STEWART INFORMATION SERVICES CORP - 10-Q Quarterly Report

Back to GetFilings.com

FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from to
--------------- ----------------

Commission file number 1-12688

STEWART INFORMATION SERVICES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 74-1677330
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

1980 Post Oak Blvd., Houston TX 77056
------------------------------------------------------------
(Address of principal executive offices, including zip code)

(713) 625-8100
----------------------------------------------------
(Registrant's telephone number, including area code)

- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of July 31, 2003.

Common 16,849,618
Class B Common 1,050,012

FORM 10-Q
QUARTERLY REPORT
Quarter Ended June 30, 2003

TABLE OF CONTENTS

Item No. Page
- -------- ----
Part I - FINANCIAL INFORMATION

1. Financial Statements 1

2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6

3. Quantitative and Qualitative Disclosures About
Market Risk 9

4. Controls and Procedures 10

Part II - OTHER INFORMATION

1. Legal Proceedings 11

4. Submission of Matters to a Vote of Security Holders 11

5. Other Information 11

6. Exhibits and Reports on Form 8-K 12

Signature 13

Certifications Pursuant to Section 302(a) of the
Sarbanes-Oxley Act of 2002 14

As used in this report, "we", "us", "our" and "Stewart" mean Stewart Information
Services Corporation and our subsidiaries unless the context indicates
otherwise.

STEWART INFORMATION SERVICES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
FOR THE QUARTERS AND SIX MONTHS ENDED
JUNE 30, 2003 and 2002

See notes to condensed consolidated financial statements.

-1-

STEWART INFORMATION SERVICES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2003 AND DECEMBER 31, 2002

See notes to condensed consolidated financial statements.

-2-

STEWART INFORMATION SERVICES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002

See notes to condensed consolidated financial statements.

-3-

STEWART INFORMATION SERVICES CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Interim Financial Statements

The financial information contained in this report for the three and six month
periods ended June 30, 2003 and 2002, and as of June 30, 2003, is unaudited. In
the opinion of our management, all adjustments necessary for a fair presentation
of this information for all unaudited periods, consisting only of normal
recurring accruals, have been made. The results of operations for the interim
periods are not necessarily indicative of results for a full year. This report
should be read in conjunction with the Company's Annual Report on Form 10-K for
the year ended December 31, 2002.

Certain amounts in the 2002 condensed consolidated financial statements have
been reclassified for comparative purposes. Net earnings, as previously
reported, were not affected.

Note 2: Segment Information

Our two reportable segments are title and real estate information. Selected
financial information related to these segments follows:

Note 3: Earnings Per Share

Our basic earnings per share figures were calculated by dividing net earnings by
the weighted average number of shares of Common Stock and Class B Common Stock
outstanding during the reporting period. The only potentially dilutive effect on
earnings per share relates to our stock option plans.

In calculating the effect of the options and determining a figure for diluted
earnings per share, the average number of shares used in calculating basic
earnings per share was increased by 118,000 and 158,000 for the three month
periods ended June 30, 2003 and 2002, respectively and 107,000 and 152,000 for
the six month periods ended June 30, 2003 and 2002, respectively.

-4-

Note 4: New Significant Accounting Pronouncement

The Company has adopted the standards for how an issuer classifies and measures
financial instruments with characteristics of both liabilities and equity
required by SFAS No. 150 for financial instruments entered into or modified
after May 31, 2003, effective June 15, 2003. The effect on our consolidated
financial position or results of operations was immaterial.

Note 5: Stock-based Compensation

The Company has two fixed stock-based employee compensation plans. The Company
accounts for the plans under the intrinsic value method. Accordingly, no
stock-based employee compensation cost is reflected in net earnings, as all
options granted under the plans had an exercise price equal to the market value
of the underlying Common Stock on the date of grant.

The Company applies APB No. 25 and related Interpretations in accounting for its
plans. Under SFAS No. 123, compensation cost would be recognized for the fair
value of the employees' purchase rights, which is estimated using the
Black-Scholes model. The Company assumed a dividend yield of 0%, an expected
life of ten years for each option, expected volatility of 35.7% and 42.3% and a
risk-free interest rate of 4.3% and 4.8% for the six months ended June 30, 2003
and 2002, respectively.

Had compensation cost for the Company's plans been determined consistent with
SFAS No. 123, the Company's net earnings and earnings per share would have been
reduced to the pro forma amounts indicated below:

Note 6: Equity in Investees

The amount of earnings from equity investments was $1.8 million and $0.9 million
for the quarter ended June 30, 2003 and 2002, respectively and $3.0 million and
$1.4 million for the six month periods ended June 30, 2003 and 2002,
respectively. These amounts are included in "title insurance revenues - direct
operations" in the condensed consolidated statements of earnings and
comprehensive earnings.

Note 7: Contingent Liabilities and Commitments

We adopted the disclosure requirements for guarantees required by FASB
Interpretation No. 45 effective December 31, 2002. We have also adopted the
initial recognition and measurement provision of the non-contingent aspects of
guarantees issued or modified after December 31, 2002.

On June 30, 2003 the Company was contingently liable for guarantees of
indebtedness owed primarily to banks and others by unconsolidated equity
investees and other third parties. The guarantees relate primarily to business
expansion and generally expire no later than June 30, 2008. The maximum
potential future payments on the guarantees amount to $1,691,000 for equity
investees and $8,283,000 for other third parties. Management believes that the
collateral available, primarily title plants and the guarantees of corporate
stock, would enable the Company to recover the amounts paid under the
guarantees. The Company believes no provision for losses is needed because no
loss is expected on these guarantees.

In the ordinary course of business the Company guarantees the third party
indebtedness of its consolidated subsidiaries. On June 30, 2003 the maximum
potential future payments on the guarantees is not more than the notes payable
recorded on the consolidated balance sheets.

-5-

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

GENERAL. Our primary business is title insurance. We close transactions and
issue policies on homes and other real property located in all 50 states, the
District of Columbia, U.S. territories and several foreign countries through
more than 6,800 issuing locations. Our direct operations include affiliated
agencies while agency operations include nonaffiliated agencies that have
underwriting contracts with us. We also sell electronically delivered real
estate services and information, as well as mapping products and geographic
information systems, to domestic and foreign governments and private entities.

Our business has two main segments: title insurance and real estate
information (REI). These segments are closely related due to the nature of their
operations and common customers. The segments provide services throughout the
United States through a network of offices, including both direct operations and
agencies. Although we conduct operations in several international markets, at
current levels non-USA operations are immaterial with respect to our
consolidated financial results.

Generally, the principal factors that contribute to increases in our
operating revenues for our title and REI segments include:

o declining mortgage interest rates, which usually increase home sales
and refinancing transactions;

o rising home prices;

o higher premium rates;

o increased market share;

o opening of new offices and acquisitions; and

o a higher ratio of commercial transactions that, although relatively few
in number, typically yield higher premiums.

These factors may override the seasonal nature of the title business.

CRITICAL ACCOUNTING POLICIES. We believe the accounting policies that are the
most critical to our financial statements, and that are subject to the most
judgment and estimates, are those relating to title loss reserves, premium
revenue recognition and recoverability of long-lived assets, such as goodwill
and title plants.

Title loss reserves represent the aggregate future payments, net of
recoveries, that we expect to incur on policy and escrow losses and in costs to
settle claims. Future title loss payments are difficult to estimate due to the
complex nature of title claims, the length of time over which claims are paid,
the significantly varying dollar amounts of individual claims and other factors.
Loss provision amounts are based on reported claims, historical loss experience,
title industry averages, the current legal environment and the types of policies
written. The title loss reserves are continually reviewed and adjusted, as
appropriate. Independent actuaries review the adequacy of the reserves on an
annual basis.

Premium revenues on title insurance written by our direct title
operations are recognized as revenue at the time of the closing of the related
real estate transaction. Premium revenues on title insurance policies written by
agencies are recognized primarily when policies are reported to us. Revenues are
recorded on a total premium basis versus net to the underwriter. We accrue for
unreported policies where reasonable estimates can be made based on historical
reporting patterns of agencies, current trends and known information about
agencies.

We review the carrying values of title plants and other long-lived
assets if certain events occur that may indicate impairment. Impairment is
indicated when the projected undiscounted cash flow over the estimated life of
an asset is less than its carrying value. If impairment is determined by
management, the book amount is written down to fair value by calculating the
discounted value of the projected cash flow. In accordance with SFAS No. 142
"Goodwill and Other Intangible Assets", goodwill for each reporting unit is
tested for impairment annually by an independent valuation and goodwill
determined to be impaired is expensed to current operations.

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO SIX MONTHS ENDED JUNE 30, 2002

OPERATING ENVIRONMENT. According to published industry data, interest rates for
30-year fixed rate mortgages, excluding points, for the first six months of 2003
averaged 5.7% as compared with 6.9% for the same period in 2002. Comparable
rates averaged 6.5% in the full year 2002.

In 2002 rates were steady at about 7% until April. Rates then declined
through December 2002, reaching a low of 5.9%. At the end of June 2003, rates
were at a level of about 5.2%.

-6-

Operating in these mortgage interest rate environments, real estate
activity was much stronger in the first half of 2003 as compared with the first
half of 2002. Nationwide, refinancing transactions remained strong in 2003. The
ratio of refinancings to total loan applications was 75.8% for the first six
months of 2003, compared with 46.5% for the same period in 2002. Refinancings
usually have lower title insurance premium rates than real property sales.
Existing home sales increased 3.4% in 2003 over 2002.

TITLE REVENUES. Our revenues from title operations increased 34.5% in the first
six months of 2003 over the first six months in 2002. Revenues from direct
operations increased 45.2% in 2003, as the number of direct closings we handled
increased 46.6%. The largest revenue increases in 2003 were primarily in
California, Texas and Washington. Direct closings relate only to files closed by
our underwriters and subsidiaries and do not include closings by agencies. The
average revenue per closing decreased 1.4% in 2003.

Premium revenues from agencies increased 26.7% to $522.8 million in
2003 from $412.5 million in 2002. The increase in 2003 was primarily due to the
increases in both refinancings and real property sales. The largest revenue
increases in both years were primarily in California, New York and Florida.

REI REVENUES. Real estate information revenues were $38.6 million in 2003 and
$33.2 million in 2002. The increase in 2003 resulted primarily from providing an
increased number of product and service deliveries resulting from the large
volume of real estate transactions.

INVESTMENTS. Investment income decreased 3.4% in 2003 primarily because of lower
yields, partially offset by increases in average balances invested. We realized
a gain on the sale of investment real estate during the second quarter of 2002,
but it was offset by a comparable after-tax loss of $1.2 million on the sale of
WorldCom bonds. Certain investment gains and losses were realized as part of the
on-going management of the investment portfolio for the purpose of improving
performance.

AGENT RETENTION. The amounts retained by agencies, as a percentage of revenues
from agency operations, were 82.3% and 81.7% in 2003 and 2002. Amounts retained
by title agencies are based on contracts between the agencies and our title
insurance underwriters. The percentage that amounts retained by agencies bear to
agency revenues may vary from year to year because of the geographical mix of
agency operations and the volume of title revenues.

EMPLOYEE COSTS. Employee costs for the combined business segments increased
32.6% in 2003. The number of persons we employed at June 30, 2003 and June 30,
2002 was approximately 8,600 and 7,200, respectively. The increase in staff in
2003 was primarily due to the increased title and REI volume and the acquisition
of new offices. In our REI segment, employee costs increased in 2003 and 2002
primarily due to the increase in REI volume.

OTHER OPERATING EXPENSES. Other operating expenses for the combined business
segments increased 22.0% in 2003. The increase was primarily in new offices,
search fees, business promotion and supplies. Other operating expenses also
include rent, premium taxes, telephone, title plant expenses and travel and
auto. Most of these operating expenses follow, to varying degrees, the changes
in transaction volume and revenues.

Our employee costs and certain other operating costs are sensitive to
inflation. To the extent inflation causes increases in the prices of homes and
other real estate, premium revenues are also increased. Premiums are determined
in part by the insured values of the transactions we handle.

TITLE LOSSES. Provisions for title losses, as a percentage of title operating
revenues, were 4.2% in 2003 and 4.4% in 2002. We continue to experience low loss
ratios because of our improved practices. Also, increases in refinancing
transactions, which generally result in lower loss exposure, have led to lower
loss ratios.

INCOME TAXES. The provision for federal, state and foreign income taxes
represented effective tax rates of 37.2% and 38.3% in 2003 and 2002,
respectively. The annual effective tax rate for 2003 is estimated to be
approximately 37.5%.

-7-

THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THREE MONTHS ENDED JUNE 30, 2002

OPERATING ENVIRONMENT. According to published industry data, interest rates for
30-year fixed rate mortgages, excluding points, for the three months ended June
30, 2003 averaged 5.5% as compared with 6.8% for the same period in 2002.

Operating in these mortgage interest rate environments, real estate
activity was much stronger in the second quarter of 2003 as compared to the
second quarter of 2002. Nationwide, refinancing transactions remained strong in
2003. The ratio of refinancings to total loan applications was 74.7% for the
second quarter of 2003, compared with 42.7% for the same period in 2002.
Refinancings usually have lower title insurance premium rates than real property
sales. Existing home sales increased 4.7% in 2003 over 2002.

TITLE REVENUES. Our revenues from title operations increased 40.2% in the second
quarter of 2003 over the second quarter in 2002. Revenues from direct operations
increased 57.8% in 2003, as the number of direct closings we handled increased
63.4%. The largest revenue increases in the second quarter of 2003 were
primarily in California, Texas and Washington. Direct closings relate only to
files closed by our underwriters and subsidiaries and do not include closings by
agencies. The average revenue per closing decreased 3.2% in 2003.

Premium revenues from agencies increased 28.7% to $298.8 million in for
the second quarter of 2003 from $232.2 million in 2002. The increase in 2003 was
primarily due to the increases in both refinancings and real property sales. The
largest revenue increases in both years were primarily in California, Florida,
New York and Virginia.

REI REVENUES. Real estate information revenues were $19.6 million for the second
quarter of 2003 and $17.2 million for the second quarter of 2002. The increase
in 2003 resulted primarily from providing an increased number of product and
service deliveries resulting from the large volume of real estate transactions.

INVESTMENTS. Investment income decreased 4.3% in the second quarter of 2003
compared to the second quarter of 2002 primarily because of lower yields,
partially offset by increases in average balances invested. We realized a gain
on the sale of investment real estate during the second quarter of 2002, but it
was offset by a comparable after-tax loss of $1.2 million on the sale of
WorldCom bonds. Certain investment gains and losses were realized as part of the
ongoing management of the investment portfolio for the purpose of improving
performance.

AGENCY RETENTION. The amounts retained by agencies, as a percentage of revenues
from agency operations, were 82.2% and 81.2% in the second quarters 2003 and
2002, respectively. Amounts retained by title agencies are based on contracts
between agencies and our title underwriters. The percentage that amounts
retained by agencies bears to agency revenues may vary from year to year because
of the geographical mix of agency operations and the volume of title revenues.

EMPLOYEE COSTS. Employee costs for the combined business segments increased
38.9% in 2003. The number of persons we employed at June 30, 2003 and June 30,
2002 was approximately 8,600 and 7,200, respectively. The increase in staff in
2003 was primarily due to the increased title and REI volume and the acquisition
of new offices. In our REI segment, employee costs increased in 2003 primarily
due the increase in REI volume.

OTHER OPERATING EXPENSES. Other operating expenses for the combined business
segments increased 22.8% in the second quarter of 2003. The increase was
primarily in new offices, search fees, business promotion and premium taxes.
Other operating expenses also include rent, supplies, telephone, title plant
expenses and travel and auto. Most of these operating expenses follow, to
varying degrees, the changes in transaction volume and revenues.

Our employee costs and certain other operating costs are sensitive to
inflation. To the extent inflation causes increases in the prices of homes and
other real estate, premium revenues are also increased. Premiums are determined
in part by the insured values of the transactions we handle.

TITLE LOSSES. Provisions for title losses, as a percentage of title operating
revenues, were 4.2% in second quarter 2003 and 4.3% in second quarter 2002. We
continue to experience low loss ratios because of our improved practices. Also,
increases in refinancing transactions, which generally result in lower loss
exposure, have led to lower loss ratios.

INCOME TAXES. The provisions for federal, state and foreign income taxes
represented effective tax rates of 37.9% and 38.4% in the second quarters of
2003 and 2002, respectively.

-8-

LIQUIDITY AND CAPITAL RESOURCES. Cash provided by operations was $84.9 million
and $42.6 million in 2003 and 2002, respectively. Cash flow from operations has
been the primary source of financing for additions to property and equipment,
expanding operations and other requirements. This source may be supplemented by
bank borrowings. We do not have any material source of liquidity or financing
that involves off-balance sheet arrangements.

A substantial majority of consolidated cash and investments is held by
Stewart Title Guaranty Company (Guaranty) and its subsidiaries. Cash transfers
between Guaranty and its subsidiaries and the Company are subject to certain
legal restrictions. See Notes 2 and 3 to our consolidated financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2002.

Our liquidity, excluding Guaranty and its subsidiaries, is comprised of
cash and investments aggregating $11.2 million and short-term liabilities of
$0.5 million at June 30, 2003. We know of no commitments or uncertainties that
are likely to materially affect our ability to fund cash needs.

We consider our capital resources to be adequate. Our capital resources
are represented by a low debt-to-equity ratio, in which notes payable is $21.1
million and stockholders' equity is $564 million at June 30, 2003. We are not
aware of any trends, either favorable or unfavorable, that would materially
affect notes payable or stockholders' equity and we do not expect any material
changes to the cost of such resources. However, significant acquisitions in the
future could materially affect the notes payable or stockholders' equity
balances.

Forward-looking statements. All statements included in this report, other than
statements of historical fact, addressing activities, events or developments
that we expect or anticipate will or may occur in the future, are
forward-looking statements. Such forward-looking statements are subject to risks
and uncertainties including, among other things, changes in mortgage interest
rates, employment levels, actions of competitors, changes in real estate
markets, general economic conditions, legislation (primarily legislation related
to title insurance) and other risks and uncertainties discussed in our filings
with the Securities and Exchange Commission.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in our investment strategies, types of
financial instruments held or the risks associated with such instruments which
would materially alter the market risk disclosures made in our Annual Statement
on Form 10-K for the year ended December 31, 2002.

-9-

Item 4. Controls and Procedures

In Release No. 34-46427, effective August 29, 2002, the Securities and
Exchange Commission, among other things, adopted rules requiring reporting
companies to maintain disclosure controls and procedures to provide reasonable
assurance that a registrant is able to record, process, summarize and report the
information required in the registrant's quarterly and annual reports under the
Securities Exchange Act of 1934 (the "Exchange Act"). We believe that our
existing disclosure controls and procedures have been effective to accomplish
these objectives.

Our principal executive officers and our principal financial officer, based
upon their evaluation of our disclosure controls and procedures conducted as of
a date within 90 days before the filing date of this quarterly report (as
defined in Rule 13a-14(c) and Rule 15d-14(c) under the Exchange Act), have
concluded that those disclosure controls and procedures are effective.

There have been no changes in our internal controls or in other factors known
to us that could significantly affect these controls subsequent to their
evaluation, nor were any corrective actions necessary with regard to significant
deficiencies and material weaknesses.

-10-

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are a party to routine lawsuits incidental to our business, most of which
involve disputed policy claims. In many of these suits, the plaintiff seeks
exemplary or treble damages in excess of policy limits based on the alleged
malfeasance of an issuing agent. We do not expect that any of these proceedings
will have a material adverse effect on our consolidated financial condition.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a) Our Annual Meeting of Stockholders was held on April 25, 2003 for the
purpose of electing our board of directors.

(b) Proxies for the meeting were solicited pursuant to Section 14 (a) of the
Securities Exchange Act of 1934, and there was no solicitation in
opposition to management's solicitations. All of the Registrant's
nominees were elected.

(c) Stockholder votes with respect to the election of directors at our
Annual Meeting were as follows:

A. Directors Elected by Common Stockholders:

B. Directors Elected by Class B Common Stockholders:

There were no broker non-votes with respect to the election of
directors.

ITEM 5. OTHER INFORMATION

We paid regular quarterly cash dividends on our common stock from 1972
through 1999. Our Board of Directors has approved a plan to repurchase up to 5
percent (up to 838,000 shares) of our outstanding common stock. Our Board
decided to discontinue our regular quarterly dividend in favor of returning
those and additional funds to stockholders' equity through the stock repurchase
plan. Under this plan, we repurchased 116,900 shares of common stock during
2000. We did not repurchase any shares of our common stock in 2001, 2002 or in
the first six months of 2003.

In June 2003, the Board voted to recommence an annual dividend payout due to
recent favorable tax law changes. The amount and timing of the dividend payout
will be determined in the fourth quarter 2003.

An additional 208,769 shares of treasury stock were acquired primarily in the
second quarter of 2002. The majority of these shares were acquired as a result
of the consolidation of a majority owned subsidiary that was previously held as
an equity method investment. All of these shares were held by us at June 30,
2003.

-11-

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

3.1 - Certificate of Incorporation of the Registrant, as amended March
19, 2001 (incorporated by reference in this report from Exhibit
3.1 of Annual Report on Form 10-K for the fiscal year ended
December 31, 2000)

3.2 - By-Laws of the Registrant, as amended March 13, 2000
(incorporated by reference in this report from Exhibit 3.2 of
Annual Report on Form 10-K for the fiscal year ended December
31, 2000)

4. - Rights of Common and Class B Common Stockholders

* 10.1 - Summary of agreements as to payment of bonuses to certain
executive officers (incorporated by reference in this report
from Exhibit 10.1 of Annual Report on Form 10-K for the fiscal
year ended December 31, 2002)

* 10.2 - Deferred Compensation Agreements dated March 10, 1986, amended
July 24, 1990 and October 30, 1992, between the Registrant and
certain executive officers (incorporated by reference in this
report from Exhibit 10.2 of Annual Report on Form 10-K for the
fiscal year ended December 31, 1997)

* 10.3 - Stewart Information Services Corporation 1999 Stock Option Plan
(incorporated by reference in this report from Exhibit 10.3 of
Annual Report on Form 10-K for the fiscal year ended December
31, 1999)

* 10.4 - Stewart Information Services Corporation 2002 Stock Option Plan
for Region Managers (incorporated by reference in this report
from Exhibit 10.4 of Quarterly Report on Form 10-Q for the
quarter ended March 31, 2002)

32.1 - Certificate of Co-Chief Executive Officer pursuant to Section
906(a) of the Sarbanes-Oxley Act of 2002

32.2 - Certificate of Co-Chief Executive Officer pursuant to Section
906(a) of the Sarbanes-Oxley Act of 2002

32.3 - Certificate of Chief Financial Officer pursuant to Section
906(a) of the Sarbanes-Oxley Act of 2002

99.1 - Details of Investments at June 30, 2003 and December 31, 2002

* A management compensation plan, contract or arrangement.

During the quarterly period covered by this report, we filed a report on Form
8-K dated July 25, 2003, reporting financial results for the three and six
months ended June 30, 2003.

-12-

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, we have
duly caused this report to be signed on our behalf by the undersigned thereunto
duly authorized.

Stewart Information Services Corporation
----------------------------------------
(Registrant)

August 6, 2003
- ----------------
Date

/S/ MAX CRISP
---------------------------------------------
Max Crisp
(Executive Vice President and Chief Financial
Officer, Secretary-Treasurer, Director and
Principal Financial and Accounting Officer)

-13-

CERTIFICATIONS

Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002

I, Malcolm S. Morris, certify that:

1. I have reviewed the quarterly report on Form 10-Q of Stewart Information
Services Corporation (registrant);

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statement made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a and 15d-14) for the registrant and we have (a) designed
such controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
quarterly report is being prepared; (b) evaluated the effectiveness of the
registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
functions); (a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and (b) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: August 6, 2003

/S/ MALCOLM S. MORRIS
-----------------------------------------
[Signature]
Title: Chairman of the Board and Co-Chief
Executive Officer

-14-

CERTIFICATIONS

Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002

I, Stewart Morris, Jr., certify that:

1. I have reviewed the quarterly report on Form 10-Q of Stewart Information
Services Corporation (registrant);

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statement made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a and 15d-14) for the registrant and we have (a) designed
such controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
quarterly report is being prepared; (b) evaluated the effectiveness of the
registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
functions); (a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and (b) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: August 6, 2003

/S/ STEWART MORRIS, JR.
----------------------------------------
[Signature]
Title: President and Co-Chief Executive
Officer

-15-

CERTIFICATIONS

Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002

I, Max Crisp, certify that:

1. I have reviewed the quarterly report on Form 10-Q of Stewart Information
Services Corporation (registrant);

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statement made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a and 15d-14) for the registrant and we have (a) designed
such controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
quarterly report is being prepared; (b) evaluated the effectiveness of the
registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
functions); (a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and (b) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: August 6, 2003

/S/ MAX CRISP
------------------------------------
[Signature]
Title: Executive Vice President and
Chief Financial Officer, Secretary-
Treasurer, Director and Principal
Financial and Accounting Officer

-16-

INDEX TO EXHIBITS

* A management compensation plan, contract or arrangement.