Schedule I - Financial Information of the Registrant (Parent Company)

12 Months Ended

Dec. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Schedule I - Financial Information of the Registrant (Parent Company)

SCHEDULE I

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF INCOME AND RETAINED EARNINGS

	For the Years Ended December 31,
	2020	2019	2018
	(in $ thousands)
Revenues
Investment income	30,000	—	25,000
Merger termination fee	—	50,000	—
Other income	1,182	753	665
	31,182	50,753	25,665
Expenses
Interest	2,511	4,106	3,511
Other operating expenses	9,262	12,787	15,174
	11,773	16,893	18,685
Income before taxes and income from subsidiaries	19,409	33,860	6,980
Income tax expense	(15)	(15)	(126)
Income from subsidiaries	135,511	44,770	40,669
Net income	154,905	78,615	47,523
Retained earnings at beginning of year	564,392	514,248	491,698
Cash dividends on Common Stock	(30,478)	(28,471)	(28,565)
Cumulative effect adjustments on adoption of new accounting pronouncements	—	—	3,592
Retained earnings at end of year	688,819	564,392	514,248

See accompanying notes to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

BALANCE SHEETS

	As of December 31,
	2020	2019
	(in $ thousands)
Assets
Cash and cash equivalents	3,604	36,849
Receivables:
Notes - due from subsidiaries	45,193	5,193
Receivables from affiliates	2,258	260
	47,451	5,453
Property and equipment, at cost:
Furniture and equipment	75	88
Accumulated depreciation	(74)	(83)
	1	5
Investments in subsidiaries, on an equity-method basis	1,055,154	802,994
Operating lease assets	7,439	8,931
Goodwill	8,068	8,470
Other assets	16,339	15,810
	1,138,056	878,512
Liabilities
Accounts payable and other liabilities	24,040	21,417
Operating lease liabilities	10,029	10,914
Notes payable	98,875	98,875
	132,944	131,206
Contingent liabilities and commitments	—	—
Stockholders’ equity
Common Stock – $1 par, authorized 51,500,000; issued 27,080,403 and 24,061,568; outstanding 26,728,242 and 23,709,407, respectively	27,080	24,062
Additional paid-in capital	274,857	164,217
Retained earnings	688,819	564,392
Accumulated other comprehensive income (loss) (AOCI):
Foreign currency translation adjustments	(8,238)	(13,027)
Net unrealized investment gains	25,260	10,328
Treasury stock – 352,161 common shares, at cost	(2,666)	(2,666)
Total stockholders’ equity	1,005,112	747,306
	1,138,056	878,512

See accompanying notes to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2020	2019	2018
	(in $ thousands)
Reconciliation of net income to cash (used) provided by operating activities:
Net income	154,905	78,615	47,523
Add (deduct):
Depreciation	4	8	4
(Increase) decrease in receivables – net	(1,998)	(253)	922
(Increase) decrease in other assets – net	(529)	1,659	853
Increase (decrease) in payables and accrued liabilities – net	2,978	2,698	(4,476)
Income from and other adjustments for subsidiaries	(170,816)	(43,240)	(45,793)
Cash (used) provided by operating activities	(15,456)	39,487	(967)
Investing activities:
Dividends from subsidiary	30,000	—	25,000
Collections on notes receivables	40,000	1,416	24,900
Increases in notes receivables	(80,000)	—	(5,193)
Investments in and contributions to subsidiaries	(85,470)	—	—
Cash (used) provided by investing activities	(95,470)	1,416	44,707
Financing activities:
Issuance of new Common Stock	108,961	—	—
Dividends paid	(30,226)	(28,345)	(28,263)
Repurchases of Common Stock	(1,054)	(532)	(1,175)
Purchase of remaining interest of consolidated subsidiary	—	—	(1,101)
Cash provided (used) by financing activities	77,681	(28,877)	(30,539)
Increase in cash and cash equivalents	(33,245)	12,026	13,201
Cash and cash equivalents at beginning of year	36,849	24,823	11,622
Cash and cash equivalents at end of year	3,604	36,849	24,823
Supplemental information:
Income taxes paid, net	180	—	—
Interest paid	2,490	4,009	3,849

See accompanying notes to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

NOTES TO FINANCIAL STATEMENT INFORMATION

The Parent Company operates as a holding company, transacting substantially all of its business through its subsidiaries. Its consolidated financial statements are included in Part II, Item 8 of Form 10-K. The Parent Company financial statements should be read in conjunction with the aforementioned consolidated financial statements and notes thereto and financial statement schedules.

Merger agreement. In 2018, the Company entered into an agreement and plan of merger (Merger Agreement) with Fidelity National Financial, Inc. (FNF), A Holdco Corp. and S Holdco LLC, pursuant to which, subject to the satisfaction or waiver of certain conditions, the Company was to be acquired by FNF. In 2019, the Company and FNF mutually terminated the Merger Agreement and, as stipulated in the Merger Agreement, FNF paid the Company a merger termination fee of $50.0 million, which was presented as such in the 2019 statement of income and retained earnings.

Investment income. During 2020 and 2018, Stewart Title Guaranty Company, a wholly-owned subsidiary, paid to the Parent Company dividends of $30.0 million and $25.0 million, respectively.

Other operating expenses. Other operating expenses included $6.8 million and $12.7 million of expenses related to the Merger Agreement and strategic alternatives review in 2019 and 2018, respectively. Also included in the 2019 other operating expenses were $2.2 million of executive insurance policy settlement expenses.