8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): February 20, 2008

STEWART INFORMATION SERVICES CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE (STATE OR OTHER JURISDICTION) 001-02658 (COMMISSION FILE NO.) 74-1677330 (I.R.S. EMPLOYER IDENTIFICATION NO.)

1980 Post Oak Blvd, Houston, Texas 77056

(Address Of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code: (713) 625-8100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CRF 240.14a-12)

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

A press release issued by Stewart Information Services Corporation on February 20, 2008, regarding financial results for the three months and year ended December 31, 2007, is attached hereto as Exhibit 99.1, and the first paragraph and the financial statements at the end of the release are incorporated herein by reference. This information is not deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any Securities Act registration statements.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) EXHIBITS

Exhibit No.	Description
99.1	Press release of Stewart Information Services Corporation dated February 20, 2008, reporting financial results for the three months and year ended December 31, 2007.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

STEWART INFORMATION SERVICES CORPORATION (Registrant)
By:	/s/ Max Crisp
	(Max Crisp, Executive Vice President, Secretary, Treasurer, Director and Principal Financial Officer)

Date: February 20, 2008

EX-99.1

NEWS from:

STEWART INFORMATION SERVICES CORPORATION

P.O. Box 2029, Houston, Texas 77252-2029

www.stewart.com

Contact:	Ted C. Jones
	Director - Investor Relations
	(713) 625-8014

FOR RELEASE AT 6AM CST

Stewart Reports Operating Results for 2007

HOUSTON, February 20, 2008 - Stewart Information Services Corporation (NYSE-STC) today reported the results of its operations for the year and fourth quarter ended December 31, 2007. (Dollar amounts in the table below are in millions, except per share figures.)

	Year
	2007(a)			2006(b)
Total revenues	$	2,106.7		$	2,471.5
Pretax (loss) earnings before minority interests		(51.9	)		84.5
Net (loss) earnings		(40.2	)		43.3
Net (loss) earnings per diluted share		(2.21	)		2.36

	Fourth Quarter
	2007(c)			2006
Total revenues	$	499.7		$	645.8
Pretax (loss) earnings before minority interests		(46.7	)		19.7
Net (loss) earnings		(31.3	)		10.7
Net (loss) earnings per diluted share		(1.74	)		0.59

(a)   The year 2007 includes pretax charges of $40.9 million ($26.6 million after taxes, or $1.46 per share) to increase reserves due to large title claims of $33.4 million and a $7.5 million reserve adjustment relating to policies issued in prior years. Also included in 2007 are pretax gains of $8.8 million ($4.1 million after taxes and minority interests, or $0.22 per share) from the sale of two subsidiaries and real estate.

(b)   The year 2006 includes pretax charges of $9.2 million ($6.0 million after taxes, or $0.33 per diluted share) relating to large title claims.

(c)   The fourth quarter of 2007 includes pretax charges of $20.0 million ($13.0 million after taxes, or $0.72 per share) to increase reserves due to nine large title claims totaling $15.0 million, and an additional adjustment of $5.0 million relating to incurred but not reported reserves resulting from an increase in the frequency of large title claims.

The loss incurred by the Company in 2007 was its first full-year loss since 1974. The sudden collapse of the subprime mortgage lending market, tightening of credit availability in general, rising foreclosures, weakening home sales and falling home prices were factors contributing to a severe decline in the cyclical U.S. real estate market. For the year 2007 compared with 2006, existing home sales fell 12.6 percent and new home sales were down 26.1 percent. Existing home prices overall fell 6.0 percent.

Since the Company’s revenues are closely related to the volume and value of real estate transactions, the Company’s title revenues declined by 15.4 percent for the year 2007. For 2007, the Company’s title order counts, based on orders per workday, were 14.6 percent and 20.8 percent lower for the year and fourth quarter, respectively, compared with the same periods in 2006.

In the fourth quarter of 2007 compared with the same period in 2006, business declined in the Company’s title office, agency and underwriting operations in nearly all states. This decline was particularly significant in Florida and the western states of California, Nevada, Arizona and Washington. However the impact was far less severe in Texas and certain other states. Underwriting results in the fourth quarter of 2007 were reduced by additions to title loss reserves of $20.0 million, or $15.7 million more than in the fourth quarter of 2006. These additions to claim reserves were caused by a number of large claims primarily attributed to independent agency defalcations and a related increase in incurred but not reported reserves resulting from an increase in the frequency of large claims. In addition to the increase in losses from large claims, the Company’s loss experience on normal claims worsened. Overall, the Company lost $46.7 million before taxes and minority interests in the fourth quarter of 2007.

The Company has responded aggressively to the decline in the real estate market and is taking the appropriate steps to restore profitability and achieve reasonable profit margins in the future. “Strong efforts have been made to increase revenues through sales training and market segmentation,” said Stewart Morris, Jr., president and co-chief executive officer. “Our market opportunities have been helped by competitors exiting certain geographic markets. We have closed approximately 145 unprofitable locations, predominately branch offices, since December 31, 2006 and are closing additional locations in the first quarter of 2008. We have reduced employee counts and are concentrating on increasing employee productivity, controlling compensation expense in specific markets and renegotiating office leases,” said Morris.

The Company reduced employee counts company-wide approximately 675 in the fourth quarter of 2007, totaling approximately 1,500 since the beginning of 2007. Additional reductions have occurred in the first quarter of 2008. The decrease since the beginning of 2006, when the real estate market downturn began, has been approximately 2,100, or 20.6 percent. Other operating expenses have not declined at the same rate as revenues due to the relatively fixed nature of some of these costs, such as rent and other occupancy expenses, and costs associated with our growing international and commercial businesses. Other operating expenses also increased due to the costs associated with acquisitions and the impact in the fourth quarter of 2007 of costs associated with closing offices.

“Title losses in our company and in the industry traditionally increase with a downturn in real estate activity. We are making every effort to manage the controllable factors that contribute to our losses,” said Malcolm S. Morris, chairman and co-chief executive officer. “Our long-standing methodology for estimating our provision for future title losses, which is based on reported claims, historical loss payment experience, title industry averages and the current legal and economic environment, is basically unchanged. However, applying that methodology in light of our worse-than-expected claims payment experience related to policies issued in 2004-2006, together with a number of large claims, resulted in an increase in our provision for future losses, as a percentage of title operating revenues, to 8.5 percent in 2007 from 6.0 percent in 2006.”

The Company continued to grow its profitable international and commercial businesses during 2007. The increase in business in international markets was attributable to Canada, Mexico and Central Europe. In addition, acquisitions made since the same period in the prior year increased revenues $4.9 million and contributed pretax earnings of $0.9 million in the fourth quarter of 2007.

The Company remains committed to its long-term strategies and restructuring efforts in this extremely difficult real estate environment. The year 2008 will be one of improvements in technology efficiencies as the Company continues its consolidation of data centers, conversion from its legacy production systems and refinement of SureClose®,our customer-oriented transaction management platform. As the Company progresses in the implementation of its shared-services initiative and consolidation of field operations, it will set the stage for measurable, reduced back-office expenses in future years. Aligning and leveraging the Company’s systems and processes for growth and expansion opportunities will provide significant long-term benefits.

During the year, the Company completed its stock purchase plan, acquiring approximately 258,000 shares, or 1.5 percent, of its outstanding Common Stock. In December 2007, the Company paid an annual dividend of 75 cents per share, the same as in the previous two years, representing a yield of approximately 2.5 percent at the date of announcement.

Stewart Information Services Corporation is a customer-driven, technology-enabled, strategically competitive, real estate information, title insurance and transaction management company. Stewart provides title insurance and related information services required for settlement by the real estate and mortgage industries through more than 9,500 policy-issuing offices and agencies in the United States and international markets. Stewart also provides post-closing lender services, automated county clerk land records, property ownership mapping, geographic information systems, property information reports, document preparation, background checks and expertise in tax-deferred exchanges. More information can be found at www.stewart.com.

This press release may contain forward-looking statements, which include all statements other than statements of historical facts. Forward-looking statements are not guarantees of performance and no assurance can be given that Stewart's expectations will be achieved. In particular, historical order counts do not necessarily indicate future revenues since Stewart cannot predict the number of orders that will result in closings.

###

STEWART INFORMATION SERVICES CORPORATION

STATEMENTS OF EARNINGS

(In thousands of dollars, except per share amounts)

	Three months ended December 31				Year ended December 31
	2007		2006		2007		2006
Revenues
Title insurance:
Direct operations		213,138		262,647		947,342		1,028,688
Agency operations		256,410		351,309		1,040,719		1,321,994
Real estate information		16,497		21,244		66,037		81,159
Investment income		9,055		9,229		36,073		34,913
Investment and other gains - net		4,570		1,379		16,520		4,727
		499,670		645,808		2,106,691		2,471,481

Expenses
Amounts retained by agencies	208,300	282,668	843,038	1,067,071
Employee costs	162,797	182,311	689,107	728,529
Other operating expenses	107,868	106,948	409,999	405,951
Title losses and related claims	54,884	41,708	168,501	141,557
Depreciation and amortization	10,688	10,842	41,125	37,747
Interest	1,788	1,666	6,842	6,090
	546,325	626,143	2,158,612	2,386,945

(Loss) earnings before taxes and minority interests	(46,655	)	19,665	(51,921	)	84,536
Income tax (benefit) expense	(17,685	)	4,614	(23,926	)	23,045
Minority interests	2,342		4,306	12,225		18,239
Net (loss) earnings	(31,312	)	10,745	(40,220	)	43,252

Average number of diluted shares (000)	18,030		18,308	18,162		18,304
Diluted (loss) earnings per share	(1.74	)	0.59	(2.21	)	2.36

Segment information:
Title revenues	483,173		624,564	2,040,654		2,390,322
Title pretax (loss) earnings before minority interests	(45,867	)	19,852	(54,037	)	83,234

REI revenues	16,497		21,244		66,037	81,159
REI pretax (loss) earnings before minority interests	(788	)	(187	)	2,116	1,302

Selected financial information:
Cash (used) provided by operations	(2,805	)	44,878	14,949	105,064
Title loss payments - net of recoveries	30,593		27,320	117,550	107,170
Changes in other comprehensive earnings - net of taxes	759		318	8,666	2,433
Number of title orders opened (000):
October	48		59
November	42		55
December	38		48
Quarter	128		162
Number of title orders closed (000):
Quarter	93		124

	December 31 2007		December 31 2006
Stockholders’ equity		750,944		802,262
Number of shares outstanding (000)		18,031		18,231
Book value per share		41.65		44.00

STEWART INFORMATION SERVICES CORPORATION

BALANCE SHEETS (condensed)

(In thousands of dollars)

	December 31			December 31
	2007			2006
Assets
Cash and cash equivalents		109,239			136,137
Short-term investments		79,780			161,711
Investments - statutory reserve funds		518,586			490,540
Investments - other		98,511			78,249
Receivables - premiums from agencies		48,040			58,023
Receivables - other		93,335			61,556
Allowance for uncollectible amounts		(11,613	)		(9,112	)
Property and equipment		96,457			99,325
Title plants		78,245			70,324
Goodwill		208,824			204,302
Intangible assets		17,157			15,444
Other assets		105,413			91,708
		1,441,974			1,458,207
Liabilities

Notes payable	108,714	109,549
Accounts payable and accrued liabilities	108,658	130,589
Estimated title losses	446,116	384,396
Deferred income taxes	11,832	14,139
Minority interests	15,710	17,272
	691,030	655,945
Contingent liabilities and commitments

Stockholders' equity
Common and Class B Common Stock and additional paid-in capital	141,196		148,517
Retained earnings	597,118		649,598
Accumulated other comprehensive earnings	16,727		8,061
Treasury stock	(4,097	)	(3,914	)

Total stockholders' equity	750,944	802,262
	1,441,974	1,458,207

February 20, 2008