Good morning, and thank you for joining us today for Stewart's fourth quarter and full year 2025 earnings conference call. We will be discussing results that were released yesterday after the close.

Joining me today are CEO Fred Eppinger and CFO David Hisey. To listen online, please go to the stewart.com website to access the link for this conference call.

This conference call may contain forward-looking statements that involve a number of risks and uncertainties. Please refer to the company's press release and other filings with the SEC for a discussion of the risks and uncertainties that could cause our actual results to differ materially.

During our call, we will discuss some non-GAAP measures. For reconciliation of these non-GAAP measures, please refer to the appendix in today's earnings release, which is available on our website at stewart.com.

Let me now turn the call over to Fred.

Thank you for joining us today for Stewart's fourth quarter and full year earnings conference call. Yesterday, we released the financial results for the fourth quarter and full year, which David will review with you shortly.

I'd like to open today's call with some remarks on the overall progress we made in '25, and before shifting, and then shifting to market conditions a little bit, and then our fourth quarter results and strategic outlook for each of the businesses. We are very pleased with the progress we made in '25, strengthening and growing the earnings power of all our businesses.

While commercial markets saw some awakening, in '25, we remained in a multi-year slump for existing home sales, with two years in a row of the lowest existing home sales in 30 years. Despite this market headwind, we grew revenues by 18%, net income by 48%, and adjusted EPS by 46% full year '25.

That growth has allowed us to gain share and improve margins. We grew the company's adjusted pretax margin to 6.8%, up from 5.8% year prior.

We have created momentum for the company through continued execution of our targeted growth plans, and has strengthened our position in each business. We delivered more distinctive products and services for our customers and made good progress on becoming a destination for the best talent in the industry.

At the end of '25, we also rounded out our lender services portfolio with the acquisition of Mortgage Contracting Services, also known as MCS. In 2025, virtually all of our growth was organic, but we will continue to set our sights on additional profitable growth through targeted acquisitions.

We enhanced our financial flexibility to capitalize on potential opportunities in the near term by successfully upsizing our credit facility by $100 million to $300 million and executing an equity offering of 2.2 million shares of stock, raising $140 million to provide additional dry power. In 2025, we also increased our dividend for the fifth year in a row, moving from $2.00 to $2.10 a share annually.

Moving towards some highlights for our businesses. In 2025, we grew all domestic commercial revenues by 34% year-over-year.

This growth can be attributed to continued success in the expansion of our national commercial services business and growth in our small commercial growth initiative in our direct operations business unit. Our national commercial services business grew 43% year-over-year with significant growth across all of our asset classes.

In our real estate solution business, we grew revenues by 22% year-over-year and continue to have a very robust pipeline of opportunities. We have made significant progress on our expansion of this business line since beginning the journey in the late 2019, and look forward to seeing how recently acquired MCS will expand our breadth and client coverage for top lenders and servicers.

Our agency services business also made strong progress in '25, growing revenue by 21% overall. Our strategy to drive more commercial through our agents was also very successful, delivering 34% growth for the year.

Now I'd like to turn to the broader housing environment and our fourth quarter results. In the fourth quarter, we were able to maintain and in most of our businesses improve on our momentum.

For the fourth quarter, we grew revenue 20% and adjusted net income by 52% compared to the fourth quarter '24. This growth is meaningful us for us given the existing home sales grew in the quarter just under 1%, very slightly in the quarter.

We will see signs for cautious, we see signs for cautious optimism for housing in '26. In the fourth quarter, 30-year mortgage rates hovered between 6.1% and 6.35% range, showing a bit more stability than more recent short-term trends.

We have also seen a shift in the composition of mortgage holders, with the population of mortgage holders with rates of 6% or higher exceeding the population of those below 3%. This implies that we are seeing people continue to buy and sell for life events, and that the market is beginning to accept we are unlikely to return to the 3% rates in the future.

In the beginning of '26, we have seen rates remain in the low 6% range, and housing inventory has continued to be a little bit better than last year, and it was up 8% for the quarter compared to fourth quarter '24. Looking forward, we believe we have rounded the corner and are heading in the right direction to get back to a more normalized existing home sales environment in the coming years.

We do not anticipate existing home sales getting all the way back to their long-term historic average of 5 million units in '26, but we believe we will begin to see modest market improvements in '26. Our direct operations business unit grew 3%, I'm sorry, 8% in the fourth quarter compared to the same period last year, which we feel is strong given that this business is the most impacted by the effects of the challenged residential housing market.

We remain focused on prioritizing share gains in target MSAs both organically and inorganically, and we continue to make strides in our strategic initiative to grow our Main Street commercial business that runs through our direct office. Our Main Street commercial business grew 17% for the full year and 16% in the fourth quarter in direct operations.

We continue to expect a portion of our future growth in this business to come from targeted acquisitions, and we maintain a growing pipeline of targets that should begin to develop as the market signals a return to normal levels. Our national commercial services business delivered another solid quarter of growth.

Success for this group is largely due to increased coverage in a number of geographic markets and asset classes, expansion of our team, and our ability to underwrite larger transactions over the past several years given our improved surplus. We are focused on continuing to invest in best-in-class talent to grow share, as relationships are especially important in this space and allow us to expand on our network and deepen our expertise.

Because of the work we have done to continually improve this unit, in the fourth quarter we benefited from underwriting some sizable transactions. We grew national commercial service business unit by 49% in the quarter.

We are pleased with the progress here, and it is and it really represents the improved competitive position we have built for ourselves in the commercial market. Energy continues to be a point of strength, but for the year, energy growth was less than overall growth in this sector.

In '25, energy grew 34% for the year, and all other classes grew 46%. We remain focused on growing all asset classes and target geographies to expand our overall footprint.

Our agency services business had another strong quarter, with revenues up 20% year-over-year for the quarter. This amount of growth is strong when considering that the overall housing market is near flat to last year, which affects our agency partners.

We remain focused on growing this business through the expansion of wallet share with existing agents and on onboarding new agents in all states, with an emphasis on 15 states that are most attractive from an agency perspective. We are seeing sustained growth year-to-date agency across all our target markets, and most notably Florida, Texas, and New York.

Our commercial initiative with agents have also been a big part of our success as we continue to build the mo- momentum we have had in recent years at four agents to differentiating our service and better our offerings to our agent partners, and we saw 34% growth in this important initiative in 2025. Our real estate solutions business grew by 29% the fourth quarter compared to last year.

We also improved our margin in the fourth quarter over last year, but our full-year margin of 10.1% was a bit short of our target for the full year '25 due to some isolated pricing issues and expand expansion costs. For the full year '26, we fully expect to improve margins and deliver in the low teen range for this segment, and expect that our recent acquisition of MCS will help us improve our historical margin outlook.

As mentioned in late December, we closed our acquisition of MCS, a property preservation service provider, allowing us to expand our default services offering and cross-sell and cross-sell customers across our expanded product lines. We expect continued progress in this business line as the market improves.

Moving to our international operations, we are focused on broadening our geographic presence and depth in Canada, increasing our commercial penetration, and expanding our presence in the refi market. In the fourth quarter, we grew our non-commercial revenue by 20% for the year, and we grew total international revenue by 11%.

We believe we can build on our strong position in these markets and continue to grow share. Overall, we remain dedicated to strengthening our company through geography, customer, and channel expansion in each business to set the company up for continued long-term success.

I'm proud of the work we did in '25 to further the company, and look forward to seeing how we can capitalize on the potentially improving market conditions and opportunities in '26. I want to thank our customers and our agent partners for their continued trust.

We are committed to doing our best to serve you with excellence. Finally, to the Stewart team, I want to thank you for the loyalty and continued dedication to excellence.

We are committed to being a destination for best-in-class talent. This year, I had the opportunity to meet with thousands of employees across many different cities in the U.S.

and Canada as part of my year-long roadshow. My my time with you all during this series was powerful, as it showed me that we have a very dedicated team that is aligned and focused on the strategic objective of becoming the premier title services company.

We point to this dedication and alignment as a key component of why we've received several employment awards this year, including the USA TODAY's Top 25 Workplaces, Forbes America's Best Employers for Company Culture, and ranking number one Forbes America's Best Employer for Women in Business Services. We are also proud that we were able to support our employees by donating $1.2 million through the Stewart Foundation to their local communities.

We stood up the foundation together in '21, and we made a significant impact on our communities since the inception. I could not be prouder of the progress we have made on our journey.

We all know that much remains to be done to accomplish our goals, but I look forward to seeing where we grow together. David, I will now turn it over to you to provide an update on our results.

Good morning, everyone, and thank you, Fred. I appreciate our employees and customers for their steadfast support in this slow residential real estate market.

Yesterday, Stewart reported strong fourth quarter results with both revenue and profitability improvements. Fourth quarter net income was $36 million, or diluted earnings per share of $1.25, on revenues of $791 million.

Appendix A of our press release shows adjustments to our consolidated and segment results, primarily related to net realized and unrealized gains and losses, acquired intangible asset amortization, and office closure and severance expenses that we use to measure operating performance. On an adjusted basis, fourth quarter net income was 50% higher at $48 million, or $1.65 diluted earnings per share, compared to $32 million, or $1.17 diluted earnings per share.

In our title segment, operating revenues improved $106 million, or 19%, driven by strong results from both our direct and agency title operations. As a result, title pretax income increased $13 million, or 28%.

On an adjusted basis, title pretax income improved 35% to $68 million from $51 million. Adjusted pretax margin improved to 10% compared to approximately 9% last year.

In our direct title business, total fourth quarter open and closed orders for commercial and residential transactions improved compared to last year. Domestic commercial revenues increased $32 million, or 38%, with growth in all asset classes led by data centers and energy.

Transaction size increases, our average domestic commercial fee per file improved 39% to approximately $27,000 compared to approximately $20,000 last year. Average domestic fee per file improved 13% to $3,300 compared to $2,900 last year, primarily as a result of transaction mix.

Total international revenues increased modestly. Our agency operations were robust, with gross agency revenues of $334 million, 20% higher than last year.

This increase was primarily driven by improved volumes in our key agency states such as Florida, New York, and commercial transactions. After agent retention, net agency revenues increased $11 million, or 22%.

On title losses, total title losses in the fourth quarter increased slightly due to increased title revenues. The fourth quarter title loss ratio improved to 3.4% from 3.7% last year due to our continued overall favorable claims experience.

We expect our title losses in 2026 to average in the 3.5% to 4% range. On our real estate solutions segment, total revenues improved 29% by $25 million, primarily driven by our credit information services business.

As Fred mentioned, we recently added MCS and expect it to be a major contributor to the segment's revenues and profits going forward. The segment's adjusted pretax income improved 47% to $10 million compared to $6 million last year.

We are focused on the overall cost of services and strengthening customer relationships. Adjusted pretax margin was 8.5%, a percent better than last year's fourth quarter, and we expect our margins to normalize in the low teens as these relationships mature.

On consolidated expenses, our employee costs ratio improved 29% compared to 31% last year, primarily due to increased revenues, while our other operating expense ratio was 25%, comparable to last year. On other matters, our financial position remains solid to support our customers, employees, and the real estate market.

Our total cash and investments were approximately $480 million in excess of statutory premium reserve requirements. As Fred noted, our line of credit and December common share equity offering provide us financial flexibility.

Total Stewart stockholders' equity at December 31, 2025 was approximately $1.6 billion, with a book value of $54 per share, which is $4 better than last year. Net cash provided by operations improved by $22 million, or 32%, primarily due to higher net income.

Again, thank you to our customers and employees, and we remain confident in our service to the real estate markets. I'll now turn the call over to the operator for questions.

Hey, everyone. Good morning.

Just wanted to start with commercial. Given the strong commercial activity in 2025, can you talk about your expectations for commercial revenue growth in '26?

Then this related question, there's been meaningful seasonality in 1Q, but given what you see in the commercial pipeline on the commercial side, do you think 1Q could be sort of a little better than usual? Thanks.

Great questions, Bose. I feel very confident in kind of our pipeline and activity.

It's pretty broad. It's pretty good.

I do think there will continue to be seasonality in commercial. The fourth quarter in particular this year, I think, was very robust.

I think you're going to see that for a lot of people in the industry for some reasons. I do think we're going to hope our first quarter, in general, should be a little bit better than last year, but we'll still have the difficulties of the first quarter in my view.

The commercial in general, I think, it'll be a good year for us next year, looking at the activity and the breadth of the activity. Some of the comparisons will be interesting to see on growth.

I think we can grow commercial next year, yes. I just think 49% is not a there's going to be some comparisons here given how quickly we kind of grow into our skin, that we might see some kind of moderating of growth, of course, and some comparisons that might be kind of not as robust on the growth side.

Again, it's going in the right direction in every class, and we're hiring and trying to really get after it. I feel good about the depth.

The other thing that's really interesting, qualitatively, is we're leading more deals. Like some of these big deals, right, historically, we would participate, but we control more now, and you could just feel it and see it, which gives me comfort that we're moving in the right direction.

Even if we went a little sideways this year and digested the growth, in the next 2 years, I'm as confident as I've always been on being able to go. We're probably 14% share right now in the market.

I think over the next 2, 3 years, we're going to get closer to 20, right? I can't time that, but the momentum and our ability to get after it is there.

I do think the market, in general, is going to be relatively strong this year as well. Hopefully, that's helpful.

Great. That's great.

That's very helpful. Thanks.

Then actually, can you remind us what percentage of your agent premiums are commercial?

That's a great question. We've been, obviously, trying to grow that business, and I have some of the information on that.

Of the 20% growth, we grew purchase about 16% for the quarter and 15% for the year. We grew refi with agency about 40, but that's only about 3%, $3 million of growth because it's such a small percentage of our business.

Then the commercial was about 34% for the year. You can look at the mix.

I don't have that specific percentages of each, but it's very small refi. Again, of the growth in the purchase, it represented about $125 million of the growth.

You could kind of back into the percentages. Again, it's heavy purchase.

It's probably somewhere around 15% to 20% commercial now. The rest is refi.

What's nice about it to me is that when you look at the 15%, 16%, 16% growth for the quarter in purchase, the market's somewhere between 1 and 2, right? I know that we're going to get the data where we're going to have another share movement in most of these markets that is pretty robust.

On commercial, I would say we're playing catch-up. If I was a guessing man and I looked at my competitors, their numbers of commercial in their agency would be closer to 15% to 20%, and so we're still catching up of our penetration of commercial in the agency.

I wouldn't be surprised if our percentage of growth in commercial doesn't continue because we're catching up, right? I would say our competitors are probably in the 20% to 22% range and we're probably in that 15% range.

Great. Then just one last one on commercial.

Have you talked about commercial, the direct margins versus the residential direct margins? Is that something, I can't remember if you've discussed that?

They're a little better. Again, the costs are more variable in commercial because of the way the commission structures work and the arrangements with developers and stuff.

It's a tad better. It's probably a third better.

Again, the other thing about it is the float is also better. There's a investment income portion of commercial that is quite important.

For us, I can't tell you what the competitors' numbers are, but that scale matters because of the nature of the work itself. As we get bigger, the margins get better, right, because of the critical mass you need to see in some of these asset classes and skill sets.

It's a good margin enhancer, and it's a margin grower if we can continue to grow this business. We are probably somewhere, probably the fourth quarter, 18% of our revenue was commercial, title was commercial, but over the year, my guess is the average is 14% to 15%.

If I look at my best competitors, the big guys, they're probably in the low to mid-20s, if I was guessing. It's hard to back into it because it goes through the various channels.

We are, again, short there, too. It's not just our share in that business, but even relative to our business mix, we were short.

That's why this is an important initiative and this progress for us is very helpful as a company. So.

That's great. Thanks.

Thanks a lot for the call.

Morning, Geoff.

Good morning, thank you. I have a couple questions.

First, what are the plans for the line of credit? Do you have an aggressive paydown schedule there, or do you think it's just the plan to let that leverage come down gradually with equity growth?

Hey, Geoff, it's David. I would say the latter.

We could pay it off at any point. I think we're just trying to keep flexibility, as Fred talked about.

I think we're about $200 million drawn. We may bring it down a little, but you may see that for the year.

Okay. Then, bigger picture, I wanted to ask you about AI and the effect you feel it's having on your business, and if that's still accelerating.

Also the effect it's had on the broader business. It looks like there's been some capital investment coming into the space for data collection, data mining, data organization.

Curious if you view those as M&A opportunities, or is that something we should think about in terms of longer-term competitive consideration?

It's a great question. It's obviously, as I've said previously, because of the way we have so much unstructured documents, there's a big benefit both on efficiency, customer satisfaction, quality, because our losses are because you make a mistake, right?

We're a warranty. The more efficient you can examine the documents and get to the right points quickly, the better you are.

We have, gosh, probably 75 individual initiatives going on right now that have AI to apply in our businesses around customer service or efficiency or data consolidation and management. My view, from a competitive point of view, is an enormous advantage of the bigger people, it's not going to eliminate our business or anything, it's going to make us better, higher quality, better kind of throughput and consistency.

It's like a lot of little singles, is how I'd describe it, but important. There are tools, you are exactly right, there are innovation and tools.

There is one tool in one of our businesses right now, to your point, that I'm likely to buy. Which can get plugged in and make our service better in one of our businesses.

Again, because our business is so unique and weird, this isn't a revolution, this is kind of in my view, a way to make so many parts of your business better. Title's weird, the opportunities tend to be smallish in the market opportunity, and so there will be some of that tool thing.

Just like, if you remember just in the P&C world, after the crisis, the .com, the same exact thing happened is all these companies failed, but some of the solutions, the models were extracted by the bigger companies to accelerate some of their innovation. I think there will be some of that.

Is it going to be massive? No.

I'm pretty excited about what's happening. Again, we have a really interesting oligopoly, right, because of the scale, size, and data, and reach.

If the big players are using this kind of tool, it's going to increase the quality of our delivery. It is a really good interesting observation.

I would also say there's characteristics in our business that are very similar between us and other kind of insurance delivery through independent channels. There's some of these things that are kind of repetitive, and so there'll be people that'll be able to kind of accelerate your advancement because they can take something from another industry and kind of slide it over.

Again, I tell our folks, what I like about it is that it's not about technology, right? It's about businesses driving improvement by using a tool that makes a more consistent delivery of data.

It's helpful. I would also say that some of the what people talk about is overblown a little bit.

This is a world still of you can get to 90% of the solution, but the last 10 is the hardest, and we're still in that range. Human intervention remains really critical, particularly in our business.

Again, so that's kind of how I see it developing.

Okay. Then, David, just an accounting question related to this.

Given the digitization at the municipal level and the increased ease of collecting data, is there any implications for the title plant assets, particularly more legacy plants, because it's now cheaper to create those?

No, as you probably know, title plants vary and access to title data varies across the country. The plants are needed in the markets that we're in to access data, there shouldn't be any issues if you're talking about recoverability.

Yeah. What is happening is we're able, through the way we've set up the centralized processing and management, the enhancing of the value of those plants has been kind of really helpful, right, because we can supplement the data in those plants more efficiently.

It's becoming kind of more helpful in our business, particularly as we grow.

Thank you.

Good morning. How are you all?

Good, good.

Earlier, you mentioned seeing signs of cautious optimism for housing as we look into '26. Can you talk a bit more about the specific transactions, and whether those are broad-based or concentrated in certain areas?

Sure. It's a good question.

Last year everybody said, this time last year or earlier, say, in the fourth quarter when we had that little downturn in rates and we had a nice little spurt in December orders and it ended up translating into some March closed orders, people were saying, 'Oh, by the end of the year, we're going to see 8% to 10% improvement.' I didn't see any of that, right, because your under 3% mortgage was still really high, and the inventory quality was not great.

Matter of fact, I think we got to a point where 20% of all transactions were People were flippers because it was old inventory. Now, what I see is the under 3 has ticked down a little bit, the quality of inventory has gotten a little bit better and has increased.

People will say it goes up and down, and there's some seasonality to inventory. It's 8% up in the fourth quarter year-over-year, and we're seeing more activity.

Do I think it's going to be more than 6% to 7% or 8% growth? No, I think it's modest.

It feels like that this year, whereas last year, right from the get, I said you were going to be flat, even though the estimates from some of the economists were up. This year, I can feel it.

You saw our open orders, right, you can see some of the open order data and how it's getting a little bit better. Again, I don't think it's going to be over the top, but I believe we're going to start seeing some movement this year.

Again, the first quarter is always hard for us with geography, with everything. As far as the breadth, I think there is some breadth to it.

Again, some of the places that didn't go up as much don't move as much, like the Midwest kind of tends to have less variability in it. The South tends to be the swing a lot of times.

I feel pretty good about modest improvement. What we're trying to make sure we're on top of and planning for is that kind of how do you capture that.

Got it.

Correct. Touching on rates, looking at data from the ICE mortgage monitor, I can see that once rates go below, say, 6%, the number of people with in-the-money mortgages increases significantly.

Could you give some color or maybe quantify the impact that would have in your revenues if that were to happen, and ultimately, in earnings?

Again, there's a lot of talk about it. I don't know how scientific any of that is.

Again, I look at last October, and we had a cup of coffee a little bit under 6, and things jumped, right? There is some optics around that six.

What I would tell you about our economics, our big swing of our economics is really existing home sales, as we've said. We've been sitting at 4 million for over 3 years, right, with zero growth.

The reason it's such a swing for us is because it's the fixed-cost base for us, with 500 locations. Particularly in the first quarter, when you're at that level, you've got so little volume going through the system, it's a real drag on your returns.

What I've said is if we got to 5 million, our margins go to 12%, right, 11.5%, 12%, because you're filling the excess capacity. Particularly, if you can't sleep one night, look at our first-quarter results in '23 and '22 and '21, when things were still really strong, it's an enormous swing for us, right?

Now we've tried to fill the bucket in direct through small commercial growth and some organic attempts around micro markets, etc. You can think about a straight line almost between the 4 million and the 5 million of leverage of our business.

Again, it's a little seasonal because, again, the volumes are so low in the first quarter, but that's the way we think about it. Again, it's tied, and so that's the big portion, but it's everywhere, right?

My appraisal, like the appraisals, you go through the businesses, there's a fixed-cost portion of all those businesses, and once you're at a 30-year low, you strain kind of on the margin. That's why when I say in our lender services business, right where we are where 11, 12, now I think we're 12 to 13 is kind of the where we're going for this kind of year, but if we got back to 5 million, that thing's going to get to mid-teens, because all those businesses are affected, too, right?

A little less, but it's part of our equation. One of the things that are most interesting about us is if you look at a '19 to '24, for example, in the volumes, all of our competitors' margins went down more than ours because of the volume decrease, and ours went up, but that's because we started bad.

We made improvements, but we're still very tied to that core metric. Try to get less that, sure.

The other thing I would say, and I've mentioned this a number of things in public settings, because I think there's some chance that a journey beyond 4.5 is going to take longer. I think we're going to get some improvement, but it could get stalled for various reasons.

We're working hard to make that, trying to get to double-digit at 4.5. A lot of work to do, but with geographic focus, some product portfolio stuff we're doing, some operating model, because I'd like us to be able to show a kind of improvement if we get stalled at that kind of 4.5, because there is some chance that it's just going to take a little bit longer to get to 5.

I'm optimistic on an improvement, but I'm cautious about how quickly it gets to that 5, 5.5 million and really focusing on continuing earnings growth while we get there. So.

Yeah. Maybe a last one and I'll get back in the queue.

You've highlighted efforts to grow agency in a few targeted MSAs, including Texas. With Texas Department of Insurance finalizing a 6% reduction on title premium rates effective March 1st, if you can walk us through how that change will flow through your financials and how you're thinking about the impact on the business, both near-term and longer-term?

Yep. The rate again, it's fixed.

What they agreed to is a 6% reduction and it's in July or something. That's much less of an issue than what it was planned, first of all.

What we've done is we've addressed this through reviewing all our fees and services and stuff in Texas. It's low single-digit impact on earnings this year.

We've managed it well. Now I'm concerned for some of our agent partners in rural places in particular because they don't make a lot of money and that's a meaningful change.

I do think it's going to cause some disruption in some of the agencies, particularly small agents in parts of Texas, because there isn't, in my view, right now, there's not a ton of margin for agents given the rate structure. What's weird about our world, right, is that people think about it as a cyclical world, they take a 3-year average or 5-year average or whatever.

The problem is that '21 and '22 are once-in-a-lifetime, never-happen-again kind of event. If you rate them too much, you overreact to the excess earnings that were made in those 2 years.

I think Texas is a perfect example where that reduction's overstated given what today's environment is, and it's going to have some impact on agents. For us, financially, I don't think it's going to be much if anything.

We put it in our plan, everything, but it doesn't change my expectations for growth of earnings or anything in our businesses.

Thank you.

Thank you.

All right. I guess this will be my last one.

You talked about prioritizing share gains in those key MSAs, both organically and through M&A. Can you give us a bit more color on how you're thinking about that strategy today, including whether you have a target level of capital that you plan to deploy this year, and how that might be split between the title business and the real estate solutions business?

Great question. In direct, to me, as I've said, there's a more of a kind of a fixed-cost, minimum scale way to think about direct in MSA levels.

Early on, the problem we had is we were an inch deep and a mile wide. We had a lot of offices that were chronically unprofitable unless the market was at its peak.

We shut some stuff down, reallocated capital. We actually purchased in about 30 MSAs some business because the scale difference, if you get over 10% share locally, is the margins are much better.

The ability to manage the ups and downs is better. Your service consistency is better.

Your ability to centralize and things and variableize the costs are better. We reviewed the 140 MSAs.

We said which ones are mostly agent-oriented, which ones are we strong, which ones we like the market, but we're not where we need to be. We have 30 or so MSAs in particular that we think we can move the dial and it'd be good for the company to get to a higher share level in those areas.

We also have what I call micromarkets, which is the markets, the suburbs of Nashville, the difference between Austin and San Antonio, the growth in between, where we could do fill-ins of acquisitions and tie it to the bigger offices in those locations. We have these targets that would materially both improve top line and bottom line to the company.

For the last 2 years, we kind of didn't do really any because what happened is agents weren't making any money, and so they weren't going to get enough to be comfortable or happy about that. They can kind of talk to us and communicate with us, but there wasn't a price point, even with an earn-out.

What has happened is, as people have reengineered their operations through getting through the tough times and made a little bit of money, they're seeing the improvement that I'm seeing. All of a sudden, in these target markets, those conversations are becoming more constructive, right, for those that are decided this is one of the alternatives they want to consider.

For me, I've said, over the next 3 years, I've said a bunch of times, over the next 3 years, I see $300 million roughly of acquisitions in the direct channel against these kind of markets that would structurally improve our margin, regardless of cycle, in that business. What I said in my script, I am much more optimistic that this year some of that could start to happen.

I don't know when, but, again, I only want people that will work for both of us, getting to that right trade price so there's no risk for us and no risk for them, and I think we're getting closer. That 300 in my mind over the next 3 years is kind of the way I've thought about it.

As most of the transactions in that space are small, they're $10 to $30 million. It's cuz you're geared to a market or a market opportunity.

That, by far, if you look at our overall capital plan, I would say the other businesses are in, we don't need to do acquisitions. What I have said out loud recently is that in lender services, there's a couple of spots where we got really good traction that it might make sense to consolidate some of the competitors.

Again, they wouldn't be big transactions. What's emerging is we've got so much momentum with some of the big lenders that fitting in our network or buying some of those customer relationships could make some sense.

Again, that's a little bit more opportunistic, and that I think you'll see a $300 million, those again are, will there be a $20 million or $30 million opportunity? The other thing I would say is what Jeff just said, there are a handful of really teeny, like $3 million, $4 million, tool sets that I do think will be available in some of these businesses that accelerate some of the development we want to do to make our service better and our delivery better because of what's happening with not just AI, there's a bunch of things happening with certain development.

That's where our capital is. I don't think it's going to be a huge number.

I think what happens quickly as the market comes back and we improve margins, we generate a lot of cash, I believe the majority of what we're going to be doing is self-funded. I still believe that.

There was just a timing thing here that I wanted to give ourselves some flexibility because of what I saw happening over the next 6, 9 months. I think, in general, we should be able to self-fund what I'm talking about over the next 3 years.

Yep. I'm going to stick to my word.

You answered the follow-up that I would have had, but

thanks a lot. Appreciate it.

Thank you.

Yeah.

Hey, Jeff.

Thanks. Sorry, just a couple number questions.

David, could you update us on what you saw January trend-wise for orders? Also share your thoughts for investment income in the coming year relative to '25?

Geoff. With respect to orders, I think Jeff or Fred just covered it a little bit.

Things have been opening up a little, particularly relative to last year's quarter. They're up a bit.

We just have to see how things play out here cuz rates have been a little volatile, as you've seen, but right now, things seem a little bit better than last year. With respect to interest income, and this also goes to Fred's comment on the float benefit of getting commercial, so as it stands now, if you plan on maybe a one or two rate cuts and assume most escrow earnings are tied to short-term rates, we may come down a little bit, but we don't expect it to come down that much, and the main reason is because the escrow balances will grow and offset it.

Largely a volume offset to rate cut impact.

I would say it could come down a bit, several million or so, but it's really a function of how quickly if they don't drop rates till the fall, right, and volume continues to pick up, then you're sort of holding, maybe increasing a little, right? If volume doesn't pick up as quickly and they drop rates at the next meeting or two, right, then you could go down a little bit.

Okay. All right, thank you.

Hey, guys. One more from me as well.

Can you give us an idea about the revenue contribution from MCS and is there much seasonality there as that comes in?

Both good questions. There is a little seasonality, particularly the first quarter, okay, for that business.

I think when we bought the company, we talked, they does Bose,

I think we had covered this a little bit in different forms, but it's about $165 million a year revenue company, sort of in the $40 million EBITDA or so range, and, we'll just have to see where it goes from there cuz foreclosures have been increasing, as you've seen, FHA delinquencies have been increasing. That's about how they're running now.

A little lower in the first quarter, and that's it.

Great. Thanks a lot.

Thank you.

I just want to thank everybody for their interest in Stewart. As I said earlier, I'm very pleased with '25.

We made good progress, and we have good momentum, and I believe that momentum will continue into '26 if we stay focused. Thank you for all your attention and interest in the company.

Thanks.