HOUSTON, Aug. 6 /EMWNews/ -- Stewart Information Services

Corporation (NYSE: STC) today reported updated results of operations for

the second quarter and six months ended June 30, 2008. The update to the

second quarter's and six months' earnings is related to the discovery of

additional information subsequent to the Company's original earnings

release on July 30, 2008 and prior to filing its quarterly report on Form

10-Q with the Securities and Exchange Commission. This additional

information connected several independent claims to the same series of

fraudulent transactions which resulted in the reclassification of the

claims as a single large title claim. The impact of this title policy claim

resulted in a pretax charge of $3.0 million ($2.0 million after taxes, or

$0.11 per share) to the second quarter and six months ended June 30, 2008.

The information presented herein has been updated, as necessary, to reflect

the impact of this matter to the second quarter and six months ended June

30, 2008. There are no other updates to previously reported amounts.

(Dollar amounts in the table below are in millions, except for per share

figures.)










                                                         Second Quarter

                                                      2008(a)         2007



    Total revenues                                    $428.5         $573.4

    Pretax (loss) earnings before minority interests   (44.2)          19.2

    Net (loss) earnings                                (28.6)          10.1

    Net (loss) earnings per

    diluted share                                      (1.58)          0.55



                                                            Six Months

                                                      2008(a)        2007(b)



    Total revenues                                    $822.7       $1,105.1

    Pretax (loss) earnings before minority interests   (85.0)          14.6

    Net (loss) earnings                                (53.9)           5.4

    Net (loss) earnings per diluted share              (2.98)          0.29







    (a)  The second quarter of 2008 includes pretax charges totaling $27.2

         million ($17.7 million after taxes, or $0.98 per share) relating to a

         reserve adjustment of $10.0 million for prior policy years, $11.2

         million relating to large claims and two agency defalcations, and a

         software impairment charge of $6.0 million.  The first three months

         of 2008 includes an additional charge of $4.6 million ($3.0 million

         after taxes, or $0.17 per share) relating to an agency defalcation.



    (b)  The first six months of 2007 includes a $3.2 million gain ($2.1

         million after taxes, or $0.11 per diluted share) from the sale of two

         subsidiaries and a charge of $7.4 million ($4.8 million after taxes,

         or $0.26 per diluted share) relating to large claims.

    Financial Results



    The continuing decline in our orders resulting from the decrease in new

and existing home sales, home prices, construction and lending in the

second quarter of 2008, coupled with worsening policy claims payment

experience and a software impairment charge, resulted in a pretax (and

before minority interests) loss of $44.2 million compared with earnings of

$19.2 million in the same quarter last year. The software impairment charge

of $6.0 million relates to software developed, and now abandoned, in our

REI segment for one of its subsidiaries.



    Revenues in the second quarter of 2008 fell to $428.5 million, a

decline of 25.3 percent from the $573.4 million in the same period last

year. This reduction in revenues reflects the second quarter 2008 decline

in our order volume resulting from decreases in existing home sales (down

16.7 percent), new home sales (down 33.2 percent) and existing home prices

(down 15.8 percent) compared with the second quarter of 2007. Our

international operations remained profitable, offsetting, in part, our loss

in the second quarter of 2008 for U.S. operations.



    Total revenues for the first half of 2008 were $822.7 million, down

25.6 percent from the same period in 2007. Overall, the Company reported a

loss of $85.0 million before taxes and minority interests in the first half

of 2008 compared with a profit of $14.6 million in the same period in 2007.



    "We are responding strategically to this downturn by implementing cost

reductions throughout the Company. We remain committed to our long-term

strategies and restructuring efforts even in this extremely difficult real

estate environment," said Malcolm S. Morris, co-chief executive officer and

chairman. "We are progressing in our shared-services initiatives and have

contracted several national relationships for savings in procurement. These

initiatives and relationships, which range from accounting and information

technology to procurement and human resources, have significant potential

for process improvements and cost reductions. We are also consolidating

many of our separate corporate entities to better serve our customers,

streamline our administrative functions and reduce fixed costs.



    "We are experiencing higher than expected payments of policy claims,

which resulted in our taking a $10.0 million charge this quarter relating

to prior policy years," added Morris. "However, we are continuing to make

progress in reducing our risk exposure through the review and cancellation

of higher-risk title agencies and by auditing potential title agencies

prior to adding them to our agency network."



    "We continue to respond to declining market conditions by aggressively

reducing variable and fixed expenses," said Stewart Morris, Jr., co-chief

executive officer and president. "In the second quarter of 2008, our

employee count was reduced by 350, which brings our year-to-date reduction

to 810, or 9.6 percent. Our total reduction in employee count is 2,400, or

24.6 percent, since December 31, 2006. We have also closed 68 unprofitable

branch and office locations since the beginning of 2008.



    "In addition, we are responding to the consumer in these tough

markets," said Morris. "We announced a simplification of our rate structure

in California to better serve our customers. Also in this quarter, we

formed a new multi-state foreclosure trustee company that will allow us to

offer nationwide default services. We remain on track for site conversions

of legacy production systems to our new, but proven, web-based production

systems this year. A recent fire in an office where we have implemented our

paperless technology reinforced our commitment to long-term investment in

our web-based production system and SureClose(R), our transaction

management technology. Within hours of the fire, the office was up and

running remotely via the internet and closings continued with no loss of

service or files," said Morris.



    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 throughout the United States and in

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 http://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         Six months ended

                                 June 30                   June 30

                             2008        2007         2008         2007

    Revenues

    Title insurance:

      Direct operations    200,688      270,428      381,275      500,042

      Agency operations    213,513      276,434      404,566      548,688

    Real estate

     information            11,302       16,497       26,018       33,030

    Investment income        7,456        9,168       15,534       18,219

    Investment and

     other (losses)

     gains - net            (4,412)         902       (4,709)       5,124

                           428,547      573,429      822,684    1,105,103



    Expenses



    Amounts retained by

     agencies              174,562      222,752      330,124      445,142

    Employee costs         146,076      179,096      298,039      355,888

    Other operating

     expenses               86,412      105,241      173,248      198,884

    Title losses and

     related claims         49,595       35,117       79,316       66,976

    Depreciation and

     amortization            8,950       10,149       18,041       20,034

    Impairment of other

     assets.                 6,011            -        6,011            -

    Interest                 1,121        1,874        2,936        3,542

                           472,727      554,229      907,715    1,090,466



    (Loss)earnings

     before taxes and

     minority interests    (44,180)      19,200      (85,031)      14,637

    Income tax (benefit)

     expense               (17,526)       5,541      (34,288)       2,921

    Minority interests       1,934        3,535        3,137        6,354

    Net (loss) earnings    (28,588)      10,124      (53,880)       5,362



    (Loss) earnings per

     diluted share           (1.58)        0.55        (2.98)        0.29

    Average number of

     diluted shares (000)   18,092       18,351       18,069       18,340



    Segment information:



      Title revenues       417,245      556,932      795,787    1,068,873

      Title pretax (loss)

       earnings before

        minority interests (35,763)      19,862      (77,308)      11,807



      REI revenues          11,302       16,497       26,897       36,230

      REI pretax (loss)

       earnings before

        minority interests  (8,417)        (662)      (7,723)       2,830



    Selected financial

     information:



      Cash (used) provided

        by operations      (15,862)      31,922      (47,309)      16,806

      Title loss payments -

       net of recoveries    38,981       22,424       69,463       47,877

      Changes in other

       comprehensive

       earnings - net

       of taxes             (7,654)        (286)      (7,496)         547



    Number of title orders

     opened (000):

      April                   48.4         59.0

      May                     43.1         60.7

      June                    38.9         58.1

        Quarter              130.4        177.8



    Number of title orders

     closed (000):

        Quarter               93.5        125.1







                                                  June 30             Dec 31

                                                    2008               2007



    Stockholders' equity                          694,959            754,059

    Number of shares outstanding (000)             18,146             18,031

    Book value per share                            38.30              41.82







    STEWART INFORMATION SERVICES CORPORATION

    BALANCE SHEETS (condensed)

    (In thousands of dollars)



                                                     June 30        Dec 31

                                                       2008          2007



    Assets

    Cash and cash equivalents                        102,900        109,239

    Short-term investments                            57,212         79,780

    Investments - statutory reserve funds            503,152        518,586

    Investments - other                               83,721         98,511

    Receivables - premiums from agencies              37,968         48,040

    Receivables - other                              105,373         93,335

    Allowance for uncollectible amounts             (12,352)       (11,613)

    Property and equipment                            86,411         96,457

    Title plants                                      79,027         78,245

    Goodwill                                         209,879        208,824

    Intangible assets                                 12,986         17,157

    Other assets                                     103,986        105,413



                                                   1,370,263      1,441,974







    Liabilities

    Notes payable                                    116,799        108,714

    Accounts payable and accrued liabilities          93,501        122,167

    Estimated title losses                           450,229        441,324

    Minority interests                                14,775         15,710



                                                     675,304        687,915



    Contingent liabilities and commitments





    Stockholders' equity

    Common and Class B Common Stock and

     additional paid-in capital                      143,472        141,196

    Retained earnings                                543,238        597,118

    Accumulated other comprehensive earnings          12,346         19,842

    Treasury stock                                    (4,097)        (4,097)



        Total stockholders' equity                   694,959        754,059



                                                   1,370,263      1,441,974



    August 6, 2008