Stewart Information Services Corporation (NYSE:STC) Q1 2024 Earnings Call Transcript

Frederick Eppinger: Yeah. So again, I don’t — think about, think about target markets a little different from direct and agency. So in agency, there’s a number of — we like to grow in a lot of states. Most states have relatively good economics, but there are 14 states in particular that have attractive economics that we’re subscale or under share represented. They tend to be in the Southeast because we’re pretty big in the Northeast. There’s some in the Midwest. Pennsylvania is one of those. And so the 14 — Texas is one of those, Florida is one of those. So in agency, it has a lot to do with the economic profile of the splits and other fees and services, et cetera. And so, that’s kind of what we got to get done. And Florida is the poster child of that for us.

On the direct side, it’s a little different, right? So I talked about the 150 MSAs. We did a lot, with about 40 of them. As the market gets better and there’ll be more transaction opportunity, there’s 35 or so that I’m particularly interested in that are kind of core markets, places like a Nashville would be one of those places. And so that’s one category. The second category is once you’ve got a good established position in a city, you can do satellite opportunities. So San Antonio is a great example of that for us. Dallas is a great example for us. We have a very good position. But there are parts of the suburbs that are real opportunities. And so you could do smaller fill-ins. And so I would say there’s kind of, as I say, 30, 40 core markets, I think we could make a significant move on.

And then there’s a bunch more that there are fill-ins that we would focus on. Your point on California. I just want to be clear. I don’t see us growing California much. We are kind of a niche player, if you will. We’re targeted in certain places. We’ll be there forever. We’ll be good where we are, but we’re quite a ways behind. And you got the two leaders are well entrenched. It’s almost exclusively a direct market, as you know, because the economics are so skewed toward that direction. And I don’t want to burn ourselves. We’re not going to burn our way into California. So I don’t think of that as a high priority for the company going forward as far as growth. We’ll run it well. We’ll solidify the positions we have. We’ll invest in our people there.

But I don’t see that as a big part of the growth.

Geoffrey Dunn: Okay. All right. Thank you.

Frederick Eppinger: Yes.

Operator: And at this time, as there are no further questions in the queue, I’d like to turn the conference back over to the presenters for any additional or closing comments.

Frederick Eppinger: I just want to thank everybody for joining us and having the interest in Stewart. Thank you.

Operator: Thank you. Again, that concludes today’s Stewart Information Services first quarter conference call. At this time, you may disconnect. Thank you for your participation and have a great day.