STEWART INFORMATION SERVICES CORPSTC

STEWART INFORMATION SERVICES CORP Fair Value Disclosure

10-KFiled Feb 27, 20262 min read
Fair value measurements. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs when possible. The three levels of inputs used to measure fair value are as follows:
•Level 1 – quoted prices in active markets for identical assets or liabilities;
•Level 2 – observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and
•Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
At December 31, 2025, financial instruments measured at fair value on a recurring basis are summarized below:
Level 1Level 2Level 3Fair value
measurements
 (in $ thousands)
Investments in securities:
Debt securities:
Municipal— 12,274 — 12,274 
Corporate— 143,621 — 143,621 
Foreign— 348,084 — 348,084 
U.S. Treasury Bonds— 54,509 — 54,509 
Equity securities:47,682 — — 47,682 
47,682 558,488 — 606,170 
At December 31, 2024, financial instruments measured at fair value on a recurring basis are summarized below:
Level 1Level 2Level 3Fair value
measurements
 (in $ thousands)
Investments in securities:
Debt securities:
Municipal— 14,415 — 14,415 
Corporate— 210,307 — 210,307 
Foreign— 313,619 — 313,619 
U.S. Treasury Bonds— 48,274 — 48,274 
Equity securities:82,484 — — 82,484 
82,484 586,615 — 669,099 

At December 31, 2025, Level 1 financial instruments consist of equity securities. Level 2 financial instruments consist of municipal, governmental, and corporate bonds, both U.S. and foreign. In accordance with the Company’s policies and guidelines which incorporate relevant statutory requirements, the Company’s third-party registered investment manager invests only in securities rated as investment grade or higher by the major rating services, where observable valuation inputs are significant. The fair value of the Company's investments in debt and equity securities is primarily determined using a third-party pricing service provider. The third-party pricing service provider calculates the fair values using both market approach and model valuation methods, as well as pricing information obtained from brokers, dealers and custodians. Management ensures the reasonableness of the third-party service valuations by comparing them with pricing information from the Company's investment manager.

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2024Feb 28, 2025
2023Feb 29, 2024
2022Feb 28, 2023
2021Feb 28, 2022
2020Mar 1, 2021
2019Feb 27, 2020
2018Feb 28, 2019
2017Feb 28, 2018
2016Feb 27, 2017
2015Feb 26, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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