スチュアート・インフォメーション・サービシズ(STC) 2026年第3四半期決算説明会：住宅市場の低迷が利益率を圧迫

スチュアート・インフォメーション・サービシズ（NYSE: STC）が発表した2026年第3四半期決算は、住宅ローン金利が7%を超えて住宅取引高や利益率を押し下げたことで減益となりました。商業用権利調査・保険（商業タイトル）、代理店部門、およびM&A（企業買収）が減収を防ぎ増収を支えたものの、調整後希薄化後EPSは前年同期比で低下しました。

主なポイント

• 第3四半期の純利益は前年同期の4,400万ドルから3,000万ドルに減少、希薄化後EPSは1.55ドルから0.98ドルに低下しました。
• 調整後純利益は4,100万ドル（希薄化後1株あたり1.33ドル）となり、前年同期の4,700万ドル（同1.64ドル）から減少しました。
• タイトル保険営業収益は代理店および直営商業部門の収益に支えられて5%増加したものの、調整後タイトル税引前利益は前年同期の6,100万ドルから5,200万ドルへ減少しました。
• 不動産ソリューション事業の売上高は、主にMCSの買収ならびに信用情報・査定サービスの成長により68%増加しました。同部門の調整後税引前利益率は11.0%から10.4%に低下しました。
• 30年固定住宅ローン金利が7%を超えてローン申請の減少、キャンセル率の上昇、取引高の軟化を招いたため、経営陣は次四半期に向けて住宅市場環境がさらに悪化すると予想しています。
• スチュアートは年間配当を1株あたり2.10ドルから2.20ドルに引き上げました。これは6年未満で7回目の増配となります。

主要財務データ

年初来の総営業収益は22%増加し、調整後EPSは8%増加しました。第3四半期の増収率は13%に減速しました。

事業および業績ハイライト

タイトル保険事業

国内商業用タイトル収益は、複数のアセットクラスで成約件数が18%増加したことにより、700万ドル（9%）増加しました。取引規模の縮小やデータセンター・エネルギー関連案件の低迷により、1件あたりの平均手数料は8%減少して16,300ドルとなりました。

経営陣によると、数百万ドル規模の商業用案件の成約が数件、第4四半期にずれ込みました。商業用のパイプラインは堅調であり、データセンター関連の減速は見られないとする一方、デット（負債）に依存する小規模な商業取引には弱さが見られるとの市場の指摘にも触れました。

国内非商業用収益は300万ドル（2%）増加しました。国際事業の総収益は、前年同期に大型商業案件が含まれていた反動が主因で、400万ドル（10%）減少しました。

代理店粗収益は、フロリダ州を含む大半の主要州での成長により、2,500万ドル（7%）増加しました。代理店手数料控除後の代理店収益は500万ドル（8%）増加しました。住宅向け代理店保険料は7%増加し、商業向け保険料は25%増加しました。

タイトル損失率は3.4%となり、前年同期とおおむね同水準でした。

不動産ソリューション事業

不動産ソリューション事業の売上高は68%増加しましたが、MCSおよびNationwide Appraisal Networkの買収を除くと7%増でした。インフォーマティブ・リサーチ社や査定サービスにおける既存顧客からの注文および収益の減速が利益率の押し下げ要因となりました。

経営陣によると、既存店舗ベースの信用データ取扱量は約6%〜7%減少し、既存顧客からの査定取扱量は約4%〜5%減少しました。住宅ローン取引のキャンセル率は当四半期中に最大15%に達し、申請および成約の双方の段階で得られる収益に影響を与えました。

デフォルト（債務不履行）関連サービス事業が減収の一部を相殺しました。経営陣は、差し押さえ活動の発生が不動産保全サービスの支えになっていると言及しました。

買収および投資

スチュアートは2026年中に、Nationwide Appraisal Network、ProTitleUSA、Tower Titleの大型案件3件の買収を完了しました。ProTitleUSAとTower Titleは9月1日に手続が完了したため、第3四半期の業績への影響はわずかに留まりました。

Nationwide Appraisal Networkは物件査定の規模を拡大し、ProTitleUSAは集中型の機関投資家向けタイトルサービスを強化、Tower Titleは商業エネルギーおよび電気通信インフラ分野の機能を補強しました。経営陣は、これら3件の取引に約1億5,000万ドルを投じたと述べました。

スチュアートはまた、ラティキン・タイトル（Rattikin Title）の買収を発表し、ダラス・フォートワース市場における地位を強化しました。

業績予想・ガイダンス

経営陣は住宅市場の低迷が次四半期まで続くと見込んでいます。同社は、顧客対応に必要なリソースの維持や市場の混乱から生じる好機を追求しつつ、投資および費用を抑制・管理する方針です。

不動産ソリューション事業の利益率は、今後数四半期にわたり現在の10%〜10.5%程度の水準にとどまると予想されています。経営陣は、既存住宅販売件数が410万戸〜420万戸となる安定した市場環境では利益率が約13%〜14%に回復可能と考えており、住宅環境が安定すれば今後2〜3四半期で10%台前半から中盤の利益率を目指しています。

スチュアートは、通期でのタイトル損失率が平均して3%台半ばから4%の範囲になると予想しています。

経営陣は、人工知能（AI）導入による本格的な財務上の成果が現れるまでには約18ヶ月かかる可能性があると述べました。ただし、住宅市場の低迷が続いた場合でも、自動化によって今後4〜6四半期にわたり費用抑制に貢献すると期待しています。

リスクと注目点

• 住宅ローン金利が7%を超えたことで買い手の様子見姿勢が強まり、住宅取引高が減少しています。
• 住宅ローン申請がキャンセルされる前に費用や事前作業が発生するため、市場活動の急激な変化が利益率への圧迫要因となっています。
• 商業用収益は取引の規模や成約時期によって変動しやすい傾向があります。
• 国際事業の前年同期比は、前年同期に異例の大型商業取引があったことで影響を受けました。
• 不動産ソリューション事業の収益比率が高まるにつれ、同部門におけるサービスコストの上昇が連結ベースのその他営業費用を押し上げています。
• 過去2年間に大幅な成長を記録したため、経営陣は商業用部門の前年同期比での比較条件が厳しくなると予想しています。

質疑応答のハイライト

経営陣は、数百万ドル規模の商業用案件の成約が第3四半期から第4四半期に延期されたと推計しています。現時点でこれらの取引が成約に至らない兆候はないと述べています。

タイトル保険免除（タイトルウェイバー）について、経営陣は近年の変更によって貸し手（レンダー）の参加は広がったものの、対象となる借り換え市場が大幅に拡大したわけではないと述べました。集中型の貸し手向け借り換え業務はスチュアートの事業のわずかな部分を占めるに過ぎないため、影響は限定的と見込んでいます。

スチュアートは100件以上のAI活用取り組みを推進しており、そのうち約50件ですでに業務上の活用可能性が示されています。代理店の効率性、正確性、処理時間の向上につながるとして、検索機能が主な注力分野となっています。

決算説明会 文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, and thank you for joining the Stewart Information Services Third Quarter 2026 Earnings Call. [Operator Instructions] Please note today's call is being recorded. [Operator Instructions]

It is now my pleasure to turn today's conference over to Brian Glaze, Chief Accounting Officer. Please go ahead.

Brian Glaze

Thank you for joining us today for Stewart's third quarter 2026 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 a 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.

Frederick Eppinger

Thank you for joining us today for Stewart's third quarter 2026 earnings conference call.

Yesterday, we released the financial results for the quarter, and I will kick off today's call with an overview of our outlook for housing, followed by a review of our performance for the period and strategic direction broadly by business. I will then turn the call over to David so he can provide further commentary on our performance for the quarter.

In the third quarter, the market began to set a new lower bar for residential housing. Market primarily driven by the rapid escalation in the 30-year mortgage rate throughout the quarter. In August, the 30-year rates moved higher than in the same period a year prior and the rapid increase continued rates around 7.5% into October. As we have seen in the past 3 years, buyers will very quickly moved to the sidelines in a situation where rates meet or exceed 7% or when rates move up very quickly.

In Q3, we experienced both these scenarios, resulting in a below 4 million existing home sales for 2 of the 3 months in the quarter, a decrease of about 3% to 4% year-over-year in August and September. We believe the residential market conditions will continue to decline into the next quarter. Considering this outlook, we will be very focused on managing our business investments and expenses while continuing to capitalize on some of the market opportunities this disruptive market will create.

In the third quarter, we delivered adjusted earnings per share of $1.33. Year-to-date total operating revenue was up 22% and adjusted EPS growth was up 8%.

For the quarter, growth slowed to 13% and our adjusted EPS delivery was below last year's third quarter as we saw decreased margins in some of our businesses due to the rapidly decreasing residential volume off historic lows.

Our national commercial services business continued to deliver solid performance with overall commercial growing 9%. While the growth was less than our recent run rate, our order growth is strong and our competitive position continues to improve. We did see a number of closing shifts in the fourth quarter, which is not uncommon in the changing market. We continue to be very positive on our improving competitive position and our future growth opportunity.

In the third quarter, we also welcomed Tower Title to the family, expanding our commercial energy and infrastructure team capabilities for servicing the telecommunications space. The acquisition of best-in-class talent has remained our strategic growth priority for the national commercial services and the addition of Tower Title as well as the strategic hires we executed last quarter will help us further bolster this business for the long-term success as these new hires ramp up in their seats and begin to convert business in the coming quarters. We've had a lot of momentum in this space in the last 3 years, and we will continue to encounter some tough comparables for ourselves given the outsized growth we've had.

Overall, we remain positive on the large commercial and continue to see growth across multiple asset classes, though that growth is often lumpy given the time lines and transaction sizes.

Our direct operations bear the brunt of the slowing residential market and drove the majority of our margin reduction in title. Overall, our direct title operations business unit grew consolidated residential refinance and Main Street commercial by 1% in the second quarter compared to the same time frame last year. We saw residential volumes decrease by 3% and refi shrink 7%. That was offset by our mainstream commercial delivering 11% growth. Our growth plan for this business remains focused on strengthening our position and attracting MSAs through organic and inorganic efforts and continue to grow mainstream commercial.

In 2026, we have seen more opportunities present themselves in attractive geographies. Given market conditions, we will still focus on pursuing these opportunities, but we are sharpening our pencils even further to ensure they fit in our long-term financial goals.

In the third quarter, we announced the acquisition of Rattikin Title, one of the oldest and well-respected title agencies in Texas servicing Fort Worth. This transaction is a great example of a strong strategic fit for Stewart as it strengthens our position in the Dallas-Fort Worth marketplace, giving us a Fort Worth stronghold.

Our centralized title operations, which are included in our direct title revenue summary, includes our centralized refinance institutional business and reverse business.

In the third quarter, we welcomed ProTitleUSA and DocSolutionUSA to this organization. The addition of these companies, along with our existing offerings expand our scale to the title services for investors and capital market clients. In the third quarter, we grew this business 20% for these businesses.

Finally, moving to our international operations. We focused on profitably growing our business. In the third quarter, we saw a slight deceleration of our non-commercial revenue by 1%. However, we have grown our revenue in this business unit by 4% year-to-date, which is solid given the Canadian residential marketplace has been decelerating existing home sales since September of '25.

On the commercial front, we delivered $7.3 million in revenue, consistent sequentially with the second quarter, but behind the third quarter of '25 as we had a handful of very large transactions that closed in the third quarter last year. We believe we are on the right track in our international operations, and we will continue to build on our strong positions in these markets and continue to grow share.

Turning to Agency Services. In the third quarter, we saw net revenues [indiscernible] by 11% compared to the third quarter of last year. We are pleased with this given that the agents confront the same challenged residential market as our direct operations. We are focused on growing this business through winning the business with new agents and expanding wallet share of existing agents with the emphasis on 15 target states in addition to the expansion of our commercial footprint for agents. We continue to make good progress on these priorities with residential premiums up 7% and commercial premiums up 25% in the third quarter when compared to the same time frame last year.

As mentioned last quarter, we took advantage of some market disruption and expanded our agency team, which we have and will continue to see the benefit of as they ramp up and settle into their positions. While increasing market challenges will put pressure on future growth, we believe our ability to shift share should continue.

Turning to our Real Estate Solutions business. In the third quarter, we grew revenue by 68% and 7% after removing the impact of 2 acquisitions we made this year, MCS and NAN. Our adjusted pretax margin slipped from 11.3% last year to 10.5% this year. The margin was driven by a significant slowdown in orders and revenue from existing accounts in Informative Research, our credit data business and in appraisal.

From a strategic perspective, we remain focused on continuing to expand our coverage and servicing of the top 300 lenders. Our suite of products and services is in a good position, giving us even a great ability to cross-sell through new business.

I am pleased that we are able to maintain our double-digit margins in these conditions and believe we will get to low to mid-teen margin deliveries in the execution of our strategic priorities in a more stable residential market environment over the next 2 to 3 quarters.

I believe we are setting a new floor in the residential market that will likely continue into the next quarter. We will react to market changes by taking needed actions, but we'll be careful to retain the resources needed to serve our clients and react to opportunities I believe will come from this disruption. We remain focused on being a resilient company that has a growing portfolio of operations that will deliver share growth and improving margin performance over the next 2 to 3 years.

Thank you for your time, attention and interest in Stewart. As an enterprise, we are dedicated to being the premier title and real estate services company. I'm proud to share that in the third quarter, we delivered our seventh dividend increase in just under 6 years, raising our annual dividend from $2.10 a share to $2.20 a share. We are committed to strengthening and growing the company for continued long-lasting success while confronting the current challenging conditions.

To our customers and agents, thank you for your trust and dedication to Stewart. We are committed to serving you with excellence. And to the Stewart team, I want to thank you for your dedication and perseverance. It takes considerable effort to grow our company and even more so to confront such a challenging residential housing conditions. Thank you for your commitment to the company. I look forward to seeing where we can take this company together.

So David, I'll now turn it over to you to provide an update on our results.

David Hisey

Good morning, everyone, and thank you, Fred.

I want to thank our employees and customers for their continued support and partnership as we navigate this even more challenging real estate market with 30-year mortgage rates over 7% since mid-September.

Yesterday, Stewart reported third quarter 2026 net income of $30 million with diluted EPS of $0.98 compared to the prior year's quarter net income of $44 million and diluted EPS of $1.55. On an adjusted basis, third quarter net income was $41 million or diluted EPS of $1.33 compared to net income of $47 million or diluted EPS of $1.64 last year.

Appendix A of our press release shows adjustments to our consolidated and segment results, primarily related to acquired intangible amortization, acquisition-related expenses and net realized and unrealized gains, which we use to evaluate operating performance.

In the title segment, operating revenues increased $31 million or 5%, primarily driven by higher agency and direct commercial revenues. Title operating expenses increased 6%, primarily due to higher revenues and higher employee costs related to select growth investments while beginning to address the market transition as Fred spoke about.

Title pretax income in the third quarter was $47 million compared to $62 million last year, while on an adjusted basis, pretax income was $52 million compared to $61 million last year.

In our direct title business, direct title revenues increased $6 million or 2%, primarily due to increased commercial transactions. Domestic commercial revenues increased $7 million or 9% as closed orders improved 18% across multiple asset classes, while average fee per file decreased 8% to $16,300 due to reduced transaction sizes with less data center and energy activity. Domestic non-commercial revenue increased slightly by $3 million or 2% and total international revenues were down $4 million or 10% due primarily to a large commercial transaction last year.

On our agency operations, gross agency revenues increased $25 million or 7%, reflecting growth across a majority of our key agency states, including Florida. Net of agent retention, agency revenues improved $5 million or 8% compared to last year.

On title losses, title loss expense for the third quarter increased primarily due to higher title revenues, while the title loss ratio was 3.4% comparable to last year. We expect our title losses to average from mid-3% to 4% over a year.

In our real estate solutions segment, total revenues increased $80 million or 68%, primarily driven by the MCS acquisition and growth in our credit information and valuation services operations.

RES adjusted pretax margin increased by $7 million or 56% compared to $13 million last year, while adjusted pretax margin was 10.4% compared to 11% last year.

On our consolidated operating expenses, our employee cost ratio improved to 26% compared to 27% last year, primarily due to higher operating revenues, while the other operating expense ratio increased to 29% compared to 24%, primarily due to revenue growth in our Real Estate Solutions segment, which typically incurs higher service costs as a percent of revenue and as our Real Estate Solutions segment grows as a percentage of total revenue.

Our financial position remains solid and well positioned to support our customers employees in the real estate market. Total cash and investments was approximately $300 million in excess of statutory reserve fund requirements. Total Stewart stockholders' equity was approximately $1.7 billion, representing book value of approximately $55 per share.

Net cash provided by operations was $47 million compared to $93 million last year, primarily due to lower net operating income and timing of payments related to operating liabilities.

Again, thank you to our customers and employees for their continued support. We remain confident in our ability to serve the real estate markets.

I will now turn the call over to the operator for questions.

Operator

[Operator Instructions] Our first question today comes from Bose George with KBW.

質疑応答

Bose George

Actually, first, just on the commercial side. So you guys noted some timing in terms of deals getting pushed out. Can you help quantify that? And also, are you seeing any broader signs of slowdown in the commercial pipeline, either on higher rates or specifically for the data centers, anything just related to political opposition at the local levels?

Frederick Eppinger

Yes. So it's multiple millions that got pushed, Bose. So it was meaningful to the quarter. And again, there's no indication it won't close in the fourth quarter, but there was some movement. Interestingly enough, our pipeline, and you can see from the open orders and stuff, records and commercial, has been really strong for us.

I have heard in the marketplace and clearly among agents, I've heard of a slower in the small commercial market. We have not seen it in our numbers yet, but there is a talk that it was small, more debt-oriented, there is some slowing. On the data center thing, we have not seen any slowdown at all.

And so again, it's hard to know what could have been, I guess, given all the noise you see in the marketplace. But it's a pretty robust portfolio that we see. We haven't seen any flow. For us, what's odd about us, as you know, in the last 2 years, we've doubled commercial. So we have a lot of quarters last year, we grew over 40%, 50%.

So some of our comparisons are a little odd for growth, but I really like the flow we're seeing. We have the best team we've ever had been able to make some investments over the last year here. So I continue to see growth opportunity there for the company in the next couple of years.

Bose George

Okay. Great. I might have missed the first part, but just on the amount that got pushed, did you give a dollar amount? I sort of missed what you said there.

Frederick Eppinger

I did, I guess it's a few million. Yeah, it's a handful of million. So it's not a small amount, and it's a handful of transactions.

Bose George

Okay. Great. And then actually just switching over to the Services segment. Can you just help us think about the drivers of the increase in expense relative to the revenues? Can you remind us how much of the segment is impacted by rates? And then you mentioned for just the margin outlook for that segment. And how much of that -- like to the extent we have, say, the market remains at this level into next year, does that change that? And can you just remind us what you said for margins for next year for that segment?

Frederick Eppinger

So what I've been saying, the portfolio we have, as you know, that portfolio is really made up of 3 pieces. It's made up of the appraisal business, the credit data and then the default business. In all 3 of those now, we're the top 3, 4 players. So we have critical mass. And again, there's some things happening in all those spaces around the importance of technology, and I feel good that we're going to continue to see consolidation and share growth there.

The 2 that are very sensitive to kind of the residential rate environment are appraisal and the data. And the complicating factor, by the way, is that it's worse than just closes. So we've had historical cancellations this quarter, probably up to 15% of the transactions. And we've had a big decrease in kind of mortgage applications.

So the way of data, for example, in credit data, we get paid both when the mortgage application gets opened, right, because some of our work is done in verification of kind of the quality of the credit, et cetera. And then we get paid again at the close, right?

So as the market goes down, you obviously have less revenue, so our same -- what I call same-store growth. So we've had some new accounts. So we still continue to grow a little bit, but we've seen about 6%, 7% reduction in same-store volume, which is the combination of the amount closed files, as you can imagine, but also more cancellations. And so we've seen a decrease in the -- just the opening of mortgage apps.

So that's where your margin goes because if you lose 2/3 of your revenue, which is kind of how to think about it between the opening of the application and then the closing, as those things cancel, you can see that your revenue is going to go down.

In appraisal, same thing, although we don't do a lot of prework in appraisal, most of that work is done afterwards. We don't have a lot of waste and costs. But we've seen in those 2 businesses, 4%, 5% for the appraisal part reduction of volume with our current customers. So that's why the volume.

So the margin, the margin is in that 10%, 10.5%, right? But all I need is a normalized market. I don't need it to go all the way back. I just need it to stabilize. So you don't have these deltas and changes because the changes are what cost you kind of -- because you're carrying the expenses because you're doing some of the work and then it goes away.

So again, what I've said is that business, even at 4.1, 4.2 kind of existing home sales, that's going to be about a 13%, 14% margin business. So we built the scale. We got the nice mix between the 3 businesses. For the next couple of quarters, we're going to see, in my view, kind of at this level of margin in that business. But I like the long term. It's a more stable part of our portfolio because of the mix we have now.

So again, that's why I say it will kind of migrate back up, I would say, after the next couple of 2 quarters.

David Hisey

You put out that information on FHA delinquencies and some of your reports that were like 11%, although they've been stabilizing. But the roles to foreclosure are just sort of getting started, and that's where the property preservation business helps. So it's a bit of an offset to what Fred was talking about.

Bose George

Okay. Great. But even in a flattish market next year, the margins go back up a few points as this lag kind of goes away.

Frederick Eppinger

I believe so. And again, there's a bunch of interesting changes with Vantage scores, which we can get into at some point that is going to position us really well to consolidate and grow share in that market because we have a very unique product and solution for those that transition to them.

So I feel very good about kind of the credit data business over the long haul.

Operator

[Operator Instructions] We'll go next to Oscar Nieves with Stephens Inc.

Oscar Nieves Santana

My first one is on the recent acquisitions that you announced, the one at the end of 2Q or at the beginning of 3Q and the ones at the beginning of September. Just wondering if you could walk us through those acquisitions and what we should expect them to add to revenue and earnings and how big those deals were and when they close or if they close already?

David Hisey

Yes Oscar, so we did 3 so far of size this year. We did the appraisal one back in I think it was April, Nationwide Appraisal, NAN. That just rolls into our Stewart Valuation Intelligence business. So the appraisal business that Fred talked about, and it just gives us scale. That's one of the things that got us up to now being like a top 3 player there.

The other 2 are in Title. So ProTitle goes into the CTS segment that Fred talked about. Those both closed on 9/1 and then Tower title that he also talked about, they just basically go into their respective businesses, right? So CTS will get ProTitle, Tower will get -- commercial will get Tower and they just add to those businesses.

But we said that we typically buy those kind of businesses that these are title businesses, so 4% to 6% EBITDA. These are higher margins. So I think you're maybe on the higher end. So if you just think about all the money we had to deploy at year-end between NAN and these other 2, we basically deployed $150 million. And so you can sort of back into what economics you might be able to get out of that.

And you'll see the acquisitions number in our 10-Q, so it will all be public. I would say to you, the last 2 were kind of late in this quarter and -- so it was marginal impact at all on the quarter. But in both cases, again, to me, they're really important because Tower gives us this additional capability and infrastructure, where I think we're going to have sustained growth in the business and it covers an area that we like.

And the ProTitle is the whole institutional business. One of the things I'm doing in the centralized title business is to create less volatile, I'm not a big refi guy, so our centralized title is really a portfolio of specialty centralized title. And these bring the institutional or the institutional business to us. And I feel good about all of these.

Oscar Nieves Santana

My next one is Bill Pulte has made some tweaks recently that have impacted title stocks. There's a lot of nervousness around potential expansion of title waivers. Any incremental commentary on that point?

Frederick Eppinger

Yes. Again, I think what's been said continually about the title is kind of old news. And essentially, what they did is they expanded the number of lenders that are in it. The coverage is roughly the same. It's a very small subset of refi that is included in the title space. And again, we'll see how it plays out.

I keep saying if it tests out, the whole thing is going to be pricing, because if it makes sense, we are not really big in the refi market and I don't think there's many scenarios that want to be big in the refi market given the volatility of that business and the low margins that are in it. But again, I don't see it -- there's no big expansion from where we are, but the number of, again, lenders that are participating is a little bit bigger. So again, it doesn't have much impact.

David Hisey

Oscar, the other thing to keep in mind is if you look at our refi orders, like Fred said, we don't really have much in that centralized lender. So most of our refi orders came from customers that we issued a prior Stewart policy on and they're out in our field operations. So stuff like this doesn't really impact them that much.

Oscar Nieves Santana

I guess my last one, are you seeing any AI and automation show up in margins yet, especially as you mentioned earlier that you expect a challenged market over the next few quarters?

Frederick Eppinger

Yes, it is interesting. It's a great question because I'm feeling pretty bullish on our AI initiatives. I think the financial impact is going to take 18 months to kind of see kind of the robust financial impact, although we are seeing it today, particularly in the search area.

And again, we've got some really interesting things that we're doing there. And I think the search area is the place where there's the greatest opportunity for efficiency, and accuracy and what I consider better turnaround time, for instance, for our agents, which I think matters to the combined economics.

So yeah, I am pretty bullish. The other thing, obviously, we give the Virtual Underwriter who rendered it to our agents, which actually helps their efficiency and the work when they do the clearing of title and the underwriting of policies for the agent.

But again, I think I mentioned to you, we have over 100 initiatives and frankly, there's like 50 that are penciling already operationally that we track returns on. And it's early days, but it is, in my view, going to be helpful, particularly if you see the residential market sit at 4/1 longer, which I think people are talking about, I think over the next 4 to 6 quarters it's going to be very helpful to us to manage expenses.

But again, I think it also is really good about quality from the quality of delivery and some of the consistency of turnaround, which is really what, particularly the agency channel, they really appreciate.

Operator

[Operator Instructions] And at this time, there are no additional questions in queue. I will now turn the meeting back to Fred for any additional or closing remarks.

Frederick Eppinger

I want to thank everybody for their interest in Stewart and appreciate you joining us on the call.

Operator

Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.