<\/p>\n
First American Financial Reports First Quarter 2023 Results<\/b><\/p>\n
SANTA ANA, Calif.–(BUSINESS WIRE<\/a>)– Current Quarter Highlights<\/b><\/p>\n Selected Financial Information \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n Three Months Ended<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n March 31,<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n<\/tr>\n \nTotal revenue<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,446.1<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n2,033.7<\/p>\n<\/td>\n<\/tr>\n \nIncome before taxes<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n59.6<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n129.8<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nNet income<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n45.9<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n97.9<\/p>\n<\/td>\n<\/tr>\n \nNet income per diluted share<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.44<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n0.88<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nTotal revenue for the first quarter of 2023 was $1.4 billion, down 29 percent compared with the first quarter of 2022. Net income in the current quarter was $46 million, or 44 cents per diluted share, compared with net income of $98 million, or 88 cents per diluted share, in the first quarter of 2022. The net investment losses in the current quarter were $7 million, or 5 cents per diluted share, compared with net investment losses of $43 million, or 29 cents per diluted share, in the first quarter of last year.<\/p>\n \n\u201cChallenging market conditions continued into the first quarter,\u201d said Ken DeGiorgio, chief executive officer at First American Financial Corporation. \u201cExisting home sales have fallen to levels not seen since the 2008 financial crisis and the commercial real estate market has significantly declined. Although the adverse market environment weighed on our results, our expense management efforts and growth in net investment income allowed us to deliver a title pretax margin of 6.5 percent this quarter while continuing to invest in innovation and other strategic initiatives that drive our long-term growth strategy.<\/p>\n \n\u201cMoving forward, the purchase market, which appears to have stabilized, is showing improvement in the first three weeks of April, with open orders up over 5 percent compared with March. While there is a high degree of uncertainty concerning the commercial market outlook, we remain optimistic that transaction activity will improve in the second half of the year.<\/p>\n \n\u201cAlso, I want to thank our employees who have shown resiliency through difficult market conditions. They\u2019ve remained steadfast and committed to our company and our customers, enabling us to grow our market share by over two percentage points in 2022, which will pay dividends when the current cycle turns. I am also pleased to announce that First American has been named one of the 100 Best Companies to Work For by Great Place to Work\u00ae<\/sup> and Fortune<\/i> Magazine for the eighth consecutive year. This accomplishment is a tribute to our unique culture and our people who, in addition to delivering best-in-class service, continuously find new and innovative ways to meet our customers\u2019 needs.\u201d<\/p>\n Title Insurance and Services \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n Three Months Ended<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n March 31,<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nTotal revenues<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,348.6<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n1,997.3<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nIncome before taxes<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n88.2<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n219.5<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nPretax margin<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n6.5<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n11.0<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nTitle open orders(1)<\/sup><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n172,600<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n279,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nTitle closed orders(1)<\/sup><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n106,600<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n205,100<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nU.S. Commercial<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nTotal revenues<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n148.4<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n242.1<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nOpen orders<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n25,600<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n35,500<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nClosed orders<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n14,900<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n18,300<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nAverage revenue per order<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n9,900<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n13,200<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n (1)<\/sup> U.S. direct title insurance orders only.<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nTotal revenues for the Title Insurance and Services segment during the first quarter were $1.3 billion, down 32 percent compared with the same quarter of 2022. Direct premiums and escrow fees declined 39 percent compared with the first quarter of 2022, driven by a 48 percent decline in the number of direct title orders closed that was partly offset by a 15 percent increase in the average revenue per direct title order closed. The average revenue per direct title order increased to $3,428, primarily attributable to a shift in the mix to higher premium commercial transactions from lower premium refinance transactions. The shift in the mix to commercial transactions was partly offset by a 25% decline in the average revenue per order for commercial orders this quarter. Agent premiums, which are recorded on approximately a one-quarter lag relative to direct premiums, declined 38 percent in the current quarter as compared with last year.<\/p>\n \nInformation and other revenues were $222 million during the quarter, down $80 million, or 26 percent compared with the same quarter of last year. This decline was the result of lower transaction levels across several business units, including the company\u2019s data and property information products, and post-close and document generation services.<\/p>\n \nInvestment income was $125 million in the first quarter, up $72 million from the same quarter last year. The increase was primarily due to rising interest rates, which drove higher interest income from the company\u2019s cash and investment portfolio, escrow balances and tax-deferred property exchange balances. The impact of higher interest rates was partly offset by lower average balances, primarily in the company\u2019s escrow and tax-deferred exchange balances. Net investment gains totaled $7 million in the current quarter, compared with net investment gains of $30 million in the first quarter of 2022. Net investment gains this quarter were due to the change in the fair value of equity securities, partly offset by losses on the sale of fixed-income securities. Last year\u2019s gains were primarily attributable to a gain realized on the sale of an investment in a title insurance business, partially offset by changes in the fair values of marketable equity securities.<\/p>\n \nPersonnel costs were $459 million in the first quarter, down $124 million, or 21 percent, compared with the same quarter of 2022. The decline in personnel costs was primarily due to lower incentive compensation, and salary and benefit expense, driven by lower headcount. Severance expense was $4 million in the current quarter.<\/p>\n \nOther operating expenses were $224 million in the first quarter, a decrease of $81 million, or 27 percent, compared with the first quarter of 2022. The decrease was primarily attributable to lower production expense across several business units due to lower transaction volumes and reduced discretionary expense.<\/p>\n \nThe provision for policy losses and other claims was $35 million in the first quarter, or 3.5 percent of title premiums and escrow fees, down from the 4.0 percent loss provision rate in the prior year.<\/p>\n \nDepreciation and amortization expense was $44 million in the first quarter, up $4 million, or 11 percent, compared with the same period last year, due to higher amortization of software. This quarter, amortization of intangibles related to acquisitions totaled $10 million.<\/p>\n \nPretax income for the Title Insurance and Services segment was $88 million in the first quarter, compared with $220 million in the first quarter of 2022. Pretax margin was 6.5 percent in the current quarter, compared with 11.0 percent last year. Excluding the impact of net investment gains and losses, the pretax margin was 6.1 percent this year, compared with 9.6 percent last year.<\/p>\n Home Warranty \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n Three Months Ended<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n March 31,<\/b><\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2023<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n 2022<\/b><\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nTotal revenues<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n103.7<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n103.4<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nIncome before taxes<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n15.9<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n15.9<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \nPretax margin<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n15.3<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n15.4<\/p>\n<\/td>\n \n%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nTotal revenues for the Home Warranty segment were $104 million in the first quarter of 2023, slightly ahead of the first quarter of 2022. The segment posted pretax income of $16 million this quarter, flat compared with last year. The claim loss rate was 47.3 percent in the first quarter, compared with 46.4 percent last year, primarily due to higher claim severity partly offset by lower frequency. Home Warranty\u2019s pretax margin was 15.3 percent this quarter, compared with 15.4 percent last year. Excluding the impact of net investment gains and losses, pretax margin was 15.2 percent this quarter, compared with 16.6 percent last year.<\/p>\n Corporate<\/b><\/p>\n \nBeginning this quarter, all current and prior year results for the company\u2019s property and casualty business have been reclassified to the Corporate segment.<\/p>\n \nNet investment income was $8 million this quarter, compared with a loss of $8 million in the first quarter of 2022, primarily attributable to changes in the value of investments associated with the company\u2019s deferred compensation program. These amounts were largely offset by personnel expense reflecting returns on the plan participants\u2019 investments.<\/p>\n \nNet investment losses were $14 million this quarter, compared with losses of $71 million last year, due to changes in the fair value of the company\u2019s venture portfolio.<\/p>\n \nInterest expense was $13 million in the first quarter, a decline of $1.9 million compared with last year due to the repayment of $250 million in senior unsecured notes upon maturity in February. Overall, the Corporate segment posted a net loss of $45 million in the first quarter.<\/p>\n Teleconference\/Webcast<\/b><\/p>\n \nFirst American\u2019s first-quarter 2023 results will be discussed in more detail on Thursday, April 27, 2023, at 11 a.m. EDT, via teleconference. The toll-free dial-in number is 877-407-8293. Callers from outside the United States may dial +1-201-689-8349.<\/p>\n \nThe live audio webcast of the call will be available on First American\u2019s website at www.firstam.com\/investor<\/a><\/i>. An audio replay of the conference call will be available through May 11, 2023, by dialing 201-612-7415 and using the conference ID 13738122. An audio archive of the call will also be available on First American\u2019s investor website.<\/p>\n About First American<\/b><\/p>\n First American Financial Corporation (NYSE: FAF)<\/b> is a premier provider of title, settlement and risk solutions for real estate transactions. With its combination of financial strength and stability built over more than 130 years, innovative proprietary technologies, and unmatched data assets, the company is leading the digital transformation of its industry. First American also provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $7.6 billion in 2022, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2023, First American was named one of the 100 Best Companies to Work For by Great Place to Work\u00ae<\/sup> and Fortune<\/i> Magazine for the eighth consecutive year. More information about the company can be found at www.firstam.com<\/i><\/a>.<\/p>\n Website Disclosure<\/b><\/p>\n
\nFirst American Financial Corporation (NYSE: FAF), a premier provider of title, settlement and risk solutions for real estate transactions and the leader in the digital transformation of its industry, today announced financial results for the first quarter ended March 31, 2023.<\/p>\n\n
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