First 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 third quarter
ended Sept. 30, 2024.
Current Quarter Highlights
- Earnings per diluted share of $(1.00), or $1.34 per share on an
adjusted basis
- Net investment losses of $312 million, or $2.28 per diluted
share, primarily due to investment portfolio rebalancing
project
- Rebalanced investment portfolio expected to result in an
increase in interest income of approximately $67 million per
year
- Total revenue of $1.4 billion, down 5 percent compared with
last year
- Adjusted total revenue of $1.7 billion, up 4 percent compared
with last year
- Title Insurance and Services segment investment income of $136
million, down 4 percent compared with last year
- Title Insurance and Services segment pretax margin of (10.1)
percent, or 11.6 percent on an adjusted basis
- Commercial revenues of $190 million, up 19 percent compared
with last year
- Home Warranty segment pretax margin of 8.1 percent, or 7.7
percent on an adjusted basis
- Debt-to-capital ratio of 34.8 percent, or 26.6 percent
excluding secured financings payable of $878 million
- Repurchased 293,155 shares for a total of $16 million at an
average price of $54.96
- Year to date, repurchased 1.1 million shares for a total of $60
million at an average price of $54.64
- Raised common stock dividend by 2 percent to an annual rate of
$2.16 per share
- Raised $450 million in a public offering of 10-year senior
notes at 5.45 percent
- Cash flow from operations of $237 million, compared with $219
million last year
Selected Financial Information ($
in millions, except per share data)
Three Months Ended
September 30,
2024
2023
Total revenue
$
1,406.1
$
1,481.2
Income/(loss) before taxes
$
(144.4
)
$
(1.7
)
Net income/(loss)
$
(104.0
)
$
(1.7
)
Net income/(loss) per diluted share
$
(1.00
)
$
(0.02
)
Adjusted net income
$
138.4
$
128.2
Adjusted net income per diluted share
$
1.34
$
1.22
Total revenue for the third quarter of 2024 was $1.4 billion,
down 5 percent compared with the third quarter of 2023. Net loss in
the current quarter was $104 million, or $1.00 per diluted share,
compared with net loss of $2 million, or 2 cents per diluted share,
in the third quarter of 2023. Adjusted net income in the current
quarter was $138 million, or $1.34 per diluted share, compared with
$128 million, or $1.22 per diluted share, in the third quarter of
last year. Net investment losses in the current quarter were $312
million, or $2.28 per diluted share, compared with net investment
losses of $164 million, or $1.17 per diluted share, in the third
quarter of last year. Purchase-related intangible amortization in
the current quarter was $8 million, or 6 cents per diluted share,
compared with $10 million, or 7 cents per diluted share in the
third quarter of last year. The effective tax rate this quarter was
28.4 percent. Excluding the impact of net realized investment
losses and purchase-related intangible amortization, the tax rate
was 20.5 percent which benefited from $6 million in research and
development and foreign tax credits recognized this quarter.
“We benefited from measured improvement in market conditions
during the third quarter, with adjusted revenue up 4 percent, the
first year-over-year growth since the second quarter of 2022,” said
Ken DeGiorgio, chief executive officer at First American Financial
Corporation. “Our adjusted earnings per diluted share were $1.34,
an increase of ten percent. In our title segment, premiums and
escrow revenues were up across all key business lines, but most
notably in our commercial division, where revenues were up 19
percent.
"As we indicated last quarter, we expect that modest revenue
growth for the full year of 2024 will enable us to achieve title
margins similar to what we posted in 2023. We now have stronger
conviction in that outcome given the recent performance of our
commercial business and the increase in interest income resulting
from a rebalancing of our investment portfolio. The first
year-over-year growth in revenue in nine quarters, coupled with our
expectation that affordability challenges will gradually abate,
also make us cautiously optimistic that we are in the beginning
stage of a new cycle that will drive further improvement in
2025.
"The recent hurricanes inflicted widespread damage and
devastation across several southeastern states. Many of our
employees — and the communities in which they live — have endured
profound hardships. While we are grateful that all of our people
are safe, we know that many now face the difficult task of
recovery. I want to thank our people for all they have done to lend
a hand to those impacted and to reiterate our company’s commitment
to support our people and their communities."
Title Insurance and Services ($ in
millions, except average revenue per order)
Three Months Ended
September 30,
2024
2023
Total revenues
$
1,290.3
$
1,524.4
Income/(loss) before taxes
$
(130.3
)
$
160.3
Pretax margin
(10.1
)%
10.5
%
Adjusted pretax margin
11.6
%
12.0
%
Title open orders(1)
166,100
157,300
Title closed orders(1)
121,600
120,000
U.S. Commercial
Total revenues
$
189.9
$
159.8
Open orders
25,500
25,200
Closed orders
14,400
14,800
Average revenue per order
$
13,200
$
10,800
(1) U.S. direct title insurance orders
only.
Total revenues for the Title Insurance and Services segment
during the third quarter were $1.3 billion, down 15 percent
compared with the same quarter of 2023. Total adjusted revenues in
the current quarter were $1.6 billion, up 4 percent compared with
last year. Direct premiums and escrow fees increased by 9 percent
compared with the third quarter of last year, driven by a 7 percent
increase in the average revenue per order closed and a 1 percent
increase in the number of direct title orders closed in our
domestic operations. The average revenue per direct title order
increased to $3,926, primarily due to increases in the average
revenue per order for commercial and purchase transactions. Agent
premiums, which are recorded on approximately a one-quarter lag
relative to direct premiums, were up 3 percent compared with last
year.
Information and other revenues were $242 million during the
quarter, up $2 million, or 1 percent, compared with last year.
Investment income was $136 million in the third quarter, down $5
million compared with the same quarter last year. The decline was
primarily driven by lower average interest-bearing escrow and
tax-deferred property exchange balances, partly offset by higher
interest income from the company's warehouse lending business and
the partial impact of the company's investment portfolio
rebalancing project. Net investment losses totaled $308 million in
the current quarter, compared with losses of $16 million in the
third quarter of 2023. Net realized investment losses in the
current quarter were primarily attributable to losses realized from
the company's investment portfolio rebalancing project, partly
offset by a favorable change in the fair value of marketable equity
securities. Net investment losses in the third quarter of last year
were primarily due to unfavorable changes in the fair value of
marketable securities and losses recognized on the sale of
fixed-income securities.
Personnel costs were $492 million in the third quarter, up $23
million, or 5 percent compared with the same quarter of 2023. The
increase in personnel costs was primarily due to higher salary,
incentive compensation, employee benefits, and payroll tax expense,
partly offset by lower severance expense.
Other operating expenses of $252 million in the current quarter
were up $9 million, or 4 percent compared with the third quarter of
2023 primarily due to higher production and software expense.
The provision for policy losses and other claims was $37 million
in the third quarter, or 3.0 percent of title premiums and escrow
fees, unchanged from the prior year. The third quarter rate
reflects an ultimate loss rate of 3.75 percent for the current
policy year and a net decrease of $9 million in the loss reserve
estimate for prior policy years.
Depreciation and amortization expense was $52 million in the
third quarter, up $6 million, or 12 percent, compared with the same
period last year, due to higher amortization of capitalized
software from recently deployed digital settlement products.
Interest expense was $24 million in the current quarter, up 2
percent compared with last year primarily due to higher interest
expense in the company's warehouse lending business, largely offset
by lower interest expense related to our subservicing business.
The Title Insurance and Services segment posted a pretax loss of
$130 million in the third quarter, compared with pretax income of
$160 million in the third quarter of 2023. Pretax margin was (10.1)
percent in the current quarter, compared with 10.5 percent last
year. Adjusted pretax margin was 11.6 percent in the current
period, compared with 12.0 percent last year.
Home Warranty ($ in millions)
Three Months Ended
September 30,
2024
2023
Total revenues
$
110.9
$
108.2
Income before taxes
$
9.0
$
9.4
Pretax margin
8.1
%
8.7
%
Adjusted pretax margin
7.7
%
9.3
%
Total revenues for the Home Warranty segment were $111 million
in the third quarter, up 2 percent compared with last year. The
segment posted pretax income of $9 million this quarter, down 4
percent compared with last year. The claim loss rate was 53.8
percent in the third quarter, compared with 54.9 percent last year,
due to lower claim counts that were partially offset by higher
claim severity. Home Warranty’s pretax margin was 8.1 percent this
quarter, compared with 8.7 percent last year. Adjusted pretax
margin was 7.7 percent this quarter, compared with 9.3 percent last
year.
Corporate
Net investment income was $9 million this quarter, up $13
million from the prior year, primarily attributable to changes in
the value of investments associated with the company’s deferred
compensation program. This amount was offset by higher personnel
expense, reflecting returns on the plan participants’
investments.
Net recognized investment losses were $4 million this quarter,
compared with losses of $147 million last year. Excluding these net
recognized losses, the Corporate pretax loss was $19 million this
quarter, down $5 million compared with the third quarter of last
year, due to favorable reserve adjustments related to the legacy
property and casualty business.
Teleconference/Webcast
First American’s third quarter 2024 results will be discussed in
more detail on Thursday, Oct. 24, 2024, at 11 a.m. EDT, via
teleconference. The toll-free dial-in number is +1-877-407-8293.
Callers from outside the United States may dial
+1-201-689-8349.
The live audio webcast of the call will be available on First
American’s website at www.firstam.com/investor. An audio replay of
the conference call will be available through Nov. 7, 2024, by
dialing +1-201-612-7415 and using the conference ID 13749447. An
audio archive of the call will also be available on First
American’s investor website.
About First American
First American Financial Corporation (NYSE: FAF) is a
premier provider of title, settlement and risk solutions for real
estate transactions. With its combination of financial strength and
stability built over 135 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 $6.0 billion in 2023, the company offers its products
and services directly and through its agents throughout the United
States and abroad. In 2024, First American was named one of the 100
Best Companies to Work For by Great Place to Work® and Fortune
Magazine for the ninth consecutive year, and named one of the 100
Best Workplaces for Innovators by Fast Company for the second
consecutive year. More information about the company can be found
at www.firstam.com.
Website Disclosure
First American posts information of interest to investors at
www.firstam.com/investor. This includes opened and closed title
insurance order counts for its U.S. direct title insurance
operations, which are posted approximately 10 to 12 days after the
end of each month.
Forward-Looking Statements
Certain statements made in this press release and the related
management commentary contain, and responses to investor questions
may contain, forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and section
21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements can be identified by the fact that they
do not relate strictly to historical or current facts and may
contain the words “believe,” “anticipate,” “expect,” “intend,”
“plan,” “predict,” “estimate,” “project,” “will be,” “will
continue,” “will likely result,” or other similar words and phrases
or future or conditional verbs such as “will,” “may,” “might,”
“should,” “would,” or “could.” These forward-looking statements
include, without limitation, statements regarding future
operations, performance, financial condition, prospects, plans and
strategies. These forward-looking statements are based on current
expectations and assumptions that may prove to be incorrect. Risks
and uncertainties exist that may cause results to differ materially
from those set forth in these forward-looking statements. Factors
that could cause the anticipated results to differ from those
described in the forward-looking statements include, without
limitation: interest rate fluctuations; changes in conditions of
the real estate markets; volatility in the capital markets;
unfavorable economic conditions; impairments in the company’s
goodwill or other intangible assets; failures at financial
institutions where the company deposits funds; regulatory oversight
and changes in applicable laws and government regulations,
including privacy and data protection laws; heightened scrutiny by
legislators and regulators of the company’s title insurance and
services segment and certain other of the company’s businesses;
regulation of title insurance rates; limitations on access to
public records and other data; climate change, health crises,
terrorist attacks, severe weather conditions and other catastrophe
events; changes in relationships with large mortgage lenders and
government-sponsored enterprises; changes in measures of the
strength of the company’s title insurance underwriters, including
ratings and statutory capital and surplus; losses in the company’s
investment portfolio or venture investment portfolio; material
variance between actual and expected claims experience;
defalcations, increased claims or other costs and expenses
attributable to the company’s use of title agents; any inadequacy
in the company’s risk management framework or use of models;
systems damage, failures, interruptions, cyberattacks and
intrusions, or unauthorized data disclosures; innovation efforts of
the company and other industry participants and any related market
disruption; errors and fraud involving the transfer of funds;
failures to recruit and retain qualified employees; the company’s
use of a global workforce; inability of the company to fulfill
parent company obligations and/or pay dividends; inability to
realize anticipated synergies or produce returns that justify
investment in acquired businesses; a reduction in the deposits at
the company’s federal savings bank subsidiary; claims of
infringement or inability to adequately protect the company’s
intellectual property; and other factors described in the company’s
quarterly report on Form 10-Q for the quarter ended June 30, 2024,
as filed with the Securities and Exchange Commission. The
forward-looking statements speak only as of the date they are made.
The company does not undertake to update forward-looking statements
to reflect circumstances or events that occur after the date the
forward-looking statements are made.
Use of Non-GAAP Financial Measures
This news release and related management commentary contain
certain financial measures that are not presented in accordance
with generally accepted accounting principles (GAAP), including an
adjusted debt to capitalization ratio, personnel and other
operating expense ratios, success ratios, net operating revenues;
and adjusted revenues, adjusted pretax income, adjusted pretax
margin, adjusted net income, and adjusted earnings per share. The
company is presenting these non-GAAP financial measures because
they provide the company’s management and investors with additional
insight into the financial leverage, operational efficiency and
performance of the company relative to earlier periods and relative
to the company’s competitors. The company does not intend for these
non-GAAP financial measures to be a substitute for any GAAP
financial information. In this news release, these non-GAAP
financial measures have been presented with, and reconciled to, the
most directly comparable GAAP financial measures. Investors should
use these non-GAAP financial measures only in conjunction with the
comparable GAAP financial measures.
First American Financial
Corporation
Summary of Consolidated
Financial Results and Selected Information
(in millions, except per share
amounts and title orders, unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Total revenues
$
1,406.1
$
1,481.2
$
4,443.0
$
4,574.2
(Loss) income before income taxes
$
(144.4
)
$
(1.7
)
$
65.5
$
236.0
Income tax (benefit) expense
(41.0
)
(0.5
)
5.8
54.8
Net (loss) income
(103.4
)
(1.2
)
59.7
181.2
Less: Net income (loss) attributable to
noncontrolling interests
0.6
0.5
1.0
(1.5
)
Net (loss) income attributable to the
Company
$
(104.0
)
$
(1.7
)
$
58.7
$
182.7
Net (loss) income per share attributable
to stockholders:
Basic
$
(1.00
)
$
(0.02
)
$
0.56
$
1.75
Diluted
$
(1.00
)
$
(0.02
)
$
0.56
$
1.75
Cash dividends declared per share
$
0.54
$
0.53
$
1.60
$
1.57
Weighted average common shares
outstanding:
Basic
103.6
104.2
103.9
104.4
Diluted
103.6
104.2
104.3
104.7
Selected Title Insurance Segment
Information
Title orders opened(1)
166,100
157,300
491,200
504,500
Title orders closed(1)
121,600
120,000
349,000
354,900
Paid title claims
$
56.8
$
47.5
$
150.8
$
125.1
(1) U.S. direct title insurance orders
only.
First American Financial
Corporation
Selected Consolidated Balance
Sheet Information
(in millions,
unaudited)
September 30,
December 31,
2024
2023
Cash and cash equivalents
$
2,953.4
$
3,605.3
Investments
7,795.7
7,948.9
Goodwill and other intangible assets,
net
1,945.3
1,961.3
Total assets
16,566.4
16,802.8
Reserve for claim losses
1,230.0
1,282.4
Notes and contracts payable
1,847.7
1,393.9
Total stockholders’ equity
$
5,092.2
$
4,848.1
First American Financial
Corporation
Segment Information
(in millions,
unaudited)
Three Months Ended
Title
Home
Corporate
September 30, 2024
Consolidated
Insurance
Warranty
(incl. Elims.)
Revenues
Direct premiums and escrow fees
$
639.6
$
536.2
$
103.5
$
(0.1
)
Agent premiums
683.9
683.9
—
—
Information and other
247.5
241.7
5.7
0.1
Net investment income
146.6
136.5
1.2
8.9
Net investment (losses) gains
(311.5
)
(308.0
)
0.5
(4.0
)
1,406.1
1,290.3
110.9
4.9
Expenses
Personnel costs
523.6
491.7
20.6
11.3
Premiums retained by agents
546.7
546.7
—
—
Other operating expenses
279.8
251.8
23.0
5.0
Provision for policy losses and other
claims
91.8
36.6
55.7
(0.5
)
Depreciation and amortization
53.2
51.9
1.3
0.0
Premium taxes
19.2
17.8
1.3
0.1
Interest
36.2
24.1
—
12.1
1,550.5
1,420.6
101.9
28.0
(Loss) income before income taxes
$
(144.4
)
$
(130.3
)
$
9.0
$
(23.1
)
Three Months Ended
Title
Home
Corporate
September 30, 2023
Consolidated
Insurance
Warranty
(incl. Elims.)
Revenues
Direct premiums and escrow fees
$
595.5
$
493.7
$
101.8
$
0.0
Agent premiums
664.5
664.5
—
—
Information and other
245.7
240.1
5.5
0.1
Net investment income
139.1
141.7
1.6
(4.2
)
Net investment losses
(163.6
)
(15.6
)
(0.7
)
(147.3
)
1,481.2
1,524.4
108.2
(151.4
)
Expenses
Personnel costs
485.8
468.5
19.6
(2.3
)
Premiums retained by agents
531.4
531.4
—
—
Other operating expenses
273.8
243.2
20.9
9.7
Provision for policy losses and other
claims
91.1
34.8
55.9
0.4
Depreciation and amortization
47.3
46.2
1.2
(0.1
)
Premium taxes
17.7
16.4
1.2
0.1
Interest
35.8
23.6
—
12.2
1,482.9
1,364.1
98.8
20.0
(Loss) income before income taxes
$
(1.7
)
$
160.3
$
9.4
$
(171.4
)
First American Financial
Corporation
Segment Information
(in millions,
unaudited)
Nine Months Ended
Title
Home
Corporate
September 30, 2024
Consolidated
Insurance
Warranty
(incl. Elims.)
Revenues
Direct premiums and escrow fees
$
1,773.2
$
1,472.4
$
300.8
$
(0.0
)
Agent premiums
1,864.0
1,864.0
—
—
Information and other
717.1
699.8
17.4
(0.1
)
Net investment income
404.4
378.9
3.2
22.3
Net investment (losses) gains
(315.7
)
(283.1
)
1.5
(34.1
)
4,443.0
4,132.0
322.9
(11.9
)
Expenses
Personnel costs
1,517.5
1,429.8
61.2
26.5
Premiums retained by agents
1,486.7
1,486.7
—
—
Other operating expenses
822.6
729.1
66.7
26.8
Provision for policy losses and other
claims
240.8
100.1
142.0
(1.3
)
Depreciation and amortization
155.4
151.6
3.7
0.1
Premium taxes
48.6
45.0
3.5
0.1
Interest
105.9
69.9
—
36.0
4,377.5
4,012.2
277.1
88.2
Income (loss) before income taxes
$
65.5
$
119.8
$
45.8
$
(100.1
)
Nine Months Ended
Title
Home
Corporate
September 30, 2023
Consolidated
Insurance
Warranty
(incl. Elims.)
Revenues
Direct premiums and escrow fees
$
1,713.0
$
1,416.1
$
296.9
$
0.0
Agent premiums
1,879.6
1,879.6
—
—
Information and other
722.9
706.0
16.9
(0.0
)
Net investment income
423.4
408.2
4.4
10.8
Net investment (losses) gains
(164.7
)
(6.2
)
0.2
(158.7
)
4,574.2
4,403.7
318.4
(147.9
)
Expenses
Personnel costs
1,487.9
1,412.3
59.3
16.3
Premiums retained by agents
1,496.8
1,496.8
—
—
Other operating expenses
804.8
710.4
62.4
32.0
Provision for policy losses and other
claims
262.9
109.6
150.1
3.2
Depreciation and amortization
138.9
135.2
3.6
0.1
Premium taxes
47.7
44.2
3.4
0.1
Interest
99.2
61.0
—
38.2
4,338.2
3,969.5
278.8
89.9
Income (loss) before income taxes
$
236.0
$
434.2
$
39.6
$
(237.8
)
First American Financial
Corporation
Reconciliation of Non-GAAP
Financial Measures
(in millions, except margin
and per share amounts, unaudited)
Consolidated
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Total revenues
$
1,406.1
$
1,481.2
$
4,443.0
$
4,574.2
Non-GAAP adjustments:
Less: Net investment losses
(311.5
)
(163.6
)
(315.7
)
(164.7
)
Adjusted total revenues
$
1,717.6
$
1,644.8
$
4,758.7
$
4,738.9
Pretax (loss) income
$
(144.4
)
$
(1.7
)
$
65.5
$
236.0
Non-GAAP adjustments:
Less: Net investment losses
(311.5
)
(163.6
)
(315.7
)
(164.7
)
Plus: Purchase-related intangible
amortization
7.7
9.6
25.4
28.9
Adjusted pretax income
$
174.8
$
171.5
$
406.6
$
429.6
Pretax margin
(10.3
)%
(0.1
)%
1.5
%
5.2
%
Non-GAAP adjustments:
Less: Net investment (losses)
(20.0
)%
(9.9
)%
(6.5
)%
(3.3
)%
Plus: Purchase-related intangible
amortization
0.5
%
0.6
%
0.5
%
0.6
%
Adjusted pretax margin
10.2
%
10.4
%
8.5
%
9.1
%
Net (loss) income
$
(104.0
)
$
(1.7
)
$
58.7
$
182.7
Non-GAAP adjustments, net of tax:
Less: Net investment losses
(236.6
)
(122.7
)
(239.4
)
(123.5
)
Plus: Purchase-related intangible
amortization
5.8
7.2
19.3
21.7
Adjusted net income
$
138.4
$
128.2
$
317.4
$
327.9
Earnings per diluted share (EPS)
$
(1.00
)
$
(0.02
)
$
0.56
$
1.75
Non-GAAP adjustments, net of tax:
Less: Net investment losses
(2.28
)
(1.17
)
(2.30
)
(1.18
)
Plus: Purchase-related intangible
amortization
0.06
0.07
0.18
0.21
Adjusted EPS
$
1.34
$
1.22
$
3.04
$
3.14
Purchase-related intangible amortization
includes amortization of noncompete agreements,
customer relationships, and trademarks
acquired in business combinations.
Totals may not sum due to rounding.
First American Financial
Corporation
Reconciliation of Non-GAAP
Financial Measures
(in millions except margin,
unaudited)
By Segment
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Title Insurance and Services
Segment
Total revenues
$
1,290.3
$
1,524.4
$
4,132.0
$
4,403.7
Non-GAAP adjustments:
Less: Net investment losses
(308.0
)
(15.6
)
(283.1
)
(6.2
)
Adjusted total revenues
$
1,598.3
$
1,540.0
$
4,415.1
$
4,409.9
Pretax (loss) income
$
(130.3
)
$
160.3
$
119.8
$
434.2
Non-GAAP adjustments:
Less: Net investment losses
(308.0
)
(15.6
)
(283.1
)
(6.2
)
Plus: Purchase-related intangible
amortization
7.7
9.6
25.3
28.8
Adjusted pretax income
$
185.4
$
185.5
$
428.2
$
469.2
Pretax margin
(10.1
)%
10.5
%
2.9
%
9.9
%
Non-GAAP adjustments:
Less: Net investment losses
(21.2
)%
(0.9
)%
(6.2
)%
(0.1
)%
Plus: Purchase-related intangible
amortization
0.5
%
0.6
%
0.6
%
0.6
%
Adjusted pretax margin
11.6
%
12.0
%
9.7
%
10.6
%
Home Warranty Segment
Total revenues
$
110.9
$
108.2
$
322.9
$
318.4
Non-GAAP adjustments:
Less: Net investment gains (losses)
0.5
(0.7
)
1.5
0.2
Adjusted total revenues
$
110.4
$
108.9
$
321.4
$
318.2
Pretax income
$
9.0
$
9.4
$
45.8
$
39.6
Non-GAAP adjustments:
Less: Net investment gains (losses)
0.5
(0.7
)
1.5
0.2
Adjusted pretax income
$
8.5
$
10.1
$
44.3
$
39.4
Pretax margin
8.1
%
8.7
%
14.2
%
12.4
%
Non-GAAP adjustments:
Less: Net investment gains (losses)
0.4
%
(0.6
)%
0.4
%
---
%
Adjusted pretax margin
7.7
%
9.3
%
13.8
%
12.4
%
Purchase-related intangible amortization
includes amortization of noncompete agreements,
customer relationships, and trademarks
acquired in business combinations.
Totals may not sum due to rounding.
First American Financial
Corporation
Expense and Success Ratio
Reconciliation
Title Insurance and Services
Segment
($ in millions,
unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Total revenues
$
1,290.3
$
1,524.4
$
4,132.0
$
4,403.7
Less: Net investment losses
(308.0
)
(15.6
)
(283.1
)
(6.2
)
Net investment income
136.5
141.7
378.9
408.2
Premiums retained by agents
546.7
531.4
1,486.7
1,496.8
Net operating revenues
$
915.1
$
866.9
$
2,549.5
$
2,504.9
Personnel and other operating expenses
$
743.5
$
711.7
$
2,158.9
$
2,122.7
Ratio (% net operating revenues)
81.2
%
82.1
%
84.7
%
84.7
%
Ratio (% total revenues)
57.6
%
46.7
%
52.2
%
48.2
%
Change in net operating revenues
$
48.2
$
44.6
Change in personnel and other operating
expenses
31.8
36.2
Success Ratio(1)
66
%
81
%
(1) Change in personnel and other
operating expenses divided by change in net operating revenues.
First American Financial
Corporation
Supplemental Direct Title
Insurance Order Information(1)
(unaudited)
Q324
Q224
Q124
Q423
Q323
Open Orders per Day
Purchase
1,428
1,592
1,498
1,105
1,461
Refinance
502
378
332
325
356
Refinance as % of residential orders
26
%
19
%
18
%
23
%
20
%
Commercial
398
395
416
349
399
Default and other
267
286
263
231
280
Total open orders per day
2,595
2,650
2,508
2,010
2,497
Closed Orders per Day
Purchase
1,120
1,177
939
930
1,141
Refinance
314
265
240
221
280
Refinance as % of residential orders
22
%
18
%
20
%
19
%
20
%
Commercial
225
236
231
252
236
Default and other
241
271
247
219
249
Total closed orders per day
1,900
1,948
1,656
1,623
1,905
Average Revenue per Order
(ARPO)(2)
Purchase
$
3,572
$
3,605
$
3,360
$
3,421
$
3,474
Refinance
1,291
1,206
1,151
1,284
1,227
Commercial
13,194
11,720
9,989
11,001
10,763
Default and other
355
433
363
421
469
Total ARPO
$
3,926
$
3,818
$
3,516
$
3,899
$
3,653
Business Days
64
64
62
62
63
(1) U.S. operations only.
(2) Average revenue per order (ARPO)
defined as direct premiums and escrow fees divided by closed title
orders.
Totals may not sum due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241023579032/en/
Media Contact: Marcus Ginnaty Corporate Communications
First American Financial Corporation 714-250-3298
Investor Contact: Craig Barberio Investor Relations First
American Financial Corporation 714-250-5214
Grafico Azioni First American (NYSE:FAF)
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