The First American Financial Corporation expects to show a profit for the first ...
April 25, 1990, SANTA ANA, CALIFORNIA
Kennedy also said that currently the outlook for all of 1990 is favorable and he believes that The First American Financial Corporation's results for the year should improve over those of 1989 in spite of a recent adverse California court ruling that could result in a maximum title loss of $6.1 million. This ruling will be appealed, and no loss reserve can be properly established until such time as the lawsuits are completed and the validity of the claimant's rights, if any, have been determined.
"Our first quarter is usually the poorest quarterly period of the year," Kennedy said, "but new orders and closings are up about 7% over last year and this trend should bode well for the second quarter as well.
"While we are pleased to see this improved performance in the first quarter," Kennedy continued, "there are certain potentially adverse factors that could impact our results, primarily the unsettled condition of the savings and loan industry. The real estate economy, on which our title insurance business depends, requires ample funds at a reasonable price. Whether the banks and other financial institutions can make up that shortfall is somewhat questionable at this time. However, in spite of these reservations, we feel First American is well positioned to increase market share and revenues this year."
In the first quarter of 1989, First American had revenues of $165,290,000 and a net loss of $1,263,000, or $.13 a share on a restated basis.
Kennedy also told the shareholders the company is planning to continue its expansion program and currently is involved in several acquisition negotiations. He noted these acquisitions would be made utilizing First American's new Class B shares, in keeping with a previously announced plan to use this new class of stock for acquisitions, convertible debt issuances, employee incentive programs and for public and private offerings.
At the annual meeting, shareholders re-elected the following 15 incumbent directors. They are George L. Argyros, chairman and chief executive officer, Arnel Development Company and Affiliates, Costa Mesa, California; Stanley L. Bauer, Los Angeles attorney; J. David Chatham, president and chief executive officer, Chatham Properties and Chatham Holdings, Inc., Atlanta, Georgia; Lewis W. Douglas, Jr., real estate developer, Santa Monica, California; Paul B. Fay, Jr., president, The Fay Improvement Company, San Francisco, California; Frank Harrington, president, Harrington Development, Newport Beach, California; Harold C. Kean, director, Washington Federal Savings and Loan Association, Seattle, Washington; D.P. Kennedy, president, The First American Financial Corporation and chairman of the board, First American Title Insurance Company, Santa Ana, California; Parker S. Kennedy, executive vice president, The First American Financial Corporation and president, First American Title Insurance Company, Santa Ana, California; Robert B. McLain, president, McLain Development Co., Newport Beach, California; R.J. Munzer, retired chairman of the board, Petrolane Incorporated, Long Beach, California; Roslyn B. Payne, president, Jackson Street Partners, Ltd., San Francisco, California; Gregor G. Peterson, private investor, Incline Village, Nevada; and Virginia M. Ueberroth, financial advisor, Laguna Beach, California.
Also elected to the board was Anthony R. Moiso, 50, president and chief executive officer of Santa Margarita Company in San Juan Capistrano, California, who was appointed to the board in February.
The First American Financial Corporation, based in Santa Ana, California, operates its title insurance business through its principal subsidiary, First American Title Insurance Company, one of the largest title insurers in the nation. The firm offers title services through a network of more than 5,500 offices or agents in all 50 states. It also provides title services abroad in Guam, Mexico, Puerto Rico, the Virgin Islands and the United Kingdom.