The First American Financial Corporation announces sharp drop in net income for the year 1990
March 14, 1991, SANTA ANA, CALIFORNIA
"The real estate recession continued in most areas of the country during 1990," Kennedy said, "and in the fourth quarter spread to the far western states where fourth quarter revenues fell sharply."
Revenues for the year ended December 31, 1990, increased to $707,841,000, compared with $699,405,000 in 1989, a record level for the eighth consecutive year, despite the depressed economy.
Fourth quarter revenues totaled $172,947,000, down from $186,908,000 for the fourth quarter ended December 31, 1989. Net income for the fourth quarter totaled $523,000, or 5 cents per share, after accounting for the "fresh start" provisions of the Omnibus Budget Reconciliation Act of 1990, which resulted in an income tax benefit of $7,816,000. This compares with net income of $7,446,000, or 74 cents per share, for the year-earlier fourth quarter.
"Expense control continues to be an important concern," Kennedy said. "The largest expense category, salaries and other personnel costs, traditionally account for more than 50 percent of the company's total expense. During the fourth quarter, personnel costs were reduced $3,132,000, or 5 percent.
"Provisions for title losses continue to plague the company," Kennedy continued. "There is, however, evidence that our training programs and careful administration of the agency network are producing favorable results."
First American Financial, 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 the Bahamas, Bermuda, Canada, Guam, Mexico, Puerto Rico, the Virgin Islands and the United Kingdom. The company celebrated its 100th anniversary in 1989.
Year ended December 31: 1990 1989 Revenue $707,841,000 $699,405,000 Net income $ 3,310,000 $ 13,462,000 Net income per share $ .33 $ 1.35 Average shares outstanding 9,911,000 9,966,000
Quarter ended December 31: Revenue $172,947,000 $186,908,000 Net income $ 523,000 $ 7,446,000 Net income per share $ .05 $ .74