The First American Financial Corporation announces first quarter 1994 pre-tax ...


April 26, 1994, SANTA ANA, CALIFORNIA

The First American Financial Corporation (NYSE: FAF) today reported record first-quarter pre-tax profits, more than double those of first quarter 1993. First-quarter after-tax earnings were $9.4 million, or 82¢ per share, compared with first quarter 1993 earnings of $4.5 million, or 40¢ per share, before the effect of an accounting change.

Revenues for the first three months of 1994 totaled $372.4 million, the highest for any first quarter in the company's history, compared with $279.0 million in the first quarter of 1993, an increase of 33 percent.

"Each of our operating segments showed significantly increased revenues and earnings over last year's comparable quarter," President Parker S. Kennedy said. "This is reflective of both market share growth and operational productivity."

New refinance orders in March and April have declined considerably when compared with the same months in the prior year, due to the recent rise in mortgage interest rates. However, resale transactions, new construction and commercial activity have started to surge. These trends are expected to continue throughout the year, barring any significant rate hikes by the Federal Reserve, Kennedy explained.

"In response to these trends, we continue to carefully monitor our personnel/new order ratios and will make the necessary adjustments in order to maintain a satisfactory profit level," Kennedy said.

The First American Financial Corporation, based in Santa Ana, California, is a leading provider of real estate financial services, including title insurance, tax monitoring, home warranty, credit reporting and property information services, to real property buyers and mortgage lenders. The company also operates a trust and banking business in Southern California. The company offers its title services through a network of more than 300 offices and 4,000 agents throughout the United States. It also provides title services abroad in the Bahama Islands, Bermuda, Canada, Guam, Mexico, Puerto Rico, the U.S. Virgin Islands and the United Kingdom.

 
Quarter ended March 31:                     1994	     1993 
Revenues                               $372,436,000     $278,966,000 
Net income before accounting change    $  9,398,000     $  4,484,000 
Accounting change                      $       --       $  4,200,000 
Net income                             $  9,398,000     $  8,684,000 
Average shares outstanding               11,416,000       11,292,000 
 
Per share data 
 
Net income before accounting change    $        .82     $        .40 
Accounting change                      $       --       $        .37 
Net income                             $        .82     $        .77 
SELECTED FINANCIAL DATA
(Unaudited)

For the Three Months Ended
March 31

19941993


RESULTS OF OPERATIONS
Revenues
Operating revenues $ 369,024,000 $ 275,605,000
Investment and other income3,412,000 3,361,000


372,436,000 278,966,000


Expenses
Salaries and other personnel costs110,320,000 84,761,000
Premiums retained by agents145,912,000 109,723,000
Other operating expenses58,591,000 45,147,000
Provision for title losses and other claims29,663,000 22,780,000
Depreciation and amortization4,610,000 3,846,000
Interest1,568,000 1,345,000
Minority interests949,000 847,000


351,613,000 268,449,000


Income (loss) before premium and income taxes20,823,000 10,517,000
Premium taxes4,325,000 3,223,000


Income (loss) before income taxes $ 16,498,000 $ 7,294,000


OPERATING REVENUES
Title Insurance:
Direct operations $ 153,678,000 $ 113,617,000
Agency operations178,811,000 133,695,000
332,489,000 247,312,000
Tax Service27,463,000 20,379,000
Home Warranty6,135,000 5,076,000
Trust and Banking2,937,000 2,838,000


Total operating revenues $ 369,024,000 $ 275,605,000


INCOME BEFORE INCOME TAXES
Title Insurance $ 14,392,000 $ 4,871,000
Tax Service9,568,000 7,850,000
Home Warranty1,399,000 1,256,000
Trust and Banking677,000 646,000


Total before corporate expenses and
premium taxes26,036,000 14,623,000


Corporate expenses5,213,000 4,106,000
Premium taxes4,325,000 3,223,000


Income (loss) before income taxes $ 16,498,000 $ 7,294,000


TITLE INSURANCE ORDER COUNTS
FROM DIRECT OPERATIONS
Title orders opened259,700 256,300
Title orders closed212,800 165,300

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