The First American Financial Corporation announces 1994 profits of $19 million ...
February 8, 1995, SANTA ANA, CALIFORNIA
The company's 1994 profits were $18.9 million, or $1.66 per share, despite a net loss of $2.9 million, or 25 cents per share, in the fourth quarter. This compares to 1993 earnings of $66.3 million, or $5.84 per share, and fourth quarter 1993 earnings of $20.5 million, or $1.80 per share. 1993 results included a $4.2 million tax benefit, or 37 cents per share, relating to Statement of Financial Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes."
Revenues in 1994 totaled $1.376 billion, a decrease of 2 percent from last year's record of $1.398 billion. However, the company's fourth quarter revenues were $300.1 million, a decrease of 27 percent from the $409.2 million for the same period last year. "Lower revenues in the fourth quarter of 1994 were due in large part to the succession of interest rate hikes by the Federal Reserve during 1994, a persistently poor real estate economy in California and a return of traditional, seasonal conditions that negatively impact transaction volumes," said President Parker S. Kennedy. "The relatively low volume of new orders during the latter part of 1994 and January 1995 will adversely affect the first quarter 1995 results."
Kennedy noted that the company continues to focus on cost reduction efforts, while continuing to enhance its ability to provide customers with consistent, high-quality service. In January 1995, the company acquired key service components--credit reporting and flood certification--now operating under the company's subsidiary, First American Real Estate Information Services, Inc. The company also greatly enhanced its title insurance branch network with key acquisitions during 1994. According to Kennedy, "the long-term earnings potential of First American remains very strong."
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 December 31: 1994 1993 Revenues $ 300,076,000 $ 409,154,000 Income (loss) before income taxes $ (4,777,000) $ 34,907,000 Net income (loss) $ (2,877,000) $ 20,507,000 Net income (loss) per share $ (0.25) $ 1.80
Year ended December 31: Revenues $1,376,393,000 $1,398,426,000 Income before income taxes $ 32,245,000 $ 103,991,000 Net income before accounting change $ 18,945,000 $ 62,091,000 Accounting change--SFAS 109 -- $ 4,200,000 Net income $ 18,945,000 $ 66,291,000 Per share data: Net income before accounting change $ 1.66 $ 5.47 Accounting change $ -- $ .37 Net income $ 1.66 $ 5.84 Average shares outstanding 11,447,000 11,353,000
For the Three Months Ended
For the Year Ended|
|RESULTS OF OPERATIONS|
|Investment and other income||5,667,000||7,879,000||$19,447,000||18,645,000|
|Salaries and other personnel costs||101,019,000||113,243,000||423,328,000||397,902,000|
|Premiums retained by agents||112,614,000||143,518,000||533,598,000||504,375,000|
|Other operating expenses||58,941,000||64,343,000||232,532,000||222,934,000|
|Provision for title losses and other claims||21,400,000||40,805,000||110,230,000||125,588,000|
|Depreciation and amortization||4,950,000||4,367,000||19,796,000||16,333,000|
|Income (loss) before premium and income taxes||(1,133,000)||40,967,000||47,698,000||121,608,000|
|Income (loss) before taxes||$(4,777,000)||$34,907,000||$32,245,000||103,991,000|
|Real Estate Information||19,270,000||27,624,000||94,816,000||95,069,000|
|Trust and Banking||3,844,000||3,486,000||12,433,000||11,731,000|
|Total operating revenues||$294,409,000||$401,275,000||$1,356,946,000||$1,379,781,000|
|INCOME (LOSS) BEFORE INCOME TAXES|
|Real Estate Information||(364,000)||9,439,000||17,371,000||35,046,000|
|Trust and Banking||1,425,000||1,385,000||3,214,000||3,313,000|
|Total before corporate expenses and premium taxes||3,738,000||44,890,000||65,113,000||141,150,000|
|Income (loss) before taxes||$(4,777,000)||$34,907,000||$32,245,000||$103,991,000|
COUNTS FROM DIRECT OPERATIONS
|Title orders opened||177,400||302,400||872,900||1,218,400|
|Title orders closed||150,800||270,600||722,900||932,700|