The First American Financial Corporation reports a return to profitability ...


July 26, 1995, SANTA ANA, CALIFORNIA

The First American Financial Corporation (NYSE: FAF), a leading provider of real estate-related financial services, today reported positive second quarter 1995 results that reflect marked improvements in the national real estate market. Although the company suffered a loss in the first quarter, second quarter results, together with current new order counts, signal improved profitability for the remainder of the year.

First American's second quarter 1995 net income of $1.1 million, or $.10 per share, compares with net income of $7.6 million, or $.67 per share for the same period of 1994. Revenues for the quarter totaled $293.2 million, a decrease of 21 percent when compared to the second quarter 1994 revenues of $369.0 million.

For the six-month period ended June 30, 1995, the company realized a net loss of $11.6 million, or $1.01 per share, compared to net income of $17.0 million, or $1.49 per share, for the same period in 1994. During the first half of 1995, revenues decreased 25 percent to $554.4 million from $741.4 million for the same period of the prior year.

"Current interest rate levels indicate improved revenues in all of our primary business segments," said President Parker S. Kennedy. "Recent signs of economic strength, including a higher-than-expected jump in new and existing home sales and a marked increase in closings at the end of the second quarter, are strong indicators of increased profit margins and results for the third quarter."

"Market share growth, coupled with cost control, continues to be our point of focus," Kennedy continued. "Customer satisfaction was the motivating factor behind our diversification, and we continue to progress toward achieving our long-term objective of providing our customers a cost-efficient menu of services."

The First American Financial Corporation, based in Santa Ana, California, is a leading provider of real estate-related financial services, including title insurance, tax monitoring, home warranty, credit reporting, flood compliance 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 titleservices abroad in the Bahama Islands, Bermuda, Canada, Guam, Mexico, Puerto Rico, the U.S. Virgin Islands and the United Kingdom.

Synopsis:

 
Quarter ended June 30:			1995		1994 
Revenues			    $293,240,000    $369,011,000 
Income before income taxes	    $  1,837,000    $ 13,434,000 
Net income			    $  1,137,000    $  7,634,000 
Net income per share		    $        .10    $        .67 

Six months ended June 30: Revenues $554,394,000 $741,447,000 Income (loss) before income taxes $(19,672,000) $ 29,932,000 Net income (loss) $(11,572,000) $ 17,032,000 Net income (loss) per share $ (1.01) $ 1.49 Average shares outstanding 11,411,000 11,447,000


SELECTED FINANCIAL DATA
(Unaudited)





For the Three Months EndedFor the Six Months Ended
June 30June 30







19951994 19951994


RESULTS OF OPERATIONS
Revenues
Operating revenues $286,748,000 $364,131,000 $543,036,000 $732,735,000
Investment and other income6,492,000 4,880,000 11,358,0008,712,000









293,240,000 369,011,000 554,394,000 741,447,000









Expenses
Salaries and other personnel costs103,687,000 109,678,000 203,737,000 219,998,000
Premiums retained by agents91,252,000 143,780,000 183,647,000 289,692,000
Other operating expenses63,979,000 59,055,000 123,266,000 117,646,000
Provision for title losses and other claims22,419,000 31,935,000 43,725,000 61,598,000
Depreciation and amortization4,584,000 4,998,000 8,795,000 9,608,000
Interest1,639,000 1,407,000 3,252,000 2,975,000
Minority interests563,000 853,000 543,000 1,802,000









288,123,000 351,706,000 567,965,000 703,319,000









Income before premium and income taxes5,117,000 17,305,000 (13,571,000) 38,128,000
Premium taxes 3,280,000 3,871,000
6,101,000 8,196,000
Income (loss) before income taxes$1,837,000 $13,434,000 $(19,672,000) $29,932,000









OPERATING REVENUES
Title Insurance:
Direct operations $128,714,000 $151,799,000 $230,659,000 $305,057,000
Agency operations114,050,000 177,029,000 231,422,000 355,840,000









242,764,000 328,828,000 462,081,000 660,897,000
Real Estate Information32,875,000 25,639,000 58,980,000 53,102,000
Home Warranty7,830,000 6,889,000 15,219,000 13,024,000
Trust and Banking 3,279,000 2,775,000 6,756,000 5,712,000









Total operating revenues$286,748,000 $364,131,000 $543,036,000 $732,735,000









INCOME BEFORE INCOME TAXES
Title Insurance $6,524,000 $13,376,000 $(8,037,000) $27,768,000
Real Estate Information1,524,000 5,412,000 144,000 14,980,000
Home Warranty1,644,000 1,830,000 3,172,000 3,229,000
Trust and Banking539,000 541,000 1,471,000 1,218,000









Total before corporate expenses and
premium taxes10,231,000 21,159,000 (3,250,000) 47,195,000
Corporate expenses5,114,000 3,854,000 10,321,000 9,067,000
Premium taxes3,280,000 3,871,000 6,101,000 8,196,000









Income (loss) before income taxes$1,837,000 $13,434,000$(19,672,000) $29,932,000









TITLE INSURANCE ORDER COUNTS
FROM DIRECT OPERATIONS
Title orders opened236,400 231,600 427,000 491,300
Title orders closed 165,800 194,000 301,100 406,800

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