The First American Financial Corporation announces better-than-expected fourth quarter results


February 8, 1996, SANTA ANA, CALIFORNIA

The First American Financial Corporation (NYSE: FAF) announced today better-than-expected fourth quarter results due to lower mortgage interest rates and improvements in the national real estate market.

Net income for the fourth quarter increased to $9.8 million, or 87¢ per share, as compared with a net loss of $2.9 million, or 25¢ per share, for the same period in 1994. Revenues of $364.5 million for the fourth quarter 1995 increased 21.5 percent when compared with the $300.1 million reported for the same period last year.

The company's 1995 profits were $7.6 million, or 67¢ per share, despite a net loss of $12.7 million, or $1.11 per share, in the first quarter 1995. This compares with 1994 earnings of $18.9 million, or $1.66 per share. Revenues in 1995 totaled $1.3 billion, a decrease of 9.2 percent from last year's $1.4 billion.

"Recent actions by the Federal Reserve Board have favorably affected mortgage originations, resulting in an increase in order volumes for all of our primary title and real estate information service segments," said President Parker S. Kennedy. "Should this monetary policy remain stable, we foresee a stronger first half of 1996 compared with the first half of 1995." Kennedy noted that although new orders are on the rise, the company continues to focus on personnel efficiencies through expansion and continued development of the company's technology resources.

"Our new acquisitions in early 1995 have generated positive results and provide tremendous cross-marketing opportunities for all of our businesses," Kennedy continued. "We remain focused on market share growth and expect that the opportunities our mix of services and products is producing will grow significantly. As the only full-service real estate information provider, we will continue to integrate and expand these services to more efficiently meet the needs of our customers."

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 certification 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.

Synopsis--

 
Quarter ended December 31:		     1995		1994 
Revenues			       $  364,494,000	  $  300,076,000 
Inhcome (loss) before income taxes     $   17,939,000	  $   (4,777,000) 
Net income (loss)		       $    9,839,000	  $   (2,877,000) 
Net income (loss) per share	       $         0.87	  $        (0.25) 
	  
Year ended December 31: 
 
Revenues			       $1,250,216,000	  $1,376,393,000 
Income before income taxes	       $   13,787,000	  $   32,245,000 
Net income 			       $    7,587,000	  $   18,945,000 
Net income per share		       $	 0.67	  $	    1.66 
Average shares outstanding	           11,403,000	      11,447,000 
First American




For the Three Months Ended
For the Year Ended




December 31
December 31











1995
1994
1995
1994


RESULTS OF OPERATIONS


















Revenues








Operating revenues


$ 357,794,000
$ 294,409,000
$ 1,227,185,000
$ 1,356,946,000
Investment and other income


6,700,000
5,667,000
23,031,000
19,447,000













364,494,000
300,076,000
1,250,216,000
1,376,393,000









Expenses








Salaries and other personnel costs


117,387,000
101,019,000
431,984,000
423,328,000
Premiums retained by agents


124,295,000
112,614,000
413,444,000
533,598,000
Other operating expenses


71,314,000
58,941,000
260,611,000
232,532,000
Provision for title losses and other claims


23,257,000
21,400,000
90,387,000
110,230,000
Depreciation and amortization


4,471,000
4,950,000
18,002,000
19,796,000
Interest


1,420,000
1,862,000
6,242,000
6,267,000
Minority interests


726,000
423,000
2,132,000
2,944,000













342,870,000
301,209,000
1,222,802,000
1,328,695,000









Income (loss) before premium and income taxes


21,624,000
(1,133,000)
27,414,000
47,698,000
Premium taxes


3,685,000
3,644,000
13,627,000
15,453,000









Income (loss) before income taxes


$ 17,939,000
$ (4,777,000)
$ 13,787,000
$ 32,245,000









OPERATING REVENUES


















Title Insurance:









Direct operations


$ 143,239,000
$ 123,684,000
$ 517,616,000
$ 562,566,000
Agency operations


155,044,000
140,067,000
517,173,000
659,015,000













298,283,000
263,751,000
1,034,789,000
1,221,581,000
Real Estate Information


46,949,000
19,270,000
145,755,000
94,816,000
Home Warranty


8,737,000
7,544,000
32,531,000
28,116,000
Trust and Banking


3,825,000
3,844,000
14,110,000
12,433,000









Total operating revenues


$ 357,794,000
$ 294,409,000
$ 1,227,185,000
$ 1,356,946,000





























INCOME (LOSS) BEFORE INCOME TAXES








Title Insurance


$ 10,791,000
$ 610,000
$ 17,540,000
$ 37,819,000
Real Estate Information


12,148,000
(364,000)
19,690,000
17,371,000
Home Warranty


2,128,000
2,067,000
6,828,000
6,709,000
Trust and Banking


972,000
1,425,000
3,304,000
3,214,000









Total before corporate expenses and








premium taxes


26,039,000
3,738,000
47,362,000
65,113,000
Corporate expenses


4,415,000
4,871,000
19,948,000
17,415,000
Premium taxes


3,685,000
3,644,000
13,627,000
15,453,000









Income (loss) before income taxes


$ 17,939,000
$ (4,777,000)
$ 13,787,000
$ 32,245,000









TITLE INSURANCE ORDER COUNTS








FROM DIRECT OPERATIONS


















Title orders opened


223,200
177,400
894,400
872,900
Title orders closed


181,100
150,800
667,200
722,900











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