First American Financial announces record fourth quarter 1996 revenues and ...


February 11, 1997, SANTA ANA, CALIFORNIA

The First American Financial Corporation (NYSE: FAF) announced today record-breaking fourth quarter revenues and better-than-expected fourth quarter results. These favorable results were due in large part to an improvement in the national real estate economy, particularly residential resale transactions and year-end commercial activity.

Net income for the fourth quarter 1996 increased to $11.8 million, or $1.03 per share, as compared with $9.8 million, or 87¢ per share, for the same period in 1995. Record revenues for the fourth quarter 1996 were $425.5 million, an increase of 16.7 percent when compared with the $364.5 million reported for the same period last year.

The company's 1996 profits were $53.6 million, or $4.68 per share, a substantial improvement over 1995 earnings of $7.6 million, or 67¢ per share. Revenues in 1996 were a company record of $1.598 billion, an increase of 27.8 percent when compared with last year's $1.250 billion.

"We are extremely pleased with the company's 1996 operating performance," said President Parker S. Kennedy. "The resurgence in the residential resale and new home sale markets, coupled with our continuing efforts to integrate services for the lending community, produced a record-breaking revenue base for 1996.

"The first quarter of 1997 will be impacted by the seasonal slowdown in new orders experienced during November and December, which resulted in reduced inventory of open orders to start 1997," Kennedy continued. "Although refinance transactions played a role in the first quarter 1996, we have not seen a significant level of refinance activity since that time, which may bring anticipated profits for the first quarter 1997 below last year's first quarter level. However, given the current interest rate and consumer confidence levels, we expect 1997 to be a reasonably strong year. As the leading provider of real estate-related financial and informational services, we remain focused on increasing market share in all of our primary businesses."

The First American Financial Corporation, based in Santa Ana, California, is the nation's leading provider of real estate-related financial and informational services. The corporation's subsidiaries include First American Title Insurance Company, a national and international title insurer, First American Real Estate Information Services, Inc., which offers tax monitoring, credit reporting, flood certification, appraisal services, mortgage loan servicing systems and property information services nationally, and First American Home Buyers Protection Corporation, a home warranty company. The corporation also operates First American Trust Company and First Security Thrift Company in Southern California. First American Financial has more than 10,000 employees in over 400 branch offices in the United States and abroad. Information about the company's subsidiaries and an archive of its press releases can be found at http://www.firstam.com on the Internet.

Any statements looking forward in time inherently involve risks and uncertainties, including but not limited to the effect of interest rate fluctuations, changes in the performance of the real estate markets and the effect of changing economic conditions.

Quarter ended December 31:                      1996	                 1995

Revenues                                 $   425,512,000          $   364,494,000
Income before income taxes               $    17,811,000          $    17,939,000
Net income                               $    11,811,000          $     9,839,000
Net income per share                     $          1.03          $          0.87
	
Year ended December 31:

Revenues                                 $ 1,597,566,000          $ 1,250,216,000
Income before income taxes               $    89,189,000          $    13,787,000
Net income                               $    53,589,000          $     7,587,000
Net income per share                     $          4.68          $          0.67
Average shares outstanding                    11,451,000               11,403,000


For the Three Months Ended For the Twelve Months Ended

December 31
December 31

1996 1995 1996 1995


RESULTS OF OPERATIONS

Revenues
Operating revenues $ 419,889,000 $ 357,794,000 $ 1,571,168,000 $ 1,227,185,000
Investment and other income 5,623,000
6,700,000
26,398,000
23,031,000

425,512,000
364,494,000
1,597,566,000
1,250,216,000
Expenses
Salaries and other personnel costs 145,381,000 117,387,000 531,250,000 431,984,000
Premiums retained by agents 143,737,000 124,295,000 516,593,000 413,444,000
Other operating expenses 87,483,000 71,314,000 327,744,000 260,611,000
Provision for title losses and other claims 18,999,000 23,257,000 86,487,000 90,387,000
Depreciation and amortization 6,321,000 4,471,000 22,207,000 18,002,000
Interest 1,013,000 1,420,000 4,796,000 6,242,000
Minority interests 473,000
726,000
2,624,000
2,132,000

403,407,000
342,870,000
1,491,701,000
1,222,802,000
Income before premium and income taxes 22,105,000 21,624,000 105,865,000 27,414,000
Premium taxes 4,294,000
3,685,000
16,676,000
13,627,000
Income (loss) before income taxes $ 17,811,000
$ 17,939,000
$ 89,189,000
$ 13,787,000
OPERATING REVENUES
Total operating revenues
$ 419,889,000

$ 357,794,000

$ 1,571,168,000

$ 1,227,185,000
INCOME BEFORE INCOME TAXES
Title Insurance $ 17,204,000 $ 10,791,000 $ 66,056,000 $ 17,540,000
Real Estate Information 8,327,000 12,148,000 52,581,000 19,690,000
Home Warranty 1,583,000 2,128,000 8,178,000 6,828,000
Trust and Banking 1,129,000
972,000
3,728,000
3,304,000
Total before corporate expenses and premium taxes 28,243,000 26,039,000 130,543,000 47,362,000
Corporate expenses 6,138,000 4,415,000 24,678,000 19,948,000
Premium taxes 4,294,000 3,685,000 16,676,000 13,627,000
Income (loss) before income taxes
$ 17,811,000

$ 17,939,000

$ 89,189,000

$ 13,787,000
TITLE INSURANCE ORDER COUNTS
FROM DIRECT OPERATIONS
Title orders opened
239,500 223,200 1,026,900 894,400
Title orders closed 192,800 181,100 775,100 667,200

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