FIRST AMERICAN FINANCIAL ANNOUNCES RECORD-SETTING FIRST QUARTER 1998 Results ...


April 23, 1998, SANTA ANA, CALIFORNIA

The First American Financial Corporation (NYSE: FAF), the leading provider of real estate-related financial and information services, announced today a record-breaking first quarter for revenues, net income and earnings per share. These results were the highest of any previously reported quarter in the company’s history.

Net income for the first quarter 1998 was $45.0 million, which included a previously announced investment gain of $32.4 million ($19.6 million on an after-tax basis, or $1.09 per diluted share), relating to the joint venture agreement with Experian. The resulting operational net income for the quarter of $25.4 million, or $1.40 per diluted share, was a company record and represents an increase of 776 percent when compared with net income of $2.9 million, or 16 cents per diluted share, for the same period in 1997. Revenues for the first three months of 1998 (excluding the investment gain mentioned above) totaled $572.6 million, an increase of 49.5 percent when compared with the first quarter 1997 revenues of $382.9 million. Low mortgage interest rates and a particularly strong California real estate market contributed to record-setting residential transaction activity.

"Our significant first quarter operating results reflect a robust real estate economy," said President Parker S. Kennedy. "Affordable interest rates, low unemployment and high consumer confidence created a steady demand for housing across the country. With new orders at record levels, and with continued strength in the real estate markets and the national economy, we expect strong second quarter results."

"We are excited about our previously announced first quarter 1998 acquisitions," Kennedy continued, "namely Contour Software, the largest supplier of mortgage origination software to the mortgage broker industry, and Data Tree, the largest recorded title document image repository in the country which provides services and systems to county recorders, governmental agencies and the title industry. As part of our strategic growth plan, we continue to add efficient and profitable businesses, services and products to the company’s extensive menu of services. These first quarter acquisitions will provide significant opportunities as they are integrated into the First American family of companies."

The First American Financial Corporation, based in Santa Ana, California, is the nation’s leading provider of real estate-related financial and information 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, property data services, flood certification, field inspection services, appraisal services, mortgage loan origination and servicing systems and mortgage document preparation; First American Home Buyers Protection Corporation, a home warranty company; and First American Capital Management, an investment advisory firm. The Corporation also operates First American Trust Company and First Security Thrift Company in Southern California. First American Financial has approximately 14,000 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 March 31:                              1998*          1997
Revenues                                        $ 605,049,000  $ 382,877,000
Income before income taxes & minority interests $  82,118,000  $   5,077,000
Net income                                      $  44,965,000  $   2,866,000
Net income per share:					
  Basic                                         $        2.57  $         .17
  Diluted                                       $        2.49  $         .16
Average shares outstanding:					
  Basic                                            17,466,000     17,351,000
  Diluted                                          18,072,000     17,733,000

* Results include an investment gain of $32.4 million ($19.6 million on an after-tax basis, or $1.09 per diluted share), relating to the joint venture agreement with Experian.


SELECTED FINANCIAL DATA
(Unaudited)

            For the Three Months Ended
            March 31
            1998   1997
  RESULTS OF OPERATIONS        
                 
  Revenues              
  Operating revenues         $ 561,614,000   $ 376,425,000
  Investment and other income         43,435,000 * 6,452,000
           
605,049,000
 
382,877,000
  Expenses              
  Salaries and other personnel costs         199,122,000   140,787,000
  Premiums retained by agents         140,045,000   122,193,000
  Other operating expenses         135,000,000   84,470,000
  Provision for title losses and other claims         27,328,000   18,592,000
  Depreciation and amortization         13,706,000   6,475,000
  Premium taxes         4,154,000   4,161,000
  Interest         3,576,000   1,122,000
           
522,931,000
 
377,800,000
  Income before income taxes and minority interests         $ 82,118,000
  $ 5,077,000
                 
  OPERATING REVENUES              
                 
  Title Insurance:              
 
Direct operations
        $ 225,719,000   $ 147,674,000
 
Agency operations
        176,536,000
  152,106,000
            402,255,000   299,780,000
  Real Estate Information         140,360,000   62,047,000
  Home Warranty         13,173,000   10,068,000
  Trust and Banking         5,826,000   4,530,000
  Total operating revenues        
$ 561,614,000
 
$ 376,425,000
                 
                 
  INCOME BEFORE INCOME TAXES              
  AND MINORITY INTERESTS              
                 
  Title Insurance         $ 30,261,000   $ (57,000)
  Real Estate Information         23,535,000   7,823,000
  Home Warranty         3,026,000   1,636,000
  Trust and Banking         1,588,000
  915,000
  Total before corporate expenses         58,410,000   10,317,000
  Corporate expenses         (23,708,000) * 5,240,000
  Income before income taxes and minority interests        
$ 82,118,000
 
$ 5,077,000
                 
                 
  TITLE INSURANCE ORDER COUNTS              
  FROM DIRECT OPERATIONS              
                 
  Title orders opened         397,800   258,400
  Title orders closed         260,600   181,500

* Includes an investment gain of $32.4 million relating to the joint venture agreement with Experian.

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