February 9, 1999, SANTA ANA, Calif.

The First American Financial Corporation (NYSE: FAF), the leading provider of real estate-related information products and services, announced today record-breaking annual and fourth quarter revenues, net income and earnings per share.

Net income for the fourth quarter of 1998 was $53.0 million, or 85 cents per diluted share, representing a 156 percent increase over net income of $20.7 million, or 37 cents per diluted share, for the same period in 1997. The 1998 results were the highest of any previously reported fourth quarter and were achieved despite a $6.2 million pre-tax charge ($3.8 million on an after-tax basis, or 6 cents per diluted share) associated with the write-off of certain capitalized software in the company's information services operations. Analysts' consensus estimates for the fourth quarter of 1998 were 80 cents per diluted share. Revenues for the fourth quarter of 1998 were $797.3 million, an increase of 43 percent when compared with revenues of $557.0 million reported for the same period last year.

The company's record-breaking 1998 profits were $178.9 million, or $2.99 per diluted share, which represents an increase of 177 percent when compared with 1997 results of $64.5 million, or $1.16 per diluted share. Record-setting revenues in 1998 totaled $2.84 billion, an increase of 49 percent when compared with last year's revenues of $1.91 billion. These profits and revenues for the year exclude a previously announced investment gain of $32.4 million, $19.8 million on an after-tax basis, or 33 cents per diluted share, relating to its joint venture with Experian.

Full-year 1998 and 1997 results have been restated to reflect the company's current year acquisitions accounted for as poolings of interests. In addition, 1997 per share amounts and shares outstanding have been adjusted for the three-for-two stock split distributed on Jan. 15, 1998, and the three-for-one stock split distributed on July 17, 1998.

With mortgage interest rates reaching their lowest level in five years, 1998 marked a banner year for the real estate industry. Mortgage loan originations for the year were at record levels, sales of existing homes reached a record 4.8 million units and new home sales hit a 21-year record high, with housing values growing at a pace slightly above inflation.

"First American excelled in 1998's strong real estate market, profiting from the increased volume of real estate transactions nationwide and strong market share gains," stated Parker S. Kennedy, president of The First American Financial Corporation. "We are extremely excited about our prospects for 1999, particularly in our newly established consumer risk management division and our pending merger with National Information Group.

"We are committed to delivering strong operating results for our shareholders in 1999. We remain focused on our successful growth strategies which include expanding our products to serve a new client base of businesses, employers, landlords and consumers, as well as increasing market share and efficiencies; enhancing our technological capabilities; and cost-effectively bundling and delivering a full menu of information products to our mortgage customers."

It was also noted that during the first quarter of 1999, the company will implement a change to its accounting policy for tax service contracts in anticipation of the issuance of a Securities and Exchange Commission Staff Accounting Bulletin regarding revenue recognition. The new accounting policy will be adopted prospectively and apply to all new loans to be serviced beginning Jan. 1, 1999. The change will provide for a more ratable recognition of revenues and gross profit from tax service contracts, reducing the amount of revenue and gross profit recognized at the inception of such agreements and spreading it over the life of the contract. Although this accounting change will likely cause a reduction in tax service revenues and earnings recognized in the early years of each tax service contract, it is anticipated by the company that starting in the second year following its adoption, this method will begin to reduce the volatility in reported financial results arising from the inherent cyclicality of the company's tax service business. This change will have no impact on cash flow from operations.

The First American Financial Corporation, based in Santa Ana, Calif., is the nation's leading provider of real estate-related information products and 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, loss mitigation services, mortgage loan origination and servicing systems, and mortgage document preparation nationally; 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 more than 17,000 employees in over 400 branches in the United States and abroad. Information about the company's subsidiaries and an archive of its press releases can be found on the Internet at

Any statements in this release looking forward in time involve risks and uncertainties, including but not limited to the following risks: the effect of interest rate fluctuations; changes in the performance of the real estate markets; the effect of changing economic conditions; the demand for and the acceptance of the company's products; and contingencies associated with the Year 2000 issue.
Quarter ended December 31:19981997
Revenues $ 797,281,000 $ 556,966,000
Income before income taxes and minority interests $ 94,567,000 $ 36,967,000
Income taxes $ 32,700,000 $ 14,900,000
Minority interests $ 8,849,000 $ 1,389,000
Net income $ 53,018,000 $ 20,678,000
Net income per share:
$ .88 $ .38
$ .85 $ .37
Average shares outstanding:
59,942,000 54,448,000
62,690,000 56,041,000

Year ended December 31:
Revenues $ 2,877,328,000 $ 1,908,923,000
Income before income taxes and minority interests $ 361,422,000 $ 109,675,000
Income taxes $ 127,700,000 $ 41,500,000
Minority interests $ 35,012,000 $ 3,676,000
Net income $ 198,710,000 $ 64,499,000
Net income per share:
$ 3.46 $ 1.18
$ 3.32 $ 1.16
Average shares outstanding:
57,450,000 54,448,000
59,822,000 55,717,000

Full-year 1998 and 1997 results have been restated to reflect the company’s current year acquisitions accounted for as poolings of interests. In addition, 1997 per share amounts and shares outstanding have been adjusted for the three-for-two stock split distributed on Jan. 15, 1998 and the three-for-one stock split distributed on July 17, 1998.

For the Three Months EndedFor the Twelve Months Ended
December 31
December 31

Operating revenues $ 784,747,000 $ 549,755,000 $ 2,802,190,000 $ 1,881,666,000
Investment and other income12,534,000 7,211,000 75,138,000 *27,257,000




Salaries and other personnel costs254,616,000 184,182,000 914,058,000 659,325,000
Premiums retained by agents220,416,000 167,023,000 773,030,000 563,137,000
Other operating expenses170,095,000 126,052,000 611,332,000 421,056,000
Provision for title losses and other claims29,874,000 24,734,000 118,763,000 90,323,000
Depreciation and amortization17,251,000 10,635,000 59,804,000 38,489,000
Premium taxes5,895,000 4,349,000 20,912,000 16,904,000
Interest4,567,000 3,024,000 18,007,000 10,014,000




Income before income taxes and minority interests

$ 36,967,000

$ 361,422,000

$ 109,675,000
Title Insurance:
Direct operations $ 311,179,000 $ 221,342,000 $ 1,097,989,000 $ 761,774,000
Agency operations275,190,000 207,487,000 965,228,000 700,193,000




Real Estate Information176,947,000 102,652,000 656,018,000 352,833,000
Home Warranty15,177,000 13,007,000 58,204,000 46,859,000
Trust and Banking6,254,000 5,267,000 24,751,000 20,007,000
Total operating revenues
$ 784,747,000

$ 549,755,000

$ 2,802,190,000

$ 1,881,666,000
Title Insurance $ 73,547,000 $ 29,963,000 $ 227,906,000 $ 79,602,000
Real Estate Information24,787,000 10,601,000 116,333,000 45,107,000
Home Warranty2,799,000 2,584,000 11,406,000 8,871,000
Trust and Banking1,509,000
Total before corporate expenses and minority interests 102,642,000 44,187,000 362,801,000 137,642,000
Corporate expenses8,075,000 7,220,000 1,379,000 27,967,000
Income before income taxes and minority interests
$ 94,567,000

$ 36,967,000

$ 361,422,000

$ 109,675,000
Title orders opened 410,000 298,800 1,585,400 1,173,300
Title orders closed 336,700 238,900 1,210,200 885,600

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


Access the powerful online services available only at First American.

We value your privacy. Learn why we collect this information and how we use it. Sign In
Forgot Username or Password?

Sign Up

Sign up for a myFirstAm® account.

Other Platforms

  • FASTWeb

    Title ordering, routing and tracking.

  • AgentNet®

    eJackets, closing protection letters, back title, bulletins and more.


    Access the nation's largest land record database.

  • Home Warranty

    Coverage for a home's major systems and appliances.