First American Announces 3rd Qtr Non-Cash Charge for Fannie Mae, Freddie Mac Preferred Securities
September 9, 2008, SANTA ANA, Calif.
The First American Corporation (NYSE: FAF), America’s largest provider of business information, today announced that, as a result of actions taken by the U.S. government with respect to the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), it will record other-than-temporary impairment and take a non-cash charge to third quarter earnings related to its investments in perpetual preferred securities issued by Fannie Mae and Freddie Mac. The value of these securities has decreased materially and it is unclear if and when the value will improve. First American currently holds perpetual preferred securities in Fannie Mae at a cost of approximately $30.3 million and in Freddie Mac at a cost of approximately $7.6 million. First American does not hold any common stock or other equity securities issued by Fannie Mae or Freddie Mac.
About First American
The First American Corporation (NYSE: FAF) is a FORTUNE 500® company that traces its history to 1889. With revenues of approximately $8.2 billion in 2007, it is America’s largest provider of business information. First American combines advanced analytics with its vast data resources to supply businesses and consumers with valuable information products to support the major economic events of people’s lives, such as getting a job, renting an apartment, buying a car or house, securing a mortgage and opening or buying a business. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within five primary business segments, including: Title Insurance and Services, Specialty Insurance, Information and Outsourcing Solutions, Data and Analytic Solutions, and Risk Mitigation and Business Solutions. More information about the company and an archive of its press releases can be found at www.firstam.com.
This current report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the statements relating to the anticipated charge to third quarter earnings. Risks and uncertainties exist that may cause results to differ materially from those set forth in the forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include changes in market conditions or governmental action with respect to Fannie Mae and/or Freddie Mac. The forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.