The First American Corporation Celebrates 120-Year Anniversary as It Prepares for Split
—Separation of Financial Services Companies from Information Solutions Companies Will Enable Both to Grow and Prosper—
August 31, 2009, SANTA ANA, Calif.
SANTA ANA, Calif., Aug. 31, 2009––The First American Corporation (NYSE: FAF), America’s largest provider of business information, announced today a year-long celebration to mark its 120th year of service to the real estate and mortgage industries. The company also reaffirmed its plan to separate its Information Solutions and Financial Services businesses, creating two new publicly traded companies, as soon as the first half of 2010.
From its roots as an Orange County, Calif., abstract company, First American has grown to become an industry leader, delivering a vast array of products and services used in real estate transactions, risk management, insurance and consumer marketing. Today, 90 percent of all real estate transactions in the United States involve at least one First American product or service. The company’s primary businesses include one of the nation’s largest title insurance companies, a trust company, tax services, home warranty and flood certification businesses and the nation’s most robust data and analytics provider to the mortgage industry and the investment community. The company first went public, trading on the over-the-counter market, in 1964 and began offering its stock on the New York Stock Exchange in 1993. Since 1993, its stock has delivered more than a 640 percent* return to shareholders and has out-performed the Dow Jones Industrial Average (a 282 percent gain) as well as many other large companies.
First American has announced that it will separate its Information Solutions companies—consisting primarily of its Information and Outsourcing Solutions, Data and Analytics Solutions, and Risk Mitigation and Business Solutions segments—and its Financial Services companies—comprised of its title insurance, specialty insurance and trust operations—to maximize the unrealized value of the company’s information businesses, while strengthening the competitive positions of both companies. The move is expected to occur within the first half of 2010. In the first half of 2009, the Financial Services and Information Solutions Groups reported revenues of $ 1.86 billion and $1.11 billion, respectively.
Parker S. Kennedy, First American’s chairman, chief executive officer and the great grandson of the company’s founder, C.E. Parker, said: “Our success and ability to thrive despite challenging market conditions is a result of our talented and dedicated people. Our commitment to delivering exceptional customer service, innovation and process improvement have set the pace for our industry. We are proud to reach this significant milestone as we position our company to be agile and responsive to market needs, while remaining true to the founding principles that continue to drive our business forward. Our decision to separate our two main businesses is an example of the kind of forward-looking decisions that have guided our company through 23 economic downturns over the past 120 years, and enabled us to produce consistent returns for investors and top-tier products and services for our customers.”
Today, First American maintains a global presence with operations in more than 90 countries and its title insurance, flood certification, tax services and data and analytics companies are among the largest in the nation.
“The title and financial services businesses are the heritage of our company and the platform from which it grew,” said Dennis J. Gilmore, chief executive officer of First American’s Financial Services Company. “The coming separation will allow us to build upon the strong foundation we’ve already laid and uniquely position us to realize the abundant opportunities that lie ahead.”
Frank V. McMahon, chief executive officer of First American’s Information Solutions Company added: “Since 1986, First American has made more than 150 acquisitions, many of which were information, data and outsourcing companies. As a stand-alone business, the Information Solutions Company will be able to further integrate these operations to develop the next generation of solutions for our clients. The new products and solutions that we are developing are leveraging our unmatched data assets and our enhanced analytical capabilities.”
First American’s leadership and drive for innovation continue to set the pace for the real estate and mortgage industries. Notable contributions and achievements by First American include:
- Launching the industry’s first high-speed automated title search platform (FAST Search), significantly reducing the time and cost associated with title searches
- Introducing the enhanced protections of its Eagle Policy® of title insurance, which was adopted as the industry standard by the American Land Title Association
- Responding to the needs of consumers in times of natural disasters, such as Hurricane Katrina and the California wildfires, by providing free replacement documents and discounted title services to affected homeowners
- Streamlining accessibility to public records through its property information businesses
- Building the industry’s most technologically advanced property data repository, with over 500 terabytes of data, that covers 97 percent of all U.S. properties (140 million), more than 50 million active mortgages, and 96 percent of loan-level, non-agency mortgage securities
- Providing advanced data and analytics to enhance decision making within the mortgage industry and investment community: reducing risk and supporting mortgage originations.
About First American
The First American Corporation (NYSE: FAF) is a FORTUNE 500® company that traces its history to 1889. With total revenues of approximately $6.2 billion in 2008, 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.
*Based on the January 1, 1993, stock price
Certain statements made in this press release, including but not limited to those related to the consummation and timing of the split of the company’s Financial Services and Information Solutions businesses, are 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. These forward-looking statements may contain the words “believe,” “anticipate,” “expect,” “plan,” “predict,” “estimate,” “project,” “will be,” “will continue,” “will likely result,” or other similar words and phrases. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include: interest rate fluctuations; changes in the performance of the real estate markets; limitations on access to public records and other data; general volatility in the capital markets; changes in applicable government regulations; heightened scrutiny by legislators and regulators of the company’s Title Insurance and Services segment and certain other of the company’s businesses; the inability to consummate the spin-off transaction or to consummate it in the form originally proposed as a result of, among other factors, the inability to obtain necessary regulatory approvals, the failure to obtain the final approval of the company’s board of directors, the inability to obtain third party consents or undesirable concessions or accommodations required to be made to obtain such consents, the landscape of the real estate and mortgage credit markets, market conditions, the inability to transfer assets into the entity being spun-off or unfavorable reactions from customers, ratings agencies, investors or other interested persons; the inability to realize the benefits of the proposed spin-off transaction as a result of the factors described immediately above, as well as, among other factors, increased borrowing costs, competition between the resulting companies, unfavorable reactions from employees, the inability of the financial services company to pay the anticipated level of dividends, the triggering of rights and obligations by the transaction or any litigation arising out of or related to the separation; consolidation among the company’s significant customers and competitors; changes in the company’s ability to integrate businesses which it acquires; unfavorable economic conditions; impairments in the company’s goodwill or other intangible assets; losses in the company’s investment portfolio; expenses of and funding obligations to the company’s pension plan; weakness in the commercial real estate market and increases in the amount or severity of commercial real estate transaction claims; and other factors described in Part I, Item 1A of the company’s annual report on Form 10-K for the year ended December 31, 2008, as updated in Part II, Item 1A of the company’s quarterly reports on Form 10-Q for the quarters ended March 31 and June 30, 2009, in each case as filed with the Securities and Exchange Commission. 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.