First American Financial Reports Second Quarter 2021 Results

—Reports Second Quarter Earnings of $2.72 per Diluted Share—


July 22, 2021, Santa Ana, Calif.

First American Financial Corporation (NYSE: FAF), a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, today announced financial results for the second quarter ended June 30, 2021.

Download the complete press release as a PDF

Current Quarter Highlights

  • Total revenue of $2.3 billion, up 41 percent compared with last year
    • Closed title orders up 7 percent, driven by growth in purchase and commercial orders, partially offset by lower refinance orders
    • Average revenue per order up 36 percent, primarily driven by an increase in average revenue per order for commercial transactions and by residential home price appreciation  
  • Title Insurance and Services segment pretax margin of 19.1 percent  
    • 16.3 percent excluding net realized investment gains  
  • Commercial revenues of $223.3 million, up 104 percent compared with last year
  • Specialty Insurance segment pretax margin of 13.0 percent
    • 2.6 percent excluding net realized investment gains
  • Net realized investment gains of $86.5 million, or 59 cents per diluted share
    • Includes gain on a venture investment of $43.7 million
  • Debt-to-capital ratio of 23.5 percent, or 16.0 percent excluding secured financings payable of $611.0 million

Selected Financial Information
($ in millions, except per share data)

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2021

 

 

2020

 

Total revenue

 

$

2,266.4

 

 

$

1,608.7

 

Income before taxes

 

 

399.4

 

 

 

225.3

 

 

 

 

 

 

 

 

 

 

Net income

 

$

302.3

 

 

$

170.7

 

Net income per diluted share

 

 

2.72

 

 

1.52

 

Total revenue for the second quarter of 2021 was $2.3 billion, an increase of 41 percent relative to the second quarter of 2020. Net income in the current quarter was $302.3 million, or $2.72 per diluted share, compared with net income of $170.7 million, or $1.52 per diluted share, in the second quarter of 2020. Net realized investment gains in the current quarter were $86.5 million, or 59 cents per diluted share, compared with net realized investment gains of $69.3 million, or 47 cents per diluted share, in the second quarter of last year. The net realized investment gains in the current quarter were primarily due to a gain related to a venture investment and the change in the fair value of marketable equity securities, while net realized investment gains in the second quarter of last year were primarily driven by the change in the fair value of marketable equity securities.

“First American continued to deliver record results in the second quarter,” said Dennis J. Gilmore, chief executive officer at First American Financial Corporation. “Our title segment posted a pretax margin of 19.1 percent, the highest in the company’s history.  

“These outstanding results were driven by continued strength in the purchase market and a strong rebound in the commercial market. We also benefited from high productivity bolstered by our ongoing data and title automation initiatives. In addition, we recognized a $44 million gain this quarter related to our venture investments program, which continues to provide strategic and financial benefit.

“Moving forward, we will manage our capital to create long-term shareholder value, including continued investment to expand our position as the leading industry innovator.”

Title Insurance and Services
($ in millions, except average revenue per order)

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2021

 

 

2020

 

Total revenues

 

$

2,108.2

 

 

$

1,462.9

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

402.4

 

 

$

237.8

 

Pretax margin

 

 

19.1

%

 

 

16.3

%

 

 

 

 

 

 

 

 

 

Title open orders(1)

 

 

329,500

 

 

 

351,300

 

Title closed orders(1)

 

 

271,100

 

 

 

254,500

 

 

 

 

 

 

 

 

 

 

U.S. Commercial

 

 

 

 

 

 

 

 

   Total revenues

 

$

223.3

 

 

$

109.5

 

   Open orders

 

 

37,100

 

 

 

23,200

 

   Closed orders

 

 

20,200

 

 

 

14,900

 

   Average revenue per order

 

$

11,100

 

 

$

7,400

 

(1) U.S. direct title insurance orders only.

 

 

 

 

 

 

 

 

Total revenues for the Title Insurance and Services segment during the second quarter were $2.1 billion, up 44 percent compared with the same quarter of 2020. Direct premiums and escrow fees were up 48 percent compared with the second quarter of 2020, driven by a 7 percent increase in the number of direct title orders closed and a 36 percent increase in the average revenue per direct title order closed. The average revenue per direct title order increased to $2,651, due to higher average revenue per order from commercial transactions related to larger deal size and from residential transactions primarily driven by strong home price appreciation. In addition, the shift in the order mix from lower-premium residential refinance transactions to higher-premium commercial and purchase transactions also impacted the average revenue per order. Agent premiums, which are recorded on approximately a one-quarter lag relative to direct premiums, were up 51 percent in the current quarter as compared with last year.

Information and other revenues were $298.2 million during the quarter, up 31 percent compared with the same quarter of last year. The increase was primarily due to higher demand for the company’s title information products in our data and analytics, commercial and loss mitigation business lines.  

Investment income was $47.5 million in the second quarter, up $4.2 million, or 10 percent from the same quarter last year. The increase was primarily due to higher interest income in the company’s warehouse lending business and higher average balances in the company’s investment portfolio, partially offset by the impact of the decline in short-term interest rates on the company’s tax-deferred property exchange and escrow balances. Net realized investment gains totaled $70.4 million in the current quarter, compared with net realized investment gains of $62.8 million in the second quarter of 2020. This quarter’s net realized investment gains were primarily driven by a gain related to a venture investment, compared with net realized gains in the second quarter of last year that were primarily due to the change in the fair value of marketable equity securities. 

Personnel costs were $556.8 million in the second quarter, an increase of $139.8 million, or 34 percent, compared with the same quarter of 2020. This increase was attributable to higher incentive compensation and employee benefit expense due to growth in revenues and profitability, and higher salary expense from an increase in the number of employees.  

Other operating expenses were $297.6 million in the second quarter, up $75.4 million, or 34 percent, compared with the second quarter of 2020. The increase was primarily due to higher production-related costs resulting from elevated order volume, and higher software and professional services expense.  

The provision for policy losses and other claims was $67.7 million in the second quarter, or 4.0 percent of title premiums and escrow fees, a decrease from a 5.0 percent loss provision rate in the prior year. The current quarter rate reflects an ultimate loss rate of 4.0 percent for the current policy year with no change in the loss reserve estimates for prior policy years.

 Depreciation and amortization expense was $39.5 million in the second quarter, up $0.5 million, or 1 percent, compared with the same period last year, due to higher amortization of intangible assets.  

Pretax income for the Title Insurance and Services segment was $402.4 million in the second quarter, compared with $237.8 million in the second quarter of 2020. Pretax margin was 19.1 percent in the current quarter, compared with 16.3 percent last year. Excluding the impact of net realized investment gains, the pretax margin was 16.3 percent this year, compared with 12.5 percent last year.

Specialty Insurance
($ in millions)

 

Three Months Ended

 

 

 

June 30,

 

 

 

2021

 

 

2020

 

Total revenues

 

$

151.6

 

 

$

133.5

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

19.7

 

 

$

7.3

 

Pretax margin

 

 

13.0

%

 

 

5.5

%

Total revenues for the Specialty Insurance segment were $151.6 million in the second quarter of 2021, an increase of 14 percent compared with the second quarter of 2020. Pretax income for the segment was $19.7 million, compared with $7.3 million last year.

Home warranty revenues grew this quarter to $107.6 million, up 10 percent compared with last year. The loss rate was 55.5 percent, compared with 54.7 percent last year, primarily driven by higher average cost per claim. Home warranty’s pretax income was $13.7 million, compared with $15.8 million last year.

The wind down of the property and casualty business is on track to be completed in the third quarter of 2022. At the close of the current quarter, policies-in-force had declined by 22 percent since the beginning of the year. Pretax income was $6.0 million, largely due to a $12.2 million gain from the sale of agency operations.     

Teleconference/Webcast

First American’s second-quarter 2021 results will be discussed in more detail on Thursday, July 22, 2021, at 11 a.m. EDT, via teleconference. The toll-free dial-in number is 877-407-8293. Callers from outside the United States may dial +1-201-689-8349.

The live audio webcast of the call will be available on First American’s website at www.firstam.com/investor. An audio replay of the conference call will be available through August 5, 2021, by dialing 201-612-7415 and using the conference ID 13721369. An audio archive of the call will also be available on First American’s investor website.

About First American

First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance, settlement services and risk solutions for real estate transactions that traces its heritage back to 1889. First American also provides title plant management services; title and other real property records and images; valuation products and services; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $7.1 billion in 2020, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2021, First American was named to the Fortune 100 Best Companies to Work For® list for the sixth consecutive year. More information about the company can be found at www.firstam.com.

Website Disclosure

First American posts information of interest to investors at www.firstam.com/investor. This includes opened and closed title insurance order counts for its U.S. direct title insurance operations, which are posted approximately 10 to 12 days after the end of each month.

Forward-Looking Statements

Certain statements made in this press release and the related management commentary contain, and responses to investor questions may contain, 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 can be identified by the fact that they do not relate strictly to historical or current facts and may contain the words “believe,” “anticipate,” “expect,” “intend,” “plan,” “predict,” “estimate,” “project,” “will be,” “will continue,” “will likely result,” or other similar words and phrases or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” or “could.” These forward-looking statements include, without limitation, statements regarding future operations, performance, financial condition, prospects, plans and strategies. These forward-looking statements are based on current expectations and assumptions that may prove to be incorrect. 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, without limitation: interest rate fluctuations; changes in the performance of the real estate markets; volatility in the capital markets; unfavorable economic conditions; the coronavirus pandemic and responses thereto; impairments in the company’s goodwill or other intangible assets; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; failures at financial institutions where the company deposits funds; regulatory oversight and changes in applicable laws and government regulations, including privacy and data protection laws; heightened scrutiny by legislators and regulators of the company’s title insurance and services segment and certain other of the company’s businesses; regulation of title insurance rates; limitations on access to public records and other data; climate change, health crises, severe weather conditions and other catastrophe events; changes in relationships with large mortgage lenders and government-sponsored enterprises; changes in measures of the strength of the company’s title insurance underwriters, including ratings and statutory capital and surplus; losses in the company’s investment portfolio or venture capital portfolio; material variance between actual and expected claims experience; defalcations, increased claims or other costs and expenses attributable to the company’s use of title agents; any inadequacy in the company’s risk management framework; systems damage, failures, interruptions, cyberattacks and intrusions, or unauthorized data disclosures; innovation efforts of the company and other industry participants and any related market disruption; errors and fraud involving the transfer of funds; the company’s use of a global workforce; inability of the company’s subsidiaries to pay dividends or repay funds; and other factors described in the company’s annual report on Form 10-Q for the quarter ended March 31, 2021, 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.

Use of Non-GAAP Financial Measures

This news release and related management commentary contain certain financial measures that are not presented in accordance with generally accepted accounting principles (GAAP), including an adjusted debt to capitalization ratio, personnel and other operating expense ratios, success ratios, net operating revenues; and adjusted revenues, adjusted pretax income, adjusted earnings per share, and adjusted pretax margins for the company, its title insurance and services segment and its specialty insurance segment. The company is presenting these non-GAAP financial measures because they provide the company’s management and investors with additional insight into the financial leverage, operational efficiency and performance of the company relative to earlier periods and relative to the company’s competitors. The company does not intend for these non-GAAP financial measures to be a substitute for any GAAP financial information. In this news release, these non-GAAP financial measures have been presented with, and reconciled to, the most directly comparable GAAP financial measures. Investors should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. Because not all companies use identical calculations, the presentation of these non-GAAP measures may not be comparable to other similarly titled measures of other companies.   

First American Financial Corporation

 

Summary of Consolidated Financial Results and Selected Information

 

(in thousands, except per share amounts and title orders, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Total revenues

 

$

2,266,375

 

 

$

1,608,729

 

 

$

4,292,120

 

 

$

3,021,672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$

399,416

 

 

$

225,295

 

 

$

705,438

 

 

$

297,619

 

Income tax expense

 

 

96,008

 

 

 

53,601

 

 

 

167,572

 

 

 

62,079

 

Net income

 

 

303,408

 

 

 

171,694

 

 

 

537,866

 

 

 

235,540

 

Less: Net income attributable to noncontrolling interests

 

 

1,109

 

 

 

1,039

 

 

 

1,951

 

 

 

1,681

 

Net income attributable to the Company

 

$

302,299

 

 

$

170,655

 

 

$

535,915

 

 

$

233,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.73

 

 

$

1.52

 

 

$

4.83

 

 

$

2.07

 

Diluted

 

$

2.72

 

 

$

1.52

 

 

$

4.81

 

 

$

2.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.46

 

 

$

0.44

 

 

$

0.92

 

 

$

0.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

110,866

 

 

 

112,309

 

 

 

111,001

 

 

 

112,939

 

Diluted

 

 

111,177

 

 

 

112,555

 

 

 

111,303

 

 

 

113,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Title Insurance Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title orders opened(1)

 

 

329,500

 

 

 

351,300

 

 

 

692,700

 

 

 

705,700

 

Title orders closed(1)

 

 

271,100

 

 

 

254,500

 

 

 

558,700

 

 

 

457,200

 

Paid title claims

 

$

32,873

 

 

$

34,986

 

 

$

72,842

 

 

$

77,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) U.S. direct title insurance orders only.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First American Financial Corporation

 

Selected Consolidated Balance Sheet Information

 

(in thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Cash and cash equivalents

 

$

2,222,675

 

 

$

1,275,466

 

Investments

 

 

8,814,914

 

 

 

7,150,689

 

Goodwill and other intangible assets, net

 

 

1,555,993

 

 

 

1,573,102

 

Total assets

 

 

15,426,885

 

 

 

12,795,988

 

Reserve for claim losses

 

 

1,242,510

 

 

 

1,178,004

 

Notes and contracts payable

 

 

1,008,241

 

 

 

1,010,756

 

Total stockholders’ equity

 

$

5,263,744

 

 

$

4,909,972

 

First American Financial Corporation

 

Segment Information

 

(in thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

June 30, 2021

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

917,451

 

 

$

787,244

 

 

$

130,207

 

 

$

 

Agent premiums

 

 

904,897

 

 

 

904,897

 

 

 

 

 

 

 

Information and other

 

 

301,439

 

 

 

298,242

 

 

 

3,457

 

 

 

(260

)

Net investment income

 

 

56,074

 

 

 

47,482

 

 

 

1,816

 

 

 

6,776

 

Net realized investment gains

 

 

86,514

 

 

 

70,364

 

 

 

16,150

 

 

 

 

 

 

 

2,266,375

 

 

 

2,108,229

 

 

 

151,630

 

 

 

6,516

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

588,266

 

 

 

556,827

 

 

 

22,727

 

 

 

8,712

 

Premiums retained by agents

 

 

718,424

 

 

 

718,424

 

 

 

 

 

 

 

Other operating expenses

 

 

330,719

 

 

 

297,586

 

 

 

23,726

 

 

 

9,407

 

Provision for policy losses and other claims

 

 

149,930

 

 

 

67,686

 

 

 

82,244

 

 

 

 

Depreciation and amortization

 

 

40,939

 

 

 

39,470

 

 

 

1,433

 

 

 

36

 

Premium taxes

 

 

22,467

 

 

 

20,698

 

 

 

1,769

 

 

 

 

Interest

 

 

16,214

 

 

 

5,187

 

 

 

 

 

 

11,027

 

 

 

 

1,866,959

 

 

 

1,705,878

 

 

 

131,899

 

 

 

29,182

 

Income (loss) before income taxes

 

$

399,416

 

 

$

402,351

 

 

$

19,731

 

 

$

(22,666

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

June 30, 2020

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

651,984

 

 

$

530,735

 

 

$

121,249

 

 

$

 

Agent premiums

 

 

597,895

 

 

 

597,895

 

 

 

 

 

 

 

Information and other

 

 

231,169

 

 

 

228,252

 

 

 

3,103

 

 

 

(186

)

Net investment income

 

 

58,420

 

 

 

43,234

 

 

 

2,316

 

 

 

12,870

 

Net realized investment gains (losses)

 

 

69,261

 

 

 

62,823

 

 

 

6,850

 

 

 

(412

)

 

 

 

1,608,729

 

 

 

1,462,939

 

 

 

133,518

 

 

 

12,272

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

451,487

 

 

 

417,066

 

 

 

20,681

 

 

 

13,740

 

Premiums retained by agents

 

 

472,398

 

 

 

472,398

 

 

 

 

 

 

 

Other operating expenses

 

 

250,088

 

 

 

222,192

 

 

 

19,283

 

 

 

8,613

 

Provision for policy losses and other claims

 

 

138,688

 

 

 

56,431

 

 

 

82,257

 

 

 

 

Depreciation and amortization

 

 

40,976

 

 

 

38,995

 

 

 

1,943

 

 

 

38

 

Premium taxes

 

 

16,354

 

 

 

14,319

 

 

 

2,035

 

 

 

 

Interest

 

 

13,443

 

 

 

3,736

 

 

 

 

 

 

9,707

 

 

 

 

1,383,434

 

 

 

1,225,137

 

 

 

126,199

 

 

 

32,098

 

Income (loss) before income taxes

 

$

225,295

 

 

$

237,802

 

 

$

7,319

 

 

$

(19,826

)

First American Financial Corporation

 

Segment Information

 

(in thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

June 30, 2021

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

1,703,126

 

 

$

1,444,741

 

 

$

258,385

 

 

$

 

Agent premiums

 

 

1,750,189

 

 

 

1,750,189

 

 

 

 

 

 

 

Information and other

 

 

580,331

 

 

 

573,646

 

 

 

7,205

 

 

 

(520

)

Net investment income

 

 

105,127

 

 

 

90,135

 

 

 

3,750

 

 

 

11,242

 

Net realized investment gains

 

 

153,347

 

 

 

134,578

 

 

 

18,769

 

 

 

 

 

 

 

4,292,120

 

 

 

3,993,289

 

 

 

288,109

 

 

 

10,722

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

1,123,448

 

 

 

1,060,970

 

 

 

46,654

 

 

 

15,824

 

Premiums retained by agents

 

 

1,389,725

 

 

 

1,389,725

 

 

 

 

 

 

 

Other operating expenses

 

 

626,122

 

 

 

562,074

 

 

 

46,365

 

 

 

17,683

 

Provision for policy losses and other claims

 

 

290,377

 

 

 

127,798

 

 

 

162,579

 

 

 

 

Depreciation and amortization

 

 

79,237

 

 

 

76,183

 

 

 

2,983

 

 

 

71

 

Premium taxes

 

 

45,053

 

 

 

41,516

 

 

 

3,537

 

 

 

 

Interest

 

 

32,720

 

 

 

11,043

 

 

 

 

 

 

21,677

 

 

 

 

3,586,682

 

 

 

3,269,309

 

 

 

262,118

 

 

 

55,255

 

Income (loss) before income taxes

 

$

705,438

 

 

$

723,980

 

 

$

25,991

 

 

$

(44,533

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

June 30, 2020

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

1,272,621

 

 

$

1,032,036

 

 

$

240,585

 

 

$

 

Agent premiums

 

 

1,197,577

 

 

 

1,197,577

 

 

 

 

 

 

 

Information and other

 

 

442,681

 

 

 

436,525

 

 

 

6,542

 

 

 

(386

)

Net investment income

 

 

104,294

 

 

 

102,902

 

 

 

4,900

 

 

 

(3,508

)

Net realized investment gains (losses)

 

 

4,499

 

 

 

(5,476

)

 

 

3,460

 

 

 

6,515

 

 

 

 

3,021,672

 

 

 

2,763,564

 

 

 

255,487

 

 

 

2,621

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

881,147

 

 

 

838,681

 

 

 

42,126

 

 

 

340

 

Premiums retained by agents

 

 

947,779

 

 

 

947,779

 

 

 

 

 

 

 

Other operating expenses

 

 

507,328

 

 

 

448,787

 

 

 

40,831

 

 

 

17,710

 

Provision for policy losses and other claims

 

 

256,165

 

 

 

111,481

 

 

 

144,684

 

 

 

 

Depreciation and amortization

 

 

72,425

 

 

 

68,512

 

 

 

3,837

 

 

 

76

 

Premium taxes

 

 

33,669

 

 

 

29,837

 

 

 

3,832

 

 

 

 

Interest

 

 

25,540

 

 

 

7,709

 

 

 

 

 

 

17,831

 

 

 

 

2,724,053

 

 

 

2,452,786

 

 

 

235,310

 

 

 

35,957

 

Income (loss) before income taxes

 

$

297,619

 

 

$

310,778

 

 

$

20,177

 

 

$

(33,336

)

First American Financial Corporation

 

Reconciliation of Pretax Margins and Earnings per Diluted Share

 

Excluding Net Realized Investment Gains and Losses ("NRIG(L)")

 

(in thousands, except margin and per share amounts, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

2,266,375

 

 

$

1,608,729

 

 

$

4,292,120

 

 

$

3,021,672

 

Less: NRIG(L)

 

 

86,514

 

 

 

69,261

 

 

 

153,347

 

 

 

4,499

 

Total revenues excluding NRIG(L)

 

$

2,179,861

 

 

$

1,539,468

 

 

$

4,138,773

 

 

$

3,017,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

 

$

399,416

 

 

$

225,295

 

 

$

705,438

 

 

$

297,619

 

Less: NRIG(L)

 

 

86,514

 

 

 

69,261

 

 

 

153,347

 

 

 

4,499

 

Pretax income excluding NRIG(L)

 

$

312,902

 

 

$

156,034

 

 

$

552,091

 

 

$

293,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax margin

 

 

17.6

%

 

 

14.0

%

 

 

16.4

%

 

 

9.8

%

Less: Pretax margin impact of NRIG(L)

 

 

3.2

%

 

 

3.9

%

 

 

3.1

%

 

 

0.1

%

Pretax margin excluding NRIG(L)

 

 

14.4

%

 

 

10.1

%

 

 

13.3

%

 

 

9.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per diluted share (EPS)

 

$

2.72

 

 

$

1.52

 

 

$

4.81

 

 

$

2.06

 

Less: EPS impact of NRIG(L)

 

 

0.59

 

 

$

0.47

 

 

 

1.05

 

 

 

0.03

 

EPS excluding NRIG(L)

 

$

2.13

 

 

$

1.05

 

 

$

3.76

 

 

$

2.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title Insurance and Services Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

2,108,229

 

 

$

1,462,939

 

 

$

3,993,289

 

 

$

2,763,564

 

Less: NRIG(L)

 

 

70,364

 

 

 

62,823

 

 

 

134,578

 

 

 

(5,476

)

Total revenues excluding NRIG(L)

 

$

2,037,865

 

 

$

1,400,116

 

 

$

3,858,711

 

 

$

2,769,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

 

$

402,351

 

 

$

237,802

 

 

$

723,980

 

 

$

310,778

 

Less: NRIG(L)

 

 

70,364

 

 

 

62,823

 

 

 

134,578

 

 

 

(5,476

)

Pretax income excluding NRIG(L)

 

$

331,987

 

 

$

174,979

 

 

$

589,402

 

 

$

316,254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax margin

 

 

19.1

%

 

 

16.3

%

 

 

18.1

%

 

 

11.2

%

Less: Pretax margin impact of NRIG(L)

 

 

2.8

%

 

 

3.8

%

 

 

2.8

%

 

 

(0.2

)%

Pretax margin excluding NRIG(L)

 

 

16.3

%

 

 

12.5

%

 

 

15.3

%

 

 

11.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Insurance Segment