First American Financial Reports Second Quarter 2022 Results


July 28, 2022, Santa Ana, Calif.

First American Financial Corporation (NYSE: FAF), a premier provider of title, settlement and risk solutions for real estate transactions and the leader in the digital transformation of its industry, today announced financial results for the second quarter ended June 30, 2022.

Download the complete press release as a PDF

Current Quarter Highlights

  • Earnings per diluted share of $1.01, or $1.97 excluding 96 cents of net investment losses
  • Total revenue of $2.1 billion, down 9 percent compared with last year
    • Excluding net investment losses, total revenue was $2.2 billion, up 1 percent compared with last year
  • Net investment losses of $133 million, primarily due to a decline in the fair value of marketable equity securities
  • Title Insurance and Services segment pretax margin of 11.7 percent
    • 13.9 percent excluding net investment losses
  • Title Insurance and Services segment investment income of $70 million, up 49 percent compared with last year  
  • Commercial revenues of $289 million, up 30 percent compared with last year
  • Specialty Insurance segment pretax margin of 3.8 percent
    • 7.4 percent excluding net investment losses
  • Repurchased 3.9 million shares for a total of $227 million at an average price of $57.93
    • Through July 27, repurchased an additional 963,000 shares for a total of $52 million at an average price of $54.20
  • Board of directors approved a new $400 million share repurchase authorization
  • Debt-to-capital ratio of 29.6 percent, or 25.0 percent excluding secured financings payable of $429 million
  • Cash flow from operations of $191 million compared with $253 million last year

Selected Financial Information

($ in millions, except per share data)

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2022

 

 

2021

 

Total revenue

 

$

2,062

 

 

$

2,266

 

Income before taxes

 

$

141

 

 

$

399

 

 

 

 

 

 

 

 

 

 

Net income

 

$

109

 

 

$

302

 

Net income per diluted share

 

$

1.01

 

 

$

2.72

 

 

Total revenue for the second quarter of 2022 was $2.1 billion, down 9 percent compared with the second quarter of 2021. Net income in the current quarter was $109 million, or $1.01 per diluted share, compared with net income of $302 million, or $2.72 per diluted share, in the second quarter of 2021. Net investment losses in the current quarter were $133 million, or 96 cents per diluted share, compared with net investment gains of $86 million, or 59 cents per diluted share, in the second quarter of last year. The net investment losses in the current quarter were primarily due to a decline in the fair value of marketable equity securities, compared with net investment gains in the second quarter of last year that were primarily driven by an unrealized gain recognized on a venture investment and an increase in the fair value of marketable equity securities.

"Our second quarter business results were strong, with our title segment delivering a pretax margin of 13.9 percent, excluding net investment losses," said Ken DeGiorgio, chief executive officer at First American Financial Corporation. "Total revenue, excluding net investment losses, was up 1 percent, as continued strength in the commercial business, growth in investment income and revenue from recent acquisitions offset the decline in residential refinance and purchase activity.

"Given the decline in residential real estate activity and uncertainty in the economic outlook, we are maintaining our focus on expense management, particularly in business units most impacted by the decline in residential transactions. While we continue to effectively manage our cost structure, we also remain steadfastly committed to investing in strategic initiatives that support our company's growth and operational efficiency, including our digital closing and title automation initiatives, and the expansion and enhancement of the data assets that fuel them.

"In terms of capital allocation, we continued to prioritize share repurchases, acquiring 3.9 million shares for a total of $227 million during the quarter and through July 27 an additional 963,000 shares. Since the beginning of the year, we repurchased approximately 6 percent of our shares outstanding as of the end of last year. Reflecting its confidence in the long-term prospects of our company, our board recently approved a new $400 million share repurchase authorization which enhances our capital deployment flexibility going forward."

Title Insurance and Services

($ in millions, except average revenue per order)

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2022

 

 

2021

 

Total revenues

 

$

2,053

 

 

$

2,064

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

240

 

 

$

358

 

Pretax margin

 

 

11.7

%

 

 

17.3

%

 

 

 

 

 

 

 

 

 

Title open orders(1)

 

 

257,200

 

 

 

329,500

 

Title closed orders(1)

 

 

205,000

 

 

 

271,100

 

 

 

 

 

 

 

 

 

 

U.S. Commercial

 

 

 

 

 

 

 

 

   Total revenues

 

$

289

 

 

$

223

 

   Open orders

 

 

35,600

 

 

 

37,100

 

   Closed orders

 

 

22,000

 

 

 

20,200

 

   Average revenue per order

 

$

13,200

 

 

$

11,100

 

(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, down 0.5 percent compared with the same quarter of 2021. Direct premiums and escrow fees were up 1 percent compared with the second quarter of 2021, driven by a 33 percent increase in the average revenue per direct title order closed that was largely offset by a 24 percent decline in the number of direct title orders closed. The average revenue per direct title order increased to $3,523, primarily attributable to an increase in the average deal size in our commercial business and a shift in the mix to higher premium commercial transactions from lower premium refinance transactions. Agent premiums, which are recorded on approximately a one-quarter lag relative to direct premiums, were up 4 percent in the current quarter as compared with last year.

Information and other revenues were $305 million during the quarter, up $6 million, or 2 percent compared with the same quarter of last year. Excluding the impact of recent acquisitions, information and other revenues declined by $41 million, or 14 percent. This decline was the result of lower transaction levels across several business units driven by the decline in residential mortgage originations.

Investment income was $70 million in the second quarter, up $23 million from the same quarter last year. The increase was primarily due to higher interest income from the company's investment portfolio, escrow balances and tax-deferred property exchange balances as a result of rising interest rates and higher average invested balances. Net investment losses totaled $52 million in the current quarter, compared with net investment gains of $26 million in the second quarter of 2021. Net investment losses and gains in each period, respectively, were primarily attributable to the change in the fair value of marketable equity securities.

Personnel costs were $613 million in the second quarter, an increase of $57 million, or 10 percent, compared with the same quarter of 2021, primarily due to the impact of recent acquisitions. Excluding the impact of recent acquisitions, personnel costs declined by $3 million due to lower incentive compensation, employee benefit and overtime costs. These lower costs were largely offset by higher salary expense and $10 million in severance expense incurred as part of a reduction-in-force this quarter.

Other operating expenses were $316 million in the second quarter, up $16 million, or 5 percent, compared with the second quarter of 2021. The increase was primarily due to the impact of recent acquisitions, which added $27 million to expenses.

The provision for policy losses and other claims was $69 million in the second quarter, or 4.0 percent of title premiums and escrow fees, in line with the 4.0 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 $41 million in the second quarter, up $1 million, or 3 percent, compared with the same period last year, due to higher amortization of software and other intangibles related to recent acquisitions.

Pretax income for the Title Insurance and Services segment was $240 million in the second quarter, compared with $358 million in the second quarter of 2021. Pretax margin was 11.7 percent in the current quarter, compared with 17.3 percent last year. Excluding the impact of net investment losses and gains, the pretax margin was 13.9 percent this year, compared with 16.3 percent last year.

Specialty Insurance

($ in millions)

 

Three Months Ended

 

 

 

June 30,

 

 

 

2022

 

 

2021

 

Total revenues

 

$

104

 

 

$

152

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

4

 

 

$

20

 

Pretax margin

 

 

3.8

%

 

 

13.2

%

 

Total revenues for the Specialty Insurance segment were $104 million in the second quarter of 2022, a decline of 32 percent compared with the second quarter of 2021. Pretax income for the segment was $4 million, compared with $20 million last year which included a $12 million gain from the sale of agency operations. In addition, the current quarter net investment losses were $4 million, compared with $4 million in net investment gains last year.

Home warranty total revenues were $102 million this quarter, down 5 percent compared with last year. Excluding net investment losses and gains, total revenues were up 2 percent. The loss rate was 52.4 percent, compared with 55.5 percent last year, driven by lower claim frequency partly offset by higher severity as pressure on average claim cost continued. Home warranty's pretax income was $9 million, compared with $13 million last year. Excluding the impact of net investment losses and gains, pretax income was $13 million this year, compared with $10 million last year.

The wind-down of the property and casualty business remains on track for completion in the third quarter of 2022. At the close of the second quarter, the company had no active homeowner policies and only approximately 800 renters policies remained in force. The property and casualty business ended the quarter with a pretax loss of $5 million.

Teleconference/Webcast

First American's second-quarter 2022 results will be discussed in more detail on Thursday, July 28, 2022, 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 11, 2022, by dialing 201-612-7415 and using the conference ID 13731471. 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 premier provider of title, settlement and risk solutions for real estate transactions. With its combination of financial strength and stability built over more than 130 years, innovative proprietary technologies, and unmatched data assets, the company is leading the digital transformation of its industry. First American also provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty

products; banking, trust and wealth management services; and other related products and services. With total revenue of $9.2 billion in 2021, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2022, First American was named one of the 100 Best Companies to Work For by Great Place to Work® and Fortune Magazine for the seventh 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 conditions of the real estate markets; volatility in the capital markets; unfavorable economic conditions; impairments in the company's goodwill or other intangible assets; 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 investment 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 or use of models; 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; failures to recruit and retain qualified personnel; the company's use of a global workforce; inability of the company's subsidiaries to pay dividends or repay funds; inability to realize anticipated synergies or produce returns that justify investment in acquired businesses; and other factors described in the company's annual report on Form 10-K for the year ended December 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.

First American Financial Corporation

 

Summary of Consolidated Financial Results and Selected Information

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Total revenues

 

$

2,062

 

 

$

2,266

 

 

$

4,096

 

 

$

4,292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$

141

 

 

$

399

 

 

$

271

 

 

$

705

 

Income tax expense

 

 

31

 

 

 

95

 

 

 

63

 

 

 

167

 

Net income

 

 

110

 

 

 

304

 

 

 

208

 

 

 

538

 

Less: Net income attributable to noncontrolling interests

 

 

1

 

 

 

2

 

 

 

1

 

 

 

2

 

Net income attributable to the Company

 

$

109

 

 

$

302

 

 

$

207

 

 

$

536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.01

 

 

$

2.73

 

 

$

1.89

 

 

$

4.83

 

Diluted

 

$

1.01

 

 

$

2.72

 

 

$

1.89

 

 

$

4.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.51

 

 

$

0.46

 

 

$

1.02

 

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

107.9

 

 

 

110.9

 

 

 

109.1

 

 

 

111.0

 

Diluted

 

 

108.1

 

 

 

111.2

 

 

 

109.4

 

 

 

111.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Title Insurance Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title orders opened(1)

 

 

257,200

 

 

 

329,500

 

 

 

536,200

 

 

 

692,700

 

Title orders closed(1)

 

 

205,000

 

 

 

271,100

 

 

 

410,100

 

 

 

558,700

 

Paid title claims

 

$

59

 

 

$

33

 

 

$

98

 

 

$

73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First American Financial Corporation

 

Selected Consolidated Balance Sheet Information

 

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Cash and cash equivalents

 

$

1,745

 

 

$

1,228

 

Investments

 

 

9,486

 

 

 

10,596

 

Goodwill and other intangible assets, net

 

 

2,023

 

 

 

1,806

 

Total assets

 

 

16,262

 

 

 

16,451

 

Reserve for claim losses

 

 

1,308

 

 

 

1,284

 

Notes and contracts payable

 

 

1,646

 

 

 

1,648

 

Total stockholders' equity

 

$

4,916

 

 

$

5,767

 

 

Segment Information

 

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

June 30, 2022

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

897

 

 

$

793

 

 

$

104

 

 

$

 

Agent premiums

 

 

937

 

 

 

937

 

 

 

 

 

 

 

Information and other

 

 

308

 

 

 

305

 

 

 

3

 

 

 

 

Net investment income

 

 

53

 

 

 

70

 

 

 

1

 

 

 

(18

)

Net investment losses

 

 

(133

)

 

 

(52

)

 

 

(4

)

 

 

(77

)

 

 

 

2,062

 

 

 

2,053

 

 

 

104

 

 

 

(95

)

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

618

 

 

 

613

 

 

 

20

 

 

 

(15

)

Premiums retained by agents

 

 

748

 

 

 

748

 

 

 

 

 

 

 

Other operating expenses

 

 

344

 

 

 

316

 

 

 

20

 

 

 

8

 

Provision for policy losses and other claims

 

 

127

 

 

 

69

 

 

 

58

 

 

 

 

Depreciation and amortization

 

 

42

 

 

 

41

 

 

 

1

 

 

 

 

Premium taxes

 

 

23

 

 

 

22

 

 

 

1

 

 

 

 

Interest

 

 

19

 

 

 

4

 

 

 

 

 

 

15

 

 

 

 

1,921

 

 

 

1,813

 

 

 

100

 

 

 

8

 

Income (loss) before income taxes

 

$

141

 

 

$

240

 

 

$

4

 

 

$

(103

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

June 30, 2021

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

917

 

 

$

787

 

 

$

130

 

 

$

 

Agent premiums

 

 

905

 

 

 

905

 

 

 

 

 

 

 

Information and other

 

 

302

 

 

 

299

 

 

 

4

 

 

 

(1

)

Net investment income

 

 

56

 

 

 

47

 

 

 

2

 

 

 

7

 

Net investment gains

 

 

86

 

 

 

26

 

 

 

16

 

 

 

44

 

 

 

 

2,266

 

 

 

2,064

 

 

 

152

 

 

 

50

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

588

 

 

 

556

 

 

 

23

 

 

 

9

 

Premiums retained by agents

 

 

719

 

 

 

719

 

 

 

 

 

 

 

Other operating expenses

 

 

331

 

 

 

300

 

 

 

23

 

 

 

8

 

Provision for policy losses and other claims

 

 

150

 

 

 

67

 

 

 

83

 

 

 

 

Depreciation and amortization

 

 

41

 

 

 

40

 

 

 

1

 

 

 

 

Premium taxes

 

 

22

 

 

 

20

 

 

 

2

 

 

 

 

Interest

 

 

16

 

 

 

4

 

 

 

 

 

 

12

 

 

 

 

1,867

 

 

 

1,706

 

 

 

132

 

 

 

29

 

Income before income taxes

 

$

399

 

 

$

358

 

 

$

20

 

 

$

21

 

 

First American Financial Corporation

 

Segment Information

 

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

June 30, 2022

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

1,671

 

 

$

1,459

 

 

$

212

 

 

$

 

Agent premiums

 

 

1,885

 

 

 

1,885

 

 

 

 

 

 

 

Information and other

 

 

617

 

 

 

607

 

 

 

10

 

 

 

 

Net investment income

 

 

99

 

 

 

122

 

 

 

3

 

 

 

(26

)

Net investment losses

 

 

(176

)

 

 

(22

)

 

 

(6

)

 

 

(148

)

 

 

 

4,096

 

 

 

4,051

 

 

 

219

 

 

 

(174

)

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

1,220

 

 

 

1,196

 

 

 

42

 

 

 

(18

)

Premiums retained by agents

 

 

1,506

 

 

 

1,506

 

 

 

 

 

 

 

Other operating expenses

 

 

681

 

 

 

620

 

 

 

42

 

 

 

19

 

Provision for policy losses and other claims

 

 

249

 

 

 

134

 

 

 

115

 

 

 

 

Depreciation and amortization

 

 

83

 

 

 

81

 

 

 

2

 

 

 

 

Premium taxes

 

 

47

 

 

 

45

 

 

 

2

 

 

 

 

Interest

 

 

39

 

 

 

8

 

 

 

 

 

 

31

 

 

 

 

3,825

 

 

 

3,590

 

 

 

203

 

 

 

32

 

Income (loss) before income taxes

 

$

271

 

 

$

461

 

 

$

16

 

 

$

(206

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

June 30, 2021

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

1,703

 

 

$

1,445

 

 

$

258

 

 

$

 

Agent premiums

 

 

1,750

 

 

 

1,750

 

 

 

 

 

 

 

Information and other

 

 

581

 

 

 

575

 

 

 

7

 

 

 

(1

)

Net investment income

 

 

105

 

 

 

90

 

 

 

4

 

 

 

11

 

Net investment gains

 

 

153

 

 

 

48

 

 

 

19

 

 

 

86

 

 

 

 

4,292

 

 

 

3,908

 

 

 

288

 

 

 

96

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

1,123

 

 

 

1,060

 

 

 

47

 

 

 

16

 

Premiums retained by agents

 

 

1,390

 

 

 

1,390

 

 

 

 

 

 

 

Other operating expenses

 

 

627

 

 

 

565

 

 

 

45

 

 

 

17

 

Provision for policy losses and other claims

 

 

290

 

 

 

127

 

 

 

163

 

 

 

 

Depreciation and amortization

 

 

79

 

 

 

76

 

 

 

3

 

 

 

 

Premium taxes

 

 

45

 

 

 

41

 

 

 

4

 

 

 

 

Interest

 

 

33

 

 

 

11

 

 

 

 

 

 

22

 

 

 

 

3,587

 

 

 

3,270

 

 

 

262

 

 

 

55

 

Income before income taxes

 

$

705

 

 

$

638

 

 

$

26

 

 

$

41

 

 

First American Financial Corporation

 

Reconciliation of Pretax Margins and Earnings per Diluted Share

 

Excluding Net Investment Gains and Losses ("NIG(L)")

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

2,062

 

 

$

2,266

 

 

$

4,096

 

 

$

4,292

 

Less: NIG(L)

 

 

(133

)

 

 

86

 

 

 

(176

)

 

 

153

 

Total revenues excluding NIG(L)

 

$

2,195

 

 

$

2,180

 

 

$

4,272

 

 

$

4,139

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

 

$

141

 

 

$

399

 

 

$

271

 

 

$

705

 

Less: NIG(L)

 

 

(133

)

 

 

86

 

 

 

(176

)

 

 

153

 

Pretax income excluding NIG(L)

 

$

274

 

 

$

313

 

 

$

447

 

 

$

552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax margin

 

 

6.8

%

 

 

17.6

%

 

 

6.6

%

 

 

16.4

%

Less: Pretax margin impact of NIG(L)

 

 

(5.7

)%

 

 

3.2

%

 

 

(3.9

)%

 

 

3.1

%

Pretax margin excluding NIG(L)

 

 

12.5

%

 

 

14.4

%

 

 

10.5

%

 

 

13.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per diluted share (EPS)

 

$

1.01

 

 

$

2.72

 

 

$

1.89

 

 

$

4.81

 

Less: EPS impact of NIG(L)

 

 

(0.96

)

 

 

0.59

 

 

 

(1.23

)

 

 

1.05

 

EPS excluding NIG(L)

 

$

1.97

 

 

$

2.13

 

 

$

3.12

 

 

$

3.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title Insurance and Services Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

2,053

 

 

$

2,064

 

 

$

4,051

 

 

$

3,908

 

Less: NIG(L)

 

 

(52

)

 

 

26

 

 

 

(22

)

 

 

48

 

Total revenues excluding NIG(L)

 

$

2,105

 

 

$

2,038

 

 

$

4,073

 

 

$

3,860

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

 

$

240

 

 

$

358

 

 

$

461

 

 

$

638

 

Less: NIG(L)

 

 

(52

)

 

 

26

 

 

 

(22

)

 

 

48

 

Pretax income excluding NIG(L)

 

$

292

 

 

$

332

 

 

$

483

 

 

$

590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax margin

 

 

11.7

%

 

 

17.3

%

 

 

11.4

%

 

 

16.3

%

Less: Pretax margin impact of NIG(L)

 

 

(2.2

)%

 

 

1.0

%

 

 

(0.5

)%

 

 

1.0

%

Pretax margin excluding NIG(L)

 

 

13.9

%

 

 

16.3

%

 

 

11.9

%

 

 

15.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Insurance Segment

<