The cash dividend is payable on July 16, 2012 to shareholders of record as of June 29, 2012.

About First American
First American Financial Corporation (NYSE: FAF)is a leading provider of title insurance and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.8 billion in 2011, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

In his new role, Swed is responsible for all areas of the company’s daily operations, including revenue and market share growth, client relationship management and technology.  Erin Bishop, who has served as president of the Heritage Escrow Company, will remain in her role.

Swed has held a variety of leadership roles with First American Title Insurance Company’s Southwest Division since 2010.

“Ryan’s business acumen and demonstrated leadership abilities make him highly qualified to run Heritage Escrow as that company expands in the Southern California markets,” said Curt Caspersen, president of First American Title Insurance Company’s Southwest Division.

Prior to joining First American, Swed held various positions at Bank of America and The Vanguard Group. He holds a B.A. in political science (public law) from University of California, San Diego, and his M.S. in Finance and a J.D. from Chapman University School of Law in Orange, Calif.

About First American
First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.8 billion in 2011, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

In this role, Hodgkin is responsible for identifying new high-net-worth clients and assisting them in reaching their financial goals through the development and implementation of investment, estate, gift planning and other wealth management strategies.

Before joining First American Trust, Hodgkin served as executive director of Mothers Against Drunk Driving for San Diego County. Prior to that, she was a planned giving consultant for Palomar Pomerado Health Foundation and a financial consultant for A.G. Edwards.

“Pat will be a key contributor to the growth of our business in San Diego as she combines her financial expertise and local knowledge with the comprehensive suite of services we offer our clients,” said Kelly Dudley, president of First American Trust. “Pat anticipates her clients’ needs, which has proven to be a great benefit for those seeking a trusted financial advisor.”

Hodgkin is a past president of the Rotary Club of San Marcos, Calif., and a former board member of the Boys and Girls Club of San Marcos, Calif. She has previously held her Series 7, 63 and 6 licenses.

About First American
First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.8 billion in 2011, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

Download the press release as a PDF (78 kb)

Current Quarter Highlights

• Title Insurance and Services segment pretax margin of 6.8 percent
  • Highest first-quarter margin since 2006
• Title open orders up 31 percent compared to last year, primarily driven by refinance transactions
• Commercial division revenues of $81.5 million, up 21 percent compared to last year
• Specialty Insurance segment pretax margin of 17.3 percent
• Completed a new $600 million, four-year senior secured revolving credit facility on April 17, 2012

Total revenues for the first quarter of 2012 were $966.8 million, an increase of 4 percent relative to the first quarter of 2011. Net income in the current quarter was $31.3 million, or 29 cents per diluted share, compared with a net loss of $15.3 million, or 15 cents per diluted share, in the first quarter of 2011. Last year's results included a $45.3 million reserve-strengthening adjustment in the company's Canadian operations, which is $27.2 million on an after-tax basis, or 26 cents per diluted share.

"The year is off to a good start," said Dennis J. Gilmore, chief executive officer at First American Financial Corporation. "Our efficient and scalable cost structure coupled with improved market conditions enabled us to deliver our best first-quarter title margin since 2006.

"First-quarter open orders were the strongest in three years, up 31 percent year-over-year, driven primarily by a significant increase in refinance activity and a modest but encouraging increase in resale transactions. Growth in our commercial business continued, with revenues up 21 percent compared with last year. While current market conditions and order volumes have clearly improved, we continue to maintain tight control on expenses. 

"In April, we also completed a new $600 million revolving credit facility with improved pricing and terms compared to the previous facility. This new facility enhances our flexibility and strengthens our financial position."     

Total revenues for the Title Insurance and Services segment were $891.2 million, a 3 percent increase from the same quarter of 2011. Direct premiums and escrow fees were up 16 percent from the first quarter of 2011, directly comparable with the 16 percent increase in the number of direct title orders closed in the quarter. Average revenue per direct title order was $1,315, compared with $1,310 in the first quarter of 2011. Agent premiums were lower by 6 percent in the current quarter, which is comparable with the 4 percent decline in direct premiums experienced in the fourth quarter, reflecting the normal reporting lag of approximately one quarter.

Information and other revenues were $155.3 million this quarter, up 3 percent as compared to the same quarter of last year, primarily attributable to higher demand for the company's title plant information and increased international service revenues, offset in part by lower sales of default information products. Total investment income was down 5 percent in the first quarter, primarily reflecting higher net realized investment losses.

Personnel costs were $277.6 million in the first quarter, an increase of $18.5 million, or 7 percent, compared with the first quarter of 2011.  This increase was primarily due to higher incentive-based compensation, increased healthcare-related expenses, and one additional payroll day in the current quarter.

Other operating expenses were $171.8 million in the first quarter, down $3.8 million, or 2 percent, compared with the first quarter of 2011. This decrease was primarily due to lower office-related expenses resulting from the company's consolidation and closure of certain title offices. Further contributing to the decrease in other operating expenses was a decline in professional services costs. These decreases were partially offset by higher production-related expenses due to increased order activity.

The provision for policy losses and other claims was $52.2 million in the first quarter, or 7.2 percent of title premiums and escrow fees, down $44.2 million compared with the same quarter of the prior year. Last year's results included a $45.3 million reserve-strengthening adjustment in the company's Canadian operations. The current quarter rate of 7.2 percent reflects an ultimate loss rate of 6.2 percent for the current policy year and a net increase in the loss reserve estimates for prior policy years, primarily 2007 and 2008.

Pretax income for the Title Insurance and Services segment was $60.8 million in the first quarter, compared with a $15.7 million pretax loss in the first quarter of 2011. Pretax margin was 6.8 percent in the current quarter. 

Total revenues for the Specialty Insurance segment were $74.2 million in the first quarter of 2012, an increase of 8 percent compared with the first quarter of 2011. The overall loss ratio in the Specialty Insurance segment was 49 percent in the current quarter, down from 51 percent in the prior year. Pretax margin was 17.3 percent, down from 18.0 percent in the first quarter of 2011.

Teleconference/Webcast
First American's first quarter 2012 results will be discussed in more detail on Thursday, April 26, 2012, at 11 a.m. ET, via teleconference. The toll-free dial-in number is (877) 918-5752. Callers from outside the United States may dial (517) 319-9305. The pass code for the event is "First American."

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 May 3, 2012, by dialing (203) 369-0663. 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 and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.8 billion in 2011, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. 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 direct title insurance operations, which are posted approximately 12 days after the end of each month.

Forward-Looking Statements
Certain statements made in this press release and the related management commentary and responses to investor questions, including but not limited to those related to the effects of the HARP 2.0 program, closed order projections, corporate net expense projections, and expense management 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; 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; 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; regulation of title insurance rates; reform of government-sponsored mortgage enterprises; limitations on access to public records and other data; product migration; changes resulting from increases in the size of the company's customers; changes in measures of the strength of the company's title insurance underwriters, including ratings and statutory surpluses; losses in the company's investment portfolio; expenses of and funding obligations to the pension plan; 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; systems interruptions and intrusions, wire transfer errors or unauthorized data disclosures; inability to realize the benefits of the company's offshore strategy; 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-K for the year ended December 31, 2011, 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 a personnel and other operating expense ratio. The company is presenting these non-GAAP financial measures because they provide the company's management and investors with additional insight into the 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.

The facility was oversubscribed during the syndication and the company exercised its option to increase the size of the facility from $500 million to $600 million in connection with the closing.  This facility replaces the company’s $400 million revolving facility that would have matured on June 1, 2013.  J.P. Morgan Securities LLC, U.S. Bank National Association and Wells Fargo Securities, LLC served as joint lead arrangers and joint bookrunners under the new facility.

            Pricing under the facility reflects a 75 basis point reduction from the prior facility.  The financial covenants contained in the facility mirror those of the prior facility, while certain other provisions no longer apply at current ratings, have become less restrictive or have been removed. In addition, the facility provides for a release of the security if the company meets certain ratings levels.  

About First American

            First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.8 billion in 2011, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

With this new integration, myFirstAm subscribers are able to manage their newsletter account, select content, add or delete subscribers and perform other standard account management functions without leaving the myFirstAm platform. In addition, myFirstAm subscribers who do not currently have a Housing Trends eNewsletter subscription will be directed to a link to subscribe.

MyFirstAm is First American’s new Web interface designed to make the closing process more efficient by providing easy access to title and escrow orders and other products and services.

"Housing Trends eNewsletter has shown remarkable growth since its inception more than three years ago," said Alan Arora, vice president of customer-facing technology for First American Title Insurance Company. "Providing the option of accessing the newsletter from within our system is just one example of our efforts to simplify processes for our customers."

First American added this functionality as an accommodation to myFirstAm users who are Housing Trends eNewsletter subscribers. The newsletter is a monthly communication published by eFrogPond, Inc., that includes a variety of content such as U.S. Census Bureau key market indicators, articles, videos, blog links, community reports and real estate sales and price activity provided by local Multiple Listing Services and the National Association of REALTORS^®.

"We think our tech-savvy subscriber base will appreciate the convenience of being able to access their Housing Trends eNewsletter account from the myFirstAm platform,” said Susie Hale, chief executive officer of eFrogPond, Inc.

Access to the Housing Trends eNewsletter through the myFirstAm platform is now available to subscribers in California, Texas, New Mexico, and Arizona, with other states expected to follow throughout the year.
 

About First American Title Insurance Company

First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. The company has its headquarters in Santa Ana, Calif. Information about First American Financial Corporation’s subsidiaries and an archive of its press releases can be found on the Internet at www.firstam.com.

Through its proprietary technology solution, EAGLEPRO^™, this group now offers homebuilders and homebuyers the option of paperless delivery of their transaction-related documents. Typically, closing document packets include more than 100 printed pages that are delivered by mail. This paperless option, provided through a secure electronic environment, eliminates the need to print and mail hard copies. Electronic delivery also provides homebuyers with a quick and easy way to review pertinent information and the flexibility to access their documents at anytime.     

“We believe that this initiative is the right thing to do for the environment and is in alignment with our homebuilder clients’ efforts to build more energy-efficient homes and reduce environmental waste,” said Joe Tavarez, president of First American Title’s Homebuilder Services Division.  “Additionally, it illustrates our commitment to helping streamline our clients’ processes and reduce costs while providing flexibility for their buyers.”

Additional information on First American Title Insurance Company’s Homebuilder Services Division can be found at www.fahomebuilder.com

About First American Title Insurance Company
First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. The company has its headquarters in Santa Ana, Calif. Information about First American Financial Corporation’s subsidiaries and an archive of its press releases can be found at www.firstam.com.

The call will follow the release of the company’s earnings results for the first quarter of 2012, which is scheduled earlier that day at 7:00 a.m. ET.

The conference call, which will also be broadcast over the Internet and is open to investors, members of the financial community, the media and other members of the public, can be accessed online at www.firstam.com/investor or by dialing toll free (877) 918-5752. Callers from outside the United States may dial (517) 319-9305. The pass code for the event is “First American.”

An audio replay of the conference call will be available through May 3, 2012, by dialing (203) 369-0663. An audio archive of the call and a copy of the first-quarter 2012 earnings release, including the financial information contained therein, 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 and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.8 billion in 2011, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

The Energy Group works in collaboration with First American offices and agents across the country to implement title-related due diligence and insurance offerings that address the unique requirements of energy transactions. 

Energy projects tend to be extremely complex and require dedicated resources to analyze risks associated with mineral and water rights, encroachments, and severable and future improvements. The Energy Group, working with the Company’s senior underwriters, has developed a targeted coverage approach to address the unique requirements of energy development activities. This specialized group also helps to simplify transaction processes, lowering costs and mitigating risks. Focused land title due diligence, escrow and insurance solutions are offered for national and international transactions through a proprietary electronic delivery platform that includes links to products and documents.

“The complexities of the energy submarket challenge the national title insurer to develop specialized products and services,” said Sally French Tyler, executive vice president and divisional president of First American Title Insurance Company’s Centralized Businesses.  “With the Energy Group, we’ve built a talented team of focused and experienced experts to meet this challenge.”

About First American Title Insurance Company
First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. The company has its headquarters in Santa Ana, Calif. Information about First American Financial Corporation’s subsidiaries and an archive of its press releases can be found on the Internet at www.firstam.com.

In his new role, Friedman is responsible for all areas within the company’s Default Services group, including new product development, compliance, client relations management and technology.  

Prior to joining First American, Friedman served as president and chief operating officer for PREO LLC, an online real estate marketplace for distressed assets. He has also held positions at OneWest Bank, formerly Indymac Federal Bank, and at Fannie Mae.

A native of Southern California, Friedman holds a bachelor’s degree in psychology from California State University, Northridge.

About First American Title Insurance Company
First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. The company has its headquarters in Santa Ana, Calif. Information about First American Financial Corporation’s subsidiaries and an archive of its press releases can be found on the Internet at www.firstam.com.

Florida is now the second state in which Data Trace has complete title plant database coverage. Data Trace announced in March that it had finalized its title plant expansion into every county in California. Florida is a strategic market for Data Trace and, according to a study posted on Realtor.com, Florida was home to five of the 20 most active U.S. real estate markets in the month of February 2012. Settlement services companies rely on timely and accurate information from Data Trace’s title plant databases to assist in conducting real estate transactions, such as housing sales and refinances.

”We entered Florida more than 30 years ago with our first title plant in Hillsborough County,” said Robert Karraa, president of Data Trace. “We have always had a strong commitment to the Florida market and are proud to have achieved this important milestone in our geographic expansion plan.”

About Data Trace
Data Trace Information Services LLC provides technology that enables settlement services companies to connect to regional title databases and access them using a standardized interface. The Data Trace system is the largest and most advanced of its kind and delivers title history information, property tax assessment and payment data, document images and property profiles in major metropolitan areas across the United States. With its significant geographical coverage, Data Trace’s title plant and tax database of nearly 1 billion records is the broadest and most comprehensive title information system available and is used by the largest national title insurance underwriters in the U.S. For additional information, visit Data Trace's website at www.eDataTrace.com.

Media Contact:
Amanda Price
Vice President Marketing and Product Management
Data Trace Information Services LLC
(714) 250-6599

“It is with great sadness that we announce the passing of Don Kennedy,” said Dennis J. Gilmore, chief executive officer for First American. “Don was a true visionary and a man of tremendous integrity who was admired by all those who knew him. While we will greatly miss his wise counsel and quick wit, he leaves behind a legacy of creativity and innovation that will always remain with our company.”

When Kennedy began leading First American’s expansion efforts in 1957, the company’s revenues were less than $1.5 million. By 2006, they exceeded $8 billion. In a spin-off transaction completed in 2010, First American’s data businesses became a separate company known as CoreLogic.  First American and CoreLogic are now traded on the New York Stock Exchange.

The grandson of First American’s founder, C.E. Parker, Kennedy served First American for more than 60 years. He is credited with beginning the company’s expansion efforts in 1957 with the acquisition of title companies outside the Santa Ana area. Kennedy’s strategy of allowing the leadership of each First American office to operate as if it was its own company played a key role in driving this expansion and the company’s profitability. First American continued to grow in later decades through international expansion and through the addition of other businesses whose products and services were involved in the real estate transaction process. In 1985, the company began developing and acquiring extensive databases of real property information, and offered products and services using this data.

Parker S. Kennedy, First American’s chairman and Donald Kennedy’s son stated, “When Dad started with First American, the company had one office in one county and now it has hundreds of offices throughout the world. He saw the opportunity for growth and worked tirelessly to create a great company. I couldn’t have asked for a better dad and the company couldn’t have had a better leader.”

Donald Kennedy, whose family roots in Orange County date to  1873, attended Santa Ana High School and graduated from Stanford University in 1940. After serving in the Navy during World War II, where he took part in the landings in Southern France, he graduated from the University of Southern California School of Law.

Kennedy joined First American in 1948, when it was known as Orange County Title Company. After passing the bar exam in 1949, he served as the company’s associate counsel for three years, then was appointed vice president of First American in 1951, executive vice president in 1958, president in 1963, and chairman of the board in 1993. He was named chairman emeritus in 2003, a title he maintained after retiring from the board of directors in 2008. Kennedy also served as vice chairman of First American’s principal subsidiary, First American Title Insurance Company. He consistently went to his office at First American’s Santa Ana campus until he was 90 years old.

Kennedy has left an indelible mark not only on First American, but also on the title insurance industry, helping to usher in many of the advancements and practices that are commonplace today. Among his many professional affiliations, Kennedy served as president of both the California Land Title Association and the American Land Title Association, and chaired numerous committees in both organizations.

A lifelong philanthropist, Kennedy’s extensive involvement in community affairs included support of dozens of organizations focused on Orange County and Santa Ana. A past chairman of the Orange County Business Committee for the Arts, Kennedy also served on the boards of South Coast Repertory and the Bowers Museum of Cultural Art, among others. When serving on the board at Bowers, he was instrumental in negotiating the museum’s partnerships with the Smithsonian Institution and the British Museum. His support for the museum’s north wing, which was named the Dorothy and Donald Kennedy Wing in 2007, tripled the size of its exhibit space. He served on the board of trustees for Chapman University and was a member of Stanford University’s Athletic Board, as well.

Kennedy also provided key support for the creation of the Chapman University School of Law and was recognized in 1999 with the dedication of the Donald P. Kennedy Hall, a state-of-the-art teaching facility and home of the university’s school of law. That same year he was named “Man of the Century” by Orange Coast Magazine.

An avid life-long golfer, Kennedy scored his first hole-in-one in 1930 at the age of 12, and went on to score eight more over the next seven decades. Kennedy was a member of Stanford University’s 1939 NCAA championship golf team and also was an active member of the Santa Ana Country Club for most of his life. When elected as the club’s president in 1952, he was the youngest person to have served in that capacity.

Kennedy is survived by his wife of 65 years, Dorothy; his son, Parker S. Kennedy; two daughters, Elizabeth Myers and Amy Healey; six grandchildren; and two great-grandchildren. For more information on Kennedy’s life, please visit www.firstam.com.

About First American
First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.8 billion in 2011, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

In this new role, Hoffman is responsible for leading and overseeing all aspects of First American’s Los Angeles County  and Ventura County title insurance, escrow and sales activities. He is based in the company’s Glendale, Calif., office.

Hoffman has served as a sales manager for First American’s Los Angeles and Ventura counties’ operations for the past two years. Prior to joining the company, he managed and led sales and operations for several multi-national organizations, both public and private.

"Judd has a long career of demonstrated leadership in both sales and operations," said Curt Caspersen, president of the Southwest Division of First American Title Insurance. "He will be an asset as we grow our business throughout the greater Los Angeles area."
 

About First American Title Insurance Company
First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. The company has its headquarters in Santa Ana, Calif. Information about First American Financial Corporation’s subsidiaries and an archive of its press releases can be found on the Internet at www.firstam.com.

In addition to providing property information indexed by a property owner’s name, Data Trace specializes in title plant data indexed geographically by parcel number. This geographic index reduces search time, especially in densely populated counties where there is a higher likelihood of property owners having identical or similar names.

"Over the years, we’ve proven ourselves as a leading data provider in the settlement services industry," said Robert Karraa, president of Data Trace. "Through our continued geographic expansion, we are the first to offer our customers data covering the entire state of California, and do so through a single platform."
 

About Data Trace
Data Trace Information Services LLC provides technology that enables settlement services companies to connect to regional title databases and access them using a standardized interface. The Data Trace system is the largest and most advanced of its kind and delivers title history information, property tax assessment and payment data, document images and property profiles in major metropolitan areas across the United States. With its significant geographical coverage, Data Trace’s title plant and tax database of nearly 1 billion records is the broadest and most comprehensive title information system available and is used by the largest national title insurance underwriters in the U.S. For additional information, visit Data Trace's website at www.eDataTrace.com.

Download the complete release as a PDF (PDF 89kb)

Current Quarter Highlights

• Title Insurance and Services segment adjusted pretax margin of 10.0 percent
  • GAAP pretax margin of 7.7 percent, which includes $19.2 million charge for final settlement of the Bank of America lawsuit and $2.0 million in net realized investment losses
• Commercial division revenues of $107.3 million, up 10 percent compared to last year
• International division revenues of $87.4 million, up 5 percent compared to last year
• Specialty Insurance segment pretax margin of 13.9 percent
• Cash flow from operations of $107.6 million

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

Total revenues for the fourth quarter of 2011 were $996.6 million, a decline of 3 percent relative to the fourth quarter of 2010. Net income in the current quarter was $40.2 million, or 38 cents per diluted share, compared with net income of $47.1 million, or 44 cents per diluted share, in the fourth quarter of 2010. The current quarter results include a $19.2 million charge, or 11 cents per diluted share, for the final settlement of the Bank of America lawsuit. The current quarter results also include net realized investment losses of $2.2 million, or 1 cent per diluted share, compared with $2.8 million, or 2 cents per diluted share, in the fourth quarter of 2010.

Total revenues for the full year of 2011 were $3.8 billion, a decline of 2 percent relative to the prior year. Net income was $78.3 million, or $0.73 per diluted share, compared with $127.8 million, or $1.20 per diluted share, in 2010.  The results for the full year 2011 include charges of $77.5 million, or 43 cents per diluted share, comprised of a total of $32.2 million taken in the third and fourth quarters for settlement of the Bank of America lawsuit and $45.3 million taken in the first quarter in connection with the guaranteed valuation product offered in Canada. In addition, the full year results for 2011 include $9.2 million of net realized investment losses, or 5 cents per diluted share, compared with net realized investment gains of $2.2 million, or 1 cent per diluted share, in 2010.

"We are pleased with our company's performance in the fourth quarter," said Dennis J. Gilmore, chief executive officer at First American Financial Corporation. "Our efficiency initiatives, coupled with increased commercial and refinance activity, enabled us to deliver our strongest title segment margins of the year.

"Looking forward, we see positive momentum with total open orders per day up 19 percent in January compared with the fourth quarter, primarily driven by commercial and refinance activity. We also expect the HARP 2.0 program to stimulate additional refinance activity beginning in the second quarter. Given our efficient cost structure and conservative balance sheet, we are well positioned to capitalize on a gradually improving economy.

"I am also pleased to report that our board of directors has approved a 33 percent increase in the regular quarterly dividend from $0.06 per common share to $0.08 per share commencing in the first quarter of 2012."

Total revenues for the Title Insurance and Services segment were $922.5 million, a 3 percent decline from the same quarter of 2010. Direct premiums and escrow fees were down 4 percent as compared to the fourth quarter of 2010. This was due to a 16 percent decline in the number of direct title orders closed in the quarter, which reflects the decline in mortgage originations, largely offset by higher average revenue per order. Average revenue per direct title order was $1,504, an increase of 14 percent, compared with the fourth quarter of 2010. This was primarily due to a shift in the mix of revenues to higher-premium resale and commercial transactions, as well as an increase in the average revenue per closed commercial order. Agent premiums were lower by 2 percent in the current quarter, which is comparable with the 1 percent decline in direct premiums we experienced in the third quarter, reflecting the normal reporting lag of approximately one quarter.

Information and other revenues were $153.7 million this quarter, down 4 percent as compared to the same quarter of last year, driven by the same factors impacting direct title operations. Total investment income was up 7 percent in the fourth quarter, primarily reflecting lower net realized investment losses compared to last year.

Personnel costs were $287.5 million in the fourth quarter, a decrease of $12.3 million, or 4 percent, compared with the fourth quarter of 2010. This decline was primarily due to a reduction in  headcount and reduced costs related to employee benefit plans.  

Other operating expenses were $167.5 million in the fourth quarter, down $19.4 million, or 10 percent, compared with the fourth quarter of 2010. This decrease reflects reductions in professional and other outside service expenses in the current quarter.

The provision for policy losses and other claims was $64.5 million in the fourth quarter, or 8.6 percent of title premiums and escrow fees, up $21.9 million compared with the same quarter of the prior year. Excluding the $19.2 million charge for the final settlement of the Bank of America lawsuit, the current quarter rate of 6.0 percent reflects an ultimate loss rate of 5.6 percent for the current policy year and a net increase in the loss reserve estimates for prior policy years.

Pretax income for the Title Insurance and Services segment was $71.4 million in the fourth quarter, compared with $81.3 million in the fourth quarter of 2010, or a decrease of 12 percent. Pretax margin was 7.7 percent in the current quarter, compared with 8.6 percent in the fourth quarter of 2010.  

Total revenues for the Specialty Insurance segment were $72.2 million in the fourth quarter of 2011, essentially flat compared with the fourth quarter of 2010. Pretax margin was 13.9 percent, down from 14.3 percent in the fourth quarter of 2010. The overall loss ratio in the Specialty Insurance segment was 54 percent in both the current quarter and the prior year.  

Dividend Increase

The board of directors has approved a 33 percent increase in the regular quarterly dividend from $0.06 per common share to $0.08 per share commencing in the first quarter of 2012.  The board of directors declared the $0.08 per share cash dividend payable on April 16, 2012, to shareholders of record as of March 30, 2012.

Teleconference/Webcast

First American's fourth quarter and full year 2011 results will be discussed in more detail on Thursday, Feb. 23, 2012, at 11 a.m. ET, via teleconference. The toll-free dial-in number is (800) 593-8971. Callers from outside the United States may dial (212) 547-0240. The pass code for the event is "First American."

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 Feb. 28, 2012, by dialing (203) 369-1811. 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 and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.8 billion in 2011, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. 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 direct title insurance operations, which are posted approximately 12 days after the end of each month.

Forward-Looking Statements

Certain statements made in this press release and the related management commentary and responses to investor questions, including but not limited to those related to the effects of the HARP 2.0 program, an improving economy, future performance, expense management, and future organic growth and strategic acquisitions 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; volatility in the capital markets; unfavorable economic conditions; impairments in the company's goodwill or other intangible assets; changes in measures of the strength of the company's title insurance underwriters, including ratings and statutory surpluses; increased claims or other costs and expenses attributable to the company's use of title agents; failures at financial institutions where the company deposits funds; 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; reform of government-sponsored mortgage enterprises; limitations on access to public records and other data; regulation of title insurance rates; inability of the company's subsidiaries to pay dividends or repay funds; expenses of and funding obligations to the pension plan; material variance between actual and expected claims experience; systems interruptions and intrusions, wire transfer errors or unauthorized data disclosures; inability to realize the benefits of the company's offshore strategy; product migration; increases in the size of the company's customers; losses in the company's investment portfolio; and other factors described in the company's quarterly report on Form 10-Q for the quarter ended September 30, 2011, 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 pretax margin. The company is presenting these non-GAAP financial measures because they provide the company's management and investors with additional insight into the operational 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.

Download the complete release as a PDF (PDF 89kb)

The cash dividend is payable on April 16, 2012 to shareholders of record as of March 30, 2012.
 

About First American
First American Financial Corporation is a leading provider of title insurance and settlement services to the real estate and mortgage industries that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.8 billion in 2011, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

The call will follow the release of the company’s earnings results for the fourth quarter of 2011, which is scheduled earlier that day at 7:00 a.m. ET.

The conference call, which will also be broadcast over the Internet and is open to investors, members of the financial community, the media and other members of the public, can be accessed online at www.firstam.com/investor or by dialing toll free (800) 593-8971. Callers from outside the United States may dial (212) 547-0240. The pass code for the event is “First American.”

An audio replay of the conference call will be available through Feb. 28, 2012, by dialing (203) 369-1811. An audio archive of the call and a copy of the third-quarter 2011 earnings release, including the financial information contained therein, 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 and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.9 billion in 2010, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

This month’s NAHB/First American IMI reveals that the number of housing markets showing measurable improvement nearly doubled in January with the addition of 40 new metropolitan areas to the index. The IMI now boasts 76 improving markets, up from 41 in December, with 31 states and the District of Columbia represented by at least one entry. The list also reflects the deletion of five metros from last month: Anchorage, Alaska; Fort Wayne, Ind.; Canton, Ohio; Scranton, Pa., and Charleston, W.Va.

The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. New entrants to the list in January include the following (listed alphabetically by state):

Florence, Ala.

Tuscaloosa, Ala.

Fayetteville, Ark.

Denver, Colo.

Greeley, Colo.

Bridgeport, Conn.

New Haven, Conn.

Cape Coral, Fla.

Jacksonville, Fla.

Punta Gorda, Fla.

Honolulu, Hawaii

Ames, Iowa

Des Moines, Iowa

Dubuque, Iowa

Elkhart, Ind.

Indianapolis, Ind.

Lafayette, Ind.

Lake Charles, La.

Worcester, Mass.

Grand Rapids, Mich.

Lansing, Mich.

Monroe, Mich.

Minneapolis, Minn.

Columbia, Mo.

Joplin, Mo.

Fargo, N.D.

Manchester, N.H.

Cincinnati, Ohio

Oklahoma City, Okla.

Tulsa, Okla.

Corvallis, Ore.

Erie, Pa.

Philadelphia, Pa.

Chattanooga, Tenn.

Clarksville, Tenn.

Nashville, Tenn.

College Station, Texas

Dallas, Texas

Victoria, Texas

Madison, Wisc.

"The fact that the list of improving housing markets nearly doubled this month shows that a significant, positive trend is developing, and is even more relevant when you consider the expanding geographic distribution of the list – which now includes 31 states and the District of Columbia," noted NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.  "This trend could be even stronger if not for the numerous impediments that continue to slow a housing and economic recovery, including overly restrictive lending policies and the growing inventory of distressed properties in certain markets."

"While relatively small metropolitan areas continue to dominate the list of improving housing markets, it’s important to note that several major metros in diverse parts of the country have now joined the field as well – including such places as Dallas, Denver, Honolulu, Indianapolis, Nashville and Philadelphia," added NAHB Chief Economist David Crowe. "This is an encouraging sign that gradually strengthening economic conditions are starting to take hold across a broader swath of America."

"The substantial gain in the number of improving housing markets in January shows that more consumers are looking favorably at a home purchase in light of today’s historically low interest rates and attractive prices, particularly in areas where job growth has picked up," added Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metropolitan area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list. A complete list of all 76 metropolitan areas currently on the IMI is available at: www.nahb.org/imi.

Editor’s Note: The NAHB/First American Improving Markets Index (IMI) is released on the fourth business day of each month at 10:00 a.m. ET, unless that day falls on a Friday, in which case, the index will be released the following Monday. A full calendar of 2011 release dates can be found at www.nahb.org/imi.  

About First American
First American Financial Corporation (NYSE: FAF)is a leading provider of title insurance and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other

real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.9 billion in 2010, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

About NAHB
The National Association of Home Builders is a Washington-based trade association representing more than 160,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. NAHB is affiliated with 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for this year.

At the present time, the company expects to issue press releases announcing quarterly and year-to-date financial results on the following dates:

• Thursday, Feb. 23, 2012 – 2011 Fourth Quarter and Year-End Results
• Thursday, April 26, 2012 – First Quarter Results
• Thursday, July 26, 2012 – Second Quarter Results
• Thursday, Oct. 25, 2012 – Third Quarter Results

About First American
First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.9 billion in 2010, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

HARP 2.0 differs significantly from the previous version of HARP in that there is no limitation on loan-to-value (LTV) ratios, credit score requirements are lower and mortgage lenders can approach borrowers proactively, in accordance with the program guidelines. These program changes are expected to help lenders reach a previously untapped population of American homeowners, allowing those qualified to refinance into loans with lower interest rates and, in some cases, shorter terms.

First American’s Quick Start HARP solution supports the revised program by helping mortgage lenders develop their own "push” or "pull” approach to soliciting homeowners.  In a "push” version, the lender utilizes internal loan data and First American’s proprietary title automation to proactively solicit homeowners who might benefit from HARP 2.0. The "pull” version is used when homeowners contact the lender to inquire about HARP 2.0.  In both cases, First American’s automated title technology delivers a title commitment to the lender in seconds, rather than a non-binding title "decision”.

First American developed its original solution in early 2010, for use with the first version of HARP. In doing so, the company worked closely with mortgage lenders to design specialized workflows that improve pull-through and closing times. Quick Start HARP adds to these features with significantly reduced title premium rates and settlement costs for qualified refinances. This allows lenders to further assist homeowners by offering "no closing cost” loans that roll fees into the mortgage principal or into the new mortgage rate.

"Successful ‘push’ programs have the dual advantages of cost and time reduction for lenders and borrowers,” said Patrick E. McLaughlin, president of First American Title Insurance Company’s Mortgage Services division. "Our experience and capacity will be advantageous to lenders who want to maximize their ability to bring HARP 2.0’s benefits to qualifying borrowers"

HARP 2.0 transactions are prioritized for special handling within First American’s settlement centers and follow streamlined curative guidelines. This results in closings that can be completed in as few as 14 business days. The program can be customized to include mobile notary signings or the use of First American’s eSignSmart, a technology that allows homeowners to sign loan documents electronically on a mobile tablet or digital signing pad.

 "Through advanced, accurate title automation and prioritized processes, we were able to achieve above-average results in speed to loan closings for the first version of HARP,” said Robert Camerota, chief operating officer of First American’s Mortgage Services division. "Our Quick Start HARP solution can be rapidly adapted to a lender’s current or proposed workflow and supports a variety of refinance strategies, including lower interest rates, shorter-term mortgages, earlier rate locks and no closing cost loans.”

About First American Mortgage Services
First American Mortgage Services, a division of First American Title Insurance Company, is a leading provider of origination and default solutions and a primary source of national title insurance, settlement, and valuation services for residential retail originators and servicers.  The division supports all aspects of the residential origination and the default servicing processes, successfully supplying products and services that have assisted in closing more than one million mortgages nationwide.  Through our flexible technology and vast resources, we are unique in our ability to provide customized, comprehensive and seamless solutions.  More information about the division’s solutions can be accessed on its website at www.famortgageservices.com.

About First American Title Insurance Company
The First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. First American Title provides comprehensive title insurance coverage and professional services for purchases, construction, refinances, or equity loans. The company’s thorough searches, title clearance, and insurance help to produce clear property titles and enable the efficient transfer of real estate. 

The transaction is expected to close in January 2012 pending regulatory approval and terms of the deal were not disclosed. With the acquisition of Hexter-Fair, First American will increase its market share by adding 21 new offices in the Dallas-Fort Worth metropolitan area.  

Hexter-Fair’s current owner, David Fair, will remain as chairman of the new entity, Hexter-Fair/First American Title Company, LLC, and will continue to be an integral part of the leadership team.

“This acquisition will significantly enhance First American’s title operations in Dallas-Fort Worth,” said Dennis Gilmore, president of First American Title Insurance Company.  “Together with Republic Title, the new entity will increase our range of service in that area and further our strategy to grow market share in the largest title and settlement services markets.”

About First American Title Insurance Company
First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. The company has its headquarters in Santa Ana, Calif. Information about First American Financial Corporation’s subsidiaries and an archive of its press releases can be found at www.firstam.com.

The cash dividend is payable on Jan. 17, 2012, to shareholders of record as of Dec. 30, 2011. 

About First American
First American Financial Corporation is a leading provider of title insurance and settlement services to the real estate and mortgage industries that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.9 billion in 2010, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

This month’s NAHB/First American IMI reveals that the number of improving housing markets continued to expand for a fourth consecutive month, rising from 30 in November to 41.

The index identifies metropolitan areas that have shown at least six months of improvement in employment and housing prices as well as an increase in housing permits.

The December list featured 20 new additions, including several major markets such as Washington, D.C., San Jose, Calif., and Toledo, Ohio. Meanwhile, nine smaller markets dropped off the list, primarily due to softer house prices. The following metro areas are new to the list for December:

Ann Arbor, Mich.

Athens, Ga.

Boulder, Colo.

Burlington, Vt.

Canton, Ohio

Charleston, W. Va.

Danville, Va.

Fort Wayne, Ind.

Grand Forks, N.D.

Jackson, Miss.

Kingsport, Tenn.

Laredo, Texas

Lincoln, Neb.

Muncie, Ind.

Muskegon, Mich.

San Jose, Calif.

Scranton, Pa.

Toledo, Ohio

Washington, D.C.

Winchester, Va.

"The increases we continue to see in the number and geographic diversity of improving metros are quite encouraging, and evidence of the fact that all housing markets are dependent on uniquely local factors," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. He noted that as of December, a total of 21 states and the District of Columbia are represented on the improving markets list -- up from14 states represented in November.

"The continued modest improvement we see across diverse housing markets combined with the recent improvement in unemployment are encouraging signs that the economy may finally be gaining some traction," said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.

The nine markets that dropped off the IMI in December include Alexandria, La., Fairbanks, Alaska, Hinesville, Ga., Houma, La., Jonesboro, Ark., Lima, Ohio, Pine Bluff, Ark., Sumter, S.C., and Waco, Texas. All but two of these metros fell from the list due to softening house prices. The exceptions to the rule were Jonesboro and Waco, where declines were registered in employment and single-family housing permits, respectively.

The total list of improving housing markets in December, as defined by the IMI, includes the following 41 entries (listed alphabetically by state):

Anchorage, Alaska

San Jose, Calif.

Boulder, Colo.

Fort Collins, Colo.

Washington, D.C.

Athens, Ga.

Davenport, Iowa

Waterloo, Iowa

Kankakee, Ill.

Fort Wayne, Ind.

Muncie, Ind.

Monroe, La.

New Orleans, La.

Ann Arbor, Mich.

Muskegon, Mich.

Jackson, Miss.

Fayetteville, N.C.

Winston-Salem, N.C.

Bismarck, N.D.

Grand Forks, N.D.

Lincoln, Neb.

Canton, Ohio

Toledo, Ohio

Pittsburgh, Pa.

Scranton, Pa.

Williamsport, Pa.

Kingsport, Tenn.

Amarillo, Texas

Corpus Christi, Texas

Laredo, Texas

McAllen, Texas

Midland, Texas

Odessa, Texas

Sherman, Texas

Tyler, Texas

Danville, Va.

Winchester, Va.

Burlington, Vt.

Charleston, W.V.

Casper, Wyo.

Cheyenne, Wyo.

"The December IMI results are very much in keeping with the latest government housing data and our own builder surveys, which have shown modest signs of improvement in certain individual markets where employment is gaining and distressed properties are not as numerous," said NAHB Chief Economist David Crowe. "These gradual improvements are now becoming evident not just in small, energy-producing metros that have previously dominated the IMI, but also in several larger markets and areas with more diverse economies."

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.

Please visit www.nahb.org/imi for additional data, tables and a list of 2011 future economic release dates.

Editor’s Note: The NAHB/First American Improving Markets Index (IMI) is released on the fourth business day of each month at 10:00 a.m. ET, unless that day falls on a Friday, in which case, the index will be released the following Monday. A full calendar of 2011 release dates can be found at www.nahb.org/imi.

About First American
First American Financial Corporation (NYSE: FAF)is a leading provider of title insurance and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.9 billion in 2010, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

About NAHB
The National Association of Home Builders is a Washington-based trade association representing more than 160,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. NAHB is affiliated with 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for this year.

This month’s IMI reveals that the number of improving housing markets continued to expand for a third consecutive month, rising from 23 to 30. Nine metropolitan areas were added to this month’s list, including Cheyenne, Wyo., Corpus Christi, Texas, Davenport, Iowa, Fort Collins, Colo., Hinesville, Ga. Lima, Ohio, Monroe, La., Tyler, Texas and Williamsport, Pa.

The index identifies metropolitan areas that have shown at least six months of improvement in employment, housing prices and an increase in housing permits. The following metros were listed on the November index:

Alexandria, La.

Amarillo, Texas

Anchorage, Alaska

Bismarck, N.D.                                                                                         

Casper, Wyo.

Cheyenne, Wyo.

Corpus Christi, Texas

Davenport, Iowa

Fairbanks, Alaska

Fayetteville, N.C.

Fort Collins, Colo.

Hinesville, Ga.

Houma, La.

Jonesboro, Ark.

Kankakee, Ill.

Lima, Ohio

McAllen, Texas

Midland, Texas

Monroe, La.

New Orleans, La.

Odessa, Texas

Pine Bluff, Ark.

Pittsburgh, Pa.

Sherman, Texas

Sumter, S.C.

Tyler, Texas

Waco, Texas

Waterloo, Iowa

Williamsport, Pa.

Winston-Salem, N.C.

“Texas continues to dominate the list of improving housing markets in November, increasing its number of entries to eight and continuing a trend in which energy-producing metros seem to be doing better than the average,” said NAHB Chairman Bob Nielsen, a homebuilder from Reno, Nev. “Meanwhile, the geographic diversity of metros also continued to expand this month, with the states of Colorado, Georgia and Ohio all represented for the first time. This is further evidence that all housing markets are uniquely dependent upon local conditions, and some are leading the way toward an eventual, broader recovery.”

“When we start to look at real estate at the local level, we can see that economic conditions are improving,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. “These green shoots of housing recovery during a cold economic spring remind us all that real estate is local and that housing will recover one market at a time.”

The two metros that dropped off the list in November were Iowa City, Iowa and Wichita Falls, Texas. These metros experienced declines in their employment and permit data, respectively.

“The November IMI remains heavily weighted towards smaller cities, with Pittsburgh and New Orleans as the only major metros represented,” said NAHB Chief Economist David Crowe. “This is indicative of the tough conditions that continue to prevail across much of the country, particularly in larger markets that have been hit hardest by job losses and foreclosures during the recession and that will take more time to heal. However, momentum is building in pockets of the country where energy and agriculture are the dominant industries and where consistent, measurable improvements in economic conditions are now becoming apparent.”

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.

Please visit www.nahb.org/imi for additional data, tables and a list of 2011 future economic release dates.

Editor’s Note: The NAHB/First American Improving Markets Index (IMI) is released on the fourth business day of each month at 10:00 a.m. ET, unless that day falls on a Friday, in which case, the index will be released the following Monday. A full calendar of 2011 release dates can be found at www.nahb.org/imi.  

About First American
First American Financial Corporation (NYSE: FAF)is a leading provider of title insurance and settlement services to the real estate and mortgage industries, that traces its heritage back to 1889. First American and its affiliated companies also provide title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $3.9 billion in 2010, the company offers its products and services directly and through its agents and partners in all 50 states and abroad. More information about the company can be found at www.firstam.com.

About NAHB
The National Association of Home Builders is a Washington-based trade association representing more than 160,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. NAHB is affiliated with 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for this year.

SANTA ANA, Calif., Oct. 27, 2011 /PRNewswire/ -- First American Financial Corporation (NYSE: FAF), a leading global provider of title insurance and settlement services for real estate transactions, today announced financial results for the third quarter ended Sept. 30, 2011.

Current Quarter Highlights

• Title Insurance and Services segment pretax income of $48.9 million, which includes:
  • $13.0 million reserve charge in connection with Bank of America's pending lawsuit
  • $14.7 million increase in claim loss reserves for prior policy years, primarily 2007
• Commercial division revenues of $89.0 million, up 22 percent compared to last year
• International division revenues of $97.4 million, up 24 percent compared to last year
• Specialty Insurance segment pretax income of $6.7 million for a 9.0 percent margin
• Cash flow from operations of $53.2 million
• Debt-to-total-capital ratio of 12.3 percent as of Sept. 30, 2011

Total revenues for the third quarter of 2011 were $965.0 million, a decline of 4 percent relative to the third quarter of 2010. Net income in the current quarter was $21.0 million, or 20 cents per diluted share, compared with net income of $33.1 million, or 31 cents per diluted share, in the third quarter of 2010. The current quarter results include net realized investment losses of $3.3 million, or 2 cents per diluted share, compared with $0.4 million, or 0.2 cents per diluted share in the third quarter of 2010. The current quarter results also include total reserve additions of $27.7 million, or 15 cents per diluted share, compared with $10.3 million, or 6 cents per diluted share in the third quarter of 2010.

"We are encouraged by the continued strength in our commercial business, a strong rebound in our International division, and a significant increase in refinance orders opened during the third quarter," said Dennis J. Gilmore, chief executive officer at First American Financial Corporation.  "The quarter also benefited from the $40 million annualized expense reduction program that we implemented last quarter.

"As lower mortgage interest rates took hold in the quarter, we experienced a significant increase in open orders in August that has largely continued through September and into October.  This improved order flow, coupled with continued momentum in our commercial business, provides us with a strong pipeline going into the fourth quarter."  

Total revenues for the Title Insurance and Services segment were $897.8 million, a 3 percent decline from the same quarter of 2010. The lower total revenues were driven by a decline in both direct and agent title premiums, partly offset by higher information and other revenues. Direct premiums and escrow fees were down 1 percent, compared to the third quarter of 2010, due to an 18 percent decline in the number of direct title orders closed in the quarter that was largely offset by higher average revenue per order. Average revenue per direct title order was $1,561, an increase of 21 percent, compared with the third quarter of 2010, primarily due to a change in the mix toward higher-premium resale and commercial transactions. Agent premiums were lower by 8 percent in the current quarter, reflecting the normal reporting lag of approximately one quarter.

Information and other revenues were $160.2 million this quarter, up 5 percent as compared to the same quarter of last year, driven by our Canadian operations. Total investment income was up 2 percent in the third quarter, reflecting lower net realized investment losses compared to last year.

Personnel costs were $279.0 million in the third quarter, a decrease of $6.1 million, or 2 percent, compared with the third quarter of 2010. This decline was primarily due to a reduction in U.S. headcount and reduced costs related to employee benefit plans.  

Other operating expenses were $174.0 million in the third quarter, down $8.7 million, or 5 percent, compared with the third quarter of 2010. This decrease was primarily due to lower office-related costs and a reduction in consulting expenses that were partially offset by an increase in production-related expenses in the company's commercial, default and international businesses.

The provision for policy losses and other claims was $69.5 million in the third quarter, or 9.7 percent of title premiums and escrow fees, up $20.0 million compared with the same quarter of the prior year. The current quarter rate of 9.7 percent reflects an ultimate loss rate of 5.8 percent for the current policy year and includes $14.7 million in unfavorable development for prior policy years, primarily 2007, and a $13.0 million reserve in connection with Bank of America's pending lawsuit against the Company.

While the Company estimates its financial exposure from this lawsuit to be between $13 million and $42 million, its best estimate of its financial exposure is $13 million, which is also the amount for which the Company has offered to settle the case. These amounts do not reflect any potential recovery from third parties.  

Pretax income for the Title Insurance and Services segment was $48.9 million in the third quarter, compared with $60.0 millionin the third quarter of 2010, or a decrease of 19 percent. Pretax margin was 5.4 percent in the current quarter, compared with 6.5 percent in the third quarter of 2010.

Total revenues for the Specialty Insurance segment were $74.3 million in the third quarter of 2011, essentially flat compared with the third quarter of 2010. Pretax margin was 9.0 percent, down from 16.4 percent in the third quarter of 2010. The overall loss ratio in the Specialty Insurance segment was 60 percent in the current quarter, compared with 53 percent in the prior year.  Policy losses were higher in both the home warranty and property and casualty business lines during the quarter.

First American Financial Corporation (NYSE: FAF), a leading global provider of title insurance and settlement services for real estate transactions, today announced financial results for the third quarter ended Sept. 30, 2011.

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 direct title insurance operations, which are posted approximately 15 days after the end of each month.

Forward-Looking Statements

Certain statements made in this press release and the related management commentary and responses to investor questions, including but not limited to those related to the fourth quarter pipeline, the estimated financial exposure from the Bank of America litigation, the outlook for our commercial business, CoreLogic's review of strategic alternatives, future market conditions, and future organic growth and strategic investments, 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; volatility in the capital markets; unfavorable economic conditions; impairments in the company's goodwill or other intangible assets; changes in measures of the strength of the company's title insurance underwriters, including ratings and statutory surpluses; failures at financial institutions where the company deposits funds; 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; reform of government-sponsored mortgage enterprises; limitations on access to public records and other data; regulation of title insurance rates; inability of the company's subsidiaries to pay dividends or repay funds; expenses of and funding obligations to the pension plan; weakness in the commercial real estate market and increases in the amount or severity of commercial real estate transaction claims; material variance between actual and expected claims experience; systems interruptions and intrusions, wire transfer errors or unauthorized data disclosures;inability to realize the benefits of the company's offshore strategy; product migration; increases in the size of the company's customers; losses in the company's investment portfolio; and other factors described in the company's quarterly report on Form 10-Q for the quarter ended June 30, 2011, 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.