Exhibit 99.1
| | | | | | |
 | | | | NEWS | | FOR IMMEDIATE RELEASE |
FIRST AMERICAN FINANCIAL REPORTS THIRD QUARTER 2015 RESULTS
—Reports Earnings of 69 Cents per Diluted Share—
SANTA ANA, Calif., Oct. 22, 2015 – First American Financial Corporation (NYSE: FAF), a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, today announced financial results for the third quarter ended Sept. 30, 2015.
Current Quarter Highlights
| | • | | Total revenue of $1.4 billion, up 10 percent compared with last year |
| | - | | Direct title orders closed were up 3 percent |
| | - | | Average revenue per direct title order closed was up 10 percent |
| | • | | Title Insurance and Services segment pretax margin of 10.6 percent |
| | • | | Commercial revenue of $171.9 million, up 15 percent compared with last year |
| | • | | Specialty Insurance segment total revenue was up 7 percent, with a pretax margin of 1.7 percent |
| | - | | Includes $3.5 million in claim losses as a result of northern California wildfires |
| | • | | Cash flow from operations of $185.3 million compared with $121.3 million last year |
Selected Financial Information
($ in millions, except per share data)
| | | | | | | | |
| | | For the Three Months Ended
Sept. 30 | |
| | | 2015 | | | 2014 | |
Total revenue | | $ | 1,383.9 | | | $ | 1,259.7 | |
Income before taxes | | | 115.4 | | | | 116.0 | |
Net income | | $ | 75.5 | | | $ | 80.7 | |
Net income per diluted share | | | 0.69 | | | | 0.74 | |
Total revenue for the third quarter of 2015 was $1.4 billion, an increase of 10 percent relative to the third quarter of 2014. Net income in the current quarter was $75.5 million, or 69 cents per diluted share, compared with net income of $80.7 million, or 74 cents per diluted share, in the third quarter of 2014. The current quarter results include net realized investment losses of $3.1 million, or 2 cents per diluted share, compared with gains of $14.4 million, or 9 cents per diluted share, in the third quarter of last year.
“Our third-quarter results in the title segment were strong, driven by higher closing activity in the residential purchase market and continued growth in our commercial business,” said Dennis J. Gilmore, chief executive officer at First American Financial Corporation. “Our continued effective management of expenses enabled the title segment to generate strong operating leverage and a pretax margin in line with our 10 to 12 percent target range.
“Earnings in our specialty insurance segment were lower than expected this quarter, primarily due to $3.5 million in claim losses from recent wildfires in northern California. In addition, the losses in our home warranty business were higher than last year, but in line with historical third-quarter claim rates.
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First American Financial Reports Third Quarter 2015 Results
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“The Consumer Financial Protection Bureau’s new mortgage disclosure rule went into effect on October 3 and, while it is still too early to evaluate the ultimate impact, we continue to expect temporary delays in closings as the industry adapts to the changes required. Despite these anticipated delays, we are optimistic that the market environment will continue to be favorable in 2016.”
Title Insurance and Services
($ in millions, except average revenue per order)
| | | | | | | | |
| | | For the Three Months Ended
Sept. 30 | |
| | | 2015 | | | 2014 | |
Total revenue | | $ | 1,288.2 | | | $ | 1,165.8 | |
Income before taxes | | $ | 137.0 | | | $ | 121.0 | |
Pretax margin | | | 10.6 | % | | | 10.4 | % |
Direct open orders | | | 310,800 | | | | 297,500 | |
Direct closed orders | | | 224,000 | | | | 217,400 | |
U.S. Direct Commercial | | | | | | | | |
Total revenue | | $ | 171.9 | | | $ | 149.0 | |
Open orders | | | 34,100 | | | | 31,000 | |
Closed orders | | | 20,600 | | | | 19,700 | |
Average revenue per order | | $ | 8,400 | | | $ | 7,600 | |
Total revenue for the Title Insurance and Services segment was $1.3 billion, a 10 percent increase from the same quarter of 2014. Direct premiums and escrow fees were up 11 percent from the third quarter of 2014, driven by a 3 percent increase in the number of direct title orders closed in the quarter and a 10 percent increase in the average revenue per direct title order to $2,119. The increase in revenue per direct title order closed was primarily attributable to an increase in the average size of commercial transactions and the number of large commercial deals closed in the quarter, as well as higher residential real estate values. Agent premiums were up 16 percent in the current quarter compared with last year.
Information and other revenue was $161.9 million this quarter, up 1 percent compared with the same quarter of last year. Excluding the $4.0 million impact of a recent acquisition, information and other revenue was down 2 percent from the same period last year, reflecting the continued reduction in demand for the company’s default information products. This decline was significantly offset by higher demand for certain non-insured products and services driven by the increase in transaction activity during the quarter.
Investment income was $25.4 million in the third quarter, up 15 percent from the third quarter of 2014. The increase was primarily attributable to higher interest income driven by growth in average invested balances in the debt securities portfolio. Net realized investment losses totaled $3.1 million in the current quarter, compared with gains of $12.8 million in the third quarter of 2014.
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First American Financial Reports Third Quarter 2015 Results
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Personnel costs were $379.5 million in the third quarter, an increase of $33.8 million, or 10 percent, compared with the same quarter of 2014. This increase was primarily attributable to higher incentive compensation expense driven by improved revenue and profitability.
Other operating expenses were $201.8 million in the third quarter, essentially flat compared with the third quarter of 2014. Production-related expenses declined due to a shift in the mix to products with lower production-related expenses as a percentage of revenues, which offset increases in temporary labor costs from higher order volume.
The provision for policy losses and other claims was $71.8 million in the third quarter, or 6.5 percent of title premiums and escrow fees, an increase of $6.7 million compared with the same quarter of the prior year due to an increase in title premiums and escrow fees. The current quarter rate includes an ultimate loss rate of 6.0 percent for the current policy year.
Pretax income for the Title Insurance and Services segment was $137.0 million in the third quarter, compared with $121.0 million in the third quarter of 2014. Pretax margin was 10.6 percent in the current quarter, compared with 10.4 percent last year.
Specialty Insurance
($ in millions)
| | | | | | | | |
| | | For the Three Months Ended
Sept. 30 | |
| | | 2015 | | | 2014 | |
Total revenue | | $ | 101.2 | | | $ | 94.9 | |
Income before taxes | | $ | 1.7 | | | $ | 10.4 | |
Pretax margin | | | 1.7 | % | | | 11.0 | % |
Total revenue for the Specialty Insurance segment was $101.2 million in the third quarter of 2015, an increase of 7 percent compared with the third quarter of 2014. The increase in revenue was primarily driven by higher premiums earned in the home warranty business line. Both the home warranty and property and casualty business lines experienced higher losses in the current quarter, which resulted in a segment loss ratio of 68.7 percent, compared with 59.7 percent in the prior year. The increase in the loss ratio in the home warranty business was primarily attributable to higher claim frequency, as well as higher contract servicing costs. This business experienced unusually low claims activity in the third quarter of last year, while the loss ratio this quarter reflects its typical third-quarter claims experience. In the property and casualty business, the increase in the loss ratio was due to higher claim severity, primarily driven by $3.5 million in losses from the recent wildfires in northern California, partly offset by lower claim frequency. As a result, the pretax margin in the current quarter declined to 1.7 percent from 11.0 percent in the third quarter of 2014.
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First American Financial Reports Third Quarter 2015 Results
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Teleconference/Webcast
First American’s third quarter 2015 results will be discussed in more detail on Thursday, Oct. 22, 2015, 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 201-689-8349.
The live audio webcast of the call will be available on First American’s website atwww.firstam.com/investor. An audio replay of the conference call will be available through Nov. 5, 2015, by dialing 201-612-7415 and using the conference ID 13621641. An audio archive of the call will also be available on First American’s investor website.
About First American
First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance, settlement services and risk solutions for real estate transactions that traces its heritage back to 1889. First American also provides title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $4.7 billion in 2014, the company offers its products and services directly and through its agents throughout the United States and abroad. More information about the company can be found atwww.firstam.com.
Website Disclosure
First American posts information of interest to investors atwww.firstam.com/investor. This includes opened and closed title insurance order counts for its U.S. 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 impact of the new integrated mortgage disclosure rule; an improving economy; the outlook for the housing market, including sustained growth in the purchase market; outlook for the commercial business; the company’s ability to capitalize on an improving housing market; expense management; and the expected normalized tax rate, 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; the Consumer Financial Protection Bureau’s exercise of its broad rulemaking and supervisory powers; compliance with the Consumer Financial Protection Bureau’s integrated disclosure rules; regulation of title insurance rates; reform of government-sponsored mortgage enterprises; limitations on access to public records and other data; 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; expenses of and funding obligations to the pension plan; material variance between actual and expected claims experience; defalcations, increased claims or other costs and
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First American Financial Reports Third Quarter 2015 Results
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expenses attributable to the company’s use of title agents; any inadequacy in the company’s risk mitigation efforts; systems damage, failures, 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; inability to realize the benefits of, and challenges arising from, the company’s acquisition strategy; and other factors described in the company’s quarterly report on Form 10-Q for the quarter ended June 30, 2015, 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 adjusted earnings per share (diluted), adjusted pretax margin, personnel and other operating expense ratios and success ratios. 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.
| | |
| Investor Contact: | | Media Contact: |
| |
| Craig Barberio | | Marcus Ginnaty |
| Investor Relations | | Corporate Communications |
| First American Financial Corporation | | First American Financial Corporation |
| 714-250-5214 | | 714-250-3298 |
(Additional Financial Data Follows)
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First American Financial Reports Third Quarter 2015 Results
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First American Financial Corporation
Summary of Consolidated Financial Results and Selected Information
(in thousands, except per share amounts and title orders)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended
September 30 | | | For the Nine Months Ended
September 30 | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Total revenues | | $ | 1,383,915 | | | $ | 1,259,730 | | | $ | 3,818,788 | | | $ | 3,422,498 | |
Income before income taxes | | $ | 115,396 | | | $ | 115,952 | | | $ | 315,966 | | | $ | 227,663 | |
Income tax expense | | | 39,637 | | | | 35,015 | | | | 108,831 | | | | 74,186 | |
| | | | | | | | | | | | | | | | |
Net income | | | 75,759 | | | | 80,937 | | | | 207,135 | | | | 153,477 | |
Less: Net income attributable to noncontrolling interests | | | 217 | | | | 232 | | | | 615 | | | | 454 | |
| | | | | | | | | | | | | | | | |
Net income attributable to the Company | | $ | 75,542 | | | $ | 80,705 | | | $ | 206,520 | | | $ | 153,023 | |
| | | | | | | | | | | | | | | | |
Net income per share attributable to stockholders: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.69 | | | $ | 0.75 | | | $ | 1.91 | | | $ | 1.43 | |
Diluted | | $ | 0.69 | | | $ | 0.74 | | | $ | 1.88 | | | $ | 1.41 | |
Cash dividends declared per share | | $ | 0.25 | | | $ | 0.24 | | | $ | 0.75 | | | $ | 0.60 | |
Weighted average common shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 108,647 | | | | 107,136 | | | | 108,284 | | | | 106,727 | |
Diluted | | | 110,004 | | | | 108,863 | | | | 109,706 | | | | 108,546 | |
Selected Title Information | | | | | | | | | | | | | | | | |
Title orders opened | | | 310,800 | | | | 297,500 | | | | 983,000 | | | | 886,900 | |
Title orders closed | | | 224,000 | | | | 217,400 | | | | 678,100 | | | | 611,700 | |
Paid title claims | | $ | 50,260 | | | $ | 57,160 | | | $ | 205,662 | | | $ | 204,556 | |
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First American Financial Reports Third Quarter 2015 Results
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First American Financial Corporation
Selected Balance Sheet Information
(in thousands)
(unaudited)
| | | | | | | | |
| | | September 30,
2015 | | | December 31,
2014 | |
Cash and cash equivalents | | $ | 894,430 | | | $ | 1,190,080 | |
Investment portfolio | | | 4,766,051 | | | | 4,033,892 | |
Goodwill and other intangible assets, net | | | 1,019,437 | | | | 1,015,757 | |
Total assets | | | 8,121,148 | | | | 7,666,100 | |
Reserve for claim losses | | | 971,453 | | | | 1,011,780 | |
Notes and contracts payable | | | 584,952 | | | | 587,337 | |
Total stockholders’ equity | | $ | 2,690,070 | | | $ | 2,572,917 | |
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First American Financial Reports Third Quarter 2015 Results
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First American Financial Corporation
Segment Information
(in thousands, unaudited)
| | | | | | | | | | | | | | | | |
For the Three Months Ended September 30, 2015 | | Consolidated | | | Title
Insurance | | | Specialty
Insurance | | | Corporate
(incl. Elims.) | |
Revenues | | | | | | | | | | | | | | | | |
Direct premiums and escrow fees | | $ | 625,652 | | | $ | 527,592 | | | $ | 98,060 | | | $ | — | |
Agent premiums | | | 576,450 | | | | 576,450 | | | | — | | | | — | |
Information and other | | | 162,671 | | | | 161,882 | | | | 795 | | | | (6 | ) |
Net investment income | | | 22,272 | | | | 25,381 | | | | 2,336 | | | | (5,445 | ) |
Net realized investment (losses) gains(1) | | | (3,130 | ) | | | (3,149 | ) | | | 19 | | | | — | |
| | | | | | | | | | | | | | | | |
| | | 1,383,915 | | | | 1,288,156 | | | | 101,210 | | | | (5,451 | ) |
| | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | | |
Personnel costs | | | 400,884 | | | | 379,509 | | | | 16,854 | | | | 4,521 | |
Premiums retained by agents | | | 462,087 | | | | 462,087 | | | | — | | | | — | |
Other operating expenses | | | 220,623 | | | | 201,793 | | | | 12,290 | | | | 6,540 | |
Provision for policy losses and other claims | | | 139,126 | | | | 71,768 | | | | 67,358 | | | | — | |
Depreciation and amortization | | | 21,072 | | | | 19,753 | | | | 1,197 | | | | 122 | |
Premium taxes | | | 17,439 | | | | 15,612 | | | | 1,827 | | | | — | |
Interest | | | 7,288 | | | | 650 | | | | — | | | | 6,638 | |
| | | | | | | | | | | | | | | | |
| | | 1,268,519 | | | | 1,151,172 | | | | 99,526 | | | | 17,821 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | $ | 115,396 | | | $ | 136,984 | | | $ | 1,684 | | | $ | (23,272 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
For the Three Months Ended September 30, 2014 | | Consolidated | | | Title
Insurance | | | Specialty
Insurance | | | Corporate
(incl. Elims.) | |
Revenues | | | | | | | | | | | | | | | | |
Direct premiums and escrow fees | | $ | 564,396 | | | $ | 473,443 | | | $ | 90,953 | | | $ | — | |
Agent premiums | | | 496,887 | | | | 496,887 | | | | — | | | | — | |
Information and other | | | 161,227 | | | | 160,636 | | | | 596 | | | | (5 | ) |
Net investment income | | | 22,828 | | | | 22,048 | | | | 1,734 | | | | (954 | ) |
Net realized investment gains(1) | | | 14,392 | | | | 12,821 | | | | 1,571 | | | | — | |
| | | | | | | | | | | | | | | | |
| | | 1,259,730 | | | | 1,165,835 | | | | 94,854 | | | | (959 | ) |
| | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | | |
Personnel costs | | | 365,304 | | | | 345,751 | | | | 16,419 | | | | 3,134 | |
Premiums retained by agents | | | 395,324 | | | | 395,324 | | | | — | | | | — | |
Other operating expenses | | | 219,536 | | | | 202,362 | | | | 10,778 | | | | 6,396 | |
Provision for policy losses and other claims | | | 119,390 | | | | 65,073 | | | | 54,317 | | | | — | |
Depreciation and amortization | | | 24,127 | | | | 21,879 | | | | 1,210 | | | | 1,038 | |
Premium taxes | | | 15,427 | | | | 13,730 | | | | 1,697 | | | | — | |
Interest | | | 4,670 | | | | 716 | | | | — | | | | 3,954 | |
| | | | | | | | | | | | | | | | |
| | | 1,143,778 | | | | 1,044,835 | | | | 84,421 | | | | 14,522 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | $ | 115,952 | | | $ | 121,000 | | | $ | 10,433 | | | $ | (15,481 | ) |
| | | | | | | | | | | | | | | | |
| (1) | Includes impairment losses recorded in earnings, except for impairments on investments accounted for under the equity method, which are recorded in investment income. |
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First American Financial Reports Third Quarter 2015 Results
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First American Financial Corporation
Segment Information
(in thousands, unaudited)
| | | | | | | | | | | | | | | | |
For the Nine Months Ended September 30, 2015 | | Consolidated | | | Title
Insurance | | | Specialty
Insurance | | | Corporate
(incl. Elims.) | |
Revenues | | | | | | | | | | | | | | | | |
Direct premiums and escrow fees | | $ | 1,772,581 | | | $ | 1,490,054 | | | $ | 282,527 | | | $ | — | |
Agent premiums | | | 1,495,879 | | | | 1,495,879 | | | | — | | | | — | |
Information and other | | | 479,849 | | | | 477,447 | | | | 2,422 | | | | (20 | ) |
Net investment income | | | 70,694 | | | | 73,151 | | | | 6,552 | | | | (9,009 | ) |
Net realized investment (losses) gains(1) | | | (215 | ) | | | (1,544 | ) | | | 1,897 | | | | (568 | ) |
| | | | | | | | | | | | | | | | |
| | | 3,818,788 | | | | 3,534,987 | | | | 293,398 | | | | (9,597 | ) |
| | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | | |
Personnel costs | | | 1,155,500 | | | | 1,081,340 | | | | 48,782 | | | | 25,378 | |
Premiums retained by agents | | | 1,199,375 | | | | 1,199,375 | | | | — | | | | — | |
Other operating expenses | | | 652,290 | | | | 595,849 | | | | 37,010 | | | | 19,431 | |
Provision for policy losses and other claims | | | 363,550 | | | | 194,053 | | | | 169,497 | | | | — | |
Depreciation and amortization | | | 63,389 | | | | 59,443 | | | | 3,579 | | | | 367 | |
Premium taxes | | | 46,920 | | | | 41,836 | | | | 5,084 | | | | — | |
Interest | | | 21,798 | | | | 1,868 | | | | — | | | | 19,930 | |
| | | | | | | | | | | | | | | | |
| | | 3,502,822 | | | | 3,173,764 | | | | 263,952 | | | | 65,106 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | $ | 315,966 | | | $ | 361,223 | | | $ | 29,446 | | | $ | (74,703 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
For the Nine Months Ended September 30, 2014 | | Consolidated | | | Title
Insurance | | | Specialty
Insurance | | | Corporate
(incl. Elims.) | |
Revenues | | | | | | | | | | | | | | | | |
Direct premiums and escrow fees | | $ | 1,529,391 | | | $ | 1,266,171 | | | $ | 263,220 | | | $ | — | |
Agent premiums | | | 1,341,020 | | | | 1,341,020 | | | | — | | | | — | |
Information and other | | | 464,572 | | | | 463,036 | | | | 1,553 | | | | (17 | ) |
Net investment income | | | 64,254 | | | | 57,082 | | | | 5,305 | | | | 1,867 | |
Net realized investment gains(1) | | | 23,261 | | | | 19,249 | | | | 3,101 | | | | 911 | |
| | | | | | | | | | | | | | | | |
| | | 3,422,498 | | | | 3,146,558 | | | | 273,179 | | | | 2,761 | |
| | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | | |
Personnel costs | | | 1,045,955 | | | | 973,249 | | | | 47,420 | | | | 25,286 | |
Premiums retained by agents | | | 1,070,260 | | | | 1,070,260 | | | | — | | | | — | |
Other operating expenses | | | 622,024 | | | | 569,494 | | | | 32,606 | | | | 19,924 | |
Provision for policy losses and other claims | | | 337,739 | | | | 188,378 | | | | 149,361 | | | | — | |
Depreciation and amortization | | | 63,879 | | | | 57,416 | | | | 3,787 | | | | 2,676 | |
Premium taxes | | | 41,971 | | | | 37,332 | | | | 4,639 | | | | — | |
Interest | | | 13,007 | | | | 1,955 | | | | — | | | | 11,052 | |
| | | | | | | | | | | | | | | | |
| | | 3,194,835 | | | | 2,898,084 | | | | 237,813 | | | | 58,938 | |
| | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | $ | 227,663 | | | $ | 248,474 | | | $ | 35,366 | | | $ | (56,177 | ) |
| | | | | | | | | | | | | | | | |
| (1) | Includes impairment losses recorded in earnings, except for impairments on investments accounted for under the equity method, which are recorded in investment income. |
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First American Financial Reports Third Quarter 2015 Results
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First American Financial Corporation
Expense and Success Ratio Reconciliation
Title Insurance and Services Segment
($ in thousands, unaudited)
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended
September 30 | | | For the Nine Months Ended
September 30 | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Total revenues | | $ | 1,288,156 | | | $ | 1,165,835 | | | $ | 3,534,987 | | | $ | 3,146,558 | |
Less: Net realized investment (losses) gains | | | (3,149 | ) | | | 12,821 | | | | (1,544 | ) | | | 19,249 | |
Net investment income | | | 25,381 | | | | 22,048 | | | | 73,151 | | | | 57,082 | |
Premiums retained by agents | | | 462,087 | | | | 395,324 | | | | 1,199,375 | | | | 1,070,260 | |
| | | | | | | | | | | | | | | | |
Net operating revenues | | $ | 803,837 | | | $ | 735,642 | | | $ | 2,264,005 | | | $ | 1,999,967 | |
| | | | | | | | | | | | | | | | |
Personnel and other operating expenses | | $ | 581,302 | | | $ | 548,113 | | | $ | 1,677,189 | | | $ | 1,542,743 | |
Ratio (% net operating revenues) | | | 72.3 | % | | | 74.5 | % | | | 74.1 | % | | | 77.1 | % |
Ratio (% total revenues) | | | 45.1 | % | | | 47.0 | % | | | 47.4 | % | | | 49.0 | % |
Change in net operating revenues | | $ | 68,195 | | | | | | | $ | 264,038 | | | | | |
Change in personnel and other operating expenses | | | 33,189 | | | | | | | | 134,446 | | | | | |
Success Ratio (1) | | | 49 | % | | | | | | | 51 | % | | | | |
| (1) | Change in personnel and other operating expenses divided by change in net operating revenues |
First American Financial Corporation
Pretax Margin Reconciliation
Title Insurance and Services Segment
($ in thousands, unaudited)
| | | | | | | | |
| | | For the Three Months Ended
September 30 | |
| | | 2015 | | | 2014 | |
GAAP total revenues | | $ | 1,288,156 | | | $ | 1,165,835 | |
Less: Net realized investment (losses) gains | | | (3,149 | ) | | | 12,821 | |
| | | | | | | | |
Adjusted total revenues | | $ | 1,291,305 | | | $ | 1,153,014 | |
| | | | | | | | |
GAAP pretax income | | $ | 136,984 | | | $ | 121,000 | |
Less: Net realized investment (losses) gains | | | (3,149 | ) | | | 12,821 | |
| | | | | | | | |
Adjusted pretax income | | $ | 140,133 | | | $ | 108,179 | |
| | | | | | | | |
GAAP pretax margin | | | 10.6 | % | | | 10.4 | % |
Adjusted pretax margin | | | 10.9 | % | | | 9.4 | % |
First American Financial Corporation
Earnings Per Diluted Share (EPS) Reconciliation
(unaudited)
| | | | | | | | |
| | | For the Three Months Ended
September 30 | |
| | | 2015 | | | 2014 | |
EPS (Diluted) | | $ | 0.69 | | | $ | 0.74 | |
Less: Net realized investment (losses) gains per share (after tax) | | | (0.02 | ) | | | 0.09 | |
| | | | | | | | |
Adjusted EPS (Diluted) | | $ | 0.71 | | | $ | 0.65 | |
| | | | | | | | |
-more-
First American Financial Reports Third Quarter 2015 Results
Page 11
First American Financial Corporation
Supplemental Direct Title Order Information
(unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Q315 | | | Q215 | | | Q115 | | | Q414 | | | Q314 | |
Open Orders per Day | | | | | | | | | | | | | | | | | | | | |
Purchase | | | 2,099 | | | | 2,324 | | | | 2,002 | | | | 1,611 | | | | 2,033 | |
Refinance | | | 1,629 | | | | 1,758 | | | | 2,379 | | | | 1,627 | | | | 1,521 | |
Refinance as % of residential orders | | | 44 | % | | | 43 | % | | | 54 | % | | | 50 | % | | | 43 | % |
Commercial | | | 532 | | | | 544 | | | | 532 | | | | 505 | | | | 485 | |
Other(1) | | | 596 | | | | 612 | | | | 612 | | | | 522 | | | | 609 | |
| | | | | | | | | | | | | | | | | | | | |
Total open orders per day | | | 4,856 | | | | 5,238 | | | | 5,525 | | | | 4,263 | | | | 4,648 | |
| | | | | | | | | | | | | | | | | | | | |
Closed Orders per Day | | | | | | | | | | | | | | | | | | | | |
Purchase | | | 1,687 | | | | 1,681 | | | | 1,247 | | | | 1,420 | | | | 1,573 | |
Refinance | | | 1,152 | | | | 1,420 | | | | 1,471 | | | | 1,122 | | | | 1,113 | |
Refinance as % of residential orders | | | 41 | % | | | 46 | % | | | 54 | % | | | 44 | % | | | 41 | % |
Commercial | | | 321 | | | | 325 | | | | 300 | | | | 330 | | | | 308 | |
Other(1) | | | 339 | | | | 425 | | | | 386 | | | | 377 | | | | 404 | |
| | | | | | | | | | | | | | | | | | | | |
Total closed orders per day | | | 3,500 | | | | 3,852 | | | | 3,403 | | | | 3,249 | | | | 3,397 | |
| | | | | | | | | | | | | | | | | | | | |
Average Revenue per Order (ARPO) (2) | | | | | | | | | | | | | | | | | | | | |
Purchase | | $ | 2,080 | | | $ | 2,036 | | | $ | 1,921 | | | $ | 1,944 | | | $ | 1,950 | |
Refinance | | | 863 | | | | 871 | | | | 880 | | | | 869 | | | | 857 | |
Commercial | | | 8,360 | | | | 8,182 | | | | 8,117 | | | | 9,558 | | | | 7,568 | |
Other(1) | | | 670 | | | | 477 | | | | 580 | | | | 437 | | | | 480 | |
Total ARPO | | $ | 2,119 | | | $ | 1,953 | | | $ | 1,865 | | | $ | 2,171 | | | $ | 1,926 | |
Business Days | | | 64 | | | | 64 | | | | 61 | | | | 63 | | | | 64 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| (1) | Includes default and other orders |
Totals may not add due to rounding
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