“We delivered strong results in our title insurance segment this quarter, with revenues up 10 percent,” said Dennis J. Gilmore, chief executive officer for First American Financial Corporation. “In our purchase business, closed orders were up 22 percent, and our commercial division continued its strong momentum with total revenues up 26 percent compared with last year.
“In response to a decline in refinance activity during the quarter, we began making adjustments to our cost structure, primarily in business units tied to refinance transactions. As we move into the fourth quarter, we continue to manage our expenses in response to market activity.
“During the quarter, we repurchased 2.2 million common shares for a total of $47.1 million at an average price of $21.91. We believe the company is well positioned to create value for our shareholders, particularly given the favorable long-term outlook for housing market fundamentals.”
Title Insurance and Services
($ in millions, except average revenue per order)
For the Three Months Ended
|Income before taxes||$||125.0||$||141.9|
|Direct open orders||316,000||438,500|
|Direct closed orders||273,400||305,600|
|Average revenue per order||$||10,200||$||8,800|
* Includes commercial activity from the National Commercial Services division only.
Total revenues for the Title Insurance and Services segment were $1.2 billion, a 10 percent increase from the same quarter of 2012. Direct premiums and escrow fees were up 6 percent from the third quarter of 2012, due to a 19 percent increase in the revenue per direct title order to $1,784 that was partially offset by an 11 percent decline in the number of direct title orders closed. The increase in revenue per direct title order was primarily attributable to the continued shift in the order mix to higher-premium residential resale and commercial transactions. Agent premiums were up 24 percent in the current quarter, which is consistent with the increase in direct premiums during the previous quarter, reflecting the typical reporting lag of approximately one quarter.