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First American Financial Reports First Quarter 2014 Results

Stocks in this article: FAF

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 first quarter ended March 31, 2014.

Current Quarter Highlights

  • Total revenues down 12 percent compared with last year
    • Refinance closed orders down 64 percent
  • Title Insurance and Services segment pretax margin of 4.6 percent
  • Title order mix shifting to higher-premium purchase transactions
    • Refinance transactions accounted for 42 percent of residential open orders
  • Commercial revenues of $115.7 million, up 25 percent compared with last year
  • Specialty Insurance segment total revenues up 7 percent, with a pretax margin of 16.0 percent
  • Debt-to-capital ratio of 15.6 percent as of March 31, 2014
  • Significant capital management actions taken:
    • Doubled dividend to annual rate of $0.96 per share; 3.6 percent yield at quarter end
    • Raised share repurchase authorization to $250 million, with $183 million remaining
    • Closed $155 million acquisition of Interthinx, Inc. on March 12, 2014

Selected Financial Information

($ in millions, except per share data)

    For the Three Months Ended
March 31
2014     2013
Total revenues $ 1,012.8     $ 1,146.8
Income before taxes 35.3 59.6
Net income $ 21.7 $ 36.2
Net income per diluted share 0.20 0.33

Total revenues for the first quarter of 2014 were $1.0 billion, a decline of 12 percent relative to the first quarter of 2013. Net income in the current quarter was $21.7 million, or 20 cents per diluted share, compared with net income of $36.2 million, or 33 cents per diluted share, in the first quarter of 2013. The current quarter results include net realized investment gains of $2.6 million as well as impairments of investments accounted for under the equity method of $2.0 million, which together impacted net income by less than 1 cent per diluted share. The first quarter of 2013 included net realized investment gains of $9.3 million, or 5 cents per diluted share.

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