EX-99.1 2 faf-ex991_6.htm EX-99.1 faf-ex991_6.htm

Exhibit 99.1

 

NEWS

 FOR

 IMMEDIATE

 RELEASE

 

FIRST AMERICAN FINANCIAL REPORTS Results

for the fourth QUARTER and full year of 2020

Reports Fourth Quarter Earnings of $2.49 per Diluted Share

 

SANTA ANA, Calif., Feb. 11, 2021 – 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 fourth quarter ended Dec. 31, 2020.

 

Current Quarter Highlights

Total revenue of $2.2 billion, up 24 percent compared with last year

 

-

Closed title orders up 32 percent, driven by a 75 percent increase in refinance orders

 

-

Average revenue per order down 6 percent, driven by the shift to refinance transactions

Net realized investment gains of $55.5 million, or 38 cents per diluted share, primarily due to the change in the fair value of equity securities

Title Insurance and Services segment record pretax margin of 18.9 percent

 

-

16.8 percent excluding net realized investment gains

Commercial revenues of $226.6 million, down 5 percent compared with last year

In January 2021, entered into book transfer agreements to facilitate exit from the property and casualty insurance business within the Specialty Insurance segment

 

-

Transfer expected to be complete by the third quarter of 2022

Board of directors approved a new $300 million share repurchase plan

Repurchased 1.4 million shares for a total of $69.7 million at an average price of $49.20

Debt-to-capital ratio of 23.7 percent, or 17.0 percent excluding secured financings payable of $516.2 million  

 

 

Full Year 2020 Highlights

Total revenue of $7.1 billion, up 14 percent compared with last year

Title Insurance and Services segment pretax margin of 15.7 percent

 

-

14.6 percent excluding net realized investment gains

Specialty Insurance segment pretax margin of -4.7 percent

Cash flow from operations of $1.1 billion, up 19 percent compared with last year

Return on equity of 14.9 percent

Closed $350 million acquisition of Docutech

Repurchased 3.2 million shares for a total of $138.6 million at an average price of $43.44

Raised the common stock dividend by 5 percent in both January and November to an annual rate of $1.84 per share

Named to the Fortune 100 Best Companies to Work For® list for the fifth consecutive year

 

 

 

 

 

 

 

 

 

 

 

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First American Financial Reports Fourth Quarter and Full Year 2020 Results

Page 2

Selected Financial Information

($ in millions, except per share data)

 

 

Three Months Ended

 

 

Full Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Total revenue

 

$

2,151.3

 

 

$

1,728.7

 

 

$

7,086.7

 

 

$

6,202.1

 

Income before taxes

 

 

382.3

 

 

 

288.5

 

 

 

923.3

 

 

 

905.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

280.3

 

 

$

224.0

 

 

$

696.4

 

 

$

707.4

 

Net income per diluted share

 

 

2.49

 

 

1.97

 

 

 

6.16

 

 

 

6.22

 

 

Total revenue for the fourth quarter of 2020 was $2.2 billion, an increase of 24 percent relative to the fourth quarter of 2019. Net income in the current quarter was $280.3 million, or $2.49 per diluted share, compared with net income of $224.0 million, or $1.97 per diluted share, in the fourth quarter of 2019. Net realized investment gains in the current quarter were $55.5 million, or 38 cents per diluted share, compared with net realized investment gains of $23.8 million, or 16 cents per diluted share, in the fourth quarter of last year. The current quarter was also impacted by two items related to the company’s decision to exit the property and casualty insurance business within the Specialty Insurance segment.  

The first was a reversal of a portion of the impairment initially taken in the third quarter, resulting in an $18.3 million benefit, or 13 cents per diluted share. The second was a permanent tax difference of $7.4 million, or 7 cents per diluted share, which adversely impacted the tax rate.  

Total revenue for the full year of 2020 was $7.1 billion, up 14 percent compared with the prior year. Net income was $696.4 million, or $6.16 per diluted share, compared with net income of $707.4 million, or $6.22 per diluted share, in 2019. Net realized investment gains were $105.0 million, or 71 cents per diluted share, compared with net realized investment gains of $66.4 million, or 46 cents per diluted share last year. In addition, the company recorded a pretax impairment of $54.9 million, or 45 cents per diluted share, related to the property and casualty insurance business within the Specialty Insurance segment.

“Our 2020 performance demonstrated the remarkable resilience of our people amidst the challenges presented by the pandemic,” said Dennis J. Gilmore, chief executive officer at First American Financial Corporation. “The company closed over one million transactions while most of our people were working from home. Historically high industry mortgage originations supported revenue growth of 14 percent to $7.1 billion, a new record for the company, and we achieved a pretax title margin of 15.7 percent.  

“During the year, we executed on our commitment to return capital to shareholders. The company increased the common stock dividend by 5 percent in both January and November to an annual rate of $1.84 per share. We also repurchased 3.2 million shares for a total of $139 million.

“Looking ahead, the robust mortgage market has continued into 2021, with strong refinance and purchase activity, driven by elevated housing demand and low mortgage rates. We are also encouraged by the rebound in the commercial market in the fourth quarter and expect our commercial business performance will continue to improve throughout the year. In January, the company also entered into

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First American Financial Reports Fourth Quarter and Full Year 2020 Results

Page 3

book transfer agreements to facilitate our exit from the property and casualty insurance business, enabling us to maintain focus on our core business and redeploy the capital to areas with higher expected returns. We expect to complete the transfer by the third quarter of 2022.”

  

Title Insurance and Services

($ in millions, except average revenue per order)

 

 

Three Months Ended

 

 

 

December 31,

 

 

 

2020

 

 

2019

 

Total revenues

 

$

2,000.1

 

 

$

1,591.2

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

377.2

 

 

$

283.8

 

Pretax margin

 

 

18.9

%

 

 

17.8

%

 

 

 

 

 

 

 

 

 

Title open orders(1)

 

 

354,600

 

 

 

251,700

 

Title closed orders(1)

 

 

295,100

 

 

 

224,200

 

 

 

 

 

 

 

 

 

 

U.S. Commercial

 

 

 

 

 

 

 

 

   Total revenues

 

$

226.6

 

 

$

238.9

 

   Open orders

 

 

32,100

 

 

 

32,900

 

   Closed orders

 

 

19,400

 

 

 

20,900

 

   Average revenue per order

 

$

11,700

 

 

$

11,400

 

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

 

 

 

 

 

 

 

 

 

Total revenues for the Title Insurance and Services segment during the fourth quarter were $2.0 billion, up 26 percent compared with the same quarter of 2019. Direct premiums and escrow fees were up 24 percent compared with the fourth quarter of 2019, driven by a 32 percent increase in the number of direct title orders closed that was partially offset by a 6 percent decline in the average revenue per direct title order closed. The average revenue per direct title order declined to $2,457, primarily due to the shift in the order mix from higher-premium commercial and purchase transactions to lower-premium residential refinance transactions. Agent premiums, which are recorded on approximately a one-quarter lag relative to direct premiums, were up 25 percent in the current quarter as compared with last year.

Information and other revenues were $281.6 million during the quarter, up 39 percent compared with the same quarter of last year. The increase was primarily due to the growth in mortgage originations that led to higher demand for the company’s title information products and the recent acquisition of Docutech.    

Investment income was $51.6 million in the fourth quarter, down $18.2 million, or 26 percent. The decline was primarily due to the impact of lower short-term interest rates on the investment portfolio and cash balances, partially offset by higher interest income from the company’s warehouse lending business. Net realized investment gains totaled $50.4 million in the current quarter, compared with gains of $20.6 million in the fourth quarter of 2019, primarily due to the change in the fair value of equity securities for both periods.

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First American Financial Reports Fourth Quarter and Full Year 2020 Results

Page 4

Personnel costs were $514.7 million in the fourth quarter, an increase of $64.6 million, or 14 percent, compared with the same quarter of 2019. This increase was primarily attributable to higher incentive compensation and salary expense, as well as the impact of recent acquisitions.  

Other operating expenses were $299.6 million in the fourth quarter, up $75.6 million, or 34 percent, compared with the fourth quarter of 2019. The increase was primarily due to higher production-related costs as a result of the growth in order volume, higher professional services and the impact of recent acquisitions.

The provision for policy losses and other claims was $80.8 million in the fourth quarter, or 5.0 percent of title premiums and escrow fees, an increase from a 4.0 percent loss provision rate in the prior year. The current quarter rate reflects an ultimate loss rate of 4.5 percent for the current policy year with an $8.1 million increase in the loss reserve estimates for prior policy years.

Depreciation and amortization expense was $36.6 million in the fourth quarter, up $7.0 million, or 24 percent, compared with the same period last year, primarily due to the amortization of intangibles related to recent acquisitions.  

Pretax income for the Title Insurance and Services segment was $377.2 million in the fourth quarter, compared with $283.8 million in the fourth quarter of 2019. Pretax margin was 18.9 percent in the current quarter, compared with 17.8 percent last year. Excluding the impact of net realized investment gains, the pretax margin was 16.8 percent this year, unchanged compared with last year.

 

Specialty Insurance

($ in millions)

 

Three Months Ended

 

 

 

December 31,

 

 

 

2020

 

 

2019

 

Total revenues

 

$

140.6

 

 

$

131.6

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

$

26.7

 

 

$

22.0

 

Pretax margin

 

 

19.0

%

 

 

16.7

%

 

Total revenues for the Specialty Insurance segment were $140.6 million in the fourth quarter of 2020, an increase of 7 percent compared with the fourth quarter of 2019. This quarter, the segment’s financial results benefited from an $18.3 million reversal of a portion of the impairment initially recorded in the third quarter within the property and casualty business. The overall loss ratio for the segment was 65.2 percent, up from 51.2 percent last year due to higher claim losses in both the property and casualty and home warranty businesses. The home warranty business continued to experience higher claim frequency in the fourth quarter, significantly driven by claims in the appliance and plumbing trades.

 

 

 

 

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First American Financial Reports Fourth Quarter and Full Year 2020 Results

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Teleconference/Webcast

First American’s fourth quarter 2020 results will be discussed in more detail on Thursday, February 11, 2021, at 11 a.m. EST, via teleconference. The toll-free dial-in number is 877-407-8293. Callers from outside the United States may dial +1-201-689-8349.

The live audio webcast of the call will be available on First American’s website at www.firstam.com/investor. An audio replay of the conference call will be available through February 25, 2021, by dialing 201-612-7415 and using the conference ID 13714735. 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; banking, trust and wealth management services; and other related products and services. With total revenue of $7.1 billion in 2020, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2020, First American was named to the Fortune 100 Best Companies to Work For® list for the fifth consecutive year. More information about the company can be found at www.firstam.com.

Website Disclosure

First American posts information of interest to investors at www.firstam.com/investor. This includes opened and closed title insurance order counts for its U.S. direct title insurance operations, which are posted approximately 10 to 12 days after the end of each month.

 

 

 

 

 

 

 

 

 

 

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First American Financial Reports Fourth Quarter and Full Year 2020 Results

Page 6

 

Forward-Looking Statements

Certain statements made in this press release and the related management commentary contain, and responses to investor questions may contain, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and may contain the words “believe,” “anticipate,” “expect,” “intend,” “plan,” “predict,” “estimate,” “project,” “will be,” “will continue,” “will likely result,” or other similar words and phrases or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” or “could.” These forward-looking statements include, without limitation, statements regarding future operations, performance, financial condition, prospects, plans and strategies. These forward-looking statements are based on current expectations and assumptions that may prove to be incorrect. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include, without limitation: interest rate fluctuations; changes in the performance of the real estate markets; volatility in the capital markets; unfavorable economic conditions; the coronavirus pandemic and responses thereto; impairments in the company’s goodwill or other intangible assets; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; failures at financial institutions where the company deposits funds; regulatory oversight and changes in applicable laws and government regulations, including privacy and data protection laws; heightened scrutiny by legislators and regulators of the company’s title insurance and services segment and certain other of the company’s businesses; regulation of title insurance rates; limitations on access to public records and other data; climate change, health crises, severe weather conditions and other catastrophe events; changes in relationships with large mortgage lenders and government-sponsored enterprises; changes in measures of the strength of the company’s title insurance underwriters, including ratings and statutory capital and surplus; losses in the company’s investment portfolio; material variance between actual and expected claims experience; defalcations, increased claims or other costs and expenses attributable to the company’s use of title agents; any inadequacy in the company’s risk management framework; systems damage, failures, interruptions, cyberattacks and intrusions, or unauthorized data disclosures; innovation efforts of the company and other industry participants and any related market disruption; errors and fraud involving the transfer of funds; the company’s use of a global workforce; inability of the company’s subsidiaries to pay dividends or repay funds; and other factors described in the company’s quarterly report on Form 10-Q for the quarter ended September 30, 2020, as filed with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made.  The company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

 

Use of Non-GAAP Financial Measures

This news release and related management commentary contain certain financial measures that are not presented in accordance with generally accepted accounting principles (GAAP), including an adjusted debt to capitalization ratio, personnel and other operating expense ratios, success ratios, net operating revenues; and adjusted revenues, adjusted pretax income, adjusted earnings per share, and adjusted pretax margins for the company, its title insurance and services segment and its specialty insurance segment. The company is presenting these non-GAAP financial measures because they provide the company’s management and investors with additional insight into the financial leverage, operational efficiency and performance of the company relative to earlier periods and relative to the company’s competitors. The company does not intend for these non-GAAP financial measures to be a substitute for any GAAP financial information. In this news release, these non-GAAP financial measures have been presented with, and reconciled to, the most directly comparable GAAP financial measures. Investors should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures.

 

 

Media Contact:

Marcus Ginnaty
Corporate Communications
First American Financial Corporation
714-250-3298

 

Investor Contact:

Craig Barberio

Investor Relations

First American Financial Corporation

714-250-5214

 

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First American Financial Reports Fourth Quarter and Full Year 2020 Results

Page 7

 

First American Financial Corporation

 

Summary of Consolidated Financial Results and Selected Information

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Total revenues

 

$

2,151,274

 

 

$

1,728,664

 

 

$

7,086,667

 

 

$

6,202,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$

382,280

 

 

$

288,513

 

 

$

923,270

 

 

$

905,018

 

Income tax expense

 

 

100,915

 

 

 

63,907

 

 

 

222,774

 

 

 

195,170

 

Net income

 

 

281,365

 

 

 

224,606

 

 

 

700,496

 

 

 

709,848

 

Less: Net income attributable to noncontrolling interests

 

 

1,074

 

 

 

608

 

 

 

4,067

 

 

 

2,438

 

Net income attributable to the Company

 

$

280,291

 

 

$

223,998

 

 

$

696,429

 

 

$

707,410

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.50

 

 

$

1.98

 

 

$

6.18

 

 

$

6.26

 

Diluted

 

$

2.49

 

 

$

1.97

 

 

$

6.16

 

 

$

6.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.46

 

 

$

0.42

 

 

$

1.78

 

 

$

1.68

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

112,165

 

 

 

113,301

 

 

 

112,746

 

 

 

113,080

 

Diluted

 

 

112,486

 

 

 

113,984

 

 

 

113,020

 

 

 

113,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Title Insurance Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title orders opened(1)

 

 

354,600

 

 

 

251,700

 

 

 

1,470,900

 

 

 

1,093,000

 

Title orders closed(1)

 

 

295,100

 

 

 

224,200

 

 

 

1,043,800

 

 

 

795,800

 

Paid title claims

 

$

43,252

 

 

$

42,469

 

 

$

164,104

 

 

$

162,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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First American Financial Reports Fourth Quarter and Full Year 2020 Results

Page 8

First American Financial Corporation

 

Selected Consolidated Balance Sheet Information

 

(in thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Cash and cash equivalents

 

$

1,275,466

 

 

$

1,485,959

 

Investments

 

 

7,214,820

 

 

 

6,589,443

 

Goodwill and other intangible assets, net

 

 

1,573,102

 

 

 

1,242,741

 

Total assets

 

 

12,795,988

 

 

 

11,519,167

 

Reserve for claim losses

 

 

1,178,004

 

 

 

1,063,044

 

Notes and contracts payable

 

 

1,010,756

 

 

 

728,232

 

Total stockholders’ equity

 

$

4,909,972

 

 

$

4,420,484

 

 

 


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First American Financial Reports Fourth Quarter and Full Year 2020 Results

Page 9

First American Financial Corporation

 

Segment Information

 

(in thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

December 31, 2020

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

906,957

 

 

$

777,045

 

 

$

129,912

 

 

$

 

Agent premiums

 

 

839,444

 

 

 

839,444

 

 

 

 

 

 

 

Information and other

 

 

284,797

 

 

 

281,609

 

 

 

3,447

 

 

 

(259

)

Net investment income

 

 

64,530

 

 

 

51,600

 

 

 

2,118

 

 

 

10,812

 

Net realized investment gains

 

 

55,546

 

 

 

50,418

 

 

 

5,128

 

 

 

 

 

 

 

2,151,274

 

 

 

2,000,116

 

 

 

140,605

 

 

 

10,553

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

549,032

 

 

 

514,735

 

 

 

22,436

 

 

 

11,861

 

Premiums retained by agents

 

 

663,861

 

 

 

663,861

 

 

 

 

 

 

 

Other operating expenses

 

 

330,701

 

 

 

299,609

 

 

 

21,374

 

 

 

9,718

 

Provision for policy losses and other claims

 

 

165,506

 

 

 

80,808

 

 

 

84,698

 

 

 

 

Depreciation and amortization

 

 

38,327

 

 

 

36,587

 

 

 

1,703

 

 

 

37

 

Impairments on disposition of business

 

 

(18,329

)

 

 

 

 

 

(18,329

)

 

 

 

Premium taxes

 

 

23,950

 

 

 

21,896

 

 

 

2,054

 

 

 

 

Interest

 

 

15,946

 

 

 

5,372

 

 

 

 

 

 

10,574

 

 

 

 

1,768,994

 

 

 

1,622,868

 

 

 

113,936

 

 

 

32,190

 

Income (loss) before income taxes

 

$

382,280

 

 

$

377,248

 

 

$

26,669

 

 

$

(21,637

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

December 31, 2019

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

748,443

 

 

$

626,130

 

 

$

122,313

 

 

$

 

Agent premiums

 

 

671,602

 

 

 

671,602

 

 

 

 

 

 

 

Information and other

 

 

205,973

 

 

 

202,972

 

 

 

3,253

 

 

 

(252

)

Net investment income

 

 

78,806

 

 

 

69,843

 

 

 

2,753

 

 

 

6,210

 

Net realized investment gains

 

 

23,840

 

 

 

20,608

 

 

 

3,232

 

 

 

 

 

 

 

1,728,664

 

 

 

1,591,155

 

 

 

131,551

 

 

 

5,958

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

476,683

 

 

 

450,153

 

 

 

19,874

 

 

 

6,656

 

Premiums retained by agents

 

 

529,749

 

 

 

529,749

 

 

 

 

 

 

 

Other operating expenses

 

 

256,251

 

 

 

224,024

 

 

 

23,421

 

 

 

8,806

 

Provision for policy losses and other claims

 

 

114,515

 

 

 

51,912

 

 

 

62,603

 

 

 

 

Depreciation and amortization

 

 

31,484

 

 

 

29,600

 

 

 

1,846

 

 

 

38

 

Impairments on disposition of business

 

 

 

 

 

 

 

 

 

 

 

 

Premium taxes

 

 

19,725

 

 

 

17,950

 

 

 

1,775

 

 

 

 

Interest

 

 

11,744

 

 

 

3,951

 

 

 

 

 

 

7,793

 

 

 

 

1,440,151

 

 

 

1,307,339

 

 

 

109,519

 

 

 

23,293

 

Income (loss) before income taxes

 

$

288,513

 

 

$

283,816

 

 

$

22,032

 

 

$

(17,335

)


-more-


First American Financial Reports Fourth Quarter and Full Year 2020 Results

Page 10

First American Financial Corporation

 

Segment Information

 

(in thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

December 31, 2020

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

2,987,525

 

 

$

2,489,992

 

 

$

497,533

 

 

$

 

Agent premiums

 

 

2,759,455

 

 

 

2,759,455

 

 

 

 

 

 

 

Information and other

 

 

1,013,360

 

 

 

1,000,805

 

 

 

13,439

 

 

 

(884

)

Net investment income

 

 

221,290

 

 

 

199,228

 

 

 

9,123

 

 

 

12,939

 

Net realized investment gains

 

 

105,037

 

 

 

86,194

 

 

 

12,328

 

 

 

6,515

 

 

 

 

7,086,667

 

 

 

6,535,674

 

 

 

532,423

 

 

 

18,570

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

1,941,477

 

 

 

1,834,832

 

 

 

86,834

 

 

 

19,811

 

Premiums retained by agents

 

 

2,184,420

 

 

 

2,184,420

 

 

 

 

 

 

 

Other operating expenses

 

 

1,119,108

 

 

 

999,701

 

 

 

83,104

 

 

 

36,303

 

Provision for policy losses and other claims

 

 

579,507

 

 

 

262,456

 

 

 

317,051

 

 

 

 

Depreciation and amortization

 

 

148,979

 

 

 

141,292

 

 

 

7,535

 

 

 

152

 

Impairments on disposition of business

 

 

54,935

 

 

 

 

 

 

54,935

 

 

 

 

Premium taxes

 

 

77,504

 

 

 

69,256

 

 

 

8,248

 

 

 

 

Interest

 

 

57,467

 

 

 

18,211

 

 

 

 

 

 

39,256

 

 

 

 

6,163,397

 

 

 

5,510,168

 

 

 

557,707

 

 

 

95,522

 

Income (loss) before income taxes

 

$

923,270

 

 

$

1,025,506

 

 

$

(25,284

)

 

$

(76,952

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

Title

 

 

Specialty

 

 

Corporate

 

December 31, 2019

 

Consolidated

 

 

Insurance

 

 

Insurance

 

 

(incl. Elims.)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums and escrow fees

 

$

2,659,273

 

 

$

2,188,056

 

 

$

471,217

 

 

$

 

Agent premiums

 

 

2,373,140

 

 

 

2,373,140

 

 

 

 

 

 

 

Information and other

 

 

787,831

 

 

 

776,124

 

 

 

12,742

 

 

 

(1,035

)

Net investment income

 

 

315,413

 

 

 

282,910

 

 

 

11,249

 

 

 

21,254

 

Net realized investment gains

 

 

66,404

 

 

 

55,722

 

 

 

10,682

 

 

 

 

 

 

 

6,202,061

 

 

 

5,675,952

 

 

 

505,890

 

 

 

20,219

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personnel costs

 

 

1,806,005

 

 

 

1,701,742

 

 

 

80,120

 

 

 

24,143

 

Premiums retained by agents

 

 

1,874,266

 

 

 

1,874,266

 

 

 

 

 

 

 

Other operating expenses

 

 

923,298

 

 

 

805,480

 

 

 

80,705

 

 

 

37,113

 

Provision for policy losses and other claims

 

 

446,040

 

 

 

182,450

 

 

 

263,590

 

 

 

 

Depreciation and amortization

 

 

129,021

 

 

 

121,643

 

 

 

7,225

 

 

 

153

 

Impairments on disposition of business

 

 

 

 

 

 

 

 

 

 

 

 

Premium taxes

 

 

70,612

 

 

 

62,938

 

 

 

7,674

 

 

 

 

Interest

 

 

47,801

 

 

 

15,220

 

 

 

 

 

 

32,581

 

 

 

 

5,297,043

 

 

 

4,763,739

 

 

 

439,314

 

 

 

93,990

 

Income (loss) before income taxes

 

$

905,018

 

 

$

912,213

 

 

$

66,576

 

 

$

(73,771

)

 

-more-


First American Financial Reports Fourth Quarter and Full Year 2020 Results

Page 11

First American Financial Corporation

 

Reconciliation of Pretax Margins and Earnings per Diluted Share

 

Excluding Net Realized Investment Gains and Losses ("NRIG(L)")

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

2,151,274

 

 

$

1,728,664

 

 

$

7,086,667

 

 

$

6,202,061

 

Less: NRIG(L)

 

 

55,546

 

 

 

23,840

 

 

 

105,037

 

 

 

66,404

 

Total revenues excluding NRIG(L)

 

$

2,095,728

 

 

$

1,704,824

 

 

$

6,981,630

 

 

$

6,135,657

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

 

$

382,280

 

 

$

288,513

 

 

$

923,270

 

 

$

905,018

 

Less: NRIG(L)

 

 

55,546

 

 

 

23,840

 

 

 

105,037

 

 

 

66,404

 

Pretax income excluding NRIG(L)

 

$

326,734

 

 

$

264,673

 

 

$

818,233

 

 

$

838,614

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax margin

 

 

17.8

%

 

 

16.7

%

 

 

13.0

%

 

 

14.6

%

Less: Pretax margin impact of NRIG(L)

 

 

2.2

%

 

 

1.2

%

 

 

1.3

%

 

 

0.9

%

Pretax margin excluding NRIG(L)