First American Profits Improve in 4Q12
First American Financial Corp., Santa Ana, Calif., had net income of $93 million for the fourth quarter and $301 million for the full year 2012, both vast improvements over the $40 million and $78 million profits in the same period in 2011.
Full-year 2012 results include $57 million of net realized investment gains due to the sale of CoreLogic common stock. For 2011, First American had investment losses of $9 million and charges of $78 million.
American Land Title Association data have First American as the No. 2 largest underwriter, behind Fidelity National Financial. FNF also was profitable in 4Q12, but unlike First American this was down from prior periods.
Total revenue was up 28% over 4Q11 and 19% over the full year. For the quarter, First American had total revenue of $1.3 billion, of which $1.2 billion came from the title segment.
CEO Dennis Gilmore commented, "During the fourth quarter, closed orders in our title business were the strongest of the year, driven by refinance and commercial activity. Revenues in our commercial division were $146 million for the quarter, up 36% compared to the prior year. The company delivered a strong title segment pretax margin of 12.7%.
"With new and existing home purchases in the early stages of recovery, we are optimistic that the housing market will continue to improve. We also expect continued strength in the commercial market. While there is uncertainty concerning the impact and timing of the expected decline in refinance activity and the magnitude of growth in the purchase market, we believe the company is well positioned going into 2013."