First American Loses $67MM As It Strengthens Reserves

The First American Corp., Santa Ana, Calif., reported a fourth quarter 2008 loss of $66.9 million ($0.72 per share) a slight improvement over the fourth quarter 2007 of $67.5 million per share ($0.74 per share). The bulk of the loss is due to a $50.7 million reserve strengthening adjustment; FAF also took intangible asset impairments of $13.7 million and employee separation and other restructuring costs of $11.3 million. For the full year, the company lost $26.3 million ($0.28 per share), compared with a $3.1 million ($0.03 per share) loss in 2007. Total revenues for the fourth quarter were $1.4 billion, down 28% from $1.9 billion for the same period in 2007. In the title insurance and services segment, FAF had a pretax loss of $94.2 million, much improved over the $185.5 million for the fourth quarter of 2007. Total revenues in this segment were down 32% from the previous year due to a decline in the number of title orders closed, a decrease in the average revenue per order closed and the termination of certain agency relationships. Average revenue per direct title order was $1,462, a 19% drop off from the fourth quarter 2007.