First American Q1 2022 Earnings Report
Key Takeaways
First American Financial Corporation's first quarter 2022 results showed total revenue of $2.0 billion, unchanged compared to the first quarter of 2021. Net income was $98 million, or 88 cents per diluted share, compared to $234 million, or $2.10 per diluted share, in the same period last year. The title segment delivered a pretax margin of 11.0 percent. The company repurchased 1.6 million shares for a total of $108 million at an average price of $69.04.
Earnings per diluted share of 88 cents, or $1.17 excluding 29 cents of net investment losses.
Total revenue of $2.0 billion, unchanged compared with last year.
Closed title orders down 29 percent, driven by a 62 percent decline in refinance orders.
Commercial revenues of $242 million, up 48 percent compared with last year.
First American
First American
First American Revenue by Segment
Forward Guidance
The market is currently transitioning from record low interest rates to a more normalized environment. Accordingly, First American is sharpening its focus on expense management and will continue to invest in strategic initiatives that drive our company’s operational efficiency and future growth.
Positive Outlook
- Continued strength in the commercial and purchase markets offset the sharp decline in refinance activity.
- Ongoing funding of title automation and digital closing initiatives.
- Expansion and enhancement of the data assets that fuel automation.
- Aggressively deployed capital by repurchasing 3.25 million shares for a total of $210 million year to date.
- Named to the 100 Best Companies to Work For list by Great Place to Work® and Fortune magazine for the seventh consecutive year.
Challenges Ahead
- Sharp decline in refinance activity resulting from the rapid increase in mortgage interest rates during the quarter.
- Net investment losses in the current quarter were $43 million.
- Policies-in-force in property and casualty business had declined by 88 percent since the wind-down began at the beginning of 2021.
- Property and casualty business ended the quarter with a pretax loss of $4 million.
- Increased personnel costs were primarily due to the impact of recent acquisitions and higher salary and incentive compensation expense.
Revenue & Expenses
Visualization of income flow from segment revenue to net income