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Mar 31, 2023
First American Q1 2023 Earnings Report
First American Financial's first quarter results were announced, revealing a decrease in revenue but highlighting expense management and investment income growth.
Key Takeaways
First American Financial Corporation reported a decrease in total revenue to $1.4 billion, a 29% drop compared to the previous year. Net income was $46 million, with earnings per diluted share at 44 cents. Despite challenging market conditions, the company's expense management and net investment income growth contributed to a title pretax margin of 6.5 percent.
Earnings per diluted share were 44 cents, or 49 cents excluding net investment losses.
Total revenue reached $1.4 billion, a 29 percent decrease year-over-year.
Title Insurance and Services segment revenues totaled $1.3 billion, down 32 percent from last year.
The Title Insurance and Services segment's pretax margin was 6.5 percent (6.1 percent excluding net investment gains).
First American
First American
First American Revenue by Segment
Revenue by Segment
Title Insurance and Services Revenue
CapyFin.comHome Warranty Revenue
CapyFin.com Forward Guidance
The purchase market appears to have stabilized and is showing improvement in the first three weeks of April, with open orders up over 5 percent compared with March. While there is a high degree of uncertainty concerning the commercial market outlook, we remain optimistic that transaction activity will improve in the second half of the year.
Positive Outlook
- Purchase market appears to have stabilized.
- Open orders are up over 5% in the first three weeks of April compared to March.
- Optimism that commercial transaction activity will improve in the second half of the year.
- Expense management efforts delivered a title pretax margin of 6.5 percent.
- Market share grew by over two percentage points in 2022.
Challenges Ahead
- Challenging market conditions continued into the first quarter.
- Existing home sales have fallen to levels not seen since the 2008 financial crisis.
- The commercial real estate market has significantly declined.
- High degree of uncertainty concerning the commercial market outlook.
- Total revenue decreased by 29 percent compared to last year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income