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Jun 30, 2020
First American Q2 2020 Earnings Report
Reported earnings of $1.52 per diluted share, or $1.05 per diluted share excluding net realized investment gains.
Key Takeaways
First American Financial Corporation reported a 7% increase in total revenue to $1.6 billion for the second quarter of 2020. Net income was $170.7 million, or $1.52 per diluted share, compared to $186.7 million, or $1.64 per diluted share, in the second quarter of 2019.
Total revenue increased by 7% compared to last year, reaching $1.6 billion.
Closed title orders increased by 29%, driven by a 160% surge in refinance orders.
Net realized investment gains amounted to $69.3 million, primarily due to changes in the fair value of equity securities.
Title Insurance and Services segment pretax margin was 16.3%, or 12.5% excluding net realized 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
Given low mortgage rates, First American expects refinance activity to remain at elevated levels for the remainder of the year.
Positive Outlook
- Priority has been twofold: to keep our employees safe while meeting all the service needs of our customers
- Approximately 80 percent of our global workforce continues to work from home with high productivity
- Business is performing much better than we expected back in April, with purchase open orders returning to positive growth in June following steep declines earlier in the quarter.
- The commercial market also performed better than expected in the second quarter
- Investments First American has been making over the past few years to secure its data leadership, accelerate title automation, and enable digital closings has put us in a superior position to add value for our customers as digital innovation transforms the mortgage and home-buying experience
Revenue & Expenses
Visualization of income flow from segment revenue to net income