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Sep 30, 2022
First American Q3 2022 Earnings Report
First American Financial's third quarter performance in 2022 was reported.
Key Takeaways
First American Financial Corporation reported a decrease in total revenue to $1.8 billion, a 29% decrease compared to the previous year. Net income was $2 million, or 2 cents per diluted share, compared to $445 million, or $4.00 per diluted share, in the third quarter of 2021. The company's results were impacted by net investment losses of $226 million.
Earnings per diluted share were 2 cents, or $1.62 per share excluding $1.60 of net investment losses.
Total revenue was $1.8 billion, down 29 percent compared with last year.
Title Insurance and Services segment pretax margin of 9.9 percent, or 13.0 percent excluding net investment losses.
Repurchased 1.3 million shares for a total of $72 million at an average price of $53.31.
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
While we expect the challenging market environment to continue into 2023, we believe the company is well positioned to emerge from this cycle even stronger. The market has shifted away from refinance toward purchase and commercial transactions where we are stronger and, consequently, we are growing our market share. We are also the only title company that has a bank, which enables us to better capitalize on higher interest rates. Our strong balance sheet allows us to continue to invest in strategic initiatives, pursue acquisitions, as well as return capital to shareholders.
Positive Outlook
- Company is well positioned to emerge from this cycle even stronger.
- Market has shifted away from refinance toward purchase and commercial transactions where we are stronger and, consequently, we are growing our market share.
- Company is the only title company that has a bank, which enables us to better capitalize on higher interest rates.
- Strong balance sheet allows company to continue to invest in strategic initiatives.
- Strong balance sheet allows company to pursue acquisitions, as well as return capital to shareholders.
Challenges Ahead
- Cyclical downturn in the real estate market precipitated by rapidly rising mortgage rates led to a decline in the company’s residential business.
- Challenging market environment is expected to continue into 2023.
Revenue & Expenses
Visualization of income flow from segment revenue to net income