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Dec 31, 2020
First American Q4 2020 Earnings Report
First American reported fourth quarter earnings, demonstrating resilience amidst the pandemic with revenue increase and pretax margin improvement.
Key Takeaways
First American Financial Corporation reported a 24 percent increase in total revenue to $2.2 billion for the fourth quarter of 2020. Net income was $280.3 million, or $2.49 per diluted share, compared to $224.0 million, or $1.97 per diluted share, in the fourth quarter of 2019. The Title Insurance and Services segment's pretax margin was 18.9 percent.
Total revenue increased by 24 percent compared to last year, reaching $2.2 billion.
Closed title orders were up 32 percent, driven by a 75 percent increase in refinance orders.
Net realized investment gains totaled $55.5 million, or 38 cents per diluted share.
Title Insurance and Services segment achieved a record pretax margin of 18.9 percent.
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 robust mortgage market has continued into 2021, with strong refinance and purchase activity, driven by elevated housing demand and low mortgage rates. The company is also encouraged by the rebound in the commercial market in the fourth quarter and expect our commercial business performance will continue to improve throughout the year. In January, the company also entered into book transfer agreements to facilitate our exit from the property and casualty insurance business, enabling us to maintain focus on our core business and redeploy the capital to areas with higher expected returns. We expect to complete the transfer by the third quarter of 2022.
Positive Outlook
- Robust mortgage market continuing into 2021
- Strong refinance and purchase activity
- Elevated housing demand
- Low mortgage rates
- Rebound in the commercial market in Q4
Challenges Ahead
- None
Revenue & Expenses
Visualization of income flow from segment revenue to net income