First American Income Swells 18% in a Year on Higher Title Insurance Premiums
Real estate title insurance and settlement services provider First American Financial Corp (FAF) posted $33.8m of net income in Q210, up 18% from $28.6m in the year-ago quarter. The title insurance and services unit experienced a 6.9% pretax margin, despite a 30% decline in closed orders compared with the year-ago quarter. Average revenue per order swelled 20% over the same time last year as higher premium resale transactions took a greater share of the order mix. New title orders for refinance transactions also began to increase with record-low mortgage rates -- a trend that First American noted accelerated in July. First American completed the spin-off of CoreLogic (CLGX) on June 1, 2010. "We’ve come out of the spin-off solidly profitable, with a strong balance sheet and well positioned to continue to execute on our strategy of improving the efficiency of our business while pursuing selective, profitable growth opportunities," said First American CEO Dennis Gilmore. Gilmore added: "We expect real estate and mortgage markets to continue to be volatile, but they seem to be gradually improving. More specific to the title business, today’s low mortgage rates have improved the residential refinance market and the commercial pipeline appears to be building as the third quarter progresses." Write to Diana Golobay.