First American Financial posts $15.3 million loss
First American Financial Corp. (FAF) posted a first-quarter loss of $15.3 million, or 15 cents per share, on Thursday as the title insurer was forced to pay $45.3 million to strengthen reserves covering a guaranteed valuation product sold in Canada. That compares to a first-quarter profit of $13.8 million, or 13 cents per share, for the same quarter a year earlier. At the same time, the Santa Ana, Calif.-based title insurer increased its revenue to $931.7 million, up from $908.4 million. "We are disappointed that our first quarter results were impacted by a reserve strengthening charge we took in connection with a guaranteed valuation product we sell exclusively in Canada," said Dennis Gilmore, chief executive officer at First American Financial Corporation. "We are cancelling the product in its current form and are looking to reinsure a modified version. If we cannot reinsure all or most of the risk, we will terminate the product." The company also experienced the negative impact of increased claims in its American title operations. Gilmore said, on the other hand, First American is performing well when it comes to its commercial business and national lender operations. "Our specialty insurance segment continued its strong performance in both the home warranty and property and casualty insurance business lines, achieving a pretax margin of 17.8 percent in the quarter," he said. Write to Kerri Panchuk.