LandAmerica Financial Group, Inc. (NYSE:LFG), one of the nation's larger real estate transaction services providers, said late Friday that it will take a non-cash write down of $21 million, or $13 million after taxes, in its Lender Services segment due to an expected loss of business from Fremont General Corporation. Fremont General's mortgage lending segment, Fremont Investment & Loan, halted operations under an FDIC Cease & Desist order in early March. The company announced the potential sale of its business earlier this morning. As a result of the probable loss of business, LandAmerica said it had determined an impact to its customer relationship intangible asset related to the October 2003 acquisition of LandAmerica Tax and Flood Services, Inc., formerly known as LERETA Corp. The impairment charge will be reflected in LandAmerica's results of operations for the three months ended March 31, 2007, scheduled for release on April 24, 2007, and management at the title giant said it does not expect the impairment charge to result in any future cash expenditures. The company said the scope of impairment is likely to be limited to the Tax and Flood Services acquisition, however, as a review of the company's entire Lender Services segment found no impairment of the operating division's aggregate goodwill balance.
"We were disappointed with this development in our Lender Services business," said chairman and CEO Theodore L. Chandler, Jr. "We remain focused on initiatives to improve return on equity even if the real estate environment does not improve." Chandler noted numerous steps the company took during 2006 to improve return on equity, including reducing headcount, redomesticating LandAmerica's primary insurance subsidiaries to Nebraska to provide additional cash dividend capacity in 2007 and 2008, and implementing technology initiatives. The company slashed 500 full-time employees during the fourth quarter of 2006, it said. For more information, visit http://www.landamerica.com.
Don't subscribe? Be sure to sign up today to get our free email updates delivered direct to your inbox!