First American Financial Corp. (FAF), a supplier of title insurance and settlement services for real estate transactions, posted a profit of $31.3 million, or 29 cents a share, for the first quarter, compared with a loss of $15.3 million, or a loss of 15 cents a share in 1Q2011.
The title insurance segment posted a pretax margin of 6.8%, the highest first-quarter margin since 2006. The unit had income of $60.8 million, compared to a loss of $15.7 million.
“The year is off to a good start,” said Dennis Gilmore, chief executive officer at First American. “Our efficient and scalable cost structure coupled with improved market conditions enabled us to deliver our best first-quarter title margin since 2006.”
Gilmore said title open orders were the strongest in three years, up 31% year-over year, driven “primarily by a significant increase in refinance activity and a modest but encouraging increase in resale transactions.”
First American’s total revenue for the first quarter of 2012 was $966.8 million, up from $931.7 million in the year-ago quarter.
The company also saw continued growth in their commercial business, with revenue of $81.5 million — up 21% from last year.
On April 17, the company completed a new $600 million, four-year secured revolving credit facility, which Gilmore says “enhances our flexibility and strengthens our financial position.”
While the first quarter finished strongly, it fell below analysts’ expectations, who expected the company to earn 32 cents a share according to Thomson Reuters I/B/E/S.
jhuseman@housingwire.com
@JessicaHuseman
