First American Corporation (new) · NYSE:FAF
First American Corporation (new) — Q2 2025 Earnings Presentation
32 slides from First American Corporation (new)'s earnings presentation, Jul 24, 2025
Slide 1: First American Financial Investor Discussions
FIRST AMERICAN FINANCIAL Investor Discussions Spring 2025 ©2018 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
Slide 2: Safe Harbor Statement
Safe Harbor Statement CERTAIN STATEMENTS MADE IN THIS PRESENTATION AND THE RELATED MANAGEMENT COMMENTARY CONTAIN, AND RESPONSES TO INVESTOR QUESTIONS MAY CONTAIN, FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures THIS PRESENTATION AND RELATED MANAGEMENT COMMENTARY CONTAIN CERTAIN FINANCIAL MEASURES THAT ARE NOT PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP), INCLUDING ADJUSTED REVENUE, ADJUSTED EARNINGS PER SHARE, ADJUSTED TITLE SEGMENT INVESTM
Slide 4: Leader in the Title and Settlement Services Industry
Leader in the Title and Settlement Services Industry $6.1B Total Revenue 19,040 Employees % 93 of Revenue (1) Title Segment % 25.2 Title Market Share 800 Offices % 7 Home Warranty of Revenue (1) Segment $14.9B Total Assets 8 Countries Trusted National Brand Largest Title Plant and Property 100 Best
Slide 5: Agenda
AGENDA 5 Year Financial Performance Key Markets Currently Improving From Trough Levels Consistent Strategy and Capital Management Priorities 5
Slide 6: Historical Financial Results
Historical Financial Results TOTAL REVENUE EARNINGS PER SHARE $10.0 $9.2 $12.00 $11.14 $9.0 $10.00 $8.0 $7.6 $7.1 $ in Billions $8.00 $7.0 $6.16 $6.0 $6.1 $6.00 $6.0 $4.00 $2.45 $5.0 $2.07 $4.0 $2.00 $1.26 $3.0 $0.00 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Net Investment gain/(loss) $0.11B
Slide 7: Historical Title Insurance Margin
Historical Title Insurance Margin Purchase Originations Refinance Originations Pretax Margin Adjusted Pretax Margin $4,500 20% $4,000 15% $3,500 $3,000 ($ in Billions) 10% $2,500 $2,000 5% $1,500 $1,000 0% $500 $- -5% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20
Slide 8: Adjusted Title Pretax Reconciliation
Adjusted Title Pretax Reconciliation ($ In millions) 2020 2021 2022 2023 2024 Total Revenues $6,536 $8,321 $7,547 $5,725 $5,737 Non-GAAP adjustments: Less: Net Investment Gains/Losses 86 72 (150) (38) (345) Adjusted Total Revenues $6,449 $8,249 $7,697 $5,763 $6,083 Pretax Income $1,026 $1,359 $757 $
Slide 9: Agenda
AGENDA 5 Year Financial Performance Key Markets Currently Improving From Trough Levels Consistent Strategy and Capital Management Priorities 9
Slide 10: Refinance Modestly Improving as Mortgage Rates Decline
Refinance Modestly Improving as Mortgage Rates Decline 5,000 6.00% 5.00% 4,000 4.00% Daily Open Orders 10-Year Treasury 3,000 3.00% 2,000 2.00% 1,000 1.00% - 0.00% Refinance 10-Year % 10
Slide 11: Purchase Market Showing Early Signs of a Measured Recovery
Purchase Market Showing Early Signs of a Measured Recovery 50% GROWTH RATE vs. PRIOR YEAR 40% Purchase Market 30% 20% ▪ Transactions remain at historically low levels, as high 10% mortgage rates and home prices continue to weigh 0% on affordability -10% − Inventory is up but remains below historical
Slide 12: Commercial Market Revenue Growth Expected to Continue
Commercial Market Revenue Growth Expected to Continue Commercial Market Sales Volume(1) $ Millions FAF Direct Revenues $1,000 $1,200 NCSD Local 1,026 1,042 $800 878 $1,000 142 160 774 $800 753 767 761 $600 112 638 658 109 131 593 606 600 574 $600 113 514 108 496 500 $400 454 436 884 883 379 380 400
Slide 13: Investment Income Expected to Remain Elevated
Investment Income Expected to Remain Elevated $180 6.0% Title Segment (1) Investment Income Fed Funds Rate 5.5% $160 5.0% Each 25 basis point Fed move Title Segment Investment Income ($ in Millions) $140 impacts investment income 4.5% by ~$15 - $20 million/year(2) Fed Funds Rate $120 4.0% 3.5% $100
Slide 14: Agenda
AGENDA 5 Year Financial Performance Key Markets Currently Improving From Trough Levels Consistent Strategy and Capital Management Priorities 14
Slide 15: First American Strategy
First American Strategy VISION: To Be the Premier Title Insurance and Settlement Services Company Manage Expand Data and Actively Profitably Advantage to Invest in Grow Our Complementary Core Title Strengthen and the Core and Businesses Settlement Pursue Growth Where First Business Opportunities Ame
Slide 16: Profitably Grow our Core Title and Settlement Business
Profitably Grow our Core Title and Settlement Business ▪ Sustain leadership in Title and Settlement Services ▪ Maintain and grow profitable market share ▪ Opportunistically expand use of multi-brand marketing ▪ Focus on innovation to lead the digital transformation ▪ Develop value-added services tha
Slide 17: Expand Data Advantage to Strengthen the Core and Pursue Growth Opportunities
Expand Data Advantage to Strengthen the Core and Pursue Growth Opportunities ▪ Uniquely strengthen core title business Leverage data to achieve market leading title automation ▪ Further develop data advantage Pillar 2 Expand coverage of property data elements and geographies Strategic priorities ▪ F
Slide 18: First American has Strongest Data Foundation in the Industry
First American has Strongest Data Foundation in the Industry No. of counties Population (%) Market position Assessor/property ownership 3,142 100 1st Proprietary title plants 1,847 82 1st Deeds, Mortgages, Foreclosures 3,108 99 1st Assignments and releases 2,739 99 1st Parcel Boundaries 3,125 99 1st
Slide 19: Manage and Actively Invest in Complementary Businesses
Manage and Actively Invest in Complementary Businesses where First American has a Strategic Advantage ▪ Grow Home Warranty Accelerate direct-to-consumer growth while maintaining strong operating margins Pillar 3 ▪ Grow international business in core geographies Strategic Invest for long-term growth
Slide 20: Capital Management Strategy
Capital Management Strategy ▪ Objective: Create long-term shareholder value ▪ Capital management priorities: ▪ Make value-creating investments in our core business ▪ Acquire or invest in businesses that fit within our strategy ▪ Return excess capital to shareholders through dividends and share repur
Slide 21: Disciplined M&A Strategy Drives Growth
Disciplined M&A Strategy Drives Growth Focused Strategy ▪ Title companies that expand our footprint in key markets ▪ Data and information companies that enhance our data capabilities or advance title automation Pursuing targets ▪ Opportunities complementary to title that support or leverage our core
Slide 22: Dividends
Dividends DIVIDENDS PER SHARE Dividend Considerations $2.30 $2.14 $2.16 $2.06 $2.10 ▪ First American expects to pay a meaningful dividend $2.10 $1.94 given the company’s cash flow generation and investment opportunities $1.90 $1.78 ▪ Dividend increases are intended to be sustainable $1.70 in perpetu
Slide 23: Share Repurchases
Share Repurchases SHARE REPURCHASE HISTORY $90 1 $80 ▪ Share repurchases will be dependent upon 0.9 capital levels, market conditions and Share Buyback Period $70 0.8 $60 0.7 alternative uses of capital, among other $50 0.6 factors Share Buyback Period 0.5 ▪ A new $400 million share repurchase Share
Slide 24: Investment Considerations
Investment Considerations ▪ Focused strategy as “pure play” in title and settlement markets ▪ Attractive industry characteristics ▪ Strong competitive position in title and settlement services ▪ Opportunity to grow through focus on innovation and by leveraging unique assets (e.g. bank and data) ▪ St
Slide 25: Appendix
APPENDIX 24
Slide 26: Title Segment Net Investment Income Non-GAAP Reconciliation
Title Segment Net Investment Income Non-GAAP Reconciliation Net Investment Income Less Affiliate Investments $ in Millions Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Net Investment Income $42.7 $47.5 $49.8 $48.4 $52.7 $69.3 $105.2 $131.8 $124.6 $1
Slide 27: Investment Portfolio
Investment Portfolio CONSOLIDATED PORTFOLIO INSURANCE PORTFOLIO Gov't Agency 1% Municipal US Treasury 16% Corporate 6% 17% Gov't Agency Municipal Corporate Equity 2% 10% 29% 13% $2.9B US Treasury 2% Avg. Rating : A+ Gov't Agency Duration: 5.7 yrs. Equity Foreign MBS Book Yield: 4.3% 5% Foreign $7.7B
Slide 28: Capital Structure
Capital Structure As of December 31, 2024 $ in millions 5.45% Senior Notes Due 2034 $450 ▪ Management targets debt-to-capital ratio of 18-20% 4.0% Senior Notes Due 2030 $450 (excluding secured financings payable) ▪ Supports target financial strength ratings 2.4% Senior Notes Due 2031 $650 Unamortize
Slide 29: Ultimate Loss Ratios by Policy Year / Paid Losses by Calendar Year
Ultimate Loss Ratios by Policy Year Paid to Date Ultimate Loss Ratio - Policy Year Paid Losses - Calendar Year 14% $400 12.9% 0.1% $350 12% 11.1% Paid Losses by Calendar Year ($ in Millions) 0.1% $300 Ultimate Loss Ratios by Policy Year 10% 9.5% 9.7% 0.3% 0.04% $250 8% 6.5% $200 12.9% 0.4% 6% 5.3% 5
Slide 30: U.S. Title
U.S. TITLE DIRECT AGENCY COMMERCIAL MORTGAGE SOLUTIONS First American Financial Total Revenue US Revenue Trend $9.0 $8.0 $8.0 0.7 $2.5B $7.0 $6.5 Agent $5.9 1.0 $6.0 0.2 0.5 1.1 $4.9 $5.0 $ in Billions 41% 0.6 0.3 $1.3B $5.0B $5.0 $4.0 0.4 2.1 1.7 0.4 0.7 0.2 0.8 0.2 U.S. Title 1.8 0.2 Other 21% $6.
Slide 31: Home Warranty
HOME WARRANTY First American Financial Total Revenue Total Revenue Trend $430 $425 $ in Millions $420 $415 Home Warranty $410 Segment $0.4B $405 7% $6.1B $400 $395 422 419 417 426 $390 $385 394 $380 $375 2020 2021 2022 2023 2024 Home Warranty 30
Slide 32: 2024 Revenue Breakdown
2024 Revenue Breakdown FIRST AMERICAN FINANCIAL TITLE SEGMENT $6.0 $5.0 Agency 44% $4.0 Other $3.0 $5.7 3% International $5.7B $2.0 7% Direct $1.0 Data & Analytics 20% 5% $0.4 $0.0 Mortgage Solutions Commercial ($0.03) 3% 14% Homebuilders -$1.0 Title Segment 4% Home Warranty Segment Corporate Segmen
First American Corporation (New) — Q2 2025 Earnings Presentation on 6ix