8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 23, 2020

FIRST AMERICAN FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-34580	26-1911571
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1 First American Way, Santa Ana, California		92707-5913
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (714) 250-3000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00001 par value	FAF	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 23, 2020, First American Financial Corporation issued a press release announcing its financial results for the quarter ended June 30, 2020. The full text of the press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02, including Exhibit 99.1 hereto, is being “furnished” in accordance with General Instruction B.2 of Form 8-K. As such, this information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filings with the SEC unless it shall be explicitly so incorporated in such filings.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release, dated July 23, 2020*
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FIRST AMERICAN FINANCIAL CORPORATION
Date:  July 23, 2020	By:	/s/ Kenneth D. DeGiorgio
		Name:	Kenneth D. DeGiorgio
		Title:	Executive Vice President

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EX-99.1

Exhibit 99.1

NEWS  FOR  IMMEDIATE  RELEASE

FIRST AMERICAN FINANCIAL REPORTS second QUARTER 2020 Results

—Reports Earnings of $1.52 per Diluted Share, or $1.05 per Diluted Share

ExcludingNet Realized Investment Gains—

SANTA ANA, Calif., July 23, 2020 – First American Financial Corporation (NYSE: FAF), a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, today announced financial results for the second quarter ended June 30, 2020.

Current Quarter Highlights

• Total revenue of $1.6 billion, up 7 percent compared with last year

- Closed title orders up 29 percent, driven by a 160 percent increase in refinance orders

- Average revenue per order down 26 percent, driven by the shift to refinance transactions

• Net realized investment gains of $69.3 million, primarily due to the change in the fair value of equity securities

• Title Insurance and Services segment pretax margin of 16.3 percent

- 12.5 percent excluding net realized investment gains

• Commercial revenues of $109.5 million, down 39 percent compared with last year

• Title Insurance and Services segment investment income of $43.2 million, down 39 percent vs. 2019

• Specialty Insurance segment pretax margin of 5.5 percent

- 0.4 percent excluding net realized investment gains

• Raised $450 million in a public offering of 10-year senior notes at 4.0 percent

• Cash flow from operations of $343.8 million, compared with $266.6 million last year  

Selected Financial Information

($ in millions, except per share data)

	Three Months Ended
	June 30,
	2020		2019
Total revenue	$	1,608.7	$	1,498.6
Income before taxes		225.3		229.5
Net income	$	170.7	$	186.7
Net income per diluted share		1.52	1.64

Total revenue for the second quarter of 2020 was $1.6 billion, an increase of 7 percent relative to the second quarter of 2019. Net income in the current quarter was $170.7 million, or $1.52 per diluted share, compared with net income of $186.7 million, or $1.64 per diluted share, in the second quarter of 2019. Net realized investment gains in the current quarter were $69.3 million, or 47 cents per diluted share, compared with net realized investment gains of $8.4 million, or 6 cents per diluted share, in the second quarter of last year. The net realized investment gains in both periods were primarily due to the change in the fair value of equity securities.

“During the ongoing coronavirus pandemic, our priority has been twofold: to keep our employees safe while meeting all the service needs of our customers,” said Dennis J. Gilmore, chief executive officer

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at First American Financial Corporation. “Today, approximately 80 percent of our global workforce continues to work from home with high productivity, and it’s likely we’ll remain in that posture until the end of the year.

“Our business is performing much better than we expected back in April, with purchase open orders returning to positive growth in June following steep declines earlier in the quarter. The commercial market also performed better than expected in the second quarter, although the improvement has not been as rapid as in the purchase market. Given low mortgage rates, we expect refinance activity to remain at elevated levels for the remainder of the year.  

“The investments First American has been making over the past few years to secure its data leadership, accelerate title automation, and enable digital closings has put us in a superior position to add value for our customers as digital innovation transforms the mortgage and home-buying experience.”

Title Insurance and Services

($ in millions, except average revenue per order)

	Three Months Ended
	June 30,
	2020			2019
Total revenues	$	1,462.9		$	1,371.9
Income before taxes	$	237.8		$	232.8
Pretax margin		16.3	%		17.0	%
Title open orders(1)		351,300			296,200
Title closed orders(1)		254,500			196,600
U.S. Commercial
Total revenues	$	109.5		$	180.4
Open orders		23,200			33,000
Closed orders		14,900			19,300
Average revenue per order	$	7,400		$	9,400
(1) U.S. direct title insurance orders only.

Total revenues for the Title Insurance and Services segment during the second quarter were $1.5 billion, up 7 percent compared with the same quarter of 2019. Direct premiums and escrow fees were down 4 percent compared with the second quarter of 2019, driven by a 26 percent decline in the average revenue per direct title order closed that was largely offset by a 29 percent increase in the number of direct title orders closed. The average revenue per direct title order declined to $1,950, primarily due to the shift in the order mix to lower-premium residential refinance transactions. Agent premiums, which are recorded on approximately a one-quarter lag relative to direct premiums, were up 10 percent in the current quarter as compared with last year.

Information and other revenues were $228.3 million this quarter, up 15 percent compared with the same quarter of last year. The increase was primarily due to the recent acquisition of Docutech and the growth in mortgage originations that led to higher demand for the company’s title information products.  

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Investment income was $43.2 million in the second quarter, down $27.7 million, or 39 percent, primarily due to the impact of the decline in short-term interest rates on the investment portfolio and cash balances. Net realized investment gains totaled $62.8 million in the current quarter, compared with gains of $6.9 million in the second quarter of 2019, primarily due to the change in the fair value of equity securities.

Personnel costs were $417.1 million in the second quarter, a decline of $5.6 million, or 1 percent, compared with the same quarter of 2019. This decline was primarily attributable to lower incentive compensation expense that was largely offset by higher costs as a result of recent acquisitions.  

Other operating expenses were $222.2 million in the second quarter, up $28.1 million, or 14 percent, compared with the second quarter of 2019. The increase was primarily due to higher production-related costs as a result of the growth in order volume, the impact of recent acquisitions and higher costs across a number of expense categories, partly offset by lower travel expense.

The provision for policy losses and other claims was $56.4 million in the second quarter, or 5.0 percent of title premiums and escrow fees, an increase from a 4.0 percent loss provision rate in the prior year. The current quarter rate reflects an ultimate loss rate of 4.5 percent for the current policy year with a $5.6 million increase in the loss reserve estimates for prior policy years. In the second quarter, incurred title claims were $29.2 million, a 26 percent decline relative to 2019.

Depreciation and amortization expense was $39.0 million in the second quarter, up $7.9 million, or 26 percent, compared with the same period last year, primarily due to recent acquisitions.  

Pretax income for the Title Insurance and Services segment was $237.8 million in the second quarter, compared with $232.8 million in the second quarter of 2019. Pretax margin was 16.3 percent in the current quarter, compared with 17.0 percent last year. Excluding the impact of net realized investment gains, the pretax margin was 12.5 percent this year, compared with 16.5 percent last year.

Specialty Insurance

($ in millions)

	Three Months Ended
	June 30,
	2020			2019
Total revenues	$	133.5		$	123.0
Income before taxes	$	7.3		$	15.7
Pretax margin		5.5	%		12.8	%

Total revenues for the Specialty Insurance segment were $133.5 million in the second quarter of 2020, an increase of 9 percent compared with the second quarter of 2019. Excluding the impact of net realized investment gains, total revenues this quarter were up 4 percent, with both the home warranty and property and casualty business lines contributing to this growth. The overall loss ratio for the segment was 67.8 percent, up from 56.4 percent last year primarily due to higher claim losses in the property and casualty business. In the current quarter, the property and casualty business experienced a higher frequency of large claim losses and $4.8 million in reserve strengthening for prior period claims. The

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segment’s pretax margin in the current quarter was 5.5 percent, compared with 12.8 percent in the second quarter of last year. Excluding net realized investment gains, the current quarter’s pretax margin was 0.4 percent, compared with 11.8 percent last year.  

Teleconference/Webcast

First American’s second quarter 2020 results will be discussed in more detail on Thursday, July 23, 2020, at 11 a.m. EDT, via teleconference. The toll-free dial-in number is 877-407-8293. Callers from outside the United States may dial +1-201-689-8349.

The live audio webcast of the call will be available on First American’s website at www.firstam.com/investor. An audio replay of the conference call will be available through August 6, 2020, by dialing 201-612-7415 and using the conference ID 13706905. An audio archive of the call will also be available on First American’s investor website.

About First American

First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance, settlement services and risk solutions for real estate transactions that traces its heritage back to 1889. First American also provides title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; banking, trust and wealth management services; and other related products and services. With total revenue of $6.2 billion in 2019, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2020, First American was named to the Fortune 100 Best Companies to Work For^® list for the fifth consecutive year. More information about the company can be found at www.firstam.com.

Website Disclosure

First American posts information of interest to investors at www.firstam.com/investor. This includes opened and closed title insurance order counts for its U.S. direct title insurance operations, which are posted approximately 10 to 12 days after the end of each month.

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Forward-Looking Statements

Certain statements made in this press release 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 Exchange Act of 1934, as amended. These forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and may contain the words “believe,” “anticipate,” “expect,” “intend,” “plan,” “predict,” “estimate,” “project,” “will be,” “will continue,” “will likely result,” or other similar words and phrases or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” or “could.” These forward-looking statements include, without limitation, statements regarding future operations, performance, financial condition, prospects, plans and strategies. These forward-looking statements are based on current expectations and assumptions that may prove to be incorrect. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include, without limitation: interest rate fluctuations; changes in the performance of the real estate markets; volatility in the capital markets; unfavorable economic conditions; the coronavirus pandemic and responses thereto; impairments in the company’s goodwill or other intangible assets; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; failures at financial institutions where the company deposits funds; regulatory oversight and changes in applicable laws and government regulations, including privacy and data protection laws; heightened scrutiny by legislators and regulators of the company’s title insurance and services segment and certain other of the company’s businesses; use of social media by the company and other parties; regulation of title insurance rates; limitations on access to public records and other data; climate change, health crises, severe weather conditions and other catastrophe events; changes in relationships with large mortgage lenders and government-sponsored enterprises; changes in measures of the strength of the company’s title insurance underwriters, including ratings and statutory capital and surplus; losses in the company’s investment portfolio; material variance between actual and expected claims experience; defalcations, increased claims or other costs and expenses attributable to the company’s use of title agents; any inadequacy in the company’s risk management framework; systems damage, failures, interruptions, cyberattacks and intrusions, or unauthorized data disclosures; innovation efforts of the company and other industry participants and any related market disruption; errors and fraud involving the transfer of funds; the company’s use of a global workforce; inability of the company’s subsidiaries to pay dividends or repay funds; and other factors described in the company’s quarterly report on Form 10-Q for the quarter ended March 31, 2020, as filed with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made.  The company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Use of Non-GAAP Financial Measures

This news release and related management commentary contain certain financial measures that are not presented in accordance with generally accepted accounting principles (GAAP), including personnel and other operating expense ratios, success ratios, net operating revenues; and adjusted revenues, adjusted pretax income, adjusted earnings per share, and adjusted pretax margins for the company, its title insurance and services segment and its specialty insurance segment. The company is presenting these non-GAAP financial measures because they provide the company’s management and investors with additional insight into the operational efficiency and performance of the company relative to earlier periods and relative to the company’s competitors. The company does not intend for these non-GAAP financial measures to be a substitute for any GAAP financial information. In this news release, these non-GAAP financial measures have been presented with, and reconciled to, the most directly comparable GAAP financial measures. Investors should use these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures.

    Media Contact: Marcus Ginnaty
Corporate Communications
First American Financial Corporation
714-250-3298     Investor Contact: Craig Barberio Investor Relations First American Financial Corporation 714-250-5214

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First American Financial Corporation
Summary of Consolidated Financial Results and Selected Information
(in thousands, except per share amounts and title orders, unaudited)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Total revenues	$	1,608,729	$	1,498,620	$	3,021,672	$	2,802,201
Income before income taxes	$	225,295	$	229,497	$	297,619	$	371,167
Income tax expense		53,601		42,226		62,079		74,092
Net income		171,694		187,271		235,540		297,075
Less: Net income attributable to noncontrolling interests		1,039		616		1,681		845
Net income attributable to the Company	$	170,655	$	186,655	$	233,859	$	296,230
Net income per share attributable to stockholders:
Basic	$	1.52	$	1.65	$	2.07	$	2.62
Diluted	$	1.52	$	1.64	$	2.06	$	2.61
Cash dividends declared per share	$	0.44	$	0.42	$	0.88	$	0.84
Weighted average common shares outstanding:
Basic		112,309		113,050		112,939		112,881
Diluted		112,555		113,498		113,270		113,366
Selected Title Insurance Segment Information
Title orders opened(1)		351,300		296,200		705,700		524,000
Title orders closed(1)		254,500		196,600		457,200		347,500
Paid title claims	$	34,986	$	40,518	$	77,718	$	81,287
(1) U.S. direct title insurance orders only.

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First American Financial Corporation
Selected Consolidated Balance Sheet Information
(in thousands, unaudited)
	June 30,		December 31,
	2020		2019
Cash and cash equivalents	$	1,523,344	$	1,485,959
Investments		6,652,183		6,589,443
Goodwill and other intangible assets, net		1,591,915		1,242,741
Total assets		12,288,019		11,519,167
Reserve for claim losses		1,095,494		1,063,044
Notes and contracts payable		1,010,623		728,232
Total stockholders’ equity	$	4,565,400	$	4,420,484

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First American Financial Corporation
Segment Information
(in thousands, unaudited)
Three Months Ended			Title		Specialty		Corporate
June 30, 2020	Consolidated		Insurance		Insurance		(incl. Elims.)
Revenues
Direct premiums and escrow fees	$	651,984	$	530,735	$	121,249	$	—
Agent premiums		597,895		597,895		—		—
Information and other		231,169		228,252		3,103		(186	)
Net investment income		58,420		43,234		2,316		12,870
Net realized investment gains (losses)		69,261		62,823		6,850		(412	)
		1,608,729		1,462,939		133,518		12,272
Expenses
Personnel costs		451,487		417,066		20,681		13,740
Premiums retained by agents		472,398		472,398		—		—
Other operating expenses		250,088		222,192		19,283		8,613
Provision for policy losses and other claims		138,688		56,431		82,257		—
Depreciation and amortization		40,976		38,995		1,943		38
Premium taxes		16,354		14,319		2,035		—
Interest		13,443		3,736		—		9,707
		1,383,434		1,225,137		126,199		32,098
Income (loss) before income taxes	$	225,295	$	237,802	$	7,319	$	(19,826	)
Three Months Ended			Title		Specialty		Corporate
June 30, 2019	Consolidated		Insurance		Insurance		(incl. Elims.)
Revenues
Direct premiums and escrow fees	$	668,018	$	552,358	$	115,660	$	—
Agent premiums		543,847		543,847		—		—
Information and other		200,669		197,779		3,153		(263	)
Net investment income		77,711		70,970		2,700		4,041
Net realized investment gains		8,375		6,920		1,455		—
		1,498,620		1,371,874		122,968		3,778
Expenses
Personnel costs		447,027		422,664		19,884		4,479
Premiums retained by agents		429,086		429,086		—		—
Other operating expenses		222,348		194,129		18,236		9,983
Provision for policy losses and other claims		109,130		43,848		65,282		—
Depreciation and amortization		32,884		31,061		1,785		38
Premium taxes		16,740		14,699		2,041		—
Interest		11,908		3,574		—		8,334
		1,269,123		1,139,061		107,228		22,834
Income (loss) before income taxes	$	229,497	$	232,813	$	15,740	$	(19,056	)

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First American Financial Corporation
Segment Information
(in thousands, unaudited)
Six Months Ended			Title			Specialty		Corporate
June 30, 2020	Consolidated		Insurance			Insurance		(incl. Elims.)
Revenues
Direct premiums and escrow fees	$	1,272,621	$	1,032,036		$	240,585	$	—
Agent premiums		1,197,577		1,197,577			—		—
Information and other		442,681		436,525			6,542		(386	)
Net investment income		104,294		102,902			4,900		(3,508	)
Net realized investment gains (losses)		4,499		(5,476	)		3,460		6,515
		3,021,672		2,763,564			255,487		2,621
Expenses
Personnel costs		881,147		838,681			42,126		340
Premiums retained by agents		947,779		947,779			—		—
Other operating expenses		507,328		448,787			40,831		17,710
Provision for policy losses and other claims		256,165		111,481			144,684		—
Depreciation and amortization		72,425		68,512			3,837		76
Premium taxes		33,669		29,837			3,832		—
Interest		25,540		7,709			—		17,831
		2,724,053		2,452,786			235,310		35,957
Income (loss) before income taxes	$	297,619	$	310,778		$	20,177	$	(33,336	)
Six Months Ended			Title			Specialty		Corporate
June 30, 2019	Consolidated		Insurance			Insurance		(incl. Elims.)
Revenues
Direct premiums and escrow fees	$	1,182,220	$	955,114		$	227,106	$	—
Agent premiums		1,045,384		1,045,384			—		—
Information and other		373,561		367,870			6,219		(528	)
Net investment income		159,979		141,023			5,432		13,524
Net realized investment gains		41,057		34,665			6,392		—
		2,802,201		2,544,056			245,149		12,996
Expenses
Personnel costs		858,639		803,795			39,504		15,340
Premiums retained by agents		825,693		825,693			—		—
Other operating expenses		418,795		362,770			38,054		17,971
Provision for policy losses and other claims		206,842		80,020			126,822		—
Depreciation and amortization		65,818		62,223			3,519		76
Premium taxes		31,403		27,678			3,725		—
Interest		23,844		7,057			—		16,787
		2,431,034		2,169,236			211,624		50,174
Income (loss) before income taxes	$	371,167	$	374,820		$	33,525	$	(37,178	)

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First American Financial Corporation
Reconciliation of Pretax Margins and Earnings per Diluted Share
Excluding Net Realized Investment Gains and Losses ("NRIG(L)")
(in thousands, except margin and per share amounts, unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Consolidated
Total revenues	$	1,608,729		$	1,498,620		$	3,021,672		$	2,802,201
Less: NRIG(L)		69,261			8,375			4,499			41,057
Total revenues excluding NRIG(L)	$	1,539,468		$	1,490,245		$	3,017,173		$	2,761,144
Pretax income	$	225,295		$	229,497		$	297,619		$	371,167
Less: NRIG(L)		69,261			8,375			4,499			41,057
Pretax income excluding NRIG(L)	$	156,034		$	221,122		$	293,120		$	330,110
Pretax margin		14.0	%		15.3	%		9.8	%		13.2	%
Less: Pretax margin impact of NRIG(L)		3.9	%		0.5	%		0.1	%		1.2	%
Pretax margin excluding NRIG(L)		10.1	%		14.8	%		9.7	%		12.0	%
Earnings per diluted share (EPS)	$	1.52		$	1.64		$	2.06		$	2.61
Less: EPS impact of NRIG(L)		0.47			0.06			0.03			0.29
EPS excluding NRIG(L)	$	1.05		$	1.57		$	2.03		$	2.32
Title Insurance and Services Segment
Total revenues	$	1,462,939		$	1,371,874		$	2,763,564		$	2,544,056
Less: NRIG(L)		62,823			6,920			(5,476	)		34,665
Total revenues excluding NRIG(L)	$	1,400,116		$	1,364,954		$	2,769,040		$	2,509,391
Pretax income	$	237,802		$	232,813		$	310,778		$	374,820
Less: NRIG(L)		62,823			6,920			(5,476	)		34,665
Pretax income excluding NRIG(L)	$	174,979		$	225,893		$	316,254		$	340,155
Pretax margin		16.3	%		17.0	%		11.2	%		14.7	%
Less: Pretax margin impact of NRIG(L)		3.8	%		0.5	%		(0.2	)%		1.1	%
Pretax margin excluding NRIG(L)		12.5	%		16.5	%		11.4	%		13.6	%
Specialty Insurance Segment
Total revenues	$	133,518		$	122,968		$	255,487		$	245,149
Less: NRIG(L)		6,850			1,455			3,460			6,392
Total revenues excluding NRIG(L)	$	126,668		$	121,513		$	252,027		$	238,757
Pretax income	$	7,319		$	15,740		$	20,177		$	33,525
Less: NRIG(L)		6,850			1,455			3,460			6,392
Pretax income excluding NRIG(L)	$	469		$	14,285		$	16,717		$	27,133
Pretax margin		5.5	%		12.8	%		7.9	%		13.7	%
Less: Pretax margin impact of NRIG(L)		5.1	%		1.0	%		1.3	%		2.3	%
Pretax margin excluding NRIG(L)		0.4	%		11.8	%		6.6	%		11.4	%
Totals may not sum due to rounding.

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First American Financial Reports Second Quarter 2020 Results

Page 11

First American Financial Corporation
Expense and Success Ratio Reconciliation
Title Insurance and Services Segment
($ in thousands, unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Total revenues	$	1,462,939		$	1,371,874		$	2,763,564		$	2,544,056
Less: Net realized investment gains (losses)		62,823			6,920			(5,476	)		34,665
Net investment income		43,234			70,970			102,902			141,023
Premiums retained by agents		472,398			429,086			947,779			825,693
Net operating revenues	$	884,484		$	864,898		$	1,718,359		$	1,542,675
Personnel and other operating expenses	$	639,258		$	616,793		$	1,287,468		$	1,166,565
Ratio (% net operating revenues)		72.3	%		71.3	%		74.9	%		75.6	%
Ratio (% total revenues)		43.7	%		45.0	%		46.6	%		45.9	%
Change in net operating revenues	$	19,586					$	175,684
Change in personnel and other operating expenses		22,465						120,903
Success Ratio(1)		115	%					69	%
(1) Change in personnel and other operating expenses divided by change in net operating revenues.

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First American Financial Reports Second Quarter 2020 Results

Page 12

First American Financial Corporation
Supplemental Direct Title Insurance Order Information(1)
(unaudited)
	Q220			Q120			Q419			Q319			Q219
Open Orders per Day
Purchase		1,919			1,978			1,622			2,108			2,251
Refinance		2,898			2,884			1,487			1,922			1,408
Refinance as % of residential orders		60	%		59	%		48	%		48	%		38	%
Commercial		362			510			522			523			515
Default and other		310			345			364			405			454
Total open orders per day		5,489			5,716			3,995			4,958			4,628
Closed Orders per Day
Purchase		1,310			1,277			1,469			1,639			1,626
Refinance		2,222			1,451			1,391			1,256			854
Refinance as % of residential orders		63	%		53	%		49	%		43	%		34	%
Commercial		232			265			332			289			301
Default and other		213			276			366			318			291
Total closed orders per day		3,977			3,269			3,559			3,502			3,072
Average Revenue per Order (ARPO)
Purchase	$	2,581		$	2,526		$	2,541		$	2,528		$	2,560
Refinance		1,194			1,165			1,195			1,159			1,128
Commercial		7,373			9,690			11,425			10,791			9,356
Default and other		41			299			209			257			358
Total ARPO	$	1,950		$	2,315		$	2,603		$	2,513		$	2,620
Business Days	64			62			63			64			64
(1) U.S. operations only.
Totals may not sum due to rounding.

###

XML

Document and Entity Information	Jul. 23, 2020
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 23, 2020
Entity Registrant Name	FIRST AMERICAN FINANCIAL CORPORATION
Entity Central Index Key	0001472787
Entity Emerging Growth Company	false
Entity File Number	001-34580
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-1911571
Entity Address, Address Line One	1 First American Way
Entity Address, City or Town	Santa Ana
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92707-5913
City Area Code	(714)
Local Phone Number	250-3000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Security 12b Title	Common Stock, $0.00001 par value
Trading Symbol	FAF
Security Exchange Name	NYSE