First American earnings fall

The First American Corp. this week reported its second-quarter net income fell 17.7 percent from a year ago, despite record revenues.

First American said it earned $114.7 million, or $1.16 per share, in the second quarter, down from $139.5 million, or $1.43 per share, in the same quarter last year.

The company attributed its shrinking profits to an increase in the loss provision rate for the title insurance operations, a $22 million charge for certain title insurance regulatory/litigation matters, costs of investing in new businesses, and a drop in mortgage originations.

"Second-quarter revenues were $2.17 billion, an increase of 9 percent over the same quarter of 2005, setting an all-time company high for second quarter revenues," said Parker S. Kennedy, chairman and chief executive officer of The First American Corp, in a statement. "Year-to-date revenues of $4.17 billion increased 13 percent over the same period last year and also set an all-time company high for first-half-of-the-year revenues. This growth in revenues was achieved despite a drop in mortgage originations."

The company's stock was trading at $37.85 a share at mid-morning today.

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.