First American Corp. announced today that it will separate its financial and real estate information segments by spinning off its title insurance and related businesses into a separate company.

The new company, to be known as First American Financial Corp., will include First American’s residential and commercial title operations, its home warranty and homeowners insurance businesses, and its trust and banking services.

The transaction, expected to close in the third quarter, will leave First American’s property and mortgage information segments under the umbrella of the existing holding company, which will be renamed. The real estate information company will retain First American Corp.’s 75 percent interest in First Advantage Corp., and include three other groups:

  • Data and analytic solutions, including real property data and analytics, and mortgage risk analytics.

  • Origination solutions, including appraisal, broker price opinion and joint venture businesses.

  • Servicing and default solutions, including tax monitoring, flood zone determination and default-related businesses.

Although First American is separating its financial services and real estate information segments, the resulting companies will enter into a business arrangement “to facilitate the fulfillment of origination and default title orders to large, centralized national customers,” the company said.

Creating two separate companies allows each to implement its own growth strategy, raise capital and match management and employee incentives to the interests of shareholders, said First American Chief Executive Officer Parker Kennedy in a statement.

In an update to First American investors, analysts at Keefe, Bruyette & Woods agreed.

“We have hoped to see a restructuring of the company’s operations and view this decision as a material positive for shareholders,” the analysts said, adding that the “initiative is occurring sooner than we expected and is a more complete plan … than we thought management would be willing to entertain.”

In a separate announcement, First American said it expects to report an after-tax fourth-quarter loss of up to $50 million on revenues of $1.9 billion when it issues results for the quarter and year on Feb. 28.

First American, which traces its roots to a company founded in 1898 in Orange County, Calif., changed its name to First American Corp. in May 2000 to reflect its expansion into real estate information and other businesses outside of title insurance. Before that, the company was known as First American Financial Corp., a holding company created in 1966, and its stock is still identified by the old “FAF” ticker symbol.

Keefe, Bruyette & Woods analysts said the new financial services company, which will retain the “FAF” ticker symbol, “could represent $9-$10 per share of value for shareholders over the next year. The information services company “could warrant a valuation of $26-$27 per current FAF share,” analysts said.

Risks to those targets include a greater-than-expected slowdown in real estate sales volumes, an inability on the part of managers to control expenses through the interest-rate cycle change, and execution and integration risk of company acquisitions, the analysts said.

Dennis J. Gilmore, First American’s current chief operating officer, will be named chief executive officer of the Financial Services company, while Frank V. McMahon, First American’s current vice chairman and chief financial officer, will be the chief executive officer of the information services company. Kennedy will be executive chairman of both companies.

The new financial services company, First American Financial, will include First American Title Insurance Co., First Canadian Title, First Title plc, United General Title and Pacific Northwest Title, plus specialty insurers First American Specialty Insurance Co., First American Property and Casualty Insurance Co., and First American Home Buyers Protection Co. First American’s trust and banking companies, First American Trust, FSB and First Security Thrift, are also to be included under the umbrella of the new company.


Send tips or a Letter to the Editor to, or call (510) 658-9252, ext. 150.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription