First American Financial Corporation reported a challenging third quarter for 2024, with total revenues declining by $75.1 million, or 5.1%, to $1.4 billion compared to the same period in 2023. The company experienced a significant net loss of $104.0 million, or $(1.00) per diluted share, compared to a net loss of $1.7 million, or $(0.02) per diluted share, in Q3 2023. For the nine months ended September 30, 2024, net income attributable to the company was $58.7 million, down from $182.7 million in the prior year.
Direct premiums and escrow fees increased to $639.6 million in Q3 2024, up from $595.5 million in Q3 2023, driven by a rise in domestic commercial purchase transactions and residential refinance activity. Agent premiums also saw a slight increase to $683.9 million from $664.5 million year-over-year. However, net investment losses surged to $308.0 million in Q3 2024, compared to $15.6 million in the same quarter of 2023, largely due to a strategic investment portfolio rebalancing that resulted in realized losses of $345.4 million from the sale of certain debt securities.
The Title Insurance and Services segment reported revenues of $1.29 billion, down from $1.52 billion in Q3 2023, with a loss before income taxes of $130.3 million compared to a profit of $160.3 million in the prior year. The Home Warranty segment remained stable, generating $110.9 million in revenue, slightly up from $108.2 million in Q3 2023.
As of September 30, 2024, cash and cash equivalents decreased to $2.95 billion from $3.61 billion at the end of 2023. Total stockholders’ equity increased to $5.09 billion, up from $4.85 billion, while retained earnings fell to $3.60 billion from $3.71 billion. The company’s debt to capitalization ratio rose to 34.8% from 28.6% at the end of 2023, reflecting increased borrowings under secured financing agreements.
In September 2024, First American issued $450.0 million in senior unsecured notes due in 2034, with plans to use proceeds to repay existing debt. The company also maintained a stock repurchase program, having repurchased 1.1 million shares for $60.3 million during the nine months ended September 30, 2024, with $153.5 million remaining under the authorization.
Overall, First American Financial Corporation's performance in Q3 2024 reflects the ongoing challenges in the real estate and mortgage markets, influenced by high interest rates and economic conditions.
About First American Financial Corp
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