Q2 2026 First American Financial Corp Earnings Call Transcript
Key Points
- First American Financial Corp (FAF) reported a 36% increase in adjusted earnings per share, reaching $2.08.
- Commercial revenue increased by 34%, setting a second-quarter record with 14 transactions generating over $1 million in premium.
- The company's bank, First American Trust, saw average deposits grow by 30% year-over-year, driven by non-title sources like ServiceMac and 1031 Exchange business.
- AI initiatives have significantly improved operational efficiency, reducing form update time by 97% and enhancing customer service with virtual agents.
- The company is optimistic about its commercial business, with a strong pipeline and increasing average revenue per order (ARPU).
- Purchase revenue only increased by 2% due to affordability challenges impacting existing home sales.
- Refinance revenue growth, although up 18%, was supported by a temporary decline in mortgage rates, which have since risen again.
- Personnel costs increased by 9% due to higher incentive compensation and salary expenses.
- The success ratio was higher than the target, primarily due to investments in businesses outside of domestic Title operations, such as ServiceMac.
- The residential purchase market remains sluggish, with open purchase orders flat relative to last year.
Greetings, and welcome to the First American Financial Corporation Second Quarter Earnings Conference Call. (Operator Instructions) A copy of today's press release is available on First American's website at www.firstam.com/investor. Please note that the call is being recorded and will be available for replay from the company's Investor website and for a short time by dialing (877) 660-6853 or (201) 612-7415 and enter the conference ID 13761705.
We will now turn the call over to Craig Barberio, Vice President, Investor Relations, to make an introductory statement.
Good morning, everyone, and welcome to First American's Earnings Conference Call for the second quarter of 2026. Joining us today on the call will be our Chief Executive Officer, Mark Seaton; and Matt Wajner, Chief Financial Officer.
Some of the statements made today may contain forward-looking statements that do not relate strictly
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