First American Financial Corporation

Reported figures included GAAP EPS of $2.12 per diluted share and adjusted EPS of $2.08 per diluted share, with adjusted earnings up 36% year over year. Title adjusted total revenue was $2 billion, up 14% year over year; commercial revenue was $314 million, up 34%; agency revenue was $820 million, up 14%; information and other revenue was $295 million, up 12%; and investment income was $164 million, up 11%. The title segment posted a 15.7% pretax margin, or 14.0% adjusted, and the home warranty segment posted a 21.3% pretax margin, or 20.2% adjusted. Free cash flow for the first six months was $285 million, up 32%, capital expenditures were down 18%, average deposits were $7.9 billion, and the company repurchased 330 thousand shares for $20 million at an average price of $61.99. Management did not give formal quarterly or full-year numeric guidance, but said commercial is on pace for a record year, July commercial open orders were up 9% in the first three weeks, and open purchase orders were flat year over year in early July.

Mark Seaton emphasized that First American is using AI to rework title and settlement operations and believes that will create a durable competitive advantage. He pointed to visible progress in Endpoint and Sequoia, including faster automation rates and broader rollout plans, while also framing First American Trust as a strategic, countercyclical earnings driver through deposits from ServiceMac, 31 Exchange, and agent banking. His tone was confident and long-term oriented, especially on commercial, where he said the company is still in the early innings of the next cycle.

Matthew Wajner detailed the quarter’s financial outperformance: title adjusted revenue of $2 billion, commercial revenue of $314 million, investment income of $164 million, and adjusted EPS of $2.08. He said personnel costs were $572 million, other operating expenses were $319 million, the success ratio was 66% versus a 60% target, and the provision for policy losses and other claims was $45 million, or 3.0% of title premiums and escrow fees, unchanged from last year. He also highlighted balance sheet and capital metrics, including a 31.4% debt-to-capital ratio, 21.5% excluding secured financings payable, and $20 million of share repurchases in the quarter.

Analysts focused on whether deposit growth from ServiceMac is sustainable, how investment income should trend in the back half, whether commercial ARPO gains can continue, and how title margins and buybacks should be viewed. Management said deposit growth is being supported by several sources beyond captive title business, especially ServiceMac, 31 Exchange, and agent banking, and suggested investment income net of interest expense grew 8% year over year as a useful proxy for second-half growth. On commercial, management said the big-deal pipeline is strong, ARPO should keep rising, and the company sees the market as still early in the next commercial cycle. On capital returns, Seaton said buybacks remain opportunistic, the company is not in the market at the moment, and the current debt-to-cap ratio does not affect the buyback decision.