Market share gains and acquisitions helped offset a slowing housing market at First American Corp., which Wednesday reported higher revenue in the second quarter compared to a year earlier.
The title insurer’s revenue in the quarter was $2.2 billion, up 9% from a year earlier. It was the highest second-quarter revenue ever posted by the Santa Ana-based company.
Though mortgage originations declined in the quarter from a year earlier, First American said “increases in market share and in the average revenues per title order closed at the company’s title insurance operations, as well as acquisition activity and organic growth at the company’s specialty insurance, property information, and risk mitigation and business solutions segments,” boosted overall revenue, according to a company release.
First American’s net income fell 18% to $114 million in the period.
The company’s income, which nevertheless beat Wall Street estimates, was affected by an increase in its loss provision rate for its title insurance operations, a $22 million charge related to lawsuits and regulatory matters and investments in new operations.
In June, First American said a jury awarded competitor First Fidelity National Financial Inc. $41.3 million.
The case stemmed from a worker who tried to bring files from Fidelity to First American, which was accused of aiding the worker. First American said it would appeal the verdict.
The title insurance industry has been investigated by states over whether they illegally paid secret rebates to favored customers, including real estate developers and national chain stores.
The probes also looked into referral fees to title agents, mortgage brokers and attorneys who delivered clients. First American was among several title insurers who settled with some of the states.
First American said cost-cutting and sales measures would help the company maintain its profit margins during the second half of the year.
Shares of First American were up about 2% on Wednesday.
