The refinancing boom may be fading, but Santa Ana title insurer First American Corp. reported record profits and revenue on strong sales of homes and commercial buildings.
First American said Wednesday its profit before taxes and other charges climbed 20% to $266 million in the second quarter, versus a year earlier.
The title company said its revenue hit $1.98 billion up 15% from a year ago.
“Second quarter earnings benefited from a 16% increase in closed title orders, compared with first quarter closings,” said Chief Executive Parker Kennedy, in a statement.
“While interest rate hikes during the first half of 2005 slowed refinancings, residential and commercial property purchase transactions remained solid, which resulted in steady real estate activity for the company’s real estate-related businesses,” he said.
The company’s income after taxes also rose about 20% to $139.5 million.
Looking ahead to the second half of 2005, Kennedy said the company planned to develop “strategies to increase cost efficiencies, expand businesses and sell more data to more customers will play an important role in keeping profit margins steady.”
First American was among three title insurers that agreed to settle charges earlier this month with California Insurance Commissioner John Garamendi. He alleged they paid kickbacks to homebuilders and others in exchange for business.
First American’s share of the fine and refund is $20 million.
Shares of First American were up 2.07% to $42.8 on Wednesday.
