First American Corporation (New)

Greetings and welcome to the First American Financial Corporation First Quarter Earnings Conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. A copy of today's press release is available on First American's website at www.firstamerican.com. firstam.com forward slash 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 by entering the conference ID 137 We will now turn the call over to Craig Barbario, Vice President of Investor Relations, to make an introductory statement.

Craig Barbario, Vice President of Investor Relations, Good morning, everyone, and welcome to First American's earnings conference call for the first quarter of 2021. Joining us today will be our Chief Executive Officer, Dennis Gilmore, and Mark Seaton, Executive Vice President and Chief Financial Officer. Some of the statements made today may contain forward-looking statements that do not relate strictly to historical or current fact. These forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. Risks and uncertainties exist that might cause results to differ materially from those set forth in these forward-looking statements. For more information on these risks and uncertainties, please refer to this morning's earnings release and the risk factors discussed in our Form 10-K and subsequent SEC violence. Our presentation today contains certain non-GAAP financial measures that we believe provide additional insight into the operational efficiency and performance of the company relative to earlier periods and relative to the company's competitors. For more details on these non-GAAP financial measures, including presentation width and reconciliation to the most directly comparable GAAP financials, please refer to this morning's earnings release, which is available on our website at www.firstam.com. With that, I will now turn the call over to Dennis Gilmore.

Good morning, and thank you for joining our first quarter earnings call. The year is off to a great start with our core businesses achieving strong financial results. Our outlook remains optimistic based on market trends, and we are confident that 2021 will be another good year. Today, I'll focus my remarks on the progress we are making on a number of key strategic initiatives, as well as our venture investment program. Mark will then provide details on the first quarter results. A transformation is well underway in the real estate sector as paper-intensive processes convert to digital. First American is investing the time, expertise, and capital to continue to lead the change within the title and settlement industry. We continue to make significant investments in technology across all of our major businesses to enhance the customer experience through digital solutions. Many of these efforts are now finding success in the marketplace. In our commercial business, we've launched Clarity First, a platform that enables a streamlined closing process and provides greater transparency and efficiency relative to conventional methods. We believe it is the first end-to-end digital solution for commercial real estate transactions. Since the nationwide rollout in June, we have facilitated over 60,000 commercial transactions. Endpoint is another example of First America's commitment to innovation. A digital startup that we launched in Seattle in 2019 to reimagine the closing experience has captured a 2% market share in that area. Encouraged by our success, we've recently entered six new markets and we plan on going to 20 markets by the end of the year. In addition to providing a digital consumer experience, Endpoint is redesigning the closing process and we anticipate significant productivity gains versus today's traditional settlement transactions. Not only are we deploying new digital tools to reimagine the customer experience, We're accelerating our investment in data we need to enhance our long-term competitive position. Our data business has grown steadily over the last 10 years. Years ago, we set out to create a world-class property data company. Today, we have the industry's most comprehensive and accurate property data, including title plan information. In 2020, our data business exceeded $100 million in pre-tax earnings, a significant milestone. A number of years ago, we set out to automate the manual data entry process. We currently hold 11 patents covering OCR and data extraction, which has facilitated us capturing over 60% of our data in a fully automated manner. We expect this percentage to continue to grow in the future. This technology has allowed us to vastly increase the amount of data we capture. We are currently capturing virtually every data point on 5 million documents per month. Today, we have 500 title plants, which is the largest data repository in the industry to support title underwriting decisions. Because of our patent extraction process, we have started the journey to add an additional 1,000 title plants on a go-forward basis. In short, we are leading the effort when it comes to property data. One benefit of having a strong data foundation is that it feeds automation of our title production. Today, 96% of our companies refinance transactions run through our automated underwriting engine. Based on our own risk profile, we've achieved a fully automated underwriting decision on 50% of those orders, and we are semi-automated on an additional 40%. Given the success we've had with refinance automation, we have turned our attention to the purchase transactions. All of these initiatives, whether related to closing data or title production, will improve the experience of our customers and our own productivity, which is why we have dedicated the necessary talent, capital, and focus to lead the title and sediment industry in the digital era. Turning to our venture strategy, since 2019, we've invested $225 million in venture-backed companies in the PropTech ecosystem. These investments give us insight into the high-growth technology companies, most of which have become strategic partners. Not only have these investments added value from a strategic perspective, they are providing financial upside as well, and Mark will elaborate further in his comments. Venture investments will continue to be a component of our capital allocation strategy. We believe the strategic and financial value of these investments to our shareholders will be attractive over the long term. Additionally, I'm pleased to announce that we were recently named a Fortune 100 Best Company to Work For for the sixth consecutive year. Amid the challenges of 2020, we never lost sight of the fact that our employees are the key to our company's success. In closing, I'm very confident that 2021 will be another great year for First American. I'll now turn the call over to Mark, who will comment on our first quarter earnings.