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.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 enter the conference ID 13753085. I will now turn the call over to Craig Barbario, Vice President of Investor Relations, to make an introductory statement.

Good morning, everyone, and welcome to First American's Earnings Conference Call for the first quarter of 2025. Joining us today on the call will be our newly appointed Chief Executive Officer, Mark Seaton, and Matt Wasner, 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 may 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 yesterday's earnings release and the risk factors discussed in our Form 10-K and subsequent SEC filings. 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 yesterday's earnings release, which is available on our website at www.firstam.com. I will now turn the call over to Mark Seaton.

Thank you, Craig. I'll begin by commenting on our recent leadership changes. First, we announced that our prior CEO, Ken DiGiorgio, has departed the company. Ken was a pillar of strength at First American for over 20 years. Many of us worked with Ken for many years and valued his commitment, intellect, and dedication to First American. We wish him and his family all the best. We also announced that I have replaced Ken as CEO. I've been with a company for 18 years, serving as our chief financial officer for the last 12. I believe in our purpose, which is to deliver certainty and trust to power seamless real estate transactions. We have an amazing team and a great collection of businesses led by our core title and escrow business. We also have several adjacent businesses that are synergistic to our core title business, including data and analytics, home warranty, our bank, First American Trust, and ServiceMac, our subservicer. These adjacent businesses each have attractive growth characteristics and margin potential greater than our title business. We have a bright future given our people, unique assets, and our commitment to be the best in the markets we operate in. Next, we announced that Matt Wagner has been appointed our Chief Financial Officer. Matt has been with First American for 15 years, most recently serving as our treasurer, and prior to that, our Chief Accounting Officer. Prior to First American, Matt held roles at JPMorgan Chase and PwC. He's a perfect fit for the role and has proven to be a great leader with sound judgment, a strong financial acumen. I look forward to our investor community getting to know more of Matt in days and weeks to come. Finally, we announced that our chairman of the board, Dennis Gilmore, will become our executive chairman. Dennis was our CEO for 12 years between 2010 and 2022, during which time we generated an 18% annual total shareholder return. I worked very closely with Dennis during that time and look forward to working with him in our new roles. Turning to our business, I believe First American is poised for a good run. As we all know, our core business is title and escrow, which is driven by mortgage originations. Residential originations continue to be at trough levels, both in terms of purchase and refinance, but we experienced revenue improvement in both markets this quarter. Real estate goes in cycles, and we're at the very beginning of the next cycle. There's a lot of macro noise with tariffs, the path of interest rates, inflation, and uncertainty in the general economy. But I believe residential originations have hit a bottom, and now we can debate the path and pace of growth. The commercial side of the business, which began declining in the second half of 2022, is seeing meaningful improvement. Commercial volumes started picking up in the second half of last year, and the momentum continues into 2025, as our revenue was up 29% this quarter. While the macro uncertainty may cause transactions to slow, we have a great pipeline heading into the second quarter. As I mentioned earlier, we're at the very beginning of another growth cycle and are poised to outperform the market given our extraordinary people, deep expertise, unique assets, and commitment to do what we need to do to win. For many years now, our data and analytics businesses gained market share while dramatically expanding its title plant, property record database, and document image repositories. As the world becomes increasingly digitized and the power of artificial intelligence continues to grow exponentially, Data is needed to drive automation. And since we have more of that data than anyone, it puts us in the driver's seat. We are leveraging our bank in new ways to add value to our customers. And it also serves as a counter-cyclical business that is helping to mitigate the challenging residential origination market that we face. We also have momentum with our technology initiatives. In many ways, we're carrying redundant tech costs since we support both the new modern systems and the legacy tech that our business depends on today. But when this transition is complete, we'll not only reduce costs by eliminating redundant platforms, but more importantly, enhance the productivity of our operations. This will enable us to be the lowest cost producer of our products and services, all while maintaining the high touch customer experience our clients expect. Our business will always be a people business, but data and technology become more important every day, and First American is committed to winning with these capabilities. In the short term, Our order counts are somewhat of a mixed bag. For the first three weeks in April, our open purchase orders are down 4%. Our refinance orders rose 52% relative to last year, but it's off a low base and the market continues to be challenged with mortgage rates hovering between 5.5 and, sorry, between 6.5 and 7%. Commercial orders are up 5% so far this month, in line with the 5% growth we experienced during the first quarter. Finally, I'm pleased to report that we've been named one of the 100 best companies to work for by Great Places to Work and Fortune Magazine for the 10th consecutive year. This is an incredible accomplishment and a testament to our hardworking teams around the world who tirelessly service our customers and make First American a great place to be. Now I would like to turn the call back over to Matt for a more detailed review of our financial results.