First American Corporation (New)

Greetings and welcome to the First American Financial Corporation first quarter 2026 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 by entering the conference ID 13759993. We will now turn the call over to Craig Barbario, Vice President, Investor Relations, to make an introductory statement.

Good morning, everyone, and again, welcome to First Americans Earnings Conference Call for the first quarter of 2026. Joining us today on the call will be our 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 facts. 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'll now turn the call over to Mark Seaton.

Thank you, Craig. We are pleased to report continued momentum in the first quarter, generating adjusted earnings per share of $1.33, a 58% increase from the prior year. In commercial, revenue grew 48%, achieving a record for a first quarter. Notably, we closed 20 orders, generating more than $1 million in premium, double the amount from last year. In our national commercial services division, we are seeing broad base strength with nine of our 11 asset classes up year over year. Data centers remain a meaningful tailwind with revenue tied to this sector increasing 76% relative to last year. We are also seeing strong activity in our energy group, which grew 250% and was a top five asset class during the quarter. Residential purchase revenue continues to lag. We have been more bearish on the purchase market this year than most public forecasts, and that view is proving accurate as purchase revenue declined 4% year over year. On the refinance side, we saw a modest benefit during the quarter when mortgage rates dipped into the low 6% range. While this provided some lift in the first quarter, volumes have since softened as rates moved higher again. Another key earnings driver is our bank, First American Trust, which continues to provide a steady stream of investment income. During Q1, average deposits totaled $6.8 billion, up 19% from last year. Growth has been driven by both commercial deposits and deposits from outside of our captive title business. During the quarter, 29% of deposits came from sources beyond our captive title business, including $1.4 billion from ServiceMac and an additional $300 million from 1031 Exchange deposits. Our agent banking strategy is also gaining traction, with 284 agents currently banking with First American Trust, up 26% from last year. These balances are expected to grow as the market recovers. The bank continues to serve as a counter-cyclical earnings driver with meaningful long-term growth potential as we expand servicing, 1031 exchange, and agent banking deposits. Our primary strategic focus is to leverage AI across our business to amplify the talents of our team, better serve our customers, and strengthen our operational capabilities. Over the past year, we launched an enterprise AI platform that helps product teams develop, govern, and deploy secure compliant AI systems. This platform is an internal system that will allow us to deploy products faster and at scale. While we regularly discussed our two major enterprise initiatives, Endpoint and Sequoia, we are also seeing incremental gains across the company. One example is in our agency division, where we are deploying AI-driven tools that expand our quality control capacity by more than sixfold. We have also introduced AI-assisted examination capabilities that reduce order processing time by roughly 30 minutes per file. Importantly, these examination capabilities are not confined to our internal operations. This quarter we are extending these same AI-driven tools into AgentNet, our title agent-facing platform, leveraging our proprietary data, domain expertise, and proven production performance to deliver value to our customers. AI-driven efficiency improvements like these not only enhance our operating leverage, allowing us to scale efficiently as volumes recover, but also provide revenue opportunities by enabling us to deliver new solutions to our clients. We are also redefining how we build software. Today, 25% of our engineers are trained in agentic AI development and are moving from concepts to production weeks rather than months. Productivity will continue to improve as the rest of our product engineering teams complete training this quarter. The impact goes beyond speed. Our teams are spending more time solving customer challenges and ensuring every investment drives real value. We are embracing this transformation and believe we are on the leading edge of our industry in adopting these capabilities. Turning to Endpoint, we have outlined a plan to scale the platform across First American Title's local branch network by the end of 2027, and we remain on track. Endpoint is live in Seattle, where we have opened around 310 orders and closed 150 orders on the new system. With each transaction, we continue to learn and improve. In this pilot, we have automated approximately 30% of the tasks required to close a transaction, allowing our people to focus more on customer-facing activities and complex issues. These automation rates will only increase over time. We are expanding the endpoint pilot this quarter to First American Titles escrow officers across the state of Washington, an important milestone. We expect approximately 80% to 85% of our local branch network to be on endpoint by the end of next year. This represents a significant transformation, not just a technology rollout, but a standardization of workflows that shifts the nature of work from executing tasks to verifying them. The real value of AI lies not only in the tools themselves, but in how workflows evolve to fully leverage them. While substantial work remains, we are confident and energized by the opportunities ahead. With Sequoia, we also continue to make strong progress. As a reminder, Sequoia is our AI-powered title decisioning platform. We are currently live with refinance transactions in eight counties across California and Arizona in our direct division, where we have fully automated title decisioning 35% of the time. The more complex challenge has been purchase transactions. And last month, we reached a key milestone by launching Sequoia for purchase transactions. Today, in three counties, we are automating title decisioning for 13% of purchase transactions, instantly determining insurability at order open. Over time, our automation rates will improve and ultimately, We believe we can deliver instant title decisioning for 70% of purchase and 80% of refinance orders in markets that we have title plants. This is made possible by our industry-leading title plant data, underwriting expertise, and innovative technology. By the end of this year, we plan to expand Sequoia across California and Florida with a national rollout plan for 2027. Looking ahead, we are optimistic about our earnings trajectory. our commercial business remains strong. For the first three weeks in April, our opened commercial orders are down 4% relative to last year. But as we experienced this quarter, the fee profile matters more in commercial than the number of orders. And given our strong pipeline of sizable commercial transactions, we still believe 2026 will be a record year in our commercial business. On the purchase market, we remain more cautious than the consensus view. So far in April, open purchase orders are down 3% as the sluggish home sale trend continues. While the residential market remains at trough levels, we are focused on rolling out our new AI-powered title and escrow platforms, which will provide greater operating leverage when the market recovers. From a capital management perspective, we continue to deploy earnings into opportunities with the most attractive risk-adjusted returns. We are taking a disciplined approach to acquisitions, focusing on the right partners rather than growth for its own sake. As our stock has pulled back while our earnings and outlook have strengthened, we have taken the opportunity to repurchase shares. Matt will discuss our financial results and capital management in more detail. And with that, I'll turn the call over to him.