First American Financial Corp

Previous wording

The Company’s total revenues for the third quarter of 2025 were $2.0 billion, which reflected an increase of $572.8 million, or 40.7%, when compared with $1.4 billion for the third quarter of 2024. This increase was primarily attributable to increases in agent premiums of $114.9 million, or 16.8%, and direct premiums and escrow fees in the title insurance business of $65.3 million, or 12.2%. The third quarter of 2024 also included $311.5 million in net investment losses primarily attributable to the Company’s investment portfolio rebalancing project. In the title insurance and services segment, direct premiums and escrow fees from domestic commercial transactions and residential refinance transactions increased $55.9 million, or 29.5% and $7.3 million, or 28.1%, respectively, in the third quarter of 2025 when compared to the third quarter of 2024. Direct premiums and escrow fees from domestic residential purchase transactions decreased $5.3 million, or 2.1%, in the third quarter of 2025 when compared to the third quarter of 2024.

Current wording

The Company’s total revenues for the first quarter of 2026 were $1.8 billion, which reflected an increase of $255.7 million, or 16.2%, when compared with $1.6 billion for the first quarter of 2025. This increase was primarily attributable to increases in agent premiums of $104.8 million, or 16.0%, and direct premiums and escrow fees in the title insurance business of $97.5 million, or 21.2%. In the title insurance and services segment, direct premiums and escrow fees from domestic commercial and residential refinance transactions increased $87.5 million, or 47.6%, and $18.4 million, or 76.5%, respectively, in the first quarter of 2026 when compared to the first quarter of 2025. Direct premiums and escrow fees from domestic residential purchase transactions decreased $7.0 million, or 3.5%, in the first quarter of 2026 when compared to the first quarter of 2025.

Previous wording

According to the Mortgage Bankers Association’s October 19, 2025 Mortgage Finance Forecast (the “MBA Forecast”), residential mortgage originations in the United States (based on the total dollar value of the transactions) are forecasted to increase 19.5% in the third quarter of 2025 when compared to the third quarter of 2024. Also, according to the MBA Forecast, the dollar amount of purchase originations are forecasted to increase 1.9% and refinance originations are forecasted to increase 117.4%. This volume of domestic residential mortgage origination activity contributed to an increase of 28.1% in direct premiums and escrow fees for the Company’s direct title operations from domestic refinance transactions and a decrease of 2.1% from domestic residential purchase transactions in the third quarter of 2025 when compared to the third quarter of 2024.

Current wording

According to the Mortgage Bankers Association’s April 20, 2026 Mortgage Finance Forecast (the “MBA Forecast”), residential mortgage originations in the United States (based on the total dollar value of the transactions) are forecasted to increase 43.5% in the first quarter of 2026 when compared to the first quarter of 2025. According to the MBA Forecast, the dollar amount of purchase originations are forecasted to increase 22.1% and refinance originations are forecasted to increase 95.5%. This volume of domestic residential mortgage origination activity contributed to a decrease of 3.5% in direct premiums and escrow fees for the Company’s direct title operations from domestic residential purchase transactions and an increase of 76.5% from domestic refinance transactions in the first quarter of 2026 when compared to the first quarter of 2025.

Previous wording

During the third quarter of 2025, the level of domestic title orders opened per day by the Company’s direct title operations increased 15.2% when compared with the third quarter of 2024. Refinance and commercial opened orders per day increased 53.4% and 10.8%, respectively, while residential purchase opened orders per day decreased 3.7% in the third quarter of 2025 when compared with the third quarter of 2024.

Current wording

During the first quarter of 2026, the level of domestic title orders opened per day by the Company’s direct title operations increased 8.3% when compared with the first quarter of 2025. Commercial and refinance opened orders per day increased 3.5% and 48.1%, respectively, while residential purchase opened orders per day decreased 4.1% in the first quarter of 2026 when compared with the first quarter of 2025.

Previous wording

Direct premiums and escrow fees were $601.5 million and $1.7 billion for the three and nine months ended September 30, 2025, respectively, increases of $65.3 million, or 12.2%, and $189.1 million, or 12.8%, when compared with the respective periods of the prior year. The increase for the three months ended September 30, 2025, was due to an increase in the number of domestic title orders closed by the company, partially offset by a decline in domestic average revenues per order. The increase for the nine months ended September 30, 2025, was due to an increase in the number of domestic title orders closed and an increase in the domestic average revenues per orders. Domestic average revenues per order closed were $3,801 and $3,942 for the three and nine months ended September 30, 2025, respectively, a decrease of 3.2% and an increase of 4.6% when compared with $3,926 and $3,767 for the respective periods of the prior year. The decrease for the three months ended September 30, 2025 in the average revenues per order closed was due to a shift in the mix from higher premium commercial transactions to lower premium refinance and default transactions, partially offset by an increase in average revenues per order on commercial and purchase transactions. The increase for the nine months ended September 30, 2025 in the average revenues per order closed was due to an increase in average revenues per order on commercial and purchase transactions, partially offset by a shift in the mix from higher premium commercial transactions to lower premium refinance and default transactions. The Company’s direct title operations closed 141,800 and 378,300 domestic title orders during the three and nine months ended September 30, 2025, respectively, increases of 16.6% and 8.4% when compared with 121,600 and 349,000 domestic title orders closed during the respective periods of the prior year, which were generally consistent with the changes in residential mortgage origination activity in the United States as reported in the MBA Forecast. Domestic residential refinance orders closed per day increased by 60.0% and 46.4% and domestic residential purchase orders closed per day decreased by 5.2% for the three and nine months ended September 30, 2025, respectively, when compared to the respective periods of the prior year.

Current wording

Direct premiums and escrow fees were $557.1 million for the three months ended March 31, 2026, an increase of $97.5 million, or 21.2%, when compared with the same period of the prior year. The increase was due to increases in domestic average revenues per order and in the number of domestic title orders closed by the Company’s direct title operations. Domestic average revenues per order closed was $4,229 for the three months ended March 31, 2026, an increase of 12.9% when compared with $3,747 for the three months ended March 31, 2025, which was primarily due to an increase in average revenues per order on commercial transactions, partially offset by a shift in mix from higher premium purchase transactions to lower premium refinance transactions. The Company’s direct title operations closed 119,900 domestic title orders during the three months ended March 31, 2026, an increase of 8.8% when compared with 110,300 domestic title orders closed during the same period of the prior year, which were generally consistent with the changes in residential mortgage origination activity in the United States as reported in the MBA Forecast. Domestic residential purchase and refinance orders closed per day decreased by 6.0% and increased by 56.6%, respectively, for the three months ended March 31, 2026 when compared to the same period of the prior year.

Previous wording

Agent premiums were $798.8 million and $2.2 billion for the three and nine months ended September 30, 2025, respectively, increases of $114.9 million, or 16.8%, and $305.9 million, or 16.4%, when compared with the respective periods of the prior year. Agent premiums are recorded when notice of issuance is received from the agent, which is generally when cash payment is received by the Company. As a result, there is generally a delay between the agent’s issuance of a title policy and the Company’s recognition of agent premiums. Therefore, current quarter agent premiums typically reflect prior quarter mortgage origination activity. The increase in agent premiums for the three months ended September 30, 2025 is generally consistent with the 12.6% increase in the Company’s direct premiums and escrow fees in the second quarter of 2025 when compared with the second quarter of 2024.

Current wording

Agent premiums were $759.4 million for the three months ended March 31, 2026, an increase of $104.8 million, or 16.0%, when compared with the same period of the prior year. Agent premiums are recorded when notice of issuance is received from the agent, which is generally when cash payment is received by the Company. As a result, there is generally a delay between the agent’s issuance of a title policy and the Company’s recognition of agent premiums. Therefore, current quarter agent premiums typically reflect prior quarter mortgage origination activity. The increase in agent premiums for the three months ended March 31, 2026 is generally consistent with the 19.1% increase in the Company’s direct premiums and escrow fees in the fourth quarter of 2025 as compared with the fourth quarter of 2024.

Previous wording

Information and other revenues were $276.1 million and $776.4 million for the three and nine months ended September 30, 2025, respectively, increases of $34.4 million, or 14.2%, and $76.6 million, or 10.9%, when compared with the respective periods of the prior year. The increases were primarily due to an increase in refinance activity in the Company's Canadian operations, revenue growth in the Company's mortgage loan subservicing business and increased demand for the Company’s non-insured information products and services.

Current wording

Information and other revenues were $269.2 million for the three months ended March 31, 2026, an increase of $33.2 million, or 14.1%, when compared with the same period of the prior year. The increase was primarily due to revenue growth in the Company’s subservicing business, higher demand for non-insured information products and services and growth in refinance activity in the Company’s Canadian operations.

Previous wording

Personnel costs were $542.9 million and $1.6 billion for the three and nine months ended September 30, 2025, respectively, increases of $51.2 million, or 10.4%, and $120.9 million, or 8.5%, when compared with the respective periods of the prior year. The increases were primarily attributable to higher incentive compensation expense due to higher revenue and profitability and higher employee benefits, salaries, payroll taxes, severance and share-based compensation expenses.

Current wording

Personnel costs were $546.4 million for the three months ended March 31, 2026, an increase of $61.6 million, or 12.7%, when compared with the same period of the prior year. The increase was primarily attributable to higher incentive compensation expense due to higher revenue and profitability, and higher salaries and employee benefits expenses.

Previous wording

Agents retained $640.1 million and $1.7 billion of title premiums generated by agency operations for the three and nine months ended September 30, 2025, respectively, which compares with $546.7 million and $1.5 billion for the respective periods of the prior year. The percentage of title premiums retained by agents was 80.1% for the three and nine months ended September 30, 2025, compared to 79.9% and 79.8% for the respective periods of the prior year.

Current wording

Agents retained $602.2 million of title premiums generated by agency operations for the three months ended March 31, 2026, which compares with $525.5 million for the same period of the prior year. The percentage of title premiums retained by agents was 79.3% and 80.3% for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Other operating expenses were $275.6 million and $799.8 million for the three and nine months ended September 30, 2025, respectively, increases of $23.8 million, or 9.5%, and $70.7 million, or 9.7%, when compared with the respective periods of the prior year. The increases were primarily due to higher production expenses on higher volumes and increases in software and travel expenses. The increase for the nine months ended September 30, 2025 was partially offset by a credit related to the release of a $5.7 million acquisition-related incentive obligation in the current year and also reflects the non-recurrence of a prior year out-of-period adjustment to expense that totaled $6.2 million.

Current wording

Other operating expenses were $277.4 million for the three months ended March 31, 2026, an increase of $31.0 million, or 12.6%, when compared with the same period of the prior year. The increase was primarily due to higher production expenses on higher volumes, increases in software and travel expenses, and the lack of a prior year credit related to the release of an acquisition-related incentive obligation, partially offset by a reduction in legal expense.

Previous wording

The provision for policy losses and other claims, expressed as a percentage of title insurance premiums and escrow fees, was 3.0% for the three and nine months ended September 30, 2025 and 2024. The 3.0% loss provision rate for the three and nine months ended September 30, 2025 reflects an ultimate loss rate of 3.75% for the 2025 policy year and reserve releases of 0.75%, or $10.5 million and $28.8 million, respectively, for prior policy years, all based on title insurance premiums and escrow fees for the three and nine months ended September 30, 2025. The 3.0% loss provision rate for the three and nine months ended September 30, 2024 reflected an ultimate loss rate of 3.75% for the 2024 policy year and reserve releases of 0.75%, or $9.1 million and $25.0 million, respectively, for prior policy years, all based on title insurance premiums and escrow fees for the three and nine months ended September 30, 2024.

Current wording

The provision for policy losses and other claims, expressed as a percentage of title insurance premiums and escrow fees, was 3.0% for the three months ended March 31, 2026 and 2025. The 3.0% loss provision rate for the three months ended March 31, 2026 reflects an ultimate loss rate of 3.75% for the 2026 policy year and reserve releases of 0.75%, or $9.9 million for prior policy years, all based on title insurance premiums and escrow fees for the three months ended March 31, 2026. The 3.0% loss provision rate for the three months ended March 31, 2025 reflected an ultimate loss rate of 3.75% for the 2025 policy year and reserve releases of 0.75%, or $8.4 million for prior policy years, all based on title insurance premiums and escrow fees for the three months ended March 31, 2025.

Previous wording

Depreciation and amortization expense was $53.5 million and $156.3 million for the three and nine months ended September 30, 2025, respectively, increases of $1.6 million, or 3.1%, and $4.7 million, or 3.1%, when compared with the respective periods of the prior year. The increases were primarily due to higher amortization of capitalized internal-use software from recently deployed digital settlement products.

Current wording

Depreciation and amortization expense was $53.1 million for the three months ended March 31, 2026, an increase of $1.9 million, or 3.7%, when compared with the same period of the prior year. The increase was primarily due to higher amortization of capitalized internal-use software from recently deployed digital settlement products.

Previous wording

Premium taxes were $20.9 million and $55.2 million for the three and nine months ended September 30, 2025, respectively, increases of $3.1 million, or 17.4%, and $10.2 million, or 22.7%, when compared with the respective periods of the prior year. Premium taxes as a percentage of title insurance premiums and escrow fees were 1.5% and 1.4% for the three and nine months ended September 30, 2025, respectively, and 1.5% and 1.3% for the three and nine months ended September 30, 2024, respectively.

Current wording

Premium taxes were $20.0 million for the three months ended March 31, 2026, an increase of $3.7 million, or 22.7%, when compared with the same period of the prior year. Premium taxes as a percentage of title insurance premiums and escrow fees were 1.5% for the three months ended March 31, 2026 and 2025.

Previous wording

Pretax margins for the title insurance business reflect the high cost of performing the essential services required before insuring title, whereas the corresponding revenues are subject to regulatory and competitive pricing restraints. Due to the relatively high proportion of fixed costs in the title insurance business, pretax margins generally improve as closed order volumes increase. Pretax margins for the segment are also impacted by (1) net investment income and net investment gains or losses, which may not move in the same direction as closed order volumes, (2) the composition (residential or commercial) and type (resale, refinancing or new construction) of real estate activity and (3) the percentage of title insurance premiums generated by agency operations as margins from direct operations are generally higher than from agency operations due primarily to the large portion of the premium that is retained by the agent. The title insurance and services segment recorded pretax margins of 12.9% and 11.1% for the three and nine months ended September 30, 2025, respectively, compared with a pretax margin loss of (10.1)% and a pretax margin of 2.9% in the respective periods of the prior year.

Current wording

Pretax margins for the title insurance business reflect the high cost of performing the essential services required before insuring title, whereas the corresponding revenues are subject to regulatory and competitive pricing restraints. Due to the relatively high proportion of fixed costs in the title insurance business, pretax margins generally improve as closed order volumes increase. Pretax margins for the segment are also impacted by (1) net investment income and net investment gains or losses, which may not move in the same direction as closed order volumes, (2) the composition (residential or commercial) and type (resale, refinancing or new construction) of real estate activity and (3) the percentage of title insurance premiums generated by agency operations as margins from direct operations are generally higher than from agency operations due primarily to the large portion of the premium that is retained by the agent. The title insurance and services segment recorded pretax margins of 9.6% and 7.2% for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Direct premiums were $106.6 million and $311.9 million for the three and nine months ended September 30, 2025, respectively, increases of $3.1 million, or 3.0%, and $11.1 million, or 3.7%, when compared with the respective periods of the prior year. The increases were primarily attributable to increases in the average price per policy.

Current wording

Direct premiums were $103.1 million for the three months ended March 31, 2026, an increase of $1.5 million, or 1.5%, when compared with the same period of the prior year. The increase was primarily attributable to an increase in the average price per policy.

Previous wording

Personnel costs and other operating expenses totaled $45.8 million and $131.4 million for the three and nine months ended September 30, 2025, respectively, increases of $2.2 million, or 5.0%, and $3.5 million, or 2.7%, when compared with the respective periods of the prior year. The increases were primarily attributable to higher marketing, salaries, and incentive compensation expenses.

Current wording

Personnel costs and other operating expenses totaled $44.3 million for the three months ended March 31, 2026, an increase of $1.3 million, or 3.0%, when compared with the same period of the prior year. The increase was primarily attributable to higher software expenses, deferred acquisition costs, and salaries and severance expenses.

Previous wording

The provision for home warranty claims, expressed as a percentage of home warranty premiums, was 46.9% and 41.8% for the three and nine months ended September 30, 2025, respectively, compared with 53.8% and 47.2% for the respective periods of the prior year. The decreases in the claims rate were primarily attributable to lower claims frequency.

Current wording

The provision for home warranty claims, expressed as a percentage of home warranty premiums, was 36.1% and 37.1% for the three months ended March 31, 2026 and 2025, respectively. The decrease in the claims rate was primarily attributable to lower claims severity and lower number of claims.

Previous wording

A large portion of the revenues for the home warranty segment are generated by renewals and are not dependent on the level of real estate activity in the year of renewal. With the exception of the provision for losses, the majority of the expenses for this segment are variable in nature and, therefore, generally fluctuate with revenue. Accordingly, pretax margins (before provision for losses) are relatively constant, although, as a result of some fixed expenses, profit margins (before provision for losses) should nominally improve as premium revenues increase. Pretax margins are also impacted by net investment income and net investment gains or losses, which may not move in the same direction as premium revenues. The home warranty segment recorded pretax margins of 14.1% and 19.0% for the three and nine months ended September 30, 2025, respectively, compared with 8.1% and 14.2% in the respective periods of the prior year.

Current wording

A large part of the revenues for the home warranty segment are generated by renewals and are not dependent on the level of real estate activity in the year of renewal. With the exception of the provision for losses, the majority of the expenses for this segment are variable in nature and, therefore, generally fluctuate with revenue. Accordingly, pretax margins (before provision for losses) are relatively constant, although, as a result of some fixed expenses, profit margins (before provision for losses) should nominally improve as premium revenues increase. Pretax margins are also impacted by net investment income and net investment gains or losses, which may not move in the same direction as premium revenues. The home warranty segment recorded pretax margins of 23.5% and 22.9% for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

The Company’s inter-segment eliminations were not material for the three and nine months ended September 30, 2025 and 2024.

Current wording

The Company’s inter-segment eliminations were not material for the three months ended March 31, 2026 and 2025.

Previous wording

The Company’s effective income tax rates (income tax expense as a percentage of income before income taxes) were 23.1% and 23.6% for the three and nine months ended September 30, 2025, respectively, compared with 28.4% and 8.9% for the respective periods of the prior year. The differences in the effective tax rates are primarily due to the impact on state income taxes resulting from the relative proportion of income derived from the Company’s insurance and non-insurance businesses as well as permanent differences between amounts reported for financial statement purposes and amounts reported for income tax purposes. In addition, the effective income tax rates for 2024 reflect the impact on pretax earnings from losses and impairments on investments and tax benefits related to a state tax matter from prior years.

Current wording

The Company’s effective income tax rates (income tax expense as a percentage of income before income taxes) were 22.9% and 22.6% for the three months ended March 31, 2026 and 2025, respectively. The differences in the effective tax rates are primarily due to the impact on state income taxes resulting from the relative proportion of income derived from the Company’s insurance and non-insurance businesses as well as permanent differences between amounts reported for financial statement purposes and amounts reported for income tax purposes.

Previous wording

The Company evaluates the realizability of its deferred tax assets by assessing the valuation allowance and makes adjustments to the allowance as necessary. The factors used in assessing the likelihood of realization include forecasts of future taxable income and available tax planning strategies that could be implemented. The Company’s ability to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of its deferred tax assets. Based on future operating results in certain jurisdictions, it is possible that the current valuation allowance positions of those jurisdictions could be adjusted during the next 12 months.

Current wording

The Company evaluates the realizability of its deferred tax assets by assessing the valuation allowance and making adjustments to the allowance as necessary. The factors used in assessing the likelihood of realization include forecasts of future taxable income and available tax planning strategies that could be implemented. The Company’s ability to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of its deferred tax assets. Based on future operating results in certain jurisdictions, it is possible that the current valuation allowance positions of those jurisdictions could be adjusted during the next 12 months.

Previous wording

Cash provided by operating activities totaled $581.5 million and $572.9 million for the nine months ended September 30, 2025 and 2024, respectively, after claim payments, net of recoveries, of $261.4 million and $295.9 million, respectively. The principal nonoperating uses of cash and cash equivalents for the nine months ended September 30, 2025 and 2024 were advances and repayments related to secured financing transactions, purchases of debt and equity securities, dividends to common stockholders, capital expenditures and repurchases of company common shares. Principal nonoperating uses of cash and cash equivalents also included decreases in deposits at the Company's banking operations for the nine months ended September 30, 2024. The principal nonoperating sources of cash and cash equivalents for the nine months ended September 30, 2025 and 2024 were borrowings and collections related to secured financing transactions and proceeds from the sales and maturities of debt and equity securities. Principal nonoperating sources of cash and cash equivalents also included increases in the deposit balances at the Company’s banking operations for the nine months ended September 30, 2025 and net proceeds from issuance of unsecured senior notes for the nine months ended September 30, 2024. The net effect of all activities on cash and cash equivalents was an increase of $1.2 billion and a decrease of $651.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

Cash provided by operating activities totaled $5.6 million and cash used for operating activities totaled $52.8 million for the three months ended March 31, 2026 and 2025, respectively, after claim payments, net of recoveries, of $77.7 million and $76.3 million, respectively. The principal nonoperating uses of cash and cash equivalents for the three months ended March 31, 2026 and 2025 were advances and repayments related to secured financing transactions, purchases of debt and equity securities, dividends to common stockholders, capital expenditures and repurchases of company common shares. The principal nonoperating sources of cash and cash equivalents for the three months ended March 31, 2026 and 2025 were borrowings and collections related to secured financing transactions, proceeds from the sales and maturities of debt and equity securities and increases in the deposit balances at the Company’s banking operations. The net effect of all activities on cash and cash equivalents were increases of $1.0 billion and $327.0 million for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

The Company continually assesses its capital allocation strategy, including decisions relating to dividends, stock repurchases, capital expenditures, acquisitions and investments. In September 2025, the quarterly cash dividend was increased to 55 cents per common share, representing a 2% increase. The dividend increase was effective beginning with the September 2025 dividend. Management expects that the Company will continue to pay quarterly cash dividends at or above the current level. The timing, declaration and payment of future dividends, however, falls within the discretion of the Company’s board of directors and will depend upon many factors, including the Company’s financial condition and earnings, the capital requirements of the Company’s businesses, restrictions imposed by applicable law and any other factors the board of directors deems relevant from time to time.

Current wording

The Company continually assesses its capital allocation strategy, including decisions relating to dividends, stock repurchases, capital expenditures, acquisitions and investments. In March 2026, the Company paid a first quarter cash dividend of 55 cents per common share. Management expects that the Company will continue to pay quarterly cash dividends at or above the current level. The timing, declaration and payment of future dividends, however, falls within the discretion of the Company’s board of directors and will depend upon many factors, including the Company’s financial condition and earnings, the capital requirements of the Company’s businesses, restrictions imposed by applicable law and any other factors the board of directors deems relevant from time to time.

Previous wording

In July 2025, the Company’s board of directors approved a new share repurchase plan which authorizes the repurchase of up to $300 million of the Company’s common stock and terminated its prior share repurchase plan. Purchases may be made from time to time by the Company in the open market at prevailing market prices or in privately negotiated transactions. During the nine months ended September 30, 2025, the Company repurchased and retired 2.1 million shares of its common stock for a total purchase price of $122.3 million and, as of September 30, 2025, the Company has repurchased and retired 6.8 million shares of its common stock under the previous authorization for a total purchase price of $377.0 million.

Current wording

The Company maintains a stock repurchase plan with authorization up to $300 million of the Company’s common stock, of which $266.5 million remained as of March 31, 2026. Purchases may be made from time to time by the Company in the open market at prevailing market prices or in privately negotiated transactions. During the three months ended March 31, 2026, the Company repurchased and retired 0.6 million shares of its common stock for a total purchase price of $33.5 million.

Previous wording

Holding Company. First American Financial Corporation is a holding company that conducts all of its operations through its subsidiaries. The holding company’s current cash requirements include payments of principal and interest on its debt, taxes, payments in connection with employee benefit plans, dividends on its common stock and other expenses. The holding company is dependent upon dividends and other payments from its operating subsidiaries to meet its cash requirements. The Company’s target is to maintain a cash balance at the holding company equal to at least twelve months of estimated cash requirements. At certain points in time, the actual cash balance at the holding company may vary from this target due to, among other factors, the timing and amount of cash payments made and dividend payments received. Pursuant to insurance and other regulations under which the Company’s insurance subsidiaries operate, the amount of dividends, loans and advances available to the holding company is limited, principally for the protection of policyholders. As of September 30, 2025, under such regulations, the maximum amount available to the holding company from its insurance subsidiaries for the remainder of 2025, without prior approval from applicable regulators, was dividends of $285.0 million and loans and advances of $114.2 million. However, the timing and amount of dividends paid by the Company’s insurance subsidiaries to the holding company falls within the discretion of each insurance subsidiary’s board of directors and will depend upon many factors, including the level of total statutory capital and surplus required to support minimum financial strength ratings by certain rating agencies. Such restrictions have not had, nor are they expected to have, an impact on the holding company’s ability to meet its cash obligations.

Current wording

Holding Company. First American Financial Corporation is a holding company that conducts all of its operations through its subsidiaries. The holding company’s current cash requirements include payments of principal and interest on its debt, taxes, payments in connection with employee benefit plans, dividends on its common stock and other expenses. The holding company is dependent upon dividends and other payments from its operating subsidiaries to meet its cash requirements. The Company’s target is to maintain a cash balance at the holding company equal to at least twelve months of estimated cash requirements. At certain points in time, the actual cash balance at the holding company may vary from this target due to, among other factors, the timing and amount of cash payments made and dividend payments received. Pursuant to insurance and other regulations under which the Company’s insurance subsidiaries operate, the amount of dividends, loans and advances available to the holding company is limited, principally for the protection of policyholders. As of March 31, 2026 under such regulations, the maximum amount available to the holding company from its insurance subsidiaries for the remainder of 2026, without prior approval from applicable regulators, was dividends of $420.4 million and loans and advances of $113.6 million. However, the timing and amount of dividends paid by the Company’s insurance subsidiaries to the holding company falls within the discretion of each insurance subsidiary’s board of directors and will depend upon many factors, including the level of total statutory capital and surplus required to support minimum financial strength ratings by certain rating agencies. Such restrictions have not had, nor are they expected to have, an impact on the holding company’s ability to meet its cash obligations.

Previous wording

As of September 30, 2025, the holding company’s sources of liquidity included $119.6 million of cash and cash equivalents and $900.0 million available on the Company’s revolving credit facility. Management believes that liquidity at the holding company is sufficient to satisfy anticipated cash requirements and obligations for at least the next twelve months.

Current wording

As of March 31, 2026 the holding company’s sources of liquidity included $251.5 million of cash and cash equivalents and $900.0 million available on the Company’s revolving credit facility. Management believes that liquidity at the holding company is sufficient to satisfy anticipated cash requirements and obligations for at least the next twelve months.

Previous wording

The Company’s debt to capitalization ratios were 33.0% and 30.8% at September 30, 2025 and December 31, 2024, respectively. The Company’s adjusted debt to capitalization ratio, excluding secured financings payable of $1.1 billion and $643.8 million at September 30, 2025 and December 31, 2024, was 22.5% and 23.9%, respectively.

Current wording

The Company’s debt to capitalization ratios were 32.2% and 30.7% at March 31, 2026 and December 31, 2025, respectively. The Company’s adjusted debt to capitalization ratio, excluding secured financings payable of $1.1 billion and $906.5 million at March 31, 2026 and December 31, 2025, respectively, was 21.9%.

Previous wording

Investment Portfolio. The Company maintains a high quality, liquid investment portfolio that is primarily held at its insurance and banking subsidiaries. As of September 30, 2025, 95% of the Company’s investment portfolio consisted of debt securities, of which 72% were either United States government-backed or rated AAA and 98% were either rated or classified as investment grade. Percentages are based on the estimated fair values of the securities. Credit ratings reflect published ratings obtained from globally recognized securities rating agencies. If a security was rated differently among the rating agencies, the lowest rating was selected. For further information on the credit quality of the Company’s debt securities portfolio at September 30, 2025, see Note 3 Debt Securities to the condensed consolidated financial statements.

Current wording

Investment Portfolio. The Company maintains a high quality, liquid investment portfolio that is primarily held at its insurance and banking subsidiaries. As of March 31, 2026, 95% of the Company’s investment portfolio consisted of debt securities, of which 72% were either United States government-backed or rated AAA and 98% were either rated or classified as investment grade or better. Percentages are based on the estimated fair values of the securities. Credit ratings reflect published ratings obtained from globally recognized securities rating agencies. If a security was rated differently among the rating agencies, the lowest rating was selected. For further information on the credit quality of the Company’s debt securities portfolio at March 31, 2026, see Note 3 Debt Securities to the condensed consolidated financial statements.

Previous wording

Off-balance sheet arrangements. The Company administers escrow deposits as a service to customers in its direct title operations. Escrow deposits totaled $11.6 billion and $8.9 billion at September 30, 2025 and December 31, 2024, respectively, of which $5.0 billion and $4.0 billion, respectively, were held at FA Trust. The remaining deposits were held at third-party financial institutions. Escrow deposits held at third-party financial institutions are not considered assets of the Company and, therefore, are not included in the accompanying condensed consolidated balance sheets. All such amounts are placed in deposit accounts insured, up to applicable limits, by the Federal Deposit Insurance Corporation. The Company could be held contingently liable for the disposition of these assets.

Current wording

Off-balance sheet arrangements. The Company administers escrow deposits as a service to customers in its direct title operations. Escrow deposits totaled $10.5 billion and $9.3 billion at March 31, 2026 and December 31, 2025, respectively, of which $4.1 billion and $3.7 billion, respectively, were held at FA Trust. The remaining deposits were held at third-party financial institutions. Escrow deposits held at third-party financial institutions are not considered assets of the Company and, therefore, are not included in the accompanying condensed consolidated balance sheets. All such amounts are placed in deposit accounts insured, up to applicable limits, by the Federal Deposit Insurance Corporation. The Company could be held contingently liable for the disposition of these assets.

Previous wording

Trust assets administered by FA Trust totaled $5.4 billion and $4.8 billion at September 30, 2025 and December 31, 2024, respectively, of which $158.8 million and $169.4 million, respectively, were held at FA Trust. The remaining trust assets were held at third-party financial institutions. Trust assets administered by FA Trust and held at third-party institutions are fiduciary client assets. Trust assets held at third-party financial institutions are not considered assets of the Company and, therefore, are not included in the accompanying condensed consolidated balance sheets. The Company could be held contingently liable if FA Trust were to breach any of its fiduciary duties.

Current wording

Trust assets administered by FA Trust totaled $5.8 billion and $5.6 billion at March 31, 2026 and December 31, 2025, respectively, of which $243.8 million and $173.9 million, respectively, were held at FA Trust. The remaining trust assets were held at third-party financial institutions. Trust assets administered by FA Trust and held at third-party institutions are fiduciary client assets, which are not considered assets of the Company and, therefore, are not included in the accompanying condensed consolidated balance sheets. The Company could be held contingently liable if FA Trust were to breach any of its fiduciary duties.

Previous wording

The Company facilitates tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code and tax-deferred reverse exchanges pursuant to Revenue Procedure 2000-37. As a facilitator and intermediary, the Company holds the proceeds from sales transactions and takes temporary title to property identified by the customer to be acquired with such proceeds. Upon the completion of each such exchange, the identified property is transferred to the customer or, if the exchange does not take place, an amount equal to the sales proceeds or, in the case of a reverse exchange, title to the property held by the Company is transferred to the customer. Like-kind exchange funds administered by the Company totaled $2.4 billion and 2.3 billion at September 30, 2025 and December 31, 2024, respectively. In September 2025, FA Trust began administering like-kind exchange funds and, at September 30, 2025, held $5.1 million of such deposits. The like-kind exchange deposits held at third-party financial institutions are not included in the accompanying condensed consolidated balance sheets as the proceeds and property are not considered assets of the Company due to the structure utilized to facilitate these transactions. All such amounts are placed in deposit accounts insured, up to applicable limits, by the Federal Deposit Insurance Corporation. The Company could be held contingently liable to the customer for the transfers of property, disbursements of proceeds and the returns on such proceeds.

Current wording

The Company facilitates tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code and tax-deferred reverse exchanges pursuant to Revenue Procedure 2000-37. As a facilitator and intermediary, the Company holds the proceeds from sales transactions and takes temporary title to property identified by the customer to be acquired with such proceeds. Upon the completion of each such exchange, the identified property is transferred to the customer or, if the exchange does not take place, an amount equal to the sales proceeds or, in the case of a reverse exchange, title to the property held by the Company is transferred to the customer. Like-kind exchange funds administered by the Company totaled $2.6 billion and $2.7 billion at March 31, 2026 and December 31, 2025, respectively, of which $588.3 million and $93.6 million, respectively, were held at FA Trust. The like-kind exchange deposits held at third-party financial institutions are not included in the accompanying condensed consolidated balance sheets as the proceeds and property are not considered assets of the Company due to the structure utilized to facilitate these transactions. All such amounts are placed in deposit accounts insured, up to applicable limits, by the Federal Deposit Insurance Corporation. The Company could be held contingently liable to the customer for the transfers of property, disbursements of proceeds and the returns on such proceeds.

Previous wording

In conducting its residential mortgage loan subservicing operations, the Company administers cash deposits on behalf of its clients. Cash deposits totaled $1.8 billion and $901.0 million at September 30, 2025 and December 31, 2024, respectively, of which $1.3 billion and $606.5 million, respectively, were held at FA Trust. The remaining deposits were held at third-party financial institutions. Cash deposits held at third-party financial institutions are not considered assets of the Company and, therefore, are not included in the accompanying condensed consolidated balance sheets. All such amounts are placed in deposit accounts insured, up to applicable limits, by the Federal Deposit Insurance Corporation. The Company could be held contingently liable for the disposition of these assets. In connection with certain accounts, the Company has ongoing programs for realizing economic benefits with various financial institutions whereby it earns economic benefits either as income or as a reduction in expense. In August 2025, the Company agreed to provide a secured interest in debt securities totaling $50.0 million as collateral to be maintained on deposit in connection with a new mortgage loan subservicing agreement.

Current wording

In conducting its residential mortgage loan subservicing operations, the Company administers cash deposits on behalf of its clients. Cash deposits totaled $2.5 billion and $1.6 billion at March 31, 2026 and December 31, 2025, respectively, of which $1.7 billion and $1.0 billion, respectively, were held at FA Trust. The remaining deposits were held at third-party financial institutions. Cash deposits held at third-party financial institutions are not considered assets of the Company and, therefore, are not included in the accompanying condensed consolidated balance sheets. All such amounts are placed in deposit accounts insured, up to applicable limits, by the Federal Deposit Insurance Corporation. The Company could be held contingently liable for the disposition of these assets. In connection with certain accounts, the Company has ongoing programs for realizing economic benefits with various financial institutions whereby it earns economic benefits either as income or as a reduction in expense. The Company maintains certain debt securities on deposit with a fair value of $54.3 million at March 31, 2026 for which it has provided a secured interest as collateral in connection with a mortgage loan subservicing agreement.