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American Financial Posts Record Third-Quarter Net

November 11, 1986|JAMES S. GRANELLI | Times Staff Writer

Fueled by an increase in real estate refinancings, the First American Financial Corp. in Santa Ana posted the most profitable third quarter in its 97-year history. Net income was $9.4 million, up 74% from the $5.4 million earned in the 1986 third quarter. Revenues for the period grew 48.5% to $105.9 million from $71.3 million a year ago.

The company, parent of First American Title Insurance Co., had net earnings of $16.8 million in the first nine months--more than any prior full year's earnings and 66.3% higher than the $10.1 million earned in the same period last year. Revenues for the nine months increased 34.6% to $256.9 million from $190.85 million.

The company said its net income for the quarter and nine months would have been even higher had it not paid $2.3 million in September to settle litigation over its alleged misuse of computer programs that a Texas firm claimed were proprietary. A court in Houston rendered a $7.7-million judgment against First American last April, and the company believed the $2.3-million settlement would cost less than pursuing an appeal, said Donald P. Kennedy, First American's president.

Though the company's fortunes often mirror the cyclical nature of the business, First American anticipates continued strong gains through the first quarter of 1987, Kennedy said.

At its August meeting, First American's board of directors increased the quarterly dividend 25% to $1 a share from 80 cents a share. The company has paid a cash dividend every year since 1909. The company was formed in 1889.

First American Title has more than 2,300 branches, subsidiaries, affiliates and agents throughout the United States and in Guam, Mexico, Puerto Rico, the Virgin Islands and England.

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