FIRST AMERICAN FINANCIAL

©2018 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF

FIRST AMERICAN FINANCIALInvestor Discussions

November 2020

Safe Harbor Statement

2

CERTAIN STATEMENTS MADE IN THIS PRESENTATION AND ANY RELATED MANAGEMENT COMMENTARY CONTAIN, AND RESPONSES TO INVESTOR QUESTIONS MAY CONTAIN, FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE FACT THAT THEY DO NOT RELATE STRICTLY TO HISTORICAL OR CURRENT FACTS AND MAY CONTAIN THE WORDS “BELIEVE,” “ANTICIPATE,” “EXPECT,” “INTEND,” “PLAN,” “PREDICT,” “ESTIMATE,” “PROJECT,” “WILL BE,” “WILL CONTINUE,” “WILL LIKELY RESULT,” OR OTHER SIMILAR WORDS AND PHRASES OR FUTURE OR CONDITIONAL VERBS SUCH AS “WILL,” “MAY,” “MIGHT,” “SHOULD,” “WOULD,” OR “COULD.” THESE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, STATEMENTS REGARDING FUTURE OPERATIONS, PERFORMANCE, FINANCIAL CONDITION, PROSPECTS, PLANS AND STRATEGIES. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS THAT MAY PROVE TO BE INCORRECT. RISKS AND UNCERTAINTIES EXIST THAT MAY CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE SET FORTH IN THESE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE THE ANTICIPATED RESULTS TO DIFFER FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION: INTEREST RATE FLUCTUATIONS; CHANGES IN THE PERFORMANCE OF THE REAL ESTATE MARKETS; VOLATILITY IN THE CAPITAL MARKETS; UNFAVORABLE ECONOMIC CONDITIONS; THE CORONAVIRUS PANDEMIC AND RESPONSES THERETO; IMPAIRMENTS IN THE COMPANY’S GOODWILL OR OTHER INTANGIBLE ASSETS; UNCERTAINTY FROM THE EXPECTED DISCONTINUANCE OF LIBOR AND TRANSITION TO ANY OTHER INTEREST RATE BENCHMARK; FAILURES AT FINANCIAL INSTITUTIONS WHERE FIRST AMERICAN FINANCIAL CORPORATION (THE "COMPANY") DEPOSITS FUNDS; REGULATORY OVERSIGHT AND CHANGES IN APPLICABLE LAWS AND GOVERNMENT REGULATIONS, INCLUDING DATA PRIVACY AND DATA PROTECTION; HEIGHTENED SCRUTINY BY LEGISLATORS AND REGULATORS OF THE COMPANY’S TITLE INSURANCE AND SERVICES SEGMENT AND CERTAIN OTHER OF THE COMPANY’S BUSINESSES; USE OF SOCIAL MEDIA BY THE COMPANY AND OTHER PARTIES; REGULATION OF TITLE INSURANCE RATES; LIMITATIONS ON ACCESS TO PUBLIC RECORDS AND OTHER DATA; CLIMATE CHANGE, HEALTH CRISES, SEVERE WEATHER CONDITIONS AND OTHER CATASTROPHIC EVENTS; CHANGES IN RELATIONSHIPS WITH LARGE MORTGAGE LENDERS AND GOVERNMENT-SPONSORED ENTERPRISES; CHANGES IN MEASURES OF THE STRENGTH OF THE COMPANY’S TITLE INSURANCE UNDERWRITERS, INCLUDING RATINGS AND STATUTORY CAPITAL AND SURPLUS; LOSSES IN THE COMPANY’S INVESTMENT PORTFOLIO; MATERIAL VARIANCE BETWEEN ACTUAL AND EXPECTED CLAIMS EXPERIENCE; DEFALCATIONS, INCREASED CLAIMS OR OTHER COSTS ANDEXPENSES ATTRIBUTABLE TO THE COMPANY’S USE OF TITLE AGENTS; ANY INADEQUACY IN THE COMPANY’S RISK MANAGEMENT FRAMEWORK; SYSTEMS DAMAGE, FAILURES, INTERRUPTIONS, CYBERATTACKS AND INTRUSIONS OR UNAUTHORIZED DATA DISCLOSURES; INNOVATION EFFORTS OF THE COMPANYAND OTHER INDUSTRY PARTICIPANTS AND ANY RELATED MARKET DISRUPTION; ERRORS AND FRAUD INVOLVING THE TRANSFER OF FUNDS; THE COMPANY’S USE OF A GLOBAL WORKFORCE; INABILITY OF THE COMPANY’S SUBSIDIARIES TO PAY DIVIDENDS OR REPAY FUNDS; AND OTHER FACTORS DESCRIBED IN THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2019 AND THE COMPANY'S QUARTERLY REPORT FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2020, EACH AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE THEY ARE MADE. 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.

Use of non-GAAP Financial Measures

THIS PRESENTATION AND RELATED MANAGEMENT COMMENTARY CONTAIN CERTAIN FINANCIAL MEASURES THAT ARE NOT PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP), INCLUDING PERSONNEL AND OTHER OPERATING EXPENSE RATIOS; SUCCESS RATIOS; NET OPERATING REVENUES; AND ADJUSTED REVENUES, ADJUSTED INVESTMENT INCOME, ADJUSTED PRETAX INCOME, ADJUSTED EARNINGS PER SHARE, AND ADJUSTED PRETAX MARGINS FOR THE COMPANY, ITS TITLE INSURANCE AND SERVICES SEGMENT AND ITS SPECIALTY INSURANCE SEGMENT. ADJUSTED INVESTMENT INCOME EXCLUDES AFFILIATED INVESTMENTS AND IS PRESENTED BECAUSE IT PROVIDES THE COMPANY’S MANAGEMENT AND INVESTORSWITH A BETTER UNDERSTANDING OF THE IMPACT OF INTEREST RATES ON THE COMPANY’S INVESTMENT INCOME OVER TIME. THE COMPANY IS PRESENTING THESE OTHER NON-GAAP FINANCIAL MEASURES BECAUSE THEY PROVIDE THE COMPANY’S MANAGEMENT AND INVESTORS WITH ADDITIONAL INSIGHT INTO THE OPERATIONAL EFFICIENCY AND PERFORMANCE OF THE COMPANY RELATIVE TO EARLIER PERIODS AND RELATIVE TO THE COMPANY’S COMPETITORS. THE COMPANY DOES NOT INTEND FOR THESE NON-GAAP FINANCIAL MEASURES TO BE A SUBSTITUTE FOR ANY GAAP FINANCIAL INFORMATION. IN THIS PRESENTATION OR IN THE COMPANY’S FORM 8-K FILED ON OCTOBER 22, 2020 WITH THE SECURITIES AND EXCHANGE COMMISSION, THESE NON-GAAP FINANCIAL MEASURES HAVE BEEN PRESENTED WITH, AND RECONCILED TO, THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES. INVESTORS SHOULD USE THESE NON-GAAP FINANCIAL MEASURES ONLY IN CONJUNCTION WITH THE COMPARABLE GAAP FINANCIAL MEASURES.

3

AGENDA

Strong Track Record of Results

Challenging Market Conditions

Consistent Strategy and Capital Management Priorities

4

Leader in the Title and Settlement Services Industry

92% of Revenue, Title Segment

8% of Revenue, Specialty Insurance Segment25.2% Title Market Share

18,400 Employees

760 Offices

Largest Title Plant and Property

Record Database

Fortune 100 Best Companies to Work For®

5 Years in a Row (2016 – 2020)

Trusted National Brand

$11.5B Total Assets

5

$6.2B Total Revenue

9 Countries

Note: Revenue and market share data for 2019. All other data as of December 31, 2019.

FORTUNE and FORTUNE 100 Best Companies to Work For are registered trademarks of FORTUNE Media IP Limited.FORTUNE and FORTUNE Media IP Limited are not affiliated with, and do not endorse products or services of, First American Financial Corporation.

$551 $489

$632

$793

$913

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2015 2016 2017 2018 2019

$2.62 $3.09

$3.76 $4.19

$6.22

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

2015 2016 2017 2018 2019

$5.2 $5.6

$5.8 $5.7

$6.2

$3.0

$3.5

$4.0

$4.5

$5.0

$5.5

$6.0

$6.5

2015 2016 2017 2018 2019

$ in

Bill

ion

sPast 5 Years: Achieved Strong Financial Results

6

TOTAL REVENUE

$ in

Mill

ion

s

EARNINGS PER SHARE

CASH FROM OPERATIONS RETURN ON EQUITY

10.8%11.9%

13.0% 13.1%

17.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2015 2016 2017 2018 2019

Historical Title Insurance Margin

7 Source: October 2020 MBA

-5%

0%

5%

10%

15%

20%

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

E

20

21

E

Purchase Originations Refinance Originations Pretax Margin($

inB

illio

ns)

-40

-20

0

20

40

60

80

100

120

9/30/2015 9/30/2016 9/30/2017 9/30/2018 9/30/2019 9/30/2020

SPX Index FAF US Equity FNF US Equity

Total Annualized Return

1 year 3 year 5 year

First American (11.1)% 3.7% 8.7%

Fidelity (26.6)% 0.4% 7.3%

S&P 500 15.1% 12.3% 14.1%

Total Shareholder Return

8 Source: Bloomberg, weekly as of 9/30/2020

AGENDA




9

Impact of COVID-19 On Our Business

Business Operations Financial Impact to Date Balance Sheet and Investments

▪ Business mix has been weighted toward refinance transactions as pandemic negatively impacted purchase and commercial activity

▪ Refinance open orders up 106% Q3 YTD

▪ Purchase open orders up 1% Q3 YTD after rebounding strongly beginning in June

▪ Commercial direct revenues down 23% Q3 YTD as market continues to rebalance in 2H

▪ Data businesses performing well

▪ Transaction volumes and adoption up meaningfully

▪ Prudent loss reserving despite no increase in incurred claims

▪ Raised title loss provision rate to 5% due to potential impact of current economic conditions

▪ Q3 YTD claims below actuarial expectations

▪ Top priority is keeping employees safe –activated business continuity plans quickly

▪ Vast majority of workforce working from home

▪ Committed to not making any layoffs through the end of the second quarter

▪ Currently managing to success ratio

▪ Focused on maintaining service for customers

▪ Deemed an essential business in nearly all states

▪ Quickly resolved disruptions in order to continue to provide high-quality service amid surging refinance volume

▪ Investments in data and automation paying off – remains a core focus

▪ Allows us to successfully manage high volume

▪ Resilient balance sheet with strong holding company liquidity

▪ Debt capacity, revolving credit facility, and dividends from subsidiaries

▪ Conservative investment portfolio with limited exposure to COVID-affected assets

▪ $6.3bn investment portfolio – 94% debt securities

▪ 99% of debt securities are investment grade with an average rating of AA

▪ 67% of debt securities are U.S. government-backed or AAA rated

▪ Minimal exposure to sectors/classes most exposed to COVID-19

10

Low Mortgage Rates Driving Strong Refinance Activity

11

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

-

1,000

2,000

3,000

4,000

5,000

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Jan

-19

Feb

-19

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

Oct

-19

No

v-1

9

De

c-1

9

Jan

-20

Feb

-20

Mar

-20

Ap

r-2

0

May

-20

Jun

-20

Jul-

20

Au

g-2

0

Sep

-20

Oct

-20

10

-Yea

r Tr

easu

ry

Dai

ly O

pen

Ord

ers

Refinance 10-Year %

Purchase Activity Quickly Recovered From Pandemic

12

First American Operations▪ 550 local offices focused on purchase

▪ Leading homebuilder business

▪ Fee per file ~2x refinance

Purchase Market▪ Pandemic causing severe, negative impact

to economy and employment

▪ Purchase activity plummeted as stay-at-home orders enacted (April-May)

▪ Market demand recovered by June given strong market fundamentals and pandemic dynamics

− Mortgage rates are low − Home price appreciation brisk − Inventory remains an issue

GROWTH RATE vs. PRIOR YEAR

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Title Order Closed Average Revenue per Order

13

Commercial Market Sales Volume(1) Direct Revenues

Commercial Outlook

(1) Source: Real Capital Analytics ULI Real Estate Economic Forecast May 2020 (includes purchase transactions over $2.5 million only)

508601 562 594

644 655

87

96 99

102 109 112

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

2014 2015 2016 2017 2018 2019

NCSD Local

595

696 661 696

753

$ Millions

767

Commercial - Current Trend and Outlook

• Most major asset classes and geographic markets significantly impacted by the pandemic

• Capital availability and low interest rates continue to support market and incentivize opportunistic buyers

• Price discovery progressing, order pipeline building and beginning to see the return of large transactions

• Path of recovery from pandemic-induced market break remains uncertain but optimistic

582

181

72

155

262311

379

453

573

514 494

581 593

300

400

500

$0

$200

$400

$600

$800

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

($ in

Bill

ion

s)

Declining Short-term Rates a Headwind to Investment Income

14(1) Excludes affiliated investments (See reconciliation in Appendix).(2) Company estimate.

Title Segment(1)

Each 25 basis point Fed move impacts investment income by ~$12 - $15 million/year(2)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

$16

$26

$36

$46

$56

$66

$76

Q1

'16

Q2

'16

Q3

'16

Q4

'16

Q1

'17

Q2

'17

Q3

'17

Q4

'17

Q1

' 18

Q2

' 18

Q3

' 18

Q4

' 18

Q1

' 19

Q2

' 19

Q3

' 19

Q4

' 19

Q1

' 20

Q2

' 20

Q3

' 20

Titl

e Se

gmen

t In

vest

men

t In

com

e ($

in M

illio

ns)

Investment Income Fed Funds Rate

Fed Fu

nd

s Rate

AGENDA



15


First American Strategy

16

Deploy Our Capital to Maximize Long-Term Shareholder Returns

People and Culture

Compliance and Risk Management

Innovation

To Be the Premier Title Insurance and Settlement Services Company

Profitably Grow OurCore Title

andSettlement

Business

Strengthen the Enterprise Through Data and Process Advantage

Manageand Actively

Invest in Complementary

Businesses Where First

American has a Strategic

Advantage

VISION:

17

Profitably Grow our Core Title and Settlement Business

Pillar 1Strategic priorities

▪ Sustain leadership in Title – focusing on top 10 states

▪ Maintain and grow profitable market share

▪ Drive digital transformation

▪ Develop value-added services that strengthen customer relationships

▪ Win with emerging customers

Be the preferred title company for next-generation real estate

companies

▪ Grow interest income

Provide banking services to our agents to improve their risk

profile and improve our returns

18

Strengthen the Enterprise through Data and Process Advantage


▪ Further develop data advantage

Expand coverage of property data elements and geographies

▪ Achieve market-leading title automation

Leverage data advantage together with data science capability

▪ Find new businesses that can leverage our data

Determine innovative and meaningful ways to monetize our data

▪ Grow licensing and online data visualization organically

Leverage position in market to meet the growing data needs

from customers

FAF has Strongest Data Foundation in the Industry

No. of counties Population (%) Market position

Assessor/property ownership 3,144 100 1st

Proprietary title plants 546 60 1st

Deeds, Mortgages, Foreclosures 3,088 99 1st

Assignments and releases 2,308 96 1st

Parcel Boundaries 3,054 99 1st

Homeowner associations 2,664 99 1st

Active real estate listings 1.6M 85 1st (tie)

Document images (6.9B total) 1,501 84 1st

19

20

Manage and Actively Invest in Complementary Businesses where First American has a Strategic Advantage


▪ Grow Home Warranty

Accelerate direct-to-consumer growth while maintaining strong

operating margins

▪ Grow international business in core geographies

Invest for long-term growth in Canada, Europe, and Australia

▪ Seek out new opportunities

Enter adjacent businesses where First American has a strategic

advantage

▪ Initiated a process for sale of the Property & Casualty (P&C) business during Q3 2020

Redeploy capital to areas with higher expected returns

Capital Management Strategy

▪ Objective: Create long-term shareholder value

▪ Capital management priorities:

▪ Make value-creating investments in our core business

▪ Acquire businesses that fit within our strategy

▪ Return excess capital to shareholders through dividends and share repurchases

▪ Maintain adequate capital levels

▪ Manage our capital structure prudently

▪ Maintain ample financial flexibility and holding company liquidity

21

Disciplined M&A Strategy Drives Growth

Focused Strategy▪ Title companies that expand our footprint

in key markets

▪ Data and information companies that enhance our data capabilities or advance title automation

▪ Opportunities complementary to title

Disciplined Process▪ Strategic and cultural fit

▪ Risk adjusted return targets

▪ Operational integration

22

Pursuing targets that support or

leverage our core title and settlement

business

Dividends

▪ First American expects to pay a meaningful dividend given the company’s cash flow generation and investment opportunities

▪ Dividend increases are intended to be sustainable in perpetuity

▪ Dividend increases will be dependent upon expected holding company cash flows, market conditions and alternative uses of capital, among other factors

▪ The company is not committed to increasing the dividend every year

23

Dividend ConsiderationsDIVIDENDS PER SHARE

PAYOUT RATIO

Note: 2020 based on current dividend and consensus EPS estimate of $4.74 (operating).

$0.84$1.00

$1.20

$1.44$1.60 $1.68

$1.78

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

2014 2015 2016 2017 2018 2019 2020E

39% 38% 38% 38% 38%

27%

38%

0%

20%

40%

60%

2014 2015 2016 2017 2018 2019 2020E

Investment Considerations

▪ Focused strategy as “pure play” in title and settlement markets

▪ Attractive industry characteristics

▪ Strong competitive position in title and settlement services

▪ Opportunity to grow through focus on innovation and by leveraging unique assets (e.g. bank and data)

▪ Expect earnings and margin growth as mortgage originations improve

▪ Strong balance sheet with ample liquidity and financial flexibility

▪ Commitment to return capital to shareholders

24

APPENDIX

25

Title Segment Net Investment Income Non-GAAP Reconciliation

26

Net Investment Income Less Affiliate Investments$ in Millions

Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4’18 Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20

Net Investment Income $26.6 $34.7 $37.9 $38.3 $41.4 $51.7 $60.9 $69.3 $70.1 $71 $72 $69.8 $59.7 $43.2 $44.7

Less: Affiliate Investments 1.6 1.8 1.1 (0.8) (0.3) 1.0 1.5 0.5 (0.2) 0.3 1.6 1.0 (0.1) 1.2 2.4

Adjusted Net Investment Income $25.0 $32.9 $36.8 $39.0 $41.7 $50.7 $59.3 $68.8 $70.2 $70.6 $70.4 $68.8 $59.8 $42.0 $42.3

Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16

Net Investment Income $15.7 $19.3 $22.0 $2.7 $21.8 $26.0 $25.4 $24.4 $24.9 $27.5 $29.0 $29.4

Less: Affiliate Investments (2.0) 0.3 2.8 (17.6) 1.1 3.7 2.8 0.1 0.9 2.1 2.8 2.4

Adjusted Net Investment Income $17.7 $19.0 $19.2 $20.3 $20.6 $22.2 $22.6 $24.3 $24.0 $25.4 $26.2 $27.0

30%

12%

54%

1%

3%

Uses of Free Cash Flow and Debt Proceeds

27

▪ ~54% of cash flow went into the investment portfolio to strengthen the balance sheet

▪ Moving forward, further balance sheet strengthening not necessary as capital levels exceed current targets

CUMULATIVE 5 YEAR USES

Dividends

Acquisitions

Net Cash & Investments

Share Repurchases Pension Termination

$(200)

$(100)

$-

$100

$200

$300

$400

$500

$600

$700

$800

2015 2016 2017 2018 2019

$ in

Mill

ion

s

Investment Portfolio

28

CONSOLIDATED PORTFOLIO INSURANCE PORTFOLIO

BANK PORTFOLIO

Note: Debt and equity securities as of September 30, 2020

Avg. Rating : AA-Duration: 4.1 yrs.Book Yield: 2.7%

Avg. Rating : AA+Duration: 2.6 yrs.Book Yield: 1.8%

Avg. Rating : AADuration: 3.2 yrs.Book Yield: 2.2%

US Treasury2%

Gov't Agency4%

Municipal17%

Corporate14%

Gov't Agency MBS53%

Bank Loans1%

Foreign3%

Equity6% $6.3B

US Treasury

4%

Gov't Agency

2%

Municipal18%

Corporate24%

Gov't Agency

MBS30%

Bank Loans

2%

Foreign6%

Equity14%

$2.8B

Gov't Agency

5%

Municipal17%

Corporate6%

Gov't Agency

MBS72%

$3.5B

As of September 30, 2020 ($ in Millions)

4.3% Senior Notes Due 2023 $249



Trust Deed Notes $13

Other Notes $7

Revolving Credit Facility $0

Notes and Contracts Payable $1,012

Secured Financings Payable (SFP) $527

Total Debt $1,539

Total Equity $4,735

Debt-to-Total Capital Ratio 24.5%

Debt-to-Total Capital Ratio (excluding SFP) 17.6%

Capital Structure

▪ Management targets debt-to-capital ratio of 18-20% (excluding secured financings payable)

▪ Supports target financial strength ratings

▪ $700 million revolving credit facility 100% undrawn

▪ Credit facility term ends in April 2024

▪ Significant financial flexibility to seize strategic opportunities

29

As of September 30, 2020 ($ in Millions)




Trust Deed Notes $13

Other Notes $7

Revolving Credit Facility $0

Notes and Contracts Payable $1,012

Secured Financings Payable (SFP) $527

Total Debt $1,539

Total Equity $4,735

Debt-to-Total Capital Ratio 24.5%

Debt-to-Total Capital Ratio (excluding SFP) 17.6%

Share Repurchases

▪ Share repurchases will be dependent upon capital levels, market conditions and alternative uses of capital, among other factors

▪ $300 million new share repurchase authorization approved by board of directors in November

30

SHARE REPURCHASE HISTORY

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0.1

0.2

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0.4

0.5

0.6

0.7

0.8

0.9

1

$0

$10

$20

$30

$40

$50

$60

$70

2-J

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Repurchase Summary

2013 2018/2019 2020

Shares purchased 3.0 million 0.5 million 1.7 million

Total amount $64.5 million $20.9 million $65.8 million

Avg. price per share $21.87 $44.20 $38.64

IRR 14.1% 8.6% 31.8%

Ultimate Loss Ratios by Policy Year

31 Note: Ultimate loss ratios are estimates and calculated as a percentage of title premiums and escrow fees for a given policy year as of February 29, 2020

Paid

Losses b

y Calen

dar Year ($

in M

illion

s)

Ult

imat

e Lo

ss R

atio

s b

y P

olic

y Ye

ar

5.1%

7.3%

9.3%

10.5%

12.4%

9.1%

5.8%

4.7% 4.4%

2.8% 2.7%3.3%

1.8% 1.6% 1.3%0.8%

0.2%

0.3%

0.4%

0.5%

0.8%

0.8%

0.8%

0.7%

0.7%0.9%

0.8% 1.0%

1.6%

1.5%2.1%

2.4%

3.1%

3.6%4.5%

$0

$50

$100

$150

$200

$250

$300

$350

$400

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E

Paid to Date Ultimate Loss Ratio - Policy Year Paid Losses - Calendar Year

11.3%

13.2%

9.9%

6.5%

5.4% 5.3%

3.7%

4.9%

3.3%3.7% 3.8%

9.8%

3.9%

5.3%

7.6%

3.6%3.8%

4.5%

2019 Incurred Claims Detail

32

CLAIM CAUSE PROCESS CAUSE

57% Direct / 43% Agent

No Error60%

Unclassified4%

Escrow/Closing9%

Underwriting3%

Exam7%

Search14%

Other3%

File Shortage

0%Escrow/Closing3%GAP

0%Liens16%

Encumbrances16%

Fraud11%

Basic Risks27%

Other8%

Defective Title9%

Permit Violation10%

Claim Severity Distribution

33

CLAIM COUNT BY SEVERITY GROUP PAID CLAIMS BY SEVERITY GROUP

Large claims: $250,000 and greater Typical claims: $1,000 to $250,000 Minor claims: Less than $1,000

Note: Data for 2019 paid claims; excludes file shortages and de minimis claims

Large Claims1%

Typical Claims67%

Minor Claims32%

Large Claims

46%

Typical Claims

54%

Minor Claims0%

SPECIALTY INSURANCE SEGMENT

U.S. Title

Direct

Agency

Commercial

International Title

Canada

United Kingdom

Mortgage & Data Solutions

Mortgage Solutions

Database Solutions

Banking & Services

Trust & Banking

Real Estate Services

Home Warranty

Property & Casualty

Australia/New Zealand

TITLE INSURANCE AND SERVICES SEGMENT

FIRST AMERICANFINANCIAL CORPORATION

ORGANIZATIONAL STRUCTURE

34

2.1 2.3 2.3 2.3 2.4

1.2 1.3 1.3 1.3 1.4

0.70.7 0.7 0.8

0.8

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

2015 2016 2017 2018 2019

Agent Direct Commercial

$ in

Bill

ion

s$

in B

illio

ns

$2.4BAgent

38%

$1.4BDirect

23%$0.8BCommercial

13%

U.S. TITLE

DIRECT AGENCY COMMERCIAL

Total Revenue Trend

$4.0$4.2 $4.4 $4.4

U.S. Title74%

$4.6B$6.2B

First American Financial Total Revenue

35

$4.6

SPECIALTY INSURANCE

Total Revenue Trend

PROPERTY & CASUALTY HOME WARRANTY

36

First American Financial Total Revenue

Specialty Segment … $0.5B $6.2B

260 299 327 344 370

134 137

139 125 136

$0

$100

$200

$300

$400

$500

$600

2015 2016 2017 2018 2019

Home Warranty Property & Casualty

$ in

Mill

ion

s $394

$ in

Mill

ion

s

$436$465 $469

$506

92%Title Segment

8%Specialty Segment

Agency44%

Direct27%

Commercial15%

Mortgage & Data

Solutions9%

International5%

73%Home

Warranty

27%Property &

Casualty

2019 Revenue Breakdown

37

FIRST AMERICAN FINANCIAL

U.S. Title

$6.2B

TITLE SEGMENT

$0.5B

SPECIALTY SEGMENT

$5.7B

FIRST AMERICAN FINANCIAL

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