<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------------ ----------------------
Commission file number 0-3658
--------------------------------------------------
THE FIRST AMERICAN FINANCIAL CORPORATION
-------------------------------------------
(Exact name of registrant as specified in its charter)
Incorporated in California 95-1068610
-------------------------- ---------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
114 East Fifth Street, Santa Ana, California 92701-4699
-------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(714)558-3211
-------------------------------------------------------------------
(Registrant's telephone number, including area code)
-------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since lasT report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----------- -----------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports to be filed by Section 12,13 or 15(d) of the Securities Exchange Act of
1934 subsequent to the distribution of securities under a plan confirmed by a
court.
Yes ----------- No -----------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
$1 par value - 11,434,282 as of August 7, 1996
<PAGE>
INFORMATION INCLUDED IN REPORT
------------------------------
Part I: Financial Information
Item 1. Financial Statements
A. Condensed Consolidated Statements of Income
B. Condensed Consolidated Balance Sheets
C. Condensed Consolidated Statements of Cash Flows
D. Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II: Other Information
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
Items 2-5 have been omitted because they are not applicable with
respect to the current reporting period.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE FIRST AMERICAN FINANCIAL CORPORATION
----------------------------------------
(Registrant)
/s/ Thomas A. Klemens
---------------------------------------
Thomas A. Klemens
Executive Vice President,
Chief Financial Officer
(Principal Financial Officer
and Duly Authorized to Sign on
Behalf of Registrant)
Date: August 9, 1996
1
<PAGE>
Part I: Financial Information
---------------------
Item 1. Financial Statements
--------------------
THE FIRST AMERICAN FINANCIAL CORPORATION
AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30 June 30
---------------------------- ----------------------------
1996 1995 1996 1995
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
REVENUES
Operating revenues $404,878,000 $286,748,000 $745,757,000 $543,036,000
Investment and other income 8,496,000 6,492,000 14,993,000 11,358,000
------------- ------------ ------------- ------------
413,374,000 293,240,000 760,750,000 554,394,000
------------- ------------ ------------- ------------
EXPENSES
Salaries and other personnel costs 132,742,000 103,687,000 252,982,000 203,737,000
Premiums retained by agents 128,218,000 91,252,000 238,090,000 184,647,000
Other operating expenses 84,011,000 63,979,000 157,475,000 123,266,000
Provision for title losses and other claims 23,488,000 22,419,000 42,463,000 43,725,000
Depreciation and amortization 5,558,000 4,584,000 10,007,000 8,795,000
Interest 1,281,000 1,639,000 2,510,000 3,252,000
Minority interests 864,000 563,000 1,484,000 543,000
------------- ------------ ------------- ------------
376,162,000 288,123,000 705,011,000 567,965,000
------------- ------------ ------------- ------------
Income (loss) before premium and income taxes 37,212,000 5,117,000 55,739,000 (13,571,000)
Premium taxes 4,385,000 3,280,000 7,930,000 6,101,000
------------- ------------ ------------- ------------
Income (loss) before income taxes 32,827,000 1,837,000 47,809,000 (19,672,000)
Income taxes 13,400,000 700,000 19,800,000 (8,100,000)
------------- ------------ ------------- ------------
Net income (loss) $19,427,000 $1,137,000 $28,009,000 ($11,572,000)
============= ============ ============= ============
Net income (loss) per share $ 1.70 $ .10 $ 2.45 $ (1.01)
============= ============ ============= ============
Cash dividends per share $ .18 $ .15 $ .33 $ .30
============= ============ ============= ============
WEIGHTED AVERAGE NUMBER OF SHARES 11,447,000 11,421,000 11,439,000 11,411,000
============= ============ ============= ============
</TABLE>
2
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
AND SUBSIDIARY COMPANIES
Condensed Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $152,484,000 $145,902,000
------------ ------------
Accounts and accrued income receivable, net 95,042,000 75,069,000
------------ ------------
Investments:
Deposits with savings and loan associations
and banks 24,095,000 18,637,000
Debt securities 137,565,000 128,875,000
Equity securities 8,407,000 21,445,000
Other long-term investments 27,276,000 25,230,000
------------ ------------
197,343,000 194,187,000
------------ ------------
Loans receivable 51,490,000 46,134,000
------------ ------------
Property and equipment, at cost 201,029,000 192,496,000
Less- accumulated depreciation (77,094,000) (73,672,000)
------------ ------------
123,935,000 118,824,000
------------ ------------
Title plants and other indexes 86,729,000 82,454,000
------------ ------------
Assets acquired in connection
with claim settlements
(net of valuation reserves
of $11,094,000 and $11,246,000) 26,130,000 25,592,000
------------ ------------
Deferred income taxes 39,748,000 39,994,000
------------ ------------
Goodwill and other intangibles, net 73,273,000 71,825,000
------------ ------------
Deferred policy acquisition costs 23,923,000 24,342,000
------------ ------------
Other assets 60,499,000 49,455,000
------------ ------------
$930,596,000 $873,778,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits $ 47,251,000 $ 43,418,000
------------ ------------
Accounts payable and accrued liabilities 106,362,000 80,938,000
------------ ------------
Deferred revenue 103,505,000 104,315,000
------------ ------------
Reserve for known and incurred but
not reported claims 242,037,000 238,161,000
------------ ------------
Income taxes payable 10,922,000 2,812,000
------------ ------------
Notes and contracts payable 72,402,000 77,206,000
------------ ------------
Minority interests in consolidated subsidiaries 22,848,000 24,161,000
------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1 par value
Authorized - 500,000 shares; outstanding - none
Common stock, $1 par value
Authorized - 24,000,000 shares
Outstanding - 11,448,000 and 11,411,000 shares 11,448,000 11,411,000
Additional paid-in capital 45,172,000 44,270,000
Retained earnings 267,318,000 243,093,000
Net unrealized gain on securities 1,331,000 3,993,000
------------ ------------
325,269,000 302,767,000
------------ ------------
$930,596,000 $873,778,000
============ ============
</TABLE>
3
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
AND SUBSIDIARY COMPANIES
------------------------
Condensed Consolidated Statements of Cash Flows
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30
--------------------------------------------
1996 1995
-------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 28,009,000 $ (11,572,000)
Adjustments to reconcile net income (loss) to cash provided by
(used for) operating activities-
Provision for title losses and other claims 42,463,000 43,725,000
Depreciation and amortization 10,007,000 8,795,000
Minority interests in net income 1,484,000 543,000
Other, net (640,000) 1,128,000
Changes in assets and liabilities excluding effects of
company acquisitions and noncash transactions-
Claims paid, including assets acquired, net of recoveries (39,077,000) (30,643,000)
Net change in income tax accounts 11,223,000 (3,133,000)
Increase in accounts and accrued income receivable (19,878,000) (13,463,000)
Increase (decrease) in accounts payable and accrued liabilities 15,466,000 (3,862,000)
Decrease in deferred revenue (1,054,000) (7,796,000)
Other, net (7,554,000) 1,097,000
-------------- ---------------
Cash provided by (used for) operating activities 40,449,000 (15,181,000)
-------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash effect of company acquisitions (3,306,000) (31,039,000)
Net increase in deposits with banks (5,458,000) (293,000)
Net increase in loans receivable (5,356,000) (2,472,000)
Purchases of debt and equity securities (40,365,000) (7,983,000)
Proceeds from sales of debt and equity securities 33,451,000 32,345,000
Proceeds from maturities of debt securities 8,031,000 7,920,000
Net decrease in other investments 147,000 1,257,000
Capital expenditures (12,474,000) (10,256,000)
Proceeds from sale of property and equipment 1,092,000 117,000
-------------- ---------------
Cash used for investing activities (24,238,000) (10,404,000)
-------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in demand deposits 3,833,000 1,169,000
Repayment of debt (9,330,000) (9,079,000)
Purchase of Company shares (348,000) (1,393,000)
Cash dividends (3,784,000) (3,425,000)
-------------- ---------------
Cash used for financing activities (9,629,000) (12,728,000)
-------------- ---------------
Net increase (decrease) in cash and cash equivalents 6,582,000 (38,313,000)
Cash and cash equivalents - Beginning of year 145,902,000 154,234,000
-------------- ---------------
- End of first half $ 152,484,000 $115,921,000
============== ===============
SUPPLEMENTAL INFORMATION:
Cash paid during the first half for:
Interest $ 2,729,000 $ 3,268,000
Premium taxes $ 7,149,000 $ 7,682,000
Income taxes $ 8,760,000 $ 2,362,000
Noncash investing and financing activities:
Shares issued for stock bonus plan $ 1,287,000 $ 1,128,000
Liabilities incurred in connection with company acquisitions $ 11,311,000 $ 11,812,000
Net unrealized (loss) gain on securities $ (2,662,000) $ 6,344,000
</TABLE>
4
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
AND SUBSIDIARY COMPANIES
------------------------
Notes to Condensed Consolidated Financial Statements
----------------------------------------------------
(Unaudited)
Note 1 - Basis of Condensed Consolidated Financial Statements
- -------------------------------------------------------------
The condensed consolidated financial information included in this report has
been prepared in conformity with the accounting principles and practices
reflected in the consolidated financial statements included in the annual
report filed with the Commission for the preceding calendar year. All
adjustments are of a normal recurring nature and are, in the opinion of
management, necessary to a fair statement of the consolidated results for the
interim periods. This report should be read in conjunction with the Company's
1995 Annual Report to Stockholders and the Company's Annual Report on Form 10-
K for the year ended December 31, 1995.
Note 2 - Stock Option Plan
- --------------------------
At the Annual Meeting of Stockholders held on April 24, 1996, The First American
Financial Corporation 1996 Stock Option Plan was approved. Concurrently, The
Compensation Committee of the Board of Directors granted 635,000 options at an
exercise price of $25.625. These options had no affect on the Company's earnings
per share computations for the current reporting period. Under the plan, the
maximum number of common shares that may be subject to options is 1,250,000.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
RESULTS OF OPERATIONS
Three and six months ended June 30:
OVERVIEW
Beginning in the second quarter 1994, increased mortgage interest rates caused
a downward trend in new order counts and closings as refinance transactions
came to virtual halt. Due to seasonal considerations, this condition
intensified at yearend 1994 resulting in a low inventory of new orders going
into 1995. As a result, the Company reported a first quarter 1995 loss.
During the second quarter 1995, marked improvements in the national real
estate market resulted in significant order count increases and enabled the
Company to return to profitability. Mortgage interest rates peaked in January
1995 and decreased throughout the remainder of the year and into 1996, helped
by an easing of monetary policy by the Federal Reserve Board. This, together
with an improved real estate economy (including the beginnings of a modest
recovery in California), contributed to high order counts resulting in a strong
first quarter 1996. During the second quarter 1996, continued improvements in
the national real estate market and the Company's successful integration of its
diverse businesses resulted in record revenues and significantly increased
pretax profits.
OPERATING REVENUES
Set forth below is a summary of operating revenues for each of the Company's
segments.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------------- ------------------------------
($000) ($000)
1996 % 1995 % 1996 % 1995 %
---- --- ---- --- ---- --- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Title Insurance:
Direct operations $166,748 41 $128,714 45 $304,238 41 $230,659 42
Agency operations 158,104 39 114,050 40 294,468 39 231,422 43
-------- --- -------- --- -------- --- -------- ---
324,852 80 242,764 85 598,706 80 462,081 85
Real Estate Information 66,265 16 32,875 11 120,659 16 58,980 11
Home Warranty 9,761 3 7,830 3 18,500 3 15,219 3
Trust and Banking 4,000 1 3,279 1 7,892 1 6,756 1
-------- --- -------- --- -------- --- -------- ---
Total $404,878 100 $286,748 100 $745,757 100 $543,036 100
======== === ======== === ======== === ======== ===
</TABLE>
TITLE INSURANCE. Operating revenues from direct operations increased 29.5% and
31.9% for the three and six months ended June 30, 1996, respectively, when
compared with the same periods of the prior year. These increases were
attributable to an increase in the number of title orders closed by the
Company's direct operations, as well as an increase in the average revenues per
order closed. The Company's direct operations closed 209,200 and 386,800 title
orders during the three and six months ended June 30, 1996, respectively,
representing increases of 26.2% and 28.5% when compared with the same periods of
the prior year. The average revenues per order closed were $797 and $787 for the
three and six months ended June 30, 1996, respectively, as compared with $776
and $766 for the same periods of the prior year. These increases were primarily
due to the significant decline in refinance activity, coupled with the improved
mix of higher-margin commercial and residential resale and new home transactions
during the current quarter. Operating revenues from agency operations increased
38.6% and 27.2% for the three and six months ended June 30, 1996, respectively,
when compared with the same periods of the prior year. These increases were
primarily due to the same factors affecting direct operations, as well as the
effects of the inherent delay in reporting by agents.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations (continued)
--------------------------------
REAL ESTATE INFORMATION. Real estate information operating revenues increased
101.6% and 104.6% for the three and six months ended June 30, 1996,
respectively, when compared with the same periods of the prior year. These
increases were primarily due to the same factors affecting title insurance, as
well as market penetration, primarily by the Company's flood determination and
credit reporting divisions. The second quarter 1996 also included $4.4 million
of operating revenues attributable to the Company's acquisition of Exelis, Inc.
HOME WARRANTY. Home warranty operating revenues increased 24.7% and 21.6% for
the three and six months ended June 30, 1996, respectively, when compared with
the same periods of the prior year. These increases were primarily
attributable to improvements in the residential resale markets in which this
business segment operates.
INVESTMENT AND OTHER INCOME
Investment and other income increased $2.0 million, or 30.9%, and $3.6
million, or 32.0%, for the three and six months ended June 30, 1996,
respectively, when compared with the same periods of the prior year. The
increase for the current three-month period was primarily due to increases of
approximately $1.5 million in realized investment gains, $0.4 million in
equity in earnings of affiliates and $0.2 million in gains on the sale of
fixed assets, partially offset by a 2.5% decrease in the average investment
portfolio balance. The increase for the current six-month period was also
primarily due to realized investment gains and increases in equity in earnings
of affiliates, offset in part by a 7.3% decrease in the average investment
portfolio balance.
TOTAL OPERATING EXPENSES
TITLE INSURANCE. Salaries and other personnel costs were $103.1 million and
$198.2 million for the three and six months ended June 30, 1996, respectively,
increases of 15.6% and 19.0% when compared with the same periods of the prior
year. These increases were primarily due to costs incurred processing the
high number of title orders opened during the respective periods. The
increase for the second quarter 1996 was also impacted by costs incurred
servicing orders opened during the first quarter 1996 but not closed until the
second quarter 1996. The Company's direct operations opened 259,100 and
531,600 title orders during the three and six months ended June 30, 1996,
respectively, increases of 9.6% and 24.5% when compared with the 236,400 and
427,000 opened during the same periods of the prior year.
Agents retained $128.2 million and $238.1 million of title premiums generated
by agency operations for the three and six months ended June 30, 1996,
respectively, which compares with $91.3 million and $184.6 million for the
same periods of the prior year. The percentage of title premiums retained by
agents ranged from 79.8% to 81.1% due to regional variances (i.e., the agency
share varies from region to region and thus the geographical mix of agency
revenues causes this variation).
Other operating expenses were $55.2 million and $105.0 million for the three
and six months ended June 30, 1996, respectively, increases of 21.5% and 18.7%
when compared with the same periods of the prior year. These increases were
primarily attributable to the incremental costs associated with processing the
increase in order volumes.
The provision for title losses as a percentage of title insurance operating
revenues was 5.1% for the six months ended June 30, 1996, and 7.2% for the
same period of the prior year. This decrease was primarily due to an ongoing
improvement in the Company's loss experience.
REAL ESTATE INFORMATION. Real estate information personnel and other
operating expenses were $47.7 million and $86.0 million for the three and six
months ended June 30, 1996, respectively, increases of 62.8% and 55.6% when
compared with the same periods of the prior year. These increases were
primarily attributable to costs incurred servicing the increase in business
volume, as well as approximately $5.2 million of costs incurred during the
second quarter 1996 attributable to the Company's acquisition of Excelis, Inc.
Also contributing to the increases were costs incurred expanding the flood
determination and credit reporting divisions.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations (continued)
--------------------------------
HOME WARRANTY. Home warranty personnel and other operating expenses were $2.8
million and $5.5 million for the three and six months ended June 30, 1996,
respectively, increases of 20.6% and 14.1% when compared with the same periods
of the prior year. These increases were primarily attributable to costs
incurred servicing the increased business volume. The provision for home
warranty losses expressed as a percentage of home warranty operating revenues
was 53.2% and 56.0% for the six months ended June 30, 1996 and 1995,
respectively. The decrease in loss ratio was primarily attributable to a
decrease in the average number of claims per contract.
PRETAX PROFITS (LOSSES)
Set forth below is a summary of pretax profits for each of the Company's
segments.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------- -------------------------------
($000) ($000)
1996 % 1995 % 1996 % 1995 %
---- --- ---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Title Insurance $23,581 54 $ 6,524 64 $ 31,740 46 $ (8,037) 247
Real Estate Information 16,628 38 1,524 15 30,410 45 144 (4)
Home Warranty 2,399 6 1,644 16 4,687 7 3,172 (98)
Trust and Banking 838 2 539 5 1,617 2 1,471 (45)
------- --- ------- --- -------- --- -------- ---
Total before corporate 43,446 100 10,231 100 68,454 100 (3,250) 100
=== === === ===
Corporate (6,234) (5,114) (12,715) (10,321)
------- ------- -------- --------
Total $37,212 $ 5,117 $ 55,739 $(13,571)
======= ======= ======== ========
</TABLE>
In general, the title insurance business is a lower profit margin business
when compared to the Company's other segments. The lower profit margins
reflect the high cost of producing title evidence whereas the corresponding
revenues are subject to regulatory and competitive pricing restraints. Due to
this relatively high proportion of fixed costs, title insurance profit margins
generally improve as closed order volumes increase. In addition, title
insurance profit margins are affected by the composition (residential or
commercial) and type (resale, refinancing or new construction) of real estate
activity. Profit margins from resale and new construction transactions are
generally higher than from refinancing transactions because in many states
there are premium discounts on, and cancellation rates are higher for,
refinance transactions. Title insurance profit margins are also affected by
the percentage of operating revenues generated by agency operations. Profit
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. Real estate information pretax profits are generally unaffected
by the type of real estate activity but increase as the volume of residential
real estate loan transactions increases.
PREMIUM TAXES
Premium taxes were $7.9 million and $6.1 million for the six months ended June
30, 1996 and 1995, respectively. Premium taxes as a percentage of title
insurance operating revenues remained constant at 1.3%.
INCOME TAXES
The effective income tax rate of 41.4% for the six months ended June 30, 1996,
remained relatively constant when compared with the same period of the prior
year.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations (continued)
--------------------------------
NET INCOME
Net income for the three and six months ended June 30, 1996, was $19.4
million, or $1.70 per share, and $28.0 million, or $2.45 per share,
respectively. Net income (loss) for the three and six months ended June 30,
1995, was $1.1 million, or $0.10 per share, and $(11.6) million, or $(1.01)
per share, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Total cash and cash equivalents increased $6.6 million and decreased $38.3
million for the six months ended June 30, 1996 and 1995, respectively. The
increase for the current year period was primarily due to cash provided by
operating activities, offset in part by capital expenditures, net increases in
loans receivable and deposits with banks, and the repayment of debt. The
decrease for the prior year period was primarily due to cash used for
operating activities, the net cash effect of company acquisitions, capital
expenditures and the repayment of debt, offset in part by the proceeds from
the sales of certain debt and equity securities.
Notes and contracts payable as a percentage of total capitalization decreased to
17.2% at June 30, 1996, from 19.1% at December 31, 1995. The decrease was
primarily due to the net income contribution to equity as well as the reduction
of debt.
Management believes that all of its anticipated cash requirements for the
immediate future will be met from internally generated funds.
9
<PAGE>
Part II: Other Information
-----------------
Item 1. Legal Proceedings.
-----------------
The Company reported in its Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 (the "Form 10-K"), that its subsidiary,
First American Title Insurance Company ("First American"), together
with other title insurers and certain individuals, is a defendant in
civil actions entitled Brown, et al. v. Ticor Title Insurance Co., et
al., and Segall, et al. v. Stewart Title Guaranty Co., et al., which
have been consolidated, for pretrial matters, in the U.S. District
Court in Phoenix, Arizona, under the title "In Re Title Search and
Examination Services Antitrust Litigation," as Case No. MDL-94-1027.
In subsequent developments, First American, along with the other
defendants in these actions, has entered into an agreement with the
plaintiffs to settle both actions that has been approved by the
District Court. The Court's order approving the settlement agreement
became final on July 24, 1996. The Company's management does not
believe that compliance with this agreement will materially and
adversely affect its financial condition.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
(27) Financial Data Schedule.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K dated April 23, 1996 (the
"Form 8-K"), during the quarterly period covered by this report.
The Form 8-K contains Item 5, describing the Company's
acquisition of certain assets and liabilities of Residential
Information Services Limited Partnership.
10
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
(27) Financial Data Schedule
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<DEBT-HELD-FOR-SALE> 137,565,000
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 8,407,000
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 197,343,000
<CASH> 152,484,000
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 23,923,000
<TOTAL-ASSETS> 930,596,000
<POLICY-LOSSES> 242,037,000
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 72,402,000
0
0
<COMMON> 11,448,000
<OTHER-SE> 313,821,000
<TOTAL-LIABILITY-AND-EQUITY> 930,596,000
745,757,000
<INVESTMENT-INCOME> 12,190,000
<INVESTMENT-GAINS> 2,803,000
<OTHER-INCOME> 0
<BENEFITS> 42,463,000
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 47,809,000
<INCOME-TAX> 19,800,000
<INCOME-CONTINUING> 28,009,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,009,000
<EPS-PRIMARY> 2.45
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
