<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 23, 1996
(Date of earliest event reported: April 1, 1996)
------------------------------------------------
The First American Financial Corporation
----------------------------------------
(Exact name of registrant as specified in its charter)
California 0-3658 95-1068610
--------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
114 East Fifth Street, Santa Ana, California 92701-4642
-------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 714-558-3211
------------
<PAGE>
ITEM 5. OTHER EVENTS.
Excelis, Inc. ("Excelis"), an indirect wholly-owned subsidiary of the
Registrant, completed the acquisition of selected assets of Residential
Information Services Limited Partnership ("RIS") effective April 1, 1996 (the
"Closing Date"). Prior to the acquisition, RIS provided information management
products and services, primarily to mortgage lenders, as well as computer
outsourcing and consulting services. RIS's major products included its Excelis
mortgage loan servicing system ("EMLSS"), its master loan subservicing system
("MLSS"), its loan production system, its secondary marketing system ("SMS") and
its front-end system ("FES").
RIS is wholly-owned by Residential Services Corporation of America, a
wholly-owned subsidiary of The Prudential Insurance Company of America. For
fiscal year 1995, RIS had an operating loss of approximately $24 million, which
was attributable in part to high operational costs associated with lease
obligations and personnel levels held by RIS.
The principal assets acquired by Excelis include EMLSS, MLSS, SMS and
FES, and certain contract rights. In connection with the acquisition, Excelis
has assumed certain liabilities of RIS. These liabilities included certain
above-market leases which were marked to market and taken by Excelis at such
market value. In order to utilize the assets acquired, Excelis will employ some
of the former RIS employees. RIS retained its liability for all severance and
associated personnel costs for approximately one-half of RIS employees.
The purchase price paid by Excelis was $2 million, consisting of
approximately $600,000 cash and assumption of liabilities amounting to
approximately $1.4 million. Excelis has agreed to make future payments, based
on its earnings, to RIS following the fifth and seventh anniversaries of the
Closing Date.
ITEM 7. EXHIBITS.
(99) Press release dated April 23, 1996.
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 hereunto duly authorized.
THE FIRST AMERICAN FINANCIAL CORPORATION
(Registrant)
Date: April 23, 1996 By /s/ Thomas A. Klemens
--------------------------
Thomas A. Klemens
Executive Vice President
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibit No. Description Page
- ----------- ----------- ------------
(99) Press release dated April 23, 1996
<PAGE>
Exhibit (99)
Contact: Thomas A. Klemens
Chief Financial Officer
(714) 558-3211, ext. 7442
FIRST AMERICAN FINANCIAL COMPLETES ACQUISITION
OF EXCELIS MORTGAGE LOAN SERVICING SYSTEM
SANTA ANA, CALIFORNIA, APRIL 23, 1996 - The First American Financial Corporation
(NYSE: FAF) announced the completion of the acquisition of the Excelis Mortgage
Loan Servicing System (MLS) from Residential Information Services (RIS), a unit
of Prudential Insurance Company of America. Now known as Excelis, Inc., this
latest business addition further enhances First American's ability to meet the
needs of the mortgage lending community.
Excelis joins First American's title insurance, real estate tax service,
flood compliance, credit reporting, property information, home warranty, equity
loan service and records management operations.
Regarding the purchase of Excelis, First American Financial President
Parker S. Kennedy stated, "Our bundling of services has reached new and
unprecedented industry levels. We are now the leading provider of real estate-
related services in the country. This position has developed through our
steadfast commitment to providing the highest quality service, in a cost-
effective manner, to all of our customers. This started with our title insurance
operations and has continued for 107 years."
John Long, president of First American Real Estate Information Services,
Inc., the subsidiary of First American Financial which will oversee the new
unit, believes that customers now using First American's tax service, flood data
and other products will greatly benefit from the efficiencies presented by the
addition of Excelis to our menu of services.
Excelis MLS is the only commercially available real-time and on-line
servicing system that has been developed since 1990 to meet increasingly
sophisticated market demands. The software employs rules-based technology which
enables the user to customize the system to fit its individual servicing
criteria
<PAGE>
and policies. In this way, Excelis MLS eliminates the problems usually
associated with other service bureaus' "one size fits all" approach. The system
manages work flow, minimizes business risks, and improves operational efficiency
by providing mortgage lenders with greater control over their portfolios.
Although the Excelis system was not operated at a profit by RIS, First
American expects that to change within the next 12 to 18 months. "The initial
costs of merging the Excelis system into First American Real Estate Information
Services could produce marginal losses in that operation during the ramp up of
Excelis, but we expect to see this business become a substantial contributor to
our revenue base over time," said Parker Kennedy. "Furthermore, unlike many of
our other businesses which are directly affected by real estate cycles, we
anticipate that when Excelis is fully integrated into our operations, it will
provide a steady revenue stream from loan servicing contracts even when mortgage
originations are on the decline."
It was further announced that Mark Brisebois has been named president of
the new Excelis unit. Brisebois, who is also chief information officer for First
American Real Estate Information Services, is responsible for the successful
development and introduction of First American's RAPID system, a sophisticated
electronic service connecting First American's customers with the company's full
range of products and services. Brisebois will be joined on the Excelis
management team by executive vice president Gwen Bennett, formerly senior vice
president of RIS.
The First American Financial Corporation, based in Santa Ana, California,
is the nation's leading provider of real estate-related financial and
informational services. The corporation's subsidiaries include First American
Title Insurance Company, a national and international title insurer, First
American Real Estate Information Services, Inc., which offers tax monitoring,
credit reporting, flood certification, mortgage loan servicing systems and
property information services nationally, and First American Home Buyers
Protection Corporation, a home warranty company. The corporation also operates
First American Trust Company and First Security Thrift in Southern California.
First American Financial has over 10,000 employees in over 400 branch offices in
the United States and abroad.
# # #
