<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
------ ------
Commission file number 0-3658
A. Full title of the Plan and the address of the Plan, if different from
that of the issuer named below:
The First American Financial Corporation
401(k) Savings Plan
B. Name of issuer of securities held pursuant to the Plan and the address of
its principal executive office:
The First American Financial Corporation
114 East Fifth Street
Santa Ana, California 92701
Page 1 of 14
<PAGE>
FINANCIAL STATEMENTS
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<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
(1) Report of Independent Accountants 4
(2) Consent of Independent Accountants 5
(3) Financial Statements of The First
American Financial Corporation
401(k) Savings Plan
Statement of Net Assets Available for
Plan Benefits, with Fund Information
as of December 31, 1995 8
Statement of Changes in Net Assets
Available for Plan Benefits, with Fund
Information for the year ended
December 31, 1995 8
Notes to Financial Statements 9
Supplemental Schedules:
Item 27a - Assets held for Investment
Purposes as of December 31, 1995 13
Item 27d - Schedule of Reportable
Transactions for the year ended
December 31, 1995 14
</TABLE>
Page 2 of 14
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Committee administering the Plan has duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly authorized.
The First American Financial Corporation
401(k) Savings Plan
Date: June 28, 1996 /s/ THOMAS A. KLEMENS
----------------------------------------
Thomas A. Klemens
Page 3 of 14
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REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Participants and
Administration Committee of
The First American Financial Corporation
401(k) Savings Plan
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of The First American Financial Corporation 401(k) Savings Plan
(the Plan) as of December 31, 1995 and the changes in the net assets available
for plan benefits for the year then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in Schedules I
and II is presented for purposes of additional analysis and is not a required
part of the basic financial statements but is additional information required by
ERISA. The Fund Information in the statement of net assets available for plan
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for benefits and the changes in net assets available for
benefits of each fund. The supplemental schedules and Fund Information have
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
PRICE WATERHOUSE LLP
Costa Mesa, California
June 14, 1996
Page 4 of 14
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CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-86398) of The First American Financial Corporation
of our report dated June 14, 1996 appearing in the Annual Report of The First
American Financial Corporation 401(k) Savings Plan on Form 11-K for the year
ended December 31, 1995.
PRICE WATERHOUSE LLP
Costa Mesa, California
June 14, 1996
Page 5 of 14
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THE FIRST AMERICAN
FINANCIAL CORPORATION
401(k) SAVINGS PLAN
REPORT AND FINANCIAL STATEMENTS DECEMBER 31, 1995
Page 6 of 14
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFOMATION AS OF
DECEMBER 31, 1995
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<TABLE>
<CAPTION>
FUND INFORMATION
--------------------------------------------------------------------------------------------------
COMPANY INTERNATIONAL SMALL CAP LARGE CAP MONEY
STOCK STOCK STOCK STOCK BOND MARKET
FUND FUND FUND FUND FUND FUND TOTAL
---------- ------------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 2,975 $ 8,192 $ 2,831 $ 3,796 $ 2,758 $2,117,049 $ 2,137,601
Investments, at fair value:
Investment companies 1,944,082 2,370,519 1,902,859 3,165,076 1,467,249 10,849,785
Receivables:
Participant contributions 62,372 81,691 64,463 106,898 50,852 72,724 439,000
Employer contributions 1,807 1,425 1,389 2,373 1,216 2,822 11,032
---------- ------------- ---------- ---------- ---------- ---------- -----------
Total assets 2,011,236 2,461,827 1,971,542 3,278,143 1,522,075 2,192,595 13,437,418
---------- ------------- ---------- ---------- ---------- ---------- -----------
Liabilities:
Fees payable 5,983 7,717 5,983 10,102 5,300 9,689 44,774
---------- ------------- ---------- ---------- ---------- ---------- -----------
Total liabilities 5,983 7,717 5,983 10,102 5,300 9,689 44,774
---------- ------------- ---------- ---------- ---------- ---------- -----------
Net assets available for
plan benefits $2,005,253 $2,454,110 $1,965,559 $3,268,041 $1,516,775 $2,182,906 $13,392,644
========== ============= ========== ========== ========== ========== ===========
</TABLE>
The accompanying notes to financial statements are
an integral part of these statements.
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND
INFORMATION AS OF DECEMBER 31, 1995
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------------------------------------
Company International Small Cap Large Cap Money
Stock Stock Stock Stock Bond Market
Fund Fund Fund Fund Fund Fund TOTAL
------------- -------------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions (deductions) in net
assets available for plan
benefits:
Interest and dividends $ 18,569 $ 92,665 $ 106,507 $ 75,138 $ 40,820 $ 52,245 $ 385,944
Net appreciation
(depreciation)
in fair value of
investments 338,026 (5,247) 106,341 333,320 78,228 850,668
Contributions by
participants 1,488,099 2,216,154 1,590,890 2,565,322 1,279,049 1,974,437 11,113,951
Contributions by employer 185,786 271,313 185,507 306,637 177,083 325,410 1,451,736
Benefit payments to
participants (32,466) (50,535) (25,935) (44,943) (31,964) (50,151) (235,994)
Fees and expenses (22,341) (31,484) (22,441) (37,469) (21,121) (38,805) (173,661)
Interfund transfers 29,580 (38,756) 24,690 70,036 (5,320) (80,230)
Net increase in net
assets available for plan
benefits 2,005,253 2,454,110 1,965,559 3,268,041 1,516,775 2,182,906 13,392,644
Net assets available for plan
benefits, beginning of year
Net assets available for plan
benefits, end of year $2,005,253 $2,454,110 $1,965,559 $3,268,041 $1,516,775 $2,182,906 $13,392,644
========== ========== ========== ========== ========== ========== ===========
</TABLE>
The accompanying notes to financial statements are
an integral part of these statements.
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
GENERAL
The First American Financial Corporation 401(k) Savings Plan (the "Plan") is
a defined contribution profit sharing plan covering all U.S. employees of The
First American Financial Corporation or an eligible subsidiary that has
adopted the Plan (the "Company"). An employee is eligible to participate in
the Plan if the employee is employed by the Company on the last day of the
plan year and has completed at least 1,000 hours of service during the plan
year. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA). Although it has not expressed any
intention to do so, the Company has the right, under the terms of the Plan,
to terminate the Plan subject to ERISA provisions. The Plan is administered
by an administrative committee appointed by the Board of Directors of the
Company.
CONTRIBUTIONS
Employee contributions to the Plan are based upon a percentage of gross pay
as designated by each participant. Participants may contribute up to 12% of
their annual wages but not more than the applicable limit imposed by the
Internal Revenue Service. Contributions are invested based on each
participant's election in one or more of the following funds: Company Stock
Fund, International Stock Fund, Small Cap Stock Fund, Large Cap Stock Fund,
Bond Fund, and Money Market Fund.
The Company makes matching contributions of 50% of the first $500 of a
participant's contributions each year and the Company may make profit sharing
contributions which would be determined by the Company's Board of Directors.
PARTICIPANTS' ACCOUNTS
Each participant's account is credited with the participant's contributions,
Company matching contributions, any profit sharing contributions and any Plan
earnings.
VESTING
All participant and Company contributions are fully vested at all times.
BENEFIT PAYMENTS
Participants or beneficiaries may elect to withdraw benefits upon termination
of employment, retirement, permanent disability, or death. Other withdrawals
from the Plan can be made under certain circumstances.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual basis
of accounting in accordance with generally accepted accounting principles.
VALUATION OF INVESTMENTS
Investments in collective investment funds and common stock are stated at
market value determined by quoted market prices in an active market.
INVESTMENT INCOME
Dividend and interest income are recorded as earned. The net appreciation
(depreciation) in the fair value of investments consists of the realized
gains or losses and the unrealized appreciation (depreciation) of
investments.
Page 9 of 14
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
USE OF ESTIMATES
Certain amounts and disclosures included in the financial statements of the
Plan require management to make estimates which could differ from actual
results.
3. INVESTMENT OPTIONS
Plan participants may choose among six investment options:
. Money Market Fund - This fund invests in cash equivalents and money
-----------------
market investments initially through the Fidelity U.S. Treasury Income
Portfolio. The fund's objective is to obtain current income while
preserving capital and maintaining liquidity.
. Bond Fund - This fund invests in intermediate-term maturity government
---------
bonds initially through the Vanguard Admiral Intermediate-Term U.S.
Treasury Portfolio. The fund's objective is to preserve initial principal
and accrued interest, and obtain current income.
. Large Cap Stock Fund - This fund invests in stocks of large U.S.
--------------------
companies initially through the Fidelity Advisor Growth Opportunities
Fund. The fund's objective is to seek returns from capital growth and
dividends of stocks of larger U.S. companies.
. Small Cap Stock Fund - This fund invests in stocks of small U.S.
--------------------
companies initially through the Federated Mini-Cap Fund. The fund's
objective is to seek maximum long-term return from a combination of
capital growth and dividend income.
. International Stock Fund - This fund invests in stocks of non-U.S.
------------------------
companies initially through the Templeton Foreign Fund. The fund's
objective is to seek long-term growth opportunities in non-U.S. stocks.
. Company Stock Fund - This fund invests in shares of First American
------------------
Financial Corporation common stock ("Company Stock") and such other
assets, awaiting investment in Company Stock, as the plan trustee
considers advisable. The plan trustee may purchase shares of Company
Stock for the fund from the Company or on the open market. If purchased
from the Company, Company Stock is valued at its closing price on the day
the stock was purchased or, if no sales of Company Stock occurred on the
open market that day, on the next preceding day when the Company Stock
was traded.
4. TAX STATUS
The Company has applied for but not received a determination letter from the
United States Treasury Department concerning the qualification of the Plan
for tax-exempt status under Section 401(a) of the Internal Revenue Code and
for exemption from federal income taxes under the provisions of Section
501(a).
The Plan sponsor believes that the Plan will qualify under applicable
provisions of the Internal Revenue Code and will thereby be exempt from
federal income taxes.
Page 10 of 14
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
5. ADMINISTRATIVE EXPENSES
Expenses incurred by the Plan for accounting and administration are borne
partially by the Plan's sponsor and partially by the Plan. For the year
ended December 31, 1995, fees paid by the Plan amounted to $173,661, and fees
paid by the Plan's sponsor totalled $134,375.
Page 11 of 14
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
401(K) SAVINGS PLAN
SUPPLEMENTAL SCHEDULES
Page 12 of 14
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
401(k) SAVINGS PLAN
SCHEDULE 1 - ITEM 27A ASSETS HELD FOR INVESTMENT PURPOSES
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<TABLE>
<CAPTION>
DESCRIPTION OF INVESTEMENT, CURRENT VALUE
IDENTITY OF ISSUE, BORROWER, LESSOR, MATURITY DATE, RATE OF INTEREST, AT DECEMBER 31,
OR SIMILIAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST 1995
- ------------------------------------ --------------------------------- ----------- ---------------
<S> <C> <C> <C>
Investment Companies
- --------------------
Templeton Foreign Fund, Class I 258,226 shares $2,382,175 $2,370,519
Federated Mini Cap Fund 141,898 shares 1,801,511 1,902,859
Fidelity Adv Growth Opportunity Fund 100,034 shares 2,840,433 3,165,076
Class A
Vanguard Admiral Intermediate-Term 137,512 shares 1,392,106 1,467,249
---------- ----------
U.S. Treasury Portfolio
Total investment companies $8,416,225 $8,905,703
U.S. Corporation Common Stock
- -----------------------------
First American Financial Corporation* 72,676 shares, common stock $1,614,781 $1,944,082
Cash and Short-Term Investments
- -------------------------------
Fidelity U.S. Treasury Income Portfolio 2,114,771 units, par value $2,114,771 $2,114,771
</TABLE>
* Party-in-interest.
Page 13 of 14
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION
401(k) SAVINGS PLAN
SCHEDULE II - ITEM 27D SCHEDULE OF REPORTABLE TRANSACTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXPENSE CURRENT VALUE NET
INCURRED OF ASSET ON REALIZED
IDENTIY OF PARTY DESCRIPTION PURCHASE SELLING LEASE WITH COST TRANSACTION GAIN
INVOLVED OF ASSET PRICE PRICE RENTAL TRANSACTION OF ASSET DATE (LOSS)
- ---------------------- --------------- ---------- -------- --------- ----------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Templeton Templeton $2,429,407 $2,429,407 $2,429,407
Foreign Fund
Templeton Templeton $146,306 139,897 146,306 $6,409
Foreign Fund
Federated Investment Federated Mini 1,755,758 1,755,758 1,755,758
Counseling Cap Fund
Federated Investment Federated Mini 65,747 60,754 65,747 4,993
Counseling Cap Fund
Fidelity Management and Fidelity Adv Growth 2,850,474 2,850,474 2,850,474
Research Company Opportunity Fund
Fidelity Management and Fidelity Adv Growth 93,856 85,182 93,856 8,674
Research Company Opportunity Fund
The Vanguard Group Vanguard Admiral 1,478,639 1,478,639 1,478,639
Intermediate-Term
U.S. Treasury
Portfolio
The Vanguard Group Vanguard Admiral 89,619 86,534 89,619 3,085
Intermediate-Term
U.S. Treasury
Portfolio
Fidelity Management and Fidelity U.S. 2,306,948 2,306,948 2,306,948
Research Company Treasury Income
Portfolio
Fidelity Management and Fidelity U.S. 192,177 192,177 192,177
Research Company Treasury Income
Portfolio
The First American Common stock 1,690,244 1,690,244 1,690,244
Financial Corporation
The First American Common stock 84,031 75,307 84,031 8,724
Financial Corporation
</TABLE>
Note - Under ERISA, a reportable transaction is a transaction or series of
transactions during the period that involves more than 5% of the fair value of
plan assets at the beginning of the period.
Page 14 of 14