The First American Corporation Q2 2009 Earnings Call Transcript

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2009-07-31 04:53:19.0

Tags: U.S. Bancorp Piper Jaffray Inc., Call Transcript, Earnings, Operational Accounting, Research & Development, Finance, Business Operations, Seeking Alpha, First American Corp.

Question-and-Answer Session

Operator

(Operator instructions) Our first question comes from Jason Deleeuw from Piper Jaffray. Sir, your line is open.

Jason Deleeuw -- Piper Jaffray

Thank you, good morning everyone.

Park Kennedy

Good morning, Jason.

Jason Deleeuw -- Piper Jaffray

With the 7100 open orders per day in July, what percent of those are you seeing is refi orders? And then your direct order, you revenue per direct -- per order was up a little bit sequentially quarter-over-quarter. If you get more of a normal like a 50-50 purchase, refi mix, do you think your revenue per order can return to like the levels we saw back in 2008, 15, 16, above 1600?

Dennis Gilmore

Sure. This is Dennis. Let me answer the question. A couple of things, first, we are running at about 34% to 37% refinance right now in our mix. We have seen an increase in our purchase market, but we still are operating in a weak commercial market. When we look at our average order profile, we had a sequential decline over the last year, I think of 18%. But we are encouraged by an increase of 4% over the first quarter, so we are running right now at about $1300 per file. We are anticipating a modest increase in our average fee per order heading into the second quarter, but I am going to use the word again, ?modest,’ because we are going to see a better mix towards resale, but that mix is still heavily swayed towards lower end properties, which have lower average fees and we still will not see a recovery in the commercial markets, probably until 2010 at the earliest.

Jason Deleeuw -- Piper Jaffray

So, in that we would still – you are probably going to fall a little bit short at least on the revenue per order than what we saw like a year ago even if the mix is the same just because of the lower end properties and commercial weakness.

Dennis Gilmore

That’s what we are modeling right now.

Jason Deleeuw -- Piper Jaffray

Okay. And then for – I am just wondering if you have the title business right-sized for the current volumes you are seeing through July, do you think there will be more cuts needed? And what kind of pretax margin – I mean it was very strong this quarter and I am just wondering what kind of margin in title do you think you can get at these current volumes.

 

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