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LandAmerica Releases First Quarter Results

April 30, 2008

RICHMOND, Va., -- LandAmerica Financial Group, Inc. announces operating results for the first quarter ended March 31, 2008.

  (In millions, except per share data)

 

First Quarter  2008

First Quarter 2007

Total revenue

$686.4

$948.6

Net (loss) income

$(24.2)

$4.7

Net (loss) income per diluted share

$(1.60)

$0.26

"Our first quarter results reflect the persistently challenging economic conditions and the measures we have taken during the latter half of 2007 to significantly reduce operating costs," said Chairman and Chief Executive Officer Theodore L. Chandler, Jr.  "Tight mortgage lending conditions from reduced liquidity in the mortgage-backed securities market were factors in keeping transactional demand at bay.  These conditions, coupled with a reduction in our commercial business and some increased severity in claims, compressed margins during first quarter 2008.

"On the competitive front, we improved our national market share, based on title premiums, by approximately 90 basis points for fourth quarter 2007 over fourth quarter 2006."  Chandler added, "We will continue to reduce costs in our operating structure to provide a strong foundation for growth when the markets normalize."

First Quarter Highlights

Total revenue decreased by 27.6% in first quarter 2008 from first quarter 2007.  The decline in total revenue and earnings in first quarter 2008 compared to first quarter 2007 reflects persistently lower residential mortgage originations and a reduction in commercial revenue during the quarter.  As estimated by the Mortgage Bankers Association, home sales volume declined by approximately 1.7 million, or 23.4%, in first quarter 2008 from the comparable period in 2007.

  • Direct revenue from title and non-title commercial operations was $90.7 million in first quarter 2008 compared to $111.6 million in first quarter 2007, a decrease of 18.7%.
  • In first quarter 2008, the Company reduced full-time equivalents ("FTEs") by approximately 300 to 10,740 at March 31, 2008.  This represents a cumulative reduction in FTEs of approximately 3,600, or 25.4%, since January 1, 2007 before the effect of acquisitions.
  • General, administrative and other expenses decreased by $34.4 million, or 18.4%, in first quarter 2008 from first quarter 2007.
  • The claims provision as a percentage of operating revenue for the Title Operations segment was 9.7% in first quarter 2008, up from 8.6% in fourth quarter 2007 and 6.5% in first quarter 2007.  The increase in the claims provision ratio in first quarter 2008 was primarily due to approximately $12 million of increased individual claims over $1 million ("large claims").  This large claims activity related primarily to the 2004, 2006 and 2007 policy years.  Excluding large claims activity, the claims provision ratio would have been 7.5%.

Source: LandAmerica Financial Group, Inc.



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