The First American Corporation Announces Plan to Separate Its Financial Services...

The First American Corporation Announces Plan to Separate Its Financial
Services and Information Solutions Companies
-Creates Two Pure Play Companies-

SANTA ANA, Calif., Jan. 15 /PRNewswire-FirstCall/ -- The First American
Corporation (NYSE: FAF) ("First American"), America's largest provider of
business information, today announced that its board of directors has approved
a plan to spin-off its Financial Services companies, consisting primarily of
its Title Insurance and Specialty Insurance reporting segments, into a
separate public company to be called First American Financial Corporation. The
Information Solutions company, which will consist primarily of the current
Property Information and Mortgage Information segments, as well as First
American's 75 percent interest in First Advantage Corporation (Nasdaq: FADV),
will remain at the existing holding company, which will be renamed prior to
the separation. The transaction, which the company anticipates will be
tax-free to shareholders, is expected to close in the third quarter.
"Over the last two decades we have built the preeminent real estate
information and title insurance businesses," stated Parker S. Kennedy,
chairman and chief executive officer of First American. "We believe that this
transaction will unlock the unrealized value of our information businesses,
while strengthening the competitive positions of both companies. After the
separation, each company will have the financial strength and flexibility to
implement its own unique growth strategies, allowing both organizations to
refine and refocus their business mix. Because each company will have its own
separate results and its own publicly traded stock, each company will also be
in a better position to raise capital and align management and employee
incentives with the interests of shareholders."
The Financial Services company is expected to pay the same aggregate
dividend as that currently paid by the company, and the Information Solutions
company is not expected to pay a dividend.
The transaction is subject to customary conditions, including final
approval by First American's board of directors, filing and effectiveness of a
Form 10 Registration Statement with the Securities and Exchange Commission,
receipt of a tax ruling from the IRS and the approval of applicable regulatory
authorities.
Once the transaction is complete, First American shareholders will own 100
percent of the common equity in both the Financial Services and the
Information Solutions companies. Both companies are expected to trade on the
New York Stock Exchange, with the Financial Services company expected to trade
under the current ticker symbol "FAF."
Information Solutions Company
The Information Solutions company is a leading provider of a wide range of
data and analytics products and solutions. The company provides outsource
solutions with leading market shares in mortgage risk analytics; property,
credit and employment information; as well as a number of other businesses.
To better align its businesses to its customer base, the Information
Solutions company's operations will be organized into four reporting groups:
-- Data & Analytic Solutions, which will include the company's real
property data and analytics, mortgage risk analytics and title plant
businesses;
-- Origination Solutions, which will include the company's traditional
appraisal, broker price opinions and national joint venture
businesses;
-- Servicing & Default Solutions, which will include the company's tax
monitoring, flood zone determination and default-related businesses;
and
-- First Advantage, a market leading risk mitigation and business
solutions provider, which will be 75 percent owned by the Information
Solutions company.

Financial Services Company
The Financial Services company will include the company's leading
worldwide residential and commercial title operations, its home warranty and
homeowner insurance businesses, and its trust and banking services. This
business will include the following:
-- Title Services: First American Title Insurance Company, First Canadian
Title, First Title plc, United General Title and Pacific Northwest
Title;
-- Specialty Insurance: First American Specialty Insurance Company,
First American Property and Casualty Insurance Company, and
First American Home Buyers Protection Company; and
-- Trust and Banking: First American Trust, FSB and First Security
Thrift.

The Financial Services and Information Solutions companies plan to enter
into a business arrangement to facilitate the fulfillment of origination and
default title orders to large, centralized national customers.
Leadership
Dennis J. Gilmore, First American's current chief operating officer, will
be named chief executive officer of the Financial Services company; and
Frank V. McMahon, First American's current vice chairman and chief financial
officer, will be named chief executive officer of the Information Solutions
company. Parker S. Kennedy will become executive chairman of both companies.
Capital Management
First American's board of directors also has authorized the repurchase of
$300 million of the company's common shares. This is in addition to the $60
million remaining on the $500 million previously authorized.
Additionally, the company has received a financing commitment from Wells
Fargo for a $200 million interim credit facility. Prior to the separation, the
company expects to put in place separate credit facilities for both the
Financial Services and the Information Solutions companies.
Advisors
Lehman Brothers Inc. is serving as financial advisor and Gibson, Dunn &
Crutcher LLP is serving as legal counsel to the company.
Teleconference/Webcast
This announcement will be discussed in more detail on Tuesday, Jan. 15,
2008, at 10:00 a.m. ET, via teleconference. The dial-in number is
(888) 955-3516 and the pass code is FIRST AMERICAN. The live audio webcast of
the call and copies of the slide presentation will be available on First
American's Web site at http://www.firstam.com/investor. An audio replay of the
conference call will be available through Jan. 22, 2008, by dialing
(203) 369-0409. An audio archive of the call will also be available for replay
on First American's Web site.
About First American
The First American Corporation (NYSE: FAF) is a FORTUNE 500(R) company
that traces its history to 1889. With revenues of approximately $8.5 billion
in 2006, it is America's largest provider of business information. First
American combines advanced analytics with its vast data resources to supply
businesses and consumers with valuable information products to support the
major economic events of people's lives, such as getting a job, renting an
apartment, buying a car or house, securing a mortgage and opening or buying a
business. The First American Family of Companies, many of which command
leading market share positions in their respective industries, operate within
five primary business segments, including: Title Insurance and Services,
Specialty Insurance, Mortgage Information, Property Information and First
Advantage. More information about the company and an archive of its press
releases can be found at http://www.firstam.com.
Forward-Looking Statements
Certain statements made in this press release, including those related to
the tax free nature of the transaction; the effects of the spin-off (including
value-enhancement, strengthened competitive positions, implementation of
growth strategies, refocused business mixes, increased potential for raising
capital and increased alignment of incentives); payment of dividends;
anticipated trading on the New York Stock Exchange; and post-transaction
corporate structure and management, are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These and other
forward-looking statements may contain the words "believe," "anticipate,"
"expect," "predict," "estimate," "project," "will be," "will continue," "will
likely result," and other similar words and phrases. Risks and uncertainties
exist that may cause results to differ materially from those set forth in
these forward-looking statements. Factors that could cause the anticipated
results to differ from those described in the forward-looking statements
include: interest rate fluctuations; continuing disruption in the credit
markets; the performance of the real estate markets; limitations on access to
public records and other data; general volatility in the capital markets;
changes in applicable government regulations; heightened scrutiny by
legislators and regulators of the title insurance business and certain other
regulated businesses; consolidation among significant customers and
competitors; changes in the ability to integrate acquired businesses; systems
interruptions and intrusions; the inability to realize the benefits of the
offshore strategy; product migration; the inability to consummate the spin-off
transaction as a result of, among other factors, the inability to obtain
necessary regulatory approvals or the failure to obtain the final approval of
the company's board of directors; the inability to recognize the benefits of
the spin-off transaction as a result of, among other factors, unexpected
corporate overhead costs, unfavorable reaction from customers, employees,
ratings agencies or other interested persons, the triggering of rights and
obligations by the spin-off, accommodations required to be made to obtain
consents or waivers or the inability to transfer assets into the entity being
spun-off; and other factors described in Part I, Item 1A of the company's
annual report on Form 10-K for the year ended Dec. 31, 2006, as updated in
Part II, Item 1A of the company's quarterly report on Form 10-Q for the period
ended June 30, 2007, and in Part II, Item 1A of the company's quarterly report
on Form 10-Q for the period ended September 30, 2007, in each case as filed
with the Securities and Exchange Commission. The forward-looking statements
speak only as of the date they are made. The company does not undertake to
update forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements are made.
Media Contact:
Jo Etta Bandy
Corporate Communications
The First American Corporation
(714) 250-3298
jbandy@firstam.com

Investor Contact
Mark Seaton
Investor Relations
The First American Corporation
(714) 250-4264
mseaton@firstam.com

SOURCE The First American Corporation

Media, Jo Etta Bandy, Corporate Communications, +1-714-250-3298,
jbandy@firstam.com, or Investors, Mark Seaton, Investor Relations,
+1-714-250-4264, mseaton@firstam.com, both of The First American Corporation