First American cyber incident expected to impact Q4 2023 financials

Key Takeaways:

– First American Financial believes the cybersecurity incident will have a material impact on its Q4 2023 financial results.
– The incident has caused delays in certain transactions, resulting in a loss of revenue.
– Revenue from affected transactions will now be recognized in Q1 2024 instead of Q4 2023.
– The incident also incurred a one-time expense for the company.
– Despite the incident, First American does not believe it will have a material impact on its overall financial conditions or ongoing results of operations.
– The company has informed customers that consumer data has been stolen, but details about the scope and nature of the data have not been released.
– In the third quarter of 2023, First American reported $1.481 billion in revenue and a net loss of $1.2 million.

HousingWire:

Big Four title firm First American Financial believes the cybersecurity incident it incurred on Dec. 20, 2023, will have material impact on its fourth quarter 2023 financial results, according to a document filed with the Securities and Exchange Commission last Friday.

In the filing, First American informed the public that it believes it has contained the incident and reiterated that it has resumed normal business operations, which it first announced on Dec. 29, 2023.

Due to the cybersecurity attack, certain transactions that were to close in Q4 2023 were delayed so revenue from those transactions won’t show up until Q1 2024, while other transactions were moved to other companies resulting in a loss of revenue.

“As a result of the incident, receipt of notices of the issuance of certain title policies have been delayed and, as a result, related revenue that would have been recognized in the fourth quarter of 2023 will not be recognized until the first quarter of 2024,” the filing states.

First American also noted that it occurred a one-time expense due to the incident.

Despite this, the company said in the filing that it does not believe the incident will have any material impact on First American’s overall financial conditions of its ongoing results of operations.

In addition to First American Title Insurance and First American Title Guaranty, the First American Financial umbrella encompasses nearly two dozen subsidiaries, including DataTrace, ACI, and ServiceMac.

First American has informed customers that the perpetrators have stolen consumer data, however details about the scope and nature of the data have yet to be released.

During the third quarter of 2023, First American reported $1.481 billion in revenue and a net loss of $1.2 million.

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Property Chomp’s Take:

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In recent news, First American Financial, one of the leading title firms in the industry, has encountered a significant cybersecurity incident that will have a material impact on its financial results for the fourth quarter of 2023. The incident, which occurred on December 20, 2023, prompted First American to file a document with the Securities and Exchange Commission last Friday, detailing the potential consequences of the cyber attack.

According to the filing, First American believes that it has successfully contained the incident and has resumed normal business operations since December 29, 2023. However, due to the attack, certain transactions that were scheduled to close in the fourth quarter of 2023 were delayed, resulting in a shift of revenue recognition to the first quarter of 2024. Additionally, some transactions were redirected to other companies, leading to a loss of revenue for First American.

The filing also mentions that the incident incurred a one-time expense for the company. Despite these setbacks, First American stated in the document that it does not anticipate any significant impact on its overall financial conditions or ongoing results of operations.

First American Financial is a conglomerate that includes various subsidiaries such as DataTrace, ACI, and ServiceMac, in addition to First American Title Insurance and First American Title Guaranty. The company has informed its customers that consumer data has been stolen by the perpetrators of the cyber attack, but specific details regarding the nature and extent of the stolen data have not been disclosed yet.

In the third quarter of 2023, First American reported $1.481 billion in revenue but also recorded a net loss of $1.2 million. The cybersecurity incident adds another challenge for the company to overcome as it navigates the financial impacts and works towards ensuring the security of its systems and customer data.

serves as a reminder of the importance of cybersecurity in today’s digital landscape. It highlights the potential risks that businesses face and the need for robust security measures to protect sensitive information. As technology continues to advance, companies must remain vigilant and proactive in safeguarding their digital assets and maintaining the trust of their customers.

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