First American Has Record-Setting Year : Earnings: Revenue for the 104-year-old financial company, based in Santa Ana, rose 45% to $1.1 billion, profit to $43.3 million.

Riding the wave of refinancings and out-of-state home sales, First American Financial Corp. posted record annual revenue Tuesday of $1.1 billion and record profit of $43.3 million, or $4.55 a share.

The unaudited earnings figures for last year were well above $3 million, or 31 cents a share, that First American earned for 1991, when it suffered first-quarter losses after the recession first hit real estate sales. Revenue jumped 45% above 1991’s revenue of $756.8 million.

“By any measure, 1992 was the most rewarding and profitable year in the company’s history,” said Donald P. Kennedy, the company’s chairman and president. First American, based in Santa Ana, is the holding company for First American Title Insurance Co., the nation’s second-largest title insurer, and related services.

Kennedy said the company’s real estate-related operations--tax monitoring and home warranty services--also continued to grow, helping to boost revenue and income. The 104-year-old company also owns a successful trust operation, First American Trust Co.

Though figures from banks and thrifts show a slowdown in refinancings, Kennedy said, he thinks that mortgage interest rates will remain low this year and that homeowners will continue to refinance.

In addition, he said, home sales are increasing, even in California, and that will help to boost First American’s mix of business. Title companies usually earn about twice as much for insuring titles in home sales than in refinancings.

With the recession continuing in California, which typically represents a third of First American Title’s volume, the company probably won’t generate as much revenue this year, Kennedy said. But its less costly tax service operation, which notifies lenders of borrowers’ failures to pay property taxes, gives the company a chance to post even higher profit this year, he said.

“I’m really enthused about our company. I just wish I wasn’t so old,” the 74-year-old executive said.

For the fourth quarter, the company earned $12.3 million, or $1.10 a share, a fivefold increase over $2.4 million, or 24 cents a share, for the last quarter of 1991. Three-month revenue grew 48% to $326.4 million from $220.2 million.

The company took steps last year to strengthen its balance sheet and position itself for further growth, including possible acquisitions. Early last year, it acquired two title operations in New York to enhance its East Coast operations.

It also refinanced $65 million in debt into a five-year loan to cancel provisions that allowed banks to call loans in whenever they wanted. Regulators, wary of California’s real estate market, have been urging banks to call in such loans early.

First American also merged its two classes of common stock to attract more investors, especially institutional investors that didn’t or couldn’t invest in companies with dual stocks. And it issued 2 million new shares of the combined stock, raising $38 million in cash.

First American Title offers insurance through a network of more than 300 offices and 4,000 agents in all 50 states, as well as in the Bahamas, Bermuda, Canada, Guam, Mexico, Puerto Rico, the Virgin Islands and the United Kingdom.

Wall Street showed enthusiasm for First American’s latest results, boosting the company’s stock price to $42.25 a share, up 72.5 cents, in Tuesday’s trading on the New York Stock Exchange.

Joining the Billion-Dollar Club

For the first time in its 104-year history, First American Financial Corp. is reorting annual revenue of more than $1 billion.

REVENUE

In millions of dollars

1987: 636.8

1988: 643.9

1989: 699.4

1990: 707.8

1991: 756.8

1992: 1,115.5

PROFIT

In millions of dollars

1987: 32.4

1988: 12.3

1989: 13.5

1990: 3.3

1991: 3.0

1992: 43.3

O.C.’s Big Six

The addition of First American Financial Corp. rounds out Orange County’s billion-dollar club membership at an even half-dozen.

Rockwell International Corp.

Nature of business: High technology

Headquarters: Seal Beach

1992 revenues: $1.9 billion for year ended Sept. 30

Fluor Corp

Headquarters: Irvine

Nature of business: Engineering, construction

1992 revenues: $6.6 billion for year ended Oct. 31

Bergen Brunswig Corp

Headquarters: Orange

Nature of business: Pharmaceuticals distributor

1992 revenues: $5.1 billion for year ended Aug. 31

Pacificare Health Systems Inc.

Headquarters: Cypress

Nature of business: Health maintenance organization

1992 revenues: $1.7 billion for year ended Sept. 30

FHP International Corp.

Headquarters: Fountain Valley

Nature of business: Health maintenance organization

1992 revenues: $1.6 billion for year ended June 30

First American Financial Corp.

Headquarters: Santa Ana

Nature of business: Title insurer

1992 revenues: $1.1 billion for year ended Dec. 31

Source: First American Financial Corp., Bloomberg Business News, Times files, researched by DALLAS M. JACKSON / Los Angeles Times