First American sees ‘material impact’ on Q4 results from cyber security incident

In a regulatory filing, First American stated, “As disclosed in the Original Report, the company identified unauthorized activity on certain of its information technology systems. Upon detection, the company acted to contain, assess and remediate the incident. On December 20, 2023, the company elected to isolate systems from the Internet. The company retained leading experts, worked with law enforcement and notified certain regulatory authorities. The company believes it has contained the incident and has resumed business operations. As a result of the incident, certain transactions that would have been consummated in the fourth quarter of 2023 were delayed and, consequently, revenue from those transactions will not be recognized until the first quarter of 2024. Certain other transactions that would have been consummated in the fourth quarter of 2023 were moved to other providers, which resulted in a loss of revenue. In addition, the company recognizes revenue from its agents when a notice of title policy issuance is received. 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. In the fourth quarter of 2023 the company also incurred one-time expenses as a result of the incident. While the company expects the incident to have a material impact on the fourth quarter of 2023 results of operations, the company does not believe the incident will have a material impact on the company’s overall financial condition or on its ongoing results of operations.”