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First American Financial (FAF) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. First American Financial disclosed 29 risk factors in its most recent earnings report. First American Financial reported the most risks in the “Finance & Corporate” category.

Risk Overview Q2, 2026

Risk Distribution
29Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

First American Financial disclosed risks per quarterNo. of Risks2627282930Q3Q4Q12023Q2Q3Q4Q12024Q2Q3Q4Q12025Q2Q3Q4Q12026Q2Showing: Q2, 2026
Risks removedRisks addedRisks changedFirst American Financial Risk Factors
  • Share Price & Shareholder Rights - Risk 1
    28. Certain provisions of the Company's bylaws and certificate of incorporation, as well as regulatory requirements, could discourage, delay, or prevent an unsolicited acquisition proposal or change of control that stockholders may consider favorable

    The Company's bylaws and certificate of incorporation contain provisions that could make it more difficult for a third party to acquire the Company without the approval of the Company's incumbent board of directors. These provisions include: - a classified board structure, with directors elected in staggered classes, which will be phased out over time and will not be fully declassified until the 2029 annual meeting of stockholders;- until the board is fully declassified, stockholders may remove directors only for cause;- stockholders may not change the size of the board or fill vacancies on the board, except as may be provided in the terms of any preferred stock the Company may issue in the future;- stockholders may act only at a duly called meeting of stockholders and may not act by written consent;- stockholders must comply with advance notice requirements to nominate directors or present other business at stockholder meetings; and - the board may, without stockholder approval, issue preferred stock and determine the rights and terms of that preferred stock, including voting rights, or adopt a stockholder rights plan. In addition, federal banking laws and regulations and state insurance laws and regulations require third parties to obtain prior approval to acquire control of the Company due to its status as a savings and loan holding company and an insurance holding company. These provisions and regulatory requirements could have the effect of discouraging an unsolicited acquisition proposal or delaying, deferring or preventing a change of control transaction that might involve a premium price or otherwise be considered favorably by the Company's stockholders.

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Risk Highlights Q2, 2026

Main Risk Category
Finance & Corporate
With 14 Risks
Number of Disclosed Risks
29
No changes from last report
S&P 500 Average: 32
Recent Changes
0Risks added
0Risks removed
1Risks changed
Since Jun 2026
Number of Risk Changed
1
+1
From last report
S&P 500 Average: 1

Risk Word Cloud

10.a downgrade by ratings agencies, reductions in statutory capital and surplus maintained by the company's title insurance underwriters or a deterioration in other measures of financial strength could adversely affect the companymeasures of financial strength24.actual claims experience could materially vary from the expected claims experience reflected in the company's reserve for incurred but not reported claimsexpected claims experience reflected15.the company's use of a global workforce involves risks that could adversely affect the companyglobal workforce involves risks27.a reduction in the deposits at the company's federal savings bank subsidiary could require the company to borrow funds to maintain liquidityfederal savings bank subsidiary19.regulation of title insurance rates could adversely affect the companyregulation of title insurance rates4.conditions in the real estate market generally impact the demand for a substantial portion of the company's products and servicesreal estate market generally impact29.the company may be susceptible to claims of infringement and may not be able to adequately protect its intellectual propertysusceptible to claims of infringement28.certain provisions of the company's bylaws and certificate of incorporation, as well as regulatory hurdles, may reduce the likelihood of any unsolicited acquisition proposal or potential change of control that the company's stockholders might consider favorablepotential change of control17.regulatory oversight and changes in government regulation could require the company to raise capital, make it more difficult to deploy capital, including dividends to stockholders and repurchases of the company's shares, prohibit or limit the company's operations, make it more costly or burdensome to conduct such operations, result in decreased demand for the company's products and services or otherwise adversely affect the companydifficult to deploy capital5.unfavorable economic conditions adversely affect the companyunfavorable economic conditions adversely affect

Risk Factors Full Breakdown - Total Risks 29

Share Price & Shareholder Rights1 | 3.4%
  • Share Price & Shareholder Rights - Risk 1Changed
    28. Certain provisions of the Company's bylaws and certificate of incorporation, as well as regulatory requirements, could discourage, delay, or prevent an unsolicited acquisition proposal or change of control that stockholders may consider favorable

    The Company's bylaws and certificate of incorporation contain provisions that could make it more difficult for a third party to acquire the Company without the approval of the Company's incumbent board of directors. These provisions include: - a classified board structure, with directors elected in staggered classes, which will be phased out over time and will not be fully declassified until the 2029 annual meeting of stockholders;- until the board is fully declassified, stockholders may remove directors only for cause;- stockholders may not change the size of the board or fill vacancies on the board, except as may be provided in the terms of any preferred stock the Company may issue in the future;- stockholders may act only at a duly called meeting of stockholders and may not act by written consent;- stockholders must comply with advance notice requirements to nominate directors or present other business at stockholder meetings; and - the board may, without stockholder approval, issue preferred stock and determine the rights and terms of that preferred stock, including voting rights, or adopt a stockholder rights plan. In addition, federal banking laws and regulations and state insurance laws and regulations require third parties to obtain prior approval to acquire control of the Company due to its status as a savings and loan holding company and an insurance holding company. These provisions and regulatory requirements could have the effect of discouraging an unsolicited acquisition proposal or delaying, deferring or preventing a change of control transaction that might involve a premium price or otherwise be considered favorably by the Company's stockholders.

Accounting & Financial Operations3 | 10.3%
Debt & Financing7 | 24.1%
Corporate Activity and Growth3 | 10.3%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.