First American Exchange Company Review 2026: Funds and Own Bank

Who First American Exchange Company is, and where it shows up in the filings

A qualified intermediary (QI) holds the cash from your sale until you buy the replacement property. Federal law defines one only by exclusion (not you, not your agent), as our guide to the 1031 qualified intermediary rules explains. This page asks a narrower question: what does the parent of a well-known QI say, in documents it signs under the securities laws, about your money?

FAEC is a legal subsidiary, not a filer. Exhibit 21 to FAF's 10-K filed February 18, 2026 lists First American Exchange Company, LLC among its subsidiaries, organized in Delaware. (The exhibit's own heading says “as of December 31, 2024”, although it was filed with the report for 2025.) On February 2, 2023 FAF announced that it had completed the acquisition of the assets of 1031 Solutions, LLC, a Boulder, Colorado exchange company founded in 2002, and said all of its capabilities would be positioned under the First American Exchange Company brand.

The 10-K never uses the company's name. It describes the activity instead: the Company “facilitates tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code and tax-deferred reverse exchanges pursuant to Revenue Procedure 2000-37”, and “holds the proceeds from sales transactions and takes temporary title to property identified by the customer”. For the side-by-side with Fidelity National Financial's IPX1031 and Stewart's Asset Preservation, see our comparison of 1031 exchange companies; the rest of this page is about First American's record.

Twenty years of exchange funds, from FAF's annual reports

Every year-end figure below comes from the first filing that reports it. The 2006 to 2009 figures are from the 10-Ks of The First American Corporation, the predecessor whose financial-services businesses were spun off on June 1, 2010 into FAF (the predecessor became CoreLogic); the 10-K for 2010 onward is FAF's. The 2008 balance is $0.6 billion in the 10-K for 2008 and $553.1 million in the 10-K for 2009.

The 10-Ks through 2021 say the funds were “held by the Company”; from the 10-K for 2022 the wording is “administered by the Company”. FAF rounds to $0.1 billion from 2012.

Two things stand out. The book follows deal volume: it swung from $2.9 billion to $6.0 billion in 2021 and back to $1.8 billion by 2023. And it is small beside the escrow deposits FAF holds: at June 30, 2026 escrow deposits were $12.2 billion, of which $4.9 billion sat at First American Trust, FSB.

The wording of the promise changed in 2008

FAF does not publish the exchange agreement, so the closest thing to a statement of who owes you the money is a sentence in the notes to its accounts. It has changed.

“Remains contingently liable” became “could be held contingently liable” in the 10-K that followed the 2008 credit crisis. We do not know why; the filing does not say. What the sentence does tell you is that FAF treats the obligation as a possibility, not a booked liability, and that in the 16 annual reports we searched it has not described a bond, an insurance policy or a written parent guarantee for exchangers.

Its own bank: 2010 and 2025 to 2026

In 2010 and again today, part of the exchange money has sat at a bank FAF owns.

First Security Business Bank (FSBB), 2008 to 2011. The 10-K for 2010 reports exchange funds of $609.9 million at December 31, 2010, $408.8 million of them at FSBB, a FAF subsidiary. Those deposits “are included in the accompanying consolidated balance sheets in cash and cash equivalents with offsetting liabilities included in deposits”, so they were on FAF's balance sheet, unlike the rest. FAF reports that in the third quarter of 2011 it “began the multi-year process of winding-down the operations of FSBB”; at December 31, 2011 none of the $564.7 million was at FSBB.

First American Trust, FSB (FA Trust), 2025 to 2026. The 10-Q for September 30, 2025 says “In September 2025, FA Trust began administering like-kind exchange funds”. The amounts since:

Shares use FAF's rounded totals, so they are approximate. Sources: FAF Forms 10-Q for September 30, 2025 (0001193125-25-248967), March 31, 2026 (0001193125-26-174195) and June 30, 2026 (0001193125-26-314255), and the 10-K for 2025.

FA Trust is a federal savings bank regulated and supervised by the Office of the Comptroller of the Currency and the FDIC; the Federal Reserve supervises FAF as a savings and loan holding company. At December 31, 2025 the bank had assets of $6.8 billion, deposits of $6.2 billion and stockholder's equity of $510 million, and FAF says its deposits “consist primarily of funds deposited by its affiliates and, in some instances, by non-affiliated title agents”. FAF's 10-K says deposit balances at FA Trust “are temporarily invested in cash and cash equivalents and debt securities”, with the offsetting liabilities in deposits on FAF's consolidated balance sheet. Those consolidated deposits rose from $5,292.7 million at December 31, 2025 to $7,877.9 million at June 30, 2026.

What this changes for an exchanger (our reading): the money is still insured by the FDIC only “up to applicable limits”, and the standard maximum deposit insurance amount is $250,000 (12 CFR 330.1). Whether more than that is covered for you depends on whether the account qualifies for pass-through treatment, under which funds deposited by an agent or nominee are “insured to the same extent as if deposited in the name of the principal(s)” (12 CFR 330.7(a)). The Treasury's 1031 regulation says that in a QI transfer “the qualified intermediary is not considered the agent of the taxpayer for purposes of section 1031(a)” (26 CFR 1.1031(k)-1(g)(4)(i)). That sentence is about the tax result; we do not claim to know how the FDIC treats a QI's pooled account, and you should put the question to the QI in writing, along with which bank holds your funds. The affiliation matters in one more way: the 10-K's risk factor says that if a bank holding such deposits fails, FAF “could be held liable”, and with FA Trust the bank is FAF's own.

What the filings do not say

We searched the whitespace-normalized text of FAF's 16 annual reports for 2010 to 2025:

• “First American Exchange”: no hits. The company is named only in the exhibit list of subsidiaries.
• “Fidelity bond” and “qualified intermediary”: no hits. “Errors and omissions” appears once in each of the 10-Ks for 2015 to 2025, about title insurance agents. FAF reports no bond or professional-liability amount for FAEC.
• “Auction rate”: no hits in those 16 reports, in the predecessor's 10-Ks for 2007 to 2009 or in its September 30, 2008 10-Q. LandAmerica's exchange company (below) held auction rate securities; we found nothing in FAF's or its predecessor's filings that says FAEC did.
• Interest: FAF says declines in “escrow and tax-deferred property exchange balances” reduced its interest income in 2024, but it does not quantify what it earns on exchange funds. Fidelity National Financial reports a figure for its own QI; see our comparison page.
• Litigation: we found no FAEC-specific lawsuit, regulatory order or enforcement action in the FAF filings we read. That is a statement about what we read, not a clean bill of health: we did not search state court dockets.

State law that reaches a QI: five verified statutes

There is no federal license for a QI. State statutes differ, and most apply when the property you sell is in that state or the QI maintains an office or solicits there. We verified five from official legislative or revisor sites on October 10, 2026. Nevada (chapter 645G of the Nevada Revised Statutes, which our qualified intermediary guide lists as requiring a license), Colorado and Oregon also have statutes, but the official text was blocked or unavailable to us, so they are left out here.

Three points that bear on a QI owned by a listed insurer with its own bank (our reading):

• Bonds are one total, not per client. Each statute sets a minimum amount for the facilitator; none of the five says it is per exchange. $1,000,000 against FAF's reported $2.8 billion is 0.036% (our arithmetic).
• Public-company carve-outs exist for change of control. Connecticut's change-of-control notice duty excepts a “publicly traded company”, defined to include its subsidiaries (sections 36a-830 and 36a-831), and Washington's excepts a publicly traded company or its wholly owned subsidiary (RCW 19.310.030). FAF is listed, so FAEC's clients would not necessarily be told of a sale of it.
• Financial-institution exclusions differ. California, Connecticut and Washington exclude a financial institution acting only as a depository or qualified escrow holder; Maine's definition of “financial institution” includes “an affiliate or subsidiary of such institution” and Maine exempts financial institutions from its license (sections 1395 and 1396). Whether a QI owned by a company that owns a savings bank falls inside that Maine exemption is a legal question we cannot answer; ask the QI which state rules it says apply.

When a QI fails: three cases on the record

None of these is First American. They show what a failed QI costs and what the paperwork looked like beforehand.

LES is the case closest to a title-insurer subsidiary like FAEC: a QI owned by a listed insurer, whose parent wrote in its 10-Q that the exchange company was obligated for the return of proceeds. Our qualified intermediary guide covers what the bankruptcy court decided about exchangers' claims. The difference visible in the filings is the one in the previous section: LandAmerica's 10-Q discloses auction rate securities in the exchange funds; FAF's annual reports do not mention them.

What the record supports, and what it does not

Supports: FAEC belongs to a listed, bank-regulated financial group that has reported the size of its exchange book every year since 2006, that places the money in FDIC-insured deposit accounts (some now at its own bank), and that has not reported a loss of exchange funds in the filings we read. Does not support: any statement that your money is guaranteed. The 10-K says FAF “could be held contingently liable”; it does not say it will pay, it states no bond or insurance amount, and its own risk factor says that if a bank holding the money fails, FAF cannot promise to recover it. Nothing in the record ranks FAEC above or below IPX1031, Asset Preservation or an independent QI; what each parent says is in our companies comparison.

What an exchanger can do with this

Ask First American Exchange Company, in writing, before you sign the exchange agreement:

• Which bank holds my funds, and whether it is First American Trust, FSB or a third-party bank. If FA Trust, ask for the account title and whether your balance would be treated as insured by the FDIC as your funds or only up to $250,000.
• Whether the funds will be in a separately identified account or a qualified escrow or trust that needs my written authorization to withdraw, the structure the statutes above list as a choice or, in Washington, as an alternative to the bond.
• Fidelity bond and errors and omissions: a certificate with the insurer, the amount, the covered acts, and whether it covers employees and owners. Remember it is one amount for all clients. Washington gives a client the right to evidence of compliance “before entering into an exchange agreement” (RCW 19.310.040(2)).
• What rate you will be paid on the money and who keeps the rest. FAF does not publish it.
• Whether the parent guarantees performance in writing, or whether the obligation is only the QI's.
• Where the 45-day and 180-day clocks stand: missing those, not the QI, is what usually costs an exchange its deferral. See the year-end timeline and the 1031 rules guide.

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read and saved on October 10, 2026: SEC EDGAR filings of First American Financial Corporation (CIK 1472787): Forms 10-K 0001193125-11-051851, 0001193125-12-081753, 0001193125-13-084593, 0001564590-14-000338, 0001564590-15-000816, 0001564590-16-012941, 0001564590-17-001755, 0001564590-18-002317, 0001564590-19-003456, 0001564590-20-005064, 0001564590-21-006163, 0001564590-22-005550, 0000950170-23-002816, 0000950170-24-017418, 0000950170-25-024488 and 0001193125-26-055516 with Exhibit 21; Forms 10-Q 0000950170-25-058211, 0000950170-25-098495, 0001193125-25-248967, 0001193125-26-174195 and 0001193125-26-314255; The First American Corporation (CIK 36047) Forms 10-K 0001193125-08-043818, 0001193125-09-042644 and 0001193125-10-044803 and Form 10-Q 0001193125-08-219783; LandAmerica Financial Group (CIK 877355) Form 10-Q 0001002105-08-000361 and Form 8-K 0001002105-08-000407; First American press release of February 2, 2023; California Financial Code sections 51000 to 51013 (leginfo.legislature.ca.gov); Connecticut General Statutes chapter 669 (cga.ct.gov); Maine Revised Statutes Title 10 sections 1395 to 1400 (legislature.maine.gov); Code of Virginia sections 55.1-800 to 55.1-806 (law.lis.virginia.gov); Revised Code of Washington chapter 19.310 (app.leg.wa.gov); 12 CFR 330.1 and 330.7 and 26 CFR 1.1031(k)-1 (ecfr.gov, current to October 1, 2026); 528 F. Supp. 2d 1343 (courtlistener.com); Justice Department releases of August 13, 2009 and November 17, 2011. Percentages, shares and the bond comparison are our arithmetic. The statements that certain phrases do not appear are our text searches of the saved filings. This is analysis of public documents, not investment, legal or tax advice.