##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



FORM 10-Q



|    |  |                                                    
|--- |  | ---------------------------------------------------
|(X) |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|    |  | THE SECURITIES EXCHANGE ACT OF 1934                

OR

|      |  |                                                     
|----- |  | ----------------------------------------------------
|(   ) |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|      |  | THE SECURITIES EXCHANGE ACT OF 1934                 

For the Quarter Ended September 30, 2002

Commission File Number 0-24961

AMERICAN NATIONAL FINANCIAL, INC.

---

(Exact name of registrant as specified in its charter)




|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|California                                                     |  | 33-0731548                             
|                                                              
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)



|                                                      |  |            |  | 
|----------------------------------------------------- |  | ---------- |  | 
|1111 E. Katella Avenue, Suite 220, Orange, California |  | 92867     
|                                                     
|(Address of principal executive offices)              |  | (Zip Code)



(714) 289-4300

---

(Registrants telephone number, including area code)




Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES   ( X )           NO   (   )

Indicate the number of shares outstanding of each of the issuers classes of
Common Stock, as of the latest practicable date.

Common stock, no par value, 9,526,083 shares as of November 4, 2002





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TABLE OF CONTENTS



|                              |                                                                                               |                                                             |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------------------- |  |  |  |  |  | 
|Part I: FINANCIAL INFORMATION
|                              | Item 1. Condensed Consolidated Financial Statements                                          
|                              |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS                      
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS              
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY  
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS            
|                              |                                                                                               | Notes to Condensed Consolidated Financial Statements       
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Quantitative and Qualitative Market Risk Disclosures                                 
|                              | Item 4. Controls and Procedures                                                              
|Part II: OTHER INFORMATION   
|                              | Item 1. Legal Proceedings                                                                    
|                              | Item 2. Changes in Securities                                                                
|                              | Item 6. Exhibits and Reports on Form 8-K.                                                    
|SIGNATURES                   
|EXHIBIT 99.1                 
|EXHIBIT 99.2                 



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##### Table of Contents



FORM 10-Q
 
QUARTERLY REPORT
Quarter Ended September 30, 2002

TABLE OF CONTENTS

|         |  |                                                                                              |  |                                                                    |  |            
|-------- |  | -------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------ |  | -----------
|         |  |                                                                                              |  |                                                                    |  | Page Number
|         |  |                                                                                              |  |                                                                    |  |            
|Part I:  |  | FINANCIAL INFORMATION                                                                        |  |                                                                   
|         |  | Item 1.                                                                                      |  | Condensed Consolidated Financial Statements                        |  |            
|         |  |                                                                                              |  | A.     Condensed Consolidated Balance Sheets as of                 |  |            
|         |  |                                                                                              |  | September 30, 2002 and December 31, 2001                           |  | 3          
|         |  |                                                                                              |  | B.     Condensed Consolidated Statements of Earnings               |  |            
|         |  |                                                                                              |  | for the three-month and nine month periods ended                   |  |            
|         |  |                                                                                              |  | September 30, 2002 and 2001                                        |  | 4          
|         |  |                                                                                              |  | C.     Condensed Consolidated Statements of Comprehensive Earnings |  |            
|         |  |                                                                                              |  | for the three-month and nine-month periods                         |  |            
|         |  |                                                                                              |  | ended September 30, 2002 and 2001                                  |  | 5          
|         |  |                                                                                              |  | D.     Condensed Consolidated Statement of Shareholders Equity    |  |            
|         |  |                                                                                              |  | for the nine-month period ended September 30, 2002                 |  | 6          
|         |  |                                                                                              |  | E.     Condensed Consolidated Statements of Cash Flows             |  |            
|         |  |                                                                                              |  | for the nine-month periods ended September 30, 2002 and 2001       |  | 7          
|         |  |                                                                                              |  | F.     Notes to Condensed Consolidated Financial Statements        |  | 8          
|         |  | Item 2.                                                                                      |  | Managements Discussion and Analysis of Financial                  |  |            
|         |  |                                                                                              |  | Condition and Results of Operations                                |  | 10         
|         |  | Item 3.                                                                                      |  | Quantitative and Qualitative Market Risk Disclosures               |  | 15         
|         |  | Item 4.                                                                                      |  | Controls and Procedures                                            |  | 15         
|Part II: |  | OTHER INFORMATION                                                                            |  |                                                                   
|         |  | Item 1.                                                                                      |  | Legal Proceedings                                                  |  | 15         
|         |  | Item 2.                                                                                      |  | Changes in Securities                                              |  | 15         
|         |  | Items 3., 4 and 5. of Part II have been omitted because they are not applicable with respect |  |                                                                   
|         |  | to the current reporting period                                                              |  | 15                                                                
|         |  | Item 6.                                                                                      |  | Exhibits and Reports on Form 8-K                                   |  | 16         





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##### Table of Contents






Part I: FINANCIAL INFORMATION




Item 1. Condensed Consolidated Financial Statements 
 AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)


|                                                                                                                           |                                            |                      |        |        |        |               |        |              |        |  |  | 
|-------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------------------- | ------ | ------ | ------ | ------------- | ------ | ------------ | ------ |  |  | 
|                                                                                                                           |                                            |                      |        |        |        | September 30, |        | December 31,
|                                                                                                                           |                                            |                      |        |        |        | 2002          |        | 2001        
|                                                                                                                           |                                            |                      |        |        |        |               |        |             
|                                                                                                                           |                                            |                      |        |        |        | (Unaudited)   |        |              |        | 
|ASSETS                                                                                                                    
|Current assets:                                                                                                            |                                            |                      |        |        |        |               |        |             
|Cash and cash equivalents                                                                                                  |                                            | $                    | 17,658 |        |        | $             | 9,400  |             
|Short-term investments, at cost, which approximates fair market value                                                      |                                            |                      | 1,290  |        |        |               | 618    |             
|Accrued investment interest                                                                                                |                                            |                      | 412    |        |        |               | 383    |             
|Trade receivables, net of allowance for doubtful accounts of $1,936 in 2002 and
$2,011 in 2001                             |                                            |                      | 4,174  |        |        |               | 3,803  |             
|Notes receivables  related party, net                                                                                     |                                            |                      |       |        |        |               | 1,812  |             
|Deferred tax asset, current                                                                                                |                                            |                      | 2,869  |        |        |               | 1,791  |             
|Prepaid expenses and other current assets                                                                                  |                                            |                      | 2,299  |        |        |               | 507    |             
|                                                                                                                           |                                            |                      |        |        |        |               |        |             
|                                                                                                                           |                                            | Total current assets |        |        | 28,702 |               |        |              | 18,314 | 
|Investment securities available for sale, at fair market value                                                             |                                            |                      | 26,620 |        |        |               | 24,721 |             
|Deferred tax asset, long-term                                                                                              |                                            |                      | 2,328  |        |        |               | 1,946  |             
|Property and equipment, net                                                                                                |                                            |                      | 10,315 |        |        |               | 7,614  |             
|Title plants                                                                                                               |                                            |                      | 4,132  |        |        |               | 2,699  |             
|Deposits with the Insurance Commissioner                                                                                   |                                            |                      | 133    |        |        |               | 133    |             
|Cost in excess of net assets acquired, net of accumulated amortization
of $2,022 in 2002 and 2001                          |                                            |                      | 11,226 |        |        |               | 11,226 |             
|                                                                                                                           |                                            |                      |        |        |        |               |        |             
|                                                                                                                           |                                            | Total assets         |        | $      | 83,456 |               |        | $            | 66,653 | 
|                                                                                                                           |                                            |                      |        |        |        |               |        |             
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                      
|Current liabilities:                                                                                                       |                                            |                      |        |        |        |               |        |             
|Accounts payable and other accrued expenses                                                                                |                                            | $                    | 17,051 |        |        | $             | 15,092 |             
|Customer advances                                                                                                          |                                            |                      | 5,090  |        |        |               | 4,802  |             
|Current portion of long-term debt                                                                                          |                                            |                      | 521    |        |        |               | 566    |             
|Current portion of obligations under capital leases with affiliates                                                        |                                            |                      | 109    |        |        |               | 102    |             
|Current portion of obligations under capital leases with non-affiliates                                                    |                                            |                      | 177    |        |        |               | 146    |             
|Reserve for claim losses                                                                                                   |                                            |                      | 3,570  |        |        |               | 2,730  |             
|Income tax payable                                                                                                         |                                            |                      | 2,940  |        |        |               |       |             
|Due to affiliate                                                                                                           |                                            |                      | 2,776  |        |        |               | 2,712  |             
|                                                                                                                           |                                            |                      |        |        |        |               |        |             
|                                                                                                                           | Total current liabilities                  |                      |        | 32,234 |        |               |        | 26,150       |       
|Long-term debt                                                                                                             |                                            |                      | 595    |        |        |               | 2,962  |             
|Obligations under capital leases with affiliates                                                                           |                                            |                      | 636    |        |        |               | 722    |             
|Obligations under capital leases with non-affiliates                                                                       |                                            |                      | 822    |        |        |               | 906    |             
|                                                                                                                           |                                            |                      |        |        |        |               |        |             
|                                                                                                                           | Total liabilities                          |                      |        | 34,287 |        |               |        | 30,740       |       
|Shareholders equity:                                                                                                      |                                            |                      |        |        |        |               |        |             
|Preferred stock, no par value; authorized 5,000,000 shares; issued and
outstanding, none                                   |                                            |                      |       |        |        |               |       |             
|Common stock, no par value; authorized, 50,000,000 shares; issued and
outstanding, 9,516,535 in 2002 and 8,869,714 in 2001 |                                            |                      |       |        |        |               |       |             
|Additional paid in capital                                                                                                 |                                            |                      | 23,442 |        |        |               | 20,905 |             
|Retained earnings                                                                                                          |                                            |                      | 26,578 |        |        |               | 13,741 |             
|Accumulated other comprehensive (loss) income                                                                              |                                            |                      | (851   | )      |        |               | 1,267  |             
|                                                                                                                           |                                            |                      |        |        |        |               |        |             
|                                                                                                                           | Total shareholders equity                 |                      |        | 49,169 |        |               |        | 35,913       |       
|                                                                                                                           |                                            |                      |        |        |        |               |        |             
|                                                                                                                           | Total liabilities and shareholders equity |                      | $      | 83,456 |        |               | $      | 66,653       |       
|                                                                                                                           |                                            |                      |        |        |        |               |        |             

See accompanying notes to condensed consolidated financial statements

3



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AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)

|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |        | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | - | ------------------ | ------ | ----------------- | - | ------ | ------ | ---- | - | ------ | ------- |  | - | ------ | ------ | 
|                                                                                                                                                                                  |                |   | Three months ended |        | Nine months ended
|                                                                                                                                                                                  |                |   | September 30,      |        | September 30,    
|                                                                                                                                                                                  |                |   |                    |        |                  
|                                                                                                                                                                                  |                |   | 2002               |        | 2001              |   | 2002   |        | 2001
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |     
|                                                                                                                                                                                  |                |   | (Unaudited)       
|Revenues:                                                                                                                                                                         |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Net title service revenue  related party                                                                                                                                         |                | $ | 28,280             |        |                   | $ | 18,885 |        |      | $ | 75,320 |         |  | $ | 54,062 |       
|Escrow fees                                                                                                                                                                       |                |   | 11,474             |        |                   |   | 7,844  |        |      |   | 30,692 |         |  |   | 23,335 |       
|Underwriting premiums                                                                                                                                                             |                |   | 5,795              |        |                   |   | 2,354  |        |      |   | 13,763 |         |  |   | 5,698  |       
|Ancillary service fees                                                                                                                                                            |                |   | 5,167              |        |                   |   | 4,317  |        |      |   | 15,547 |         |  |   | 12,717 |       
|Gain on sale/exchange of equity security                                                                                                                                          |                |   | 72                 |        |                   |   | 3      |        |      |   | 2,461  |         |  |   | 1,003  |       
|Investment revenue                                                                                                                                                                |                |   | 351                |        |                   |   | 335    |        |      |   | 1,137  |         |  |   | 910    |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|                                                                                                                                                                                  | Total revenues |   |                    | 51,139 |                   |   |        | 33,738 |      |   |        | 138,920 |  |   |        | 97,725 | 
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Expenses:                                                                                                                                                                         |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Personnel costs                                                                                                                                                                   |                |   | 25,846             |        |                   |   | 18,505 |        |      |   | 70,338 |         |  |   | 53,238 |       
|Other operating expenses including $603 and $851, and
$1,561 and $2,914 with affiliate for the three-month and
nine-month periods ended September 30, 2002 and 2001,
respectively |                |   | 13,926             |        |                   |   | 8,608  |        |      |   | 35,259 |         |  |   | 24,247 |       
|Title plant rent and maintenance                                                                                                                                                  |                |   | 2,221              |        |                   |   | 1,733  |        |      |   | 6,457  |         |  |   | 5,748  |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|                                                                                                                                                                                  | Total expenses |   |                    | 41,993 |                   |   |        | 28,846 |      |   |        | 112,054 |  |   |        | 83,233 | 
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Earnings before income taxes                                                                                                                                                      |                |   | 9,146              |        |                   |   | 4,892  |        |      |   | 26,866 |         |  |   | 14,492 |       
|Income taxes                                                                                                                                                                      |                |   | 3,396              |        |                   |   | 2,055  |        |      |   | 11,015 |         |  |   | 5,991  |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Net earnings                                                                                                                                                                      |                | $ | 5,750              |        |                   | $ | 2,837  |        |      | $ | 15,851 |         |  | $ | 8,501  |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Basic earnings per share                                                                                                                                                          |                | $ | 0.61               |        |                   | $ | 0.32   |        |      | $ | 1.73   |         |  | $ | 0.89   |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Weighted average shares outstanding, basic                                                                                                                                        |                |   | 9,479              |        |                   |   | 8,779  |        |      |   | 9,147  |         |  |   | 9,568  |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Diluted earnings per share                                                                                                                                                        |                | $ | 0.52               |        |                   | $ | 0.29   |        |      | $ | 1.50   |         |  | $ | 0.82   |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Weighted average shares outstanding, diluted                                                                                                                                      |                |   | 11,048             |        |                   |   | 9,946  |        |      |   | 10,584 |         |  |   | 10,399 |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Cash dividends per share, actual                                                                                                                                                  |                | $ | 0.125              |        |                   | $ | 0.125  |        |      | $ | 0.375  |         |  | $ | 0.325  |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       
|Cash dividends per share after giving retroactive effect
to 10% stock dividend and 25% stock split                                                                                |                | $ | 0.125              |        |                   | $ | 0.10   |        |      | $ | 0.325  |         |  | $ | 0.305  |       
|                                                                                                                                                                                  |                |   |                    |        |                   |   |        |        |      |   |        |         |  |   |        |       

See accompanying notes to condensed consolidated financial statements

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AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)

|                                     |                                                                         |   |                    |        |                   |   |       |     |      |   |        |        |   |   |       |       |  
|------------------------------------ | ----------------------------------------------------------------------- | - | ------------------ | ------ | ----------------- | - | ----- | --- | ---- | - | ------ | ------ | - | - | ----- | ----- | -
|                                     |                                                                         |   | Three months ended |        | Nine months ended
|                                     |                                                                         |   | September 30,      |        | September 30,    
|                                     |                                                                         |   |                    |        |                  
|                                     |                                                                         |   | 2002               |        | 2001              |   | 2002  |     | 2001
|                                     |                                                                         |   |                    |        |                   |   |       |     |     
|                                     |                                                                         |   | (Unaudited)       
|Net earnings                         |                                                                         | $ | 5,750              |        |                   | $ | 2,837 |     |      | $ | 15,851 |        |   | $ | 8,501 |      
|Other comprehensive earnings (loss): |                                                                         |   |                    |        |                   |   |       |     |      |   |        |        |   |   |       |      
|                                     | Unrealized gain (loss) on investment, securities available for sale (1) |   |                    | (1,192 | )                 |   |       | 339 |      |   |        | (710   | ) |   |       | 1,267 |  
|                                     | Reclassification adjustment for (gains) in net earnings (2)             |   |                    | (46    | )                 |   |       | (2  | )    |   |        | (1,408 | ) |   |       | (592  | )
|                                     |                                                                         |   |                    |        |                   |   |       |     |      |   |        |        |   |   |       |      
|Other comprehensive earnings (loss)  |                                                                         |   | (1,238             | )      |                   |   | 337   |     |      |   | (2,118 | )      |   |   | 675   |      
|                                     |                                                                         |   |                    |        |                   |   |       |     |      |   |        |        |   |   |       |      
|Comprehensive earnings               |                                                                         | $ | 4,512              |        |                   | $ | 3,174 |     |      | $ | 13,733 |        |   | $ | 9,176 |      
|                                     |                                                                         |   |                    |        |                   |   |       |     |      |   |        |        |   |   |       |      



|(1) |  | Net of income taxes (benefit) of ($779) and $198, and ($446) and $990 for
the three-month and nine-month periods ended September 30, 2002 and 2001,
respectively.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Net of income taxes
(benefit) of $26 and $1, and $1,053 and $411 for the
three-month and nine-month periods ended September 30, 2002 and 2001,
respectively.     

See accompanying notes to condensed consolidated financial statements

5



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AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(In thousands, except per share data)

|                            |                                                                                             |  |              |          |            |   |          |   |               |   |                 |        |        |   |        |        |   |   |             |        |   |   |        |        |  
|--------------------------- | ------------------------------------------------------------------------------------------- |  | ------------ | -------- | ---------- | - | -------- | - | ------------- | - | --------------- | ------ | ------ | - | ------ | ------ | - | - | ----------- | ------ | - | - | ------ | ------ | -
|                            |                                                                                             |  |              |          |            |   |          |   |               |   |                 |        |        |   |        |        |   |   | Accumulated |        |   |   |       
|                            |                                                                                             |  | Common Stock |          | Additional |   |          |   |               |   | Other           |        | Total 
|                            |                                                                                             |  |              |          | Paid In    |   | Retained |   | Comprehensive |   | Shareholders'  
|                            |                                                                                             |  | Shares       |          | Amount     |   | Capital  |   | Earnings      |   | (Loss) Earnings |        | Equity
|                            |                                                                                             |  |              |          |            |   |          |   |               |   |                 |        |       
|Balance, December 31, 2001  |                                                                                             |  | 8,869,714    |          |            | $ |         |   |               | $ | 20,905          |        |        | $ | 13,741 |        |   | $ | 1,267       |        |   | $ | 35,913 |       
|                            | Exercise of stock options, including
associated tax benefit                                 |  |              | 793,394  |            |   |          |  |               |   |                 | 4,292  |        |   |        |       |   |   |             |       |   |   |        | 4,292  |  
|                            | Redemption of director and/or
officer notes receivable in exchange for common stock retired |  |              | (146,573 | )          |   |          |  |               |   |                 | (1,755 | )      |   |        |       |   |   |             |       |   |   |        | (1,755 | )
|                            | Unrealized loss on investment
securities available for sale                                 |  |              |         |            |   |          |  |               |   |                 |       |        |   |        |       |   |   |             | (2,118 | ) |   |        | (2,118 | )
|                            | Dividends ($0.325 per share)                                                                |  |              |         |            |   |          |  |               |   |                 |       |        |   |        | (3,014 | ) |   |             |       |   |   |        | (3,014 | )
|                            | Net earnings                                                                                |  |              |         |            |   |          |  |               |   |                 |       |        |   |        | 15,851 |   |   |             |       |   |   |        | 15,851 |  
|                            |                                                                                             |  |              |          |            |   |          |   |               |   |                 |        |        |   |        |        |   |   |             |        |   |   |        |       
|Balance, September 30, 2002 |                                                                                             |  | 9,516,535    |          |            | $ |         |   |               | $ | 23,442          |        |        | $ | 26,578 |        |   | $ | (851        | )      |   | $ | 49,169 |       
|                            |                                                                                             |  |              |          |            |   |          |   |               |   |                 |        |        |   |        |        |   |   |             |        |   |   |        |       

See accompanying notes to condensed consolidated financial statements

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AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

|                                                     |                                                                                 |                                                           |                                           |         |                   |        |        |        |       |        |  
|---------------------------------------------------- | ------------------------------------------------------------------------------- | --------------------------------------------------------- | ----------------------------------------- | ------- | ----------------- | ------ | ------ | ------ | ----- | ------ | -
|                                                     |                                                                                 |                                                           |                                           |         | Nine months ended
|                                                     |                                                                                 |                                                           |                                           |         | September 30,    
|                                                     |                                                                                 |                                                           |                                           |         |                  
|                                                     |                                                                                 |                                                           |                                           |         | 2002              |        | 2001  
|                                                     |                                                                                 |                                                           |                                           |         |                   |        |       
|Cash flows from operating activities:                |                                                                                 |                                                           |                                           |         |                   |        |        |       
|Net earnings                                         |                                                                                 | $                                                         | 15,851                                    |         |                   | $      | 8,501  |       
|                                                     | Adjustments to reconcile net earnings to cash provided by operating activities: |                                                           |                                           |         |                   |        |        |        |      
|                                                     | Depreciation and amortization                                                   |                                                           |                                           | 1,916   |                   |        |        | 2,023  |      
|                                                     | Gain on sale/exchange of investments                                            |                                                           |                                           | (2,461  | )                 |        |        | (1,003 | )    
|                                                     | Loss on sale of property and equipment                                          |                                                           |                                           | 3       |                   |        |        | 14     |      
|                                                     | Changes in:                                                                     |                                                           |                                           |         |                   |        |        |        |      
|                                                     |                                                                                 | Accounts
receivables, net                                 |                                           |         | (371              | )      |        |        | 415   |       
|                                                     |                                                                                 | Interest receivable                                       |                                           |         | (29               | )      |        |        | (126  | )     
|                                                     |                                                                                 | Tax benefit associated with the exercise of stock options |                                           |         | 1,847             |        |        |        | 81    |       
|                                                     |                                                                                 | Prepaid expenses and other assets                         |                                           |         | (1,736            | )      |        |        | (15   | )     
|                                                     |                                                                                 | Income taxes receivable and deferred income taxes         |                                           |         | 1,480             |        |        |        | 1,300 |       
|                                                     |                                                                                 | Accounts payable and other accrued expenses               |                                           |         | 1,656             |        |        |        | 6,243 |       
|                                                     |                                                                                 | Net increase in reserve for claim losses                  |                                           |         | 840               |        |        |        | 185   |       
|                                                     |                                                                                 | Due to (from) affiliates                                  |                                           |         | 64                |        |        |        | (11   | )     
|                                                     |                                                                                 | Customer advances                                         |                                           |         | 288               |        |        |        | 929   |       
|                                                     |                                                                                 |                                                           |                                           |         |                   |        |        |       
|                                                     |                                                                                 |                                                           | Net cash provided by operating activities |         |                   | 19,348 |        |        |       | 18,536 |  
|                                                     |                                                                                 |                                                           |                                           |         |                   |        |        |       
|Cash flow from investing activities:                 |                                                                                 |                                                           |                                           |         |                   |        |        |       
|                                                     | Proceeds from sale of investment securities                                     |                                                           |                                           | 12,673  |                   |        |        | 1,870  |      
|                                                     | Proceeds from maturity investment securities                                    |                                                           |                                           | 2,300   |                   |        |        |       |      
|                                                     | Proceeds from short term investments                                            |                                                           |                                           | 480     |                   |        |        |       |      
|                                                     | Collections of notes receivable                                                 |                                                           |                                           |        |                   |        |        | 552    |      
|                                                     | Additions to property and equipment                                             |                                                           |                                           | (4,620  | )                 |        |        | (2,092 | )    
|                                                     | Additions to notes receivable                                                   |                                                           |                                           |        |                   |        |        | (214   | )    
|                                                     | Purchase of investment securities available for sale                            |                                                           |                                           | (15,982 | )                 |        |        | (7,342 | )    
|                                                     | Purchase of short term investments                                              |                                                           |                                           | (1,699  | )                 |        |        | (2,175 | )    
|                                                     | Purchase of title plants                                                        |                                                           |                                           | (1,433  | )                 |        |        |       |      
|                                                     |                                                                                 |                                                           |                                           |         |                   |        |        |       
|                                                     |                                                                                 |                                                           | Net cash used in investing activities     |         |                   | (8,281 | )      |        |       | (9,401 | )
|                                                     |                                                                                 |                                                           |                                           |         |                   |        |        |       
|Cash flows from financing activities:                |                                                                                 |                                                           |                                           |         |                   |        |        |       
|                                                     | Repayment of long-term debt                                                     |                                                           |                                           | (2,412  | )                 |        |        | (506   | )    
|                                                     | Payments of capital lease obligations                                           |                                                           |                                           | (197    | )                 |        |        | (188   | )    
|                                                     | Proceeds from exercise of stock options                                         |                                                           |                                           | 2,445   |                   |        |        | 275    |      
|                                                     | Additions to capital lease obligations                                          |                                                           |                                           | 65      |                   |        |        |       |      
|                                                     | Proceeds from issuance of common stock                                          |                                                           |                                           |        |                   |        |        | 218    |      
|                                                     | Dividends paid                                                                  |                                                           |                                           | (2,710  | )                 |        |        | (2,169 | )    
|                                                     | Purchase of treasury stock                                                      |                                                           |                                           |        |                   |        |        | (6,188 | )    
|                                                     |                                                                                 |                                                           |                                           |         |                   |        |        |       
|                                                     |                                                                                 |                                                           | Net cash used in financing activities     |         |                   | (2,809 | )      |        |       | (8,558 | )
|                                                     |                                                                                 |                                                           |                                           |         |                   |        |        |       
|Increase in cash and cash equivalents                |                                                                                 |                                                           | 8,258                                     |         |                   |        | 577    |       
|Cash and cash equivalents at the beginning of period |                                                                                 |                                                           | 9,400                                     |         |                   |        | 9,450  |       
|                                                     |                                                                                 |                                                           |                                           |         |                   |        |        |       
|Cash and cash equivalents at end of period           |                                                                                 | $                                                         | 17,658                                    |         |                   | $      | 10,027 |       
|                                                     |                                                                                 |                                                           |                                           |         |                   |        |        |       
|Supplemental disclosure of cash flow information:    |                                                                                 |                                                           |                                           |         |                   |        |        |       
|                                                     | Cash paid during the year:                                                      |                                                           |                                           |         |                   |        |        |        |      
|                                                     |                                                                                 | Interest                                                  |                                           | $       | 239               |        |        | $      | 328   |       
|                                                     |                                                                                 | Income taxes                                              |                                           |         | 6,699             |        |        |        | 5,050 |       
|                                                     | Non-cash investing activities:                                                  |                                                           |                                           |         |                   |        |        |        |      
|                                                     |                                                                                 | Dividend declared and unpaid                              |                                           | $       | 1,185             |        |        | $      | 881   |       

See accompanying notes to condensed consolidated financial statements

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Notes to Condensed Consolidated Financial Statements

Note A  Basis of Financial Statements

The financial information included in this report includes the accounts of
American National Financial, Inc. and its subsidiaries (collectively, the
Company) and has been prepared in accordance with accounting principles
generally accepted in the United States of America and the instructions to Form
10-Q and Article 10 of Regulation S-X. All adjustments, consisting of normal
recurring accruals considered necessary for a fair presentation have been
included. This report should be read in conjunction with the Companys Annual
Report on Form 10-K for the year ended December 31, 2001.

Certain reclassifications have been made to the
2001 Condensed Consolidated Financial
Statements to conform to classifications used in 2002.

Note B  Share and Per Share Restatement

On June 27, 2002, our Board of Directors declared a five-for-four (5:4) stock
split effective July 18, 2002. All data with respect to earnings per share,
dividends per share and share information, including price per share where
applicable, have been retroactively adjusted to reflect the effects of the
stock split.

Note C  Department of Insurance

In June 2001, auditors from the State of California Department of Insurance
commenced a market conduct examination of American Title Company (ATC).
Similar examinations have been or are being conducted at virtually all
companies in the title insurance business. The examination is not yet
completed. We are unable to determine if an unfavorable outcome is either
probable or remote, however, management does not believe that any outcome will
have a material effect on our condensed consolidated financial statements.

NOTE D  Earnings Per Share

The Company presents basic earnings per share representing net earnings
divided by the weighted average shares outstanding (excluding all common stock
equivalents), and diluted earnings per share, representing the dilutive
effect of all common stock equivalents. The following table illustrates the
computation of basic and diluted earnings per share.

|                                                                        |  |                                          |        |                   |  |      |       |      |  |   |        |  |  |   |        | 
|----------------------------------------------------------------------- |  | ---------------------------------------- | ------ | ----------------- |  | ---- | ----- | ---- |  | - | ------ |  |  | - | ------ | 
|                                                                        |  | Three months ended                       |        | Nine months ended
|                                                                        |  | September 30,                            |        | September 30,    
|                                                                        |  |                                          |        |                  
|                                                                        |  | 2002                                     |        | 2001              |  | 2002 |       | 2001
|                                                                        |  |                                          |        |                   |  |      |       |     
|                                                                        |  | (In thousands, except per share amounts)
|Net earnings, basic and diluted basis                                   |  | $                                        | 5,750  |                   |  | $    | 2,837 |      |  | $ | 15,851 |  |  | $ | 8,501  | 
|                                                                        |  |                                          |        |                   |  |      |       |      |  |   |        |  |  |   |        | 
|Weighted average shares outstanding during the period, basic            |  |                                          | 9,479  |                   |  |      | 8,779 |      |  |   | 9,147  |  |  |   | 9,568  | 
|Plus: Common stock equivalent shares assumed from
conversion of options |  |                                          | 1,569  |                   |  |      | 1,167 |      |  |   | 1,437  |  |  |   | 831    | 
|                                                                        |  |                                          |        |                   |  |      |       |      |  |   |        |  |  |   |        | 
|Weighted average shares outstanding during the period,
diluted          |  |                                          | 11,048 |                   |  |      | 9,946 |      |  |   | 10,584 |  |  |   | 10,399 | 
|                                                                        |  |                                          |        |                   |  |      |       |      |  |   |        |  |  |   |        | 
|Basic earnings per share                                                |  | $                                        | 0.61   |                   |  | $    | 0.32  |      |  | $ | 1.73   |  |  | $ | 0.89   | 
|                                                                        |  |                                          |        |                   |  |      |       |      |  |   |        |  |  |   |        | 
|Diluted earnings per share                                              |  | $                                        | 0.52   |                   |  | $    | 0.29  |      |  | $ | 1.50   |  |  | $ | 0.82   | 
|                                                                        |  |                                          |        |                   |  |      |       |      |  |   |        |  |  |   |        | 

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NOTE E  Cash Dividend

On September 25, 2002, our Board of Directors declared a quarterly cash
dividend of $.125 per share, paid on October 21, 2002, to stockholders of
record on October 7, 2002.

NOTE F  Recent Accounting Pronouncements

Pursuant to the Employee Stock Purchase Plan and the Non-Employee Director
Stock Purchase Plan adopted September 29, 1999 by the Board of Directors of
ANFI (collectively, the Purchase Plan), ANFI was authorized to loan to
certain employees and non-employee directors an aggregate of $2,000,000 for the
purchase of ANFI common stock, no par value (Common Stock). The Purchase
Plan made open market purchases of Company common stock through a broker dealer
designated by the Company. All loans were full recourse and unsecured, and had
a five-year term with interest at six and one quarter percent (61/4%). In
January 2002, the Emerging Issues Task Force (EITF) of the Financial
Accounting Standards Board issued EITF 02-1 Classification of Assets Received
in Exchange for Equity Instruments. Through March 31, 2002, the notes
recorded in connection with these loans have been classified as notes
receivable. Recent interpretations of EITF 02-1 require that such loans and
accrued interest be classified as contra equity. Accordingly, at June 30,
2002, $1.8 million was reclassified to reduce stockholders equity.

On July 10, 2002, the Company agreed to accept shares of its common stock as
full payment of the notes. The price per share ($14.97 pre-stock split) was
determined using the 20-day average closing price on the NASDAQ through July
10, 2002. On a post stock split basis ($11.99 per share), the Company received
146,575 shares of common stock, which shares were retired.

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, Business Combinations (SFAS No.
141) and Statement of Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets (SFAS No. 142). SFAS No. 141 requires that all
business combinations be accounted for under the purchase method. The
statement further requires separate recognition of intangible assets that meet
one of two criteria. The statement applies to all business combinations
initiated after June 30, 2001.

SFAS No. 142 requires an intangible asset that we acquire to be initially
recognized and measured based on its fair value. The statement also provides
that goodwill should not be amortized, but shall be tested for impairment
annually, or more frequently if circumstances indicate potential impairment,
through a comparison of fair value to its carrying amount. Existing goodwill
was amortized through December 31, 2001, after which time amortization ceased.
We performed a goodwill impairment test in accordance with SFAS No. 142 and
there was no impairment of goodwill. Excluding amortization expense of
$140,000 and $420,000 for the three and nine-month periods ended September 30,
2001, net earnings, basic earnings per share and diluted earnings per share
would have been $3.0 million, $8.9 million, $0.34, $0.93
and $0.30, $0.86,
respectively, for the three and nine-month periods ended September 30, 2001.

In October 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment of
Long-Lived Assets (SFAS No. 144) which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. While SFAS No.
144 supercedes Statement of Financial Accounting Standards No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of, it retains many of the fundamental provisions of that statement.
SFAS No. 144 does not have a material impact on our financial statements or
results of operations.

In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146, Accounting for Costs Associated with
Exit or Disposal Activities, (SFAS No. 146). This standard is effective for
exit or disposal activities that are initiated after December 31, 2002. The
adoption of this standard is not expected to have a material effect on the
Companys financial position or results of operations.

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NOTE G  Transactions with Affiliates

On July 5, 2002, senior management of the Company, in a private transaction
sold 627,982 shares, on a pre-split basis, of their personal holdings of the
Companys common stock to Fidelity National Financial, Inc. (FNF) at a
negotiated price of $15.00 per share. Adjusted for the stock split, FNF
received 784,978 shares at a price of $12.00 per share. FNFs ownership in the
Company is 28.5% as of September 30, 2002 compared to
19.9% as of June 30, 2002. Senior management ownership of the
Company (excluding vested and unvested stock options) after this transaction is
25.1%.

NOTE H  Note Payable

In September 2002, we paid in full a $1.9 million mortgage note payable
and accrued interest in the amount $3,000.




Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations

Factors That May Affect Operating Results

The statements contained in this Quarterly Report on Form 10-Q that are not
purely historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, including statements regarding the Companys expectations, hopes,
intentions or strategies regarding the future.

Forward-looking statements included in this document are based on information
available to us on the date hereof, and we assume no obligation to update any
such forward-looking statements. It is important to note that our actual
results could differ materially from those in such forward-looking statements.
The reader should consult the risk factors listed from time to time and other
information disclosed in our reports on Forms 10-K and filings under the
Securities Act of 1933, as amended.

The following discussion provides information to help understand and assess
significant changes and trends related to our financial condition and results
of operations. You should read this discussion and analysis in conjunction
with the consolidated financial statements and the notes thereto.

Overview

Our revenues include net title service revenue, escrow fees, underwriting
premiums, ancillary service fees, gain on sale/exchange of equity securities
and investment income. Our operations generate escrow fees from holding and
disbursing funds and documents in connection with the closing of real estate
transactions. Escrow fees generally fluctuate in a pattern consistent with the
fluctuation in net title service revenue. We also provide title insurance
services through direct operations and through independent title insurance
agents utilizing our underwriter, National Title Insurance of New York Inc.
(National). Our ancillary services complement title and escrow services. In
addition, many of our real estate related services are counter-cyclical to our
title insurance and escrow services.

Net title service revenue and escrow fee revenues are recognized as income at
the time the underlying real estate transaction closes. Expenses directly
related to the title and escrow process are recognized as they are incurred
throughout the duration of the transaction. As a result, our recognition of
revenue lags approximately 45-90 days behind the recognition of the
corresponding expenses. Other fees and revenue are generally recognized as
income at the time the underlying transaction closes; however, certain other
fees and revenue are recognized as income over the period during which the
service is provided. These factors may result in fluctuations in gross
margins. Net title service revenues consist of gross title insurance premiums
less an 11% underwriting fee paid to the underwriter. Investment
revenue
consists of revenues received from our investment portfolio in addition to the
gain on sale/exchange of equity securities.

While the number of orders that are closed affects our revenue, personnel costs
are the largest component of our expenses. Since personnel costs are relatively
fixed over the short term, in a rapidly declining market, reductions in the
number of orders can adversely affect margins. Gross margins are also affected
by the relative numbers of orders that relate to refinancing transactions as
compared to those relating to real estate sale transactions.

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The average fee per file and corresponding gross margins are higher for real
estate sale and resale transactions than refinance transactions for three
principal reasons: (i) a larger percentage of sale and resale orders close as
compared to refinance orders, (ii) typically two policies are issued in a
resale transaction (one each to the buyer and lender) whereas only one is
issued in a refinance transaction, (iii) the base rate charged on sale and
resale transactions is typically higher than that charged on refinance
transactions. As title insurance premiums are calculated with regard to the
purchase price of the property or the amount of the related mortgage, average
fees per file will also increase during periods in which real estate prices and
corresponding mortgage loans are increasing.

Results of Operations

Revenue

The following table presents information regarding the components of our
revenue:

|                                           |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |        | 
|------------------------------------------ |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------- |  |  | - | ------ | 
|                                           |  | Three months ended |        | Nine months ended
|                                           |  | September 30,      |        | September 30,    
|                                           |  |                    |        |                  
|                                           |  | 2002               |        | 2001              |  | 2002 |        | 2001
|                                           |  |                    |        |                   |  |      |        |     
|                                           |  | (Unaudited)       
|Gross title premiums                       |  | $                  | 37,537 |                   |  | $    | 23,561 |      |  | $ | 98,344  |  |  | $ | 66,430 | 
|                                           |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |        | 
|Net title service revenue  related party  |  |                    | 28,280 |                   |  |      | 18,885 |      |  |   | 75,320  |  |  |   | 54,062 | 
|Escrow fees                                |  |                    | 11,474 |                   |  |      | 7,844  |      |  |   | 30,692  |  |  |   | 23,335 | 
|Underwriting premiums                      |  |                    | 5,795  |                   |  |      | 2,354  |      |  |   | 13,763  |  |  |   | 5,698  | 
|Ancillary services fees                    |  |                    | 5,167  |                   |  |      | 4,317  |      |  |   | 15,547  |  |  |   | 12,717 | 
|Gain on sale/exchange of equity securities |  |                    | 72     |                   |  |      | 3      |      |  |   | 2,461   |  |  |   | 1,003  | 
|Investment
revenue                         |  |                    | 351    |                   |  |      | 335    |      |  |   | 1,137   |  |  |   | 910    | 
|                                           |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |        | 
|Total revenue                              |  | $                  | 51,139 |                   |  | $    | 33,738 |      |  | $ | 138,920 |  |  | $ | 97,725 | 
|                                           |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |        | 
|Orders closed                              |  |                    | 50,500 |                   |  |      | 30,500 |      |  |   | 123,300 |  |  |   | 90,450 | 
|                                           |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |        | 
|Average fee per file                       |  | $                  | 902    |                   |  | $    | 913    |      |  | $ | 971     |  |  | $ | 919    | 
|                                           |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |        | 

Total RevenueTotal revenue for the third quarter ended September 30, 2002
increased 51.6% to $51.1 million from $33.7 million in the comparable 2001
period. Total revenues for the nine-month period ended September 30, 2002
increased 42.2% to $138.9 million from $97.7 million for the same prior year
period. The increase in total revenue for the three-month and nine-month
periods is primarily the result of strength in our title, escrow, underwriting
premiums and ancillary services, which were positively impacted by favorable
market conditions, especially the favorable real estate market aided in part by
reduced interest rates and increased money supply.

Net Title Service Revenue  related party.Net title service revenue for the
three-month and nine-month periods ended September 30, 2002 compared to the
same 2001 periods increased $9.4 million, or 49.7% to $28.3 million from $18.9
million, and $21.3 million or 39.3% to $75.3 million from $54.1 million,
respectively, which is the result of the increase in both closed title orders
and in the refinance activity businesses. In the three-month periods ended
September 30, 2002 and 2001, the average fee per file decreased to $902 and
$913. The fee per file decrease in the three months ended September 30, 2002
and 2001, respectively, is consistent with the lower fee per file refinance
market compared to the higher fee per file resale real estate market. In the
nine-month periods ended September 30, 2002 and 2001 the average fee per file
were $971 and $919. The fee per file increase is consistent with the mix of
title orders closing in the higher fee per file resale business compared to a
lower fee per file refinance driven market in comparable nine-month period.

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The following table depicts monthly title and escrow orders opened and closed
for the first, second and third quarter of 2002 and 2001.

|                       |  |        |         |        |  |  |         | 
|---------------------- |  | ------ | ------- | ------ |  |  | ------- | 
|                       |  | Orders |         | Orders
|Month                  |  | Opened |         | Closed
|                       |  |        |         |       
|January 2002           |  |        | 15,300  |        |  |  | 12,600  | 
|February 2002          |  |        | 14,100  |        |  |  | 11,900  | 
|March 2002             |  |        | 14,300  |        |  |  | 12,900  | 
|                       |  |        |         |        |  |  |         | 
|First Quarter 2002     |  |        | 43,700  |        |  |  | 37,400  | 
|                      
|April 2002             |  |        | 15,500  |        |  |  | 12,200  | 
|May 2002               |  |        | 16,700  |        |  |  | 11,700  | 
|June 2002              |  |        | 18,800  |        |  |  | 11,500  | 
|                       |  |        |         |        |  |  |         | 
|Second Quarter 2002    |  |        | 51,000  |        |  |  | 35,400  | 
|                      
|July 2002              |  |        | 25,600  |        |  |  | 13,900  | 
|August 2002            |  |        | 37,200  |        |  |  | 18,000  | 
|September 2002         |  |        | 32,100  |        |  |  | 18,600  | 
|                       |  |        |         |        |  |  |         | 
|Third Quarter 2002     |  |        | 94,900  |        |  |  | 50,500  | 
|                      
|Nine-months ended 2002 |  |        | 189,600 |        |  |  | 123,300 | 
|                       |  |        |         |        |  |  |         | 
|January 2001           |  |        | 19,100  |        |  |  | 6,900   | 
|February 2001          |  |        | 20,000  |        |  |  | 8,200   | 
|March 2001             |  |        | 20,400  |        |  |  | 11,100  | 
|                       |  |        |         |        |  |  |         | 
|First Quarter 2001     |  |        | 59,500  |        |  |  | 26,200  | 
|                      
|April 2001             |  |        | 16,200  |        |  |  | 10,900  | 
|May 2001               |  |        | 15,900  |        |  |  | 11,900  | 
|June 2001              |  |        | 13,400  |        |  |  | 10,950  | 
|                       |  |        |         |        |  |  |         | 
|Second Quarter 2001    |  |        | 45,500  |        |  |  | 33,750  | 
|                      
|July 2001              |  |        | 12,600  |        |  |  | 10,900  | 
|August 2001            |  |        | 15,000  |        |  |  | 10,800  | 
|September 2001         |  |        | 14,000  |        |  |  | 8,800   | 
|                       |  |        |         |        |  |  |         | 
|Third Quarter 2001     |  |        | 41,600  |        |  |  | 30,500  | 
|                      
|Nine months ended 2001 |  |        | 146,600 |        |  |  | 90,450  | 
|                       |  |        |         |        |  |  |         | 

Escrow Fees.Escrow fees for the third quarter of 2002 were $11.5 million, an
increase of $3.6 million, or 46.3% from the third quarter of 2001. The nine
months ended September 30, 2002, escrow fees were $30.7 million, an increase of
$7.4 million, or 31.5% from the comparable 2001 period. Escrow fees are
primarily related to real estate transactions activity in the Companys direct
operations. The increase in escrow fees is primarily the result of market
conditions fueled by continued interest rate decreases and our recent broadened
market in Phoenix, Arizona and our newest market in Clark County, Nevada.

Underwriting Premiums.Revenues from underwriting premiums for the third
quarter of 2002 were $5.8 million, an increase of $3.4 million, or 146.2% from
the third quarter of 2001. For the nine months ended September 30, 2002,
underwriting premiums were $13.8 million, an increase of $8.1 million, or
141.5% from the comparable 2001 period. In 2002 the increase in underwriting
premiums was indicative of the expansion of our underwriter both through direct
operations in Clark County, Nevada and independent agency relationships.

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Ancillary Service Fees.Ancillary service
fees, such as document preparation
services, appraisal services, inspections services, notary signing services and
property management services relate partly to the level and mix of business, as
well as the performance of certain ancillary service businesses. Ancillary
service fees for the third quarter of 2002 increased $850,000, or 19.7% to $5.2
million from $4.3 million in the comparable 2001 period. Ancillary service
fees totaled $15.5 million for the nine-month period ended September 30, 2002,
an increase of $2.8 million, or 22.3% from ancillary service fees of $12.7
million for the 2001 period. The increase in both periods ended September 30,
2002 is attributed to the Companys strategy to strengthen its ancillary
service business. The Company continues to leverage its core title and escrow
businesses and its national presence to expand ancillary service businesses.

Gain On Sale/Exchange of Equity Securities. Gain on sale/exchange of equity
securities in the nine-month period ended September 30, 2002 arose from our
receiving 322,318 shares of CKE Restaurant Inc.s (CKE) common stock for the
remaining 656,453 shares of Santa Barbara Restaurant Group, Inc. (SBRG)
common stock which we owned. SBRG and CKE concluded a merger in March 2002.
The CKE stock price on the closing date of the transaction was $9.45 per share.
In accordance with APB Opinion 29, Accounting for Nonmonetary Transactions,
even though the shares received were not sold, a realized gain of $2.4 million
was required to be recorded. The market price of the 322,318 shares
of CKE common stock
still owned by the Company was $4.00 per share on
November 4, 2002. The $1.0 million gain in 2001 is the result of
the sale of a large block of SBRG common stock at the then current market
price.

Investment Revenue.Investment revenue is primarily a function of securities
markets, interest rates and the amount of cash available for investment.
Investment income in the third quarter of 2002 increased $16,000 or 4.8% to
$351,000 from $335,000 in the corresponding 2001 period. Investment
revenue for
the nine-month period ended September 30, 2002 totaled $1.1 million compared
with $910,000 in the same 2001 period. The increase in investment and interest
revenue earned in the third quarter ended September 30, 2002 is primarily the
result of an increase in average invested assets.

Expenses

The following table presents the components of our expenses:

|                                 |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |        | 
|-------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------- |  |  | - | ------ | 
|                                 |  | Three months ended |        | Nine months ended
|                                 |  | September 30,      |        | September 30,    
|                                 |  |                    |        |                  
|                                 |  | 2002               |        | 2001              |  | 2002 |        | 2001
|                                 |  |                    |        |                   |  |      |        |     
|                                 |  | (Unaudited)       
|Personnel costs                  |  | $                  | 25,846 |                   |  | $    | 18,505 |      |  | $ | 70,338  |  |  | $ | 53,238 | 
|Other operating expenses         |  |                    | 13,926 |                   |  |      | 8,608  |      |  |   | 35,259  |  |  |   | 24,247 | 
|Title plant rent and maintenance |  |                    | 2,221  |                   |  |      | 1,733  |      |  |   | 6,457   |  |  |   | 5,748  | 
|                                 |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |        | 
|Total expenses                   |  | $                  | 41,993 |                   |  | $    | 28,846 |      |  | $ | 112,054 |  |  | $ | 83,233 | 
|                                 |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |        | 

Our principal costs include personnel costs, other operating expenses and title
plant rent and maintenance. Personnel costs include both base salaries and
commission expense paid to employees and are the most significant operating
expense incurred. These expenses fluctuate with the level of orders opened and
closed and the mix of revenue.

Other operating expenses consist of facilities expenses, postage and courier
services, computer services, professional services, advertising expense,
general insurance, trade and note receivable allowances, depreciation expense
and interest expense.

Title plant rent and maintenance costs consist of payments to access title
plants and the costs of updating these plants. Title plant rent and
maintenance costs include daily update expenses that are dependent on the
volume of real estate transaction activity and a rental charge that is based on
actual usage.

Personnel Costs.Personnel costs totaled $25.8 million, $18.5 million, $70.3
million and $53.2 million for the three-month and nine-month periods ended
September 30, 2002 and 2001, respectively. Personnel costs, as a percentage of
total revenue, exclusive of investment revenue and gain on sale/exchange of
equity securities, decreased to 51.0% for the three-month period ended
September 30, 2002 compared with 55.4% for the corresponding period in 2001.
For the nine-month periods ended September 30, 2002 and 2001, personnel
expenses as a percentage of total revenue, exclusive of investment
revenue and
gain on sale/exchange of equity securities, were 52.0% and 55.6%, respectively.
Our ability to handle increased resale and refinance activity without a
significant increase in staffing resulted in the decreased

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personnel expense as a percentage of revenue. We continue to take significant
measures to maintain appropriate personnel levels and costs relative to the
volume and mix of business and revenues. We continue to monitor the prevailing
market conditions and will respond as necessary.

Other Operating Expenses.Other operating expenses, as a percentage of total
revenue, exclusive of investment income and gain on sale/exchange of equity
securities, increased to 27.5% in the three-month period ended September 30,
2002 compared with 25.8% for the corresponding 2001 period. Other operating
expenses, as a percentage of total revenue, exclusive of investment revenue and
gain on sale/exchange of equity securities, increased to 26.1% for the
nine-month period ended September 30, 2002 compared with 25.3% for the
corresponding 2001 period. Our new market in Nevada and our expansion in
Arizona caused the increase in other operating expenses for both the
three-month and nine-month periods, however, certain fixed costs are incurred
regardless of revenue levels, resulting in fluctuations year over year. In
addition, expenses paid to affiliates declined due to the implementation of our
own employee benefit programs, the costs of which are included in other
operating expenses. We continuously review and evaluate operating expenses
relative to existing and projected market conditions.

Plant Rent and Maintenance Expense.Title plant rent and maintenance expense
totaled $2.2 million and $1.7 million for the three month periods ended
September 30, 2002 and 2001, respectively, and $6.5 million and $5.7 million
for the nine-month periods ended September 30, 2002 and 2001, respectively.
Title plant rent and maintenance expense decreased as a percentage of total
revenue, exclusive of investment income and gain on sale/exchange of equity
securities, to 4.4% from 5.2% in the three-month periods ended September 30,
2002 and 2001, respectively, and to 4.8% from 6.0% as a percentage of total
revenue, exclusive of investment revenue and gain on sale/exchange of equity
securities for the nine-month periods ended September 30, 2002 and 2001, respectively. The
decrease in both the three and nine-month periods in title plant expense is
primarily a result of renegotiations within several counties in California and
Arizona resulting in maintaining consistent cost reductions for the Company as
well as our increase in independent agency underwriting premiums.

Income Taxes.Income taxes as a percentage of earnings, for the three-month
and nine-month periods ended September 30, 2002, as a percentage of earnings,
were 37.2% and 41.0%, income taxes for the three-month and nine-month periods
ended September 30, 2001, were 42.0% and 41.4%, respectively. The fluctuations
with income taxes as a percentage of earnings, is attributable to the effect of
state income taxes on our wholly-owned underwritten title company and our
ancillary service companies; the change in the amount and the characteristics
of net revenue, operating income versus investment revenue; and the tax treatment
of certain items.

Liquidity and Capital Resources

Cash Flows.Our current cash requirements include debt service, debt relating
to capital leases, personnel and other operating expenses, taxes and dividends
on common stock. We believe that all anticipated cash requirements for current
and long-term operations will be met from internally generated funds and
through cash received from our subsidiaries. Our cash requirements include
expenses relating to the development and expansion of Nationals agency
business. We presently have in place much of the infrastructure (principally
consisting of personnel) that will be used for this development.

Two significant sources of our funds are dividends and distributions from our
subsidiaries. As a holding company, we receive cash from our subsidiaries in
the form of dividends and as reimbursement for operating and other
administrative expenses we incur. These reimbursements are executed within the
guidelines of various management agreements between the Company and our
subsidiaries. Our insurance underwriting subsidiary is restricted by state
regulations in their ability to pay dividends and make distributions. Our
underwritten title company and our ancillary companies collect premiums and
fees and pay underwriting fees and operating expenses. These companies are
restricted only to the extent of maintaining minimum levels of working capital
and net worth, but are not restricted by state regulations or banking
authorities in their ability to pay dividends and make distributions.
The restrictions to maintain minimum levels of working capital and
net worth have not changed since December 31, 2001.

In March 2002, we completed the purchase of an ownership interest in a title
plant located in Clark County, Nevada, for a purchase price of $1.3 million,
paid in cash. Also, in March, we acquired the right to access a title plant
located in San Francisco, California for $115,000, paid in cash.

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In April 2002, we completed the purchase of an office building located in the
County of Orange, California, for a purchase price of $1.1 million, paid in
cash. This building will house our growing American Documents division and a
new escrow office.

In September 2002, we paid in full a $1.9 million mortgage note payable
and accrued interest in the amount $3,000.

Capital Stock Transactions.On September 26, 2002, our Board of Directors
approved a stock repurchase program. Under the program, the Company is
authorized to repurchase up to an aggregate of $5 million of our common stock
in the open market, in block purchases or in privately negotiated transactions,
depending upon market conditions and other factors.

On June 27, 2002, our Board of Directors declared a five-for-four (5:4) stock
split effective July 18, 2002. All data with respect to earnings per share,
dividends per share and share information, including price per share where
applicable, have been retroactively adjusted to reflect the effects of the
stock split.

Critical Accounting Policies.There have been no material changes in our
critical accounting policies described in our Annual Report on Form 10-K for
the year ended December 31, 2001.




Item 3. Quantitative and Qualitative Market Risk Disclosures

There have been no material changes in the market risk disclosure described in
our annual report on Form 10-K for the year ended December 31, 2001.




Item 4. Controls and Procedures

Within 90 days prior to the date of this report, we carried out an evaluation,
under the supervision and with the participation of our principal executive
officer and principal financial officer, of the effectiveness of the design and
operation of the disclosure controls and procedures. Based on this evaluation,
our principal executive officer and principal financial officer concluded that
our disclosure controls and procedures are effective in timely alerting them to
material information required to be included in our periodic SEC reports. It
should be noted that the design of any system of controls is based in part upon
certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.

In addition, we reviewed our internal controls, and there have no significant
changes in our internal controls or in other factors that could significantly
affect those controls subsequent to the date of their last evaluation.




Part II: OTHER INFORMATION




Item 1. Legal Proceedings

In the ordinary course of business, we are involved in various pending and
threatened litigation matters related to our operations, some of which include
claims for punitive or exemplary damages. We believe that no actions depart
from customary litigation incidental to our business and that the resolution of
all such litigation will not have a material adverse effect on the Company.




Item 2. Changes
in Securities and Use of Proceeds

On June 27, 2002, our Board of Directors declared a five-for-four (5:4) stock
split effective July 18, 2002. All data with respect to earnings per share,
dividends per share and share information, including price per share where
applicable, have been retroactively adjusted to reflect the effects of the
stock split. Fractional shares were cashed out and payments were made to
shareholders in lieu of fractional shares.

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Item 6. Exhibits and Reports on Form 8-K.

(a)  Exhibits:

|     |  |                                                                                                                               
|---- |  | ------------------------------------------------------------------------------------------------------------------------------
|99.1 |  | Certification of Periodic Financial Reports pursuant to 18
U.S.C. §1350 signed by Michael C. Lowther, Chief Executive Officer.
|    
|99.2 |  | Certification of Periodic Financial Reports pursuant to 18
U.S.C. §1350 signed by Carl A. Strunk, Chief Financial Officer.    

(b)  Reports on Form 8-K:

None.







SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

AMERICAN NATIONAL FINANCIAL, INC.

---

(Registrant)


|    |  |                                                                                                                               |  |                        
|--- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | -----------------------
|By: |  | /s/  Carl A. Strunk                                                                                                           |  |                        
|    |  |                                                                                                                               |  |                        
|    |  | Carl A. Strunk
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) and Director |  | Date: 
November 7, 2002

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CERTIFICATIONS

I, Michael C. Lowther, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of American National
Financial, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4.    The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

a)    designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;

b)    evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c)    presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.    The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a)    all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b)    any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and

6.    The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

|                        |  |                                                        
|----------------------- |  | -------------------------------------------------------
|Date:  November 7, 2002 |  | /s/  Michael C. Lowther                                
|                        |  |                                                        
|                        |  | Michael C. Lowther
Chairman and Chief Executive Officer

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CERTIFICATION

I, Carl A. Strunk, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of American National
Financial, Inc.;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4.    The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

a)    designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;

b)    evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c)    presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.    The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a)    all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b)    any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and

6.    The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

|                       |  |                                                                                                                              
|---------------------- |  | -----------------------------------------------------------------------------------------------------------------------------
|Date: November 7, 2002 |  | /s/ Carl A. Strunk                                                                                                           
|                       |  |                                                                                                                              
|                       |  | Carl A. Strunk
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) and Director

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|        |  |                                                                                                                               
|------- |  | ------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Description                                                                                                                   
|99.1    |  | Certification of Periodic Financial Reports pursuant to 18
U.S.C. §1350 signed by Michael C. Lowther, Chief Executive Officer.
|       
|99.2    |  | Certification of Periodic Financial Reports pursuant to 18
U.S.C. §1350 signed by Carl A. Strunk, Chief Financial Officer.    

19