<PAGE>   1

                                  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, 1999

                         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                              (I.R.S. Employer
 incorporation or organization)                           Identification Number)


17911 Von Karman Avenue, Suite 240, Irvine, California                  92614
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)


                                 (949) 622-4700
              ----------------------------------------------------
              (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, 7,150,000 shares as of November 12, 1999

       Exhibit Index appears on page 11 of 12 sequentially numbered pages.


<PAGE>   2


                                    FORM 10-Q

                                QUARTERLY REPORT

                        Quarter Ended September 30, 1999

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Part I:  FINANCIAL INFORMATION                                                              Page Number
                                                                                            -----------
<S>      <C>                                                                                <C>
         Item 1.  Condensed Consolidated Financial Statements

                  A.  Condensed Consolidated Balance Sheets as of                                3
                      September  30, 1999 and December 31, 1998

                  B.  Condensed Consolidated Statements of Earnings                              4
                      for the three-month and nine-month periods ended
                      September 30, 1999 and 1998

                  C.  Condensed Consolidated Statements of Comprehensive                         5
                      Earnings for the three-month and nine-month periods
                      ended September 30, 1999 and 1998

                  D.  Condensed Consolidated Statements of Cash Flows                            6
                      for the nine-month periods ended September 30, 1999 and 1998

                  E.  Notes to Condensed Consolidated Financial Statements                       7

         Item 2.  Management's Discussion and Analysis of Financial                              8
                      Condition and Results of Operations

         Item 3.  Quantitative and Qualitative Market Risk Disclosures                          10

Part II: OTHER INFORMATION

         Items 1, 2, 3, 4 and 5 of Part II have been omitted because they are
                  not applicable with respect to the current reporting period.

         Item 6.  Exhibits and Reports on Form 8-K                                              11
</TABLE>


                                   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)                             Date: November 15, 1999



                                       2
<PAGE>   3


Part I:  FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements

               AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 September 30,       December 31,
                                                                                     1999               1998
                                                                                 -------------       ------------
                                                                                  (Unaudited)
<S>                                                                              <C>                 <C>
                                               ASSETS

Current assets:
  Cash and cash equivalents ..................................................    $ 6,969,255        $10,344,987
  Short-term investments, at cost, which approximates fair market value ......        294,000            150,000
  Accrued investment interest ................................................        233,802                 --
  Trade receivable, net of allowance for doubtful accounts
    of $567,838 at September 30, 1999 and $1,895,684 at December 31, 1998 ....      6,635,193          8,575,808
  Notes receivables, net .....................................................        124,620                 --
  Deferred income taxes ......................................................      3,114,430          2,395,298
  Prepaid expenses and other current assets ..................................      1,201,928          2,909,388
                                                                                  -----------        -----------
        Total current assets .................................................     18,573,228         24,375,481
Other investments, available for sale, at fair market value ..................     14,032,958                 --
Property and equipment, net ..................................................      7,733,376          4,010,187
Title plants .................................................................      2,377,223          2,252,023
Intangibles, net of accumulated amortization of $839,909 in 1999 and
  $609,103 in 1998 ...........................................................      8,118,273          6,738,350
        Total assets .........................................................    $50,835,058        $37,376,041
                                                                                  ===========        ===========

                                LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable and other accrued expenses, including $59,018
    to affiliates in 1999 and $126,630 in 1998 ...............................    $ 4,488,001        $ 6,354,355
  Customer advances ..........................................................      1,596,205          2,190,364
  Current portion of long-term debt ..........................................         53,184            442,500
  Current portion of obligations under capital leases with affiliates ........         65,909            741,561
  Current portion of obligations under capital leases with non-affiliates ....        173,026            115,643
  Reserve for claim losses ...................................................      4,348,459                 --
  Income taxes payable .......................................................      1,354,411          3,750,029
  Due to affiliate ...........................................................      1,671,576          1,892,910
                                                                                  -----------        -----------
        Total current liabilities ............................................     13,750,771         15,487,362
Long term debt ...............................................................      2,004,656                 --
Obligations under capital leases with affiliates .............................        619,504            669,435
Obligations under capital leases with non-affiliates .........................      1,219,042          1,321,070
                                                                                  -----------        -----------
        Total liabilities ....................................................     17,593,973         17,477,867
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, 7,150,000 in 1999 and 4,917,096 in 1998 ..........             --                 --
  Additional paid in capital .................................................     21,745,777         12,324,264
  Retained earnings ..........................................................     11,615,038          7,573,910
                                                                                  -----------        -----------
                                                                                   33,360,815         19,898,174
  Accumulated comprehensive earnings .........................................       (119,730)                --
  Total shareholders' equity .................................................     33,241,085         19,898,174
                                                                                  -----------        -----------
  Total liabilities and shareholders' equity .................................    $50,835,058        $37,376,041
                                                                                  ===========        ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements


                                       3
<PAGE>   4


               AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS


<TABLE>
<CAPTION>
                                                                       Three months ended             Nine months ended
                                                                          September 30,                 September 30,
                                                                   --------------------------     --------------------------
                                                                      1999            1998           1999           1998
                                                                   -----------    -----------     -----------    -----------
                                                                           (Unaudited)                    (Unaudited)
<S>                                                                <C>            <C>             <C>            <C>
Revenues:
  Net title service revenue -- related party ....................  $12,136,141    $13,152,130     $40,855,466    $37,273,468
  Escrow fees ...................................................    6,128,634      6,462,876      19,977,614     17,179,061
  Other service charges .........................................    2,890,695      4,056,035       9,771,597     10,981,228
  Investment income, including realized gains and losses ........      312,675         76,645         642,081        289,463
                                                                   -----------    -----------     -----------    -----------
        Total revenues ..........................................   21,468,145     23,747,686      71,246,758     65,723,220
                                                                   -----------    -----------     -----------    -----------

Expenses:
  Personnel costs ...............................................   13,436,153     12,758,440      41,828,103     35,280,827
  Other operating expenses includes $953,794 and $882,895
    with affiliate for the three-month period ended
    September 30, 1999 and 1998, and $3,013,219
    and $2,565,125 with affiliate for the nine-month period
    ended September 30, 1999 and 1998, respectively .............    5,248,537      4,879,675      14,068,922     12,654,305
  Title plant rent and maintenance ..............................    1,523,131      2,121,403       4,704,988      5,137,292
                                                                   -----------    -----------     -----------    -----------
        Total expenses ..........................................   20,207,821     19,759,518      60,602,013     53,072,424
                                                                   -----------    -----------     -----------    -----------

Earnings before income taxes and minority interest
  in net earnings of consolidated subsidiary ....................    1,260,324      3,988,168      10,644,745     12,650,796
Provision for income taxes ......................................      516,999      1,748,394       4,458,621      5,280,433
                                                                   -----------    -----------     -----------    -----------
Earnings before minority interest in net earnings of
  consolidated subsidiary .......................................      743,325      2,239,774       6,186,124      7,370,363
Minority interest in net earnings of consolidated subsidiary ....           --       (849,786)             --     (2,894,332)
                                                                   -----------    -----------     -----------    -----------
Net earnings ....................................................  $   743,325    $ 1,389,988     $ 6,186,124    $ 4,476,031
                                                                   ===========    ===========     ===========    ===========

Basic net earnings ..............................................  $   743,325    $ 1,389,988     $ 6,186,124    $ 4,476,031
                                                                   ===========    ===========     ===========    ===========
Basic earnings per share ........................................  $      0.10    $      0.49     $      0.91    $      1.55
                                                                   ===========    ===========     ===========    ===========
Weighted average shares outstanding, basic basis ................    7,150,000      2,834,750       6,773,022      2,889,995
                                                                   ===========    ===========     ===========    ===========

Diluted net earnings ............................................  $   743,325    $ 1,389,988     $ 6,186,124    $ 4,476,031
                                                                   ===========    ===========     ===========    ===========
Diluted earnings per share ......................................  $      0.10    $      0.45     $      0.91    $      1.41
                                                                   ===========    ===========     ===========    ===========
Weighted average shares outstanding, diluted basis ..............    7,150,000      3,123,209       6,816,697      3,178,454
                                                                   ===========    ===========     ===========    ===========

Cash dividends per share ........................................  $      0.10    $        --     $      0.30    $        --
                                                                   ===========    ===========     ===========    ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements


                                       4
<PAGE>   5


               AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS


<TABLE>
<CAPTION>
                                                    Three months ended         Nine months ended
                                                       September 30,             September 30,
                                                  -----------------------   ------------------------
                                                    1999          1998         1999         1998
                                                  ---------    ----------   ----------    ----------
                                                        (Unaudited)                (Unaudited)
<S>                                               <C>          <C>          <C>           <C>
Net earnings ..................................   $ 743,325    $1,389,988   $6,186,124    $4,476,031
                                                  ---------    ----------   ----------    ----------

Other comprehensive loss:
  Unrealized losses on investments, net (1) ...    (132,556)           --     (119,730)           --
                                                  ---------    ----------   ----------    ----------

  Comprehensive earnings ......................   $ 610,769    $1,389,988   $6,066,394    $4,476,031
                                                  =========    ==========   ==========    ==========
</TABLE>

(1)  Net of income tax benefit of ($60,393) and $0, and ($54,549) and $0 for the
     three-month and nine-month periods ended September 30, 1999 and 1998,
     respectively.




See accompanying notes to condensed consolidated financial statements



                                       5
<PAGE>   6


               AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                               Nine months ended
                                                                                                 September 30,
                                                                                         ------------------------------
                                                                                             1999              1998
                                                                                         ------------      ------------
                                                                                                   (Unaudited)
<S>                                                                                      <C>               <C>
Cash flows from operating activities:
     Net earnings ...................................................................    $  6,186,124      $ 4,476,031
     Adjustments to reconcile net earnings to cash provided by operating activities:
         Depreciation and amortization ..............................................       1,738,258        1,012,362
         Net increase in reserve for claim loss .....................................         195,182               --
         Unrealized losses in investments ...........................................        (119,730)              --
         Minority interest in net earnings of consolidated subsidiary ...............              --        2,894,332
         Gain on sale of property and equipment .....................................          (4,674)              --
         Changes in:
         Accounts receivable, net ...................................................       1,940,615       (2,096,897)
             Net increase in interest receivables ...................................        (233,802)              --
             Prepaid expenses and other assets ......................................          59,437         (277,444)
             Income taxes payable and deferred income taxes .........................      (3,114,750)       1,255,218
             Accounts payable and other accrued expenses ............................      (2,581,354)       4,563,179
             Due to affiliate .......................................................        (221,334)      (1,411,170)
             Deposits with Insurance Commissioner ...................................              --           (7,500)
             Customer advances ......................................................        (594,159)              --
                                                                                         ------------      -----------
                Total cash provided by operating activities: ........................       3,249,813       10,408,111
                                                                                         ------------      -----------

Cash flows from investing activities:
     Advance to related party .......................................................              --       (1,531,169)
     Assets acquired, net of cash ...................................................       1,234,970         (160,000)
     Purchase of title plant ........................................................        (125,200)              --
     Collections of notes receivable ................................................         155,643               --
     Purchase of property and equipment .............................................      (5,554,271)      (1,763,473)
     Proceeds from sale of real estate ..............................................         330,000               --
     Additions to notes receivable ..................................................        (280,259)              --
     Purchase of investments ........................................................     (11,223,053)      (1,879,135)
                                                                                         ------------      -----------

                Total cash used in investing activities: ............................     (15,462,170)      (5,333,777)
                                                                                         ------------      -----------

Cash flows from financing activities:
     Borrowings .....................................................................       2,080,000       (4,800,000)
     Repayment of long term debt ....................................................        (464,660)              --
     Proceeds from stock options exercised ..........................................         219,717               --
     Proceeds from issuance of common stock .........................................       9,201,796               --
     Payments under capital lease obligations .......................................        (770,228)        (521,210)
     Dividends paid .................................................................      (1,430,000)              --
                                                                                         ------------      -----------

                Total cash used in investing activities: ............................       8,836,625       (5,321,210)
                                                                                         ------------      -----------

     Increase in cash and cash equivalents ..........................................      (3,375,732)        (246,876)
     Cash and cash equivalents at the beginning of year .............................      10,344,987        7,223,635
                                                                                         ------------      -----------
     Cash and cash equivalents at end of year .......................................    $  6,969,255      $ 6,976,759
                                                                                         ============      ===========

Supplemental disclosure of cash flow information:
     Cash paid during the year:
         Interest ...................................................................         131,937          562,044
         Income taxes ...............................................................       6,582,500        4,045,853
     Non-cash financing activities:
         Dividends declared and unpaid ..............................................         715,000               --
</TABLE>


See accompanying notes to condensed consolidated financial statements


                                       6
<PAGE>   7


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 generally accepted
accounting principles 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, 1998 and the Prospectus dated February 12, 1999.

Certain reclassifications have been made in the 1998 Condensed Consolidated
Financial Statements to conform to classifications used in 1999.

Note B - Dividends

On September 29, 1999, the Company's Board of Directors declared a quarterly
cash dividend of $.10 per share, payable on October 26, 1999, to stockholders of
record on October 12, 1999.

Note C - Investments

Marketable securities are stated at market value as determined by the most
recently traded price of each security at the balance sheet date. The Company
invests primarily in high-grade bonds and certain equity securities. All
securities are defined as available-for-sale securities under the provisions of
Statement of Financial Accounting Standards No. ("SFAS") 115, "Accounting for
Certain Investments in Debt and Equity Securities."

Management determines the appropriate classification of its investments in
marketable securities at the time of purchase and reevaluates such determination
at each balance sheet date. Securities that are bought and held principally for
the purpose of selling them in the near term are classified as trading
securities and unrealized gains and losses are included in earnings.
Available-for-sale securities are carried at fair value, with the unrealized
gains and losses, net of tax, reported as a separate component of stockholders'
equity.

Note D - Reserves for Claim Losses

The Company's reserve for claim losses includes known claims as well as losses
the Company expects to incur, net of recoupments. Each known claim is reserved
for on the basis of a review by the Company as to the estimated amount of the
claim and the cost required to settle the claim. Reserves for claims which are
incurred but not reported are provided for at the time premium revenue is
recognized based on historical loss experience, and other factors, including
industry averages, claim loss history, current legal environment, geographic
consideration and type of policy written. The occurrence of a significant major
claim in any given period could have a material adverse effect on the Company's
financial condition and results of operations for such period. Escrow losses are
expensed when they become known and are included in other operating expenses.

Note E - Acquisition

On May 28, 1999, the Department of Insurance, State of New York, approved the
acquisition of National Title Insurance of New York ("National"), a New York
underwriter, by American Title Company a subsidiary of American National
Financial Inc. from Fidelity National Financial, Inc. National Title Insurance
Company of New York is licensed to issue title insurance policies in 35 states
and the U.S. Virgin Islands. The $3.25 million dollar purchase price was paid in
cash and the transaction was completed in June 1999.

On April 1, 1999, the Company completed the purchase of a home office building
located in Orange, California for $2,600,000. In connection with the purchase,
the Company financed $2,080,000 in the form of a mortgage note payable to a
financial institution that bears interest at the prime lending rate with
principal payments in the amount of $4,432 payable monthly. The note matures on
April 1, 2004.



                                       7
<PAGE>   8


Note F - Employee Stock Purchase Loan Plan

On September 29, 1999, the Company's Board of Directors approved the adoption of
the American National Financial, Inc. Employee Stock Purchase Loan Plan
("Employee Plan") and the Non-Employee Director Stock Purchase Loan Program
("Director Program"). The purpose of the Loan Plan and Loan Program is to
provide key employees and directors with further incentive to maximize
shareholder value. The Company authorized an aggregate of $2,000,000 in loans.
Loan Plan and Loan Program funds must be used to make private or open market
purchases of Company common stock through a broker-dealer designated by the
Company. All loans are full recourse and unsecured, and will have a five-year
term. Interest will accrue on the loans at a rate of 5% per annum due at
maturity. Loans may be prepaid any time without penalty.

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 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. All forward-looking statements
included in this document are based on information available to the Company on
the date hereof, and the Company assumes no obligation to update any such
forward-looking statements. It is important to note that the Company's 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 the Company's reports on Forms 10-K and filings under
the Securities Act of 1933, as amended.

Results of Operations

Total revenue for the third quarter of 1999 decreased $2.3 million, or 9.6%, to
$21.5 million from $23.7 million for the third quarter of 1998. Total revenue
for the nine-month period ending September 30, 1999 increased $5.5 million, or
8.4%, to $71.2 million from $65.7 million for the comparable 1998 period. The
decrease in total revenue for the three-month period ended September 30, 1999 is
primarily the result of rising interest rates and the decrease in order count
during the third quarter due to decline in refinance activity and a shift in the
mix of business from a refinance driven market to a more traditional purchase
and resale market. The increase for the nine-month period ended September 30,
1999 compared to corresponding 1998 period is the result of internal expansion
and the favorable market conditions in the first six-months of 1999. The third
quarter revenues weakened resulting in year over year increase. Additionally,
the trends in revenues generated by operations of the Company's ancillary
service subsidiaries were consistent with this decline as the demand for these
services are constant with the trend in real estate activity.

Net title service revenue decreased $1.0 million, or 7.7%, to $12.1 million from
$13.2 million for the three-month period ending September 30, 1999, which is
consistent with the current real estate market environment and the decline in
third quarter orders. Net title service revenue increased $3.6 million, or 9.6%
to $40.9 million from $37.3 million for the nine-month period ending September
30, 1999 and 1998. The average fee per file increased to $978 in the three-month
period ended September 30, 1999 from $859 for the corresponding 1998 period. The
increase in fee per file is indicative of a change in the percentage mix of
title orders from refinance to resale.

Escrow fees have followed the same trend as net title service revenue. Escrow
fees decreased to $334,000, or 5.2%, from $6.5 million to $6.1 million for the
three-month period ending September 30, 1999. For the nine-month period ending
September 30, 1999 escrow fees increased $2.8 million, or 16.3%, to $20.0
million from $17.2 million. The increase in the nine-month period ending
September 30, 1999 compared to the corresponding 1998 period is the result of
favorable market conditions and the Company's expansions of escrow offices in
the first six-months of 1999.

Other fees and income also followed the same trend as net title service revenue,
as would be expected. Other fees and income decreased 28.7% to $2.9 million in
the third quarter of 1999 from $4.1 million in the third quarter of 1998. This
decrease is consistent with the decline in orders and current seasonal decline
in ancillary business. For the nine months ended September 30, 1999 other fees
and income decreased 11.0% to $9.7 from $10.9 million for the comparable 1998
period. This decline is consistent with the current market activity.



                                       8
<PAGE>   9


Interest and investment income increased 306.5% to $313,000 in the third quarter
ending September 30, 1999, from $77,000 in the third quarter of 1998. Investment
income for the nine-months ended September 30, 1999 totaled $642,000 compared to
$289,000 in the comparable 1998 period, an increase of 122.0%. The increase in
interest and investment income is the result of the increase in the Company's
investment portfolio resulting from the acquisition of National and an increase
in other invested assets.

The Company's operating expenses consist primarily of personnel costs, other
operating expenses and title plant maintenance. Net title service revenue,
escrow fees and the majority of other fees and revenue are recognized as income
at the time the underlying transaction closes. As a result, revenue lags
approximately 60-90 days behind expenses and therefore gross margins may
fluctuate.

Personnel costs include both base salaries and commissions paid to employees,
and are the most significant operating expenses incurred by the Company. These
costs generally fluctuate with the level of orders opened and closed and with
the mix of revenues. Personnel costs, as a percentage of total revenue,
increased to 62.6% for the three-month period ended September 30, 1999 compared
to 53.7% for the corresponding 1998 period. For the nine-month period ending
September 30, 1999 and 1998, personnel expenses as a percentage of total revenue
were 58.7% and 53.7% respectively. The increase in the nine-month period ended
September 30, 1999 was the result of favorable market conditions during the
first six-months that did not continue into the third quarter. Management
believes that recent staff reductions have brought employee headcounts in line
with current order openings. The Company continues to monitor the market
conditions and remains aggressive to adjust personnel costs to levels consistent
with revenues. Personnel costs totaled $13.4 and $12.8 for the quarters ended
September 30, 1999 and 1998, respectively, and $41.8 million and $35.3 million
for the nine-month periods ended September 30, 1999 and 1998, respectively.

Other operating expenses consist primarily of facilities expenses, escrow
losses, provision for claim losses, courier services, computer services,
professional services, general insurance, interest expense, trade and notes
receivable allowances and depreciation. Other operating expenses increased as a
percentage of total revenue to 24.4% in the third quarter of 1999 from 20.5% in
the third quarter of 1998. Other operating expenses as a percentage of total
revenue increased to 19.7% for the nine-month periods ended September 30, 1999
compared to 19.3% for the 1998 period. The fluctuation in the year over year
increases can be attributed to expenses related to start-up costs associated
with the National Title Insurance Company of New York, Inc. acquisition and
expansion costs during the first six months of 1999. The Company implemented and
remains committed to aggressive cost control programs which will maintain
operating expense levels consistent with the levels of revenue reduction. Other
operating expenses totaled $5.2 million in the third quarter of 1999 compared to
$4.9 million in the third quarter of 1998. For the nine-month periods ended
September 30, 1999 and 1998, other operating expenses totaled $14.1 million and
$12.7 million, respectively.

Title plant maintenance expenses decreased as a percentage of total revenue to
7.1% for the three-month period ended September 30, 1999, compared to 8.9% for
the comparable 1998 period. The reduction as a percentage of total revenue is
the result of the current year contract negotiations which reduced plant access
costs and is consistent with the levels of revenue production. For the
nine-month periods ended September 30, 1999 and 1998, title plant maintenance as
a percentage of total revenue were 6.6% and 7.8%, respectively. Title plant
maintenance totaled $1.5 million and $2.1 million for the quarters ended
September 30, 1998 and 1998 respectively, and $4.7 million and $5.1 million for
the nine-month periods ended September 30, 1999 and 1998, respectively.

Income tax expense for the three-month and nine-month period ended September 30,
1999 and 1998, as a percentage of earnings before income taxes was 41.0% and
43.8%, respectively. Income tax expense for the nine-month periods ended
September 30, 1999 and 1998 was 41.9% and 41.7%, respectively. The fluctuations
in income tax expense as a percentage of earnings before income taxes are
attributable to the Company's estimate of ultimate tax liability and the
characteristics of net income, i.e. operating income versus investment income,
taxable versus non-taxable.

Liquidity and Capital Resources

The Company's current cash requirements include debt service, debt relating to
capital leases, personnel, operating expenses, taxes and dividends on its common
stock. The Company believes that all anticipated cash requirements for current
operations will be met from internally generated funds and existing cash
resources.

As a holding company, the Company receives cash from its subsidiaries in the
form of reimbursement for operating and other administrative expenses. Positive
cash flow from the insurance subsidiary is invested primarily in long-term
investments. The insurance subsidiary is restricted by state regulations in
their ability to pay dividends and make distributions. The Company's ancillary
service subsidiaries collect revenue and pay operating expenses, however, they
are not regulated by



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insurance regulatory or banking authorities.

Year 2000

Information technology is an integral part of the Company's business. The
Company also recognizes the critical nature of and the technological challenges
associated with the Year 2000 issue. The Year 2000 issue ("Y2K") results from
computer programs and computer hardware that utilize only two digits to identify
a year in the date field, rather than four digits. If such programs or hardware
are not modified or upgraded information systems could fail, lock up, or in
general fail to perform according to normal expectations. The Company has
implemented a program and committed both personnel and other resources to
determine the extent of potential Y2K issues. Included within the scope of this
program are systems used in title plants, title policy processing, escrow
production, claims processing, real estate related services, financial
management, human resources, payroll and infrastructure. In addition to a review
of internal systems, the Company has initiated formal communications with third
parties with which it does business in order to determine whether or not they
are Y2K compliant and the extent to which the Company may be vulnerable to third
parties' failure to become Y2K compliant. The Company continues the process of
identifying Y2K compliant issues in its systems, equipment and processes. The
Company is making changes to such systems, updating or replacing such equipment,
and modifying such processes to make them Y2K compliant.

The Company has developed a four-phase program to become Y2K compliant. Phase I
is, "Plan Preparation and Identification of the Problem." This is a continuing
phase that will extend beyond the year 2000 itself. Phase II is, "Plan Execution
and Remediation." Phase III is, "Testing." Phase IV is, "Maintaining Y2K
Compliance." The Company will be substantially Y2K compliant by the end of
November 1999. The status of the Y2K compliance program is monitored by senior
management of the Company and by the Audit Committee of the Company's Board of
Directors. The costs of the Y2K related efforts incurred to date have not been
material, and the estimate of remaining costs to be incurred is not considered
to be material. Due to the complexities of estimating the cost of modifying
applications to become Y2K compliant and the difficulties in assessing third
parties', including various local governments upon which the Company relies upon
to provide title-related data, ability to become Y2K compliant, estimates may be
subject to change.

Management of the Company believes that its electronic data processing and
information systems will be Y2K compliant; however, there can be no assurance
all of the Company's systems will be Y2K compliant, or the costs to be Y2K
compliant will not exceed management's current expectations, or that the failure
of such systems to be Y2K compliant will not have a material adverse effect on
the Company's business. The Company believes that functions currently performed
with the assistance of electronic data processing equipment could be performed
manually or outsourced if certain systems were determined not to be Y2K
compliant on or after January 1, 2000.

The Company has substantially completed a contingency plan in the event that any
systems are not Y2K compliant.

This entire section, "Year 2000 Issues", is hereby designated a "Year 2000
Readiness Disclosure", as defined in the Year 2000 Information and Readiness
Disclosure Act.

Item 3.  Quantitative and Qualitative Market Risk Disclosures

The Company does not believe that there have been any material changes in market
risks since year-end other than the recent increases in interest rates.



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Part II: OTHER INFORMATION

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

                  (a)  Exhibits:

         Exhibit 11 Computation of Basic and Diluted Earnings Per Share

         Exhibit 27 Financial Data Schedule

                  (b)  Reports on Form 8-K:

         None.




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