Q4 2019 Earnings Call
[music].
Good day, ladies and gentlemen, and welcome to the SNS <unk> 2019 fourth quarter earnings call.
During today's presentation, all parties will be in listen only mode.
Following the presentation the conference will be open for questions with instructions to follow at that time.
As a reminder, this conference call is being recorded.
I would now let's turn the call over to Jamie Willis Investor Relations for up enough. Please go ahead Sir.
Thank you operator, and good morning, everyone. Thank you for joining our fourth quarter 2019 earnings Conference call. Joining me today, our chairman Bill Foley CEO, Randy Quirk, President Mike Nolan.
So Tony Park, and nothing GE CEO, Chris Blonde.
Well began with a brief strategic overview for Bell Randy will review the title business Antonio finish with a review of the financial highlights.
And open the call for your questions and finish with concluding remarks from Bill Foley.
Before we begin I would like to remind you that this conference call may contain forward looking statements that involve a number of risks and uncertainties.
Statements that are not historical facts, including statements about our expectations hopes intentions or strategies regarding the future or forward looking statements.
Forward looking statements are based on management's beliefs as well as assumptions made by and information currently available to management because such statements are based on expectations that the future financial and operating results and are not statements attack actual results may differ materially from those projected.
We undertake no obligation to update any forward looking statements, whether as a result of new information future events or otherwise.
The risks and uncertainties, which forward looking statements are subject to include but are not limited to the risks and other factors detailed in our press release dated yesterday and then the statement regarding forward looking information risk factors and other sections of the company's form 10-K, and other filings with the FCC.
This conference call will be available for replay via webcast at our website at <unk> Dot com. It will also be available through phone replay beginning at two P.M. eastern.
Today through February 21st the replay number is 84451 to two nine to one.
The access code is 13697834, let me now turn the call over to our Chairman Bill Foley.
Jamie the fourth quarter was another strong quarter for our title business, finishing up a banner year, we generated adjusted pretax title earnings of 355 million in a 16.3% adjusted pretax title margin during the fourth quarter.
For the year, we generated adjusted pretax title earnings of 1.3 billion a record with adjusted pre tax what type of margin of 16.3%, which was our best since 2003.
What Randy go into more details on the times business a bullet.
Turning to our acquisition of energy hold Apptio holdings are in a country, which we announced last week.
Enough has agreed to acquire F and G for $12, a 50 cents per share converts converts dog in and equity deals valued at approximately 2.7 billion.
We expect the transaction to be more than 20% accretive on a pro forma basis to AEP and that's 2021 earnings and 10% accretive on a pro forma basis do you happen to us.
2020 earnings.
Assuming the transaction closes by June Thirtyth two twentytwenty.
Through the acquisition FNF will expand into the retirement and insurance business.
Diversify into those cash income streams beyond title insurance.
Importantly, we expect F and G to reduce the risk involuntary volatility volatility inherent in our title operations by providing a counterbalance to evidence, earning sensitivity to mortgage interest rates well offering significant in a meeting video earnings accretion.
Ideally.
Additionally, we are excited with Devon, she's very attractive growth outlook is the retirement and insurance business is benefiting from an aging demographic and accommodate government policy, which are driving robust demand for their products.
FNF also offers F and G size scale and financial strength, which will allow FMC to capitalize on incremental organic and integrate inorganic growth opportunities.
No, we expect or acquisition to accelerate EPAM geez.
Ratings upgrades, which will open new broker dealer bank channels for the distribution of his retirement and insurance products.
We also see the potential for cross selling of retirement and insurance products.
So that's extensive think network.
Looking forward, we're committed to creating meaningful long term value for shareholders through thoughtful capital allocation strategy focused on dividends share repurchases debt pay down and further investments in our business segments.
We have no plans to alter our current dividend policy and as reminder, during the fourth quarter, we raised our quarterly dividends, 6.5% to 33 cents per share, which use 90 million it available holding company cash.
With the addition of effigies earnings and cash flow, we would expect to increase our dividend overtime.
We will continue to be opportunistic buyers overstocked in accordance with our existing buyback authorization.
During the quarter and prior to the blackout periods, we repurchased 80000 shares at a total of 2.1 million shares throughout the year.
Our current repurchase plan is 22.2 million shares remaining on the authorization.
After the holding company cash inflows were 350 million three or 51 million, primarily from the 335 million in underwriter in non underwriter dividends in the fourth quarter and 16 million in principal interest on the company on the intercompany Servicelink note. The net result was that we ended the fourth quarter the blood.
The 1.1 billion in available holding company cash I'll now turn the call over to Randy Quirk discuss the title shirt.
Thank you Bill.
We generated adjusted pre tax tie learnings of 355 million 97 million, what 38% increase over the strong fourth quarter of 2018.
Our adjusted pretax title margin was 16.3% 210 basis point increase over the prior year.
We had a 39% increase in direct orders closed comprised of a 5% increase in daily purchase orders closed 139% increase data refinance orders closed and an 11% increase in total commercial orders closed.
Purchase order sharpened increased by 3% versus the fourth quarter of 2018 refinance orders opened increased by 110% versus the fourth quarter 2018, as the current mortgage rate environment drives refinances volumes.
Lastly, total commercial orders opened decreased by 20% over the fourth quarter of 2018.
This quarter produced improving trends and purchase orders opened a strong continued quarter, a refinance orders opened as well as ongoing strength and commercial orders and.
We expect mortgage originations to remain strong first half a year and then began to moderate through the remainder of 2020.
For the fourth quarter total orders opened averaged 7800 per day with October at 8500 November at 8200 and December at 6700.
Purchase orders opened were up 3% encourage orders were up 5% on a daily basis in the fourth quarter.
[noise] daily purchase orders opened in October were up by 1% versus the prior year period, well November was up 4% and December was up 5% versus the prior period.
Refinance orders opened and closed increased by 110% and 139% respectively on a daily basis versus the fourth quarter of 2018.
For the month of January total order show up and we're over 8800 per day with a steady steady increase each week and nearly 10500 orders opened per day and the first week in February.
Daily purchase order is open for the month of January increased by 5% versus the prior year daily refinance orders open increased by 98% over the prior year period.
Total commercial revenue of 321 million was at 2% decline versus the record breaking fourth quarter of 2018.
Driven primarily by a 12% decrease in the fee per file partially offset by an 11% increase and closed orders.
Commercial orders opened increased by 20% in the fourth quarter versus the prior year.
Total commercial revenue for the year 2018, what's our best annual revenue performance since we began tracking total commercial revenue in 2015.
Lastly, staffing levels remained relatively stable during the fourth quarter. However, in the second and third quarter, our staffing needs increased by approximately 500 as a result already open order and closed or volume increase.
Let me now turn the call over to Tony Park to review the financial highlights.
Thank you Randy we generated $2.4 billion and total revenue in the fourth quarter with the title segment generating all but the $52 million of revenue we generated in our corporate segment.
Net earnings were $340 million, which included $131 million in net realized gains adjusted net earnings were $263 million or 95 cents per diluted share.
Excluding net realized gains of $135 million, our title segment generated $2.2 billion and total revenue for the fourth quarter, 20% increase from the fourth quarter 2018.
Direct premiums increased by 14% versus the fourth quarter 2018.
Agency revenue grew by 23% and escrow title related and other fees also increased by 23% versus the prior year.
Personnel cost increased by 11% and other operating expenses grew by 19%.
Oh, and the title business generated a 16.3% adjusted pretax title margin, a 210 basis point increase versus the fourth quarter 2018.
Included in the increase in operating expenses were some unusual dispute and litigation related items, including the settlement of a case dating back nearly two decades.
Since these types of expenses show up from time to time, we don't exclude them from adjusted earnings. However, it is relevant to point them out those amounts were over were approximately $24 million and negatively impacted our title Mart margin by over 100 basis points.
Interest income of $55 million was a 3 million dollar increase over the prior year as we saw the positive impact of the reinvestment of proceeds from maturing fixed income securities and increased cash and short term investment balances, partially offset by a decline in short term interest rates on the interest we are.
The client exchange funds, we hold Energen 31 exchange business.
FNF debt outstanding was $838 million on December 31st for a debt to total capital ratio of 12.8%.
Our claims paid a $53 million were $13 million lower than our provision of $66 million for the fourth quarter. The carried reserve for claims losses is currently $34 million or 2% above the actuaries central estimate.
We continue to provide for claims that at 4.5% of total title premiums.
Finally, our investment portfolio totaled $5.8 billion at December 30, Onest included in the $5.8 billion, our fixed maturity and preferred securities a $2.5 billion with an average duration of 3.6 years and an average rating of a too.
Equity securities of $800 million short term and other investments of $1.1 billion and cash of $1.4 billion.
The $1.4 billion in cash over $1.1 billion currently sits at the holding company level.
Let me now I'll turn the call back to our operator to allow for any questions.
Thank you we will now be conducting a question and answer session.
I would like to ask a question press star one on your telephone keypad.
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One moment, please while we pull for questions.
Thank you. Our first question comes from the line of Mark Devries with Barclays. Please proceed with your question.
Yeah. Thanks first questions for Randy.
Let me give you just talk a little bit more about you know what you saw in your commercial volumes in the quarter as you noted.
You know orders close is actually up that but the revenue per order was down.
What that.
Characteristics for of the of the business you saw and then also do the pipeline as you indicated you know probably the biggest increase since you started monitoring it and the open orders kind of your optimism going forward. Thanks.
Markets actually Mike in the fourth quarter. There was a couple of things about the order bottoms. One there are up substantially as you saw 20%, but we did have a couple of big multi site transactions that we didnt have in the fourth quarter of 2018 and that partly drove the increase in open orders. It also had an effect on the average fee per file.
Ill, because you're spreading that aggregate premium over many more locations and it just lowers the average fee per file when you do the math I'd also point out that in the fourth quarter last year.
That was are really tough comp.
That was probably one of our I think it was probably our highest average fee per file a national commercial that we've ever had we had a number of large single site transactions and some high rate states.
I think the pipeline if you looked at the back half a year or up 15% in the third quarter 20 in the fourth and I think another 15 in January so we're just seeing really strong order volumes and strong pipeline.
Okay got it next question maybe for Bill.
Assuming that the F and G transaction closes as planned.
How do you think about the relative attractiveness of the different up options, you'll have for deploying your free cash flow coming out of the title business.
Where do you see the best returns between investing it on the F and G business buybacks M&A dividends et cetera.
Yeah, I think M&A is of his other than perhaps by blocks of business.
The F and G side will not be significant what I would like to see US do is continue to look at our dividends and move our dividend north.
And then also reengage on the stock repurchase program.
And we're we've just got a couple of open items going on right now with F and G. So we're precluded from repurchasing shares at this particular time, but as soon as the window opens we intend to go back in and started our normal daily stock repurchased or repurchase plans or repurchase program.
So SNG will be like six be exciting for us it's a it's a growth business.
We're going to enable them to get a ratings Bob ratings increase which will allow different channels open up for F and G.
And that will kind of be where.
M&A occurs to the extent there is M&A and then there is also always opportunities and possibilities with regard to title agents that we may want to assimilate to bring into our bring into our company.
But there there aren't a lot of available, but there are some and we will continue to try and grow our markets, you're either through acquisition or through organic growth by taking market share from the other large players.
Okay. Thank you.
Thanks.
Your next question comes from the line of Bose George with KBW. Please proceed with your question.
Yeah good afternoon.
She can you give us some guidance on your expectation for interest income next year.
Just assuming interest rates stayed fairly stable.
Sure Bose. This is Tony So we are generated about $225 million an interest income over the course of 2019 and as you know we went through a period of three a fed rate adjustments downward. So we will feel a little pressure as we move our way through 2020.
My expectation is over the course of 2020 will probably declined about $20 million and that's fairly spread equally maybe a little less than Q1 relative to the prior year Q1, but then it will pick up a little bit gradually and so again, you could almost average it out to about $5 million of impact.
On a comp basis per quarter.
Okay, Great Thats helpful. Thanks, and then actually last quarter you guys spoke about.
Potentially building a bank and I was just if that's still on the agenda and been any potential timing for that.
It is still on the agenda, we deferred our filings we are ready to raise to submit our filings, but we decided to further filings until the SNG transaction.
It was concluded we just didn't want to can confuse regulators were too.
Two significant filings with the same time.
It is something we could see in 2021, yes. It is something you could see you see the filings or the the the applications in 2021.
The timing.
Thats really up that's out of our control.
Okay, great. Thanks.
Our next question comes from the line of Mackenzie Aron with Zelman. Please proceed with your question.
[noise] Thanks, good afternoon.
Just was wondering if you could talk a little bit about margin expectations. This year given sounds like commercial is gonna be very strong, especially in the in the first half a year, but recognizing back half a year.
Revised might start to become a headwind. So just any any color you could get around margins this year.
Yes. This is Randy well as you know our margins here. This year at 16 three was a significant.
We got to come in but a very good first quarter second quarter, what the a refinance volume.
And and we do have growth into purchase market.
That's that's got momentum that we think could continue on throughout the rest of year and of course America at the commercial markets, a very solid very stable and we've got a great pipeline going and what the 20%.
Increased an open orders that Mike mentioned so.
You know.
We're looking for another very very good year.
First quarter, we'll have a little bit of seasonality our measure our target has always been a 15% you're in a year end margin, but I think we can push up from there and get it up into that 16% range again so.
We're looking for a solid year, we need to see what rates to of course.
But our expectations or a pretty high Rhonda good place right now and.
Well get a obviously a better measure out as we get to its first six months of here, but I think getting back back up in this.
Range is as a very good possibility.
Great. Thank you.
Our next question comes from the line of so him bonds, leaving aside Ji. Please proceed with your question.
Hey, good morning, guys I'm just had a couple on F. G. I guess as we think about your earnings mix going forward longer term you know after the acquisition it looks like it's going to be 20, 575 GE title.
Where would you like that mix to go to and where we you'd feed feel adequately hedged I guess I would just a point of this acquisition.
Well I would like to take more in terms of what are the assets under management going to end up being that SNG and our goal is to double the assets under management in five years, if that were to happen, we're probably going to be a 50 50 company earnings wise, but that's what that's really our that's our primary focus is to keep growing.
Assets under management, and Chris can talk about that through through a bit too.
Yeah, I think again a couple of key points. This is Chris blunt. One. This is just an accelerator to the strategy that's already in place. So we don't need outsized additional growth to achieve that over the next five years, a bill mentioned the ratings upgrade obviously that is critical for us so that will be a big accelerant to our organic growth.
And we are effectively a capital self sufficient at the moment and so this is the potential our capital infusion or need would really be if we just simply stepped on the gas.
From here.
Got it and then I was just wondering on investment income you know I think if she's yield is somewhere in the 4.5% range with the Blackstone relationship. It has there been any discussion internally on maybe moving some of the FNF book over there.
To sort of get that yield accretion over time, yes. There has been discussion and that's that's kind of a part of our part of our plans to take some of this free cash we have cities that FNF that we just leave in money market funds and so on and free up some of that and led to let Chris work with it with Blackstone or are there any thoughts on timing on that I mean is.
Right after the acquisition or something for 2021, Bill do you have to be after the acquisition and right now Chris is busy a consolidating some offices and working through we're working through the the acquisition plan, but it wouldn't be that complicated to give blackstone from additional some additional funds.
Got it or.
Thank you.
Our next question comes from the line of Pablo Singzon with JP Morgan. Please proceed with your question.
Hi, Thanks for taking my question. So the first one is how do you think about future growth.
Potential and rating upgrades I was wondering if you could talk about vindication, just moving from a triple B plus then the minus compared doing from an e. meintzer knee, which I think you had director I, just maybe a longer term outcome. So I guess you know what distribution channels open up when you do the minus and are there certain partners that you can only to exactly the flat.
And Chris prior to the FNF deal was your broker love this year, just premise and being ready to Triple B.
Yeah, Hey, great Great question, So I'll answer reverse order, yes, the on the roll out that's going to occur in the second quarter of this year into independent broker dealer and banks.
I was assuming a minus if you know those distribution channels, that's kind of minimum table Stakes. So we had hoped that maybe a year out 18 months out we could get to that next upgrade so accelerating that is is very meaningful to us so as a safe hopefully at some point solid day and am best.
Minus with the S&P and Moody's and Fitch as of the World. That's what that is a very big deal for us. So that will open up a faster deeper penetration into a independent broker dealers it opens up banks.
Combined with all of the great relationships that FNF has so and then it will also bring into play markets that we have not.
Been able to really playing yet like pension risk transfer. So this is a kind of taking what was a good growth story and a lot of initiatives in 2021, and 22 and basically rolling it forward a year year and a house.
Okay. That's helpful and then Chris just a second one in FCC statutory earnings, which I view as a proxy for cash flow and I guess the context of this question is just the topic of cash flow generation, which I think as one of the themes investments in FNF focus on so in the past it begs stat earnings at about 200 million every year, which if I understood correctly is truly excess capital net if any.
Requirements and so just recognizing the new ones that have seen gotten stat. How should we think about that 200 million in the context for operating earnings, which if you go back consensus should grow by about 30% over the next couple of years should we expect a similar trajectory for stock cash flow, but maybe perhaps of the like.
Yeah, so public for any of your little careful here because as you know where we've got our earnings release coming up on the 26, but a couple of comments that we've made before as I said when we project forward pre FNF. We felt we were capital self sufficient for the growth plans that we had at the time so I'm now.
Now having the potential at least for additional capital if needed just allows us to accelerate that growth a one thing you've seen from us consistently and I don't expect that that would changes you know our stat earnings have been pretty consistent and tracking our GAAP earnings, which it hopefully gives folks comfort that you know were straight down the middle on on.
How we account for things that I want to make any prognostications, but yeah. This.
It should be a positive in terms of access to capital and.
Nothing that would cause it to be a negative.
Okay. Thanks very answers.
As a reminder, if you would like to ask a question press star one on your telephone keypad.
Our next question comes from the line of John Campbell with Stephens. Please proceed with your question.
Hey, guys good morning.
Bill or maybe Tony just a bigger picture question left you know there's clearly been that was from somewhat mixed reception you guys. It had a couple of days since the announcement I'm sure you've talked a lot of investors what what's the main pushback or maybe the what's the most common thing you think FNF investors are missing with this still.
Well the main pushback I think it's just surprised currently and and.
I think that people anticipated that we're going to do something with the excess cash, but I don't I don't think that they knew exactly what add a lot of people were hopeful that we'd give it to them either in the form of a buyback or dividend and when that didnt happen I think.
If you've seen some people you know maybe that were holders are sellers. I think you also have some arb activity that influences right out of the gate something like this.
You know, Chris can probably speak to maybe some of the some of the things that people Miss in F and G that might be different than than a similar companies and their industry.
Tony I think Thats right I would add that you know we're not a traditional life insurance company. So that's probably the biggest misunderstood component that people need to get out and do their homework to appreciate we've got a young book of fixed indexed and indexed annuities. So we don't have lot of legacy assets.
We've proven over time the company is pretty resilient to movements in interest rates, we've been able to maintain a very consistent that spread with rates you know everywhere from 140 on the 10 year to 3% on the tenure. So I think there's a sense. If you don't know the space everybody gets lumped together low rates bad for insurance companies, yes for truck.
Additional legacy insurance companies, but we are much more of a a spread lender, where we can reprice our liabilities on a regular basis. So that's probably number one the second is this issue of what we're late night credit cycle and we.
What's in that portfolio, we've actually taken credit risk down.
During the the Blackstone period, where Blackstone has been managing the ft portfolio and we've done stress tests, which was released publicly we've had independent folks verify that so that the miss there is two you're getting some extra yield but it must be coming at it at the harm of credit actually we've enhanced credit we've been doing things like.
Selling triple B corporates and buying higher rated a structured securities CMBS asset backed securities. So it's really sort of a getting your head around we believe we've improved the credit profile.
Those securities a little less liquid, but we have very sticky liabilities and a ton of liquidity. So.
I think those are probably the two that most of our investors took a while to get their arms around that because the sector. The life sector. When rates are down just doesn't trade well, but most of what people are concerned about just doesn't apply to us.
Okay that makes sense. Thank you and then I guess also bigger picture with FPL. Bill is there is there a way to Kanye kind of fits into this future landscape.
No I don't I don't I don't see this is a kenai opportunity Kenai is more focused on the.
On the Fintech and then took type investments data data.
Data companies.
[music].
If we route to get involved.
In a in a.
And kind of area of business that were of.
The.
We're headed relationship with the F and G or it could be in the kind of a marketing marketing side marketing organizations, but we don't really feel like this is a.
This is a can I can I type investment.
Okay that makes sense one last quick one Tony thanks for calling out the legal fees. We were like look curious about the title pretax margins. I think you said that was 100 depths of an impact.
Little curious why didn't backed that out of adjusted results is there any particular reason or is this some type of expense that maybe continues over the near term anything to call out there.
Well, they it's a continuation of the expense, but I do want to be careful about cherry picking this type of stuff. We do have legal expenses that flow through every quarter. These were just a lot bigger than what we normally have and so I want to be careful that I don't call him out one quarter and then maybe when they're down the next that I don't mentioned that just from FCC purposes.
So it's a fair question and as you know, we don't like to back out a lot of stuff other than the standard stuff. We normally do so I thought it made more sense just to call. It out and this phone call in it I think it was about 110 basis points back of the all below okay. Thanks for the call up.
Our next question comes from the line of Mark Hughes. Please proceed with your question.
Yes. Thank you good afternoon.
You had a very strong numbers and the a escrow title other fees also agency I Wonder if you could talk about what's driving that dynamic here lately and also about the sustainability.
I'll give Mike the agency side, but on the escrow and other we do have stronger escrow fees as a percentage of re fi, especially in the west and so if you see direct premiums up 14 or 15%.
Our our escrow fees were up 25 or 28% on those particular orders just because you sort of have a minimum fee for escrow and so that was part of that we also had stronger revenue on a in the loan care area, where they've taken on a lot more loans over the course of the last 12.
Months and also in the Servicelink valuations business, we we were stronger there in revenue versus Q4 of a year ago. So that's why you see a lot of strength there, yes. She said markets. Mike We're very pleased with the agency results, we had a record quarter and a record year and we really feel like we're taking share.
In some key markets in the agency World, including Florida, and places like Pennsylvania, New Jersey in Georgia.
The market share numbers that we have through the first nine months of the year show us up a full.
Point nationally, which is which is a strong increase in market share.
Thank you and then the.
Would it be two months to ask on the February you describe it looks like good acceleration.
Presumably some of that the.
Seasonality can you say and I think you said that the purchase market continues to have good momentum.
How did that the February compare year over year I think January is up five any sense on how February so trying to yeah. This is this is Randy of course, we only had really one weekend into February.
We did have in the week of February record.
Refinance order volume ever so that again that was for one week, but the purchase.
Increase held a three and half 4%, but again that was Oh, it's one week and with purchase typically it'll it'll grow as you move through the through the month, but that was a that's a one week.
Look at at February up but of course going into right direction, Yes, I'll just add up there mark as well that the total open orders and again you know early part of February or over 10000, I think 10500 100 up against 8800 in January.
Big increase.
Yeah, and then one final question on the F and G. The goal the double assets in five years is there kind of a notional template how much of that should be organic versus how much might be a locker PRT transactions.
Yeah, I would say that the overwhelming out part of that will be organic growth. So there is that does not assume any large transactions not that we wouldn't take a swing at a couple of smaller size blocks or flow transaction for example, but.
The bulk of that is just running out the playbook of you know we've been growing at 20% in our core IMO channel that doesn't show signs of we're not anticipating that slowing for any particular reason to now we add in banks and broker dealers. You know couple of small block transactions, maybe a flow deal here or there it's not.
Heroic assumptions to to get to that doubling.
Thank you.
Our next question is a follow up question from Soham bonds Lee with ESI. Jay. Please proceed with your question Hey, guys banks, just a follow up on fee per file was down 15% year over year I know, there's some mix shift there, but you know there's a lot of going on this year with rifai in purchase and.
How are you guys thinking about fee per file for the year.
On a year over year basis.
I would it's Mike I wouldn't think.
We may get a little bit of an increase if purchase grows and revise down a little bit so you'd get a positive shift there and I would think commercial fee per file would be consistent with levels and 29 team.
Okay. So he's a mid singles growth.
Reasonable for this year.
Yeah, I mean, yeah, I would think that's a that's a reasonable expectation of a lot of its going to depend on mix. If we had a lot more rate by the especially at the start of the year, we'll see some pressure on the fee per file and that's really what you see it a 15% decline has a lot to do with a with the fact that we just had a.
Todd or revise that closed in Q4, yeah makes thanks. Thank you.
Our next question is the follow up question for Mark Hughes with Suntrust. Please proceed with your question.
Yes. Thank you on the F and G. I note, though one of a little bit folks and airspace American equity yesterday.
Hi, good results they talked about a lengthening of the assets the more persistency lower lapse of and therefore, you're getting higher long term earnings I'm just sort of curious.
Whether you've seen that phenomenon in your book have you already taken into account when you look at your financials. Just a couple of words on that topic would be helpful.
Yeah. This is Chris again, I, probably have to be real careful just given where we are in our timing of our own <unk> earnings announcements, but you'll probably the most important thing is.
Strong topline.
Growth and we're not just say, we're not seeing negative patterns. So maybe just leave it at that.
Very good thank you.
Our next question is they follow up question from John Campbell with Stephens. Please proceed with your question Hey, guys. Thanks, just one quick follow up on the agent remittance rate that looks like it's worked in your favor you know relative last year last two quarters I was thinking maybe with seasonality some of the western states there maybe.
Higher remains very I thought that would actually work against you. This quarter is there something structural there that's helping that.
John It's Mike as you know, we actually don't do a much agency business in the Western States I think it's it's really the growth we've had in markets like Florida vis-a-vis some other markets, where we have.
You know better promulgated splits in a market like that and also markets like in the Carolinas.
Okay.
Thank you.
Mr. Fully we have no further questions at this time I would now like to turn the floor back over to you for closing comments.
Thank you, we're very pleased with our fourth quarter title results that rounded out a record breaking year looking into 2020, we had with an anticipated moderation of mortgage originations later in the year.
We will remain vigilant on expenses as we manage the expected slowdown in volumes Lastly, we're excited to welcome F and G into the ethnic family in the coming months upon completion of our pending merger.
Thank you for joining us today, and we look forward to updating everyone on our first quarter coal.
[noise], ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a lot of women.
Yeah.