Q3 2020 Fidelity National Financial Inc Earnings Call

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During todays presentation, all parties will be listen only mode. Following.

Following the presentation the conference will be open for questions with construction all I've got.

As a reminder, this conference call is being recorded.

I would now like to turn the call over to Jayme, along with Investor Relations.

Go ahead.

Thank you operator, and good morning, everyone. Thank you for joining our third quarter 2020, <unk> earnings Conference call.

Joining me today is our CEO, Randy Quirk President Mike Nolan.

So Tony Park, and SNG CEO, Chris one.

Well begin with a brief strategic overview from Randy Michael Mike will review the title business, Chris will review F and G and Tony will finish with a review of the financial highlights well then open the call for your questions and finish with some concluding remarks Randy.

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 in particular, the COVID-19 pandemic. There is significant uncertainty about the duration and exactly the impact of this pandemic.

Statements that are not historical facts, including statements about our expectations hopes intentions or strategies regarding the future are forward looking statements.

Forward looking statements are based on managements beliefs, as well as assumptions made by and information currently available to management at the time of this call because such statements are based on expectations as to future financial and operating results and are not statements of fact actual results may differ materially from those projected we undertake no obligation.

HM to update any forward looking statement, 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 in the statement regarding forward looking information risk factors and other sections of the company's form 10-K, and other filings with the S.P.C. diff.

This conference call will be available for replay replay via webcast at our website at FNF Dot com. It will also be available through phone replay beginning at three PM Eastern time today through.

Through November 12, the replay number is 84451 to do nine to one and the access code is 1371 092 way.

Let me now turn the call over to our CEO Randy.

Thank you Jamie.

I would like to start by thanking our employees for their continued efforts as we work together through this challenging environment.

It is our goal to ensure the health and safety of our employees, while maintaining the continuity and efficiency of our operations as we strive to meet our customers needs day in and day out.

We were able to accomplish these goals and achieve superior results from the third quarter, while approximately 60% of our work or work force continued to work remotely.

For the third quarter, we generated.

Record adjusted pre tax time learning, so 528 million compared with 407 million in the year ago quarter, and a 21.2% adjusted pre tax title margin.

Compared with an 18.6% in the third quarter of 2019, and our best assess the third quarter of 2003.

Well our financial results were robust. We also made strong gains advancing our technology initiatives, which are focused on improving the security transparency and overall closer and experience, perhaps an EPS customers.

Mike will go into this in more detail, but we believe that our unmatched national footprint and strong local market relationships provides FNF with a significant competitive advantage that we can further leverage technology.

Turning to our acquisition of FCL Holdings F and G continues to execute on EPS growth strategy, producing excellent sales results in the quarter, while maintaining pricing discipline.

Finches recent entrance into the bank and broker dealer channel has surpassed expectations and we continue to see strong momentum into the fourth quarter.

Furthermore, effigies investment portal portfolio continues to perform well in the current environment.

Chris and his team also had success during the third quarter streamlining effigies operations as they entered into an agreement to sell F and G reinsurance to Appcito Holdings, a subsidiary of areas Management Corporation.

The rationale for this divestiture was largely tied to the tax advantage of this third party offshore reinsurance platform, which was no longer available upon after an EPS acquisition.

G.

In connection with the transaction definitely also entered into a mutually beneficial annuity flow reinsurance partnership.

The sale of EPS Angies reinsurance represents a terrific outcome for F and G is clients employees and FNF shareholders.

Transaction is expected to close prior to year end.

Chris will go into more detail about F and G is third quarter results shortly.

Looking forward, we continue to be committed to creating meaningful long term value for our shareholders through our capital allocation strategy.

Most recently, we announced we announced a quarterly cash dividend dividend of 36 cents per share, which reflects a fourth quarter dividend increase of 9%.

In conjunction with this announcement, we announced our plans for targeting $500 million and share repurchases based on market conditions over the course of the next 12 months.

Let me now turn the call over to Mike Nolan to discuss title insurance business in more detail.

Thank you Randy as Randy mentioned, the third quarter was a record quarter for adjusted pre tax title earnings and produced our best quarterly adjusted pre tax title margin since the third quarter of 2003, as we benefited from the delayed spring selling season as sustained momentum in refinance.

For the third quarter, we generated adjusted pre tax title earnings of 528 million, a 30% increase over the third quarter of 2019.

Our adjusted pre tax title margin was 21.2%.

260 basis point increase over the prior year quarter.

We had a 40% increase in direct orders closed down.

Driven by an 87% increase in daily you refinance orders closed.

An 8% increase in daily purchase orders closed offset by a 16% decrease in total commercial orders closed.

Total commercial revenue was $216 million compared with the year ago quarter of 301 million due to the 16% decrease in closed orders and a 14% decline in total commercial fee per file.

For the third quarter total orders opened averaged.