FNF Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Fidelity National Financial (FNF) reported strong Q2 2024 results, with net earnings of $306 million ($1.12 per share) and adjusted net earnings of $338 million ($1.24 per share). The Title Segment contributed $241 million, while the F&G Segment added $122 million. Key highlights include:

- Title Segment revenue of $1.9 billion, with an adjusted pre-tax title margin of 16.2%
- F&G Segment achieved record gross sales of $4.4 billion, a 47% increase year-over-year
- F&G reached record assets under management of $52.2 billion
- FNF paid common dividends of $0.48 per share, totaling $131 million

The company's performance demonstrates successful adaptation to current market conditions, with strong demand for F&G's products and continued strength in the Title business.

Positive

• Net earnings increased to $306 million ($1.12 per share) from $219 million ($0.81 per share) in Q2 2023
• Adjusted net earnings rose to $338 million ($1.24 per share) from $274 million ($1.01 per share) in Q2 2023
• Title Segment adjusted pre-tax margin improved to 16.2% from 15.8% in Q2 2023
• F&G Segment achieved record gross sales of $4.4 billion, a 47% increase year-over-year
• F&G reached record assets under management of $52.2 billion, a 13% increase from Q2 2023
• Total revenue increased to $3.158 billion from $3.068 billion in Q2 2023

Negative

• F&G Segment adjusted net earnings include alternative investment returns $17 million below long-term expectations
• F&G Segment reported net significant expense items of $10 million

Insights

Financial Analyst

FNF's Q2 2024 results show solid performance across both Title and F&G segments. Adjusted net earnings increased to $338 million ($1.24 per share), up 23% year-over-year. The Title segment demonstrated resilience with an industry-leading adjusted pre-tax margin of 16.2%, despite challenging market conditions. This reflects effective cost management and operational efficiency.

The F&G segment was a standout, with record gross sales of $4.4 billion, up 47% YoY. This growth, driven by strong demand across retail and institutional channels, has led to record assets under management of $52.2 billion. The segment's contribution to FNF's earnings has grown significantly, now accounting for 40% of earnings in H1 2024.

Overall, FNF's diversified business model is proving effective in navigating the current economic environment, with F&G's growth offsetting potential headwinds in the Title segment due to higher mortgage rates.

Market Research Analyst

FNF's Q2 results reflect broader market trends in real estate and financial services. The Title segment's performance, with total revenue holding steady at $1.9 billion, suggests resilience in a challenging housing market. The 4% increase in direct title premiums and 10% rise in agency title premiums indicate some strength in certain areas of real estate transactions.

F&G's record sales highlight the growing demand for annuity and life insurance products, particularly among baby boomers approaching retirement. This trend is likely to continue given demographic shifts and economic uncertainty. The 39% increase in retail channel sales and robust institutional market sales demonstrate F&G's strong market positioning.

Investors should note the company's ability to maintain profitability and grow assets under management in a complex economic environment, suggesting potential for continued performance as market conditions evolve.

Investment Strategist

FNF's Q2 results present a compelling investment case. The company's ability to grow earnings in a challenging environment for its Title business is noteworthy. The adjusted net earnings per share of $1.24 represent a 22.8% YoY increase, outpacing many peers in the financial services sector.

The F&G segment's rapid growth is particularly intriguing. With AUM reaching $52.2 billion, up 13% YoY and gross sales up 47%, this segment is becoming a significant driver of FNF's overall performance. This diversification helps mitigate risks associated with cyclicality in the real estate market.

Investors should also appreciate FNF's strong balance sheet and commitment to shareholder returns, as evidenced by the $0.48 per share dividend. With $696 million in cash and short-term investments, FNF has flexibility for future growth initiatives or capital returns.

While the Title segment faces headwinds from higher mortgage rates, its industry-leading margins demonstrate effective management and potential for strong performance when the real estate market improves.

JACKSONVILLE, Fla., Aug. 5, 2024 /PRNewswire/ -- Fidelity National Financial, Inc. (NYSE:FNF) ("FNF" or the "Company"), a leading provider of title insurance and transaction services to the real estate and mortgage industries and a leading provider of insurance solutions serving retail annuity and life customers and institutional clients through its majority-owned, publicly traded subsidiary F&G Annuities & Life, Inc. (NYSE:FG) ("F&G"), today reported financial results for the second quarter ended June 30, 2024.

Net earnings attributable to common shareholders for the second quarter were $306 million, or $1.12 per diluted share (per share), compared to $219 million, or $0.81 per share, for the second quarter of 2023. Net earnings attributable to common shareholders include mark-to-market effects and non-recurring items; all of which are excluded from adjusted net earnings attributable to common shareholders.

Adjusted net earnings attributable to common shareholders (adjusted net earnings) for the second quarter were $338 million, or $1.24 per share, compared to $274 million, or $1.01 per share, for the second quarter of 2023. The Title Segment contributed $241 million, compared to $226 million for the second quarter of 2023. The F&G Segment contributed $122 million, compared to $67 million for the second quarter of 2023. The Corporate Segment had adjusted net earnings of $2 million before eliminating $27 million of dividend income from F&G in the consolidated financial statements, compared to $2 million for the second quarter of 2023. The Title Segment's increase reflects higher average fee per file, higher agency revenue and an uplift in investment income.  F&G Segment adjusted net earnings include alternative investment returns below our long-term expectations of $17 million and net significant expense items of $10 million. Please see "Segment Financial Results" for F&G under "Non-GAAP Measures and Other Information" for further explanation.

Company Highlights

• Title Segment revenue and margin uplift; continue to successfully navigate current market: For the Title Segment, total revenue of $1.9 billion for the quarter, in line with the second quarter of 2023. Total revenue, excluding recognized gains and losses, of $2.0 billion for the second quarter, a 5% increase over $1.9 billion in the second quarter of 2023. Adjusted pre-tax title margin was 16.2% for the quarter, compared to 15.8% in the second quarter of 2023
• F&G Segment sustainable sales growth across multi-channel platform and record assets under management: For the F&G Segment, record gross sales of $4.4 billion for the second quarter, a 47% increase over the second quarter of 2023. F&G achieved record assets under management (AUM) of $52.2 billion as of June 30, 2024, driven by new business flows, stable inforce retention and net debt and equity proceeds over the past twelve months
• Sustainable common dividend backed by strong balance sheet: FNF paid common dividends of $0.48 per share for $131 million and ended the second quarter with $696 million in cash and short-term liquid investments at the holding company

William P. Foley, II, Chairman, commented, "Our Title business continues to perform well, delivering an industry leading adjusted pre-tax Title margin of 16.2% for the second quarter, as compared to 15.8% in the year ago quarter, and demonstrating our disciplined operating strategy as we've adapted to the current market.  While higher mortgage rates are impacting residential purchase volumes, F&G is benefiting from strong demand for its products given demographic tailwinds, prior investments in building out its multi-channel sales platform and continued strong investment performance.  As a result, F&G has achieved record gross sales of $4.4 billion for the second quarter, an increase of 47% over the second quarter of 2023, as the business is seeing strength across all of its sales channels.  F&G's earnings contribution to FNF has grown to 40% for the first half of 2024, providing an important complement to our Title business.  Taken together, our business is performing at a high level which speaks to both our momentum and successful execution to deliver strong results."

Summary Financial Results

(In millions, except per share data)	Three Months Ended			Year to Date
	June 30, 2024		June 30, 2023	2024		2023
Total revenue	$      3,158		$      3,068	$      6,457		$      5,542
F&G total gross sales1	$      4,420		$      3,008	$      7,915		$      6,289
F&G assets under management1	$    52,208		$    46,004	$    52,208		$    46,004
Total assets	$    88,824		$    73,021	$    88,824		$    73,021
Adjusted pre-tax title margin	16.2 %		15.8 %	13.7 %		13.2 %
Net earnings attributable to common shareholders	$         306		$         219	$         554		$         160
Net earnings per share attributable to common shareholders	$        1.12		$        0.81	$        2.04		$        0.59
Adjusted net earnings1	$         338		$         274	$         544		$         425
Adjusted net earnings per share1	$        1.24		$        1.01	$        2.00		$        1.57
Weighted average common diluted shares	273		271	272		271
Total common shares outstanding	273		272	273		272

1	See definition of non-GAAP measures below

 

Segment Financial Results 

Title Segment
This segment consists of the operations of the Company's title insurance underwriters and related businesses, which provide core title insurance and escrow and other title-related services including loan sub-servicing, valuations, default services, and home warranty.

Mike Nolan, Chief Executive Officer, commented, "Through the second quarter, we have continued to effectively manage our business to the trend in opened orders and delivered another industry leading performance, while generating strong cash flows that we have used to reinvest in the business and return to our shareholders. Our results reflect a disciplined operating strategy and ongoing investments in data and innovative technologies like InHere, our industry leading digital transaction platform. We had over 1 million real estate professionals and consumers use inHere in full year 2023 and nearly 700,000 in the first half of this year. Additionally, during the quarter we named our Chief Artificial Intelligence Officer. This appointment highlights AI's importance for the future and our commitment to responsibly harness its potential to generate efficiencies, increase productivity and enhance our customers' experience throughout their transactions."

Second Quarter 2024 Highlights

• Total revenue of $1.9 billion, compared with $1.9 billion in the second quarter of 2023
• Total revenue, excluding recognized gains and losses, of $2.0 billion, a 5% increase over second quarter of 2023
  • Direct title premiums of $564 million, a 4% increase over second quarter of 2023
  • Agency title premiums of $784 million, a 10% increase over second quarter of 2023
  • Commercial revenue of $273 million, a 4% increase over second quarter of 2023
• Purchase orders opened increased 2% on a daily basis and purchase orders closed were in line with the second quarter of 2023
• Refinance orders opened decreased 1% on a daily basis and refinance orders closed decreased 4% on a daily basis from second quarter of 2023
• Commercial orders opened increased 1% over the second quarter of 2023 and commercial orders closed decreased 7% from second quarter of 2023
• Total fee per file of $3,759 for the second quarter, a 4% increase over the second quarter of 2023

Second Quarter 2024 Financial Results

• Pre-tax title margin of 12.2% and industry leading adjusted pre-tax title margin of 16.2% for the second quarter of 2024, compared to 12.5% and 15.8%, respectively, in the second quarter of 2023
• Pre-tax earnings from continuing operations in Title for the second quarter of $235 million, compared with $233 million for the second quarter of 2023
• Adjusted pre-tax earnings in Title for the second quarter of $324 million compared with $302 million for the second quarter of 2023. The increase reflects higher average fee per file, higher agency revenue and an uplift in investment income

F&G Segment
This segment consists of operations of FNF's majority-owned subsidiary F&G, a leading provider of insurance solutions serving retail annuity and life customers and funding agreement and pension risk transfer institutional clients.

Chris Blunt, Chief Executive Officer, commented, "Our business continues to perform well as we experienced strength across all of our channels having delivered record retail sales of $3.2 billion, increasing 39% over the prior year quarter, while our institutional market sales were $1.2 billion, up strongly as compared to $700 million of sales in the prior year quarter.  Our retail products are seeing strong demand as consumers want to secure relatively higher rates, guaranteed tax deferred growth and principal protection, which is particularly attractive to baby boomers who are approaching retirement, a significant demographic trend with a long tail.  We ended the second quarter with a record $61.4 billion of assets under management before flow reinsurance.  We have plenty of momentum and continue to drive asset growth, deliver margin expansion and generate accretive returns that are well on pace to achieve our Investor Day targets."

Second Quarter 2024

• Record profitable gross sales: Gross sales of $4.4 billion for the second quarter, an increase of 47% over the second quarter of 2023, driven by record retail channel sales and robust institutional market sales
• Record Retail channel sales of $3.2 billion for the second quarter, an increase of 39% over the second quarter of 2023, driven by strong annuity sales
• Robust Institutional market sales of $1.2 billion, compared to $0.7 billion in the second quarter of 2023, driven by higher funding agreements due to more favorable market conditions
• Net sales of $3.4 billion for the second quarter, an increase of 55% over the second quarter of 2023
• Record assets under management (AUM) of $52.2 billion as of June 30, 2024, an increase of 13% from $46.0 billion as of June 30, 2023, driven by net new business flows, stable inforce retention and net debt and equity proceeds over the past twelve months. AUM before flow reinsurance was $61.4 billion as of June 30, 2024
• Net earnings attributable to common shareholders for F&G Segment of $171 million for the second quarter due to favorable mark-to-market movement, compared to $110 million for the second quarter of 2023 which included favorable mark-to-market movement
• Adjusted net earnings attributable to common shareholders for F&G Segment of $122 million for the second quarter, compared to $67 million for the second quarter of 2023
  • F&G's adjusted net earnings reflect alternatives investment portfolio short-term mark-to-market movement that differs from long-term return expectation. The second quarter of 2024 includes short term investment income from alternative investments and $10 million of net significant expense items, whereas the second quarter of 2023 included short term investment income from alternative investments and $4 million of significant income items
  • As compared to the prior year quarter, adjusted net earnings reflect asset growth, margin diversification from accretive flow reinsurance fees and owned distribution margin, disciplined expense management and higher interest expense due to planned capital market activity
  • Please see "Segment Financial Results" for F&G under "Non-GAAP Measures and Other Information" for further explanation

Conference Call
We will host a call with investors and analysts to discuss FNF's second quarter 2024 results on Tuesday, August 6, 2024, beginning at 11:00 a.m. Eastern Time.  A live webcast of the conference call will be available on the Events and Multimedia page of the FNF Investor Relations website at fnf.com.  The conference call replay will be available via webcast through the FNF Investor Relations website at fnf.com. The telephone replay will be available from 3:00 p.m. Eastern Time on August 6, 2024, through August 13, 2024, by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International). The access code will be 13747344.

About Fidelity National Financial, Inc.
Fidelity National Financial, Inc. (NYSE: FNF) is a leading provider of title insurance and transaction services to the real estate and mortgage industries.  FNF is the nation's largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York - that collectively issue more title insurance policies than any other title company in the United States.  More information about FNF can be found at fnf.com. 

About F&G
F&G is part of the FNF family of companies. F&G is committed to helping Americans turn their aspirations into reality. F&G is a leading provider of insurance solutions serving retail annuity and life customers and institutional clients and is headquartered in Des Moines, Iowa. For more information, please visit fglife.com.

Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, this earnings release includes non-GAAP financial measures, which the Company believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. These non-GAAP measures include adjusted net earnings per share, adjusted pre-tax title earnings, adjusted pre-tax title earnings as a percentage of adjusted title revenue (adjusted pre-tax title margin), adjusted net earnings attributable to common shareholders (adjusted net earnings), assets under management (AUM), average assets under management (AAUM) and sales. 

Management believes these non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods.  Our non-GAAP measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate such non-GAAP measures in the same manner as we do.

The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.  By disclosing these non-GAAP financial measures, FNF believes it offers investors a greater understanding of, and an enhanced level of transparency into, the means by which the Company's management operates the Company.

Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings, net earnings attributable to common shareholders, net earnings per share, or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Further, FNF's non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are provided below.

Forward-Looking Statements and Risk Factors
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding our expectations, hopes, intentions or strategies regarding the future are 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 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 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: changes in general economic, business, political crisis, war and pandemic conditions, including ongoing geopolitical conflicts; weakness or adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding or a weak U.S. economy; our potential inability to find suitable acquisition candidates; our dependence on distributions from our title insurance underwriters as a main source of cash flow; significant competition that F&G and our operating subsidiaries face; compliance with extensive government regulation of our operating subsidiaries, including regulation of title insurance and services and privacy and data protection laws; systems damage, failures, interruptions, cyberattacks and intrusions, or unauthorized data disclosures; and other risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of FNF's Form 10-K and other filings with the Securities and Exchange Commission.

FNF-E

FIDELITY NATIONAL FINANCIAL, INC. SECOND QUARTER SEGMENT INFORMATION (In millions, except per share data) (Unaudited)
		Consolidated		Title		F&G		Corporate and Other		Eliminations
Three Months Ended
June 30, 2024
Direct title premiums		$            564		$            564		$             —		$                  —		$                  —
Agency title premiums		784		784		—		—		—
Escrow, title related and other fees		1,115		571		505		39		—
Total title and escrow		2,463		1,919		505		39		—
Interest and investment income		783		87		684		39		(27)
Recognized gains and losses, net		(88)		(75)		(17)		4		—
Total revenue		3,158		1,931		1,172		82		(27)
Personnel costs		779		680		69		30		—
Agent commissions		609		609		—		—		—
Other operating expenses		387		311		46		30		—
Benefits & other policy reserve changes		608		—		608		—		—
Market risk benefit (gains) losses		20		—		20		—		—
Depreciation and amortization		189		35		147		7		—
Provision for title claim losses		61		61		—		—		—
Interest expense		47		—		28		19		—
Total expenses		2,700		1,696		918		86		—
Pre-tax earnings (loss)		$            458		$            235		$           254		$                   (4)		$                (27)
Income tax expense (benefit)		116		72		50		(6)		—
Earnings (loss) from equity investments		1		1		—		—		—
Non-controlling interests		37		5		33		(1)		—
Net earnings (loss) attributable to common shareholders		$            306		$            159		$           171		$                    3		$                (27)
EPS attributable to common shareholders - basic		$          1.13
EPS attributable to common shareholders - diluted		$          1.12
Weighted average shares - basic		271
Weighted average shares - diluted		273

 

FIDELITY NATIONAL FINANCIAL, INC. SECOND QUARTER SEGMENT INFORMATION (In millions, except per share data) (Unaudited)
		Consolidated		Title		F&G		Corporate and Other		Eliminations
Three Months Ended
June 30, 2024
Net earnings (loss) attributable to common shareholders		$                306		$                159		$           171		$                    3		$                (27)
Pre-tax earnings (loss)		$                458		$                235		$           254		$                   (4)		$                (27)
Non-GAAP Adjustments
Recognized (gains) and losses, net		53		75		(18)		(4)		—
Market related liability adjustments		(71)		—		(71)		—		—
Purchase price amortization		35		14		19		2		—
Transaction costs		(3)		—		(3)		—		—
Adjusted pre-tax earnings (loss)		$                472		$                324		$           181		$                   (6)		$                (27)
Total non-GAAP, pre-tax adjustments		$                  14		$                  89		$           (73)		$                   (2)		$                  —
Income taxes on non-GAAP adjustments		(4)		(21)		16		1		—
Non-controlling interest on non-GAAP adjustments		8		—		8		—		—
Deferred tax asset valuation allowance		14		14		—		—		—
Total non-GAAP adjustments		$                  32		$                  82		$           (49)		$                   (1)		$                  —
Adjusted net earnings (loss) attributable to common shareholders		$                338		$                241		$           122		$                    2		$                (27)
Adjusted EPS attributable to common shareholders - diluted		$               1.24

 

FIDELITY NATIONAL FINANCIAL, INC. SECOND QUARTER SEGMENT INFORMATION (In millions, except per share data) (Unaudited)
		Consolidated		Title		F&G		Corporate and Other		Elimination
Three Months Ended
June 30, 2023
Direct title premiums		$            541		$            541		$             —		$                  —		$                  —
Agency title premiums		713		713		—		—		—
Escrow, title related and other fees		1,212		581		576		55		—
Total title and escrow		2,466		1,835		576		55		—
Interest and investment income		618		79		525		35		(21)
Recognized gains and losses, net		(16)		(50)		67		(33)		—
Total revenue		3,068		1,864		1,168		57		(21)
Personnel costs		755		656		56		43		—
Agent commissions		550		550		—		—		—
Other operating expenses		394		330		33		31		—
Benefits & other policy reserve changes		817		—		817		—		—
Market risk benefit (gains) losses		(30)		—		(30)		—		—
Depreciation and amortization		151		39		104		8		—
Provision for title claim losses		56		56		—		—		—
Interest expense		43		—		25		18		—
Total expenses		2,736		1,631		1,005		100		—
Pre-tax earnings (loss)		$            332		$            233		$           163		$                (43)		$                (21)
Income tax expense (benefit)		90		65		33		(8)		—
Earnings from equity investments		1		1		—		—		—
Non-controlling interests		24		4		20		—		—
Net earnings (loss) attributable to common shareholders		$            219		$            165		$           110		$                (35)		$                (21)
EPS attributable to common shareholders - basic		$          0.81
EPS attributable to common shareholders - diluted		$          0.81
Weighted average shares - basic		270
Weighted average shares - diluted		271

 

FIDELITY NATIONAL FINANCIAL, INC. SECOND QUARTER SEGMENT INFORMATION (In millions, except per share data) (Unaudited)
		Consolidated		Title		F&G		Corporate and Other		Elimination
Three Months Ended
June 30, 2023
Net earnings (loss) attributable to common shareholders		$                219		$                165		$                110		$                (35)		$                (21)
Pre-tax earnings (loss)		$                332		$                233		$                163		$                (43)		$                (21)
Non-GAAP Adjustments
Recognized (gains) and losses, net		113		50		30		33		—
Market related liability adjustments		(102)		—		(102)		—		—
Purchase price amortization		28		19		6		3		—
Transaction costs		2		—		—		2		—
Adjusted pre-tax earnings (loss)		$                373		$                302		$                  97		$                   (5)		$                (21)
Total non-GAAP, pre-tax adjustments		$                  41		$                  69		$                (66)		$                  38		$                  —
Income taxes on non-GAAP adjustments		(11)		(17)		15		(9)		—
Non-controlling interest on non-GAAP adjustments		8		—		8		—		—
Deferred tax asset valuation allowance		17		9		—		8		—
Total non-GAAP adjustments		$                  55		$                  61		$                (43)		$                  37		$                  —
Adjusted net earnings (loss) attributable to common shareholders		$                274		$                226		$                  67		$                    2		$                (21)
Adjusted EPS attributable to common shareholders - diluted		$               1.01

 

FIDELITY NATIONAL FINANCIAL, INC. YTD SEGMENT INFORMATION (In millions, except per share data) (Unaudited)
		Consolidated		Title		F&G		Corporate and Other		Elimination
Six Months Ended
June 30, 2024
Direct title premiums		$        1,004		$         1,004		$          —		$               —		$                  —
Agency title premiums		1,377		1,377		—		—		—
Escrow, title related and other fees		2,396		1,055		1,246		95		—
Total title and escrow		4,777		3,436		1,246		95		—
Interest and investment income		1,493		170		1,300		77		(54)
Recognized gains and losses, net		187		(12)		195		4		—
Total revenue		6,457		3,594		2,741		176		(54)
Personnel costs		1,506		1,298		135		73		—
Agent commissions		1,069		1,069		—		—		—
Other operating expenses		756		596		104		56		—
Benefits & other policy reserve changes		1,769		—		1,769		—		—
Market risk benefit (gains) losses		9		—		9		—		—
Depreciation and amortization		356		71		270		15		—
Provision for title claim losses		107		107		—		—		—
Interest expense		96		—		58		38		—
Total expenses		5,668		3,141		2,345		182		—
Pre-tax earnings (loss) from continuing operations		$            789		$            453		$       396		$               (6)		$                (54)
Income tax expense (benefit)		179		117		76		(14)		—
Earnings (loss) from equity investments		2		2		—		—		—
Non-controlling interests		58		7		51		—		—
Net earnings (loss) attributable to common shareholders		$            554		$            331		$       269		$                 8		$                (54)
EPS attributable to common shareholders - basic		$          2.04
EPS attributable to common shareholders - diluted		$          2.04
Weighted average shares - basic		271
Weighted average shares - diluted		272

 

FIDELITY NATIONAL FINANCIAL, INC. YTD SEGMENT INFORMATION (In millions, except per share data) (Unaudited)
		Consolidated		Title		F&G		Corporate and Other		Elimination
Six Months Ended
June 30, 2024
Net earnings (loss) attributable to common shareholders		$                554		$                331		$           269		$                    8		$                (54)
Pre-tax earnings (loss)		$                789		$                453		$           396		$                   (6)		$                (54)
Non-GAAP Adjustments
Recognized (gains) and losses, net		22		12		14		(4)		—
Market related liability adjustments		(126)		—		(126)		—		—
Purchase price amortization		76		30		41		5		—
Transaction costs		(2)		—		(3)		1		—
Adjusted pre-tax earnings (loss)		$                759		$                495		$           322		$                   (4)		$                (54)
Total non-GAAP, pre-tax adjustments		$                (30)		$                  42		$           (74)		$                    2		$                  —
Income taxes on non-GAAP adjustments		7		(10)		17		—		—
Deferred tax asset valuation allowance		8		8		—		—		—
Non-controlling interest on non-GAAP adjustments		5		—		5		—		—
Total non-GAAP adjustments		$                (10)		$                  40		$           (52)		$                    2		$                  —
Adjusted net earnings (loss) attributable to common shareholders		$                544		$                371		$           217		$                  10		$                (54)
Adjusted EPS attributable to common shareholders - diluted		$               2.00

 

FIDELITY NATIONAL FINANCIAL, INC. YTD SEGMENT INFORMATION (In millions, except per share data) (Unaudited)
						F&G
Six Months Ended		Consolidated		Title				Corporate and Other		Elimination
June 30, 2023
Direct title premiums		$            969		$            969		$                  —		$                  —		$                  —
Agency title premiums		1,263		1,263		—		—		—
Escrow, title related and other fees		2,092		1,052		941		99		—
Total title and escrow		4,324		3,284		941		99		—
Interest and investment income		1,229		160		1,044		46		(21)
Recognized gains and losses, net		(11)		(28)		52		(35)		—
Total revenue		5,542		3,416		2,037		110		(21)
Personnel costs		1,432		1,254		109		69		—
Agent commissions		970		970		—		—		—
Other operating expenses		754		626		69		59		—
Benefits & other policy reserve changes		1,629		—		1,629		—		—
Market risk benefit (gains) losses		29		—		29		—		—
Depreciation and amortization		285		76		194		15		—
Provision for title claim losses		100		100		—		—		—
Interest expense		85		—		47		38		—
Total expenses		5,284		3,026		2,077		181		—
Pre-tax earnings (loss)		$            258		$            390		$                (40)		$                (71)		$                (21)
Income tax expense (benefit)		104		92		25		(13)		—
Earnings from equity investments		1		1		—		—		—
Non-controlling interests		(5)		6		(11)		—		—
Net earnings (loss) attributable to common shareholders		$            160		$            293		$                (54)		$                (58)		$                (21)
EPS attributable to common shareholders - basic		$          0.59
EPS attributable to common shareholders - diluted		$          0.59
Weighted average shares - basic		270
Weighted average shares - diluted		271

 

FIDELITY NATIONAL FINANCIAL, INC. YTD SEGMENT INFORMATION (In millions, except per share data) (Unaudited)
		Consolidated		Title		F&G		Corporate and Other		Elimination
Six Months Ended
June 30, 2023
Net earnings (loss) attributable to common shareholders		$                160		$                293		$           (54)		$                (58)		$                (21)
Pre-tax earnings (loss)		$                258		$                390		$           (40)		$                (71)		$                (21)
Non-GAAP Adjustments
Recognized (gains) and losses, net		167		28		104		35		—
Market related liability adjustments		142		—		142		—		—
Purchase price amortization		55		37		11		7		—
Transaction costs		7		—		2		5		—
Adjusted pre-tax earnings (loss)		$                629		$                455		$           219		$                (24)		$                (21)
Total non-GAAP, pre-tax adjustments		$                371		$                  65		$           259		$                  47		$                  —
Income taxes on non-GAAP adjustments		(81)		(16)		(54)		(11)		—
Deferred tax asset valuation allowance		7		(1)		—		8		—
Non-controlling interest on non-GAAP adjustments		(32)		—		(32)		—		—
Total non-GAAP adjustments		$                265		$                  48		$           173		$                  44		$                  —
Adjusted net earnings (loss) attributable to common shareholders		$                425		$                341		$           119		$                (14)		$                (21)
Adjusted EPS attributable to common shareholders - diluted		$               1.57

 

FIDELITY NATIONAL FINANCIAL, INC. SUMMARY BALANCE SHEET INFORMATION (In millions)
		June 30, 2024			December 31, 2023
		(Unaudited)			(Unaudited)
Cash and investment portfolio			$         63,916			$         58,816
Goodwill			5,107			4,830
Title plant			420			418
Total assets			88,824			80,614
Notes payable			4,175			3,887
Reserve for title claim losses			1,721			1,770
Secured trust deposits			800			731
Accumulated other comprehensive (loss) earnings			(2,087)			(2,119)
Non-controlling interests			721			552
Total equity and non-controlling interests			7,981			7,460
Total equity attributable to common shareholders			7,260			6,908

 

Non-GAAP Measures and Other Information

Title Segment

The table below reconciles pre-tax title earnings to adjusted pre-tax title earnings.

	Three Months Ended				Six Months Ended
(Dollars in millions)	June 30, 2024	June 30, 2023			June 30, 2024	June 30, 2023
Pre-tax earnings	$                   235	$                    233			$                   453	$                   390
Non-GAAP adjustments before taxes
Recognized (gains) and losses, net	75	50			12	28
Purchase price amortization	14	19			30	37
Total non-GAAP adjustments	89	69			42	65
Adjusted pre-tax earnings	$                   324	$                    302			$                   495	$                   455
Adjusted pre-tax margin	16.2 %	15.8 %			13.7 %	13.2 %

 

FIDELITY NATIONAL FINANCIAL, INC. QUARTERLY OPERATING STATISTICS (Unaudited)
		Q2 2024		Q1 2024		Q4 2023		Q3 2023		Q2 2023		Q1 2023		Q4 2022		Q3 2022
Quarterly Opened Orders ('000's except % data)
Total opened orders*		344		315		257		318		347		308		266		363
Total opened orders per day*		5.5		5.1		4.1		5.0		5.4		5.0		4.3		5.7
Purchase % of opened orders		80 %		79 %		78 %		80 %		79 %		78 %		76 %		76 %
Refinance % of opened orders		20 %		21 %		22 %		20 %		21 %		22 %		24 %		24 %
Total closed orders*		229		186		192		224		233		188		216		278
Total closed orders per day*		3.6		3.0		3.1		3.6		3.6		3.0		3.5		4.3
Purchase % of closed orders		81 %		79 %		80 %		80 %		81 %		78 %		76 %		76 %
Refinance % of closed orders		19 %		21 %		20 %		20 %		19 %		22 %		24 %		24 %
Commercial (millions, except orders in '000's)
Total commercial revenue		$      273		$      238		$      294		$      263		$      263		$      241		$      344		$      381
Total commercial opened orders		50.7		48.7		43.7		49.1		50.2		48.5		44.9		54.8
Total commercial closed orders		25.7		24.3		26.3		25.6		27.7		24.7		30.5		35.2
National commercial revenue		$      145		$      123		$      164		$      131		$      132		$      123		$      177		$      195
National commercial opened orders		21.4		19.4		18.2		19.2		19.5		18.8		17.8		22.1
National commercial closed orders		9.8		9.2		10.1		9.4		10.1		8.7		11.9		14.0
Total Fee Per File
Fee per file		$   3,759		$   3,555		$   3,806		$   3,618		$   3,598		$   3,446		$   3,649		$   3,621
Residential fee per file		$   2,995		$   2,746		$   2,889		$   2,861		$   2,897		$   2,601		$   2,542		$   2,697
Total commercial fee per file		$ 10,600		$   9,800		$  11,200		$  10,300		$   9,500		$   9,800		$  11,300		$  10,800
National commercial fee per file		$ 14,800		$  13,400		$  16,300		$  14,000		$ 13,000		$  14,100		$  14,900		$  13,900
Total Staffing
Total field operations employees		10,300		10,000		9,900		10,400		10,600		10,400		10,700		12,000
Actual title claims paid ($ millions)		$       70		$        70		$        64		$        69		$       67		$        62		$        79		$        65

 

FIDELITY NATIONAL FINANCIAL, INC. MONTHLY TITLE ORDER STATISTICS
			Direct Orders Opened *				Direct Orders Closed *
Month		/ (% Purchase)				/ (% Purchase)
April 2024			119,000	81 %			75,000	81 %
May 2024			118,000	80 %			81,000	82 %
June 2024			107,000	79 %			73,000	81 %
Second Quarter 2024			344,000	80 %			229,000	81 %
			Direct Orders Opened *				Direct Orders Closed *
Month		/ (% Purchase)					/ (% Purchase)
April 2023			106,000	80 %			70,000	80 %
May 2023			125,000	79 %			81,000	81 %
June 2023			116,000	79 %			82,000	81 %
Second Quarter 2023			347,000	79 %			233,000	81 %
* Includes an immaterial number of non-purchase and non-refinance orders

 

F&G Segment

The table below reconciles net earnings (loss) attributable to common shareholders to adjusted net earnings attributable to common shareholders.  The F&G Segment is reported net of noncontrolling minority interest.

	Three Months Ended				Six Months Ended
(Dollars in millions)	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net earnings attributable to common shareholders	$                 171		$                 110		$               269		$                 (54)
Non-GAAP adjustments(1):
Recognized (gains) losses, net	(18)		30		14		104
Market related liability adjustments	(71)		(102)		(126)		142
Purchase price amortization	19		6		41		11
Transaction costs	(3)		—		(3)		2
Income taxes on non-GAAP adjustments	16		15		17		(54)
Non-controlling interest on non-GAAP adjustments	8		8		5		(32)
Adjusted net earnings (loss) attributable to common shareholders(1)	$                 122		$                   67		$               217		$                 119

 

• Adjusted net earnings of $122 million for the second quarter of 2024 include $122 million, or $0.45 per share, of investment income from alternative investments and $3 million, or $0.01 per share, of CLO redemption gains and bond prepay income; partially offset by $13 million, or $0.05 per share, of net expense from actuarial model updates and refinements. Alternative investments investment income based on management's long-term expected return of approximately 10% was $139 million, or $0.51 per share.
  
  
• Adjusted net earnings of $67 million for the second quarter of 2023 included $69 million, or $0.26 per share, of investment income from alternative investments and $4 million, or $0.01 per share, of bond prepay income. Alternative investments investment income based on management's long-term expected return of approximately 10% was $116 million, or $0.43 per share.
  
  
• Adjusted net earnings of $217 million for the six months ended June 30, 2024 include $206 million, or $0.76 per share, of investment income from alternative investments and $8 million or $0.03 per share of CLO redemption gains and bond prepay income; partially offset by $13 million, or $0.05 per share, of net expense from actuarial model updates and refinements. Alternative investments investment income based on management's long-term expected return of approximately 10% was $267 million, or $0.98 per share.
  
  
• Adjusted net earnings of $119 million for the six months ended June 30, 2023 included $152 million, or $0.57 per share, of investment income from alternative investments and $4 million, or $0.01 per share, of bond prepay income, partially offset by $31 million, or $0.11 per share, tax valuation allowance expense. Alternative investments investment income based on management's long-term expected return of approximately 10% was $227 million, or $0.84 per share.

Footnotes:
1.	Non-GAAP financial measure. See the Non-GAAP Measures section below for additional information.

 

The table below provides a summary of sales highlights.

		Three Months Ended					Six Months Ended
(In millions)		June 30, 2024		June 30, 2023			June 30, 2024		June 30, 2023
Total annuity sales		$              3,123		$             2,288			$              5,887		$               5,012
Indexed universal life sales		44		42			86		79
Funding agreements (FABN/FHLB)		915		200			1,020		456
Pension risk transfer		338		478			922		742
Gross sales(1)		$              4,420		$             3,008			$              7,915		$               6,289
Sales attributable to flow reinsurance to third parties		(975)		(796)			(2,168)		(1,868)
Net Sales(1)		$              3,445		$             2,212			$              5,747		$               4,421

Footnotes:
1.	Non-GAAP financial measure. See the Non-GAAP Measures section below for additional information.

 

DEFINITIONS  

The following represents the definitions of non-GAAP measures used by the Company.

Adjusted Net Earnings attributable to common shareholders

Adjusted net earnings attributable to common shareholders is a non-GAAP economic measure we use to evaluate financial performance each period. Adjusted net earnings attributable to common shareholders is calculated by adjusting net earnings (loss) attributable to common shareholders to eliminate:

i. Recognized (gains) and losses, net: the impact of net investment gains/losses, including changes in allowance for expected credit losses and other than temporary impairment ("OTTI") losses, recognized in operations; and the effects of changes in fair value of the reinsurance related embedded derivative and other derivatives, including interest rate swaps and forwards;

ii. Market related liability adjustments: the impacts related to changes in the fair value, including both realized and unrealized gains and losses, of index product related derivatives and embedded derivatives, net of hedging cost; the impact of initial pension risk transfer deferred profit liability losses, including amortization from previously deferred pension risk transfer deferred profit liability losses; and the changes in the fair value of market risk benefits by deferring current period changes and amortizing that amount over the life of the market risk benefit;

iii. Purchase price amortization: the impacts related to the amortization of certain intangibles (internally developed software, trademarks and value of distribution asset and the change in fair value of liabilities recognized as a result of acquisition activities);

iv. Transaction costs: the impacts related to acquisition, integration and merger related items;

v. Certain income tax adjustments: the impacts related to unusual tax items that do not reflect our core operating performance such as the establishment or reversal of significant deferred tax asset valuation allowances in our Title and Corporate and Other segments;

vi. Other "non-recurring," "infrequent" or "unusual items":  Management excludes certain items determined to be "non-recurring," "infrequent" or "unusual" from adjusted net earnings when incurred if it is determined these expenses are not a reflection of the core business and when the nature of the item is such that it is not reasonably likely to recur within two years and/or there was not a similar item in the preceding two years;

vii. Non-controlling interest on non-GAAP adjustments: the portion of the non-GAAP adjustments attributable to the equity interest of entities that FNF does not wholly own; and

viii. Income taxes: the income tax impact related to the above-mentioned adjustments is measured using an effective tax rate, as appropriate by tax jurisdiction

While these adjustments are an integral part of the overall performance of F&G, market conditions and/or the non-operating nature of these items can overshadow the underlying performance of the core business. Accordingly, management considers this to be a useful measure internally and to investors and analysts in analyzing the trends of our operations. Adjusted net earnings should not be used as a substitute for net earnings (loss). However, we believe the adjustments made to net earnings (loss) in order to derive adjusted net earnings provide an understanding of our overall results of operations.

Assets Under Management (AUM)

AUM is comprised of the following components and is reported net of reinsurance assets ceded in accordance with GAAP:

i. total invested assets at amortized cost, excluding investments in unconsolidated affiliates, owned distribution and derivatives;

ii. investments in unconsolidated affiliates at carrying value;

iii. related party loans and investments;

iv. accrued investment income;

v. the net payable/receivable for the purchase/sale of investments; and

vi. cash and cash equivalents excluding derivative collateral at the end of the period.

Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the size of our investment portfolio that is retained.

AUM before Flow Reinsurance

AUM before Flow Reinsurance is comprised of components consistent with AUM, but also includes flow reinsured assets.

Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the size of our investment portfolio including reinsured assets.

Average Assets Under Management (AAUM)

AAUM is calculated as AUM at the beginning of the period and the end of each month in the period, divided by the total number of months in the period plus one.

Management considers this non-GAAP financial measure to be useful internally and to investors and analysts when assessing the rate of return on retained assets.

Sales 

Annuity, IUL, funding agreement and non-life contingent PRT sales are not derived from any specific GAAP income statement accounts or line items and should not be viewed as a substitute for any financial measure determined in accordance with GAAP. Sales from these products are recorded as deposit liabilities (i.e., contractholder funds) within the Company's consolidated financial statements in accordance with GAAP. Life contingent PRT sales are recorded as premiums in revenues within the consolidated financial statements. Management believes that presentation of sales, as measured for management purposes, enhances the understanding of our business and helps depict longer term trends that may not be apparent in the results of operations due to the timing of sales and revenue recognition.

 

View original content:https://www.prnewswire.com/news-releases/fnf-reports-second-quarter-2024-financial-results-302214677.html

SOURCE Fidelity National Financial, Inc.

FAQ

What was FNF's net earnings per share for Q2 2024?

FNF reported net earnings of $1.12 per diluted share for Q2 2024, compared to $0.81 per share in Q2 2023.

How much did FNF's Title Segment contribute to adjusted net earnings in Q2 2024?

The Title Segment contributed $241 million to FNF's adjusted net earnings in Q2 2024, compared to $226 million in Q2 2023.

What was F&G's gross sales growth in Q2 2024 compared to Q2 2023?

F&G achieved record gross sales of $4.4 billion in Q2 2024, representing a 47% increase over Q2 2023.

What was FNF's adjusted pre-tax title margin for Q2 2024?

FNF's adjusted pre-tax title margin was 16.2% for Q2 2024, compared to 15.8% in Q2 2023.

How much did FNF pay in common dividends for Q2 2024?

FNF paid common dividends of $0.48 per share, totaling $131 million in Q2 2024.