Fidelity National's 3Q income rises as orders and fees increase
In the third quarter, Fidelity National Financial like its peers, benefited from the refinance-driven mortgage market. On a quarter-to-quarter basis, the company increased its opened and closed title orders while boosting its fee income per residential file.
The company had 847,000 direct orders opened in the third quarter, up from 693,000 in the second quarter and 592,000 in the third quarter of 2019. Over the same time frame, its closed order volume grew to 571,000 from 487,000 and 409,000 respectively.
Fidelity's open order volume for the third quarter was more than double the second largest title insurer, First American, which had 410,000.
Fee per residential file for the third quarter was $1,803, an increase of $89 from $1,614 in the second quarter. But the 60%-40% refinance-to-purchase mix of open orders was similar to the 63%-37% mix in the second quarter. For closed orders, there was a shift to more purchase business in the third quarter, 52%-48%, compared with 63%-37% for the second quarter.
But in the third quarter of 2019, when purchases were 52% of opened orders and 55% of closed orders, Fidelity earned $2,459 per file.
As a result, Fidelity National Financial reported third quarter net earnings of $378 million, with its title insurance business contributing $376 million.
This compares with net earnings of $301 million in the second quarter, with net earnings from the title unit of $391 million.<< just double-checking that these numbers are right?
One year prior, the holding company earned $250 million, with the title company earning $291 million. The two most recent quarter's earnings include Fidelity's purchase of the remaining 92% of life insurer FGL Holdings, a transaction that closed in June.
"We generated adjusted pre-tax title earnings of $528 million, a record quarter, and an adjusted pre-tax title margin of 21.2%, our best quarterly margin since the third quarter of 2003, as we benefited from the delayed spring selling season and sustained momentum in refinance," Fidelity National Chairman Bill Foley said in a press release. "During the third quarter refinance opened and closed orders on a daily basis increased 83% and 87%, respectively."