On November 7, 2023, Fidelity National Financial Inc (FNF, Financial) released its financial results for the third quarter ended September 30, 2023. The company reported an increase in net earnings attributable to common shareholders to $426 million, or $1.57 per diluted share, up from $362 million, or $1.32 per share, in the third quarter of 2022. Adjusted net earnings attributable to common shareholders, which excludes certain items, stood at $333 million, or $1.23 per share, compared to $272 million, or $0.99 per share, in the prior-year quarter.
Performance and Financial Highlights
The Title Segment's contribution to adjusted net earnings was $245 million for the quarter, a decrease from $298 million in the third quarter of 2022. This decline was primarily due to a significant drop in residential and commercial volumes as a result of higher mortgage rates. Despite the challenging market conditions, the Title Segment maintained an industry-leading adjusted pre-tax title margin of 16.2%.
The F&G Segment, which serves retail annuity and life customers and institutional clients, contributed $102 million to adjusted net earnings, a notable improvement from an adjusted net loss of $12 million in the third quarter of 2022. This segment achieved record assets under management of $47.4 billion as of September 30, 2023.
Strategic and Operational Resilience
William P. Foley, II, highlighted the strength and competitive advantage of FNF's Title business, emphasizing the ability to navigate a challenging environment with an adjusted pre-tax title margin of 16.2%. He also pointed out the growing importance of the F&G Segment's counter-cyclical business, which contributed 31% of FNF's consolidated adjusted net earnings.
“Our third quarter Title results highlight the strength of our business and the competitive advantage that we continue to maintain and grow. While residential purchase applications hit their lowest levels since 1995, we once again delivered an industry leading adjusted pre-tax title margin of 16.2%, further demonstrating our ability to navigate an extremely challenging environment. Our results also display the increasingly important contribution of F&G’s counter cyclical business whose assets under management grew to a record $47 billion in the quarter, while the F&G segment’s adjusted net earnings contributed 31% of FNF’s consolidated adjusted net earnings.”
FNF also maintained a strong liquidity position, ending the quarter with $949 million in cash and short-term liquid investments, and continued its commitment to the quarterly cash dividend.
Segment Financial Results
The Title Segment saw a decrease in total revenue to $1.9 billion, an 18% decrease from the third quarter of 2022. Direct title premiums and agency title premiums both experienced significant declines, as did commercial revenue. However, the total fee per file remained in line with the third quarter of 2022.
The F&G Segment reported gross sales of $2.8 billion, a slight decrease from the third quarter of 2022, with institutional market sales offsetting lower retail channel sales. The segment's adjusted net earnings of $102 million for the third quarter reflected growth in assets, product margin expansion, and earnings from accretive flow reinsurance.
Looking Ahead
FNF is well-positioned to navigate the current market conditions and take advantage of any opportunities that may arise from market dislocations. The company will host a conference call on November 8, 2023, to discuss the third quarter results in further detail.
For more comprehensive information on FNF's third quarter financial results, including detailed financial tables and segment results, please visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Fidelity National Financial Inc for further details.
