Fidelity National Financial Q2 2026 Earnings Call Transcript

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Provided by Quartr
August 6, 2026

Key Takeaways

  • Positive Sentiment: Strong second-quarter performance: Adjusted net earnings rose 16% year over year to $370 million, or $1.39 per diluted share, while adjusted pre-tax Title earnings increased 33% to $448 million.
  • Positive Sentiment: The Title business continued to outperform peers despite historically low residential transaction volumes, with purchase orders up 3% year over year and July total orders up 7%. Commercial revenue reached $778 million in the first half, up 24%, supported by broad strength across industrial, multifamily, data centers, retail, energy and other asset classes.
  • Negative Sentiment: Management expects modest Title margin compression in the second half of 2026 relative to the second quarter, as recruiting and recent tuck-in acquisitions add expenses before their revenue contribution fully ramps.
  • Positive Sentiment: F&G’s assets under management rose 8% year over year to $74.7 billion, while core retail sales remained exceptionally strong at $1.8 billion. Management is also exploring a strategic partner for Peak Altitude, potentially bringing in proceeds to support growth and shareholder value.
  • Neutral Sentiment: FNF returned $195 million to shareholders in the second quarter and ended June with $457 million in holding-company cash and short-term investments, while management estimated approximately $600 million of subsidiary dividend capacity for the second half of the year.
AI Generated. May Contain Errors.
Earnings Conference Call
Fidelity National Financial Q2 2026
00:00 / 00:00

Transcript Sections

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Operator

Good morning, welcome to FNF's second quarter 2026 earnings call. During today's presentation, all callers will be placed in a listen-only mode. Following management's prepared remarks, the conference will be open for questions with instructions to follow at that time. I would now like to turn the call over to Lisa Foxworthy-Parker, Senior Vice President, Investor and External Relations. Please go ahead.

Lisa Foxworthy-Parker
SVP of Investor and External Relations at FNF

Thanks, operator, welcome everyone. I'm joined today by Mike Nolan, CEO, and Tony Park, CFO. We look forward to addressing your questions following our prepared remarks. F&G's management team, including Conor Murphy, CEO and President, and Mark Wiltse, Interim CFO, will also be available for Q&A. We're also glad to welcome F&G's incoming CFO, Michael Bailey, who joined the company earlier this week and will listen in on today's call. Today's earnings call may include forward-looking statements and projections under the Private Securities Litigation Reform Act, which do not guarantee future events or performance. We do not undertake any duty to revise or update such statements to reflect new information, subsequent events, or changes in strategy. Please refer to our most recent quarterly and annual reports and other SEC filings for details on important factors that could cause actual results to differ materially from those expressed or implied.

Lisa Foxworthy-Parker
SVP of Investor and External Relations at FNF

This morning's discussion also includes non-GAAP measures, which management believes are relevant in assessing the financial performance of the business. Non-GAAP measures have been reconciled to GAAP where required and in accordance with SEC rules within our earnings materials available on the company's investor website. Please note that today's call is being recorded and will be available for webcast replay. With that, I'll hand the call over to Mike Nolan.

Mike Nolan
CEO at FNF

Thank you, Lisa, good morning. We are very pleased with our second quarter results, which reflect sustained momentum across our company. Both of our businesses are well-positioned for the current market and for longer-term growth. I'd also like to thank our employees for achieving another quarter of industry-leading performance. We are generating greater momentum in sequential daily opened orders in purchase and refinance relative to our peers, while also delivering strength in commercial revenue trending towards historic highs. All of this is a direct result of their exceptional contributions to stay ahead of our competition. Starting with Title, we delivered adjusted pre-tax Title earnings of $448 million for the second quarter, up 33% over the second quarter of 2025. This generated an industry-leading adjusted pre-tax Title margin of 17.8% for the second quarter, an increase of 230 basis points over the second quarter of 2025.

Mike Nolan
CEO at FNF

Our second quarter results reflect continued strong performance across the business, highlighted by strength in our commercial, residential and agency businesses. Additionally, our disciplined expense management drove strong incremental margins. Looking at our Title results more closely, starting with purchase, U.S. existing home sales remain at historically low levels at around the 4 million annual pace due to elevated mortgage rates and housing market dynamics. We were encouraged to see increases in daily purchase orders opened over the prior year and sequential quarters, steadily outperforming relative to peers. Our daily purchase orders opened were up 3% over the second quarter of 2025, up 7% over the first quarter of 2026, and up 4% for the month of July versus the prior year. Our refinance volumes continue to be responsive to 30-year mortgage rates, although accounting for only 7% of our direct revenue in the second quarter.

Mike Nolan
CEO at FNF

Refinance orders opened were 1,600 per day in the second quarter as compared to 1,300 in the second quarter of 2025 and 2,000 in the first quarter of 2026. Volumes remained resilient at 1,500 per day in the month of July as mortgage rates moved higher. Our refinance orders open per day were up 16% over the second quarter of 2025, down 22% from the first quarter of 2026, and up 15% for the month of July versus the prior year. For commercial, we were on track for a very strong and potentially record year, with direct commercial revenue of $778 million in the first six months, up 24% over $626 million in the first half of 2025. We continue to see growth in both national and local markets' daily orders opened, up 3% and 10% respectively in the second quarter over the second quarter of 2025.

Mike Nolan
CEO at FNF

Total commercial orders opened were 919 per day, up 7% over the second quarter of 2025, up 1% over the first quarter of 2026, and up 2% for the month of July versus the prior year. We remain bullish on commercial due to several factors. First, we have a strong pipeline of commercial deals slated to close with broad strength across geographies and asset classes, including industrial data centers, multifamily, affordable housing, retail, and energy. Next, our scale and expertise position us to participate in the largest transactions in the market. We closed 29 transactions generating over $1 million each in premiums in the second quarter across multiple asset classes in both our direct and agency businesses. This is reflected in our higher trending commercial fee profile. Third, our current performance reflects the U.S. office real estate market in the early stage of a fragmented recovery.

Mike Nolan
CEO at FNF

We believe this sector's eventual rebound will provide a potential tailwind as we look ahead. Finally, commercial real estate activity is sustained by ongoing property sale and refinance activity that contribute to overall order volumes as well. To bring it all together, total orders opened were steady and averaged 6,200 per day in the second quarter. For the month of July, total orders opened were 5,900 per day, up 7% over the prior year. Looking ahead, we expect commercial momentum to continue but remain cautious on residential purchase and refinance activity for the remainder of the year. We have also recently had higher strategic investment in active recruiting and a handful of attractive tuck-in acquisitions. While these strategic investments build the business for the long term, they do typically front-load expenses while revenues take a few months to ramp up and reach full productivity.

Mike Nolan
CEO at FNF

We expect to see this near-term effect on our results, including some modest compression to adjusted pre-tax title margin in the second half of the year. Over time, once mortgage rates improve, we believe residential purchase and refinance activity will accelerate and trend toward historical levels. This recovery represents additional earnings power given the operational leverage that we have built into our model. This operational leverage also comes through our technology and AI investments. As a reminder, FNF in the title industry hold a unique position in real estate transactions. FNF provides the rails upon which real estate transactions run by orchestrating complex multi-party settlements, safeguarding the movement of funds, and mitigating fraud in every transaction.

Mike Nolan
CEO at FNF

Through our continuing technology innovations and embedding AI tools into these workflows, we believe that we can drive significant value over time by enhancing efficiency in our customer's experience, reducing risk, and strengthening fraud prevention across real estate transactions. Momentum also continues with our inHere digital transaction platform that has scaled to a fully deployed enterprise solution. During 2025, inHere reached nearly 2.8 million unique users and engaged 80% of our residential sale transactions. For the first six months of 2026, we have maintained engagement at 80% of our residential sales transactions, demonstrating deep integration into daily workflows. This foundational technology drives efficiency, transparency, and a superior customer experience in the escrow closing process, with built-in compliance and enhanced fraud protection. We are in our seventh year of inHere and recently launched the property monitoring component in the second quarter in 35 states.

Mike Nolan
CEO at FNF

This service provides visibility and alerts for a property that is provided to customers as a complimentary post-closing service from FNF title companies. We have received positive feedback from our customers, and once property monitoring is fully deployed, our footprint is expected to far exceed others in the industry. These successful and pioneering investments in technology have and continue to play a critical role in our ability to maintain our industry-leading position for adjusted pre-tax title margin. Turning now to our F&G segment. I'd like to take a brief moment to congratulate Conor on his promotion to CEO and President of F&G, officially welcome Michael Bailey as CFO of F&G, and thank Mark Wiltse, who has recently served as interim CFO. Following F&G's recent executive leadership transition, we expect Conor and Mike to continue the strategic momentum toward a more fee-based, higher margin, and less capital-intensive business model.

Mike Nolan
CEO at FNF

As previously announced, Chris Blunt will continue as a director of F&G and as Peak Altitude's CEO, a business that Chris has been building. F&G has invested nearly $700 million in four owned distribution investments that generated $80 million of EBITDA for the full year 2025. Chris has launched a formal process to explore strategic alternatives for Peak Altitude to capture its significant growth opportunities and unlock that intrinsic value for both F&G's and FNF's shareholders. We believe that both F&G and subsidiary Peak Altitude have plenty of runway ahead to continue growing AUM, growing earnings, and growing shareholder value. I would also like to take a moment to personally thank Chris for all of his work and effort over the past few years leading F&G. Under Chris's leadership, F&G has significantly expanded its products and distribution and nearly tripled assets under management since joining the company in 2019.

Mike Nolan
CEO at FNF

Turning to F&G's results, assets under management before reinsurance have nearly reached the $75 billion threshold at June 30th. Gross AUM of $74.7 billion was up 8% over the prior year. On a standalone basis, F&G reported GAAP equity excluding AOCI of $6 billion at quarter end, and has grown its book value per share excluding AOCI to $45.93, up 68% since the 2020 acquisition. With that, let me now turn the call over to Tony to review FNF's second quarter financial performance and provide additional insights.

Tony Park
CFO at FNF

Thank you, Mike. Starting with our consolidated results, we generated $4.1 billion in total revenue in the second quarter. Excluding net recognized gains and losses, our total revenue was $3.7 billion as compared with $3.5 billion in the second quarter of 2025. We reported second quarter net earnings of $288 million, including net recognized gains of $333 million versus net earnings of $278 million, including $98 million of net recognized gains in the second quarter of 2025. Adjusted net earnings were $370 million, or $1.39 per diluted share, compared with $318 million or $1.16 per share in the second quarter of 2025. The Title segment contributed $339 million, the F&G segment contributed $65 million, and the Corporate segment had an adjusted net loss of $6 million before eliminating $28 million of dividend income from F&G in the consolidated financial statements.

Tony Park
CFO at FNF

Turning to second quarter financial highlights specific to the Title segment. Our Title segment generated $2.5 billion in total revenue in the second quarter, excluding net recognized gains of $14 million compared with $2.2 billion in the second quarter of 2025. Direct premiums increased 21% over the prior year, agency premiums increased 15%, and escrow title-related and other fees increased 13%. Personnel costs increased 9%, and other operating expenses increased 15%. All in, the Title business generated adjusted pre-tax Title earnings of $448 million, up 33% over $337 million in the second quarter of 2025, and a 17.8% adjusted pre-tax Title margin in the quarter versus 15.5% in the prior year quarter. Our Title and Corporate investment portfolio totaled $5.1 billion at June 30th. Interest and investment income in the Title and Corporate segments was $93 million, excluding income from F&G dividends to the holding company.

Tony Park
CFO at FNF

For the next 12 months, we expect a range of $95 million-$100 million in interest and investment income per quarter, assuming no Fed rate actions with increasing 1031 exchange and fixed income balances partially offset by lower cash balances. In addition, we expect approximately $28 million per quarter of common and preferred dividend income from F&G to the Corporate segment. Our Title claims paid of $67 million were $11 million lower than our provision of $78 million for the second quarter. The carried reserve for Title claim losses is approximately $15 million or 1% above the actuary central estimate. We continue to provide for Title claims at 4.5% of total Title premiums. Next, turning to financial highlights specific to the F&G segment. Since F&G hosted its earnings call earlier this morning and provided a thorough update, I will provide a few key highlights.

Tony Park
CFO at FNF

F&G's AUM before reinsurance increased to $74.7 billion at June 30, up 8% over the prior year. This includes retained assets under management of $55.9 billion. F&G's retained investment portfolio performed very well once again this quarter. The portfolio is high quality with 97% of fixed maturities being investment-grade. It is well-matched to the liability profile and diversified across asset types. Credit-related impairments have remained low and stable, averaging six basis points over the past five years and a modest two basis points in the first half of this year. F&G reported gross sales of $2.7 billion for the second quarter, comprised of $2 billion of core sales and $700 million of opportunistic sales. This mix reflects pricing discipline and capital allocation to highest return opportunities. Core retail sales of indexed annuities and indexed life were $1.8 billion for the second quarter.

Tony Park
CFO at FNF

This is one of our strongest quarters on record for core retail sales and reflects continued momentum for F&G despite another quarter of contraction in industry FIA sales as compared with the prior year quarter. Core institutional sales of pension risk transfer were $200 million for the second quarter as expected. Ahead of the seasonal increase in PRT sales typically seen in the second half of the year. Opportunistic sales were primarily comprised of $600 million of funding agreements, as well as $100 million of multiyear guaranteed annuities, which we have de-emphasized due to returns currently below threshold. F&G's net sales were $1.5 billion in the second quarter. This reflects flow reinsurance in line with capital targets for multiyear guaranteed annuities and fixed indexed annuities.

Tony Park
CFO at FNF

Adjusted net earnings for the F&G segment were $65 million for the second quarter, reflecting our approximate 72% ownership stake, compared with $89 million in the second quarter of 2025, which reflected our approximate 82% ownership stake. F&G's core spread remains consistent as the business maintained disciplined pricing. F&G continues to provide an important complement to our title business. In the first six months, the F&G segment contributed 23% of FNF's adjusted net earnings, down from 32% for the first half of 2025. Turning to capital and liquidity, FNF continues to maintain a strong balance sheet and balanced capital allocation strategies. Our track record has generated a steady level of free cash flow, allowing us to continue to invest in our business and build for the long term. We also continue to return excess cash to shareholders.

Tony Park
CFO at FNF

During the second quarter, FNF returned approximately $195 million of capital to shareholders through $138 million of common dividends and $57 million of share repurchases. This brought capital returned to shareholders during the first six months of the year to approximately $417 million through $278 million of dividends and $139 million of share repurchases. From a capital allocation perspective, we ended 2025 with $659 million in cash and short-term liquid investments at the holding company. During the first six months, our cash position and cash generation funded $278 million of common dividends paid, $36 million of holding company interest expense, and $139 million in opportunistic share repurchases, all while keeping pace with wage inflation and funding the continued higher spend in risk and technology required in today's landscape.

Tony Park
CFO at FNF

We ended the second quarter with $457 million in cash and short-term liquid investments at the holding company, which is about 70% of the amount held at year-end 2025. This concludes our prepared remarks. Let me now turn the call back to our operator for questions.

Operator

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we pull for questions. Thank you. Our first question is from Bose George with KBW.

Bose George
Bose George
Analyst at KBW

Hey, guys. Good morning.

Tony Park
CFO at FNF

Good morning.

Bose George
Bose George
Analyst at KBW

On the margin, Mike, I think you talked about a modest compression in the title pre-tax margin in the second half of 2026. Is that relative to the first half or a year-over-year comparison? Can you, I think you touched on it, but go over the drivers again.

Mike Nolan
CEO at FNF

I would say it's probably in relation to the second quarter, primarily. As you know, there's always puts and takes around the margins, including the mix of direct and agency, commercial performance, the non-title businesses in the title segment. As I talked about in the beginning, we've had some really strong recruiting this year. I think we're having our best recruiting performance these last two quarters as we've ever had. A handful of acquisitions, including a couple that we closed in July, that'll add a little over 200 people to the organization. The revenue doesn't come in at the same level in the beginning, but all the expense does.

Mike Nolan
CEO at FNF

We will definitely be looking at staffing as we go through the back half of the year as we always do in relation to our orders, and we'll manage those staffing expenses accordingly.

Bose George
Bose George
Analyst at KBW

Okay, great. Thanks. Actually, Tony, can we get the margin by the different segments, if you have that?

Tony Park
CFO at FNF

Sure, Bose, thanks. Yeah, 17.8% pre-tax margin for the quarter up against 15.5% in the second quarter of last year. Our direct ops were up maybe 80 basis points to a little over 26% for that distributed network. Our agency business was up about 110 basis points to 8% on gross agency dollars. Our NCS units, those are our national commercial units, just shy of 30% margin on those standalone. A little up from the prior year second quarter. Our loan subservicing business was down some. We had some

Tony Park
CFO at FNF

Some kind of almost one-time or non-recurring benefits in the prior year's second quarter, which really bolstered our margins in that business in 2025. Having said that, we're still almost at a 21% margin in loan subservicing. Home warranty had another strong quarter with an 18% margin, up almost 200 basis points. ServiceLink also, with its centralized platform of refi and default services, was at about 24%, up a couple of hundred basis points there as well.

Bose George
Bose George
Analyst at KBW

Okay, great. Thanks for the detail.

Tony Park
CFO at FNF

Thanks.

Operator

Next, we'll move to Mark Hughes with Truist Securities.

Mark Hughes
Mark Hughes
Analyst at Truist Securities

Yeah, thank you. The purchase order outperformance you touched on, I think it sounds like some of those personnel additions and tuck-ins have been contributing to that. Anything else you would highlight?

Mike Nolan
CEO at FNF

Well, I think, Mark, it's certainly recruiting influence because we've had pretty consistent outperformance now for a number of months relative to the top peers. I think it's also just our people, our multi-brand strategy, and the support we provide the people in the field through our tech stack, our inHere digital transaction platform, our marketing spend. You put it all together, I think it's creating a differentiation in the marketplace.

Mark Hughes
Mark Hughes
Analyst at Truist Securities

Very good. The Peak, the strategic process, I think on the earlier call, there was a reference to maybe getting a partner to take ownership of half or a bit more than half. What would be done? Would the goal be to set a valuation mark? Would it be to take those proceeds and step up capital management? What's the thinking there?

Mike Nolan
CEO at FNF

Conor, you want to-

Conor Murphy
CEO and President at F&G

Yeah. Hey, Mark, it's Conor. Yeah, that's fair. The strategic option that we probably favor at this early stage would be a 51% partner so we can continue to grow the underlying business. We have great faith in the expansion opportunity there. I think to the second part of your question, in terms of proceeds, yeah, I think we would anticipate bringing those in and just thinking through the most logical mix of how we would deploy those. But certainly, a noteworthy element in terms of continuing to grow the value of the business.

Mark Hughes
Mark Hughes
Analyst at Truist Securities

Okay. Would that be used for future M&A, or would capital management be one of the alternatives?

Conor Murphy
CEO and President at F&G

Well, I-

Mark Hughes
Mark Hughes
Analyst at Truist Securities

Understanding that it's not an especially capital-intensive business.

Conor Murphy
CEO and President at F&G

I would imagine, I would say that it's more likely growing core business opportunities than M&A for us. I think that the Peak entity with a partner will focus on M&A on their part, I think they'll do that with their own funding.

Mark Hughes
Mark Hughes
Analyst at Truist Securities

Very good. Mike, you talked about the property monitoring. Could you talk a little bit more about that? Does that move the dial in terms of margins or business volumes? What is the thinking there?

Mike Nolan
CEO at FNF

I think it's just we want to provide more value to our buyers and sellers, and really our buyers. By extension to the real estate community. It's not something for margins. We're offering it as a complimentary monitoring for people who close with us, and we're doing it at a scale really nobody else can do it at. We think it's a value add. We think it'll be recognized well by market participants, and we're excited to be expanding it.

Mark Hughes
Mark Hughes
Analyst at Truist Securities

That helps maintain relationships, grow relationships, and take market share.

Mike Nolan
CEO at FNF

Certainly. I think it's just another value add from the FNF family to be on top of all the other things that we do to bring value to our customers.

Mark Hughes
Mark Hughes
Analyst at Truist Securities

Thank you.

Mike Nolan
CEO at FNF

Thanks.

Operator

As a reminder to everyone, if you would like to ask a question, please press star one at this time. Next, we'll move to Oscar Nieves with Stephens Inc.

Oscar Nieves
Oscar Nieves
Analyst at Stephens Inc.

Hey, good morning, everyone.

Mike Nolan
CEO at FNF

Good morning.

Oscar Nieves
Oscar Nieves
Analyst at Stephens Inc.

Morning. The second AI comments you made earlier. You mentioned that inHere is now engaging around 80% of your purchase transactions. Can you translate that into a cost per file or cycle time number yet? Or is it still too early to isolate that impact from everything else that's moving through the P&L?

Mike Nolan
CEO at FNF

We don't have a number on it. We know it brings efficiencies in that we get information directly from participants into the system. It's connected to our SoftPro system, so there's a plus there. It does allow the customers to track and get information on their orders without having to call or email. Really what we see, though, is that people want to use it, and that's where the 80% comes in, that it's being received well by our customers and our real estate agents.

Mike Nolan
CEO at FNF

I think over time, with the different things we do in tech, ultimately it just shows up in how our margins improve and how our overall productivity improves. We're not doing time and motion studies, Oscar, to determine how many minutes we're saving on a file.

Oscar Nieves
Oscar Nieves
Analyst at Stephens Inc.

Right. Okay. That's helpful. On the acquisitions that you mentioned earlier, you said you'd have some closing in July and you've seen record recruiting. Can you give us a sense of what you're paying for those acquisitions, whether they're concentrating in specific markets or geographies, and what's the capacity that you're building, whether that's primarily commercial or is it a mix of residential and commercial?

Mike Nolan
CEO at FNF

Yeah, great questions. I would say the recruiting and the acquisitions are over multiple geographies. Certainly, in the West, we've had some really strong recruiting success in Texas, for example, which is a really important state for us. Also markets in the East. Really both. In terms of mix, probably more on the residential side than commercial side. Certainly commercial comes with it, particularly in local markets where people might, or companies that you're acquiring might have a mix of business like that. In terms of what we're paying, we're still in the 4x-6x pre-tax profit valuations.

Oscar Nieves
Oscar Nieves
Analyst at Stephens Inc.

Okay. One more question for now. I think you said you closed 29 transactions over $1 million in premium this quarter in commercial. Is that pace of large deal flow something you see as durable and growing, or was this quarter unusually concentrated? That seems like the key swing factor for whether commercial fee per file holds near the current levels.

Mike Nolan
CEO at FNF

Yeah. I would say that this certainly seemed to be one of our biggest quarters. We haven't tracked this for terribly long, but we know it's of interest, we're doing that. Whether it continues, it's tough to say. I think we do have a strong pipeline of commercial orders, some of which are large and could be in that category. The other thing I would say about the commercial environment is just the strength across so many segments. I know data centers gets a lot of publicity, but as I look at our last quarter and the surveys we do with our management team, the top categories were industrial, multifamily, energy, retail, affordable housing, really all coming in strong. Mentions of things like hospitality, health, and medical, and it's getting a little bit lower, but even people talking about office, particularly suburban office.

Mike Nolan
CEO at FNF

Then the data centers as well. It's just a really broad base and our orders are still holding around that 900 level. A little over 900 for the first half of the year, which is a nice step up from just around 850 we averaged last year. Still very optimistic and excited about what the rest of the year brings in commercial.

Tony Park
CFO at FNF

Oscar, this is Tony. I will just add that the $29 million transactions that we referenced does include some agency transactions as well, mostly on the direct side, but some of those are agency. When you talk about fee per file, for example, we are talking specifically about direct because we're not capturing the fee per file on the agency side.

Oscar Nieves
Oscar Nieves
Analyst at Stephens Inc.

Right. I said last one before, just to squeeze a short one on a topic that you just mentioned. You talked about the office recovery being still early and fragmented, that it could be a tailwind ahead. What would you actually need to see in office to call that a real inflection? How big could that swing commercial volumes if it does turn? With that, I'll get back in the queue. Thank you.

Mike Nolan
CEO at FNF

Oscar, it's Mike. I think seeing transactions returning to more normalcy in central business district in particular. Think New York, for example, and some of the other big cities. It seems like the suburban office might be recovering a little bit quicker. How big it could be is hard to say, but I do remember 2015 when we had our first year, I think when we hit $1 billion in commercial revenue, and office was at the top of the list as a driver, and in particular, New York. I think it can be meaningful. I can't put a number to it.

Oscar Nieves
Oscar Nieves
Analyst at Stephens Inc.

Thank you very much.

Operator

Next we'll hear from Geoffrey Dunn with Dowling & Partners.

Geoffrey Dunn
Analyst at Dowling & Partners

Thanks. Good morning, guys.

Mike Nolan
CEO at FNF

Morning.

Tony Park
CFO at FNF

Morning.

Geoffrey Dunn
Analyst at Dowling & Partners

Tony, can you tell us what the remaining regulatory dividend capacity is in the back half of the year? Do you have an estimate for unregulated dividends in the back half?

Tony Park
CFO at FNF

Yeah. My best guess would be on the regulatory side, somewhere around $200 million. If I extended that to all of our unregulated or less regulated subsidiaries, the total would probably be somewhere in the $600 million range for the back half of the year.

Geoffrey Dunn
Analyst at Dowling & Partners

I'm sorry, that 600 includes the 200 or?

Tony Park
CFO at FNF

It does. It does.

Geoffrey Dunn
Analyst at Dowling & Partners

Okay. Got it. Then just a bigger high level question, Mike, for you. All the big title companies are investing in tech, and you're seeing some of the smaller companies doing it as well, with the expectation ultimately that you'll get a benefit through margin. When you think about longer term, do you think that improved margins will be sustainable, or do you think that pressure, most likely political, could come to bear and you'd have to pass on some of that gain to reduce the cost to borrowers?

Mike Nolan
CEO at FNF

Yeah. It's an interesting question, Jeff, there's probably a range of outcomes. I think margins should improve as we get better productivity out of technology, including AI. How much? It's hard to say. There's obviously a lot of inputs into that. I think for the industry, if margins were all rising in a significant way, you could see some regulatory pressure on pricing and maybe part of that being given back in pricing. It is a 50-state regulated business. There's not one regulator, you also have many market participants who some are performing at different levels, I don't know that you could select one participant if they had better margins than the others and say, well, there's an issue. Certainly a possibility, but really hard to call at this point.

Geoffrey Dunn
Analyst at Dowling & Partners

Okay. Just lastly, with respect to Texas pricing, is that above average, or below average relative to your overall book of business?

Mike Nolan
CEO at FNF

I would say the pricing in Texas is generally higher than the average across the country. Now, keep in mind, we do a lot of agency business in Texas, where the promulgated split is 15% to the insurance company, 85% to the agent. Clearly there, the agent's keeping most of that. Yeah, average pricing, I think if you looked at it per 1,000 dollar liability, for example, Texas would be on the higher end.

Geoffrey Dunn
Analyst at Dowling & Partners

Right. Thank you.

Mike Nolan
CEO at FNF

Thanks.

Operator

There are no further questions at this time. I would like to turn the floor back to Mike Nolan for closing remarks.

Mike Nolan
CEO at FNF

Thanks for joining our call this morning. We delivered strong second quarter results with our complementary businesses executing well in a dynamic environment. Title business continues to outperform, delivering industry-leading margins in what remains a low residential transaction environment while capitalizing on very strong commercial activity. We remain well-positioned to benefit from continued strength in commercial and an eventual recovery in residential transaction volumes, as well as benefits from our investments in technology, automation, and artificial intelligence. Likewise, F&G continues to execute on its strategy that is focused on balancing continued growth in its spread-based business alongside the fee-based flow reinsurance, middle market life insurance, and own distribution strategies as they focus on delivering long-term shareholder value. Thanks for your time this morning. We appreciate your interest in FNF and look forward to updating you on our third quarter earnings call.

Operator

Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.

Analysts
    • Lisa Foxworthy-Parker
      SVP of Investor and External Relations at FNF
    • Mike Nolan
      CEO at FNF
    • Tony Park
      CFO at FNF
    • Bose George
      Analyst at KBW
    • Mark Hughes
      Analyst at Truist Securities
    • Conor Murphy
      CEO and President at F&G
    • Oscar Nieves
      Analyst at Stephens Inc.
    • Geoffrey Dunn
      Analyst at Dowling & Partners
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