Fidelity National Financial, Inc.

Good morning, and welcome to FNF's first quarter earnings call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Lisa Foxworthy-Parker, SVP, Investor, and External Relations. Please go ahead.

Great. Thanks, Operator, and welcome, everyone. Joining me today are Mike Nolan, Chief Executive Officer, and Tony Park, Chief Financial Officer. We look forward to addressing your questions following our prepared remarks. Also, Chris Blunt, F&G's Chief Executive Officer, and Wendy Young, F&G's Chief Financial Officer, will join us for the Q&A portion of 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 a discussion of the factors that could cause actual results to differ materially from those expressed or implied. This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors. Non-GAP measures have been reconciled to GAP where required in accordance with SEC rules within our earnings materials available on the company's website. Yesterday, we issued a press release, which is also available on our website. And today's call is being recorded and will be available for webcast replay at fnf.com. It will also be available through telephone replay beginning today at 3 p.m. Eastern Time through May 11, 2023. And now, I'll turn the call over to our CEO, Mike Nolan.

Thank you, Lisa, and good morning. We are pleased with our solid performance in the quarter as we continue to navigate a volatile and challenging environment. Starting with our title business, the focus remains on providing our customers exceptional service, protecting our policyholders, and building our business for the long term, as well as maximizing our margins in a given market. In light of the steep decline in mortgage volumes as compared to the prior year, and given the low inventory coming out of the fourth quarter, we continued to monitor expenses closely and reduced our field staff by an additional 2% in the first quarter. This is after a 26% reduction of field staff net of acquisitions in 2022, one of the largest reductions in our history. As a result of these actions, we delivered adjusted pre-tax earnings in our title segment of $153 million and an industry-leading adjusted pre-tax title margin of 10%. We are pleased with this result given that volumes remain at historically low levels. Moving into 2023, we have been closely monitoring for sequential trends in residential purchase volumes. In a typical year, we expect purchase open orders to build in the first and second quarters off of the seasonal low of the fourth quarter. At this time, we are seeing encouraging indications of improving order volumes, albeit coming off lower levels than the last few years. Residential purchase orders opened per day in both March and April showed sequential improvement, and April was our best month since August of last year. Looking at sequential volumes more closely, daily purchase orders opened were up 20% over the fourth quarter of 2022, and up 6% for the month of April versus March, although building off a lower base. And refinance orders open per day were up 6% over the fourth quarter of 2022 and flat for the month of April versus March. Our total commercial orders open were 781 per day, up 8% over the fourth quarter of 2022 and down 3% for the month of April versus March. Overall, Total orders opened average 5,000 per day in the first quarter, with January at 4,700, February at 5,100, and March at 5,100. For the month of April, total orders opened were 5,300 per day, up 4% over March. From here, we expect the volatile market environment will continue to provide both headwinds and tailwinds for market participants. On the residential side, Although there is not yet firm footing for rates and home affordability, there are solid fundamentals, such as pent-up demand and a growing working age and first-time buyer population, that are expected to support a rebound once rates move downward and sellers and buyers more fully return to the market. From a commercial perspective, our mix continues to weight towards industrial, multifamily, and sectors like affordable housing, energy, and hospitality. In the first quarter, we generated commercial revenue of $241 million, which is consistent with our first quarters between 2015 and 2020. Reflecting on what these factors mean for FNF's title business, we expect near-term margin improvement to be modest, given the relatively low volumes that we have seen in our first quarter open orders, which is indicative of the level of closed orders we will have in the second quarter. Beyond these near-term pressures, we remain confident in the fundamentals of the business and continue to strategically build and expand our title business for the long term through acquisitions, recruiting talent, and enhancing our title capabilities. Finally, F&G is off to a strong start as a public company and continues to deliver on its diversified growth strategy. F&G reported record assets under management of $45 billion at March 31st, driven by record top-line growth and stable in-forest retention. We are nearly at the three-year mark since the 2020 merger, and F&G is well ahead of our original expectation to double its assets under management over five years. Tony will provide more detail on the F&G segment results in a minute. Wrapping up, I'd like to thank our employees for their commitment and dedication. to keeping us on track to deliver a solid start to the year despite the market challenges. Let me now turn the call over to Tony Park to review FNF's first quarter financial highlights.