Fidelity National Financial, Inc. (FNF) Earnings Call Transcript & Summary

Hello. Thank you all for joining us. I am Barclays U.S. consumer finance analyst, Mark DeVries. Very pleased to be joined today by the team from FNF. We have FNF President, Mike Nolan; and CFO, Tony Park; along with the CEO of F&G, Chris Blunt. We are going to be doing a fireside chat today, so I have a number of prepared questions to ask. But this is being done live. So if anyone in the audience has any questions they'd like directed to the team. You can e-mail me, my e-mail address should be available on your screen. [email protected] or you could also try to message me on Bloomberg.

So with that brief intro, I'll kick it off. Can you just talk about, maybe for you, Mike, how May volumes on the title side have trended since your earnings call? Have you seen refi orders stabilize now that rates have stabilized? And the 30-year mortgages kind of dip back kind of below the sub-3% range?

Sure, Mark. It's still a pretty strong market. We've seen a sequential improvement as we move into May. I mean we only have 2 weeks of data, so you've got to keep that in mind. But purchase sequentially is up about 6% from a pretty strong April number on the purchase side. The comps are a little soft to talk about year-over-year. So I think the sequential views may be more important. And on the refi side, you're right, they have stabilized with rate movement and sequentially are up about 5% over April.

Okay. And what do you think is a sustainable level of refinance demand. I mean if rates remain at these levels, it's -- I think by most accounts, there's still a lot of borrowers out there who still have a rate incentive to refinance. So could we see refi transactions hold this level for a good part of the year?

I think we could. And of course, it's all about the rate. I mean if you look at the Black Knight monitor report, the mortgage monitor report they put out, they kind of track that. And you can just see the volatility in the refinance candidates based on their metrics and how it moves with rate, it's very sensitive to kind of those rate movements. But I think at the -- we're right around 3%, maybe a little above. I think they're still estimating about a $13 million pool of eligible refinance candidates. And that's pretty consistent with the numbers, even if you go back a year. It's not like that pool has been depleted. It really just moves up and down with the rates if that makes sense. So we still see 2021 is a really good refinance market. MBAs, I think, pegged at about $1.6 trillion. And Fannie is a bit more optimistic. I think they're a little over $2 trillion. They'll probably update those forecast this month. But even at those numbers, you're talking about one of the best refinance markets we've had in ever. I mean it's not the best, obviously, '03 and last year. But If you go back to 2019, I think we had a $1 trillion market.

Sounds about right, yes.

So that feels pretty good to me.

Yes. Yes. Fair enough. Yesterday, First American commented on how they're seeing double-digit year-over-year increases in revenue per order. Obviously, part of that is driven by the home price appreciation, but they also talked about some positive kind of geographic mix shift towards the coast where you get higher home prices in general? Are you guys seeing kind of similar trends?

We are. I took a look at our year-over-year numbers and our fee per file on the purchase side went from about, call it, $2,900 back in March of 2020. And to about $3,200 in March of '21, about a 10% increase. Some of that's going to be home price appreciation. We probably get maybe 60% of the home price appreciation. So if home prices are up 10%, maybe we get 6% reflected in our fee per file. And the rest could very well be geography or just deal size for whatever reason, but it could be coastal geography.

Okay. It's interesting. I think they cited the same 60% number. My recollection is historically, it's been 50%. Has there been some kind of -- a little bit of a shift in kind of the pricing grids that's made it a little bit more flat than -- and a little bit more linear in terms of the pricing than what we've seen historically?

I think there's been changes in pricing grids over time to try to simplify them. There used to be a lot more bands or buckets. But I don't know if that's the reason I thought we always said 60%, but maybe we said 50% to 60%. It's not an exact science, so that might be part of the challenge there.

Okay. Fair enough. Turning to the commercial business. To what extent do you believe we're seeing with the recent strength, if I catch-up in kind of commercial activity from a very quiet second and third quarter of last year versus what looks like a more long-lasting just boom in commercial demand?

I think it's hard to have great visibility into whether it's catch-up demand or not, I tend to think it's not. And I would point to -- as I look at our order trends going back pre-pandemic. We had a record year in 2019 for orders, open and close and also revenue. And if you remember, we came into January and February and really that first half of March with strong order growth. We were running, I don't know, I think 15% ahead of 2019 kind of first quarter then the pandemic hit. And of course, you had the dislocation for -- on the open side, at least a good 6 weeks, the last 2 weeks of March and all of April. But then we've had sequential improvement really every month in the back half -- really starting in May of 2020, it improves sequentially pretty much every month or it was flattish and then usually going to fall off in December. And we were averaging over 900 commercial orders a day in the fourth quarter, which is a really high historic number. And now as we've gone into 2020, we're seeing February, March and April, over 1,000 orders a day, which we've only happened one other time in our history. which was February of 2020. So that kind of longer data set around order growth tells me it's not really catch-up demand, but just a lot of transactional activity in a lot of places.

Got it. And then in terms of sectors in the commercial business, where are you seeing the most strength and weakness? And what kind of trends more specifically, you're seeing in retail and hospitality?

Sure. Maybe before sectors because I think this will also partly answer that. One of the changes we've seen in 2020, that sort of growth was really more heavyweight on the local commercial side. We talk about the national and the local side, the national tends to have the larger transactions. And in 2020, we definitely saw more order growth locally vis-a-vis national. That trends now -- the national is kind of coming back, and we're seeing good solid growth kind of in line with the local growth as we go into 2020. So that's really positive, I think, for our revenue as we move into the later part of the year an average fee per file. On a sector basis, It's still a story largely about multifamily and industrial. They've been kind of the consistent winners really throughout this process with things like energy and gaming, health and medical, those kind of come in and out, but particularly in the energy and gaming side when they come in, they're big. So there's still activity around there. I would say our national operators, we kind of do an informal survey every quarter of our 21 national offices and really seeing more optimism and that informal survey around retail and hospitality that they really think going forward, there's going to be more activity in those sectors. So some optimism around maybe some underperforming sectors growing and still feeling that multifamily and industrial will kind of remain strong. Probably the one that's got the most questions around it still is office, particularly large office.

Okay. That's helpful. So your title margins have been well in excess of your long-term historical average. even before this refi boom, have you been able to realize maybe a structural margin improvement within your title business as you recognize the effects of ongoing automation efforts coupled with kind of the really strong commercial order demand?

I think so. It's been a -- it's a process that develops over some number of years, where we focused on leveraging automation on the title front end through our investments in things like SkySlope, I'm not -- probably SoftPro, NextDays, ValueCheck, our EXOS Technologies and really integrating that with our title plants, our starter repositories, centralization of the title production, our offshoring in India. All that's really come together, and it's probably as well integrated as it's ever been. And the timing has been great because now we came into this fantastic market in 2020. And I think all that ties together and really showed up in the performance in the fourth quarter, in particular, where we -- I think we -- our opens and close were up 40-plus percent over the prior year with 4% more employees. You can check those numbers because I'm not -- I don't have them in front of me. And in the first quarter, I think we closed about 50-plus percent more orders with about 6% more staff than the prior year. And I think automation is a big part of that story. And volume certainly play a role. I mean you kind of need the volume to drive it as well. But I think there's definitely a structural improvement.

Okay. And how do we think about those the sustainable of those margins, when refi inevitably starts to slow. Is there less -- because you had more benefit on automation on the way up, is there less room to take expense out and kind of mitigate the impact of lower revenues?

That's a good question, and maybe Tony will weigh in as well. But part of it is the timing of change. So if orders fall drastically quickly, sometimes you can't quite get the expense out at the same speed. And so you can have sort of a decremental impact to margins in that environment. If it happens more slowly, then I think you can adapt better and probably protect your margins better in the short term.

Yes. I mean we have a fixed cost infrastructure, and we have variables and fixed, but we all know that it's a big fixed cost. And so you benefit from that on the upside with incremental margins that are very strong. But when volume falls off, you have the opposite effect. You have a decremental margin that's dramatic quickly. And then, of course, we go to work on the staffing levels right away. And in fairly short order, we can adjust the size. The good news about the refi business is that we all know it's about 1/3 of the fee for file as what we have with the purchase. So it's roughly $1,000 to $3,000 or even a little more than $3,000 on the purchase side. So it takes a lot more of that falling off to offset a growing in a pretty solid -- apparently, pretty solid purchase market. And so maybe revenue really doesn't get knocked down that much. And I think that's what the forecast would tell you, at least for 2021 is that, yes, you have refi coming down, but purchase market is still growing. And so it may offset or may even see revenue growth.

Okay. Claims experience has been pretty benign the last several years, what would you need to see to revise claims assumptions and provisioning even lower?

Yes, you're right. It's been very stable. Our inventory of claims continues to fall. We're somewhere just over 10,000 claims in inventory right now. And I think our peak back in 2010 was something like 45,000 claims. So it's fallen every year since 2010. And the short answer, I guess, to your question on what we would have to see to kind of change our view. Certainly, if we saw claims inventory increasing, or new claims submissions increasing, we'd have to pay close attention to that and consider whether we're entering a period where maybe claims still a little higher. I think on the downside or maybe the positive side, I think we probably need to see the foreclosure moratoria lifted and see if anything is triggered there. I would expect that maybe we have an influx of new claims. I don't know if that will necessarily mean an influx of more payments or an increase in reserving requirements or provisioning or anything like that. But I think we're going to see more claims when that happens or if that happens, I suppose it's when, and see how that plays out. In the meantime, we're sitting on a redundancy of almost $90 million, and we do need to be a little bit cautious there because at some point, it becomes something a little more than immaterial. And if we get there, then we'll have to either reverse some of that redundancy or adjust our provision rate. But right now, I'm comfortable 4.5% of title premiums. We've been there for a long time and built a little bit of redundancy, but not something that's unmanageable, I guess.

Yes. Do you have a sense for whether any of the automation you've been implementing is improving both kind of the quality of your data and the quality and reliability of searches and potentially, maybe structurally, just lowering your claims experience?

Yes. It's a good question. I'm not sure it's an easy question to answer. We do know actually that claims are down. Typically, with a refi volume like we've seen over the last several years, claims would be lower. The economy has been strong, so you haven't seen foreclosures and so claims would be lower. So it's maybe hard to know. I think maybe if claims come up, would spike up a little bit, we'll get a sense of what those claims look like. And maybe compare that to history. I wouldn't at all be surprised if stronger data sets and more efficiency and better technology would drive claims lower But I also don't think I can make that statement right now because maybe we need to just see a little bit more.

Yes. And I would just add, and it's more anecdotal, but we continue to refine and improve our starters repository. I think we have well over 30 million unique starters in that. And that's tightly integrated with our claims information. So I do think that gets better over time. But to Tony's point, I don't know that we can definitively state that there's been a lowering of claims because of that.

Okay. Shifting gears a little bit, there has been increasing focus on technology firms seeking to digitize and automate the mortgage closing and settlement process, including title. Can you discuss your own innovation to improve the closing process for consumers and how you're guarding against the threat of new entrants?

Sure, Mark. I think as you know, we've talked a little bit about this in the past, but we're really focused on the continued rollout and development of our inHere platform. And that's really a digital transaction platform that really allows buyers and sellers to transact with us from the opening of the transaction. So when that purchase agreement gets signed and we know we have an order, and we're now reaching out to a buyer to let them know we're handling the transaction all the way to the closing. And whether that closing ends up with a paper signing or a digital signing, we're fully capable to do that. And we're -- we've been working on this for a while. And the keys for us have always been how do you do something like that at scale. We didn't want to just do it in a market or a beta site, that kind of a thing. We thought, no, no, we want to be able to deliver this experience to all of our customers wherever they are. And so we really built the APIs with SoftPro on the front-end digital technology. The cloud that we went to a couple of years ago that we've talked about is a big part of that story. And we're there. I mean, We're starting with our opening packages. I think we did over 100,000 digital opening packages in April. We're over 1.5 million, since we started the process. I think that really points to the scalability of our company and the size we have, which is actually a very strong competitive advantage. And we're getting about a 60% plus completion rate from consumers in completing that opening package, and that's really the start of the process. It's kind of like the front door to a digital experience. And then we're layering in additional functionality as we go. We've rolled out the ability to do a mobile earnest money deposit, just another feature, another value add for those that want to choose that versus writing a paper check for earnest money, additional signing ability of other documents. And it ultimately will conclude and can conclude with signing the documents for closing digitally, notarizing digitally and finishing the transaction that way. The way I think about this is it's obviously an evolution and some people will want that full digital experience, and others might not. And some might want a combination, and we're fully prepared to kind of deliver both, but that's a big part of our focus. And I think as far as defending competitive threats, you really need to focus on your customers and the parties to the transaction. And if you continue to deliver them additional value in the form of improved visibility, improved transparency and better security, I think that's how you defend your competitive advantage. So it's not really about what the other person is doing, it's really about staying really close to your customers. And so we're excited about that. I think we're doing things that nobody else is doing today and might have a more difficult time, at least doing it at the level that we can.

Okay. Where do you see the greatest threat from some of these fintech firms where it looks like they may be doing some really innovative things?

Well, I guess I'm waiting for the innovative things, but I don't want to dismiss anyone because we do pay attention. And we're all -- we're fully prepared to compete with all the participants in the industry. But we've had a decision engine for years. We have an instant decision engine in ServiceLink, for example. There's a lot of talk about kind of instant title these days. We've had it and we're using it. We leverage a lot of title automation to produce. We opened 3 million title orders last year. And we're touching that with a high level of automation. So I guess that's -- I'll pause there.

Okay. Okay. Yes. I think you mentioned one of your competitive advantages in size. And I think more specifically, part of that is just feet on the street, right? Like real estate is an extremely local business. Although one question I have is does -- to the extent to which the process can become more and more digitized and centralized, does that, to a certain extent, dilute some of the value of the local presence that comes from having like a national sales force who's out there serving your customers?

Well, I would agree that the -- particularly when you're talking about residential purchase transactions, it's very much a community-based business. And it's driven by primarily individual real estate agents who live in those communities. And I think as long as that is how the business is transacted, it really plays to our strength. I don't know that digitizing parts of the process change that dynamic very much. But if individual real estate agents don't maintain control, then that changes that dynamic.

Got it. That's helpful. Let's see. Changing gears again here. Do you have an appetite for M&A or partnerships with more smaller, more tech-focused mortgage companies that could potentially add capabilities?

I think -- you mean -- so buying technology-enabling kind of processes. Absolutely. And we look at those things. And I think we've had a history of buying tech or investing in tech. And I think we certainly will look and are looking at opportunities there. And if something makes sense for us, we'd absolutely do it.

Yes. We build and buy depending on what makes sense. If it's a utility, we'll probably buy it or subscribe rather. If it's something that's core to our business, it might be something that we build.

I mean SkySlope is a good example. We bought SkySlope, they sell automation and kind of back-office process efficiencies to real estate brokers. But their development work is playing a key role in our inHere, digital platform. So they're really adding a lot of value as to how we build that out. So I think that's an example of a more recent acquisition is kind of playing a role in how we think about tech.

Okay. More broadly on capital allocation here, Tony. On buybacks, how active have you been quarter-to-date? How should we think about [ sensitive ] to share price? And how are you thinking about the current dividend and payout ratio and other alternative uses of capital here?

Yes, Mark. So as you probably know, we have over $1 billion in cash, and we're generating a lot of strong cash flow In the title business, we are active in the buyback. We committed to $500 million in buyback. We started that in the fourth quarter of last year, about halfway through that commitment through March of this year. So we'll continue to execute on that in a regular -- pretty regular basis, and I wouldn't be surprised if once we get to the end of that commitment that the Board revisits that and re-ups that, we think there's value in the buyback right now, especially with the capital we have. In terms of the dividend, the board typically looks at that once a year. We don't really focus necessarily on a payout ratio. I think we're probably somewhere around 30% based on last year's earnings and dividend. So that will bounce around a little bit. We don't like to target a payout ratio because we can have volatility in our earnings, and of course, that would force us, at times, to reduce the dividend, and we don't like to be in that position. And so it's more just about growing that dividend over time, which I think we're happy to do. I think right now, the yield is over 3%. I think that's a pretty strong yield. And so that's kind of where we stand. But as I mentioned, Cash flow generation is strong. M&A has been fairly quiet of late since F&G in the middle of last year. But that's always a potential for capital just because we grew through M&A. And even if we can't do a national title company, there's plenty of agents out there that we could acquire or maybe some related businesses that maybe fit into the real estate area. So there's plenty of -- I'm sure there's plenty of potential.

Yes. Is this a tough environment to buy agents in? Are they just so busy in making so much money that they don't want to be distracted? Or are you actually seeing opportunities to pick up agents there?

No, we're seeing opportunities for sure. It's an interesting time when you think about it because of the valuation issue with peak kind of performance, but certainly plenty of opportunities.

Okay. And then Just one last question on the title business. Anything you're looking at out of Washington, whether it's changes to the 1031 exchange rules or anything else that could be impactful to your business?

Yes. I mean, 1031 is a pretty small part of our business. It's a good business for us, but I think we made $30 million in that business last year on a pretax basis. We felt the brunt of interest rates as they've come down So this year probably looks more like $25 million. If the Biden tax plan goes into effect as proposed, which I think is probably -- well, it's probably not likely, but potentially That could impact our 1031 exchange business. I wouldn't -- I think we -- at least the way I've read it now, it's something like gains above $500,000 would not be eligible for a tax-deferred exchange. But more than half of our deposits or proceeds are less than $500,000. So those would all qualify. And I mentioned proceeds versus gains. So if you have $1 million proceeds, that very well might have a gain that's lower than $500,000. So I don't know how impactful it would be to our 1031 exchange business. The only other thing that comes to mind, obviously, is tax policy, overall income tax policy, 21% federal rate now. We all saw that come down pretty dramatically 4 years ago or whenever that happened. And I suppose it could go back up. And it sort of is what it is, and we'll adjust accordingly. But yes, I wouldn't be surprised to maybe see that, the corporate tax rate increase above where it is today. On the state level, I don't know that there's a whole lot of activity on the regulatory state front.

Yes, I would agree with that.

Okay. Great. Turning to F&G, although I think this first question might actually be more for Tony. How do you see the earnings contribution from F&G in an environment where rates rise further from here and financial demand slows, resulting in an origination market that's closer to like $2 trillion?

Yes. Maybe I'll start, and Chris can talk about the F&G side, but it's hard to know. I mean it's hard to model title even giving -- even with a given that you've provided of a $2 trillion market. Certainly, title comes down, we'll adjust accordingly. But bottom line is we're not going to make as much money even if we can preserve some of those margins and probably enjoy better margins in that cycle than we have in previous cycles. But the good news is F&G doesn't go down in that environment. F&G stays strong and probably grows as they have in that environment. And so it just becomes more of a balance, I think. F&G is earning 100-plus basis points on their average assets under management. So to the extent that continues to grow, their earnings grow, and so it becomes instead of, I don't know, 90-10 or 85-15. Maybe it becomes 75-25 or 60-40. It all depends on kind of where you land.

Yes. I think the only thing I'd add to that is about, Mark, about 20% of our book, our investment portfolios and floating rate, securities, so you'd get some immediate uplift there, whether it's an increase in LIBOR or we simply repositioned into higher-yielding assets. So that's one. You would get a pickup in demand just as crediting rates are nominally higher than does spur additional demand. And then as rates are consistently rising, you pick up a bit of a lag effect when you're repricing your in-force book. So it's really kind of the 3 levers that would benefit, but it could be 20% to 30% higher earnings for us in a plus 100 basis point scenario.

Okay. That's helpful. Chris, have you seen kind of a difference in the impact to demand from higher rates, depending on how long rates have been low prior to that? So in other words, do you have a really sustained period of very low rates. If they jump, do you see people being much more responsive and seeing a lot more incremental demand than if it's a move following a more shorter period of low rates?

Yes. I don't know if we've seen a pattern there. It's more a question of how steep is the yield curve. So right now, we've got a very steep curve. That helps us tremendously. Now if we go out and shop a 5-year CD, it's going to be about 1% taxable. It's probably the most competitive rate right now. Our product would pay, say, 210 tax deferred for a 5-year contract. And so that's really the competition for a fixed instrument. On the FIA front, it just gives us a bigger option budget so people can have a higher participation rate. So yes, I do think you see a pickup as rates are moving higher, just because everybody's reference is there. There's also an absolute effect where there's just a number at which people are motivated to move out of cash. So probably helping us more than anything is banks are drowning in deposits. And as you see on your own funds, the rate that people are getting on cash is 0. I mean you have money markets that are literally paying a basis point.

Yes. So how do you approach pricing in an environment like this where rates have moved higher in -- but clearly, are not at what most people would view at normalized levels, but feel biased higher. How does that kind of filter through to pricing?

Yes. It's a great question. So as I mentioned before, we reprice every contract, nearly every contract annually. So think of roughly 1/12 of our book comes up every month for repricing. And so for us, we look at what's our return target. We'll look at the competitive environment of what our competitors doing in terms of their REIT movements. But those tend to be pretty consistent. You don't see big outliers there. So again, really, the only difference at the delta is in a rising rate environment, you just lag. You're setting your new business and your renewal rates, assuming a certain environment, if rates move up higher and you're investing at a higher level, you're generally capturing a couple of basis points of additional spread on the upside. And the demand piece for us is not just higher assets under management, but we're at a scale inflection point where every $1 billion of incremental assets for us, largely falls to the bottom line, right? Because we're at scale now from an expense standpoint. So that drives down our operating expense ratio.

Okay. And how has the competitive dynamic been -- you see increasing interest from private equity to be involved in your business. Is that starting to filter through to something more aggressive pricing?

Yes, I wouldn't say more aggressive pricing. It's actually been more occasionally folks that don't have that connection, but it's often transitory. We had a competitor who was super aggressive in the first quarter in terms of rate setting. But frankly, if you don't have the return on your investment portfolio, all you're doing is accepting a lower margin, and that tends not to last. In fact, that's already started to dissipate. So there's always 1 or 2 competitors that will jump into the market looking to gather assets. But this longer-term trend of carriers that have an investment partner who's an originator of fixed income, that would be us, that would be a theme. That would be a Global Atlantic market continuing to take market share. That's been going on for years and will continue. But there's 3 or 4 of us in a market with 50-plus carriers. So there's a lot of market share to go still.

Okay. And -- but you're not -- among those 3 carriers with that type of really valuable partnership? You're not seeing competition there to try and take share just given kind of the enhanced capability on the investment side?

Yes, I think that's right. So we don't see -- it's a largely rational market plus we were probably the laggard in terms of diversifying our distribution. But like the other players that I mentioned, we've all got now 5 or 6 different channels for sourcing premiums. And so that tends to lead that folks don't need to be irrational in any one channel because you're not dependent on it, if you will.

Okay. And how is your portfolio growth so far since the deal closed, been measuring up to kind of what your expectations were?

Yes, I'd say we're ahead. The 2 big changes post-FNF acquisition We lost some of the tax benefits. As you know, we sold our Bermuda Flow business. But it opened up channels like pension risk transfer, where we're now actively in the market bidding on cases. It's opened up the funding agreement back note market. So I would say we lost the Flow business, which was a pretty competitive business to begin with, but it's opened up this gigantic institutional opportunity. So I would say right now, we are tracking ahead of what the expectations were in the deal model.

Okay. And then obviously, the penetration of broker direct channel is still in early days, and -- but with significant growth already demonstrated, how much runway do you see in that channel? Do you have any longer-term market share aspirations with brokers?

Yes. I'd probably say it this way. Our immediate market of fixed annuities about 100 -- roughly $150 billion a year of sales. 40% of that's independent agents. The balance is banks and broker-dealers. So we've more than doubled the opportunity set in retail. We've now added PRT funding agreement notes. That's probably another $50 billion a year of potential opportunity. And then the next step for us will be products like a registered indexed product where the floor can be negative, not 0. So it's the exact same product construction in place to the exact same strengths. That's actually the fastest-growing segment for us. So think of that as just a whole new pie. So I would say we doubled our existing pie, and we've added a couple more. So our opportunity sets probably $200-plus billion, $250 billion per year. So yes, there's no reason to think that our bank and broker-dealer channel can't be at least as big, if not bigger, than the independent agent channel where we're today, bringing in about $4 billion of premiums, if you throw in a couple of billion more from institutional channels, you can get to some pretty large numbers in terms of inflows.

Okay. Great. And then turning to your investment portfolio, have there been any substantial changes in your portfolio positioning in recent months?

No, this is more incremental. There have been opportunities in direct loan origination, Blackstone's continues to open up very interesting opportunities to source capital-efficient investments for us in the portfolio. We've probably brought down some of the structured portion of the portfolio percentage in terms of how we allocate new dollars simply as spreads have come in. CLOs, again, just performed incredibly well during the last crisis, but spreads have narrowed there. So I would say the margin, probably a little more whole loan origination and a little bit less being allocated to CLOs, but it's more incremental than any big asset allocation shifts.

Okay. Have you been able to take advantage of like really strong credit markets over the last year, maybe to sell down some investments where you think the market may not appreciate some of the remaining risks as well as you do?

Yes. And this is really where the Blackstone advantage came through in spades. They've got 300 credit analysts. They do loan-by-loan analysis. So at the bottom of the crisis there in a relatively short period of time, they literally re-underwrote the entire portfolio. We repositioned about 2%, 2.5% of the portfolio where, to your point, Mark, you might have a single A tranche of CMBS that had more retailer lodging exposure than you were comfortable and another single A tranche that had almost none, and they were treating within a point or 2 of one another. So yes, we did do some upgrading of the portfolio. So I would say it's an even stronger portfolio than what we had going into the crisis initially and more diversified as we've opened up more asset classes. So yes, we feel really good about where it sits.

Okay. And we joked about this before, but just for the audience, you don't have any crypto holdings, right?

Yes. No, no, crypto holdings. Yes. Not sure we can spell crypto.

Great. Well, on that note, I think I'm out of questions. I don't see anything coming in from the audience. So let me just thank everyone for joining us today and thank the team from FNF for your time and insights. I really appreciate it.

Thanks, Mark.

Thank you.

Thank you, again.

Take care.