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

Great. Good morning, everyone. Thanks for joining us for our next session for the KBW Title Day. Next up, we have the management team from Fidelity National Financial. With us, we have Mike Nolan, the CEO; Tony Park, the CFO; and Lisa Foxworthy-Parker, the Head of Investor Relations. So let's kick it off with a discussion on what you're seeing in the market in terms of current order trends. So Mike, let me turn it over to you for that.

Yes. Thanks, Bose, and thanks for having us today. It's interesting when you look at this year to last year and as we went into kind of the fourth quarter of last year, we had sort of a rising rate environment, if you remember. And this year, we kind of have the opposite of that, and we can really see it in the order trends. So for November, our purchase orders on the open side are up 5% a day versus last November and also essentially flat sequentially to October. And that's really interesting because that's unusual. Usually, pretty much every month, those purchase orders are falling off in the second half of the year and then they kind of go back up starting in January. We've talked about that a lot. On the refi side, our refinance opens were up 54% to last November. And again, we had rates rising last year, and so the refis were kind of falling off and now they're sort of the opposite. So a lot of strength there. And then on the commercial side, opens were up 14% over last November. And November on the open side with commercial per day, it was our second best open month of the year. And that's also unusual in that usually in the fourth quarter, our opens are the softest of the 4 quarters.

Okay. Great. And then can you discuss the fee per file trends as well? And can you remind us how HPA impacts the fee per file?

Yes. Thanks, Bose. Maybe I'll jump in here. Yes, the fee per file on a consolidated basis has actually been growing. We're up I don't know the exact percent, but it's trending -- been trending upward. And a lot of that has been driven by commercial, the size of the commercial deals and the volume, if you will, or the percentage of commercial revenue we have in our mix. Home price appreciation certainly has an impact on the purchase side of things, and it probably contributes about 60% of the total. So if, let's say, home prices are up 5% annually, then maybe our fee per file might be up 3%. So that's that 60%. If you look at the third quarter, our purchase fee per file was up about 4% over the prior year third quarter. Our refinance fee per file was up about 7% over the prior year third quarter. And just looking at trends that I'm looking at now, not a lot of change really in the subsequent months. October's purchase fee per file was up about 1% over September. That could be a lot of things. It doesn't necessarily mean home prices continue to rise. It might just be the mix of business. And then in November, they purchase -- residential purchase was flat with October. So again, I get the sense that prices -- home prices are stabilizing, but it sometimes takes time and price discovery for people to figure that out. And I think that might be why things aren't as robust maybe as they might be. But I think stability in home prices is going to be helpful to -- we believe there's a lot of demand out there, and I think that will be helpful to getting more deals done.

Okay. And then in terms of the commercial fee per file, is that less sort of formulaic in terms of how much commercial -- how much of the transaction size goes up versus the fee per file itself?

It's certainly driven by transaction size, and it probably varies by state, certainly. Some of them are regulated and there's a rate sheet and others, it's just negotiated. But certainly, as property values increase, commercial fees per file increase. I don't know, Mike, if you wanted to weigh in at all on that.

I think that's absolutely correct. And Bose, and I think others have talked about this as well, some of the types of deals we're doing in the industry, particularly the data centers are just larger. And so the fee per files are getting a benefit overall from some of these larger transactions than we've really seen historically.

Okay. Great. And then switching over to margins. You guys reported a very strong margin in the third quarter of 17.8%. Can you talk about where you think commercial -- sorry, where you think overall margins could end up in 2026 relative to 2025?

Yes, yes. Well, maybe I'll start with when we came into '25, the base case was it's going to look a lot like '24, and that really held up for the first half. I mean, it was very, very similar. And then as you point out, we had that especially strong third quarter with a lot of margin expansion, and it was driven by just a better commercial environment, refi environment, stable purchase, and good expense discipline and good performance from some of our non-title businesses in the Title segment, and we talked about that on the call. I think as we go into '26, and there's a lot of variables that go into this, as you well know. But I think the base case would be if you look at the MBA and Fannie Mae forecast, they're pretty similar. And they're projecting existing home sales to be somewhere, let's call it, in the 4.4% to 4.5% range. And maybe it's changed since the last time I looked at it, but somewhere in that range. That's about a 10% improvement over where we are right now. We're running around 4%. So if you've got some more existing home sales and a stable to a plus refi market, and a stable to a plus commercial market, our base case would be we'd have better margins in '26 vis-a-vis '25. But there's always the variables around what happens with rates. That assumes rates stay pretty stable or decline and it assumes that home affordability doesn't get worse, things like that. But that would be the base case, I would say.

Great. And then can you remind us what you've said about 2025 margins versus 2024 for the full year? And then in terms of your normalized range, which is that 15% to 20% number, what takes you back to the midpoint or higher?

Well, yes, back on '25, again, the starting point was a lot like '24 until the third quarter. And with that outperformance, we now are ahead of where we were, I think, for 9 months, correct, Tony?

Yes, yes.

And we would assume that we would, at this point, again, other things being equal, outperform '24. I don't know by what magnitude. And then in terms of -- what was the second question?

Second part was just the normalized range, the 15% to 20%...

Yes. I think that's still a good range. We're still in year 4 and we're nearing the end of a fourth year of really low transactional environment. And it's still very volatile. I mean, just look at the way rates have moved around. I already talked about it. We had rates declining in the third quarter last year, then they went back up in the fourth quarter. They stayed high for a good part of this year. Now they've come down and who knows where they go from here. So it's just with the volatility, I think the 15% to 20% is still probably a right range to think about. If we get up an environment with stronger existing home sales and lower rates and strong commercial, we can do the upper bound of that and maybe like we did in '21, exceed it.

Yes. Okay. Great. Actually, let me just remind people to submit questions through the chat. I wanted to dig into the commercial side a little more. Can you talk about just the commercial pipeline? You noted that commercial open orders usually decline in 4Q, but they've stayed pretty elevated, which I guess bodes well for '26. And what's the -- is there a typical time line between open and close? Or does that vary quite a bit?

Yes. Well, the pipeline is really good, and we've talked about this. We're running -- I just want to get to my numbers here, but we've been running in the mid- to higher 800 a day pretty much all year. We've only had 1 month in '25 where we were under 800 a day, and that was January. So -- and in context, if you look at really the back half of '22, '23, '24, it was all mid-700 kind of ranges. So we've had a step-up in volume. And then on the national side, it's had more strength. And we've also talked about this, I think, 6 consecutive quarters with double-digit open orders on national. So that just tells you we're building a pipeline. And to have November be the second best open month of the year at 891 a day, that tells you there's some real strength as we go into next year. In terms of the closing time frame, it's just tough in commercial. Some close quick and some don't. And so it's hard to say what sort of the average is. What we do know is in a given year, we close and you can look back at 10 years of data, somewhere in the mid-50s to low 60s of the full year open orders. Your closing number will be 60% of whatever that full year open number. So if that's helpful, that's the model. And then you can pick your fee per file that you want to pick and you know what our revenue is going to be. And we've said this year, we expect that will be $1.4-plus billion, and we still think that. And that will be our third best year ever. And '26 could be better.

Okay. Actually, just sticking to that last comment, your record years were '21 and '22. I mean, just given the pipeline that you're seeing right now, do you think '26 could be better than '21 and '22?

I think we could certainly get to that $1.5 billion number, maybe be better, maybe be right at it. That's based on continued strength, obviously, in those open order numbers. Something else that I think can be additive is -- and we see signs of it. It's still somewhat anecdotal, but we see signs of office transactions picking up. And I think I talked about it on the call that we survey our commercial managers every quarter that run our national footprint. And they're in the action on commercial every day. And we survey them about what asset classes are showing top to bottom the most strength in downtown office and suburban office for the first time I can remember, weren't at the bottom of a survey. I think we surveyed 12 asset classes, and I think they were 7 and 8 in this last survey, which might not sound like a lot, but they've been 11 and 12 for about 4 years. So it's anecdotal information, but encouraging.

Yes. Okay. Great. Actually, there are a couple of questions from the audience. First, what's the relative incremental margin profile of changes in the fee per file versus the changes in the number of files. So I guess, the changes in the price versus volumes?

Yes. I don't know. I'd probably need an economist or some sort of -- someone smarter than me to help you with that. I mean, generally speaking, we guide toward a 40-plus percent incremental margin on direct revenue. And obviously, that's a combination of transaction number and transaction fee per file. We've always said we'll take numbers over price appreciation or fee per file because when volume hits, we're very efficient at processing it and our incremental margins surge even beyond that 40%. But I don't know specifically the ratio, if you will between the number of transactions versus the fee per file.

Okay. Great. And then actually another question. You talked recently about using AI to build a new title plant more efficiently. If this becomes more standard, does it mean that smaller players can build their own title plants? And how does this impact your business across both revenues generated from selling access to your title plants as well as your agency business?

I don't know if it creates more opportunity for others to do things with title plants. We -- when we think about our proprietary data, which includes lots of things, but our title plants is a big part of that, and our starter repository is a big part of that. And we have the biggest starter repository in the industry by a lot. We really think most importantly about how does that allow us to reduce our marginal cost of producing the work. And 90% of our title volume gets touched by our proprietary title plants, our automation technology, our integration with offshore, centralized work environment and so on. And we do sell access, but it's a smaller part of the puzzle. So whether that could have more competition, I don't know. But we focus a lot on how efficient we are in managing these plants and the quality and the cost effectiveness of using them. So I feel confident that from a competitive standpoint, we're really in a good spot.

Yes. We get that question a lot. So some people may believe that a big part of our revenue source is selling access or selling the information. And really, to Mike's point, I mean, we use our title plants to generate our title commitments and our title insurance policies. Revenue from selling to third parties is minimal. It's very -- it might be different with our competitors, but for us, it is very minimal to us.

Okay. Great. And then actually, just a follow-up on that. I mean, in terms of the competition from smaller companies, I mean, the fact that you guys have, I guess, presumably almost the largest title plants in terms of your coverage, presumably your title -- your AI agents could be trained in a way that a smaller company presumably could not, right, if they don't have the access to the data unless they buy it from you and presumably you don't sort of -- data that they purchase can't be, I would assume you should train their AI agents, right, to do that?

I mean I think it's a good point. Data is key. And if you don't have the data, it's very difficult to leverage AI, and I think anyone would probably agree with that. So you got to start with the data, and then you can use tools like AI and other tools to be more efficient and more productive. So I think if you're a player that doesn't really have the data, it's a little tougher to leverage the AI.

Yes. Okay. Great. And actually, I wanted to switch on to your expectations for purchase and refi now as you look into 2026. And can you remind us where refi stands as a percentage of the -- of total revenues and where that was sort of when refi was very strong?

Yes, Bose -- refi as a percent -- the way we measure it, refinance as a percentage of total direct revenue. So that actually would include all of our direct revenue. It was 7% in the third quarter, 7% in the second quarter of this year, 7% in the first quarter of this year. And basically, it's been at that level for a while now. I don't know what it was when rates started going up in early '22, but it dropped to single digits in a hurry. If you go back to 2020, which was the peak, certainly in terms of percentage, we were 30-ish percent of our direct revenue was residential refinance. And then in '21, also a very strong year, that dropped down into the 20s. I think the full year '21 was 22%. And so it went from 30% down to 22%. And now we're in the single digits, call it, higher single digits.

Okay. Great.

Yes. And to kind of give some color around like what could it look like as we go into '26, maybe frame kind of where we were. And I think our peak month, and it might have been '21, Tony, I don't remember, but we opened 9,000 open refinances a day. And then when we got to more of the trough like levels in the past few years, that got down to around 1,000. And 1,000 was really consistent across -- what was it, 2 years, Tony, maybe?

Right. That was the trough.

So you can kind of -- the 9,000 was ultimate peak probably for our history. I'm not saying that's a ceiling, but that was probably the ultimate peak and 1,000 was kind of the floor. And as we started '24, we were running for the most part at that 1,000 level. And then rates got a little bit better in August. And by September, we were opening 1,800 a day. That's an 80% improvement with some -- then rates went up and it went back down. And then this year, we hit 2,100 a day in September. And I'm calling out these numbers just to give some color or some context to how quickly it can change, where if you looked at just September of '25 at 2,100 a day, that's a doubling of a market if you think about that 1,000 number. So I think into '26, I can't tell you what it's going to be, but if rates stay where they're at or come down more, a doubling of the market, I think, is certainly in scope and maybe more. I mean if rates got into the 5s, I'm sure somebody can do the analysis of how many more people get brought into a refi opportunity at 5.5% or 5.75%. You think of how many people have taken out mortgages above 6.5% in the last couple of years. It's millions of people. I don't know what the number is, but the potential opportunity is there. But I do think to really unlock it to more than a double, let's say, I think you'd need to see rates get into those 5s.

Yes, yes. Okay. Absolutely. Makes sense. And then actually switching over to your loss provision. It's been about, I think, it's 4.5% now for a couple of years. Can you talk about the outlook for taking that higher or more likely lower? It's quite a bit -- it is higher than your peers, and you just feel like you're being potentially conservative on that provision.

Yes. We've been very consistent at 4.5% of title premiums for several years now. One thing that may be a nuance, but it's important if you're comparing to our peers is we don't often talk about it the same way. So we talk about it as a percentage of title premiums. I believe our peers talk about it in terms of title revenue. And so if you're talking about a percentage, make sure we're doing the math properly. Having said that, I think Stewart is roughly in the same number. If you use title revenue for us and for Stewart, I think we're in the ballpark of 3-ish percent or something like that. No, no. I'm sorry, I think it's 3.9% or something like that. So we're probably fairly consistent with Stewart. I would say that my look at First American is that they are releasing reserves all year long. So basically, what that means is they're not suggesting that their losses for the current year are going to be any different, but they are saying that their losses in prior years were overestimated, and so they're taking some of that back in. And it looked to me like it's about $30 million year-to-date. So that's, I think, probably helping their margin as they work through the year. In terms of our outlook, I still feel like we're in a good spot. I think 4.5% of gross title premiums is a good number for now. Our carried up against our actuaries has been very consistent for a few years now, somewhere in the, call it, $30 million to $75 million above their central estimate. So there's a little cushion there, not a lot of cushion there. And the band is pretty wide. And so it's very immaterial that difference. And so yes, I think -- I don't know that we're being overly conservative. I think we're kind of right down the middle in terms of that number. And my outlook would probably be more of the same unless I see something different.

Okay. Great. And then can you talk about just the losses on commercial versus residential? Is there much of a difference in terms of loss ratios?

Generally speaking, our losses, whether it's commercial or purchase or refinance is probably a little lower generally in terms of ultimate loss ratio. But purchase and commercial are pretty consistent. You will have periods where with the foreclosure crisis, we had a lot more on the residential side or when you had project failures in the '08 policy year, for example, we had a spike in commercial losses. But over a long period of time, I would say they're pretty consistent.

Okay. Great. Actually, let me just -- there's another question. So I guess the question is, I can imagine on a very large data center project, you guys as the industry leader capture more than your existing share of commercial. Is that right? Whoever in the stack on that meta DC probability isn't calling one of the smaller players. So yes, I guess the question is on these big projects, do you guys get more than your pro rata share just given your size?

Yes, it's an interesting question. I would say that for the most part, you see probably the big underwriters, the bigger underwriters maybe getting a strong percentage of those transactions. But agents do get data center transactions, but then they've still got to go obviously to the underwriters to get that component done. And the reality is on these big ones, it really requires participation from -- certainly, the big 3 or 4 underwriters are all participating sometimes even a smaller one. And yes, we're getting a decent share of that given our strength, our balance sheet, our ability to take higher liabilities than others on these transactions. So I don't know if there's any data around market share of data center transactions, but we certainly feel like we're and many or all of these deals in a pretty significant way.

Okay. Actually, and then one just related question to the loss content. So on the larger deals, do you guys -- are you syndicating some of that exposure or reinsuring just given the size of some of those?

We're not. I mean, we take what we can take. Oftentimes, I would say the buyer of the title insurance, which the customer, if you will, kind of self-syndicates in a way, they bring in the rest of the industry because a lot of these deals are very large, and it takes the old industry to take on that risk. We have a reinsurance treaty separate apart from this, it's not facultative. It's a treaty. So it's not a deal-by-deal situation at all. It's basically coverage to the extent we have large losses, we go to that treaty to help cover that. But on a deal-by-deal basis, I would say there's a lot of coinsurance.

Okay. Great. And one more question from the audience. Can you talk about the incremental margin per file versus volumes? I guess the question is existing home sales versus new home sales. Is there a margin differential there?

Yes, there really wouldn't be a difference. I mean if we've got a single transaction and it's a new home and you've got an existing home and there's the same liability in the same area, it's going to be the same. The new home segment, particularly with the large national builders, they generally have captive title agencies. And so a lot of that volume is going through an agency distribution versus direct. And so there's different margin profiles on that for that reason.

Okay. Great. Just remind people if you want to submit a question, please submit it through the chat. So switching over to capital. Can you talk about capital currently at the holding company and then just your priorities for capital return or capital...

Yes, we reported at the end of the third quarter that we had about, I think, $735 million in holding company cash, which was up about $150 million from the prior year quarter. So we had a real strong quarter in terms of cash coming up to holdco. The priorities clearly are the common dividend, which we just raised as we typically do in the fourth quarter Board meeting, and we raised that again. And so let's call it, $560 million or $565 million of, call it, committed capital for an annual dividend. We pay about $75 million in interest expense, so pretty nominal on that front. And then we're opportunistic with buybacks and M&A. M&A has been light over the last couple of years with price discovery, and we're always looking, and we're doing some deals, but not as many as we would normally do. And we look to spend in a normal year, maybe $200 million to $300 million in M&A activity, and it's been less than that probably the last couple of years. And then buybacks, again, opportunistic. We like to be in the market on a regular basis, sometimes more aggressively like we were in the second quarter when we felt like there was a little bit of pressure on the share price for a bit of time there. So we were more aggressive there. And then we came back in the third quarter. And again, it was more of a daily consistent approach to buybacks, but it wasn't at the same level that we did in the third quarter -- I'm sorry, in the second quarter. And that's kind of how we like to do it on the buyback front. In a, call it, an environment like what we've seen over the past few years, we probably generate $900 million to $1 billion of cash flow to holdco through our subsidiaries. And then in a strong year, it might look more like $1.5 billion. Going back to the 2021 year, for example, I think it was more like $1.5 billion of free cash flow.

Okay. And in terms of more capital return, I mean, the main variable is to be heading closer to that range. I mean, not necessarily up in that area, but it's sort of a more normalized market generating more dividendable income up to holdco.

Yes. I mean we would expect stronger cash flows. And then with that, we kind of look at the buckets and see where we spend that. The dividend is pretty consistent, and it grows nominally over time. And then the opportunistic piece would be, are there -- is there a reason to go bigger into the buybacks and are there more opportunities on the M&A front.

Okay. Great. Actually, let's switch over to technology. Can -- I guess we touched briefly on AI, but can you discuss your investment in AI? What are the use cases for AI within the title industry? How big an impact do you think it could be over time?

Yes. I'd start with saying I think the impact could be big. It's hard to know today just how big. But our approach, and I'm really excited about the way we've approached this is you've got to build the right foundation to deploy it. And that starts with having data and knowing how to leverage it and it helps to be moved to the cloud. And then you've got to build literacy in your organization on how to use it. And that -- sometimes I think people forget about that part. But to me, it's the most important part. So we've rolled out AI tools to every single employee across the footprint. We can see each month that more people are using it, engaging in our training, engaging in things, submitting things about how they want to use it. We've also rolled out the Microsoft GitHub tool to all of our developers. We have hundreds of developers in this company, and they're using it and learning more about it. And we're going to build this literacy to the point where everyone has these tools in their daily work life. And if nothing else, we're going to see a personal productivity lift just from that. But I think that's really to scratch the surface kind of point, when you think about -- and I think this is true for the industry, when you think about all the documents that we handle in this industry, I think AI fits nicely into that because I think it's sort of built to quickly analyze, distill, collect information that's in document repositories. And there's all kinds of use cases, I think, that will come out of this. But at the end of the day, I think it's going to allow our employees to get to answers faster, serve customers better and become a more efficient process for our company and certainly the title industry in general.

Okay. Great. And then just sticking to technology, can you talk about the inHere digital platform? I think the recently announced partnership with CLEAR on -- to combat fraud and just broadly where that sort of fits in what you're trying to do?

Yes. Maybe I'll start with CLEAR and then jump back to inHere because they're sort of separate. When you think about fighting fraud, wire fraud, hackers, all those things, there's not one way to stop it. It takes multiple things. And at the core of all of them is are you properly authenticating the people you're doing business with. And there's lots of ways we do that. The partnership with CLEAR is really just another element of that. They have one of the best databases of identity out there. And so we will start to leverage that database to better authenticate the people we're doing business with. We think that will be very helpful in combating fraud. But it's just one thing of many, many things, and there'll be more things to come because the bad actors get better at this. At the same time, we're all trying to defend it. It affects every business and every industry. inHere, again, is separate, although I think it has a protective element to it because one of the things we're doing is we're moving people out of e-mail to transact with us. We're having people start the transaction in the inHere platform, which starts with an authentication process that you don't have when you're dealing with e-mail. And then once you authenticate them and then now all the communications occurring and they're tracking the transaction in the app or on the portal, if it's a desktop, you're just by definition, reducing some risk because e-mail is really one of the vectors that the bad guys and the bad people access to get people to do the wrong thing and wire the money to the wrong bank, for example. We've rolled out inHere across our entire footprint. We're the only company that's done it. We've had it now for a couple of years really across the footprint. We've got all of our operations on SoftPro, so we're on a single system. The APIs connect directly into inHere, and we keep adding features to it and seeing more use and seeing our core customers, real estate agents and transaction coordinators really loving the technology because they can get information whenever they want it, it's self-service, on-demand 24/7, 7 days a week. And you think about a top real estate agent that's managing multiple transactions at once. They can have it all on the inHere platform regardless of what brand they're working with us. We have multiple brands. And many times, we have agents that work with all of our brands. It's all there branded for them. And I just think it will continue to grow like we've seen already. And when the market starts to rebound, then I think we'll really see an increase in activity on the platform as well.

Great. And I think you said 85% of the users are using that platform. Is that the number you gave?

Yes. So when we -- all of our transactions now, we send out an invitation to inHere. We call it start inHere. So they're invited to go on into the portal and get authenticated and then they have that ability to be on the platform. And I think we're seeing currently about 85% take us up on the invitation and start that way. And that's been growing that number. So that tells us that consumers are adopting it and like it.

Okay. And that number, is that an agent side? Or is it on -- is it used by...

This is direct. So -- it's not -- in the way that it's deployed for our direct footprint really is specific to the direct footprint. There are some features, digital-like features that exist on the SoftPro side for agents, but it's not the same platform.

Okay. Okay. Great. We have a few minutes left. Please submit questions if you have any through the chat. Actually, switching to the regulatory side, can you give a quick update? Anything new on the regulatory front, either at the FHFA side or at the state side, you're keeping an eye on?

Yes, I would say it's really quiet, I would say, on the federal side or the FHFA side. The pilot still exists. It's the same pilot. It really hasn't changed. I think there's very little activity in it maybe by design. So we've not seen much impact. We have a lot of engagement with Fannie and Freddie on all kinds of issues, and we work together on a lot of different things. We're not in the pilot, and that's set to end in May. We'll see if it does or it doesn't. On the state side, there's always a lot going on. There's a lot of different bills across the country that can impact the title industry, good or bad. They're not necessarily designed to deal with the title industry, but sometimes it's just sort of collateral. And a lot of them revolve around redaction kind of statutes that have been more prominent over time. And so we have a team of people that monitor every state legislature and every potential bill that we think can impact us. And I wouldn't say that there's a lot of alarm bells going off, but we do work very well with the states and try to take a collaborative approach like we understand what you're trying to accomplish, but here are some things you need to think about if you're going to redact some of the public recording information as an example. And we frankly had a lot of success in working with states, but it's sort of a constant monitoring process.

Okay. Great. Actually, I wanted to squeeze in a couple on FG. Actually, can you walk through the rationale for distributing the 12% of outstanding FG shares as a dividend to shareholders and just what that means going forward?

Yes. Maybe I'll jump in and Mike can weigh in as well. Yes, the bottom line really is that the Board has been very, very pleased with FG's performance and the opportunity for future growth and future cash flow and future value creation. And so a lot of people have asked if we're going to ever spin this off to our shareholders or when we're going to spin it off. There was a 5-year window or a 5-year point where we could do it after that point. And that 5 years came along in early June of this year. But again, the bottom line, the Board is still happy with the asset. The challenge we've really had is that there wasn't enough public float out there for buyers, for shareholders to invest in F&G. And we heard that a lot from people, especially F&G heard it a lot that, hey, if we want to own F&G, it's very difficult to accumulate a position because of the public float available. And if we do accumulate a position, it's hard to sell that if we chose to do that. And so the Board decided that we would -- we, FNF would distribute another 12% of our ownership to FNF shareholders in the form of a dividend, which would be a dividend to our shareholders, so a benefit to FNF shareholders, but at the same time, a benefit to F&G and F&G's shareholders by getting more shares out in the marketplace and increasing that 18% float to about 30%. So FNF will own -- post distribution, which happens at the end of this year, FNF will own 70%, and we'll have 30% out there in the public domain. And it increases the availability of public float to about $1 billion, which I think is meaningful because it allows people to invest. Now the other question we've gotten, what does that mean for a tax-free spin? And it does prevent or preclude FNF from spinning the rest of F&G to FNF shareholders in a tax-free manner because you have to own at least 80% of the company to do that. So the Board looked at it and viewed it as, hey, we like this asset. We want to keep this asset. We want to grow this asset. But we want to give them a fair chance to get a real valuation in the public domain.

Okay. Great. Well, our time is up. So thanks very much to FNF for participating, and thanks to the audience for joining us today.

Thanks, Bose. Thanks, everybody.

Thank you.

Thank you.