Fidelity National Financial(US:FNF)2024-08-07 20:09Financial Performance - Total revenues increased by $90 million in Q2 2024 and by $915 million in the first half of 2024 compared to the same periods in 2023[243] - Net earnings rose by $100 million in Q2 2024 and by $457 million in the first half of 2024 compared to the same periods in 2023[243] - Total revenues for the three months ended June 30, 2024, were $1,931 million, up from $1,864 million in the same period of 2023, representing a growth of 3.6%[246] - Total revenues for the F&G segment in Q2 2024 were $1,172 million, slightly up from $1,168 million in Q2 2023, with total revenues for the first half of 2024 at $2,741 million compared to $2,037 million in the same period in 2023[260] - Total revenues in the Corporate and Other segment increased by $25 million, or 44%, in the three months ended June 30, 2024, compared to the same period in 2023[306] - Total revenues in the Corporate and Other segment increased by $66 million, or 60%, in the six months ended June 30, 2024, compared to the same period in 2023[306] Expenses and Costs - Total expenses for the three months ended June 30, 2024, were $1,696 million, compared to $1,631 million in the same period of 2023, reflecting an increase of 4.0%[246] - Personnel costs rose to $680 million in the three months ended June 30, 2024, up from $656 million in the same period of 2023, an increase of 3.7%[246] - Personnel costs increased by $24 million, or 4%, in Q2 2024 compared to Q2 2023, and by $44 million, or 4%, in the first half of 2024 compared to the same period in 2023[250] - Other operating expenses decreased by $19 million, or 6%, in Q2 2024, and by $30 million, or 5%, in the first half of 2024 compared to the same periods in 2023[250] - Income tax expense was $116 million for the three months ended June 30, 2024, compared to $90 million in the same period of 2023, representing an increase of 29%[246] Market and Economic Conditions - The average interest rate for a 30-year fixed mortgage increased to 7.0% in Q2 2024 compared to 6.5% in Q2 2023[233] - The U.S. residential mortgage originations market is forecasted to grow from $2.3 trillion in 2024 to $2.5 trillion in 2026[234] - The median existing-home sales price increased to $426,900 in June 2024, a rise of approximately 4% from June 2023[235] - The unemployment rate was 4.1% in June 2024, compared to 3.6% in June 2023, indicating a stable labor market[235] Insurance and Annuity Products - Direct title insurance premiums for Q2 2024 were $564 million, up from $541 million in Q2 2023, while total revenues for the same period reached $3,158 million[242] - Title premiums increased by $94 million, or 7%, in the three months ended June 30, 2024, compared to the same period in 2023, driven by a $23 million (4%) increase from direct operations and a $71 million (10%) increase from agency operations[247] - The company expects continued demand for indexed annuity and indexed universal life products due to the aging U.S. population, with over 10,000 people turning 65 each day[240] - Agent premiums for Q2 2024 were $784 million, a 10% increase from $713 million in Q2 2023, while net retained agent premiums were $175 million, representing 22% of agent premiums[251] Investment Income and Portfolio - Interest and investment income increased by $8 million, or 10%, in the three months ended June 30, 2024, compared to the same period in 2023[249] - Interest and investment income increased to $684 million in Q2 2024 from $525 million in Q2 2023, with total interest and investment income for the first half of 2024 at $1,300 million compared to $1,044 million in the same period in 2023[260] - Gross investment income for the six months ended June 30, 2024, was $1,442 million, up 23.4% from $1,167 million in the prior year[263] - Interest and investment income attributable to certain funds withheld reinsurance agreements was $155 million for the three months ended June 30, 2024, compared to $76 million in the same period of 2023[263] Cash Flow and Capital Management - Operating cash flow for the six months ended June 30, 2024, was $2,954 million, a decrease of $185 million compared to $3,139 million in the same period of 2023[309] - Cash flows used in investing activities decreased to $3,021 million in the first half of 2024 from $4,231 million in 2023, primarily due to increased cash inflows from investment securities[309] - Financing cash flows provided by financing activities increased to $2,190 million in the first half of 2024, up by $248 million from $1,942 million in 2023, driven by higher contractholder deposits[309] - The company paid dividends of $0.48 per share in Q2 2024, totaling approximately $131 million to common shareholders[308] - The company has a new three-year stock repurchase program effective July 31, 2024, allowing the purchase of up to 25 million shares of common stock[309] Asset Management - The fair value of the investment portfolio as of June 30, 2024, was $54,945 million, an increase from $51,751 million on December 31, 2023[277] - The fixed income portfolio's fair value was $43,826 million as of June 30, 2024, compared to $40,419 million on December 31, 2023, indicating a growth of approximately 6%[279] - The company’s asset-backed securities amounted to $15,682 million as of June 30, 2024, compared to $14,623 million on December 31, 2023, reflecting a growth in this segment[283] - The total fair value of fixed maturity securities available for sale increased to $26,003 million as of June 30, 2024, from $25,550 million as of December 31, 2023[295] Risk Management - The company had potential credit exposure to structured securities with a fair value of $163 million as of June 30, 2024, and recognized allowances for expected credit losses of $58 million[300] - The company had no exposure to investments in Russia or Ukraine, maintaining an immaterial amount of direct exposure to European sovereign debt[301] - The average market value/book value of the investment category with the largest unrealized loss position was 80% for services, media, and other as of June 30, 2024[297] - As of June 30, 2024, the watch list included 115 securities with an amortized cost of $1,449 million and unrealized losses of $450 million, resulting in a fair value of $999 million[300]