Good morning and welcome to FNF's First Quarter 2026 Earnings Call. During today's presentation, all callers will be placed in listen-only mode. Following management's prepared remarks, the conference will be opened for questions with instructions to follow at that time. I would now like to turn the call over to Lisa Foxworthy-Parker, SVP, Investor and External Relations. Please go ahead.

Thanks, Operator, and welcome, everyone. I'm joined today by Mike Nolan, CEO, and Tony Parks, CFO. We look forward to addressing your questions following our prepared remarks. F&G's management team, including Chris Blunt, CEO, and Connor Murphy, President and CFO, will also be available for Q&A. 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 SAC filings for details on important factors that could cause actual results to differ materially from those expressed or implied. 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. And with that, I'll hand the call over to Mike

Nolan. Thank you, Lisa, and good morning. Our combined business continue to deliver outstanding financial results through the first quarter. Starting with title, we deliver adjusted pre-tax title earnings of $268 million, up 27% over the first quarter of 2025. This generated an industry leading adjusted pre-tax title margin of 13.1% for the first quarter, an increase of 140 basis points over 11.7% in the first quarter of 2025. Our first quarter results reflect continued strong performance across the business, highlighted by strength in our direct commercial, refinance, and agency businesses. Additionally, our disciplined expense management drove strong incremental margins. Looking at our title results more closely, on the purchase front, we saw typical first quarter's seasonality, with sequential improvement coming off the fourth quarter, while existing home sales remain well below the historical average. Our daily purchase orders opened were up 2% over the first quarter of 2025, up 25% over the fourth quarter of 2025, and up 4% for the month of April versus the prior year. Our refinance volumes continue to be responsive to 30-year mortgage rates. This boosted refinance orders open to $2,000 per day in the first quarter as mortgage rates moved into the low 6% level. Volumes subsequently moderated to $1,600 per day in the month of April as mortgage rates moved higher. Our refinance orders open per day were up 52% over the first quarter of 2025, up 16% over the fourth quarter of 2025, and up 13% for the month of April versus the prior year. For commercial, volumes continued to be strong, with direct commercial revenue of $338 million in the first quarter, up 15% over $293 million in the first quarter of 2025. This was driven by a 22% increase in national revenues and an 8% increase in local revenues. We continue to see growth in both national and local market daily orders opened, with each up 5% over the first quarter of 2025. Total commercial orders opened were 906 per day, up 5% over the first quarter of 2025, up 11% over the fourth quarter of 2025, and up 9% for the month of April versus the prior year. We also have a strong inventory of commercial deals slated to close, diversified across a broad set of asset classes, including industrial, data centers, multifamily, affordable housing, retail, and energy. To bring it all together, total orders opened averaged $6,400 per day in the first quarter, with January at $5,900, February at $6,500, and March at $6,600. For the month of April, total orders opened worth 6,200 per day, which was up 7% over the prior year. As we enter the second quarter, I want to address a question we hear frequently. How do we think about our 15% to 20% targeted annual range for adjusted pre-tax title margin? Let me start with what we've already demonstrated. Existing home sales have been near 4 million units for more than three consecutive years among the lowest levels in three decades, while mortgage rates have remained elevated. And yet, we've delivered an industry-leading full-year 2025 adjusted pre-tax title margin of 15.9%. That is the direct result of our scale decades of investment in technology and automation and our disciplined operating model that have continued to strengthen the earnings power of this business. We are confident that we can continue to deliver within our 15 to 20 percent annual range, even if total residential volumes remain at current levels over the near term. 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. Beyond a residential volume recovery, the benefits of our continuous investments in technology and AI have the potential to further enhance our business. I want to spend a few minutes on AI, what we are doing, and what it means for our business. F&F and the title industry hold a unique position in real estate transactions. We do not sit next to the real estate transaction. we sit inside the transactions, orchestrating complex multi-party settlements, safeguarding the movement of funds, and mitigating fraud in every transaction. By embedding AI tools into these workflows, we can drive significant value by enhancing efficiency and our customers' experience, reducing risk, and strengthening fraud prevention across real estate transactions. These gains come from having highly curated, deep sets of transactional data to augment AI. We have built our proprietary data by closing and ensuring millions of transactions. It cannot be replicated by simply digitizing public records, regardless of how sophisticated technology becomes. As we build out our AI capabilities, we are leveraging this proprietary data alongside our deep experience and historical knowledge, and this is what sets FNF apart. Usage of AI tools by our employees is growing, with more than half of our workforce using AI tools regularly, and we are deploying customized solutions across our title and escrow operations, as well as within ServiceLink, LoanCare, our real estate technology companies, agency operations and software development. Importantly, we are focused on implementing AI responsibly and compliantly with appropriate governance, human oversight, and risk and regulatory controls in place. We have deliberately avoided a concentrated bet on any single model or platform. Instead, we are deploying AI directly with the data and workflows each team already owns inside or alongside the technology they already use. While we already have a highly automated process for searching county records, we believe AI will have a meaningful benefit to other significant areas of real estate transactions as we integrate AI capabilities end-to-end throughout the entire title and settlement process. We are confident that our scale, our proprietary data, our fully deployed technology and our financial strength will continue to position F&F as an industry leader and place us at the forefront of shaping changes in our industry in a way that continues to bring value to our customers, shareholders, and employees. Turning now to our F&G segment, F&G's assets under management before reinsurance have grown to nearly $75 billion at March 31st, up 11% over the prior year. On a standalone basis, F&G reported gap equity excluding AOCI of $6.2 billion at quarter end and has grown its book value per share, excluding AOCI, to $46.51, up 70% since the 2020 acquisition. F&G's diversified self-funding capital model is supported by its annual enforced capital generation and third-party capital through their reinsurance sidecar and strategic flow reinsurance partnerships. Together, these sources of capital provide financial strength and flexibility to invest for growth and return capital to F&G shareholders through dividends and opportunistic share repurchases. We are very pleased with F&G as they continue to execute on their strategy toward a more fee-based, higher margin, and less capital-intensive business model with a focus on growing the core business and creating long-term shareholder value. Before I turn the call over to Tony, I want to take a moment to recognize our employees. I'd like to extend my sincere thanks for their continued dedication to our customers, their focus on execution, and their embrace of the innovation and technology that is driving this business forward. They are the foundation of everything we are building. With that, let me now turn the call over to Tony to review FNF's first quarter financial performance

and provide additional insights. Thank you, Mike. Starting with our consolidated results, we generated first quarter total revenue of $3.2 billion. Excluding net recognized gains and losses, our total revenue was $3.3 billion as compared with $3 billion in the first quarter of 2025. We reported first quarter net earnings of $243 million, including net recognized losses of $78 million, compared with net earnings of $83 million, including net recognized losses of $287 million in the first quarter of 2025. Adjusted net earnings were $249 million, or $0.93 per diluted share, compared with $213 million, or $0.78 per share, in the first quarter of 2025. The title segment contributed $197 million, the F&G segment contributed $80 million, and the corporate segment adjusted net earnings were zero before eliminating $28 million of dividend income from F&G in the consolidated financial statements. Turning to first quarter financial highlights specific to the title segment, our title segment generated $2.1 billion in total revenue in the first quarter, excluding net recognized losses of $46 million, compared with $1.8 billion in the first quarter of 2025. 5. Direct premiums increased 14% over the prior year, agency premiums increased 16%, and escrow, title-related, and other fees increased 12%. Personnel costs increased 11%, and other operating expenses increased 9%. All in, the title business generated adjusted pre-tax title earnings of $268 million, up 27 percent over $211 million in the first quarter of 2025, and a 13.1 percent adjusted pre-tax title margin in the quarter versus 11.7 percent in the prior year quarter. Our title and corporate investment portfolio totaled $4.8 billion at March 31. Interest and investment income in the title and corporate segments was $99 million, excluding income from F&G dividends to the holding company. For the remainder of 2026, we expect a range of $90 to $95 million in interest and investment income per quarter during 2026, assuming no Fed rate cuts in the remainder of the year and stable 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 $57 million were $5 million lower than our provision of $62 million for the first quarter. The carried reserve for title claim losses is approximately $31 million, or 2% above the actuary's 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. F&G's AUM before reinsurance increased to $74.5 billion at March 31, up 11% over the prior year. This includes retained assets under management of $56.4 billion, up 3% over the prior year. F&G reported gross sales of $3.2 billion for the first quarter, as compared with $2.9 billion in the first quarter of 2025. This reflects core sales of $2 billion for the first quarter, which includes indexed annuities, indexed life, and pension risk transfer, as well as $1.2 billion of funding agreements and multi-year guaranteed annuities, two products we view as opportunistic, depending on economics and market opportunity. F&G's net sales were $2.2 billion in the first quarter. This reflects flow reinsurance in line with capital targets for multi-year guaranteed annuities and fixed indexed annuities. Adjusted net earnings for the F&G segment were $80 million for the first quarter, reflecting our approximate 70% ownership stake. Compared with $80 million in the first quarter of 2025, which reflected our approximate 84% ownership stake, F&G's operating performance from their underlying spread-based and fee-based businesses continues to be strong. F&G continues to provide an important complement to our title business. The F&G segment contributed 32% of F&F's adjusted net earnings for the first quarter, as compared with 38% in the first quarter of 2025. From a capital and liquidity perspective, F&F continues to maintain a strong balance sheet and balanced capital allocation strategy. Our track record has generated a steady level of free cash flow, allowing us to continue to invest in our business through attractive acquisitions and technology as we manage the business and continue to build for the long term. F&F has returned approximately $222 million of capital to our shareholders in the first quarter, as compared with $161 million in the first quarter of 2025. This reflects $140 million of common stock dividends and $82 million of share repurchases in the current period. We have remained active with share repurchases in the second quarter. From a capital allocation perspective, we ended 2025 with $659 million in cash and short-term liquid investments at the holding company. the first quarter, our cash position and cash generation funded $140 million of common dividends paid, $25 million of holding company interest expense, and $82 million in share repurchases, all while keeping pace with wage inflation and funding the continued higher spend in risk and technology required in today's landscape. We ended the first quarter with $495 million in cash and short-term liquid investments at the holding company. This concludes our prepared remarks, and let me now turn the call back to our operator for questions.

Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question comes from Mark DeVries with Deutsche Bank. Please state your question.

Yeah, thank you. Good morning. First question, maybe for Tony. How are FG's earnings kind of tracking to your expectations? And are there any disconnects that you guys have observed kind of between your expectations and where, you know, kind of we in the analyst community have been modeling FG's earnings?

Yeah, thanks for the question. I'm probably going to turn that over to the F&G guys because, yes, it's been a bit of a frustration that the analysts' expectations seem to assume a return on alternatives. And yet, when we report, they're maybe not picking up that piece. And so there seems to be a larger delta than what we see, which is actually earnings that we're pretty close to in line with what we thought the consensus was. But, you know, maybe, Chris and Connor, you can weigh in a little bit here.

Yeah, this is Chris. I'd say Tony hit it. Other than there's usually a little bit of first quarter seasonality, we were actually pleased with the results. I think they were on expectation as far as what we were expecting. And I do think the disconnect is around alternatives, which have obviously underperformed industry standards to normalize for that. So I think in some cases, it's either being normalized too high or not normalized at all. And I think our outlook there has been fairly consistent. We have redefined alts to be focused on what people actually think of with alternatives, you know, private equity, interest, anything equity related. That's about $4 billion. So it's really not that hard to model. You know, if you look at your long-term expectation, I think we gave a range of 12% to 14% of what you think over time that should kick in from an earnings perspective. But in terms of base spread, home distribution, reinsurance, operating leverage of driving down expenses, it's been consistent and growing. We had a little bit of noise this quarter of fixed income yield was down. So probably two-thirds of that was more timing and one-offs as opposed to anything, any permanent degradation there.

Okay, got it. And then we have a question for Mike. Yeah, Mike, you're kind of optimistic this could turn our term, but kind of how often is the margin lift over the next couple of years, even if the market size holds its current levels?

Yeah, Mark, you did cut out a little bit, but I think the question is what benefits we expect to see from AI on the margin side, even if the market stays flat. Was that it? Absolutely expect margin improvement in the same size environment over time with technology tooling like AI. Just like we've seen that with title automation that we've implemented over the last couple of decades. That's been a big driver behind our margin improvement and the fact that we can get the kind of margins we're getting now in low transactional environments. But I can't give you a number. I think that'll become more apparent as we go through the balance of the year and probably see smaller wins with AI investments and AI tooling, and then bigger wins as we move into 27 and get more advantage out of really embedded tooling in the more full.

Are there specific tools that you're building on that you have more optimistic, you know, you're more optimistic about that can more meaningfully kind of move the needle that are worth calling out?

Yeah, I don't know that I'll get into specific tools, but maybe as I think are parts of the business. And as we said from the beginning, kind of a four-part process, really building out a risk and governance framework, which we've done and worked on for the past really year I think that's very important to have in place, given both the opportunities for AI, but the risks that come with AI tooling. Second is building literacy and diffusing the tools across the entire company. As we talked about, more than half of our employees are now using these tools regularly. Third, our individual solutions inside ServiceLink, Loan Care, et cetera, as we talked about on the call. And then the fourth is really the area that I think will have the biggest impact, and that's when you embed tools into workflows like SoftPro and in here that we have built at scale that no one else has, and we'll get more benefit on the settlement side where you really have more of your labor and your cost in terms of the process inside the business.

Our next question comes from Boz George with KBW. Please state your question.

Actually, just sticking to the margin discussion, can you go through margins by segment and just curious how the commercial margins look, especially compared to like previous peaks?

Yeah, thanks, Boz. This is Tony. As you know, we reported 13.1% pre-tax title margin up against 11.7%. If you break that down into our various what I'll call operations, margin up about 100 basis points, a 16% margin versus 14% in the prior year. And our service link business, which is centralized, refinanced, and default, had a 23%, so really almost to a unit positive improvement over the prior year quarter.

And if I could just add one thing to that, Bo, is in our centralized refi business inside ServiceLink having the model, we had a 23% first quarter margin up against 9% last year. A little bit of extra volume can go a long way inside the efficient model that we built for the centralized platform.

Okay, great. That's a great caller. Thanks. And then, actually, I wanted to just ask about the buybacks. You noted it's, I guess, in April, it remains strong. I'm just curious how you should think about that, maybe relative to what you guys did last year, or just ways to kind of sort of think about a range this year.

Yeah, thanks, Bo. It's hard to know exactly where we'll land in terms of buybacks. I did say that we remain active, and we will remain active. I firmly believe that. We bought $82 million of shares back in the first quarter, almost 2 million shares. Certainly, if we see signs of weakness, we're more active. But I would expect that once blackout windows lift, we'll be back in the market on a regular cadence. Last year's second quarter, we came in really strong. I wouldn't necessarily expect that. That might have been to the tune of about $250 million. But having said that, I do expect that we're going to be active.

Okay, great.

Our next question comes from Mark Hughes with Troost Securities. Please state your question.

Yeah, thank you. Good morning. Good morning. On FG, the question about returns, and we had chatted about this on the conference call earlier, but I just wanted to make sure I'm kind of on the right track. The return on asset in the quarter return on asset, 76 BIPs, if you take into account the unusual items or the underperformance on the alts, you get up to about 110 BIPs. When we model that on a go-forward basis, would it just make more sense at this point to model it more at the 80 basis point level and factor that into the F&F earnings rather than, I think, kind of the longer-term target, which was 110, but, you know, it's been dampened here recently. Just wanted to get your sense on the best approach.

This is Chris. I think that would be a very conservative way to model it, But I don't know an inappropriate way to model it. So, yeah, I think 80 bps, probably a little low as a jumping off point. But if you said that's a jumping off point for just pure spread income at current alts levels, then, yeah, you're more likely to have tailwind coming from alts as opposed to, you know, we've been normalizing. And, yeah, it's been five years since we've seen meaningful realizations. And every year we come in expectant that it's going to be the year of the IPO. and then, you know, something happens externally. So I think we're still confident that we will see that when things normalize. But, yeah, I don't think that's an unreasonable way to think about it. It would just be a conservative way, I believe, to model it. I don't know, Connor, if you agree with that. Yeah, I think that's fair.

And as we talked about some of the things that happened this quarter, there were some temporary elements this quarter that's probably about 10.

Just to be clear, it's been kind of that difference between, you know, the 34 basis points this quarter is kind of the difference in the What leads to some misinterpretation or volatility, perhaps, you know, thinking back to the earlier question.

Yeah, I think what Connor is saying is there was probably 10 bps of some other one-time effects. But if you look at it over time, quarter by quarter, all just to be, that's sort of the disconnect of how do you think about that normalization? And, you know, my guess is neither stock gets a whole lot of credit for it, given how long it's been since we've had realizations. But, again, still optimistic that if we do start to see transaction activity pick up, that should actually become a tailwind for us.

When we think about the purchase business, moving on to title, the growth in open orders in Q1 and 4% for April, if I heard properly, It sounds like FNF, at least relative to the public peers, is doing a little bit better. Is that a geographic issue, an execution issue? It may just be a few points here and there, but I'm curious if there's any driver to that little better.

Yeah, Mark, it's Mike. You know, it's hard to know, but we were very pleased to see a 25% sequential improvement in the first quarter. that's above historical averages, even though we're still in an overall low environment, you know, the 4% up in April. So I, you know, I don't know if it's a geographic issue or not. I do know that our recruiting has been incredibly strong, and it was very strong last year. We just had a phenomenal first-quarter recruiting effort, maybe our best ever. And, you know, we're attracting a lot of talented people to the company, and they bring volume with them. So whether that's playing into those numbers, I can't say for sure, but I'm very pleased with what the field's doing in terms of, you know, just building more talent inside this organization.

Is there a kind of structural reason for that? Maybe in a softer market, people want to be in a bigger organization? or is it just more company-specific? I'm curious on that.

Yeah, again, it's hard to know. I would say our recruiting is broad-based. It's across a lot of other players in the industry that we continue to invest in the business consistently, regardless of the macro environment, building technology, creating good marketing tools, the Inherent Digital Transaction Platform. I think we're doing a lot of things that lead this industry, and hopefully people at other organizations see that and want to be a part of it.

If I could just squeeze in one more, there was a discussion about maybe a process to look at a way to optimize value in the owned distribution within F&G. I was curious if there was any sense of timing on the process when we might hear more about that.

Yeah, this is Chris. It's probably premature to comment on the exact timing. But again, to just go back to the rationale, we've invested about $700 million in own distribution. We see substantial opportunity to grow what we already have and make more investments. And so, yeah, really just an exercise of what's the best way to fund that growth opportunity. You know, is it still underneath FG? Is it consolidated, deconsolidated? So that's just sort of the exercise we're going through. But, yeah, I'd imagine the next couple of quarters we would probably have, you know, a bit of an update for you there.

Thank you very much.

Thanks, Mark.

A reminder to all participants, to ask a question, please press star and one on your telephone keypad. Our next question comes from Oscar Naives with Stevens Incorp. Please state your question.

Hey, good morning. My first one is on F&G. In mid-March, F&G announced the $100 million buyback program, which was right after December distribution of F&G shares to F&F shareholders. And I think during the F&G earnings calls today, it was mentioned that $29 million of the program was deployed in 1Q. So one would think that if F&F has no plans to sell shares in the open market, the buyback could increase F&F's ownership stake in F&G. So how should we be thinking about this?

Yeah, it's a good question, Oscar. I mean, clearly the reason for the distribution back in December was to get more flowed out into the marketplace. And so we went from an 82% roughly ownership down to a 70%. F&G's shares were under pressure, and the float wasn't really helping, at least in the early phases of having those shares out there. I think F&G saw an opportunity to buy back their shares at a discount, a real significant discount. F&F doesn't take a position that we need to own X number of shares. We're just trying to value out that. If that means that we close that gap from 70 to 80 or wherever it might be, that's very possible. But, again, there's no target necessarily for where F&F might end up in that ownership.

That's very helpful. And then turning to title, starting with the fee profile, what can you share on what you're seeing in terms of the trajectory of fee profile for both presidential and commercial?

Yeah, it's good. Thanks for the question. I would say that the residential fee profile has been pretty consistent year over year, almost. And I think we've seen, you know, pricing modality there, but particularly national commercial fee profile in the first cases. So, you know, fairly stable in residential.

And just one last one on the outlook. Looking at the residential outlook since the last earnings call, the NBA and Finance may have revised their forecast down, and they're now calling for existing home sales to be between 4.1 and 4.2 million seasonally adjusted for the year in 26 and around 4.5 million in 27. What's your take on that? Do you view those assumptions as conservative or are they too aggressive?

yeah i i don't i don't think there um because we came into the year for residential was really upside and purchase and refi with the fact that we had lower more stable rates to start to the year and then the macro environment as we got into march and into april kind of a little bit and that's probably when fanny and mba revisers down because you know their 27th forecast now oscar as you pointed out, looks a lot like their 26 forecast that they had 60 days ago, you know. So it's just hard to say. What we do see, though, is, and I've commented on this before, sensitivity to lower rate movements than we probably have seen in prior vintages. And I think if it really comes down to if rates, if things stabilize, The macro environment gets a little calmer and rates stabilize maybe in that lower six environment. We're going to have upside in the back half of the year in residential. And if they don't, you know, we'll probably continue on this current trajectory. I'm very pleased we had a 4% increase in purchase opens in April. And we're still driving. We think absent the 3% mortgage years, it's really one of the best first quarters we've ever had. And so we'll perform well regardless of the environment, and we'll manage the business to kind of whatever order environment we have. But we're very confident in our position.

Thank you. And if I can squeeze just one last one on capital allocation, what are you seeing in the M&A pipeline, and has there been any notable shift in activity since last quarter?

Yeah, thanks, Oscar. I'll turn it over to Mike. But my impression is, even though we haven't made many acquisitions really over the course of the last, I don't know, 15 months or so, I get the sense there's more opportunity, especially on the title agent side. I just feel like we're hearing a lot more about it. We're having more discussions. And I would expect that we have more activity this year and next than we've seen in the last two years.

Yeah, I would agree with that, Tony. I think there's more conversations, I think there's more opportunities, but you never know if you're going to strike a deal. And I would say just kind of stay tuned on how that plays out.

Great. Thank you so much. And this will conclude our question and answer session. I will now turn the conference over to CEO Mike Nolan for closing remarks.

Thanks for joining our call this morning. We delivered strong first-quarter results with our complementary businesses executing well in a dynamic environment. The title segment is performing well in what remains a low transactional environment and is capitalizing on stronger commercial activity. We are delivering industry-leading margins and remain well-positioned to benefit from a recovery in residential volumes. Shifts on technology and AI is contributing to our performance today, and we see potential to further enhance our business. Likewise, F&G is executing on its strategy that is focused on balancing continued growth in its spread-based business alongside the fee-based flow re-insurance, middle market life insurance, and owned distribution strategies as they focus on delivering long-term shareholder value. Thanks for your time this morning. We appreciate your interest in F&F and look forward to updating you on our second quarter earnings call.

Thank you for attending today's presentation and the conference call has concluded. You may now disconnect.