The big news coming from Fidelity National Financial’s (FNF) conference call with analysts was not the spectacular showing by the company’s earnings in the fourth quarter and full year 2016.
Instead, it was the news that expansion continues at the company, both in the title insurance area and in real estate brokerage companies.
FNF Chairman William Foley said on the call with analysts that the company made a handful of title-related acquisitions in 2016, and planned more this year.
“We’re making periodic acquisitions in the title insurance – in the title agent area to attempt to grow our market share and grow our business base in various states,” Foley said, according to a transcript of the call from Seeking Alpha. “We made about 12 or 13 of them last year. Only a couple were in excess of $20 million. This year, we anticipate the same sort of pace of acquisitions.”
Full coverage of the company’s earnings report, along with reaction from FNF CEO Randy Quirk, will be available later this week.
But it was a question from Stephens Inc. analyst John Campbell that opened Foley up on future growth. Campbell said the company had talked about the real estate brokerage business, and he asked whether Fidelity would consider something sizeable – comparing a move by Fidelity into brokerage with Realogy’s plan of starting in real estate brokerage companies and expanding into title.
“We are actually looking at various real estate brokerage companies,” Foley said, according to the Seeking Alpha transcript. “We’ve focused on the West Coast because we have a pretty good operation in the Bay Area and we’ve recently expanded that into Southern California. We’re looking at opportunities up in the Northwest.”
Foley said the optimum tie would be between a broker network and FNF’s direct operations.
“What we’d like to do is expand that real estate brokerage network where we have strong direct operations. And so, that’s going to be primarily in states such as Arizona, Colorado, California, Oregon, Washington, Texas, Illinois, Florida,” he said. “But it is an area of focus for us.”
That’s because Fidelity is looking at compiling the end-to-end services which many companies are looking to form around the mortgage transaction.
“Yeah, we’re very interested in the business of controlling the real estate transaction from the point of time that the listing is opened with the Realtor and then managing that transaction on behalf of the Realtors and lenders all the way through the title, all the way through the close,” Foley said, according to the Seeking Alpha transcript. “And that was part of the rationale behind the CINC (Commissions Inc.) acquisition last summer.”
All of which means Fidelity’s strategic operations throughout 2017 should be worth following closely.
“It is an area that we want to focus on as we supplement our title insurance or title agency operations, direct operations in various states,” Foley said. “So, you kind of hit on the – that’s the one area that we didn’t really say much about but we’re very interested in it and we’re looking at a lot of different opportunities.”