FNF - NYSE

Good morning, and welcome to FNF Fourth Quarter and Full-Year 2023 Earnings Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions with instructions to follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Lisa Foxworthy-Parker, Senior Vice President, Investor and External Relations. Please go ahead.

Great. Thanks, operator, and welcome everyone. Joining me today are Mike Nolan, Chief Executive Officer; and Tony Park, Chief Financial Officer. We look forward to addressing your questions following our prepared remarks. Chris Blunt, F&G CEO; and Wendy Young, F&G CFO, will join us for the Q&A portion of today's call. Today's earnings 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 SEC filings for a discussion of the factors that could cause actual results to differ materially from those expressed or implied. This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors. Non-GAAP measures have been reconciled to GAAP where required in accordance with SEC rules within our earnings materials available on the Company's website. Yesterday, we issued a press release, which is also available on our website. Today's call is being recorded and will be available for webcast replay at fnf.com. It will also be available through telephone replay beginning today at 3:00 PM Eastern Time through February 29, 2024. And now, I'll turn the call over to our CEO, Mike Nolan.

Thank you, Lisa, and good morning. I am proud of our results and would like to thank all our employees for their accomplishments in 2023 as we delivered another industry-leading performance in the Title Segment and record-setting performance in the F&G Segment. Before I cover the results, I'd like to address our recently reported cybersecurity incident. Given the strong execution of our recovery plan, we were able to resume normal operations quickly in the quarter. As far as the minor negative impact to our fourth quarter Title Segment results, we estimate the incident reduced adjusted pre-tax title earnings by $8 million to $10 million and lowered our adjusted pre-tax title margin by roughly 50 basis points and 12.3%, which would have been in line with the prior year quarter to 11.8% as reported. The F&G Segment was not impacted. As challenging as this event was, it really showcased how our team pulled together. I'd especially like to thank our employees and advisers who worked tirelessly around the clock to resolving incidents and our employees in the field who work diligently with our customers to minimize the impact. FNF remains committed to protecting our client and customer information and cybersecurity remains a top priority. Now turning to the results for the Title Segment. Our Title business has continued to perform well in 2023. We delivered adjusted pre-tax earnings in our Title Segment of $964 million and achieved an industry-leading adjusted pre-tax Title margin of 13.7% for the full-year. This is an outstanding result, despite the persistent housing market downturn, as home affordability has been cited as the worst in a generation due to continued higher U.S. mortgage rates, which peaked at over 8% in October, combined with limited housing supply. One of the key drivers to our ability to successfully navigate the tough market is our continued focus on managing expenses. For the full-year, we reduced total field operations employee count by approximately 8%. We have also consolidated some of our direct office Title locations, which has generated about $1 million per month and facilities cost savings. Commercial volumes continue to be in line with our expectations and consistent with the levels seen in years like 2015 through 2020. We generated commercial revenue of $294 million in the fourth quarter and $1.1 billion for the full-year. During 2023, we saw continued strength in multifamily, industrial and other segments like energy and affordable housing, similar to recent years. Looking at fourth quarter volumes more closely. Daily purchase orders opened were up 1% over the fourth quarter of 2022, up 7% for the month of January versus the prior year, and up 23% for the month of January versus December. And refinance orders opened per day were down 11% from the fourth quarter of 2022, down 1% for the month of January versus the prior year, and up 15% for the month of January versus December. Our total commercial orders opened were 704 per day, down 3% from the fourth quarter of 2022, flat for the month of January versus the prior year, and up 3% for the month of January versus December. Overall, total orders opened averaged 4,100 per day in the fourth quarter, with October at 4,600, November at 3,800, and December at 4,000. For the month of January, total orders opened were 4,800 per day, up 20% versus December. While we are pleased with our strong performance and profitability, we remain cautious as we have entered the first quarter of 2024 with historic low order volumes, which are expected to pressure industry margins much like last year. During 2023, we progressed from an adjusted pre-tax title margin of 10% in the first quarter to mid-teens in the middle of the year and tapering to 11.8% in the fourth quarter, which in aggregate produced a full-year level of 13.7%. As always, we will manage our business to the trend in opened orders to protect our profitability. We feel that we are well-positioned for the current market and poised to benefit from a potential turn in the housing market, should mortgage rates drop in 2024? Beyond the near-term pressures, we remain bullish on the mid to long-term fundamentals of the real estate market. We will continue to develop and invest in technology, recruit top talent, and make strategic acquisitions, all while maintaining industry-leading margins. Over the past year, we've invested approximately $300 million in 10 acquisitions. Our inHere platform is another area where we continue to invest. This is our industry-leading end-to-end real estate experience platform, which is fully deployed across our residential business and integrated within our direct operations. Adoption of the platform has been strong, shown by the following highlights for 2023, over 1 million agents, transaction coordinators, and consumers used inHere to manage their transactions, up more than 50% over the prior year. Over 750,000 starting here opening packages were sent to consumers with 64% completing these packages entirely online. Our Title Company has automatically published over 400,000 orders to win here, providing our customers with enhanced efficiency and transparency into their transactions. inHere's performance throughout 2023 demonstrates its growing relevance and utility in the real estate sector. Its diverse offerings and accessibility through both web and mobile platforms make it a vital resource that's significantly aged processing of residential transactions. We expect to add functionality and content to inHere to further enhance the transaction experience of agents, transaction coordinators, and consumers, which in turn will create market growth and efficiency opportunities for FNF over the near and long term. Turning to our F&G business. We are pleased to see investor recognition of F&G's success as its market capitalization has increased from $2.4 billion at the time of the partial spin-off in December of 2022 to approximately $5.8 billion at the end of 2023. F&G is profitably growing its assets under management before flow and reinsurance to a record $56.3 billion at December and comprise nearly 30% of FNF's adjusted net earnings for the full-year 2023. We were also pleased to see the most recent rating agency recognition of F&G's success as AM Best upgraded the financial strength ratings of F&G's primary operating companies to A from A- in January 2024, recognizing the financial strength and stability of F&G's business as they successfully execute on their diversified growth strategy. Given the success that F&G has achieved, combined with the many opportunities to grow and expand the business, FNF Board made the decision to invest $250 million in F&G to take advantage of the current opportunity for growth. As announced on January 16, 2024, the independent special committees of both companies agreed at a mandatory convertible preferred security, which will provide F&G additional capital to celebrate growth of its retained AUM. With that, let me now turn the call over to Tony to review FNF's fourth quarter and full-year financial performance and provide additional highlights.

Thank you, Mike. Starting with our consolidated results. We generated $3.4 billion in total revenue in the fourth quarter, and we reported a fourth quarter net loss of $69 million, including net recognized gains of $203 million versus a net loss of $5 million, including $118 million of net recognized losses in the fourth quarter of 2022. The Title Segment contributed net earnings of $228 million. The F&G Segment had a net loss of $251 million and the Corporate Segment had a net loss of $46 million. The net recognized gains and losses in each period are primarily due to mark-to-market accounting treatment of equity and preferred stock securities, whether the securities were disposed of in the quarter or continued to be held in our investment portfolio. Excluding net recognized gains and losses, our total revenue was $3.2 billion, as compared with $2.7 billion in the fourth quarter of 2022. Adjusted net earnings were $204 million or $0.75 per diluted share compared with $274 million or $1.01 per share for the fourth quarter of 2022. The Title Segment contributed $174 million. The F&G Segment contributed $64 million and the Corporate Segment had an adjusted net loss of $34 million. For the full-year 2023, we saw a strong performance for the Title Segment, despite a difficult environment as well as record growth for the F&G Segment, which together generated solid profitability. Total revenue excluding gains and losses was $11.9 billion in the full-year 2023, and reflects a 9% decrease from the full-year 2022, primarily due to the decline in Title order volumes. This generated $962 million in adjusted net earnings, a decrease of 35% from $1.5 billion in full-year 2022. The Title Segment contributed $760 million. The F&G Segment contributed $285 million, and the Corporate Segment had an adjusted net loss of $83 million. Turning to financial highlights, specific to the Title Segment. Our Title Segment generated $1.7 billion in total revenue in the fourth quarter, excluding net recognized gains of $65 million, compared with $1.8 billion in the fourth quarter of 2022. Direct premiums decreased by 10% versus the fourth quarter of 2022. Agency premiums decreased by 13%, and escrow title-related and other fees decreased by 4% versus the prior year. Personnel costs decreased by 4% and other operating expenses decreased by 10%. All in, the title business generated adjusted pre-tax title earnings of $198 million compared with $227 million for the fourth quarter of 2022, and an 11.8% adjusted pre-tax title margin for the quarter versus 12.3% in the prior year quarter. As Mike highlighted, excluding the one-time 50 basis point impact of the cybersecurity incident, our fourth quarter adjusted pre-tax title margin was 12.3%, and in line with the prior year quarter. For the full-year, the title business generated adjusted pre-tax title earnings of $964 million, compared with $1.6 billion for the full-year 2022, and a 13.7% adjusted pre-tax title margin versus 16.7% in the full-year 2022. Our Title and Corporate investment portfolio totaled $5 billion at December 31. Interest and investment income in the Title and Corporate segments of $103 million increased $3 million, as compared with the prior year quarter, primarily due to higher income from cash and short-term investments, partially offset by lower income from our 1031 exchange business. Looking to 2024, we expect to generate interest and investment income of $95 million to $100 million in each of the first two quarters before falling to $75 million to $85 million in the second half of the year with anticipated Fed funds cuts of 100 basis points to 150 basis points. Our Title claims paid of $64 million were $14 million higher than our provision of $50 million for the fourth quarter. The carried reserve for Title claim losses is approximately $70 million or 4.2% above the actuary 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. F&G hosted its earnings call earlier this morning and provided a thorough update. So, I will focus on the key highlights of its quarterly and full-year performance. F&G reported record gross sales of $4.1 billion in the fourth quarter, a 52% increase from the fourth quarter of 2022 and $13.2 billion for the full-year 2023. A 17% increase over the full-year 2022, driven by record retail sales and robust institutional market sales. F&G's net sales retained were $2.5 billion in the fourth quarter and $9.2 billion for the full-year 2023. Net sales reflect third-party flow reinsurance, which has increased from 50% to 90% of MYGA sales during 2023, as expected. F&G has successfully expanded from one to three high-quality and established flow reinsurance partners, which provides counterparty diversification benefit and more capacity. And the higher percentage of flow reinsurance, which provides a lower capital requirement on ceded new business, while allocating capital to the highest returning retained business enhances cash flow, provides fee-based earnings, and is accretive to F&G's returns. F&G has profitably grown its retained assets under management to a record $49.5 billion at December 31. AUM before flow reinsurance was $56.3 billion, adjusting for the approximately $7 billion of cumulative new business ceded and well ahead of our expectations at the time of acquisition. Adjusted net earnings for the F&G Segment were $64 million in the fourth quarter. This includes alternative investment returns below our long-term expectations by $31 million or $0.11 per share and significant expense items of $16 million or $0.06 per share. For the full-year 2023, adjusted net earnings for the F&G Segment were $285 million. This includes alternative investment returns below our long-term expectations by $130 million or $0.48 per share and significant expense items of $43 million or $0.16 per share. To bring it all together, F&G adjusted net earnings, excluding significant items in the F&G Segment, were $251 million or $0.92 per diluted share in the fourth quarter and $1.1 billion or $4.19 per diluted share for the full-year. I will wrap up with a few thoughts on capital and liquidity. We remain focused on ensuring a balanced capital allocation strategy, as we navigate the current environment. We held $886 million in cash in short-term liquid investments at the holding company level at December 31, which has remained relatively steady over the course of the year despite the effect of market headwinds and historical low volumes in the Title business. As a reminder, this year-end amount is prior to the $250 million investment, made in F&G in January 2024. On February 16, 2024, FNF and F&G, each entered into amended and restated credit agreements. For FNF, this included an extension of the maturity of the facility from October 2025 to February 2029. For F&G, this included an increase to the size of the facility commitment to $750 million from $665 million and extended the maturity of the facility by two years to November 2027. Thereby enhancing our liquidity profile and financial flexibility. F&G's outstanding balance is $365 million, which reflects a $150 million paydown in the fourth quarter. FNF's consolidated debt was $3.9 billion on December 31, up approximately $200 million from the preceding quarter due to F&G's senior note issuance and a partial revolver paydown in December. As a result, FNF's consolidated debt-to-capitalization ratio, excluding AOCI, was 28.9% as of December 31. This is in line with our long-term target range of 20% to 30%, and we expect that our balance sheet will naturally delever, as a result of growth in shareholders' equity, excluding AOCI. Going forward, our consolidated annual interest expense on debt outstanding is approximately $200 million, comprised of $80 million for FNF's holding company debt and $120 million for F&G Segment debt. Following our record level of share repurchases in 2021 and 2022, at a total combined cost of $1 billion, we prudently moderated our repurchase volume in 2023, to preserve financial flexibility through the multi-decade low volumes of this market cycle. Therefore, there were no share repurchases in the fourth quarter and only $4 million of share repurchases in 2023. During the fourth quarter, we paid common dividends of $0.48 per share, for a total of $133 million. We continue to view our current annual common dividend of approximately $525 million as sustainable. This concludes our prepared remarks. And let me now turn the call back to our operator for questions.

Thank you. We will now conduct our question-and-answer session. [Operator Instructions]. And our first question comes from Bose George with KBW. Please state your question.

Hey, guys. Good afternoon. The first question is just on the margin expectations. I know you don't really, you know, discuss sort of guidance. But when we think about 2024, assuming volumes are up only modestly and, you know, investment income down a little bit based on your guidance, you know, is there any reason to think the margin should be up very much or, you know, sort of in the same ballpark as '23?

Yes, Bose, it's Mike, and, and good afternoon. I would say, you know, cautious to margins, particularly in the first quarter, probably looks a lot like last year, given the inventory volumes in the fourth quarter are lower, you know, we do have maybe, you know, a little bit of a lower expense base that helps, but, but pretty cautious to the first quarter and a, and a bit more optimistic, as we, as we move through the year. Encouraged by the increase in, you know, resale open orders in January, up 7% over last year and the sequential improvement, I think, lines up well for, for maybe a modestly better purchase environment, as we go through, through '24. But the, the real difference maker will just be what happens to rates. If we get, if we get better rates, as we go through the year and particularly in the second half, I think there's some upside to margins there. You know, when you think about refi was up sequentially 15% in January, and that was really driven by the modest decrease in rates that we saw, you know, kind of in the back half of the -- of December, I guess. So it's really going to be about the rates, but, but I think there is some potential for modestly better margins as we go through the year.

And Bose, maybe I'll just, I'll just add on that. You mentioned the, the guidance on investment income, and that guidance really assumes that rates come down. And so when we got to the back half of the year and a $75 million to $85 million investment income number, that does assume at least 100 basis points reduction. And if that happens, then the title business is doing a lot better. And so I think we still hold those margins.

Yes, yes. That makes sense. Thanks. And then just actually on the Corporate Segment, it looked like the loss was a little higher than usual on the quarterly numbers. Is there -- what's sort of a reasonable number to model for -- you know, for that segment?

Yes, the way I would look at it is more your adjusted pre-tax. And I think for the fourth quarter, it was $22 million loss versus $20 million in the, in the third quarter and roughly that in the fourth quarter of the prior year. What you're seeing is a couple of items in there, that we've carved out of, of normal earnings. One was $10 million related to the cybersecurity event and another item was an $8 million charge, we took to terminate an old frozen pension plan that dates back more than 20 years. And so that was $18 million. But again, you carve that out. You're also seeing, if you're looking at the bottom line, some noise in the tax rate. We had a little movement around with, with valuation allowances really throughout the year, either coming -- going up or going down, depending on the market and so the tax rate may be, may be confusing it a little bit as well.

Okay, great. Thanks.

Thank you. And our next question comes from Mark DeVries with Deutsche Bank. Please state your question.

Yes, thank you. I was hoping you could give us some more detailed thoughts on kind of, you know, why was the Board thought that the new $250 million investment in F&G was the best use of capital here? And, and could you also just update us on your thoughts on kind of prioritization for capital going forward?

Yes, Mark. Maybe I'll start. Others can jump in as well. In terms of the $250 million, I think we may have stated this in the last call or maybe it wasn't part of it. I don't remember if we had announced it at that point. But it was really the, the Board looking at the performance of F&G, since really the date of acquisition back in June of 2020, the strong leadership, the performance, the growth in assets and thought, you know, we could -- we have an opportunity here to continue to grow the asset base and retain those assets or we have reinsurance partners, where we could, you know, utilize that and, and not keep as much of those assets. And I think the Board -- well, we have almost $1 billion in holdco cash and $250 million was a reasonable investment, especially if you can get a 7% or roughly 7% return on that over a three-year period and, and get that back in equity at the end. And so I think it was just another, another investment, if you will, or, or validation of, hey, we really like what's going on at F&G, and, and, and we want to continue to invest in that and keep more of those assets. F&G, as you know, is generating about 30% of our adjusted net earnings. And the thesis that we started with, rates go up, F&G outperforms, Title underperforms, and that's pretty much played out. We, we see true value creation in, in that investment. And so, you know, I think, I think it made a lot of sense. Just touching on capital allocation, I think we talked about a little bit in the prepared remarks. But, you know, if the dividend at $525 million annually, it's M&A of $200 million to $300 million, just normal course, absent some, you know, significant deal. I think we would expect to spend that. Not all of that shows up. It's holdco cash spend. Some of that is done at the subsidiary level, but, you know, you can assume that $200 million to $300 million sort of our run rate buybacks. As you probably know, we, we, we took 2023 off, in terms of being in the market for buybacks, as we just wanted to see how this title business plays out, how the, how the, the macro environment goes, how our cost-cutting goes, I think it's all gone well from an expense management standpoint, but we're still at historical lows in terms of volumes. And so we're taking a look and that's why you didn't see any, any buyback activity there. And then, you know, just finally, I think on the, on the debt side of things, we feel very comfortable other than the, the revolver, which we had coming due I think in 2025, we don't have any debt coming due. Now that we've extended that revolver to, to 2029, I think we're in a really good shape from a debt standpoint.

Okay. That's, that's really helpful. And then, am I right in thinking that, you know, the Board's conclusion that F&G is a good place to deploy capital today is completely independent of any views they may have on whether, you know, holding F&G inside of FNF is the most efficient place for those shares to ultimately reside? And, and could you just remind us on kind of when the year-year anniversary is on the acquisition of F&G?

Yes, the five-year anniversary is June of 2025. That's the point where we could spend, as long as we own at least 80% of the Company, which we do, we own 85% of the Company. We could spin that to our FNF shareholders tax-free. And so that is a, that is a date that, that people have certainly referenced, and we've answered the question. I do believe to your first comment or statement and, and Mike and Chris can weigh in as well, I do believe that these are independent decisions. I think at this point, the Board likes the investment and wants to continue to grow this asset and create value. But I don't think it's a statement around what we might ultimately do or not do with, with the asset going forward. So I think that's, that's probably all I can say now unless others, others want to make a comment.

I would just, just -- I would just agree with Tony that it's -- that those are independent considerations and really focused on the growth opportunities. The growth has been tremendous, doubling assets in three years and the expansion in, in channels to, to sell has been incredible, and we want to take advantage of that.

Okay. That makes a lot of sense. Thanks, guys.

Thanks, Mark.

Our next question comes from Soham Bhonsle with BTIG. Please state your question.

Hey, guys. Hope you're doing well. Just to follow up on that last question. I mean, I guess, from your point of view, is there any concern around, you know, if we do enter sort of a lower rate environment, how that potentially affects F&G's performance, right, in that scenario, and it is growing as a part of your business? Or is the view that, hey, look, rates go down, okay, maybe F&G earnings do sort of decline a little bit, but they will get it back on the title side? Just wanted to get your thoughts there.

Chris, do you want to maybe weigh in on your thoughts around F&G's performance if interest rates come down?

Yes, happy to do that. And, and I guess the first comment I would make is we've grown earnings consistently and the tenure has been anywhere from 39 basis points to peaking over 5%, and we've just consistently grown earnings throughout that period. So clearly, in a rising rate environment, it's easier for us to get extra spread. So I would say we get outsized earnings. But that does not imply that we would even necessarily see a decline in earnings. You know, as long as we continue to grow, we continue to grow AUM, it might not be the windfall that it feels like right now with wind at the back. But we're pretty proud of our ability to deliver pretty consistent earnings. And I think that's probably an underappreciated part of the FNF stock, is the positive impact, probably the Title when rates come down and we, we wouldn't expect a significant drop-off on the F&G side. The other is we did announce on our F&G earnings call this morning that we've hedged now out about half of our floating rate exposure. That would be the one place where we would feel it relatively quickly, but I'd also remind you, a good portion of our in-force, we get to readjust pricing and margins every single year. So we can adapt to interest rates in either direction.

And Soham, it's Mike. I would just add then that we would welcome a lower rate environment, given that we don't think it's a significant impact on F&G and it would be a significant positive impact on the Title business.

Okay. Great. And then, Tony, like when I'm looking at the residential fee per file, it was up mid-teens this quarter, so much stronger than where HPA is today. I mean, I guess, what's going on there? And then on the national commercial side, it looks like fee per file was up low double digits as well. And that just sort of goes against sort of what we're seeing in the market. So I just wanted to get your thoughts on those two items.

Yes. So what I have in front of me here and, and maybe I need to double check it, but, but I show that our purchase fee per file was about $3,350 -- $3,350, up against about $3,180 in the prior year fourth quarter, which is up about 6%. And then on the refinance side and keep in mind, refinance is, is very negligible at this point, about 5% of total direct revenue. But nonetheless, the refinance fee per file $1,289 basically, $1,289 versus $1,226, so up about 5%. So I don't know that blended to me, residential is, you know, 5% or 6%, which I think holds up relative to, to what, what the market would, would show overall. In terms of the commercial, yes, I don't know. I think that's probably more a mix deal. I think we, we tend to have larger deals in Q4. Mike, I don't know if you have any thoughts on the commercial fee profile and why it was...

Yes. On the commercial, and you're right, Soham, it was, it was significantly higher in the fourth quarter versus a pretty good number in the fourth quarter last year. It was heavily influenced by a couple of really large transactions that we had. And so I would, I would expect that number to, you know, kind of reconcile to more normal, as we, as we move back into -- as we move through to '24.

Okay. Great. And then just a quick last one. Mike, are you guys seeing any sort of fallout from just the cybersecurity impact? You know, we're hearing some potential diversification? Just wanted to get your, your thoughts on the market there.

Yes. I, I really don't see that. I think the impact has been with customers negligible. I, I personally talked to a number of large customers, who, who've given no indication that there's any concerns. And I'm not really expecting so many impact from long-term customer relationships.

Okay, great. Thanks. Thanks a lot, guys.

Okay.

Our next question comes from John Campbell with Stephens. Please state your question.

Hey, guys.

Hey, John.

Hey, John.

[Operator Instructions]. Just one moment, please. Go ahead, Mr. Campbell.

Okay. Hey, guys. I wanted to revisit the M&A commentary. You guys mentioned $300 million over 10 acquisitions last year. Hoping you can maybe help with the phasing of those deals, maybe roughly what portion of the year you captured those? And then also if you could help with the sizing of the all-in contribution and maybe how much that's influencing your direct order count?

Yes. I'll start. Mike can probably touch on it as well. So a lot of that, frankly, was January 1 because I think the Property Insight deal was 200-ish and that happened at the very beginning of the year. And then I think things slowed down a bit and then picked up maybe in the latter part of the year. And so a lot of the deals were smaller, not large title agent acquisitions. And so from an order count standpoint, not significant. But keep in mind, it was kind of a strange year where there's a lot of, you know, price discovery out there in terms of trying to figure out what the right price is to buy and of course, for the sellers to figure out if they can afford to sell, when their businesses are clearly off the peak. And so, you know, I think that I would, I would expect more activity in 2024 than 2023 in terms of title agent M&A. Mike, do you want to address that?

Yes. I would agree. Obviously, the dollar amount heavily weighted by the TitlePoint deal. I'm looking at the list of acquisitions, about half were in the first half and half in the second. Half of the year at '23, probably a modest impact on, on order counts, but, but I don't have a number to give you, John, as to how much it impacted order counts.

Okay. And I felt that -- recognized that the earlier acquisition that -- the size of it. So it seems like it's pretty immaterial, just tuck-in acquisitions across agencies. So that was what I was looking for. On the cybersecurity incident, I want to touch on maybe two items there. So first, on the November orders obviously affected, December jumped pretty sharply. I think your open orders were up 15% or so on purchase. How much of that was stemming from a push-out in order activity? Is there any way to size that up?

I think it's difficult to, you know, say with certainty. But as we looked at the two months, it looks like, particularly when you get out of the centralized world because it's different there because you have these electronic connections with your customers and they, they kind of turn them off when you have a security event. But I would agree with you, our, our November open orders were off about 10% expectation, and, and that kind of lines up with, you know, the couple of days, where we were really restricted from taking orders. And then December, to your point, was up 15%, and I think that was definitely higher than expectations. So I really feel like the business that didn't happen in November, we just picked up in December. And when we looked at our revenues kind of on a per-day basis, the last couple of days in November and into December, I think we were just really picking up those closings. And I think it speaks to the great work that our field employees did to, to work with individual customers and, and to move transactions off of a couple of days, to the next couple of days and maybe into the next week. So, you know, I think that's why we said the, the impact was, was very, very minimal. And I think customers work with us very well in, in, in dealing with, with the event.

Yes, that's great to hear. And then just moving on to the closing or the closed orders in December. I mean, if I look at the closing ratio, it was way, way below kind of what you've seen historically. I guess the question here is, do you think -- would you expect a higher closing ratio in January, as you push some of that? I'm guessing this was probably capacity issues, but maybe a higher closing ratio in January, as you catch back up on those orders?

I have to go back and look at those numbers, John, to give you a better answer. I would say when we look at the full-year in '23, closing ratios were probably lower than historical averages. And I think that's driven by, obviously, the rate environment. I would expect, as we normalize potentially into the back end of '24 and beyond, the closing ratio should improve overall. I would say the same for commercial.

Okay. Got it. And if I could squeeze in one more, I've gotten questions about the -- growing your light position. So maybe if you could talk to that and then also the rationale behind that investment?

The light position? Is that what you asked?

Yes.

Yes. I don't think we've grown the light position much. If we have, I think it's been pretty, pretty negligible. It hasn't crossed my radar. So I'd have to double check and get back to you on that.

Okay. Sounds good. Thanks, guys.

Thanks, John.

Thank you. [Operator Instructions]. Our next question comes from Mark Hughes with Truist Securities. Please state your question.

Yes, thank you. Was the $8 million frozen pension adjustment, was that adjusted out for your earnings number? Or was that still included in the expenses?

No, it was -- Mark, it was adjusted out, yes.

Okay. All right. Very good. And then the inHere, you talked about $1 million contacts up 50%. What is the penetration now at that point, if you've got 1 million folks that are using it? What is the opportunity for that to continue to grow and have an impact on expenses or revenue?

I think -- it's Mike, Mark. I think the potential for it to continue to grow is significant. The -- you know, from a kind of a real estate agent transaction coordinator standpoint, I think there's still a lot of upside. And that $1 million number includes both consumers and agents and their staff. So I think there's a lot of potential there. The consumer number is driven more just by the marketplace. So as more transactions occur, you know, rates come down and more transactions occur, we'll send out more packages to consumers and more consumers will engage with us on it. And, and the numbers are actually suppressed given the lower market. So maybe a long-winded answer to say. I think there's still quite a bit of potential.

Yes. Thank you very much.

Thanks, Mark.

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

Thank you. We are proud of our very strong performance in 2023. We remain well-positioned to navigate the market cycle and are continuing to build and expand our Title business for the long term. Likewise, F&G's opportunities are compelling with many prospects ahead to drive asset growth, deliver margin expansion, and generate accretive returns. Thanks for your time this morning. We appreciate your interest in FNF and look forward to updating you on our first quarter earnings call.