Q4 2023 Fidelity National Financial Inc Earnings Call

Participants

Anthony John Park; Executive VP & CFO; Fidelity National Financial, Inc.

Christopher Owsley Blunt; CEO, President & Director; Fidelity & Guaranty Life Insurance Company

Lisa Foxworthy-Parker; SVP of Investor & External Relations; Fidelity National Financial, Inc.

Michael Joseph Nolan; CEO; Fidelity National Financial, Inc.

Bose Thomas George; MD; Keefe, Bruyette, & Woods, Inc., Research Division

John Robert Campbell; MD & Research Analyst; Stephens Inc., Research Division

Mark Christian DeVries; Research Analyst; Deutsche Bank AG, Research Division

Mark Douglas Hughes; MD; Truist Securities, Inc., Research Division

Soham Jairaj Bhonsle; VP & Residential Housing Services Analyst; BTIG, LLC, Research Division

Presentation

Operator

Good morning, and welcome to FNF's Fourth Quarter and Full Year 2023 Earnings Call. (Operator Instructions) 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.

Lisa Foxworthy-Parker

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's CEO; and Wendy Young, F&G's 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 p.m. Eastern Time, through February 29, 2024. And now, I'll turn the call over to our CEO, Mike Nolan.

Michael Joseph Nolan

Thank you, Lisa, and good morning. I'm proud of our results and I 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 pretax Title earnings by $8 million to $10 million and lowered our adjusted pretax Title margin, by roughly 50 basis points, from 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 pulls together. I'd especially like to thank our employees and advisers, who worked tirelessly around the clock to resolve the incident and our employees in the field, who worked 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 results for the Title segment. Our Title business has continued to perform well in 2023. We delivered adjusted pretax earnings in our Title segment of $964 million and achieved an industry-leading adjusted pretax Title margin of 13.7% for the full year. This is an outstanding result, despite the persistent housing market downturn, as form 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 in 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 380 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 pretax 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 open 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 have invested approximately $300 million in 10 acquisitions. Our in-air 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 in here 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 companies automatically published over 400,000 orders to inHere, 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 significantly aids 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 has profitably grown its assets under management, before flow and reinsurance to a record $56.3 billion at December. And comprised 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 on a mandatory convertible preferred security, which will provide F&G additional capital to accelerate 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.

Anthony John Park

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 off 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 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 pretax Title earnings of $198 million, compared with $227 million for the fourth quarter of 2022 and an 11.8% adjusted pretax Title margin for the quarter versus 12.3% in the prior year quarter.
As Mike highlighted, excluding the onetime 50 basis point impact of the cybersecurity incident, our fourth quarter adjusted pretax Title margin was 12.3% and in line with the prior year quarter. For the full year, the Title business generated adjusted pretax Title earnings of $964 million, compared with $1.6 billion for the full year 2022. And a 13.7% adjusted pretax 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 2 quarters, before falling to $75 million to $85 million in the second half of the year, with anticipated Fed funds cuts of 100 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 2020, 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 1 to 3 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 and 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 2 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 partial revolver paydown in December.
As a result, FNF 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.

Question and Answer Session

Operator

(Operator Instructions) And our first question comes from Bose George with KBW.

Bose Thomas George

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

Michael Joseph Nolan

Yes. Bose, it's Mike. I would say 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, we do have maybe a little bit of a lower expense base that helps, but pretty cautious to the first quarter and a bit more optimistic, as we move through the year. Encouraged by the increase in resale open orders in January, up 7% over last year and the sequential improvement, I think, lines up well for maybe a modestly better purchase environment, as we go through '24.
But the real difference maker will just be what happens to rates. If we get better rates, as we go through the year, particularly in the second half, I think there's some upside to margins there. 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, kind of in the back half of December, I guess. So it's really going to be about the rates, but I think there is some potential for modestly better margins as we go through the year.

Anthony John Park

And Bose, maybe I'll just add on that. You mentioned 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.

Bose Thomas George

Yes. That makes sense. 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 that segment?

Anthony John Park

Yes, the way I would look at it is more your adjusted pretax. And I think for the fourth quarter, it was $22 million loss versus $20 million 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 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 valuation allowances really throughout the year, either coming -- going up or going down depending on the market and so that the tax rate may be confusing it a little bit as well.

Operator

And our next question comes from Mark DeVries with Deutsche Bank.

Mark Christian DeVries

I was hoping you could give us some more detailed thoughts on kind of -- why was the Board thought that the new $250 million investment in FG was the best use of capital here? And could you also just update us on your thoughts on kind of prioritization for capital going forward?

Anthony John Park

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 Board looking at the performance of FG, since really the date of acquisition back in June of 2020, the strong leadership, the performance, the growth in assets and thought 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 utilize that 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 3-year period and get that back in equity at the end. And so I think it was just another investment, if you will, or validation of, hey, we really like what's going on at F&G, 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, FG outperforms, Title underperforms, and that's pretty much played out. We see true value creation in that investment. And so 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 if the dividend at $525 million annually, it's M&A of $200 million to $300 million, just normal course, absent some 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 can assume that $200 million to $300 million sort of our run rate buybacks.
As you probably know, 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 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 buyback activity there.
And then, just finally, I think on the debt side of things, we feel very comfortable, other than 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 2029, I think we're in a really good shape from a debt standpoint.

Mark Christian DeVries

Okay. That's really helpful. And then, am I right in thinking that the Board's conclusion that FG is a good place to deploy capital today is completely independent of any views they may have on whether holding FG inside of FNF is the most efficient place for those shares to ultimately reside? And could you just remind us on kind of when the 5-year anniversary is on the acquisition of FG?

Anthony John Park

Yes, the 5-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 date that people have certainly referenced, and we've answered the question. I do believe to your first comment or statement 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, create value. But I don't think it's a statement around what we might ultimately do or not do with the asset going forward. So I think that's probably all I can say now unless others want to make a comment.

Michael Joseph Nolan

I would just -- I would just agree with Tony that -- that those are independent considerations and really focused on the growth opportunities. The growth has been tremendous, doubling assets in 3 years, and the expansion in channels to sell has been incredible, and we want to take advantage of that.

Operator

Our next question comes from Soham Bhonsle with BTIG.

Soham Jairaj Bhonsle

Just to follow up on that last question. I mean, I guess, from your point of view, is there any concern around if we do enter sort of a lower rate environment, how that potentially affects FG'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 FG 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.

Michael Joseph Nolan

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

Christopher Owsley Blunt

Yes. Happy to do that. 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. 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 wouldn't expect a significant drop-off on the FG side.
The Others, we did announce on our FG 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.

Michael Joseph Nolan

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 FG and it would be a significant positive impact on the Title business.

Soham Jairaj Bhonsle

Okay. Great. And then, Tony, like when I'm looking at the residential fee per file, it was up mid-teens this quarter, 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 just wanted to get your thoughts on those 2 items.

Anthony John Park

Yes. So what I have in front of me here and maybe I need to double check it, but I show that our purchase fee per file was about $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, refinances 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 5% or 6%, which I think holds up relative to what the market 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 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...

Michael Joseph Nolan

On the Commercial, and you're right, Soham, 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 expect that number to kind of reconcile to more normal, as we move back into -- as we move through to '24.

Soham Jairaj Bhonsle

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

Michael Joseph Nolan

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

Operator

Our next question comes from John Campbell with Stephens.

John Robert Campbell

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?

Anthony John Park

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 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 I think that I would expect more activity in 2024 than 2023 in terms of title agent M&A. Mike, do you want to address that?

Michael Joseph Nolan

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 order counts, but I don't have a number to give you, John, as to how much it impacted order counts.

John Robert Campbell

Okay. And I felt recognize 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 2 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?

Michael Joseph Nolan

I think it's difficult to say with certainty, but as we looked at the 2 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 kind of turn them off when you have a security event. But I would agree with you, our November open orders were off about 10% expectation, and that kind of lines up with 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 work with individual customers and to move transactions off of a couple of days, to the next couple of days and maybe into the next week. So I think that's why we say, the impact was very, very minimal. And I think customers work with us very well in dealing with the event.

John Robert Campbell

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?

Michael Joseph Nolan

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.

John Robert Campbell

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?

Anthony John Park

The light position? Is that what you asked?

John Robert Campbell

Yes.

Anthony John Park

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

Operator

(Operator Instructions) Next question comes from Mark Hughes with Truist Securities.

Mark Douglas Hughes

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

Anthony John Park

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

Mark Douglas Hughes

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?

Michael Joseph Nolan

I think -- it's Mike, Mark. I think the potential for it to continue to grow is significant. The -- 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, 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 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.

Operator

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

Michael Joseph Nolan

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.

Operator

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