Fidelity National Posts Record Profit in 1991

Riding the wave of refinancings, title insurer Fidelity National Financial Inc. said Wednesday that it posted record revenue and profit in 1991, earning $6.2 million on revenue of $220.6 million.

Last year’s net income, which amounted to $1.73 per share, is 19% higher than the $5.2 million, or $1.46 per share, earned in the Irvine-based company’s previous fiscal year, which ended Oct. 31, 1990.

Last year, the company changed its reporting period from fiscal to calendar year to conform to tax and regulatory reporting periods.

Fidelity’s revenue increased 20% last year from its fiscal-year revenue of $183.3 million.

The decline in interest rates and resulting boom in mortgage refinancings were not the only factors boosting the company’s performance, said William P. Foley II, Fidelity’s president and chief executive.

The company increased its market share by expanding existing branch networks and acquiring other title companies and continued to keep a lid on costs, he said.

The per-share earnings reflect a 10% stock dividend paid Aug. 1, but it does not reflect a 4-for-3 stock split, to be awarded March 31. For comparative purposes, earnings per share after that split would amount to $1.30 per share last year and $1.10 per share in fiscal 1990.

Fidelity was put together seven years ago in a leveraged buyout of several title insurance companies. The company moved its headquarters to Irvine from Scottsdale, Ariz., in October, 1987.

Foley and other executives have long attempted to secure investor interest in the company’s stock, mostly to little avail. In the past 12 months, the stock had traded as low as $9.75 a share, but it climbed steadily through last fall. Recently, the stock has won favor among some industry analysts, who have been recommending it to investors.

Fidelity’s price jumped $8 a share in the first two months this year to $25.25 per share. It has slid a bit since, closing Wednesday at $22.25 a share, down 62.5 cents per share from Tuesday’s closing price on the New York Stock Exchange.

The company, through its subsidiary, Fidelity National Title Insurance Co., issues title insurance and performs other title-related services in 33 states and the District of Columbia.