Fidelity National Posts Strong Gains for Third Quarter

A continued heavy dose of home-loan refinancings, along with profits from companies acquired earlier this year, helped Fidelity National Financial Inc. post strong earnings of $3.4 million, or 56 cents a share, for the third quarter.

Profit for the parent company of Fidelity National Title Insurance Co. was nearly eight times more than earnings of $446,000, or 9 cents a share, for the third quarter last year. Quarterly revenue nearly doubled to $108.1 million--the first time the company has exceeded $100 million in sales for a three-month period--from $56.9 million a year earlier.

“A very large part of our results was due to the still extremely high refinance market,” said Frank P. Willey, Fidelity’s executive vice president and general counsel.

A “positive impact” on the bottom line, he said, also came from the first full quarter of operations of the company’s major acquisition in June of Meridian Title Insurance Co. in Reading, Pa., and its subsidiary, American Title Insurance Co. That purchase nearly doubled Fidelity’s size to about $250 million in assets.

Willey said that, based on economic predictions, continued low-interest rates will keep the refinancing market strong in California through most of next year. The resale market will remain sluggish, he said.

“There’s still an awful lot of properties and refinancings available,” he said.

Real estate closings with Fidelity title insurance rose 58% to 82,645 for the third quarter from 52,175 closings for the same period last year. New title orders opened rose 86% to 147,416 for the three-month period from 79,246 a year earlier.

For the first nine months, Fidelity earned $10.5 million, nearly triple its $3.6-million profit for the same period last year. Revenue rose 64% to $261.3 million from $159.2 million.

Early this month, Fidelity said it had reached a tentative agreement to acquire Security Title & Guaranty Co. in New York. Willey said the deal could close in the final quarter but will more likely be completed in the first quarter next year. The acquisition will add about $46 million in cash and investments to Fidelity’s balance sheet.

Fidelity issues title insurance through subsidiaries in 48 states, the District of Columbia, Puerto Rico and the Virgin Islands.