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Fidelity National Financial Inc  (NYSE:FNF)
Q4 2018 Earnings Conference Call
Feb. 14, 2019, 1:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to the FNF 2018 Fourth Quarter Earnings Call. At this time, all participant lines are in a listen-only mode. Later, there will be an opportunity for your questions. Instructions will be given at that time. As a reminder, today's conference call is being recorded.

I'd now like to turn the conference over to Dan Murphy. Please go ahead.

Daniel Kennedy Murphy -- Senior Vice President and Treasurer

Thank you. And thank you for joining us for our fourth quarter 2018 earnings conference call. Joining me today are our Chairman, Bill Foley; CEO, Randy Quirk; President, Mike Nolan; CFO, Tony Park; and EVP, Brent Bickett.

We'll begin with a brief strategic overview from Bill. Randy will review the title business, and Tony will finish with a review of the financial highlights. We'll then open the call for your questions and finish with some concluding remarks from Bill Foley.

This conference call may contain forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our expectations, hopes, intentions or strategies regarding the future, are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future financial and operating results, and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties, which forward-looking statements are subject to include, but are not limited to, the risks and other factors detailed in our press release dated yesterday and in the statement regarding forward-looking information, risk factors and other sections of the company's Form 10-K and other filings with the SEC.

This conference call will be available for replay via webcast at our website at fnf.com and will also be available through phone replay beginning at 3.00 PM Eastern Time today, through February the 21st. The replay number is 800-475-6701, and the access code is 462490.

Let me now turn the call over to our Chairman, Bill Foley.

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

Thank you, Dan. The fourth quarter was a solid finish to a strong year for our title business, as we generated adjusted pre-tax title earnings of $258 million and a 14.4% adjusted pre-tax title margin. For the full year 2018, we generated adjusted pre-tax title earnings of nearly $1.1 billion, and an adjusted pre-tax margin of 14.8%. I'll let Randy go into more details on the title business.

We continue to work through the regulatory process for the Stewart Information Services acquisition, and are engaged in the Second Request related to the FTC's HSR regulatory review of the transaction. Unfortunately, the FTC informed us that no work related to the regulatory review occurred during the recent roughly month long government shutdown. Also on January 31, 2019, New York State Department of Financial Services provided written notice of its disapproval of FNF's application to acquire control of Stewart Title Insurance Company, a New York domiciled title insurance underwriter, that is licensed only in the State of New York.

We have several courses of action that we are evaluating, which may -- which will include a discussion with the New York Department -- State Department of Financial Services, to better understand these concerns and respond to the letter. We also have other attractive alternatives available. We continue to believe the Stewart acquisition will create meaningful long-term value for our shareholders.

On the capital allocation front, we used $82 million of our December -- to pay our December common stock cash dividend of $0.30 a share. We also repurchased 630,000 shares of stock for approximately $20 million during the fourth quarter. Additionally, more than $150 million in combined underwriter and non-underwriter dividends were paid up to the FNF holding company level in the fourth quarter. The net result was we ended the year with 550 million in available holding company cash.

I'll now turn the call over to Randy to discuss the title business.

Raymond R. Quirk -- Chief Executive Officer

Thank you, Bill. We generated adjusted pre-tax title earnings of $258 million, a $15 million or 5% decrease from the fourth quarter of 2017. And our adjusted pre-tax title margins were 14.4%, a 30 basis point decline versus the prior year. We did experience some softness in the residential purchase market in the fourth quarter, as purchase orders closed declined by 6% versus the prior year and 8% on a per day basis. Response to that slowdown in the purchase market, were reduced staffing in our field operations by approximately 564 positions or 5% during the fourth quarter. We ended 2018 with approximately 1,050 or 9% fewer employees in our field operations than at the end of 2017.

As we enter 2019, we are optimistic that the strong economy, relatively stable mortgage rates, potentially slower home price appreciation, and the possibilities of increased residential supply, will provide the backdrop for a restart of the strength in the residential purchase market that we saw for much of 2018.

For the fourth quarter, total open orders averaged 6,000 per day, with October at 6,500 November at nearly 6,200, and December at a seasonally slower 5,300 per day. Purchase orders opened and closed were down 7% and 8% respectively on a daily basis, and refinance orders opened and closed declined by 32% and 35% respectively on a daily basis, versus the fourth quarter of 2017.

For the month of January total open orders were nearly 6,800 per day, with the first two weeks plus of the month below that -- at 6,300 orders per day in the last two weeks, much stronger at 7,300 total orders open per day.

Purchased open orders per day declined by 6% versus January of 2017. Our refinance orders open per day decreased 16% versus the prior year. Our direct business generated a 1% increase in direct title premiums versus the fourth quarter of 2017, while the agency revenue declined by 3% versus the prior year. Direct revenue benefited from a 16% increase in the fee per file, primarily driven by the 69% of closed orders being purchased, related to 61% in the prior year, and a 13% growth in total commercial revenue. This was offset by a 16% decrease in total closed orders, driven primarily by the 6% decline in closed purchase orders, and the 34% decline in refinanced closings versus the fourth quarter of 2017.

Total commercial revenue of $324 million was a quarterly company record, and a 13% increase over the fourth quarter of 2017, driven primarily by a 6% increase in closed commercial orders and a 6% increase in the commercial fee per file. Commercial orders open declined by less than 1% in the fourth quarter versus the prior year. For the full year 2018, total commercial revenue was a record $1.1 billion. We expect another strong performance from our commercial operations in 2019.

Let me now turn the call over to Tony Park, to review financial highlights.

Anthony J. Park -- Chief Financial Officer

Thank you, Randy. We generated nearly $1.7 billion in total revenue in the fourth quarter, with the title segment generating all but the $38 million of revenue in our corporate segment.

Net earnings were $44 million, which included $144 million in realized losses due to the mark-to-market accounting treatment of equity and preferred stock securities in our investment portfolio. Adjusted net earnings were $175 million or $0.63 per diluted share. Excluding realized losses of $135 million due to that mark-to-market accounting treatment of equity and preferred stock securities in our investment portfolio, the title segment generated nearly $1.8 billion in total revenue for the fourth quarter, a 3% decrease from the fourth quarter of 2017.

Direct premiums increased by 1% versus the fourth quarter of 2017, and agency revenue declined by 3% versus the prior year. Personnel costs declined by 3% and other operating expenses fell by nearly 1%. All in, the title business generated a 14.4% adjusted pre-tax title margin, a 30 basis point decrease versus the fourth quarter of 2017.

Interest income of $52 million, was a $14 million increase over the prior year, as we continue to see the positive impact of higher short-term interest rates on the interest we earn on the client exchange funds we hold in our 1031 exchange business, the reinvestment of proceeds from maturing fixed income securities and from cash and short-term investments.

FNF debt outstanding remained at $836 million for a debt-to-total capital ratio of 14%. Our claims paid of $58 million were $2 million higher than our provision of $56 million for the fourth quarter. The carried reserve for claims losses is currently $44 million or 3% above the actuary central estimate, and we continue to believe that 4.5% of title premiums is an appropriate provision rate.

The tax rate in the fourth quarter was approximately 26%. The tax rate is always a bit of a moving target throughout the year, and we currently expect a tax rate of approximately 25% for 2019.

Finally, our investment portfolio totaled more than $4.8 billion at December 31. From a regulated standpoint, we have $1.4 billion in statutory reserves, $1.5 billion in regulated cash and investments, $820 million in secured trust deposits, and nearly $90 million in deferred revenue at our Home Warranty company, for a total of more than $3.8 billion in regulated cash and investments.

From an unregulated perspective, we have $550 million of unregulated cash as of December 31. There is $250 million in cash and investments at ServiceLink and other subsidiaries, and $140 million in equity method investments, all of which are restricted primarily by minimum working capital or other regulatory requirements.

Let me now turn the call back to our operator to allow for any questions.

Questions and Answers:

Operator

Thank you. (Operator Instructions). Our first question is from the line of Mark DeVries from Barclays. Please go ahead.

Mark DeVries -- Barclays -- Analyst

Yeah, thanks. If you could address, could you discuss what the issues are that the New York DFS has raised and how you might look to address their concerns? And if you can satisfy them? Just talk through kind of what paths forward you have?

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

Well, the lady who is the insurance commissioner has been no friend of the title insurance business in New York. On her last day in office, signed a declination. We can reapply and we think we have good reason to get an approval. We can certainly sit down with them and talk about alternatives, which could include a number of different paths, which I'd prefer not to go into, because we're still evaluating different alternatives.

But the transaction is not blocked by the New York State Insurance Department's lack of approval of the transfer of the common stock of -- we call it Stewart Title of New York. It's a single state underwriter that only does business in that state, and it doesn't stop our transaction, frankly. What we need to do, is get the FTC to keep on following through and need to show them why this is a good transaction, not only for Stewart Title, but for FNF, but also for the consumer. And that's where we are looking -- that's really our focus right now. So we're not totally concerned about New York, to be honest with you.

Mark DeVries -- Barclays -- Analyst

Okay. And any guidance you can provide us on what this could mean for timing of the ultimate closing of the deal?

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

We are very close right now to finalizing our situation with the FTC. We have until October of this year. And one interesting fact that has developed, as you know is our cash on hand at the holding company is now $550 million and growing. Well at this point, we really don't have to borrow any money to buy Stewart Title.

So we're holding Stewart Title together, Randy and Mike and Roger are out doing townhall meetings, holding the staff together. The Stewart Title staff are very anxious for this transaction to conclude. So we're actually very encouraged about Stewart Title employee reaction to the transaction, and frankly the longer it takes, the more money we have on hand and we won't have to borrow any money and we can then engage in our stock repurchase program. I am sure you noticed that we did a very modest increase in the dividend, but we've been holding back the repurchase of shares and really doing much with the dividend for over a year -- for the last year, because trying to gain cash for Stewart Title. So every kind of --

every kind of negative news situation is always some good news. And so I'm frankly not discouraged.

Mark DeVries -- Barclays -- Analyst

Okay, great. And then finally, can you just help us think through kind of the margin impact from some of your expense initiatives late in the year, kind of when were the headcount reductions done and what could that mean for margin as we look into the first half of 2019?

Raymond R. Quirk -- Chief Executive Officer

Sure, this is Randy. We really saw this downturn on the purchase side coming in the third quarter. As you know, we eliminated about 250 positions in the third quarter. As we went into the fourth quarter, we continued in October, we eliminated 286 positions. In November, 181 positions; in December, 100 positions. So we worked it all the way through the fourth quarter. And then in January, we continued and we were down over 130 positions. So it's about 700 reductions in the last four months. And if you include Q3, that's pushing up toward 900. We're down a 1,000 year-over-year.

So the impact in the first quarter, it will roll into the second quarter, because this has been such a constant initiative. But we have the productivity numbers back up on the opening side, that we've been looking for. The January orders came in at 6,800 per day, came in really at September-October levels. So we've had a nice rebound in that regard. So we know it will have a margin impact. We haven't calculated that yet. But we're looking for a strong finish to the first quarter and will probably capture most of that in the second quarter.

Mark DeVries -- Barclays -- Analyst

Okay. Thank you.

Operator

Next we'll go to the line of Bose George with KBW. Please go ahead.

Thomas McJoynt -- KBW -- Analyst

Hey guys, this is Tommy McJoynt on for Bose. I want to ask about the title segment escrow line. So it seems like it came in a bit weaker than we expected, given kind of its relationship to the declining premium. Is there anything you can call out there or any sort of run rate kind of read across we can get from that?

Anthony J. Park -- Chief Financial Officer

Yeah, this is Tony. Here is what I'd say, the commercial premiums were so strong that they sort of skew that line item in title premiums, and so you don't see the fall off, the 6% fall off on the residential purchase side. The best way to look at it might be to combine title and escrow into one line item, back out the total commercial and you get to residential. And then you can see kind of a 7% or 8% decline, which is pretty consistent with what we saw in terms of the purchase market falloff.

Thomas McJoynt -- KBW -- Analyst

Okay, thanks. And then just -- that strength in commercial this quarter, was it like more particularly lumpy than what you've seen? I understand that certain big deals can can drive big swings, but is there anything really unique to call out this quarter?

Mike Nolan -- President

This is Mike. I don't know that it was unique. I mean, it was a very strong quarter, driven by national commercial revenue, which was up 15%. But our local commercial was also up 10%. So really strong improvement in both areas. There were strengths across multiple segments, office, industrial, multifamily, and probably the only thing that was a little bit different is we had bit more transactions in the multi-site space. So that did help drive up the national segment a bit.

Thomas McJoynt -- KBW -- Analyst

Okay. And then just last one, seems like you got a nice acceleration as we moved in the back half of January. Any comment on kind of where those trends went, as we started heading into February?

Mike Nolan -- President

Well, sure. The first two weeks of -- as I said earlier, the first two weeks of January, we were opening up 6,300 orders per day. The last two weeks of January, we were opening up 7,300 orders per day, and that's holding -- or going into -- really in one week into February. So we expect that to sort of be the run rate and to grow from there. Our trajectory coming out of the low point of the end of December in 2019, is actually -- we are coming out more quickly than we did in 2018, just at a bit of a lower level. So we believe that will that continue and March really is the month, when you get the spring buying season. We're little bit into a more traditional January and February here in 2019, without the benefit of a huge -- but we do have a consistent refinance business. But this looks a little bit more traditional than what we've seen for the last couple of years, particularly in the January-February months.

Thomas McJoynt -- KBW -- Analyst

Makes sense. Thanks guys.

Operator

Next we go to the line of Jason Deleeuw with Piper Jaffray. Please go ahead.

Jason Deleeuw -- Piper Jaffray -- Analyst

Yes, thanks for taking the question. Wondering on the investment income, there was another step-up in the title segment to $48 million, it was up $2 million quarter-over-quarter, and there was a Fed rate hike in December. So can we expect further gains in net interest and investment income and kind of any help in thinking in terms of the magnitude, as we think for the full year 2019?

Anthony J. Park -- Chief Financial Officer

Sure, Jason, this is Tony. You're right, the Fed increases have helped the entire portfolio. Certainly on the 1031 exchange side, as well as reinvestment of our fixed maturities and cash and short-term that we're holding. Overall, we had $52 million in interest income in the fourth quarter, and I would expect kind of gradual increases, probably a couple of million dollars in Q1. Q2 , we generally get the benefit of some dividends on some title plant ownerships of about $4 million. So I would expect that to be closer to $60 million, and then drop back down maybe to $56 million in the third quarter and $58 million in the fourth quarter. So there should be a nice strong run rate increase of, call it, close to $50 million in 2019.

Jason Deleeuw -- Piper Jaffray -- Analyst

Great, thank you for that. And then, I'm not sure to the extent that you -- you can respond. But I'm just wondering, I think there are 28 states that have approved the deal already. Is there any color you can give us in any like key states that have approved, and has there been any communications or any conversations with any of the states that have approved?

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

Well the reason we did the process and filed our applications and communicated where we had meetings, where we were asked to have meetings, and explain the the Stewart transaction. In most -- in many of those states, Stewart is a small competitor, and so the approval process is fairly straightforward. Really the the larger states are, Texas and New York, and of course in the FTC. We're making -- while we aren't making progress with New York right now, we intend to make more progress. But with Texas, we're making good progress.

And this is really not an anti-competitive acquisition. This is an acquisition of putting two companies together. The one company has retrenched over the last several years, and it's a chance for the people of Stewart Title, the employees that are working there, to really affiliate with the largest company in the country and to really have a lot of good growth prospects. So it has just taken a long time. We knew it take a -- we knew it would take a long time. But we're still in there and the government shutdown, as I mentioned, didn't help us. We lost time and then they have the -- the FTC has to get back to work, and then they have to put it on the top of the file -- on top of the files they are looking at, and then they have to ask, is it just -- we're a little frustrated and it's tedious. But we're not giving up. We're going forward.

Jason Deleeuw -- Piper Jaffray -- Analyst

Good to hear. Thank you.

Operator

Next we'll go to the line of John Campbell with Stephens. Please go ahead.

John Campbell -- Stephens -- Analyst

Hey guys, just one more on the deal review in New York. I mean, you guys have obviously put the price collar out there. I think it was a $75 million to $225 million of potential rev loss but I'm guessing. One of the past you guys could take is simply I guess divest some assets there. There is a worst-case scenario in New York, I mean would you be able to stay in that range?

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

Yeah, I don't think we recover -- we don't recover 100%. Brent, what's our recovery rate on revenue?

Brent P. Bickett -- Executive Vice President, Corporate Strategy

First $75 million, there is no reduction. Between $75 million to $225 million the divested revenues. It's pro rata to $4.50 a share, maximum reduction the purchase price.

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

So we have some downside protection. That's why we are not overly concerned. And then certainly, the divestment is one idea. I'd really rather not go into the various paths that we have, because we have a lot of them and one state is not going to slow this thing down. It just isn't going to happen.

John Campbell -- Stephens -- Analyst

Got it. I don't want to pry too much and I don't know if you guys can even talk to this. But are the regulators looking more at direct share? Is it a combination of directing agency?

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

We're not sure what New York was looking at. The FTC is interested in the commercial business. The direct share is not -- direct share and agency share is not a concern to them, at this time. But it's more of the commercial business and how we would ensure that they're viable competitors in the commercial business.

Stewart Title actually really isn't a strong competitor of ours. On the large commercial transactions, they reinsure through third parties most of the risks. So again, there is an explanation process. We are a very small industry that's very specialized, and it just is -- it is a tedious process, and we're just trying to be patient, and we (inaudible) process.

John Campbell -- Stephens -- Analyst

Okay, thanks for that detail. Last one from me, on the 5% reduction of field support staff, is there a way to size up that fixed cost savings? And then secondly, as we get back in the spring selling season, or maybe the heart of the selling season, do you need to staff that back up?

Raymond R. Quirk -- Chief Executive Officer

A lot of our decisions with staffing revolve around our productivity numbers in our metrics. We are not likely to be staffing up when we get into the spring time, we'll hold the line as best we can. When we really see significant volume increase, that's when we'll start staffing up again. So I don't know if that answers your question.

Anthony J. Park -- Chief Financial Officer

But maybe a couple million dollars a month John in run rate savings. So, we would expect as we work our way through -- if we stay at these headcount levels, which of course we don't, because of dynamics in the business. But if we did, that's the kind of savings you'd realize.

John Campbell -- Stephens -- Analyst

Okay. Thanks for the color guys.

Operator

Next we go to line of -- one moment here. Apologize. I'm just having some technical difficulties here. One moment please. Gentlemen, I apologize for the delay. One moment here. All right we move onto the line of Mark Hughes with SunTrust. Please go ahead.

Mark Hughes -- SunTrust -- Analyst

Okay. This question will be worth the wait.

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

Hi Mark.

Mark Hughes -- SunTrust -- Analyst

Or maybe not. The residential fee per file, can you give us some sense of how you're progressing in terms of purchase versus refi? Did you see a deceleration in purchase or just any sense on that front?

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

Well, we did see a deceleration on purchase, Q4 we had mentioned that. The mix on the opening side still is -- ranges -- it's a little bit of a moving target by 67% to 70% on the purchase side, as I had mentioned earlier, the refinance has actually been very consistent over the last six or seven months, and we even see a little bit of an uptick there in the first quarter with the interest rates settling down a bit.

Mark Hughes -- SunTrust -- Analyst

(Multiple Speakers).

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

It was in that same range and of course, it does impact the fee per file, and I think where we're running at about $2,800.

Raymond R. Quirk -- Chief Executive Officer

Yeah $2,800 total, which includes everything. If you just look at residential, we did come off a little bit in Q4, looks like from about $2,000 to about $1,955, well ahead of what we did in the fourth quarter of 2017. But that could just be where the orders were, size the deal that sort of thing.

Mark Hughes -- SunTrust -- Analyst

The New York Department, excuse my ignorance on this, do they have the absolute say on the New York subsidiary, the Title of New York, or if the FTC in other states give their approval, can they be overruled in anyway?

Raymond R. Quirk -- Chief Executive Officer

No, they have the absolute right to approve or disapprove the transfer of the Stewart Title Insurance Company of New York Stock to a purchase. It's a single state underwriter. So it's only New York. And it's one state and the rest of the states -- for the rest of the states, New York is not relevant.

Mark Hughes -- SunTrust -- Analyst

Very good. Thank you.

Operator

All right. Next we move to the line of Mackenzie Aron with Zelman. Please go ahead.

Mackenzie Aron -- Zelman and Associates -- Analyst

Thanks, good afternoon. First question on the agency trends, it looks like its continued to underperform (inaudible) on the direct revenue. Just curious if there's anything driving that specifically, that you can call out?

Mike Nolan -- President

Hi Mackenzie it's Mike. I would say the agency performance has been very-very steady, very stable. The difference in revenue primarily relates to the fact that we don't have as much commercial business coming through agency. So when you look at the fourth quarter, agency was up 3%, direct was essentially flat. The difference was that commercial revenue inside the directs.

Mackenzie Aron -- Zelman and Associates -- Analyst

Okay, that's helpful. And then on the direct purchase trends continued to outperform some of your peers during the quarter. Curious if you could quantify if there's any M&A benefit going on there or anything geographically you can call out on the direct purchase closing?

Mike Nolan -- President

No, there's really no M&A influence. We've been pretty consistent with the mix in the volume and the direction of the volume. So there's nothing unusual that doesn't play there.

Mackenzie Aron -- Zelman and Associates -- Analyst

And anything by geography that you would call out?

Mike Nolan -- President

It's really across the board; the West, California, has probably fallen off a little bit more than the Midwest and the East in terms of quarter-over-quarter performance. But purchase is still going to be strong, as we get into the back end of Q1 and roll out through the rest of the year. Geographically, I don't see anything that's too specific there.

Mackenzie Aron -- Zelman and Associates -- Analyst

Okay, great. Thank you.

Operator

And our next question is from the line of Chris Gamaitoni from Compass Point. Please go ahead.

Chris Gamaitoni -- Compass Point -- Analyst

Thanks for taking my question. With the headcount down 9% year-over-year, I'm trying to kind of walk through the delta with the personnel expense, and the total unit(ph)only down 3%. Was there a large severance cost influence in the quarter?

Raymond R. Quirk -- Chief Executive Officer

No severance costs. We have had some health insurance increases that have trended. I think it's probably consistent with other businesses as well. But we saw, I think $5 million increase from from the third quarter to the fourth, and I think year-over-year fourth quarter to fourth, I think we are up about $7 million in health insurance. So that's one thing that I noticed that's kind of unusual. But beyond that, I didn't see anything.

Chris Gamaitoni -- Compass Point -- Analyst

That's very helpful. And you mentioned you're almost at the point where you don't need to borrow to complete Stewart, do you have any outlook on the potential for cash generation to the parent over the next 12 months?

Raymond R. Quirk -- Chief Executive Officer

Yeah. So $550 million on balance sheet at the end of the year, we're probably upstream close to a $1 billion, some of that is estimated, and some of that is locked in because of our insurance company subsidiaries, we kind of know that. But $1 billion in total cash would upstream in 2019. Uses of that obviously are our common dividend of $350 million or so, and and some interest expense, so call it $400 million. So kind of a net $600 million before you take into account buybacks and Stewart Title and other uses.

Chris Gamaitoni -- Compass Point -- Analyst

And is the plan on buybacks that once Stewart -- assuming it does close, you would try to take shares out -- reduce that share count?

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

Absolutely. We will have -- we will have the cash. I think after Stewart Title, you will see us as a dividend payer, a stock repurchase and a very efficient operator of the largest business, title business in the world.

Chris Gamaitoni -- Compass Point -- Analyst

Perfect. Thank you so much.

Operator

And next, we go to a question from Geoffrey Dunn with Dowling & Partners. Please go ahead.

Geoffrey Dunn -- Dowling and Partners -- Analyst

Thanks. First Randy I apologize, in your commentary about January, did I hear 6,300 first half, 7,300 back?

Raymond R. Quirk -- Chief Executive Officer

Correct.

Geoffrey Dunn -- Dowling and Partners -- Analyst

And did you have any comment on early February?

Raymond R. Quirk -- Chief Executive Officer

February was rolling at about the same as the back half of January.

Geoffrey Dunn -- Dowling and Partners -- Analyst

Okay. And then, Tony, with respect to that billion dollar dividend flow, what do you think the rough breakdown is between regulated and unregulated?

Anthony J. Park -- Chief Financial Officer

It's a little stronger on the regulated side, because we had a tax benefit that flowed through the regulated entities that -- a little bit unusual for close to $150 million or so. Typically though, it's more like 50-50.

Geoffrey Dunn -- Dowling and Partners -- Analyst

Okay. And then I guess, Bill or Randy, do you have any thoughts on the States Title acquisition, a tech start-up coming in and buying one of the bigger regional players?

Mike Nolan -- President

Geoff, it's actually Mike. I think it's indicative of the fact that they've recognized that their tech start-up idea might not actually work so well in the title industry. And they bought a traditional title operation, and I think they see that that's really probably the better way to go, in terms of trying to build a footprint in the industry.

Geoffrey Dunn -- Dowling and Partners -- Analyst

Meaning that the tech idea doesn't work? Or you need an existing platform to try to leverage the technology into?

Mike Nolan -- President

I think it's recognition that the tech idea might not be successful in the title industry. As you know, Geoff, in order to be successful, you got to build relationships with realtors and loan originators, and attorneys and developers, and you need to have people to do that in communities across the country. And I think that's what lacks -- what's lacking in their tech idea.

Geoffrey Dunn -- Dowling and Partners -- Analyst

Okay. Thanks.

Operator

(Operator Instructions). And there are no further questions. You may continue.

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

Thanks very much. The fourth quarter was a good finish to a strong year for our title business. We continue to work through the regulatory process for the Stewart Information Services acquisition and continue to believe the Stewart acquisition will create meaningful long-term value for our shareholders. Thanks for being with us today.

Operator

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Teleconference. You may now disconnect.

Duration: 37 minutes

Call participants:

Daniel Kennedy Murphy -- Senior Vice President and Treasurer

William P. Foley, II -- Non-Executive Chairman of the Board, Executive Chairman of Black Knight Financial Services

Raymond R. Quirk -- Chief Executive Officer

Anthony J. Park -- Chief Financial Officer

Mark DeVries -- Barclays -- Analyst

Thomas McJoynt -- KBW -- Analyst

Mike Nolan -- President

Jason Deleeuw -- Piper Jaffray -- Analyst

John Campbell -- Stephens -- Analyst

Brent P. Bickett -- Executive Vice President, Corporate Strategy

Mark Hughes -- SunTrust -- Analyst

Mackenzie Aron -- Zelman and Associates -- Analyst

Chris Gamaitoni -- Compass Point -- Analyst

Geoffrey Dunn -- Dowling and Partners -- Analyst

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