But we believe regardless, we’re creating real value and highlighted by the AEL deal, but we feel like value’s being created, F&G actually throws off a lot of cash. Currently, we’re reinvesting that cash in sales growth because we are getting great returns from that and continuing to build value in our investment. But keep in mind you could really realize that cash flow and I think Wendy said something like $800 million annually is being thrown off from the block currently, and that just grows over time. But we could realize that value at any time if we wanted to constrain sales. And at this point, and that’s not what we want do. We want to continue to create value in that business and that’s what we’re doing. So in terms of optionality, we’ve talked about it before we could hold, we could spend now, we could spend later in a tax free manner, we could sell, we could merge it with a company, we could reinsure a block.
But at this point, as I mentioned earlier, the Board’s very pleased with the performance and the value that we’re creating and actually we’re getting cash flow through the dividend that F&G’s paying. So it’s been a real positive.
Soham Bhonsle: Okay. Great. Yes. And then I guess on title, Tony, if I sort of take a look at your residential business this quarter, the 230,000 orders and maybe just run rate that on an annualized basis, you get to somewhere around 9%, 9.50% on orders. And you did a 15.8% margin this quarter. So I mean, assuming that commercial sort of troughs this year, it seems like opens are better as well, so that’s what it’s suggesting. Is there any reason that margins next year can’t get to sort of the mid to high-15s if we sort of get some recovery on the resi side, obviously understanding there’s going to be quarterly variances here.
Mike Nolan: Yes. This is Mike. I would say, if we get a better revenue environment in 2024 in a more normalized levels, let’s say that the 15% to 20% that we’ve talked about in the past is certainly what we’d expect. We’ve done a lot of work on the expense side and I think we’re well prepared to take advantage of an improving market. I think the second quarter’s a good example of that with the margin lift we got off the first quarter of 580 basis points. It was really just – we got a commercial market that that was good in the second quarter, and then we took advantage of an improving residential environment sequentially, and we had the expense discipline to do that. So as we go into 2024, we’ll be well prepared on the expense side and it’ll really be about how well – well, two things.
One, commercial holding up and how well the residential market rebounds. On this point, I was looking at when the last time rates were this high, we got 7% interest rates, and that was back in 2001 and in 2000 rates were 8% and those were two of the weakest transactional markets. I kind of remember in my career. But then rates came down to 6% in 2002 and kind of stayed there around the 6% number for the next three or four years and the market really grew tremendously, both in terms of refinance and resale activity. I’m not saying that will happen necessarily. But if we get lowering interest rate environment as we move forward over the next 12 months to whatever months, I think the opportunity for us is very strong.
Soham Bhonsle: Great. Thanks a lot guys.
Mike Nolan: Thanks.
Operator: Thank you. Our next question comes from the line of John Campbell with Stephens Inc. Please go ahead.
John Campbell: Hi guys, good morning. Congrats on a great quarter.
Mike Nolan: Thanks, John.
Tony Park: Thanks, John.
