Mark Seaton: Really what drove the drag was we had a little bit less revenue at Endpoint and a little bit more expenses at both Endpoint and kind of our instant decision for first transactions. We’re making a lot of progress with both. Would the drag should be less going forward just because Q1 is typically the lowest revenue? So just the fact that our revenue at the title segment is going to improve from here on out. That’s just because of the math is going to reduce the drag from here on out.
Terry Ma: Got it. That makes sense. Thank you.
Mark Seaton: Thanks, Terry.
Operator: And the next question comes from the line of Soham Bhonsle with BTIG. Please proceed with your question.
Soham Bhonsle : Hey, good morning, guys. Hope you all doing well?
Ken DeGiorgio: Good morning.
Soham Bhonsle : Mark I just want to dig a little bit on the margin guide. So, if I sort of take what you’re implying right sort of flattish margins for this year that would imply margins for every quarter sort of going forward are just I guess higher from last year to hit that double-digit margin. So can you just walk us through some of the moving parts? I think you just mentioned some of the drag stuff. But like just a little bit more detail there would be helpful.
Mark Seaton: Yes, sure. So just with our margin outlook there’s a few things going on. I mean, just to reiterate, I mean, we think that the margins will be comparable to last year. It’s still early in the year. There’s still a lot of things that are moving around. On the positive side, we’ve got — we’re off the bottom now. We just talked about this. We’ve got open orders up and that’s going to bode well for later in the year. So, we finally feel like after two years of having negative growth, we’re bumping up off the bottom and we’re going to expect growth in our core businesses of purchasing commercial. We’ve got tailwinds with respect to the loss rate. We’ve got tailwinds with respect to a lot of the cost-cutting efforts we did last year and then we got headwinds.
We’ve got — we’re going to have about $20 million more of depreciation this year, because of some of the capital expenditures we’ve made in the past and some of these projects are going live. So that’s going to be a headwind. Some of our benefits and 401(k) matches and things like that kind of get reset. And then we just talked about earlier on the call that we have some headwinds for investment income. So I think that for the — I think the second quarter is going to be tough to beat, where we were a year ago but we expect that the margins second half of the year will be kind of better than we had last year. And when you mix that all together we should be in line with last year.
Soham Bhonsle: Okay. Got it. And then just on investment income. So you sort of noted non-interest-bearing deposit main moving out of FA-trusted third-party banks. Should we – I guess in the guide that you gave the 120 I believe, are you sort of baking in a continuation of that? Or do you sort of see more normalization there after this quarter?
Mark Seaton: Yes. Thanks for that. First of all, they’re interest-bearing accounts they’re going to these third parties. I just want to correct that. And in our guide here we don’t – we assume that 30% mix stayed the same. So that’s a risk. I mean if the 30% keeps climbing I mean that’s going to be a risk to our $120 million to $125 million guide. But we also are kind of in the very early stages of coming up of plans to kind of reverse that trend by paying more at the bank. So I think assuming a 30% mix of third-party does a reasonable assumption but it could go higher lower depending on what happens in the market.
Soham Bhonsle: All right. Thanks, guys.
Mark Seaton: Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Mark Hughes with Truist Securities. Please proceed with your question.
Mark Hughes: Yes, thank you. Good morning. Maybe more detail you can discuss on the potential regulatory changes, if buyers are not required to purchase the title insurance but it’s bundled in with the mortgage. How do you view that as a competitive evolution in the business?
Ken DeGiorgio: Yes. And I assume you’re talking about Mark the CFPB request for information for prohibiting lenders from passing through the cost of title. I mean – this has been – this was tried before by HUD and it didn’t get off the ground. I think probably a big reason for that and I think it will be a big reason for why I probably won’t get off the ground this time around either is the lack of transparency. So I think policymakers prefer that borrowers know exactly what they’re paying for because ultimately borrowers will still pay for lenders, title insurance policies. It will just be wrapped up into the interest rate or loan level price adjustments or what have you. So I don’t think ultimately it will take off. But if it does, I think the value proposition of Title Insurance to lenders is well established.
And I think again, we have to keep a close eye on developments but I don’t think it will ultimately have a significant impact on the lender side of our Title Insurance business or the industry for that matter.
Mark Hughes: Thank you for that. The commercial ARPO, you suggested that was an indication that price discovery is progressing. Was there – is there a mix shift to part of that bigger deals started happening because of the price discovery? Is that the idea?
Mark Seaton: Yes. The bigger deals are always a component that we look at. We had four what we call mega deals with premium over $1 million in the most recent quarter. So that always has an effect on the commercial ARPO. But as a general statement we think that after – again after seeing declines in commercial ARPO for several quarters now. It’s finally leveled off which is a good sign. It kind of mirrors the bottoming we’ve seen on the residential side.
