F&G Annuities & Life, Inc.

F&G reported second-quarter adjusted net earnings of $85 million, or $0.65 per share. Adjusted ROE, excluding AOCI, was 8%, and adjusted ROA was 68 basis points. AUM before reinsurance increased to $74.7 billion, up 8% year over year, with retained AUM at $55.9 billion. Gross sales were $2.7 billion, including $2.0 billion of core sales and $700 million of opportunistic sales; net sales were $1.5 billion. Core retail sales were $1.8 billion, and core institutional PRT sales were $200 million. The retained fixed income yield was 4.91%, up 14 basis points from Q1 2026 and 8 basis points from Q2 2025. Management said second-quarter results were largely in line with expectations and core spread remained consistent. For alternative investments, income was $49 million, below the long-term expected return of 12%, and management indicated near-term returns may stay around 7% to 8%. For the first half, the company paid $75 million of common and preferred dividends, $80 million of holding company interest expense, and repurchased $120 million of stock, buying back 4.5 million shares at an average price of $26.44. Guidance-wise, management expects further operating expense ratio improvement to about 45 basis points by year-end 2027, a debt-to-capitalization target of about 25%, and RBC above 400%; PRT is expected to be a second-half business, targeted around $1.5 billion to $2.0 billion annually.

Connor Murphy emphasized continuity in strategy and said the company is focused on expanding retail and institutional franchises while shifting toward fee-based, higher-margin, and less capital-intensive earnings. He highlighted one of the strongest core retail quarters on record and said momentum is continuing into Q3, while also stressing that Peak Altitude strategic alternatives could unlock value that the market is not currently assigning. His tone was confident but measured, repeatedly framing the quarter as disciplined execution rather than a dramatic shift.

Mark Wiltse said Q2 results were largely in line with expectations and that core spread remained consistent as pricing discipline held. He cited adjusted net earnings of $85 million, or $0.65 per share, and said alternative investment income of $49 million was below the long-term 12% expectation but in line with the preannounced estimate; Q2 adjusted ROE was 8% and adjusted ROA 68 basis points. He also highlighted a strong capital position, with annualized interest expense of about $165 million on $2.3 billion of debt, a target of holding company cash and invested assets at 2x interest coverage, and an RBC target above 400%; the new CLO capital charges were described as manageable, with an estimated 10-point RBC impact before management action.

Analysts pressed on spread stability, buyback appetite, MYGAs, alternative investment returns, and the PRT pipeline. Murphy said spreads were broadly where expected, with some temporary Q1 items resolving in Q2, while a bit of mortality softness in the PRT book should resolve in the second half. On buybacks, he said Q2 was a good opportunity because the stock was down, but repurchases should not be assumed to continue at that pace and are not a primary capital deployment tool. On MYGAs, he said F&G is still writing some business but expects core retail to remain the priority near term; on PRT he said the pipeline has been a bit muted in the first half, with roughly 4 modest deals written, and the company still targets about $1.5 billion to $2.0 billion annually.