1. F&G reported Q2 2025 net earnings of $35 million, down from $198 million. 2. Adjusted net earnings decreased to $103 million from $139 million YoY. 3. Record assets under management reached $69.2 billion, up 13% YoY. 4. Gross sales of $4.1 billion were strong but down from Q2 2024's record. 5. Adjusted return on equity rose to 8.8%, up 40 bps YoY.
Significantly lower net earnings and adjusted earnings reflect operational challenges. Historical data shows such declines often lead to negative investor sentiment.
Financial results indicate challenges, yet AUM growth offers potential recovery signals that investors may evaluate closely.
Immediate market reaction is likely to reflect lowered earnings, but strong AUM may stabilize price soon after.
DES MOINES, Iowa, Aug. 6, 2025 /PRNewswire/ -- F&G Annuities & Life, Inc. (NYSE: FG) (F&G or the Company), a leading provider of insurance solutions serving retail annuity and life customers and institutional clients, today reported financial results for the second quarter ended June 30, 2025.
Net earnings attributable to common shareholders (net earnings) for the second quarter were $35 million, or $0.26 per diluted share, compared to $198 million, or $1.55 per share, for the second quarter of 2024. Net earnings for the second quarter included $49 million of net unfavorable mark-to-market effects and $19 million of other unfavorable items; all of which are excluded from adjusted net earnings. Net earnings for the second quarter of 2024 included $70 million of net favorable mark-to-market effects and $11 million of other unfavorable items; all of which are excluded from adjusted net earnings.
Adjusted net earnings attributable to common shareholders (adjusted net earnings) for the second quarter were $103 million, or $0.77 per share, compared to $139 million, or $1.10 per share, for the second quarter of 2024. Adjusted net earnings include significant income and expense items and alternative investment portfolio returns from short-term mark-to-market movement that differ from long-term return expectations. Please see the "Second Quarter 2025 Results" and "Non-GAAP Measures and Other Information" sections for further explanation.
Chris Blunt, F&G's Chief Executive Officer, said, "We grew AUM before flow reinsurance to $69.2 billion at the end of the second quarter, an increase of 13% from second quarter 2024, driven by strong sales. Our business is benefiting from increased scale, as our ratio of operating expense to AUM before flow reinsurance has decreased by 5 basis points from the second quarter of 2024, and we expect further improvement in the second half of the year. Our high-quality investment portfolio is performing well and credit-related impairments remain below our pricing assumption. Overall, we have had tremendous growth since FNF acquired F&G in June 2020, with a cumulative 58% increase in book value per share excluding AOCI since year-end 2020, to $43.39 at the end of the second quarter."
Mr. Blunt continued, "F&G benefits from both spread-based and fee-based earnings, including our flow reinsurance, middle market life insurance, and owned distribution strategies which leverage our position as one of the industry's largest distributors of annuities and life insurance. We remain confident that we will deliver on our medium-term Investor Day targets as we move further toward a more fee-based, higher margin, and less capital intensive business model."
Record AUM before flow reinsurance was $69.2 billion, an increase of 13% over $61.4 billion at the end of the second quarter 2024. This included retained AUM of $55.6 billion, an increase of 7% over $52.2 billion at the end of the second quarter 2024. A rollforward of AUM can be found in the "Non-GAAP Measures and Other Information" section of this release.
Gross sales were $4.1 billion, one of our best sales quarters in history, driven by record retail channel sales and strong pension risk transfer sales; our all-time record of $4.4 billion was in the second quarter of 2024.
Record retail channel sales were more than $3.6 billion, 13% higher than the second quarter of 2024; this reflects one of our best quarters for indexed annuities, as well as a record quarter for both indexed universal life and multiyear guaranteed annuity sales.
Institutional market sales were $0.5 billion of pension risk transfer sales, compared to $1.2 billion in the second quarter of 2024 with $0.9 billion of funding agreements and $0.3 billion of pension risk transfer sales. Institutional sales are opportunistic and volumes vary quarter to quarter.
Net sales were $2.7 billion, compared to $3.4 billion in the second quarter of 2024; this reflects third party flow reinsurance at varying ceded amounts in line with capital targets.
Adjusted net earnings of $103 million, or $0.77 per share, compared to $139 million, or $1.10 per share for the second quarter of 2024. Adjusted net earnings include significant income and expense items and alternative investment portfolio returns from short-term mark-to-market movement that differ from long-term return expectations.
Total F&G equity attributable to common shareholders, excluding AOCI, was $5.9 billion, or $43.39 per share, as of June 30, 2025. This reflects an increase of $0.08 per share during the quarter, including $0.62 per share increase from adjusted net earnings and other; partially offset by $0.36 per share net decrease for mark-to-market movements and $0.18 per share decrease from capital actions.
Members of F&G's senior management team will host a conference call with the investment community to discuss F&G's second quarter 2025 results on Thursday, August 7, 2025, beginning at 9:00 a.m. Eastern Time. The conference call will be broadcast live over F&G's Investor Relations website at investors.fglife.com. A replay will also be available at the same location.
F&G is committed to helping Americans turn their aspirations into reality. F&G is a leading provider of insurance solutions serving retail annuity and life customers and institutional clients and is headquartered in Des Moines, Iowa. For more information, please visit fglife.com.
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, this presentation includes non-GAAP financial measures, which the Company believes are useful to help investors better understand its financial performance, competitive position, and prospects for the future.
This press release contains forward-looking statements that are subject to known and unknown risks and uncertainties, many of which are beyond our control. Readers are encouraged to review these statements carefully.
Lisa Foxworthy-Parker
SVP of Investor & External Relations
[email protected]
515.330.3307