F&G beat Q2 EPS estimates as new CEO Connor Murphy outlines a strategy for a stabilizing rate environment. Sales of fixed-indexed annuities fell 8%.
F&G Annuities & Life (FG) reported adjusted net earnings of $1.12 per share for the second quarter, beating the analyst consensus of $1.05. Adjusted net earnings came in at $141 million, up from $132 million a year earlier. Net investment income rose to $1.43 billion from $1.38 billion, helped by higher yields on the fixed-income portfolio. Total assets under management grew 5% year over year to $115 billion.
The quarter was the first under new CEO Connor Murphy, who took over from Chris Blunt in July. Murphy, previously the company's president, said F&G is focused on expanding distribution and managing the spread business in a rate environment that has stabilized after last year's rapid declines.
Sales of fixed-indexed annuities, the core product line, totaled $2.7 billion in the quarter, down 8% from a year earlier. Murphy attributed the shift to consumer preference for shorter-duration products as rates stay elevated relative to recent history. He said he expects annuity sales to stabilize in the second half as policyholders adjust.
Interim CFO Mark Wiltse said the company is evaluating how to deploy excess capital, including share repurchases and bolt-on acquisitions. F&G bought back $50 million of stock during the quarter. The risk-based capital ratio stood at about 420%, above the internal target of 400%. The company kept its full-year 2026 adjusted net earnings guidance of $4.40 to $4.70 per share.
On the call, analysts pressed Murphy on commercial real estate exposure. He said F&G's commercial mortgage loan portfolio represents 8% of general account assets, with a weighted average loan-to-value ratio of 57%. Delinquencies remain below 1%.
Wilma Jackson Burdis of Raymond James asked about the timeline for naming a permanent CFO. Murphy said the board is conducting a search and expects a decision by year-end. Incoming CFO Mike Bailey joined the company this week and listened in on the call.
AlphaScala's scoring system rates FG at 48 out of 100 (Mixed). The stock page is /stocks/fg.
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