--- title: "F&G Q2 2026 earnings: Mark-to-market effects drive a GAAP loss" type: "News" locale: "en" url: "https://longbridge.com/en/news/295021881.md" description: "F&G Annuities & Life reported a Q2 2026 GAAP loss of $0.62 per share, driven by $144 million in unfavorable mark-to-market effects. Revenue rose 4% to $1.421 billion, but total benefits and expenses increased 16%. Adjusted net earnings declined 17% to $85 million due to lower alternative-investment income and product-margin pressure. Assets under management reached a record $74.7 billion, while gross sales fell 34% as the company reduced opportunistic volumes." datetime: "2026-08-05T21:55:53.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295021881.md) - [en](https://longbridge.com/en/news/295021881.md) - [zh-HK](https://longbridge.com/zh-HK/news/295021881.md) generator: "portal-rs" --- # F&G Q2 2026 earnings: Mark-to-market effects drive a GAAP loss F&G Annuities & Life (NYSE: FG) reported second-quarter 2026 revenue of $1.421 billion for the period ended June 30, up about 4% from $1.364 billion a year earlier, while diluted EPS swung to a loss of $0.62 from earnings of $0.26. Net unfavorable mark-to-market effects were the main driver of the GAAP loss, while adjusted earnings also declined amid lower alternative-investment income and product-margin pressure. AUM before reinsurance nevertheless reached a record $74.7 billion. ## Core Financial Results Revenue increased as interest and investment income rose to $718 million from $682 million and net recognized gains increased to $290 million from $51 million. That was partly offset by life insurance premiums and other fees declining to $394 million from $608 million. Total benefits and expenses rose faster than revenue, reaching $1.515 billion compared with $1.307 billion. Benefits and other changes in policy reserves increased to $1.149 billion from $993 million, contributing to a $94 million pre-tax loss. | Metric | Q2 2026 | Q2 2025 | YoY change | | ------------------------------------------------------- | -------------- | -------------- | ---------------- | | Total revenue | $1.421 billion | $1.364 billion | About 4% higher | | Total benefits and expenses | $1.515 billion | $1.307 billion | About 16% higher | | Pre-tax earnings (loss) | $(94) million | $57 million | Swung to a loss | | Net earnings (loss) attributable to common shareholders | $(81) million | $35 million | Swung to a loss | | Diluted EPS | $(0.62) | $0.26 | Swung to a loss | | Adjusted net earnings | $85 million | $103 million | About 17% lower | | Adjusted diluted EPS | $0.65 | $0.77 | About 16% lower | Adjusted net earnings are a non-GAAP measure that excludes specified market-related, accounting and nonrecurring items. They should be considered alongside the GAAP loss rather than as a replacement for it. ## Business and Sales Performance AUM before reinsurance increased 8% to $74.7 billion from $69.2 billion, setting a company record. Retained AUM, however, increased only 1% to $55.9 billion. F&G said retained AUM reflected positive asset flows offset by the $1.8 billion in-force block ceded in the F&G Life Re (Bermuda) sale and a $750 million funding agreement-backed note maturity. Sales declined primarily because F&G reduced opportunistic volumes. The prior-year quarter included near-record opportunistic sales, while the company prioritized pricing discipline and capital allocation in Q2 2026. Core retail sales remained comparatively stable, supported by indexed annuities. | Sales metric | Q2 2026 | Q2 2025 | YoY change | | ---------------------------------- | -------------- | -------------- | ------------------------- | | Gross sales | $2.719 billion | $4.106 billion | About 34% lower | | Core sales | $2.018 billion | $2.199 billion | About 8% lower | | Indexed annuity sales | $1.744 billion | $1.701 billion | About 3% higher | | Pension risk transfer sales | $232 million | $445 million | About 48% lower | | Opportunistic sales | $701 million | $1.907 billion | About 63% lower | | Multiyear guaranteed annuity sales | $101 million | $1.907 billion | About 95% lower | | Funding agreements | $600 million | $0 | Increased by $600 million | | Net sales | $1.464 billion | $2.744 billion | About 47% lower | The main change within opportunistic sales was the reduction in multiyear guaranteed annuities, partly offset by higher funding agreements. F&G noted that these opportunistic volumes can vary substantially depending on pricing economics and market conditions. Sales are management operating metrics and are not equivalent to GAAP revenue; many annuity and funding-agreement sales are recorded as deposit liabilities. ## Profitability and Balance Sheet Adjusted return on equity excluding AOCI declined to 8.0% from 8.8%, while adjusted return on assets eased to 68 basis points from 71 basis points. Adjusted ROA for the last 12 months was 85 basis points, in line with full-year 2025. Total assets increased to $103.6 billion at June 30 from $98.4 billion at December 31, 2025. Cash and cash equivalents rose to $2.1 billion from $1.5 billion, while notes payable remained nearly unchanged at $2.24 billion. Common shareholders’ equity excluding AOCI was $6.0 billion, equal to $45.93 per share. Book value per share excluding AOCI increased by $1.50 from $44.43 at the end of 2025. GAAP total equity declined to $4.7 billion as the accumulated other comprehensive loss widened and treasury stock increased. F&G returned $128 million to shareholders during the quarter, consisting of $37 million in common and preferred dividends and $91 million used to repurchase approximately 3.3 million common shares at an average price of $27.27. The company did not characterize these repurchases as an assessment of intrinsic value. Credit performance remained stable. Investment-grade securities represented 97% of retained fixed maturities, while credit-related impairments averaged six basis points over the past five years and remained below pricing assumptions through the first half of 2026. ## Market Effects Drove the GAAP Loss, but Adjusted Earnings Also Weakened F&G attributed $144 million of the quarterly GAAP loss to net unfavorable mark-to-market effects and another $22 million to other unfavorable items excluded from adjusted earnings. Market effects are reflected across investment, derivative and liability-related accounting lines, so the recognized-gains revenue line should not be considered in isolation. Even after removing those items, adjusted net earnings declined from $103 million to $85 million. Alternative-investment income fell to $49 million, or $0.38 per share, from $67 million, or $0.50 per share, and remained below management’s long-term expected return of approximately 12% in both periods. F&G said core spread remained consistent because of disciplined pricing. However, total product margin was reduced by the F&G Life Re (Bermuda) sale, lower surrender-charge fee income and higher other liability costs. Asset growth, flow-reinsurance fees, owned-distribution margin and expense discipline provided partial offsets. ## Management Perspective CEO and President Conor Murphy emphasized record AUM before reinsurance, continued momentum in core retail sales and stable credit performance. Management presented the reduction in opportunistic sales as a deliberate result of pricing and capital-allocation discipline. F&G’s longer-term priorities include expanding fee-based, higher-margin and less capital-intensive earnings streams while continuing to operate its spread-based insurance business. Management also pointed to reinsurance relationships and in-force earnings generation as sources of financial flexibility. ## Risks Investors Need to Watch - **Market-related earnings volatility:** The $144 million unfavorable mark-to-market impact demonstrates that investment, derivative and liability remeasurements can produce significant swings in GAAP earnings. - **Alternative-investment returns:** Alternative-investment income declined year over year and remained below management’s long-term expected return, weighing on adjusted earnings and returns on assets. - **Lower sales and retained asset growth:** Gross and net sales fell substantially, while retained AUM grew only 1% despite an 8% increase before reinsurance. Continued sales reductions or higher reinsurance flows could limit growth in retained assets. - **Product-margin pressure:** The Bermuda reinsurance transaction, lower surrender-charge income and higher liability costs reduced total product margin. The duration of these pressures will affect the path of adjusted earnings. ## Summary F&G’s Q2 2026 results combined record AUM before reinsurance with lower sales and weaker profitability. Market-related accounting effects drove the GAAP loss, but adjusted earnings also declined because of lower alternative-investment income and reduced product margins. The main items to monitor are retained AUM growth, the mix between core and opportunistic sales, alternative-investment returns and whether asset growth and expense discipline can offset ongoing margin pressures. 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