F&G Annuities & Life(FG) - 2025 Q3 - Quarterly Results

Financial Performance - Gross sales for Q3 2025 reached $4.2 billion, an increase of 8% compared to Q3 2024[6] - Net sales for Q3 2025 were $2.8 billion, up 17% from Q3 2024[6] - Common adjusted net earnings (ANE) for 3Q25 were $546 million, with an adjusted return on assets (ROA) of 0.87%[70] - Adjusted net earnings for Q3 2025 were $165 million, with investment income from alternative investments $67 million below the long-term expected return of approximately 10%[141] - For the nine months ended September 30, 2025, adjusted net earnings totaled $359 million, reflecting a significant increase compared to previous periods[140] Assets Under Management (AUM) - Assets under management (AUM) as of Q3 2025 totaled $56.6 billion, reflecting an 8% year-over-year increase[7] - The total assets under management (AUM) before flow reinsurance reached a record $71.4 billion, including retained AUM of $56.6 billion[68] - The company aims to grow AUM by 50% and increase adjusted ROA to between 1.33% and 1.55%[19] Returns on Assets and Equity - Adjusted return on assets (ROA) for Q3 2025 was 0.92%, consistent with the previous quarter[6] - Adjusted return on equity (ROE) for Q3 2025 was 8.8%, in line with Q2 2025[6] - The company is targeting an increase in adjusted ROE to 13% to 14%[19] Capital Management - Year-to-date capital return to shareholders reached $98 million as of Q3 2025[6] - The debt-to-capitalization ratio was managed to a long-term target of 25%, with total equity ex AOCI at $6.3 billion as of 3Q25[74] - The target long-term debt-to-total capitalization is approximately 25%, maintaining a 400% risk-based capital (RBC) ratio[2] - F&G has returned $98 million of capital to shareholders year-to-date in Q3 2025 through common and preferred dividends[1] Investment Income - Investment income from alternative investments for YTD Q3 2025 was $213 million, up from $113 million in YTD Q3 2024[9] - Investment income from alternative investments was significantly below expectations across multiple quarters, impacting overall earnings[141] Market Position and Growth - The company completed a common stock offering with net proceeds of $269 million to support future growth and liquidity[74] - The company completed the FNF merger and launched new bank and broker dealer channels in 2025, expanding its market presence[138] - F&G's market capitalization reached $4.2 billion as of September 30, 2025[138] Portfolio Diversification - The CLO portfolio is well diversified across industries, with 12% in High Tech and 8% in Services: Business[7] - The CMBS portfolio has a market value of $4.1 billion, with an investment grade credit quality of 87%[14] - The Commercial Mortgage Loan (CML) portfolio has an average loan-to-value ratio of approximately 60% and consists of 86 holdings[23] - The Alternative LPs portfolio has a net asset value of $3 billion, representing 5% of the total portfolio, with a historical average return of 12%[27] - The real estate portfolio has a market value of $13 billion, with a weighted average life of 5.5 years[30] - The CLO exposure has a market value of $5 billion, with 99% rated investment grade[17] - The average loan size in the CML portfolio is $28 million, with only 1.2% of loans having a debt service coverage ratio (DSCR) below 1x[23] - The portfolio is focused on high-quality CLO securities backed by a highly diversified pool of loans[18] Financial Health and Ratings - The company received multiple ratings upgrades, including an upgrade to 'A-' from S&P Global, indicating strong financial health and growth potential[138] - F&G's diversified investment portfolio and strong capitalization were highlighted as key factors in maintaining financial flexibility and meeting stringent capital requirements[139] - F&G's total equity, excluding AOCI, is a critical measure for assessing its capital position and financial stability[160] - Total F&G equity attributable to common shareholders, excluding AOCI, is based on total F&G Annuities & Life, Inc. shareholders' equity excluding the effect of AOCI and preferred stocks[161] Business Strategy - The company is focused on expanding its fee-based, higher margin, and capital-light business model[17] - The company is actively diversifying its sources of earnings and scaling its business to generate profitable growth[139] - The company expects steady and growing adjusted net earnings over time, driven by asset growth and operating expense discipline[71]