Lincoln National Swings to Profit on Strong Revenue Growth

TL;DR

**LNC-PD is back in the black, showing strong asset growth and improved cash flow, making it a solid buy for dividend-seeking investors.**

AI Summary

LINCOLN NATIONAL CORP (LNC-PD) reported a significant turnaround in net income, reaching $445 million for the three months ended September 30, 2025, compared to a net loss of $528 million in the same period of 2024. For the nine months, net income was $423 million in 2025, a substantial decrease from $1,588 million in 2024. Total revenues increased to $4,555 million for the three months ended September 30, 2025, up from $4,111 million in 2024, driven by higher insurance premiums ($1,637 million vs. $1,614 million), fee income ($1,384 million vs. $1,352 million), and net investment income ($1,544 million vs. $1,416 million). The company's total assets grew to $415,275 million as of September 30, 2025, from $390,831 million at December 31, 2024, primarily due to an increase in total investments to $136,102 million from $129,918 million and separate account assets to $179,860 million from $168,438 million. Stockholders' equity also saw a healthy increase to $10,452 million from $8,269 million over the same period, largely due to a $1,197 million increase in accumulated other comprehensive income (loss) for the nine months ended September 30, 2025. Cash and invested cash significantly increased to $10,668 million from $5,801 million, reflecting strong cash flows from financing activities, including $15,394 million in policyholder deposits. The company adopted ASU 2023-07, Segment Reporting, effective January 1, 2025, enhancing segment disclosures.

Why It Matters

This filing indicates a positive shift for Lincoln National, moving from a net loss to a profit, which could signal improved operational efficiency and market conditions for investors. The substantial increase in total assets and stockholders' equity suggests a strengthening balance sheet, potentially making LNC-PD a more attractive investment compared to competitors facing similar market pressures. Employees may see increased job security and potential for growth as the company's financial health improves. For customers, the stability could mean continued reliable service and product offerings in a competitive insurance and retirement planning landscape. The broader market might view this as a sign of resilience within the financial services sector, particularly for companies with diverse wealth accumulation and protection products.

Risk Assessment

Risk Level: medium — While LNC-PD reported a net income of $445 million for the quarter, the nine-month net income of $423 million is significantly lower than the $1,588 million reported in the prior year, indicating potential volatility. The company also holds $8,971 million in gross unrealized losses on fixed maturity AFS securities as of September 30, 2025, with $5,387 million of these losses held for greater than twelve months, which could impact future earnings if realized.

Analyst Insight

Investors should consider LNC-PD for its dividend stability and recent return to profitability, but monitor the significant unrealized losses on fixed maturity securities. The increase in cash and invested cash to $10,668 million suggests liquidity, which is a positive sign. A deeper dive into the specific segments, especially Annuities and Life Insurance, would be prudent to understand the drivers of the revenue growth.

Financial Highlights

debt To Equity

0.55

revenue

$4.555B

operating Margin

N/A

total Assets

$415.275B

total Debt

$5.772B

net Income

$445M

eps

$2.15

gross Margin

N/A

cash Position

$10.668B

revenue Growth

+10.8%

Revenue Breakdown

Key Numbers

• $445M — Net Income (Q3 2025) (Significant turnaround from a $528M net loss in Q3 2024.)
• $4.555B — Total Revenues (Q3 2025) (Increased from $4.111B in Q3 2024, indicating strong top-line growth.)
• $415.275B — Total Assets (Sep 30, 2025) (Increased from $390.831B at Dec 31, 2024, showing balance sheet expansion.)
• $10.452B — Total Stockholders' Equity (Sep 30, 2025) (Increased from $8.269B at Dec 31, 2024, reflecting improved financial health.)
• $10.668B — Cash and Invested Cash (Sep 30, 2025) (Nearly doubled from $5.801B at Dec 31, 2024, indicating strong liquidity.)
• $8.971B — Gross Unrealized Losses on AFS Securities (Sep 30, 2025) (A significant risk, with $5.387B held for over twelve months.)
• $15.394B — Policyholder Deposits (9M 2025) (Strong inflow of funds, contributing to cash growth.)
• $2.15 — Basic EPS (Q3 2025) (Positive turnaround from -$3.29 in Q3 2024.)
• $0.45 — Cash Dividends Declared Per Common Share (Q3 2025) (Consistent with Q3 2024, indicating stable shareholder returns.)

Key Players & Entities

• LINCOLN NATIONAL CORP (company) — registrant
• Protective Life Insurance Company (company) — reinsurance partner
• Swiss Re Life & Health America, Inc (company) — reinsurance partner
• $445 million (dollar_amount) — net income for three months ended September 30, 2025
• $528 million (dollar_amount) — net loss for three months ended September 30, 2024
• $423 million (dollar_amount) — net income for nine months ended September 30, 2025
• $1,588 million (dollar_amount) — net income for nine months ended September 30, 2024
• $415,275 million (dollar_amount) — total assets as of September 30, 2025
• $10,452 million (dollar_amount) — total stockholders' equity as of September 30, 2025
• $10,668 million (dollar_amount) — cash and invested cash as of September 30, 2025

FAQ

Risk Factors

• Interest Rate Sensitivity [high — market]: The company's investment portfolio is sensitive to changes in interest rates. A significant increase in interest rates could lead to unrealized losses on fixed maturity securities, impacting capital and liquidity. As of September 30, 2025, gross unrealized losses on available-for-sale securities were $8,971 million, with $5,387 million held for over twelve months.
• Equity Market Volatility [medium — market]: Fluctuations in equity markets can impact the value of equity securities and variable annuity business, affecting fee income and profitability. The company holds $542 million in equity securities as of September 30, 2025.
• Credit Risk [medium — financial]: The company is exposed to credit risk through its investment portfolio, including fixed maturity securities, mortgage loans, and derivative instruments. Deterioration in credit quality of issuers or counterparties could lead to losses. Allowances for credit losses were noted on fixed maturity securities ($97 million) and mortgage loans ($230 million) as of September 30, 2025.
• Regulatory Changes [medium — regulatory]: The insurance industry is subject to extensive regulation, which can change and impact business operations, product offerings, and capital requirements. New regulations or changes in interpretation could adversely affect the company's financial condition.
• Cybersecurity and Data Privacy [medium — operational]: The company relies on technology and handles sensitive customer data, making it vulnerable to cybersecurity threats and data breaches. A successful cyberattack could result in significant financial losses, reputational damage, and regulatory penalties.
• Liquidity Risk [medium — financial]: While cash and invested cash increased significantly to $10,668 million as of September 30, 2025, the company must manage its liquidity to meet policyholder obligations and operational needs. Unexpected demands for surrenders or claims could strain liquidity.

Industry Context

Lincoln National Corporation operates in the highly competitive life insurance and retirement services industry. Key trends include a shift towards variable and indexed annuity products, increasing demand for retirement income solutions, and ongoing consolidation within the sector. Companies are also navigating evolving regulatory landscapes and the need for digital transformation to enhance customer experience and operational efficiency.

Regulatory Implications

The company is subject to state-level insurance regulations, federal securities laws, and tax regulations. Changes in accounting standards, capital requirements (e.g., risk-based capital), and consumer protection laws can significantly impact financial reporting and business strategies. The adoption of ASU 2023-07 reflects the ongoing focus on transparent and detailed segment reporting.

What Investors Should Do

1. Monitor interest rate sensitivity and unrealized losses.
2. Analyze segment performance under new reporting standards.
3. Assess the sustainability of the net income turnaround.
4. Evaluate the growth in separate account assets and liabilities.
5. Review the impact of policyholder deposits on cash flow.

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Reported a significant turnaround in net income to $445 million, compared to a loss in the prior year, and increased total assets to $415.275 billion.
• 2025-01-01: Adoption of ASU 2023-07 — Enhanced segment reporting disclosures, providing investors with more granular insights into business segment performance.
• 2024-12-31: Prior Year End Reporting — Provided the baseline for year-over-year comparisons, showing total assets of $390.831 billion and stockholders' equity of $8.269 billion.
• 2024-09-30: Prior Year Quarter Reporting — Reported a net loss of $528 million for the quarter, highlighting the significant improvement in the current period.

Glossary

Available-for-sale securities

Investments that are not classified as held-to-maturity or trading securities. They are reported at fair value, with unrealized gains and losses included in other comprehensive income. (A significant portion of LNC's investment portfolio, subject to market risk and unrealized losses.)

Accumulated other comprehensive income (loss)

A component of stockholders' equity that includes unrealized gains and losses on available-for-sale securities, foreign currency translation adjustments, and pension plan adjustments. (A significant increase in AOCI ($1,197 million for nine months ended Sep 30, 2025) contributed to the growth in stockholders' equity.)

Separate account assets

Assets held in accounts that are legally separate from the company's general account. These are typically associated with variable annuity and variable life insurance products, where the policyholder bears the investment risk. (A substantial and growing portion of LNC's balance sheet, representing $179.860 billion as of September 30, 2025.)

DAC, VOBA, DSI

Deferred acquisition costs (DAC), Value of business acquired (VOBA), and Deferred sales inducements (DSI) are intangible assets representing costs incurred in acquiring new business and amounts credited to policyholders. (These represent significant assets on the balance sheet, impacting profitability over time as they are amortized.)

Future contract benefits

Liabilities representing the amounts expected to be paid to policyholders in the future under insurance and annuity contracts. (A major liability for LNC, reflecting its core insurance and annuity business.)

ASU 2023-07

Accounting Standards Update 2023-07, which provides guidance on segment reporting, requiring companies to disclose information about their reportable segments. (Adopted by LNC effective January 1, 2025, leading to enhanced segment disclosures in this filing.)

Year-Over-Year Comparison

Lincoln National Corporation has demonstrated a significant financial turnaround in the three months ended September 30, 2025, reporting a net income of $445 million compared to a net loss of $528 million in the same period of 2024. Total revenues also saw a healthy increase of 10.8% to $4.555 billion, driven by growth across insurance premiums, fee income, and net investment income. Total assets expanded to $415.275 billion, and crucially, stockholders' equity saw a substantial rise to $10.452 billion, partly due to a significant improvement in accumulated other comprehensive income. While liquidity has strengthened with cash and invested cash nearly doubling to $10.668 billion, the company continues to face market risks, notably substantial unrealized losses on its investment portfolio.

Filing Documents

• lnc-20250930.htm (10-Q) — 7313KB
• exhibit311-lnc10qx3q2025.htm (EX-31.1) — 10KB
• exhibit312-lnc10qx3q2025.htm (EX-31.2) — 9KB
• exhibit321-lnc10qx3q2025.htm (EX-32.1) — 4KB
• exhibit322-lnc10qx3q2025.htm (EX-32.2) — 4KB
• 0000059558-25-000093.txt ( ) — 33663KB
• lnc-20250930.xsd (EX-101.SCH) — 134KB
• lnc-20250930_cal.xml (EX-101.CAL) — 157KB
• lnc-20250930_def.xml (EX-101.DEF) — 933KB
• lnc-20250930_lab.xml (EX-101.LAB) — 1330KB
• lnc-20250930_pre.xml (EX-101.PRE) — 1193KB
• lnc-20250930_htm.xml (XML) — 9357KB

Financial Statements

Financial Statements: Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 1 Unaudited Consolidated Statements of Comprehensive Income (Loss) for the thre e and nine months ended September 30, 2025 and 2024 2 Unaudited Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 3 Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 4 Notes to Unaudited Consolidated Financial Statements: Note 1 – Nature of Operations and Basis of Presentation 5 Note 2 – New Accounting Standards 6 Note 3 – Investments 7 Note 4 – Variable Interest Entities 17 Note 5 – Derivative Instruments 18 Note 6 – DAC, VOBA, DSI and DFEL 28 Note 7 – Reinsurance 31 Note 8 – MRBs 32 Note 9 – Separate Accounts 33 Note 1 0 – Policyholder Account Balances 34 Note 1 1 – Future Contract Benefits 38 Note 1 2 – D ebt 46 Note 1 3 – Fair Value of Financial Instruments 48 Note 1 4 – Contingencies and Commitments 63 Note 1 5 – Shares and Stockholders' Equity 68 Note 1 6 – Segment Information 72 Note 1 7 – Realized Gain (Loss) 80 Note 1 8 – Federal Income Taxes 81 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 82 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 138 Item 4.

Controls and Procedures

Controls and Procedures 138 PART II Item 1.

Legal Proceedings

Legal Proceedings 140 Item1A.

Risk Factors

Risk Factors 140 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 141 Item 5. Other Information 141 Item 6. Exhibits 141 Exhibit Index for the Report on Form 10-Q 142

Signatures

Signatures 143 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements LINCOLN NATIONAL CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except share data) As of As of September 30, December 31, 2025 2024 (Unaudited) ASSETS Investments: Fixed maturity available-for-sale securities, at fair value (amortized cost: 2025 - $ 98,632 ; 2024 - $ 97,415 ; allowance for credit losses: 2025 - $ 97 ; 2024 - $ 46 ) $ 90,680 $ 87,111 Trading securities 1,853 2,025 Equity securities 542 294 Mortgage loans on real estate, net of allowance for credit losses (portion at fair value: 2025 - $ 230 ; 2024 - $ 232 ) 22,230 21,083 Policy loans 2,584 2,476 Derivative investments 10,427 9,677 Other investments 7,786 7,252 Total investments 136,102 129,918 Cash and invested cash 10,668 5,801 Deferred acquisition costs, value of business acquired and deferred sales inducements 12,681 12,537 Reinsurance recoverables, net of allowance for credit losses 28,665 28,750 Deposit assets, net of allowance for credit losses 33,066 30,776 Market risk benefit assets 4,694 4,860 Accrued investment income 1,172 1,108 Goodwill 1,144 1,144 Other assets 7,223 7,499 Separate account assets 179,860 168,438 Total assets $ 415,275 $ 390,831 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Policyholder account balances $ 133,223 $ 126,197 Future contract benefits 41,852 39,807 Funds withheld reinsurance liabilities 17,559 16,907 Market risk benefit liabilities 1,190 1,046 Deferred front-end loads 7,349 6,730 Payables for collateral on investments 11,153 10,020 Short-term debt – 300 Long-term debt 5,772 5,856 Other liabilities 6,865 7,261 Separate account liabilities 179,860 168,438 Total liabilities 404,823 382,562 Contingencies and Commitments (See Note 1 4 ) Stockholders' Equity Preferred stock – 10,000,000 shares authorized: Series C preferred stock – 20,000 shares authorized, issued and outstanding as of September 30, 2025, and December 31, 2024 493 493 Series D preferred stock – 20,000

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Nature of Operations and Basis of Presentation Nature of Operations Lincoln National Corporation and its subsidiaries ("LNC" or the "Company," which also may be referred to as "we," "our" or "us") operate multiple insurance businesses through four business segments: Annuities, Life Insurance, Group Protection and Retirement Plan Services. In addition, we include financial results for operations that are not directly related to our business segments in Other Operations. The collective group of businesses uses "Lincoln Financial" as its marketing identity. Through our business segments, we sell a wide range of wealth accumulation, wealth protection, group protection and retirement products and solutions. These products primarily include variable annuities, fixed annuities (including indexed), registered index-linked annuities ("RILA"), universal life insurance ("UL"), variable universal life insurance ("VUL"), linked-benefit UL and VUL, indexed universal life insurance ("IUL"), term life insurance, group life, disability and dental and employer-sponsored retirement plans and services. For more information on our segments and the products and solutions we provide, see Note 16 . Basis of Presentation The accompanying unaudited consolidated financial statements are prepared in accordance with United States of America generally accepted accounting principles ("GAAP") for interim financial information and with the instructions for the Securities and Exchange Commission ("SEC") Quarterly Report on Form 10-Q, including Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The information contained in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"), should be read in connection with the reading of these interim unaudite

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