Lincoln Financial posts $688M Q2 profit, highlights strategic shift, Bain Capital deal

Lincoln Financial (NYSE: LNC) reported strong second-quarter 2025 results, delivering net income of $688 million ($3.80 per diluted share) and adjusted operating income of $427 million ($2.36 per diluted share). The company said the results reflect an increasingly diversified earnings mix, record results in Group Protection, and disciplined execution on strategic priorities. The quarter also marked the closing of a partnership with Bain Capital to accelerate future growth initiatives. Bain acquired a 9.9% common equity stake in Lincoln for $825M.

Strategic Repositioning and Capital Deployment

Lincoln Financial CEO Ellen Cooper emphasized during Thursday’s earnings call that the company is reshaping its business mix towards higher-margin, capital-efficient products. The company is investing in distribution expansion, digital capabilities, and targeted market growth, particularly in supplemental health and local markets within its Group business. CFO Christopher Neczypor highlighted plans to deploy excess capital from the Bain Capital transaction to retain more fixed business, reduce reliance on flow reinsurance, and optimize legacy life blocks for improved free cash flow generation.

Quarterly Snapshot

- Net income: $688 million, or $3.80 per diluted share, vs. $884 million in the same period a year ago.

- Adjusted operating income: $427 million, or $2.36 per diluted share, compared to $324 million in the second quarter of 2024. (The primary difference between net income and adjusted operating income resulted from a $0.3 billion net after-tax gain, or $1.77 per diluted share, primarily due to the non-economic impacts of changes in market risk benefits.)

- Group Protection earnings up 33% to $173 million with a record 12.5% margin

- Annuities sales of $4.0 billion, up 5% year over year, with spread-based products making up 66% of sales

- Life Insurance returned to profitability with $32 million in earnings

- Retirement Plan Services deposits increased 10% year over year to $3.6 billion.

Management Perspective

Cooper said Lincoln Financial is building a stronger, more resilient foundation for long-term growth, noting four consecutive quarters of adjusted operating income growth and a sustained RBC ratio above 420%. “Our momentum is building, our track record is increasingly evident, and we're excited about the path forward,” she said.

Neczypor added that Lincoln's capital deployment strategy will prioritize growth in Group Protection, diversification of annuity products, and optimizing legacy life portfolios. “We remain confident in our trajectory and our ability to deliver enduring shareholder value,” he said.

By The Numbers

- Total Revenue: $3.6 billion in deposits for Retirement Plan Services (+10% YoY)

- Earnings Per Share (EPS): $2.36 adjusted operating income per diluted share

- Group Protection premiums: $1.4 billion (+7% YoY)

- Annuities net outflows: $1.2 billion, with RILA growth offsetting traditional VA declines

- Life Insurance sales: $121 million (+15% YoY)

- Shares of Lincoln stock have risen more than 10% this year, to $37 per share, and were up nearly $3.00 per share, or 8.65%) in early trading Thursday.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].