Lincoln National (LNC) Financials

Lincoln National (NYSE: LNC) has experienced significant fluctuations in its financial performance over the past four years, as evidenced by the key financial data from its quarterly filings. Here's an analysis of the main trends based on income statements, cash flow statements, and balance sheets from 2022 through Q1 2025.

• The company consistently generates substantial non-interest income, notably from other service charges, premiums earned, and net realized & unrealized capital gains on investments, with Q1 2025 showing $4.69 billion in total non-interest income.
• Lincoln has a large asset base, having steadily grown total assets from approximately $324.7 billion at Q3 2022 to $382.9 billion by Q1 2025.
• The increase in long-term debt alongside growth in deposits suggests the company is leveraging financing to support asset growth and operations, with long-term debt rising from about $12.8 billion in Q3 2022 to $14.15 billion in Q1 2025, and deposits increasing notably by over $4 billion in recent quarters.
• The company maintained non-interest operating expenses in a relatively stable range, around $2.5 billion to $3.2 billion quarterly, indicating control over operational costs despite revenue fluctuations.
• Cash balances and interest-bearing deposits at other banks rose from about $5 billion total in early 2023 to over $35 billion combined by Q1 2025, reflecting strong liquidity but also a shift in cash management strategy.
• Mortgage servicing rights and deferred acquisition costs remain substantial intangible assets, around $20 billion and $12.5 billion respectively, consistent with Lincoln’s business model in insurance and financial services.
• Lincoln reported a net loss of $722 million in Q1 2025, marking a considerable downturn from profit quarters in 2023 and 2024, indicating recent operational and/or market challenges.
• The company recorded a sharp drop in total revenue in Q1 2025 to approximately $4.69 billion from $5.14 billion in Q4 2024, amid a dramatic decline in net realized & unrealized capital gains (down from $1.93 billion to $1.47 billion) and other income components.
• Cash flow from operating activities turned negative in Q1 2025 at -$272 million compared to positive cash flows in prior quarters, signaling operational cash pressure.
• Total liabilities increased consistently, growing from about $322 billion in Q3 2022 to $374.7 billion in Q1 2025, which, combined with declining equity (from $6.7 billion in early 2023 to about $8.2 billion in Q1 2025 showing modest equity growth but pressured by income losses), might constrain financial flexibility.

Summary: Lincoln National has demonstrated strong revenue generation in its core insurance and investment operations over the past several years, supported by a solid asset and deposit base. However, recent quarters, particularly Q1 2025, reveal challenges with profitability and cash flow. The company faces headwinds that have resulted in net losses and operational cash flow deficits, despite stable expense management and liquidity. Investors should monitor the company's ability to rebound from this dip in profitability and its management of liabilities and capital structure going forward.