and in morning, to things going I'm three We appreciate Thank discuss and morning. good our this you, to listening everyone. everyone dialing call. Ellen,
First, the on we'll an capital. provide a quarter, update recap including of
on financials. the Second, investment our with we'll update segment we'll through And finish portfolio. an lastly, level go
adjusted current items investments notable returns. common share. let's line available stockholders stockholders of per prior or $XXX There common available million the period. or of $X.XX targeted diluted second in to the So diluted operating income or were Last was Alternative to a start reported with our Net we in quarter. income no per were share. quarter night, $X.XX million, with recap $XXX
factors. three predominantly by income The for difference between operating net is adjusted quarter the driven and
an First, quarter, with net in in increase higher coupled our a rates, benefits, risk markets impacted the favorably in interest income. market to equity resulting non-operating increase second
interest the hedge driven and Second, and rates value. in equity increase quarter, our again during the markets declined in by instruments
to an As in result Re, repositioned as in down market Ellen we with our realized $XXX transaction hedge June explicit resulting capital announced volatility. sensitivity program reinsurance objective as securities with capital hedge of intended loss fair of mentioned, a supporting to work reducing continues of third, our the an market May of as to Fortitude after-tax million. we value XXth, And impaired
that That associated value pursuant applicable of fair $XXX position realized position. million of after-tax those loss any subsequent unrealized an to the remaining assets totaling accounting transaction unrealized the the Note, with will were included closing the of as guidance, with transaction, at in in XX. be gain, were gain only June the assets an The in in change assets transaction. along included impairments
the mentioned, this impairment timing no capital impact this Ellen to dynamic quarter. As has statutory of
convey continued Lastly, the Re. closing our to with confidence I want in Fortitude transaction
expect of the transaction, close in course. and we the time, size approval to due the takes Given deal regulatory
preferred I item stock Before the highlight one turning want regarding to to of housekeeping quarterly the dividend. capital, pattern
$XX was dividend the will is decrease For the first fourth reflects to million $XX third $XX when the is increasing roughly again quarter, payable. the which semiannual in This timing second the million. million of down dividend of the back the quarter, roughly in increase roughly in quarter. This before quarter to portion the
approximately capital. to quarter We was RBC first turn flat that quarter the an of with with XXX%. now Let's ratio our estimated ended level
Ellen noted, XX to Fortitude RBC increase the expect the by close ratio points we approximately transaction. the of at As
related to in group to the every business modest with quarter, with First of our helping offset and continued this quarter's the in pressure Bank. credit bankruptcy strength headwinds Republic of there Like realization Life are and losses tailwinds
capital at Lastly, level above target are hold our to continuing we LNBAR.
year. with We with better program pleased are performance than of actual performance far this our expected the hedge repositioned being so
resuming been and thus, have to continue LNBAR company. it calm year-to-date, markets time regular pass we believe prudent more to is dividends before allow the holding However, to to relatively
the to Now turning results. segment
Let's was once in quarter. again highlight the start which Group, with the
to like we things. Before say get and the I'd numbers, three into step back
First, and platform on this the Lincoln. team's focus to the continued overall of long-term business growth the is restoring in the strategy critical of the profitability
flow, about a to our group these our market talk protection well-run decreasing free strategic you've volatility earnings. Ellen our of obvious, At cash risk business diversifying Over stating heard the the the bigger, objectives. more objectives: past of and growing capital year, accomplish each profitable, sensitivity to our helps
X.X% higher at execution management or from be taken the are basis the moment over new quarter Second, the the business there tends was we've margin with this while points the favorable XXX in this to seasonally quarter last also second and strong. year-over-year. very backdrop earnings strategic benefiting is And strong and industry place, in steps a year
a it's but rate. not So this margin good would quarter story, to the run reflective of we be expect the
few Third, will our as continue a our years, story. we business next to bigger look part out over Group the become of
mix in experienced a that strategic history. objectives. pieces of term as our to are not to our many obviously over third we would long overall While moving execute contributed We there earnings Group this shift expect quarter, the we've the almost something continue operating recent profile, on earnings
Turning numbers. the to
This the quarter. $XX improvement both and broad-based income of $XXX was to show disability million year compared life to as prior operating reported million quarter, progress. Group results The continue in
was lower including their continued economic year-over-year. and results These Our are new the disability favorable driven to our in work support and XX% an strategy, second improvement loss execution resulting of claims. journey strong investments basis quarter, of our XXX group a ratio environment, points by claimants return to in
mortality results are population year. loss consistent XX%, We reflects improved from prior working our ratio seeing the product the age also lower with in with XX% loss U.S. a ratio mortality. down lower The of from life trends
of on The expense expenses. focus over XX.X% ratio investment a to talent the year and operational reflection from to prior increased our our XX.X%, in Turning strengthening organization.
us investments, we our optimal outcomes are provide allowing While expenses higher, are for strong our seeing on returns to customers.
a very flow. in we contributing GAAP cash are we which Overall, both to earnings are free meaningful the with group in way pleased the business, making and is progress
on will objectives. the Going continue against executing forward, enterprise growing group focused be our as important strategic to business we remain
Now let’s quarter. in subside year The $XXX Sequentially, offset higher another of prepayment turn expenses and to income. was with million million due $XXX $X income, quarter by income million to tax decrease the earnings the favorable solid on prior Of the operating partially prior higher from Annuities. compared quarter, due fee spread to income. when impact income million prepayment income the lower half Annuities improved last decrease the delivered quarter year. the primarily year earnings $XX prepayment second note, of lower will higher the primarily third year-over-year to mostly excluding item in from the in in of began as
earlier, as our to fluctuation temporary quarter. interest driven I in benefited earnings year sequentially, to But costs line. the relative experienced impacting from Turning prior by income headwinds, some spreads, noted Annuities higher we credited spread option
decline XXXX. leveling for fourth quarter we before ahead, quarter rebounding Looking annuity expect to in one and spreads in more the
interest our increased the overall environment, in higher rate Lastly, environment. are as line rate rates of a with to than up surrender block. And while reminder, have XX% type fixed of results less this for generally in-force expectations due annuities make annuities the
a our in comment for business place, I past, we in and block. new both reinsurance in-force reiterate have to the Additionally, on made have
look at value the it that our are When those reported on remember important you on an flows account to relates gross offset is line. it basis surrenders to numbers, the that and as is through then seeded a there numbers
a size, significant solid in Annuity a the cash block quarter-to-quarter once noise the free again company. delivered business some always is and for there while So, of flow our result
are business. We upside about continue in long-term to the growth excited see and this
higher reported due decline quarter. prepayment to in Retirement largely was to Plan million income to The compared million lower operating expenses. turn $XX income prior the Retirement now of Let’s and year $XX Services.
business, from Annuities Retirement subside the business on lower income in of year-over-year in the the prepayment second impacts half mostly the the will As year.
Two items the headwinds. partly offset
relative first is to which ago. spreads, by year higher base expanded points The basis a XX
As mentioned will previously, I be spread not linear. expansion
that for year expansion Our retirement. we digits in expectation is spread the mid-single end the with
led markets, prior account in favorable compared with combined the flows, net positive to year. a Second, X% growth equity values to average
account last continue year, a to for As spread strength with from coupled the anticipate retirement should result values, the higher the the expenses environment, we in for continued of tailwinds business. quarter, we noted higher stable while remainder
income impact compared Insurance. was year million by income. Lastly, last The Life by let’s year’s assumption $XX driven quarter. in operating to Life run of from the $XX partially investment offset discuss prior decrease Insurance primarily alternative million reported rate reset, higher
Additionally, seasonally alternative earnings. life the improved sequential mortality investment and better in income improvement drove
quarter. claims expectations total our underlying with to this in line Turning mortality, mostly were
However, frequency severity. the given that future policyholder benefit lower mortality under the while any variability around for LFPB, quarter, reserve, term experienced the term LDTI, products will in products net of Note smooths experienced in liability universal less claims, time. Block see reported variability over that or given life-type higher
for an profits. mechanism and the reserving type is DAC However, universal yet life higher offsetting could quarterly be amortization quarter-to-quarter in as did volatility not there there change, to tied products, longer no change
Shifting due basis environment. basis spreads, the in base of were duration quarter, continued benefits to the the XX points the block, to rate certain prior duration points down higher low coupled quarter delayed the programs the This, during from environment. nature in year the spreads place XXX put rate the with of impact of has long extension
anticipate expanding before than in current slightly We levels to bottom XXXX. continue to lower spreads
the remain there alternative first remain for sequential are as but persistent quarter. improving of power and work of with us. We profile earnings improvement, we seasonal coupled free focused line more ahead walked supported through still in flow time. over performing the headwinds Overall, business The Life you investments with in the the cash on mortality benefits expectations
us is key this drivers to increase. There an start a let remain company-wide the Expenses of expenses. saying to area briefly and team. three for focus management Turning me as by are elevated,
has of at strategically last lot some management do a new and business. First, on a need grow for take is to there investment our diligence to year, strategic businesses projects. in look been really we need the over With the fresh what our
And will looking more translate into part you out some expense so nonrecurring and of better once ongoing will beyond, that of start this but importantly, overall to XXXX is and profitability. be
The the cost these decline. thing a there year. over challenges driver, of largest the an will second of environment. some the then as base to inflationary the expense that in result last Over and we system time, And is faced expenses in increase the impact the is is obviously, note current
pressures, the will support benefits to objectives. committed earnings our generation which Beyond both of and Spark these we implementing expense initiative the remain growth capital
You to from will benefits dissipate that spend see year, with the increasing begin initiatives. next coinciding
to where quarter. our investments, again Moving was credit the solid performance once for
consecutive Our portfolio favorable eighth migrations, management. conservatively our experienced positioned, construction credit net credit disciplined proactive portfolio remains risk quarter and we of and reflecting
economic test stress the asset name, outside name class navigate ability stress our by manageable various to regularly and input We with in our impact our on investment expect levels to team Our scenarios. managers. highly sector environments portfolio and confident capital a have credit remain from by under
Turning well, very of total update mortgage continues to perform assets. which on invested portfolio, representing an to our loan commercial XX%
no rigorous CMX no material underwriting, We extensions to focused or we maintained transitional loan CML below. be of processes real and exposure. or and XXX% respectively, to modifications service stabilized X.X negligible equity XX% ongoing loan estate on properties and rate debt exposure average senior and loans direct on loan-to-value continue fixed ratios forced Our and strategy no coverage and disciplined have with weighted with times, monitoring
the from on our down overall three Office points proactively assets. basis. invested continue perspective both shift basis of total, from our portfolio holdings, of portfolio, our X.X% XXX represents Office, In an represents years mix Office from as absolute CML and just a we ago away Within to XX%
second Office of we A $XX remains have XXXX, area maturities. million key only in focus maturities. the of remaining In near-term half of
and million with times. We of loans of in well have ratio are positioned XXXX coming near-term $XXX million perform a maturities average an XXXX, due X.X conservatively continue further $XXX debt-to-service to and maturities with coverage Office respectively. and
that portfolio investment We of return environments. strength to targeted wide return, portfolio, long-term of can across a diversification construction Now economic and investment strategies variety line alternative quarter a the of in our alternative perform performance. well generated our our on investment our X.X% in turning reflecting with this
is small estate. allocations Additionally, the having portfolio only venture benefiting from and to real capital
and a on from made economic statutory our quarter, and generally on investment well portfolio on for as the reinsurance not which total have in Lastly, as our I both our Lincoln reiterate filings of our our investment portfolio to the those point call asset agreements we include certain last do more listings assets risk.
I excludes information investment just agreements. to As related reinsurance assets a the result, those our to relating the discussed portfolio
closing, In three reiterate points. let me
the know quarter we more do, we’re have work and a direction. making, with this pleased the progress was but to we step in we’re First, right
and top portfolio rebuilding we investment I’m our our concern shareholders. priority, remains work our our as of areas on recent market and and sustainable perform very for continues third, manageable. well, execute Second, to exposure teams to to plan value is create confident in a And long-term capital
We appreciate everyone taking the time to listen today.
Now turn taking to the we With let Al. your to back that, call me look forward questions.
