EQH

Hello, everyone. Thank you for joining us, and welcome to the Equitable Holdings Q1 2026 Earnings and Conferencing Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Erik Bass, Chief Strategy Officer and Head of Investor Relations. Erik, please go ahead.

Thank you. Good morning and welcome to Equitable Holdings' first quarter 2026 earnings call. Materials for today's call can be found on our website at ir.equitableholdings.com. Before we begin, I would like to note that some of the information we present today is forward-looking and subject to certain SEC rules and regulations regarding disclosure. Our results may differ materially from those expressed in or indicated by such forward-looking statements. Please refer to the safe harbor language on slide two of our presentation for additional information. Joining me on today's call are Mark Pearson, President and Chief Executive Officer of Equitable Holdings; Robin Raju, our Chief Financial Officer; Nick Lane, President of Equitable Financial; Onur Erzan, President of AllianceBernstein; and Thomas Simeone, Chief Financial Officer of AllianceBernstein.

During this call, we will be discussing certain financial measures that are not based on Generally Accepted Accounting Principles, also known as non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures and related definitions may be found on the investor relations portion of our website and in our earnings release, slide presentation, and financial supplement. We will also refer to the pending transaction with Corebridge. Any statements about the transaction made during this call are not an offer of securities. A registration statement containing a prospectus will be filed with the SEC in connection with the transaction. I will now turn the call over to Mark.

Good morning, thank you for joining today's call. The first quarter marked an extraordinary moment in Equitable's 166-year history with the announcement of our planned merger with Corebridge, which will create a world-class platform to help our customers plan, save for, and achieve secure financial futures. This morning, I will spend some time discussing why we believe that by leveraging the complementary strengths of Equitable and Corebridge, the combined company will deliver tremendous value for both our customers and shareholders. On slide four, I will start by providing a few highlights from our first quarter results. We reported non-GAAP operating earnings of $1.62 per share, or $1.68 per share after adjusting for notable items. This increased 25% versus the first quarter of 2025, driven by healthy organic growth momentum, improved mortality experience, and a lower share count.

We continue to expect earnings per share growth to exceed the high end of our 12%-15% target range in 2026. Assets under management ended the quarter at $1.1 trillion, up 9% year-over-year. While equity markets declined modestly in the first quarter, they have since recovered, and higher average AUM versus 2025 levels should continue to provide a near-term tailwind for earnings. Our balance sheet remains a core strength with a combined NAIC RBC ratio of approximately 475% and $1.2 billion of holding company liquidity. Our credit portfolio continues to perform well, and as Robin will walk through, we are positioned to handle even a severe stress scenario. We remain committed to being a consistent returner of capital and executing the share buybacks assumed in our 2026 financial plan.

Turning to organic growth. We see good momentum in retirement sales and flows, even as the level of competition has increased. Total sales increased 10% year-over-year, driven by strength in RILAs, and we have $1.3 billion of net inflows. Wealth management delivered another strong growth quarter with $2 billion of advisory net inflows. Over the last 12 months, the business produced a 13% organic growth rate. During the quarter, we also closed on the acquisition of Stifel Independent Advisors, which is a good example of how we can use bolt-on M&A to help scale our wealth management business. Asset management earnings grew 11% year-over-year, driven by higher AUM and increased ownership. AB had net outflows of $7.1 billion in the first quarter, driven primarily by active equities and taxable fixed income.

Private wealth and private markets remained bright spots as both had positive flows in the period. Total private markets AUM increased 13% year-over-year to $85 billion, and AB remains on track to meet or exceed its target of $90 billion-$100 billion in AUM by the end of 2027. While near-term flows may remain volatile, AB has a record institutional pipeline of nearly $28 billion, which includes several large insurance mandates that will fund over the next few quarters. AB will also be a meaningful beneficiary of the Corebridge merger, as we expect it to receive at least $100 billion of incremental assets over the next few years.

As I will walk through over the next few slides, the motivating factor behind the Corebridge merger is our belief that it will accelerate our growth strategy and position us to be a long-term winner across all the markets we compete in. The companies have complementary strengths with limited overlap across products. We have already begun the integration planning process and have high confidence in achieving at least $500 million of expense synergies. As a result, the merger will be immediately accretive to earnings per share, and we expect to deliver 10%+ accretion on a run rate basis by the end of 2028, with potential upside from revenue synergies. Moving to slide five, before talking about the merger, I want to highlight five attributes we believe are critical for long-term success and which we use when evaluating any strategic option, including this merger.

Underlying everything, of course, is providing an exceptional customer experience. Customers that are easy to do business with and offer the products and advice needed to transform complex financial risks into simple, reliable outcomes will attract clients and distributors. Developing deep brand loyalty will help create predictable and growing value for shareholders. Second, in intermediated markets like financial services, having strong distribution is critical as clients want local access to expert, personalized advice. Privileged shelf space, particularly in channels with high barriers to entry, provides a meaningful competitive advantage in acquiring new customers while also managing the cost of funds. Third is the imperative of competitive scale. Size matters. Being able to invest in technology and automation will improve efficiency and result in lower unit costs and a lower expense ratio. This provides capacity to reinvest in growth while simultaneously delivering higher profit margins.

Fourth, we know that shareholders value consistent growth in earnings and cash flow across different market cycles, and having diversified sources of earnings and capital enhances the ability to deliver this. Disciplined risk management is also critical to give clients and investors confidence in the resilience of the balance sheet, especially during periods of macro uncertainty and market stress. Finally, we see significant value in owning insurance, asset management, and wealth management businesses to participate in the full value chain and benefit from the significant demographic tailwinds driving growth across each of these markets. It also means that shareholders capture the high multiple fee earnings generated by distributing and managing the assets associated with the insurance and retirement solutions that are manufactured. By attracting the very best talent and aligning to these five convictions, we ensure that when our clients win, our shareholders win.

Turning to slide six, I will highlight why the merger with Corebridge aligns to these convictions and will drive growth and shareholder value. The merger brings together three outstanding franchises to create a diversified financial services company with over 12 million customers, $1.5 trillion in AUMA, and leading positions across retirement, life insurance, asset management, and wealth management. Equitable and Corebridge complement each other well with different strengths and limited overlap. We intend to capitalize on our scale advantages to reduce unit costs and achieve a lower cost of capital. We expect to have a top quartile expense ratio and will be able to combine our resources when making growth investments. This will make us more profitable, drive more cash generation, and increase our return on capital. We will have formidable distribution capabilities and leading positions across the retail, institutional, and work site channels.

The depth and breadth of our distribution should enable us to expand our offerings while achieving a lower average cost of funds, resulting in more profitable new business. We will also have flexibility to allocate capital where we see the best risk-adjusted returns and customer demand. In addition, our integrated business model allows us to capture the full value chain by acting as a product manufacturer, distributor, and asset manager. This differentiates us from our competitors, most of whom only participate in one or two of these verticals. While the merger will shift our mix more towards retirement, it also helps scale AB and wealth management, enhancing the value of these high multiple businesses. We remain focused on maximizing the flywheel benefits inherent in our model. Finally, the new Equitable will have a robust balance sheet and is expected to generate over $4 billion of cash flow annually.

We are aligned in having strong financial principles that govern how we operate, starting with economic management of the balance sheet and a focus on cash generation. Ultimately, we want to produce consistent results and cash flow across market cycles so that we can provide attractive returns to shareholders while also investing for growth. I will conclude on slide seven by providing some clear examples of how the merger will help accelerate growth across all our businesses. Starting with Retirement and Institutional, the combined firm will have approximately $540 billion of AUM and unmatched breadth across products and distribution. We knew that Equitable would need to become more diversified over time in order to fully participate in the growing U.S. retirement market. Combining with Corebridge makes us a top three provider of fixed and indexed annuities and expands our institutional capabilities, notably in pension risk transfer.

It also adds a strong life business that provides earnings and capital diversification and should benefit from selling through Equitable Advisors. In addition, the merger doubles our third-party distribution network to approximately 900 firms, expanding our ability to reach new customers. The combined firm will originate $70 billion-$80 billion of liabilities annually, highlighting the size and scale of our platform. We will have a more balanced business mix that provides liquidity benefits and positions us well to generate consistent growth across market cycles while deploying capital where we can earn the most attractive returns. Moving to asset management, AB will also benefit from the merger in multiple ways. We expect AB to add at least $100 billion of Corebridge general and separate account assets over the next couple of years, resulting in total AUM of nearly $1 trillion.

AB will also benefit from the combined firms increased liability generation, which should drive higher ongoing net inflows. We also see an opportunity to commercialize some of Corebridge's internal asset origination capabilities, particularly for real estate and commercial mortgage loans, by leveraging AB's global distribution. Over time, we expect to find additional sources of incremental revenues and net flows, including the potential to develop new commercial partnerships. Lastly, the addition of Corebridge Advisors accelerates the path to scaling our wealth management business and adds approximately $20 billion of AUA. The merger will expand our proprietary product offering to include fixed and indexed annuities and indexed universal life, which will be a win for advisors, particularly our emerging sales force. We will have a more attractive platform and more financial resources, which should enhance our ability to recruit and develop new and experienced financial advisors.

Overall, the key message I want to leave you with is that having increased scale would provide competitive advantages that translate into stronger and more consistent growth and enhances our profitability. I will now turn the call over to Robin to highlight the financial benefits from the merger and discuss our first quarter results in more detail.

Thanks, Mark. I want to echo my excitement about the merger and the ways in which it will accelerate our growth strategy and deliver attractive financial outcomes for our shareholders. On slide eight, we highlight some of the key financial benefits. First, the combined company will have a robust balance sheet with significant capital. As of year-end 2025, pro forma GAAP book value exceeded $30 billion, and the companies had over $25 billion of statutory capital. The pro forma leverage ratio is approximately 26%, which provides financial flexibility. Second, we will have a more diversified business mix with equal contribution from fee and spread-based earnings. This should help us generate more consistent earnings in different market environments. Third, we project at least 10% accretion to EPS and cash generation on a run rate basis by year-end 2028, driven by expense, capital, and tax synergies.

We also expect to have a 15%+ return on equity. These projections do not include any benefit from the anticipated revenue synergies. Finally, we forecast over $5 billion of annual earnings power and over $4 billion of cash flows to the holding company, which will make us the most profitable company in the sector based on U.S. earnings. Turning to slide nine, I will provide some more detail on first quarter results. On a consolidated basis, non-GAAP operating earnings were $472 million or $1.62 per share, and we reported net income of $621 million or $2.14 per share. Notable items in the quarter included $32 million of below plan alternatives and a $13 million benefit from the purchase of tax credits.

Adjusting for these items, non-GAAP operating earnings per share was $1.68, up 25% year-over-year. This is consistent with our earnings per share growth guidance of above 12%-15% for 2026. The 25% increase in earnings per share was driven by 9% year-over-year increase in total AUM, AUA, lower mortality claims, the benefit of our increased ownership stake in AllianceBernstein, and a lower share count, which reflects the incremental buybacks executed following the RGA transaction. In the first quarter of 2026, our alts portfolio, which is 2% of our general account, produced an annualized return of 3.5%, with results pressured by lower CLO equity returns. Given weaker market conditions in the first quarter, we currently project our portfolio to have a return of 2%-3% in the second quarter.

While it's premature to predict what will happen in the second half of 2026, based on the lower returns for the first half of the year, we now expect the full year return to be below our prior 8%-9% guidance. Adjusted book value per share ex-AOCI with AB at market value was $34.70. We view this as a more meaningful number than reported book value per share, which significantly understates the fair value of our AB stake. On this basis, our adjusted debt-to-capital ratio was 24.5%, down 40 basis points sequentially. On slide 10, I'll provide some more details on segment-level earnings drivers. In retirement, first quarter earnings excluding notable items were $394 million. Net interest margin, or NIM, increased 3% sequentially, as lower alternative investment income was offset by growth in general account assets.

Excluding alternatives, our NIM spread improved by 5 basis points sequentially, helped by a 4 basis point benefit from a modest recovery in MVAs. This reverses the downward trend in spreads we experienced over the past year and supports our view that spreads are beginning to stabilize. On a sequential basis, the growth in NIM was partially offset by lower fee-based revenues as market declines pressured average separate account AUM. Turning to asset management, AB reported earnings of $140 million, up 11% year-over-year as a result of higher base fees and our increased ownership percentage. While base fees benefited from 7% year-over-year increase in AUM, this was partially offset by lower fee rate due to a shift in asset mix.

As expected, performance fees were relatively modest in this quarter, but we raised our full year forecast from $80 million-$100 million to $95 million-$115 million. Moving to wealth management, we experienced strong year-over-year growth in advisory fees and transaction revenues, driving a 22% increase in earnings. As a reminder, fourth quarter 2025 results benefited from favorable one-time items. In this quarter, we had seasonally higher expenses and a couple of million of costs related with the Stifel acquisition. We still expect double-digit earnings growth in 2026. Finally, corporate and other reported a loss of $98 million in the quarter after adjusting for notable items, which is consistent with our 2026 guidance. Mortality was slightly favorable in the quarter and improved versus previous periods.

On slide 11, I'll highlight Equitable's strong balance sheet and cash flows, which enable us to be a consistent returner of capital to shareholders. We know there has been a lot of focus on credit risk, so we've updated our investment portfolio stress test to reflect our holdings as of year-end 2025. This assumes a hypothetical severe credit stress scenario, at least as bad as the global financial crisis and a decline of 40% in equity markets. We estimate slightly less than a 50-point decline in RBC ratio, which from a starting point of 475% still leaves us comfortably above our 400% target. As a result, we are well-positioned to handle a potential downturn in credit markets. That being said, today we do not see any signs of weakness in our portfolio.

In the appendix, we provided updated disclosures on our private credit portfolio, which represent 18% of our general account and is 95% investment-grade assets that match well against our liabilities. Let me now turn to cash. We ended the first quarter with $1.2 billion of cash at the holding company, above our $500 million target, and we remain on track to achieve our target of 2026 cash generation of $1.8 billion. During the first quarter, we returned $223 million to shareholders, including $147 million of share repurchases. We were blacked out from buying back shares for the second half of the quarter due to the merger with Corebridge, which depressed our payout ratio for the period.

We remain committed to delivering our 60%-70% payout ratio target for 2026 and recognize that share buybacks look extremely compelling at the current valuation. We plan to be in the market purchasing shares during the open windows between now and the closing of the transaction. On slide 12, we show a timeline with key dates related to the merger and the specific time periods of when we will be able to repurchase stock. Both Equitable and Corebridge trade at a significant discount relative to where we believe they should be valued, making buybacks meaningfully accretive to shareholders. As a result, you can expect that we will be active in the market during the windows that are available to us. We expect to file the initial merger proxy statement today after market close. We can repurchase shares from that point until we mail the final proxy.

There is not a set date for that mailing, we do not expect it to occur until at least early June. We will be able to repurchase shares again after the shareholder vote. If any repurchases from our 2026 capital plan are not completed prior to the merger close, we plan to execute them as part of an ASR shortly after the closing. As a reminder, the exchange ratio for the merger is fixed and will not be affected by any share repurchases executed by either company. I will now turn the call back over to Mark for some closing comments. Mark?

Thanks, Robin. Equitable delivered solid first quarter results, and we remain confident in achieving our EPS growth and cash generation guidance for 2026, even with the volatile market backdrop. Looking forward, I am incredibly excited about the powerhouse franchise we are creating through the merger with Corebridge. As we have talked about this morning, the combined company will have the scale, distribution strength, and product breadth to deliver differentiated growth and returns. I am confident that this merger positions us to win with customers and deliver superior value to shareholders over time. We will now open the line to take your questions.

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, Please press star one to raise your hand, to withdraw your question press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Wes Carmichael with Wells Fargo. Your line is open. Please go ahead.

Hey, good morning. Thank you. My first question was on the retirement segment. You had a pretty good earnings result in the quarter. Previously, I think you talked about spread compression abating in the second half of 2026, at least on a percentage basis. Do you still think that's the case given the mix of the book here? Maybe you could just talk a little bit about what you're seeing on the cost of funds side from competitive dynamic.

Sure, Wes. Thank you for your question. We were happy to see a spread stabilize here in the first quarter. If you look quarter-over-quarter, spread income NIM was up $11 million quarter-over-quarter. If you exclude alts too, it's up even more, and excluding some of the MVA benefit, it was up about 1 basis point net. If you look at it was about 1.69% or 169 basis points. I think that's a level you can probably expect at this point, and you can expect spread income to grow as the general account excluding embedded derivatives grow.

I mean, two primary factors that you see, yes, with the abatement of some of the higher margin in-force that's run off, that's a smaller part of the business mix, but also the discipline in the new business underwriting that we're seeing. Despite what you hear on the competition, you know, RILA sales were up 14% year-over-year, and the pricing discipline has been maintained, and the margins have been good. The combination of that with the runoff of the in-force should lead to stabilization of spreads going forward.

Got it. Thanks, Robin. Maybe just a more broad question, but on the Equitable-Corebridge merger, I know you reiterated EPS guidance with materials. Just wondering if you've done a bit more work, I guess, in earnest on progress toward the merger. Have any of your expectations changed in terms of the financial impact? Maybe anywhere are you seeing more or less opportunity relative to, I guess, a little bit more than a month ago when the deal was announced?

Thanks, Wes. It's Mark Pearson. Yes, I think the things we'd say is the integration planning process is well underway now with the top 50 or so leaders from each of the organizations. We really are confirming through that the complementarity of the two businesses. We are stronger together in terms of our product breadth, in terms of our distribution, in terms of the scale. That is confirming everything we've told you in terms of the synergy opportunities and the look forward. We are also pretty excited on the revenue synergy side, but we're gonna save telling you that until first half of 2027 when we've done the work and we can start to quantify it for you.

Confirming the expense synergies now and then also starting to work on the revenue side as well.

Got it. Thank you.

Your next question comes from the line of Suneet Kamath with Jefferies. Your line is open. Please go ahead.

Great. Thanks. I just wanted to start on the buybacks with the window opening, I guess, later tonight. How should we think about the pace of buybacks here over the next month? Is there any sort of restrictions or coordination that's required with Corebridge, or are you guys just kind of operating at your own sort of speed?

Sure. Thanks, Suneet. As we laid out in the presentation, we're excited to say we're gonna be back in the market with share buybacks. We expect to file the proxy this evening. That enables us to open up the window again until the final mailing that will happen in June. Within that time period, expect us to be active in the market. The returns on a share buyback are very attractive at this point in time. That's one of the reasons why we wanted to be back in. Both us and Corebridge will coordinate together to make sure that share buybacks maintain accretion for shareholders throughout the period. As I laid out in the presentation, after the shareholder vote, that'll open up the next window for share buybacks.

Anything that's not completed, by the closing will be completed as an ASR if needed. Shareholders should expect the same level of capital return from both companies that they would have otherwise received. We're happy to say we're going to be at back in the market because buybacks are accretive given that both stocks look cheap right now.

Okay, that's helpful. I guess on the $70 billion-$80 billion of originated liabilities that you guys are sort of talking about, is there a practical limit in terms of how much assets AB can originate in order to back those liabilities?

No, we're fortunate. With $70 billion-$80 billion of liabilities, we're gonna have four asset managers that we're gonna leverage. Obviously AllianceBernstein are in-house. Also, we get to benefit from some of the capabilities that Corebridge brings to the merger, so Blackstone, BlackRock, and their internal capabilities as well. $70 billion-$80 billion provides lots of assets to put to work and allows us to be disciplined on the general account and getting the best risk-adjusted returns on those assets across the board. I would expect everybody to benefit. Obviously, AB will benefit from the broader revenue synergies as well. That doesn't take into account the future growth. That's the $100 billion in separate account and general account assets that will move over to AB as a starting point.

Then there'll be upside from there with the future growth of the $70 billion-$80 billion benefiting AB and our other asset managers as well.

Okay, thanks.

Your next question comes from the line of Ryan Krueger with KBW. Your line is open. Please go ahead.

Hey, thanks. Good morning. In the merger call, you talked about 2%-4% synergies from capital and taxes that were part of the 10%+ overall synergies. I just wanted to, I guess, ask if, you know, is that a true best estimate or did you embed some conservatism there and, you know, you could possibly, as you do more work, see some upside to the capital benefits of the merger?

Thanks, Ryan. Some of the benefits that we spoke about the merger, I think it's just important to repeat. It's gonna be day one accretive and 10%+ going forward after everything's at a run rate basis. In addition, the diversification of both businesses together means we'll have more stability in earnings and cash flows, which I think will lead to a lower cost of capital and a better profile for us going forward. To your question on the 10%+ synergies, we referenced 6%-8% coming from expense synergies. There we said we at least expect to at least get $500 million. There should be upside to that. The remainder will be from tax and capital, which I would say is our best estimate at this point in time.

We'll always do more work going forward. You can see both companies, Equitable and Corebridge, very active in terms of capital management, since the IPO, you could expect that to continue going forward. Most importantly, though, as Mark mentioned earlier, these numbers do not include the benefit of revenue synergies. I think that's what's gonna differentiate this transaction on a go-forward basis, is the more assets and revenues going to AllianceBernstein, leveraging Corebridge's index IUL and fixed annuity products with Equitable Advisors and leveraging our VO product with their third-party distribution. If we can be successful in capturing more revenue with the two companies together, this will be a stronger franchise that deserves a higher multiple going forward.

Thank you. Just one question on the P-GAAP impacts. I mean, I understand that it's contingent on where interest rates are, and there's probably a lot of work to be done on this. Maybe just directionally, can you give any sense of, like, if the merger closed now, would this be more likely to be a positive or negative potential impact to your GAAP earnings?

I think it's too early to say at this point in time. As we put together the P-GAAP, we'll finalize that prior to close, and we'll certainly give you that guidance. I think there'll be moving parts in the P-GAAP, one, on the balance sheet basis. Obviously, the book value of the combined companies will be bigger, and that'll just be reflective of wherever the market cap of Equitable is at that standpoint. On the income side, there'll be moving parts between VOBA, DAC, and then fair value of some of the assets, and we'll do that work. As we do that work, we'll disclose it as we get closer to the close of the transaction.

Okay. Thank you.

Your next question comes from the line of Tom Gallagher with Evercore ISI. Your line is open. Please go ahead.

Good morning. One question about the quarter and then one about the merger. On the quarter, the MVA gains that you had in retirement, Robin, can you comment on absolute dollars of earnings that that represented this quarter? Would you expect there to be any sustainability there, or was there something unusual about why they were higher?

Sure. Thanks. We were, again, key point for me is that spread stabilized ex-alt and ex-DMVA, so about a 1 basis point improvement. The MVA was about, approximately $10 million in the quarter. We don't expect benefits on a go-forward basis. That's something we don't include in our forecast or budgeting. As you've seen, that's been positive or negative through different periods over time. Excluding the MVA and excluding the impact of alts, spreads improved by 1 basis point quarter-over-quarter.

Gotcha. $10 million was the earnings contribution?

Yes. Approximately.

Gotcha. My question on the merger, I listened closely to what you've been saying about the revenue synergies. I haven't heard much of an emphasis on your institutional spread business, which I know is small for you. It's bigger for Corebridge. Is that an opportunity? Because when I look at you and Corebridge on a standalone basis, you're probably half of the size or maybe 30% or 40% of the size of that business compared to, like, the Mets and the Prus of the world. I'm just wondering, is that a business that we should expect you to really scale up?

Sure. I think for Corebridge and Equitable, the FABN market has been attractive. It's generated good returns for us. It's obviously spread dependent, depending on where our spreads trade at different time periods, that allows us to go in and out. Obviously with the balance sheet being much bigger, it gives us more capacity to lean in in that market, given if spreads are there and pricing is there. It's certainly an opportunity for us with the larger balance sheet going forward.

Okay, thanks.

Your next question comes from the line of Joel Hurwitz with Dowling & Partners. Your line is open. Please go ahead.

Hey, good morning. Robin, first, can you just unpack what you guys saw from a mortality perspective in the quarter? It looked pretty good with the reported benefit ratio at 83.1%.

Yeah, it was nice to have a nice quarter on mortality this quarter. You know, our benefit ratio is 83%. That's the lowest it's been in any quarter over the last year, which is good. Overall, we saw lower claims, and less high base amount claims as well, specifically with benefited us this quarter. Going forward, we think with the guidance that we've given to the market, captures appropriately what we'd expect to see in mortality. You know, we look forward to speaking more about good mortality and focusing on the growth in the other businesses as well going forward.

Got it. In retirement, it looks like you're starting to utilize flow reinsurance for some of your spread business. Can you just talk about what products that's on, how much you, I guess, you plan to do and the economics for Equitable?

Sure, yes. We did, in the fourth quarter, we started a bit to do some flow reinsurance on our RILA product. Flow reinsurance is a tool that we think is helpful for us when making products accretive going forward. It's an important tool in the toolkit. We could look at flow reinsurance in other products as well, and even post-merger, as you know, Corebridge does some flow reinsurance as well. As long as it's accretive for us versus not doing it's something that we'll look at selectively in different products. As you know, it's important to have a good counterparty, which we have. We try to make sure AB continues to manage a portion of the assets for us going forward. We also have Bermuda as a tool in our toolkit as well.

We'll look at that for flow reinsurance for selective products, for our internal products and also potentially for third-party opportunities going forward as well. Flow reinsurance is something that we'll always look at across our businesses.

Got it. Thank you.

Your next question comes from the line of Alex Scott with Barclays. Your line is open. Please go ahead.

Hi, good morning. Thanks. First one I have is on cash flow. Wanted to see if you could talk a bit about just the cash generation of the business and how that'll trend through, you know, the integration process, you know, with just some higher expenses related to the integration itself and probably some sort of hockey stick dynamic. Could you help us think through the way that that'll progress over the next few years?

It's probably a little bit too early to give you too many specifics. I'd say, you know, both companies obviously have strong cash flow generation across. On the Equitable side, we continue to feel comfortable with our $1.8 billion guidance that we provided this year and the $2 billion for 2027. Expect that to be in addition to the investments that we have in growth to help grow our new business franchises across the board. As part of the integration, we will target $500+ million in expense synergies and expect that'll be a 1.5x investment with a very good payback associated with it.

That investment is split between cash and non-cash, and the timing of that, we'll provide further updates as we get closer to the close of the transaction and the integration planning is more complete.

Got it. That's helpful. I guess, related topic is just the excess capital level that you have right now, particularly at the OpCo level, pretty significant, and Corebridge has a pretty significant amount of excess capital as well. You know, how will this transaction change the way you approach at all to?

You know, the amount of excess capital you hold over time. I mean, I think it's been a while now that you've sort of sat on a pretty high level, and you mentioned this, the stress test doesn't even take you down that close to your buffer at this point, and that was a pretty extreme stress test. You know, are you thinking about that differently with the transaction coming on?

Yeah. I think, again, going forward, we will have an Investor Day in 2027 where we'll give further guidance on all those metrics. Look, if I take a step back, as we mentioned, the two companies are stronger together. The balance sheets are more resilient. They're more diversified across each other. There'll be a lower cost of equity across the company, and we'll be well-positioned to maintain, you know, different cycles in the market, whether that be credit or equity, because of the diversification of the businesses. What does that do? That allows us to leverage excess capital for best use for shareholders. Obviously, share buybacks are a very attractive use at this time given the valuations of both companies. It also allows us to invest in growth.

We see very good returns across in the RILA market and the other markets across both companies. The more we can invest in growth and grow earnings going forward, which will translate into growth and cash, that'll benefit shareholders over the long term. We'll evaluate all those investment in growth, investment in share buybacks for uses of excess capital as the two companies come together.

Got it. Thank you.

Your next question comes from the line of Yaron Kinar with Mizuho. Your line is open. Please go ahead.

Thank you. Good morning. Just a couple of, on capital deployment. You know, if the windows end up being a bit narrower than expected or liked and ultimately you have to complete the buyback through an ASR at the end of the year, is that 15%+ EPS growth target still achievable?

Yes. I think we're pretty comfortable. If you look where we, the quarter we've ended at, +25% on an EPS basis overall. That was with a lower share buyback in the first quarter. If you look the windows that we have available to us, we believe we can deploy a lot of capital in the markets to buy back stock at these levels and keeping within our 60%-70% payout ratio by year-end. The windows that we have are pretty broad and we think give us the availability and the timing needed to deploy our capital plan. Anything that is left, we'll complete it in an ASR. We feel comfortable with the guidance.

Remember, the guidance for this year is that we'd be above our 12%-15%, and we still expect to be above our 12%-15%, as we progress during the year.

Great. Then the second one also on capital deployment. You know, with the Stifel deal done, I think you'd expressed interest in continuing to grow the wealth business both organically and inorganically. I'm assuming though that given where the share price is today, buybacks would be a far more attractive capital deployment venue or avenue than doing a deal in wealth.

Look, I don't know if I'd say it all is deal specific. Ultimately, we're in a fortunate position where the company can execute on its capital return program for shareholders and invest for growth. That's a position of strength that we're in right now. Obviously we want the Stifel transaction to complete its closure. The advisors will transition to our platform later this year. We can also look for opportunities at AllianceBernstein to grow on the asset management side as well. Obviously, where the share price is now, it needs to be accretive for shareholders, as you see this deal was as well with the merger that we announced.

Ultimately, we're well-positioned because we can buy back stock at this price and deploy excess capital to fuel future growth and make us a stronger company going forward.

Thank you.

Your next question comes from the line of Wilma Burdis with Raymond James. Your line is open. Please go ahead.

Hey, good morning. Given the window for buybacks will be May 6 through sometime in June, maybe if we could just drill down a little bit. Is there any limit to the amount Equitable could buy given limitations on the percentage of daily trading volume? If you could just help us a little bit with the math there. I was just giving it a shot myself, but didn't quite get there, so thanks.

Hey, Wilma. Yes. Look, we obviously have some limitations on average daily trading volume that we have to keep. You know, we feel as though, and I think corporate would say the same, the windows that we have available to us provide us the flexibility that we need to be in the market to buy back stock. We'll have this. Again, we'll have this time period between when we file the proxy tonight versus the final proxy in June to complete, you know, a decent amount of share buybacks. We'll also have the ability again post a shareholder vote. We think we can. We feel pretty comfortable to execute within a reasonable average daily trading volume our capital plans this year.

We'd expect to end with ASR at our 60%-70% payout ratio and no change in the amount of capital return to shareholders for this year.

Okay. if there's any way you can give a little bit more detail just on the restrictions there, just as a quick follow-up there. Second question. I think the commentary that you guys have implied on the capital and tax benefits, I back calculated it to around $500 million-$1.5 billion of capital that would be freed up by the deal. Any way to tell if that estimate is somewhere in the ballpark? Thanks

Hey, Wilma, I don't know if there's any other color I'd give on the share buybacks at this time. On the capital and tax benefits of the deal, you know, as we mentioned, the EPS accretion will be 6%-8% from the expenses and hopefully more than that. We'd expect it to be more given the size of synergy potential that we have between both organizations, and then we'll have capital and tax benefits as well that we're not gonna give nominal amounts at this time. Again, going forward, as we get into the Investor Day next year, I think you could expect more information on those numbers and also the revenue synergy.

Don't forget, that's the big part that we get excited about internally of what this brings to AllianceBernstein, what this brings to our wealth management business, and what this does for a broader product distribution across both companies. That will lead to a higher multiple over time.

Absolutely. Love the distribution. Thank you.

Your next question comes from the line of Pablo Singzon with JPMorgan. Your line is open. Please go ahead.

Hi. Good morning. Just a follow-up on the mortality. 1Q and 4Q tend to be the highest mortality quarters for you. Given this, do you expect corporate loss to be better sequentially, or was 1Q just too favorable?

No, look, in one quarter, we did have some favorability in mortality. As we mentioned, the benefits ratio with 83%, that's lower than it was last quarter, as you could see in the supplement and also lower than it was over the last year. The corporate and other guidance that we gave for the full year was the $350 million-$400 million. We expect to be within that guidance if you look on a normalized basis this quarter. Also keep in mind, going forward, the benefit of the RGA transaction really limits the volatility related to mortality for us going forward. I think you're starting to see those benefits come through, then we'd expect that to continue.

Thanks, Robin. Second question. The implementation of VM-22, do you see that having any material impact, whether from a price or a capital standpoint on the fixed annuity block you're getting from Corebridge? Thanks.

Yeah. I'd let Corebridge answer that on the VM-22 side. Look, we've done obviously, as you can look across both sides, have done diligence on each other on whether that be on the asset side or the liability and potential regulation. You know, we feel comfortable where both companies combined are positioned ahead of any regulation or asset changes.

Thank you.

Your next question comes from the line of Tracy Benguigui with Wolfe Research. Your line is open. Please go ahead.

Thank you. Good morning. Going back to the P-GAAP changes, you mentioned some of the moving parts. I want to touch on AB. It seems like a big thing that folks misunderstand about Equitable is your asset leverage. They're not looking at the right denominator. My personal view is statutory capital matters more. With this merger coming up, I understand with your P-GAAP, you could mark up AB. My question is, how should we expect a large goodwill asset? I'm also curious, is doing the deal the only way to mechanically recognize AB's equity value?

Sure. Thanks, thanks, Tracy. You know, I think you're right. I think the way to look at it is not GAAP leverage, but obviously, stat is a bigger piece and something that a lot of people don't look at. On the GAAP side, you're right. It doesn't capture the full market value of AllianceBernstein. Outside of a transaction like and with P-GAAP, I don't think you can. Since we own AllianceBernstein, we can't write up the asset as it is, as it exists today. That is one of the benefits of the transaction. It will lead to some additional goodwill, but there are a lot of moving parts related to the P-GAAP. It's too early to give you precise numbers on how the P-GAAP works.

You know, ultimately, both companies, if you look, as I mentioned, the statutory capital is going to be $25 billion of the pro forma company. The GAAP equity is going to be above $30 billion. We feel very well-positioned in terms of the size of both balance sheets, and especially well-positioned having, you know, AB, a wealth management franchise, and a broader retirement platform to grow sales.

Well, staying with AB, I'm curious if the combined company's plans are to change the 68% stake.

No. Currently, right now, we're quite happy with our ownership of AllianceBernstein at 68%, 69%. AB is a key part of the flywheel and expected to grow. Again, the synergy potential of AB is pretty significant. Maybe I'll ask Onur to talk about the revenue synergies that potential of AllianceBernstein. I think that's a big part of this deal is the benefits of AllianceBernstein and getting the $100 billion of separate account and general account assets.

Yeah. Thanks, Robin. I'll also let you catch your breath a bit after multiple questions. Definitely, we are very excited about the $100+ billion that Mark and Robin mentioned. Obviously, it's going to come from both the general account and the separate account businesses, as well as funds and retirement plans. We have multiple opportunities to do work over the next seven, eight months before the merger closes. A very actionable, bankable bottom-up plan, and that comes on top of a record pipeline we had before the Corebridge-Equitable merger. It builds on a very sizable pipeline that already exists. Very excited about that. Also like the fact that it's a diverse set of asset classes ranging from public to private, fixed income, multi-asset equities. It will allow us to scale multiple platforms all at the same time.

Would you want to take that stake up if you like the business?

No change right now in our stake of AllianceBernstein. I think we've been clear of that after we, you know, purchased at the increase last year, we went from 62% to approximately 68%, 69%. We have no other plans at this time. We're really focused. The combined firms are really focused on execution of this merger. You know, we're pretty excited. We, as Mark mentioned on the call, we established the integration office. We got our teams together, and everybody's focused on planning to execute the expense and revenue synergies and making sure we have the right people in the right seats. That's our focus at this time.

Thank you.

Your next question comes from the line of Mark Hughes with Truist. Your line is open. Please go ahead.

Yeah, thank you very much. Good morning. In the RILA business, sales are pretty strong. I wonder if you could discuss the competitive environment and then maybe touch on the biggest impact, biggest benefit from the merger on distribution.

Great. This is Nick. As you mentioned, overall, we had a strong quarter in sales and volume, with RILAs up 14% and $1.3 billion of net flows, translating to a 6% trailing 12-month organic growth rate. Look, we're very mindful of competitive trends. As we mentioned last quarter, we saw new entrants in 2025 reverberate back to more rational pricing in the fourth quarter, and we don't see any material change in competitive activity this quarter. Looking forward, we continue to see strong demand for RILA driven by favorable demographics. In the macro uncertainty, I'd highlight consumer sentiment is at an all-time low, so people are looking for protected equity stories. We believe we've got a durable edge to capture it.

This is both generating attractive yields through AB, our differentiated distribution with Equitable Advisors, and our third-party networks. As Robin and Mark alluded to, the merger will even expand our reach in that area. Finally, we have deep relationships and scale. As the pie's grown, we've nearly doubled our sales over the last three years. This was another first quarter in record sales and volume. Just impacting, you know, the benefits on distribution, better reach, deeper relationships. As Mark mentioned, we see scale becoming in equally increasingly important to generate profitable growth and protect margins. Corebridge will give us both of this immediately. As such, we think we're in a privileged position to capture the disproportionate share of value in the growing retirement market.

Understood. Of the $70 billion-$80 billion in liability origination, capacity, how much of that is third party versus owned distribution?

Yeah. The way to look about it is the $70 billion-$80 billion is the combined companies post-merger. Today in for Equitable, about 35% of our sales in the retirement business come through Equitable Advisors. That's the way to look at it.

Thank you.

We have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect.