Philadelphia-based Lincoln National Corp. plans to buy back $950 million worth of preferred stock to pay back the U.S. Treasury for money it received from the government last year.

Dennis R. Glass

The life insurer’s move, after discussions with the U.S. Office of Thrift Supervision, follows a similar action by Hartford Financial Services Group in March.

The shares were issued to the U.S. Treasury under the Treasury’s Capital Purchase Program (CPP).

Lincoln Financial intends to repurchase the $950 million of preferred shares with net proceeds from a $335 million common stock offering, net proceeds from a $250 million senior notes offering and cash currently held at the holding company. In addition, net proceeds from a senior notes offering of up to $500 million will be used as part of a long-term financing solution supporting universal life reserves of Lincoln Financial’s insurance subsidiaries, the company said.

“We appreciate the critical role the government and the American taxpayers have played in stabilizing the financial markets and we are pleased to announce a plan to repurchase Treasury’s investment sooner than originally anticipated,” said Dennis R. Glass, president and chief executive officer. “Lincoln Financial always viewed this investment as temporary capital and intended to return it as soon as it was prudent.

“As we have said, we ended the year in a strong capital position, and our first quarter results reflected the strength of our business model. The repurchase of the CPP preferred shares combined with securing long term financing for a portion of our life insurance reserves completes a series of capital initiatives in support of our strong ratings and gives us additional financial flexibility as we look to invest in our core businesses.”

The federal government continues to hold warrants to buy 13 million shares of Lincoln Financial at $10.92 per share, but Lincoln does not intend to repurchase them.