Suneet Kamath: Can you give us a sense maybe of how your fixed annuity spreads that you wrote on new business in the sort of fourth quarter and the third quarter kind of compared to the in-force?
Unidentified Company Representative: Yes. So Suneet, this is David. I’d say given the rate environment and with the investment achievables and where crediting was. The spreads on the product were strong, and we were very comfortable with the profitability as well as the competitive nature of the product that we wrote in the quarter.
Suneet Kamath: And then you made a comment about not expecting, I guess, the same level of fixed annuity sales in 2023. A I guess, where do you see the best growth opportunities in terms of annuities? I mean you mentioned a new Shield product. But just curious kind of where you think the puck is going on that business.
Myles Lambert: Suneet, it’s Myles. I’ll take that one. So yes, we’re highly focused on growing Shield sales, a suite of Shield products this year, and that’s where we’re going to — we expect to see most of the growth.
Operator: And it comes from the line of John Barnidge with Piper Sandler. Please proceed.
John Barnidge: I noticed on the investment portfolio, mortgage loan exposure grew from 16% to 20% over the last year. Can you maybe talk about the attractiveness of that asset class where rates are. I get it pairs nicely with spread products, but curious on that growth through third-party investment managers.
John Rosenthal: John, it’s John. And yes, the — our mortgage loan portfolio grew from about 16% of our assets to 20%. So you’re pretty nice growth during the year. We like — well, as a reminder, it’s not just commercial mortgage loans. Although they do make up the majority at about $13.5 billion, we have a $5 billion allocation to residential whole loans and a little over $4 billion in agricultural mortgages. We like all three of those asset classes for their relative value as well as a diversifier away from corporate credit, which is our biggest exposure, as you know. So we intended to grow the asset class. And you’re right, these loans are a really good fit for our institutional spread margin business. which grew by about $5 billion during the year and accounted for a nice portion of the commercial loan growth.
Operator: And the question comes from the line of Tom Gallagher with Evercore ISI. Please proceed.
Tom Gallagher: Eric, I just wanted to start on you’re getting a little more cautious on capital return. Can you just give some indication about what guidepost you’re looking at? Is it really just the passage of time in terms of the Fed tightening cycle ending and seeing what the impact is before you pivot back to kind of going back to a higher level of capital return? Any color on that?
Eric Steigerwalt: Sure, Tom. Look, I think you got it, but I’m happy to talk a little bit about it. We’re watching the macroeconomic environment. Obviously, us and everybody else is watching what the Fed is doing. Are we going to have a real credit cycle or not? We want to return capital — we continue to do so as we speak in the first 5 weeks, we repurchased about 0.7% of our shares. So it’s not like we’ve stopped returning capital, and it’s definitely strategically not like we’re going to stop returning capital. But we’re cautious. We’ve said this many times. You’ve seen what we’ve done over the last four years. We want to protect what we’ve built here. We’ve got an outstanding distribution franchise. And I want to make sure that we’re in a situation where we can sell.
