(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Exhibit Number | Description | |||||||
99.1 | ||||||||
99.2 | ||||||||
104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
AMERICAN EQUITY | |||||||||||
INVESTMENT LIFE HOLDING COMPANY | |||||||||||
By: | /s/ Axel Andre | ||||||||||
Axel Andre | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
For more information, contact: | ||||||||
Steven D. Schwartz, Head of Investor Relations | ||||||||
(515) 273-3763, sschwartz@american-equity.com | ||||||||
FOR IMMEDIATE RELEASE | ||||||||
August 7, 2023 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Premiums and other considerations | $ | 2,516 | $ | 3,831 | $ | 6,653 | $ | 13,909 | |||||||||||||||
Annuity product charges | 71,642 | 55,514 | 134,233 | 107,869 | |||||||||||||||||||
Net investment income | 542,685 | 592,308 | 1,104,008 | 1,159,731 | |||||||||||||||||||
Change in fair value of derivatives | 242,739 | (506,181) | 288,629 | (983,700) | |||||||||||||||||||
Net realized losses on investments | (24,679) | (33,272) | (52,466) | (46,399) | |||||||||||||||||||
Other revenue | 16,736 | 9,408 | 33,130 | 18,225 | |||||||||||||||||||
Total revenues | 851,639 | 121,608 | 1,514,187 | 269,635 | |||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||
Insurance policy benefits and change in future policy benefits | 5,125 | 6,998 | 12,333 | 20,613 | |||||||||||||||||||
Interest sensitive and index product benefits | 122,387 | 140,346 | 180,298 | 428,263 | |||||||||||||||||||
Market risk benefits (gains) losses | (144,124) | (299,278) | 39,570 | (107,385) | |||||||||||||||||||
Amortization of deferred sales inducements | 46,951 | 44,696 | 93,552 | 89,781 | |||||||||||||||||||
Change in fair value of embedded derivatives | 213,764 | (885,984) | 618,204 | (2,279,633) | |||||||||||||||||||
Interest expense on notes and loan payable | 11,227 | 6,461 | 22,245 | 12,886 | |||||||||||||||||||
Interest expense on subordinated debentures | 1,338 | 1,346 | 2,674 | 2,663 | |||||||||||||||||||
Amortization of deferred policy acquisition costs | 68,476 | 72,485 | 136,711 | 145,454 | |||||||||||||||||||
Other operating costs and expenses | 75,697 | 59,872 | 149,701 | 117,667 | |||||||||||||||||||
Total benefits and expenses | 400,841 | (853,058) | 1,255,288 | (1,569,691) | |||||||||||||||||||
Income before income taxes | 450,798 | 974,666 | 258,899 | 1,839,326 | |||||||||||||||||||
Income tax expense | 95,652 | 211,377 | 59,644 | 396,572 | |||||||||||||||||||
Net income | 355,146 | 763,289 | 199,255 | 1,442,754 | |||||||||||||||||||
Less: Net loss available to noncontrolling interests | (217) | (4) | (114) | (4) | |||||||||||||||||||
Net income available to American Equity Investment Life Holding Company stockholders | 355,363 | 763,293 | 199,369 | 1,442,758 | |||||||||||||||||||
Less: Preferred stock dividends | 10,919 | 10,919 | 21,838 | 21,838 | |||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 344,444 | $ | 752,374 | $ | 177,531 | $ | 1,420,920 | |||||||||||||||
Earnings per common share | $ | 4.43 | $ | 8.13 | $ | 2.20 | $ | 15.01 | |||||||||||||||
Earnings per common share - assuming dilution | $ | 4.36 | $ | 8.06 | $ | 2.17 | $ | 14.86 | |||||||||||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||||||||||
Earnings per common share | 77,767 | 92,544 | 80,576 | 94,693 | |||||||||||||||||||
Earnings per common share - assuming dilution | 78,928 | 93,375 | 81,824 | 95,652 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 344,444 | $ | 752,374 | $ | 177,531 | $ | 1,420,920 | |||||||||||||||
Adjustments to arrive at non-GAAP operating income available to common stockholders: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | 22,737 | 37,054 | 47,121 | 50,779 | |||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (124,816) | (470,813) | 81,386 | (1,318,020) | |||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (184,700) | (335,330) | (47,750) | (216,417) | |||||||||||||||||||
Net investment income | 4,609 | — | 2,118 | — | |||||||||||||||||||
Other revenue | 5,969 | — | 11,938 | — | |||||||||||||||||||
Income taxes | 59,373 | 167,944 | (20,392) | 321,034 | |||||||||||||||||||
Non-GAAP operating income available to common stockholders | $ | 127,616 | $ | 151,229 | $ | 251,952 | $ | 258,296 | |||||||||||||||
Impact of excluding notable items (a) | $ | 8,892 | $ | — | $ | 18,458 | $ | — | |||||||||||||||
Per common share - assuming dilution: | |||||||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 4.36 | $ | 8.06 | $ | 2.17 | $ | 14.86 | |||||||||||||||
Adjustments to arrive at non-GAAP operating income available to common stockholders: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | 0.29 | 0.39 | 0.58 | 0.53 | |||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (1.58) | (5.04) | 0.99 | (13.78) | |||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (2.34) | (3.59) | (0.58) | (2.26) | |||||||||||||||||||
Net investment income | 0.06 | — | 0.02 | — | |||||||||||||||||||
Other revenue | 0.08 | — | 0.15 | — | |||||||||||||||||||
Income taxes | 0.75 | 1.80 | (0.25) | 3.35 | |||||||||||||||||||
Non-GAAP operating income available to common stockholders | $ | 1.62 | $ | 1.62 | $ | 3.08 | $ | 2.70 | |||||||||||||||
Impact of excluding notable items (a) | $ | 0.11 | $ | — | $ | 0.23 | $ | — |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Notable items impacting non-GAAP operating income available to common stockholders: | |||||||||||||||||||||||
Expense associated with strategic incentive award | 8,892 | — | $ | 18,458 | $ | — | |||||||||||||||||
Total notable items (a) | $ | 8,892 | $ | — | $ | 18,458 | $ | — |
Q2 2023 | |||||
Total stockholders’ equity attributable to American Equity Investment Life Holding Company | $ | 2,571,915 | |||
Equity available to preferred stockholders (a) | (700,000) | ||||
Total common stockholders' equity (b) | 1,871,915 | ||||
Accumulated other comprehensive (income) loss (AOCI) | 3,425,248 | ||||
Total common stockholders’ equity excluding AOCI (b) | 5,297,163 | ||||
Net impact of fair value accounting for derivatives and embedded derivatives | (1,587,599) | ||||
Net capital markets impact on the fair value of market risk benefits | (638,442) | ||||
Total common stockholders’ equity excluding AOCI and the net impact of fair value accounting for fixed index annuities (b) | $ | 3,071,122 | |||
Common shares outstanding | 78,047,941 | ||||
Book Value per Common Share: (c) | |||||
Book value per common share | $ | 23.98 | |||
Book value per common share excluding AOCI (b) | $ | 67.87 | |||
Book value per common share excluding AOCI and the net impact of fair value accounting for fixed index annuities (b) | $ | 39.35 | |||
Twelve Months Ended | |||||
June 30, 2023 | |||||
Average Common Stockholders' Equity Attributable to American Equity Investment Life Holding Company, Excluding Average AOCI and Average Net Impact of Fair Value Accounting for Fixed Index Annuities | |||||
Average total stockholders’ equity | $ | 3,098,646 | |||
Average equity available to preferred stockholders | (700,000) | ||||
Average equity available to common stockholders | 2,398,646 | ||||
Average AOCI | 2,828,421 | ||||
Average common stockholders' equity excluding average AOCI | 5,227,067 | ||||
Average net impact of fair value accounting for derivatives and embedded derivatives | (1,502,922) | ||||
Average net capital markets impact on the fair value of market risk benefits | (550,149) | ||||
Average common stockholders' equity excluding average AOCI and average net impact of fair value accounting for fixed index annuities | $ | 3,173,996 | |||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 633,155 | |||
Adjustments to arrive at non-GAAP operating income available to common stockholders: | |||||
Net realized losses on financial assets, including credit losses | 44,606 | ||||
Change in fair value of derivatives and embedded derivatives | (149,799) | ||||
Capital markets impact on the change in fair value of market risk benefits | (224,950) | ||||
Net investment income | 3,594 | ||||
Other revenue | 17,907 | ||||
Income taxes | 60,412 | ||||
Non-GAAP operating income available to common stockholders | $ | 384,925 | |||
Impact of excluding notable items (a) | $ | 200,348 | |||
Return on Average Common Stockholders' Equity Attributable to American Equity Investment Life Holding Company | |||||
Net income available to common stockholders | 26.4 | % | |||
Return on Average Common Stockholders' Equity Attributable to American Equity Investment Life Holding Company, Excluding Average AOCI and Average Net Impact of Fair Value Accounting for Fixed Index Annuities | |||||
Non-GAAP operating income available to common stockholders | 12.1 | % |
Notable Items | Twelve Months Ended | ||||
June 30, 2023 | |||||
Notable items impacting non-GAAP operating income available to common stockholders: | |||||
Expense associated with strategic incentive award | $ | 18,458 | |||
Impact of actuarial assumption updates | 181,890 | ||||
Total notable items (a) | $ | 200,348 |
A. | Financial Highlights | |||||||
Non-GAAP Financial Measures | ||||||||
B. | Product Summary | |||||||
C. | Investment Summary | |||||||
D. | ||||||||
E. |
June 30, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Investments: | |||||||||||
Fixed maturity securities, available for sale, at fair value | $ | 38,680,457 | $ | 39,804,617 | |||||||
Mortgage loans on real estate | 7,373,609 | 6,949,027 | |||||||||
Real estate investments | 1,270,213 | 1,056,063 | |||||||||
Limited partnerships and limited liability companies | 1,649,959 | 1,266,779 | |||||||||
Derivative instruments | 1,131,597 | 431,727 | |||||||||
Other investments | 1,412,939 | 1,817,085 | |||||||||
Total investments | 51,518,774 | 51,325,298 | |||||||||
Cash and cash equivalents | 5,000,657 | 1,919,669 | |||||||||
Coinsurance deposits | 14,247,284 | 13,254,956 | |||||||||
Market risk benefits | 234,470 | 229,871 | |||||||||
Accrued investment income | 488,396 | 497,851 | |||||||||
Deferred policy acquisition costs | 2,842,615 | 2,773,643 | |||||||||
Deferred sales inducements | 2,134,254 | 2,045,683 | |||||||||
Deferred income taxes | 293,466 | 438,434 | |||||||||
Income taxes recoverable | 55,678 | 55,498 | |||||||||
Other assets | 829,831 | 642,696 | |||||||||
Total assets | $ | 77,645,425 | $ | 73,183,599 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Liabilities: | |||||||||||
Policy benefit reserves | $ | 59,856,677 | $ | 58,781,836 | |||||||
Market risk benefits | 2,673,272 | 2,455,492 | |||||||||
Other policy funds and contract claims | 202,251 | 512,790 | |||||||||
Notes and loan payable | 788,754 | 792,073 | |||||||||
Subordinated debentures | 78,927 | 78,753 | |||||||||
Funds withheld for reinsurance liabilities | 7,565,295 | 6,577,426 | |||||||||
Other liabilities | 3,885,208 | 1,614,479 | |||||||||
Total liabilities | 75,050,384 | 70,812,849 | |||||||||
Stockholders' equity: | |||||||||||
Preferred stock, Series A | 16 | 16 | |||||||||
Preferred stock, Series B | 12 | 12 | |||||||||
Common stock | 78,048 | 84,810 | |||||||||
Additional paid-in capital | 1,055,963 | 1,325,316 | |||||||||
Accumulated other comprehensive loss | (3,425,248) | (3,746,230) | |||||||||
Retained earnings | 4,863,124 | 4,685,593 | |||||||||
Total stockholders' equity attributable to American Equity Investment Life Holding Company | 2,571,915 | 2,349,517 | |||||||||
Noncontrolling interests | 23,126 | 21,233 | |||||||||
Total stockholders' equity | 2,595,041 | 2,370,750 | |||||||||
Total liabilities and stockholders' equity | $ | 77,645,425 | $ | 73,183,599 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Premiums and other considerations | $ | 2,516 | $ | 3,831 | $ | 6,653 | $ | 13,909 | |||||||||||||||
Annuity product charges | 71,642 | 55,514 | 134,233 | 107,869 | |||||||||||||||||||
Net investment income | 542,685 | 592,308 | 1,104,008 | 1,159,731 | |||||||||||||||||||
Change in fair value of derivatives | 242,739 | (506,181) | 288,629 | (983,700) | |||||||||||||||||||
Net realized losses on investments | (24,679) | (33,272) | (52,466) | (46,399) | |||||||||||||||||||
Other revenue | 16,736 | 9,408 | 33,130 | 18,225 | |||||||||||||||||||
Total revenues | 851,639 | 121,608 | 1,514,187 | 269,635 | |||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||
Insurance policy benefits and change in future policy benefits | 5,125 | 6,998 | 12,333 | 20,613 | |||||||||||||||||||
Interest sensitive and index product benefits | 122,387 | 140,346 | 180,298 | 428,263 | |||||||||||||||||||
Market risk benefits (gains) losses | (144,124) | (299,278) | 39,570 | (107,385) | |||||||||||||||||||
Amortization of deferred sales inducements | 46,951 | 44,696 | 93,552 | 89,781 | |||||||||||||||||||
Change in fair value of embedded derivatives | 213,764 | (885,984) | 618,204 | (2,279,633) | |||||||||||||||||||
Interest expense on notes and loan payable | 11,227 | 6,461 | 22,245 | 12,886 | |||||||||||||||||||
Interest expense on subordinated debentures | 1,338 | 1,346 | 2,674 | 2,663 | |||||||||||||||||||
Amortization of deferred policy acquisition costs | 68,476 | 72,485 | 136,711 | 145,454 | |||||||||||||||||||
Other operating costs and expenses | 75,697 | 59,872 | 149,701 | 117,667 | |||||||||||||||||||
Total benefits and expenses | 400,841 | (853,058) | 1,255,288 | (1,569,691) | |||||||||||||||||||
Income before income taxes | 450,798 | 974,666 | 258,899 | 1,839,326 | |||||||||||||||||||
Income tax expense | 95,652 | 211,377 | 59,644 | 396,572 | |||||||||||||||||||
Net income | 355,146 | 763,289 | 199,255 | 1,442,754 | |||||||||||||||||||
Less: Net loss available to noncontrolling interests | (217) | (4) | (114) | (4) | |||||||||||||||||||
Net income available to American Equity Investment Life Holding Company stockholders | 355,363 | 763,293 | 199,369 | 1,442,758 | |||||||||||||||||||
Less: Preferred stock dividends | 10,919 | 10,919 | 21,838 | 21,838 | |||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 344,444 | $ | 752,374 | $ | 177,531 | $ | 1,420,920 | |||||||||||||||
Earnings per common share | $ | 4.43 | $ | 8.13 | $ | 2.20 | $ | 15.01 | |||||||||||||||
Earnings per common share - assuming dilution | $ | 4.36 | $ | 8.06 | $ | 2.17 | $ | 14.86 | |||||||||||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||||||||||
Earnings per common share | 77,767 | 92,544 | 80,576 | 94,693 | |||||||||||||||||||
Earnings per common share - assuming dilution | 78,928 | 93,375 | 81,824 | 95,652 |
Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | |||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Traditional life insurance premiums | $ | 629 | $ | 698 | $ | 626 | $ | 634 | $ | 691 | |||||||||||||||||||
Life contingent immediate annuity considerations | 1,887 | 3,439 | 2,365 | 2,205 | 3,140 | ||||||||||||||||||||||||
Surrender charges | 33,777 | 26,542 | 22,030 | 19,783 | 15,345 | ||||||||||||||||||||||||
Lifetime income benefit rider fees | 37,865 | 36,049 | 39,636 | 41,036 | 40,169 | ||||||||||||||||||||||||
Net investment income | 542,685 | 561,323 | 537,995 | 609,737 | 592,308 | ||||||||||||||||||||||||
Change in fair value of derivatives | 242,739 | 45,890 | 22,243 | (176,671) | (506,181) | ||||||||||||||||||||||||
Net realized gains (losses) on investments | (24,679) | (27,787) | 14,411 | (15,860) | (33,272) | ||||||||||||||||||||||||
Other revenue (a) | 16,736 | 16,394 | 13,032 | 10,988 | 9,408 | ||||||||||||||||||||||||
Total revenues | 851,639 | 662,548 | 652,338 | 491,852 | 121,608 | ||||||||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||||||||
Traditional life insurance policy benefits and change in future policy benefits (b) | 940 | 1,206 | 944 | 118 | 495 | ||||||||||||||||||||||||
Life contingent immediate annuity benefits and change in future policy benefits (c) | 4,185 | 6,002 | 5,004 | 6,541 | 6,503 | ||||||||||||||||||||||||
Interest sensitive and index product benefits | 122,387 | 57,911 | 57,626 | 68,982 | 140,346 | ||||||||||||||||||||||||
Market risk benefits (gains) losses (d) | (144,124) | 183,694 | 33,490 | 77,579 | (299,278) | ||||||||||||||||||||||||
Amortization of deferred sales inducements | 46,951 | 46,601 | 45,966 | 46,223 | 44,696 | ||||||||||||||||||||||||
Change in fair value of embedded derivatives (e) | 213,764 | 404,440 | 342,409 | (415,374) | (885,984) | ||||||||||||||||||||||||
Interest expense on notes payable | 11,227 | 11,018 | 10,228 | 8,984 | 6,461 | ||||||||||||||||||||||||
Interest expense on subordinated debentures | 1,338 | 1,336 | 1,335 | 1,333 | 1,346 | ||||||||||||||||||||||||
Amortization of deferred policy acquisition costs | 68,476 | 68,235 | 66,831 | 71,726 | 72,485 | ||||||||||||||||||||||||
Other operating costs and expenses | 75,697 | 74,004 | 62,389 | 59,470 | 59,872 | ||||||||||||||||||||||||
Total benefits and expenses | 400,841 | 854,447 | 626,222 | (74,418) | (853,058) | ||||||||||||||||||||||||
Income (loss) before income taxes | 450,798 | (191,899) | 26,116 | 566,270 | 974,666 | ||||||||||||||||||||||||
Income tax expense (benefit) | 95,652 | (36,008) | (6,817) | 121,380 | 211,377 | ||||||||||||||||||||||||
Net income (loss) (b)(c)(d)(e) | 355,146 | (155,891) | 32,933 | 444,890 | 763,289 | ||||||||||||||||||||||||
Less: Net income (loss) available to noncontrolling interests | (217) | 103 | 361 | 1 | (4) | ||||||||||||||||||||||||
Net income (loss) available to American Equity Investment Life Holding Company stockholders (b)(c)(d)(e) | 355,363 | (155,994) | 32,572 | 444,889 | 763,293 | ||||||||||||||||||||||||
Less: Preferred stock dividends | 10,919 | 10,919 | 10,919 | 10,918 | 10,919 | ||||||||||||||||||||||||
Net income (loss) available to American Equity Investment Life Holding Company common stockholders (b)(c)(d)(e) | $ | 344,444 | $ | (166,913) | $ | 21,653 | $ | 433,971 | $ | 752,374 | |||||||||||||||||||
Earnings (loss) per common share | $ | 4.43 | $ | (2.00) | $ | 0.25 | $ | 4.95 | $ | 8.13 | |||||||||||||||||||
Earnings (loss) per common share - assuming dilution (b)(c)(d)(e) | $ | 4.36 | $ | (2.00) | $ | 0.25 | $ | 4.90 | $ | 8.06 | |||||||||||||||||||
Weighted average common shares outstanding (thousands): | |||||||||||||||||||||||||||||
Earnings (loss) per common share | 77,767 | 83,417 | 85,274 | 87,707 | 92,544 | ||||||||||||||||||||||||
Earnings (loss) per common share - assuming dilution | 78,928 | 83,417 | 86,402 | 88,581 | 93,375 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 344,444 | $ | 752,374 | $ | 177,531 | $ | 1,420,920 | |||||||||||||||
Adjustments to arrive at non-GAAP operating income available to common stockholders: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | 22,737 | 37,054 | 47,121 | 50,779 | |||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (124,816) | (470,813) | 81,386 | (1,318,020) | |||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (184,700) | (335,330) | (47,750) | (216,417) | |||||||||||||||||||
Net investment income | 4,609 | — | 2,118 | — | |||||||||||||||||||
Other revenue | 5,969 | — | 11,938 | — | |||||||||||||||||||
Income taxes | 59,373 | 167,944 | (20,392) | 321,034 | |||||||||||||||||||
Non-GAAP operating income available to common stockholders | $ | 127,616 | $ | 151,229 | $ | 251,952 | $ | 258,296 | |||||||||||||||
Impact of excluding notable items (a) | $ | 8,892 | $ | — | $ | 18,458 | $ | — | |||||||||||||||
Per common share - assuming dilution: | |||||||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 4.36 | $ | 8.06 | $ | 2.17 | $ | 14.86 | |||||||||||||||
Adjustments to arrive at non-GAAP operating income available to common stockholders: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | 0.29 | 0.39 | 0.58 | 0.53 | |||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (1.58) | (5.04) | 0.99 | (13.78) | |||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (2.34) | (3.59) | (0.58) | (2.26) | |||||||||||||||||||
Net investment income | 0.06 | — | 0.02 | — | |||||||||||||||||||
Other revenue | 0.08 | — | 0.15 | — | |||||||||||||||||||
Income taxes | 0.75 | 1.80 | (0.25) | 3.35 | |||||||||||||||||||
Non-GAAP operating income available to common stockholders | $ | 1.62 | $ | 1.62 | $ | 3.08 | $ | 2.70 | |||||||||||||||
Impact of excluding notable items (a) | $ | 0.11 | $ | — | $ | 0.23 | $ | — |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Notable items impacting non-GAAP operating income available to common stockholders: | |||||||||||||||||||||||
Expense associated with strategic incentive award | $ | 8,892 | $ | — | $ | 18,458 | $ | — | |||||||||||||||
Total notable items (a) | $ | 8,892 | $ | — | $ | 18,458 | $ | — |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net realized losses on financial assets, including credit losses: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | $ | 22,737 | $ | 37,054 | $ | 47,121 | $ | 50,779 | |||||||||||||||
Income taxes | (4,888) | (7,966) | (10,131) | (10,917) | |||||||||||||||||||
$ | 17,849 | $ | 29,088 | $ | 36,990 | $ | 39,862 | ||||||||||||||||
Change in fair value of derivatives and embedded derivatives: | |||||||||||||||||||||||
Fixed index annuities | $ | (97,095) | $ | (275,057) | $ | 45,852 | $ | (919,820) | |||||||||||||||
Reinsurance contracts | (19,750) | (199,422) | 44,630 | (401,866) | |||||||||||||||||||
Interest rate swaps | (7,971) | 3,666 | (9,096) | 3,666 | |||||||||||||||||||
Income taxes | 26,825 | 103,814 | (17,505) | 285,421 | |||||||||||||||||||
$ | (97,991) | $ | (366,999) | $ | 63,881 | $ | (1,032,599) | ||||||||||||||||
Capital market impact on the fair value of market risk benefits: | |||||||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | $ | (204,779) | $ | (348,676) | $ | (83,437) | $ | (235,674) | |||||||||||||||
Amortization of capital markets impact on the fair value of market risk benefits | 20,079 | 13,346 | 35,687 | 19,257 | |||||||||||||||||||
Income taxes | 39,710 | 72,096 | 10,266 | 46,530 | |||||||||||||||||||
$ | (144,990) | $ | (263,234) | $ | (37,484) | $ | (169,887) | ||||||||||||||||
Net investment income: | |||||||||||||||||||||||
Income associated with assets transferred under reinsurance treaty | $ | 4,609 | $ | — | $ | 2,118 | $ | — | |||||||||||||||
Income taxes | (990) | — | (455) | — | |||||||||||||||||||
$ | 3,619 | $ | — | $ | 1,663 | $ | — | ||||||||||||||||
Other revenue: | |||||||||||||||||||||||
Amortization of deferred fees associated with reinsurance treaties | $ | 5,969 | $ | — | $ | 11,938 | $ | — | |||||||||||||||
Income taxes | (1,284) | — | (2,567) | — | |||||||||||||||||||
$ | 4,685 | $ | — | $ | 9,371 | $ | — |
Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | |||||||||||||||||||||||||
Net income (loss) available to American Equity Investment Life Holding Company common stockholders | $ | 344,444 | $ | (166,913) | $ | 21,653 | $ | 433,971 | $ | 752,374 | |||||||||||||||||||
Adjustments to arrive at non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||||||||
Net realized (gains) losses on financial assets, including credit losses | 22,737 | 24,384 | (19,460) | 16,945 | 37,054 | ||||||||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (124,816) | 206,202 | 169,767 | (400,952) | (470,813) | ||||||||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (184,700) | 136,950 | 2,309 | (179,509) | (335,330) | ||||||||||||||||||||||||
Net investment income | 4,609 | (2,491) | 1,476 | — | — | ||||||||||||||||||||||||
Other revenue | 5,969 | 5,969 | 5,969 | — | — | ||||||||||||||||||||||||
Income taxes | 59,373 | (79,765) | (39,998) | 120,802 | 167,944 | ||||||||||||||||||||||||
Non-GAAP operating income (loss) available to common stockholders | $ | 127,616 | $ | 124,336 | $ | 141,716 | $ | (8,743) | $ | 151,229 | |||||||||||||||||||
Impact of excluding notable items (a) | $ | 8,892 | $ | 9,566 | $ | — | $ | 181,890 | $ | — | |||||||||||||||||||
Per common share - assuming dilution: | |||||||||||||||||||||||||||||
Net income (loss) available to American Equity Investment Life Holding Company common stockholders | $ | 4.36 | $ | (2.00) | $ | 0.25 | $ | 4.90 | $ | 8.06 | |||||||||||||||||||
Adjustments to arrive at non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||||||||
Anti-dilutive impact for losses (b) | — | 0.03 | — | — | — | ||||||||||||||||||||||||
Net realized (gains) losses on financial assets, including credit losses | 0.29 | 0.29 | (0.23) | 0.19 | 0.39 | ||||||||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (1.58) | 2.43 | 1.96 | (4.52) | (5.04) | ||||||||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (2.34) | 1.62 | 0.03 | (2.03) | (3.59) | ||||||||||||||||||||||||
Net investment income | 0.06 | (0.03) | 0.02 | — | — | ||||||||||||||||||||||||
Other revenue | 0.08 | 0.07 | 0.07 | — | — | ||||||||||||||||||||||||
Income taxes | 0.75 | (0.94) | (0.46) | 1.36 | 1.80 | ||||||||||||||||||||||||
Non-GAAP operating income (loss) available to common stockholders | $ | 1.62 | $ | 1.47 | $ | 1.64 | $ | (0.10) | $ | 1.62 | |||||||||||||||||||
Impact of excluding notable items (a) | $ | 0.11 | $ | 0.11 | $ | — | $ | 2.05 | $ | — |
Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | |||||||||||||||||||||||||
Notable items impacting non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||||||||
Expense associated with strategic incentive award | $ | 8,892 | $ | 9,566 | $ | — | $ | — | $ | — | |||||||||||||||||||
Impact of actuarial assumption updates | — | — | — | 181,890 | — | ||||||||||||||||||||||||
Total notable items (a) | $ | 8,892 | $ | 9,566 | $ | — | $ | 181,890 | $ | — |
Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | |||||||||||||||||||||||||
Net realized (gains) losses on investments | $ | 24,679 | $ | 27,787 | $ | (14,411) | $ | 15,860 | $ | 33,272 | |||||||||||||||||||
Net investment income | 4,609 | (2,491) | 1,476 | — | — | ||||||||||||||||||||||||
Other revenue | 5,969 | 5,969 | 5,969 | — | — | ||||||||||||||||||||||||
Change in fair value of derivatives | (338,579) | (198,239) | (172,643) | 14,423 | 415,171 | ||||||||||||||||||||||||
Increase (decrease) in total revenues | (303,322) | (166,974) | (179,609) | 30,283 | 448,443 | ||||||||||||||||||||||||
Change in fair value of embedded derivatives | (213,764) | (404,440) | (342,409) | 415,374 | 885,984 | ||||||||||||||||||||||||
Market risk benefits (gains) losses | 184,700 | (136,950) | (2,309) | 179,509 | 335,330 | ||||||||||||||||||||||||
Interest sensitive and index product benefits (a) | 1,943 | 3,402 | 5,048 | (1,084) | (3,782) | ||||||||||||||||||||||||
Increase (decrease) in total benefits and expenses | (27,121) | (537,988) | (339,670) | 593,799 | 1,217,532 | ||||||||||||||||||||||||
Increase (decrease) in income (loss) before income taxes | (276,201) | 371,014 | 160,061 | (563,516) | (769,089) | ||||||||||||||||||||||||
Increase (decrease) in income tax expense benefit | (59,373) | 79,765 | 39,998 | (120,802) | (167,944) | ||||||||||||||||||||||||
Increase (decrease) in net income (loss) available to common stockholders | $ | (216,828) | $ | 291,249 | $ | 120,063 | $ | (442,714) | $ | (601,145) |
Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | |||||||||||||||||||||||||
Capitalization: | |||||||||||||||||||||||||||||
Notes and loan payable | $ | 800,000 | $ | 800,000 | $ | 800,000 | $ | 800,000 | $ | 500,000 | |||||||||||||||||||
Subordinated debentures payable to subsidiary trusts | 78,927 | 78,839 | 78,753 | 78,668 | 78,584 | ||||||||||||||||||||||||
Total debt | 878,927 | 878,839 | 878,753 | 878,668 | 578,584 | ||||||||||||||||||||||||
Total stockholders’ equity attributable to American Equity Investment Life Holding Company | 2,571,915 | 2,605,485 | 2,349,517 | 2,157,667 | 3,625,377 | ||||||||||||||||||||||||
Total capitalization | 3,450,842 | 3,484,324 | 3,228,270 | 3,036,335 | 4,203,961 | ||||||||||||||||||||||||
Accumulated other comprehensive loss (AOCI) | 3,425,248 | 3,036,429 | 3,746,230 | 3,984,496 | 2,231,594 | ||||||||||||||||||||||||
Total capitalization excluding AOCI (a) | $ | 6,876,090 | $ | 6,520,753 | $ | 6,974,500 | $ | 7,020,831 | $ | 6,435,555 | |||||||||||||||||||
Total stockholders’ equity attributable to American Equity Investment Life Holding Company | $ | 2,571,915 | $ | 2,605,485 | $ | 2,349,517 | $ | 2,157,667 | $ | 3,625,377 | |||||||||||||||||||
Equity available to preferred stockholders (b) | (700,000) | (700,000) | (700,000) | (700,000) | (700,000) | ||||||||||||||||||||||||
Total common stockholders' equity (c) | 1,871,915 | 1,905,485 | 1,649,517 | 1,457,667 | 2,925,377 | ||||||||||||||||||||||||
Accumulated other comprehensive loss | 3,425,248 | 3,036,429 | 3,746,230 | 3,984,496 | 2,231,594 | ||||||||||||||||||||||||
Total common stockholders’ equity excluding AOCI (c) | 5,297,163 | 4,941,914 | 5,395,747 | 5,442,163 | 5,156,971 | ||||||||||||||||||||||||
Net impact of fair value accounting for derivatives and embedded derivatives | (1,587,599) | (1,490,297) | (1,652,169) | (1,721,324) | (1,418,244) | ||||||||||||||||||||||||
Net capital markets impact on the fair value of market risk benefits | (638,442) | (493,452) | (600,958) | (602,772) | (461,856) | ||||||||||||||||||||||||
Total common stockholders’ equity excluding AOCI and the net impact of fair value accounting for fixed index annuities (c) | $ | 3,071,122 | $ | 2,958,165 | $ | 3,142,620 | $ | 3,118,067 | $ | 3,276,871 | |||||||||||||||||||
Common shares outstanding | 78,047,941 | 77,753,194 | 84,810,255 | 85,966,505 | 90,168,512 | ||||||||||||||||||||||||
Book Value per Common Share: (d) | |||||||||||||||||||||||||||||
Book value per common share | $ | 23.98 | $ | 24.51 | $ | 19.45 | $ | 16.96 | $ | 32.44 | |||||||||||||||||||
Book value per common share excluding AOCI (c) | $ | 67.87 | $ | 63.56 | $ | 63.62 | $ | 63.31 | $ | 57.19 | |||||||||||||||||||
Book value per common share excluding AOCI and the net impact of fair value accounting for fixed index annuities (c) | $ | 39.35 | $ | 38.05 | $ | 37.05 | $ | 36.27 | $ | 36.34 | |||||||||||||||||||
Debt-to-Capital Ratios: (e) | |||||||||||||||||||||||||||||
Senior debt / Total capitalization | 11.6 | % | 12.3 | % | 11.5 | % | 11.4 | % | 7.8 | % | |||||||||||||||||||
Total debt / Total capitalization | 12.8 | % | 13.5 | % | 12.6 | % | 12.5 | % | 9.0 | % | |||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | ||||||||||||||||||||||||||||||||
4.44% | 4.24% | Average yield on invested assets | 4.42% | 4.48% | 4.30% | 4.48% | 4.33% | |||||||||||||||||||||||||||||||
1.82% | 1.66% | Aggregate cost of money | 1.85% | 1.81% | 1.76% | 1.75% | 1.69% | |||||||||||||||||||||||||||||||
2.62% | 2.58% | Aggregate investment spread | 2.57% | 2.67% | 2.54% | 2.73% | 2.64% | |||||||||||||||||||||||||||||||
Impact of: | ||||||||||||||||||||||||||||||||||||||
0.01% | 0.04% | Investment yield - additional prepayment income | 0.01% | —% | 0.01% | 0.03% | 0.05% | |||||||||||||||||||||||||||||||
0.02% | 0.02% | Cost of money effect of over hedging | 0.03% | —% | —% | —% | 0.02% | |||||||||||||||||||||||||||||||
$ | 49,354,006 | $ | 54,748,602 | Weighted average investments | $ | 49,125,197 | $ | 49,304,219 | $ | 50,040,228 | $ | 54,378,154 | $ | 54,768,966 | ||||||||||||||||||||||||
49,398,076 | 54,699,422 | Ending investments | 49,398,076 | 48,852,319 | 49,811,623 | 54,056,886 | 54,699,422 |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | ||||||||||||||||||||||||||||||||
Investment income: | ||||||||||||||||||||||||||||||||||||||
$ | 1,067,052 | $ | 1,049,685 | Fixed income (a) | $ | 533,930 | $ | 533,122 | $ | 511,077 | $ | 547,326 | $ | 539,382 | ||||||||||||||||||||||||
28,662 | 111,862 | Mark-to-market private asset income (a) | 9,035 | 19,627 | 26,816 | 61,671 | 53,816 | |||||||||||||||||||||||||||||||
$ | 1,095,714 | $ | 1,161,547 | Total non-GAAP investment income (b) | $ | 542,965 | $ | 552,749 | $ | 537,893 | $ | 608,997 | $ | 593,198 | ||||||||||||||||||||||||
Investment yield: | ||||||||||||||||||||||||||||||||||||||
4.54% | 3.92% | Fixed income investment yield | 4.57% | 4.52% | 4.26% | 4.16% | 4.04% | |||||||||||||||||||||||||||||||
2.43% | 18.23% | Mark-to-market private asset yield | 1.48% | 3.61% | 5.29% | 13.89% | 15.15% | |||||||||||||||||||||||||||||||
4.44% | 4.24% | Total investment yield | 4.42% | 4.48% | 4.30% | 4.48% | 4.33% | |||||||||||||||||||||||||||||||
Weighted average investments: | ||||||||||||||||||||||||||||||||||||||
$ | 46,990,472 | $ | 53,521,544 | Fixed income investments | $ | 46,684,803 | $ | 47,129,120 | $ | 48,012,311 | $ | 52,602,319 | $ | 53,347,874 | ||||||||||||||||||||||||
2,363,534 | 1,227,058 | Mark-to-market private assets | 2,440,394 | 2,175,099 | 2,027,917 | 1,775,835 | 1,421,092 | |||||||||||||||||||||||||||||||
$ | 49,354,006 | $ | 54,748,602 | Total weighted average investments | $ | 49,125,197 | $ | 49,304,219 | $ | 50,040,228 | $ | 54,378,154 | $ | 54,768,966 |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | ||||||||||||||||||||||||||||||||
Included in interest sensitive and index product benefits: | ||||||||||||||||||||||||||||||||||||||
$ | 69,040 | $ | 296,783 | Index credits | $ | 65,507 | $ | 3,533 | $ | 3,861 | $ | 4,648 | $ | 72,398 | ||||||||||||||||||||||||
113,551 | 122,104 | Interest credited | 57,235 | 56,316 | 56,402 | 62,383 | 60,770 | |||||||||||||||||||||||||||||||
Included in change in fair value of derivatives: | ||||||||||||||||||||||||||||||||||||||
(73,050) | (303,207) | Proceeds received at option expiration | (69,449) | (3,601) | (4,061) | (4,865) | (75,115) | |||||||||||||||||||||||||||||||
321,263 | 325,472 | Pro rata amortization of option cost | 163,992 | 157,271 | 154,463 | 167,197 | 165,375 | |||||||||||||||||||||||||||||||
$ | 430,804 | $ | 441,152 | Cost of money for deferred annuities | $ | 217,285 | $ | 213,519 | $ | 210,665 | $ | 229,363 | $ | 223,428 | ||||||||||||||||||||||||
$ | 47,225,241 | $ | 53,048,016 | Weighted average liability balance outstanding | $ | 47,086,271 | $ | 47,266,672 | $ | 47,802,219 | $ | 52,337,208 | $ | 52,940,739 |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | ||||||||||||||||||||||||||||||||
$ | 47,504,615 | $ | 53,191,277 | Account balances at beginning of period | $ | 47,031,605 | $ | 47,504,615 | $ | 51,913,689 | $ | 52,762,558 | $ | 53,119,291 | ||||||||||||||||||||||||
— | — | Reserves ceded - in-force | — | — | (3,810,982) | (257,779) | — | |||||||||||||||||||||||||||||||
47,504,615 | 53,191,277 | Account balance at beginning of period, net of reinsurance ceded | 47,031,605 | 47,504,615 | 48,102,707 | 52,504,779 | 53,119,291 | |||||||||||||||||||||||||||||||
1,907,617 | 1,237,291 | Net deposits | 1,174,953 | 732,664 | 613,084 | 496,940 | 562,366 | |||||||||||||||||||||||||||||||
182,123 | 46,689 | Premium bonuses | 136,856 | 45,267 | 33,617 | 27,385 | 23,547 | |||||||||||||||||||||||||||||||
182,591 | 418,887 | Fixed interest credited and index credits | 122,742 | 59,849 | 60,263 | 67,031 | 133,168 | |||||||||||||||||||||||||||||||
(60,319) | (30,886) | Surrender charges | (33,777) | (26,542) | (22,030) | (19,783) | (15,345) | |||||||||||||||||||||||||||||||
(73,914) | (76,983) | Lifetime income benefit rider fees | (37,865) | (36,049) | (39,636) | (41,036) | (40,169) | |||||||||||||||||||||||||||||||
(2,499,131) | (2,023,717) | Surrenders, withdrawals, deaths, etc. | (1,250,932) | (1,248,199) | (1,243,390) | (1,121,627) | (1,020,300) | |||||||||||||||||||||||||||||||
$ | 47,143,582 | $ | 52,762,558 | Account balances at end of period | $ | 47,143,582 | $ | 47,031,605 | $ | 47,504,615 | $ | 51,913,689 | $ | 52,762,558 |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | ||||||||||||||||||||||||||||||||
$ | 1,521,954 | $ | 2,362,947 | MRB balance at beginning of period | $ | 1,632,918 | $ | 1,521,954 | $ | 1,762,629 | $ | 1,721,376 | $ | 2,075,033 | ||||||||||||||||||||||||
— | — | Reserves ceded - in-force | — | — | (331,020) | 4,496 | — | |||||||||||||||||||||||||||||||
850 | 4,833 | Issuances | (2,071) | 2,921 | 1,230 | 1,366 | 913 | |||||||||||||||||||||||||||||||
62,933 | 21,662 | Interest accrual | 33,374 | 29,559 | 23,910 | 20,626 | 12,424 | |||||||||||||||||||||||||||||||
56,444 | 58,891 | Attributed fees collected | 28,247 | 28,197 | 29,585 | 29,010 | 29,378 | |||||||||||||||||||||||||||||||
— | — | Benefits payments | — | — | — | — | — | |||||||||||||||||||||||||||||||
(84,287) | (235,673) | Effect of changes in interest rates and equity markets | (202,709) | 118,422 | (16,236) | (197,978) | (348,675) | |||||||||||||||||||||||||||||||
896 | 44,331 | Effect of changes in assumptions and policyholder behavior | (974) | 1,870 | (5,023) | 224,522 | 7,220 | |||||||||||||||||||||||||||||||
28,904 | (535,615) | Effect of changes in instrument specific credit risk | 98,909 | (70,005) | 56,879 | (40,789) | (54,917) | |||||||||||||||||||||||||||||||
1,587,694 | 1,721,376 | MRB balance at end of period, net (a) | 1,587,694 | 1,632,918 | 1,521,954 | 1,762,629 | 1,721,376 | |||||||||||||||||||||||||||||||
813,302 | 588,352 | MRB net deferred capital markets impact, end of period | 813,302 | 628,602 | 765,552 | 767,862 | 588,352 | |||||||||||||||||||||||||||||||
$ | 2,400,996 | $ | 2,309,728 | Non-GAAP MRB balance, end of period (b) | $ | 2,400,996 | $ | 2,261,520 | $ | 2,287,506 | $ | 2,530,491 | $ | 2,309,728 |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | ||||||||||||||||||||||||||||||||
$ | 9,642,336 | $ | 4,660,690 | Account value of business ceded subject to fee income at beginning of period | $ | 10,155,767 | $ | 9,642,336 | $ | 5,612,098 | $ | 5,065,538 | $ | 4,859,360 | ||||||||||||||||||||||||
— | — | In-force account value ceded subject to fee income | — | — | 3,810,982 | 257,779 | — | |||||||||||||||||||||||||||||||
1,455,573 | 404,848 | Premiums on business ceded subject to fee income | 821,413 | 634,160 | 351,971 | 288,781 | 206,178 | |||||||||||||||||||||||||||||||
(234,171) | — | Disbursements on business ceded subject to fee income | (113,442) | (120,729) | (132,715) | — | — | |||||||||||||||||||||||||||||||
$ | 10,863,738 | $ | 5,065,538 | Account value of business ceded subject to fee income at end of period | $ | 10,863,738 | $ | 10,155,767 | $ | 9,642,336 | $ | 5,612,098 | $ | 5,065,538 | ||||||||||||||||||||||||
$ | 45,068 | $ | 18,225 | Non-GAAP operating revenue associated with recurring fees (a) | $ | 22,705 | $ | 22,363 | $ | 19,001 | $ | 10,988 | $ | 9,408 |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | ||||||||||||||||||||||||||||||||
American Equity Life: | ||||||||||||||||||||||||||||||||||||||
$ | 2,207,477 | $ | 1,427,676 | Fixed index annuities | $ | 1,471,638 | $ | 735,839 | $ | 637,021 | $ | 627,444 | $ | 671,696 | ||||||||||||||||||||||||
1,527 | 2,202 | Annual reset fixed rate annuities | 834 | 693 | 1,856 | 1,271 | 1,140 | |||||||||||||||||||||||||||||||
193,066 | 2,830 | Multi-year fixed rate annuities | 37,032 | 156,034 | 49,216 | 4,465 | 485 | |||||||||||||||||||||||||||||||
705 | 16,526 | Single premium immediate annuities | 278 | 427 | 494 | 1,915 | 3,073 | |||||||||||||||||||||||||||||||
2,402,775 | 1,449,234 | 1,509,782 | 892,993 | 688,587 | 635,095 | 676,394 | ||||||||||||||||||||||||||||||||
Eagle Life: | ||||||||||||||||||||||||||||||||||||||
634,872 | 231,128 | Fixed index annuities | 406,273 | 228,599 | 145,772 | 102,379 | 104,374 | |||||||||||||||||||||||||||||||
3,039 | 7 | Annual reset fixed rate annuities | 1,770 | 1,269 | 230 | 143 | — | |||||||||||||||||||||||||||||||
331,161 | 2,463 | Multi-year fixed rate annuities | 82,932 | 248,229 | 65,434 | 14,684 | 123 | |||||||||||||||||||||||||||||||
969,072 | 233,598 | 490,975 | 478,097 | 211,436 | 117,206 | 104,497 | ||||||||||||||||||||||||||||||||
Consolidated: | ||||||||||||||||||||||||||||||||||||||
2,842,349 | 1,658,804 | Fixed index annuities | 1,877,911 | 964,438 | 782,793 | 729,823 | 776,070 | |||||||||||||||||||||||||||||||
4,566 | 2,209 | Annual reset fixed rate annuities | 2,604 | 1,962 | 2,086 | 1,414 | 1,140 | |||||||||||||||||||||||||||||||
524,227 | 5,293 | Multi-year fixed rate annuities | 119,964 | 404,263 | 114,650 | 19,149 | 608 | |||||||||||||||||||||||||||||||
705 | 16,526 | Single premium immediate annuities | 278 | 427 | 494 | 1,915 | 3,073 | |||||||||||||||||||||||||||||||
3,371,847 | 1,682,832 | Total before coinsurance ceded | 2,000,757 | 1,371,090 | 900,023 | 752,301 | 780,891 | |||||||||||||||||||||||||||||||
1,463,525 | 429,015 | Coinsurance ceded | 825,526 | 637,999 | 286,445 | 253,446 | 215,452 | |||||||||||||||||||||||||||||||
$ | 1,908,322 | $ | 1,253,817 | Net after coinsurance ceded | $ | 1,175,231 | $ | 733,091 | $ | 613,578 | $ | 498,855 | $ | 565,439 |
Surrender Charge | Net Account Value | |||||||||||||||||||||||||||||||
Product Type | Avg. Years At Issue | Avg. Years Remaining | Avg. % Remaining | Dollars in Thousands | % | |||||||||||||||||||||||||||
Fixed Index Annuities | 12.3 | 4.8 | 7.9% | $ | 41,563,203 | 88.2 | % | |||||||||||||||||||||||||
Annual Reset Fixed Rate Annuities | 7.2 | 1.6 | 3.1% | 1,198,840 | 2.5 | % | ||||||||||||||||||||||||||
Multi-Year Fixed Rate Annuities | 3.9 | 1.4 | 7.0% | 4,381,539 | 9.3 | % | ||||||||||||||||||||||||||
Total | 11.4 | 4.4 | 7.7% | $ | 47,143,582 | 100.0 | % |
Surrender Charge Percentages: | Fixed Annuities Account Value | Fixed Index Annuities Account Value | |||||||||
No surrender charge | $ | 874,352 | $ | 4,436,953 | |||||||
0.0% < 2.0% | 62,859 | 2,608,474 | |||||||||
2.0% < 3.0% | 31,276 | 3,753,293 | |||||||||
3.0% < 4.0% | 19,087 | 697,116 | |||||||||
4.0% < 5.0% | 5,288 | 2,958,714 | |||||||||
5.0% < 6.0% | 38,260 | 2,260,177 | |||||||||
6.0% < 7.0% | 62,414 | 2,425,430 | |||||||||
7.0% < 8.0% | 3,465,637 | 2,317,794 | |||||||||
8.0% < 9.0% | 669,109 | 2,716,586 | |||||||||
9.0% < 10.0% | 156,084 | 3,385,827 | |||||||||
10.0% or greater | 196,013 | 14,002,839 | |||||||||
$ | 5,580,379 | $ | 41,563,203 |
Surrender Charge Expiration By Year: | Fixed and Fixed Index Annuities Account Value | Weighted Average Surrender Charge | |||||||||
Out of Surrender Charge | $ | 5,311,305 | 0.00 | % | |||||||
2023 | 2,737,572 | 3.75 | % | ||||||||
2024 | 3,742,107 | 4.64 | % | ||||||||
2025 | 5,092,048 | 3.88 | % | ||||||||
2026 | 4,606,380 | 5.33 | % | ||||||||
2027 | 4,011,274 | 6.91 | % | ||||||||
2028 | 3,936,639 | 8.26 | % | ||||||||
2029 | 3,992,571 | 9.71 | % | ||||||||
2030 | 3,148,257 | 11.68 | % | ||||||||
2031 | 3,759,590 | 13.32 | % | ||||||||
2032 | 3,093,978 | 13.89 | % | ||||||||
2033 | 2,294,465 | 15.81 | % | ||||||||
2034 | 652,734 | 17.67 | % | ||||||||
2035 | 338,352 | 18.25 | % | ||||||||
2036 | 193,131 | 18.74 | % | ||||||||
2037 | 119,473 | 19.22 | % | ||||||||
2038 | 101,458 | 19.70 | % | ||||||||
2039 | 12,248 | 20.00 | % | ||||||||
$ | 47,143,582 | 7.69 | % |
June 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Carrying Amount | Percent | Carrying Amount | Percent | ||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||
U.S. Government and agencies | $ | 175,462 | 0.4 | % | $ | 169,071 | 0.4 | % | |||||||||||||||
States, municipalities and territories | 3,261,318 | 7.2 | % | 3,822,943 | 8.5 | % | |||||||||||||||||
Foreign corporate securities and foreign governments | 519,466 | 1.1 | % | 616,938 | 1.4 | % | |||||||||||||||||
Corporate securities | 18,254,340 | 40.0 | % | 20,201,774 | 44.8 | % | |||||||||||||||||
Residential mortgage backed securities | 1,316,563 | 2.9 | % | 1,366,927 | 3.0 | % | |||||||||||||||||
Commercial mortgage backed securities | 3,260,792 | 7.1 | % | 3,447,075 | 7.6 | % | |||||||||||||||||
Other asset backed securities | 6,725,121 | 14.7 | % | 5,155,254 | 11.4 | % | |||||||||||||||||
Total fixed maturity securities | 33,513,062 | 73.4 | % | 34,779,982 | 77.1 | % | |||||||||||||||||
Mortgage loans on real estate | 7,150,041 | 15.7 | % | 6,778,977 | 15.0 | % | |||||||||||||||||
Real estate investments | 1,270,213 | 2.8 | % | 1,056,063 | 2.3 | % | |||||||||||||||||
Limited partnerships and limited liability companies | 1,649,959 | 3.6 | % | 1,266,779 | 2.8 | % | |||||||||||||||||
Derivative instruments | 1,131,597 | 2.5 | % | 431,727 | 1.0 | % | |||||||||||||||||
Other investments | 909,289 | 2.0 | % | 829,900 | 1.8 | % | |||||||||||||||||
Total investments, net of modified coinsurance investments | 45,624,161 | 100.0 | % | 45,143,428 | 100.0 | % | |||||||||||||||||
Coinsurance investments (a) | 5,894,613 | 6,181,870 | |||||||||||||||||||||
Total investments | $ | 51,518,774 | $ | 51,325,298 |
NAIC Designation | Amortized Cost | Carrying Amount | Percent | Rating Agency Rating | Amortized Cost | Carrying Amount | Percent | |||||||||||||||||||||||||||||||
1 | $ | 24,100,091 | $ | 21,497,873 | 64.1 | % | Aaa/Aa/A | $ | 23,940,750 | $ | 21,363,629 | 63.7 | % | |||||||||||||||||||||||||
2 | 12,987,640 | 11,438,235 | 34.1 | % | Baa | 13,112,008 | 11,537,084 | 34.4 | % | |||||||||||||||||||||||||||||
3 | 548,122 | 470,165 | 1.4 | % | Ba | 529,257 | 454,719 | 1.4 | % | |||||||||||||||||||||||||||||
4 | 102,614 | 92,058 | 0.4 | % | B | 119,610 | 107,675 | 0.3 | % | |||||||||||||||||||||||||||||
5 | 6,765 | 6,917 | — | % | Caa | 18,915 | 17,502 | 0.1 | % | |||||||||||||||||||||||||||||
6 | 11,648 | 7,814 | — | % | Ca and lower | 36,340 | 32,453 | 0.1 | % | |||||||||||||||||||||||||||||
37,756,880 | 33,513,062 | 100.0 | % | 37,756,880 | 33,513,062 | 100.0 | % | |||||||||||||||||||||||||||||||
Coinsurance investments (a) | 5,566,135 | 5,167,395 | Coinsurance investments (a) | 5,566,135 | 5,167,395 | |||||||||||||||||||||||||||||||||
$ | 43,323,015 | $ | 38,680,457 | $ | 43,323,015 | $ | 38,680,457 |
General Description (a) | Amortized Cost | Allowance for Credit Losses | Amortized Cost, Net of Allowance | Net Unrealized Gains (Losses), Net of Allowance | Fair Value | |||||||||||||||||||||||||||
States, municipalities and territories | $ | 20,657 | $ | — | $ | 20,657 | $ | (3,339) | $ | 17,318 | ||||||||||||||||||||||
Corporate securities - Public securities | 3,990 | — | 3,990 | (140) | 3,850 | |||||||||||||||||||||||||||
Corporate securities - Private placement securities | 7,658 | (3,132) | 4,526 | (1,463) | 3,063 | |||||||||||||||||||||||||||
Residential mortgage backed securities | 14,016 | (67) | 13,949 | (1,647) | 12,302 | |||||||||||||||||||||||||||
Commercial mortgage backed securities | 101,927 | — | 101,927 | (17,126) | 84,801 | |||||||||||||||||||||||||||
Other asset backed securities | 1,879 | — | 1,879 | 19 | 1,898 | |||||||||||||||||||||||||||
Collateralized loan obligations | 160,319 | (947) | 159,372 | (30,283) | 129,089 | |||||||||||||||||||||||||||
$ | 310,446 | $ | (4,146) | $ | 306,300 | $ | (53,979) | $ | 252,321 |
June 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||
Available for sale: | |||||||||||||||||||||||
U.S. Government and agencies | $ | 179,087 | $ | 175,462 | $ | 173,638 | $ | 169,071 | |||||||||||||||
States, municipalities and territories | 3,706,777 | 3,261,318 | 4,356,191 | 3,822,943 | |||||||||||||||||||
Foreign corporate securities and foreign governments | 585,449 | 519,466 | 680,263 | 616,938 | |||||||||||||||||||
Corporate securities: | |||||||||||||||||||||||
Capital goods | 1,380,044 | 1,203,058 | 1,601,113 | 1,395,595 | |||||||||||||||||||
Consumer discretionary | 4,541,717 | 3,856,042 | 5,086,479 | 4,320,219 | |||||||||||||||||||
Energy | 1,017,803 | 923,675 | 1,219,370 | 1,111,891 | |||||||||||||||||||
Financials | 6,246,840 | 5,488,098 | 6,467,052 | 5,634,229 | |||||||||||||||||||
Government non-guaranteed | 189,320 | 165,056 | 202,740 | 179,440 | |||||||||||||||||||
Industrials | 134,368 | 108,483 | 166,061 | 138,999 | |||||||||||||||||||
Information technology | 1,199,832 | 1,039,804 | 1,344,461 | 1,160,067 | |||||||||||||||||||
Materials | 1,026,548 | 886,721 | 1,169,188 | 1,021,288 | |||||||||||||||||||
Telecommunications | 1,187,414 | 988,322 | 1,306,495 | 1,090,868 | |||||||||||||||||||
Transportation | 984,676 | 873,587 | 1,100,681 | 975,393 | |||||||||||||||||||
Utilities | 3,111,757 | 2,648,176 | 3,620,946 | 3,115,520 | |||||||||||||||||||
Other | 74,251 | 73,318 | 58,184 | 58,265 | |||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||
Government agency | 755,168 | 705,470 | 806,999 | 754,349 | |||||||||||||||||||
Prime | 373,194 | 316,580 | 387,838 | 334,613 | |||||||||||||||||||
Alt-A | 55,115 | 56,348 | 54,910 | 58,091 | |||||||||||||||||||
Non-qualified mortgage | 196,504 | 182,325 | 169,847 | 157,960 | |||||||||||||||||||
Other | 56,191 | 55,840 | 62,235 | 61,914 | |||||||||||||||||||
Commercial mortgage backed securities: | |||||||||||||||||||||||
Government agency | 164,999 | 153,259 | 170,307 | 157,903 | |||||||||||||||||||
Non-agency | 3,558,841 | 3,107,533 | 3,668,300 | 3,289,172 | |||||||||||||||||||
Other asset backed securities: | |||||||||||||||||||||||
Auto | 372,904 | 369,260 | 44,450 | 41,896 | |||||||||||||||||||
Consumer discretionary | 602,942 | 570,056 | 122,068 | 118,843 | |||||||||||||||||||
Financials | 345,273 | 317,615 | 283,238 | 252,493 | |||||||||||||||||||
Collateralized loan obligations | 4,974,918 | 4,765,571 | 4,071,929 | 3,775,347 | |||||||||||||||||||
Other | 734,948 | 702,619 | 1,005,440 | 966,675 | |||||||||||||||||||
37,756,880 | 33,513,062 | 39,400,423 | 34,779,982 | ||||||||||||||||||||
Coinsurance investments (a) | 5,566,135 | 5,167,395 | 5,465,596 | 5,024,635 | |||||||||||||||||||
$ | 43,323,015 | $ | 38,680,457 | $ | 44,866,019 | $ | 39,804,617 |
June 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Principal | Percent | Principal | Percent | ||||||||||||||||||||
Property type distribution | |||||||||||||||||||||||
Commercial mortgage loans: | |||||||||||||||||||||||
Office | $ | 252,168 | 3.5 | % | $ | 277,767 | 4.1 | % | |||||||||||||||
Retail | 827,217 | 11.6 | % | 878,352 | 13.0 | % | |||||||||||||||||
Industrial/Warehouse | 871,596 | 12.2 | % | 853,215 | 12.6 | % | |||||||||||||||||
Apartment | 995,879 | 14.0 | % | 893,910 | 13.2 | % | |||||||||||||||||
Hotel | 285,271 | 4.0 | % | 285,271 | 4.2 | % | |||||||||||||||||
Mixed Use/Other | 78,243 | 1.1 | % | 200,756 | 3.0 | % | |||||||||||||||||
Agricultural mortgage loans | 582,660 | 8.2 | % | 567,630 | 8.4 | % | |||||||||||||||||
Residential mortgage loans | 3,236,400 | 45.4 | % | 2,807,652 | 41.5 | % | |||||||||||||||||
7,129,434 | 100.0 | % | 6,764,553 | 100.0 | % | ||||||||||||||||||
Coinsurance investments (a) | 225,133 | 171,633 | |||||||||||||||||||||
$ | 7,354,567 | $ | 6,936,186 |
Commercial | Agricultural | ||||||||||||||||||||||
Amortized Cost | Average LTV | Amortized Cost | Average LTV | ||||||||||||||||||||
As of June 30, 2023: | |||||||||||||||||||||||
Debt Service Coverage Ratio: | |||||||||||||||||||||||
Greater than or equal to 1.5 | $ | 2,323,916 | 53% | $ | 284,227 | 49% | |||||||||||||||||
Greater than or equal to 1.2 and less than 1.5 | 337,210 | 62% | 240,675 | 52% | |||||||||||||||||||
Greater than or equal to 1.0 and less than 1.2 | 558,172 | 47% | 11,788 | 44% | |||||||||||||||||||
Less than 1.0 | 86,502 | 56% | 44,251 | 41% | |||||||||||||||||||
3,305,800 | 53% | 580,941 | 50% | ||||||||||||||||||||
Coinsurance investments (a) | 223,568 | 51% | — | —% | |||||||||||||||||||
$ | 3,529,368 | 53% | $ | 580,941 | 50% | ||||||||||||||||||
As of December 31, 2022: | |||||||||||||||||||||||
Debt Service Coverage Ratio: | |||||||||||||||||||||||
Greater than or equal to 1.5 | $ | 2,358,793 | 53% | $ | 266,695 | 45% | |||||||||||||||||
Greater than or equal to 1.2 and less than 1.5 | 505,644 | 61% | 236,589 | 48% | |||||||||||||||||||
Greater than or equal to 1.0 and less than 1.2 | 475,315 | 50% | 15,075 | 39% | |||||||||||||||||||
Less than 1.0 | 44,756 | 66% | 47,604 | 33% | |||||||||||||||||||
3,384,508 | 54% | 565,963 | 45% | ||||||||||||||||||||
Coinsurance investments (a) | 170,050 | 61% | — | —% | |||||||||||||||||||
$ | 3,554,558 | 54% | $ | 565,963 | 45% |
June 30, 2023 | |||||||||||||||||||||||
Commercial | Agricultural | Residential | Total | ||||||||||||||||||||
Credit exposure - by payment activity | |||||||||||||||||||||||
Performing | $ | 3,310,374 | $ | 582,660 | $ | 3,181,610 | $ | 7,074,644 | |||||||||||||||
In workout | — | — | — | — | |||||||||||||||||||
Delinquent | — | — | 54,790 | 54,790 | |||||||||||||||||||
Principal outstanding | 3,310,374 | 582,660 | 3,236,400 | 7,129,434 | |||||||||||||||||||
Unamortized discounts and premiums, net | (998) | — | 66,226 | 65,228 | |||||||||||||||||||
Deferred fees and costs, net | (3,575) | (1,719) | 1,068 | (4,226) | |||||||||||||||||||
Amortized cost | 3,305,801 | 580,941 | 3,303,694 | 7,190,436 | |||||||||||||||||||
Valuation allowance | (21,330) | (895) | (18,170) | (40,395) | |||||||||||||||||||
Carrying value | 3,284,471 | 580,046 | 3,285,524 | 7,150,041 | |||||||||||||||||||
Coinsurance investments (a) | 223,568 | — | — | 223,568 | |||||||||||||||||||
$ | 3,508,039 | $ | 580,046 | $ | 3,285,524 | $ | 7,373,609 | ||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Commercial | Agricultural | Residential | Total | ||||||||||||||||||||
Credit exposure - by payment activity | |||||||||||||||||||||||
Performing | $ | 3,389,271 | $ | 564,495 | $ | 2,773,251 | $ | 6,727,017 | |||||||||||||||
In workout | — | — | — | — | |||||||||||||||||||
Delinquent | — | 3,135 | 34,401 | 37,536 | |||||||||||||||||||
Principal outstanding | 3,389,271 | 567,630 | 2,807,652 | 6,764,553 | |||||||||||||||||||
Unamortized discounts and premiums, net | — | — | 55,917 | 55,917 | |||||||||||||||||||
Deferred fees and costs, net | (4,763) | (1,667) | 1,909 | (4,521) | |||||||||||||||||||
Amortized cost | 3,384,508 | 565,963 | 2,865,478 | 6,815,949 | |||||||||||||||||||
Valuation allowance | (22,428) | (1,021) | (13,523) | (36,972) | |||||||||||||||||||
Carrying value | 3,362,080 | 564,942 | 2,851,955 | 6,778,977 | |||||||||||||||||||
Coinsurance investments (a) | 170,050 | — | — | 170,050 | |||||||||||||||||||
$ | 3,532,130 | $ | 564,942 | $ | 2,851,955 | $ | 6,949,027 |
A.M. Best | S&P | Fitch | |||||||||||||||
Financial Strength Ratings | |||||||||||||||||
American Equity Investment Life Insurance Company | A- (stable) | A- (negative) | A- (stable) | ||||||||||||||
American Equity Investment Life Insurance Company of New York | A- (stable) | A- (negative) | A- (stable) | ||||||||||||||
Eagle Life Insurance Company | A- (stable) | A- (negative) | A- (stable) | ||||||||||||||
Credit Ratings | |||||||||||||||||
American Equity Investment Life Holding Company | bbb- (stable) | BBB- (negative) | BBB | ||||||||||||||
Senior unsecured debt | bbb- (stable) | BBB- | BBB- | ||||||||||||||
Perpetual, non-cumulative preferred stock | bb (stable) | BB | BB |
High | Low | Close | Dividend Declared | ||||||||||||||||||||
2023 | |||||||||||||||||||||||
First Quarter | $48.37 | $31.57 | $36.49 | $0.00 | |||||||||||||||||||
Second Quarter | $53.68 | $35.22 | $52.11 | $0.00 | |||||||||||||||||||
2022 | |||||||||||||||||||||||
First Quarter | $44.49 | $35.05 | $39.91 | $0.00 | |||||||||||||||||||
Second Quarter | $42.18 | $32.65 | $36.57 | $0.00 | |||||||||||||||||||
Third Quarter | $43.55 | $33.22 | $37.29 | $0.00 | |||||||||||||||||||
Fourth Quarter | $46.76 | $28.05 | $45.62 | $0.36 | |||||||||||||||||||
2021 | |||||||||||||||||||||||
First Quarter | $32.54 | $26.21 | $31.53 | $0.00 | |||||||||||||||||||
Second Quarter | $33.68 | $29.18 | $32.32 | $0.00 | |||||||||||||||||||
Third Quarter | $33.79 | $27.12 | $29.57 | $0.00 | |||||||||||||||||||
Fourth Quarter | $39.88 | $29.46 | $38.92 | $0.34 |
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