(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 | ||||||||
November 7, 2023 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Premiums and other considerations | $ | 2,657 | $ | 2,839 | $ | 9,310 | $ | 16,748 | |||||||||||||||
Annuity product charges | 84,316 | 60,819 | 218,549 | 168,688 | |||||||||||||||||||
Net investment income | 586,614 | 609,737 | 1,690,622 | 1,769,468 | |||||||||||||||||||
Change in fair value of derivatives | (383,026) | (176,671) | (94,397) | (1,160,371) | |||||||||||||||||||
Net realized losses on investments | (44,672) | (15,860) | (97,138) | (62,259) | |||||||||||||||||||
Other revenue | 20,763 | 10,988 | 53,893 | 29,213 | |||||||||||||||||||
Total revenues | 266,652 | 491,852 | 1,780,839 | 761,487 | |||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||
Insurance policy benefits and change in future policy benefits | 2,193 | 6,659 | 14,526 | 27,272 | |||||||||||||||||||
Interest sensitive and index product benefits | 193,686 | 68,982 | 373,984 | 497,245 | |||||||||||||||||||
Market risk benefits (gains) losses | (296,114) | 77,579 | (256,544) | (29,806) | |||||||||||||||||||
Amortization of deferred sales inducements | 48,354 | 46,223 | 141,906 | 136,004 | |||||||||||||||||||
Change in fair value of embedded derivatives | (451,806) | (415,374) | 166,398 | (2,695,007) | |||||||||||||||||||
Interest expense on notes and loan payable | 12,003 | 8,984 | 34,248 | 21,870 | |||||||||||||||||||
Interest expense on subordinated debentures | 1,340 | 1,333 | 4,014 | 3,996 | |||||||||||||||||||
Amortization of deferred policy acquisition costs | 70,561 | 71,726 | 207,272 | 217,180 | |||||||||||||||||||
Other operating costs and expenses | 76,630 | 59,470 | 226,331 | 177,137 | |||||||||||||||||||
Total benefits and expenses | (343,153) | (74,418) | 912,135 | (1,644,109) | |||||||||||||||||||
Income before income taxes | 609,805 | 566,270 | 868,704 | 2,405,596 | |||||||||||||||||||
Income tax expense | 133,691 | 121,380 | 193,335 | 517,952 | |||||||||||||||||||
Net income | 476,114 | 444,890 | 675,369 | 1,887,644 | |||||||||||||||||||
Less: Net income (loss) available to noncontrolling interests | (42) | 1 | (156) | (3) | |||||||||||||||||||
Net income available to American Equity Investment Life Holding Company stockholders | 476,156 | 444,889 | 675,525 | 1,887,647 | |||||||||||||||||||
Less: Preferred stock dividends | 10,918 | 10,918 | 32,756 | 32,756 | |||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 465,238 | $ | 433,971 | $ | 642,769 | $ | 1,854,891 | |||||||||||||||
Earnings per common share | $ | 5.96 | $ | 4.95 | $ | 8.06 | $ | 20.09 | |||||||||||||||
Earnings per common share - assuming dilution | $ | 5.82 | $ | 4.90 | $ | 7.92 | $ | 19.89 | |||||||||||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||||||||||
Earnings per common share | 78,034 | 87,707 | 79,719 | 92,339 | |||||||||||||||||||
Earnings per common share - assuming dilution | 79,952 | 88,581 | 81,191 | 93,270 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 465,238 | $ | 433,971 | $ | 642,769 | $ | 1,854,891 | |||||||||||||||
Adjustments to arrive at non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | 46,771 | 16,945 | 93,892 | 67,724 | |||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (115,747) | (400,952) | (34,361) | (1,718,972) | |||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (290,558) | (179,509) | (338,308) | (395,926) | |||||||||||||||||||
Net investment income | (1,746) | — | 372 | — | |||||||||||||||||||
Other revenue | 5,969 | — | 17,907 | — | |||||||||||||||||||
Expenses incurred related to acquisition | 9,714 | — | 9,714 | — | |||||||||||||||||||
Income taxes | 75,879 | 120,802 | 55,487 | 441,836 | |||||||||||||||||||
Non-GAAP operating income (loss) available to common stockholders | $ | 195,520 | $ | (8,743) | $ | 447,472 | $ | 249,553 | |||||||||||||||
Impact of excluding notable items (a) | $ | (20,958) | $ | 181,890 | $ | (2,500) | $ | 181,890 | |||||||||||||||
Per common share - assuming dilution: | |||||||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 5.82 | $ | 4.90 | $ | 7.92 | $ | 19.89 | |||||||||||||||
Adjustments to arrive at non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | 0.58 | 0.19 | 1.16 | 0.73 | |||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (1.44) | (4.52) | (0.42) | (18.43) | |||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (3.63) | (2.03) | (4.17) | (4.25) | |||||||||||||||||||
Net investment income | (0.02) | — | — | — | |||||||||||||||||||
Other revenue | 0.07 | — | 0.22 | — | |||||||||||||||||||
Expenses incurred related to acquisition | 0.12 | — | 0.12 | — | |||||||||||||||||||
Income taxes | 0.95 | 1.36 | 0.68 | 4.74 | |||||||||||||||||||
Non-GAAP operating income (loss) available to common stockholders | $ | 2.45 | $ | (0.10) | $ | 5.51 | $ | 2.68 | |||||||||||||||
Impact of excluding notable items (a) | $ | (0.26) | $ | 2.05 | $ | (0.03) | $ | 1.95 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Notable items impacting non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||
Expense associated with strategic incentive award | $ | 6,610 | $ | — | $ | 25,068 | $ | — | |||||||||||||||
Impact of actuarial assumption updates | (27,568) | 181,890 | (27,568) | 181,890 | |||||||||||||||||||
Total notable items (a) | $ | (20,958) | $ | 181,890 | $ | (2,500) | $ | 181,890 |
Q3 2023 | |||||
Total stockholders’ equity attributable to American Equity Investment Life Holding Company | $ | 2,053,576 | |||
Equity available to preferred stockholders (a) | (700,000) | ||||
Total common stockholders' equity (b) | 1,353,576 | ||||
Accumulated other comprehensive (income) loss (AOCI) | 4,425,695 | ||||
Total common stockholders’ equity excluding AOCI (b) | 5,779,271 | ||||
Net impact of fair value accounting for derivatives and embedded derivatives | (1,689,153) | ||||
Net capital markets impact on the fair value of market risk benefits | (866,530) | ||||
Total common stockholders’ equity excluding AOCI and the net impact of fair value accounting for fixed index annuities (b) | $ | 3,223,588 | |||
Common shares outstanding | 78,974,095 | ||||
Book Value per Common Share: (c) | |||||
Book value per common share | $ | 17.14 | |||
Book value per common share excluding AOCI (b) | $ | 73.18 | |||
Book value per common share excluding AOCI and the net impact of fair value accounting for fixed index annuities (b) | $ | 40.82 | |||
Twelve Months Ended | |||||
September 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 | $ | 2,105,622 | |||
Average equity available to preferred stockholders | (700,000) | ||||
Average equity available to common stockholders | 1,405,622 | ||||
Average AOCI | 4,205,096 | ||||
Average common stockholders' equity excluding average AOCI | 5,610,718 | ||||
Average net impact of fair value accounting for derivatives and embedded derivatives | (1,705,238) | ||||
Average net capital markets impact on the fair value of market risk benefits | (734,651) | ||||
Average common stockholders' equity excluding average AOCI and average net impact of fair value accounting for fixed index annuities | $ | 3,170,829 | |||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 664,422 | |||
Adjustments to arrive at non-GAAP operating income available to common stockholders: | |||||
Net realized losses on financial assets, including credit losses | 74,432 | ||||
Change in fair value of derivatives and embedded derivatives | 135,406 | ||||
Capital markets impact on the change in fair value of market risk benefits | (335,999) | ||||
Net investment income | 1,848 | ||||
Other revenue | 23,876 | ||||
Expenses incurred related to acquisition | 9,714 | ||||
Income taxes | 15,489 | ||||
Non-GAAP operating income available to common stockholders | $ | 589,188 | |||
Impact of excluding notable items (a) | $ | (2,500) | |||
Return on Average Common Stockholders' Equity Attributable to American Equity Investment Life Holding Company | |||||
Net income available to common stockholders | 47.3 | % | |||
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 | 18.6 | % |
Notable Items | Twelve Months Ended | ||||
September 30, 2023 | |||||
Notable items impacting non-GAAP operating income available to common stockholders: | |||||
Expense associated with strategic incentive award | $ | 25,068 | |||
Impact of actuarial assumption updates | (27,568) | ||||
Total notable items (a) | $ | (2,500) |
A. | Financial Highlights | |||||||
Non-GAAP Financial Measures | ||||||||
B. | Product Summary | |||||||
C. | Investment Summary | |||||||
D. | ||||||||
E. |
September 30, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Investments: | |||||||||||
Fixed maturity securities, available for sale, at fair value | $ | 32,084,932 | $ | 39,804,617 | |||||||
Mortgage loans on real estate | 7,494,983 | 6,949,027 | |||||||||
Real estate investments | 1,302,185 | 1,056,063 | |||||||||
Limited partnerships and limited liability companies | 1,763,551 | 1,266,779 | |||||||||
Derivative instruments | 733,784 | 431,727 | |||||||||
Other investments | 1,207,672 | 1,817,085 | |||||||||
Total investments | 44,587,107 | 51,325,298 | |||||||||
Cash and cash equivalents | 10,188,438 | 1,919,669 | |||||||||
Coinsurance deposits | 14,628,884 | 13,254,956 | |||||||||
Market risk benefits | 346,515 | 229,871 | |||||||||
Accrued investment income | 443,642 | 497,851 | |||||||||
Deferred policy acquisition costs | 2,933,304 | 2,773,643 | |||||||||
Deferred sales inducements | 2,257,064 | 2,045,683 | |||||||||
Deferred income taxes | 425,398 | 438,434 | |||||||||
Income taxes recoverable | 55,498 | 55,498 | |||||||||
Other assets | 847,047 | 642,696 | |||||||||
Total assets | $ | 76,712,897 | $ | 73,183,599 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Liabilities: | |||||||||||
Policy benefit reserves | $ | 60,226,094 | $ | 58,781,836 | |||||||
Market risk benefits | 2,552,907 | 2,455,492 | |||||||||
Other policy funds and contract claims | 196,299 | 512,790 | |||||||||
Notes and loan payable | 787,098 | 792,073 | |||||||||
Subordinated debentures | 79,017 | 78,753 | |||||||||
Funds withheld for reinsurance liabilities | 8,139,724 | 6,577,426 | |||||||||
Other liabilities | 2,655,213 | 1,614,479 | |||||||||
Total liabilities | 74,636,352 | 70,812,849 | |||||||||
Stockholders' equity: | |||||||||||
Preferred stock, Series A | 16 | 16 | |||||||||
Preferred stock, Series B | 12 | 12 | |||||||||
Common stock | 78,974 | 84,810 | |||||||||
Additional paid-in capital | 1,071,907 | 1,325,316 | |||||||||
Accumulated other comprehensive loss | (4,425,695) | (3,746,230) | |||||||||
Retained earnings | 5,328,362 | 4,685,593 | |||||||||
Total stockholders' equity attributable to American Equity Investment Life Holding Company | 2,053,576 | 2,349,517 | |||||||||
Noncontrolling interests | 22,969 | 21,233 | |||||||||
Total stockholders' equity | 2,076,545 | 2,370,750 | |||||||||
Total liabilities and stockholders' equity | $ | 76,712,897 | $ | 73,183,599 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Premiums and other considerations | $ | 2,657 | $ | 2,839 | $ | 9,310 | $ | 16,748 | |||||||||||||||
Annuity product charges | 84,316 | 60,819 | 218,549 | 168,688 | |||||||||||||||||||
Net investment income | 586,614 | 609,737 | 1,690,622 | 1,769,468 | |||||||||||||||||||
Change in fair value of derivatives | (383,026) | (176,671) | (94,397) | (1,160,371) | |||||||||||||||||||
Net realized losses on investments | (44,672) | (15,860) | (97,138) | (62,259) | |||||||||||||||||||
Other revenue | 20,763 | 10,988 | 53,893 | 29,213 | |||||||||||||||||||
Total revenues | 266,652 | 491,852 | 1,780,839 | 761,487 | |||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||
Insurance policy benefits and change in future policy benefits | 2,193 | 6,659 | 14,526 | 27,272 | |||||||||||||||||||
Interest sensitive and index product benefits | 193,686 | 68,982 | 373,984 | 497,245 | |||||||||||||||||||
Market risk benefits (gains) losses | (296,114) | 77,579 | (256,544) | (29,806) | |||||||||||||||||||
Amortization of deferred sales inducements | 48,354 | 46,223 | 141,906 | 136,004 | |||||||||||||||||||
Change in fair value of embedded derivatives | (451,806) | (415,374) | 166,398 | (2,695,007) | |||||||||||||||||||
Interest expense on notes and loan payable | 12,003 | 8,984 | 34,248 | 21,870 | |||||||||||||||||||
Interest expense on subordinated debentures | 1,340 | 1,333 | 4,014 | 3,996 | |||||||||||||||||||
Amortization of deferred policy acquisition costs | 70,561 | 71,726 | 207,272 | 217,180 | |||||||||||||||||||
Other operating costs and expenses | 76,630 | 59,470 | 226,331 | 177,137 | |||||||||||||||||||
Total benefits and expenses | (343,153) | (74,418) | 912,135 | (1,644,109) | |||||||||||||||||||
Income before income taxes | 609,805 | 566,270 | 868,704 | 2,405,596 | |||||||||||||||||||
Income tax expense | 133,691 | 121,380 | 193,335 | 517,952 | |||||||||||||||||||
Net income | 476,114 | 444,890 | 675,369 | 1,887,644 | |||||||||||||||||||
Less: Net income (loss) available to noncontrolling interests | (42) | 1 | (156) | (3) | |||||||||||||||||||
Net income available to American Equity Investment Life Holding Company stockholders | 476,156 | 444,889 | 675,525 | 1,887,647 | |||||||||||||||||||
Less: Preferred stock dividends | 10,918 | 10,918 | 32,756 | 32,756 | |||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 465,238 | $ | 433,971 | $ | 642,769 | $ | 1,854,891 | |||||||||||||||
Earnings per common share | $ | 5.96 | $ | 4.95 | $ | 8.06 | $ | 20.09 | |||||||||||||||
Earnings per common share - assuming dilution | $ | 5.82 | $ | 4.90 | $ | 7.92 | $ | 19.89 | |||||||||||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||||||||||
Earnings per common share | 78,034 | 87,707 | 79,719 | 92,339 | |||||||||||||||||||
Earnings per common share - assuming dilution | 79,952 | 88,581 | 81,191 | 93,270 |
Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | |||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Traditional life insurance premiums | $ | 1,842 | $ | 629 | $ | 698 | $ | 626 | $ | 634 | |||||||||||||||||||
Life contingent immediate annuity considerations | 815 | 1,887 | 3,439 | 2,365 | 2,205 | ||||||||||||||||||||||||
Surrender charges | 45,550 | 33,777 | 26,542 | 22,030 | 19,783 | ||||||||||||||||||||||||
Lifetime income benefit rider fees | 38,766 | 37,865 | 36,049 | 39,636 | 41,036 | ||||||||||||||||||||||||
Net investment income | 586,614 | 542,685 | 561,323 | 537,995 | 609,737 | ||||||||||||||||||||||||
Change in fair value of derivatives | (383,026) | 242,739 | 45,890 | 22,243 | (176,671) | ||||||||||||||||||||||||
Net realized gains (losses) on investments | (44,672) | (24,679) | (27,787) | 14,411 | (15,860) | ||||||||||||||||||||||||
Other revenue (a) | 20,763 | 16,736 | 16,394 | 13,032 | 10,988 | ||||||||||||||||||||||||
Total revenues | 266,652 | 851,639 | 662,548 | 652,338 | 491,852 | ||||||||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||||||||
Traditional life insurance policy benefits and change in future policy benefits (b) | 3,623 | 940 | 1,206 | 944 | 118 | ||||||||||||||||||||||||
Life contingent immediate annuity benefits and change in future policy benefits (c) | (1,430) | 4,185 | 6,002 | 5,004 | 6,541 | ||||||||||||||||||||||||
Interest sensitive and index product benefits | 193,686 | 122,387 | 57,911 | 57,626 | 68,982 | ||||||||||||||||||||||||
Market risk benefits (gains) losses (d) | (296,114) | (144,124) | 183,694 | 33,490 | 77,579 | ||||||||||||||||||||||||
Amortization of deferred sales inducements | 48,354 | 46,951 | 46,601 | 45,966 | 46,223 | ||||||||||||||||||||||||
Change in fair value of embedded derivatives (e) | (451,806) | 213,764 | 404,440 | 342,409 | (415,374) | ||||||||||||||||||||||||
Interest expense on notes payable | 12,003 | 11,227 | 11,018 | 10,228 | 8,984 | ||||||||||||||||||||||||
Interest expense on subordinated debentures | 1,340 | 1,338 | 1,336 | 1,335 | 1,333 | ||||||||||||||||||||||||
Amortization of deferred policy acquisition costs | 70,561 | 68,476 | 68,235 | 66,831 | 71,726 | ||||||||||||||||||||||||
Other operating costs and expenses | 76,630 | 75,697 | 74,004 | 62,389 | 59,470 | ||||||||||||||||||||||||
Total benefits and expenses | (343,153) | 400,841 | 854,447 | 626,222 | (74,418) | ||||||||||||||||||||||||
Income (loss) before income taxes | 609,805 | 450,798 | (191,899) | 26,116 | 566,270 | ||||||||||||||||||||||||
Income tax expense (benefit) | 133,691 | 95,652 | (36,008) | (6,817) | 121,380 | ||||||||||||||||||||||||
Net income (loss) (b)(c)(d)(e) | 476,114 | 355,146 | (155,891) | 32,933 | 444,890 | ||||||||||||||||||||||||
Less: Net income (loss) available to noncontrolling interests | (42) | (217) | 103 | 361 | 1 | ||||||||||||||||||||||||
Net income (loss) available to American Equity Investment Life Holding Company stockholders (b)(c)(d)(e) | 476,156 | 355,363 | (155,994) | 32,572 | 444,889 | ||||||||||||||||||||||||
Less: Preferred stock dividends | 10,918 | 10,919 | 10,919 | 10,919 | 10,918 | ||||||||||||||||||||||||
Net income (loss) available to American Equity Investment Life Holding Company common stockholders (b)(c)(d)(e) | $ | 465,238 | $ | 344,444 | $ | (166,913) | $ | 21,653 | $ | 433,971 | |||||||||||||||||||
Earnings (loss) per common share | $ | 5.96 | $ | 4.43 | $ | (2.00) | $ | 0.25 | $ | 4.95 | |||||||||||||||||||
Earnings (loss) per common share - assuming dilution (b)(c)(d)(e) | $ | 5.82 | $ | 4.36 | $ | (2.00) | $ | 0.25 | $ | 4.90 | |||||||||||||||||||
Weighted average common shares outstanding (thousands): | |||||||||||||||||||||||||||||
Earnings (loss) per common share | 78,034 | 77,767 | 83,417 | 85,274 | 87,707 | ||||||||||||||||||||||||
Earnings (loss) per common share - assuming dilution | 79,952 | 78,928 | 83,417 | 86,402 | 88,581 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 465,238 | $ | 433,971 | $ | 642,769 | $ | 1,854,891 | |||||||||||||||
Adjustments to arrive at non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | 46,771 | 16,945 | 93,892 | 67,724 | |||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (115,747) | (400,952) | (34,361) | (1,718,972) | |||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (290,558) | (179,509) | (338,308) | (395,926) | |||||||||||||||||||
Net investment income | (1,746) | — | 372 | — | |||||||||||||||||||
Other revenue | 5,969 | — | 17,907 | — | |||||||||||||||||||
Expenses incurred related to acquisition | 9,714 | — | 9,714 | — | |||||||||||||||||||
Income taxes | 75,879 | 120,802 | 55,487 | 441,836 | |||||||||||||||||||
Non-GAAP operating income (loss) available to common stockholders | $ | 195,520 | $ | (8,743) | $ | 447,472 | $ | 249,553 | |||||||||||||||
Impact of excluding notable items (a) | $ | (20,958) | $ | 181,890 | $ | (2,500) | $ | 181,890 | |||||||||||||||
Per common share - assuming dilution: | |||||||||||||||||||||||
Net income available to American Equity Investment Life Holding Company common stockholders | $ | 5.82 | $ | 4.90 | $ | 7.92 | $ | 19.89 | |||||||||||||||
Adjustments to arrive at non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | 0.58 | 0.19 | 1.16 | 0.73 | |||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (1.44) | (4.52) | (0.42) | (18.43) | |||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (3.63) | (2.03) | (4.17) | (4.25) | |||||||||||||||||||
Net investment income | (0.02) | — | — | — | |||||||||||||||||||
Other revenue | 0.07 | — | 0.22 | — | |||||||||||||||||||
Expenses incurred related to acquisition | 0.12 | — | 0.12 | — | |||||||||||||||||||
Income taxes | 0.95 | 1.36 | 0.68 | 4.74 | |||||||||||||||||||
Non-GAAP operating income (loss) available to common stockholders | $ | 2.45 | $ | (0.10) | $ | 5.51 | $ | 2.68 | |||||||||||||||
Impact of excluding notable items (a) | $ | (0.26) | $ | 2.05 | $ | (0.03) | $ | 1.95 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Notable items impacting non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||
Expense associated with strategic incentive award | $ | 6,610 | $ | — | $ | 25,068 | $ | — | |||||||||||||||
Impact of actuarial assumption updates | (27,568) | 181,890 | (27,568) | 181,890 | |||||||||||||||||||
Total notable items (a) | $ | (20,958) | $ | 181,890 | $ | (2,500) | $ | 181,890 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net realized losses on financial assets, including credit losses: | |||||||||||||||||||||||
Net realized losses on financial assets, including credit losses | $ | 46,771 | $ | 16,945 | $ | 93,892 | $ | 67,724 | |||||||||||||||
Income taxes | (10,056) | (3,643) | (20,187) | (14,560) | |||||||||||||||||||
$ | 36,715 | $ | 13,302 | $ | 73,705 | $ | 53,164 | ||||||||||||||||
Change in fair value of derivatives and embedded derivatives: | |||||||||||||||||||||||
Fixed index annuities | $ | 12,979 | $ | (299,168) | $ | 58,831 | $ | (1,218,988) | |||||||||||||||
Reinsurance contracts | (128,726) | (116,230) | (84,096) | (518,096) | |||||||||||||||||||
Interest rate swaps | — | 14,446 | (9,096) | 18,112 | |||||||||||||||||||
Income taxes | 26,461 | 85,850 | 8,956 | 371,271 | |||||||||||||||||||
$ | (89,286) | $ | (315,102) | $ | (25,405) | $ | (1,347,701) | ||||||||||||||||
Capital market impact on the fair value of market risk benefits: | |||||||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | $ | (318,409) | $ | (197,977) | $ | (401,846) | $ | (433,651) | |||||||||||||||
Amortization of capital markets impact on the fair value of market risk benefits | 27,851 | 18,468 | 63,538 | 37,725 | |||||||||||||||||||
Income taxes | 62,470 | 38,595 | 72,736 | 85,125 | |||||||||||||||||||
$ | (228,088) | $ | (140,914) | $ | (265,572) | $ | (310,801) | ||||||||||||||||
Net investment income: | |||||||||||||||||||||||
Income associated with assets transferred under reinsurance treaty | $ | (1,746) | $ | — | $ | 372 | $ | — | |||||||||||||||
Income taxes | 375 | — | (80) | — | |||||||||||||||||||
$ | (1,371) | $ | — | $ | 292 | $ | — | ||||||||||||||||
Other revenue: | |||||||||||||||||||||||
Amortization of deferred fees associated with reinsurance treaties | $ | 5,969 | $ | — | $ | 17,907 | $ | — | |||||||||||||||
Income taxes | (1,283) | — | (3,850) | — | |||||||||||||||||||
$ | 4,686 | $ | — | $ | 14,057 | $ | — | ||||||||||||||||
Other operating costs and expenses: | |||||||||||||||||||||||
Expenses incurred related to acquisition | $ | 9,714 | $ | — | $ | 9,714 | $ | — | |||||||||||||||
Income taxes | (2,088) | — | (2,088) | — | |||||||||||||||||||
$ | 7,626 | $ | — | $ | 7,626 | $ | — |
Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | |||||||||||||||||||||||||
Net income (loss) available to American Equity Investment Life Holding Company common stockholders | $ | 465,238 | $ | 344,444 | $ | (166,913) | $ | 21,653 | $ | 433,971 | |||||||||||||||||||
Adjustments to arrive at non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||||||||
Net realized (gains) losses on financial assets, including credit losses | 46,771 | 22,737 | 24,384 | (19,460) | 16,945 | ||||||||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (115,747) | (124,816) | 206,202 | 169,767 | (400,952) | ||||||||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (290,558) | (184,700) | 136,950 | 2,309 | (179,509) | ||||||||||||||||||||||||
Net investment income | (1,746) | 4,609 | (2,491) | 1,476 | — | ||||||||||||||||||||||||
Other revenue | 5,969 | 5,969 | 5,969 | 5,969 | — | ||||||||||||||||||||||||
Expenses incurred related to acquisition | 9,714 | — | — | — | — | ||||||||||||||||||||||||
Income taxes | 75,879 | 59,373 | (79,765) | (39,998) | 120,802 | ||||||||||||||||||||||||
Non-GAAP operating income (loss) available to common stockholders (c)(d)(e) | $ | 195,520 | $ | 127,616 | $ | 124,336 | $ | 141,716 | $ | (8,743) | |||||||||||||||||||
Impact of excluding notable items (a) | $ | (20,958) | $ | 8,892 | $ | 9,566 | $ | — | $ | 181,890 | |||||||||||||||||||
Per common share - assuming dilution: | |||||||||||||||||||||||||||||
Net income (loss) available to American Equity Investment Life Holding Company common stockholders | $ | 5.82 | $ | 4.36 | $ | (2.00) | $ | 0.25 | $ | 4.90 | |||||||||||||||||||
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 | 0.58 | 0.29 | 0.29 | (0.23) | 0.19 | ||||||||||||||||||||||||
Change in fair value of derivatives and embedded derivatives | (1.44) | (1.58) | 2.43 | 1.96 | (4.52) | ||||||||||||||||||||||||
Capital markets impact on the change in fair value of market risk benefits | (3.63) | (2.34) | 1.62 | 0.03 | (2.03) | ||||||||||||||||||||||||
Net investment income | (0.02) | 0.06 | (0.03) | 0.02 | — | ||||||||||||||||||||||||
Other revenue | 0.07 | 0.08 | 0.07 | 0.07 | — | ||||||||||||||||||||||||
Expenses incurred related to acquisition | 0.12 | — | — | — | — | ||||||||||||||||||||||||
Income taxes | 0.95 | 0.75 | (0.94) | (0.46) | 1.36 | ||||||||||||||||||||||||
Non-GAAP operating income (loss) available to common stockholders (c)(d)(e) | $ | 2.45 | $ | 1.62 | $ | 1.47 | $ | 1.64 | $ | (0.10) | |||||||||||||||||||
Impact of excluding notable items (a) | $ | (0.26) | $ | 0.11 | $ | 0.11 | $ | — | $ | 2.05 |
Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | |||||||||||||||||||||||||
Notable items impacting non-GAAP operating income (loss) available to common stockholders: | |||||||||||||||||||||||||||||
Expense associated with strategic incentive award | $ | 6,610 | $ | 8,892 | $ | 9,566 | $ | — | $ | — | |||||||||||||||||||
Impact of actuarial assumption updates | (27,568) | — | — | — | 181,890 | ||||||||||||||||||||||||
Total notable items (a) | $ | (20,958) | $ | 8,892 | $ | 9,566 | $ | — | $ | 181,890 |
Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | |||||||||||||||||||||||||
Net realized (gains) losses on investments | $ | 44,672 | $ | 24,679 | $ | 27,787 | $ | (14,411) | $ | 15,860 | |||||||||||||||||||
Net investment income | (1,746) | 4,609 | (2,491) | 1,476 | — | ||||||||||||||||||||||||
Other revenue | 5,969 | 5,969 | 5,969 | 5,969 | — | ||||||||||||||||||||||||
Change in fair value of derivatives | 336,059 | (338,579) | (198,239) | (172,643) | 14,423 | ||||||||||||||||||||||||
Increase (decrease) in total revenues | 384,954 | (303,322) | (166,974) | (179,609) | 30,283 | ||||||||||||||||||||||||
Change in fair value of embedded derivatives | 451,806 | (213,764) | (404,440) | (342,409) | 415,374 | ||||||||||||||||||||||||
Market risk benefits (gains) losses | 290,558 | 184,700 | (136,950) | (2,309) | 179,509 | ||||||||||||||||||||||||
Interest sensitive and index product benefits (a) | (2,099) | 1,943 | 3,402 | 5,048 | (1,084) | ||||||||||||||||||||||||
Other operating costs and expenses | (9,714) | — | — | — | — | ||||||||||||||||||||||||
Increase (decrease) in total benefits and expenses | 730,551 | (27,121) | (537,988) | (339,670) | 593,799 | ||||||||||||||||||||||||
Increase (decrease) in income (loss) before income taxes | (345,597) | (276,201) | 371,014 | 160,061 | (563,516) | ||||||||||||||||||||||||
Increase (decrease) in income tax expense benefit | (75,879) | (59,373) | 79,765 | 39,998 | (120,802) | ||||||||||||||||||||||||
Increase (decrease) in net income (loss) available to common stockholders | $ | (269,718) | $ | (216,828) | $ | 291,249 | $ | 120,063 | $ | (442,714) |
Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | |||||||||||||||||||||||||
Capitalization: | |||||||||||||||||||||||||||||
Notes and loan payable | $ | 800,000 | $ | 800,000 | $ | 800,000 | $ | 800,000 | $ | 800,000 | |||||||||||||||||||
Subordinated debentures payable to subsidiary trusts | 79,017 | 78,927 | 78,839 | 78,753 | 78,668 | ||||||||||||||||||||||||
Total debt | 879,017 | 878,927 | 878,839 | 878,753 | 878,668 | ||||||||||||||||||||||||
Total stockholders’ equity attributable to American Equity Investment Life Holding Company | 2,053,576 | 2,571,915 | 2,605,485 | 2,349,517 | 2,157,667 | ||||||||||||||||||||||||
Total capitalization | 2,932,593 | 3,450,842 | 3,484,324 | 3,228,270 | 3,036,335 | ||||||||||||||||||||||||
Accumulated other comprehensive loss (AOCI) | 4,425,695 | 3,425,248 | 3,036,429 | 3,746,230 | 3,984,496 | ||||||||||||||||||||||||
Total capitalization excluding AOCI (a) | $ | 7,358,288 | $ | 6,876,090 | $ | 6,520,753 | $ | 6,974,500 | $ | 7,020,831 | |||||||||||||||||||
Total stockholders’ equity attributable to American Equity Investment Life Holding Company | $ | 2,053,576 | $ | 2,571,915 | $ | 2,605,485 | $ | 2,349,517 | $ | 2,157,667 | |||||||||||||||||||
Equity available to preferred stockholders (b) | (700,000) | (700,000) | (700,000) | (700,000) | (700,000) | ||||||||||||||||||||||||
Total common stockholders' equity (c) | 1,353,576 | 1,871,915 | 1,905,485 | 1,649,517 | 1,457,667 | ||||||||||||||||||||||||
Accumulated other comprehensive loss | 4,425,695 | 3,425,248 | 3,036,429 | 3,746,230 | 3,984,496 | ||||||||||||||||||||||||
Total common stockholders’ equity excluding AOCI (c) | 5,779,271 | 5,297,163 | 4,941,914 | 5,395,747 | 5,442,163 | ||||||||||||||||||||||||
Net impact of fair value accounting for derivatives and embedded derivatives | (1,689,153) | (1,587,599) | (1,490,297) | (1,652,169) | (1,721,324) | ||||||||||||||||||||||||
Net capital markets impact on the fair value of market risk benefits | (866,530) | (638,442) | (493,452) | (600,958) | (602,772) | ||||||||||||||||||||||||
Total common stockholders’ equity excluding AOCI and the net impact of fair value accounting for fixed index annuities (c) | $ | 3,223,588 | $ | 3,071,122 | $ | 2,958,165 | $ | 3,142,620 | $ | 3,118,067 | |||||||||||||||||||
Common shares outstanding | 78,974,095 | 78,047,941 | 77,753,194 | 84,810,255 | 85,966,505 | ||||||||||||||||||||||||
Book Value per Common Share: (d) | |||||||||||||||||||||||||||||
Book value per common share | $ | 17.14 | $ | 23.98 | $ | 24.51 | $ | 19.45 | $ | 16.96 | |||||||||||||||||||
Book value per common share excluding AOCI (c) | $ | 73.18 | $ | 67.87 | $ | 63.56 | $ | 63.62 | $ | 63.31 | |||||||||||||||||||
Book value per common share excluding AOCI and the net impact of fair value accounting for fixed index annuities (c) | $ | 40.82 | $ | 39.35 | $ | 38.05 | $ | 37.05 | $ | 36.27 | |||||||||||||||||||
Debt-to-Capital Ratios: (e) | |||||||||||||||||||||||||||||
Senior debt / Total capitalization | 10.9 | % | 11.6 | % | 12.3 | % | 11.5 | % | 11.4 | % | |||||||||||||||||||
Total debt / Total capitalization | 11.9 | % | 12.8 | % | 13.5 | % | 12.6 | % | 12.5 | % | |||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | ||||||||||||||||||||||||||||||||
4.52% | 4.33% | Average yield on invested assets | 4.69% | 4.42% | 4.48% | 4.30% | 4.48% | |||||||||||||||||||||||||||||||
1.87% | 1.69% | Aggregate cost of money | 1.96% | 1.85% | 1.81% | 1.76% | 1.75% | |||||||||||||||||||||||||||||||
2.65% | 2.64% | Aggregate investment spread | 2.73% | 2.57% | 2.67% | 2.54% | 2.73% | |||||||||||||||||||||||||||||||
Impact of: | ||||||||||||||||||||||||||||||||||||||
0.01% | 0.04% | Investment yield - additional prepayment income | —% | 0.01% | —% | 0.01% | 0.03% | |||||||||||||||||||||||||||||||
0.03% | 0.02% | Cost of money effect of over hedging | 0.05% | 0.03% | —% | —% | —% | |||||||||||||||||||||||||||||||
$ | 49,430,113 | $ | 54,553,196 | Weighted average investments | $ | 49,528,255 | $ | 49,125,197 | $ | 49,304,219 | $ | 50,040,228 | $ | 54,378,154 | ||||||||||||||||||||||||
49,658,435 | 54,056,886 | Ending investments | 49,658,435 | 49,398,076 | 48,852,319 | 49,811,623 | 54,056,886 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | ||||||||||||||||||||||||||||||||
Investment income: | ||||||||||||||||||||||||||||||||||||||
$ | 1,606,636 | $ | 1,597,011 | Fixed income (a) | $ | 539,584 | $ | 533,930 | $ | 533,122 | $ | 511,077 | $ | 547,326 | ||||||||||||||||||||||||
69,562 | 173,533 | Mark-to-market private asset income (a) | 40,900 | 9,035 | 19,627 | 26,816 | 61,671 | |||||||||||||||||||||||||||||||
$ | 1,676,198 | $ | 1,770,544 | Total non-GAAP investment income (b) | $ | 580,484 | $ | 542,965 | $ | 552,749 | $ | 537,893 | $ | 608,997 | ||||||||||||||||||||||||
Investment yield: | ||||||||||||||||||||||||||||||||||||||
4.56% | 4.01% | Fixed income investment yield | 4.61% | 4.57% | 4.52% | 4.26% | 4.16% | |||||||||||||||||||||||||||||||
3.75% | 16.44% | Mark-to-market private asset yield | 6.12% | 1.48% | 3.61% | 5.29% | 13.89% | |||||||||||||||||||||||||||||||
4.52% | 4.33% | Total investment yield | 4.69% | 4.42% | 4.48% | 4.30% | 4.48% | |||||||||||||||||||||||||||||||
Weighted average investments: | ||||||||||||||||||||||||||||||||||||||
$ | 46,959,205 | $ | 53,146,050 | Fixed income investments | $ | 46,853,771 | $ | 46,684,803 | $ | 47,129,120 | $ | 48,012,311 | $ | 52,602,319 | ||||||||||||||||||||||||
2,470,908 | 1,407,146 | Mark-to-market private assets | 2,674,484 | 2,440,394 | 2,175,099 | 2,027,917 | 1,775,835 | |||||||||||||||||||||||||||||||
$ | 49,430,113 | $ | 54,553,196 | Total weighted average investments | $ | 49,528,255 | $ | 49,125,197 | $ | 49,304,219 | $ | 50,040,228 | $ | 54,378,154 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | ||||||||||||||||||||||||||||||||
Included in interest sensitive and index product benefits: | ||||||||||||||||||||||||||||||||||||||
$ | 189,934 | $ | 301,431 | Index credits | $ | 120,894 | $ | 65,507 | $ | 3,533 | $ | 3,861 | $ | 4,648 | ||||||||||||||||||||||||
175,097 | 184,487 | Interest credited | 61,546 | 57,235 | 56,316 | 56,402 | 62,383 | |||||||||||||||||||||||||||||||
Included in change in fair value of derivatives: | ||||||||||||||||||||||||||||||||||||||
(199,800) | (308,072) | Proceeds received at option expiration | (126,750) | (69,449) | (3,601) | (4,061) | (4,865) | |||||||||||||||||||||||||||||||
496,866 | 492,669 | Pro rata amortization of option cost | 175,603 | 163,992 | 157,271 | 154,463 | 167,197 | |||||||||||||||||||||||||||||||
$ | 662,097 | $ | 670,515 | Cost of money for deferred annuities | $ | 231,293 | $ | 217,285 | $ | 213,519 | $ | 210,665 | $ | 229,363 | ||||||||||||||||||||||||
$ | 47,273,505 | $ | 52,811,080 | Weighted average liability balance outstanding | $ | 47,280,339 | $ | 47,086,271 | $ | 47,266,672 | $ | 47,802,219 | $ | 52,337,208 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | ||||||||||||||||||||||||||||||||
$ | 47,504,615 | $ | 53,191,277 | Account balances at beginning of period | $ | 47,143,582 | $ | 47,031,605 | $ | 47,504,615 | $ | 51,913,689 | $ | 52,762,558 | ||||||||||||||||||||||||
— | (257,779) | Reserves ceded - in-force | — | — | — | (3,810,982) | (257,779) | |||||||||||||||||||||||||||||||
47,504,615 | 52,933,498 | Account balance at beginning of period, net of reinsurance ceded | 47,143,582 | 47,031,605 | 47,504,615 | 48,102,707 | 52,504,779 | |||||||||||||||||||||||||||||||
3,273,742 | 1,734,231 | Net deposits | 1,366,125 | 1,174,953 | 732,664 | 613,084 | 496,940 | |||||||||||||||||||||||||||||||
353,287 | 74,074 | Premium bonuses | 171,164 | 136,856 | 45,267 | 33,617 | 27,385 | |||||||||||||||||||||||||||||||
365,031 | 485,918 | Fixed interest credited and index credits | 182,440 | 122,742 | 59,849 | 60,263 | 67,031 | |||||||||||||||||||||||||||||||
(105,869) | (50,669) | Surrender charges | (45,550) | (33,777) | (26,542) | (22,030) | (19,783) | |||||||||||||||||||||||||||||||
(112,680) | (118,019) | Lifetime income benefit rider fees | (38,766) | (37,865) | (36,049) | (39,636) | (41,036) | |||||||||||||||||||||||||||||||
(3,858,709) | (3,145,344) | Surrenders, withdrawals, deaths, etc. | (1,359,578) | (1,250,932) | (1,248,199) | (1,243,390) | (1,121,627) | |||||||||||||||||||||||||||||||
$ | 47,419,417 | $ | 51,913,689 | Account balances at end of period | $ | 47,419,417 | $ | 47,143,582 | $ | 47,031,605 | $ | 47,504,615 | $ | 51,913,689 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | ||||||||||||||||||||||||||||||||
$ | 1,521,954 | $ | 2,362,947 | MRB balance at beginning of period | $ | 1,587,694 | $ | 1,632,918 | $ | 1,521,954 | $ | 1,762,629 | $ | 1,721,376 | ||||||||||||||||||||||||
— | 4,496 | Reserves ceded - in-force | — | — | — | (331,020) | 4,496 | |||||||||||||||||||||||||||||||
(2,202) | 6,199 | Issuances | (3,052) | (2,071) | 2,921 | 1,230 | 1,366 | |||||||||||||||||||||||||||||||
95,288 | 42,288 | Interest accrual | 32,355 | 33,374 | 29,559 | 23,910 | 20,626 | |||||||||||||||||||||||||||||||
85,798 | 87,901 | Attributed fees collected | 29,354 | 28,247 | 28,197 | 29,585 | 29,010 | |||||||||||||||||||||||||||||||
— | — | Benefits payments | — | — | — | — | — | |||||||||||||||||||||||||||||||
(368,525) | (433,651) | Effect of changes in interest rates and equity markets | (284,238) | (202,709) | 118,422 | (16,236) | (197,978) | |||||||||||||||||||||||||||||||
(69,648) | 268,853 | Effect of changes in assumptions and policyholder behavior | (70,544) | (974) | 1,870 | (5,023) | 224,522 | |||||||||||||||||||||||||||||||
205,606 | (576,404) | Effect of changes in instrument specific credit risk | 176,702 | 98,909 | (70,005) | 56,879 | (40,789) | |||||||||||||||||||||||||||||||
1,468,271 | 1,762,629 | MRB balance at end of period, net (a) | 1,468,271 | 1,587,694 | 1,632,918 | 1,521,954 | 1,762,629 | |||||||||||||||||||||||||||||||
1,103,860 | 767,862 | MRB net deferred capital markets impact, end of period | 1,103,860 | 813,302 | 628,602 | 765,552 | 767,862 | |||||||||||||||||||||||||||||||
$ | 2,572,131 | $ | 2,530,491 | Non-GAAP MRB balance, end of period (b) | $ | 2,572,131 | $ | 2,400,996 | $ | 2,261,520 | $ | 2,287,506 | $ | 2,530,491 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | ||||||||||||||||||||||||||||||||
$ | 9,642,336 | $ | 4,660,690 | Account value of business ceded subject to fee income at beginning of period | $ | 10,863,738 | $ | 10,155,767 | $ | 9,642,336 | $ | 5,612,098 | $ | 5,065,538 | ||||||||||||||||||||||||
— | 257,779 | In-force account value ceded subject to fee income | — | — | — | 3,810,982 | 257,779 | |||||||||||||||||||||||||||||||
2,325,594 | 693,629 | Premiums on business ceded subject to fee income | 870,021 | 821,413 | 634,160 | 351,971 | 288,781 | |||||||||||||||||||||||||||||||
(375,263) | — | Disbursements on business ceded subject to fee income | (141,092) | (113,442) | (120,729) | (132,715) | — | |||||||||||||||||||||||||||||||
$ | 11,592,667 | $ | 5,612,098 | Account value of business ceded subject to fee income at end of period | $ | 11,592,667 | $ | 10,863,738 | $ | 10,155,767 | $ | 9,642,336 | $ | 5,612,098 | ||||||||||||||||||||||||
$ | 71,800 | $ | 29,213 | Non-GAAP operating revenue associated with recurring fees (a) | $ | 26,732 | $ | 22,705 | $ | 22,363 | $ | 19,001 | $ | 10,988 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | ||||||||||||||||||||||||||||||||
American Equity Life: | ||||||||||||||||||||||||||||||||||||||
$ | 3,922,839 | $ | 2,055,120 | Fixed index annuities | $ | 1,715,362 | $ | 1,471,638 | $ | 735,839 | $ | 637,021 | $ | 627,444 | ||||||||||||||||||||||||
1,777 | 3,473 | Annual reset fixed rate annuities | 250 | 834 | 693 | 1,856 | 1,271 | |||||||||||||||||||||||||||||||
206,193 | 7,295 | Multi-year fixed rate annuities | 13,127 | 37,032 | 156,034 | 49,216 | 4,465 | |||||||||||||||||||||||||||||||
915 | 18,441 | Single premium immediate annuities | 210 | 278 | 427 | 494 | 1,915 | |||||||||||||||||||||||||||||||
4,131,724 | 2,084,329 | 1,728,949 | 1,509,782 | 892,993 | 688,587 | 635,095 | ||||||||||||||||||||||||||||||||
Eagle Life: | ||||||||||||||||||||||||||||||||||||||
1,133,303 | 333,507 | Fixed index annuities | 498,431 | 406,273 | 228,599 | 145,772 | 102,379 | |||||||||||||||||||||||||||||||
3,039 | 150 | Annual reset fixed rate annuities | — | 1,770 | 1,269 | 230 | 143 | |||||||||||||||||||||||||||||||
341,777 | 17,147 | Multi-year fixed rate annuities | 10,616 | 82,932 | 248,229 | 65,434 | 14,684 | |||||||||||||||||||||||||||||||
1,478,119 | 350,804 | 509,047 | 490,975 | 478,097 | 211,436 | 117,206 | ||||||||||||||||||||||||||||||||
Consolidated: | ||||||||||||||||||||||||||||||||||||||
5,056,142 | 2,388,627 | Fixed index annuities | 2,213,793 | 1,877,911 | 964,438 | 782,793 | 729,823 | |||||||||||||||||||||||||||||||
4,816 | 3,623 | Annual reset fixed rate annuities | 250 | 2,604 | 1,962 | 2,086 | 1,414 | |||||||||||||||||||||||||||||||
547,970 | 24,442 | Multi-year fixed rate annuities | 23,743 | 119,964 | 404,263 | 114,650 | 19,149 | |||||||||||||||||||||||||||||||
915 | 18,441 | Single premium immediate annuities | 210 | 278 | 427 | 494 | 1,915 | |||||||||||||||||||||||||||||||
5,609,843 | 2,435,133 | Total before coinsurance ceded | 2,237,996 | 2,000,757 | 1,371,090 | 900,023 | 752,301 | |||||||||||||||||||||||||||||||
2,335,186 | 682,461 | Coinsurance ceded | 871,661 | 825,526 | 637,999 | 286,445 | 253,446 | |||||||||||||||||||||||||||||||
$ | 3,274,657 | $ | 1,752,672 | Net after coinsurance ceded | $ | 1,366,335 | $ | 1,175,231 | $ | 733,091 | $ | 613,578 | $ | 498,855 |
Surrender Charge | Net Account Value | |||||||||||||||||||||||||||||||
Product Type | Avg. Years At Issue | Avg. Years Remaining | Avg. % Remaining | Dollars in Thousands | % | |||||||||||||||||||||||||||
Fixed Index Annuities | 12.1 | 4.8 | 8.0% | $ | 41,949,830 | 88.5 | % | |||||||||||||||||||||||||
Annual Reset Fixed Rate Annuities | 7.2 | 1.5 | 3.1% | 1,153,026 | 2.4 | % | ||||||||||||||||||||||||||
Multi-Year Fixed Rate Annuities | 3.9 | 1.2 | 6.9% | 4,316,561 | 9.1 | % | ||||||||||||||||||||||||||
Total | 11.3 | 4.4 | 7.7% | $ | 47,419,417 | 100.0 | % |
Surrender Charge Percentages: | Fixed Annuities Account Value | Fixed Index Annuities Account Value | |||||||||
No surrender charge | $ | 884,374 | $ | 4,935,647 | |||||||
0.0% < 2.0% | 69,501 | 2,720,098 | |||||||||
2.0% < 3.0% | 21,420 | 3,207,130 | |||||||||
3.0% < 4.0% | 11,004 | 710,847 | |||||||||
4.0% < 5.0% | 6,347 | 2,913,937 | |||||||||
5.0% < 6.0% | 44,961 | 2,044,412 | |||||||||
6.0% < 7.0% | 72,481 | 2,386,991 | |||||||||
7.0% < 8.0% | 3,716,813 | 2,063,075 | |||||||||
8.0% < 9.0% | 322,400 | 3,543,497 | |||||||||
9.0% < 10.0% | 140,766 | 3,301,744 | |||||||||
10.0% or greater | 179,520 | 14,122,452 | |||||||||
$ | 5,469,587 | $ | 41,949,830 |
Surrender Charge Expiration By Year: | Fixed and Fixed Index Annuities Account Value | Weighted Average Surrender Charge | |||||||||
Out of Surrender Charge | $ | 5,820,021 | 0.00 | % | |||||||
2023 | 1,758,500 | 4.68 | % | ||||||||
2024 | 3,655,105 | 4.51 | % | ||||||||
2025 | 4,894,123 | 3.59 | % | ||||||||
2026 | 4,439,164 | 5.12 | % | ||||||||
2027 | 3,855,433 | 6.50 | % | ||||||||
2028 | 3,916,461 | 7.93 | % | ||||||||
2029 | 3,892,192 | 9.37 | % | ||||||||
2030 | 3,599,233 | 10.97 | % | ||||||||
2031 | 3,680,800 | 13.05 | % | ||||||||
2032 | 3,147,057 | 13.74 | % | ||||||||
2033 | 3,345,772 | 15.83 | % | ||||||||
2034 | 642,054 | 17.52 | % | ||||||||
2035 | 332,756 | 18.16 | % | ||||||||
2036 | 191,196 | 18.61 | % | ||||||||
2037 | 119,832 | 19.12 | % | ||||||||
2038 | 100,996 | 19.60 | % | ||||||||
2039 | 28,722 | 20.00 | % | ||||||||
$ | 47,419,417 | 7.73 | % |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Carrying Amount | Percent | Carrying Amount | Percent | ||||||||||||||||||||
Fixed maturity securities: | |||||||||||||||||||||||
U.S. Government and agencies | $ | 162,885 | 0.4 | % | $ | 169,071 | 0.4 | % | |||||||||||||||
States, municipalities and territories | 2,564,632 | 6.6 | % | 3,822,943 | 8.5 | % | |||||||||||||||||
Foreign corporate securities and foreign governments | 376,549 | 1.0 | % | 616,938 | 1.4 | % | |||||||||||||||||
Corporate securities | 15,327,047 | 39.2 | % | 20,201,774 | 44.8 | % | |||||||||||||||||
Residential mortgage backed securities | 1,179,159 | 3.0 | % | 1,366,927 | 3.0 | % | |||||||||||||||||
Commercial mortgage backed securities | 2,666,615 | 6.8 | % | 3,447,075 | 7.6 | % | |||||||||||||||||
Other asset backed securities | 4,544,208 | 11.6 | % | 5,155,254 | 11.4 | % | |||||||||||||||||
Total fixed maturity securities | 26,821,095 | 68.6 | % | 34,779,982 | 77.1 | % | |||||||||||||||||
Mortgage loans on real estate | 7,253,036 | 18.6 | % | 6,778,977 | 15.0 | % | |||||||||||||||||
Real estate investments | 1,302,185 | 3.3 | % | 1,056,063 | 2.3 | % | |||||||||||||||||
Limited partnerships and limited liability companies | 1,763,551 | 4.5 | % | 1,266,779 | 2.8 | % | |||||||||||||||||
Derivative instruments | 733,784 | 1.9 | % | 431,727 | 1.0 | % | |||||||||||||||||
Other investments | 1,207,672 | 3.1 | % | 829,900 | 1.8 | % | |||||||||||||||||
Total investments, net of modified coinsurance investments | 39,081,323 | 100.0 | % | 45,143,428 | 100.0 | % | |||||||||||||||||
Coinsurance investments (a) | 5,505,784 | 6,181,870 | |||||||||||||||||||||
Total investments | $ | 44,587,107 | $ | 51,325,298 |
NAIC Designation (b) | Amortized Cost | Carrying Amount | Percent | Rating Agency Rating (b) | Amortized Cost | Carrying Amount | Percent | |||||||||||||||||||||||||||||||
1 | $ | 19,327,495 | $ | 16,056,424 | 60.0 | % | Aaa/Aa/A | $ | 19,135,971 | $ | 15,898,906 | 59.4 | % | |||||||||||||||||||||||||
2 | 11,960,953 | 10,118,937 | 37.8 | % | Baa | 12,120,183 | 10,243,694 | 38.3 | % | |||||||||||||||||||||||||||||
3 | 486,580 | 424,137 | 1.6 | % | Ba | 465,323 | 408,223 | 1.6 | % | |||||||||||||||||||||||||||||
4 | 116,264 | 98,929 | 0.4 | % | B | 134,646 | 113,734 | 0.4 | % | |||||||||||||||||||||||||||||
5 | 61,334 | 45,253 | 0.2 | % | Caa | 72,400 | 55,761 | 0.2 | % | |||||||||||||||||||||||||||||
6 | 10,000 | 7,127 | — | % | Ca and lower | 34,103 | 30,489 | 0.1 | % | |||||||||||||||||||||||||||||
31,962,626 | 26,750,807 | 100.0 | % | 31,962,626 | 26,750,807 | 100.0 | % | |||||||||||||||||||||||||||||||
Coinsurance investments (a) | 5,792,530 | 5,263,837 | Coinsurance investments (a) | 5,792,530 | 5,263,837 | |||||||||||||||||||||||||||||||||
$ | 37,755,156 | $ | 32,014,644 | $ | 37,755,156 | $ | 32,014,644 |
General Description (a) | Amortized Cost | Allowance for Credit Losses | Amortized Cost, Net of Allowance | Net Unrealized Losses, Net of Allowance | Fair Value | |||||||||||||||||||||||||||
States, municipalities and territories | $ | 20,657 | $ | — | $ | 20,657 | $ | (5,211) | $ | 15,446 | ||||||||||||||||||||||
Corporate securities - Public securities | 31,490 | — | 31,490 | (3,174) | 28,316 | |||||||||||||||||||||||||||
Corporate securities - Private placement securities | 5,902 | (2,911) | 2,991 | (1,220) | 1,771 | |||||||||||||||||||||||||||
Residential mortgage backed securities | 56,503 | (97) | 56,406 | (9,757) | 46,649 | |||||||||||||||||||||||||||
Commercial mortgage backed securities | 140,270 | — | 140,270 | (29,352) | 110,918 | |||||||||||||||||||||||||||
Other asset backed securities | 1,632 | — | 1,632 | (17) | 1,615 | |||||||||||||||||||||||||||
Collateralized loan obligations | 159,599 | (610) | 158,989 | (22,537) | 136,452 | |||||||||||||||||||||||||||
$ | 416,053 | $ | (3,618) | $ | 412,435 | $ | (71,268) | $ | 341,167 |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||
Available for sale: | |||||||||||||||||||||||
U.S. Government and agencies | $ | 172,650 | $ | 162,885 | $ | 173,638 | $ | 169,071 | |||||||||||||||
States, municipalities and territories | 3,198,030 | 2,564,632 | 4,356,191 | 3,822,943 | |||||||||||||||||||
Foreign corporate securities and foreign governments | 471,253 | 376,549 | 680,263 | 616,938 | |||||||||||||||||||
Corporate securities: | |||||||||||||||||||||||
Capital goods | 1,196,803 | 955,857 | 1,601,113 | 1,395,595 | |||||||||||||||||||
Consumer discretionary | 3,986,069 | 3,098,900 | 5,086,479 | 4,320,219 | |||||||||||||||||||
Energy | 898,830 | 777,821 | 1,219,370 | 1,111,891 | |||||||||||||||||||
Financials | 5,912,712 | 4,993,005 | 6,467,052 | 5,634,229 | |||||||||||||||||||
Government non-guaranteed | 172,445 | 140,264 | 202,740 | 179,440 | |||||||||||||||||||
Industrials | 105,153 | 74,555 | 166,061 | 138,999 | |||||||||||||||||||
Information technology | 951,613 | 751,771 | 1,344,461 | 1,160,067 | |||||||||||||||||||
Materials | 838,165 | 662,877 | 1,169,188 | 1,021,288 | |||||||||||||||||||
Telecommunications | 1,054,950 | 801,928 | 1,306,495 | 1,090,868 | |||||||||||||||||||
Transportation | 872,240 | 728,781 | 1,100,681 | 975,393 | |||||||||||||||||||
Utilities | 2,861,062 | 2,272,475 | 3,620,946 | 3,115,520 | |||||||||||||||||||
Other | 71,761 | 68,813 | 58,184 | 58,265 | |||||||||||||||||||
Residential mortgage backed securities: | |||||||||||||||||||||||
Government agency | 741,965 | 666,154 | 806,999 | 754,349 | |||||||||||||||||||
Prime | 359,188 | 292,854 | 387,838 | 334,613 | |||||||||||||||||||
Alt-A | 54,056 | 52,653 | 54,910 | 58,091 | |||||||||||||||||||
Non-qualified mortgage | 161,973 | 149,121 | 169,847 | 157,960 | |||||||||||||||||||
Other | 18,355 | 18,377 | 62,235 | 61,914 | |||||||||||||||||||
Commercial mortgage backed securities: | |||||||||||||||||||||||
Government agency | 145,436 | 131,881 | 170,307 | 157,903 | |||||||||||||||||||
Non-agency | 3,011,835 | 2,534,734 | 3,668,300 | 3,289,172 | |||||||||||||||||||
Other asset backed securities: | |||||||||||||||||||||||
Auto | 248,005 | 244,709 | 44,450 | 41,896 | |||||||||||||||||||
Consumer discretionary | 567,460 | 527,291 | 122,068 | 118,843 | |||||||||||||||||||
Financials | 307,945 | 282,731 | 283,238 | 252,493 | |||||||||||||||||||
Collateralized loan obligations | 3,004,676 | 2,870,726 | 4,071,929 | 3,775,347 | |||||||||||||||||||
Other | 636,390 | 618,751 | 1,005,440 | 966,675 | |||||||||||||||||||
32,021,020 | 26,821,095 | 39,400,423 | 34,779,982 | ||||||||||||||||||||
Coinsurance investments (a) | 5,792,530 | 5,263,837 | 5,465,596 | 5,024,635 | |||||||||||||||||||
$ | 37,813,550 | $ | 32,084,932 | $ | 44,866,019 | $ | 39,804,617 |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Principal | Percent | Principal | Percent | ||||||||||||||||||||
Property type distribution | |||||||||||||||||||||||
Commercial mortgage loans: | |||||||||||||||||||||||
Office | $ | 248,345 | 3.4 | % | $ | 277,767 | 4.1 | % | |||||||||||||||
Retail | 806,724 | 11.2 | % | 878,352 | 13.0 | % | |||||||||||||||||
Industrial/Warehouse | 887,129 | 12.3 | % | 853,215 | 12.6 | % | |||||||||||||||||
Apartment | 986,690 | 13.6 | % | 893,910 | 13.2 | % | |||||||||||||||||
Hotel | 285,271 | 3.9 | % | 285,271 | 4.2 | % | |||||||||||||||||
Mixed Use/Other | 77,140 | 1.1 | % | 200,756 | 3.0 | % | |||||||||||||||||
Agricultural mortgage loans | 585,020 | 8.1 | % | 567,630 | 8.4 | % | |||||||||||||||||
Residential mortgage loans | 3,359,939 | 46.4 | % | 2,807,652 | 41.5 | % | |||||||||||||||||
7,236,258 | 100.0 | % | 6,764,553 | 100.0 | % | ||||||||||||||||||
Coinsurance investments (a) | 243,203 | 171,633 | |||||||||||||||||||||
$ | 7,479,461 | $ | 6,936,186 |
Commercial | Agricultural | ||||||||||||||||||||||
Amortized Cost | Average LTV | Amortized Cost | Average LTV | ||||||||||||||||||||
As of September 30, 2023: | |||||||||||||||||||||||
Debt Service Coverage Ratio: | |||||||||||||||||||||||
Greater than or equal to 1.5 | $ | 2,322,151 | 50% | $ | 275,965 | 49% | |||||||||||||||||
Greater than or equal to 1.2 and less than 1.5 | 332,692 | 60% | 247,369 | 52% | |||||||||||||||||||
Greater than or equal to 1.0 and less than 1.2 | 575,795 | 47% | 15,741 | 43% | |||||||||||||||||||
Less than 1.0 | 56,421 | 54% | 44,238 | 41% | |||||||||||||||||||
3,287,059 | 51% | 583,313 | 50% | ||||||||||||||||||||
Coinsurance investments (a) | 241,947 | 50% | — | —% | |||||||||||||||||||
$ | 3,529,006 | 51% | $ | 583,313 | 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% |
September 30, 2023 | |||||||||||||||||||||||
Commercial | Agricultural | Residential | Total | ||||||||||||||||||||
Credit exposure - by payment activity | |||||||||||||||||||||||
Performing | $ | 3,291,299 | $ | 585,020 | $ | 3,266,094 | $ | 7,142,413 | |||||||||||||||
In workout | — | — | — | — | |||||||||||||||||||
Delinquent | — | — | 93,845 | 93,845 | |||||||||||||||||||
Principal outstanding | 3,291,299 | 585,020 | 3,359,939 | 7,236,258 | |||||||||||||||||||
Unamortized discounts and premiums, net | (958) | — | 67,138 | 66,180 | |||||||||||||||||||
Deferred fees and costs, net | (3,282) | (1,707) | 669 | (4,320) | |||||||||||||||||||
Amortized cost | 3,287,059 | 583,313 | 3,427,746 | 7,298,118 | |||||||||||||||||||
Valuation allowance | (21,802) | (1,105) | (22,175) | (45,082) | |||||||||||||||||||
Carrying value | 3,265,257 | 582,208 | 3,405,571 | 7,253,036 | |||||||||||||||||||
Coinsurance investments (a) | 241,947 | — | — | 241,947 | |||||||||||||||||||
$ | 3,507,204 | $ | 582,208 | $ | 3,405,571 | $ | 7,494,983 | ||||||||||||||||
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- (watch) | A- (watch) | A- (stable) | ||||||||||||||
American Equity Investment Life Insurance Company of New York | A- (watch) | A- (watch) | A- (stable) | ||||||||||||||
Eagle Life Insurance Company | A- (watch) | A- (watch) | A- (stable) | ||||||||||||||
Credit Ratings | |||||||||||||||||
American Equity Investment Life Holding Company | bbb- (watch) | BBB- (watch) | BBB | ||||||||||||||
Senior unsecured debt | bbb- (watch) | BBB- | BBB- | ||||||||||||||
Perpetual, non-cumulative preferred stock | bb (watch) | 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 | |||||||||||||||||||
Third Quarter | $54.44 | $51.73 | $53.64 | $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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