UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 2016
AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY
(Exact Name of Registrant as Specified in its Charter)
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| | |
Iowa | 001-31911 | 42-1447959 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Indentification No.) |
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| |
6000 Westown Parkway, West Des Moines, Iowa | 50266 |
(Address of Principal Executive Offices) | (Zip Code) |
(515) 221-0002
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On February 10, 2016, the registrant issued a press release announcing its financial results for the quarter ended December 31, 2015, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference. The registrant's financial supplement for the quarter ended December 31, 2015, is attached as Exhibit 99.2 and is incorporated herein by reference.
The information, including exhibits attached hereto, furnished under this Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Item 9.01. Financial Statements and Exhibits
The following exhibits are being furnished with this Form 8-K.
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| | |
Exhibit Number | | Description |
99.1 | | Press release dated February 10, 2016, announcing American Equity Investment Life Holding Company's financial results for the quarter ended December 31, 2015. |
99.2 | | American Equity Investment Life Holding Company's Financial Supplement for the quarter ended December 31, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 10, 2016
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| AMERICAN EQUITY | |
| INVESTMENT LIFE HOLDING COMPANY | |
| | | |
| | | |
| By: | /s/ John M. Matovina | |
| | John M. Matovina | |
| | Chief Executive Officer and President | |
| | | |
EXHIBIT INDEX
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Exhibit Number | | Description |
99.1 | | Press release dated February 10, 2016, announcing American Equity Investment Life Holding Company's financial results for the quarter ended December 31, 2015. |
99.2 | | American Equity Investment Life Holding Company's Financial Supplement for the quarter ended December 31, 2015. |
Exhibit 99.1
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| | For more information, contact: |
| |
| John M. Matovina, Chief Executive Officer |
| (515) 457-1813, jmatovina@american-equity.com |
| |
| Ted M. Johnson, Chief Financial Officer |
| (515) 457-1980, tjohnson@american-equity.com |
| | |
FOR IMMEDIATE RELEASE | | Debra J. Richardson, Chief Administrative Officer |
February 10, 2016 | | (515) 273-3551, drichardson@american-equity.com |
| | |
| | Julie L. LaFollette, Director of Investor Relations |
| | (515) 273-3602, jlafollette@american-equity.com |
American Equity Reports Fourth Quarter and Full Year 2015 Results
Company Highlights
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• | Fourth quarter 2015 net income of $33.8 million or $0.40 per diluted common share; Full year 2015 net income of $219.8 million or $2.72 per diluted common share |
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• | Fourth quarter 2015 operating income1 of $50.1 million or $0.60 per diluted common share; Full year 2015 operating income1 of $195.8 million or $2.42 per diluted common share |
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• | Fourth quarter 2015 annuity sales of $2.14 billion; Full year 2015 annuity sales of $7.1 billion |
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• | Policyholder funds under management of $41.2 billion, up 16.6% for the year |
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• | Fourth quarter 2015 investment spread of 2.67% |
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• | Operating income1 return on average equity1 of 12.5% |
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• | Risk-based capital (RBC) ratio of 336% |
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• | Book value per share (excluding accumulated other comprehensive income) of $21.36 |
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• | Annual cash dividend of $0.22 per share |
WEST DES MOINES, Iowa (February 10, 2016) - American Equity Investment Life Holding Company (NYSE: AEL), a leading issuer of fixed index annuities, today reported fourth quarter 2015 net income of $33.8 million, or $0.40 per diluted common share, compared to $31.2 million, or $0.39 per diluted common share, for fourth quarter 2014. For the year ended December 31, 2015, net income was $219.8 million, or $2.72 per diluted common share, compared to $126.0 million, or $1.58 per diluted common share, for the year ended December 31, 2014.
Operating income1 for the fourth quarter of 2015 was $50.1 million, or $0.60 per diluted common share, compared to $50.7 million, or $0.63 per diluted common share, for fourth quarter 2014. For the year ended December 31, 2015, operating income1 was $195.8 million, or $2.42 per diluted common share, compared to $190.6 million, or $2.39 per diluted common share, for the year ended December 31, 2014.
Fourth quarter results capped off another year in which the Company's operating income1 and related per share amount were record highs. For the year the Company delivered 16.6% growth in policyholder funds under management and a 12.5% operating return1 on average equity. Over the past ten years, the Company's operating income1 has compounded at a 13% annual rate while policyholder funds under management have grown 15% annually. American Equity believes this track record classifies it as one of the best growth companies of the past decade in the life insurance and financial services industries. The Company believes this success is the result of offering attractive products that meet the needs of Americans preparing for--or enjoying--retirement combined with its best in class service to distribution partners and policyholders.
Other achievements in 2015 included Standard & Poor's upgrading the Company's rating from below investment grade to investment grade and the August 2015 common equity offering. The equity offering raised $104.5 million in initial net proceeds and gives the Company the right under two forward sales agreements to receive $135 million in additional net proceeds through August 2016. These forward sales agreements enable the Company to better manage its capital by matching the issuance of additional equity with any need for such capital that might arise from continued growth. The Company also paid an annual cash dividend of $0.22 per share in December 2015. This represented a 10% increase from the previous year, marked the 17th consecutive year a cash dividend has been paid and the 12th consecutive year the annual cash dividend amount has been increased.
RECORD FOURTH QUARTER SALES UP 86% Y/Y AND 17% SEQUENTIALLY
Fourth quarter sales of $2.1 billion set a new single quarter record, growing 86% from the prior year fourth quarter and 17% sequentially. Commenting on sales, John Matovina, Chief Executive Officer and President, said: "As we previously disclosed, fourth quarter sales were outstanding, contributing to a record year. We achieved this milestone by capturing market share in the independent agent distribution channel. Our attractive product offerings and unmatched service levels enabled us to capitalize on the market opportunity created earlier in the year when one of our competitors in this channel withdrew a highly competitive product from the market. We also withstood some new competition in that channel that emerged in the third quarter. Furthermore, we could not have achieved the $7.1 billion full year sales record without the $505 million contribution from our Eagle Life subsidiary which is selling fixed index and fixed rate annuities through broker-dealers and banks."
Turning to the outlook for sales, Matovina added: "While we are proud of 2015's record sales and always strive to grow, we acknowledge that topping 2015 this year will be a challenge. We enjoyed having guaranteed lifetime income riders in the independent agent distribution channel that had among the highest benefits in the final three quarters of 2015. Several companies have emerged this year with robust guaranteed lifetime income benefits, including the previously mentioned competitor. Comparatively, our guaranteed lifetime income riders are a bit less competitive, but are still very strong in the independent agent distribution channel. Nonetheless, we expect a satisfactory level of sales from this channel in the current year. We continue to distinguish ourselves with competitively priced products, a consistent presence in the market, and best in class service to agents and policyholders. As we discussed in our prior quarter commentary, we anticipated a boost in fourth quarter sales and our new business pipeline from impending changes to
our lifetime income benefit riders which became effective for applications received after 2015. We ended 2015 with more than 7,000 pending applications which provides a strong foundation for first quarter 2016 production. We will also be introducing a lifetime income rider in the near future that will expand our menu of riders into a segment of that market for which we currently do not have a product."
Matovina concluded: "A key growth initiative for us is expanding in the broker-dealer and bank distribution channels, two channels that represent a significant growth opportunity for fixed index annuity sales. We formed our Eagle Life subsidiary to pursue this opportunity, and after a couple of years of laying the foundation and creating the infrastructure to serve these channels, we saw meaningful success in 2015. Eagle Life grew its production to over $500 million, up more than 400% from $121 million of sales in 2014. More than 80% of Eagle Life's 2015 sales were produced by two key distribution relationships. Notably, the room to grow in these channels is substantial and Eagle Life is positioned to capitalize on that opportunity. We have several new distribution relationships that we expect will begin producing for us in 2016."
SPREAD DECLINES ON LOWER INVESTMENT YIELD
American Equity’s investment spread was 2.67% for the fourth quarter of 2015 compared to 2.83% for the third quarter of 2015 as a result of a seventeen basis point decrease in average yield on invested assets and a one basis point decrease in the cost of money.
Average yield on invested assets continued to be favorably impacted by non-trendable items and unfavorably impacted by the investment of new premiums and portfolio cash flows at rates below the portfolio rate. Fee income from bond transactions and prepayment income added 0.07% to fourth quarter 2015 average yield on invested assets compared to 0.14% from such items in the third quarter of 2015. Adjusting for the effect of non-trendable items, the average yield on invested assets for the quarter fell by ten basis points from the prior quarter. The average yield on fixed income securities purchased and commercial mortgage loans funded in the fourth quarter of 2015 was 4.03% compared to average yields ranging from 3.73% - 3.89% in the first three quarters of 2015.
The aggregate cost of money for annuity liabilities decreased by one basis point to 1.95% in the fourth quarter of 2015 compared to 1.96% in the third quarter of 2015. This decrease reflected continued reductions in crediting rates but the effect from the rate reductions was partially offset by a one basis point decrease in the benefit from over hedging the obligations for index linked interest from 0.02% in the third quarter of 2015 to 0.01% in the fourth quarter of 2015.
Commenting on investment spread, John Matovina, said: “The low interest rate environment remains a strong headwind for our business and industry. While we were able to capture slightly higher yields in the fourth quarter, the markets are still offering yields below our portfolio rate and we held more cash and short-term investments than usual this quarter, both of which put downward pressure on our investment income and average yield on invested assets. We are counteracting the impact of lower investment yields by reducing the rates on our policy liabilities but the impact on the cost of money from these reductions is less than the impact on the average yield on invested assets from investment purchases by a few basis points. We continue to have flexibility to reduce our crediting rates, if necessary, and could decrease our cost of money by approximately 0.48% through further reductions in renewal rates to guaranteed minimums should the investment yields currently available to us persist. Most importantly, we intend to maintain our risk discipline
in managing our investment portfolio and not chase higher yields in assets and asset classes that do not fit our risk profile.”
CREDIT QUALITY OF BOND PORTFOLIO REMAINS HIGH; MANAGEABLE EXPOSURE TO TROUBLED SECTORS
The Company believes it has successfully minimized credit risk in its investment portfolio. At December 31, 2015, 96.5% of its fixed maturity securities were rated investment grade by nationally recognized statistical rating organizations. This represents a modest increase from 95.9% investment grade securities at December 31, 2014. At December 31, 2015, the Company held securities in the energy, metals and mining sectors with a fair value of $2.9 billion and an unrealized loss of $336 million. Of these holdings, 95% were rated investment grade. During the fourth quarter of 2015, the Company recorded a $12.4 million other than temporary impairment charge on securities of one issuer in the metals and mining sector. At December 31, 2015, the Company's Watch List of securities deemed at risk for a future other than temporary impairment assessment consisted of securities from ten issuers with a fair value of $73.0 million and an unrealized loss of $53.5 million. This unrealized loss represents less than 3% of the Company's consolidated stockholder's equity and its statutory capital and surplus at December 31, 2015.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future operations, strategies, financial results or other developments, and are subject to assumptions, risks and uncertainties. Statements such as “guidance”, “expect”, “anticipate”, “believe”, “goal”, “objective”, “target”, “may”, “should”, “estimate”, “projects” or similar words as well as specific projections of future results qualify as forward-looking statements. Factors that may cause our actual results to differ materially from those contemplated by these forward looking statements can be found in the company’s Form 10-K filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date the statement was made and the company undertakes no obligation to update such forward-looking statements. There can be no assurance that other factors not currently anticipated by the company will not materially and adversely affect our results of operations. Investors are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf.
CONFERENCE CALL
American Equity will hold a conference call to discuss fourth quarter 2015 earnings on Thursday, February 11, 2016, at 9:00 a.m. CST. The conference call will be webcast live on the Internet. Investors and interested parties who wish to listen to the call on the Internet may do so at www.american-equity.com.
The call may also be accessed by telephone at 855-865-0606, passcode 21638338 (international callers, please dial 704-859-4382). An audio replay will be available shortly after the call on AEL’s website. An audio replay will also be available via telephone through February 18, 2016 at 855-859-2056, passcode 21638338 (international callers will need to dial 407-537-3406).
ABOUT AMERICAN EQUITY
American Equity Investment Life Holding Company, through its wholly-owned operating subsidiaries, issues fixed annuity and life insurance products, with a primary emphasis on the sale of fixed index and fixed rate annuities. American Equity Investment Life Holding Company, a New York Stock Exchange Listed company (NYSE: AEL), is headquartered in West Des Moines, Iowa. For more information, please visit www.american-equity.com.
1 Use of non-GAAP financial measures is discussed in this release in the tables that follow the text of the release.
###
American Equity Investment Life Holding Company
Consolidated Statements of Operations (Unaudited)
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| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2015 | | 2014 | | 2015 | | 2014 |
| (Dollars in thousands, except per share data) |
Revenues: | | | | | | | |
Premiums and other considerations | $ | 10,679 |
| | $ | 10,126 |
| | $ | 36,048 |
| | $ | 32,623 |
|
Annuity product charges | 37,102 |
| | 32,513 |
| | 136,168 |
| | 118,990 |
|
Net investment income | 438,262 |
| | 403,849 |
| | 1,692,192 |
| | 1,531,667 |
|
Change in fair value of derivatives | 69,338 |
| | 146,231 |
| | (336,146 | ) | | 504,825 |
|
Net realized gains (losses) on investments, excluding other than temporary impairment ("OTTI") losses | (151 | ) | | 2,131 |
| | 10,211 |
| | (4,003 | ) |
OTTI losses on investments: | | | | | | | |
Total OTTI losses | (15,415 | ) | | — |
| | (25,547 | ) | | — |
|
Portion of OTTI losses recognized in (from) other comprehensive income | 2,068 |
| | (564 | ) | | 6,011 |
| | (2,627 | ) |
Net OTTI losses recognized in operations | (13,347 | ) | | (564 | ) | | (19,536 | ) | | (2,627 | ) |
Loss on extinguishment of debt | — |
| | (1,951 | ) | | — |
| | (12,502 | ) |
Total revenues | 541,883 |
| | 592,335 |
| | 1,518,937 |
| | 2,168,973 |
|
| | | | | | | |
Benefits and expenses: | | | | | | | |
Insurance policy benefits and change in future policy benefits | 12,829 |
| | 11,624 |
| | 45,458 |
| | 41,815 |
|
Interest sensitive and index product benefits | 165,622 |
| | 359,319 |
| | 968,053 |
| | 1,473,700 |
|
Amortization of deferred sales inducements | 57,112 |
| | 34,743 |
| | 209,390 |
| | 131,419 |
|
Change in fair value of embedded derivatives | 118,414 |
| | 53,973 |
| | (464,698 | ) | | 32,321 |
|
Interest expense on notes payable | 6,873 |
| | 8,244 |
| | 28,849 |
| | 36,370 |
|
Interest expense on subordinated debentures | 3,101 |
| | 3,046 |
| | 12,239 |
| | 12,122 |
|
Amortization of deferred policy acquisition costs | 99,243 |
| | 49,629 |
| | 286,114 |
| | 163,578 |
|
Other operating costs and expenses | 25,731 |
| | 20,996 |
| | 96,218 |
| | 81,584 |
|
Total benefits and expenses | 488,925 |
| | 541,574 |
| | 1,181,623 |
| | 1,972,909 |
|
Income before income taxes | 52,958 |
| | 50,761 |
| | 337,314 |
| | 196,064 |
|
Income tax expense | 19,182 |
| | 19,544 |
| | 117,484 |
| | 70,041 |
|
Net income | $ | 33,776 |
| | $ | 31,217 |
| | $ | 219,830 |
| | $ | 126,023 |
|
| | | | | | | |
Earnings per common share | $ | 0.41 |
| | $ | 0.41 |
| | $ | 2.78 |
| | $ | 1.69 |
|
Earnings per common share - assuming dilution | $ | 0.40 |
| | $ | 0.39 |
| | $ | 2.72 |
| | $ | 1.58 |
|
| | | | | | | |
Weighted average common shares outstanding (in thousands): | | | | | | | |
Earnings per common share | 81,733 |
| | 75,620 |
| | 78,937 |
| | 74,431 |
|
Earnings per common share - assuming dilution | 83,851 |
| | 80,154 |
| | 80,961 |
| | 79,894 |
|
American Equity Investment Life Holding Company
NON-GAAP FINANCIAL MEASURES
In addition to net income, the Company has consistently utilized operating income and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate its financial performance. Operating income equals net income adjusted to eliminate the impact of items that fluctuate from quarter to quarter in a manner unrelated to core operations. The Company believes measures excluding their impact are useful in analyzing operating trends and the combined presentation and evaluation of operating income together with net income provides information that may enhance an investor’s understanding of its underlying results and profitability.
Reconciliation from Net Income to Operating Income (Unaudited)
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| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2015 | | 2014 | | 2015 | | 2014 |
| (Dollars in thousands, except per share data) |
Net income | $ | 33,776 |
| | $ | 31,217 |
| | $ | 219,830 |
| | $ | 126,023 |
|
Adjustments to arrive at operating income: (a) | | | | | | | |
Net realized investment (gains) losses, including OTTI | 5,538 |
| | (613 | ) | | 3,709 |
| | 2,863 |
|
Change in fair value of derivatives and embedded derivatives - index annuities | 11,675 |
| | 16,463 |
| | (28,477 | ) | | 51,099 |
|
Change in fair value of derivatives and embedded derivatives - debt | (848 | ) | | 32 |
| | 758 |
| | 61 |
|
Litigation reserve | — |
| | — |
| | — |
| | (916 | ) |
Extinguishment of debt | — |
| | 3,604 |
| | — |
| | 11,516 |
|
Operating income (a non-GAAP financial measure) | $ | 50,141 |
| | $ | 50,703 |
| | $ | 195,820 |
| | $ | 190,646 |
|
| | | | | | | |
Per common share - assuming dilution: | | | | | | | |
Net income | $ | 0.40 |
| | $ | 0.39 |
| | $ | 2.72 |
| | $ | 1.58 |
|
Adjustments to arrive at operating income: | | | | | | | |
Net realized investment (gains) losses, including OTTI | 0.07 |
| | (0.01 | ) | | 0.04 |
| | 0.04 |
|
Change in fair value of derivatives and embedded derivatives - index annuities | 0.14 |
| | 0.21 |
| | (0.35 | ) | | 0.64 |
|
Change in fair value of derivatives and embedded derivatives - debt | (0.01 | ) | | — |
| | 0.01 |
| | — |
|
Litigation reserve | — |
| | — |
| | — |
| | (0.01 | ) |
Extinguishment of debt | — |
| | 0.04 |
| | — |
| | 0.14 |
|
Operating income (a non-GAAP financial measure) | $ | 0.60 |
| | $ | 0.63 |
| | $ | 2.42 |
| | $ | 2.39 |
|
| |
(a) | Adjustments to net income to arrive at operating income are presented net of income taxes and where applicable, are net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC). |
American Equity Investment Life Holding Company
NON-GAAP FINANCIAL MEASURES
Average Stockholders' Equity and Return on Average Equity (Unaudited)
Return on average equity measures how efficiently the Company generates profits from the resources provided by its net assets. Return on average equity is calculated by dividing net income and operating income for the trailing twelve months by average equity excluding average accumulated other comprehensive income ("AOCI"). The Company excludes AOCI because AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments.
|
| | | |
| Twelve Months Ended |
| December 31, 2015 |
| (Dollars in thousands) |
Average Stockholders' Equity 1 | |
Average equity including average AOCI | $ | 2,030,613 |
|
Average AOCI | (461,532 | ) |
Average equity excluding average AOCI | $ | 1,569,081 |
|
| |
Net income | $ | 219,830 |
|
Operating income | 195,820 |
|
| |
Return on Average Equity Excluding Average AOCI | |
Net income | 14.01 | % |
Operating income | 12.48 | % |
1 - The net proceeds received from the Company's public offering of common stock in August 2015 are included in the computations of average stockholders' equity on a weighted average basis based upon the number of days they were available to the Company in the twelve month period. The weighted average amount is added to the simple average of (a) stockholders' equity at the beginning of the twelve month period and (b) stockholders' equity at the end of the twelve month period excluding the net proceeds received from the public stock offering in August 2015.
Exhibit 99.2
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement
December 31, 2015
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A. | Financial Highlights | |
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| Non-GAAP Financial Measures | |
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B. | Product Summary | |
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C. | Investment Summary | |
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D. | | |
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E. | | |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
|
| | | | | | | |
| December 31, 2015 | | December 31, 2014 |
Assets | | | |
Investments: | | | |
Fixed maturity securities: | | | |
Available for sale, at fair value | $ | 36,421,839 |
| | $ | 32,445,202 |
|
Held for investment, at amortized cost | 76,622 |
| | 76,432 |
|
Equity securities, available for sale, at fair value | 7,828 |
| | 7,805 |
|
Mortgage loans on real estate | 2,435,257 |
| | 2,434,580 |
|
Derivative instruments | 337,256 |
| | 731,113 |
|
Other investments | 291,530 |
| | 286,726 |
|
Total investments | 39,570,332 |
| | 35,981,858 |
|
| | | |
Cash and cash equivalents | 397,749 |
| | 701,514 |
|
Coinsurance deposits | 3,187,470 |
| | 3,044,342 |
|
Accrued investment income | 362,104 |
| | 326,559 |
|
Deferred policy acquisition costs | 2,905,136 |
| | 2,058,556 |
|
Deferred sales inducements | 2,232,148 |
| | 1,587,257 |
|
Deferred income taxes | 232,683 |
| | — |
|
Income taxes recoverable | 29,599 |
| | 9,252 |
|
Other assets | 123,942 |
| | 280,396 |
|
Total assets | $ | 49,041,163 |
| | $ | 43,989,734 |
|
| | | |
Liabilities and Stockholders' Equity | | | |
Liabilities: | | | |
Policy benefit reserves | $ | 45,495,431 |
| | $ | 39,802,861 |
|
Other policy funds and contract claims | 324,850 |
| | 365,819 |
|
Notes payable | 400,000 |
| | 421,679 |
|
Subordinated debentures | 246,450 |
| | 246,243 |
|
Deferred income taxes | — |
| | 3,895 |
|
Other liabilities | 629,897 |
| | 1,009,361 |
|
Total liabilities | 47,096,628 |
| | 41,849,858 |
|
| | | |
Stockholders' equity: | | | |
Common stock | 81,354 |
| | 76,062 |
|
Additional paid-in capital | 630,367 |
| | 513,218 |
|
Accumulated other comprehensive income | 201,663 |
| | 721,401 |
|
Retained earnings | 1,031,151 |
| | 829,195 |
|
Total stockholders' equity | 1,944,535 |
| | 2,139,876 |
|
Total liabilities and stockholders' equity | $ | 49,041,163 |
| | $ | 43,989,734 |
|
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
|
| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2015 | | 2014 | | 2015 | | 2014 |
Revenues: | | | | | | | |
Premiums and other considerations | $ | 10,679 |
| | $ | 10,126 |
| | $ | 36,048 |
| | $ | 32,623 |
|
Annuity product charges | 37,102 |
| | 32,513 |
| | 136,168 |
| | 118,990 |
|
Net investment income | 438,262 |
| | 403,849 |
| | 1,692,192 |
| | 1,531,667 |
|
Change in fair value of derivatives | 69,338 |
| | 146,231 |
| | (336,146 | ) | | 504,825 |
|
Net realized gains (losses) on investments, excluding other than temporary impairment ("OTTI") losses | (151 | ) | | 2,131 |
| | 10,211 |
| | (4,003 | ) |
OTTI losses on investments: | | | | | | | |
Total OTTI losses | (15,415 | ) | | — |
| | (25,547 | ) | | — |
|
Portion of OTTI losses recognized in (from) other comprehensive income | 2,068 |
| | (564 | ) | | 6,011 |
| | (2,627 | ) |
Net OTTI losses recognized in operations | (13,347 | ) | | (564 | ) | | (19,536 | ) | | (2,627 | ) |
Loss on extinguishment of debt | — |
| | (1,951 | ) | | — |
| | (12,502 | ) |
Total revenues | 541,883 |
| | 592,335 |
| | 1,518,937 |
| | 2,168,973 |
|
| | | | | | | |
Benefits and expenses: | | | | | | | |
Insurance policy benefits and change in future policy benefits | 12,829 |
| | 11,624 |
| | 45,458 |
| | 41,815 |
|
Interest sensitive and index product benefits | 165,622 |
| | 359,319 |
| | 968,053 |
| | 1,473,700 |
|
Amortization of deferred sales inducements | 57,112 |
| | 34,743 |
| | 209,390 |
| | 131,419 |
|
Change in fair value of embedded derivatives | 118,414 |
| | 53,973 |
| | (464,698 | ) | | 32,321 |
|
Interest expense on notes payable | 6,873 |
| | 8,244 |
| | 28,849 |
| | 36,370 |
|
Interest expense on subordinated debentures | 3,101 |
| | 3,046 |
| | 12,239 |
| | 12,122 |
|
Amortization of deferred policy acquisition costs | 99,243 |
| | 49,629 |
| | 286,114 |
| | 163,578 |
|
Other operating costs and expenses | 25,731 |
| | 20,996 |
| | 96,218 |
| | 81,584 |
|
Total benefits and expenses | 488,925 |
| | 541,574 |
| | 1,181,623 |
| | 1,972,909 |
|
Income before income taxes | 52,958 |
| | 50,761 |
| | 337,314 |
| | 196,064 |
|
Income tax expense | 19,182 |
| | 19,544 |
| | 117,484 |
| | 70,041 |
|
Net income | $ | 33,776 |
| | $ | 31,217 |
| | $ | 219,830 |
| | $ | 126,023 |
|
| | | | | | | |
Earnings per common share | $ | 0.41 |
| | $ | 0.41 |
| | $ | 2.78 |
| | $ | 1.69 |
|
Earnings per common share - assuming dilution | $ | 0.40 |
| | $ | 0.39 |
| | $ | 2.72 |
| | $ | 1.58 |
|
Weighted average common shares outstanding (in thousands): | | | | | | | |
Earnings per common share | 81,733 |
| | 75,620 |
| | 78,937 |
| | 74,431 |
|
Earnings per common share - assuming dilution | 83,851 |
| | 80,154 |
| | 80,961 |
| | 79,894 |
|
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Quarterly Summary - Most Recent 5 Quarters (Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| Q4 2015 | | Q3 2015 | | Q2 2015 | | Q1 2015 | | Q4 2014 |
| (Dollars in thousands, except per share data) |
Revenues: | | | | | | | | | |
Traditional life insurance premiums | $ | 2,891 |
| | $ | 2,664 |
| | $ | 2,659 |
| | $ | 2,703 |
| | $ | 2,537 |
|
Life contingent immediate annuity considerations | 7,788 |
| | 5,671 |
| | 7,378 |
| | 4,294 |
| | 7,589 |
|
Surrender charges | 10,543 |
| | 13,104 |
| | 11,413 |
| | 11,554 |
| | 10,418 |
|
Lifetime income benefit rider fees | 26,559 |
| | 24,871 |
| | 20,996 |
| | 17,128 |
| | 22,095 |
|
Net investment income | 438,262 |
| | 436,085 |
| | 418,176 |
| | 399,669 |
| | 403,849 |
|
Change in fair value of derivatives | 69,338 |
| | (351,360 | ) | | (23,024 | ) | | (31,100 | ) | | 146,231 |
|
Net realized gains (losses) on investments, excluding OTTI | (151 | ) | | 1,159 |
| | 4,324 |
| | 4,879 |
| | 2,131 |
|
Net OTTI losses recognized in operations | (13,347 | ) | | (5,229 | ) | | (828 | ) | | (132 | ) | | (564 | ) |
Loss on extinguishment of debt | — |
| | — |
| | — |
| | — |
| | (1,951 | ) |
Total revenues | 541,883 |
| | 126,965 |
| | 441,094 |
| | 408,995 |
| | 592,335 |
|
| | | | | | | | | |
Benefits and expenses: | | | | | | | | | |
Traditional life insurance policy benefits and change in future policy benefits | 2,044 |
| | 1,730 |
| | 1,971 |
| | 1,931 |
| | 1,300 |
|
Life contingent immediate annuity benefits and change in future policy benefits | 10,785 |
| | 9,229 |
| | 10,479 |
| | 7,289 |
| | 10,324 |
|
Interest sensitive and index product benefits (a)(b) | 165,622 |
| | 213,465 |
| | 306,141 |
| | 282,825 |
| | 359,319 |
|
Amortization of deferred sales inducements (c) | 57,112 |
| | 65,807 |
| | 75,518 |
| | 10,953 |
| | 34,743 |
|
Change in fair value of embedded derivatives | 118,414 |
| | (414,724 | ) | | (219,601 | ) | | 51,213 |
| | 53,973 |
|
Interest expense on notes payable | 6,873 |
| | 7,283 |
| | 7,354 |
| | 7,339 |
| | 8,244 |
|
Interest expense on subordinated debentures | 3,101 |
| | 3,075 |
| | 3,047 |
| | 3,016 |
| | 3,046 |
|
Amortization of deferred policy acquisition costs (c) | 99,243 |
| | 67,885 |
| | 104,700 |
| | 14,286 |
| | 49,629 |
|
Other operating costs and expenses | 25,731 |
| | 24,497 |
| | 24,868 |
| | 21,122 |
| | 20,996 |
|
Total benefits and expenses | 488,925 |
| | (21,753 | ) | | 314,477 |
| | 399,974 |
| | 541,574 |
|
Income before income taxes | 52,958 |
| | 148,718 |
| | 126,617 |
| | 9,021 |
| | 50,761 |
|
Income tax expense | 19,182 |
| | 51,412 |
| | 43,772 |
| | 3,118 |
| | 19,544 |
|
Net income (a)(b)(c) | $ | 33,776 |
| | $ | 97,306 |
| | $ | 82,845 |
| | $ | 5,903 |
| | $ | 31,217 |
|
| | | | | | | | | |
Earnings per common share | $ | 0.41 |
| | $ | 1.22 |
| | $ | 1.07 |
| | $ | 0.08 |
| | $ | 0.41 |
|
Earnings per common share - assuming dilution (a)(b)(c) | $ | 0.40 |
| | $ | 1.19 |
| | $ | 1.05 |
| | $ | 0.07 |
| | $ | 0.39 |
|
Weighted average common shares outstanding (in thousands): | | | | | | | | | |
Earnings per common share | 81,733 |
| | 79,676 |
| | 77,237 |
| | 77,042 |
| | 75,620 |
|
Earnings per common share - assuming dilution | 83,851 |
| | 81,559 |
| | 79,227 |
| | 79,118 |
| | 80,154 |
|
| |
(a) | Q4 2015 includes an adjustment to reserves for living income benefit riders which reduced interest sensitive and index product benefits by $1.9 million, which after related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs and income taxes, increased net income and earnings per common share-assuming dilution by $0.7 million and $0.01 per share, respectively. |
| |
(b) | Q3 2015 includes expense from the revision of assumptions used in determining reserves held for living income benefit riders. The impact increased interest sensitive and index product benefits by $18.3 million and decreased net income and earnings per common share - assuming dilution by $11.8 million and $0.14 per share, respectively. |
| |
(c) | Q3 2015 includes benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $5.6 million and $11.0 million, respectively, and increased net income and earnings per common share- assuming dilution by $10.7 million and $0.13 per share, respectively. |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
NON-GAAP FINANCIAL MEASURES
In addition to net income, we have consistently utilized operating income and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance. Operating income equals net income adjusted to eliminate the impact of items that fluctuate from quarter to quarter in a manner unrelated to core operations, and we believe measures excluding their impact are useful in analyzing operating trends. We believe the combined presentation and evaluation of operating income together with net income provides information that may enhance an investor’s understanding of our underlying results and profitability.
Reconciliation from Net Income to Operating Income (Unaudited)
|
| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2015 | | 2014 | | 2015 | | 2014 |
| (Dollars in thousands, except per share data) |
Net income | $ | 33,776 |
| | $ | 31,217 |
| | $ | 219,830 |
| | $ | 126,023 |
|
Adjustments to arrive at operating income: (a) | | | | | | | |
Net realized investment (gains) losses, including OTTI | 5,538 |
| | (613 | ) | | 3,709 |
| | 2,863 |
|
Change in fair value of derivatives and embedded derivatives - index annuities | 11,675 |
| | 16,463 |
| | (28,477 | ) | | 51,099 |
|
Change in fair value of derivatives and embedded derivatives - debt | (848 | ) | | 32 |
| | 758 |
| | 61 |
|
Litigation reserve | — |
| | — |
| | — |
| | (916 | ) |
Extinguishment of debt | — |
| | 3,604 |
| | — |
| | 11,516 |
|
Operating income (a non-GAAP financial measure) | $ | 50,141 |
| | $ | 50,703 |
| | $ | 195,820 |
| | $ | 190,646 |
|
| | | | | | | |
Per common share - assuming dilution: | | | | | | | |
Net income | $ | 0.40 |
| | $ | 0.39 |
| | $ | 2.72 |
| | $ | 1.58 |
|
Adjustments to arrive at operating income: | | | | | | | |
Net realized investment (gains) losses, including OTTI | 0.07 |
| | (0.01 | ) | | 0.04 |
| | 0.04 |
|
Change in fair value of derivatives and embedded derivatives - index annuities | 0.14 |
| | 0.21 |
| | (0.35 | ) | | 0.64 |
|
Change in fair value of derivatives and embedded derivatives - debt | (0.01 | ) | | — |
| | 0.01 |
| | — |
|
Litigation reserve | — |
| | — |
| | — |
| | (0.01 | ) |
Extinguishment of debt | — |
| | 0.04 |
| | — |
| | 0.14 |
|
Operating income (a non-GAAP financial measure) | $ | 0.60 |
| | $ | 0.63 |
| | $ | 2.42 |
| | $ | 2.39 |
|
| |
(a) | Adjustments to net income to arrive at operating income are presented net of income taxes and where applicable, are net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC). |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
NON-GAAP FINANCIAL MEASURES
Summary of Adjustments to Arrive at Operating Income (Unaudited)
|
| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2015 | | 2014 | | 2015 | | 2014 |
| (Dollars in thousands) |
Net realized investment gains and losses, including OTTI: | | | | | | | |
Net realized (gains) losses on investments, including OTTI | $ | 13,498 |
| | $ | (1,567 | ) | | $ | 9,325 |
| | $ | 6,630 |
|
Amortization of DAC and DSI | (4,926 | ) | | 619 |
| | (3,588 | ) | | (2,201 | ) |
Income taxes | (3,034 | ) | | 335 |
| | (2,028 | ) | | (1,566 | ) |
| $ | 5,538 |
| | $ | (613 | ) | | $ | 3,709 |
| | $ | 2,863 |
|
Change in fair value of derivatives and embedded derivatives: | | | | | | | |
Index annuities | $ | (12,954 | ) | | $ | 61,891 |
| | $ | (40,420 | ) | | $ | 196,816 |
|
2015 notes, note hedge and warrants | — |
| | (2,062 | ) | | — |
| | (6,293 | ) |
Interest rate caps and swap | (1,450 | ) | | 2,116 |
| | 1,296 |
| | 6,397 |
|
Amortization of DAC and DSI | 30,176 |
| | (37,261 | ) | | (3,635 | ) | | (117,764 | ) |
Income taxes | (4,945 | ) | | (8,189 | ) | | 15,040 |
| | (27,996 | ) |
| $ | 10,827 |
| | $ | 16,495 |
| | $ | (27,719 | ) | | $ | 51,160 |
|
Litigation reserve: | | | | | | | |
Change in litigation reserve recorded in other operating costs | $ | — |
| | $ | — |
| | $ | — |
| | $ | (2,212 | ) |
Amortization of DAC and DSI | — |
| | — |
| | — |
| | 795 |
|
Income taxes | — |
| | — |
| | — |
| | 501 |
|
| $ | — |
| | $ | — |
| | $ | — |
| | $ | (916 | ) |
Extinguishment of debt: | | | | | | | |
Loss on extinguishment of debt | $ | — |
| | $ | 1,951 |
| | $ | — |
| | $ | 12,502 |
|
Income taxes | — |
| | 1,653 |
| | — |
| | (986 | ) |
| $ | — |
| | $ | 3,604 |
| | $ | — |
| | $ | 11,516 |
|
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
NON-GAAP FINANCIAL MEASURES
Quarterly Summary - Most Recent 5 Quarters (Unaudited)
Reconciliation from Net Income to Operating Income
|
| | | | | | | | | | | | | | | | | | | |
| Q4 2015 | | Q3 2015 | | Q2 2015 | | Q1 2015 | | Q4 2014 |
| (Dollars in thousands, except per share data) |
Net income | $ | 33,776 |
| | $ | 97,306 |
| | $ | 82,845 |
| | $ | 5,903 |
| | $ | 31,217 |
|
Adjustments to arrive at operating income: (a) | | | | | | | | | |
Net realized investment (gains) losses, including OTTI | 5,538 |
| | 1,639 |
| | (1,649 | ) | | (1,819 | ) | | (613 | ) |
Change in fair value of derivatives and embedded derivatives - index annuities | 11,675 |
| | (54,535 | ) | | (29,274 | ) | | 43,657 |
| | 16,463 |
|
Change in fair value of derivatives and embedded derivatives - debt | (848 | ) | | 1,506 |
| | (977 | ) | | 1,077 |
| | 32 |
|
Extinguishment of debt | — |
| | — |
| | — |
| | — |
| | 3,604 |
|
Operating income (a non-GAAP financial measure) (b)(c)(d) | $ | 50,141 |
| | $ | 45,916 |
| | $ | 50,945 |
| | $ | 48,818 |
| | $ | 50,703 |
|
| | | | | | | | | |
Operating income per common share - assuming dilution (b)(c)(d) | $ | 0.60 |
| | $ | 0.56 |
| | $ | 0.64 |
| | $ | 0.62 |
| | $ | 0.63 |
|
| |
(a) | Adjustments to net income to arrive at operating income are presented net of income taxes and where applicable, are net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs. |
| |
(b) | Q4 2015 includes an adjustment to reserves for living income benefit riders which reduced interest sensitive and index product benefits by $1.9 million, which after related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs and income taxes, increased operating income and operating income per common share-assuming dilution by $0.5 million and $0.01 per share, respectively. |
| |
(c) | Q3 2015 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $0.5 million and $4.3 million, respectively, and increased operating income and operating income per common share- assuming dilution by $3.1 million and $0.04 per share, respectively. |
| |
(d) | Q3 2015 includes expense from the revision of assumptions used in determining reserves held for living income benefit riders. The impact increased interest sensitive and index product benefits by $18.3 million and decreased operating income and operating income per common share - assuming dilution by $11.8 million and $0.14 per share, respectively. |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
NON-GAAP FINANCIAL MEASURES
Summary of Adjustments to Arrive at Operating Income (Unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| Q4 2015 | | Q3 2015 | | Q2 2015 | | Q1 2015 | | Q4 2014 |
| (Dollars in thousands) |
Net realized (gains) losses on investments | $ | 151 |
| | $ | (1,159 | ) | | $ | (4,324 | ) | | $ | (4,879 | ) | | $ | (2,131 | ) |
Net OTTI losses recognized in operations | 13,347 |
| | 5,229 |
| | 828 |
| | 132 |
| | 564 |
|
Change in fair value of derivatives | (132,818 | ) | | 322,406 |
| | 116,627 |
| | 114,843 |
| | 19,033 |
|
Loss on extinguishment of debt | — |
| | — |
| | — |
| | — |
| | 1,951 |
|
Increase in total revenues | (119,320 | ) | | 326,476 |
| | 113,131 |
| | 110,096 |
| | 19,417 |
|
| | | | | | | | | |
Amortization of deferred sales inducements | (3,075 | ) | | (12,644 | ) | | (23,306 | ) | | 38,686 |
| | 14,579 |
|
Change in fair value of embedded derivatives | (118,414 | ) | | 413,583 |
| | 215,659 |
| | (50,646 | ) | | (42,912 | ) |
Amortization of deferred policy acquisition costs | (22,175 | ) | | 3,830 |
| | (30,593 | ) | | 56,500 |
| | 22,063 |
|
Increase (decrease) in total benefits and expenses | (143,664 | ) | | 404,769 |
| | 161,760 |
| | 44,540 |
| | (6,270 | ) |
Increase (decrease) in income before income taxes | 24,344 |
| | (78,293 | ) | | (48,629 | ) | | 65,556 |
| | 25,687 |
|
Increase (decrease) in income tax expense | 7,979 |
| | (26,903 | ) | | (16,729 | ) | | 22,641 |
| | 6,201 |
|
Increase (decrease) in net income | $ | 16,365 |
| | $ | (51,390 | ) | | $ | (31,900 | ) | | $ | 42,915 |
| | $ | 19,486 |
|
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Capitalization/Book Value per Share
|
| | | | | | | |
| December 31, 2015 | | December 31, 2014 |
| (Dollars in thousands, except per share data) |
Capitalization: | | | |
Notes payable: | | | |
September 2015 Notes | $ | — |
| | $ | 21,679 |
|
July 2021 Notes | 400,000 |
| | 400,000 |
|
Subordinated debentures payable to subsidiary trusts | 246,450 |
| | 246,243 |
|
Total debt | 646,450 |
| | 667,922 |
|
Total stockholders’ equity | 1,944,535 |
| | 2,139,876 |
|
Total capitalization | 2,590,985 |
| | 2,807,798 |
|
Accumulated other comprehensive income (AOCI) | (201,663 | ) | | (721,401 | ) |
Total capitalization excluding AOCI (a) | $ | 2,389,322 |
| | $ | 2,086,397 |
|
| | | |
Total stockholders’ equity | $ | 1,944,535 |
| | $ | 2,139,876 |
|
Accumulated other comprehensive income | (201,663 | ) | | (721,401 | ) |
Total stockholders’ equity excluding AOCI (a) | $ | 1,742,872 |
| | $ | 1,418,475 |
|
| | | |
Common shares outstanding (b) | 81,584,091 |
| | 76,605,527 |
|
| | | |
Book Value per Share: (c) | | | |
Book value per share including AOCI | $ | 23.83 |
| | $ | 27.93 |
|
Book value per share excluding AOCI (a) | $ | 21.36 |
| | $ | 18.52 |
|
| | | |
Debt-to-Capital Ratios: (d) | | | |
Senior debt / Total capitalization | 16.7 | % | | 20.2 | % |
Adjusted debt / Total capitalization | 16.7 | % | | 20.2 | % |
| |
(a) | Total capitalization, total stockholders’ equity and book value per share excluding AOCI, non-GAAP financial measures, are based on stockholders’ equity excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, we believe these non-GAAP financial measures provide useful supplemental information. |
| |
(b) | Common shares outstanding include shares held by the NMO Deferred Compensation Trust: 2015 - 230,012 shares; 2014 - 543,120 shares |
| |
(c) | Book value per share including and excluding AOCI is calculated as total stockholders’ equity and total stockholders’ equity excluding AOCI divided by the total number of shares of common stock outstanding. |
| |
(d) | Debt-to-capital ratios are computed using total capitalization excluding AOCI. Adjusted debt includes notes payable and the portion of the total subordinated debentures payable to subsidiary trusts outstanding (qualifying trust preferred securities) that exceeds 15% of total capitalization excluding AOCI. |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Spread Results
|
| | | | | | | |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2015 | | 2014 | | 2015 | | 2014 |
Average yield on invested assets | 4.62% | | 4.95% | | 4.73% | | 4.90% |
Aggregate cost of money | 1.95% | | 2.03% | | 1.96% | | 2.10% |
Aggregate investment spread | 2.67% | | 2.92% | | 2.77% | | 2.80% |
| | | | | | | |
Impact of: | | | | | | | |
Investment yield - additional prepayment income | 0.07% | | 0.13% | | 0.08% | | 0.07% |
Cost of money effect of over hedging | 0.01% | | 0.05% | | 0.04% | | 0.03% |
| | | | | | | |
Weighted average investments (in thousands) | $38,054,743 | | $32,770,087 | | $35,857,262 | | $31,316,916 |
Weighted average investments include fixed maturity securities at amortized cost and equity securities at cost. The numerator for average yield on invested assets includes net investment income and the tax effect of investment income that is exempt from income taxes.
Summary of Cost of Money for Deferred Annuities
|
| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2015 | | 2014 | | 2015 | | 2014 |
| (Dollars in thousands) |
Included in interest sensitive and index product benefits: | | | | | | | |
Index credits | $ | 72,030 |
| | $ | 264,980 |
| | $ | 587,705 |
| | $ | 1,096,504 |
|
Interest credited | 62,425 |
| | 67,146 |
| | 250,371 |
| | 275,671 |
|
Included in change in fair value of derivatives: | | | | | | | |
Proceeds received at option expiration | (73,240 | ) | | (269,208 | ) | | (602,436 | ) | | (1,103,710 | ) |
Pro rata amortization of option cost | 136,129 |
| | 114,387 |
| | 510,595 |
| | 432,494 |
|
Cost of money for deferred annuities | $ | 197,344 |
| | $ | 177,305 |
| | $ | 746,235 |
| | $ | 700,959 |
|
| | | | | | | |
Weighted average liability balance outstanding (in thousands) | $ | 40,429,839 |
| | $ | 34,870,894 |
| | $ | 38,126,188 |
| | $ | 33,363,490 |
|
Annuity Account Balance Rollforward
|
| | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | Year Ended December 31, |
| 2015 | | 2014 | | 2015 | | 2014 |
| (Dollars in thousands) |
Account balances at beginning of period | $ | 39,610,034 |
| | $ | 34,378,748 |
| | $ | 35,363,041 |
| | $ | 31,535,846 |
|
Net deposits | 1,938,759 |
| | 1,090,724 |
| | 6,579,405 |
| | 3,988,881 |
|
Premium bonuses | 140,514 |
| | 88,803 |
| | 486,924 |
| | 330,080 |
|
Fixed interest credited and index credits | 134,455 |
| | 332,126 |
| | 838,076 |
| | 1,372,175 |
|
Surrender charges | (10,543 | ) | | (10,418 | ) | | (46,614 | ) | | (47,500 | ) |
Lifetime income benefit rider fees | (26,559 | ) | | (22,095 | ) | | (89,554 | ) | | (71,490 | ) |
Surrenders, withdrawals, deaths, etc. | (537,013 | ) | | (494,847 | ) | | (1,881,631 | ) | | (1,744,951 | ) |
Account balances at end of period | $ | 41,249,647 |
| | $ | 35,363,041 |
| | $ | 41,249,647 |
| | $ | 35,363,041 |
|
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Annuity Deposits by Product Type
|
| | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, | | Year Ended December 31, |
Product Type | | 2015 | | 2014 | | 2015 | | 2014 |
| | (Dollars in thousands) |
Fixed index annuities | | $ | 2,043,077 |
| | $ | 1,116,333 |
| | $ | 6,791,689 |
| | $ | 3,999,439 |
|
Annual reset fixed rate annuities | | 12,570 |
| | 13,914 |
| | 45,182 |
| | 57,273 |
|
Multi-year fixed rate annuities | | 82,107 |
| | 12,902 |
| | 214,356 |
| | 103,293 |
|
Single premium immediate annuities | | 5,667 |
| | 6,521 |
| | 32,752 |
| | 24,580 |
|
Total before coinsurance ceded | | 2,143,421 |
| | 1,149,670 |
| | 7,083,979 |
| | 4,184,585 |
|
Coinsurance ceded | | 198,995 |
| | 52,425 |
| | 471,822 |
| | 171,124 |
|
Net after coinsurance ceded | | $ | 1,944,426 |
| | $ | 1,097,245 |
| | $ | 6,612,157 |
| | $ | 4,013,461 |
|
Surrender Charge Protection and Account Values by Product Type
Annuity Surrender Charges and Net (of coinsurance) Account Values at December 31, 2015:
|
| | | | | | | | | | | | | |
| | Surrender Charge | | Net Account Value |
Product Type | | Avg. Years At Issue | | Avg. Years Remaining | | Avg. % Remaining | | Dollars in Thousands | | % |
| | | | | | | | | | |
Fixed Index Annuities | | 13.9 | | 9.3 | | 14.7% | | $ | 39,345,831 |
| | 95.4 | % |
Annual Reset Fixed Rate Annuities | | 10.9 | | 3.7 | | 7.6% | | 1,415,241 |
| | 3.4 | % |
Multi-Year Fixed Rate Annuities (a) | | 6.7 | | 1.7 | | 4.2% | | 488,575 |
| | 1.2 | % |
Total | | 13.7 | | 9.1 | | 14.3% | | $ | 41,249,647 |
| | 100.0 | % |
| |
(a) | 28% of Net Account Value is no longer in multi-year guarantee period and can be adjusted annually. |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Annuity Liability Characteristics
|
| | | | | | | |
| Fixed Annuities Account Value | | Fixed Index Annuities Account Value |
| (Dollars in thousands) |
SURRENDER CHARGE PERCENTAGES: | | | |
No surrender charge | $ | 733,746 |
| | $ | 1,359,766 |
|
0.0% < 2.0% | 24,895 |
| | 523,955 |
|
2.0% < 3.0% | 74,317 |
| | 60,535 |
|
3.0% < 4.0% | 14,665 |
| | 686,509 |
|
4.0% < 5.0% | 98,494 |
| | 50,038 |
|
5.0% < 6.0% | 91,282 |
| | 530,269 |
|
6.0% < 7.0% | 66,803 |
| | 286,649 |
|
7.0% < 8.0% | 61,828 |
| | 467,806 |
|
8.0% < 9.0% | 64,826 |
| | 714,329 |
|
9.0% < 10.0% | 120,222 |
| | 1,297,708 |
|
10.0% or greater | 552,738 |
| | 33,368,267 |
|
| $ | 1,903,816 |
| | $ | 39,345,831 |
|
|
| | | | | | |
| Fixed and Fixed Index Annuities Account Value | | Weighted Average Surrender Charge |
| (Dollars in thousands) | | |
SURRENDER CHARGE EXPIRATION BY YEAR: | | | |
Out of Surrender Charge | $ | 2,093,512 |
| | 0.00 | % |
2016 | 696,872 |
| | 1.70 | % |
2017 | 844,602 |
| | 3.27 | % |
2018 | 767,234 |
| | 5.63 | % |
2019 | 567,606 |
| | 7.06 | % |
2020 | 934,114 |
| | 8.58 | % |
2021 | 1,272,703 |
| | 10.09 | % |
2022 | 1,963,992 |
| | 12.04 | % |
2023 | 4,915,395 |
| | 13.86 | % |
2024 | 5,455,168 |
| | 14.93 | % |
2025 | 5,927,795 |
| | 15.11 | % |
2026 | 2,672,439 |
| | 17.31 | % |
2027 | 2,801,075 |
| | 18.16 | % |
2028 | 2,489,984 |
| | 18.50 | % |
2029 | 3,054,441 |
| | 18.99 | % |
2030 | 2,009,197 |
| | 19.49 | % |
2031 | 2,769,455 |
| | 19.99 | % |
2032 | 14,063 |
| | 20.00 | % |
| $ | 41,249,647 |
| | 14.35 | % |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Annuity Liability Characteristics
|
| | | | | | | |
| Fixed Annuities Account Value | | Fixed Index Annuities Account Value |
| (Dollars in thousands) |
CREDITED RATE VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL: | | | |
No differential | $ | 926,689 |
| | $ | 1,117,176 |
|
› 0.0% - 0.25% | 202,037 |
| | 43,578 |
|
› 0.25% - 0.5% | 203,290 |
| | 170,024 |
|
› 0.5% - 1.0% | 154,992 |
| | 694,946 |
|
› 1.0% - 1.5% | 56,464 |
| | 1,643 |
|
› 1.5% - 2.0% | 1,357 |
| | — |
|
› 2.0% - 2.5% | 72 |
| | — |
|
1.00% ultimate guarantee - 2.51% wtd avg interest rate (a) | 131,870 |
| | 33,050 |
|
1.50% ultimate guarantee - 1.41% wtd avg interest rate (a) | 127,040 |
| | 3,761,414 |
|
2.00% ultimate guarantee - 2.27% wtd avg interest rate (a) | 100,005 |
| | — |
|
2.25% ultimate guarantee - 2.31% wtd avg interest rate (a) | — |
| | 1,201,045 |
|
3.00% ultimate guarantee - 2.54% wtd avg interest rate (a) | — |
| | 2,380,932 |
|
Allocated to index strategies (see tables that follow) | — |
| | 29,942,023 |
|
| $ | 1,903,816 |
| | $ | 39,345,831 |
|
| |
(a) | The minimum guaranteed interest rate for the fixed rate or the fixed rate strategy is 1.00%. The ultimate guaranteed rate is applied on less than 100% of the premium. |
If all crediting rates were reduced to minimum guaranteed rates (subject to limitations imposed by ultimate minimum guaranteed rates where applicable) the weighted average crediting rate as of December 31, 2015 for fixed annuities and funds allocated to the fixed rate strategy for fixed index annuities would decrease by 0.36%.
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Annuity Liability Characteristics
FIXED INDEX ANNUITIES ACCOUNT VALUE - INDEX STRATEGIES
|
| | | | | | | | | | | | | | | | | | | |
Annual Monthly Average and Point-to-Point with Caps |
| Minimum Guaranteed Cap |
| 1% | | 3% | | 4% | | 7% | | 8% + |
Current Cap | (Dollars in thousands) |
At minimum | $ | 1,722 |
| | $ | 10,389 |
| | $ | 1,619,706 |
| | $ | 52,310 |
| | $ | 256,499 |
|
1.75% - 3% | 3,078,904 |
| | — |
| | — |
| | — |
| | — |
|
3% - 4% | 3,007,206 |
| | 101,861 |
| | — |
| | — |
| | — |
|
4% - 5% | 116,507 |
| | 117,351 |
| | 3,187,006 |
| | — |
| | — |
|
5% - 6% | 244,323 |
| | 88,618 |
| | 3,005,850 |
| | — |
| | — |
|
6% - 7% | — |
| | — |
| | 54 |
| | — |
| | — |
|
>= 7% | — |
| | 15,886 |
| | 1,485 |
| | 75,307 |
| | 17,075 |
|
|
| | | | | | | | | | | | | | | |
Annual Monthly Average and Point-to-Point with Participation Rates |
| Minimum Guaranteed Participation Rate |
| 10% | | 25% | | 35% | | 50% + |
Current Participation Rate | (Dollars in thousands) |
At minimum | $ | 636 |
| | $ | 416,553 |
| | $ | 151,229 |
| | $ | 178,236 |
|
< 20% | 329,218 |
| | — |
| | — |
| | — |
|
20% - 40% | 652,948 |
| | 261,715 |
| | — |
| | — |
|
40% - 60% | 218,129 |
| | 135,412 |
| | 102,142 |
| | 621 |
|
>= 60% | 5,219 |
| | — |
| | — |
| | — |
|
|
| | | |
S&P 500 Monthly Point-to-Point - Minimum Guaranteed Monthly Cap = 1.0% |
(Dollars in thousands) | |
Current Cap | |
At minimum | $ | 16,745 |
|
1.2% - 1.9% | 8,743,890 |
|
2.0% - 2.3% | 1,613,689 |
|
>= 2.4% | 68,202 |
|
|
| | | |
Volatility Control Index | |
(Dollars in thousands) | |
Current Asset Fee | |
At Maximum | $ | — |
|
0.75% - 1.75% | 110,836 |
|
2.25% - 2.75% | 1,223,843 |
|
3.00% | 611,721 |
|
If all caps and participation rates were reduced to minimum caps and participation rates and current asset fees were increased to their maximums, the cost of options would decrease by 0.53% based upon prices of options for the week ended January 26, 2016.
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Summary of Invested Assets
|
| | | | | | | | | | | | | |
| December 31, 2015 | | December 31, 2014 |
| Carrying Amount | | Percent | | Carrying Amount | | Percent |
| (Dollars in thousands) |
Fixed maturity securities: | | | | | | | |
United States Government full faith and credit | $ | 471,256 |
| | 1.3 | % | | $ | 138,460 |
| | 0.4 | % |
United States Government sponsored agencies | 1,398,611 |
| | 3.5 | % | | 1,393,890 |
| | 3.9 | % |
United States municipalities, states and territories | 3,755,367 |
| | 9.5 | % | | 3,723,309 |
| | 10.4 | % |
Foreign government obligations | 212,565 |
| | 0.5 | % | | 193,803 |
| | 0.5 | % |
Corporate securities | 23,879,016 |
| | 60.3 | % | | 21,566,724 |
| | 59.9 | % |
Residential mortgage backed securities | 1,462,072 |
| | 3.7 | % | | 1,751,345 |
| | 4.9 | % |
Commercial mortgage backed securities | 4,174,396 |
| | 10.5 | % | | 2,807,620 |
| | 7.8 | % |
Other asset backed securities | 1,145,178 |
| | 2.9 | % | | 946,483 |
| | 2.6 | % |
Total fixed maturity securities | 36,498,461 |
| | 92.2 | % | | 32,521,634 |
| | 90.4 | % |
Equity securities | 7,828 |
| | — | % | | 7,805 |
| | — | % |
Mortgage loans on real estate | 2,435,257 |
| | 6.2 | % | | 2,434,580 |
| | 6.8 | % |
Derivative instruments | 337,256 |
| | 0.9 | % | | 731,113 |
| | 2.0 | % |
Other investments | 291,530 |
| | 0.7 | % | | 286,726 |
| | 0.8 | % |
| $ | 39,570,332 |
| | 100.0 | % | | $ | 35,981,858 |
| | 100.0 | % |
Credit Quality of Fixed Maturity Securities - December 31, 2015
|
| | | | | | | | | | | | | | | | |
NAIC Designation | | Carrying Amount | | Percent | | Rating Agency Rating | | Carrying Amount | | Percent |
| | (Dollars in thousands) | | | | | | (Dollars in thousands) | | |
1 | | $ | 24,207,801 |
| | 66.3 | % | | Aaa/Aa/A | | $ | 23,724,648 |
| | 65.0 | % |
2 | | 11,589,325 |
| | 31.8 | % | | Baa | | 11,491,609 |
| | 31.5 | % |
3 | | 654,538 |
| | 1.8 | % | | Ba | | 657,760 |
| | 1.8 | % |
4 | | 44,312 |
| | 0.1 | % | | B | | 68,712 |
| | 0.2 | % |
5 | | — |
| | — | % | | Caa and lower | | 388,908 |
| | 1.1 | % |
6 | | 2,485 |
| | — | % | | In or near default | | 166,824 |
| | 0.4 | % |
| | $ | 36,498,461 |
| | 100.0 | % | | | | $ | 36,498,461 |
| | 100.0 | % |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Watch List Securities - December 31, 2015
|
| | | | | | | | | | | | | | |
General Description | | Amortized Cost | | Unrealized Gains (Losses) | | Fair Value | | Months Below Amortized Cost |
| | (Dollars in thousands) | | |
Investment grade | | | | | | | | |
Corporate securities: | | | | | | | | |
Financials | | $ | 20,000 |
| | $ | (3,888 | ) | | $ | 16,112 |
| | 52 |
Industrials | | 4,980 |
| | (1,817 | ) | | 3,163 |
| | 14 |
Other asset backed securities: | | | | | |
|
| | |
Financials | | 2,855 |
| | (856 | ) | | 1,999 |
| | 57 |
| | $ | 27,835 |
| | $ | (6,561 | ) | | $ | 21,274 |
| | |
Below investment grade | | | | | | | | |
Corporate securities: | | | | | | | | |
Energy | | $ | 45,090 |
| | $ | (18,900 | ) | | $ | 26,190 |
| | 16 - 32 |
Materials | | 39,209 |
| | (18,923 | ) | | 20,286 |
| | 6 - 35 |
Telecommunications | | 6,000 |
| | (3,240 | ) | | 2,760 |
| | 18 |
Other asset backed securities: | | | | | | | | |
Financials | | 8,332 |
| | (5,856 | ) | | 2,476 |
| | 31 |
| | $ | 98,631 |
| | $ | (46,919 | ) | | $ | 51,712 |
| | |
| | $ | 126,466 |
| | $ | (53,480 | ) | | $ | 72,986 |
| | |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Fixed Maturity Securities by Sector
|
| | | | | | | | | | | | | | | |
| December 31, 2015 | | December 31, 2014 |
| Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value |
| (Dollars in thousands) |
Available for sale: | | | | | | | |
United States Government full faith and credit and sponsored agencies | $ | 1,856,786 |
| | $ | 1,869,867 |
| | $ | 1,502,134 |
| | $ | 1,532,350 |
|
United States municipalities, states and territories | 3,422,667 |
| | 3,755,367 |
| | 3,293,551 |
| | 3,723,309 |
|
Foreign government obligations | 210,953 |
| | 212,565 |
| | 181,128 |
| | 193,803 |
|
Corporate securities: | | | | | | | |
Consumer discretionary | 1,983,595 |
| | 2,012,874 |
| | 1,677,362 |
| | 1,800,455 |
|
Consumer staples | 1,612,382 |
| | 1,649,408 |
| | 1,376,634 |
| | 1,489,951 |
|
Energy | 2,622,284 |
| | 2,410,184 |
| | 2,307,432 |
| | 2,378,038 |
|
Financials | 4,955,851 |
| | 5,134,209 |
| | 3,928,295 |
| | 4,246,882 |
|
Health care | 1,944,109 |
| | 2,007,107 |
| | 1,742,218 |
| | 1,884,132 |
|
Industrials | 3,236,836 |
| | 3,295,598 |
| | 2,537,927 |
| | 2,746,752 |
|
Information technology | 1,689,259 |
| | 1,694,466 |
| | 1,324,095 |
| | 1,388,990 |
|
Materials | 1,732,123 |
| | 1,624,073 |
| | 1,589,219 |
| | 1,654,125 |
|
Telecommunications | 543,689 |
| | 547,424 |
| | 509,913 |
| | 542,055 |
|
Utilities | 3,277,402 |
| | 3,427,041 |
| | 2,991,652 |
| | 3,358,901 |
|
Residential mortgage backed securities: | | | | | | | |
Government agency | 687,515 |
| | 741,431 |
| | 689,378 |
| | 759,902 |
|
Prime | 474,756 |
| | 493,096 |
| | 683,206 |
| | 721,454 |
|
Alt-A | 204,714 |
| | 227,545 |
| | 244,262 |
| | 269,989 |
|
Commercial mortgage backed securities: | | | | | | | |
Government agency | 359,273 |
| | 370,966 |
| | 299,288 |
| | 320,343 |
|
Other | 3,878,992 |
| | 3,803,430 |
| | 2,421,006 |
| | 2,487,277 |
|
Other asset backed securities: | | | | | | | |
Consumer discretionary | 62,852 |
| | 61,759 |
| | 71,081 |
| | 73,298 |
|
Energy | 8,143 |
| | 9,097 |
| | 8,230 |
| | 9,459 |
|
Financials | 816,906 |
| | 821,343 |
| | 628,464 |
| | 649,388 |
|
Industrials | 223,414 |
| | 231,678 |
| | 177,864 |
| | 190,217 |
|
Telecommunications | 13,789 |
| | 14,575 |
| | 14,837 |
| | 16,139 |
|
Utilities | 5,420 |
| | 6,726 |
| | 5,870 |
| | 7,982 |
|
Redeemable preferred stock - financials | — |
| | 10 |
| | — |
| | 11 |
|
| $ | 35,823,710 |
| | $ | 36,421,839 |
| | $ | 30,205,046 |
| | $ | 32,445,202 |
|
Held for investment: | | | | | | | |
Corporate security - financials | $ | 76,622 |
| | $ | 65,377 |
| | $ | 76,432 |
| | $ | 75,838 |
|
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Fixed Maturity Securities by Sector
Energy and Metals & Mining
In the table on the previous page, oil and metals and mining exposure is reflected within the foreign government, energy, material, utilities, energy and industrial sectors. Our privately placed available for sale fixed maturity securities at December 31, 2015 total $167.3 million fair value ($189.6 million amortized cost) in Energy and $39.2 million fair value ($47.5 million amortized cost) in Metals & Mining and are not included in the following tables.
|
| | | | | | | | | | | | | | |
| | December 31, 2015 |
Sector and Subsector | | Amortized Cost | | Fair Value | | Unrealized Gain (Loss) | | Average Credit Rating |
| | (Dollars in thousands) | | |
Energy | | | | | | | | |
Independent | | $ | 494,440 |
| | $ | 435,476 |
| | $ | (58,964 | ) | | Baa |
Integrated | | 451,848 |
| | 438,884 |
| | (12,964 | ) | | A |
Oil field services | | 399,077 |
| | 348,558 |
| | (50,519 | ) | | Baa |
Refining | | 101,055 |
| | 97,379 |
| | (3,676 | ) | | Baa |
Midstream | | 738,396 |
| | 663,068 |
| | (75,328 | ) | | Baa |
Government owned no guarantee | | 283,504 |
| | 283,522 |
| | 18 |
| | A |
Metals & Mining | | $ | 546,906 |
| | $ | 442,943 |
| | $ | (103,963 | ) | | Baa |
Total Energy and Metals & Mining | | $ | 3,015,226 |
| | $ | 2,709,830 |
| | $ | (305,396 | ) | | Baa |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Amortized Cost at December 31, 2015 |
| | Energy | | | | |
NRSRO Rating | | Independent | | Integrated | | Oil field services | | Refining | | Midstream | | Government Owned No Guarantee | | Metals & Mining | | Total |
| | (Dollars in thousands) |
Aaa | | $ | — |
| | $ | 23,914 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 23,914 |
|
Aa | | — |
| | 166,662 |
| | 28,277 |
| | — |
| | — |
| | 147,763 |
| | — |
| | 342,702 |
|
A | | 130,615 |
| | 150,400 |
| | 117,993 |
| | 11,617 |
| | 90,185 |
| | 85,846 |
| | 74,670 |
| | 661,326 |
|
Baa | | 363,825 |
| | 110,872 |
| | 223,741 |
| | 89,438 |
| | 614,167 |
| | 25,259 |
| | 382,121 |
| | 1,809,423 |
|
Ba | | — |
| | — |
| | 29,066 |
| | — |
| | 34,044 |
| | 24,636 |
| | 60,093 |
| | 147,839 |
|
B | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 23,897 |
| | 23,897 |
|
Below B | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 6,125 |
| | 6,125 |
|
| | $ | 494,440 |
| | $ | 451,848 |
| | $ | 399,077 |
| | $ | 101,055 |
| | $ | 738,396 |
| | $ | 283,504 |
| | $ | 546,906 |
| | $ | 3,015,226 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fair Value at December 31, 2015 |
| | Energy | | | | |
NRSRO Rating | | Independent | | Integrated | | Oil field services | | Refining | | Midstream | | Government Owned No Guarantee | | Metals & Mining | | Total |
| | (Dollars in thousands) |
Aaa | | $ | — |
| | $ | 24,734 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 24,734 |
|
Aa | | — |
| | 166,245 |
| | 27,997 |
| | — |
| | — |
| | 152,334 |
| | — |
| | 346,576 |
|
A | | 127,940 |
| | 144,831 |
| | 112,187 |
| | 10,928 |
| | 90,335 |
| | 91,499 |
| | 67,332 |
| | 645,052 |
|
Baa | | 307,536 |
| | 103,074 |
| | 191,603 |
| | 86,451 |
| | 550,056 |
| | 24,227 |
| | 321,617 |
| | 1,584,564 |
|
Ba | | — |
| | — |
| | 16,771 |
| | — |
| | 22,677 |
| | 15,462 |
| | 37,226 |
| | 92,136 |
|
B | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 13,618 |
| | 13,618 |
|
Below B | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 3,150 |
| | 3,150 |
|
| | $ | 435,476 |
| | $ | 438,884 |
| | $ | 348,558 |
| | $ | 97,379 |
| | $ | 663,068 |
| | $ | 283,522 |
| | $ | 442,943 |
| | $ | 2,709,830 |
|
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Mortgage Loans on Commercial Real Estate
|
| | | | | | | | | | | | | | |
| December 31, 2015 | | December 31, 2014 |
| Principal | | Percent | | Principal | | Percent |
| (Dollars in thousands) |
Geographic distribution | | | | | | | |
East | $ | 698,113 |
| | 28.5 | % | | $ | 701,638 |
| | 28.5 | % |
Middle Atlantic | 160,261 |
| | 6.6 | % | | 166,249 |
| | 6.8 | % |
Mountain | 252,442 |
| | 10.3 | % | | 279,075 |
| | 11.4 | % |
New England | 13,161 |
| | 0.5 | % | | 12,280 |
| | 0.5 | % |
Pacific | 355,268 |
| | 14.5 | % | | 302,307 |
| | 12.3 | % |
South Atlantic | 456,227 |
| | 18.6 | % | | 471,849 |
| | 19.2 | % |
West North Central | 313,120 |
| | 12.8 | % | | 349,028 |
| | 14.2 | % |
West South Central | 201,317 |
| | 8.2 | % | | 175,295 |
| | 7.1 | % |
| $ | 2,449,909 |
| | 100.0 | % | | $ | 2,457,721 |
| | 100.0 | % |
| | | | | | | |
Property type distribution | | | | | | | |
Office | $ | 396,154 |
| | 16.2 | % | | $ | 484,585 |
| | 19.7 | % |
Medical office | 77,438 |
| | 3.2 | % | | 88,275 |
| | 3.6 | % |
Retail | 790,158 |
| | 32.2 | % | | 711,775 |
| | 29.0 | % |
Industrial/Warehouse | 686,400 |
| | 28.0 | % | | 649,425 |
| | 26.4 | % |
Hotel | 3,361 |
| | 0.1 | % | | 30,640 |
| | 1.3 | % |
Apartment | 352,971 |
| | 14.4 | % | | 335,087 |
| | 13.6 | % |
Mixed use/other | 143,427 |
| | 5.9 | % | | 157,934 |
| | 6.4 | % |
| $ | 2,449,909 |
| | 100.0 | % | | $ | 2,457,721 |
| | 100.0 | % |
| | | | | | | |
| December 31, 2015 | | December 31, 2014 | | | | |
Credit Exposure - By Payment Activity | | | | | | | |
Performing | $ | 2,438,341 |
| | $ | 2,451,760 |
| | | | |
In workout | 11,568 |
| | — |
| | | | |
Delinquent | — |
| | — |
| | | | |
Collateral dependent | — |
| | 5,961 |
| | | | |
| 2,449,909 |
| | 2,457,721 |
| | | | |
Specific loan loss allowance | (7,842 | ) | | (12,333 | ) | | | | |
General loan loss allowance | (6,300 | ) | | (10,300 | ) | | | | |
Deferred prepayment fees | (510 | ) | | (508 | ) | | | | |
| $ | 2,435,257 |
| | $ | 2,434,580 |
| | | | |
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Shareholder Information
Corporate Offices:
American Equity Investment Life Holding Company
6000 Westown Parkway
West Des Moines, IA 50266
Inquiries:
John M. Matovina, Chief Executive Officer and President
(515) 457-1813, jmatovina@american-equity.com
Ted M. Johnson, Chief Financial Officer and Treasurer
(515) 457-1980, tjohnson@american-equity.com
Debra J. Richardson, Executive Vice President and Secretary
(515) 273-3551, drichardson@american-equity.com
Common Stock and Dividend Information:
New York Stock Exchange symbol: “AEL”
|
| | | | | | | |
| High | | Low | | Close | | Dividend Declared |
2015 | | | | | | | |
First Quarter | $29.62 | | $25.46 | | $29.13 | | $0.00 |
Second Quarter | $29.90 | | $25.06 | | $26.98 | | $0.00 |
Third Quarter | $30.02 | | $22.36 | | $23.31 | | $0.00 |
Fourth Quarter | $28.30 | | $22.55 | | $24.03 | | $0.22 |
| | | | | | | |
2014 | | | | | | | |
First Quarter | $26.42 | | $18.84 | | $23.62 | | $0.00 |
Second Quarter | $25.15 | | $20.97 | | $24.60 | | $0.00 |
Third Quarter | $25.25 | | $21.69 | | $22.88 | | $0.00 |
Fourth Quarter | $29.75 | | $21.36 | | $29.19 | | $0.20 |
| | | | | | | |
2013 | | | | | | | |
First Quarter | $15.03 | | $12.33 | | $14.89 | | $0.00 |
Second Quarter | $16.60 | | $14.03 | | $15.70 | | $0.00 |
Third Quarter | $21.42 | | $15.64 | | $21.22 | | $0.00 |
Fourth Quarter | $26.46 | | $20.01 | | $26.38 | | $0.18 |
Transfer Agent:
Computershare Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-0310
Phone: (877) 282-1169
Fax: (781) 575-2723
www.computershare.com
Annual Report and Other Information:
Shareholders may receive when available, without charge, a copy of American Equity’s Annual Report, SEC filings and/or press releases by calling Julie L. LaFollette, Investor Relations, at (515) 273-3602 or by visiting our web site at www.american-equity.com.
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - December 31, 2015
Research Analyst Coverage
Steven Schwartz
Raymond James & Associates, Inc.
(312) 612-7686
steven.schwartz@raymondjames.com
Randy Binner
Friedman, Billings, Ramsey & Co., Inc.
(703) 312-1890
rbinner@fbr.com
Mark Hughes
SunTrust Robinson Humphrey
(615) 748-5680
mark_hughes@rhco.com
John Barnidge
Sandler O'Neill & Partners, L.P.
(312) 281-3412
jbarnidge@sandleroneill.com
Erik J. Bass
Citigroup Global Markets, Inc.
(212) 816-5257
erik.bass@citi.com
Pablo Singzon II
JP Morgan
(212) 622-2295
pablo.s.singzon@jpmorgan.com
Kenneth S. Lee
RBC Capital Markets, LLC
(212) 905-5995
kenneth.s.lee@rbccm.com
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