American Equity Investment Life pany(AEL) - 2022 Q3 - Quarterly Report

Financial Position - Total assets decreased to $70,184,997 thousand as of September 30, 2022, down from$78,349,109 thousand as of December 31, 2021, representing a decline of approximately 10.4%[8] - Total liabilities decreased to $66,974,369 thousand as of September 30, 2022, compared to$72,025,982 thousand as of December 31, 2021, a reduction of about 7.1%[8] - Policy benefit reserves were $61,137,017 thousand as of September 30, 2022, down from$65,477,778 thousand as of December 31, 2021, indicating a decrease of approximately 6.4%[8] - Total stockholders' equity attributable to American Equity Investment Life Holding Company decreased to $3,207,698 thousand in 2022 from$6,323,127 thousand in 2021, a decline of about 49.3%[8] - Total stockholders' equity as of September 30, 2022, was $3,210,628, a decrease from$6,375,208 as of September 30, 2021, reflecting a decline of approximately 50%[24] Cash and Cash Equivalents - Cash and cash equivalents fell to $1,808,132 thousand in 2022 from$4,508,982 thousand in 2021, a significant drop of about 59.9%[8] - Cash and cash equivalents at the end of the period were $1,808,132, down from$12,684,793 at the end of the same period in 2021, marking a decrease of approximately 86%[30] - Cash and cash equivalents were reported at $1,808.1 million as of September 30, 2022, compared to$4,509.0 million as of December 31, 2021, indicating a decrease of about 60%[51] Income and Earnings - Net income for the three months ended September 30, 2022, was $312,601, representing a 104.5$152,865 in the same period of 2021[16] - For the nine months ended September 30, 2022, net income was $1,239,400, compared to$380,855 for the same period in 2021, representing an increase of approximately 226%[27] - Net investment income increased to $609,737 for the three months ended September 30, 2022, up 15.8$526,366 in the prior year[12] - Earnings per common share for the three months ended September 30, 2022, were $3.44, compared to$1.53 for the same period in 2021, reflecting a 125.5% increase[12] Investment Performance - The company reported accrued investment income of $516,649 thousand in 2022, up from$445,097 thousand in 2021, an increase of about 16%[8] - The company experienced a significant change in the fair value of embedded derivatives, resulting in a loss of $2,695,007 for the nine months ended September 30, 2022, compared to a loss of$545,104 in the same period of 2021[27] - The fair value of corporate securities was $26,894.1 million as of September 30, 2022, down from$34,660.2 million as of December 31, 2021, representing a decline of approximately 22%[51] - The total unrealized losses on corporate securities as of September 30, 2022, were $(4.10) billion[92] Credit Losses and Provisions - The allowance for credit losses on mortgage loans increased to$35,604 thousand in 2022 from $24,024 thousand in 2021, representing a rise of approximately 48.1$1.49 million for the three months ended September 30, 2022[96] - The total amount of credit losses not previously recorded added to the allowance was $439,000 for the period[108] - The company maintains a valuation allowance believed adequate to absorb estimated expected credit losses based on amortized cost[119] Derivatives and Hedging - The company entered into interest rate swaps designated as fair value hedges in Q2 2022, with hedge accounting applied to offset changes in fair value of the hedged assets[37] - Derivative instruments designated as hedging instruments include interest rate swaps with a notional value of$408,369 thousand and a fair value of $32,620 thousand as of September 30, 2022[151] - The company reported a net loss of$25,747 thousand related to interest rate swaps for the three months ended September 30, 2022[157] Shareholder Actions - The company has repurchased approximately 22.7 million shares of common stock at an average price of $34.63 per share since the inception of the share repurchase program in 2020, with$213 million remaining under the program as of September 30, 2022[181] - Dividends paid on Series A and Series B preferred stock totaled $5.9 million and$5.0 million for the three months ended September 30, 2022, respectively[178] Strategic Initiatives - The company has established a strategy called AEL 2.0, focusing on investment management and capital structure to enhance profitability and operational efficiency[193] - The company plans to migrate to a capital-efficient business model with increased fee-like earnings and scale investments into higher returning private assets[197] - Fitch affirmed an "A-" financial strength rating for the company and revised its outlook to "stable" from "negative" on its financial strength ratings[199]