American Equity Investment Life pany(AEL) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenues for Q1 2024 reached $989.96 million, a significant increase from$662.55 million in Q1 2023, representing a growth of approximately 49.2%[18] - Net income available to American Equity Investment Life Holding Company common stockholders for Q1 2024 was $332.08 million, compared to a net loss of$166.91 million in Q1 2023[18] - Earnings per common share for Q1 2024 were $4.20, a substantial improvement from a loss of$2.00 per share in the same quarter last year[18] - Net income for the three months ended March 31, 2024, was $342,645, compared to a net loss of$155,891 for the same period in 2023, representing a significant turnaround[22] - Comprehensive income for the period was $132,582, down from$553,910 in the prior year, primarily due to a decrease in other comprehensive income[22] Assets and Liabilities - Total assets increased to $80.78 billion as of March 31, 2024, up from$79.92 billion at the end of 2023, reflecting a growth of approximately 1.1%[14] - Total liabilities rose to $77.61 billion as of March 31, 2024, compared to$76.87 billion at the end of 2023, indicating an increase of about 0.9%[14] - Total stockholders' equity increased to $3,171,573 as of March 31, 2024, up from$3,047,774 at the end of 2023, reflecting positive net income and share-based compensation[26] Investment Income and Cash Flow - The company reported a net investment income of $554.74 million for Q1 2024, slightly down from$561.32 million in Q1 2023[18] - The company reported net cash provided by operating activities of $1,070,006 for the three months ended March 31, 2024, compared to$865,043 for the same period in 2023, indicating improved operational efficiency[30] - The company’s cash and cash equivalents increased to $13.50 billion in Q1 2024, up from$9.77 billion in Q4 2023, marking a growth of approximately 38.0%[10] Derivatives and Fair Value - The change in fair value of derivatives for Q1 2024 was a gain of $409.77 million, compared to a gain of$45.89 million in Q1 2023, showing a significant improvement[18] - The change in fair value of embedded derivatives resulted in a gain of $162,202 for the period, contrasting with a gain of$404,440 in the same period last year[30] - The fair value hierarchy categorizes financial instruments into three levels, with Level 1 representing quoted prices in active markets[43] Policy Benefits and Reserves - Policy benefit reserves stood at $60.98 billion as of March 31, 2024, compared to$60.90 billion at the end of 2023, reflecting a marginal increase[14] - The liability for future policy benefits decreased from $303,200 thousand as of December 31, 2023, to$293,943 thousand as of March 31, 2024, reflecting a reduction of approximately 3.9%[175] - The net liability for future policy benefits, after reinsurance recoverable, decreased from $323,159 thousand at the end of 2023 to$313,609 thousand at the end of Q1 2024, a reduction of approximately 2.3%[175] Market Risk and Credit Losses - The total balance of market risk benefits decreased from $2,606,673 thousand as of December 31, 2023, to$2,539,221 thousand as of March 31, 2024, a decline of approximately 2.6%[182] - The company has a policy to identify securities that could potentially have credit loss, involving ongoing monitoring of market events[103] - The allowance for credit losses was $3.5 million as of March 31, 2024, and$4.0 million as of December 31, 2023[96] Mortgage Loans and Performance - The total principal outstanding for commercial mortgage loans was $3.480 billion as of March 31, 2024, down from$3.550 billion at December 31, 2023, representing a decrease of approximately 2%[116] - The carrying value of residential mortgage loans was $3.253 billion as of March 31, 2024, compared to$3.433 billion at December 31, 2023, indicating a decrease of about 5.2%[116] - The company closely monitors loan performance across commercial, agricultural, and residential mortgage loan portfolios[137] Changes in Accounting Standards - The company adopted new accounting standards for troubled debt restructurings and vintage disclosures effective January 1, 2023, with no material impact on financial statements[38] - The company implemented targeted improvements to the accounting for long-duration insurance contracts effective January 1, 2023, enhancing measurement models and disclosure requirements[39]