Exhibit 99.2
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement
June 30, 2016
| A. | Financial Highlights | |
| Non-GAAP Financial Measures | ||
| B. | Product Summary | |
| C. | Investment Summary | |
| D. | ||
| E. | ||
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
| June 30, 2016 | December 31, 2015 | ||||||
| Assets | |||||||
| Investments: | |||||||
| Fixed maturity securities: | |||||||
| Available for sale, at fair value | $ | 39,863,803 | $ | 36,421,839 | |||
| Held for investment, at amortized cost | 76,722 | 76,622 | |||||
| Equity securities, available for sale, at fair value | 7,813 | 7,828 | |||||
| Mortgage loans on real estate | 2,451,375 | 2,435,257 | |||||
| Derivative instruments | 576,262 | 337,256 | |||||
| Other investments | 292,776 | 291,530 | |||||
| Total investments | 43,268,751 | 39,570,332 | |||||
| Cash and cash equivalents | 1,547,041 | 397,749 | |||||
| Coinsurance deposits | 4,120,911 | 3,187,470 | |||||
| Accrued investment income | 377,393 | 362,104 | |||||
| Deferred policy acquisition costs | 2,417,192 | 2,905,136 | |||||
| Deferred sales inducements | 1,843,672 | 2,232,148 | |||||
| Deferred income taxes | — | 232,683 | |||||
| Income taxes recoverable | 35,677 | 29,599 | |||||
| Other assets | 110,691 | 112,171 | |||||
| Total assets | $ | 53,721,328 | $ | 49,029,392 | |||
| Liabilities and Stockholders' Equity | |||||||
| Liabilities: | |||||||
| Policy benefit reserves | $ | 49,432,481 | $ | 45,495,431 | |||
| Other policy funds and contract claims | 304,827 | 324,850 | |||||
| Notes payable | 393,739 | 393,227 | |||||
| Subordinated debentures | 241,650 | 241,452 | |||||
| Deferred income taxes | 99,194 | — | |||||
| Other liabilities | 636,047 | 629,897 | |||||
| Total liabilities | 51,107,938 | 47,084,857 | |||||
| Stockholders' equity: | |||||||
| Common stock | 82,279 | 81,354 | |||||
| Additional paid-in capital | 636,861 | 630,367 | |||||
| Accumulated other comprehensive income | 893,232 | 201,663 | |||||
| Retained earnings | 1,001,018 | 1,031,151 | |||||
| Total stockholders' equity | 2,613,390 | 1,944,535 | |||||
| Total liabilities and stockholders' equity | $ | 53,721,328 | $ | 49,029,392 | |||
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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Revenues: | |||||||||||||||
| Premiums and other considerations | $ | 11,458 | $ | 10,037 | $ | 18,803 | $ | 17,034 | |||||||
| Annuity product charges | 41,124 | 32,409 | 77,629 | 61,091 | |||||||||||
| Net investment income | 459,830 | 418,176 | 910,656 | 817,845 | |||||||||||
| Change in fair value of derivatives | 39,099 | (23,024 | ) | (34,966 | ) | (54,124 | ) | ||||||||
| Net realized gains (losses) on investments, excluding other than temporary impairment ("OTTI") losses | 2,737 | 4,324 | 5,424 | 9,203 | |||||||||||
| OTTI losses on investments: | |||||||||||||||
| Total OTTI losses | (762 | ) | — | (6,780 | ) | (132 | ) | ||||||||
| Portion of OTTI losses recognized in (from) other comprehensive income | (3,684 | ) | (828 | ) | (3,360 | ) | (828 | ) | |||||||
| Net OTTI losses recognized in operations | (4,446 | ) | (828 | ) | (10,140 | ) | (960 | ) | |||||||
| Total revenues | 549,802 | 441,094 | 967,406 | 850,089 | |||||||||||
| Benefits and expenses: | |||||||||||||||
| Insurance policy benefits and change in future policy benefits | 13,393 | 12,450 | 22,502 | 21,670 | |||||||||||
| Interest sensitive and index product benefits | 111,121 | 306,141 | 208,792 | 588,966 | |||||||||||
| Amortization of deferred sales inducements | 30,672 | 75,518 | 58,151 | 86,471 | |||||||||||
| Change in fair value of embedded derivatives | 284,303 | (219,601 | ) | 550,160 | (168,388 | ) | |||||||||
| Interest expense on notes payable | 6,882 | 7,354 | 13,762 | 14,693 | |||||||||||
| Interest expense on subordinated debentures | 3,206 | 3,047 | 6,374 | 6,063 | |||||||||||
| Amortization of deferred policy acquisition costs | 50,665 | 104,700 | 100,378 | 118,986 | |||||||||||
| Other operating costs and expenses | 26,823 | 24,868 | 53,653 | 45,990 | |||||||||||
| Total benefits and expenses | 527,065 | 314,477 | 1,013,772 | 714,451 | |||||||||||
| Income (loss) before income taxes | 22,737 | 126,617 | (46,366 | ) | 135,638 | ||||||||||
| Income tax expense (benefit) | 8,029 | 43,772 | (16,233 | ) | 46,890 | ||||||||||
| Net income (loss) | $ | 14,708 | $ | 82,845 | $ | (30,133 | ) | $ | 88,748 | ||||||
| Earnings (loss) per common share | $ | 0.18 | $ | 1.07 | $ | (0.37 | ) | $ | 1.15 | ||||||
| Earnings (loss) per common share - assuming dilution | $ | 0.18 | $ | 1.05 | $ | (0.37 | ) | $ | 1.12 | ||||||
| Weighted average common shares outstanding (in thousands): | |||||||||||||||
| Earnings (loss) per common share | 82,517 | 77,237 | 82,323 | 77,140 | |||||||||||
| Earnings (loss) per common share - assuming dilution | 83,184 | 79,227 | 83,073 | 79,173 | |||||||||||
Page 2
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Quarterly Summary - Most Recent 5 Quarters (Unaudited)
| Q2 2016 | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Revenues: | |||||||||||||||||||
| Traditional life insurance premiums | $ | 2,398 | $ | 2,634 | $ | 2,891 | $ | 2,664 | $ | 2,659 | |||||||||
| Life contingent immediate annuity considerations | 9,060 | 4,711 | 7,788 | 5,671 | 7,378 | ||||||||||||||
| Surrender charges | 11,997 | 14,565 | 10,543 | 13,104 | 11,413 | ||||||||||||||
| Lifetime income benefit rider fees | 29,127 | 21,940 | 26,559 | 24,871 | 20,996 | ||||||||||||||
| Net investment income | 459,830 | 450,826 | 438,262 | 436,085 | 418,176 | ||||||||||||||
| Change in fair value of derivatives | 39,099 | (74,065 | ) | 69,338 | (351,360 | ) | (23,024 | ) | |||||||||||
| Net realized gains (losses) on investments, excluding OTTI | 2,737 | 2,687 | (151 | ) | 1,159 | 4,324 | |||||||||||||
| Net OTTI losses recognized in operations | (4,446 | ) | (5,694 | ) | (13,347 | ) | (5,229 | ) | (828 | ) | |||||||||
| Total revenues | 549,802 | 417,604 | 541,883 | 126,965 | 441,094 | ||||||||||||||
| Benefits and expenses: | |||||||||||||||||||
| Traditional life insurance policy benefits and change in future policy benefits | 2,177 | 1,545 | 2,044 | 1,730 | 1,971 | ||||||||||||||
| Life contingent immediate annuity benefits and change in future policy benefits | 11,216 | 7,564 | 10,785 | 9,229 | 10,479 | ||||||||||||||
| Interest sensitive and index product benefits (b)(c) | 111,121 | 97,671 | 165,622 | 213,465 | 306,141 | ||||||||||||||
| Amortization of deferred sales inducements (a)(d) | 30,672 | 27,479 | 57,112 | 65,807 | 75,518 | ||||||||||||||
| Change in fair value of embedded derivatives | 284,303 | 265,857 | 118,414 | (414,724 | ) | (219,601 | ) | ||||||||||||
| Interest expense on notes payable | 6,882 | 6,880 | 6,873 | 7,283 | 7,354 | ||||||||||||||
| Interest expense on subordinated debentures | 3,206 | 3,168 | 3,101 | 3,075 | 3,047 | ||||||||||||||
| Amortization of deferred policy acquisition costs (a)(d) | 50,665 | 49,713 | 99,243 | 67,885 | 104,700 | ||||||||||||||
| Other operating costs and expenses | 26,823 | 26,830 | 25,731 | 24,497 | 24,868 | ||||||||||||||
| Total benefits and expenses | 527,065 | 486,707 | 488,925 | (21,753 | ) | 314,477 | |||||||||||||
| Income (loss) before income taxes | 22,737 | (69,103 | ) | 52,958 | 148,718 | 126,617 | |||||||||||||
| Income tax expense (benefit) | 8,029 | (24,262 | ) | 19,182 | 51,412 | 43,772 | |||||||||||||
| Net income (loss) (a)(b)(c)(d) | $ | 14,708 | $ | (44,841 | ) | $ | 33,776 | $ | 97,306 | $ | 82,845 | ||||||||
| Earnings (loss) per common share | $ | 0.18 | $ | (0.55 | ) | $ | 0.41 | $ | 1.22 | $ | 1.07 | ||||||||
| Earnings (loss) per common share - assuming dilution (a)(b)(c)(d) | $ | 0.18 | $ | (0.55 | ) | $ | 0.40 | $ | 1.19 | $ | 1.05 | ||||||||
| Weighted average common shares outstanding (in thousands): | |||||||||||||||||||
| Earnings (loss) per common share | 82,517 | 82,129 | 81,733 | 79,676 | 77,237 | ||||||||||||||
| Earnings (loss) per common share - assuming dilution | 83,184 | 82,961 | 83,851 | 81,559 | 79,227 | ||||||||||||||
| (a) | Q1 2016 includes expense from unlocking which increased amortization of deferred sales inducements and deferred policy acquisition costs by $17.9 million and $26.1 million, respectively, and increased the net loss and loss per common share- assuming dilution by $28.4 million and $0.35 per share, respectively. |
| (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 net income and earnings per common share-assuming dilution by $0.7 million and $0.01 per share, respectively. |
| (c) | 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. |
| (d) | Q3 2015 includes a 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. |
Page 3
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
NON-GAAP FINANCIAL MEASURES
In addition to net income (loss), 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 (loss) 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. The most significant adjustments to arrive at operating income eliminate the impact of fair value accounting for our fixed index annuity business and are not economic in nature but rather impact the timing of reported results. We believe the combined presentation and evaluation of operating income together with net income (loss) provides information that may enhance an investor’s understanding of our underlying results and profitability.
Reconciliation from Net Income (Loss) to Operating Income (Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||
| Net income (loss) | $ | 14,708 | $ | 82,845 | $ | (30,133 | ) | $ | 88,748 | ||||||
| Adjustments to arrive at operating income: (a) | |||||||||||||||
| Net realized investment (gains) losses, including OTTI | 605 | (2,556 | ) | 1,760 | (5,377 | ) | |||||||||
| Change in fair value of derivatives and embedded derivatives - index annuities | 53,129 | (44,403 | ) | 150,678 | 22,133 | ||||||||||
| Change in fair value of derivatives and embedded derivatives - debt | 768 | (1,670 | ) | 3,532 | 171 | ||||||||||
| Income taxes | (19,108 | ) | 16,729 | (54,737 | ) | (5,912 | ) | ||||||||
| Operating income (a non-GAAP financial measure) | $ | 50,102 | $ | 50,945 | $ | 71,100 | $ | 99,763 | |||||||
| Per common share - assuming dilution: | |||||||||||||||
| Net income (loss) | $ | 0.18 | $ | 1.05 | $ | (0.37 | ) | $ | 1.12 | ||||||
| Adjustments to arrive at operating income: | |||||||||||||||
| Anti-dilutive effect of net loss | — | — | 0.01 | — | |||||||||||
| Net realized investment (gains) losses, including OTTI | — | (0.04 | ) | 0.02 | (0.07 | ) | |||||||||
| Change in fair value of derivatives and embedded derivatives - index annuities | 0.64 | (0.56 | ) | 1.81 | 0.28 | ||||||||||
| Change in fair value of derivatives and embedded derivatives - debt | 0.01 | (0.02 | ) | 0.04 | — | ||||||||||
| Income taxes | (0.23 | ) | 0.21 | (0.65 | ) | (0.07 | ) | ||||||||
| Operating income (a non-GAAP financial measure) | $ | 0.60 | $ | 0.64 | $ | 0.86 | $ | 1.26 | |||||||
| (a) | Adjustments to net income (loss) to arrive at operating income are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) where applicable. |
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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
NON-GAAP FINANCIAL MEASURES
Summary of Adjustments to Arrive at Operating Income (Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| (Dollars in thousands) | |||||||||||||||
| Net realized investment gains and losses, including OTTI: | |||||||||||||||
| Net realized (gains) losses on investments, including OTTI | $ | 1,709 | $ | (3,496 | ) | $ | 4,716 | $ | (8,243 | ) | |||||
| Amortization of DAC and DSI | (1,104 | ) | 940 | (2,956 | ) | 2,866 | |||||||||
| Income taxes | (215 | ) | 907 | (625 | ) | 1,909 | |||||||||
| $ | 390 | $ | (1,649 | ) | $ | 1,135 | $ | (3,468 | ) | ||||||
| Change in fair value of derivatives and embedded derivatives: | |||||||||||||||
| Index annuities | $ | 112,740 | $ | (97,362 | ) | $ | 316,324 | $ | 66,286 | ||||||
| Interest rate caps and swap | 768 | (1,670 | ) | 3,532 | 171 | ||||||||||
| Amortization of DAC and DSI | (59,611 | ) | 52,959 | (165,646 | ) | (44,153 | ) | ||||||||
| Income taxes | (18,893 | ) | 15,822 | (54,112 | ) | (7,821 | ) | ||||||||
| $ | 35,004 | $ | (30,251 | ) | $ | 100,098 | $ | 14,483 | |||||||
Page 5
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
NON-GAAP FINANCIAL MEASURES
Quarterly Summary - Most Recent 5 Quarters (Unaudited)
Reconciliation from Net Income (Loss) to Operating Income
| Q2 2016 | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Net income (loss) | $ | 14,708 | $ | (44,841 | ) | $ | 33,776 | $ | 97,306 | $ | 82,845 | ||||||||
| Adjustments to arrive at operating income: (a) | |||||||||||||||||||
| Net realized investment (gains) losses, including OTTI | 605 | 1,155 | 8,572 | 2,542 | (2,556 | ) | |||||||||||||
Change in fair value of derivatives and embedded derivatives - index annuities | 53,129 | 97,549 | 17,221 | (83,409 | ) | (44,403 | ) | ||||||||||||
Change in fair value of derivatives and embedded derivatives - debt | 768 | 2,764 | (1,449 | ) | 2,574 | (1,670 | ) | ||||||||||||
| Income taxes | (19,108 | ) | (35,629 | ) | (7,979 | ) | 26,903 | 16,729 | |||||||||||
| Operating income (a non-GAAP financial measure) (b)(c)(d)(e) | $ | 50,102 | $ | 20,998 | $ | 50,141 | $ | 45,916 | $ | 50,945 | |||||||||
| Per common share - assuming dilution: | |||||||||||||||||||
| Net income (loss) | $ | 0.18 | $ | (0.55 | ) | $ | 0.40 | $ | 1.19 | $ | 1.05 | ||||||||
| Adjustments to arrive at operating income: | |||||||||||||||||||
| Anti-dilutive effect of net loss | — | 0.01 | — | — | — | ||||||||||||||
| Net realized investment (gains) losses, including OTTI | — | 0.01 | 0.10 | 0.03 | (0.04 | ) | |||||||||||||
| Change in fair value of derivatives and embedded derivatives - index annuities | 0.64 | 1.18 | 0.21 | (1.02 | ) | (0.56 | ) | ||||||||||||
| Change in fair value of derivatives and embedded derivatives - debt | 0.01 | 0.03 | (0.02 | ) | 0.03 | (0.02 | ) | ||||||||||||
| Income taxes | (0.23 | ) | (0.43 | ) | (0.09 | ) | 0.33 | 0.21 | |||||||||||
| Operating income (a non-GAAP financial measure) (b)(c)(d)(e) | $ | 0.60 | $ | 0.25 | $ | 0.60 | $ | 0.56 | $ | 0.64 | |||||||||
| (a) | Adjustments to net income (loss) to arrive at operating income are presented net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs where applicable. |
| (b) | Q1 2016 includes expense from unlocking which increased amortization of deferred sales inducements and deferred policy acquisition costs by $18.1 million and $26.3 million, respectively, and decreased operating income and operating income per common share- assuming dilution by $28.6 million and $0.35 per share, respectively. |
| (c) | 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. |
| (d) | 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. |
| (e) | 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. |
Page 6
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
NON-GAAP FINANCIAL MEASURES
Summary of Adjustments to Arrive at Operating Income (Unaudited)
| Q2 2016 | Q1 2016 | Q4 2015 | Q3 2015 | Q2 2015 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Net realized (gains) losses on investments | $ | (2,737 | ) | $ | (2,687 | ) | $ | 151 | $ | (1,159 | ) | $ | (4,324 | ) | |||||
| Net OTTI losses recognized in operations | 4,446 | 5,694 | 13,347 | 5,229 | 828 | ||||||||||||||
| Change in fair value of derivatives | (170,795 | ) | (59,509 | ) | (132,818 | ) | 322,406 | 116,627 | |||||||||||
| Decrease (increase) in total revenues | (169,086 | ) | (56,502 | ) | (119,320 | ) | 326,476 | 113,131 | |||||||||||
| Amortization of deferred sales inducements | 28,027 | 48,002 | (3,075 | ) | (12,644 | ) | (23,306 | ) | |||||||||||
| Change in fair value of embedded derivatives | (284,303 | ) | (265,857 | ) | (118,414 | ) | 413,583 | 215,659 | |||||||||||
| Amortization of deferred policy acquisition costs | 32,688 | 59,885 | (22,175 | ) | 3,830 | (30,593 | ) | ||||||||||||
| Increase (decrease) in total benefits and expenses | (223,588 | ) | (157,970 | ) | (143,664 | ) | 404,769 | 161,760 | |||||||||||
| Increase (decrease) in income (loss) before income taxes | 54,502 | 101,468 | 24,344 | (78,293 | ) | (48,629 | ) | ||||||||||||
| Increase (decrease) in income tax expense | 19,108 | 35,629 | 7,979 | (26,903 | ) | (16,729 | ) | ||||||||||||
| Increase (decrease) in net income (loss) | $ | 35,394 | $ | 65,839 | $ | 16,365 | $ | (51,390 | ) | $ | (31,900 | ) | |||||||
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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Capitalization/Book Value per Share
| June 30, 2016 | December 31, 2015 | ||||||
| Capitalization: | |||||||
| Notes payable | $ | 400,000 | $ | 400,000 | |||
| Subordinated debentures payable to subsidiary trusts | 246,559 | 246,450 | |||||
Total debt | 646,559 | 646,450 | |||||
| Total stockholders’ equity | 2,613,390 | 1,944,535 | |||||
| Total capitalization | 3,259,949 | 2,590,985 | |||||
| Accumulated other comprehensive income (AOCI) | (893,232 | ) | (201,663 | ) | |||
Total capitalization excluding AOCI (a) | $ | 2,366,717 | $ | 2,389,322 | |||
| Total stockholders’ equity | $ | 2,613,390 | $ | 1,944,535 | |||
| Accumulated other comprehensive income | (893,232 | ) | (201,663 | ) | |||
Total stockholders’ equity excluding AOCI (a) | $ | 1,720,158 | $ | 1,742,872 | |||
| Common shares outstanding (b) | 82,293,829 | 81,584,091 | |||||
Book Value per Share: (c) | |||||||
| Book value per share including AOCI | $ | 31.76 | $ | 23.83 | |||
| Book value per share excluding AOCI (a) | $ | 20.90 | $ | 21.36 | |||
Debt-to-Capital Ratios: (d) | |||||||
| Senior debt / Total capitalization | 16.9 | % | 16.7 | % | |||
| Adjusted debt / Total capitalization | 16.9 | % | 16.7 | % | |||
| (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: 2016 - 15,058 shares; 2015 - 230,012 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. |
Page 8
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Spread Results
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||
| 2016 | 2015 | 2016 | 2015 | ||||
| Average yield on invested assets | 4.54% | 4.78% | 4.56% | 4.76% | |||
| Aggregate cost of money | 1.92% | 1.94% | 1.92% | 1.96% | |||
| Aggregate investment spread | 2.62% | 2.84% | 2.64% | 2.80% | |||
| Impact of: | |||||||
| Investment yield - additional prepayment income | 0.04% | 0.07% | 0.06% | 0.04% | |||
| Cost of money effect of over hedging | —% | 0.07% | —% | 0.06% | |||
| Weighted average investments (in thousands) | $40,600,182 | $35,043,846 | $40,032,851 | $34,428,106 | |||
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 June 30, | Six Months Ended June 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| (Dollars in thousands) | |||||||||||||||
| Included in interest sensitive and index product benefits: | |||||||||||||||
| Index credits | $ | 8,900 | $ | 216,902 | $ | 15,431 | $ | 414,505 | |||||||
| Interest credited | 66,265 | 62,379 | 128,967 | 125,427 | |||||||||||
| Included in change in fair value of derivatives: | |||||||||||||||
| Proceeds received at option expiration | (9,308 | ) | (222,864 | ) | (16,050 | ) | (425,446 | ) | |||||||
| Pro rata amortization of option cost | 140,477 | 124,709 | 280,243 | 243,510 | |||||||||||
| Cost of money for deferred annuities | $ | 206,334 | $ | 181,126 | $ | 408,591 | $ | 357,996 | |||||||
| Weighted average liability balance outstanding (in thousands) | $ | 43,080,446 | $ | 37,294,188 | $ | 42,482,613 | $ | 36,605,612 | |||||||
Annuity Account Balance Rollforward
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| (Dollars in thousands) | |||||||||||||||
| Account balances at beginning of period | $ | 42,519,915 | $ | 36,471,034 | $ | 41,249,647 | $ | 35,363,041 | |||||||
| Net deposits | 1,497,701 | 1,719,093 | 3,126,454 | 2,921,891 | |||||||||||
| Premium bonuses | 88,533 | 125,600 | 196,207 | 219,190 | |||||||||||
| Fixed interest credited and index credits | 75,165 | 279,281 | 144,398 | 539,932 | |||||||||||
| Surrender charges | (11,997 | ) | (11,413 | ) | (26,562 | ) | (22,967 | ) | |||||||
| Lifetime income benefit rider fees | (29,127 | ) | (20,996 | ) | (51,067 | ) | (38,124 | ) | |||||||
| Surrenders, withdrawals, deaths, etc. | (499,212 | ) | (445,256 | ) | (998,099 | ) | (865,620 | ) | |||||||
| Account balances at end of period | $ | 43,640,978 | $ | 38,117,343 | $ | 43,640,978 | $ | 38,117,343 | |||||||
Page 9
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Annuity Deposits by Product Type
| Three Months Ended June 30, | Six Months Ended June 30, | Year Ended December 31, | ||||||||||||||||||
| Product Type | 2016 | 2015 | 2016 | 2015 | 2015 | |||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Fixed index annuities | $ | 1,525,546 | $ | 1,757,193 | $ | 3,213,548 | $ | 2,984,433 | $ | 6,791,689 | ||||||||||
| Annual reset fixed rate annuities | 15,866 | 13,137 | 32,571 | 24,187 | 45,182 | |||||||||||||||
| Multi-year fixed rate annuities | 550,558 | 17,715 | 935,590 | 87,217 | 214,356 | |||||||||||||||
| Single premium immediate annuities | 8,313 | 9,632 | 13,627 | 18,164 | 32,752 | |||||||||||||||
| Total before coinsurance ceded | 2,100,283 | 1,797,677 | 4,195,336 | 3,114,001 | 7,083,979 | |||||||||||||||
| Coinsurance ceded | 594,269 | 68,952 | 1,055,255 | 173,946 | 471,822 | |||||||||||||||
| Net after coinsurance ceded | $ | 1,506,014 | $ | 1,728,725 | $ | 3,140,081 | $ | 2,940,055 | $ | 6,612,157 | ||||||||||
Surrender Charge Protection and Account Values by Product Type
Annuity Surrender Charges and Net (of coinsurance) Account Values at June 30, 2016:
| Surrender Charge | Net Account Value | ||||||||||||
| Product Type | Avg. Years At Issue | Avg. Years Remaining | Avg. % Remaining | Dollars in Thousands | % | ||||||||
| Fixed Index Annuities | 13.8 | 9.2 | 14.4% | $ | 41,577,829 | 95.3 | % | ||||||
| Annual Reset Fixed Rate Annuities | 10.9 | 3.6 | 7.6% | 1,413,302 | 3.2 | % | |||||||
| Multi-Year Fixed Rate Annuities | 6.5 | 2.7 | 5.5% | 649,847 | 1.5 | % | |||||||
| Total | 13.6 | 8.9 | 14.1% | $ | 43,640,978 | 100.0 | % | ||||||
Page 10
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Annuity Liability Characteristics
Fixed Annuities Account Value | Fixed Index Annuities Account Value | ||||||
| (Dollars in thousands) | |||||||
| SURRENDER CHARGE PERCENTAGES: | |||||||
| No surrender charge | $ | 763,539 | $ | 1,491,299 | |||
| 0.0% < 2.0% | 15,564 | 668,235 | |||||
| 2.0% < 3.0% | 55,011 | 60,759 | |||||
| 3.0% < 4.0% | 23,526 | 533,157 | |||||
| 4.0% < 5.0% | 69,566 | 87,386 | |||||
| 5.0% < 6.0% | 90,792 | 453,594 | |||||
| 6.0% < 7.0% | 56,279 | 403,825 | |||||
| 7.0% < 8.0% | 72,296 | 455,659 | |||||
| 8.0% < 9.0% | 69,583 | 1,014,355 | |||||
| 9.0% < 10.0% | 288,429 | 1,692,773 | |||||
| 10.0% or greater | 558,564 | 34,716,787 | |||||
| $ | 2,063,149 | $ | 41,577,829 | ||||
Fixed and Fixed Index Annuities Account Value | Weighted Average Surrender Charge | |||||
| (Dollars in thousands) | ||||||
| SURRENDER CHARGE EXPIRATION BY YEAR: | ||||||
| Out of Surrender Charge | $ | 2,254,838 | 0.00 | % | ||
| 2016 | 396,858 | 1.68 | % | |||
| 2017 | 800,787 | 2.36 | % | |||
| 2018 | 735,123 | 4.76 | % | |||
| 2019 | 547,746 | 6.23 | % | |||
| 2020 | 908,523 | 8.14 | % | |||
| 2021 | 1,352,413 | 9.53 | % | |||
| 2022 | 2,010,431 | 11.28 | % | |||
| 2023 | 4,847,615 | 13.12 | % | |||
| 2024 | 5,389,621 | 14.26 | % | |||
| 2025 | 5,911,890 | 14.51 | % | |||
| 2026 | 3,970,687 | 15.56 | % | |||
| 2027 | 2,746,391 | 17.76 | % | |||
| 2028 | 2,443,355 | 18.35 | % | |||
| 2029 | 3,042,568 | 18.76 | % | |||
| 2030 | 2,403,846 | 19.20 | % | |||
| 2031 | 2,840,626 | 19.76 | % | |||
| 2032 | 1,023,160 | 19.99 | % | |||
| 2033 | 14,500 | 20.00 | % | |||
| $ | 43,640,978 | 14.07 | % | |||
Page 11
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
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 | $ | 933,858 | $ | 1,178,055 | |||
| › 0.0% - 0.25% | 167,658 | 54,416 | |||||
| › 0.25% - 0.5% | 375,438 | 134,007 | |||||
| › 0.5% - 1.0% | 27,867 | 751,266 | |||||
| › 1.0% - 1.5% | 1,369 | 1,728 | |||||
| › 1.5% - 2.0% | 73 | — | |||||
| › 2.0% - 2.5% | 321,105 | — | |||||
| 1.00% ultimate guarantee - 2.75% wtd avg interest rate (a) | 136,152 | 98,877 | |||||
| 1.50% ultimate guarantee - 1.34% wtd avg interest rate (a) | 98,295 | 4,570,487 | |||||
| 2.00% ultimate guarantee - 2.24% wtd avg interest rate (a) | 1,334 | — | |||||
| 2.25% ultimate guarantee - 2.3% wtd avg interest rate (a) | — | 1,272,391 | |||||
| 3.00% ultimate guarantee - 2.51% wtd avg interest rate (a) | — | 2,486,553 | |||||
| Allocated to index strategies (see tables that follow) | — | 31,030,049 | |||||
| $ | 2,063,149 | $ | 41,577,829 | ||||
| (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 June 30, 2016 for fixed annuities and funds allocated to the fixed rate strategy for fixed index annuities would decrease by 0.36%.
Page 12
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
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 | $ | 1,677 | $ | 45,773 | $ | 1,678,610 | $ | 49,023 | $ | 229,564 | |||||||||
| 1.75% - 3% | 4,144,123 | — | — | — | — | ||||||||||||||
| 3% - 4% | 2,659,836 | 58,935 | — | — | — | ||||||||||||||
| 4% - 5% | 166,504 | 167,351 | 3,757,921 | — | — | ||||||||||||||
| 5% - 6% | 330,868 | 123,226 | 1,928,791 | — | — | ||||||||||||||
| 6% - 7% | — | — | 19 | — | — | ||||||||||||||
| >= 7% | — | 16,378 | 791 | 67,172 | 15,253 | ||||||||||||||
| Annual Monthly Average and Point-to-Point with Participation Rates | |||||||||||||||
| Minimum Guaranteed Participation Rate | |||||||||||||||
| 10% | 20% - 25% | 35% | 50% + | ||||||||||||
| Current Participation Rate | (Dollars in thousands) | ||||||||||||||
| At minimum | $ | 434 | $ | 439,864 | $ | 137,912 | $ | 161,339 | |||||||
| < 20% | 374,727 | — | — | — | |||||||||||
| 20% - 40% | 749,928 | 204,375 | — | — | |||||||||||
| 40% - 60% | 484,725 | 127,593 | 94,593 | 68 | |||||||||||
| >= 60% | 4,812 | — | — | — | |||||||||||
| S&P 500 Monthly Point-to-Point - Minimum Guaranteed Monthly Cap = 1.0% | |||
| (Dollars in thousands) | |||
| Current Cap | |||
| At minimum | $ | 15,967 | |
| 1.20% - 1.40% | 3,556,534 | ||
| 1.45% - 1.70% | 2,897,692 | ||
| 1.80% - 2.00% | 2,960,461 | ||
| >= 2.10% | 1,006,720 | ||
| Volatility Control Index | |||
| (Dollars in thousands) | |||
| Current Asset Fee | |||
| At Maximum | $ | — | |
| 0.75% - 1.75% | 141,284 | ||
| 2.25% - 2.75% | 1,217,464 | ||
| 3.00% - 3.50% | 833,504 | ||
Page 13
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
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 0.59% based upon prices of options for the week ended July 26, 2016.
Page 14
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Summary of Invested Assets
| June 30, 2016 | December 31, 2015 | ||||||||||||
Carrying Amount | Percent | Carrying Amount | Percent | ||||||||||
| (Dollars in thousands) | |||||||||||||
| Fixed maturity securities: | |||||||||||||
| United States Government full faith and credit | $ | 449,439 | 1.0 | % | $ | 471,256 | 1.3 | % | |||||
| United States Government sponsored agencies | 1,380,266 | 3.2 | % | 1,398,611 | 3.5 | % | |||||||
| United States municipalities, states and territories | 3,975,544 | 9.2 | % | 3,755,367 | 9.5 | % | |||||||
| Foreign government obligations | 253,990 | 0.6 | % | 212,565 | 0.5 | % | |||||||
| Corporate securities | 26,459,838 | 61.2 | % | 23,879,016 | 60.3 | % | |||||||
| Residential mortgage backed securities | 1,392,441 | 3.2 | % | 1,462,072 | 3.7 | % | |||||||
| Commercial mortgage backed securities | 4,735,210 | 10.9 | % | 4,174,396 | 10.5 | % | |||||||
| Other asset backed securities | 1,293,797 | 3.0 | % | 1,145,178 | 2.9 | % | |||||||
| Total fixed maturity securities | 39,940,525 | 92.3 | % | 36,498,461 | 92.2 | % | |||||||
| Equity securities | 7,813 | — | % | 7,828 | — | % | |||||||
| Mortgage loans on real estate | 2,451,375 | 5.7 | % | 2,435,257 | 6.2 | % | |||||||
| Derivative instruments | 576,262 | 1.3 | % | 337,256 | 0.9 | % | |||||||
| Other investments | 292,776 | 0.7 | % | 291,530 | 0.7 | % | |||||||
| $ | 43,268,751 | 100.0 | % | $ | 39,570,332 | 100.0 | % | ||||||
Credit Quality of Fixed Maturity Securities - June 30, 2016
| NAIC Designation | Carrying Amount | Percent | Rating Agency Rating | Carrying Amount | Percent | |||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
| 1 | $ | 25,965,937 | 65.0 | % | Aaa/Aa/A | $ | 25,522,259 | 63.9 | % | |||||||
| 2 | 12,860,194 | 32.2 | % | Baa | 12,943,431 | 32.4 | % | |||||||||
| 3 | 980,322 | 2.5 | % | Ba | 819,379 | 2.1 | % | |||||||||
| 4 | 107,753 | 0.3 | % | B | 133,805 | 0.3 | % | |||||||||
| 5 | 12,180 | — | % | Caa | 74,266 | 0.2 | % | |||||||||
| 6 | 14,139 | — | % | Ca and lower | 447,385 | 1.1 | % | |||||||||
| $ | 39,940,525 | 100.0 | % | $ | 39,940,525 | 100.0 | % | |||||||||
Page 15
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Watch List Securities - June 30, 2016
| General Description | Amortized Cost | Unrealized Losses | Fair Value | Months Below Amortized Cost | ||||||||||
| (Dollars in thousands) | ||||||||||||||
| Investment grade | ||||||||||||||
| Corporate securities: | ||||||||||||||
| Financials | $ | 20,000 | $ | (2,568 | ) | $ | 17,432 | 58 | ||||||
| Other asset backed securities: | ||||||||||||||
| Financials | 2,218 | (665 | ) | 1,553 | 63 | |||||||||
| $ | 22,218 | $ | (3,233 | ) | $ | 18,985 | ||||||||
| Below investment grade | ||||||||||||||
| Corporate securities: | ||||||||||||||
| Energy | $ | 45,045 | $ | (12,718 | ) | $ | 32,327 | 22 - 38 | ||||||
| Materials | 32,749 | (9,123 | ) | 23,626 | 12 - 41 | |||||||||
| Industrials | 4,981 | (2,981 | ) | 2,000 | 20 | |||||||||
| Telecommunications | 2,171 | (1,241 | ) | 930 | 24 | |||||||||
| Other asset backed securities: | ||||||||||||||
| Financials | 4,854 | (3,176 | ) | 1,678 | 37 | |||||||||
| $ | 89,800 | $ | (29,239 | ) | $ | 60,561 | ||||||||
| $ | 112,018 | $ | (32,472 | ) | $ | 79,546 | ||||||||
Page 16
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Fixed Maturity Securities by Sector
| June 30, 2016 | December 31, 2015 | ||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
| (Dollars in thousands) | |||||||||||||||
| Available for sale: | |||||||||||||||
| United States Government full faith and credit and sponsored agencies | $ | 1,765,648 | $ | 1,829,705 | $ | 1,856,786 | $ | 1,869,867 | |||||||
| United States municipalities, states and territories | 3,459,913 | 3,975,544 | 3,422,667 | 3,755,367 | |||||||||||
| Foreign government obligations | 234,382 | 253,990 | 210,953 | 212,565 | |||||||||||
| Corporate securities: | |||||||||||||||
| Consumer discretionary | 2,076,303 | 2,239,959 | 1,983,595 | 2,012,874 | |||||||||||
| Consumer staples | 1,674,020 | 1,855,156 | 1,612,382 | 1,649,408 | |||||||||||
| Energy | 2,656,241 | 2,686,344 | 2,622,284 | 2,410,184 | |||||||||||
| Financials | 5,153,544 | 5,594,745 | 4,955,851 | 5,134,209 | |||||||||||
| Health care | 1,962,804 | 2,183,316 | 1,944,109 | 2,007,107 | |||||||||||
| Industrials | 3,410,412 | 3,706,054 | 3,236,836 | 3,295,598 | |||||||||||
| Information technology | 1,767,440 | 1,883,632 | 1,689,259 | 1,694,466 | |||||||||||
| Materials | 1,769,928 | 1,844,134 | 1,732,123 | 1,624,073 | |||||||||||
| Telecommunications | 569,091 | 610,818 | 543,689 | 547,424 | |||||||||||
| Utilities | 3,353,715 | 3,778,951 | 3,277,402 | 3,427,041 | |||||||||||
| Residential mortgage backed securities: | |||||||||||||||
| Government agency | 675,374 | 769,764 | 687,515 | 741,431 | |||||||||||
| Prime | 395,636 | 414,475 | 474,756 | 493,096 | |||||||||||
| Alt-A | 186,624 | 208,202 | 204,714 | 227,545 | |||||||||||
| Commercial mortgage backed securities: | |||||||||||||||
| Government agency | 423,594 | 461,360 | 359,273 | 370,966 | |||||||||||
| Other | 4,176,937 | 4,273,850 | 3,878,992 | 3,803,430 | |||||||||||
| Other asset backed securities: | |||||||||||||||
| Consumer discretionary | 67,777 | 67,456 | 62,852 | 61,759 | |||||||||||
| Energy | 8,072 | 8,141 | 8,143 | 9,097 | |||||||||||
| Financials | 960,620 | 970,457 | 816,906 | 821,343 | |||||||||||
| Industrials | 216,986 | 228,024 | 223,414 | 231,678 | |||||||||||
| Telecommunications | 12,696 | 13,581 | 13,789 | 14,575 | |||||||||||
| Utilities | 4,971 | 6,138 | 5,420 | 6,726 | |||||||||||
| Redeemable preferred stock - financials | — | 7 | — | 10 | |||||||||||
| $ | 36,982,728 | $ | 39,863,803 | $ | 35,823,710 | $ | 36,421,839 | ||||||||
| Held for investment: | |||||||||||||||
| Corporate security - financials | $ | 76,722 | $ | 68,542 | $ | 76,622 | $ | 65,377 | |||||||
Page 17
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
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, and industrial sectors. Our privately placed available for sale fixed maturity securities at June 30, 2016 total $176.0 million fair value ($183.7 million amortized cost) in Energy and $41.7 million fair value ($45.6 million amortized cost) in Metals & Mining and are not included in the following tables.
| June 30, 2016 | ||||||||||||||
| Sector and Subsector | Amortized Cost | Fair Value | Unrealized Gain (Loss) | Average Credit Rating | ||||||||||
| (Dollars in thousands) | ||||||||||||||
| Energy | ||||||||||||||
| Independent | $ | 499,692 | $ | 494,424 | $ | (5,268 | ) | Baa | ||||||
| Integrated | 491,459 | 521,976 | 30,517 | A | ||||||||||
| Oil field services | 405,207 | 380,973 | (24,234 | ) | Baa | |||||||||
| Refining | 104,622 | 108,976 | 4,354 | Baa | ||||||||||
| Midstream | 760,507 | 768,248 | 7,741 | Baa | ||||||||||
| Government owned no guarantee | 284,207 | 305,970 | 21,763 | A | ||||||||||
| Metals & Mining | 562,055 | 554,527 | (7,528 | ) | Baa | |||||||||
| Total Energy and Metals & Mining | $ | 3,107,749 | $ | 3,135,094 | $ | 27,345 | Baa | |||||||
| Amortized Cost at June 30, 2016 | ||||||||||||||||||||||||||||||||
| Energy | ||||||||||||||||||||||||||||||||
| NRSRO Rating | Independent | Integrated | Oil field services | Refining | Midstream | Government Owned No Guarantee | Metals & Mining | �� | Total | |||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||
| Aaa | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
| Aa | — | 228,196 | — | — | — | 19,912 | — | 248,108 | ||||||||||||||||||||||||
| A | 89,477 | 78,798 | 135,821 | 12,104 | 90,864 | 214,437 | 76,592 | 698,093 | ||||||||||||||||||||||||
| Baa | 363,984 | 149,246 | 176,218 | 92,518 | 635,624 | 25,262 | 287,890 | 1,730,742 | ||||||||||||||||||||||||
| Ba | 32,189 | 35,219 | 64,104 | — | 34,019 | — | 129,879 | 295,410 | ||||||||||||||||||||||||
| B | 14,042 | — | 29,064 | — | — | 24,596 | 54,134 | 121,836 | ||||||||||||||||||||||||
| Below B | — | — | — | — | — | — | 13,560 | 13,560 | ||||||||||||||||||||||||
| $ | 499,692 | $ | 491,459 | $ | 405,207 | $ | 104,622 | $ | 760,507 | $ | 284,207 | $ | 562,055 | $ | 3,107,749 | |||||||||||||||||
| Fair Value at June 30, 2016 | ||||||||||||||||||||||||||||||||
| Energy | ||||||||||||||||||||||||||||||||
| NRSRO Rating | Independent | Integrated | Oil field services | Refining | Midstream | Government Owned No Guarantee | Metals & Mining | Total | ||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||
| Aaa | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
| Aa | — | 250,929 | — | — | — | 22,120 | — | 273,049 | ||||||||||||||||||||||||
| A | 95,615 | 82,530 | 149,461 | 12,631 | 98,202 | 238,764 | 82,365 | 759,568 | ||||||||||||||||||||||||
| Baa | 357,636 | 155,938 | 161,209 | 96,345 | 640,424 | 25,945 | 292,484 | 1,729,981 | ||||||||||||||||||||||||
| Ba | 28,678 | 32,579 | 50,616 | — | 29,622 | — | 125,285 | 266,780 | ||||||||||||||||||||||||
| B | 12,495 | — | 19,687 | — | — | 19,141 | 40,174 | 91,497 | ||||||||||||||||||||||||
| Below B | — | — | — | — | — | — | 14,219 | 14,219 | ||||||||||||||||||||||||
| $ | 494,424 | $ | 521,976 | $ | 380,973 | $ | 108,976 | $ | 768,248 | $ | 305,970 | $ | 554,527 | $ | 3,135,094 | |||||||||||||||||
Page 18
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Mortgage Loans on Commercial Real Estate
| June 30, 2016 | December 31, 2015 | |||||||||||||
| Principal | Percent | Principal | Percent | |||||||||||
| (Dollars in thousands) | ||||||||||||||
| Geographic distribution | ||||||||||||||
| East | $ | 672,512 | 27.3 | % | $ | 698,113 | 28.5 | % | ||||||
| Middle Atlantic | 160,283 | 6.5 | % | 160,261 | 6.6 | % | ||||||||
| Mountain | 234,568 | 9.5 | % | 252,442 | 10.3 | % | ||||||||
| New England | 12,944 | 0.6 | % | 13,161 | 0.5 | % | ||||||||
| Pacific | 385,306 | 15.6 | % | 355,268 | 14.5 | % | ||||||||
| South Atlantic | 472,253 | 19.2 | % | 456,227 | 18.6 | % | ||||||||
| West North Central | 325,402 | 13.2 | % | 313,120 | 12.8 | % | ||||||||
| West South Central | 200,144 | 8.1 | % | 201,317 | 8.2 | % | ||||||||
| $ | 2,463,412 | 100.0 | % | $ | 2,449,909 | 100.0 | % | |||||||
| Property type distribution | ||||||||||||||
| Office | $ | 341,209 | 13.9 | % | $ | 396,154 | 16.2 | % | ||||||
| Medical office | 72,087 | 2.9 | % | 77,438 | 3.2 | % | ||||||||
| Retail | 815,013 | 33.1 | % | 790,158 | 32.2 | % | ||||||||
| Industrial/Warehouse | 690,503 | 28.0 | % | 686,400 | 28.0 | % | ||||||||
| Hotel | 3,255 | 0.1 | % | 3,361 | 0.1 | % | ||||||||
| Apartment | 372,459 | 15.1 | % | 352,971 | 14.4 | % | ||||||||
| Mixed use/other | 168,886 | 6.9 | % | 143,427 | 5.9 | % | ||||||||
| $ | 2,463,412 | 100.0 | % | $ | 2,449,909 | 100.0 | % | |||||||
| June 30, 2016 | December 31, 2015 | |||||||||||||
| Credit Exposure - By Payment Activity | ||||||||||||||
| Performing | $ | 2,453,915 | $ | 2,438,341 | ||||||||||
| In workout | 1,648 | 11,568 | ||||||||||||
| Delinquent | — | — | ||||||||||||
| Collateral dependent | 7,849 | — | ||||||||||||
| 2,463,412 | 2,449,909 | |||||||||||||
| Specific loan loss allowance | (4,552 | ) | (7,842 | ) | ||||||||||
| General loan loss allowance | (6,300 | ) | (6,300 | ) | ||||||||||
| Deferred prepayment fees | (1,185 | ) | (510 | ) | ||||||||||
| $ | 2,451,375 | $ | 2,435,257 | |||||||||||
Page 19
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Shareholder Information
Corporate Offices:
American Equity Investment Life Holding Company
6000 Westown Parkway
West Des Moines, IA 50266
Inquiries:
Steven Schwartz, Vice President-Investor Relations
(515) 273-3673, sschwartz@american-equity.com
Common Stock and Dividend Information:
New York Stock Exchange symbol: “AEL”
| High | Low | Close | Dividend Declared | ||||
| 2016 | |||||||
| First Quarter | $23.65 | $12.65 | $16.80 | $0.00 | |||
| Second Quarter | $16.96 | $12.77 | $14.25 | $0.00 | |||
| 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 | |||
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 Steven Schwartz, Vice President-Investor Relations, at (515) 273-3763 or by visiting our web site at www.american-equity.com.
Page 20
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - June 30, 2016
Research Analyst Coverage
Thomas Gallagher
Evercore ISI
(212) 446-9439
thomas.gallagher@evercoreisi.com
Randy Binner
Friedman, Billings, Ramsey & Co., Inc.
(703) 312-1890
rbinner@fbr.com
Pablo Singzon II
JP Morgan
(212) 622-2295
pablo.s.singzon@jpmorgan.com
C. Gregory Peters
Raymond James & Associates, Inc.
(727) 567-1534
greg.peters@raymondjames.com
Kenneth S. Lee
RBC Capital Markets, LLC
(212) 905-5995
kenneth.s.lee@rbccm.com
John Barnidge
Sandler O'Neill & Partners, L.P.
(312) 281-3412
jbarnidge@sandleroneill.com
Mark Hughes
SunTrust Robinson Humphrey
(404) 926-5072
mark_hughes@rhco.com
Page 21