This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

American Equity Reports Third Quarter 2012 Results

American Equity Investment Life Holding Company (NYSE: AEL), a leading underwriter of index and fixed rate annuities, today reported third quarter 2012 operating income 1 of $22.2 million, or $0.34 per diluted common share, compared to third quarter 2011 operating income of $41.5 million, or $0.67 per diluted common share. Operating income for the third quarter of 2012 was impacted by revisions to assumptions utilized in the determination of deferred policy acquisition costs, deferred sales inducements and the liability for future benefits to be paid under the living income benefit rider which reduced operating income by $4.9 million or $0.07 per diluted common share. Operating income for the third quarter of 2011 was impacted by similar assumption revisions which increased operating income by $12.5 million or $0.20 per diluted common share.

Highlights for the third quarter of 2012 include:

  • Annuity sales for the third quarter of 2012 were $982 million (before coinsurance) compared to second quarter 2012 annuity sales of $917 million (before coinsurance).
  • Total invested assets grew to $26.0 billion (amortized cost basis = $23.4 billion).
  • Investment spread for the third quarter of 2012 was 2.62% compared to 2.70% for the second quarter of 2012.
  • Estimated risk-based capital (RBC) ratio at September 30, 2012 based upon trailing twelve months annuity sales remained above target at 336%.

SPREAD RESULT IMPACTED BY CASH

American Equity’s investment spread for the third quarter of 2012 continued to be affected by the impact of holding excess cash during the quarter. The average excess cash balance for the third quarter of 2012 was $1.7 billion compared to $1.4 billion and $759 million for the second and first quarters of 2012. The foregone investment income from holding such excess cash balance is estimated at 0.29% for the third quarter of 2012 compared to 0.27% and 0.14% for the second and first quarters of 2012. The excess cash balance is primarily attributable to calls of U.S. Government agency and other securities which totaled $3.8 billion in the first nine months of 2012 with an average yield of 5.31%. The high level of excess cash may persist for several more quarters as the Company holds $932 million of U.S. Government agency securities with coupon rates of 4.00% or higher that are expected to be called in the fourth quarter of 2012 and another $949 million of such securities that are callable in the first six months of 2013.

1 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs