Ameriprise Financial, Inc. (NYSE: AMP) today reported record third quarter 2013 results. Net income (1) in the quarter was $381 million, or $1.86 per diluted share, up from $174 million, or $0.79 per diluted share, a year ago. Operating earnings increased 36 percent to a record $392 million compared to $289 million a year ago, and operating earnings per diluted share increased 45 percent to $1.91.
Operating net revenues increased 7 percent to $2.7 billion. Adjusting for the exit of bank operations last year, revenues were up 8 percent. Revenue growth was driven by robust client net inflows, increased client activity and market appreciation. Higher asset levels and improved advisor productivity more than offset the impact of low interest rates.
Operating expenses increased 1 percent to $2.1 billion reflecting increased volume-related distribution expense offset by lower amortization of deferred acquisition costs (DAC) from the company’s annual review of insurance and annuity valuation assumptions and modeling changes (unlocking). The company’s ongoing expense discipline resulted in general and administrative expenses remaining essentially flat compared to a year ago even after normalizing for former banking operations.
Operating earnings growth was strong and reflected fee-based business growth and ongoing expense discipline. In addition, operating earnings included a non-cash benefit from unlocking in the current period compared to an unfavorable unlocking impact a year ago.Return on shareholders’ equity excluding accumulated other comprehensive income (AOCI) was 18.2 percent for the 12 months ended September 30, 2013. Operating return on equity excluding AOCI reached a record 19.4 percent at quarter end, a 400 basis point increase from a year ago. The company continues to return capital to shareholders while maintaining a strong financial foundation. In the quarter, a total of $475 million was returned to shareholders through share repurchases and dividends. During the past four quarters,129 percent of operating earnings was returned to shareholders.