American Equity Investment Life pany(AEL) - 2025 Q3 - Quarterly Results

Financial Performance - GAAP net income for Q3 2025 was $208 million, a 48% increase from Q2 2025 and a 170% increase year-over-year[3] - Distributable operating earnings for Q3 2025 reached $354 million, reflecting a 14% quarter-over-quarter increase and a 30% increase year-to-date compared to 2024[3] - Net investment income for Q3 2025 was $1,285 million, an 11% increase from Q2 2025 and a 25% increase year-over-year[7] - Total net investment income for Q3 2025 reached $1,285 million, a 4% increase quarter-over-quarter and a 26% increase year-over-year[29] - The cost of funds for Q3 2025 was $899 million, reflecting a 4% increase from Q2 2025 and a 46% increase from Q3 2024[31] Assets and Liabilities - Total assets as of September 30, 2025, amounted to $130,559 million, representing a 3% increase from Q2 2025 and a 6% increase year-over-year[3] - Total liabilities increased to $119,578 million, a 3% rise from Q2 2025 and a 5% increase year-to-date[3] - Total equity grew to $10,981 million, marking a 7% increase from Q2 2025 and a 10% increase year-over-year[3] - Total investments as of September 30, 2025, amounted to $89,728 million, an increase of $1,448 million from December 31, 2024[14] Annuity and Investment Performance - Annuity investment spread for the twelve months ended September 30, 2025, was reported at 1.7%[3] - Gross annuity sales for Q3 2025 totaled $4,854 million, representing a 13% increase from Q2 2025 and a 17% increase year-over-year[33] - Total net annuity sales for the year-to-date 2025 reached $12,914 million, a 44% increase compared to the same period in 2024[33] - The yield on net invested assets was reported at 6.0% for the twelve months ended September 30, 2025[29] Operating Expenses and Claims - Policyholder benefits and claims incurred for Q3 2025 totaled $527 million, a 36% decrease from Q2 2025 and a 38% decrease year-over-year[7] - Operating expenses for Q3 2025 were $156 million, down 28% from Q2 2025 and down 32% year-over-year[7] Equity and Stockholder Information - Total common stockholders' equity stood at $10,393 million, accounting for 79% of total capitalization[27] - The total adjusted common stockholders' equity increased by 3% from Q2 2025, reaching $10,292 million[10] - The total equity, excluding accumulated other comprehensive income and non-controlling interests, was $9,626 million, representing 72% of total equity[27] Investment Quality and Risk - The company maintains a strong financial strength rating of 'A' from AM Best and Standard & Poor's across its insurance subsidiaries as of September 30, 2025[25] - The carrying value of fixed maturities, available-for-sale, at fair value was $52,529 million, accounting for 59% of total investments[15] - The company reported that over 95% of available-for-sale fixed maturity U.S. treasury and government securities are rated NAIC 1 or 2, indicating high credit quality[17] Non-Performing Loans and Mortgage Information - Non-performing commercial mortgage loans rose to $205 million, representing 2% of total commercial mortgage loans as of September 30, 2025, compared to 1% or $117 million at December 31, 2024[20] - The average loan-to-value (LTV) ratio for commercial mortgage loans increased to 51% as of September 30, 2025, from 49% at December 31, 2024[22] - Total commercial mortgage loans, net of coinsurance funds withheld investments, decreased to $8,388 million as of September 30, 2025, down from $9,382 million at December 31, 2024, a decline of 10.6%[22] Definitions and Non-GAAP Measures - Distributable Operating Earnings (DOE) is a non-GAAP measure used to assess operating results, defined as net income after applicable taxes, excluding depreciation and amortization, with a focus on ongoing performance[44] - Total adjusted common stockholder's equity excludes the impact of AOCI and certain adjustments related to mark-to-market gains and losses, providing a clearer view of equity attributable to American National Group Inc.[46] - Non-GAAP net investment income adjusts GAAP net investment income by excluding non-annuity segments and including mark-to-market gains/losses, enhancing understanding of investment performance[47] - Annuity cost of funds includes liability costs related to fixed deferred and indexed annuities, providing insight into the underlying profitability drivers of the business[48]