Ameriprise Financial Reports First Quarter 2021 Results

Rhea-AI Summary

Ameriprise Financial reported a strong Q1 2021, with adjusted operating earnings per diluted share of $5.43, a 27% increase compared to the previous year, despite a 79% drop in GAAP net income to $3.58 per share. Revenue hit $3.3 billion, marking a 10% increase driven by robust client inflows exceeding $14 billion. The company also raised its quarterly dividend by 9% to $1.13 per share. The acquisition of BMO’s EMEA asset management business for $845 million enhances growth opportunities.

Positive

• Adjusted operating earnings per diluted share increased by 27% to $5.43.
• Quarterly revenue grew by 10% year-over-year to $3.3 billion.
• Achieved record assets under management of $1.14 trillion, a 36% increase.
• Total client net inflows exceeded $14 billion during the quarter.
• Raised quarterly dividend by 9% to $1.13 per share.
• Acquisition of BMO’s EMEA asset management business for $845 million expands market presence.

Negative

• GAAP net income per diluted share decreased by 77% to $3.58.
• GAAP earnings impacted by market changes affecting valuation of derivatives.
• Adjusted operating earnings down 4% year-over-year.

Ameriprise Financial, Inc. (NYSE: AMP):

Earnings Per Diluted Share			Return on Equity, ex AOCI (1)
	Q1 2021			Q1 2021
GAAP	$3.58		GAAP	(1.1)%
Adjusted Operating	$5.43		Adjusted Operating	29.9%

Ameriprise increased its quarterly dividend 9 percent to $1.13 per share

First quarter adjusted operating earnings per diluted share was $5.43. The prior year period included a tax benefit from a projected net operating loss (NOL) of $1.12 per diluted share. Excluding this impact, adjusted operating EPS increased 27 percent from $4.29 reflecting strong business growth.		Perspective from Jim Cracchiolo, Chairman and Chief Executive Officer
		“Ameriprise delivered an excellent first quarter, building on our momentum from 2020. We continue to execute our strategy well, invest for business growth and deliver meaningful results. And, as economies reopen globally and activity increases, there's a large and growing opportunity to help more consumers and institutions achieve their goals.   “Our priority is to deliver a differentiated client experience and reach more people through our leading advice value proposition at Ameriprise, as well as through the broad capabilities and perspective at Columbia Threadneedle. This consistent focus is resulting in strong organic growth, including generating more than $14 billion of client net inflows in the quarter.   “As we recently announced, we will be complementing our growth with the strategic acquisition of BMO’s EMEA asset management business. This will increase Columbia Threadneedle’s presence in the European institutional market and expand our investment capabilities and solutions to meet growing client demand.   “With our consistent level of free-cash flow generation and financial strength, we were again able to increase our dividend another 9 percent – our 17th increase over the past 16 years – use cash for the acquisition and ensure our capital return plans are on track, all while maintaining our strong financial foundation.”
First quarter GAAP net income per diluted share was $3.58, which was negatively impacted by market changes that affected the valuation of derivatives. In the prior year period, the severe market dislocation, steep interest rate reduction and credit spread widening related to COVID-19 resulted in a substantial increase in GAAP results. See details on page 2.
Adjusted operating net revenue was $3.3 billion, a 10 percent increase from strong organic growth, an excellent result in the face of significant headwinds from low short-term interest rates.
General and administrative expenses were well managed in light of business growth, up 7 percent. Excluding the impact of share price appreciation on compensation expense, G&A was up 2 percent.
Assets under management and administration were up 36 percent to $1.14 trillion, a record high from strong client flows in Wealth and Asset Management, as well as market appreciation.
The company continues to generate strong organic growth, with more than $14 billion of client net inflows from Advice & Wealth Management and Asset Management.
The advisor network grew to 10,031 with 93 new experienced advisors joining the company in the quarter.
Investment performance at Columbia Threadneedle Investments remains excellent with 103 funds with 4- and 5-star Morningstar ratings.
The company returned $491 million of capital to shareholders in the quarter and announced a 9 percent increase in its quarterly dividend to $1.13 per share.
On April 12, Ameriprise announced the acquisition of BMO’s EMEA Asset Management business for approximately $845 million in cash. This acquisition expands key capabilities in attractive and growing market segments where BMO EMEA Asset Management has leading positions.
(1) Return on equity excluding AOCI is calculated on a trailing 12-month basis.

As indicated, the severe market dislocation and steep interest rate reduction in the first quarter of 2020 related to COVID-19 distorted the company’s prior year GAAP and operating results. This included a tax benefit in the year ago quarter from a projected net operating loss (NOL) that was not ultimately realized.

Ameriprise Financial, Inc.
First Quarter Summary
	Quarter Ended March 31,								% Over/ (Under)
(in millions, except per share amounts, unaudited)	2021				2020
GAAP net income	$	437			$	2,036			(79)%
Adjusted operating earnings (see reconciliation on p. 25)	$	663			$	694			(4)%
Adjusted operating earnings excluding Net Operating Loss (NOL) tax benefit (see reconciliation on p. 25)	$	663			$	550			21%
GAAP net income per diluted share (1)	$	3.58			$	15.88			(77)%
Adjusted operating earnings per diluted share (see reconciliation on p. 25)	$	5.43			$	5.41			-
Adjusted operating earnings per diluted share excluding Net Operating Loss (NOL) tax benefit (see reconciliation on p. 25) (2)	$	5.43			$	4.29			27%
GAAP Return on Equity, ex. AOCI	(1.1		)	%	59.5			%
Adjusted Operating Return on Equity, ex. AOCI	29.9			%	39.7			%
Weighted average common shares outstanding:
Basic	119.8				126.4
Diluted	122.2				128.2
(1) GAAP EPS of $3.58, a reduction of 77 percent. Primarily driven by the prior year quarter, which was positively impacted by the significant change in the company’s credit spread and valuation of derivatives used to hedge the company’s variable annuity living benefit guarantees due to severe market dislocation. Current year quarter results were negatively impacted by market changes that affected the valuation of derivatives.
(2) Adjusted operating earnings per diluted share excluding net operating loss (NOL) tax benefit of $5.43, up 27 percent. The significant equity market dislocation in the prior year period created a tax benefit of $1.12 per diluted share associated with the utilization of a NOL that was ultimately not utilized.

Ameriprise Financial, Inc.
Advice & Wealth Management Segment Adjusted Operating Results
	Quarter Ended March 31,						% Over/ (Under)	Adjusted(1) % Over/ (Under)
(in millions, unaudited)	2021			2020
Net revenues	$	1,879		$	1,695		11%	16%
Distribution expenses	1,135			970			(17)%	(17)%
G&A / other expense	355			347			(2)%	(2)%
Pretax adjusted operating earnings	$	389		$	378		3%	30%
Pretax adjusted operating margin	20.7		%	22.3		%	(160) bps	215 bps
(1) Adjusted for $78 million impact from interest rates. See reconciliation on page 28.

	Quarter Ended March 31,					% Over/ (Under)
(in billions, unless otherwise noted)	2021			2020
Total client assets	$	762		$	560	36%
Total client net flows (1)	$	9.3		$	7.7	21%
Wrap net flows (1)	$	10.4		$	6.7	55%
AWM cash balance	$	40.4		$	40.0	1%
Average gross yield on cash balances (in bps)	65			172
Adjusted operating net revenue per advisor (TTM in thousands)	$	689		$	680	1%
Adjusted for interest rates (2)	$	689		$	640	8%
(1) See definition on page 12.
(2) Adjusted for impact from interest rates. See reconciliation on page 28.

Advice & Wealth Management pretax adjusted operating earnings were $389 million, driven by strong flows, higher transactional activity and strong expense management. Excluding the impact from the decline in short-term interest rates of $78 million, adjusted operating earnings increased 30 percent and pretax adjusted operating margin increased 215 basis points. On a sequential basis, pretax operating earnings increased 11 percent and pretax adjusted operating margin expanded 90 basis points.

Adjusted operating net revenues were $1.9 billion, reflecting strong net flows and market appreciation. Excluding the decline in short-term interest rates, revenues increased 16 percent. On a sequential basis, revenues increased 6 percent from strong flows and market appreciation, partially offset by fewer fee days in the current quarter.

Total expenses were $1.5 billion. General and administrative expense was well managed and increased 2 percent, which was in line with expectations based upon the cost associated with increased activity and the impact of share price appreciation on compensation expense.

Total client assets grew 36 percent to $762 billion, with continued strong total client flows of $9.3 billion in the quarter. The company’s ability to meet client needs efficiently and effectively is translating into excellent organic growth. Advisor productivity remains high with a 55 percent increase in flows in the investment advisory business and a 12 percent increase in transactional activity. Wrap net flows reached a record $10.4 billion. Cash balances remain elevated at $40.4 billion with a substantial opportunity for clients to put cash back to work in the future.

Adjusted operating net revenue per advisor on a trailing 12-month basis was $689,000. Excluding the decline in short-term interest rates, adjusted net revenue per advisor increased 8 percent. Total advisors were 10,031 from a combination of high advisor retention and the addition of 93 experienced advisors in the quarter.

Ameriprise Financial, Inc.
Asset Management Segment Adjusted Operating Results
	Quarter Ended March 31,								% Over/ (Under)
(in millions, unaudited)	2021				2020
Net revenues	$	828			$	686			21%
Distribution expenses	268				231				(16)%
G&A / other expenses	332				298				(11)%
Pretax adjusted operating earnings	$	228			$	157			45%
Net pretax adjusted operating margin (1)	43.9			%	37.9			%
	Quarter Ended March 31,								% Over/ (Under)
(in billions)	2021				2020
Total segment AUM	$	564			$	426			32%
Net Flows
Global Retail net flows	$	4.6			$	(2.9	)		NM
Global Institutional net flows, ex. legacy insurance partners flows	1.6				1.1				45%
Legacy insurance partners flows	(1.3		)		(0.6		)		NM
Total segment net flows	$	4.9			$	(2.4	)		NM
Model delivery AUA Flows (2)	$	0.3			$	0.1			NM
(1) See reconciliation on page 13.
(2) Estimated based on the period to period change in assets less calculated performance based on strategy returns on a one-quarter lag.
NM Not Meaningful - variance equal to or greater than 100%

Asset Management pretax adjusted operating earnings were $228 million, up 45 percent, reflecting our investment engine, which is driving revenue growth through consistent investment performance and compelling thought leadership leading to increased customer engagement. The prior year quarter included an unfavorable performance fee adjustment. The net pretax adjusted operating margin was 43.9 percent.

Adjusted operating revenues increased 21 percent to $828 million from the cumulative benefit of inflows, a favorable mix shift and higher equity markets. The overall fee rate remained strong at 52 basis points.

Adjusted operating expenses increased 13 percent. General and administrative expenses grew 12 percent driven primarily from higher compensation expense related to stronger business performance and Ameriprise share price appreciation compared to last year, as well as the costs associated with increased activity levels.

Total assets under management increased 32 percent reflecting higher equity markets and net inflows. Investment performance remained strong across equity, fixed income and asset-allocation strategies.

In the quarter, net inflows were $4.9 billion, an improvement of $7.3 billion from a year ago. Excluding legacy insurance partners outflows, net inflows were $6.2 billion, reflecting a continuation of positive flow trends across multiple distribution channels and strategies.

• Retail net inflows were $4.6 billion. Net inflows in North America were $4.8 billion with notable inflows in the broker-dealer channel partially offset by modest outflows in EMEA.
• Global institutional net inflows were $1.6 billion, with gross sales across multiple strategies.

Ameriprise Financial, Inc.
Retirement & Protection Solutions Segment (1) Adjusted Operating Results
	Quarter Ended March 31,							% Over/ (Under)
(in millions, unaudited)	2021				2020
Net revenues	$	787			$	759		4%
Expenses	604				592			(2)%
Pretax adjusted operating earnings	$	183			$	167		10%

Retirement & Protection Solutions pretax adjusted operating earnings increased 10 percent to $183 million. Results were strong from market appreciation, partially offset by higher claims versus an abnormally low level in the year ago period. Overall claims remain within expected ranges.

Retirement sales increased 30 percent year-over-year to $1.5 billion. Retirement sales without living benefit guarantees represented 64 percent of variable annuity sales, driven by our lower-risk structured product, as well as our RAVA 5 product without living benefit guarantees. This sales shift is having a gradual impact on our inforce block, with account values with living benefit riders down nearly 2 percentage points year-over-year to 63 percent. This sales trend is expected to continue and meaningfully shift the mix of the business over time to lower-risk products that do not have living benefit guarantees. Annuity net amount at risk as a percent of account values was de minimis at 0.4 percent for living benefits and 0.1 percent for death benefits, which management believes is one of the lowest among major variable annuity writers, reflecting the high quality of the book.

Sales of protection products were flat to a year ago with a product mix shift that is consistent with our focused approach. Sales of higher-margin accumulation VUL products increased more than 75 percent and sales shifted away from indexed UL products as expected given pricing changes that reflect the low interest rate environment.

(1) Retirement & Protection Solutions segment includes Retirement Solutions (Variable Annuities and Payout Annuities) and Protection Solutions (Life and Disability Insurance). Fixed Annuities moved to the Corporate & Other segment in Q3 2020 as a closed block. Prior periods have been restated.

Ameriprise Financial, Inc.
Corporate & Other Segment (1) Adjusted Operating Results
	Quarter Ended March 31,							% Over/ (Under)
(in millions, unaudited)	2021				2020
Corporate & Other, excluding Closed Blocks	$	(63	)		$	(52	)	(21)%
Closed Blocks (2)	42				2			NM
Pretax adjusted operating earnings	$	(21	)		$	(50	)	58%
Long Term Care	$	46			$	2		NM
Fixed Annuities	(4		)		—			-
Closed Blocks pretax adjusted operating earnings	$	42			$	2		NM
(1) Fixed Annuities was moved into the Corporate & Other segment as a closed block. Prior periods have been restated.
(2) Long Term Care and Fixed Annuities.
NM Not Meaningful - variance equal to or greater than 100%

Total Corporate & Other pretax adjusted operating loss was $21 million, a $29 million improvement from the prior year.

Corporate & Other, excluding Closed Blocks, pretax adjusted operating loss was $63 million. Results in the quarter included $11 million of higher compensation expense related to the impact of Ameriprise share price appreciation and $15 million from a strategic investment gain. The year ago quarter included an $11 million benefit from Ameriprise share price depreciation.

Long Term Care pretax adjusted operating earnings were $46 million from higher mortality and terminations, primarily related to COVID-19, which had a decreasing impact as we moved through the quarter.

Fixed Annuities pretax adjusted operating loss was $4 million from narrowed spreads related to continued low interest rates.

Taxes

The operating effective tax rate was 14.9 percent for the first quarter. The full year operating effective tax rate is expected to be approximately 17 percent.

About Ameriprise Financial

At Ameriprise Financial, we have been helping people feel confident about their financial future for more than 125 years. With extensive advisory, asset management and insurance capabilities and a nationwide network of approximately 10,000 financial advisors, we have the strength and expertise to serve the full range of individual and institutional investors' financial needs. For more information, or to find an Ameriprise financial advisor, visit ameriprise.com.

Ameriprise Financial Services, LLC offers financial planning services, investments, insurance and annuity products. Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA and managed by Columbia Management Investment Advisers, LLC. Threadneedle International Limited is an SEC- and FCA-registered investment adviser affiliate of Columbia Management Investment Advisers, LLC based in the U.K. RiverSource insurance and annuity products are issued by RiverSource Life Insurance Company, and in New York only by RiverSource Life Insurance Co. of New York, Albany, New York. Only RiverSource Life Insurance Co. of New York is authorized to sell insurance and annuity products in the state of New York. These companies are all part of Ameriprise Financial, Inc. CA License #0684538. RiverSource Distributors, Inc. (Distributor), Member FINRA.

Non-GAAP Financial Measures

The company believes the presentation of adjusted operating earnings and other non-GAAP financial measures, and the corresponding ratios, best represents the underlying performance of our core operations and facilitates a more meaningful trend analysis without the distortion of various adjustment items. Management uses non-GAAP financial measures to evaluate our financial performance on a basis comparable to that used by some securities analysts and investors and to provide a valuable perspective for investors. These non-GAAP financial measures are taken into consideration, to varying degrees, for purposes of business planning and analysis and for certain compensation-related matters. Non-GAAP financial measures are intended to supplement investors’ understanding of our performance and should not be considered alternatives for financial measures presented in accordance with GAAP. These measures are discussed in more detail below and may not be comparable to other companies’ similarly titled non-GAAP financial measures. Non-GAAP financial measure reconciliations can be found on the subsequent pages.

Forward-Looking Statements

This news release contains forward-looking statements that reflect management’s plans, estimates and beliefs. Actual results could differ materially from those described in these forward-looking statements. Examples of such forward-looking statements include:

• statements of the company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, general and administrative costs, consolidated tax rate, return of capital to shareholders, and excess capital position and financial flexibility to capture additional growth opportunities;
• statements about the expected trend in the shift of the retirement product sales business to lower risk products without living benefit guarantees over time;
• other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and
• statements estimating the expected full year operating effective tax rate;
• statements of assumptions underlying such statements.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on track,” “project,” ”continue,” “able to remain”, “resume,” “deliver,” “develop,” “evolve,” “drive,” ”enable,” “flexibility,” “scenario, “case,” “appear” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from such statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Management cautions readers to carefully consider the risks described in the “Risk Factors” discussion under Part 1, Item 1A of and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2020, Part 1, Item 1A available at ir.ameriprise.com. Management undertakes no obligation to update publicly or revise any forward-looking statements.

The financial results discussed in this news release represent past performance only, which may not be used to predict or project future results. The financial results and values presented in this news release are based upon asset valuations that represent estimates as of the date of this news release and may be revised in the company’s Form 10-Q for the quarter ended March 31, 2021.

Ameriprise Financial announces financial and other information to investors through the company’s investor relations website at ir.ameriprise.com, as well as SEC filings, press releases, public conference calls and webcasts. Investors and others interested in the company are encouraged to visit the investor relations website from time to time, as information is updated and new information is posted. The website also allows users to sign up for automatic notifications in the event new materials are posted. The information found on the website is not incorporated by reference into this release or in any other report or document the company furnishes or files with the SEC.

Ameriprise Financial, Inc.
Consolidated GAAP Results
(in millions, except per share amounts, unaudited)	1 Qtr 2021				1 Qtr 2020			% Over/ (Under)	4 Qtr 2020			% Over/ (Under)
Revenues
Management and financial advice fees	$	2,102			$	1,770		19%	$	2,003		5%
Distribution fees	458				464			(1)%	422			9%
Net investment income	377				328			15%	318			19%
Premiums, policy and contract charges	347				395			(12)%	375			(7)%
Other revenues	71				69			3%	71			-
Total revenues	3,355				3,026			11%	3,189			5%
Banking and deposit interest expense	5				25			80%	6			17%
Total net revenues	3,350				3,001			12%	3,183			5%
Expenses
Distribution expenses	1,175				995			(18)%	1,096			(7)%
Interest credited to fixed accounts	159				91			(75)%	121			(31)%
Benefits, claims, losses and settlement expenses	653				(1,747		)	NM	982			34%
Amortization of deferred acquisition costs	5				512			99%	(72		)	NM
Interest and debt expense	42				46			9%	38			(11)%
General and administrative expense	823				753			(9)%	828			1%
Total expenses	2,857				650			NM	2,993			5%
Pretax income	493				2,351			(79)%	190			NM
Income tax provision	56				315			82%	13			NM
Net income	$	437			$	2,036		(79)%	$	177		NM
Earnings per share
Basic earnings per share	$	3.65			$	16.11			$	1.46
Earnings per diluted share	$	3.58			$	15.88			$	1.43
Weighted average common shares outstanding
Basic	119.8				126.4				120.9
Diluted	122.2				128.2				123.4
NM Not Meaningful - variance equal to or greater than 100%

Ameriprise Financial, Inc.
Consolidated Highlights and Capital Summary
(in millions unless otherwise noted, unaudited)	1 Qtr 2021				1 Qtr 2020			% Over/ (Under)	4 Qtr 2020			% Over/ (Under)
Assets Under Management and Administration
Advice & Wealth Management AUM	$	396,533			$	273,072		45%	$	376,811		5%
Asset Management AUM	564,131				426,163			32%	546,613			3%
Corporate AUM	97				48			NM	82			18%
Eliminations	(39,655		)		(27,923		)	{ "@context": "https://schema.org", "@type": "FAQPage", "name": "Ameriprise Financial Reports First Quarter 2021 Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What were Ameriprise Financial's Q1 2021 earnings results?", "acceptedAnswer": { "@type": "Answer", "text": "Ameriprise reported adjusted operating earnings per diluted share of $5.43 for Q1 2021, up 27% year-over-year." } }, { "@type": "Question", "name": "How much did Ameriprise Financial increase its dividend in 2021?", "acceptedAnswer": { "@type": "Answer", "text": "Ameriprise increased its quarterly dividend by 9% to $1.13 per share." } }, { "@type": "Question", "name": "What was the revenue for Ameriprise Financial in Q1 2021?", "acceptedAnswer": { "@type": "Answer", "text": "The revenue for Q1 2021 was $3.3 billion, a 10% increase from the previous year." } }, { "@type": "Question", "name": "What acquisition did Ameriprise Financial announce in April 2021?", "acceptedAnswer": { "@type": "Answer", "text": "Ameriprise announced the acquisition of BMO’s EMEA asset management business for approximately $845 million." } }, { "@type": "Question", "name": "How did Ameriprise Financial's assets under management change in Q1 2021?", "acceptedAnswer": { "@type": "Answer", "text": "Assets under management rose by 36% to a record high of $1.14 trillion." } } ] } FAQ What were Ameriprise Financial's Q1 2021 earnings results? Ameriprise reported adjusted operating earnings per diluted share of $5.43 for Q1 2021, up 27% year-over-year. How much did Ameriprise Financial increase its dividend in 2021? Ameriprise increased its quarterly dividend by 9% to $1.13 per share. What was the revenue for Ameriprise Financial in Q1 2021? The revenue for Q1 2021 was $3.3 billion, a 10% increase from the previous year. What acquisition did Ameriprise Financial announce in April 2021? Ameriprise announced the acquisition of BMO’s EMEA asset management business for approximately $845 million. How did Ameriprise Financial's assets under management change in Q1 2021? Assets under management rose by 36% to a record high of $1.14 trillion. Ameriprise Financial, Inc. NYSE:AMP AMP Rankings #254 Ranked by Market Cap #1778 Ranked by Dividends AMP Latest News Nov 21, 2024 Growth Resources Draw Advisor with $110 Million to Ameriprise Financial from LPL Nov 19, 2024 Tri-Continental Corporation Declares Fourth Quarter Distribution Nov 14, 2024 AM Best Affirms Credit Ratings of Ameriprise Financial, Inc. and Its Subsidiaries Nov 13, 2024 Ameriprise Financial and Feeding America® Join Forces to Help Provide Meals This Holiday Season Nov 11, 2024 Sophisticated Resources to Support High-Net-Worth Clients Draws Advisor with $100 Million to Ameriprise Team AMP Stock Data Market Cap 55.64B Float 96.83M Insiders Ownership 0.17% Institutions Ownership 87.25% Short Percent 1.16% Industry Asset Management Sector Investment Advice Website Link Country United States of America City MINNEAPOLIS Explore About Rhea-AI Sitemap Legal Terms of Use Cookie Notice Privacy Policy Links RSS feed Patreon Discord Server Facebook Reddit Google News © 2020-2024 StockTitan.net