Ameriprise Financial Reports First Quarter 2022 Results

Ameriprise Financial, Inc. (NYSE: AMP):

Ameriprise increased its quarterly dividend 11 percent to $1.25 per share

Current year GAAP results included $10 million of integration costs from the acquisition of BMO EMEA. Prior year GAAP results were negatively impacted by market changes that affected the valuation of derivatives.

Adjusted operating results in the prior year included $36 million after tax from favorable long term care results, primarily from COVID-related mortality and terminations. Excluding long term care favorability in the prior year, adjusted operating results increased 11 percent and adjusted operating EPS grew 16 percent. In addition, adjusted operating earnings in the current quarter included a higher effective tax rate of 17.3 percent compared to a year ago of 14.9 percent.

Advice & Wealth Management financial results reflected robust client net flows, market appreciation, increased bank profitability and disciplined expense management. Adjusted operating net revenues grew 9 percent to $2.0 billion and pretax adjusted operating earnings increased 13 percent to $440 million. Pretax adjusted operating margin was 21.5 percent, up 80 basis points, reflecting our strategic focus on profitable growth.

Distribution expenses were up 9 percent associated with robust organic growth. General and administrative and other expense increased 4 percent, primarily from higher volume-related expense and business growth over the past year.

Total client assets grew 8 percent to $823 billion. Total client flows were $10.4 billion in the quarter from substantial organic growth across our advisor network, including increased new client acquisition and deeper client relationships from existing clients, as well as experienced advisor recruiting. Greater market volatility in the quarter contributed to 6 percent lower transactional activity and higher cash balances. Cash balances increased $5.3 billion to $45.7 billion, contrary to normal seasonal patterns in the first quarter, with an opportunity for clients to put cash back to work in the future as volatility subsides.

Adjusted operating net revenue per advisor on a trailing 12-month basis was $810,000, up 18 percent, from enhanced productivity and business growth. Total advisors increased 1 percent to 10,149, reflecting excellent advisor retention, as well as the addition of 80 highly productive experienced advisors in the quarter.

Asset Management financial results reflected the cumulative benefit of net inflows and business growth, strong performance fees, the BMO EMEA acquisition and market appreciation. Adjusted operating revenues grew to $1.0 billion, up 23 percent and pretax adjusted operating earnings increased 25 percent to $285 million. Net pretax adjusted operating margin was 41.5 percent.

Distribution expense increased 3 percent primarily from equity market appreciation. General and administrative and other expense grew 37 percent, driven by the addition of the recently acquired business from BMO and elevated performance fee compensation.

Total assets under management increased 24 percent to $699 billion reflecting the cumulative benefit of net inflows and the acquisition of BMO EMEA. Long term investment performance remained strong with more than 80% of funds above median on an asset-weighted basis over 3-, 5- and 10-year time periods across equity, fixed income and asset allocation strategies.

In the quarter, net outflows were $0.7 billion and included $0.7 billion of outflows related to legacy insurance partners. Institutional flows remained strong, offset by industry headwinds in retail.

• Retail net outflows were $1.9 billion. North America outflows in equity and fixed income strategies were consistent with the industry and were influenced by market volatility. In EMEA, investor sentiment is risk off as a result of higher interest rates and geopolitical strain, which drove net outflows. These were partially offset by inflows related to U.S. clients that elected to transfer assets as part of an arrangement with BMO.
• Global institutional net inflows were $1.9 billion.

Retirement & Protection Solutions pretax adjusted operating earnings were $191 million, up 4 percent from last year due to market appreciation and lower distribution expenses. Overall claims remain within expected ranges.

Retirement & Protection Solutions sales decreased 25 percent to $1.1 billion.

• Protection sales increased 22 percent to $72 million, reflecting a continued shift of sales to higher-margin accumulation VUL products.
• Variable annuity sales decreased 27 percent to $1.0 billion reflecting the industry slowdown due to market dislocation in the quarter, as well as the discontinuation of sales with living benefit riders announced at year-end.

Total Corporate & Other pretax adjusted operating loss was $76 million.

Corporate & Other, excluding Closed Blocks, pretax adjusted operating loss was in line with expectations at $72 million. Results in the prior year period included a $15 million gain on a strategic investment.

Long Term Care pretax adjusted operating earnings were $1 million. Pretax adjusted operating earnings in the prior year period were $46 million reflecting higher terminations, primarily related to COVID-19.

Fixed Annuities pretax adjusted operating loss was $5 million.

Taxes

The operating effective tax rate was 17.3 percent for the first quarter reflecting favorable share based accounting benefits and we expect the full year operating effective tax rate to be above 19 percent. In the prior year, the operating effective tax rate was 14.9 percent in quarter and 17.6 percent for the full year.

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 over 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, BMO Asset Management Limited, LGM Investments Limited, and Pyrford International Ltd, are SEC- and FCA-registered investment adviser affiliates 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 to lower-risk products, including the exit from variable annuities with living benefit riders;
• 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;
• statements estimating the expected full year operating effective tax rate and
• 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,” “expands” 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, 2021 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 period ended March 31, 2022.

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.