UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

~~UNITED STATES~~

~~SECURITIES AND EXCHANGE COMMISSION~~

~~WASHINGTON, D.C. 20549~~

~~FORM 10-Q~~

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR ~~15(D)~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~For the Quarterly Period Ended~~ ~~September 30, 2017~~

For the Quarterly Period Ended

March 31, 2022

oOR

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TRANSITION REPORT PURSUANT TO SECTION 13 OR ~~15(D)~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from_______________________to_______________________

~~For the Transition Period from _________________________ to _________________________~~

~~Commission File No. 811-00002~~

~~AMERIPRISE CERTIFICATE COMPANY~~

~~(Exact name of registrant as specified in its charter)~~


Commission File No.			811-00002


AMERIPRISE CERTIFICATE COMPANY
(Exact name of registrant as specified in its charter)

Delaware

41-6009975

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1099 Ameriprise Financial Center

Minneapolis

Minnesota

55474

(Address of principal executive offices)

(Zip Code)

~~Registrant’s telephone number, including area code:~~ ~~(612) 671-3131~~

~~Former name, former address and former fiscal year, if changed since last report:~~ ~~Not Applicable~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.~~Yes~~ xNo o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ~~Yes~~ xNo o

Registrant’s telephone number, including area code:

(612)

671-3131

Former name, former address and former fiscal year, if changed since last report:

Not Applicable

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filero

☐

Accelerated Filer

☐

Non-accelerated Filer

☒

Smaller reporting companyo

~~Non-Accelerated Filer~~x

☐

Emerging growth companyo

☐


~~Accelerated Filer~~o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o			☐

~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).~~ ~~Yes~~ oNo x

~~Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.~~

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Outstanding at ~~November 1, 2017~~May 2, 2022

Common ~~Shares~~Stock (par value $10 per share)

150,000 shares

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

~~THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (H)(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.~~

AMERIPRISE CERTIFICATE COMPANY

FORM 10-Q

INDEX


Part I. Financial Information
Item 1. Financial Statements (Unaudited)			3
	Consolidated Statements of Operations — Three months ended March 31, 2022 and 2021		3
	Consolidated Statements of Comprehensive Income — Three months ended March 31, 2022 and 2021		4
	Consolidated Balance Sheets — March 31, 2022 and December 31, 2021		5
	Consolidated Statements of Shareholder's Equity — Three months ended March 31, 2022 and 2021		6
	Consolidated Statements of Cash Flows — Three months ended March 31, 2022 and 2021		7
	Notes to Consolidated Financial Statements		8
	1.	Basis of Presentation	8
	2.	Recent Accounting Pronouncements	8
	3.	Investments	8
	4.	Financing Receivables	12
	5.	Fair Values of Assets and Liabilities	14
	6.	Offsetting Assets and Liabilities	18
	7.	Derivatives and Hedging Activities	19
	8.	Contingencies	20
	9.	Shareholder’s Equity	21
	10.	Income Taxes	21
Item 2. Management’s Narrative Analysis			22
Item 4. Controls and Procedures			23

Part II. Other Information			24
Item 1. Legal Proceedings			24
Item 1A. Risk Factors			24
Item 6. Exhibits			24
Signatures			25

AMERIPRISE CERTIFICATE COMPANY

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


	Three Months Ended March 31,
		2022			2021
			(in thousands)
Investment income			$	14,428		$	20,996
Investment expenses			6,145			7,902
Net investment income before provision for certificate reserves and income taxes			8,283			13,094
Net provision for certificate reserves			1,331			3,740
Net investment income before income taxes			6,952			9,354
Income tax expense			1,727			2,403
Net investment income, after-tax			5,225			6,951

Net realized gain (loss) on investments before income taxes			18			1,462
Income tax expense (benefit)			4			307
Net realized gain (loss) on investments, after-tax			14			1,155
Net income			$	5,239		$	8,106
See Notes to Consolidated Financial Statements.

AMERIPRISE CERTIFICATE COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended March 31,
		2022			2021
			(in thousands)
Net income			$	5,239		$	8,106
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period			(39,913)			2,596
Reclassification of net (gains) losses on securities included in net income			(1)			(612)
Total other comprehensive income (loss), net of tax			(39,914)			1,984
Total comprehensive income (loss)			$	(34,675)		$	10,090
See Notes to Consolidated Financial Statements.

AMERIPRISE CERTIFICATE COMPANY

CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	March 31, 2022		December 31, 2021
	(in thousands, except share data)
Assets
Qualified Assets
Cash and cash equivalents	$	489,996	$	689,792
Investments in unaffiliated issuers (allowance for credit losses: 2022, $1,494; 2021, $1,518)	4,990,128		4,950,463
Receivables	10,092		10,482
Derivative assets	22,232		44,135
Total qualified assets	5,512,448		5,694,872
Deferred taxes, net	7,729		—
Taxes receivable from parent	—		50
Due from related party	15		23
Total assets	$	5,520,192	$	5,694,945

Liabilities and Shareholder’s Equity
Liabilities
Certificate reserves	$	5,197,420	$	5,300,489
Deferred taxes, net	—		4,557
Taxes payable to parent	1,445		373
Derivative liabilities	20,625		41,470
Payables to brokers, dealers and clearing organizations	190		7,862
Due to related party	1,812		1,958
Accrued expenses and other liabilities	24,645		18,206
Total liabilities	5,246,137		5,374,915

Shareholder’s Equity
Common shares ($10 par value, 150,000 shares authorized and issued)	1,500		1,500
Additional paid-in capital	295,667		302,709
Retained earnings	1,066		85
Accumulated other comprehensive income (loss), net of tax	(24,178)		15,736
Total shareholder’s equity	274,055		320,030
Total liabilities and shareholder’s equity	$	5,520,192	$	5,694,945


See Notes to Consolidated Financial Statements.

AMERIPRISE CERTIFICATE COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY (UNAUDITED)

Number of Outstanding Shares

Common Shares

Additional Paid-In Capital

Retained Earnings

Accumulated Other
Comprehensive Income (Loss), Net of Tax

Total

Appropriated for Pre-Declared Additional Credits and Interest

Appropriated for Additional Interest on Advance Payments

Un-appropriated

(in thousands, except share data)

~~Part I. Financial Information~~

~~Item 1. Financial Statements (Unaudited)~~

~~Consolidated Statements of Operations — Three months and nine months ended September 30, 2017 and 2016~~

~~Consolidated Statements of Comprehensive Income — Three months and nine months ended September 30, 2017 and 2016~~

~~Consolidated Balance Sheets — September 30, 2017 and December 31, 2016~~

~~Consolidated Statements of Shareholder's Equity — Nine months ended September 30, 2017 and 2016~~

~~Consolidated Statements of Cash Flows — Nine months ended September 30, 2017 and 2016~~

~~Notes to Consolidated Financial Statements~~

~~1. Basis of Presentation~~

~~2. Recent Accounting Pronouncements~~

~~3. Investments~~

~~4. Commercial Mortgage, Syndicated and Certificate Loans~~

~~5. Fair Values of Assets and Liabilities~~

~~6. Offsetting Assets and Liabilities~~

~~7. Derivatives and Hedging Activities~~

~~8. Contingencies~~

~~9. Shareholder’s Equity~~

~~10. Income Taxes~~

~~Item 2. Management’s Narrative Analysis~~

~~Item 4. Controls and Procedures~~

~~Part II. Other Information~~

~~Item 1. Legal Proceedings~~

~~Item 1A. Risk Factors~~

~~Item 6. Exhibits~~

~~Signatures~~


Balance, January 1, 2021	150,000	$	1,500	$	341,700	$	21	$	15	$	44,812	$	32,696	$	420,744


Net income	—	—		—		—		—		8,106		—		8,106
Other comprehensive income (loss), net of tax	—	—		—		—		—		—		1,984		1,984

Transfer to unappropriated from appropriated	—	—		—		(10)		—		10		—		—
Dividend to parent	—	—		—		—		—		(27,000)		—		(27,000)

Balance, March 31, 2021	150,000	$	1,500	$	341,700	$	11	$	15	$	25,928	$	34,680	$	403,834

Balance, January 1, 2022	150,000	$	1,500	$	302,709	$	—	$	15	$	70	$	15,736	$	320,030


Net income	—	—		—		—		—		5,239		—		5,239
Other comprehensive income (loss), net of tax	—	—		—		—		—		—		(39,914)		(39,914)


Dividend to parent	—	—		—		—		—		(4,258)		—		(4,258)
Return of capital to parent	—	—		(7,042)		—		—		—		—		(7,042)

Balance, March 31, 2022	150,000	$	1,500	$	295,667	$	—	$	15	$	1,051	$	(24,178)	$	274,055
See Notes to Consolidated Financial Statements.

AMERIPRISE CERTIFICATE COMPANY

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)~~

~~CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in thousands)
Investment income $ 37,890
$ 29,130
$ 106,014
$ 85,065
Investment expenses 9,489
8,308
27,913
24,143
Net investment income before provision for certificate reserves and income taxes 28,401
20,822
78,101
60,922
Net provision for certificate reserves 11,701
11,505
32,403
27,706
Net investment income before income taxes 16,700
9,317
45,698
33,216
Income tax expense 5,479
3,344
16,225
11,550
Net investment income, after-tax 11,221
5,973
29,473
21,666

Net realized gain (loss) on investments before income taxes (43 ) 1,031
8,854
62
Income tax expense (benefit) (15 ) 360
3,099
21
Net realized gain (loss) on investments, after-tax (28 ) 671
5,755
41
Net income $ 11,193
$ 6,644
$ 35,228
$ 21,707

Supplemental Disclosures:
Total other-than-temporary impairment losses on securities $ —
$ —
$ —
$ —
Portion of loss recognized in other comprehensive income (loss) (before taxes) —
(1 ) (193 ) (71 )
Net impairment losses recognized in net realized gain (loss) on investments $ —
$ (1 ) $ (193 ) $ (71 )
See Notes to Consolidated Financial Statements.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in thousands)
Net income $ 11,193
$ 6,644
$ 35,228
$ 21,707
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities:
Net unrealized securities gains (losses) arising during the period 587
4,631
16,110
22,812
Reclassification of net securities (gains) losses included in net income 37
(671 ) (5,742 ) (41 )
Total other comprehensive income (loss), net of tax 624
3,960
10,368
22,771
Total comprehensive income $ 11,817
$ 10,604
$ 45,596
$ 44,478
See Notes to Consolidated Financial Statements.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~CONSOLIDATED BALANCE SHEETS (UNAUDITED)~~

September 30,
2017 December 31,
2016
(in thousands, except share amounts)
Assets
Qualified Assets
Cash and cash equivalents $ 190,333
$ 134,189
Investments in unaffiliated issuers 6,605,184
6,134,674
Receivables 37,846
29,775
Derivative assets 45,538
45,098
Total qualified assets 6,878,901
6,343,736
Deferred taxes, net 45
492
Total assets $ 6,878,946
$ 6,344,228

Liabilities and Shareholder's Equity
Liabilities
Certificate reserves $ 6,373,076
$ 5,935,051
Taxes payable to parent 6,183
3,505
Derivative liabilities 38,819
38,319
Payable for investment securities purchased 58,275
6,969
Due to related party and other liabilities 31,205
34,592
Total liabilities 6,507,558
6,018,436

Shareholder's Equity
Common shares ($10 par value, 150,000 shares authorized and issued) 1,500
1,500
Additional paid-in capital 252,517
247,517
Total retained earnings 112,168
81,940
Accumulated other comprehensive income (loss), net of tax 5,203
(5,165 )
Total shareholder's equity 371,388
325,792
Total liabilities and shareholder's equity $ 6,878,946
$ 6,344,228
See Notes to Consolidated Financial Statements.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY (UNAUDITED)~~

Number of Outstanding Shares Common Shares Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss), Net of Tax Total
Appropriated for
Pre-Declared Additional Credits and Interest
Appropriated for Additional Interest on Advance Payments Un-appropriated
(in thousands, except share data)
Balance at January 1, 2016 150,000 $ 1,500 $ 214,517 $ 8 $ 15 $ 53,590 $ (18,808 ) $ 250,822
Comprehensive income:
Net income — — — — — 21,707 — 21,707
Other comprehensive income (loss), net of tax — — — — — — 22,771 22,771
Total comprehensive income 44,478
Transfer from appropriated to unappropriated — — — (8 ) — 8 — —
Receipt of capital from parent — — 25,000 — — — — 25,000
Balance at September 30, 2016 150,000 $ 1,500 $ 239,517 $ — $ 15 $ 75,305 $ 3,963 $ 320,300

Balance at January 1, 2017 150,000 $ 1,500 $ 247,517 $ — $ 15 $ 81,925 $ (5,165 ) $ 325,792
Comprehensive income:
Net income — — — — — 35,228 — 35,228
Other comprehensive income (loss), net of tax — — — — — — 10,368 10,368
Total comprehensive income 45,596
Dividend to parent — — — — — (5,000 ) — (5,000 )
Receipt of capital from parent — — 5,000 — — — — 5,000
Balance at September 30, 2017 150,000 $ 1,500 $ 252,517 $ — $ 15 $ 112,153 $ 5,203 $ 371,388
See Notes to Consolidated Financial Statements.

~~AMERIPRISE CERTIFICATE COMPANY~~

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Cash Flows from Operating Activities
Net income	$	5,239	$	8,106
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of premiums, accretion of discounts, net	396		409

Net realized (gain) loss on Available-for-Sale securities	(1)		(774)
Other net realized (gain) loss	6		31
Provision for credit losses	(24)		(720)
Changes in operating assets and liabilities:
Dividends and interest receivable	(89)		1,583
Certificate reserves, net	(1,065)		(996)
Deferred taxes, net	316		728
Taxes payable to/receivable from parent, net	1,122		1,786
Derivatives, net of collateral	(32)		76
Other liabilities	7,529		10,402
Other receivables	46		108


Other, net	(136)		1,402
Net cash provided by (used in) operating activities	13,307		22,141

Cash Flows from Investing Activities
Available-for-Sale securities:

Maturities, redemptions, calls and other	1,022,546		1,350,911
Purchases	(1,131,208)		(920,810)
Syndicated loans and commercial mortgage loans:
Sales, maturities and repayments	8,864		12,699
Purchases and fundings	—		(3,806)



Certificate loans, net	(1)		65
Net cash provided by (used in) investing activities	(99,799)		439,059

Cash Flows from Financing Activities
Payments from certificate holders and other additions	733,156		722,804
Certificate maturities and cash surrenders	(835,160)		(1,224,312)

Dividend to parent	(4,258)		(27,000)
Return of capital to parent	(7,042)		—
Net cash provided by (used in) financing activities	(113,304)		(528,508)

Net increase (decrease) in cash and cash equivalents	(199,796)		(67,308)
Cash and cash equivalents at beginning of period	689,792		562,652
Cash and cash equivalents at end of period	$	489,996	$	495,344

Supplemental disclosures including non-cash transactions:
Cash paid (received) for income taxes	$	183	$	310
Cash paid for interest	2,483		5,545
See Notes to Consolidated Financial Statements.

Nine Months Ended September 30,
2017 2016
(in thousands)
Cash Flows from Operating Activities
Net income $ 35,228
$ 21,707
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of premiums, accretion of discounts, net 16,714
17,622
Deferred income tax expense (benefit) (50 ) (27 )
Net realized (gain) loss on Available-for-Sale securities (9,026 ) (133 )
Other net realized (gain) loss (21 ) —
Other-than-temporary impairments and provision for loan loss 193
71
Changes in operating assets and liabilities:
Dividends and interest receivable (4,418 ) (4,707 )
Certificate reserves, net 1,258
3,986
Deferred taxes, net (5,583 ) (12,261 )
Taxes payable to/receivable from parent, net 2,678
4,000
Derivatives, net of collateral (809 ) (87 )
Other liabilities (2,782 ) 3,398
Other receivables (25 ) (12 )
Other, net 277
(36 )
Net cash provided by (used in) operating activities 33,634
33,521

Cash Flows from Investing Activities
Available-for-Sale securities:
Sales 90,498
7,036
Maturities, redemptions and calls 1,495,221
1,173,295
Purchases (1,987,024 ) (2,017,710 )
Syndicated loans, commercial mortgage loans and real estate owned:
Sales, maturities and repayments 32,423
46,331
Purchases and fundings (45,447 ) (17,085 )
Certificate loans, net 72
146
Net cash provided by (used in) investing activities (414,257 ) (807,987 )

Cash Flows from Financing Activities
Payments from certificate holders and other additions 3,594,855
3,183,717
Certificate maturities and cash surrenders (3,158,088 ) (2,376,283 )
Capital contribution from parent 5,000
25,000
Dividend to parent (5,000 ) —
Net cash provided by (used in) financing activities 436,767
832,434

Net increase (decrease) in cash and cash equivalents 56,144
57,968
Cash and cash equivalents at beginning of period 134,189
137,557
Cash and cash equivalents at end of period $ 190,333
$ 195,525

Supplemental disclosures including non-cash transactions:
Cash paid for income taxes $ 13,359
$ 17,827
Cash paid for interest 34,815
25,413
See Notes to Consolidated Financial Statements.

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

Ameriprise Certificate Company (“ACC”), is a wholly owned subsidiary of Ameriprise Financial, Inc. (“Ameriprise Financial” or the “Parent”). ACC is registered as an investment company under the Investment Company Act of 1940. The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). ACC uses the consolidation method of accounting for its wholly owned subsidiary, Investors Syndicate Development Corp. The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods have been made. All adjustments made were of a normal recurring nature. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Annual Report on Form 10-K of ACC for the year ended December 31, ~~2016,~~2021, filed with the Securities and Exchange Commission (“SEC”) on February ~~23, 2017~~25, 2022 (“~~2016~~2021 10-K”).

ACC evaluated events or transactions that occurred after the ~~consolidated~~ balance sheet date for potential recognition or disclosure through the date the ~~consolidated~~ financial statements were issued. No subsequent events or transactions requiring recognition or disclosure were identified.

2. Recent Accounting Pronouncements

Future Adoption of New Accounting Standards

~~Statement of Cash Flows - Classification of Certain Cash Receipts~~Financial Instruments – Credit Losses – Troubled Debt Restructurings and ~~Cash Payments~~Vintage Disclosures

In ~~August 2016,~~March 2022, the Financial Accounting Standards Board (“FASB”) ~~updated~~proposed amendments to Accounting Standard Update No. 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (“Topic 326”). The update removes the ~~accounting standards related to classification of~~recognition and measurement guidance for Troubled Debt Restructurings (“TDRs”) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, and modifies the disclosure requirements for certain ~~cash receipts~~loan refinancing and ~~cash payments on~~restructuring by creditors when a borrower is experiencing financial difficulty. Rather than applying the ~~statement of cash flows because current standards lacked sufficient~~recognition and measurement for TDRs, an entity must apply the loan refinancing and restructuring guidance to ~~consistently classify cash payments and receipts.~~determine whether a modification results in a new loan or a continuation of an existing loan. The update ~~includes~~also requires entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The amendments ~~addressing~~are to be applied prospectively, but entities may apply a modified retrospective transition for changes to the ~~classification~~recognition and measurement of ~~eight specific cash flow issues. The standard is~~TDRs. For entities that have adopted Topic 326, the amendments are effective for interim and annual periods beginning after December 15, ~~2017.~~2022. Early adoption is permitted ~~and all amendments must be~~for entities that have adopted ~~during the same~~Topic 326, including adoption in an interim period. ~~ACC early adopted the standard for the interim period ended March 31, 2017 on a retrospective basis.~~ The adoption of the standard ~~did~~is not expected to have a material impact on the ~~ACC’s consolidated statements of cash flows.~~

~~Future Adoption of New Accounting Standards~~

~~Derivatives and Hedging – Targeted Improvements to Accounting for Hedging Activities~~

In August 2017, the FASB updated the accounting standards to amend the hedge accounting recognition and presentation requirements. The objectives of the update are to better align the financial reporting of hedging relationships to the economic results of an entity’s risk management activities and simplify the application of the hedge accounting guidance. The update also adds new disclosures and amends existing disclosure requirements. The standard is effective for interim and annual periods beginning after December 15, 2018, and should be applied on a modified retrospective basis. Early adoption is permitted. ACC is currently evaluating the impact of the standard on itsCompany’s consolidated results of operations and financial condition.

~~Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory~~

In October 2016, the FASB updated the accounting standards related to the recognition of income tax impacts on intra-entity transfers. The update requires entities to recognize the income tax consequences of intra-entity transfers, other than inventory, upon the transfer of the asset. The update requires the selling entity to recognize a current tax expense or benefit and the purchasing entity to recognize a deferred tax asset or liability when the transfer occurs. The standard is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. ACC is currently evaluating the impact of the standard on its consolidated results of operations and financial condition.3. Investments

~~Financial Instruments - Measurement of Credit Losses~~Investments in unaffiliated issuers were as follows:

In June 2016, the FASB updated the accounting standards related to accounting for credit losses on certain types of financial instruments. The update replaces the current incurred loss model for estimating credit losses with a new model that requires an entity to estimate the credit losses expected over the life of the asset. Generally, the initial estimate of the expected credit losses and subsequent changes in the estimate will be reported in current period earnings and recorded through an allowance for credit losses on the balance sheet. The current credit loss model for Available-for-Sale debt securities does not change; however, the credit loss calculation and subsequent recoveries are required to be recorded through an allowance. The standard is effective for interim and annual periods beginning after December 15, 2019. Early adoption will be permitted for interim and annual periods beginning after December 15, 2018. A modified retrospective cumulative adjustment to retained earnings should be recorded as of the first reporting period in which the guidance is effective for loans, receivables, and other financial instruments subject to the new expected credit loss model. Prospective adoption is required for establishing an allowance related to Available-for-Sale debt securities, certain beneficial interests, and financial assets purchased with a more-than-insignificant amount of credit deterioration since origination. ACC is currently evaluating the impact of the standard on its consolidated results of operations and financial condition.


	March 31, 2022		December 31, 2021
	(in thousands)
Available-for-Sale securities: Fixed maturities, at fair value (allowance for credit losses: 2022 and 2021, nil; amortized cost: 2022, $4,810,888; 2021, $4,710,303)	$	4,776,881	$	4,728,811
Commercial mortgage loans and syndicated loans, at cost (allowance for credit losses: 2022, $1,494; 2021, $1,518; fair value: 2022, $209,506; 2021, $223,495)	213,163		221,569

Certificate loans — secured by certificate reserves, at cost, which approximates fair value	84		83
Total	$	4,990,128	$	4,950,463

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

~~Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities~~

In January 2016, the FASB updated the accounting standards on the recognition and measurement of financial instruments. The update requires entities to carry marketable equity securities, excluding investments in securities that qualify for the equity method of accounting, at fair value with changes in fair value reflected in net income each reporting period. The update affects other aspects of accounting for equity instruments, as well as the accounting for financial liabilities utilizing the fair value option. The update eliminates the requirement to disclose the methods and assumptions used to estimate the fair value of financial assets or liabilities held at cost on the balance sheet and requires entities to use the exit price notion when measuring the fair value of financial instruments. The standard is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted for certain provisions. Generally, the update should be applied using a modified retrospective approach by recording a cumulative-effect adjustment to equity at the beginning of the period of adoption. The update is not expected to have a material impact on ACC’s consolidated statement of financial condition. During periods in which the market value of equity securities materially changes, ACC may experience volatility in investment income recognized in its consolidated results of operations.

~~3. Investments~~

~~Investments in unaffiliated issuers were as follows:~~

September 30,
2017 December 31,
2016
(in thousands)
Available-for-Sale securities:
Fixed maturities, at fair value (amortized cost: 2017, $6,404,740; 2016, $5,966,057) $ 6,409,626
$ 5,953,701
Common stocks, at fair value (cost: 2017, $2,238; 2016, $2,448) 5,606
6,609
Commercial mortgage loans and syndicated loans, at cost (less allowance for loan losses: 2017, $3,283; 2016, $3,283; fair value: 2017, $190,941; 2016, $176,211) 189,475
173,815
Certificate loans — secured by certificate reserves, at cost, which approximates fair value 477
549
Total $ 6,605,184
$ 6,134,674

Available-for-Sale securities distributed by type were as follows:


Description of Securities	March 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Residential mortgage backed securities	$	1,834,982	$	4,665	$	(29,865)		$	1,809,782
Corporate debt securities	90,882		206		(401)			90,687
Commercial mortgage backed securities	1,218,797		429		(7,587)			1,211,639
Asset backed securities	495,698		2,271		(2,947)			495,022
State and municipal obligations	11,953		22		(177)			11,798
U.S. government and agency obligations	1,158,576		36		(659)			1,157,953
Total	$	4,810,888	$	7,629	$	(41,636)		$	4,776,881

Description of Securities September 30, 2017
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Noncredit OTTI⁽¹⁾
(in thousands)
Residential mortgage backed securities $ 3,308,646 $ 11,956 $ (9,870 ) $ 3,310,732 $ —
Corporate debt securities 1,485,293 3,035 (2,003 ) 1,486,325 3
Commercial mortgage backed securities 758,495 1,497 (2,057 ) 757,935 —
Asset backed securities 789,850 3,901 (1,766 ) 791,985 —
State and municipal obligations 62,245 250 (103 ) 62,392 —
U.S. government and agencies obligations 211 46 — 257 —
Common stocks 2,238 3,546 (178 ) 5,606 2,917
Total $ 6,406,978 $ 24,231 $ (15,977 ) $ 6,415,232 $ 2,920

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Description of Securities December 31, 2016
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Noncredit OTTI ⁽¹⁾
(in thousands)
Residential mortgage backed securities $ 3,192,055 $ 13,075 $ (21,731 ) $ 3,183,399 $ 209
Corporate debt securities 1,595,907 3,358 (4,188 ) 1,595,077 3
Commercial mortgage backed securities 500,170 1,348 (1,646 ) 499,872 —
Asset backed securities 629,277 1,357 (4,211 ) 626,423 —
State and municipal obligations 48,272 345 (107 ) 48,510 —
U.S. government and agencies obligations 376 44 — 420 —
Common stocks 2,448 4,384 (223 ) 6,609 2,668
Total $ 5,968,505 $ 23,911 $ (32,106 ) $ 5,960,310 $ 2,880

⁽¹⁾ Represents the amount of other-than-temporary impairment (“OTTI”) losses in accumulated other comprehensive income (loss). Amount includes unrealized gains and losses on impaired securities subsequent to the initial impairment measurement date. These amounts are included in gross unrealized gains and losses as of the end of the period.


Description of Securities	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Residential mortgage backed securities	$	1,680,371	$	15,708	$	(2,531)	$	1,693,548
Corporate debt securities	51,201		849		—		52,050
Commercial mortgage backed securities	1,164,516		2,449		(1,036)		1,165,929
Asset backed securities	502,328		3,265		(333)		505,260
State and municipal obligations	11,954		94		(4)		12,044
U.S. government and agency obligations	1,299,933		64		(17)		1,299,980
Total	$	4,710,303	$	22,429	$	(3,921)	$	4,728,811

As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, accrued interest of $4.5 million and $4.2 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities in the tables above and is recorded in Receivables.

As of March 31, 2022 and December 31, 2021, investment securities with a fair value of ~~$79~~$58 thousand and ~~$75~~$66 thousand, respectively, were pledged to meet contractual obligations under derivative contracts.

As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, fixed maturity securities comprised approximately ~~94%~~87% and ~~95%~~84%, respectively, of ACC’s total investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”), and Fitch Ratings Ltd. (“Fitch”). ACC uses the median of available ratings from Moody’s, S&P and Fitch, or if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, as is the case for many private placement securities, ACC may utilize ratings from other NRSROs or rate the securities internally. As of ~~September 30, 2017~~both March 31, 2022 and December 31, ~~2016, approximately $138.5 million and $148.4 million, respectively, of~~2021, no securities were internally rated by Columbia Management Investment Advisers, LLC (“CMIA”), an affiliate of ~~ACC, using criteria similar to those used by NRSROs.~~ACC.

A summary of fixed maturity securities by rating was as follows:


Ratings	March 31, 2022						December 31, 2021
	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
	(in thousands, except percentages)
AAA	$	4,624,716	$	4,589,754	96	%	$	4,556,729	$	4,570,394	97	%
AA	50,048		49,280		1		54,137		55,093		1
A	63,075		63,550		1		72,913		75,140		2
BBB	67,484		68,804		2		20,442		22,061		—
Below investment grade	5,565		5,493		—		6,082		6,123		—
Total fixed maturities	$	4,810,888	$	4,776,881	100	%	$	4,710,303	$	4,728,811	100	%

Ratings September 30, 2017 December 31, 2016
Amortized Cost Fair Value
Percent of
Total Fair Value
Amortized Cost Fair Value
Percent of
Total Fair Value
(in thousands, except percentages)
AAA $ 3,993,445 $ 3,995,886 62 % $ 3,084,275 $ 3,080,096 52 %
AA 404,685 405,144 6
278,147 277,010 5
A 727,774 726,882 11
705,520 702,031 12
BBB 1,246,724 1,249,367 20
1,755,986 1,754,223 29
Below investment grade 32,112 32,347 1
142,129 140,341 2
Total fixed maturities $ 6,404,740 $ 6,409,626 100 % $ 5,966,057 $ 5,953,701 100 %

As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~,2021, approximately ~~44%~~31% and ~~57%~~30%, respectively, of ~~the~~ securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. As of March 31, 2022, ACC had 20 issuers with holdings between 10% and 15% of total shareholder’s equity totaling $690.7 million. As of December 31, 2021, ACC had 11 issuers with holdings between 10% and 12% of total shareholder’s equity totaling $427.2 million. There were no other holdings of any other issuer greater than 10% of total shareholder’s equity as of March 31, 2022 and December 31, 2021.

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following tables ~~provide information about~~summarize the fair value and gross unrealized losses on Available-for-Sale securities, ~~with gross unrealized losses~~aggregated by major investment type and the length of time that individual securities have been in a continuous unrealized loss position:


Description of Securities	March 31, 2022
	Less than 12 Months					12 Months or More					Total
	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
	(in thousands, except number of securities)
Residential mortgage backed securities	161	$	1,313,062	$	(28,100)	50	$	135,342	$	(1,765)	211	$	1,448,404	$	(29,865)
Corporate debt securities	5	34,259		(401)		—	—		—		5	34,259		(401)
Commercial mortgage backed securities	49	908,350		(7,029)		3	51,898		(558)		52	960,248		(7,587)
Asset backed securities	17	290,462		(2,318)		4	72,760		(629)		21	363,222		(2,947)
State and municipal obligations	8	9,275		(177)		—	—		—		8	9,275		(177)
U.S. government and agency obligations	22	1,117,921		(659)		—	—		—		22	1,117,921		(659)
Total	262	$	3,673,329	$	(38,684)	57	$	260,000	$	(2,952)	319	$	3,933,329	$	(41,636)

Description of Securities September 30, 2017
Less than 12 months 12 months or more Total
Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses
(in thousands, except number of securities)
Residential mortgage backed securities 69 $ 901,209 $ (3,769 ) 87 $ 646,258 $ (6,101 ) 156 $ 1,547,467 $ (9,870 )
Corporate debt securities 38 461,237 (1,308 ) 12 139,242 (695 ) 50 600,479 (2,003 )
Commercial mortgage backed securities 24 218,953 (1,655 ) 7 29,636 (402 ) 31 248,589 (2,057 )
Asset backed securities 23 270,138 (1,113 ) 10 42,321 (653 ) 33 312,459 (1,766 )
State and municipal obligations 11 27,143 (57 ) 3 4,524 (46 ) 14 31,667 (103 )
Common stocks — — — 3 650 (178 ) 3 650 (178 )
Total 165 $ 1,878,680 $ (7,902 ) 122 $ 862,631 $ (8,075 ) 287 $ 2,741,311 $ (15,977 )


Description of Securities	Description of Securities	December 31, 2016																		Description of Securities	December 31, 2021
		Less than 12 months						12 months or more						Total							Less than 12 Months					12 Months or More					Total
		Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses				Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
		(in thousands, except number of securities)																			(in thousands, except number of securities)
Residential mortgage backed securities	Residential mortgage backed securities	74	$	1,116,318	$	(6,009	)	131	$	847,998	$	(15,722	)	205	$	1,964,316	$	(21,731	)	Residential mortgage backed securities	43	$	295,433	$	(1,733)	48	$	114,067	$	(798)	91	$	409,500	$	(2,531)
Corporate debt securities		59	676,198		(3,945		)	7	57,535		(243		)	66	733,733		(4,188		)

Commercial mortgage backed securities	Commercial mortgage backed securities	24	205,284		(1,365		)	4	32,547		(281		)	28	237,831		(1,646		)	Commercial mortgage backed securities	25	538,380		(842)		3	55,352		(194)		28	593,732		(1,036)
Asset backed securities	Asset backed securities	28	273,193		(2,312		)	16	174,793		(1,899		)	44	447,986		(4,211		)	Asset backed securities	5	117,631		(119)		5	92,986		(214)		10	210,617		(333)
State and municipal obligations	State and municipal obligations	8	17,308		(107		)	—	—		—			8	17,308		(107		)	State and municipal obligations	1	996		(4)		—	—		—		1	996		(4)
Common stocks		—	—		—			3	605		(223		)	3	605		(223		)
U.S. government and agency obligations																				U.S. government and agency obligations	9	469,836		(17)		—	—		—		9	469,836		(17)
Total	Total	193	$	2,288,301	$	(13,738	)	161	$	1,113,478	$	(18,368	)	354	$	3,401,779	$	(32,106	)	Total	83	$	1,422,276	$	(2,715)	56	$	262,405	$	(1,206)	139	$	1,684,681	$	(3,921)

As part of ACC’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities for which an allowance for credit losses has not been recognized during the three months ended March 31, 2022 is primarily attributable to ~~tighter~~the impact of higher interest rates and wider credit spreads.

~~The following table presents a rollforward~~ ACC did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. ACC does not intend to sell these securities and does not believe that it is more likely than not that ACC will be required to sell these securities before the anticipated recovery of the ~~cumulative~~remaining amortized cost basis. As of March 31, 2022 and December 31, 2021, approximately 98% and 97%, respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade.

There were no amounts recognized in the ~~Consolidated Statements of Operations~~allowance for ~~other-than-temporary impairments related to~~ credit losses on ~~available-for-sale~~Available-for-Sale securities ~~for which a portion of~~during the ~~securities’ total other-than-temporary impairments was recognized in other comprehensive income (loss):~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in thousands)
Beginning balance $ —
$ 46,486
$ 46,522
$ 51,966
Reductions for securities sold during the period (realized) —
—
(46,715 ) (5,550 )
Credit losses for which an other-than-temporary impairment was previously recognized —
1
193
71
Ending balance $ —
$ 46,487
$ —
$ 46,487
three months ended March 31, 2022 and 2021.

The change in net unrealized ~~securities~~ gains (losses) on securities in ~~other comprehensive income (loss)~~OCI includes two components, net of tax: (i) unrealized gains (losses) that arose from changes in the ~~market~~fair value of securities that were held during the period and (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit ~~other-than-temporary impairment losses~~impairments to credit losses.

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following ~~table presents~~tables present a rollforward of the net unrealized ~~securities~~ gains (losses) on Available-for-Sale securities included in ~~accumulated other comprehensive income (loss):~~AOCI:

Net Unrealized Investment Gains (Losses) Deferred Income Tax
Accumulated Other
Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
(in thousands)
Balance at January 1, 2016 $ (29,858 ) $ 11,050
$ (18,808 )
Net unrealized securities gains (losses) arising during the period ⁽¹⁾
36,209
(13,397 ) 22,812

Reclassification of (gains) losses included in net income (62 ) 21
(41 )
Balance at September 30, 2016 $ 6,289
$ (2,326 ) $ 3,963
⁽²⁾

Balance at January 1, 2017 $ (8,195 ) $ 3,030
$ (5,165 )
Net unrealized securities gains (losses) arising during the period ⁽¹⁾
25,282
(9,172 ) 16,110

Reclassification of (gains) losses included in net income (8,833 ) 3,091
(5,742 )
Balance at September 30, 2017 $ 8,254
$ (3,051 ) $ 5,203
⁽²⁾


	Net Unrealized Gains (Losses) on Securities		Deferred Income Tax		Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Gains (Losses) on Securities
	(in thousands)
Balance at January 1, 2021	$	40,810	$	(8,114)	$	32,696
Net unrealized gains (losses) on securities arising during the period (1)	3,384		(788)		2,596
Reclassification of net (gains) losses on securities included in net income (2)	(774)		162		(612)
Balance at March 31, 2021	$	43,420	$	(8,740)	$	34,680

Balance at January 1, 2022	$	18,509	$	(2,773)	$	15,736
Net unrealized gains (losses) on securities arising during the period (1)	(52,515)		12,602		(39,913)
Reclassification of net (gains) losses on securities included in net income (2)	(1)		—		(1)
Balance at March 31, 2022	$	(34,007)	$	9,829	$	(24,178)

⁽¹⁾Net unrealized ~~securities~~ gains (losses) on securities arising during the period include ~~other-than-temporary impairment losses~~impairments on Available-for-Sale securities related to factors other than credit that were recognized in ~~other comprehensive income (loss)~~OCI during the period.

⁽²⁾ ~~Includes $1.9 million and $1.2 million of noncredit related impairments~~Reclassification amounts are reported in Net realized gain (loss) on ~~securities and net unrealized securities gains (losses) on previously impaired securities as of September 30, 2017 and 2016, respectively.~~investments.

Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in ~~earnings~~Net realized gain (loss) on investments were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(in thousands)
Gross realized gains $ —
$ 1,032
$ 11,107
$ 1,290
Gross realized losses (58 ) —
(2,081 ) (1,157 )
Other-than-temporary impairments —
(1 ) (193 ) (71 )
Total $ (58 ) $ 1,031
$ 8,833
$ 62

~~Other-than-temporary impairments for the nine months ended September 30, 2017 and the three months and nine months endedSeptember 30, 2016 are related to credit losses on non-agency residential mortgage backed securities.~~


	Three Months Ended March 31,
		2022			2021
			(in thousands)
Gross realized gains			$	1		$	774
Gross realized losses			—			—
Total			$	1		$	774

Available-for-Sale securities by contractual maturity as of ~~September 30, 2017~~March 31, 2022 were as follows:


	Amortized Cost		Fair Value			Amortized Cost				Fair Value
	(in thousands)
Due within one year	$	701,031	$	701,294		Due within one year		$	1,178,734			$	1,178,200
Due after one year through five years	841,519		842,377		Due after one year through five years	82,470				82,004
Due after five years through 10 years	4,988		5,046		Due after five years through 10 years	207				234
Due after 10 years	211		257

	1,547,749		1,548,974			1,261,411				1,260,438
Residential mortgage backed securities	3,308,646		3,310,732		Residential mortgage backed securities	1,834,982				1,809,782
Commercial mortgage backed securities	758,495		757,935		Commercial mortgage backed securities	1,218,797				1,211,639
Asset backed securities	789,850		791,985		Asset backed securities	495,698				495,022
Common stocks	2,238		5,606
Total	$	6,406,978	$	6,415,232	Total	$	4,810,888			$	4,776,881

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities ~~as well as common stocks,~~ were not included in the maturities distribution.

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

4. Financing Receivables

~~4. Commercial Mortgage, Syndicated and Certificate Loans~~

~~ACC’s financing~~Financing receivables ~~include~~are comprised of commercial ~~mortgage loans, syndicated~~ loans and certificate loans. Certificate loans do not exceed the cash surrender value of the certificate at origination. As there is minimal risk of loss related to certificate loans, ACC does not record an allowance for loan losses for certificate loans.

Allowance for ~~Loan~~Credit Losses

The following ~~table presents~~tables present a rollforward of the allowance for ~~loan losses for commercial mortgage loans and syndicated loans for the nine months ended and the ending balance of the allowance for loan losses by impairment method:~~credit losses:


	Commercial Loans
	(in thousands)
Balance, January 1, 2022	$	1,518
Provisions	(24)


Balance, March 31, 2022	$	1,494

September 30,
2017 2016
(in thousands)
Beginning balance $ 3,283
$ 3,964
Charge-offs —
(209 )
Provisions —
—
Ending balance $ 3,283
$ 3,755

Individually evaluated for impairment $ —
$ —
Collectively evaluated for impairment 3,283
3,755


	Commercial Loans
	(in thousands)


Balance, January 1, 2021	3,190
Provisions	(720)


Balance, March 31, 2021	$	2,470

~~The recorded investment in commercial mortgage loans and syndicated loans by impairment method was as follows:~~

September 30,
2017 December 31,
2016
(in thousands)
Individually evaluated for impairment $ 309
$ 1,550
Collectively evaluated for impairment 192,449
175,548
Total $ 192,758
$ 177,098

As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016, ACC’s~~2021, accrued interest on commercial loans of $916 thousand and $911 thousand, respectively, is recorded ~~investment~~ in ~~financing receivables individually evaluated for impairmentfor whichthere was~~no~~related allowance for loan losses was nil~~Receivables and ~~$1.6 million,respectively. Unearned income,unamortized premiums~~excluded from the amortized cost basis of commercial loans.

Purchases and ~~discounts, and net unamortizeddeferred fees andcosts are not material to ACC’s total loan balance.~~Sales

During the three months ended March 31, 2022 and ~~nine months endedSeptember 30, 2017,~~2021, ACC purchased ~~$4.3~~nil and $3.1 million, respectively, of syndicated loans and ~~$33.0~~sold nil and $1.2 million, respectively, of syndicated loans. ~~During the three months and nine months ended~~ ~~September 30, 2016, ACC purchased $4.4 million and $11.0 million, respectively, of syndicated loans. During the three months and nine months endedSeptember 30, 2017, ACC sold $2.3 million and $3.5 million, respectively, of syndicated loans. There were no sales of financing receivables during the three months and nine months ended~~ ~~September 30, 2016~~.

ACC has not acquired any loans with deteriorated credit quality as of the acquisition date.

Credit Quality Information

Nonperforming loans ~~which are generally loans 90 days or more past due,~~ were ~~$309 thousand~~$0.3 million and ~~nil~~$1.1 million as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~,2021, respectively. All other loans were considered to be performing.

Commercial Loans

Commercial Mortgage Loans

ACC reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review.

Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates ~~as necessary.~~when credit risk changes. Commercial mortgage loans which management has assigned its highest risk rating were nil ~~and 1.8% of total commercial mortgage loans~~ as of ~~September 30, 2017~~both March 31, 2022 and December 31, ~~2016, respectively.~~2021. Loans with the highest risk rating represent distressed loans which ACC has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. ~~In addition, ACC reviews~~Total commercial mortgage loans past due were nil as of both March 31, 2022 and December 31, 2021.

The tables below present the ~~concentrations~~amortized cost basis of ~~credit risk~~commercial mortgage loans by ~~region~~year of origination and ~~property type.~~loan-to-value ratio:


	March 31, 2022
Loan-to-Value Ratio	2022		2021		2020		2019		2018		Prior		Total
	(in thousands)
> 100%	$	—	$	—	$	—	$	—	$	—	$	—	$	—
80% - 100%	—		—		—		—		—		—		—
60% - 80%	—		1,766		4,129		—		7,533		4,919		18,347
40% - 60%	—		5,328		3,000		12,137		—		12,618		33,083
< 40%	—		4,884		—		2,277		5,598		47,182		59,941
Total	$	—	$	11,978	$	7,129	$	14,414	$	13,131	$	64,719	$	111,371

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)


	December 31, 2021
Loan-to-Value Ratio	2021		2020		2019		2018		2017		Prior		Total
	(in thousands)
> 100%	$	—	$	—	$	—	$	—	$	—	$	—	$	—
80% - 100%	—		—		—		—		—		—		—
60% - 80%	1,779		4,151		1,436		7,581		2,960		4,962		22,869
40% - 60%	5,429		3,000		10,788		—		7,614		7,833		34,664
< 40%	4,996		—		2,345		5,798		10,532		35,236		58,907
Total	$	12,204	$	7,151	$	14,569	$	13,379	$	21,106	$	48,031	$	116,440

Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization rate assumptions based on property type.

In addition, ACC reviews the concentrations of credit risk by region and property type. Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows:


	Loans				Percentage					Loans				Percentage
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016			March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
	(in thousands)									(in thousands)
East North Central	$	6,123	$	3,043	6	%	4	%	East North Central	$	8,028	$	11,166	7	%	10	%
East South Central	5,048		5,509		5		6		East South Central	2,766		2,939		2		3
Middle Atlantic	10,138		10,881		10		12		Middle Atlantic	15,349		15,581		14		13
Mountain	8,313		5,850		9		7		Mountain	7,463		7,567		7		6
New England	7,264		7,424		8		9		New England	6,711		6,766		6		6
Pacific	22,949		16,511		24		19		Pacific	37,240		37,881		34		32
South Atlantic	23,455		23,846		24		27		South Atlantic	19,240		19,574		17		17
West North Central	6,845		7,253		7		8		West North Central	5,693		5,893		5		5
West South Central	6,562		7,174		7		8		West South Central	8,881		9,073		8		8
	96,697		87,491		100	%	100	%		111,371		116,440		100	%	100	%
Less: allowance for loan losses	2,341		2,341
Less: allowance for credit losses									Less: allowance for credit losses	454		493
Total	$	94,356	$	85,150					Total	$	110,917	$	115,947

Concentrations of credit risk of commercial mortgage loans by property type were as follows:


	Loans				Percentage					Loans				Percentage
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016			March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
	(in thousands)									(in thousands)
Apartments	$	16,438	$	16,527	17	%	19	%	Apartments	$	31,914	$	32,457	29	%	28	%
Industrial	23,430		16,637		24		19		Industrial	25,190		25,738		23		22
Mixed use	4,678		4,968		5		6		Mixed use	10,787		10,938		10		10
Office	6,283		6,551		6		7		Office	16,243		16,470		14		14
Retail	35,735		31,500		37		36		Retail	24,559		28,026		22		24
Hotel	819		941		1		1		Hotel	67		114		—		—
Other	9,314		10,367		10		12		Other	2,611		2,697		2		2
	96,697		87,491		100	%	100	%		111,371		116,440		100	%	100	%
Less: allowance for loan losses	2,341		2,341
Less: allowance for credit losses									Less: allowance for credit losses	454		493
Total	$	94,356	$	85,150					Total	$	110,917	$	115,947

Syndicated Loans

The recorded investment in syndicated loans as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 was ~~$96.1~~$103.3 million and ~~$89.6~~$106.6 million, respectively. ACC’s syndicated loan portfolio is diversified across industries and issuers. ~~The primary credit indicator for~~Total syndicated loans ~~is whether the loans are performing in accordance with the contractual terms of the syndication. Total nonperforming syndicated loans~~past due were nil as of ~~September 30, 2017~~both March 31, 2022 and December 31, ~~2016 were $309 thousand and nil, respectively.~~ 2021. ACC assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality.

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The ~~nonperforming~~tables below present the amortized cost basis of syndicated loans by origination year and internal risk rating:


	March 31, 2022
Internal Risk Rating	2022		2021		2020		2019		2018		Prior		Total
	(in thousands)
Risk 5	$	1,146	$	—	$	—	$	—	$	339	$	—	$	1,485
Risk 4	—		—		—		—		—		3,448		3,448
Risk 3	—		381		—		5,809		5,053		10,152		21,395
Risk 2	—		5,648		6,229		5,628		6,596		21,551		45,652
Risk 1	—		2,048		1,098		2,755		8,464		16,941		31,306
Total	$	1,146	$	8,077	$	7,327	$	14,192	$	20,452	$	52,092	$	103,286


	December 31, 2021
Internal Risk Rating	2021		2020		2019		2018		2017		Prior		Total
	(in thousands)
Risk 5	$	—	$	—	$	1,149	$	340	$	—	$	—	$	1,489
Risk 4	—		—		—		—		959		2,491		3,450
Risk 3	—		—		4,202		4,806		4,777		4,700		18,485
Risk 2	3,688		4,606		7,215		9,109		11,048		8,000		43,666
Risk 1	4,432		2,755		3,320		7,807		12,429		8,813		39,556
Total	$	8,120	$	7,361	$	15,886	$	22,062	$	29,213	$	24,004	$	106,646

Certificate Loans

Certificate loans do not exceed the cash surrender value at ~~September 30, 2017 represents less than 1%~~origination. As there is minimal risk of ~~total syndicated loans.~~loss related to certificate loans, ACC does not record an allowance for credit losses.

Troubled Debt Restructurings

There were no loans ~~restructured~~accounted for as a troubled debt restructuring by ACC during the three months ended March 31, 2022 and ~~nine months ended~~ months ended September 30, 2017. During the three months and nine months ended September 30, 2016, ACC restructured two syndicated loans and received one loan and common stock in exchange with a recorded investment of $156 thousand. The troubled debt restructuring did not have a material impact to ACC’s allowance for loan losses or income recognized for the three months and nine months ended September 30, 2016.2021. There are no material commitments to lend additional funds to borrowers whose loans have been restructured.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

5. Fair Values of Assets and Liabilities

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale.

Valuation Hierarchy

ACC categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by ACC’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:


~~Level 1~~	~~Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.~~


~~Level 2~~	~~Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.~~


~~Level 3~~	~~Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.~~

Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.

Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis:


	March 31, 2022
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash equivalents	$	—	$	472,655	$	—	$	472,655
Available-for-Sale securities:
Residential mortgage backed securities	—		1,809,782		—		1,809,782
Corporate debt securities	—		90,684		3		90,687
Commercial mortgage backed securities	—		1,211,639		—		1,211,639
Asset backed securities	—		490,131		4,891		495,022
State and municipal obligations	—		11,798		—		11,798
U.S. government and agency obligations	1,157,953		—		—		1,157,953
Total Available-for-Sale securities	1,157,953		3,614,034		4,894		4,776,881

Equity derivative contracts	—		22,232		—		22,232
Total assets at fair value	$	1,157,953	$	4,108,921	$	4,894	$	5,271,768

Liabilities
Stock market certificate embedded derivatives	$	—	$	2,601	$	—	$	2,601
Equity derivative contracts	13		20,612		—		20,625
Total liabilities at fair value	$	13	$	23,213	$	—	$	23,226

September 30, 2017
Level 1 Level 2 Level 3 Total
(in thousands)
Assets
Cash equivalents $ —
$ 144,884
$ —
$ 144,884
Available-for-Sale securities:

Residential mortgage backed securities —
3,234,526
76,206
3,310,732
Corporate debt securities —
1,364,785
121,540
1,486,325
Commercial mortgage backed securities —
727,935
30,000
757,935
Asset backed securities —
778,798
13,187
791,985
State and municipal obligations —
62,392
—
62,392
U.S. government and agencies obligations 257
—
—
257
Common stocks 1,420
4,044
142
5,606
Total Available-for-Sale securities 1,677
6,172,480
241,075
6,415,232
Equity derivative contracts 6
45,532
—
45,538
Total assets at fair value $ 1,683
$ 6,362,896
$ 241,075
$ 6,605,654

Liabilities
Stock market certificate embedded derivatives $ —
$ 8,721
$ —
$ 8,721
Equity derivative contracts —
38,819
—
38,819
Total liabilities at fair value $ —
$ 47,540
$ —
$ 47,540


	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash equivalents	$	—	$	672,275	$	—	$	672,275
Available-for-Sale securities:
Residential mortgage backed securities	—		1,693,548		—		1,693,548
Corporate debt securities	—		46,046		6,004		52,050
Commercial mortgage backed securities	—		1,165,929		—		1,165,929
Asset backed securities	—		500,369		4,891		505,260
State and municipal obligations	—		12,044		—		12,044
U.S. government and agency obligations	1,299,980		—		—		1,299,980
Total Available-for-Sale securities	1,299,980		3,417,936		10,895		4,728,811

Equity derivative contracts	—		44,135		—		44,135
Total assets at fair value	$	1,299,980	$	4,134,346	$	10,895	$	5,445,221

Liabilities
Stock market certificate embedded derivatives	$	—	$	3,853	$	—	$	3,853
Equity derivative contracts	3		41,467		—		41,470
Total liabilities at fair value	$	3	$	45,320	$	—	$	45,323

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

December 31, 2016
Level 1 Level 2 Level 3 Total
(in thousands)
Assets
Cash equivalents $ —
$ 111,385
$ —
$ 111,385
Available-for-Sale securities:
Residential mortgage backed securities —
3,030,216
153,183
3,183,399
Corporate debt securities —
1,440,921
154,156
1,595,077
Commercial mortgage backed securities —
499,872
—
499,872
Asset backed securities —
595,635
30,788
626,423
State and municipal obligations —
48,510
—
48,510
U.S. government and agencies obligations 420
—
—
420
Common stocks 2,416
3,476
717
6,609
Total Available-for-Sale securities 2,836
5,618,630
338,844
5,960,310
Equity derivative contracts —
45,098
—
45,098
Total assets at fair value $ 2,836
$ 5,775,113
$ 338,844
$ 6,116,793

Liabilities
Stock market certificate embedded derivatives $ —
$ 8,183
$ —
$ 8,183
Equity derivative contracts 6
38,313
—
38,319
Total liabilities at fair value $ 6
$ 46,496
$ —
$ 46,502

The following tables provide a summary of changes in Level 3 assets ~~and liabilities~~ measured at fair value on a recurring basis:

Available-for-Sale Securities Total
Residential Mortgage Backed Securities Corporate Debt Securities Commercial Mortgage Backed Securities Asset Backed Securities Common Stocks
(in thousands)
Balance, July 1, 2017 $ 82,214
$ 143,322
$ —
$ 3,049
$ 268
$ 228,853

Total gains (losses) included in:
Net income 5
(124 ) —
1
—
(118 )
⁽¹⁾
Other comprehensive income (loss) (57 ) 29
—
(9 ) 35
(2 )
Purchases —
1,313
30,000
—
—
31,313

Settlements (7,682 ) (23,000 ) —
—
—
(30,682 )
Transfers into Level 3 20,182
—
—
13,195
—
33,377

Transfers out of Level 3 (18,456 ) —
—
(3,049 ) (161 ) (21,666 )
Balance, September 30, 2017 $ 76,206
$ 121,540
$ 30,000
$ 13,187
$ 142
$ 241,075

Changes in unrealized gains (losses) relating to assets held at September 30, 2017 $ 5
$ (124 ) $ —
$ 1
$ —
$ (118 )
⁽¹⁾


	Available-for-Sale Securities
	Corporate Debt Securities		Asset Backed Securities		Total
	(in thousands)
Balance, January 1, 2022	$	6,004	$	4,891	$	10,895
Total gains (losses) included in:
Net income	—		17		17		(1)
Other comprehensive income (loss)	(1)		(17)		(18)



Settlements	(6,000)		—		(6,000)


Balance, March 31, 2022	$	3	$	4,891	$	4,894

Changes in unrealized gains (losses) in net income relating to assets held at March 31, 2022	$	—	17		$	17	(1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at March 31, 2022	$	—	(17)		$	(17)


	Available-for-Sale Securities
	Corporate Debt Securities		Asset Backed Securities				Total
	(in thousands)
Balance, January 1, 2021	$	6,057	$	4,891	$	10,948
Total gains (losses) included in:

Other comprehensive income (loss)	(7)		—		(7)






Balance, March 31, 2021	$	6,050	$	4,891	$	10,941


Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at March 31, 2021	$	(7)	$	—	$	(7)

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Available-for-Sale Securities Total
Residential Mortgage Backed Securities Corporate Debt Securities Asset Backed Securities Common Stocks
(in thousands)
Balance, July 1, 2016 $ 137,109
$ 153,167
$ 35,299
$ 74
$ 325,649

Total gains (losses) included in:
Net income 114
(105 ) 45
—
54
⁽¹⁾
Other comprehensive income (loss) 1,666
(27 ) (67 ) 53
1,625

Purchases 37,386
—
12,500
—
49,886

Settlements (12,042 ) (4,000 ) —
—
(16,042 )
Transfers into Level 3 —
—
—
360
360

Transfers out of Level 3 —
—
(15,063 ) —
(15,063 )
Balance, September 30, 2016 $ 164,233
$ 149,035
$ 32,714
$ 487
$ 346,469

Changes in unrealized gains (losses) relating to assets held at September 30, 2016 $ 114
$ (99 ) $ 45
$ —
$ 60
⁽¹⁾

Available-for-Sale Securities
Residential Mortgage Backed Securities Corporate Debt Securities Commercial Mortgage Backed Securities Asset Backed Securities Common Stocks Total
(in thousands)
Balance, January 1, 2017 $ 153,183
$ 154,156
$ —
$ 30,788
$ 717
$ 338,844

Total gains (losses) included in:
Net income 94
(348 ) —
2
64
(188 )
⁽²⁾
Other comprehensive income (loss) 105
(249 ) —
1
263
120

Purchases 65,138
13,481
30,000
—
—
108,619

Sales —
—
—
—
(151 ) (151 )
Settlements (29,077 ) (45,500 ) —
—
—
(74,577 )
Transfers into Level 3 20,182
—
—
16,232
3,568
39,982

Transfers out of Level 3 (133,419 ) —
—
(33,836 ) (4,319 ) (171,574 )
Balance, September 30, 2017 $ 76,206
$ 121,540
$ 30,000
$ 13,187
$ 142
$ 241,075

Changes in unrealized gains (losses) relating to assets held at September 30, 2017 $ (7 ) $ (345 ) $ —
$ 1
$ —
$ (351 )
⁽¹⁾

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Available-for-Sale Securities
Residential Mortgage
Backed Securities
Corporate Debt Securities Asset Backed Securities Common Stocks Total
(in thousands)
Balance, January 1, 2016 $ 196,334
$ 190,304
$ 29,515
$ 229
$ 416,382

Total gains (losses) included in:
Net income 460
(1,624 ) 101
—
(1,063 )
⁽³⁾
Other comprehensive income (loss) 296
2,355
(129 ) 53
2,575

Purchases 37,386
—
28,289
—
65,675

Settlements (45,644 ) (42,000 ) —
—
(87,644 )
Transfers into Level 3 —
—
—
360
360

Transfers out of Level 3 (24,599 ) —
(25,062 ) (155 ) (49,816 )
Balance, September 30, 2016 $ 164,233
$ 149,035
$ 32,714
$ 487
$ 346,469

Changes in unrealized gains (losses) relating to assets held at September 30, 2016 $ 460
$ (295 ) $ 101
$ —
$ 266
⁽¹⁾

⁽¹⁾Included in ~~investment income in the Consolidated Statements of Operations.~~Investment income.

⁽²⁾~~Represents a $253 thousand loss included in investment income and a $65 thousand gain included in net realized gain (loss) on investments in the Consolidated Statements of Operations.~~

⁽³⁾~~Represents a $1.1 million loss included in net realized gain (loss) on investments and a $73 thousand gain included in investment income in the Consolidated Statements of Operations.~~

Securities transferred from Level 3 primarily represent securities with fair values that are ~~now~~ obtained from a third-party pricing service with observable inputs. Securities transferred to Level 3 represent securities with fair ~~value~~values that are ~~now~~ based on a single non-binding broker quote. ACC recognizes transfers between levels of the fair value hierarchy as of the beginning of the quarter in which each transfer occurred. For assets and liabilities held at the end of the reporting periods that are measured at fair value on a recurring basis, there were no transfers between Level 1 and Level 2.

The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by ACC or reasonably available to ACC of Level 3 assets:

March 31, 2022

Fair Value

Valuation Technique

Unobservable Input

Range

Weighted Average

(in thousands)

Corporate debt securities
(private placements)

—

Discounted cash flow

Yield/spread to U.S. Treasuries

—%

—

September 30, 2017

December 31, 2021

Fair Value

Valuation Technique

Unobservable Input

Range

Weighted Average

Fair Value

Valuation Technique

Unobservable Input

Range

Weighted Average

(in thousands)

Corporate debt securities

(private placements)

121,537

Discounted cash flow

Yield/spread to U.S. Treasuries

0.8% - 1.2%

0.9%

Corporate debt securities
(private placements)

6,001

Discounted cash flow

Yield/spread to U.S. Treasuries

0.9%

0.9

December 31, 2016
Fair Value Valuation Technique Unobservable Input Range Weighted Average
(in thousands)
Corporate debt securities
(private placements)
$ 154,153
Discounted cash flow Yield/spread to U.S. Treasuries 0.9% - 1.7% 1.1%
The weighted average for the yield/spread to U.S. Treasuries for corporate debt securities (private placements) is weighted based on the security’s market value as a percentage of the aggregate market value of the securities.

Level 3 measurements not included in the table above are obtained from non-binding broker quotes where unobservable inputs utilized in the fair value calculation are not reasonably available to ACC.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

~~Sensitivity~~Uncertainty of Fair Value Measurements ~~to Changes in Unobservable Inputs~~

Significant increases (decreases) in the yield/spread to U.S. Treasuries used in the fair value measurement of Level 3 corporate debt

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

securities in isolation would ~~result~~have resulted in a significantly lower (higher) fair value measurement.

Determination of Fair Value

ACC uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. ACC’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. ACC’s income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, ACC maximizes the use of observable inputs and minimizes the use of unobservable inputs.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy.

Assets

Cash Equivalents

Cash equivalents include time deposits and other highly liquid investments with original or remaining maturities at the time of purchase of 90 days or less. ACC’s cash equivalents are classified as Level 2 and measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization.

Available-for-Sale Securities

When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from third-party pricing services, non-binding broker quotes, or other model-based valuation techniques.

Level 1 securities ~~primarily~~ include U.S. ~~Treasuries and common stocks.~~ Treasuries.

Level 2 securities ~~primarily~~ include residential mortgage backed securities, corporate bonds, commercial mortgage backed securities, asset backed securities and state and municipal ~~obligations and common stock.~~obligations. The fair value of these Level 2 securities is based on a market approach with prices obtained from third-party pricing services. Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes.

Level 3 securities ~~primarily~~ include certain non-agency residential mortgage backed securities, corporate bonds, asset backed securities and commercial mortgage backed securities ~~asset backed securities, and common stocks. The~~with fair value ~~of corporate bonds, non-agency residential mortgage backed securities and certain asset backed securities classified as Level 3 is~~ typically based on a single non-binding broker quote. The underlying inputs used for some of the non-binding broker quotes are not readily available to ACC. ACC’s privately placed corporate bonds are typically based on a single non-binding broker quote. In addition to the general pricing controls, ACC reviews the broker prices to ensure that the broker quotes are reasonable and, when available, compares prices of privately issued securities to public issues from the same issuer to ensure that the implicit illiquidity premium applied to the privately placed investment is reasonable considering investment characteristics, maturity, and average life of the investment.

In consideration of the above, management is responsible for the fair values recorded on the financial statements. Prices received from third-party pricing services are subjected to exception reporting that identifies investments with significant daily price movements as well as no movements. ACC reviews the exception reporting and resolves the exceptions through reaffirmation of the price or recording an appropriate fair value estimate. ACC also performs subsequent transaction testing. ACC performs annual due diligence of third-party pricing services. ACC’s due diligence procedures include assessing the vendor’s valuation qualifications, control environment, analysis of asset-class specific valuation methodologies, and understanding of sources of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. ACC also considers the results of its exception reporting controls and any resulting price challenges that arise.

Derivatives

Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The variation margin on futures contracts is classified as Level 1. The fair value of derivatives that are traded in less active over-the-counter (“OTC”) markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include options. The counterparties’ nonperformance risk associated with uncollateralized derivative assets was immaterial as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016.~~2021. See Note 6 and Note 7 for further information on the credit risk of derivative instruments and related collateral.

Liabilities

Stock Market Certificate Embedded Derivatives

ACC uses various Black-Scholes calculations to determine the fair value of the embedded derivative liability associated with the provisions of its stock market certificates. The inputs to these calculations are primarily market observable and include interest rates, volatilities, and equity index levels. As a result, these measurements are classified as Level 2.

Derivatives

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

in less active OTC markets is generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include options. The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial as of March 31, 2022 and December 31, 2021. See Note 6 and Note 7 for further information on the credit risk of derivative instruments and related collateral.

Fair Value on a Nonrecurring Basis

During the reporting periods, there were no material assets or liabilities measured at fair value on a nonrecurring basis.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Assets and Liabilities Not Reported at Fair Value

The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair ~~value. All other financial instruments that are reported at fair value have been included above in the tables with balances of assets and liabilities measured at fair value~~value:


	March 31, 2022
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3		Total
	(in thousands)
Financial Assets
Syndicated loans	$	102,246	$	—	$	93,188	$	6,922	$	100,110
Commercial mortgage loans	110,917		—		—		109,396		109,396
Certificate loans	84		—		84		—		84
Financial Liabilities
Certificate reserves	$	5,194,819	$	—	$	—	$	5,175,165	$	5,175,165


	December 31, 2021
	Carrying Value		Fair Value
			Level 1		Level 2		Level 3		Total
	(in thousands)
Financial Assets
Syndicated loans	$	105,622	$	—	$	99,691	$	4,703	$	104,394
Commercial mortgage loans	115,947		—		—		119,101		119,101
Certificate loans	83		—		83		—		83
Financial Liabilities
Certificate reserves	$	5,296,636	$	—	$	—	$	5,289,947	$	5,289,947

See Note 4 for additional information on ~~a recurring basis.~~

September 30, 2017
Carrying
Value
Fair Value
Level 1 Level 2 Level 3 Total
(in thousands)
Financial Assets
Syndicated loans $ 95,119
$ —
$ 87,115
$ 8,198
$ 95,313
Commercial mortgage loans 94,356
—
—
95,628
95,628
Certificate loans 477
—
477
—
477

Financial Liabilities
Certificate reserves $ 6,364,355
$ —
$ —
$ 6,351,068
$ 6,351,068

December 31, 2016
Carrying
Value
Fair Value
Level 1 Level 2 Level 3 Total
(in thousands)
Financial Assets
Syndicated loans $ 88,665
$ —
$ 85,368
$ 4,516
$ 89,884
Commercial mortgage loans 85,150
—
—
86,327
86,327
Certificate loans 549
—
549
—
549

Financial Liabilities
Certificate reserves $ 5,926,868
$ —
$ —
$ 5,913,672
$ 5,913,672

~~Syndicated Loans~~

~~The fair value of~~ syndicated, loans is obtained from a third-party pricing service or non-binding broker quotes. Syndicated loans that are priced using a market approach with observable inputs are classified as Level 2 and loans priced using a single non-binding broker quote are classified as Level 3.

~~Commercial Mortgage Loans~~

~~The fair value of~~ commercial mortgage ~~loans, except those with significant credit deterioration, is determined by discounting contractual cash flows using discount rates that reflect current pricing~~and certificate loans. Certificate reserves represent customer deposits for ~~loans with similar remaining maturities, liquidity~~fixed rate certificates and characteristics including loan-to-value ratio, occupancy rate, refinance risk, debt-service coverage, location, and property condition. For commercial mortgage loans with significant credit deterioration, fair value is determined using the same adjustments as above with an additional adjustment for ACC’s estimate of the amount recoverable on the loan. Given the significant unobservable inputs to the valuation of commercial mortgage loans, these measurements are classified as Level 3.stock market certificates.

~~Certificate Loans~~

Certificate loans represent loans made against and collateralized by the underlying certificate balance. These loans do not transfer to third parties separate from the underlying certificate. The outstanding balance of these loans is considered a reasonable estimate of fair value and is classified as Level 2.

~~Certificate Reserves~~

The fair value of investment certificate reserves is determined by discounting cash flows using discount rates that reflect current pricing for contracts with similar terms and characteristics, with adjustments for expense margin and ACC’s nonperformance risk specific to these liabilities. Given the use of significant unobservable inputs to this valuation, the measurement is classified as Level 3.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

6. Offsetting Assets and Liabilities

Certain derivative instruments are eligible for offset in the Consolidated Balance Sheets. ACC’s derivative instruments are subject to master netting and collateral arrangements and qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. ACC’s policy is to recognize amounts subject to master netting arrangements on a gross basis in the Consolidated Balance Sheets.

The following tables present the gross and net information about ACC’s assets subject to master netting arrangements:


	March 31, 2022
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets				Net Amount
							Financial Instruments (1)		Cash Collateral
	(in thousands)
Derivatives:
OTC	$	22,232	$	—	$	22,232	$	(20,612)	$	(1,587)	$	33

Total	$	22,232	$	—	$	22,232	$	(20,612)	$	(1,587)	$	33

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)


	September 30, 2017															December 31, 2021
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets						Net Amount			Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets				Net Amount
							Financial Instruments⁽¹⁾			Cash Collateral												Financial Instruments (1)		Cash Collateral
	(in thousands)
Derivatives:																Derivatives:
OTC	$	45,532	$	—	$	45,532	$	(38,819	)	$	(6,283	)	$	430	OTC	$	44,135	$	—	$	44,135	$	(41,467)	$	(2,635)	$	33
Exchange-traded	6		—		6		—			—			6

Total	$	45,538	$	—	$	45,538	$	(38,819	)	$	(6,283	)	$	436	Total	$	44,135	$	—	$	44,135	$	(41,467)	$	(2,635)	$	33

December 31, 2016
Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Assets Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the
Consolidated Balance Sheets Net Amount
Financial Instruments ⁽¹⁾
Cash Collateral
(in thousands)
Derivatives:
OTC $ 45,098
$ —
$ 45,098
$ (38,313 ) $ (6,785 ) $ —
Total $ 45,098
$ —
$ 45,098
$ (38,313 ) $ (6,785 ) $ —

⁽¹⁾Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets.

The following tables present the gross and net information about ACC’s liabilities subject to master netting agreements:


	March 31, 2022
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets				Net Amount
							Financial Instruments (1)		Cash Collateral
	(in thousands)
Derivatives:
OTC	$	20,612	$	—	$	20,612	$	(20,612)	$	—	$	—
Exchange-traded	13		—		13		—		—		13
Total	$	20,625	$	—	$	20,625	$	(20,612)	$	—	$	13


	September 30, 2017														December 31, 2021
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets					Net Amount			Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets				Net Amount
							Financial Instruments ⁽¹⁾			Cash Collateral											Financial Instruments (1)		Cash Collateral
	(in thousands)
Derivatives:															Derivatives:
OTC	$	38,819	$	—	$	38,819	$	(38,819	)	$	—	$	—	OTC	$	41,467	$	—	$	41,467	$	(41,467)	$	—	$	—
Exchange-traded														Exchange-traded	3		—		3		—		—		3
Total	$	38,819	$	—	$	38,819	$	(38,819	)	$	—	$	—	Total	$	41,470	$	—	$	41,470	$	(41,467)	$	—	$	3

December 31, 2016
Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Amounts of Liabilities Presented in the Consolidated Balance Sheets Gross Amounts Not Offset in the
Consolidated Balance Sheets Net Amount
Financial Instruments ⁽¹⁾
Cash Collateral
(in thousands)
Derivatives:
OTC $ 38,313
$ —
$ 38,313
$ (38,313 ) $ —
$ —
Exchange-traded 6
—
6
—
—
6
Total $ 38,319
$ —
$ 38,319
$ (38,313 ) $ —
$ 6

⁽¹⁾Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

In the tables above, the ~~amounts~~amount of assets or liabilities presented in the Consolidated Balance Sheets are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. The actual ~~amounts of~~ collateral may be greater than amounts presented in the tables.

When the fair value of collateral accepted by ACC is less than the amount due to ACC, there is a risk of loss if the counterparty fails to perform or provide additional collateral. To mitigate this risk, ACC monitors collateral values regularly and requires additional collateral when necessary. When the value of collateral pledged by ACC declines, it may be required to post additional collateral.

Cash collateral accepted by ACC is reflected in Other liabilities. See Note 7 for additional disclosures related to ACC’s derivative instruments.

7. Derivatives and Hedging Activities

Derivative instruments enable ACC to manage its exposure to various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity and interest rate indices or prices. ACC primarily enters into derivative agreements for risk management purposes related to ACC’s products.

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

ACC uses derivatives as economic hedges of equity risk related to ~~stock market certificates~~Stock Market Certificates (“SMC”). ACC does not designate any derivatives for hedge accounting. The following table presents the notional value and the gross fair value of derivative instruments, including embedded derivatives:

September 30, 2017 December 31, 2016
Notional Gross Fair Value Notional Gross Fair Value
Assets Liabilities Assets Liabilities
(in thousands)
Derivatives not designated as hedging instruments
Equity contracts⁽¹⁾
$ 877,309
$ 45,538
$ 38,819
$ 911,871
$ 45,098
$ 38,319
Embedded derivatives
Stock market certificates⁽²⁾
N/A
—
8,721
N/A
—
8,183
Total derivatives $ 877,309
$ 45,538
$ 47,540
$ 911,871
$ 45,098
$ 46,502


	March 31, 2022						December 31, 2021
	Notional		Gross Fair Value				Notional		Gross Fair Value
			Assets		Liabilities				Assets		Liabilities
	(in thousands)
Derivatives not designated as hedging instruments
Equity contracts (1)	$	354,481	$	22,232	$	20,625	$	400,458	$	44,135	$	41,470
Embedded derivatives
Stock market certificates (2)	N/A		—		2,601		N/A		—		3,853
Total derivatives	$	354,481	$	22,232	$	23,226	$	400,458	$	44,135	$	45,323

N/A Not applicable

⁽¹⁾The gross fair value of equity contracts is included in Derivative assets and Derivative ~~liabilities on the Consolidated Balance Sheets.~~liabilities.

⁽²⁾The gross fair value of SMC embedded derivatives is included in Certificate ~~reserves on the Consolidated Balance Sheets.~~reserves.

See Note 5 for additional information regarding ACC’s fair value measurement of derivative instruments.

The following ~~tables present~~table presents a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Operations:


Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments	Location of Gain (Loss) on Derivatives Recognized in Income	Amount of Gain (Loss) on Derivatives Recognized in Income												Derivatives not designated as hedging instruments	Location of Gain (Loss) on Derivatives Recognized in Income	Amount of Gain (Loss) on Derivatives Recognized in Income
			Three Months Ended September 30,						Nine Months Ended September 30,								Three Months Ended March 31,
			2017			2016			2017			2016					2022		2021
																	(in thousands)
Equity contracts	Equity contracts														Equity contracts
Stock market certificates	Stock market certificates	Net provision for certificate reserves	$	956		$	1,475		$	2,975		$	1,044		Stock market certificates	Net provision for certificate reserves	$	(42)	$	616
Stock market certificates embedded derivatives	Stock market certificates embedded derivatives	Net provision for certificate reserves	(1,024		)	(1,338		)	(2,889		)	(1,334		)	Stock market certificates embedded derivatives	Net provision for certificate reserves	7		(467)
Total	Total		$	(68	)	$	137		$	86		$	(290	)	Total		$	(35)	$	149

Ameriprise SMC offers a return based upon the relative change in a major stock market index between the beginning and end of the certificate’s term. The SMC product contains an embedded derivative. The equity based return of the certificate must be separated from the host contract and accounted for as a derivative instrument. As a result of fluctuations in equity markets, and the corresponding changes in value of the embedded derivative, the amount of expenses incurred by ACC related to the SMC product will positively or negatively impact reported earnings. As a means of hedging its obligations under the provisions for these certificates, ACC purchases and writes call options on the S&P 500 ~~Index~~^®. Index. ACC views this strategy as a prudent management of equity market sensitivity, such that earnings are not exposed to undue risk presented by changes in equity market levels. ACC also purchases futures on the S&P 500® Index to economically hedge its obligations. The futures are marked-to-market daily and exchange traded, exposing ACC to minimal counterparty risk.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

Ameriprise Step-Up Rate Certificates (“SRC”) offer the ability to step up to a higher crediting rate based upon the then-current rate for a new SRC with the same term. ACC does not currently hedge the interest rate risk related to the SRC product. The SRC product contains an embedded derivative which was not material as of September 30, 2017 and December 31, 2016.

Credit Risk

Credit risk associated with ACC’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, ACC has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting and collateral arrangements whenever practical. See Note 6 for additional information on ACC’s credit exposure related to derivative assets.

8. Contingencies

The level of regulatory activity and inquiry in the financial services industry remains elevated. From time to time, ACC receives requests for information from, and/or has been subject to examination by, both the SEC and the Minnesota Department of Commerce concerning its business activities and practices.

ACC may in the normal course of business be a party to legal, regulatory or arbitration proceedings concerning matters arising in connection with the conduct of its business activities. The outcome of any such proceeding cannot be predicted with any certainty. ACC believes that it is not a party to, nor are any of its properties the subject of, any pending legal, regulatory or arbitration

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

proceedings that are reasonably likely to have a material adverse effect on ACC’s financial condition, results of operations or liquidity. Notwithstanding the foregoing, it is possible that the outcome of any such legal, arbitration or regulatory proceedings could have a material impact on ACC’s results of operations in any particular reporting period as the proceedings are resolved.

9. Shareholder’s Equity

~~The following table provides information related to amounts reclassified from accumulated other comprehensive income (loss):~~

Accumulated Other Comprehensive Income (Loss) Reclassification Location of (Gain) Loss Recognized in Income Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Unrealized net (gains) losses on Available-for-Sale securities Net realized gains (losses) on investments $ 58
$ (1,031 ) $ (8,833 ) $ (62 )
Tax expense (benefit) Income tax expense (benefit) (21 ) 360
3,091
21
Net of tax $ 37
$ (671 ) $ (5,742 ) $ (41 )

During the three months ended March 31, 2022 and ~~nine months endedSeptember 30, 2017~~,2021, ACC ~~received~~did not receive any cash contributions from Ameriprise ~~Financial of nil and $5 million, respectively. During the~~ ~~three months and nine months ended~~ September 30, 2016, ACC received cash contributions from Ameriprise Financial of $6 million and $25 million, respectively. ACC received these contributions to maintain compliance with capital requirements due to growth of the business, and these contributions were outside of the Capital Support Agreement between Ameriprise Financial and ACC. See additional discussion on the Capital Support Agreement in ACC’s 2016 10-K.Financial.

During ~~both~~ the three months ended March 31, 2022 and ~~nine months ended September 30, 2017,~~2021, ACC paid dividends to Ameriprise Financial of ~~$5 million.~~$4.3 million and $27.0 million, respectively. During the three months ended March 31, 2022 and 2021, ACC ~~did not pay any dividends~~returned contributed capital to Ameriprise Financial of $7.0 million and nil, respectively. The payment to Ameriprise Financial was recognized as a reduction of additional paid-in capital as it was in excess of the amount of unappropriated retained earnings available to be paid as a dividend. ACC continued to maintain compliance with the capital requirements of the SEC and the Minnesota Department of Commerce during the three months ~~and nine months~~ ended ~~September 30, 2016.~~

March 31, 2022.

~~AMERIPRISE CERTIFICATE COMPANY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)~~

10. Income Taxes

~~The~~ACC’s effective tax rate was ~~32.8%~~24.8% and ~~35.8%~~ ~~for the~~ ~~three months endedSeptember 30, 2017~~ ~~and 2016, respectively.~~ ~~The effective tax rate was 35.4% and 34.8%~~ ~~for the nine~~ ~~months endedSeptember 30, 2017~~ ~~and 2016, respectively. The lower effective tax rate~~25.1% for the three months ended ~~September 30, 2017~~ ~~compared to September 30, 2016 is mainly due to~~March 31, 2022 and 2021, respectively. The effective tax rates for the three months ended March 31, 2022 and 2021 are higher than the statutory rate primarily as a ~~benefit related to~~result of state income taxes, ~~applicable to prior years.~~net of federal benefit.

ACC is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business. Consideration is given to, among other things in making this determination, i)(i) future taxable income exclusive of reversing temporary differences and carryforwards, ~~ii)~~(ii) future reversals of existing taxable temporary differences, ~~iii)~~(iii) taxable income in prior carryback years, and ~~iv)~~(iv) tax planning strategies. Based on analysis of ACC’s tax ~~positions,~~position, management believes it is more likely than not that ACC’s results of future operations and implementation of tax planning strategies will generate sufficient taxable income to enable ACC to utilize all of the deferred tax assets. Accordingly, no valuation allowance for deferred tax assets has been established as of both ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016.~~2021.

As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, ACC had ~~$2.4~~$3.9 million and ~~$2.5~~$3.8 million, respectively, of gross unrecognized tax benefits. If recognized, approximately ~~$1.6~~$3.1 million and $3.0 million, net of federal tax benefits, of ~~the~~ unrecognized tax benefits ~~for both September 30, 2017~~as of March 31, 2022 and December 31, ~~2016~~2021, respectively, would affect the effective tax rate.

It is reasonably possible that the total amount of unrecognized tax benefits will change in the next 12 months. ACC estimates that the total amount of gross unrecognized tax benefits may decrease by ~~$600 thousand to $700~~approximately $5 thousand in the next 12 months primarily due to ~~resolution of audits and statute expirations.~~state exams.

ACC recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. ACC recognized a net increase of ~~$18~~$39 thousand and ~~a net decrease of $100~~$40 thousand in interest and penalties for the three months ended March 31, 2022 and ~~nine months endedSeptember 30, 2017, respectively. ACC recognized a net increase of $10 thousand and a net decrease of $1.4 million in interest and penalties for the~~ ~~three months and nine months ended~~ ~~September 30, 2016,~~2021, respectively. As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, ACC had a payable of ~~$150~~$654 thousand and ~~$250~~$615 thousand, respectively, related to accrued interest and penalties.

ACC filesincometax returns as part of its inclusion in the consolidated federal income tax returnsofAmeripriseFinancialin the U.S. federal jurisdictionand various ~~states~~state jurisdictions. ~~In the quarter,~~The federal statute of limitations are closed on years through 2015, except for one issue for 2014 and 2015 which was claimed on amended returns. The Internal Revenue Service (“IRS”) is currently auditing Ameriprise ~~Financial received final cash settlements for resolution of the 2006 and 2011 audits. The IRS has completed its examination of the 2008through2010tax returnsand these years areeffectively settled; however, the statutes of limitation, remain open for certain carryover adjustments. The IRS iscurrently auditingAmeriprise~~Financial’s U.S.income tax returnsfor ~~2012~~2016 through ~~2015.~~2020. Ameriprise Financial’s or its subsidiaries’,including ACC’s,state income tax returns are currently under examination by various jurisdictions for years ranging from~~2005~~ 2015 through~~2015.~~ 2020.

AMERIPRISE CERTIFICATE COMPANY

ITEM 2. MANAGEMENT’S NARRATIVE ANALYSIS

The following information should be read in conjunction with Ameriprise Certificate Company’s (“~~ACC”~~ACC’s”) Consolidated Financial Statements and ~~related notes~~Notes presented in Part I, Item 1. This discussion may contain forward-looking statements that reflect ACC’s plans, estimates and beliefs. Actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed under “Forward-Looking Statements.” ACC believes it is useful to read its management’s narrative analysis in conjunction with its Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2021, filed with the Securities and Exchange Commission (“SEC”) on February ~~23, 2017~~25, 2022 (“~~2016~~2021 10-K”), as well as its current reports on Form 8-K and other publicly available information.

ACC is a wholly owned subsidiary of Ameriprise Financial, Inc. (“Ameriprise Financial”). ACC is registered as an investment company under the Investment Company Act of 1940 and is in the business of issuing face-amount investment certificates. Face-amount investment certificates issued by ACC entitle the certificate owner to receive at maturity a stated amount of money and interest or credits declared from time to time by ACC, at its discretion. The certificates issued by ACC are not insured by any government agency. ACC’s certificates are sold primarily by Ameriprise Financial Services, ~~Inc.~~LLC (“AFS”), an affiliate of ACC. ~~Ameriprise Financial Services, Inc.~~AFS is registered as a broker-dealer in all 50 states, the District of Columbia and Puerto Rico. ACC’s investment portfolio is managed by Columbia Management Investment Advisers, LLC (“CMIA”), a wholly owned subsidiary of Ameriprise Financial.

Management’s narrative analysis of the results of operations is presented in lieu of management’s discussion and analysis of financial condition and results of operations, pursuant to General Instructions H(2)(a) of Form 10-Q.

Recent Developments Regarding the COVID-19 Pandemic

~~Critical~~The coronavirus disease 2019 (‘‘COVID-19’’) pandemic has presented ongoing significant economic and societal disruption and market unpredictability, which has affected ACC’s business and operating environment driven by what has been a low interest rate environment and volatility and changes in the equity markets and the potential associated implications to client behavior. COVID-19 continues its ongoing impact and has been occurring in multiple waves, so there are still no reliable estimates of how long the implications from the pandemic will last, the effects current and other new variants will ultimately have, how many people are likely to be affected by it, or its impact on the overall economy. There is still significant uncertainty around the extent to which the COVID-19 pandemic will continue to impact ACC’s business, results of operations and financial condition, which depends on current and future developments, including the ultimate scope, duration and severity of the pandemic, success of worldwide vaccination efforts, multiple mutations of COVID-19 or similar diseases, the effectiveness of ACC’s and its affiliates’ office reopenings, the additional measures that may be taken by various governmental authorities in response to the outbreak, the actions of third parties in response to the pandemic, and the possible further impacts on the global economy. Given the ongoing impact of the pandemic, financial results may not be comparable to previous years and the results presented in this report may not necessarily be indicative of future operating results. For further information regarding the impact of the COVID-19 pandemic, and any potentially material effects, see Part 1 - Item 1A “Risk Factors” of ACC’s 2021 10-K.

Significant Accounting Policies

ACC’s ~~critical~~significant accounting policies are discussed in detail in ~~“Management's~~“Management’s Narrative Analysis ~~— Critical~~– Recent Accounting Pronouncements and Significant Accounting Policies” in ~~its 2016~~ACC’s 2021 10-K.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements and their expected impact on ACC’s future results of operations or financial condition, see Note 2 to the ~~consolidated financial statements.~~Consolidated Financial Statements.

Results of Operations for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021

ACC’s net income is derived primarily from the after-tax yield on investments and realized investment gains (losses), less investment expenses and interest credited on certificate reserve liabilities. Net income trends occur largely due to changes in returns on ACC’s investment portfolio, from realization of investment gains (losses) and from changes in interest credited to certificate products. ACC follows U.S. generally accepted accounting principles (“GAAP”).

Net income ~~increased $13.5~~decreased $2.9 million, or ~~62%~~36%, ~~to $35.2 million~~ for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 compared to $21.7 million for the prior year period due to higher investment income and net realized gains on investments in the current year period, partially offset by higher income tax expense, net provision for certificate reserves, and investment expenses.

Investment income increased $20.9 million, or 25%, to $106.0 million for the nine months ended September 30, 2017 compared to $85.1 million for the prior year period reflecting higher average investment balances from certificate net inflows and an increase in the invested assets rate.

~~Investment expenses increased $3.8 million, or 16%, to $27.9 million for the nine months ended September 30, 2017 compared to $24.1 million for~~ the prior year period primarily due to ~~higher~~lower investment income and lower net realized gains. This decline was partially offset by lower net provision for certificate reserves and lower investment expenses.

Investment income decreased $6.6 million, or 31%, for the three months ended March 31, 2022 compared to the prior year period reflecting lower average investment balances and a decrease in the average invested asset yield.

Investment expenses decreased $1.8 million, or 23%, for the three months ended March 31, 2022 compared to the prior year period primarily due to volume-driven decreases in investment advisory, distribution, and transfer agent ~~and distribution~~ fees.

Net provision for certificate reserves ~~increased $4.7~~decreased $2.4 million, or ~~17%~~65%, ~~to $32.4 million~~ for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 compared to ~~$27.7 million for~~ the prior year period ~~due to higher average certificate balances from certificate net inflows.~~

Net realized gain on investments before income taxes was $8.9 million for the nine months ended September 30, 2017 compared to net realized gain on investments of $0.1 million for the prior year period. Net realized gain on investments for the nine months ended September 30, 2017 included net realized gains from sales, tenders and calls of Available-for-Sale securities of $9.0 million primarily due to ~~the sale of non-agency residential mortgage backed securities~~lower average client crediting rates as well as common stock, partially offset by other-than-temporary impairments of $0.2 million. The other-than-temporary impairments for both periods related to credit losses on non-agency residential mortgage backed securities.lower average certificate balances.

~~The~~

AMERIPRISE CERTIFICATE COMPANY

ACC’s effective tax rate was ~~35.4%~~24.8% for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 compared to ~~34.8%~~25.1% for the prior year period.

~~AMERIPRISE CERTIFICATE COMPANY~~

Fair Value Measurements

ACC reports certain assets and liabilities at fair value; specifically, derivatives, embedded derivatives, and most investments and cash equivalents. Fair value assumes the exchange of assets or liabilities occurs in orderly transactions. Companies are not permitted to use market prices that are the result of a forced liquidation or distressed sale. ACC includes actual market prices or observable inputs in its fair value measurements to the extent available. Non-binding broker quotes are obtained when quotes from third-party pricing services are not available. ACC validates prices obtained from third parties through a variety of means such as: price variance analysis, subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of vendors. See Note 5 to the ~~consolidated financial statements~~Consolidated Financial Statements for additional information regarding ACC’s fair value measurements.

Forward-Looking Statements

This report 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. The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on ~~pace,~~track,” ~~“project”~~“project,” “continue,” “able to remain,” “resume,” “deliver,” “develop,” “evolve,” “drive,” “enable,” “flexibility,” “scenario,” “case”, “appear”, “expand” 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. ACC undertakes no obligation to update or revise any forward-looking statements.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

ACC maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to provide reasonable assurance that the information required to be reported in the Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in and pursuant to SEC regulations, including controls and procedures designed to ensure that this information is accumulated and communicated to ACC’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosure. It should be noted that, because of inherent limitations, ACC’s disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the disclosure controls and procedures are met.

ACC’s management, under the supervision and with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of ACC’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, ACC’s Chief Executive Officer and Chief Financial Officer have concluded that ACC’s disclosure controls and procedures were effective at a reasonable level of assurance as of ~~September 30, 2017.~~March 31, 2022.

Changes in Internal Control over Financial Reporting

There have not been any changes in ACC’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, ACC’s internal control over financial reporting.

AMERIPRISE CERTIFICATE COMPANY

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 8 to the Consolidated Financial Statements in ~~Part��~~Part I, Item 1 is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors provided in Part I, Item 1A of ACC’s ~~2016~~2021 10-K.

~~AMERIPRISE CERTIFICATE COMPANY~~

ITEM 6. EXHIBITS

The following exhibits are filed as part of this Quarterly Report:



Exhibit			Description

3(a)			Amended and Restated Certificate of Incorporation of American Express Certificate Company, dated August 1, 2005, filed electronically on or about March 10, 2006 as Exhibit 3(a) to Registrant’s Form 10-K is incorporated by reference.
3(b)			By-Laws of Ameriprise Certificate Company, filed electronically on or about November 5, 2010 as Exhibit ~~3 (b)~~3(b) to Registrant’s Form 10-Q, are incorporated herein by reference.
31.131.1			Certification of Abu M. Arif pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.231.2			Certification of ~~Janet C. Langner~~James R. Hill pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
3232			Certification of Abu M. Arif and ~~Janet C. Langner~~James R. Hill pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
* Filed electronically herewithin.

AMERIPRISE CERTIFICATE COMPANY

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMERIPRISE CERTIFICATE COMPANY

(Registrant)

~~(Registrant)~~

Date:

~~November 1, 2017~~May 2, 2022

ByBy:

/s/ Abu M. Arif

Abu M. Arif

Chief Executive Officer

Date:

~~November 1, 2017~~May 2, 2022

ByBy:

/s/ ~~Janet C. Langner~~

James R. Hill

~~Janet C. Langner~~

James R. Hill

Chief Financial Officer



	September 30, 2017		December 31, 2016
	(in thousands, except share amounts)
Assets
Qualified Assets
Cash and cash equivalents	$	190,333	$	134,189
Investments in unaffiliated issuers	6,605,184		6,134,674
Receivables	37,846		29,775
Derivative assets	45,538		45,098
Total qualified assets	6,878,901		6,343,736
Deferred taxes, net	45		492
Total assets	$	6,878,946	$	6,344,228

Liabilities and Shareholder's Equity
Liabilities
Certificate reserves	$	6,373,076	$	5,935,051
Taxes payable to parent	6,183		3,505
Derivative liabilities	38,819		38,319
Payable for investment securities purchased	58,275		6,969
Due to related party and other liabilities	31,205		34,592
Total liabilities	6,507,558		6,018,436

Shareholder's Equity
Common shares ($10 par value, 150,000 shares authorized and issued)	1,500		1,500
Additional paid-in capital	252,517		247,517
Total retained earnings	112,168		81,940
Accumulated other comprehensive income (loss), net of tax	5,203		(5,165		)
Total shareholder's equity	371,388		325,792
Total liabilities and shareholder's equity	$	6,878,946	$	6,344,228
See Notes to Consolidated Financial Statements.



	September 30,
	2017		2016
	(in thousands)
Beginning balance	$	3,283	$	3,964
Charge-offs	—		(209		)
Provisions	—		—
Ending balance	$	3,283	$	3,755

Individually evaluated for impairment	$	—	$	—
Collectively evaluated for impairment	3,283		3,755



	Available-for-Sale Securities
	Residential Mortgage Backed Securities			Corporate Debt Securities			Asset Backed Securities			Common Stocks			Total
	(in thousands)
Balance, January 1, 2016	$	196,334		$	190,304		$	29,515		$	229		$	416,382
Total gains (losses) included in:
Net income	460			(1,624		)	101			—			(1,063		)	⁽³⁾
Other comprehensive income (loss)	296			2,355			(129		)	53			2,575
Purchases	37,386			—			28,289			—			65,675
Settlements	(45,644		)	(42,000		)	—			—			(87,644		)
Transfers into Level 3	—			—			—			360			360
Transfers out of Level 3	(24,599		)	—			(25,062		)	(155		)	(49,816		)
Balance, September 30, 2016	$	164,233		$	149,035		$	32,714		$	487		$	346,469

Changes in unrealized gains (losses) relating to assets held at September 30, 2016	$	460		$	(295	)	$	101		$	—		$	266		⁽¹⁾



Accumulated Other Comprehensive Income (Loss) Reclassification	Location of (Gain) Loss Recognized in Income	Three Months Ended September 30,						Nine Months Ended September 30,
	Location of (Gain) Loss Recognized in Income	2017			2016			2017			2016
Unrealized net (gains) losses on Available-for-Sale securities	Net realized gains (losses) on investments	$	58		$	(1,031	)	$	(8,833	)	$	(62	)
Tax expense (benefit)	Income tax expense (benefit)	(21		)	360			3,091			21
Net of tax		$	37		$	(671	)	$	(5,742	)	$	(41	)