UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x☒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
OR
For the Quarterly Period EndedJune 30, 2023
oOR
☐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 CenterMinneapolisMinnesota55474
(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
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock (par value $10 per share)NoneNone
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☒No☐
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☒No☐
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 Filerx
☐
Emerging growth companyo☐
Accelerated Filero
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☐No☒
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, 2017August 8, 2023
Common SharesStock (par value $10 per share)150,000 shares
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (H)(1)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)
Consolidated Statements of Operations — Three months and nine months ended September 30, 2017 and 2016
3
Consolidated Statements of Comprehensive Income — Three months and nine months ended September 30, 2017 and 2016
4
Consolidated Balance Sheets — September 30, 2017 and December 31, 2016
5
Consolidated Statements of Shareholder's Equity — Nine months ended September 30, 2017 and 2016
6
Consolidated Statements of Cash Flows — Nine months ended September 30, 2017 and 2016
7
Notes to Consolidated Financial Statements
8
1. Basis of Presentation
8
2. Recent Accounting Pronouncements
8
3. Investments
9
4. Commercial Mortgage, Syndicated and Certificate Loans
13
5. Fair Values of Assets and Liabilities
15
6. Offsetting Assets and Liabilities
21
7. Derivatives and Hedging Activities
22
8. Contingencies
23
9. Shareholder’s Equity
23
10. Income Taxes
24
Item 2.  Management’s Narrative Analysis
25
Item 4.  Controls and Procedures
26
Part II.  Other Information
27
Item 1.  Legal Proceedings
27
Item 1A.  Risk Factors
27
Item 6.  Exhibits
28
Signatures
29



AMERIPRISE CERTIFICATE COMPANY

FORM 10-Q
INDEX
Part I. Financial Information
3
Item 1. Financial Statements (Unaudited)
3
3
3
4
5
6
7
1.
7
2.
7
3.
7
4.
11
5.
13
6.
18
7.
19
8.
20
9.
20
10.
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
25

2

AMERIPRISE CERTIFICATE COMPANY
PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
(in thousands)
Investment income$159,703 $20,997 $289,612 $35,425 
Investment expenses13,177 6,239 25,286 12,384 
Net investment income before provision for certificate reserves and income taxes146,526 14,758 264,326 23,041 
Net provision for certificate reserves109,380 2,053 192,313 3,384 
Net investment income before income taxes37,146 12,705 

72,013 19,657 
Income tax expense9,385 3,168 18,236 4,895 
Net investment income, after-tax27,761 9,537 53,777 14,762 
Net realized gain (loss) on investments before income taxes(274)(61)(909)(43)
Income tax expense (benefit)(58)(13)(191)(9)
Net realized gain (loss) on investments, after-tax(216)(48)(718)(34)
Net income$27,545 $9,489 

$53,059 $14,728 
See Notes to Consolidated Financial Statements.

 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 expenses9,489
 8,308
 27,913
 24,143
Net investment income before provision for certificate reserves and income taxes28,401
 20,822
 78,101
 60,922
Net provision for certificate reserves11,701
 11,505
 32,403
 27,706
Net investment income before income taxes16,700
 9,317
 45,698
 33,216
Income tax expense5,479
 3,344
 16,225
 11,550
Net investment income, after-tax11,221
 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 June 30,Six Months Ended June 30,
2023202220232022
(in thousands)
Net income$27,545 $9,489 $53,059 $14,728 
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities:
Net unrealized gains (losses) on securities arising during the period(28,648)(40,611)(7,287)(80,524)
Reclassification of net (gains) losses on securities included in net income(9)(5)257 (6)
Total other comprehensive income (loss), net of tax(28,657)(40,616)(7,030)(80,530)
Total comprehensive income (loss)$(1,112)$(31,127)$46,029 $(65,802)
See Notes to Consolidated Financial Statements.
3
 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 period587
 4,631
 16,110
 22,812
Reclassification of net securities (gains) losses included in net income37
 (671) (5,742) (41)
Total other comprehensive income (loss), net of tax624
 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)
June 30, 2023December 31, 2022
(in thousands, except share data)
Assets
Qualified Assets
Cash and cash equivalents$1,188,556 $1,180,868 
  Investments in unaffiliated issuers (allowance for credit losses: 2023, $1,471; 2022, $1,472)11,543,855 8,573,481 
Receivables42,249 24,937 
Derivative assets19,566 8,786 
Total qualified assets12,794,226 9,788,072 
Deferred taxes, net40,594 37,892 
Taxes receivable from parent279 — 
Due from related party16,901 — 
Total assets$12,852,000 $9,825,964 
Liabilities and Shareholder’s Equity
Liabilities
Certificate reserves$12,068,871 $9,313,405 
Due to related party4,236 3,047 
Taxes payable to parent2,182 5,708 
Payables to brokers, dealers and clearing organizations146,480 68,533 
Derivative liabilities13,609 6,649 
Other liabilities53,110 14,139 
Total liabilities12,288,488 9,411,481 
Shareholder’s Equity
Common shares ($10 par value, 150,000 shares authorized and issued)1,500 1,500 
Additional paid-in capital584,667 481,667 
Retained earnings99,720 46,661 
Accumulated other comprehensive income (loss), net of tax(122,375)(115,345)
Total shareholder’s equity563,512 414,483 
Total liabilities and shareholder’s equity$12,852,000 $9,825,964 
See Notes to Consolidated Financial Statements.
4
 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 issuers6,605,184
 6,134,674
Receivables37,846
 29,775
Derivative assets45,538
 45,098
Total qualified assets6,878,901
 6,343,736
Deferred taxes, net45
 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 parent6,183
 3,505
Derivative liabilities38,819
 38,319
Payable for investment securities purchased58,275
 6,969
Due to related party and other liabilities31,205
 34,592
Total liabilities6,507,558
 6,018,436
  
Shareholder's Equity 
Common shares ($10 par value, 150,000 shares authorized and issued)1,500
 1,500
Additional paid-in capital252,517
 247,517
Total retained earnings112,168
 81,940
Accumulated other comprehensive income (loss), net of tax5,203
 (5,165)
Total shareholder's equity371,388
 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 SharesCommon SharesAdditional Paid-In CapitalRetained EarningsAccumulated Other 
Comprehensive Income (Loss), Net of Tax		Total
Appropriated for Pre-Declared Additional Credits and InterestAppropriated for Additional Interest on Advance PaymentsUn-appropriated
(in thousands, except share data)
Balance at April 1, 2023150,000 $1,500 $558,667 $19,951 $15 $52,209 $(93,718)$538,624 
Net income— — — — — 27,545 — 27,545 
Other comprehensive income (loss), net of tax— — — — — — (28,657)(28,657)
Transfer to unappropriated from appropriated, net— — — (3,793)— 3,793 — — 
Receipt of capital from parent— — 26,000 — — — — 26,000 
Balance at June 30, 2023150,000 $1,500 $584,667 $16,158 $15 $83,547 $(122,375)$563,512 
Balance at April 1, 2022150,000 $1,500 $295,667 $— $15 $1,051 $(24,178)$274,055 
Net income— — — — — 9,489 — 9,489 
Other comprehensive income (loss), net of tax— — — — — — (40,616)(40,616)
Transfer to appropriated from unappropriated, net— — — 370 — (370)— — 
Dividend to parent— — — — — (7,000)— (7,000)
Balance at June 30, 2022150,000 $1,500 $295,667 $370 $15 $3,170 $(64,794)$235,928 
Balance at January 1, 2023150,000 $1,500 $481,667 $15,960 $15 $30,686 $(115,345)$414,483 
Net income— — — — — 53,059 — 53,059 
Other comprehensive income (loss), net of tax— — — — — — (7,030)(7,030)
Transfer to appropriated from unappropriated, net— — — 198 — (198)— — 
Receipt of capital from parent— — 103,000 — — — — 103,000 
Balance at June 30, 2023150,000 $1,500 $584,667 $16,158 $15 $83,547 $(122,375)$563,512 
Balance at January 1, 2022150,000 $1,500 $302,709 $— $15 $70 $15,736 $320,030 
Net income— — — — — 14,728 — 14,728 
Other comprehensive income (loss), net of tax— — — — — — (80,530)(80,530)
Transfer to appropriated from unappropriated, net— — — 370 — (370)— — 
Dividend to parent— — — — — (11,258)— (11,258)
Return of capital to parent— — (7,042)— — — — (7,042)
Balance at June 30, 2022150,000 $1,500 $295,667 $370 $15 $3,170 $(64,794)$235,928 
See Notes to Consolidated Financial Statements.
5
 Number of Outstanding SharesCommon SharesAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss), Net of TaxTotal
Appropriated for
Pre-Declared Additional Credits and Interest
Appropriated for Additional Interest on Advance PaymentsUn-appropriated
(in thousands, except share data)
Balance at January 1, 2016150,000 $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, 2016150,000 $1,500 $239,517 $— $15 $75,305 $3,963 $320,300
  
Balance at January 1, 2017150,000 $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, 2017150,000 $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)
 Six Months Ended June 30,
20232022
(in thousands)
Cash Flows from Operating Activities
Net income$53,059 $14,728 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of premiums, accretion of discounts, net(60,839)(521)
Deferred income tax expense (benefit)(474)— 
Net realized (gain) loss on Available-for-Sale securities326 (7)
Other net realized (gain) loss583 39 
Provision for credit losses(1)11 
Changes in operating assets and liabilities:
Dividends and interest receivable33,589 (3,197)
Certificate reserves, net13,175 (1,908)
Deferred taxes, net— 502 
Taxes payable to/receivable from parent, net(3,805)3,560 
Derivatives, net of collateral(400)67 
Other liabilities10,960 2,109 
Other receivables(426)114 
Other, net(2,331)(25)
Net cash provided by (used in) operating activities43,416 15,472 
Cash Flows from Investing Activities
Available-for-Sale securities:
Sales111,727 — 
Maturities, redemptions, calls and other2,724,660 1,899,822 
Purchases(5,748,558)(2,159,280)
Syndicated loans and commercial mortgage loans:
Sales, maturities and repayments21,956 35,648 
Purchases and fundings(1,976)(18,218)
Certificate loans, net25 (7)
Net cash provided by (used in) investing activities(2,892,166)(242,035)
Cash Flows from Financing Activities
Payments from certificate holders and other additions6,395,156 1,835,193 
Certificate maturities and cash surrenders(3,641,718)(1,849,700)
Capital contribution from parent103,000 — 
Dividend to parent— (11,258)
Return of capital to parent— (7,042)
Net cash provided by (used in) financing activities2,856,438 (32,807)
Net increase (decrease) in cash and cash equivalents7,688 (259,370)
Cash and cash equivalents at beginning of period1,180,868 689,792 
Cash and cash equivalents at end of period$1,188,556 $430,422 
Supplemental disclosures including non-cash transactions:
Cash paid (received) for income taxes$21,780 $512 
Cash paid for interest182,832 5,118 
See Notes to Consolidated Financial Statements.
6

 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, net16,714
 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 loss193
 71
Changes in operating assets and liabilities:   
Dividends and interest receivable(4,418) (4,707)
Certificate reserves, net1,258
 3,986
Deferred taxes, net(5,583) (12,261)
Taxes payable to/receivable from parent, net2,678
 4,000
Derivatives, net of collateral(809) (87)
Other liabilities(2,782) 3,398
Other receivables(25) (12)
Other, net277
 (36)
Net cash provided by (used in) operating activities33,634
 33,521
    
Cash Flows from Investing Activities   
Available-for-Sale securities:   
Sales90,498
 7,036
Maturities, redemptions and calls1,495,221
 1,173,295
Purchases(1,987,024) (2,017,710)
Syndicated loans, commercial mortgage loans and real estate owned:   
Sales, maturities and repayments32,423
 46,331
Purchases and fundings(45,447) (17,085)
Certificate loans, net72
 146
Net cash provided by (used in) investing activities(414,257) (807,987)
    
Cash Flows from Financing Activities   
Payments from certificate holders and other additions3,594,855
 3,183,717
Certificate maturities and cash surrenders(3,158,088) (2,376,283)
Capital contribution from parent5,000
 25,000
Dividend to parent(5,000) —
Net cash provided by (used in) financing activities436,767
 832,434
    
Net increase (decrease) in cash and cash equivalents56,144
 57,968
Cash and cash equivalents at beginning of period134,189
 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 interest34,815
 25,413
See Notes to Consolidated Financial Statements.

AMERIPRISE CERTIFICATE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1.  Basis of Presentation and Summary of Significant Accounting Policies
Nature of Business
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, 2016,2022, filed with the Securities and Exchange Commission (“SEC”) on February 23, 20172023 (“20162022 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.
The significant accounting policies for Due from related party and Other liabilities were added given the significance of the balances as of June 30, 2023.
Due from related party
The balance in Due from related party includes the amounts due from its affiliated broker-dealer, Ameriprise Financial Services, LLC, related to sales of investment certificates.
Other liabilities
Other liabilities primarily include unpaid certificate maturities and cash surrenders to certificate holders.
2.  Recent Accounting Pronouncements
Adoption of New Accounting Standards
Statement of Cash Flows - Classification of Certain Cash ReceiptsFinancial Instruments – Credit Losses – Troubled Debt Restructurings and Cash PaymentsVintage Disclosures
In August 2016,March 2022, the Financial Accounting Standards Board (“FASB”) updatedproposed amendments to Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (“Topic 326”). The update removes the accounting standards related to classification ofrecognition 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 receiptsloan refinancing and cash payments onrestructuring by creditors when a borrower is experiencing financial difficulty. Rather than applying the statement of cash flows because current standards lacked sufficientrecognition 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 includesalso 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 addressingare to be applied prospectively, but entities may apply a modified retrospective transition for changes to the classificationrecognition and measurement of eight specific cash flow issues. The standard isTDRs. For entities that have adopted Topic 326, the amendments are effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted and all amendments must be adopted during the same period.2022. ACC early adopted the standard for the interim period ended March 31, 2017 on a retrospective basis.January 1, 2023. The adoption of the standardthis update did not have a materialan 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 its 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 relatedcondition and modifications 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.
Financial Instruments - Measurement of Credit Losses
In June 2016, the FASB updated the accounting standards related to accounting for credit losses on certain types of financial instruments. The update replacesdisclosures are immaterial in 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 changesperiod.
3.  Investments
Investments 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 recordedunaffiliated issuers were 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.follows:
June 30, 2023December 31,
2022
(in thousands)
Available-for-Sale securities: Fixed maturities, at fair value (allowance for credit losses: 2023 and 2022, nil; amortized cost: 2023, $11,523,694; 2022, $8,523,011)$11,360,340 $8,368,916 
Commercial mortgage loans and syndicated loans, at cost (allowance for credit losses: 2023, $1,471; 2022, $1,472; fair value: 2023, $176,080; 2022, $195,252)183,468 204,493 
Certificate loans — secured by certificate reserves, at cost, which approximates fair value47 72 
Total$11,543,855 $8,573,481 
7

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 value477
 549
Total$6,605,184
 $6,134,674
Available-for-Sale securities distributed by type were as follows:
Description of SecuritiesJune 30, 2023
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
 (in thousands)
Corporate debt securities$1,504,939 $36 $(14,473)$1,490,502 
Residential mortgage backed securities3,168,231 4,592 (118,831)3,053,992 
Commercial mortgage backed securities2,096,907 5,514 (28,355)2,074,066 
Asset backed securities2,406,859 2,449 (10,480)2,398,828 
State and municipal obligations8,450 — (170)8,280 
U.S. government and agency obligations2,338,308 127 (3,763)2,334,672 
Total$11,523,694 $12,718 $(176,072)$11,360,340 
Description of SecuritiesSeptember 30, 2017
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Noncredit OTTI (1)
 (in thousands)
Residential mortgage backed securities$3,308,646 $11,956 $(9,870)$3,310,732 $—
Corporate debt securities1,485,293 3,035 (2,003)1,486,325 3
Commercial mortgage backed securities758,495 1,497 (2,057)757,935 —
Asset backed securities789,850 3,901 (1,766)791,985 —
State and municipal obligations62,245 250 (103)62,392 —
U.S. government and agencies obligations211 46 — 257 —
Common stocks2,238 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 SecuritiesDecember 31, 2016
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Noncredit OTTI (1)
 (in thousands)
Residential mortgage backed securities$3,192,055 $13,075 $(21,731)$3,183,399 $209
Corporate debt securities1,595,907 3,358 (4,188)1,595,077 3
Commercial mortgage backed securities500,170 1,348 (1,646)499,872 —
Asset backed securities629,277 1,357 (4,211)626,423 —
State and municipal obligations48,272 345 (107)48,510 —
U.S. government and agencies obligations376 44 — 420 —
Common stocks2,448 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 SecuritiesDecember 31, 2022
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
(in thousands)
Corporate debt securities$800,596 $497 $(8,151)$792,942 
Residential mortgage backed securities2,210,633 4,202 (114,971)2,099,864 
Commercial mortgage backed securities1,976,401 872 (28,521)1,948,752 
Asset backed securities1,463,147 2,599 (10,474)1,455,272 
State and municipal obligations9,451 — (296)9,155 
U.S. government and agency obligations2,062,783 819 (671)2,062,931 
Total$8,523,011 $8,989 $(163,084)$8,368,916 
As of SeptemberJune 30, 20172023 and December 31, 2016, investment2022, accrued interest of $37.7 million and $20.8 million, respectively, is excluded from the amortized cost basis of Available-for-Sale securities with a fair value of $79 thousandin the tables above and $75 thousand, respectively, were pledged to meet contractual obligations under derivative contracts.is recorded in Receivables.
As of SeptemberJune 30, 20172023 and December 31, 2016,2022, fixed maturity securities comprised approximately 94%89% and 95%86%, 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 SeptemberJune 30, 20172023 and December 31, 2016, approximately $138.52022, $12.5 million and $148.4$8.7 million, respectively, worth of 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:
RatingsJune 30, 2023December 31, 2022
Amortized
Cost		Fair ValuePercent of Total Fair ValueAmortized
Cost		Fair ValuePercent of Total Fair Value
 (in thousands, except percentages)
AAA$9,800,061 $9,651,311 85 %$7,504,912 $7,361,766 88 %
AA62,351 60,863 1 104,049 100,303 1 
A298,905 297,367 2 165,663 164,265 2 
BBB1,356,432 1,345,139 12 732,811 727,450 9 
Below investment grade5,945 5,660 — 15,576 15,132 — 
Total fixed maturities$11,523,694 $11,360,340 100 %$8,523,011 $8,368,916 100 %
RatingsSeptember 30, 2017 December 31, 2016
Amortized CostFair Value
Percent of 
Total Fair Value
Amortized CostFair 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%
AA404,685 405,144 6
 278,147 277,010 5
A727,774 726,882 11
 705,520 702,031 12
BBB1,246,724 1,249,367 20
 1,755,986 1,754,223 29
Below investment grade32,112 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 SeptemberJune 30, 20172023 and December 31, 2016,2022, approximately 44%33% and 57%34%, respectively, of the securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. As of June 30, 2023, ACC had 10 issuers with holdings totaling $835.9 million that individually were between 10% and 19% of total shareholder’s equity. As of December 31, 2022, ACC had 18 issuers with holdings totaling $868.0 million that individually were between 10% and 15% of total shareholder’s equity. There were no other holdings of any other issuer greater than 10% of total shareholder’s equity as of June 30, 2023 and December 31, 2022.
8

AMERIPRISE CERTIFICATE COMPANY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following tables provide information aboutsummarize the fair value and gross unrealized losses on Available-for-Sale securities, with gross unrealized lossesaggregated by major investment type and the length of time that individual securities have been in a continuous unrealized loss position:
Description of SecuritiesJune 30, 2023
Less than 12 Months12 Months or MoreTotal
Number of SecuritiesFair Value
Unrealized Losses
Number of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair Value
Unrealized Losses
(in thousands, except number of securities)
Corporate debt securities79$1,398,040 $(12,777)11$79,044 $(1,696)90$1,477,084 $(14,473)
Residential mortgage backed securities601,444,052 (20,128)2381,135,408 (98,703)2982,579,460 (118,831)
Commercial mortgage backed securities18524,341 (4,216)59850,258 (24,139)771,374,599 (28,355)
Asset backed securities581,546,430 (5,898)26393,601 (4,582)841,940,031 (10,480)
State and municipal obligations—— — 52,530 (170)52,530 (170)
U.S. government and agency obligations171,517,190 (3,763)—— — 171,517,190 (3,763)
Total232$6,430,053 $(46,782)339$2,460,841 $(129,290)571$8,890,894 $(176,072)
Description of SecuritiesSeptember 30, 2017
Less than 12 months12 months or moreTotal
Number of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized Losses
 (in thousands, except number of securities)
Residential mortgage backed securities69 $901,209 $(3,769)87 $646,258 $(6,101)156 $1,547,467 $(9,870)
Corporate debt securities38 461,237 (1,308)12 139,242 (695)50 600,479 (2,003)
Commercial mortgage backed securities24 218,953 (1,655)7 29,636 (402)31 248,589 (2,057)
Asset backed securities23 270,138 (1,113)10 42,321 (653)33 312,459 (1,766)
State and municipal obligations11 27,143 (57)3 4,524 (46)14 31,667 (103)
Common stocks— — — 3 650 (178)3 650 (178)
Total165 $1,878,680 $(7,902)122 $862,631 $(8,075)287 $2,741,311 $(15,977)
Description of SecuritiesDescription of SecuritiesDecember 31, 2016Description of SecuritiesDecember 31, 2022
Less than 12 months12 months or moreTotalLess than 12 Months12 Months or MoreTotal
Number of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized LossesNumber of SecuritiesFair ValueUnrealized Losses
(in thousands, except number of securities)(in thousands, except number of securities)
Corporate debt securitiesCorporate debt securities48 $598,028 $(8,151)— $— $— 48 $598,028 $(8,151)
Residential mortgage backed securitiesResidential mortgage backed securities74 $1,116,318 $(6,009)131 $847,998 $(15,722)205 $1,964,316 $(21,731)Residential mortgage backed securities208 1,609,795 (83,810)78 253,759 (31,161)286 1,863,554 (114,971)
Corporate debt securities59 676,198 (3,945)7 57,535 (243)66 733,733 (4,188)
Commercial mortgage backed securitiesCommercial mortgage backed securities24 205,284 (1,365)4 32,547 (281)28 237,831 (1,646)Commercial mortgage backed securities64 1,396,001 (16,637)21 379,588 (11,884)85 1,775,589 (28,521)
Asset backed securitiesAsset backed securities28 273,193 (2,312)16 174,793 (1,899)44 447,986 (4,211)Asset backed securities42 816,065 (8,671)5 87,706 (1,803)47 903,771 (10,474)
State and municipal obligationsState and municipal obligations8 17,308 (107)— — — 8 17,308 (107)State and municipal obligations7 8,251 (200)1 904 (96)8 9,155 (296)
Common stocks— — — 3 605 (223)3 605 (223)
U.S. government and agency obligationsU.S. government and agency obligations11 559,320 (671)— — — 11 559,320 (671)
TotalTotal193 $2,288,301 $(13,738)161 $1,113,478 $(18,368)354 $3,401,779 $(32,106)Total380 $4,987,460 $(118,140)105 $721,957 $(44,944)485 $5,709,417 $(163,084)
As part of ACC’s ongoing monitoring process, management determined that the change in gross unrealized losses on its Available-for-Sale securities for which an allowance for credit losses has not been recognized during the six months ended June 30, 2023 is primarily attributable to the impact of higher short-term interest rates, partially offset by tighter credit spreads.
The following table presents a rollforward As of June 30, 2023, ACC did not recognize these unrealized losses in earnings because it was determined that such losses were due to non-credit factors. ACC does not intend to sell these securities and does not believe that it is more likely than not that ACC will be required to sell these securities before the anticipated recovery of the cumulativeremaining amortized cost basis. As of June 30, 2023 and December 31, 2022, approximately 98% and 96%, respectively, of the total of Available-for-Sale securities with gross unrealized losses were considered investment grade.
There were no amounts recognized in the Consolidated Statements of Operationsallowance for other-than-temporary impairments related to credit losses on available-for-saleAvailable-for-Sale securities for which a portion ofduring the securities’ total other-than-temporary impairments was recognized in other comprehensive income (loss):
 Three Months Ended September 30, Nine Months Ended September 30,
2017 20162017 2016
(in thousands)
Beginning balance$—
 $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 and six months ended June 30, 2023 and 2022.
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 marketfair 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 to credit losses.
9

AMERIPRISE CERTIFICATE COMPANY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following table presents a rollforwardrollforwards 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) $5,203
(2) 
Net Unrealized Gains (Losses) on SecuritiesDeferred Income TaxAccumulated Other Comprehensive Income (Loss) Related to Net Unrealized Gains 
(Losses) on Securities
(in thousands)
Balance at April 1, 2023$(125,616)$31,898 $(93,718)
Net unrealized gains (losses) on securities arising during the period (1)
(37,727)9,079 (28,648)
Reclassification of net (gains) losses on securities included in net income (2)
(11)2 (9)
Balance at June 30, 2023$(163,354)$40,979 $(122,375)
Balance at April 1, 2022$(34,007)$9,829 $(24,178)
Net unrealized gains (losses) on securities arising during the period (1)
(53,435)12,824 (40,611)
Reclassification of net (gains) losses on securities included in net income (2)
(6)1 (5)
Balance at June 30, 2022$(87,448)$22,654 $(64,794)
Balance at January 1, 2023$(154,094)$38,749 $(115,345)
Net unrealized gains (losses) on securities arising during the period (1)
(9,586)2,299 (7,287)
Reclassification of net (gains) losses on securities included in net income (2)
326 (69)257 
Balance at June 30, 2023$(163,354)$40,979 $(122,375)
Balance at January 1, 2022$18,509 $(2,773)$15,736 
Net unrealized gains (losses) on securities arising during the period (1)
(105,950)25,426 (80,524)
Reclassification of net (gains) losses on securities included in net income (2)
(7)1 (6)
Balance at June 30, 2022$(87,448)$22,654 $(64,794)
(1)Net unrealized securities gains (losses) on securities arising during the period include other-than-temporary impairment lossesimpairments 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 $1.2 million of noncredit related impairmentsReclassification amounts are reported in Net realized gain (loss) on securities and net unrealized securities gains (losses) on previously impaired securities as of September 30, 2017 and 2016, respectively.investments before income taxes.
Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in earningsNet realized gain (loss) on investments before income taxes were as follows:
 Three Months Ended September 30, Nine Months Ended September 30,
2017 20162017 2016
(in thousands)
Gross realized gains$—
 $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 June 30,Six Months Ended June 30,
2023202220232022
(in thousands)
Gross realized investment gains$64 $6 $199 $7 
Gross realized investment losses(53)— (525)— 
Total$11 $6 $(326)$7 
Available-for-Sale securities by contractual maturity as of SeptemberJune 30, 20172023 were as follows:
 Amortized CostFair Value
(in thousands)
Due within one year$2,933,698 $2,924,591 
Due after one year through five years917,793 908,653 
Due after five years through 10 years206 210 
 3,851,697 3,833,454 
Residential mortgage backed securities3,168,231 3,053,992 
Commercial mortgage backed securities2,096,907 2,074,066 
Asset backed securities2,406,859 2,398,828 
Total$11,523,694 $11,360,340 
10
 Amortized Cost Fair Value
(in thousands)
Due within one year$701,031
 $701,294
Due after one year through five years841,519
 842,377
Due after five years through 10 years4,988
 5,046
Due after 10 years211
 257
 1,547,749
 1,548,974
Residential mortgage backed securities3,308,646
 3,310,732
Commercial mortgage backed securities758,495
 757,935
Asset backed securities789,850
 791,985
Common stocks2,238
 5,606
Total$6,406,978
 $6,415,232

AMERIPRISE CERTIFICATE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
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 COMPANY4.  Financing Receivables
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

4.  Commercial Mortgage, Syndicated and Certificate Loans
ACC’s financingFinancing receivables includeare 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 LoanCredit Losses
The following table presentstables 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 at January 1, 2023$1,472 
Provisions(1)
Balance at June 30, 2023$1,471 
Balance at January 1, 2022$1,518 
Provisions11 
Balance at June 30, 2022$1,529 
 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 impairment3,283
 3,755
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 impairment192,449
 175,548
Total$192,758
 $177,098
As of SeptemberJune 30, 20172023 and December 31, 2016, ACC’s2022, accrued interest on commercial loans was $1.1 million and $1.2 million, respectively, and is recorded investment in financing receivables individually evaluated for impairmentfor whichthere wasnorelated allowance for loan losses was nilReceivables and $1.6 million,respectively. Unearned income,unamortized premiumsexcluded 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 June 30, 2023 and nine months endedSeptember 30, 2017,2022, ACC purchased $4.3nil and $15.0 million, respectively, of syndicated loans, and sold $2.4 million and $33.0$0.7 million, respectively, of syndicated loans. During the three months and ninesix months ended SeptemberJune 30, 2016,2023 and 2022, ACC purchased $4.4$0.4 million and $11.0$15.0 million, respectively, of syndicated loans. During the three monthsloans, and nine months endedSeptember 30, 2017, ACC sold $2.3$3.2 million and $3.5$0.7 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 and nil$1.5 million as of Septemberboth June 30, 20172023 and December 31, 2016, respectively.2022. All other loans were considered to be performing.
Commercial Loans
Commercial Mortgage Loans
ACC reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review.
Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates as necessary. Commercialwhen credit risk changes. There were no commercial mortgage loans which management has assigned its highest risk rating were nil and 1.8% of total commercial mortgage loans as of Septemberboth June 30, 20172023 and December 31, 2016, respectively.2022. Loans with the highest risk rating represent distressed loans which ACC has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. In addition, ACC reviewsThere were no commercial mortgage loans past due as of both June 30, 2023 and December 31, 2022.
The tables below present the concentrationsamortized cost basis of credit riskcommercial mortgage loans by regionyear of origination and property type.loan-to-value ratio:
June 30, 2023
Loan-to-Value Ratio20232022202120202019PriorTotal
(in thousands)
> 100%$— $— $— $— $— $3,175 $3,175 
80% - 100%— 5,461 — — — — 5,461 
60% - 80%— — 1,702 — — — 1,702 
40% - 60%1,090 — 2,402 4,016 5,000 8,544 21,052 
< 40%— 1,554 6,628 3,000 9,000 45,865 66,047 
Total$1,090 $7,015 $10,732 $7,016 $14,000 $57,584 $97,437 
11

AMERIPRISE CERTIFICATE COMPANY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

December 31, 2022
Loan-to-Value Ratio20222021202020192018PriorTotal
(in thousands)
> 100%$— $— $— $— $3,211 $— $3,211 
80% - 100%5,500 — — — — — 5,500 
60% - 80%— 1,727 — — — 3,411 5,138 
40% - 60%— 4,963 4,062 10,630 2,570 8,299 30,524 
< 40%1,628 4,544 3,000 3,646 6,589 38,834 58,241 
Total$7,128 $11,234 $7,062 $14,276 $12,370 $50,544 $102,614 
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. For the six months ended June 30, 2023, ACC did not have any write-offs of commercial mortgage loans.
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 LoansPercentage
September 30,
2017		 December 31,
2016		 September 30,
2017		 December 31,
2016		June 30, 2023December 31, 2022June 30, 2023December 31, 2022
(in thousands)    (in thousands)  
East North Central$6,123
 $3,043
 6% 4%East North Central$8,675 $9,116 9 %9 %
East South Central5,048
 5,509
 5
 6
East South Central1,880 2,239 2 2 
Middle Atlantic10,138
 10,881
 10
 12
Middle Atlantic15,247 14,640 16 14 
Mountain8,313
 5,850
 9
 7
Mountain8,947 9,135 9 9 
New England7,264
 7,424
 8
 9
New England6,426 6,542 6 6 
Pacific22,949
 16,511
 24
 19
Pacific35,263 36,432 36 36 
South Atlantic23,455
 23,846
 24
 27
South Atlantic10,670 12,003 11 12 
West North Central6,845
 7,253
 7
 8
West North Central3,815 4,215 4 4 
West South Central6,562
 7,174
 7
 8
West South Central6,514 8,292 7 8 
96,697
 87,491
 100% 100% 97,437 102,614 100 %100 %
Less: allowance for loan losses2,341
 2,341
  
Less: allowance for credit lossesLess: allowance for credit losses368 451  
Total$94,356
 $85,150
  Total$97,069 $102,163 
Concentrations of credit risk of commercial mortgage loans by property type were as follows:
Loans Percentage LoansPercentage
September 30,
2017		 December 31,
2016		 September 30,
2017		 December 31,
2016		June 30, 2023December 31, 2022June 30, 2023December 31, 2022
(in thousands)    (in thousands)  
Apartments$16,438
 $16,527
 17% 19%Apartments$28,897 $29,969 30 %29 %
Industrial23,430
 16,637
 24
 19
Industrial24,550 25,668 25 25 
Mixed use4,678
 4,968
 5
 6
Mixed use10,391 10,658 11 11 
Office6,283
 6,551
 6
 7
Office15,844 16,293 16 16 
Retail35,735
 31,500
 37
 36
Retail15,441 17,592 16 17 
Hotel819
 941
 1
 1
Other9,314
 10,367
 10
 12
Other2,314 2,434 2 2 
96,697
 87,491
 100% 100% 97,437 102,614 100 %100 %
Less: allowance for loan losses2,341
 2,341
  
Less: allowance for credit lossesLess: allowance for credit losses368 451  
Total$94,356
 $85,150
  Total$97,069 $102,163 
Syndicated Loans
The recorded investment in syndicated loans as of SeptemberJune 30, 20172023 and December 31, 20162022 was $96.1$87.5 million and $89.6$103.4 million, respectively. ACC’s syndicated loan portfolio is diversified across industries and issuers. The primary credit indicator for syndicatedSyndicated loans is whether the loans are performing in accordance with the contractual terms of the syndication. Total nonperforming syndicated loanspast due as of SeptemberJune 30, 20172023 and December 31, 20162022 were $309 thousand$1.1 million and nil, respectively. The nonperformingACC assigns an internal risk rating to each syndicated loans at September 30, 2017 represents less than 1% of total syndicated loans.
Troubled Debt Restructurings
There were no loans restructured by ACC duringloan in its portfolio ranging from 1 through 5, with 5 reflecting the three months and nine months endedlowest quality. For the six months ended SeptemberJune 30, 2017. During the three months and nine months ended September 30, 2016,2023, 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. There are no material commitments to lend additional funds to borrowers whose loans have been restructured.any write-
12

AMERIPRISE CERTIFICATE COMPANY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

offs of syndicated loans.
The tables below present the amortized cost basis of syndicated loans by origination year and internal risk rating:
June 30, 2023
Internal Risk Rating20232022202120202019PriorTotal
(in thousands)
Risk 5$— $1,135 $— $— $— $412 $1,547 
Risk 4— — — 1,207 1,931 1,280 4,418 
Risk 3— — 2,773 713 1,925 10,295 15,706 
Risk 2— 3,754 7,772 3,983 5,038 13,875 34,422 
Risk 11,824 2,332 4,249 2,545 4,649 15,811 31,410 
Total$1,824 $7,221 $14,794 $8,448 $13,543 $41,673 $87,503 
December 31, 2022
Internal Risk Rating20222021202020192018PriorTotal
(in thousands)
Risk 5$1,132 $— $— $— $337 $— $1,469 
Risk 4— — — 1,937 — 1,786 3,723 
Risk 3— 3,561 717 3,058 4,740 6,859 18,935 
Risk 22,948 7,993 5,387 6,813 5,284 16,242 44,667 
Risk 13,342 4,423 2,556 3,467 7,880 12,889 34,557 
Total$7,422 $15,977 $8,660 $15,275 $18,241 $37,776 $103,351 
Certificate Loans
Certificate loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to certificate loans, ACC does not record an allowance for credit losses.
Modifications with Borrowers Experiencing Financial Difficulty
There were no modifications of financing receivables with borrowers experiencing financial difficulty by ACC during the three and six months ended June 30, 2023.
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 1Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.
Level 2Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.
Level 3Prices 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.
13

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:
 June 30, 2023
Level 1Level 2Level 3Total
(in thousands)
Assets 
Cash equivalents$198,361 $971,744 $— $1,170,105 
Available-for-Sale securities:   
Corporate debt securities— 1,477,099 13,403 1,490,502 
Residential mortgage backed securities— 3,053,992 — 3,053,992 
Commercial mortgage backed securities— 2,074,066 — 2,074,066 
Asset backed securities— 2,396,529 2,299 2,398,828 
State and municipal obligations— 8,280 — 8,280 
U.S. government and agency obligations1,944,907 389,765 — 2,334,672 
Total Available-for-Sale securities1,944,907 9,399,731 15,702 11,360,340 
Equity derivative contracts76 19,490 — 19,566 
Total assets at fair value$2,143,344 $10,390,965 $15,702 $12,550,011 
Liabilities 
Stock market certificate embedded derivatives$— $9,080 $— $9,080 
Equity derivative contracts— 13,609 — 13,609 
Total liabilities at fair value$— $22,689 $— $22,689 
 September 30, 2017
Level 1 Level 2 Level 3 Total
(in thousands)
Assets  
Cash equivalents$—
 $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 obligations257
 —
 —
 257
Common stocks1,420
 4,044
 142
 5,606
Total Available-for-Sale securities1,677
 6,172,480
 241,075
 6,415,232
Equity derivative contracts6
 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, 2022
Level 1Level 2Level 3Total
(in thousands)
Assets 
Cash equivalents$— $1,159,470 $— $1,159,470 
Available-for-Sale securities:
Corporate debt securities— 783,289 9,653 792,942 
Residential mortgage backed securities— 2,099,864 — 2,099,864 
Commercial mortgage backed securities— 1,948,752 — 1,948,752 
Asset backed securities— 1,450,381 4,891 1,455,272 
State and municipal obligations— 9,155 — 9,155 
U.S. government and agency obligations2,062,931 — — 2,062,931 
Total Available-for-Sale securities2,062,931 6,291,441 14,544 8,368,916 
Equity derivative contracts— 8,786 — 8,786 
Total assets at fair value$2,062,931 $7,459,697 $14,544 $9,537,172 
Liabilities
Stock market certificate embedded derivatives$— $3,572 $— $3,572 
Equity derivative contracts8 6,641 — 6,649 
Total liabilities at fair value$8 $10,213 $— $10,221 
14

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 obligations420
 —
 —
 420
Common stocks2,416
 3,476
 717
 6,609
Total Available-for-Sale securities2,836
 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 contracts6
 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
Corporate Debt SecuritiesAsset Backed SecuritiesTotal
(in thousands)
Balance at April 1, 2023$14,751 $3,815 $18,566 
Total gains (losses) included in:
Net income51 67 118 (1)
Other comprehensive income (loss)(31)(33)(64)
Settlements(1,368)(1,550)(2,918)
Balance at June 30, 2023$13,403 $2,299 $15,702 
Changes in unrealized gains (losses) in net income relating to assets held at June 30, 2023$51 $67 $118 (1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2023$(31)$(33)$(64)
Available-for-Sale Securities
Corporate Debt SecuritiesAsset Backed SecuritiesTotal
(in thousands)
Balance at April 1, 2022$3 $4,891 $4,894 
Total gains (losses) included in:
Net income— 5 5 (1)
Other comprehensive income (loss)— (5)(5)
Balance at June 30, 2022$3 $4,891 $4,894 
Changes in unrealized gains (losses) in net income relating to assets held at June 30, 2022$— $5 $5 (1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2022$— $(5)$(5)
 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 income5
 (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 320,182
 —
 —
 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 SecuritiesAsset Backed SecuritiesTotal
(in thousands)
Balance at January 1, 2023$9,653 $4,891 $14,544 
Total gains (losses) included in:
Net income77 88 165 (1)
Other comprehensive income (loss)8 (30)(22)
Purchases5,033 — 5,033 
Settlements(1,368)(2,650)(4,018)
Balance at June 30, 2023$13,403 $2,299 $15,702 
Changes in unrealized gains (losses) in net income relating to assets held at June 30, 2023$77 $88 $165 (1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2023$8 $(30)$(22)

15

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 income114
 (105) 45
 —
 54
(1) 
Other comprehensive income (loss)1,666
 (27) (67) 53
 1,625
 
Purchases37,386
 —
 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 income94
 (348) —
 2
 64
 (188)
(2) 
Other comprehensive income (loss)105
 (249) —
 1
 263
 120
 
Purchases65,138
 13,481
 30,000
 —
 —
 108,619
 
Sales—
 —
 —
 —
 (151) (151) 
Settlements(29,077) (45,500) —
 —
 —
 (74,577) 
Transfers into Level 320,182
 —
 —
 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) 

Available-for-Sale Securities
Corporate Debt SecuritiesAsset Backed SecuritiesTotal
(in thousands)
Balance at January 1, 2022$6,004 $4,891 $10,895 
Total gains (losses) included in:
Net income— 22 22 (1)
Other comprehensive income (loss)(1)(22)(23)
Settlements(6,000)— (6,000)
Balance at June 30, 2022$3 $4,891 $4,894 
Changes in unrealized gains (losses) in net income relating to assets held at June 30, 2022$— $22 $22 (1)
Changes in unrealized gains (losses) in other comprehensive income (loss) relating to assets held at June 30, 2022$— $(22)$(22)
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 income460
 (1,624) 101
 —
 (1,063)
(3) 
Other comprehensive income (loss)296
 2,355
 (129) 53
 2,575
 
Purchases37,386
 —
 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.
(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.Investment income.
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 valuevalues 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:
June 30, 2023
Fair ValueValuation TechniqueUnobservable InputRangeWeighted Average
(in thousands)
Corporate debt securities
   (private placements)		$13,400 Discounted cash flowYield/spread to U.S. Treasuries1.0%1.0%
September 30, 2017December 31, 2022
Fair Value Valuation Technique Unobservable Input Range Weighted AverageFair ValueValuation TechniqueUnobservable InputRangeWeighted Average
(in thousands) (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)		$9,650 Discounted cash flowYield/spread to U.S. Treasuries1.1%1.1%
 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 tabletables 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)

SensitivityUncertainty 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 securities in isolation would resulthave 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.
16

AMERIPRISE CERTIFICATE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
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. U.S. Treasuries are classified as Level 1. ACC’s remaining 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 corporate bonds, residential mortgage backed securities, corporate bonds, commercial mortgage backed securities, asset backed securities, state and municipal obligations and common stock.other securities. 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, commercial mortgage backed securities, asset backed securities, and common stocks. The fair value of corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and certain asset backed securities classified as Level 3 iswith fair value 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, managementManagement 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 Septemberboth June 30, 20172023 and December 31, 2016.2022. 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 calculationsmodels to determine the fair value of the embedded derivative liability associated with the provisions of its stock market certificates.certificates (“SMC”). 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
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 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 both June 30, 2023 and December 31, 2022. 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.
17

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 valuevalue:
June 30, 2023
Carrying 
Value		Fair Value
Level 1Level 2Level 3Total
(in thousands)
Financial Assets
Syndicated loans$86,399 $— $83,685 $1,252 $84,937 
Commercial mortgage loans97,069 — — 91,143 91,143 
Certificate loans47 — 47 — 47 
Financial Liabilities
Certificate reserves$12,059,791 $— $— $11,986,365 $11,986,365 
December 31, 2022
Carrying 
Value		Fair Value
Level 1Level 2Level 3Total
(in thousands)
Financial Assets
Syndicated loans$102,330 $— $96,552 $3,024 $99,576 
Commercial mortgage loans102,163 — — 95,676 95,676 
Certificate loans72 — 72 — 72 
Financial Liabilities
Certificate reserves$9,309,833 $— $— $9,253,304 $9,253,304 
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 loans94,356
 —
 —
 95,628
 95,628
Certificate loans477
 —
 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 loans85,150
 —
 —
 86,327
 86,327
Certificate loans549
 —
 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 pricingand certificate loans. Certificate reserves represent customer deposits for loans with similar remaining maturities, liquidityfixed 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.SMC.
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:
June 30, 2023
Gross Amounts of Recognized AssetsGross Amounts Offset in the Consolidated Balance SheetsAmounts of Assets Presented in the Consolidated Balance SheetsGross Amounts Not Offset in the Consolidated Balance SheetsNet Amount
Financial Instruments (1)
Cash Collateral
(in thousands)
Derivatives:
OTC$19,490 $— $19,490 $(13,609)$(5,313)$568 
Exchange-traded76 — 76 — — 76 
Total$19,566 $— $19,566 $(13,609)$(5,313)$644 
September 30, 2017December 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 AmountGross Amounts of Recognized AssetsGross Amounts Offset in the Consolidated Balance SheetsAmounts of Assets Presented in the Consolidated Balance SheetsGross Amounts Not Offset in the Consolidated Balance SheetsNet 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$8,786 $— $8,786 $(6,641)$(1,893)$252 
Exchange-traded6
 —
 6
 —
 —
 6
Total$45,538
 $—
 $45,538
 $(38,819) $(6,283) $436
Total$8,786 $— $8,786 $(6,641)$(1,893)$252 
 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.
18

AMERIPRISE CERTIFICATE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
The following tables present the gross and net information about ACC’s liabilities subject to master netting agreements:
June 30, 2023
Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the Consolidated Balance SheetsAmounts of Liabilities Presented in the Consolidated Balance SheetsGross Amounts Not Offset in the Consolidated Balance SheetsNet Amount
Financial Instruments (1)
Cash Collateral
(in thousands)
Derivatives:
OTC$13,609 $— $13,609 $(13,609)$— $— 
Total$13,609 $— $13,609 $(13,609)$— $— 
September 30, 2017December 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 AmountGross Amounts of Recognized LiabilitiesGross Amounts Offset in the Consolidated Balance SheetsAmounts of Liabilities Presented in the Consolidated Balance SheetsGross Amounts Not Offset in the Consolidated Balance SheetsNet Amount
Financial Instruments (1)
 Cash Collateral
Financial Instruments (1)
Cash Collateral
(in thousands)
Derivatives: Derivatives:
OTC$38,819
 $—
 $38,819
 $(38,819) $—
 $—
OTC$6,641 $— $6,641 $(6,641)$— $— 
Exchange-tradedExchange-traded8 — 8 — — 8 
Total$38,819
 $—
 $38,819
 $(38,819) $—
 $—
Total$6,649 $— $6,649 $(6,641)$— $8 
 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-traded6
 —
 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 amountsamount 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.
Freestanding derivative instruments are reflected in Derivative assets and Derivative liabilities. 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.
ACC uses derivatives as economic hedges of equity risk related to stock market certificates (“SMC”).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 ValueNotional Gross Fair Value
Assets LiabilitiesAssets 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
June 30, 2023December 31, 2022
NotionalGross Fair ValueNotionalGross Fair Value
AssetsLiabilitiesAssetsLiabilities
(in thousands)
Derivatives not designated as hedging instruments
Equity contracts (1)
$262,314 $19,566 $13,609 $283,681 $8,786 $6,649 
Embedded derivatives
Stock market certificates (2)
N/A— 9,080 N/A— 3,572 
Total derivatives$262,314 $19,566 $22,689 $283,681 $8,786 $10,221 
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.
19

AMERIPRISE CERTIFICATE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
As of June 30, 2023 and December 31, 2022, investment securities with a fair value of $391 thousand and $182 thousand, respectively, were pledged to meet contractual obligations under derivative contracts.
The following tables presenttable 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 IncomeAmount of Gain (Loss) on Derivatives Recognized in IncomeDerivatives not designated as hedging instrumentsLocation of Gain (Loss) on Derivatives Recognized in IncomeAmount of Gain (Loss) on Derivatives Recognized in Income
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
2017 20162017 20162023202220232022
(in thousands)
Equity contractsEquity contracts Equity contracts
Stock market certificatesStock market certificatesNet provision for certificate reserves$956
 $1,475
 $2,975
 $1,044
Stock market certificatesNet provision for certificate reserves$1,805 $(413)$2,765 $(455)
Stock market certificates embedded derivativesStock market certificates embedded derivativesNet provision for certificate reserves(1,024) (1,338) (2,889) (1,334)Stock market certificates embedded derivativesNet provision for certificate reserves(1,853)416 (3,783)423 
TotalTotal$(68) $137
 $86
 $(290)Total$(48)$3 $(1,018)$(32)
Ameriprise SMC offersoffer 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 proceedings that are reasonably likely to have a material adverse effect on ACC’s financial condition, results of operations, financial condition 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, financial condition or liquidity 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) ReclassificationLocation of (Gain) Loss Recognized in IncomeThree Months Ended September 30, Nine Months Ended September 30,
2017 20162017 2016
Unrealized net (gains) losses on Available-for-Sale securitiesNet 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 and ninesix months endedSeptember June 30, 2017,2023, ACC received 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$26.0 million and $25$103.0 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 20162022 10-K. During the three and six months ended June 30, 2022, ACC did not receive any cash contributions from Ameriprise Financial.
During both the three months and ninesix months ended SeptemberJune 30, 2017, ACC paid dividends to Ameriprise Financial of $5 million.2023, ACC did not pay any dividends to Ameriprise Financial duringFinancial. During the three months and ninesix months ended SeptemberJune 30, 2016.2022, ACC paid dividends to Ameriprise Financial of $7.0 million and $11.3 million, respectively.
20

AMERIPRISE CERTIFICATE COMPANY 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

During the three and six months ended June 30, 2023, ACC did not return any contributed capital to Ameriprise Financial. During the three and six months ended June 30, 2022, ACC returned contributed capital to Ameriprise Financial of nil and $7.0 million, 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 and six months ended June 30, 2023.
10.  Income Taxes
TheACC’s effective tax rate was 32.8%25.3% 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 rate25.0% for the three months ended SeptemberJune 30, 2017 compared to September2023 and 2022, respectively. ACC’s effective tax rate was 25.4% and 24.9% for the six months ended June 30, 2016 is mainly due to2023 and 2022, respectively.
The effective tax rates for the three and six months ended June 30, 2023 and 2022 were higher than the statutory rate primarily as a benefit related toresult of state income taxes, applicable to prior years.net of federal benefit.
ACC is required to establish a valuation allowance for any portion of theits 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)determination: (i) future taxable income exclusive of reversing temporary differences and carryforwards, ii)carryforwards; (ii) future reversals of existing taxable temporary differences, iii)differences; (iii) taxable income in prior carryback years,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 SeptemberJune 30, 20172023 and December 31, 2016.2022.
As of SeptemberJune 30, 20172023 and December 31, 2016,2022, ACC had $2.4$5.0 million and $2.5$4.3 million, respectively, of gross unrecognized tax benefits. If recognized, approximately $1.6$3.9 million and $3.4 million, net of federal tax benefits, of the unrecognized tax benefits for both Septemberas of June 30, 20172023 and December 31, 20162022, 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 $700approximately $745 thousand in the next 12 months primarily due to resolutionexpected exam closures and state statues of audits and statutelimitations expirations.
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$78 thousand and a net decrease of $100$144 thousand in interest and penalties for the three months and ninesix months endedSeptember June 30, 2017,2023, respectively. ACC recognized a net increase of $10$44 thousand and a net decrease of $1.4 million$83 thousand in interest and penalties for the three months and ninesix months ended September June 30, 2016,2022, respectively. As of SeptemberJune 30, 20172023 and December 31, 2016,2022, ACC had a payable of $150$922 thousand and $250$778 thousand, respectively, related to accrued interest and penalties.
ACC filesincometax returns as part of its inclusion in the consolidated federal income tax returnsreturn ofAmeripriseFinancialin the U.S. federal jurisdictionand various statesstate jurisdictions. InThe federal statute of limitations are closed on years through 2015. A previously open item for 2014 and 2015 was resolved in the second quarter Ameriprise Financial received final cash settlementsof 2023. Also in the second quarter of 2023, the Internal Revenue Service (“IRS”) audit 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.2016 through 2018 was finalized. The IRS iscurrently auditingAmeripriseFinancial’s U.S.income tax returnsfor 2012 through 2015.2019 and 2020. Ameriprise Financial’s or its subsidiaries’,including ACC’s,state income tax returns are currently under examination by various jurisdictions for years ranging from2005 2017 through2015. 2020.
21

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 notesNotes 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, 2016,2022, filed with the Securities and Exchange Commission (“SEC”) on February 23, 20172023 (“20162022 10-K”), as well as its quarterly reports on Form 10-Q and any current reports on Form 8-K and other publicly available information.8-K.
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 and financial condition, pursuant to General Instructions H(2)(a) of Form 10-Q.
Current Macroeconomic Environment
CriticalACC operates its business in the broader context of the macroeconomic forces around it, including the global and U.S. economies, the coronavirus disease 2019 (“COVID-19”) pandemic, changes in interest and inflation rates, financial market volatility, fluctuations in foreign exchange rates, geopolitical strain, the competitive environment, client and customer activities and preferences, and the various regulatory and legislative developments. Financial markets and macroeconomic conditions have had and will continue to have a significant impact on ACC’s operating and performance results. ACC’s success may be affected by the factors discussed in Item 1A, “Risk Factors” in ACC’s 2022 10-K and other factors as discussed herein.
Significant Accounting Policies
ACC’s criticalsignificant accounting policies are discussed in detail in “Management's“Management’s Narrative Analysis — Critical– Recent Accounting Pronouncements and Significant Accounting Policies” in its 2016ACC’s 2022 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 NineSix Months Ended SeptemberJune 30, 20172023 and 20162022
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 million, or 62%, to $35.2$38.3 million for the ninesix months ended SeptemberJune 30, 20172023 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 investment income. This increase was partially offset by higher net provision for certificate reserves along with higher investment expenses and income taxes.
Investment income increased $254.2 million for the six months ended June 30, 2023 compared to the prior year period reflecting an increase in the average invested asset yield, driven by an increase in short-term interest rates, and higher average investment balances.
Investment expenses increased $12.9 million, for the six months ended June 30, 2023 compared to the prior year period primarily due to volume-driven increases in investment advisory, distribution, and transfer agent and distribution fees.
Net provision for certificate reserves increased $4.7 million, or 17%, to $32.4$188.9 million for the ninesix months ended SeptemberJune 30, 20172023 compared to $27.7 million for the prior year period primarily 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 securitiesclient 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.higher average certificate balances.
TheACC’s effective tax rate was 35.4%25.4% for the ninesix months ended SeptemberJune 30, 20172023 compared to 34.8%24.9% 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 aretransactions and is 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 brokerBroker 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
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AMERIPRISE CERTIFICATE COMPANY
across pricing vendors and due diligence reviews of vendors. See Note 5 to the consolidated financial statementsConsolidated 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 SeptemberJune 30, 2017.2023.
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.
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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 20162022 10-K.

AMERIPRISE CERTIFICATE COMPANY

ITEM 6.  EXHIBITS
The following exhibits are filed as part of this Quarterly Report:
ExhibitDescription
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.
31.1*31.1*
Certification of Abu M. Arif pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2*31.2*
Certification of Janet C. LangnerJames R. Hill pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32*32*
Certification of Abu M. Arif and Janet C. LangnerJames 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.

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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, 2017August 8, 2023ByBy:/s/ Abu M. Arif
Abu M. Arif
Chief Executive Officer
Date:November 1, 2017August 8, 2023ByBy:/s/ Janet C. LangnerJames R. Hill
Janet C. LangnerJames R. Hill
Chief Financial Officer



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