FBL FINANCIAL GROUP INC - FORM 8-K - EX-99.2 - EXHIBIT 99.2

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8-K - 8-K - FBL FINANCIAL GROUP INC	pressrelease8k2018q1.htm
EX-99.1 - EXHIBIT 99.1 - FBL FINANCIAL GROUP INC	exh991newsrelease2018q1.htm

FBL FINANCIAL GROUP, INC.

INVESTOR SUPPLEMENT

2018 First Quarter




Corporate Headquarters	FBL Financial Group, Inc.
	5400 University Avenue
	West Des Moines, Iowa 50266-5997
	(515) 225-5400
Financial Inquiries	For more information contact:
	Kathleen Till Stange
	Vice President Corporate & Investor Relations
	Kathleen.TillStange@FBLFinancial.com
	(515) 226-6780
Internet Information	FBL Financial Group, Inc.
	www.fblfinancial.com
Stock Symbol	NYSE: FFG
Transfer Agent	American Stock Transfer & Trust Company, LLC
	6201 15th Avenue
	Brooklyn, NY 11219
	http://www.astfinancial.com



FBL Financial Group, Inc.
Financial Supplement (Unaudited)
March 31, 2018
Table of Contents/Notes

Consolidated Financial Statements:
Consolidated Balance Sheets		2
Consolidated Statements of Comprehensive Income		4
Consolidated Statements of Comprehensive Income, last five quarters		5
Net Income to Non-GAAP Operating Income Reconciliation and Pre-tax Non-GAAP Operating Income by Segment, last five quarters		6
Financial Information by Segment:
Segment Information		7
Statements of Pre-tax Non-GAAP Operating Income, last five quarters:
Annuity Segment		8
Life Insurance Segment		9
Corporate and Other Segment		11
Deferred Acquisition Costs by Segment		12
Impact of Unlocking on Pre-tax Non-GAAP Operating Income		14
Collected Premiums, last five quarters		15
Other Information		16

NOTE 1: In addition to net income as determined using U.S. Generally Accepted Accounting Principles (GAAP), we have consistently used non-GAAP operating income (a measure of earnings not recognized under GAAP), a financial measure common in the life insurance industry, as a primary economic measure to evaluate our financial performance. Non-GAAP operating income for the periods presented consists of net income adjusted to exclude the initial impact of changes in federal statutory income tax rates and tax laws, realized gains and losses on investments and the change in net unrealized gains and losses on derivatives and equity securities.

We use non-GAAP operating income, in addition to net income, to measure our performance since realized gains and losses on investments and the change in net unrealized gains and losses on derivatives and equities can fluctuate greatly from quarter to quarter. These fluctuations make it difficult to analyze core operating trends. A view of our non-GAAP operating performance without the impact of these items enhances the analysis of our results. We use non-GAAP operating income for goal setting, determining short-term incentive compensation and evaluating performance on a basis comparable to that used by many in the investment community.

NOTE 2: Certain financial information presented herein may not add due to rounding.

FBL Financial Group, Inc.

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)



	March 31, 2018		December 31, 2017
Assets
Investments:
Fixed maturities - available for sale, at fair value (amortized cost: 2018 - $6,891,191; 2017 - $6,757,250)	$	7,246,912	$	7,291,967
Equity securities - available for sale, at fair value (cost: 2018 - $98,307; 2017 - $96,715)	103,920		104,145
Mortgage loans	968,664		971,812
Real estate	1,543		1,543
Policy loans	193,413		191,398
Short-term investments	30,075		17,007
Other investments	44,973		42,371
Total investments	8,589,500		8,620,243

Cash and cash equivalents	13,653		52,696
Securities and indebtedness of related parties	130,451		130,240
Accrued investment income	82,403		76,468
Amounts receivable from affiliates	5,117		3,561
Reinsurance recoverable	105,551		108,948
Deferred acquisition costs	357,861		302,611
Value of insurance in force acquired	7,169		4,560
Current income taxes recoverable	44		3,269
Other assets	108,293		112,054
Assets held in separate accounts	638,751		651,963








Total assets	$	10,038,793	$	10,066,613

FBL Financial Group, Inc.

Consolidated Balance Sheets (Continued)

(Dollars in thousands)



	March 31, 2018		December 31, 2017
Liabilities and stockholders' equity
Liabilities:
Future policy benefits:
Interest sensitive products	$	5,446,094	$	5,299,961
Traditional life insurance and accident and health products	1,762,416		1,750,504
Other policy claims and benefits	47,250		44,475
Supplementary contracts without life contingencies	317,541		322,630
Advance premiums and other deposits	269,378		267,023
Amounts payable to affiliates	1,272		1,164
Long-term debt payable to non-affiliates	97,000		97,000
Deferred income taxes	104,372		131,912
Other liabilities	90,532		111,131
Liabilities related to separate accounts	638,751		651,963
Total liabilities	8,774,606		8,677,763

Stockholders' equity:
FBL Financial Group, Inc. stockholders' equity:
Preferred stock, without par value, at liquidation value - authorized 10,000,000 shares, issued and outstanding 5,000,000 Series B shares	3,000		3,000
Class A common stock, without par value - authorized 88,500,000 shares, issued and outstanding 24,826,563 in 2018 and 24,919,113 shares in 2017	153,195		153,589
Class B common stock, without par value - authorized 1,500,000 shares, issued and outstanding 11,413 shares in 2018 and 2017	72		72
Accumulated other comprehensive income	186,222		284,983
Retained earnings	921,663		947,148
Total FBL Financial Group, Inc. stockholders' equity	1,264,152		1,388,792
Noncontrolling interest	35		58
Total stockholders' equity	1,264,187		1,388,850
Total liabilities and stockholders' equity	$	10,038,793	$	10,066,613

FBL Financial Group, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands, except per share data)



	Three months ended March 31,
	2018			2017
Revenues:
Interest sensitive product charges	$	30,098		$	29,201
Traditional life insurance premiums	49,497			48,434
Net investment income	101,022			100,994
Net realized capital losses on sales of investments	(1,747		)	(403		)
Net impairment losses recognized in earnings	(1,295		)	(66		)
Other income	4,600			3,760
Total revenues	182,175			181,920

Benefits and expenses:
Interest sensitive product benefits	61,345			62,760
Traditional life insurance benefits	45,456			42,954
Policyholder dividends	2,551			2,553
Underwriting, acquisition and insurance expenses	39,577			34,353
Interest expense	1,213			1,212
Other expenses	5,593			4,151
Total benefits and expenses	155,735			147,983
	26,440			33,937
Income tax expense	(4,687		)	(10,733		)
Equity income, net of related income taxes	1,855			3,231
Net income	23,608			26,435
Net loss (income) attributable to noncontrolling interest	23			(2		)
Net income attributable to FBL Financial Group, Inc.	$	23,631		$	26,433

Comprehensive income (loss) attributable to FBL Financial Group, Inc.	$	(69,261	)	$	42,476

Earnings per common share	$	0.94		$	1.05
Earnings per common share - assuming dilution	$	0.94		$	1.05

Cash dividends per common share	$	0.46		$	0.44
Special cash dividend per common share	$	1.50		$	1.50

FBL Financial Group, Inc.

Consolidated Statements of Comprehensive Income (Unaudited) - Quarterly

(Dollars in thousands, except per share data)



	Q1 2017			Q2 2017			Q3 2017			Q4 2017			Q1 2018
Revenues:
Interest sensitive product charges	$	29,201		$	29,456		$	28,004		$	26,275		$	30,098
Traditional life insurance premiums	48,434			50,262			47,087			49,547			49,497
Net investment income	100,994			103,908			102,950			107,347			101,022
Net realized capital gains (losses) on sales of investments	(403		)	921			81			—			(1,747		)
Net impairment losses recognized in earnings	(66		)	—			(67		)	(3,853		)	(1,295		)
Other income	3,760			4,450			3,501			3,689			4,600
Total revenues	181,920			188,997			181,556			183,005			182,175

Benefits and expenses:
Interest sensitive product benefits	62,760			58,251			67,206			63,661			61,345
Traditional life insurance benefits	42,954			42,610			42,633			44,826			45,456
Policyholder dividends	2,553			2,557			2,487			2,543			2,551
Underwriting, acquisition and insurance expenses	34,353			36,341			27,535			36,649			39,577
Interest expense	1,212			1,213			1,213			1,212			1,213
Other expenses	4,151			4,740			4,971			4,520			5,593
Total benefits and expenses	147,983			145,712			146,045			153,411			155,735
	33,937			43,285			35,511			29,594			26,440
Income tax benefit (expense)	(10,733		)	(13,891		)	(11,220		)	76,573			(4,687		)
Equity income, net of related income taxes	3,231			2,924			2,804			2,340			1,855
Net income	26,435			32,318			27,095			108,507			23,608
Net loss (income) attributable to noncontrolling interest	(2		)	(27		)	9			(8		)	23
Net income attributable to FBL Financial Group, Inc.	$	26,433		$	32,291		$	27,104		$	108,499		$	23,631

Comprehensive income (loss) attributable to FBL Financial Group, Inc.	$	42,476		$	79,050		$	38,616		$	121,387		$	(69,261	)

Earnings per common share	$	1.05		$	1.29		$	1.08		$	4.33		$	0.94
Earnings per common share - assuming dilution	$	1.05		$	1.29		$	1.08		$	4.33		$	0.94

Cash dividends per common share	$	0.44		$	0.44		$	0.44		$	0.44		$	0.46
Special cash dividend per common share	$	1.50		$	—		$	—		$	—		$	1.50

Weighted average common shares outstanding (in thousands):
Basic	25,030			25,031			25,037			25,039			25,004
Effect of dilutive securities	22			20			18			18			16
Diluted	25,052			25,051			25,055			25,057			25,020



FBL Financial Group, Inc.
Net Income to Non-GAAP Operating Income Reconciliation and Pre-tax Non-GAAP Operating Income by Segment
(Dollars in thousands, except per share data)


	Q1 2017			Q2 2017			Q3 2017			Q4 2017			Q1 2018

Net income attributable to FBL Financial Group, Inc.	$	26,433		$	32,291		$	27,104		$	108,499		$	23,631
Net income adjustments:
Impact of change in federal tax rate (1)	—			—			—			(85,797		)	1,069
Realized gains/losses on investments (2)(3)	554			(788		)	38			2,578			2,424
Change in net unrealized gains/losses on derivatives (2)	1			(686		)	(1,389		)	(476		)	509
Non-GAAP operating income	$	26,988		$	30,817		$	25,753		$	24,804		$	27,633

Non-GAAP operating income per common share - assuming dilution	$1.08			$1.23			$1.03			$0.99			$1.10

Non-GAAP operating return on equity, excluding AOCI - last twelve months	10.6%			11.0%			10.6%			10.3%			10.3%
Non-GAAP operating return on equity, including AOCI - last twelve months	8.7%			9.0%			8.8%			8.6%			8.6%


	Q1 2017			Q2 2017			Q3 2017			Q4 2017			Q1 2018
Impact of Adjustments on FBL Net Income
Impact of change in federal tax rate (1)	$	—		$	—		$	—		$	85,797		$	(1,069	)
Realized gains/losses on investments	(469		)	921			14			(3,853		)	(1,225		)
Change in net unrealized gains/losses on equity securities	—			—			—			—			(1,817		)
Change in net unrealized gains/losses on derivatives	(49		)	107			1,897			629			(1,208		)
Offsets:
Change in amortization	253			222			(20		)	(90		)	338
Reserve change on interest sensitive products	(590		)	1,018			187			79			199
Income tax	300			(794		)	(727		)	1,133			780
Net impact of net income adjustments	$	(555	)	$	1,474		$	1,351		$	83,695		$	(4,002	)


	Q1 2017			Q2 2017			Q3 2017			Q4 2017			Q1 2018
Pre-tax non-GAAP operating income by segment:
Annuity segment	$	16,421		$	18,174		$	17,015		$	17,211		$	16,582
Life Insurance segment	13,749			17,631			12,620			9,856			10,897
Corporate and Other segment	4,162			4,195			2,638			3,866			1,881
Total pre-tax non-GAAP operating income	34,332			40,000			32,273			30,933			29,360
Income taxes on non-GAAP operating income	(7,344		)	(9,183		)	(6,520		)	(6,129		)	(1,727		)
Non-GAAP operating income	$	26,988		$	30,817		$	25,753		$	24,804		$	27,633


(1)	Q1 2018 amount represents low income housing income tax credit (LIHTC) investment equity losses related to changes in federal tax rates. Such investments are accounted for under the equity method of accounting with income/loss recorded in arrears.


(2)	Amounts are net of offsets related to changes in amortization of unearned revenue reserves, deferred sales inducements and deferred acquisition costs, as well as changes in interest sensitive product reserves and income taxes attributable to these items.


(3)	Beginning in 2018, amount includes changes in net unrealized gains/losses on equity securities.

FBL Financial Group, Inc.

Segment Information

We analyze operations by reviewing financial information regarding our primary products that are aggregated into the Annuity and Life Insurance product segments. In addition, our Corporate and Other segment includes various support operations, corporate capital and other product lines that are not currently underwritten by the Company.

The Annuity segment primarily consists of fixed rate and index annuities and supplementary contracts (some of which involve life contingencies). Fixed rate and index annuities provide for tax-deferred savings and supplementary contracts provide for the systematic repayment of funds that accumulate interest. Fixed rate annuities consist primarily of flexible premium deferred annuities, but also include single premium deferred and immediate contracts. With fixed rate annuities, we bear the underlying investment risk and credit interest to the contracts at rates we determine, subject to interest rate guarantees. With index annuity products, we bear the underlying investment risk and credit interest in an amount equal to a percentage of the gain in a specified market index, subject to minimum guarantees.

The Life Insurance segment consists of whole life, term life and universal life policies. These policies provide benefits upon the death of the insured and may also allow the customer to build cash value on a tax-deferred basis.

The Corporate and Other segment consists of the following corporate items and products/services that do not meet the quantitative threshold for separate segment reporting:



•		investments and related investment income not specifically allocated to our product segments;
•		interest expense;
•		closed blocks of variable annuity, variable universal life insurance and accident and health insurance products;
•		advisory services for the management of investments and other companies;
•		marketing and distribution services for the sale of mutual funds and insurance products not issued by us; and
•		leasing services, primarily with affiliates.

We analyze our segment results based on pre-tax non-GAAP operating income. Accordingly, income taxes are not allocated to the segments. In addition, non-GAAP operating results are reported net of transactions between the segments.



FBL Financial Group, Inc.
Statements of Pre-tax Non-GAAP Operating Income
Annuity Segment

	Q1 2017				Q2 2017			Q3 2017			Q4 2017			Q1 2018
Pre-tax Non-GAAP Operating Income				(Dollars in thousands)

Non-GAAP operating revenues:
Interest sensitive product charges	$	1,135			$	1,202		$	1,115		$	1,032		$	1,202
Net investment income	53,916				55,631			53,878			56,275			56,233
Total non-GAAP operating revenues	55,051				56,833			54,993			57,307			57,435

Non-GAAP operating benefits and expenses:
Interest sensitive product benefits	29,878				29,865			31,385			31,096			31,286
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	531				483			537			611			504
Amortization of deferred acquisition costs	2,528				2,783			505			2,690			3,065
Amortization of value of insurance in force acquired	170				170			169			169			172
Other underwriting expenses	5,523				5,358			5,382			5,530			5,826
Total underwriting, acquisition and insurance expenses	8,752				8,794			6,593			9,000			9,567
Total non-GAAP operating benefits and expenses	38,630				38,659			37,978			40,096			40,853
Pre-tax non-GAAP operating income	$	16,421			$	18,174		$	17,015		$	17,211		$	16,582

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	4,357,562			$	4,395,757		$	4,382,218		$	4,470,721		$	4,586,256
Deferred acquisition costs	89,108				89,752			91,802			92,116			92,400
Value of insurance in force acquired	4,034				3,864			3,695			3,526			3,354

Liabilities and equity:
Liabilities:
Interest sensitive product reserves	$	3,863,647			$	3,872,179		$	3,884,541		$	3,963,187		$	4,110,232
Other insurance reserves	368,378				364,368			358,691			355,877			352,747
Allocated equity, excluding AOCI	266,618				266,902			267,324			272,101			272,242

Other data:
Number of direct contracts	53,528				53,390			53,218			53,250			52,991

Portfolio yield net of assumed defaults	4.67		%		4.60		%	4.58		%	4.50		%	4.47		%
Credited rate	2.69				2.64			2.63			2.56			2.56
Spread on individual annuities at end of quarter (1)	1.98		%		1.96		%	1.95		%	1.94		%	1.91		%

Interest sensitive reserve activity:
Individual annuity reserve:
Balance, beginning of period	$	2,984,644			$	3,022,180		$	3,057,952		$	3,082,310		$	3,109,789
Deposits	80,219				75,439			55,383			66,097			76,067
Withdrawals, surrenders and death benefits	(46,610		)		(46,700		)	(45,450		)	(49,428		)	(60,623		)
Net flows	33,609				28,739			9,933			16,669			15,444

Policyholder interest	20,710				20,826			21,041			20,817			20,363
Annuitizations and other	(16,783		)		(13,793		)	(6,616		)	(10,007		)	(10,734		)
Balance, end of period	3,022,180				3,057,952			3,082,310			3,109,789			3,134,862
Other interest sensitive reserves	841,467				814,227			802,231			853,398			975,370
Total interest sensitive product reserves	$	3,863,647			$	3,872,179		$	3,884,541		$	3,963,187		$	4,110,232


(1)	Point-in-time spread at the balance sheet date used by management for decision making, which differs from the spread earned during the reporting period disclosed in the Form 10Q or 10K.



FBL Financial Group, Inc.
Statements of Pre-tax Non-GAAP Operating Income
Life Insurance Segment

	Q1 2017				Q2 2017			Q3 2017			Q4 2017			Q1 2018
Pre-tax Non-GAAP Operating Income				(Dollars in thousands)

Non-GAAP operating revenues:
Interest sensitive product charges	$	17,100			$	17,487		$	16,633		$	14,230		$	18,059
Traditional life insurance premiums	48,434				50,262			47,087			49,547			49,497
Net investment income	38,769				39,436			38,995			41,118			40,250
Other income	(160		)		(117		)	(88		)	(140		)	(79		)
Total non-GAAP operating revenues	104,143				107,068			102,627			104,755			107,727

Non-GAAP operating benefits and expenses:
Interest sensitive product benefits:
Interest and index credits	8,385				8,267			8,289			9,506			8,393
Death benefits and other	14,074				13,338			16,569			13,204			15,241
Total interest sensitive product benefits	22,459				21,605			24,858			22,710			23,634
Traditional life insurance benefits:
Death benefits	21,667				19,997			21,530			23,707			23,735
Surrender and other benefits	10,429				8,936			7,409			8,642			10,144
Increase in traditional life future policy benefits	10,859				13,678			13,694			12,477			11,578
Total traditional life insurance benefits	42,955				42,611			42,633			44,826			45,457
Policyholder dividends	2,553				2,557			2,487			2,543			2,551
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	4,903				4,874			4,544			4,919			4,923
Amortization of deferred acquisition costs	3,911				4,519			1,122			4,816			4,436
Amortization of value of insurance in force acquired	375				375			375			375			373
Other underwriting expenses	14,404				14,185			14,536			14,448			16,151
Total underwriting, acquisition and insurance expenses	23,593				23,953			20,577			24,558			25,883
Total non-GAAP operating benefits and expenses	91,560				90,726			90,555			94,637			97,525
	$	12,583			$	16,342		$	12,072		$	10,118		$	10,202
Equity income (loss), before tax	1,166				1,289			548			(262		)	695
Pre-tax non-GAAP operating income	$	13,749			$	17,631		$	12,620		$	9,856		$	10,897

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	2,878,865			$	2,913,608		$	2,942,395		$	2,935,517		$	2,967,238
Deferred acquisition costs	271,454				275,356			282,116			287,421			291,212
Value of insurance in force acquired	17,029				16,654			16,279			15,904			15,531

Liabilities and equity:
Liabilities: (1)
Interest sensitive reserves	$	905,454			$	916,067		$	930,850		$	944,690		$	953,635
Other insurance reserves	1,902,738				1,917,124			1,933,051			1,951,565			1,964,649
Allocated equity, excluding AOCI	382,319				386,413			391,464			396,571			439,031



FBL Financial Group, Inc.
Statements of Pre-tax Non-GAAP Operating Income
Life Insurance Segment (Continued)

	Q1 2017				Q2 2017			Q3 2017			Q4 2017			Q1 2018
				(Dollars in thousands)
Other data:
Number of direct policies - traditional life	364,173				364,122			364,445			365,382			364,757
Number of direct policies - universal life	64,490				64,979			65,301			66,382			66,939
Direct face amounts - traditional life	$	49,473,291			$	49,919,358		$	50,435,353		$	50,841,581		$	51,159,302
Direct face amounts - universal life	$	6,943,248			$	7,048,021		$	7,124,265		$	7,275,994		$	7,383,996

Portfolio yield net of assumed defaults	5.14		%		5.12		%	5.12		%	5.07		%	5.04		%
Credited rate	3.76				3.71			3.71			3.64			3.64
Spread on universal life at end of quarter (2)	1.38		%		1.41		%	1.41		%	1.43		%	1.40		%

Interest sensitive reserve activity: (1)
Balance, beginning of period	$	899,207			$	905,454		$	916,067		$	930,850		$	944,690
Deposits	25,604				27,292			24,708			26,267			27,847
Withdrawals and surrenders	(8,212		)		(7,130		)	(6,668		)	(5,672		)	(8,110		)
Net flows	17,392				20,162			18,040			20,595			19,737

Policyholder interest	7,687				7,570			7,997			8,806			7,752
Policy charges	(17,833		)		(18,166		)	(18,149		)	(15,008		)	(18,807		)
Benefits and other	(999		)		1,047			6,895			(553		)	263
Balance, end of period	$	905,454			$	916,067		$	930,850		$	944,690		$	953,635


(1)	Reserves on riders in interest sensitive life insurance products are included in Other insurance reserves.


(2)	Point-in-time spread at the balance sheet date used by management for decision making with universal life (excluding products with a secondary guarantee) differs from the spread earned during the reporting period disclosed in the Form 10Q or 10K.



FBL Financial Group, Inc.
Statements of Pre-tax Non-GAAP Operating Income
Corporate and Other

	Q1 2017				Q2 2017			Q3 2017			Q4 2017			Q1 2018
Pre-tax Non-GAAP Operating Income				(Dollars in thousands)

Non-GAAP operating revenues:
Interest sensitive product charges	$	10,978			$	10,894		$	10,393		$	11,252		$	11,021
Net investment income	8,768				8,643			8,719			8,788			8,411
Other income	3,920				4,567			3,589			3,829			4,679
Total non-GAAP operating revenues	23,666				24,104			22,701			23,869			24,111

Non-GAAP operating benefits and expenses:
Interest sensitive product benefits	10,059				7,894			11,697			9,410			9,342
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	721				812			705			716			680
Amortization of deferred acquisition costs	637				1,223			(2,276		)	904			2,512
Other underwriting expenses	1,098				1,721			2,045			1,607			1,402
Total underwriting, acquisition and insurance expenses	2,456				3,756			474			3,227			4,594
Interest expense	1,212				1,213			1,213			1,212			1,213
Other expenses	4,151				4,740			4,971			4,520			5,593
Total non-GAAP operating benefits and expenses	17,878				17,603			18,355			18,369			20,742
	5,788				6,501			4,346			5,500			3,369
Net loss (income) attributable to noncontrolling interest	(2		)		(27		)	9			(8		)	23
Equity loss, before tax	(1,624		)		(2,279		)	(1,717		)	(1,626		)	(1,511		)
Pre-tax non-GAAP operating income	$	4,162			$	4,195		$	2,638		$	3,866		$	1,881

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	655,476			$	652,011		$	647,104		$	671,857		$	680,285
Deferred acquisition costs	69,667				67,425			71,038			70,247			68,202
Separate account assets	615,892				625,971			637,746			651,963			638,751

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	368,405			$	367,929		$	369,167		$	369,726		$	369,022
Other insurance reserves	93,054				91,316			94,088			93,754			91,305
Separate account liabilities	615,892				625,971			637,746			651,963			638,751
Allocated equity, excluding AOCI	365,103				382,112			392,939			432,137			363,657

Rollforward of separate account balances:
Beginning separate account balance	$	597,072			$	615,892		$	625,971		$	637,746		$	651,963
Net premiums and transfers	5,160				6,804			4,945			4,745			6,667
Net investment income (loss)	31,288				19,679			22,852			26,039			(3,424		)
Charges, benefits and surrenders	(17,628		)		(16,404		)	(16,022		)	(16,567		)	(16,455		)
Ending separate account balance	$	615,892			$	625,971		$	637,746		$	651,963		$	638,751

Other data:
Number of direct contracts - variable annuity	10,320				10,157			10,017			9,857			9,671
Number of direct policies - variable universal life	38,251				37,800			37,400			36,986			36,548
Direct face amounts - variable universal life	$	4,707,786			$	4,654,603		$	4,599,050		$	4,549,732		$	4,501,972



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment

	Q1 2017				Q2 2017			Q3 2017			Q4 2017			Q1 2018
				(Dollars in thousands)
Annuity
Balance - beginning of period	$	88,762			$	89,108		$	89,752		$	91,802		$	92,116
Capitalization:
Commissions	2,718				2,908			2,226			2,681			2,972
Expenses	194				183			181			237			283
Deferral of sales inducements	269				101			173			124			129
Total capitalization	3,181				3,192			2,580			3,042			3,384
Amortization - non-GAAP operating basis, before impact of unlocking	(2,591		)		(2,852		)	(2,307		)	(2,762		)	(3,157		)
Amortization - unlocking, non-GAAP operating basis	—				—			1,752			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(244		)		304			25			34			57
Balance - end of period	$	89,108			$	89,752		$	91,802		$	92,116		$	92,400

Life Insurance
Balance - beginning of period	$	267,545			$	271,454		$	275,356		$	282,116		$	287,421
Capitalization:
Commissions	5,498				5,682			5,122			7,250			5,505
Expenses	2,037				2,400			2,298			2,309			2,391
Deferral of sales inducements	421				441			93			595			355
Total capitalization	7,956				8,523			7,513			10,154			8,251
Amortization - non-GAAP operating basis, before impact of unlocking	(4,063		)		(4,686		)	(5,172		)	(4,973		)	(4,566		)
Amortization - unlocking, non-GAAP operating basis	—				—			4,351			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	16				65			68			124			106
Balance - end of period	$	271,454			$	275,356		$	282,116		$	287,421		$	291,212

Corporate and Other
Balance - beginning of period	$	69,664			$	69,667		$	68,546		$	71,038		$	70,247
Capitalization:
Commissions	157				130			83			113			142
Deferral of sales inducements	17				2			—			7			4
Total capitalization	174				132			83			120			146
Amortization - non-GAAP operating basis, before impact of unlocking	(664		)		(1,233		)	(907		)	(902		)	(2,568		)
Amortization - unlocking, non-GAAP operating basis	—				—			3,292			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	493				(20		)	24			(9		)	377
Balance - end of period	$	69,667			$	68,546		$	71,038		$	70,247		$	68,202



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment (Continued)

	Q1 2017				Q2 2017			Q3 2017			Q4 2017			Q1 2018
				(Dollars in thousands)
Total
Balance - beginning of period	$	425,971			$	430,229		$	433,654		$	444,956		$	449,784
Capitalization:
Commissions	8,373				8,720			7,431			10,044			8,619
Expenses	2,231				2,583			2,479			2,546			2,674
Deferral of sales inducements	707				544			266			726			488
Total capitalization	11,311				11,847			10,176			13,316			11,781
Amortization - non-GAAP operating basis, before impact of unlocking	(7,318		)		(8,771		)	(8,386		)	(8,637		)	(10,291		)
Amortization - unlocking, non-GAAP operating basis	—				—			9,395			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	265				349			117			149			540
Balance - end of period	430,229				433,654			444,956			449,784			451,814
Impact of unrealized gains in AOCI	(108,091		)		(137,017		)	(142,109		)	(147,173		)	(93,953		)
Deferred acquisition costs	$	322,138			$	296,637		$	302,847		$	302,611		$	357,861



FBL Financial Group, Inc.
Impact of Unlocking on Pre-tax Non-GAAP Operating Income

	Q1 2017			Q2 2017		Q3 2017			Q4 2017		Q1 2018
			(Dollars in thousands)
Annuity Segment
Amortization of deferred sales inducements reported in interest sensitive product benefits	$	—		$	—	$	10		$	—	$	—
Amortization of deferred acquisition costs	—			—		1,743			—		—
Changes in certain product reserves reported in interest sensitive product benefits	—			—		(228		)	—		—
Increase to pre-tax non-GAAP operating income	$	—		$	—	$	1,525		$	—	$	—

Life Segment
Amortization of unearned revenue reserve reported in interest sensitive product charges and other income	$	—		$	—	$	(1,166	)	$	—	$	—
Amortization of deferred sales inducements reported in interest sensitive product benefits	—			—		422			—		—
Amortization of deferred sales inducements reported in traditional life insurance benefits	—			—		55			—		—
Amortization of deferred acquisition costs	—			—		3,873			—		—
Changes in certain product reserves reported in interest sensitive product benefits	—			—		(5,574		)	—		—
Decrease to pre-tax non-GAAP operating income	$	—		$	—	$	(2,390	)	$	—	$	—

Corporate and Other Segment
Amortization of unearned revenue reserve reported in interest sensitive product charges	$	—		$	—	$	(579	)	$	—	$	—
Amortization of deferred sales inducements reported in interest sensitive product benefits	—			—		98			—		—
Amortization of deferred acquisition costs	—			—		3,194			—		—
Changes in certain product reserves reported in interest sensitive product benefits	—			—		(799		)	—		—
Increase to pre-tax non-GAAP operating income	$	—		$	—	$	1,914		$	—	$	—

Total impact of unlocking on pre-tax non-GAAP operating income	$	—		$	—	$	1,049		$	—	$	—



FBL Financial Group, Inc.
Collected Premiums (1)

	Q1 2017				Q2 2017			Q3 2017			Q4 2017			Q1 2018
				(Dollars in thousands)
Annuity
Individual:
Fixed rate:
First year	$	32,624			$	26,315		$	12,853		$	17,575		$	17,554
Renewal	24,217				20,624			14,839			18,621			20,875
Total fixed rate	56,841				46,939			27,692			36,196			38,429
Index annuity	23,427				28,834			28,118			30,174			37,665
Total individual	80,268				75,773			55,810			66,370			76,094
Group	1,195				766			2,323			2,115			2,716
Total Annuity	81,463				76,539			58,133			68,485			78,810

Life Insurance
Direct:
Universal life:
First year	6,301				8,060			7,331			4,746			7,157
Renewal	19,113				18,873			17,216			18,868			19,848
Total universal life	25,414				26,933			24,547			23,614			27,005
Participating whole life:
First year	2,985				3,183			2,446			3,304			2,695
Renewal	24,715				24,337			22,736			24,058			24,281
Total participating whole life	27,700				27,520			25,182			27,362			26,976
Term life and other:
First year	2,442				2,573			2,529			2,738			2,718
Renewal	25,781				25,312			24,947			25,583			26,620
Total term life and other	28,223				27,885			27,476			28,321			29,338
Total direct life insurance	81,337				82,338			77,205			79,297			83,319
Reinsurance	(7,764		)		(7,176		)	(5,991		)	(6,902		)	(7,056		)
Total Life Insurance	73,573				75,162			71,214			72,395			76,263

Corporate and Other
Variable, net of reinsurance	14,733				14,114			12,204			12,554			14,529
Accident and health, net of reinsurance	101				41			98			217			55
Total Corporate and Other	14,834				14,155			12,302			12,771			14,584

Total collected premiums	$	169,870			$	165,856		$	141,649		$	153,651		$	169,657


(1)	Collected premiums is a measure of sales production not recognized under GAAP.



FBL Financial Group, Inc.
Other Information

	March 31,				June 30,			September 30,			December 31,			March 31,
	2017				2017			2017			2017			2018
				(Dollars in thousands, except per share data)

Capitalization:
Trust preferred securities, due 2047	$	97,000			$	97,000		$	97,000		$	97,000		$	97,000
Total debt	97,000				97,000			97,000			97,000			97,000

Preferred stock	3,000				3,000			3,000			3,000			3,000
Common stockholders' equity, excluding AOCI	1,014,040				1,035,427			1,051,727			1,100,809			1,074,930
Total capitalization, excluding AOCI	1,114,040				1,135,427			1,151,727			1,200,809			1,174,930

Accumulated other comprehensive income	165,598				212,357			223,869			284,983			186,222
Total capitalization, including AOCI	$	1,279,638			$	1,347,784		$	1,375,596		$	1,485,792		$	1,361,152

Common shares outstanding	24,917,960				24,928,568			24,933,510			24,930,526			24,837,976

Book Value per Share:
Excluding AOCI	$	40.70			$	41.54		$	42.18		$	44.16		$	43.28
Including AOCI	47.34				50.05			51.16			55.59			50.78

Debt-to-Capital Ratio:
Excluding AOCI	8.7		%		8.5		%	8.4		%	8.1		%	8.3		%
Including AOCI	7.6				7.2			7.1			6.5			7.1

Debt-to-Capital Ratio with 50% Credit for Trust Preferred Securities:
Excluding AOCI	4.4		%		4.3		%	4.2		%	4.0		%	4.1		%
Including AOCI	3.8				3.6			3.5			3.3			3.6

Class A Common Ownership:
Iowa Farm Bureau Federation	59.3		%		59.2		%	59.2		%	59.2		%	59.5		%
Public	40.7				40.8			40.8			40.8			40.5
	100.0		%		100.0		%	100.0		%	100.0		%	100.0		%



FBL Financial Group, Inc.
Other Information (Continued)

	March 31,		June 30,		September 30,		December 31,		March 31,
	2017		2017		2017		2017		2018

Investment by Type:
Fixed maturity securities	63.7	%	62.8	%	62.3	%	60.7	%	59.3	%
Residential mortgage-backed	5.2		5.3		5.6		6.0		6.4
Commercial mortgage-backed	7.3		7.7		7.8		8.2		9.2
Other asset-backed	9.2		9.5		9.2		9.7		9.5
Mortgage loans	10.3		10.3		10.9		11.3		11.3
Equity securities	1.7		1.6		1.5		1.5		1.2
Other	2.6		2.8		2.7		2.6		3.1

Quality of Fixed Maturity Securities:
AAA, AA, A	63.8	%	63.9	%	64.4	%	65.4	%	66.1	%
BBB	31.8		32.3		32.0		31.1		30.4
BB	3.1		2.7		2.5		2.4		2.5
<BB	1.3		1.1		1.1		1.1		1.0

Agent Strength Totals:
Full time agents and agency managers:
8-state Farm Bureau Property & Casualty channel	1,186		1,177		1,213		1,192		1,168
6 life partner states and Colorado	653		651		653		648		657
	1,839		1,828		1,866		1,840		1,825




	Q1 2017				Q2 2017			Q3 2017			Q4 2017			Q1 2018
Equity Income (Loss), net of related income taxes				(Dollars in thousands)
Pre-tax equity income (loss):
Low income housing tax credit investments	$	(1,805	)		$	(2,938	)	$	(1,918	)	$	(1,828	)	$	(1,652	)
Other equity method investments	1,347				1,948			749			(60		)	836
	(458		)		(990		)	(1,169		)	(1,888		)	(816		)
Income taxes:
Taxes on equity income (loss)	160				346			410			661			171
Investment tax credits	3,529				3,568			3,563			3,567			3,569
Equity income, net of related taxes, included in non-GAAP operating income	3,231				2,924			2,804			2,340			2,924
LIHTC investment losses related to the enactment of the Tax Act (1)	—				—			—			—			(1,069		)
Equity income, net of related income taxes	$	3,231			$	2,924		$	2,804		$	2,340		$	1,855


(1)	Amount represents LIHTC investment equity losses related to the initial (day one) impact of changes in federal income tax rates.

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FBL FINANCIAL GROUP INC Reports