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	pressrelease8k2020q2.htm
EX-99.1 - EXHIBIT 99.1 - FBL FINANCIAL GROUP INC	exh991newsrelease2020q2.htm

FBL FINANCIAL GROUP, INC.

INVESTOR SUPPLEMENT

2020 Second 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)
June 30, 2020
Table of Contents/Notes

Consolidated Financial Statements:
Consolidated Balance Sheets		2
Consolidated Statements of Comprehensive Income		4
Consolidated Statements of Comprehensive Income (Loss), last five quarters		5
Net Income (Loss) to Adjusted Operating Income Reconciliation and Pre-tax Adjusted Operating Income by Segment, last five quarters		6
Financial Information by Segment:
Segment Information		7
Statements of Pre-tax Adjusted 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 Adjusted 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 adjusted 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. Adjusted operating income for the periods presented consists of net income adjusted primarily to exclude realized gains and losses on investments, which includes the change in fair value of equity securities and the change in allowances on investments, and the change in fair value of derivatives.

We use adjusted operating income, in addition to net income, to measure our performance since realized gains and losses on investments and the change in fair value of derivatives and equities can fluctuate greatly from quarter to quarter. These fluctuations make it difficult to analyze core operating trends. A view of our adjusted operating performance without the impact of these items enhances the analysis of our results. We use adjusted 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.

We analyze our segment results based on pre-tax adjusted operating income, which excludes the impact of certain items that are included in pre-tax net income. Pre-tax adjusted operating income is a basis allowed for segment reporting under GAAP. See Note 9 to our consolidated financial statements in Form 10-Q for the period ended June, 30, 2020 for further information regarding how we define our segments and pre-tax adjusted operating income.

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

FBL Financial Group, Inc.

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)



	June 30, 2020		December 31, 2019
Assets
Investments:
Fixed maturities - available for sale, at fair value (amortized cost 2020 - $7,202,072; 2019 - $7,015,269; and allowance for credit losses 2020 - $13,219, 2019 - $0)	$	8,107,499	$	7,702,628
Equity securities - at fair value (cost: 2020 - $95,811; 2019 - $95,269)	91,857		100,228
Mortgage loans (net of allowance for credit losses 2020 - $2,703, 2019 - $0)	990,872		1,011,678
Real estate	955		955
Policy loans	200,923		201,589
Short-term investments	16,240		11,865
Other investments	53,163		62,680
Total investments	9,461,509		9,091,623

Cash and cash equivalents	15,777		17,277
Securities and indebtedness of related parties	82,628		74,791
Accrued investment income	72,607		72,332
Amounts receivable from affiliates	3,469		4,357
Reinsurance recoverable	110,991		107,498
Deferred acquisition costs	231,572		289,456
Value of insurance in force acquired	2,464		2,624
Current income taxes recoverable	5,092		6,427
Other assets	163,666		167,940
Assets held in separate accounts	599,203		645,881








Total assets	$	10,748,978	$	10,480,206

FBL Financial Group, Inc.

Consolidated Balance Sheets (Continued)

(Dollars in thousands)



	June 30, 2020			December 31, 2019
Liabilities and stockholders' equity
Liabilities:
Future policy benefits:
Interest sensitive products	$	5,747,799		$	5,548,212
Traditional life insurance and accident and health products	1,869,932			1,845,337
Other policy claims and benefits	48,308			46,883
Supplementary contracts without life contingencies	288,903			296,915
Advance premiums and other deposits	258,867			253,458
Amounts payable to affiliates	812			1,218
Long-term debt	97,000			97,000
Deferred income taxes	178,676			152,373
Other liabilities	91,717			107,013
Liabilities related to separate accounts	599,203			645,881
Total liabilities	9,181,217			8,994,290

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 24,532,588 in 2020 and 24,652,802 shares in 2019	152,168			152,661
Class B common stock, without par value - authorized 1,500,000 shares, issued and outstanding 11,413 shares in 2020 and 2019	72			72
Accumulated other comprehensive income	481,626			354,764
Retained earnings	930,937			975,260
Total FBL Financial Group, Inc. stockholders' equity	1,567,803			1,485,757
Noncontrolling interest	(42		)	159
Total stockholders' equity	1,567,761			1,485,916
Total liabilities and stockholders' equity	$	10,748,978		$	10,480,206

FBL Financial Group, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands, except per share data)



	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Revenues:
Interest sensitive product charges	$	32,909		$	32,534		$	64,629		$	63,800
Traditional life insurance premiums	50,329			50,987			99,637			100,379
Net investment income	110,435			104,894			185,352			214,534
Net realized capital gains (losses)	2,753			377			(10,648		)	10,534
Change in allowance for credit losses on investments	(497		)	—			(12,758		)	—
Other-than-temporary impairment losses	—			—			—			(869		)
Other income	4,784			4,114			9,764			8,084
Total revenues	200,713			192,906			335,976			396,462

Benefits and expenses:
Interest sensitive product benefits	79,103			65,223			123,454			135,819
Traditional life insurance benefits	45,112			41,960			91,320			88,635
Policyholder dividends	1,617			2,564			4,146			5,098
Underwriting, acquisition and insurance expenses	33,492			38,948			72,913			75,137
Interest expense	1,213			1,212			2,426			2,424
Other expenses	7,225			6,635			14,646			12,885
Total benefits and expenses	167,762			156,542			308,905			319,998
	32,951			36,364			27,071			76,464
Income tax	(6,085		)	(5,511		)	(3,004		)	(11,787		)
Equity income (loss), net of related income taxes	(743		)	1,404			(515		)	1,624
Net income	26,123			32,257			23,552			66,301
Net loss attributable to noncontrolling interest	88			41			144			40
Net income attributable to FBL Financial Group, Inc.	$	26,211		$	32,298		$	23,696		$	66,341

Comprehensive income attributable to FBL Financial Group, Inc.	$	249,415		$	145,925		$	150,558		$	277,816

Earnings per common share	$	1.06		$	1.30		$	0.95		$	2.68
Earnings per common share - assuming dilution	$	1.06		$	1.30		$	0.95		$	2.68

Cash dividends per common share	$	0.50		$	0.48		$	1.00		$	0.96
Special cash dividend per common share	$	—		$	—		$	1.50		$	1.50

FBL Financial Group, Inc.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - Quarterly

(Dollars in thousands, except per share data)



	Q2 2019			Q3 2019			Q4 2019			Q1 2020			Q2 2020
Revenues:
Interest sensitive product charges	$	32,534		$	31,135		$	32,178		$	31,720		$	32,909
Traditional life insurance premiums	50,987			46,982			50,502			49,308			50,329
Net investment income	104,894			101,478			108,986			74,917			110,435
Net realized capital gains (losses)	377			696			(2,707		)	(13,401		)	2,753
Change in allowance for credit losses on investments	—			—			—			(12,261		)	(497		)
Other-than-temporary impairment losses	—			(50		)	—			—			—
Other income	4,114			4,417			4,602			4,980			4,784
Total revenues	192,906			184,658			193,561			135,263			200,713

Benefits and expenses:
Interest sensitive product benefits	65,223			67,147			73,507			44,351			79,103
Traditional life insurance benefits	41,960			42,877			43,142			46,208			45,112
Policyholder dividends	2,564			2,441			2,514			2,529			1,617
Underwriting, acquisition and insurance expenses	38,948			39,197			26,290			39,421			33,492
Interest expense	1,212			1,213			1,213			1,213			1,213
Other expenses	6,635			5,764			6,597			7,421			7,225
Total benefits and expenses	156,542			158,639			153,263			141,143			167,762
	36,364			26,019			40,298			(5,880		)	32,951
Income tax benefit (expense)	(5,511		)	(1,642		)	(6,500		)	3,081			(6,085		)
Equity income (loss), net of related income taxes	1,404			799			1,033			228			(743		)
Net income (loss)	32,257			25,176			34,831			(2,571		)	26,123
Net (income) loss attributable to noncontrolling interest	41			(47		)	(92		)	56			88
Net income (loss) attributable to FBL Financial Group, Inc.	$	32,298		$	25,129		$	34,739		$	(2,515	)	$	26,211

Comprehensive income (loss) attributable to FBL Financial Group, Inc.	$	145,925		$	128,511		$	(16,672	)	$	(98,857	)	$	249,415

Earnings (loss) per common share	$	1.30		$	1.01		$	1.40		$	(0.10	)	$	1.06
Earnings (loss) per common share - assuming dilution	$	1.30		$	1.01		$	1.40		$	(0.10	)	$	1.06

Cash dividends per common share	$	0.48		$	0.48		$	0.48		$	0.50		$	0.50
Special cash dividend per common share	$	—		$	—		$	—		$	1.50		$	—

Weighted average common shares outstanding (in thousands):
Basic	24,757			24,759			24,761			24,763			24,724
Effect of dilutive securities	11			10			8			—			4
Diluted	24,768			24,769			24,769			24,763			24,728



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


	Q2 2019			Q3 2019			Q4 2019			Q1 2020			Q2 2020

Net income (loss) attributable to FBL Financial Group, Inc.	$	32,298		$	25,129		$	34,739		$	(2,515	)	$	26,211
Net income adjustments:
Realized gains/losses on investments (1)	(289		)	(440		)	2,147			20,112			(1,709		)
Change in net unrealized gains/losses on derivatives (1)	(272		)	526			(2,047		)	2,039			748
Adjusted operating income (2)	$	31,737		$	25,215		$	34,839		$	19,636		$	25,250

Adjusted operating income per common share - assuming dilution (2)	$1.28			$1.02			$1.41			$0.79			$1.02

Adjusted operating return on equity, excluding AOCI - last twelve months	9.9%			9.3%			10.7%			10.2%			9.6%
Adjusted operating return on equity, including AOCI - last twelve months	8.7%			7.8%			8.6%			8.0%			7.2%

	Q2 2019			Q3 2019			Q4 2019			Q1 2020			Q2 2020
Impact of Adjustments on FBL Net Income
Realized gains (losses) on investments and change in fair value of equity securities and derivatives	$	444		$	(198	)	$	70		$	(28,069	)	$	426
Offsets: (3)
Change in amortization	(48		)	(343		)	61			(176		)	134
Reserve change on interest sensitive products	315			432			(258		)	205			656
Income tax	(150		)	23			27			5,889			(255		)
Net impact of net income adjustments	$	561		$	(86	)	$	(100	)	$	(22,151	)	$	961

	Q2 2019			Q3 2019			Q4 2019			Q1 2020			Q2 2020
Pre-tax adjusted operating income by segment:
Annuity segment	$	14,637		$	8,121		$	14,414		$	12,019		$	14,917
Life Insurance segment	18,239			14,032			24,771			10,267			12,260
Corporate and Other segment	4,595			4,939			2,456			219			3,706
Total pre-tax adjusted operating income	37,471			27,092			41,641			22,505			30,883
Income taxes on adjusted operating income	(5,734		)	(1,877		)	(6,802		)	(2,869		)	(5,633		)
Adjusted operating income (2)	$	31,737		$	25,215		$	34,839		$	19,636		$	25,250

(1) Amounts are net of adjustments, as applicable, to amortization of unearned revenue reserves and deferred acquisition costs, as well as changes in interest sensitive product reserves and income taxes attributable to these items.


(2)	Adjusted operating income is a non-GAAP measure of earnings, see Note 1 on page 1 for additional information.


(3)	The items excluded from adjusted operating income impact the amortization of deferred acquisition costs and unearned revenue reserve. Certain interest sensitive reserves as well as income taxes are also impacted.

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 indexed annuities and supplementary contracts (some of which involve life contingencies). Fixed rate and indexed 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 indexed 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, including indexed universal life. 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 includes (i) wealth management services; (ii) advisory services for the management of investments and other companies; (iii) marketing and distribution services for the sale of insurance products not issued by us; (iv) leasing services with affiliates; (v) closed blocks of variable annuity, variable life and accident and health products; (vi) interest expense and (vii) investments and related investment income not specifically allocated to our product segments.

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



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

	Q2 2019				Q3 2019			Q4 2019			Q1 2020			Q2 2020
Pre-tax Adjusted Operating Income				(Dollars in thousands)

Adjusted operating revenues:
Interest sensitive product charges	$	1,772			$	1,608		$	1,734		$	1,886		$	2,079
Net investment income	52,491				49,633			52,618			52,768			51,458
Total adjusted operating revenues	54,263				51,241			54,352			54,654			53,537

Adjusted operating benefits and expenses:
Interest sensitive product benefits	30,450				28,585			30,980			33,883			30,518
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	482				405			662			421			315
Amortization of deferred acquisition costs	2,917				8,015			2,763			2,646			2,397
Amortization of value of insurance in force acquired	163				164			164			175			175
Other underwriting expenses	5,614				5,951			5,369			5,510			5,215
Total underwriting, acquisition and insurance expenses	9,176				14,535			8,958			8,752			8,102
Total adjusted operating benefits and expenses	39,626				43,120			39,938			42,635			38,620
Pre-tax adjusted operating income	$	14,637			$	8,121		$	14,414		$	12,019		$	14,917

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	4,525,458			$	4,521,789		$	4,541,355		$	4,635,897		$	4,714,493
Deferred acquisition costs	93,898				88,266			88,295			88,257			87,622
Value of insurance in force acquired	2,525				2,361			2,198			2,022			1,847

Liabilities and equity:
Liabilities:
Interest sensitive product reserves	$	4,060,032			$	4,054,299		$	4,105,054		$	4,195,802		$	4,260,316
Other insurance reserves	340,896				338,585			335,222			332,478			329,208
Allocated equity, excluding AOCI	250,853				250,934			253,096			239,999			243,245

Other data:
Number of direct contracts	52,461				52,914			51,536			50,948			50,533

Portfolio yield net of assumed defaults	4.42		%		4.38		%	4.35		%	4.32		%	4.28		%
Credited rate	2.61				2.61			2.60			2.55			2.56
Spread on individual annuities at end of quarter (1)	1.81		%		1.77		%	1.75		%	1.77		%	1.72		%

Interest sensitive reserve activity:
Individual annuity reserve:
Balance, beginning of period	$	3,207,285			$	3,214,755		$	3,204,500		$	3,221,385		$	3,203,598
Deposits	56,643				53,972			63,532			55,266			34,973
Withdrawals, surrenders and death benefits	(62,808		)		(79,157		)	(63,065		)	(66,299		)	(51,605		)
Net flows	(6,165		)		(25,185		)	467			(11,033		)	(16,632		)

Policyholder interest	21,128				18,352			21,207			21,479			20,811
Annuitizations and other	(7,493		)		(3,422		)	(4,789		)	(28,233		)	1,902
Balance, end of period	3,214,755				3,204,500			3,221,385			3,203,598			3,209,679
Other interest sensitive reserves	845,277				849,799			883,669			992,204			1,050,637
Total interest sensitive product reserves	$	4,060,032			$	4,054,299		$	4,105,054		$	4,195,802		$	4,260,316


(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 Adjusted Operating Income
Life Insurance Segment

	Q2 2019				Q3 2019			Q4 2019			Q1 2020			Q2 2020
Pre-tax Adjusted Operating Income				(Dollars in thousands)

Adjusted operating revenues:
Interest sensitive product charges	$	19,635			$	19,163		$	18,956		$	20,379		$	19,969
Traditional life insurance premiums	50,987				46,982			50,502			49,308			50,329
Net investment income	40,454				38,581			40,204			37,575			39,271
Other income	(138		)		(131		)	(159		)	(47		)	(77		)
Total adjusted operating revenues	110,938				104,595			109,503			107,215			109,492

Adjusted operating benefits and expenses:
Interest sensitive product benefits:
Interest and index credits	9,018				8,326			9,803			7,843			9,500
Death benefits and other	13,892				17,198			15,513			16,371			16,846
Total interest sensitive product benefits	22,910				25,524			25,316			24,214			26,346
Traditional life insurance benefits:
Death benefits	20,577				25,233			22,878			26,098			23,584
Surrender and other benefits	10,092				9,435			9,548			10,142			7,383
Increase in traditional life future policy benefits	11,291				8,206			10,716			9,970			14,144
Total traditional life insurance benefits	41,960				42,874			43,142			46,210			45,111
Policyholder dividends	2,564				2,441			2,514			2,529			1,617
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	5,179				4,487			5,195			4,832			4,662
Amortization of deferred acquisition costs	4,344				(592		)	(5,732		)	2,419			3,065
Amortization of value of insurance in force acquired	372				372			372			370			370
Other underwriting expenses	16,378				16,278			14,950			16,749			15,078
Total underwriting, acquisition and insurance expenses	26,273				20,545			14,785			24,370			23,175
Total adjusted operating benefits and expenses	93,707				91,384			85,757			97,323			96,249
	$	17,231			$	13,211		$	23,746		$	9,892		$	13,243
Equity income (loss), before tax	1,008				821			1,025			375			(983		)
Pre-tax adjusted operating income	$	18,239			$	14,032		$	24,771		$	10,267		$	12,260

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	3,110,890			$	3,123,239		$	3,155,216		$	3,174,890		$	3,191,110
Deferred acquisition costs	316,309				323,609			341,143			346,585			350,092
Value of insurance in force acquired	13,668				13,296			12,924			12,554			12,184

Liabilities and equity:
Liabilities: (1)
Interest sensitive reserves	$	1,013,247			$	1,024,103		$	1,039,335		$	1,050,311		$	1,067,132
Other insurance reserves	2,019,588				2,033,080			2,043,029			2,056,553			2,084,413
Allocated equity, excluding AOCI	471,279				476,443			480,489			504,451			514,602



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

	Q2 2019				Q3 2019			Q4 2019			Q1 2020			Q2 2020
				(Dollars in thousands)
Other data:
Number of direct policies - traditional life	365,340				365,099			365,399			364,286			364,117
Number of direct policies - universal life	71,049				71,367			72,972			73,508			74,178
Direct face amounts - traditional life	$	52,729,936			$	53,005,016		$	53,320,484		$	53,509,739		$	53,846,236
Direct face amounts - universal life	$	7,978,929			$	8,020,444		$	8,245,749		$	8,342,877		$	8,442,603

Portfolio yield net of assumed defaults	4.97		%		4.91		%	4.85		%	4.84		%	4.80		%
Credited rate	3.79				3.80			3.81			3.85			3.85
Spread on universal life at end of quarter (2)	1.18		%		1.11		%	1.04		%	0.99		%	0.95		%

Interest sensitive reserve activity: (1)
Balance, beginning of period	$	1,001,865			$	1,013,247		$	1,024,103		$	1,039,335		$	1,050,311
Deposits	31,271				28,110			30,962			33,118			30,903
Withdrawals and surrenders	(9,081		)		(8,455		)	(6,915		)	(7,205		)	(6,972		)
Net flows	22,190				19,655			24,047			25,913			23,931

Policyholder interest	8,349				7,774			9,165			7,156			8,971
Policy charges	(20,287		)		(20,129		)	(20,603		)	(21,774		)	(21,733		)
Benefits and other	1,130				3,556			2,623			(319		)	5,652
Balance, end of period	$	1,013,247			$	1,024,103		$	1,039,335		$	1,050,311		$	1,067,132


(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 Adjusted Operating Income
Corporate and Other

	Q2 2019				Q3 2019			Q4 2019			Q1 2020			Q2 2020
Pre-tax Adjusted Operating Income				(Dollars in thousands)

Adjusted operating revenues:
Interest sensitive product charges	$	10,714			$	10,408		$	10,757		$	10,956		$	10,282
Net investment income	8,588				8,277			8,797			8,057			6,879
Other income	4,252				4,548			4,761			5,027			4,861
Total adjusted operating revenues	23,554				23,233			24,315			24,040			22,022

Adjusted operating benefits and expenses:
Interest sensitive product benefits	8,858				7,642			12,315			7,626			8,205
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	746				720			685			699			635
Amortization of deferred acquisition costs	905				1,854			9			5,055			(633		)
Other underwriting expenses	1,413				1,244			1,231			1,777			1,802
Total underwriting, acquisition and insurance expenses	3,064				3,818			1,925			7,531			1,804
Interest expense	1,212				1,213			1,213			1,213			1,213
Other expenses	6,635				5,764			6,597			7,421			7,225
Total adjusted operating benefits and expenses	19,769				18,437			22,050			23,791			18,447
	3,785				4,796			2,265			249			3,575
Net (income) loss attributable to noncontrolling interest	41				(47		)	(92		)	56			88
Equity income (loss), before tax	769				190			283			(86		)	43
Pre-tax adjusted operating income	$	4,595			$	4,939		$	2,456		$	219		$	3,706

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	654,750			$	686,296		$	702,734		$	652,607		$	641,214
Deferred acquisition costs	62,499				60,346			60,245			55,656			55,912
Separate account assets	625,177				612,338			645,881			525,582			599,203

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	370,238			$	372,492		$	369,454		$	369,026		$	368,870
Other insurance reserves	85,842				81,706			86,094			83,905			80,819
Separate account liabilities	625,177				612,338			645,881			525,582			599,203
Allocated equity, excluding AOCI	369,536				378,198			394,408			328,408			325,330

Rollforward of separate account balances:
Beginning separate account balance	$	614,121			$	625,177		$	612,338		$	645,881		$	525,582
Net premiums and transfers	5,115				1,208			3,502			4,313			3,466
Net investment income (loss)	22,611				1,721			44,460			(107,413		)	86,556
Charges, benefits and surrenders	(16,670		)		(15,768		)	(14,419		)	(17,199		)	(16,401		)
Ending separate account balance	$	625,177			$	612,338		$	645,881		$	525,582		$	599,203

Other data:
Number of direct contracts - variable annuity	8,938				8,810			8,676			8,543			8,407
Number of direct policies - variable universal life	34,236				33,787			33,383			32,943			32,618
Direct face amounts - variable universal life	$	4,217,491			$	4,158,021		$	4,117,248		$	4,043,188		$	4,010,324



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment

	Q2 2019				Q3 2019			Q4 2019			Q1 2020			Q2 2020
				(Dollars in thousands)
Annuity
Balance - beginning of period	$	94,164			$	93,898		$	88,266		$	88,295		$	88,257
Cumulative effect of change in accounting principle related to current expected credit loss	—				—			—			286			—
Capitalization:
Commissions	2,319				2,291			2,729			2,110			1,394
Expenses	306				302			247			252			126
Total capitalization	2,625				2,593			2,976			2,362			1,520
Amortization - adjusted operating basis, before impact of unlocking	(2,974		)		(3,471		)	(2,844		)	(2,730		)	(2,463		)
Amortization - unlocking, adjusted operating basis	—				(4,863		)	—			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities	83				109			(103		)	44			308
Balance - end of period	$	93,898			$	88,266		$	88,295		$	88,257		$	87,622

Life Insurance
Balance - beginning of period	$	312,664			$	316,309		$	323,609		$	341,143		$	346,585
Cumulative effect of change in accounting principle related to current expected credit loss	—				—			—			79			—
Capitalization:
Commissions	5,451				4,243			8,160			4,353			4,641
Expenses	2,709				2,367			2,494			2,380			2,059
Deferral of sales inducements	263				111			1,517			241			284
Total capitalization	8,423				6,721			12,171			6,974			6,984
Amortization - adjusted operating basis, before impact of unlocking	(4,519		)		(3,206		)	(4,226		)	(2,514		)	(3,135		)
Amortization - unlocking, adjusted operating basis	—				3,842			10,000			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities	(259		)		(57		)	(411		)	903			(342		)
Balance - end of period	$	316,309			$	323,609		$	341,143		$	346,585		$	350,092

Corporate and Other
Balance - beginning of period	$	63,593			$	62,499		$	60,346		$	60,245		$	55,656
Cumulative effect of change in accounting principle related to current expected credit loss	—				—			—			105			—
Capitalization:
Commissions	105				77			39			59			40
Deferral of sales inducements	—				2			25			—			6
Total capitalization	105				79			64			59			46
Amortization - adjusted operating basis, before impact of unlocking	(913		)		(1,771		)	(9		)	(5,132		)	620
Amortization - unlocking, adjusted operating basis	—				(109		)	—			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities	(286		)		(352		)	(156		)	379			(410		)
Balance - end of period	$	62,499			$	60,346		$	60,245		$	55,656		$	55,912



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

	Q2 2019				Q3 2019			Q4 2019			Q1 2020			Q2 2020
				(Dollars in thousands)
Total
Balance - beginning of period	$	470,421			$	472,706		$	472,221		$	489,683		$	490,498
Cumulative effect of change in accounting principle related to current expected credit loss	—				—			—			470			—
Capitalization:
Commissions	7,875				6,611			10,928			6,522			6,075
Expenses	3,015				2,669			2,741			2,632			2,185
Deferral of sales inducements	263				113			1,542			241			290
Total capitalization	11,153				9,393			15,211			9,395			8,550
Amortization - adjusted operating basis, before impact of unlocking	(8,406		)		(8,448		)	(7,079		)	(10,376		)	(4,978		)
Amortization - unlocking, adjusted operating basis	—				(1,130		)	10,000			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities	(462		)		(300		)	(670		)	1,326			(444		)
Balance - end of period	472,706				472,221			489,683			490,498			493,626
Impact of unrealized gains in AOCI	(158,405		)		(219,109		)	(200,227		)	(152,526		)	(262,054		)
Deferred acquisition costs	$	314,301			$	253,112		$	289,456		$	337,972		$	231,572



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

	Q2 2019			Q3 2019			Q4 2019		Q1 2020		Q2 2020
			(Dollars in thousands)
Annuity Segment
Amortization of deferred sales inducements reported in interest sensitive product benefits	$	—		$	(195	)	$	—	$	—	$	—
Amortization of deferred acquisition costs	—			(4,668		)	—		—		—
Decrease to pre-tax adjusted operating income	$	—		$	(4,863	)	$	—	$	—	$	—

Life Segment
Amortization of unearned revenue reserve reported in interest sensitive product charges and other income	$	—		$	(386	)	$	—	$	—	$	—
Amortization of deferred sales inducements reported in interest sensitive product benefits	—			45			—		—		—
Amortization of deferred sales inducements reported in traditional life insurance benefits	—			69			183		—		—
Amortization of deferred acquisition costs	—			3,728			9,817		—		—
Changes in reserves reported in interest sensitive product benefits	—			(1,062		)	—		—		—
Increase to pre-tax adjusted operating income	$	—		$	2,394		$	10,000	$	—	$	—

Corporate and Other Segment
Amortization of unearned revenue reserve reported in interest sensitive product charges	$	—		$	(94	)	$	—	$	—	$	—
Amortization of deferred sales inducements reported in interest sensitive product benefits	—			26			—		—		—
Amortization of deferred acquisition costs	—			(135		)	—		—		—
Changes in reserves reported in interest sensitive product benefits	—			2			—		—		—
Decrease to pre-tax adjusted operating income	$	—		$	(201	)	$	—	$	—	$	—

Total impact of unlocking on pre-tax adjusted operating income	$	—		$	(2,670	)	$	10,000	$	—	$	—



FBL Financial Group, Inc.
Collected Premiums (1)

	Q2 2019				Q3 2019			Q4 2019			Q1 2020			Q2 2020
				(Dollars in thousands)
Annuity
Individual:
Fixed rate:
First year	$	14,308			$	13,313		$	10,489		$	5,370		$	4,465
Renewal	16,017				11,644			13,428			17,483			14,072
Total fixed rate	30,325				24,957			23,917			22,853			18,537
Index annuity	28,417				30,293			41,177			32,641			16,436
Total individual	58,742				55,250			65,094			55,494			34,973
Group	910				826			1,643			2,605			832
Total Annuity	59,652				56,076			66,737			58,099			35,805

Life Insurance
Direct:
Universal life:
First year	7,967				6,571			7,129			8,106			5,870
Renewal	22,332				21,214			22,173			24,512			24,176
Total universal life	30,299				27,785			29,302			32,618			30,046
Whole life:
First year	2,659				1,834			2,335			1,789			1,882
Renewal	23,684				22,016			23,273			23,379			23,205
Total whole life	26,343				23,850			25,608			25,168			25,087
Term life and other:
First year	2,898				2,656			2,811			2,835			3,005
Renewal	27,382				26,798			27,382			28,302			28,329
Total term life and other	30,280				29,454			30,193			31,137			31,334
Total direct life insurance	86,922				81,089			85,103			88,923			86,467
Reinsurance	(7,524		)		(6,046		)	(6,818		)	(6,288		)	(7,994		)
Total Life Insurance	79,398				75,043			78,285			82,635			78,473

Corporate and Other
Variable, net of reinsurance	13,065				10,982			10,824			13,113			11,583
Accident and health, net of reinsurance	45				41			179			179			71
Total Corporate and Other	13,110				11,023			11,003			13,292			11,654

Total collected premiums	$	152,160			$	142,142		$	156,025		$	154,026		$	125,932


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



FBL Financial Group, Inc.
Other Information

	June 30,				September 30,			December 31,			March 31,			June 30,
	2019				2019			2019			2020			2020
				(Dollars in thousands, except per share data)

Capitalization:
Short-term debt	$	—			$	16,000		$	—		$	10,000		$	—
Trust preferred securities, due 2047	97,000				97,000			97,000			97,000			97,000
Total debt	97,000				113,000			97,000			107,000			97,000

Preferred stock	3,000				3,000			3,000			3,000			3,000
Common stockholders' equity, excluding AOCI	1,091,669				1,105,035			1,127,993			1,072,858			1,083,177
Total capitalization, excluding AOCI	1,191,669				1,221,035			1,227,993			1,182,858			1,183,177

Accumulated other comprehensive income	302,793				406,175			354,764			258,422			481,626
Total capitalization, including AOCI	$	1,494,462			$	1,627,210		$	1,582,757		$	1,441,280		$	1,664,803

Common shares outstanding	24,659,885				24,662,308			24,664,215			24,642,190			24,544,001

Book Value per Share:
Excluding AOCI	$	44.27			$	44.81		$	45.73		$	43.54		$	44.13
Including AOCI	56.55				61.28			60.12			54.02			63.76

Debt-to-Capital Ratio:
Excluding AOCI	8.1		%		9.3		%	7.9		%	9.0		%	8.2		%
Including AOCI	6.5				6.9			6.1			7.4			5.8

Debt-to-Capital Ratio with 50% Credit for Trust Preferred Securities:
Excluding AOCI	4.1		%		5.3		%	3.9		%	4.9		%	4.1		%
Including AOCI	3.2				4.0			3.1			4.1			2.9

Class A Common Ownership:
Iowa Farm Bureau Federation	59.9		%		59.9		%	59.9		%	59.9		%	60.2		%
Public	40.1				40.1			40.1			40.1			39.8
	100.0		%		100.0		%	100.0		%	100.0		%	100.0		%



FBL Financial Group, Inc.
Other Information (Continued)

	June 30,		September 30,		December 31,		March 31,		June 30,
	2019		2019		2019		2020		2020

Investment by Type:
Fixed maturity securities	58.2	%	58.2	%	57.9	%	57.1	%	58.3	%
Residential mortgage-backed	7.1		7.4		7.4		7.3		7.3
Commercial mortgage-backed	11.3		11.6		11.5		12.7		12.1
Other asset-backed	7.8		7.6		7.9		7.8		8.0
Mortgage loans	11.5		11.1		11.2		11.0		10.5
Equity securities	1.2		1.1		1.1		1.0		1.0
Other	2.9		3.0		3.0		3.1		2.8

Quality of Fixed Maturity Securities:
AAA, AA, A	68.0	%	68.3	%	68.2	%	69.3	%	67.9	%
BBB	29.7		29.5		29.5		28.1		28.5
BB	1.6		1.5		1.6		1.9		2.7
<BB	0.7		0.7		0.7		0.7		0.9

Agent Strength Totals:
Full time agents and agency managers:
8-state Farm Bureau Property & Casualty channel	1,185		1,200		1,197		1,167		1,109
6 life partner states and Colorado	649		655		661		664		661
	1,834		1,855		1,858		1,831		1,770



FBL Financial Group, Inc.
Income Taxes
(Dollars in thousands)

	Q2 2019			Q3 2019			Q4 2019			Q1 2020			Q2 2020

Income tax benefit (expense)	$	(5,511	)	$	(1,642	)	$	(6,500	)	$	3,081		$	(6,085	)
Tax on equity income	(373		)	(212		)	(275		)	(61		)	197
Net income adjustments:
Income tax offset on net income adjustments	150			(23		)	(27		)	(5,889		)	255
Income taxes on adjusted operating income	$	(5,734	)	$	(1,877	)	$	(6,802	)	$	(2,869	)	$	(5,633	)

Income taxes on adjusted operating income before benefits of LIHTC investments	$	(6,633	)	$	(2,727	)	$	(7,653	)	$	(3,752	)	$	(6,557	)
Amounts related to LIHTC investments	899			850			851			883			924
Income taxes on adjusted operating income	$	(5,734	)	$	(1,877	)	$	(6,802	)	$	(2,869	)	$	(5,633	)

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FBL FINANCIAL GROUP INC Reports