Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - FBL FINANCIAL GROUP INC | exh991newsrelease2020q4.htm |
| 8-K - 8-K - FBL FINANCIAL GROUP INC | fbl-20210204.htm |
FBL FINANCIAL GROUP, INC.
INVESTOR SUPPLEMENT
2020 Fourth 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) | ||||||||
| December 31, 2020 | ||||||||
| Table of Contents/Notes | ||||||||
| Consolidated Financial Statements: | ||||||||
| Consolidated Balance Sheets | ||||||||
| Consolidated Statements of Comprehensive Income | ||||||||
| Consolidated Statements of Comprehensive Income (Loss), last five quarters | ||||||||
| Net Income (Loss) to Adjusted Operating Income Reconciliation and Pre-tax Adjusted Operating Income by Segment, last five quarters | ||||||||
| Financial Information by Segment: | ||||||||
| Segment Information | ||||||||
| Statements of Pre-tax Adjusted Operating Income, last five quarters: | ||||||||
| Annuity Segment | ||||||||
| Life Insurance Segment | ||||||||
| Corporate and Other Segment | ||||||||
| Deferred Acquisition Costs by Segment | ||||||||
| Impact of Unlocking on Pre-tax Adjusted Operating Income | ||||||||
| Collected Premiums, last five quarters | ||||||||
| Other Information | ||||||||
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 and the change in fair value of derivatives and equity securities. Effective for 2020, we revised our adjusted operating income policy to exclude proposed acquisition transaction expenses, as these expenses are not reflective of our ongoing operations. See Form 8-K filed on January 11, 2021 for more information associated with our proposed go-private transaction.
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, along with the impact of expenses associated with the go-private transaction, 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 13 to our consolidated financial statements in Form 10-K for the year ended December 31, 2019 for further information regarding how we define our segments.
NOTE 2: Certain financial information presented herein may not add due to rounding.
1
FBL Financial Group, Inc.
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
| December 31, 2020 | December 31, 2019 | ||||||||||
| Assets | |||||||||||
| Investments: | |||||||||||
| Fixed maturities - available for sale, at fair value (amortized cost 2020 - $7,179,303; 2019 - $7,015,269; and allowance for credit losses 2020 - $4,882, 2019 - $0) | $ | 8,283,687 | $ | 7,702,628 | |||||||
| Equity securities at fair value (cost: 2020 - $82,999; 2019 - $95,269) | 88,281 | 100,228 | |||||||||
| Mortgage loans (net of allowance for credit losses 2020 - $1,553, 2019 - $0) | 994,101 | 1,011,678 | |||||||||
| Real estate | 955 | 955 | |||||||||
| Policy loans | 195,666 | 201,589 | |||||||||
| Short-term investments | 63,062 | 11,865 | |||||||||
| Other investments (net of allowance for credit losses 2020 - $929, 2019 - $0) | 58,258 | 62,680 | |||||||||
| Total investments | 9,684,010 | 9,091,623 | |||||||||
| Cash and cash equivalents | 12,882 | 17,277 | |||||||||
| Securities and indebtedness of related parties | 88,445 | 74,791 | |||||||||
| Accrued investment income | 70,278 | 72,332 | |||||||||
| Amounts receivable from affiliates | 3,257 | 4,357 | |||||||||
| Reinsurance recoverable | 115,168 | 107,498 | |||||||||
| Deferred acquisition costs | 176,085 | 289,456 | |||||||||
| Value of insurance in force acquired | 2,304 | 2,624 | |||||||||
| Current income taxes recoverable | 16,732 | 6,427 | |||||||||
| Other assets | 152,929 | 167,940 | |||||||||
| Assets held in separate accounts | 674,182 | 645,881 | |||||||||
| Total assets | $ | 10,996,272 | $ | 10,480,206 | |||||||
2
FBL Financial Group, Inc.
Consolidated Balance Sheets (Continued)
(Dollars in thousands)
| December 31, 2020 | December 31, 2019 | ||||||||||
| Liabilities and stockholders' equity | |||||||||||
| Liabilities: | |||||||||||
| Future policy benefits: | |||||||||||
| Interest sensitive products | $ | 5,725,725 | $ | 5,548,212 | |||||||
| Traditional life insurance and accident and health products | 1,890,547 | 1,845,337 | |||||||||
| Other policy claims and benefits | 57,438 | 46,883 | |||||||||
| Supplementary contracts without life contingencies | 274,469 | 296,915 | |||||||||
| Advance premiums and other deposits | 271,082 | 253,458 | |||||||||
| Amounts payable to affiliates | 406 | 1,218 | |||||||||
| Long-term debt payable to non-affiliates | 97,000 | 97,000 | |||||||||
| Deferred income taxes | 211,180 | 152,373 | |||||||||
| Other liabilities | 102,127 | 107,013 | |||||||||
| Liabilities related to separate accounts | 674,182 | 645,881 | |||||||||
| Total liabilities | 9,304,156 | 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 24,384,109 in 2020 and 24,652,802 shares in 2019 | 151,061 | 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 | 587,279 | 354,764 | |||||||||
| Retained earnings | 950,687 | 975,260 | |||||||||
| Total FBL Financial Group, Inc. stockholders' equity | 1,692,099 | 1,485,757 | |||||||||
| Noncontrolling interest | 17 | 159 | |||||||||
| Total stockholders' equity | 1,692,116 | 1,485,916 | |||||||||
| Total liabilities and stockholders' equity | $ | 10,996,272 | $ | 10,480,206 | |||||||
3
FBL Financial Group, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
(Dollars in thousands, except per share data)
| Three months ended December 31, | Year ended December 31, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Interest sensitive product charges | $ | 32,473 | $ | 32,178 | $ | 132,522 | $ | 127,113 | |||||||||||||||
| Traditional life insurance premiums | 51,320 | 50,502 | 198,749 | 197,863 | |||||||||||||||||||
| Net investment income | 106,023 | 108,986 | 397,231 | 424,998 | |||||||||||||||||||
| Net realized capital gains (losses) | (3,428) | (2,707) | (12,085) | 8,523 | |||||||||||||||||||
| Change in allowance for credit losses on investments | 6,656 | — | (4,199) | — | |||||||||||||||||||
| Other-than-temporary impairment losses | — | — | — | (919) | |||||||||||||||||||
| Other income | 5,400 | 4,602 | 20,047 | 17,103 | |||||||||||||||||||
| Total revenues | 198,444 | 193,561 | 732,265 | 774,681 | |||||||||||||||||||
| Benefits and expenses: | |||||||||||||||||||||||
| Interest sensitive product benefits | 78,944 | 73,507 | 282,201 | 276,473 | |||||||||||||||||||
| Traditional life insurance benefits | 49,592 | 43,142 | 186,441 | 174,654 | |||||||||||||||||||
| Policyholder dividends | 1,659 | 2,514 | 7,538 | 10,053 | |||||||||||||||||||
| Underwriting, acquisition and insurance expenses | 32,843 | 26,290 | 143,887 | 140,624 | |||||||||||||||||||
| Interest expense | 1,377 | 1,213 | 5,015 | 4,850 | |||||||||||||||||||
| Other expenses | 10,187 | 6,597 | 32,711 | 25,246 | |||||||||||||||||||
| Total benefits and expenses | 174,602 | 153,263 | 657,793 | 631,900 | |||||||||||||||||||
| 23,842 | 40,298 | 74,472 | 142,781 | ||||||||||||||||||||
| Income tax | (2,174) | (6,500) | (8,061) | (19,929) | |||||||||||||||||||
| Equity income, net of related income taxes | 6,144 | 1,033 | 5,906 | 3,456 | |||||||||||||||||||
| Net income | 27,812 | 34,831 | 72,317 | 126,308 | |||||||||||||||||||
| Net (income) loss attributable to noncontrolling interest | 31 | (92) | 196 | (99) | |||||||||||||||||||
| Net income attributable to FBL Financial Group, Inc. | $ | 27,843 | $ | 34,739 | $ | 72,513 | $ | 126,209 | |||||||||||||||
| Comprehensive income (loss) attributable to FBL Financial Group, Inc. | $ | 86,035 | $ | (16,672) | $ | 305,028 | $ | 389,655 | |||||||||||||||
| Earnings per common share | $ | 1.14 | $ | 1.40 | $ | 2.94 | $ | 5.09 | |||||||||||||||
| Earnings per common share - assuming dilution | $ | 1.14 | $ | 1.40 | $ | 2.94 | $ | 5.09 | |||||||||||||||
| Cash dividends per common share | $ | 0.50 | $ | 0.48 | $ | 2.00 | $ | 1.92 | |||||||||||||||
| Special cash dividend per common share | $ | — | $ | — | $ | 1.50 | $ | 1.50 | |||||||||||||||
4
FBL Financial Group, Inc.
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - Quarterly
(Dollars in thousands, except per share data)
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||
| Interest sensitive product charges | $ | 32,178 | $ | 31,720 | $ | 32,909 | $ | 35,420 | $ | 32,473 | |||||||||||||||||||
| Traditional life insurance premiums | 50,502 | 49,308 | 50,329 | 47,792 | 51,320 | ||||||||||||||||||||||||
| Net investment income | 108,986 | 74,917 | 110,435 | 105,856 | 106,023 | ||||||||||||||||||||||||
| Net realized capital gains (losses) | (2,707) | (13,401) | 2,753 | 1,991 | (3,428) | ||||||||||||||||||||||||
| Change in allowance for credit losses on investments | — | (12,261) | (497) | 1,903 | 6,656 | ||||||||||||||||||||||||
| Other income | 4,602 | 4,980 | 4,784 | 4,883 | 5,400 | ||||||||||||||||||||||||
| Total revenues | 193,561 | 135,263 | 200,713 | 197,845 | 198,444 | ||||||||||||||||||||||||
| Benefits and expenses: | |||||||||||||||||||||||||||||
| Interest sensitive product benefits | 73,507 | 44,351 | 79,103 | 79,803 | 78,944 | ||||||||||||||||||||||||
| Traditional life insurance benefits | 43,142 | 46,208 | 45,112 | 45,529 | 49,592 | ||||||||||||||||||||||||
| Policyholder dividends | 2,514 | 2,529 | 1,617 | 1,733 | 1,659 | ||||||||||||||||||||||||
| Underwriting, acquisition and insurance expenses | 26,290 | 39,421 | 33,492 | 38,131 | 32,843 | ||||||||||||||||||||||||
| Interest expense | 1,213 | 1,213 | 1,213 | 1,212 | 1,377 | ||||||||||||||||||||||||
| Other expenses | 6,597 | 7,421 | 7,225 | 7,878 | 10,187 | ||||||||||||||||||||||||
| Total benefits and expenses | 153,263 | 141,143 | 167,762 | 174,286 | 174,602 | ||||||||||||||||||||||||
| 40,298 | (5,880) | 32,951 | 23,559 | 23,842 | |||||||||||||||||||||||||
| Income tax benefit (expense) | (6,500) | 3,081 | (6,085) | (2,883) | (2,174) | ||||||||||||||||||||||||
| Equity income (loss), net of related income taxes | 1,033 | 228 | (743) | 277 | 6,144 | ||||||||||||||||||||||||
| Net income (loss) | 34,831 | (2,571) | 26,123 | 20,953 | 27,812 | ||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interest | (92) | 56 | 88 | 21 | 31 | ||||||||||||||||||||||||
| Net income (loss) attributable to FBL Financial Group, Inc. | $ | 34,739 | $ | (2,515) | $ | 26,211 | $ | 20,974 | $ | 27,843 | |||||||||||||||||||
| Comprehensive income (loss) attributable to FBL Financial Group, Inc. | $ | (16,672) | $ | (98,857) | $ | 249,415 | $ | 68,435 | $ | 86,035 | |||||||||||||||||||
| Earnings (loss) per common share | $ | 1.40 | $ | (0.10) | $ | 1.06 | $ | 0.85 | $ | 1.14 | |||||||||||||||||||
| Earnings (loss) per common share - assuming dilution | $ | 1.40 | $ | (0.10) | $ | 1.06 | $ | 0.85 | $ | 1.14 | |||||||||||||||||||
| Cash dividends per common share | $ | 0.48 | $ | 0.50 | $ | 0.50 | $ | 0.50 | $ | 0.50 | |||||||||||||||||||
| Special cash dividend per common share | $ | — | $ | 1.50 | $ | — | $ | — | $ | — | |||||||||||||||||||
| Weighted average common shares outstanding (in thousands): | |||||||||||||||||||||||||||||
| Basic | 24,761 | 24,763 | 24,724 | 24,497 | 24,478 | ||||||||||||||||||||||||
| Effect of dilutive securities | 8 | — | 4 | 3 | 1 | ||||||||||||||||||||||||
| Diluted | 24,769 | 24,763 | 24,728 | 24,500 | 24,479 | ||||||||||||||||||||||||
5
| 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) | |||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| Net income (loss) attributable to FBL Financial Group, Inc. | $ | 34,739 | $ | (2,515) | $ | 26,211 | $ | 20,974 | $ | 27,843 | |||||||||||||||||||
| Net income adjustments: | |||||||||||||||||||||||||||||
| Proposed acquisition transaction expenses (1) | — | — | — | — | 2,147 | ||||||||||||||||||||||||
| Realized gains/losses on investments (2) | 2,147 | 20,112 | (1,709) | (3,300) | (2,808) | ||||||||||||||||||||||||
| Change in net unrealized gains/losses on derivatives (2) | (2,047) | 2,039 | 748 | 2,079 | 91 | ||||||||||||||||||||||||
| Adjusted operating income (3) | $ | 34,839 | $ | 19,636 | $ | 25,250 | $ | 19,753 | $ | 27,273 | |||||||||||||||||||
| Adjusted operating income per common share - assuming dilution (3) | $1.41 | $0.79 | $1.02 | $0.80 | $1.11 | ||||||||||||||||||||||||
| Adjusted operating return on equity, excluding AOCI - last twelve months | 10.7% | 10.2% | 9.6% | 9.1% | 8.4% | ||||||||||||||||||||||||
| Adjusted operating return on equity, including AOCI - last twelve months | 8.6% | 8.0% | 7.2% | 6.6% | 6.0% | ||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| Impact of Adjustments on FBL Net Income | |||||||||||||||||||||||||||||
| Proposed acquisition transaction expenses (1) | $ | — | $ | — | $ | — | $ | — | $ | (2,147) | |||||||||||||||||||
| Realized gains (losses) on investments and change in fair value of equity securities and derivatives | 70 | (28,069) | 426 | 780 | 3,176 | ||||||||||||||||||||||||
| Offsets: (4) | |||||||||||||||||||||||||||||
| Change in amortization | 61 | (176) | 134 | 639 | (247) | ||||||||||||||||||||||||
| Reserve change on interest sensitive products | (258) | 205 | 656 | 126 | 84 | ||||||||||||||||||||||||
| Income tax | 27 | 5,889 | (255) | (324) | (296) | ||||||||||||||||||||||||
| Net impact of net income adjustments | $ | (100) | $ | (22,151) | $ | 961 | $ | 1,221 | $ | 570 | |||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| Pre-tax adjusted operating income by segment: | |||||||||||||||||||||||||||||
| Annuity segment | $ | 14,414 | $ | 12,019 | $ | 14,917 | $ | 18,916 | $ | 15,181 | |||||||||||||||||||
| Life Insurance segment | 24,771 | 10,267 | 12,260 | 2,641 | 11,490 | ||||||||||||||||||||||||
| Corporate and Other segment | 2,456 | 219 | 3,706 | 829 | 4,113 | ||||||||||||||||||||||||
| Total pre-tax adjusted operating income | 41,641 | 22,505 | 30,883 | 22,386 | 30,784 | ||||||||||||||||||||||||
| Income taxes on adjusted operating income | (6,802) | (2,869) | (5,633) | (2,633) | (3,511) | ||||||||||||||||||||||||
| Adjusted operating income (3) | $ | 34,839 | $ | 19,636 | $ | 25,250 | $ | 19,753 | $ | 27,273 | |||||||||||||||||||
(1) Amount represents the transaction expenses relating to FBL Financial Group's proposed go-private transaction.
(2) 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.
(3) Adjusted operating income is a non-GAAP measure of earnings, see Note 1 on page 1 for additional information.
(4) 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.
6
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.
7
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Statements of Pre-tax Adjusted Operating Income | |||||||||||||||||||||||||||||
| Annuity Segment | |||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| Pre-tax Adjusted Operating Income | (Dollars in thousands) | ||||||||||||||||||||||||||||
| Adjusted operating revenues: | |||||||||||||||||||||||||||||
| Interest sensitive product charges | $ | 1,734 | $ | 1,886 | $ | 2,079 | $ | 1,776 | $ | 2,237 | |||||||||||||||||||
| Net investment income | 52,618 | 52,768 | 51,458 | 51,576 | 51,934 | ||||||||||||||||||||||||
| Total adjusted operating revenues | 54,352 | 54,654 | 53,537 | 53,352 | 54,171 | ||||||||||||||||||||||||
| Adjusted operating benefits and expenses: | |||||||||||||||||||||||||||||
| Interest sensitive product benefits | 30,980 | 33,883 | 30,518 | 25,652 | 30,938 | ||||||||||||||||||||||||
| Underwriting, acquisition and insurance expenses: | |||||||||||||||||||||||||||||
| Commission expense, net of deferrals | 662 | 421 | 315 | 320 | 299 | ||||||||||||||||||||||||
| Amortization of deferred acquisition costs | 2,763 | 2,646 | 2,397 | 3,384 | 2,439 | ||||||||||||||||||||||||
| Amortization of value of insurance in force acquired | 164 | 175 | 175 | 175 | 164 | ||||||||||||||||||||||||
| Other underwriting expenses | 5,369 | 5,510 | 5,215 | 4,905 | 5,150 | ||||||||||||||||||||||||
| Total underwriting, acquisition and insurance expenses | 8,958 | 8,752 | 8,102 | 8,784 | 8,052 | ||||||||||||||||||||||||
| Total adjusted operating benefits and expenses | 39,938 | 42,635 | 38,620 | 34,436 | 38,990 | ||||||||||||||||||||||||
| Pre-tax adjusted operating income | $ | 14,414 | $ | 12,019 | $ | 14,917 | $ | 18,916 | $ | 15,181 | |||||||||||||||||||
| Selected balance sheet data, securities at amortized cost: | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Investments | $ | 4,541,355 | $ | 4,635,897 | $ | 4,714,493 | $ | 4,662,809 | $ | 4,629,414 | |||||||||||||||||||
| Deferred acquisition costs | 88,295 | 88,257 | 87,622 | 87,104 | 86,289 | ||||||||||||||||||||||||
| Value of insurance in force acquired | 2,198 | 2,022 | 1,847 | 1,672 | 1,507 | ||||||||||||||||||||||||
| Liabilities and equity: | |||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Interest sensitive product reserves | $ | 4,105,054 | $ | 4,195,802 | $ | 4,260,316 | $ | 4,238,518 | $ | 4,191,493 | |||||||||||||||||||
| Other insurance reserves | 335,222 | 332,478 | 329,208 | 322,916 | 317,933 | ||||||||||||||||||||||||
| Allocated equity, excluding AOCI | 253,096 | 239,999 | 243,245 | 241,756 | 239,000 | ||||||||||||||||||||||||
| Other data: | |||||||||||||||||||||||||||||
| Number of direct contracts | 51,536 | 50,948 | 50,533 | 50,217 | 49,895 | ||||||||||||||||||||||||
| Portfolio yield net of assumed defaults | 4.35 | % | 4.32 | % | 4.28 | % | 4.21 | % | 4.14 | % | |||||||||||||||||||
| Credited rate | 2.60 | 2.55 | 2.56 | 2.56 | 2.56 | ||||||||||||||||||||||||
| Spread on individual annuities at end of quarter (1) | 1.75 | % | 1.77 | % | 1.72 | % | 1.65 | % | 1.58 | % | |||||||||||||||||||
| Interest sensitive reserve activity: | |||||||||||||||||||||||||||||
| Individual annuity reserve: | |||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 3,204,500 | $ | 3,221,385 | $ | 3,203,598 | $ | 3,209,679 | $ | 3,221,472 | |||||||||||||||||||
| Deposits | 63,532 | 55,266 | 34,973 | 43,119 | 42,142 | ||||||||||||||||||||||||
| Withdrawals, surrenders and death benefits | (63,065) | (66,299) | (51,605) | (50,945) | (65,422) | ||||||||||||||||||||||||
| Net flows | 467 | (11,033) | (16,632) | (7,826) | (23,280) | ||||||||||||||||||||||||
| Policyholder interest | 21,207 | 21,479 | 20,811 | 21,125 | 21,962 | ||||||||||||||||||||||||
| Annuitizations and other | (4,789) | (28,233) | 1,902 | (1,506) | 57 | ||||||||||||||||||||||||
| Balance, end of period | 3,221,385 | 3,203,598 | 3,209,679 | 3,221,472 | 3,220,211 | ||||||||||||||||||||||||
| Other interest sensitive reserves | 883,669 | 992,204 | 1,050,637 | 1,017,046 | 971,282 | ||||||||||||||||||||||||
| Total interest sensitive product reserves | $ | 4,105,054 | $ | 4,195,802 | $ | 4,260,316 | $ | 4,238,518 | $ | 4,191,493 | |||||||||||||||||||
(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.
8
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Statements of Pre-tax Adjusted Operating Income | |||||||||||||||||||||||||||||
| Life Insurance Segment | |||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| Pre-tax Adjusted Operating Income | (Dollars in thousands) | ||||||||||||||||||||||||||||
| Adjusted operating revenues: | |||||||||||||||||||||||||||||
| Interest sensitive product charges | $ | 18,956 | $ | 20,379 | $ | 19,969 | $ | 23,243 | $ | 20,116 | |||||||||||||||||||
| Traditional life insurance premiums | 50,502 | 49,308 | 50,329 | 47,792 | 51,320 | ||||||||||||||||||||||||
| Net investment income | 40,204 | 37,575 | 39,271 | 40,198 | 40,454 | ||||||||||||||||||||||||
| Other income | (159) | (47) | (77) | (63) | (67) | ||||||||||||||||||||||||
| Total adjusted operating revenues | 109,503 | 107,215 | 109,492 | 111,170 | 111,823 | ||||||||||||||||||||||||
| Adjusted operating benefits and expenses: | |||||||||||||||||||||||||||||
| Interest sensitive product benefits: | |||||||||||||||||||||||||||||
| Interest and index credits | 9,803 | 7,843 | 9,500 | 11,110 | 10,526 | ||||||||||||||||||||||||
| Death benefits and other | 15,513 | 16,371 | 16,846 | 22,958 | 17,251 | ||||||||||||||||||||||||
| Total interest sensitive product benefits | 25,316 | 24,214 | 26,346 | 34,068 | 27,777 | ||||||||||||||||||||||||
| Traditional life insurance benefits: | |||||||||||||||||||||||||||||
| Death benefits | 22,878 | 26,098 | 23,584 | 25,579 | 31,998 | ||||||||||||||||||||||||
| Surrender and other benefits | 9,548 | 10,142 | 7,383 | 7,835 | 8,380 | ||||||||||||||||||||||||
| Increase in traditional life future policy benefits | 10,716 | 9,970 | 14,144 | 12,113 | 9,214 | ||||||||||||||||||||||||
| Total traditional life insurance benefits | 43,142 | 46,210 | 45,111 | 45,527 | 49,592 | ||||||||||||||||||||||||
| Policyholder dividends | 2,514 | 2,529 | 1,617 | 1,733 | 1,659 | ||||||||||||||||||||||||
| Underwriting, acquisition and insurance expenses: | |||||||||||||||||||||||||||||
| Commission expense, net of deferrals | 5,195 | 4,832 | 4,662 | 4,547 | 4,782 | ||||||||||||||||||||||||
| Amortization of deferred acquisition costs | (5,732) | 2,419 | 3,065 | 8,404 | 3,287 | ||||||||||||||||||||||||
| Amortization of value of insurance in force acquired | 372 | 370 | 370 | 370 | 370 | ||||||||||||||||||||||||
| Other underwriting expenses | 14,950 | 16,749 | 15,078 | 14,179 | 15,217 | ||||||||||||||||||||||||
| Total underwriting, acquisition and insurance expenses | 14,785 | 24,370 | 23,175 | 27,500 | 23,656 | ||||||||||||||||||||||||
| Total adjusted operating benefits and expenses | 85,757 | 97,323 | 96,249 | 108,828 | 102,684 | ||||||||||||||||||||||||
| $ | 23,746 | $ | 9,892 | $ | 13,243 | $ | 2,342 | $ | 9,139 | ||||||||||||||||||||
| Equity income (loss), before tax | 1,025 | 375 | (983) | 299 | 2,351 | ||||||||||||||||||||||||
| Pre-tax adjusted operating income | $ | 24,771 | $ | 10,267 | $ | 12,260 | $ | 2,641 | $ | 11,490 | |||||||||||||||||||
| Selected balance sheet data, securities at amortized cost: | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Investments | $ | 3,155,216 | $ | 3,174,890 | $ | 3,191,110 | $ | 3,228,619 | $ | 3,218,873 | |||||||||||||||||||
| Deferred acquisition costs | 341,143 | 346,585 | 350,092 | 346,776 | 353,626 | ||||||||||||||||||||||||
| Value of insurance in force acquired | 12,924 | 12,554 | 12,184 | 11,814 | 11,444 | ||||||||||||||||||||||||
| Liabilities and equity: | |||||||||||||||||||||||||||||
| Liabilities: (1) | |||||||||||||||||||||||||||||
| Interest sensitive reserves | $ | 1,039,335 | $ | 1,050,311 | $ | 1,067,132 | $ | 1,086,664 | $ | 1,103,666 | |||||||||||||||||||
| Other insurance reserves | 2,043,029 | 2,056,553 | 2,084,413 | 2,097,431 | 2,123,108 | ||||||||||||||||||||||||
| Allocated equity, excluding AOCI | 480,489 | 504,451 | 514,602 | 520,220 | 528,358 | ||||||||||||||||||||||||
9
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Statements of Pre-tax Adjusted Operating Income | |||||||||||||||||||||||||||||
| Life Insurance Segment (Continued) | |||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Other data: | |||||||||||||||||||||||||||||
| Number of direct policies - traditional life | 365,399 | 364,286 | 364,117 | 363,880 | 364,729 | ||||||||||||||||||||||||
| Number of direct policies - universal life | 72,972 | 73,508 | 74,178 | 74,450 | 75,612 | ||||||||||||||||||||||||
| Direct face amounts - traditional life | $ | 53,320,484 | $ | 53,509,739 | $ | 53,846,236 | $ | 54,192,288 | $ | 54,732,343 | |||||||||||||||||||
| Direct face amounts - universal life | $ | 8,245,749 | $ | 8,342,877 | $ | 8,442,603 | $ | 8,503,362 | $ | 8,673,699 | |||||||||||||||||||
| Portfolio yield net of assumed defaults | 4.85 | % | 4.84 | % | 4.80 | % | 4.76 | % | 4.69 | % | |||||||||||||||||||
| Credited rate | 3.81 | 3.85 | 3.85 | 3.83 | 3.82 | ||||||||||||||||||||||||
| Spread on universal life at end of quarter (2) | 1.04 | % | 0.99 | % | 0.95 | % | 0.93 | % | 0.87 | % | |||||||||||||||||||
| Interest sensitive reserve activity: (1) | |||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 1,024,103 | $ | 1,039,335 | $ | 1,050,311 | $ | 1,067,132 | $ | 1,086,664 | |||||||||||||||||||
| Deposits | 30,962 | 33,118 | 30,903 | 30,888 | 33,115 | ||||||||||||||||||||||||
| Withdrawals and surrenders | (6,915) | (7,205) | (6,972) | (7,675) | (5,767) | ||||||||||||||||||||||||
| Net flows | 24,047 | 25,913 | 23,931 | 23,213 | 27,348 | ||||||||||||||||||||||||
| Policyholder interest | 9,165 | 7,156 | 8,971 | 9,444 | 9,910 | ||||||||||||||||||||||||
| Policy charges | (20,603) | (21,774) | (21,733) | (21,666) | (22,219) | ||||||||||||||||||||||||
| Benefits and other | 2,623 | (319) | 5,652 | 8,541 | 1,963 | ||||||||||||||||||||||||
| Balance, end of period | $ | 1,039,335 | $ | 1,050,311 | $ | 1,067,132 | $ | 1,086,664 | $ | 1,103,666 | |||||||||||||||||||
(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.
10
| FBL Financial Group, Inc. | ||||||||||||||||||||||||||||||||
| Statements of Pre-tax Adjusted Operating Income | ||||||||||||||||||||||||||||||||
| Corporate and Other | ||||||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | ||||||||||||||||||||||||||||
| Pre-tax Adjusted Operating Income | (Dollars in thousands) | |||||||||||||||||||||||||||||||
| Adjusted operating revenues: | ||||||||||||||||||||||||||||||||
| Interest sensitive product charges | $ | 10,757 | $ | 10,956 | $ | 10,282 | $ | 10,246 | $ | 10,028 | ||||||||||||||||||||||
| Net investment income | 8,797 | 8,057 | 6,879 | 7,306 | 7,298 | |||||||||||||||||||||||||||
| Other income | 4,761 | 5,027 | 4,861 | 4,946 | 5,467 | |||||||||||||||||||||||||||
| Total adjusted operating revenues | 24,315 | 24,040 | 22,022 | 22,498 | 22,793 | |||||||||||||||||||||||||||
| Adjusted operating benefits and expenses: | ||||||||||||||||||||||||||||||||
| Interest sensitive product benefits | 12,315 | 7,626 | 8,205 | 10,310 | 13,921 | |||||||||||||||||||||||||||
| Underwriting, acquisition and insurance expenses: | ||||||||||||||||||||||||||||||||
| Commission expense, net of deferrals | 685 | 699 | 635 | 669 | 583 | |||||||||||||||||||||||||||
| Amortization of deferred acquisition costs | 9 | 5,055 | (633) | 111 | (1,368) | |||||||||||||||||||||||||||
| Other underwriting expenses | 1,231 | 1,777 | 1,802 | 1,562 | 1,584 | |||||||||||||||||||||||||||
| Total underwriting, acquisition and insurance expenses | 1,925 | 7,531 | 1,804 | 2,342 | 799 | |||||||||||||||||||||||||||
| Interest expense | 1,213 | 1,213 | 1,213 | 1,212 | 1,377 | |||||||||||||||||||||||||||
| Other expenses | 6,597 | 7,421 | 7,225 | 7,878 | 8,040 | |||||||||||||||||||||||||||
| Total adjusted operating benefits and expenses | 22,050 | 23,791 | 18,447 | 21,742 | 24,137 | |||||||||||||||||||||||||||
| 2,265 | 249 | 3,575 | 756 | (1,344) | ||||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interest | (92) | 56 | 88 | 21 | 31 | |||||||||||||||||||||||||||
| Equity income (loss), before tax | 283 | (86) | 43 | 52 | 5,426 | |||||||||||||||||||||||||||
| Pre-tax adjusted operating income | $ | 2,456 | $ | 219 | $ | 3,706 | $ | 829 | $ | 4,113 | ||||||||||||||||||||||
| Selected balance sheet data, securities at amortized cost: | ||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Investments | $ | 702,734 | $ | 652,607 | $ | 641,214 | $ | 692,965 | $ | 721,175 | ||||||||||||||||||||||
| Deferred acquisition costs | 60,245 | 55,656 | 55,912 | 55,381 | 56,659 | |||||||||||||||||||||||||||
| Separate account assets | 645,881 | 525,582 | 599,203 | 616,381 | 674,182 | |||||||||||||||||||||||||||
| Liabilities and equity: | ||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Interest sensitive reserves | $ | 369,454 | $ | 369,026 | $ | 368,870 | $ | 372,594 | $ | 376,114 | ||||||||||||||||||||||
| Other insurance reserves | 86,094 | 83,905 | 80,819 | 82,944 | 85,339 | |||||||||||||||||||||||||||
| Separate account liabilities | 645,881 | 525,582 | 599,203 | 616,381 | 674,182 | |||||||||||||||||||||||||||
| Allocated equity, excluding AOCI | 394,408 | 328,408 | 325,330 | 324,166 | 334,462 | |||||||||||||||||||||||||||
| Rollforward of separate account balances: | ||||||||||||||||||||||||||||||||
| Beginning separate account balance | $ | 612,338 | $ | 645,881 | $ | 525,582 | $ | 599,203 | $ | 616,381 | ||||||||||||||||||||||
| Net premiums and transfers | 3,502 | 4,313 | 3,466 | (771) | (287) | |||||||||||||||||||||||||||
| Net investment income (loss) | 44,460 | (107,413) | 86,556 | 37,130 | 75,522 | |||||||||||||||||||||||||||
| Charges, benefits and surrenders | (14,419) | (17,199) | (16,401) | (19,181) | (17,434) | |||||||||||||||||||||||||||
| Ending separate account balance | $ | 645,881 | $ | 525,582 | $ | 599,203 | $ | 616,381 | $ | 674,182 | ||||||||||||||||||||||
| Other data: | ||||||||||||||||||||||||||||||||
| Number of direct contracts - variable annuity | 8,676 | 8,543 | 8,407 | 8,260 | 8,153 | |||||||||||||||||||||||||||
| Number of direct policies - variable universal life | 33,383 | 32,943 | 32,618 | 32,298 | 31,953 | |||||||||||||||||||||||||||
| Direct face amounts - variable universal life | $ | 4,117,248 | $ | 4,043,188 | $ | 4,010,324 | $ | 3,971,325 | $ | 3,937,325 | ||||||||||||||||||||||
11
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Deferred Acquisition Costs by Segment | |||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Annuity | |||||||||||||||||||||||||||||
| Balance - beginning of period | $ | 88,266 | $ | 88,295 | $ | 88,257 | $ | 87,622 | $ | 87,104 | |||||||||||||||||||
| Cumulative effect of change in accounting principle related to current expected credit loss | — | 286 | — | — | — | ||||||||||||||||||||||||
| Capitalization: | |||||||||||||||||||||||||||||
| Commissions | 2,729 | 2,110 | 1,394 | 1,709 | 1,451 | ||||||||||||||||||||||||
| Expenses | 247 | 252 | 126 | 190 | 322 | ||||||||||||||||||||||||
| Total capitalization | 2,976 | 2,362 | 1,520 | 1,899 | 1,773 | ||||||||||||||||||||||||
| Amortization - adjusted operating basis, before impact of unlocking | (2,844) | (2,730) | (2,463) | (2,245) | (2,502) | ||||||||||||||||||||||||
| Amortization - unlocking, adjusted operating basis | — | — | — | (1,132) | — | ||||||||||||||||||||||||
| Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities | (103) | 44 | 308 | 960 | (86) | ||||||||||||||||||||||||
| Balance - end of period | $ | 88,295 | $ | 88,257 | $ | 87,622 | $ | 87,104 | $ | 86,289 | |||||||||||||||||||
| Life Insurance | |||||||||||||||||||||||||||||
| Balance - beginning of period | $ | 323,609 | $ | 341,143 | $ | 346,585 | $ | 350,092 | $ | 346,776 | |||||||||||||||||||
| Cumulative effect of change in accounting principle related to current expected credit loss | — | 79 | — | — | — | ||||||||||||||||||||||||
| Capitalization: | |||||||||||||||||||||||||||||
| Commissions | 8,160 | 4,353 | 4,641 | 4,298 | 7,601 | ||||||||||||||||||||||||
| Expenses | 2,494 | 2,380 | 2,059 | 1,850 | 2,289 | ||||||||||||||||||||||||
| Deferral of sales inducements | 1,517 | 241 | 284 | 81 | 444 | ||||||||||||||||||||||||
| Total capitalization | 12,171 | 6,974 | 6,984 | 6,229 | 10,334 | ||||||||||||||||||||||||
| Amortization - adjusted operating basis, before impact of unlocking | (4,226) | (2,514) | (3,135) | (2,895) | (3,380) | ||||||||||||||||||||||||
| Amortization - unlocking, adjusted operating basis | 10,000 | — | — | (6,624) | — | ||||||||||||||||||||||||
| Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities | (411) | 903 | (342) | (26) | (104) | ||||||||||||||||||||||||
| Balance - end of period | $ | 341,143 | $ | 346,585 | $ | 350,092 | $ | 346,776 | $ | 353,626 | |||||||||||||||||||
| Corporate and Other | |||||||||||||||||||||||||||||
| Balance - beginning of period | $ | 60,346 | $ | 60,245 | $ | 55,656 | $ | 55,912 | $ | 55,381 | |||||||||||||||||||
| Cumulative effect of change in accounting principle related to current expected credit loss | — | 105 | — | — | — | ||||||||||||||||||||||||
| Capitalization: | |||||||||||||||||||||||||||||
| Commissions | 39 | 59 | 40 | — | — | ||||||||||||||||||||||||
| Deferral of sales inducements | 25 | — | 6 | 4 | 7 | ||||||||||||||||||||||||
| Total capitalization | 64 | 59 | 46 | 4 | 7 | ||||||||||||||||||||||||
| Amortization - adjusted operating basis, before impact of unlocking | (9) | (5,132) | 620 | 15 | 1,421 | ||||||||||||||||||||||||
| Amortization - unlocking, adjusted operating basis | — | — | — | (99) | — | ||||||||||||||||||||||||
| Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities | (156) | 379 | (410) | (451) | (150) | ||||||||||||||||||||||||
| Balance - end of period | $ | 60,245 | $ | 55,656 | $ | 55,912 | $ | 55,381 | $ | 56,659 | |||||||||||||||||||
12
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Deferred Acquisition Costs by Segment (Continued) | |||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||
| Balance - beginning of period | $ | 472,221 | $ | 489,683 | $ | 490,498 | $ | 493,626 | $ | 489,261 | |||||||||||||||||||
| Cumulative effect of change in accounting principle related to current expected credit loss | — | 470 | — | — | — | ||||||||||||||||||||||||
| Capitalization: | |||||||||||||||||||||||||||||
| Commissions | 10,928 | 6,522 | 6,075 | 6,007 | 9,052 | ||||||||||||||||||||||||
| Expenses | 2,741 | 2,632 | 2,185 | 2,040 | 2,611 | ||||||||||||||||||||||||
| Deferral of sales inducements | 1,542 | 241 | 290 | 85 | 451 | ||||||||||||||||||||||||
| Total capitalization | 15,211 | 9,395 | 8,550 | 8,132 | 12,114 | ||||||||||||||||||||||||
| Amortization - adjusted operating basis, before impact of unlocking | (7,079) | (10,376) | (4,978) | (5,125) | (4,461) | ||||||||||||||||||||||||
| Amortization - unlocking, adjusted operating basis | 10,000 | — | — | (7,855) | — | ||||||||||||||||||||||||
| Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities | (670) | 1,326 | (444) | 483 | (340) | ||||||||||||||||||||||||
| Balance - end of period | 489,683 | 490,498 | 493,626 | 489,261 | 496,574 | ||||||||||||||||||||||||
| Impact of unrealized gains in AOCI | (200,227) | (152,526) | (262,054) | (288,239) | (320,489) | ||||||||||||||||||||||||
| Deferred acquisition costs | $ | 289,456 | $ | 337,972 | $ | 231,572 | $ | 201,022 | $ | 176,085 | |||||||||||||||||||
13
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Impact of Unlocking on Pre-tax Adjusted Operating Income | |||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Annuity Segment | |||||||||||||||||||||||||||||
| Amortization of deferred sales inducements reported in interest sensitive product benefits | $ | — | $ | — | $ | — | $ | 57 | $ | — | |||||||||||||||||||
| Amortization of deferred acquisition costs | — | — | — | (1,189) | — | ||||||||||||||||||||||||
| Changes in reserves reported in interest sensitive product benefits | — | — | — | 5,358 | — | ||||||||||||||||||||||||
| Increase to pre-tax adjusted operating income | $ | — | $ | — | $ | — | $ | 4,226 | $ | — | |||||||||||||||||||
| Life Segment | |||||||||||||||||||||||||||||
| Amortization of unearned revenue reserve reported in interest sensitive product charges and other income | $ | — | $ | — | $ | — | $ | 3,772 | $ | — | |||||||||||||||||||
| Amortization of deferred sales inducements reported in interest sensitive product benefits | — | — | — | (1,207) | — | ||||||||||||||||||||||||
| Amortization of deferred sales inducements reported in traditional life insurance benefits | 183 | — | — | 138 | — | ||||||||||||||||||||||||
| Amortization of deferred acquisition costs | 9,817 | — | — | (5,556) | — | ||||||||||||||||||||||||
| Changes in reserves reported in interest sensitive product benefits | — | — | — | (7,270) | — | ||||||||||||||||||||||||
| Increase (decrease) to pre-tax adjusted operating income | $ | 10,000 | $ | — | $ | — | $ | (10,123) | $ | — | |||||||||||||||||||
| Corporate and Other Segment | |||||||||||||||||||||||||||||
| Amortization of unearned revenue reserve reported in interest sensitive product charges | $ | — | $ | — | $ | — | $ | (62) | $ | — | |||||||||||||||||||
| Amortization of deferred sales inducements reported in interest sensitive product benefits | — | — | — | 51 | — | ||||||||||||||||||||||||
| Amortization of deferred acquisition costs | — | — | — | (150) | — | ||||||||||||||||||||||||
| Changes in reserves reported in interest sensitive product benefits | — | — | — | (659) | — | ||||||||||||||||||||||||
| Decrease to pre-tax adjusted operating income | $ | — | $ | — | $ | — | $ | (820) | $ | — | |||||||||||||||||||
| Total impact of unlocking on pre-tax adjusted operating income | $ | 10,000 | $ | — | $ | — | $ | (6,717) | $ | — | |||||||||||||||||||
14
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Collected Premiums (1) | |||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Annuity | |||||||||||||||||||||||||||||
| Individual: | |||||||||||||||||||||||||||||
| Fixed rate: | |||||||||||||||||||||||||||||
| First year | $ | 10,489 | $ | 5,370 | $ | 4,465 | $ | 13,866 | $ | 8,343 | |||||||||||||||||||
| Renewal | 13,428 | 17,483 | 14,072 | 8,888 | 10,275 | ||||||||||||||||||||||||
| Total fixed rate | 23,917 | 22,853 | 18,537 | 22,754 | 18,618 | ||||||||||||||||||||||||
| Index annuity | 41,177 | 32,641 | 16,436 | 20,647 | 23,524 | ||||||||||||||||||||||||
| Total individual | 65,094 | 55,494 | 34,973 | 43,401 | 42,142 | ||||||||||||||||||||||||
| Group | 1,643 | 2,605 | 832 | 1,862 | 1,008 | ||||||||||||||||||||||||
| Total Annuity | 66,737 | 58,099 | 35,805 | 45,263 | 43,150 | ||||||||||||||||||||||||
| Life Insurance | |||||||||||||||||||||||||||||
| Direct: | |||||||||||||||||||||||||||||
| Universal life: | |||||||||||||||||||||||||||||
| First year | 7,129 | 8,106 | 5,870 | 6,336 | 6,706 | ||||||||||||||||||||||||
| Renewal | 22,173 | 24,512 | 24,176 | 24,121 | 25,728 | ||||||||||||||||||||||||
| Total universal life | 29,302 | 32,618 | 30,046 | 30,457 | 32,434 | ||||||||||||||||||||||||
| Whole life: | |||||||||||||||||||||||||||||
| First year | 2,335 | 1,789 | 1,882 | 2,141 | 3,257 | ||||||||||||||||||||||||
| Renewal | 23,273 | 23,379 | 23,205 | 21,054 | 22,518 | ||||||||||||||||||||||||
| Total whole life | 25,608 | 25,168 | 25,087 | 23,195 | 25,775 | ||||||||||||||||||||||||
| Term life and other: | |||||||||||||||||||||||||||||
| First year | 2,811 | 2,835 | 3,005 | 2,855 | 2,874 | ||||||||||||||||||||||||
| Renewal | 27,382 | 28,302 | 28,329 | 27,636 | 29,302 | ||||||||||||||||||||||||
| Total term life and other | 30,193 | 31,137 | 31,334 | 30,491 | 32,176 | ||||||||||||||||||||||||
| Total direct life insurance | 85,103 | 88,923 | 86,467 | 84,143 | 90,385 | ||||||||||||||||||||||||
| Reinsurance | (6,818) | (6,288) | (7,994) | (6,477) | (6,940) | ||||||||||||||||||||||||
| Total Life Insurance | 78,285 | 82,635 | 78,473 | 77,666 | 83,445 | ||||||||||||||||||||||||
| Corporate and Other | |||||||||||||||||||||||||||||
| Variable, net of reinsurance | 10,824 | 13,113 | 11,583 | 10,192 | 10,119 | ||||||||||||||||||||||||
| Accident and health, net of reinsurance | 179 | 179 | 71 | 43 | 79 | ||||||||||||||||||||||||
| Total Corporate and Other | 11,003 | 13,292 | 11,654 | 10,235 | 10,198 | ||||||||||||||||||||||||
| Total collected premiums | $ | 156,025 | $ | 154,026 | $ | 125,932 | $ | 133,164 | $ | 136,793 | |||||||||||||||||||
(1)Collected premiums is a measure of sales production not recognized under GAAP.
15
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Other Information | |||||||||||||||||||||||||||||
| December 31, | March 31, | June 30, | September 30, | December 31, | |||||||||||||||||||||||||
| 2019 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||
| Capitalization: | |||||||||||||||||||||||||||||
| Short-term debt | $ | — | $ | 10,000 | $ | — | $ | — | $ | — | |||||||||||||||||||
| Trust preferred securities, due 2047 | 97,000 | 97,000 | 97,000 | 97,000 | 97,000 | ||||||||||||||||||||||||
| Total debt | 97,000 | 107,000 | 97,000 | 97,000 | 97,000 | ||||||||||||||||||||||||
| Preferred stock | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | ||||||||||||||||||||||||
| Common stockholders' equity, excluding AOCI | 1,127,993 | 1,072,858 | 1,083,177 | 1,086,142 | 1,101,820 | ||||||||||||||||||||||||
| Total capitalization, excluding AOCI | 1,227,993 | 1,182,858 | 1,183,177 | 1,186,142 | 1,201,820 | ||||||||||||||||||||||||
| Accumulated other comprehensive income | 354,764 | 258,422 | 481,626 | 529,087 | 587,279 | ||||||||||||||||||||||||
| Total capitalization, including AOCI | $ | 1,582,757 | $ | 1,441,280 | $ | 1,664,803 | $ | 1,715,229 | $ | 1,789,099 | |||||||||||||||||||
| Common shares outstanding | 24,664,215 | 24,642,190 | 24,544,001 | 24,394,523 | 24,395,522 | ||||||||||||||||||||||||
| Book Value per Share: | |||||||||||||||||||||||||||||
| Excluding AOCI | $ | 45.73 | $ | 43.54 | $ | 44.13 | $ | 44.52 | $ | 45.16 | |||||||||||||||||||
| Including AOCI | 60.12 | 54.02 | 63.76 | 66.21 | 69.24 | ||||||||||||||||||||||||
| Debt-to-Capital Ratio: | |||||||||||||||||||||||||||||
| Excluding AOCI | 7.9 | % | 9.0 | % | 8.2 | % | 8.2 | % | 8.1 | % | |||||||||||||||||||
| Including AOCI | 6.1 | 7.4 | 5.8 | 5.7 | 5.4 | ||||||||||||||||||||||||
| Debt-to-Capital Ratio with 50% Credit for Trust Preferred Securities: | |||||||||||||||||||||||||||||
| Excluding AOCI | 3.9 | % | 4.9 | % | 4.1 | % | 4.1 | % | 4.0 | % | |||||||||||||||||||
| Including AOCI | 3.1 | 4.1 | 2.9 | 2.8 | 2.7 | ||||||||||||||||||||||||
| Class A Common Ownership: | |||||||||||||||||||||||||||||
| Iowa Farm Bureau Federation | 59.9 | % | 59.9 | % | 60.2 | % | 60.5 | % | 60.5 | % | |||||||||||||||||||
| Public | 40.1 | 40.1 | 39.8 | 39.5 | 39.5 | ||||||||||||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||
16
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Other Information (Continued) | |||||||||||||||||||||||||||||
| December 31, | March 31, | June 30, | September 30, | December 31, | |||||||||||||||||||||||||
| 2019 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||
| Investment by Type: | |||||||||||||||||||||||||||||
| Fixed maturity securities | 57.9 | % | 57.1 | % | 58.3 | % | 58.6 | % | 58.8 | % | |||||||||||||||||||
| Residential mortgage-backed | 7.4 | 7.3 | 7.3 | 7.6 | 7.3 | ||||||||||||||||||||||||
| Commercial mortgage-backed | 11.5 | 12.7 | 12.1 | 12.0 | 11.7 | ||||||||||||||||||||||||
| Other asset-backed | 7.9 | 7.8 | 8.0 | 7.9 | 7.8 | ||||||||||||||||||||||||
| Mortgage loans | 11.2 | 11.0 | 10.5 | 10.1 | 10.4 | ||||||||||||||||||||||||
| Equity securities | 1.1 | 1.0 | 1.0 | 1.0 | 0.9 | ||||||||||||||||||||||||
| Other | 3.0 | 3.1 | 2.8 | 2.8 | 3.1 | ||||||||||||||||||||||||
| Quality of Fixed Maturity Securities: | |||||||||||||||||||||||||||||
| AAA, AA, A | 68.2 | % | 69.3 | % | 67.9 | % | 67.6 | % | 65.7 | % | |||||||||||||||||||
| BBB | 29.5 | 28.1 | 28.5 | 28.8 | 30.4 | ||||||||||||||||||||||||
| BB | 1.6 | 1.9 | 2.7 | 2.7 | 3.1 | ||||||||||||||||||||||||
| <BB | 0.7 | 0.7 | 0.9 | 0.9 | 0.8 | ||||||||||||||||||||||||
| Agent Strength Totals: | |||||||||||||||||||||||||||||
| Full time agents and agency managers: | |||||||||||||||||||||||||||||
| 8-state Farm Bureau Property & Casualty channel | 1,197 | 1,167 | 1,109 | 1,040 | 953 | ||||||||||||||||||||||||
| 6 life partner states and Colorado | 661 | 664 | 661 | 663 | 661 | ||||||||||||||||||||||||
| 1,858 | 1,831 | 1,770 | 1,703 | 1,614 | |||||||||||||||||||||||||
| FBL Financial Group, Inc. | |||||||||||||||||||||||||||||
| Income Taxes | |||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | |||||||||||||||||||||||||
| Income tax benefit (expense) | $ | (6,500) | $ | 3,081 | $ | (6,085) | $ | (2,883) | $ | (2,174) | |||||||||||||||||||
| Tax benefit (expense) on equity income | (275) | (61) | 197 | (74) | (1,633) | ||||||||||||||||||||||||
| Net income adjustments: | |||||||||||||||||||||||||||||
| Income tax offset on net income adjustments | (27) | (5,889) | 255 | 324 | 296 | ||||||||||||||||||||||||
| Income taxes on adjusted operating income | $ | (6,802) | $ | (2,869) | $ | (5,633) | $ | (2,633) | $ | (3,511) | |||||||||||||||||||
| Income taxes on adjusted operating income before benefits of LIHTC investments | $ | (7,653) | $ | (3,752) | $ | (6,557) | $ | (3,493) | $ | (4,379) | |||||||||||||||||||
| Amounts related to LIHTC investments | 851 | 883 | 924 | 860 | 868 | ||||||||||||||||||||||||
| Income taxes on adjusted operating income | $ | (6,802) | $ | (2,869) | $ | (5,633) | $ | (2,633) | $ | (3,511) | |||||||||||||||||||
17