Document

0001012771-16-000063.txt : 20160804 0001012771-16-000063.hdr.sgml : 20160804 20160804161639 ACCESSION NUMBER: 0001012771-16-000063 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20160804 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20160804 DATE AS OF CHANGE: 20160804 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FBL FINANCIAL GROUP INC CENTRAL INDEX KEY: 0001012771 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 421411715 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11917 FILM NUMBER: 161807647 BUSINESS ADDRESS: STREET 1: 5400 UNIVERSITY AVE CITY: WEST DES MOINES STATE: IA ZIP: 50266 BUSINESS PHONE: 5152255400 8-K 1 pressrelease8k2016q2.htm 8-K Document

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (date of earliest event reported): August 4, 2016

FBL Financial Group, Inc.

(Exact name of registrant as specified in its charter)





Iowa	1-11917	42-1411715
(State of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

5400 University Avenue, West Des Moines, Iowa		50266-5997
(Address of principal executive offices)		(Zip Code)

(515) 225-5400

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a.12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On August 4, 2016, FBL Financial Group, Inc. issued a news release reporting its financial results for the three months ended June 30, 2016. The news release is furnished as Exhibit 99.1 hereto and the Financial Supplement as Exhibit 99.2 hereto. This information shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing.

SIGNATURE

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

FBL FINANCIAL GROUP, INC.

Registrant

Date: August 4, 2016

/s/ Donald J. Seibel

Donald J. Seibel

Chief Financial Officer

EXHIBIT INDEX

Exhibit No: Description

Exhibit 99.1 News release of the registrant dated August 4, 2016

Exhibit 99.2 Financial Supplement for the quarter ended June 30, 2016

EX-99.1 2 exh991newsrelease2016q2.htm EXHIBIT 99.1 Exhibit



FOR IMMEDIATE RELEASE	CONTACT:
Thursday, August 4, 2016	Kathleen Till Stange, V.P. Corporate & Investor Relations
	(515) 226-6780, Kathleen.TillStange@FBLFinancial.com

FBL Financial Group Reports Second Quarter 2016 Results

West Des Moines, Iowa, August 4, 2016 -

Financial Highlights

(Dollars in thousands, except per share data)



	Three months ended June 30,
	2016		2015
Net income attributable to FBL Financial Group	$	24,380	$	32,372
Operating income	25,676		27,805
Earnings per common share (assuming dilution):
Net income	0.97		1.29
Operating income	1.02		1.11

FBL Financial Group, Inc. (NYSE: FFG) today reported net income attributable to FBL Financial Group for the second quarter of 2016 of $24.4 million, or $0.97 per diluted common share, compared to $32.4 million, or $1.29 per diluted common share, for the second quarter of 2015. Operating income⁽¹⁾ totaled $25.7 million, or $1.02 per common share, for the second quarter of 2016, compared to $27.8 million, or $1.11 per common share, for the second quarter of 2015. Second quarter 2016 results reflect:


•	A growing book of profitable business


•	The unfavorable impact of $0.15 per share from unlocking interest rate related assumptions used in the calculation of deferred acquisition costs, value of insurance in force acquired, unearned revenue reserves and certain reserves on interest sensitive products


•	The benefit of investment fee income of $0.07 per share, primarily in the Annuity segment


•	Favorable mortality results in the Life Insurance segment

Operating income differs from the GAAP measure, net income attributable to FBL Financial Group, in that it excludes the impact of realized gains and losses on investments and the change in net unrealized gains and losses on derivatives. For further information on this non-GAAP financial measure, please refer to Note (1) and the reconciliation provided within this release.

"FBL Financial Group's second quarter 2016 earnings results were strong with net income of $0.97 per share and operating income of $1.02 per share. Annuity sales were robust with a 43 percent increase in annuity premiums collected compared to the second quarter of 2015, " said James P. Brannen, Chief Executive Officer of FBL Financial Group, Inc. "We continue to focus on the fundamentals: serving the needs of the Farm Bureau niche market and providing products and services to protect what they value most. FBL Financial Group celebrated 20 years as a public company on July 19, and this focus has only increased in these past two decades. This focus, along with financial discipline, drives our consistently strong results, even in the challenging low interest rate environment."

Product Revenues. Premiums and product charges for the second quarter of 2016 totaled $78.6 million compared to $77.2 million in the second quarter of 2015. Interest sensitive product charges increased 2.7 percent while traditional life insurance premiums increased 1.5 percent during the quarter. Premiums collected⁽²⁾in the second quarter of 2016 totaled $186.9 million compared to $158.1 million in the second quarter of 2015. Annuity premiums collected increased 43 percent while life insurance premiums collected decreased one percent.

Investment Income. Net investment income in the second quarter of 2016 totaled $100.7 million compared to $97.5 million in the second quarter of 2015. The increase is due to an increase in average invested assets partially offset by lower investment yields. The annualized yield earned on average invested assets, with securities at amortized cost, was 5.41 percent for the six months ended June 30, 2016, compared to 5.61 percent for the six months ended June 30, 2015. At June 30, 2016, 96 percent of the fixed maturity securities in FBL Financial Group's investment portfolio were investment grade debt securities.

Benefits and Expenses. Benefits and expenses totaled $149.0 million in the second quarter of 2016, an increase from $142.6 million in the second quarter of 2015. Death benefits, net of reinsurance and reserves released, totaled $23.6 million in the second quarter of 2016, compared to $24.7 million in the second quarter of 2015. By its nature, mortality experience can fluctuate from quarter to quarter.

Unlocking. During the second quarter of 2016, FBL Financial Group unlocked the assumptions used in the calculation of deferred acquisition costs, value of insurance in force acquired, unearned revenue reserves and certain reserves on interest sensitive products based on the current low interest rate environment. This unlocking resulted in a pre-tax unfavorable impact of $5.7 million, or $0.15 per share after-tax.

Net Realized Gains/Losses on Investments. In the second quarter of 2016, FBL Financial Group recognized net realized losses on investments of $2.3 million. The net realized loss on investments of $2.3 million is attributable to realized gains on sales of $6.1 million and realized losses on sales of $8.4 million.

Stock Repurchases. During the second quarter of 2016, FBL Financial Group purchased 9,602 shares of its Class A common stock. FBL Financial Group has $49.5 million remaining under its current stock repurchase program.

Capital and Book Value. As of June 30, 2016, the book value per share of FBL Financial Group common stock totaled $51.26, compared to $45.61 at December 31, 2015. Book value per share, excluding accumulated other comprehensive income⁽³⁾,totaled $40.16 at June 30, 2016, compared to $40.99 at December 31, 2015. The June 30, 2016 company action level risk based capital ratio of FBL Financial Group's wholly owned subsidiary, Farm Bureau Life Insurance Company, was approximately 541 percent.

Further Financial Information. Further information on FBL Financial Group's financial results, including results by segment, may be found in FBL Financial Group's financial supplement, available on its website, www.fblfinancial.com.

Conference Call. FBL Financial Group will hold a conference call with investors tomorrow, August 5, 2016, at 11:00 a.m. Eastern Time. The call will be webcast and a replay will be available on FBL Financial Group's website.

Certain statements in this release concerning FBL Financial Group's prospects for the future are forward-looking statements intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act. These statements generally can be identified by their context, including terms such as “believes,” “anticipates,” “expects,” or similar words. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statement. These risks and uncertainties are detailed in FBL Financial Group's reports filed with the Securities and Exchange Commission and include, but are not limited to, changes in interest rates, difficult conditions in financial markets and the economy, lack of liquidity and access to capital, investment valuations, competitive factors, a decrease in ratings, changes in laws and regulations, differences between actual claims experience and underwriting assumptions, relationships with Farm Bureau organizations, the ability to attract and retain sales agents and adverse results from litigation. These forward-looking statements are based on assumptions which FBL Financial Group believes to be reasonable; however, no assurance can be given that the assumptions will prove to be correct. FBL Financial Group undertakes no obligation to update any forward-looking statements.

FBL Financial Group is a holding company whose purpose is to protect livelihoods and futures. Its primary operating subsidiary, Farm Bureau Life Insurance Company, underwrites and markets a broad range of life insurance and annuities to individuals and businesses, which are distributed by multiline exclusive Farm Bureau agents. In addition, FBL Financial Group manages all aspects of two Farm Bureau affiliated property-casualty insurance companies for a management fee. FBL Financial Group, headquartered in West Des Moines, Iowa, is traded on the New York Stock Exchange under the symbol FFG. For more information, please visit www.fblfinancial.com.

- FINANCIAL INFORMATION AND NOTES FOLLOW -

FBL Financial Group, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)



	Three months ended						Six months ended
	June 30,						June 30,
	2016			2015			2016			2015
Revenues:
Interest sensitive product charges	$	29,027		$	28,273		$	57,138		$	56,394
Traditional life insurance premiums	49,605			48,891			99,743			96,039
Net investment income	100,722			97,489			199,107			196,262
Net realized capital gains (losses) on sales of investments	(2,269		)	7,968			(679		)	7,602

Total other-than-temporary impairment losses	(25		)	(160		)	(3,744		)	(160		)
Non-credit portion in other comprehensive income	—			—			1,522			—
Net impairment losses recognized in earnings	(25		)	(160		)	(2,222		)	(160		)

Other income	4,225			4,284			7,864			8,554
Total revenues	181,285			186,745			360,951			364,691

Benefits and expenses:
Interest sensitive product benefits	58,559			53,373			112,978			109,181
Traditional life insurance benefits	43,369			44,654			87,938			90,363
Policyholder dividends	2,515			2,956			5,555			5,917
Underwriting, acquisition and insurance expenses	38,938			35,818			76,652			71,359
Interest expense	1,213			1,212			2,425			2,424
Other expenses	4,435			4,618			8,793			9,148
Total benefits and expenses	149,029			142,631			294,341			288,392
	32,256			44,114			66,610			76,299
Income taxes	(10,477		)	(14,153		)	(21,546		)	(24,537		)
Equity income, net of related income taxes	2,613			2,402			5,265			4,171
Net income	24,392			32,363			50,329			55,933
Net loss (income) attributable to noncontrolling interest	(12		)	9			(3		)	30
Net income attributable to FBL Financial Group, Inc.	$	24,380		$	32,372		$	50,326		$	55,963

Earnings per common share - assuming dilution	$	0.97		$	1.29		$	2.01		$	2.23

Weighted average common shares	24,987,878			24,951,492			24,969,727			24,926,527
Effect of dilutive securities	42,566			87,541			50,358			98,592
Weighted average common shares - diluted	25,030,444			25,039,033			25,020,085			25,025,119

(1) Reconciliation of Net Income Attributable to FBL Financial Group to Operating Income - Unaudited

In addition to net income, FBL Financial Group has consistently utilized operating income, a non-GAAP financial measure common in the life insurance industry, as a primary economic measure to evaluate its financial performance. Operating income equals net income attributable to FBL Financial Group adjusted to eliminate the impact of realized gains and losses on investments and changes in net unrealized gains and losses on derivatives. FBL Financial Group uses operating income, in addition to net income, to measure its performance since realized gains and losses on investments and the change in net unrealized gains and losses on derivatives can fluctuate greatly from quarter to quarter. These fluctuations make it difficult to analyze core operating trends. This non-GAAP measure is used for goal setting, determining short-term incentive compensation and evaluating performance on a basis comparable to that used by many in the investment community. FBL Financial Group believes the combined presentation and evaluation of operating income, together with net income, provides information that may enhance an investor's understanding of FBL Financial Group's underlying results and profitability. A reconciliation is provided in the following table:



	Three months ended					Six months ended
	June 30,					June 30,
	2016		2015			2016		2015
	(Dollars in thousands, except per share data)
Net income attributable to FBL Financial Group	$	24,380	$	32,372		$	50,326	$	55,963
Adjustments:
Net realized gains/losses on investments^(a)	1,147		(4,975		)	1,544		(4,728		)
Change in net unrealized gains/losses on derivatives ^(a)	149		408			124		385
Operating income	$	25,676	$	27,805		$	51,994	$	51,620

Operating income per common share - assuming dilution	$	1.02	$	1.11		$	2.08	$	2.06

^(a) Net of adjustments, as applicable, to amortization of unearned revenue reserves, deferred acquisition costs, value of insurance in force acquired and income taxes attributable to these items.

(2) Premiums Collected - Net statutory premiums collected, a measure of sales production, is a non-GAAP measure and includes premiums collected from annuities and universal life-type products. For GAAP reporting, these premiums received are not reported as revenues.

(3) Reconciliation of Book Value Per Share Excluding Accumulated Other Comprehensive Income - Unaudited



	June 30, 2016		December 31, 2015
Book value per share	$	51.26	$	45.61
Less: Per share impact of accumulated other comprehensive income	11.10		4.62
Book value per share, excluding accumulated other comprehensive income	$	40.16	$	40.99

Book value per share excluding accumulated other comprehensive income is a non-GAAP financial measure. Accumulated other comprehensive income totaled $276.1 million at June 30, 2016 and $114.5 million at December 31, 2015. Since accumulated other comprehensive income fluctuates from quarter to quarter due to unrealized changes in the fair value of investments caused principally by changes in market interest rates, FBL Financial Group believes this non-GAAP financial measure provides useful supplemental information.

FBL Financial Group, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)



	June 30, 2016		December 31, 2015
Assets
Investments	$	8,187,632	$	7,722,753
Cash and cash equivalents	125,545		29,490
Deferred acquisition costs	219,626		335,783
Other assets	423,948		418,721
Assets held in separate accounts	603,706		625,257
Total assets	$	9,560,457	$	9,132,004

Liabilities and stockholders' equity
Liabilities
Future policy benefits	$	6,620,847	$	6,401,481
Other policy funds, claims and benefits	624,992		638,362
Debt	97,000		112,000
Other liabilities	336,404		220,430
Liabilities related to separate accounts	603,706		625,257
Total liabilities	8,282,949		7,997,530

Stockholders' equity
FBL Financial Group, Inc. stockholders' equity:
Preferred stock	3,000		3,000
Class A common stock	151,499		149,248
Class B common stock	72		72
Accumulated other comprehensive income	276,122		114,532
Retained earnings	846,752		867,574
Total FBL Financial Group, Inc. stockholders' equity	1,277,445		1,134,426
Noncontrolling interest	63		48
Total stockholders' equity	1,277,508		1,134,474
Total liabilities and stockholders' equity	$	9,560,457	$	9,132,004

Common shares outstanding	24,860,675		24,808,176

####

EX-99.2 3 invsupp2016q2.htm EXHIBIT 99.2 Exhibit

FBL FINANCIAL GROUP, INC.

INVESTOR SUPPLEMENT

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:
	Jim Brannen
	Chief Executive Officer
	Jim.Brannen@FBLFinancial.com
	(515) 225-5631

	Don Seibel
	Chief Financial Officer
	Don.Seibel@FBLFinancial.com
	(515) 226-6399

	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.amstock.com



FBL Financial Group, Inc.
Financial Supplement (Unaudited)
June 30, 2016
Table of Contents/Notes

Consolidated Financial Statements:
Consolidated Balance Sheets		2
Consolidated Statements of Comprehensive Income		4
Consolidated Statements of Operating Income, last five quarters		5
Financial Information by Segment:
Segment Information		6
Consolidating Statements of Pre-tax Operating Income		7
Statements of Pre-tax Operating Income, last five quarters:
Annuity Segment		9
Life Insurance Segment		10
Corporate and Other Segment		12
Deferred Acquisition Costs by Segment		13
Collected Premiums, last five quarters		15
Other Information		16

NOTE 1: In addition to net income, we have consistently used operating income, a non-GAAP financial measure common in the life insurance industry, as a primary economic measure to evaluate our financial performance. Operating income for the periods presented equals net income adjusted to eliminate the impact of realized gains and losses on investments and changes in net unrealized gains and losses on derivatives.

We use 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 can fluctuate greatly from quarter to quarter. These fluctuations make it difficult to analyze core operating trends. A view of our operating performance without the impact of these items enhances the analysis of our results. We use 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)



	June 30, 2016		December 31, 2015
Assets
Investments:
Fixed maturities - available for sale, at fair value (amortized cost: 2016 - $6,443,993; 2015 - $6,379,919)	$	7,066,458	$	6,637,776
Equity securities - available for sale, at fair value (cost: 2016 - $132,006; 2015 - $116,336)	139,473		121,667
Mortgage loans	763,427		744,303
Real estate	1,955		1,955
Policy loans	187,439		185,784
Short-term investments	22,557		28,251
Other investments	6,323		3,017
Total investments	8,187,632		7,722,753

Cash and cash equivalents	125,545		29,490
Securities and indebtedness of related parties	132,367		134,570
Accrued investment income	77,048		78,274
Amounts receivable from affiliates	5,452		2,834
Reinsurance recoverable	105,778		103,898
Deferred acquisition costs	219,626		335,783
Value of insurance in force acquired	19,724		20,913
Current income taxes recoverable	—		2,421
Other assets	83,579		75,811
Assets held in separate accounts	603,706		625,257








Total assets	$	9,560,457	$	9,132,004

FBL Financial Group, Inc.

Consolidated Balance Sheets (Continued)

(Dollars in thousands)



	June 30, 2016		December 31, 2015
Liabilities and stockholders' equity
Liabilities:
Future policy benefits:
Interest sensitive products	$	4,950,857	$	4,764,159
Traditional life insurance and accident and health products	1,669,990		1,637,322
Other policy claims and benefits	34,163		44,157
Supplementary contracts without life contingencies	335,898		339,929
Advance premiums and other deposits	254,931		254,276
Amounts payable to affiliates	678		575
Short-term debt payable to non-affiliates	—		15,000
Long-term debt payable to non-affiliates	97,000		97,000
Current income taxes	6,152		—
Deferred income taxes	224,074		135,063
Other liabilities	105,500		84,792
Liabilities related to separate accounts	603,706		625,257
Total liabilities	8,282,949		7,997,530

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 24,849,262 in 2016 and 24,796,763 shares in 2015	151,499		149,248
Class B common stock, without par value - authorized 1,500,000 shares, issued and outstanding 11,413 shares in 2016 and 2015	72		72
Accumulated other comprehensive income	276,122		114,532
Retained earnings	846,752		867,574
Total FBL Financial Group, Inc. stockholders' equity	1,277,445		1,134,426
Noncontrolling interest	63		48
Total stockholders' equity	1,277,508		1,134,474
Total liabilities and stockholders' equity	$	9,560,457	$	9,132,004

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,
	2016			2015			2016			2015
Revenues:
Interest sensitive product charges	$	29,027		$	28,273		$	57,138		$	56,394
Traditional life insurance premiums	49,605			48,891			99,743			96,039
Net investment income	100,722			97,489			199,107			196,262
Net realized capital gains (losses) on sales of investments	(2,269		)	7,968			(679		)	7,602

Total other-than-temporary impairment losses	(25		)	(160		)	(3,744		)	(160		)
Non-credit portion in other comprehensive income	—			—			1,522			—
Net impairment losses recognized in earnings	(25		)	(160		)	(2,222		)	(160		)
Other income	4,225			4,284			7,864			8,554
Total revenues	181,285			186,745			360,951			364,691

Benefits and expenses:
Interest sensitive product benefits	58,559			53,373			112,978			109,181
Traditional life insurance benefits	43,369			44,654			87,938			90,363
Policyholder dividends	2,515			2,956			5,555			5,917
Underwriting, acquisition and insurance expenses	38,938			35,818			76,652			71,359
Interest expense	1,213			1,212			2,425			2,424
Other expenses	4,435			4,618			8,793			9,148
Total benefits and expenses	149,029			142,631			294,341			288,392
	32,256			44,114			66,610			76,299
Income taxes	(10,477		)	(14,153		)	(21,546		)	(24,537		)
Equity income, net of related income taxes	2,613			2,402			5,265			4,171
Net income	24,392			32,363			50,329			55,933
Net loss (income) attributable to noncontrolling interest	(12		)	9			(3		)	30
Net income attributable to FBL Financial Group, Inc.	$	24,380		$	32,372		$	50,326		$	55,963

Comprehensive income (loss) attributable to FBL Financial Group, Inc.	$	114,584		$	(83,255	)	$	211,916		$	(30,246	)

Earnings per common share	$	0.97		$	1.30		$	2.01		$	2.24
Earnings per common share - assuming dilution	$	0.97		$	1.29		$	2.01		$	2.23

Cash dividends per common share	$	0.42		$	0.40		$	0.84		$	0.80
Special cash dividend per common share	$	—		$	—		$	2.00		$	2.00



FBL Financial Group, Inc.
Consolidated Statements of Operating Income
(Dollars in thousands, except per share data)

	Q2 2015			Q3 2015			Q4 2015			Q1 2016			Q2 2016
Operating revenues:
Interest sensitive product charges	$	28,270		$	29,861		$	28,339		$	28,111		$	28,994
Traditional life insurance premiums	48,891			46,719			48,198			50,138			49,605
Net investment income	98,218			98,253			98,434			97,318			99,137
Other income	4,284			3,543			3,534			3,639			4,225
Total operating revenues	179,663			178,376			178,505			179,206			181,961

Benefits and expenses:
Interest sensitive product benefits	53,573			55,516			55,105			53,253			57,035
Traditional life insurance benefits	44,653			41,604			44,178			44,565			43,394
Policyholder dividends	2,956			2,885			3,026			3,040			2,515
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	5,348			5,243			5,532			5,797			5,683
Amortization of deferred acquisition costs	8,609			9,504			8,767			9,550			11,352
Amortization of value of insurance in force acquired	594			667			585			552			749
Other underwriting expenses	21,012			21,108			21,100			21,952			21,334
Total underwriting, acquisition and insurance expenses	35,563			36,522			35,984			37,851			39,118
Interest expense	1,212			1,213			1,213			1,212			1,213
Other expenses	4,618			4,277			4,082			4,358			4,435
Total benefits and expenses	142,575			142,017			143,588			144,279			147,710
	37,088			36,359			34,917			34,927			34,251
Income taxes	(11,694		)	(11,855		)	(11,529		)	(11,270		)	(11,176		)
Net loss (income) attributable to noncontrolling interest	9			19			5			9			(12		)
Equity income, net of related income taxes	2,402			2,761			2,591			2,652			2,613
Operating income	27,805			27,284			25,984			26,318			25,676

Realized gains/losses on investments, net of offsets	4,975			(307		)	4,077			(397		)	(1,147		)
Change in net unrealized gains/losses on derivatives, net of offsets	(408		)	(318		)	844			25			(149		)
Net income attributable to FBL Financial Group, Inc.	$	32,372		$	26,659		$	30,905		$	25,946		$	24,380

Operating income per common share - assuming dilution	$	1.11		$	1.09		$	1.04		$	1.05		$	1.02
Earnings per common share - assuming dilution	$	1.29		$	1.06		$	1.23		$	1.04		$	0.97

Weighted average common shares outstanding (in thousands):
Basic	24,951			24,923			24,921			24,950			24,988
Effect of dilutive securities	88			80			75			58			42
Diluted	25,039			25,003			24,996			25,008			25,030

Operating return on equity, excluding AOCI - last twelve months	11.3		%	10.9		%	10.6		%	10.9		%	10.6		%
Operating return on equity, including AOCI - last twelve months	9.0		%	8.9		%	8.8		%	9.1		%	8.9		%

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 annuities and supplementary contracts (some of which involve life contingencies). Fixed rate 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. The annuity segment also includes index annuities. 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 operating income. Accordingly, income taxes are not allocated to the segments. In addition, operating results are reported net of transactions between the segments.

FBL Financial Group, Inc.

Consolidating Statements of Pre-tax Operating Income



Quarter Ended June 30, 2016	Annuity		Life Insurance			Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	932	$	16,637		$	11,425		$	28,994
Traditional life insurance premiums	—		49,605			—			49,605
Net investment income	53,022		38,570			7,545			99,137
Other income	—		(88		)	4,313			4,225
Total operating revenues	53,954		104,724			23,283			181,961

Benefits and expenses:
Interest sensitive product benefits	27,591		20,299			9,145			57,035
Traditional life insurance benefits	—		43,394			—			43,394
Policyholder dividends	—		2,515			—			2,515
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	523		4,338			822			5,683
Amortization of deferred policy acquisition costs	3,905		4,878			2,569			11,352
Amortization of value of insurance in force acquired	372		377			—			749
Other underwriting expenses	5,215		14,450			1,669			21,334
Total underwriting, acquisition and insurance expenses	10,015		24,043			5,060			39,118
Interest expense	—		—			1,213			1,213
Other expenses	—		—			4,435			4,435
Total benefits and expenses	37,606		90,251			19,853			147,710
	16,348		14,473			3,430			34,251
Net income attributable to noncontrolling interest	—		—			(12		)	(12		)
Equity loss, before tax	—		—			(1,446		)	(1,446		)
Pre-tax operating income	$	16,348	$	14,473		$	1,972		$	32,793

FBL Financial Group, Inc.

Consolidating Statements of Pre-tax Operating Income (Continued)



Quarter Ended June 30, 2015	Annuity		Life Insurance			Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	655	$	16,017		$	11,598		$	28,270
Traditional life insurance premiums	—		48,891			—			48,891
Net investment income	52,809		37,637			7,772			98,218
Other income	—		(89		)	4,373			4,284
Total operating revenues	53,464		102,456			23,743			179,663

Benefits and expenses:
Interest sensitive product benefits	28,162		18,184			7,227			53,573
Traditional life insurance benefits	—		44,653			—			44,653
Policyholder dividends	—		2,956			—			2,956
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	435		4,123			790			5,348
Amortization of deferred acquisition costs	2,751		4,049			1,809			8,609
Amortization of value of insurance in force acquired	250		344			—			594
Other underwriting expenses	5,035		14,503			1,474			21,012
Total underwriting, acquisition and insurance expenses	8,471		23,019			4,073			35,563
Interest expense	—		—			1,212			1,212
Other expenses	—		—			4,618			4,618
Total benefits and expenses	36,633		88,812			17,130			142,575
	16,831		13,644			6,613			37,088
Net loss attributable to noncontrolling interest	—		—			9			9
Equity loss, before tax	—		—			(1,671		)	(1,671		)
Pre-tax operating income	$	16,831	$	13,644		$	4,951		$	35,426



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

	Q2 2015				Q3 2015			Q4 2015			Q1 2016			Q2 2016
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	655			$	542		$	714		$	942		$	932
Net investment income	52,809				52,873			52,068			51,237			53,022
Total operating revenues	53,464				53,415			52,782			52,179			53,954

Benefits and expenses:
Interest sensitive product benefits	28,162				26,490			28,251			26,486			27,591
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	435				441			452			570			523
Amortization of deferred acquisition costs	2,751				1,477			2,701			2,338			3,905
Amortization of value of insurance in force acquired	250				288			206			175			372
Other underwriting expenses	5,035				4,957			4,903			5,462			5,215
Total underwriting, acquisition and insurance expenses	8,471				7,163			8,262			8,545			10,015
Total benefits and expenses	36,633				33,653			36,513			35,031			37,606
Pre-tax operating income	$	16,831			$	19,762		$	16,269		$	17,148		$	16,348

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	3,990,319			$	4,042,178		$	4,075,702		$	4,087,708		$	4,146,239
Deferred acquisition costs	83,156				85,271			85,819			87,245			87,405
Value of insurance in force acquired	5,585				5,299			5,088			4,917			4,544

Liabilities and equity:
Liabilities:
Interest sensitive product reserves	$	3,485,448			$	3,516,729		$	3,550,364		$	3,586,694		$	3,704,266
Other insurance reserves	373,611				373,950			370,326			373,341			368,083
Allocated equity, excluding AOCI	258,557				260,675			262,686			249,482			256,558

Other data:
Number of direct contracts	52,652				52,999			53,319			53,253			53,455

Portfolio yield net of assumed defaults	4.90		%		4.87		%	4.84		%	4.79		%	4.79		%
Credited rate	2.80				2.79			2.79			2.78			2.76
Spread on individual annuities at end of quarter (1)	2.10		%		2.08		%	2.05		%	2.01		%	2.03		%

Interest sensitive reserve activity:
Individual annuity reserve:
Balance, beginning of period	$	2,641,380			$	2,667,088		$	2,729,891		$	2,787,002		$	2,827,976
Deposits	67,730				97,494			88,090			83,578			96,890
Withdrawals, surrenders and death benefits	(45,482		)		(38,006		)	(37,526		)	(46,077		)	(38,190		)
Net flows	22,248				59,488			50,564			37,501			58,700

Policyholder interest	18,799				18,088			19,248			17,898			18,356
Annuitizations and other	(15,339		)		(14,773		)	(12,701		)	(14,425		)	(9,233		)
Balance, end of period	2,667,088				2,729,891			2,787,002			2,827,976			2,895,799
Other interest sensitive reserves	818,360				786,838			763,362			758,718			808,467
Total interest sensitive product reserves	$	3,485,448			$	3,516,729		$	3,550,364		$	3,586,694		$	3,704,266


(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 Operating Income
Life Insurance Segment

	Q2 2015				Q3 2015			Q4 2015			Q1 2016			Q2 2016
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	16,017			$	16,998		$	16,628		$	15,773		$	16,637
Traditional life insurance premiums	48,891				46,719			48,198			50,138			49,605
Net investment income	37,637				37,743			38,306			37,754			38,570
Other income	(89		)		(29		)	(63		)	(62		)	(88		)
Total operating revenues	102,456				101,431			103,069			103,603			104,724

Benefits and expenses:
Interest sensitive product benefits:
Interest credited	8,065				8,692			8,309			8,266			8,130
Death benefits and other	10,119				10,856			10,576			8,803			12,169
Total interest sensitive product benefits	18,184				19,548			18,885			17,069			20,299
Traditional life insurance benefits:
Death benefits	21,054				21,768			20,489			21,123			20,019
Surrender and other benefits	7,044				7,242			7,018			8,641			8,215
Increase in traditional life future policy benefits	16,555				12,594			16,671			14,801			15,160
Total traditional life insurance benefits	44,653				41,604			44,178			44,565			43,394
Policyholder dividends	2,956				2,885			3,026			3,040			2,515
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	4,123				4,065			4,339			4,470			4,338
Amortization of deferred acquisition costs	4,049				147			6,202			5,224			4,878
Amortization of value of insurance in force acquired	344				379			379			377			377
Other underwriting expenses	14,503				14,448			14,698			14,787			14,450
Total underwriting, acquisition and insurance expenses	23,019				19,039			25,618			24,858			24,043
Total benefits and expenses	88,812				83,076			91,707			89,532			90,251
Pre-tax operating income	$	13,644			$	18,355		$	11,362		$	14,071		$	14,473

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	2,680,504			$	2,727,032		$	2,756,265		$	2,778,449		$	2,800,935
Deferred acquisition costs	238,647				245,016			248,333			249,640			252,481
Value of insurance in force acquired	19,669				19,291			18,912			18,535			18,158

Liabilities and equity:
Liabilities: (1)
Interest sensitive reserves	$	844,306			$	850,808		$	859,582		$	865,923		$	875,067
Other insurance reserves	1,788,634				1,797,249			1,818,245			1,833,601			1,846,163
Allocated equity, excluding AOCI	325,051				327,310			332,956			369,480			372,927



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

	Q2 2015				Q3 2015			Q4 2015			Q1 2016			Q2 2016
				(Dollars in thousands)
Other data:
Number of direct policies - traditional life	364,835				364,194			365,029			364,708			364,413
Number of direct policies - universal life	62,082				62,045			62,661			62,932			63,321
Direct face amounts - traditional life	$	46,641,997			$	46,960,976		$	47,490,316		$	47,869,724		$	48,244,884
Direct face amounts - universal life	$	6,535,614			$	6,515,708		$	6,616,049		$	6,525,769		$	6,751,098

Portfolio yield net of assumed defaults	5.25		%		5.22		%	5.21		%	5.21		%	5.23		%
Credited rate	3.82				3.81			3.81			3.82			3.76
Spread on universal life at end of quarter (2)	1.43		%		1.41		%	1.40		%	1.39		%	1.47		%

Interest sensitive reserve activity: (1)
Balance, beginning of period	$	834,736			$	844,306		$	850,808		$	859,582		$	865,923
Deposits	24,413				22,828			22,955			22,026			22,158
Withdrawals and surrenders	(6,170		)		(7,868		)	(5,136		)	(6,738		)	(7,277		)
Net flows	18,243				14,960			17,819			15,288			14,881

Policyholder interest	7,365				7,794			7,605			7,523			7,420
Policy charges	(16,544		)		(16,647		)	(16,840		)	(16,900		)	(17,121		)
Benefits and other	506				395			190			430			3,964
Balance, end of period	$	844,306			$	850,808		$	859,582		$	865,923		$	875,067


(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 Operating Income
Corporate and Other

	Q2 2015				Q3 2015			Q4 2015			Q1 2016			Q2 2016
Pre-tax Operating Income (Loss)				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	11,598			$	12,321		$	10,997		$	11,396		$	11,425
Net investment income	7,772				7,637			8,060			8,327			7,545
Other income	4,373				3,572			3,597			3,701			4,313
Total operating revenues	23,743				23,530			22,654			23,424			23,283

Benefits and expenses:
Interest sensitive product benefits	7,227				9,478			7,969			9,698			9,145
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	790				737			741			757			822
Amortization of deferred acquisition costs	1,809				7,880			(136		)	1,988			2,569
Other underwriting expenses	1,474				1,703			1,499			1,703			1,669
Total underwriting, acquisition and insurance expenses	4,073				10,320			2,104			4,448			5,060
Interest expense	1,212				1,213			1,213			1,212			1,213
Other expenses	4,618				4,277			4,082			4,358			4,435
Total benefits and expenses	17,130				25,288			15,368			19,716			19,853
	6,613				(1,758		)	7,286			3,708			3,430
Net loss (income) attributable to noncontrolling interest	9				19			5			9			(12		)
Equity loss, before tax	(1,671		)		(1,035		)	(1,296		)	(1,228		)	(1,446		)
Pre-tax operating income (loss)	$	4,951			$	(2,774	)	$	5,995		$	2,489		$	1,972

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	590,971			$	581,838		$	627,598		$	605,772		$	610,526
Deferred acquisition costs	82,450				74,943			75,366			73,510			70,815
Separate account assets	676,045				617,172			625,257			607,739			603,706

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	341,076			$	345,069		$	346,177		$	349,718		$	354,952
Other insurance reserves	94,455				97,130			94,411			96,202			95,241
Separate account liabilities	676,045				617,172			625,257			607,739			603,706
Allocated equity, excluding AOCI	397,652				406,733			421,252			365,230			368,838

Rollforward of separate account balances:
Beginning separate account balance	$	688,194			$	676,045		$	617,172		$	625,257		$	607,739
Net premiums	7,218				3,455			5,808			4,629			3,275
Net investment income (loss)	(1,088		)		(45,356		)	19,291			(3,421		)	9,951
Charges, benefits and surrenders	(18,279		)		(16,972		)	(17,014		)	(18,726		)	(17,259		)
Ending separate account balance	$	676,045			$	617,172		$	625,257		$	607,739		$	603,706

Other data:
Number of direct contracts - variable annuity	11,771				11,455			11,292			11,098			10,948
Number of direct policies - variable universal life	41,653				41,148			40,693			40,204			39,736
Direct face amounts - variable universal life	$	5,166,219			$	5,089,925		$	5,030,731		$	4,962,001		$	4,901,960



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment

	Q2 2015				Q3 2015			Q4 2015			Q1 2016			Q2 2016
				(Dollars in thousands)
Annuity
Balance - beginning of period	$	83,295			$	83,156		$	85,271		$	85,819		$	87,245
Capitalization:
Commissions	2,660				3,132			2,917			3,046			3,458
Expenses	239				248			327			234			294
Deferral of sales inducements	42				132			257			326			398
Total capitalization	2,941				3,512			3,501			3,606			4,150
Amortization - operating basis, before impact of unlocking	(2,761		)		(2,909		)	(2,722		)	(2,373		)	(2,740		)
Amortization - unlocking, operating basis	—				1,419			—			—			(1,218		)
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(319		)		93			(231		)	193			(32		)
Balance - end of period	$	83,156			$	85,271		$	85,819		$	87,245		$	87,405

Life Insurance
Balance - beginning of period	$	235,395			$	238,647		$	245,016		$	248,333		$	249,640
Capitalization:
Commissions	4,923				4,392			6,786			4,236			4,844
Expenses	2,275				2,077			2,340			2,267			2,277
Deferral of sales inducements	263				125			585			279			250
Total capitalization	7,461				6,594			9,711			6,782			7,371
Amortization - operating basis, before impact of unlocking	(4,180		)		(4,637		)	(4,566		)	(5,411		)	(4,793		)
Amortization - unlocking, operating basis	—				4,400			(1,833		)	—			(271		)
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(29		)		12			5			(64		)	534
Balance - end of period	$	238,647			$	245,016		$	248,333		$	249,640		$	252,481

Corporate and Other
Balance - beginning of period	$	83,937			$	82,450		$	74,943		$	75,366		$	73,510
Capitalization:
Commissions	242				139			156			158			186
Deferral of sales inducements	7				1			19			6			4
Total capitalization	249				140			175			164			190
Amortization - operating basis, before impact of unlocking	(1,833		)		(3,513		)	(1,051		)	(2,023		)	(1,535		)
Amortization - unlocking, operating basis	—				(4,375		)	1,220			—			(1,050		)
Amortization - realized gains on investments and unrealized gains on derivatives	97				241			79			3			(300		)
Balance - end of period	$	82,450			$	74,943		$	75,366		$	73,510		$	70,815



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

	Q2 2015				Q3 2015			Q4 2015			Q1 2016			Q2 2016
				(Dollars in thousands)
Total
Balance - beginning of period	$	402,627			$	404,253		$	405,230		$	409,518		$	410,395
Capitalization:
Commissions	7,825				7,663			9,859			7,440			8,488
Expenses	2,514				2,325			2,667			2,501			2,571
Deferral of sales inducements	312				258			861			611			652
Total capitalization	10,651				10,246			13,387			10,552			11,711
Amortization - operating basis, before impact of unlocking	(8,774		)		(11,059		)	(8,339		)	(9,807		)	(9,068		)
Amortization - unlocking, operating basis	—				1,444			(613		)	—			(2,539		)
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(251		)		346			(147		)	132			202
Balance - end of period	404,253				405,230			409,518			410,395			410,701
Impact of realized/unrealized losses in AOCI	(111,878		)		(112,780		)	(73,735		)	(123,606		)	(191,075		)
Deferred acquisition costs	$	292,375			$	292,450		$	335,783		$	286,789		$	219,626



FBL Financial Group, Inc.
Collected Premiums

	Q2 2015				Q3 2015			Q4 2015			Q1 2016			Q2 2016
				(Dollars in thousands)
Annuity
Individual:
Fixed rate:
First year	$	21,630			$	55,743		$	39,462		$	26,903		$	37,574
Renewal	26,084				19,868			22,628			27,583			23,096
Total fixed rate	47,714				75,611			62,090			54,486			60,670
Index annuity	20,583				22,351			26,005			29,137			36,716
Total individual	68,297				97,962			88,095			83,623			97,386
Group	1,727				4,009			1,467			2,052			3,061
Total Annuity	70,024				101,971			89,562			85,675			100,447

Life Insurance
Direct:
Universal life:
First year	6,486				6,377			5,498			3,385			3,971
Renewal	17,350				15,632			17,166			18,155			17,828
Total universal life	23,836				22,009			22,664			21,540			21,799
Participating whole life:
First year	3,533				3,726			4,161			5,171			3,789
Renewal	24,783				22,964			24,524			25,096			24,983
Total participating whole life	28,316				26,690			28,685			30,267			28,772
Term life and other:
First year	2,980				2,827			2,737			2,670			2,515
Renewal	22,732				22,607			23,517			24,451			24,261
Total term life and other	25,712				25,434			26,254			27,121			26,776
Total direct life insurance	77,864				74,133			77,603			78,928			77,347
Reinsurance	(6,777		)		(5,974		)	(7,061		)	(7,215		)	(7,136		)
Total Life Insurance	71,087				68,159			70,542			71,713			70,211

Corporate and Other
Variable, net of reinsurance	16,959				13,838			14,424			15,680			16,218
Accident and health, net of reinsurance	34				38			216			130			38
Total Corporate and Other	16,993				13,876			14,640			15,810			16,256

Total collected premiums	$	158,104			$	184,006		$	174,744		$	173,198		$	186,914



FBL Financial Group, Inc.
Other Information

	June 30,				September 30,			December 31,			March 31,			June 30,
	2015				2015			2015			2016			2016
				(Dollars in thousands, except per share data)

Capitalization:
Short-term debt	$	—			$	—		$	15,000		$	—		$	—
Trust preferred securities, due 2047	97,000				97,000			97,000			97,000			97,000
Total debt	97,000				97,000			112,000			97,000			97,000

Preferred stock	3,000				3,000			3,000			3,000			3,000
Common stockholders' equity, excluding AOCI	981,260				994,718			1,016,894			984,192			998,323
Total capitalization, excluding AOCI	1,081,260				1,094,718			1,131,894			1,084,192			1,098,323

Accumulated other comprehensive income	172,201				169,560			114,532			185,918			276,122
Total capitalization, including AOCI	$	1,253,461			$	1,264,278		$	1,246,426		$	1,270,110		$	1,374,445

Common shares outstanding	24,814,581				24,777,925			24,808,176			24,852,306			24,860,675

Book Value per Share:
Excluding AOCI	$	39.54			$	40.15		$	40.99		$	39.60		$	40.16
Including AOCI	46.48				46.99			45.61			47.08			51.26

Debt-to-Capital Ratio:
Excluding AOCI	9.0		%		8.9		%	9.9		%	8.9		%	8.8		%
Including AOCI	7.7				7.7			9.0			7.6			7.1

Debt-to-Capital Ratio with 50% Credit for Trust Preferred Securities:
Excluding AOCI	4.5		%		4.4		%	4.9		%	4.5		%	4.4		%
Including AOCI	3.9				3.8			4.5			3.8			3.5

Class A Common Ownership:
Iowa Farm Bureau Federation	59.5		%		59.6		%	59.5		%	59.4		%	59.4		%
Public	40.5				40.4			40.5			40.6			40.6
	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,
	2015		2015		2015		2016		2016

Investment by Type:
Fixed maturity securities	65.8	%	66.0	%	65.2	%	65.4	%	65.1	%
Residential mortgage-backed	6.2		6.0		6.0		5.8		5.3
Commercial mortgage-backed	6.9		7.2		7.2		7.3		7.6
Other asset-backed	7.6		7.5		7.6		7.5		8.3
Mortgage loans	9.0		9.0		9.6		9.6		9.3
Equity securities	1.6		1.6		1.6		1.7		1.7
Other	2.9		2.7		2.8		2.7		2.7

Quality of Fixed Maturity Securities:
AAA, AA, A	63.3	%	64.4	%	65.6	%	65.0	%	64.8	%
BBB	32.6		31.7		30.9		30.7		31.0
BB	2.9		2.8		2.4		2.8		2.8
<BB	1.2		1.1		1.1		1.5		1.4

Agent Strength Totals:
Full time agents and agency managers:
8-state Farm Bureau Property & Casualty channel	1,154		1,176		1,188		1,188		1,213
6 life partner states and Colorado	656		662		661		660		659
	1,810		1,838		1,849		1,848		1,872




	Q2 2015				Q3 2015			Q4 2015			Q1 2016			Q2 2016
Equity Income (Loss), net of related income taxes				(Dollars in thousands)
Equity income (loss):
Low income housing tax credit partnerships	$	(1,997	)		$	(1,554	)	$	(1,626	)	$	(1,539	)	$	(2,508	)
Other equity method investments	326				519			330			311			1,062
	(1,671		)		(1,035		)	(1,296		)	(1,228		)	(1,446		)
Income taxes:
Taxes on equity income (loss)	585				362			454			430			507
Investment tax credits	3,488				3,434			3,433			3,450			3,552
Equity income, net of related income taxes	$	2,402			$	2,761		$	2,591		$	2,652		$	2,613