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) |
FOR IMMEDIATE RELEASE | CONTACT: |
Thursday, November 1, 2018 | Kathleen Till Stange, V.P. Corporate & Investor Relations |
(515) 226-6780, Kathleen.TillStange@FBLFinancial.com |
Three months ended September 30, | |||||||
2018 | 2017 | ||||||
Net income attributable to FBL Financial Group | $ | 31,010 | $ | 26,127 | |||
Non-GAAP operating income(1) | 31,872 | 24,776 | |||||
Earnings per common share (assuming dilution): | |||||||
Net income | 1.24 | 1.04 | |||||
Non-GAAP operating income(1) | 1.28 | 0.99 |
• | A growing book of profitable business |
• | The benefit of other investment-related income of $0.03 per share |
• | Unfavorable mortality results in the Life Segment |
• | A decrease in the reserve for guaranteed living withdrawal benefits in the Annuity Segment |
• | The negative impact of $0.01 per share from unlocking assumptions used in the calculation of deferred acquisition costs, unearned revenue reserves and certain reserves on interest sensitive products |
• | A lower effective tax rate due to the Tax Cuts and Jobs Act of 2017 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Interest sensitive product charges | $ | 31,161 | $ | 28,004 | $ | 92,165 | $ | 86,661 | |||||||
Traditional life insurance premiums | 48,124 | 47,087 | 148,712 | 145,783 | |||||||||||
Net investment income | 105,757 | 102,950 | 310,753 | 307,852 | |||||||||||
Net realized capital gains (losses) | (709 | ) | 81 | (1,615 | ) | 599 | |||||||||
Net other-than-temporary impairment losses recognized in earnings | (50 | ) | (67 | ) | (1,090 | ) | (133 | ) | |||||||
Other income | 3,828 | 3,501 | 12,065 | 11,711 | |||||||||||
Total revenues | 188,111 | 181,556 | 560,990 | 552,473 | |||||||||||
Benefits and expenses: | |||||||||||||||
Interest sensitive product benefits | 70,145 | 67,206 | 194,127 | 188,217 | |||||||||||
Traditional life insurance benefits | 44,168 | 42,633 | 133,349 | 128,197 | |||||||||||
Policyholder dividends | 2,480 | 2,487 | 7,591 | 7,597 | |||||||||||
Underwriting, acquisition and insurance expenses | 30,834 | 27,535 | 107,621 | 98,229 | |||||||||||
Interest expense | 1,212 | 1,213 | 3,638 | 3,638 | |||||||||||
Other expenses | 5,061 | 4,971 | 16,281 | 13,862 | |||||||||||
Total benefits and expenses | 153,900 | 146,045 | 462,607 | 439,740 | |||||||||||
34,211 | 35,511 | 98,383 | 112,733 | ||||||||||||
Income taxes | (4,818 | ) | (9,880 | ) | (14,462 | ) | (32,017 | ) | |||||||
Equity income, net of related income taxes | 1,642 | 487 | 3,441 | 2,629 | |||||||||||
Net income | 31,035 | 26,118 | 87,362 | 83,345 | |||||||||||
Net loss (income) attributable to noncontrolling interest | (25 | ) | 9 | 16 | (20 | ) | |||||||||
Net income attributable to FBL Financial Group, Inc. | $ | 31,010 | $ | 26,127 | $ | 87,378 | $ | 83,325 | |||||||
Earnings per common share - assuming dilution | $ | 1.24 | $ | 1.04 | $ | 3.50 | $ | 3.32 | |||||||
Weighted average common shares | 24,918,725 | 25,037,020 | 24,946,752 | 25,036,258 | |||||||||||
Effect of dilutive securities | 11,076 | 17,530 | 13,317 | 19,703 | |||||||||||
Weighted average common shares - diluted | 24,929,801 | 25,054,550 | 24,960,069 | 25,055,961 | |||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||
Net income attributable to FBL Financial Group | $ | 31,010 | $ | 26,127 | $ | 87,378 | $ | 83,325 | |||||||
Adjustments: | |||||||||||||||
Initial impact of the Tax Act(a) | (617 | ) | — | (617 | ) | — | |||||||||
Net realized gains/losses on investments(b) (c) | 603 | 38 | 2,132 | (196 | ) | ||||||||||
Change in net unrealized gains/losses on derivatives(b) | 876 | (1,389 | ) | 1,191 | (2,074 | ) | |||||||||
Non-GAAP operating income | $ | 31,872 | $ | 24,776 | $ | 90,084 | $ | 81,055 | |||||||
Non-GAAP operating income per common share - assuming dilution | $ | 1.28 | $ | 0.99 | $ | 3.60 | $ | 3.23 | |||||||
September 30, 2018 | December 31, 2017 | ||||||
Book value per share | $ | 47.98 | $ | 55.12 | |||
Less: Per share impact of accumulated other comprehensive income | 3.59 | 11.44 | |||||
Book value per share, excluding accumulated other comprehensive income | $ | 44.39 | $ | 43.68 |
September 30, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Investments | $ | 8,490,010 | $ | 8,620,243 | |||
Cash and cash equivalents | 14,425 | 52,696 | |||||
Deferred acquisition costs | 412,046 | 302,611 | |||||
Other assets | 436,941 | 425,888 | |||||
Assets held in separate accounts | 651,797 | 651,963 | |||||
Total assets | $ | 10,005,219 | $ | 10,053,401 | |||
Liabilities and stockholders' equity | |||||||
Liabilities | |||||||
Future policy benefits | $ | 7,241,185 | $ | 7,050,465 | |||
Other policy funds, claims and benefits | 630,907 | 634,128 | |||||
Debt | 97,000 | 97,000 | |||||
Other liabilities | 190,532 | 242,720 | |||||
Liabilities related to separate accounts | 651,797 | 651,963 | |||||
Total liabilities | 8,811,421 | 8,676,276 | |||||
Stockholders' equity | |||||||
FBL Financial Group, Inc. stockholders' equity: | |||||||
Preferred stock | 3,000 | 3,000 | |||||
Class A common stock | 153,160 | 153,589 | |||||
Class B common stock | 72 | 72 | |||||
Accumulated other comprehensive income | 88,961 | 284,983 | |||||
Retained earnings | 948,530 | 935,423 | |||||
Total FBL Financial Group, Inc. stockholders' equity | 1,193,723 | 1,377,067 | |||||
Noncontrolling interest | 75 | 58 | |||||
Total stockholders' equity | 1,193,798 | 1,377,125 | |||||
Total liabilities and stockholders' equity | $ | 10,005,219 | $ | 10,053,401 | |||
Common shares outstanding | 24,818,209 | 24,930,526 |
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) | ||
September 30, 2018 | ||
Table of Contents/Notes | ||
Consolidated Financial Statements: | ||
Consolidated Balance Sheets | ||
Consolidated Statements of Comprehensive Income | ||
Consolidated Statements of Comprehensive Income, last five quarters | ||
Net Income to Non-GAAP Operating Income Reconciliation and Pre-tax Non-GAAP Operating Income by Segment, last five quarters | ||
Financial Information by Segment: | ||
Segment Information | ||
Statements of Pre-tax Non-GAAP 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 Non-GAAP Operating Income | ||
Collected Premiums, last five quarters | ||
Other Information |
September 30, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Investments: | |||||||
Fixed maturities - available for sale, at fair value (amortized cost: 2018 - $6,925,616; 2017 - $6,757,250) | $ | 7,099,025 | $ | 7,291,967 | |||
Equity securities - available for sale, at fair value (cost: 2018 - $99,882; 2017 - $96,715) | 103,896 | 104,145 | |||||
Mortgage loans | 1,015,618 | 971,812 | |||||
Real estate | 1,543 | 1,543 | |||||
Policy loans | 195,723 | 191,398 | |||||
Short-term investments | 25,569 | 17,007 | |||||
Other investments | 48,636 | 42,371 | |||||
Total investments | 8,490,010 | 8,620,243 | |||||
Cash and cash equivalents | 14,425 | 52,696 | |||||
Securities and indebtedness of related parties | 59,546 | 47,823 | |||||
Accrued investment income | 81,199 | 76,468 | |||||
Amounts receivable from affiliates | 7,617 | 3,561 | |||||
Reinsurance recoverable | 104,550 | 108,948 | |||||
Deferred acquisition costs | 412,046 | 302,611 | |||||
Value of insurance in force acquired | 10,821 | 4,560 | |||||
Current income taxes recoverable | 1,454 | 6,764 | |||||
Other assets | 171,754 | 177,764 | |||||
Assets held in separate accounts | 651,797 | 651,963 | |||||
Total assets | $ | 10,005,219 | $ | 10,053,401 |
September 30, 2018 | December 31, 2017 | ||||||
Liabilities and stockholders' equity | |||||||
Liabilities: | |||||||
Future policy benefits: | |||||||
Interest sensitive products | $ | 5,451,535 | $ | 5,299,961 | |||
Traditional life insurance and accident and health products | 1,789,650 | 1,750,504 | |||||
Other policy claims and benefits | 51,820 | 44,475 | |||||
Supplementary contracts without life contingencies | 310,152 | 322,630 | |||||
Advance premiums and other deposits | 268,935 | 267,023 | |||||
Amounts payable to affiliates | 1,379 | 1,164 | |||||
Long-term debt payable to non-affiliates | 97,000 | 97,000 | |||||
Deferred income taxes | 77,958 | 130,425 | |||||
Other liabilities | 111,195 | 111,131 | |||||
Liabilities related to separate accounts | 651,797 | 651,963 | |||||
Total liabilities | 8,811,421 | 8,676,276 | |||||
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 24,806,796 in 2018 and 24,919,113 shares in 2017 | 153,160 | 153,589 | |||||
Class B common stock, without par value - authorized 1,500,000 shares, issued and outstanding 11,413 shares in 2018 and 2017 | 72 | 72 | |||||
Accumulated other comprehensive income | 88,961 | 284,983 | |||||
Retained earnings | 948,530 | 935,423 | |||||
Total FBL Financial Group, Inc. stockholders' equity | 1,193,723 | 1,377,067 | |||||
Noncontrolling interest | 75 | 58 | |||||
Total stockholders' equity | 1,193,798 | 1,377,125 | |||||
Total liabilities and stockholders' equity | $ | 10,005,219 | $ | 10,053,401 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Interest sensitive product charges | $ | 31,161 | $ | 28,004 | $ | 92,165 | $ | 86,661 | |||||||
Traditional life insurance premiums | 48,124 | 47,087 | 148,712 | 145,783 | |||||||||||
Net investment income | 105,757 | 102,950 | 310,753 | 307,852 | |||||||||||
Net realized capital gains (losses) | (709 | ) | 81 | (1,615 | ) | 599 | |||||||||
Net other-than-temporary impairment losses recognized in earnings | (50 | ) | (67 | ) | (1,090 | ) | (133 | ) | |||||||
Other income | 3,828 | 3,501 | 12,065 | 11,711 | |||||||||||
Total revenues | 188,111 | 181,556 | 560,990 | 552,473 | |||||||||||
Benefits and expenses: | |||||||||||||||
Interest sensitive product benefits | 70,145 | 67,206 | 194,127 | 188,217 | |||||||||||
Traditional life insurance benefits | 44,168 | 42,633 | 133,349 | 128,197 | |||||||||||
Policyholder dividends | 2,480 | 2,487 | 7,591 | 7,597 | |||||||||||
Underwriting, acquisition and insurance expenses | 30,834 | 27,535 | 107,621 | 98,229 | |||||||||||
Interest expense | 1,212 | 1,213 | 3,638 | 3,638 | |||||||||||
Other expenses | 5,061 | 4,971 | 16,281 | 13,862 | |||||||||||
Total benefits and expenses | 153,900 | 146,045 | 462,607 | 439,740 | |||||||||||
34,211 | 35,511 | 98,383 | 112,733 | ||||||||||||
Income tax expense | (4,818 | ) | (9,880 | ) | (14,462 | ) | (32,017 | ) | |||||||
Equity income, net of related income taxes | 1,642 | 487 | 3,441 | 2,629 | |||||||||||
Net income | 31,035 | 26,118 | 87,362 | 83,345 | |||||||||||
Net loss (income) attributable to noncontrolling interest | (25 | ) | 9 | 16 | (20 | ) | |||||||||
Net income attributable to FBL Financial Group, Inc. | $ | 31,010 | $ | 26,127 | $ | 87,378 | $ | 83,325 | |||||||
Comprehensive income (loss) attributable to FBL Financial Group, Inc. | $ | (11,110 | ) | $ | 37,639 | $ | (103,164 | ) | $ | 157,639 | |||||
Earnings per common share | $ | 1.24 | $ | 1.04 | $ | 3.50 | $ | 3.32 | |||||||
Earnings per common share - assuming dilution | $ | 1.24 | $ | 1.04 | $ | 3.50 | $ | 3.32 | |||||||
Cash dividends per common share | $ | 0.46 | $ | 0.44 | $ | 1.38 | $ | 1.32 | |||||||
Special cash dividend per common share | $ | — | $ | — | $ | 1.50 | $ | 1.50 |
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
Revenues: | |||||||||||||||||||
Interest sensitive product charges | $ | 28,004 | $ | 26,275 | $ | 30,098 | $ | 30,906 | $ | 31,161 | |||||||||
Traditional life insurance premiums | 47,087 | 49,547 | 49,497 | 51,091 | 48,124 | ||||||||||||||
Net investment income | 102,950 | 107,347 | 101,022 | 103,974 | 105,757 | ||||||||||||||
Net realized capital gains (losses) | 81 | — | (1,747 | ) | 841 | (709 | ) | ||||||||||||
Net other-than-temporary impairment losses recognized in earnings | (67 | ) | (1,420 | ) | (1,040 | ) | — | (50 | ) | ||||||||||
Other income | 3,501 | 3,689 | 4,600 | 3,637 | 3,828 | ||||||||||||||
Total revenues | 181,556 | 185,438 | 182,430 | 190,449 | 188,111 | ||||||||||||||
Benefits and expenses: | |||||||||||||||||||
Interest sensitive product benefits | 67,206 | 63,661 | 61,345 | 62,637 | 70,145 | ||||||||||||||
Traditional life insurance benefits | 42,633 | 44,826 | 45,456 | 43,725 | 44,168 | ||||||||||||||
Policyholder dividends | 2,487 | 2,543 | 2,551 | 2,560 | 2,480 | ||||||||||||||
Underwriting, acquisition and insurance expenses | 27,535 | 36,649 | 39,577 | 37,210 | 30,834 | ||||||||||||||
Interest expense | 1,213 | 1,212 | 1,213 | 1,213 | 1,212 | ||||||||||||||
Other expenses | 4,971 | 4,520 | 5,593 | 5,627 | 5,061 | ||||||||||||||
Total benefits and expenses | 146,045 | 153,411 | 155,735 | 152,972 | 153,900 | ||||||||||||||
35,511 | 32,027 | 26,695 | 37,477 | 34,211 | |||||||||||||||
Income tax benefit (expense) | (9,880 | ) | 72,000 | (3,813 | ) | (5,831 | ) | (4,818 | ) | ||||||||||
Equity income (loss), net of related income taxes | 487 | (39 | ) | 660 | 1,139 | 1,642 | |||||||||||||
Net income | 26,118 | 103,988 | 23,542 | 32,785 | 31,035 | ||||||||||||||
Net loss (income) attributable to noncontrolling interest | 9 | (8 | ) | 23 | 18 | (25 | ) | ||||||||||||
Net income attributable to FBL Financial Group, Inc. | $ | 26,127 | $ | 103,980 | $ | 23,565 | $ | 32,803 | $ | 31,010 | |||||||||
Comprehensive income (loss) attributable to FBL Financial Group, Inc. | $ | 37,639 | $ | 116,868 | $ | (69,327 | ) | $ | (22,727 | ) | $ | (11,110 | ) | ||||||
Earnings per common share | $ | 1.04 | $ | 4.15 | $ | 0.94 | $ | 1.31 | $ | 1.24 | |||||||||
Earnings per common share - assuming dilution | $ | 1.04 | $ | 4.15 | $ | 0.94 | $ | 1.31 | $ | 1.24 | |||||||||
Cash dividends per common share | $ | 0.44 | $ | 0.44 | $ | 0.46 | $ | 0.46 | $ | 0.46 | |||||||||
Special cash dividend per common share | $ | — | $ | — | $ | 1.50 | $ | — | $ | — | |||||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||||||
Basic | 25,037 | 25,039 | 25,004 | 24,917 | 24,919 | ||||||||||||||
Effect of dilutive securities | 18 | 18 | 16 | 13 | 11 | ||||||||||||||
Diluted | 25,055 | 25,057 | 25,020 | 24,930 | 24,930 |
FBL Financial Group, Inc. | |||||||||||||||||||
Net Income to Non-GAAP Operating Income Reconciliation and Pre-tax Non-GAAP Operating Income by Segment | |||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
Net income attributable to FBL Financial Group, Inc. | $ | 26,127 | $ | 103,980 | $ | 23,565 | $ | 32,803 | $ | 31,010 | |||||||||
Net income adjustments: | |||||||||||||||||||
Impact of change in federal tax rate (1) | — | (81,157 | ) | — | — | (617 | ) | ||||||||||||
Realized gains/losses on investments (2)(3) | 38 | 656 | 2,223 | (694 | ) | 603 | |||||||||||||
Change in net unrealized gains/losses on derivatives (2) | (1,389 | ) | (476 | ) | 509 | (194 | ) | 876 | |||||||||||
Non-GAAP operating income | $ | 24,776 | $ | 23,003 | $ | 26,297 | $ | 31,915 | $ | 31,872 | |||||||||
Non-GAAP operating income per common share - assuming dilution | $0.99 | $0.92 | $1.05 | $1.28 | $1.28 | ||||||||||||||
Non-GAAP operating return on equity, excluding AOCI - last twelve months | 10.3% | 10.0% | 10.0% | 9.7% | 10.5% | ||||||||||||||
Non-GAAP operating return on equity, including AOCI - last twelve months | 8.5% | 8.3% | 8.3% | 8.1% | 9.0% | ||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
Impact of Adjustments on FBL Net Income | |||||||||||||||||||
Initial impact of the Tax Act (1) | $ | — | $ | 81,157 | $ | — | $ | — | $ | 617 | |||||||||
Realized gains (losses) on investments and change in net unrealized gains/losses on equity securities and derivatives | 1,911 | (791 | ) | (3,995 | ) | 1,357 | (2,658 | ) | |||||||||||
Offsets: (4) | |||||||||||||||||||
Change in amortization | (20 | ) | (90 | ) | 338 | (226 | ) | 725 | |||||||||||
Reserve change on interest sensitive products | 187 | 79 | 199 | (7 | ) | 60 | |||||||||||||
Income tax | (727 | ) | 622 | 726 | (236 | ) | 394 | ||||||||||||
Net impact of net income adjustments | $ | 1,351 | $ | 80,977 | $ | (2,732 | ) | $ | 888 | $ | (862 | ) | |||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
Pre-tax non-GAAP operating income by segment: | |||||||||||||||||||
Annuity segment | $ | 17,015 | $ | 17,211 | $ | 16,582 | $ | 15,998 | $ | 18,179 | |||||||||
Life Insurance segment | 12,620 | 9,856 | 10,897 | 16,381 | 11,958 | ||||||||||||||
Corporate and Other segment | 4,556 | 5,694 | 3,533 | 5,434 | 7,999 | ||||||||||||||
Total pre-tax non-GAAP operating income | 34,191 | 32,761 | 31,012 | 37,813 | 38,136 | ||||||||||||||
Income taxes on non-GAAP operating income | (9,415 | ) | (9,758 | ) | (4,715 | ) | (5,898 | ) | (6,264 | ) | |||||||||
Non-GAAP operating income | $ | 24,776 | $ | 23,003 | $ | 26,297 | $ | 31,915 | $ | 31,872 |
(1) | During the third quarter of 2018, we adjusted the provisional estimate of the impact of the Tax Act on our deferred tax assets and liabilities as of December 31, 2017. See Note 5 to our consolidated financial statements in Form 10-Q for the quarter ended September 30, 2018 for additional information. |
(3) | Beginning in 2018, amount includes changes in net unrealized gains/losses on equity securities. |
• | 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. |
FBL Financial Group, Inc. | |||||||||||||||||||
Statements of Pre-tax Non-GAAP Operating Income | |||||||||||||||||||
Annuity Segment | |||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
Pre-tax Non-GAAP Operating Income | (Dollars in thousands) | ||||||||||||||||||
Non-GAAP operating revenues: | |||||||||||||||||||
Interest sensitive product charges | $ | 1,115 | $ | 1,032 | $ | 1,202 | $ | 1,217 | $ | 1,280 | |||||||||
Net investment income | 53,878 | 56,275 | 56,233 | 55,198 | 54,144 | ||||||||||||||
Total non-GAAP operating revenues | 54,993 | 57,307 | 57,435 | 56,415 | 55,424 | ||||||||||||||
Non-GAAP operating benefits and expenses: | |||||||||||||||||||
Interest sensitive product benefits | 31,385 | 31,096 | 31,286 | 31,393 | 29,037 | ||||||||||||||
Underwriting, acquisition and insurance expenses: | |||||||||||||||||||
Commission expense, net of deferrals | 537 | 611 | 504 | 518 | 374 | ||||||||||||||
Amortization of deferred acquisition costs | 505 | 2,690 | 3,065 | 3,070 | 2,319 | ||||||||||||||
Amortization of value of insurance in force acquired | 169 | 169 | 172 | 172 | 165 | ||||||||||||||
Other underwriting expenses | 5,382 | 5,530 | 5,826 | 5,264 | 5,350 | ||||||||||||||
Total underwriting, acquisition and insurance expenses | 6,593 | 9,000 | 9,567 | 9,024 | 8,208 | ||||||||||||||
Total non-GAAP operating benefits and expenses | 37,978 | 40,096 | 40,853 | 40,417 | 37,245 | ||||||||||||||
Pre-tax non-GAAP operating income | $ | 17,015 | $ | 17,211 | $ | 16,582 | $ | 15,998 | $ | 18,179 | |||||||||
Selected balance sheet data, securities at amortized cost: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Investments | $ | 4,382,218 | $ | 4,470,721 | $ | 4,586,256 | $ | 4,576,410 | $ | 4,596,422 | |||||||||
Deferred acquisition costs | 91,802 | 92,116 | 92,400 | 92,377 | 92,442 | ||||||||||||||
Value of insurance in force acquired | 3,695 | 3,526 | 3,354 | 3,182 | 3,017 | ||||||||||||||
Liabilities and equity: | |||||||||||||||||||
Liabilities: | |||||||||||||||||||
Interest sensitive product reserves | $ | 3,884,541 | $ | 3,963,187 | $ | 4,110,232 | $ | 4,075,995 | $ | 4,096,314 | |||||||||
Other insurance reserves | 358,691 | 355,877 | 352,747 | 346,270 | 344,963 | ||||||||||||||
Allocated equity, excluding AOCI | 267,324 | 272,101 | 272,242 | 269,758 | 270,918 | ||||||||||||||
Other data: | |||||||||||||||||||
Number of direct contracts | 53,218 | 53,250 | 52,991 | 53,184 | 52,925 | ||||||||||||||
Portfolio yield net of assumed defaults | 4.58 | % | 4.50 | % | 4.47 | % | 4.44 | % | 4.43 | % | |||||||||
Credited rate | 2.63 | 2.56 | 2.56 | 2.56 | 2.57 | ||||||||||||||
Spread on individual annuities at end of quarter (1) | 1.95 | % | 1.94 | % | 1.91 | % | 1.88 | % | 1.86 | % | |||||||||
Interest sensitive reserve activity: | |||||||||||||||||||
Individual annuity reserve: | |||||||||||||||||||
Balance, beginning of period | $ | 3,057,952 | $ | 3,082,310 | $ | 3,109,789 | $ | 3,134,862 | $ | 3,171,359 | |||||||||
Deposits | 55,383 | 66,097 | 76,067 | 76,725 | 53,584 | ||||||||||||||
Withdrawals, surrenders and death benefits | (45,450 | ) | (49,428 | ) | (60,623 | ) | (53,788 | ) | (62,234 | ) | |||||||||
Net flows | 9,933 | 16,669 | 15,444 | 22,937 | (8,650 | ) | |||||||||||||
Policyholder interest | 21,041 | 20,817 | 20,363 | 20,787 | 20,524 | ||||||||||||||
Annuitizations and other | (6,616 | ) | (10,007 | ) | (10,734 | ) | (7,227 | ) | (6,352 | ) | |||||||||
Balance, end of period | 3,082,310 | 3,109,789 | 3,134,862 | 3,171,359 | 3,176,881 | ||||||||||||||
Other interest sensitive reserves | 802,231 | 853,398 | 975,370 | 904,636 | 919,433 | ||||||||||||||
Total interest sensitive product reserves | $ | 3,884,541 | $ | 3,963,187 | $ | 4,110,232 | $ | 4,075,995 | $ | 4,096,314 |
(1) | Point-in-time spread at the balance sheet date used by management for decision making, which differs from the spread earned during the reporting period disclosed in the Form 10Q or 10K. |
FBL Financial Group, Inc. | |||||||||||||||||||
Statements of Pre-tax Non-GAAP Operating Income | |||||||||||||||||||
Life Insurance Segment | |||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
Pre-tax Non-GAAP Operating Income | (Dollars in thousands) | ||||||||||||||||||
Non-GAAP operating revenues: | |||||||||||||||||||
Interest sensitive product charges | $ | 16,633 | $ | 14,230 | $ | 18,059 | $ | 19,079 | $ | 18,876 | |||||||||
Traditional life insurance premiums | 47,087 | 49,547 | 49,497 | 51,091 | 48,124 | ||||||||||||||
Net investment income | 38,995 | 41,118 | 40,250 | 39,764 | 39,654 | ||||||||||||||
Other income | (88 | ) | (140 | ) | (79 | ) | (353 | ) | (108 | ) | |||||||||
Total non-GAAP operating revenues | 102,627 | 104,755 | 107,727 | 109,581 | 106,546 | ||||||||||||||
Non-GAAP operating benefits and expenses: | |||||||||||||||||||
Interest sensitive product benefits: | |||||||||||||||||||
Interest and index credits | 8,289 | 9,506 | 8,393 | 9,093 | 8,697 | ||||||||||||||
Death benefits and other | 16,569 | 13,204 | 15,241 | 14,709 | 18,475 | ||||||||||||||
Total interest sensitive product benefits | 24,858 | 22,710 | 23,634 | 23,802 | 27,172 | ||||||||||||||
Traditional life insurance benefits: | |||||||||||||||||||
Death benefits | 21,530 | 23,707 | 23,735 | 19,297 | 21,888 | ||||||||||||||
Surrender and other benefits | 7,409 | 8,642 | 10,144 | 10,392 | 8,110 | ||||||||||||||
Increase in traditional life future policy benefits | 13,694 | 12,477 | 11,578 | 14,022 | 14,170 | ||||||||||||||
Total traditional life insurance benefits | 42,633 | 44,826 | 45,457 | 43,711 | 44,168 | ||||||||||||||
Policyholder dividends | 2,487 | 2,543 | 2,551 | 2,560 | 2,480 | ||||||||||||||
Underwriting, acquisition and insurance expenses: | |||||||||||||||||||
Commission expense, net of deferrals | 4,544 | 4,919 | 4,923 | 4,715 | 4,200 | ||||||||||||||
Amortization of deferred acquisition costs | 1,122 | 4,816 | 4,436 | 4,498 | 2,148 | ||||||||||||||
Amortization of value of insurance in force acquired | 375 | 375 | 373 | 373 | 373 | ||||||||||||||
Other underwriting expenses | 14,536 | 14,448 | 16,151 | 14,833 | 14,907 | ||||||||||||||
Total underwriting, acquisition and insurance expenses | 20,577 | 24,558 | 25,883 | 24,419 | 21,628 | ||||||||||||||
Total non-GAAP operating benefits and expenses | 90,555 | 94,637 | 97,525 | 94,492 | 95,448 | ||||||||||||||
$ | 12,072 | $ | 10,118 | $ | 10,202 | $ | 15,089 | $ | 11,098 | ||||||||||
Equity income (loss), before tax | 548 | (262 | ) | 695 | 1,292 | 860 | |||||||||||||
Pre-tax non-GAAP operating income | $ | 12,620 | $ | 9,856 | $ | 10,897 | $ | 16,381 | $ | 11,958 | |||||||||
Selected balance sheet data, securities at amortized cost: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Investments | $ | 2,942,395 | $ | 2,935,517 | $ | 2,967,238 | $ | 3,006,593 | $ | 3,031,624 | |||||||||
Deferred acquisition costs | 282,116 | 287,421 | 291,212 | 294,365 | 298,368 | ||||||||||||||
Value of insurance in force acquired | 16,279 | 15,904 | 15,531 | 15,157 | 14,784 | ||||||||||||||
Liabilities and equity: | |||||||||||||||||||
Liabilities: (1) | |||||||||||||||||||
Interest sensitive reserves | $ | 930,850 | $ | 944,690 | $ | 953,635 | $ | 966,032 | $ | 979,858 | |||||||||
Other insurance reserves | 1,933,051 | 1,951,565 | 1,964,649 | 1,976,014 | 1,995,675 | ||||||||||||||
Allocated equity, excluding AOCI | 391,464 | 396,571 | 439,031 | 442,808 | 450,927 |
FBL Financial Group, Inc. | |||||||||||||||||||
Statements of Pre-tax Non-GAAP Operating Income | |||||||||||||||||||
Life Insurance Segment (Continued) | |||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Other data: | |||||||||||||||||||
Number of direct policies - traditional life | 364,445 | 365,382 | 364,757 | 364,339 | 364,412 | ||||||||||||||
Number of direct policies - universal life | 65,301 | 66,382 | 66,939 | 67,466 | 67,951 | ||||||||||||||
Direct face amounts - traditional life | $ | 50,435,353 | $ | 50,841,581 | $ | 51,159,302 | $ | 51,524,879 | $ | 51,833,952 | |||||||||
Direct face amounts - universal life | $ | 7,124,265 | $ | 7,275,994 | $ | 7,383,996 | $ | 7,483,427 | $ | 7,539,216 | |||||||||
Portfolio yield net of assumed defaults | 5.12 | % | 5.07 | % | 5.04 | % | 4.99 | % | 4.98 | % | |||||||||
Credited rate | 3.74 | 3.69 | 3.70 | 3.73 | 3.76 | ||||||||||||||
Spread on universal life at end of quarter (2) | 1.38 | % | 1.38 | % | 1.34 | % | 1.26 | % | 1.22 | % | |||||||||
Interest sensitive reserve activity: (1) | |||||||||||||||||||
Balance, beginning of period | $ | 916,067 | $ | 930,850 | $ | 944,690 | $ | 953,635 | $ | 966,032 | |||||||||
Deposits | 24,708 | 26,267 | 27,847 | 29,415 | 26,617 | ||||||||||||||
Withdrawals and surrenders | (6,668 | ) | (5,672 | ) | (8,110 | ) | (7,708 | ) | (7,577 | ) | |||||||||
Net flows | 18,040 | 20,595 | 19,737 | 21,707 | 19,040 | ||||||||||||||
Policyholder interest | 7,997 | 8,806 | 7,752 | 8,386 | 7,827 | ||||||||||||||
Policy charges | (18,149 | ) | (15,008 | ) | (18,807 | ) | (19,248 | ) | (19,129 | ) | |||||||||
Benefits and other | 6,895 | (553 | ) | 263 | 1,552 | 6,088 | |||||||||||||
Balance, end of period | $ | 930,850 | $ | 944,690 | $ | 953,635 | $ | 966,032 | $ | 979,858 |
(1) | Reserves on riders in interest sensitive life insurance products are included in Other insurance reserves. |
(2) | Point-in-time spread at the balance sheet date used by management for decision making with universal life (excluding products with a secondary guarantee) differs from the spread earned during the reporting period disclosed in the Form 10Q or 10K. |
FBL Financial Group, Inc. | ||||||||||||||||||||
Statements of Pre-tax Non-GAAP Operating Income | ||||||||||||||||||||
Corporate and Other | ||||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | ||||||||||||||||
Pre-tax Non-GAAP Operating Income | (Dollars in thousands) | |||||||||||||||||||
Non-GAAP operating revenues: | ||||||||||||||||||||
Interest sensitive product charges | $ | 10,393 | $ | 11,252 | $ | 11,021 | $ | 11,102 | $ | 10,494 | ||||||||||
Net investment income | 8,719 | 8,788 | 8,411 | 8,777 | 8,349 | |||||||||||||||
Other income | 3,589 | 3,829 | 4,679 | 3,990 | 3,936 | |||||||||||||||
Total non-GAAP operating revenues | 22,701 | 23,869 | 24,111 | 23,869 | 22,779 | |||||||||||||||
Non-GAAP operating benefits and expenses: | ||||||||||||||||||||
Interest sensitive product benefits | 11,697 | 9,410 | 9,342 | 7,714 | 8,465 | |||||||||||||||
Underwriting, acquisition and insurance expenses: | ||||||||||||||||||||
Commission expense, net of deferrals | 705 | 716 | 680 | 667 | 684 | |||||||||||||||
Amortization of deferred acquisition costs | (2,276 | ) | 904 | 2,512 | 1,876 | (1,148 | ) | |||||||||||||
Other underwriting expenses | 2,045 | 1,607 | 1,402 | 1,506 | 1,698 | |||||||||||||||
Total underwriting, acquisition and insurance expenses | 474 | 3,227 | 4,594 | 4,049 | 1,234 | |||||||||||||||
Interest expense | 1,213 | 1,212 | 1,213 | 1,213 | 1,212 | |||||||||||||||
Other expenses | 4,971 | 4,520 | 5,593 | 5,627 | 5,061 | |||||||||||||||
Total non-GAAP operating benefits and expenses | 18,355 | 18,369 | 20,742 | 18,603 | 15,972 | |||||||||||||||
4,346 | 5,500 | 3,369 | 5,266 | 6,807 | ||||||||||||||||
Net loss (income) attributable to noncontrolling interest | 9 | (8 | ) | 23 | 18 | (25 | ) | |||||||||||||
Equity income, before tax | 201 | 202 | 141 | 150 | 1,217 | |||||||||||||||
Pre-tax non-GAAP operating income | $ | 4,556 | $ | 5,694 | $ | 3,533 | $ | 5,434 | $ | 7,999 | ||||||||||
Selected balance sheet data, securities at amortized cost: | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Investments | $ | 647,104 | $ | 671,857 | $ | 680,285 | $ | 678,014 | $ | 684,541 | ||||||||||
Deferred acquisition costs | 71,038 | 70,247 | 68,202 | 66,315 | 68,101 | |||||||||||||||
Separate account assets | 637,746 | 651,963 | 638,751 | 638,061 | 651,797 | |||||||||||||||
Liabilities and equity: | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Interest sensitive reserves | $ | 369,167 | $ | 369,726 | $ | 369,022 | $ | 367,937 | $ | 371,502 | ||||||||||
Other insurance reserves | 94,088 | 93,754 | 91,305 | 89,427 | 89,389 | |||||||||||||||
Separate account liabilities | 637,746 | 651,963 | 638,751 | 638,061 | 651,797 | |||||||||||||||
Allocated equity, excluding AOCI | 385,733 | 420,412 | 351,866 | 369,593 | 379,918 | |||||||||||||||
Rollforward of separate account balances: | ||||||||||||||||||||
Beginning separate account balance | $ | 625,971 | $ | 637,746 | $ | 651,963 | $ | 638,751 | $ | 638,061 | ||||||||||
Net premiums and transfers | 4,945 | 4,745 | 6,667 | 6,264 | 836 | |||||||||||||||
Net investment income (loss) | 22,852 | 26,039 | (3,424 | ) | 11,995 | 28,717 | ||||||||||||||
Charges, benefits and surrenders | (16,022 | ) | (16,567 | ) | (16,455 | ) | (18,949 | ) | (15,817 | ) | ||||||||||
Ending separate account balance | $ | 637,746 | $ | 651,963 | $ | 638,751 | $ | 638,061 | $ | 651,797 | ||||||||||
Other data: | ||||||||||||||||||||
Number of direct contracts - variable annuity | 10,017 | 9,857 | 9,671 | 9,491 | 9,343 | |||||||||||||||
Number of direct policies - variable universal life | 37,400 | 36,986 | 36,548 | 36,056 | 35,613 | |||||||||||||||
Direct face amounts - variable universal life | $ | 4,599,050 | $ | 4,549,732 | $ | 4,501,972 | $ | 4,440,315 | $ | 4,388,771 |
FBL Financial Group, Inc. | |||||||||||||||||||
Deferred Acquisition Costs by Segment | |||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Annuity | |||||||||||||||||||
Balance - beginning of period | $ | 89,752 | $ | 91,802 | $ | 92,116 | $ | 92,400 | $ | 92,377 | |||||||||
Cumulative effect of change in accounting principle related to net unrealized gains on equity securities | — | — | — | (103 | ) | — | |||||||||||||
Capitalization: | |||||||||||||||||||
Commissions | 2,226 | 2,681 | 2,972 | 2,892 | 2,119 | ||||||||||||||
Expenses | 181 | 237 | 283 | 313 | 291 | ||||||||||||||
Deferral of sales inducements | 173 | 124 | 129 | — | — | ||||||||||||||
Total capitalization | 2,580 | 3,042 | 3,384 | 3,205 | 2,410 | ||||||||||||||
Amortization - non-GAAP operating basis, before impact of unlocking | (2,307 | ) | (2,762 | ) | (3,157 | ) | (3,137 | ) | (2,616 | ) | |||||||||
Amortization - unlocking, non-GAAP operating basis | 1,752 | — | — | — | 249 | ||||||||||||||
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities | 25 | 34 | 57 | 12 | 22 | ||||||||||||||
Balance - end of period | $ | 91,802 | $ | 92,116 | $ | 92,400 | $ | 92,377 | $ | 92,442 | |||||||||
Life Insurance | |||||||||||||||||||
Balance - beginning of period | $ | 275,356 | $ | 282,116 | $ | 287,421 | $ | 291,212 | $ | 294,365 | |||||||||
Cumulative effect of change in accounting principle related to net unrealized gains on equity securities | — | — | — | (357 | ) | — | |||||||||||||
Capitalization: | |||||||||||||||||||
Commissions | 5,122 | 7,250 | 5,505 | 5,068 | 4,279 | ||||||||||||||
Expenses | 2,298 | 2,309 | 2,391 | 2,559 | 2,257 | ||||||||||||||
Deferral of sales inducements | 93 | 595 | 355 | 257 | 163 | ||||||||||||||
Total capitalization | 7,513 | 10,154 | 8,251 | 7,884 | 6,699 | ||||||||||||||
Amortization - non-GAAP operating basis, before impact of unlocking | (5,172 | ) | (4,973 | ) | (4,566 | ) | (4,679 | ) | (4,416 | ) | |||||||||
Amortization - unlocking, non-GAAP operating basis | 4,351 | — | — | — | 2,009 | ||||||||||||||
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities | 68 | 124 | 106 | 305 | (289 | ) | |||||||||||||
Balance - end of period | $ | 282,116 | $ | 287,421 | $ | 291,212 | $ | 294,365 | $ | 298,368 | |||||||||
Corporate and Other | |||||||||||||||||||
Balance - beginning of period | $ | 68,546 | $ | 71,038 | $ | 70,247 | $ | 68,202 | $ | 66,315 | |||||||||
Cumulative effect of change in accounting principle related to net unrealized gains on equity securities | — | — | — | (30 | ) | — | |||||||||||||
Capitalization: | |||||||||||||||||||
Commissions | 83 | 113 | 142 | 120 | 86 | ||||||||||||||
Deferral of sales inducements | — | 7 | 4 | 2 | 2 | ||||||||||||||
Total capitalization | 83 | 120 | 146 | 122 | 88 | ||||||||||||||
Amortization - non-GAAP operating basis, before impact of unlocking | (907 | ) | (902 | ) | (2,568 | ) | (1,910 | ) | (1,240 | ) | |||||||||
Amortization - unlocking, non-GAAP operating basis | 3,292 | — | — | — | 2,458 | ||||||||||||||
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities | 24 | (9 | ) | 377 | (69 | ) | 480 | ||||||||||||
Balance - end of period | $ | 71,038 | $ | 70,247 | $ | 68,202 | $ | 66,315 | $ | 68,101 |
FBL Financial Group, Inc. | |||||||||||||||||||
Deferred Acquisition Costs by Segment (Continued) | |||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Total | |||||||||||||||||||
Balance - beginning of period | $ | 433,654 | $ | 444,956 | $ | 449,784 | $ | 451,814 | $ | 453,057 | |||||||||
Cumulative effect of change in accounting principle related to net unrealized gains on equity securities | — | — | — | (490 | ) | — | |||||||||||||
Capitalization: | |||||||||||||||||||
Commissions | 7,431 | 10,044 | 8,619 | 8,080 | 6,484 | ||||||||||||||
Expenses | 2,479 | 2,546 | 2,674 | 2,872 | 2,548 | ||||||||||||||
Deferral of sales inducements | 266 | 726 | 488 | 259 | 165 | ||||||||||||||
Total capitalization | 10,176 | 13,316 | 11,781 | 11,211 | 9,197 | ||||||||||||||
Amortization - non-GAAP operating basis, before impact of unlocking | (8,386 | ) | (8,637 | ) | (10,291 | ) | (9,726 | ) | (8,272 | ) | |||||||||
Amortization - unlocking, non-GAAP operating basis | 9,395 | — | — | — | 4,716 | ||||||||||||||
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives and equities | 117 | 149 | 540 | 248 | 213 | ||||||||||||||
Balance - end of period | 444,956 | 449,784 | 451,814 | 453,057 | 458,911 | ||||||||||||||
Impact of unrealized gains in AOCI | (142,109 | ) | (147,173 | ) | (93,953 | ) | (65,530 | ) | (46,865 | ) | |||||||||
Deferred acquisition costs | $ | 302,847 | $ | 302,611 | $ | 357,861 | $ | 387,527 | $ | 412,046 |
FBL Financial Group, Inc. | |||||||||||||||||||
Impact of Unlocking on Pre-tax Non-GAAP Operating Income | |||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Annuity Segment | |||||||||||||||||||
Amortization of deferred sales inducements reported in interest sensitive product benefits | $ | 10 | $ | — | $ | — | $ | — | $ | 13 | |||||||||
Amortization of deferred acquisition costs | 1,743 | — | — | — | 236 | ||||||||||||||
Changes in reserves reported in interest sensitive product benefits | (228 | ) | — | — | — | — | |||||||||||||
Increase to pre-tax non-GAAP operating income | $ | 1,525 | $ | — | $ | — | $ | — | $ | 249 | |||||||||
Life Segment | |||||||||||||||||||
Amortization of unearned revenue reserve reported in interest sensitive product charges and other income | $ | (1,166 | ) | $ | — | $ | — | $ | — | $ | 420 | ||||||||
Amortization of deferred sales inducements reported in interest sensitive product benefits | 422 | — | — | — | (209 | ) | |||||||||||||
Amortization of deferred sales inducements reported in traditional life insurance benefits | 55 | — | — | — | 65 | ||||||||||||||
Amortization of deferred acquisition costs | 3,873 | — | — | — | 2,152 | ||||||||||||||
Changes in reserves reported in interest sensitive product benefits | (5,574 | ) | — | — | — | (4,755 | ) | ||||||||||||
Decrease to pre-tax non-GAAP operating income | $ | (2,390 | ) | $ | — | $ | — | $ | — | $ | (2,327 | ) | |||||||
Corporate and Other Segment | |||||||||||||||||||
Amortization of unearned revenue reserve reported in interest sensitive product charges | $ | (579 | ) | $ | — | $ | — | $ | — | $ | (667 | ) | |||||||
Amortization of deferred sales inducements reported in interest sensitive product benefits | 98 | — | — | — | 76 | ||||||||||||||
Amortization of deferred acquisition costs | 3,194 | — | — | — | 2,382 | ||||||||||||||
Changes in reserves reported in interest sensitive product benefits | (799 | ) | — | — | — | — | |||||||||||||
Increase to pre-tax non-GAAP operating income | $ | 1,914 | $ | — | $ | — | $ | — | $ | 1,791 | |||||||||
Total impact of unlocking on pre-tax non-GAAP operating income | $ | 1,049 | $ | — | $ | — | $ | — | $ | (287 | ) |
FBL Financial Group, Inc. | |||||||||||||||||||
Collected Premiums (1) | |||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Annuity | |||||||||||||||||||
Individual: | |||||||||||||||||||
Fixed rate: | |||||||||||||||||||
First year | $ | 12,853 | $ | 17,575 | $ | 17,554 | $ | 22,514 | $ | 14,593 | |||||||||
Renewal | 14,839 | 18,621 | 20,875 | 16,446 | 11,371 | ||||||||||||||
Total fixed rate | 27,692 | 36,196 | 38,429 | 38,960 | 25,964 | ||||||||||||||
Index annuity | 28,118 | 30,174 | 37,665 | 37,442 | 29,183 | ||||||||||||||
Total individual | 55,810 | 66,370 | 76,094 | 76,402 | 55,147 | ||||||||||||||
Group | 2,323 | 2,115 | 2,716 | 3,436 | 1,186 | ||||||||||||||
Total Annuity | 58,133 | 68,485 | 78,810 | 79,838 | 56,333 | ||||||||||||||
Life Insurance | |||||||||||||||||||
Direct: | |||||||||||||||||||
Universal life: | |||||||||||||||||||
First year | 7,331 | 4,746 | 7,157 | 7,962 | 7,140 | ||||||||||||||
Renewal | 17,216 | 18,868 | 19,848 | 20,602 | 18,887 | ||||||||||||||
Total universal life | 24,547 | 23,614 | 27,005 | 28,564 | 26,027 | ||||||||||||||
Participating whole life: | |||||||||||||||||||
First year | 2,446 | 3,304 | 2,695 | 3,537 | 3,249 | ||||||||||||||
Renewal | 22,736 | 24,058 | 24,281 | 24,244 | 22,269 | ||||||||||||||
Total participating whole life | 25,182 | 27,362 | 26,976 | 27,781 | 25,518 | ||||||||||||||
Term life and other: | |||||||||||||||||||
First year | 2,529 | 2,738 | 2,718 | 2,751 | 2,513 | ||||||||||||||
Renewal | 24,947 | 25,583 | 26,620 | 26,538 | 25,995 | ||||||||||||||
Total term life and other | 27,476 | 28,321 | 29,338 | 29,289 | 28,508 | ||||||||||||||
Total direct life insurance | 77,205 | 79,297 | 83,319 | 85,634 | 80,053 | ||||||||||||||
Reinsurance | (5,991 | ) | (6,902 | ) | (7,056 | ) | (7,734 | ) | (6,186 | ) | |||||||||
Total Life Insurance | 71,214 | 72,395 | 76,263 | 77,900 | 73,867 | ||||||||||||||
Corporate and Other | |||||||||||||||||||
Variable, net of reinsurance | 12,204 | 12,554 | 14,529 | 13,575 | 11,424 | ||||||||||||||
Accident and health, net of reinsurance | 98 | 217 | 55 | 42 | 43 | ||||||||||||||
Total Corporate and Other | 12,302 | 12,771 | 14,584 | 13,617 | 11,467 | ||||||||||||||
Total collected premiums | $ | 141,649 | $ | 153,651 | $ | 169,657 | $ | 171,355 | $ | 141,667 |
(1) | Collected premiums is a measure of sales production not recognized under GAAP. |
FBL Financial Group, Inc. | |||||||||||||||||||
Other Information | |||||||||||||||||||
September 30, | December 31, | March 31, | June 30, | September 30, | |||||||||||||||
2017 | 2017 | 2018 | 2018 | 2018 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Capitalization: | |||||||||||||||||||
Short-term debt | $ | — | $ | — | $ | — | $ | 27,000 | $ | — | |||||||||
Trust preferred securities, due 2047 | 97,000 | 97,000 | 97,000 | 97,000 | 97,000 | ||||||||||||||
Total debt | 97,000 | 97,000 | 97,000 | 124,000 | 97,000 | ||||||||||||||
Preferred stock | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | ||||||||||||||
Common stockholders' equity, excluding AOCI | 1,044,521 | 1,089,084 | 1,063,139 | 1,082,159 | 1,101,762 | ||||||||||||||
Total capitalization, excluding AOCI | 1,144,521 | 1,189,084 | 1,163,139 | 1,209,159 | 1,201,762 | ||||||||||||||
Accumulated other comprehensive income | 223,869 | 284,983 | 186,222 | 131,081 | 88,961 | ||||||||||||||
Total capitalization, including AOCI | $ | 1,368,390 | $ | 1,474,067 | $ | 1,349,361 | $ | 1,340,240 | $ | 1,290,723 | |||||||||
Common shares outstanding | 24,933,510 | 24,930,526 | 24,837,976 | 24,818,209 | 24,818,209 | ||||||||||||||
Book Value per Share: | |||||||||||||||||||
Excluding AOCI | $ | 41.89 | $ | 43.68 | $ | 42.80 | $ | 43.60 | $ | 44.39 | |||||||||
Including AOCI | 50.87 | 55.12 | 50.30 | 48.89 | 47.98 | ||||||||||||||
Debt-to-Capital Ratio: | |||||||||||||||||||
Excluding AOCI | 8.4 | % | 8.1 | % | 8.3 | % | 10.2 | % | 8.1 | % | |||||||||
Including AOCI | 7.1 | 6.5 | 7.1 | 9.2 | 7.5 | ||||||||||||||
Debt-to-Capital Ratio with 50% Credit for Trust Preferred Securities: | |||||||||||||||||||
Excluding AOCI | 4.2 | % | 4.0 | % | 4.1 | % | 5.1 | % | 4.0 | % | |||||||||
Including AOCI | 3.5 | 3.3 | 3.6 | 4.6 | 3.8 | ||||||||||||||
Class A Common Ownership: | |||||||||||||||||||
Iowa Farm Bureau Federation | 59.2 | % | 59.2 | % | 59.5 | % | 59.5 | % | 59.5 | % | |||||||||
Public | 40.8 | 40.8 | 40.5 | 40.5 | 40.5 | ||||||||||||||
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
FBL Financial Group, Inc. | ||||||||||||||
Other Information (Continued) | ||||||||||||||
September 30, | December 31, | March 31, | June 30, | September 30, | ||||||||||
2017 | 2017 | 2018 | 2018 | 2018 | ||||||||||
Investment by Type: | ||||||||||||||
Fixed maturity securities | 62.3 | % | 60.7 | % | 59.3 | % | 58.0 | % | 57.2 | % | ||||
Residential mortgage-backed | 5.6 | 6.0 | 6.4 | 7.0 | 7.2 | |||||||||
Commercial mortgage-backed | 7.8 | 8.2 | 9.2 | 10.1 | 10.2 | |||||||||
Other asset-backed | 9.2 | 9.7 | 9.5 | 9.2 | 9.0 | |||||||||
Mortgage loans | 10.9 | 11.3 | 11.3 | 11.5 | 12.0 | |||||||||
Equity securities | 1.5 | 1.5 | 1.2 | 1.2 | 1.2 | |||||||||
Other | 2.7 | 2.6 | 3.1 | 3.0 | 3.2 | |||||||||
Quality of Fixed Maturity Securities: | ||||||||||||||
AAA, AA, A | 64.4 | % | 65.4 | % | 66.1 | % | 67.6 | % | 68.0 | % | ||||
BBB | 32.0 | 31.1 | 30.4 | 29.5 | 29.2 | |||||||||
BB | 2.5 | 2.4 | 2.5 | 2.0 | 1.8 | |||||||||
<BB | 1.1 | 1.1 | 1.0 | 0.9 | 1.0 | |||||||||
Agent Strength Totals: | ||||||||||||||
Full time agents and agency managers: | ||||||||||||||
8-state Farm Bureau Property & Casualty channel | 1,213 | 1,192 | 1,168 | 1,132 | 1,145 | |||||||||
6 life partner states and Colorado | 653 | 648 | 657 | 655 | 665 | |||||||||
1,866 | 1,840 | 1,825 | 1,787 | 1,810 |
FBL Financial Group, Inc. | |||||||||||||||||||
Income Taxes | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | |||||||||||||||
Income tax benefit (expense) | $ | (9,880 | ) | $ | 72,000 | $ | (3,813 | ) | $ | (5,831 | ) | $ | (4,818 | ) | |||||
Tax on equity income | (262 | ) | 21 | (176 | ) | (303 | ) | (435 | ) | ||||||||||
Net income adjustments: | |||||||||||||||||||
Impact of change in federal tax rate | — | (81,157 | ) | — | — | (617 | ) | ||||||||||||
Income tax offset on net income adjustments | 727 | (622 | ) | (726 | ) | 236 | (394 | ) | |||||||||||
Income taxes on non-GAAP operating income | $ | (9,415 | ) | $ | (9,758 | ) | $ | (4,715 | ) | $ | (5,898 | ) | $ | (6,264 | ) | ||||
Income taxes on non-GAAP operating income before benefits of LIHTC investments | $ | (10,755 | ) | $ | (10,770 | ) | $ | (5,642 | ) | $ | (6,824 | ) | $ | (7,148 | ) | ||||
Amounts related to LIHTC investments | 1,340 | 1,012 | 927 | 926 | 884 | ||||||||||||||
Income taxes on non-GAAP operating income | $ | (9,415 | ) | $ | (9,758 | ) | $ | (4,715 | ) | $ | (5,898 | ) | $ | (6,264 | ) |
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