FBL Financial Misses Earnings Ests, Grows Y/Y - Analyst Blog

FBL Financial Group Inc. FFG reported first quarter operating net earnings of 92 cents per share, a penny below the Zacks Consensus Estimate but up nearly 33% on a year-over-year basis.

Solid underlying results from life insurance and annuity segments coupled with benefit from capital transactions aided the improvement for FBL Financial. Share price also gained 1.4% to close at $44.91 on May 2.

Adjusting for net realized losses, net income of FBL Financial declined 5.2% year over year to 91 cents per share in the reported quarter.

Total revenue inched up 0.3% year over year to $168.5 million. The improvement largely came on the back of higher interest sensitive product charges (up 7.1% year over year) and traditional life insurance premiums (up 1.2%). Net investment income increased about 2% to $92.6 million on increase in average invested assets. However, lower investment yields limited the upside.

Total benefits and expenses increased 3.1% year over year owing to higher interest sensitive product benefits and higher traditional life insurance benefits.

Financial Update

FBL Financial exited the first quarter with cash and cash equivalents of $32.2 million, up substantially from $6.4 million at 2013 end. Total assets improved to $8.7 billion from $8.5 billion at 2013 end, whereas shareholder equity rose to $1.12 billion from $1.04 billion at the end of Dec 2013.

Debt balance of $97 million was flat with 2013-end level.

Additionally, book value per share grew 1.3% to $37.74 on Mar 31, 2014 from $37.27 on Dec 31, 2014.

Dividend and Share Repurchase Update

In March, FBL Financial paid a dividend of 35 cents per share. This includes the 133% hike approved in February.

The company spent $11.2 million to buy back 0.263 million shares in the first quarter. FBL has $50.0 million remaining under its current stock repurchase program approved in February.

Zacks Rank

FBL Financial carries a Zacks Rank #3 (Hold). The bottom line of some other multi-line insurers such as Cigna Corp. CI, MetLife Inc. MET and Assurant Inc. AIZ also outperformed their respective Zacks Consensus Estimate in the first quarter. All these stocks share the same Zacks Rank as FBL Financial