Market Overview

FBL Financial Group Reports First Quarter 2019 Results

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FBL Financial Group, Inc. (NYSE:FFG):

 
Financial Highlights

(Dollars in thousands, except per share data)

       
    Three months ended March 31,
2019     2018
Net income attributable to FBL Financial Group $ 34,043     $ 23,565
Adjusted operating income(1) 25,902 26,297
Earnings per common share (assuming dilution):
Net income 1.37 0.94
Adjusted operating income(1)       1.04       1.05
 

FBL Financial Group, Inc. (NYSE:FFG) today reported net income
attributable to FBL Financial Group for the first quarter of 2019 of
$34.0 million, or $1.37 per diluted common share, compared to $23.6
million, or $0.94 per diluted common share, for the first quarter of
2018. Adjusted operating income(1) totaled $25.9 million, or
$1.04 per common share, for the first quarter of 2019, compared to $26.3
million, or $1.05 per common share, for the first quarter of 2018. First
quarter 2019 earnings per share reflects:

  • Lower amortization of acquisition costs in the Corporate and Other
    segment due to the positive impact of equity markets on separate
    account performance
  • The benefit of other investment-related income of $0.04 per share
  • Lower spread income in the Annuity segment
  • Unfavorable mortality results in the Life segment
  • Net realized gains on investments

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

"FBL Financial Group delivered solid first quarter 2019 earnings with
net income of $1.37 per share and adjusted operating income of $1.04 per
share," said James P. Brannen, Chief Executive Officer of FBL Financial
Group, Inc. "In the first quarter of 2019 we also returned more than $48
million to shareholders with the payment of a special dividend of $1.50
per share and our increased quarterly dividend of $0.48 per share. As we
move forward in 2019, we remain focused on the fundamentals: serving the
needs of the Farm Bureau niche market with products and services to
protect livelihoods and futures."

Product Revenues Increase from 2018. Premiums and product charges
for the first quarter of 2019 increased to $80.7 million compared to
$79.6 million in the first quarter of 2018. Interest sensitive product
charges increased 4 percent while traditional life insurance premiums
were flat during the quarter. Premiums collected(2) in the
first quarter of 2019 totaled $160.7 million compared to $169.7 million
in the first quarter of 2018.

Investment Income of $110 Million in First Quarter. Net
investment income in the first quarter of 2019 totaled $109.6 million,
compared to $101.0 million in the first quarter of 2018. This increase
reflects a change in the fair value of derivatives and 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, including investments held as securities and
indebtedness of related parties, was 4.97 percent for the three months
ended March 31, 2019 compared to 5.21 percent for the three months ended
March 31, 2018. At March 31, 2019, 97 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 $163.5
million in the first quarter of 2019, compared to $155.7 million in the
first quarter of 2018. Death benefits, net of reinsurance and reserves
released, totaled $33.9 million in the first quarter of 2019, compared
to $32.6 million in the first quarter of 2018. By its nature, mortality
experience can fluctuate from quarter to quarter.

Net Realized Gains in the First Quarter. In the first quarter of
2019, FBL Financial Group recognized net realized gains on investments
of $9.3 million. This is attributable to realized gains of $5.8 million,
unrealized gains on equity securities of $4.4 million and
other-than-temporary impairments of $0.9 million.

Stock Repurchases. During the first quarter of 2019, FBL
Financial Group repurchased 66,475 shares of its Class A common stock.
FBL Financial Group has $36.3 million remaining under its current stock
repurchase program.

Capital and Book Value. As of March 31, 2019, the book value per
share of FBL Financial Group common stock totaled $51.13, compared to
$47.78 at December 31, 2018. Book value per share, excluding accumulated
other comprehensive income(3), totaled $43.45 at March 31,
2019, compared to $44.09 at December 31, 2018. The March 31, 2019
company action level risk based capital ratio of FBL Financial Group's
wholly owned subsidiary, Farm Bureau Life Insurance Company, was
approximately 517 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, May 3, 2019, 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. Operating under the consumer brand name Farm
Bureau Financial Services, it offers a broad range of life insurance and
annuity products 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.
Headquartered in West Des Moines, Iowa, FBL Financial Group is traded on
the New York Stock Exchange under the symbol FFG. For more information,
please visit www.fblfinancial.com
and www.fbfs.com.

 
FBL Financial Group, Inc.
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share data)
   
Three months ended
March 31,
2019     2018
Revenues:
Interest sensitive product charges $ 31,266 $ 30,098
Traditional life insurance premiums 49,392 49,497
Net investment income 109,640 101,022
Net realized capital gains (losses) 10,157 (1,747 )
Net other-than-temporary impairment losses recognized in earnings (869 ) (1,040 )
Other income   3,970     4,600  
Total revenues 203,556 182,430
 
Benefits and expenses:
Interest sensitive product benefits 70,596 61,345
Traditional life insurance benefits 46,675 45,456
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