FBL FINANCIAL GROUP INC - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

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EX-99.1 - EXHIBIT 99.1 - FBL FINANCIAL GROUP INC	exh991newsrelease2017q1.htm
8-K - 8-K - FBL FINANCIAL GROUP INC	pressrelease8k2017q1.htm

FBL FINANCIAL GROUP, INC.

INVESTOR SUPPLEMENT

First 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:
	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)
March 31, 2017
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
Impact of Unlocking on Pre-tax Operating Income		15
Collected Premiums, last five quarters		16
Other Information		17

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.

FBL Financial Group’s policy for calculating operating income is intended to accurately reflect offsets resulting from the adjustments to net income used to calculate operating income. Due to changes in product offerings since the last amendment to this policy, in the fourth quarter of 2016 FBL Financial Group refined its calculation of operating income to include offsets relating to interest sensitive product reserves. These offsets to interest sensitive product reserves, net of tax, increased operating income $0.9 million for the full year 2016 were recorded in the fourth quarter. These offsets, net of tax, increased operating income $0.4 million in the first quarter of 2017 and these offsets, net of tax, not taken into account in the computation of operating income for the first quarter of 2016 would have increased operating income by an amount less than $0.1 million.

NOTE 2: Certain financial information presented herein may not add due to rounding.

FBL Financial Group, Inc.

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)



	March 31, 2017		December 31, 2016
Assets
Investments:
Fixed maturities - available for sale, at fair value (amortized cost: 2017 - $6,689,779; 2016 - $6,661,711)	$	7,071,998	$	7,008,790
Equity securities - available for sale, at fair value (cost: 2017 - $130,931; 2016 - $130,479)	137,316		132,968
Mortgage loans	855,497		816,471
Real estate	1,955		1,955
Policy loans	187,981		188,254
Short-term investments	14,264		16,348
Other investments	11,495		9,874
Total investments	8,280,506		8,174,660

Cash and cash equivalents	16,773		33,583
Securities and indebtedness of related parties	133,018		137,422
Accrued investment income	85,736		78,437
Amounts receivable from affiliates	3,361		3,790
Reinsurance recoverable	106,131		105,290
Deferred acquisition costs	322,138		330,324
Value of insurance in force acquired	8,552		9,226
Current income taxes recoverable	—		4,309
Other assets	90,831		92,021
Assets held in separate accounts	615,892		597,072








Total assets	$	9,662,938	$	9,566,134

FBL Financial Group, Inc.

Consolidated Balance Sheets (Continued)

(Dollars in thousands)



	March 31, 2017		December 31, 2016
Liabilities and stockholders' equity
Liabilities:
Future policy benefits:
Interest sensitive products	$	5,150,113	$	5,100,625
Traditional life insurance and accident and health products	1,710,763		1,698,792
Other policy claims and benefits	44,539		43,395
Supplementary contracts without life contingencies	330,869		330,232
Advance premiums and other deposits	267,032		265,221
Amounts payable to affiliates	1,481		862
Long-term debt payable to non-affiliates	97,000		97,000
Current income taxes	1,913		—
Deferred income taxes	172,675		163,495
Other liabilities	87,965		81,182
Liabilities related to separate accounts	615,892		597,072
Total liabilities	8,480,242		8,377,876

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 24,906,547 in 2017 and 24,882,542 shares in 2016	153,242		152,903
Class B common stock, without par value - authorized 1,500,000 shares, issued and outstanding 11,413 shares in 2017 and 2016	72		72
Accumulated other comprehensive income	165,598		149,555
Retained earnings	860,726		882,672
Total FBL Financial Group, Inc. stockholders' equity	1,182,638		1,188,202
Noncontrolling interest	58		56
Total stockholders' equity	1,182,696		1,188,258
Total liabilities and stockholders' equity	$	9,662,938	$	9,566,134

FBL Financial Group, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands, except per share data)



	Three months ended March 31,
	2017			2016
Revenues:
Interest sensitive product charges	$	29,201		$	28,111
Traditional life insurance premiums	48,434			50,138
Net investment income	100,994			98,385
Net realized capital gains (losses) on sales of investments	(403		)	1,590

Total other-than-temporary impairment losses	(66		)	(3,719		)
Non-credit portion in other comprehensive income	—			1,522
Net impairment losses recognized in earnings	(66		)	(2,197		)
Other income	3,760			3,639
Total revenues	181,920			179,666

Benefits and expenses:
Interest sensitive product benefits	62,760			54,419
Traditional life insurance benefits	42,954			44,569
Policyholder dividends	2,553			3,040
Underwriting, acquisition and insurance expenses	34,353			37,714
Interest expense	1,212			1,212
Other expenses	4,151			4,358
Total benefits and expenses	147,983			145,312
	33,937			34,354
Income taxes	(10,733		)	(11,069		)
Equity income, net of related income taxes	3,231			2,652
Net income	26,435			25,937
Net (income) loss attributable to noncontrolling interest	(2		)	9
Net income attributable to FBL Financial Group, Inc.	$	26,433		$	25,946

Comprehensive income attributable to FBL Financial Group, Inc.	$	42,476		$	97,332

Earnings per common share	$	1.05		$	1.04
Earnings per common share - assuming dilution	$	1.05		$	1.04

Cash dividends per common share	$	0.44		$	0.42
Special cash dividend per common share	$	1.50		$	2.00



FBL Financial Group, Inc.
Consolidated Statements of Operating Income (1)
(Dollars in thousands, except per share data)

	Q1 2016			Q2 2016			Q3 2016			Q4 2016			Q1 2017
Operating revenues:
Interest sensitive product charges	$	28,111		$	28,994		$	25,897		$	28,938		$	29,213
Traditional life insurance premiums	50,138			49,605			47,682			49,489			48,434
Net investment income	97,318			99,137			101,333			99,832			101,453
Other income	3,639			4,225			3,616			3,681			3,760
Total operating revenues	179,206			181,961			178,528			181,940			182,860

Benefits and expenses:
Interest sensitive product benefits	53,253			57,035			65,221			59,387			62,396
Traditional life insurance benefits	44,565			43,394			42,121			47,620			42,955
Policyholder dividends	3,040			2,515			2,459			2,560			2,553
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	5,797			5,683			5,407			5,848			6,155
Amortization of deferred acquisition costs	9,550			11,352			(989		)	8,388			7,076
Amortization of value of insurance in force acquired	552			749			547			546			545
Other underwriting expenses	21,952			21,334			20,471			18,859			21,025
Total underwriting, acquisition and insurance expenses	37,851			39,118			25,436			33,641			34,801
Interest expense	1,212			1,213			1,213			1,212			1,212
Other expenses	4,358			4,435			3,854			4,319			4,151
Total benefits and expenses	144,279			147,710			140,304			148,739			148,068
	34,927			34,251			38,224			33,201			34,792
Income taxes	(11,270		)	(11,176		)	(12,480		)	(10,670		)	(11,033		)
Net loss (income) attributable to noncontrolling interest	9			(12		)	10			(3		)	(2		)
Equity income, net of related income taxes	2,652			2,613			3,128			3,047			3,231
Operating income	26,318			25,676			28,882			25,575			26,988

Realized gains/losses on investments, net of offsets	(397		)	(1,147		)	402			429			(554		)
Change in net unrealized gains/losses on derivatives, net of offsets	25			(149		)	733			876			(1		)
Net income attributable to FBL Financial Group, Inc.	$	25,946		$	24,380		$	30,017		$	26,880		$	26,433

Operating income per common share - assuming dilution	$	1.05		$	1.02		$	1.15		$	1.02		$	1.08
Earnings per common share - assuming dilution	$	1.04		$	0.97		$	1.20		$	1.07		$	1.05

Weighted average common shares outstanding (in thousands):
Basic	24,950			24,988			24,990			25,007			25,030
Effect of dilutive securities	58			42			40			33			22
Diluted	25,008			25,030			25,030			25,040			25,052

Operating return on equity, excluding AOCI - last twelve months	10.9		%	10.6		%	10.6		%	10.5		%	10.6		%
Operating return on equity, including AOCI - last twelve months	9.1		%	8.9		%	8.8		%	8.8		%	8.7		%


(1)	Operating income is a non-GAAP measure of earnings.

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 (1)



Quarter Ended March 31, 2017	Annuity		Life Insurance			Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	1,135	$	17,100		$	10,978		$	29,213
Traditional life insurance premiums	—		48,434			—			48,434
Net investment income	53,916		38,769			8,768			101,453
Other income	—		(160		)	3,920			3,760
Total operating revenues	55,051		104,143			23,666			182,860

Benefits and expenses:
Interest sensitive product benefits	29,878		22,459			10,059			62,396
Traditional life insurance benefits	—		42,955			—			42,955
Policyholder dividends	—		2,553			—			2,553
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	531		4,903			721			6,155
Amortization of deferred acquisition costs	2,528		3,911			637			7,076
Amortization of value of insurance in force acquired	170		375			—			545
Other underwriting expenses	5,523		14,404			1,098			21,025
Total underwriting, acquisition and insurance expenses	8,752		23,593			2,456			34,801
Interest expense	—		—			1,212			1,212
Other expenses	—		—			4,151			4,151
Total benefits and expenses	38,630		91,560			17,878			148,068
	16,421		12,583			5,788			34,792
Net income attributable to noncontrolling interest	—		—			(2		)	(2		)
Equity income (loss), before tax	—		1,166			(1,624		)	(458		)
Pre-tax operating income	$	16,421	$	13,749		$	4,162		$	34,332


(1)	Operating income is a non-GAAP measure of earnings.

FBL Financial Group, Inc.

Consolidating Statements of Pre-tax Operating Income (1) (Continued)



Quarter Ended March 31, 2016	Annuity		Life Insurance			Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	942	$	15,773		$	11,396		$	28,111
Traditional life insurance premiums	—		50,138			—			50,138
Net investment income	51,237		37,754			8,327			97,318
Other income	—		(62		)	3,701			3,639
Total operating revenues	52,179		103,603			23,424			179,206

Benefits and expenses:
Interest sensitive product benefits	26,486		17,069			9,698			53,253
Traditional life insurance benefits	—		44,565			—			44,565
Policyholder dividends	—		3,040			—			3,040
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	570		4,470			757			5,797
Amortization of deferred acquisition costs	2,338		5,224			1,988			9,550
Amortization of value of insurance in force acquired	175		377			—			552
Other underwriting expenses	5,462		14,787			1,703			21,952
Total underwriting, acquisition and insurance expenses	8,545		24,858			4,448			37,851
Interest expense	—		—			1,212			1,212
Other expenses	—		—			4,358			4,358
Total benefits and expenses	35,031		89,532			19,716			144,279
	17,148		14,071			3,708			34,927
Net loss attributable to noncontrolling interest	—		—			9			9
Equity loss, before tax	—		—			(1,228		)	(1,228		)
Pre-tax operating income	$	17,148	$	14,071		$	2,489		$	33,708


(1)	Operating income is a non-GAAP measure of earnings.



FBL Financial Group, Inc.
Statements of Pre-tax Operating Income (1)
Annuity Segment

	Q1 2016				Q2 2016			Q3 2016			Q4 2016			Q1 2017
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	942			$	932		$	894		$	1,039		$	1,135
Net investment income	51,237				53,022			53,945			52,475			53,916
Total operating revenues	52,179				53,954			54,839			53,514			55,051

Benefits and expenses:
Interest sensitive product benefits	26,486				27,591			29,637			29,829			29,878
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	570				523			507			614			531
Amortization of deferred acquisition costs	2,338				3,905			2,231			2,711			2,528
Amortization of value of insurance in force acquired	175				372			170			169			170
Other underwriting expenses	5,462				5,215			5,219			4,737			5,523
Total underwriting, acquisition and insurance expenses	8,545				10,015			8,127			8,231			8,752
Total benefits and expenses	35,031				37,606			37,764			38,060			38,630
Pre-tax operating income	$	17,148			$	16,348		$	17,075		$	15,454		$	16,421

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	4,087,708			$	4,146,239		$	4,248,096		$	4,316,806		$	4,357,562
Deferred acquisition costs	87,245				87,405			88,342			88,762			89,108
Value of insurance in force acquired	4,917				4,544			4,374			4,204			4,034

Liabilities and equity:
Liabilities:
Interest sensitive product reserves	$	3,586,694			$	3,704,266		$	3,744,876		$	3,827,295		$	3,863,647
Other insurance reserves	373,341				368,083			366,899			364,966			368,378
Allocated equity, excluding AOCI	249,482				256,558			259,042			264,112			266,618

Other data:
Number of direct contracts	53,253				53,455			53,410			53,676			53,528

Portfolio yield net of assumed defaults	4.79		%		4.79		%	4.74		%	4.71		%	4.67		%
Credited rate	2.78				2.76			2.72			2.70			2.69
Spread on individual annuities at end of quarter (2)	2.01		%		2.03		%	2.02		%	2.01		%	1.98		%

Interest sensitive reserve activity:
Individual annuity reserve:
Balance, beginning of period	$	2,787,002			$	2,827,976		$	2,895,799		$	2,936,817		$	2,984,644
Deposits	83,578				96,890			73,240			84,125			80,219
Withdrawals, surrenders and death benefits	(46,077		)		(38,190		)	(43,587		)	(47,417		)	(46,610		)
Net flows	37,501				58,700			29,653			36,708			33,609

Policyholder interest	17,898				18,356			19,083			19,770			20,710
Annuitizations and other	(14,425		)		(9,233		)	(7,718		)	(8,651		)	(16,783		)
Balance, end of period	2,827,976				2,895,799			2,936,817			2,984,644			3,022,180
Other interest sensitive reserves	758,718				808,467			808,059			842,651			841,467
Total interest sensitive product reserves	$	3,586,694			$	3,704,266		$	3,744,876		$	3,827,295		$	3,863,647


(1)	Operating income is a non-GAAP measure of earnings.


(2)	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 (1)
Life Insurance Segment

	Q1 2016				Q2 2016			Q3 2016			Q4 2016			Q1 2017
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	15,773			$	16,637		$	14,210		$	16,797		$	17,100
Traditional life insurance premiums	50,138				49,605			47,682			49,489			48,434
Net investment income	37,754				38,570			39,227			38,876			38,769
Other income	(62		)		(88		)	(89		)	(73		)	(160		)
Total operating revenues	103,603				104,724			101,030			105,089			104,143

Benefits and expenses:
Interest sensitive product benefits:
Interest credited	8,266				8,130			7,886			8,225			8,187
Death benefits and other	8,803				12,169			17,459			13,119			14,272
Total interest sensitive product benefits	17,069				20,299			25,345			21,344			22,459
Traditional life insurance benefits:
Death benefits	21,123				20,019			19,259			25,229			21,667
Surrender and other benefits	8,641				8,215			8,234			7,574			10,429
Increase in traditional life future policy benefits	14,801				15,160			14,628			14,817			10,859
Total traditional life insurance benefits	44,565				43,394			42,121			47,620			42,955
Policyholder dividends	3,040				2,515			2,459			2,560			2,553
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	4,470				4,338			4,229			4,577			4,903
Amortization of deferred acquisition costs	5,224				4,878			(2,788		)	3,724			3,911
Amortization of value of insurance in force acquired	377				377			377			377			375
Other underwriting expenses	14,787				14,450			14,042			12,699			14,404
Total underwriting, acquisition and insurance expenses	24,858				24,043			15,860			21,377			23,593
Total benefits and expenses	89,532				90,251			85,785			92,901			91,560
	$	14,071			$	14,473		$	15,245		$	12,188		12,583
Equity income, before tax (2)														1,166
Pre-tax operating income	$	14,071			$	14,473		$	15,245		$	12,188		$	13,749

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	2,778,449			$	2,800,935		$	2,825,458		$	2,876,555		$	2,878,865
Deferred acquisition costs	249,640				252,481			262,803			267,545			271,454
Value of insurance in force acquired	18,535				18,158			17,781			17,404			17,029

Liabilities and equity:
Liabilities: (3)
Interest sensitive reserves	$	865,923			$	875,067		$	889,645		$	899,207		$	905,454
Other insurance reserves	1,833,601				1,846,163			1,864,521			1,887,539			1,902,738
Allocated equity, excluding AOCI	369,480				372,927			379,540			386,315			382,319



FBL Financial Group, Inc.
Statements of Pre-tax Operating Income (1)
Life Insurance Segment (Continued)

	Q1 2016				Q2 2016			Q3 2016			Q4 2016			Q1 2017
				(Dollars in thousands)
Other data:
Number of direct policies - traditional life	364,708				364,413			364,132			364,698			364,173
Number of direct policies - universal life	62,932				63,321			63,446			64,044			64,490
Direct face amounts - traditional life	$	47,869,724			$	48,244,884		$	48,668,224		$	49,108,249		$	49,473,291
Direct face amounts - universal life	$	6,525,769			$	6,751,098		$	6,782,177		$	6,872,482		$	6,943,248

Portfolio yield net of assumed defaults	5.21		%		5.23		%	5.20		%	5.15		%	5.14		%
Credited rate	3.82				3.76			3.76			3.76			3.76
Spread on universal life at end of quarter (4)	1.39		%		1.47		%	1.44		%	1.39		%	1.38		%

Interest sensitive reserve activity: (3)
Balance, beginning of period	$	859,582			$	865,923		$	875,067		$	889,645		$	899,207
Deposits	22,026				22,158			21,397			23,768			25,604
Withdrawals and surrenders	(6,738		)		(7,277		)	(4,569		)	(6,043		)	(8,212		)
Net flows	15,288				14,881			16,828			17,725			17,392

Policyholder interest	7,523				7,420			7,641			7,720			7,687
Policy charges	(16,900		)		(17,121		)	(17,158		)	(17,541		)	(17,833		)
Benefits and other	430				3,964			7,267			1,658			(999		)
Balance, end of period	$	865,923			$	875,067		$	889,645		$	899,207		$	905,454


(1)	Operating income is a non-GAAP measure of earnings.


(2)	In the first quarter of 2017, a portion of our investments held in securities and indebtedness of related parties was assigned to the Life Insurance segment. These investments are accounted for under the equity method of accounting.


(3)	Reserves on riders in interest sensitive life insurance products are included in Other insurance reserves.


(4)	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 (1)
Corporate and Other

	Q1 2016				Q2 2016			Q3 2016			Q4 2016			Q1 2017
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	11,396			$	11,425		$	10,793		$	11,102		$	10,978
Net investment income	8,327				7,545			8,161			8,481			8,768
Other income	3,701				4,313			3,705			3,754			3,920
Total operating revenues	23,424				23,283			22,659			23,337			23,666

Benefits and expenses:
Interest sensitive product benefits	9,698				9,145			10,239			8,214			10,059
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	757				822			671			657			721
Amortization of deferred acquisition costs	1,988				2,569			(432		)	1,953			637
Other underwriting expenses	1,703				1,669			1,210			1,423			1,098
Total underwriting, acquisition and insurance expenses	4,448				5,060			1,449			4,033			2,456
Interest expense	1,212				1,213			1,213			1,212			1,212
Other expenses	4,358				4,435			3,854			4,319			4,151
Total benefits and expenses	19,716				19,853			16,755			17,778			17,878
	3,708				3,430			5,904			5,559			5,788
Net loss (income) attributable to noncontrolling interest	9				(12		)	10			(3		)	(2		)
Equity loss, before tax	(1,228		)		(1,446		)	(695		)	(688		)	(1,624		)
Pre-tax operating income	$	2,489			$	1,972		$	5,219		$	4,868		$	4,162

Selected balance sheet data, securities at amortized cost:
Assets:
Investments	$	605,772			$	610,526		$	604,570		$	631,731		$	655,476
Deferred acquisition costs	73,510				70,815			71,225			69,664			69,667
Separate account assets	607,739				603,706			605,729			597,072			615,892

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	349,718			$	354,952		$	359,151		$	366,519		$	368,405
Other insurance reserves	96,202				95,241			93,099			93,159			93,054
Separate account liabilities	607,739				603,706			605,729			597,072			615,892
Allocated equity, excluding AOCI	365,230				368,838			379,877			385,220			365,103

Rollforward of separate account balances:
Beginning separate account balance	$	625,257			$	607,739		$	603,706		$	605,729		$	597,072
Net premiums and transfers	4,629				3,275			1,645			(2,348		)	5,160
Net investment income (loss)	(3,421		)		9,951			22,321			9,627			31,288
Charges, benefits and surrenders	(18,726		)		(17,259		)	(21,943		)	(15,936		)	(17,628		)
Ending separate account balance	$	607,739			$	603,706		$	605,729		$	597,072		$	615,892

Other data:
Number of direct contracts - variable annuity	11,098				10,948			10,657			10,500			10,320
Number of direct policies - variable universal life	40,204				39,736			39,275			38,779			38,251
Direct face amounts - variable universal life	$	4,962,001			$	4,901,960		$	4,839,145		$	4,772,878		$	4,707,786


(1)	Operating income is a non-GAAP measure of earnings.



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment

	Q1 2016				Q2 2016			Q3 2016			Q4 2016			Q1 2017
				(Dollars in thousands)
Annuity
Balance - beginning of period	$	85,819			$	87,245		$	87,405		$	88,342		$	88,762
Capitalization:
Commissions	3,046				3,458			3,042			2,923			2,718
Expenses	234				294			186			83			194
Deferral of sales inducements	326				398			183			311			269
Total capitalization	3,606				4,150			3,411			3,317			3,181
Amortization - operating basis, before impact of unlocking (1)	(2,373		)		(2,740		)	(2,276		)	(2,775		)	(2,591		)
Amortization - unlocking, operating basis (1)	—				(1,218		)	—			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	193				(32		)	(198		)	(122		)	(244		)
Balance - end of period	$	87,245			$	87,405		$	88,342		$	88,762		$	89,108

Life Insurance
Balance - beginning of period	$	248,333			$	249,640		$	252,481		$	262,803		$	267,545
Capitalization:
Commissions	4,236				4,844			4,609			6,213			5,498
Expenses	2,267				2,277			2,358			1,871			2,037
Deferral of sales inducements	279				250			146			482			421
Total capitalization	6,782				7,371			7,113			8,566			7,956
Amortization - operating basis, before impact of unlocking (1)	(5,411		)		(4,793		)	(4,770		)	(3,822		)	(4,063		)
Amortization - unlocking, operating basis (1)	—				(271		)	7,991			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(64		)		534			(12		)	(2		)	16
Balance - end of period	$	249,640			$	252,481		$	262,803		$	267,545		$	271,454

Corporate and Other
Balance - beginning of period	$	75,366			$	73,510		$	70,815		$	71,225		$	69,664
Capitalization:
Commissions	158				186			108			183			157
Deferral of sales inducements	6				4			3			17			17
Total capitalization	164				190			111			200			174
Amortization - operating basis, before impact of unlocking (1)	(2,023		)		(1,535		)	(1,207		)	(2,000		)	(664		)
Amortization - unlocking, operating basis (1)	—				(1,050		)	1,661			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	3				(300		)	(155		)	239			493
Balance - end of period	$	73,510			$	70,815		$	71,225		$	69,664		$	69,667


(1)	Operating income is a non-GAAP measure of earnings.



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

	Q1 2016				Q2 2016			Q3 2016			Q4 2016			Q1 2017
				(Dollars in thousands)
Total
Balance - beginning of period	$	409,518			$	410,395		$	410,701		$	422,370		$	425,971
Capitalization:
Commissions	7,440				8,488			7,759			9,319			8,373
Expenses	2,501				2,571			2,544			1,954			2,231
Deferral of sales inducements	611				652			332			810			707
Total capitalization	10,552				11,711			10,635			12,083			11,311
Amortization - operating basis, before impact of unlocking (1)	(9,807		)		(9,068		)	(8,253		)	(8,597		)	(7,318		)
Amortization - unlocking, operating basis (1)	—				(2,539		)	9,652			—			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	132				202			(365		)	115			265
Balance - end of period	410,395				410,701			422,370			425,971			430,229
Impact of realized/unrealized losses in AOCI	(123,606		)		(191,075		)	(207,140		)	(95,647		)	(108,091		)
Deferred acquisition costs	$	286,789			$	219,626		$	215,230		$	330,324		$	322,138


(1)	Operating income is a non-GAAP measure of earnings.



FBL Financial Group, Inc.
Impact of Unlocking on Pre-tax Operating Income (1)

	Q1 2016			Q2 2016			Q3 2016			Q4 2016		Q1 2017
			(Dollars in thousands)
Annuity Segment
Amortization of deferred sales inducements reported in interest sensitive product benefits	$	—		$	1		$	—		$	—	$	—
Amortization of deferred acquisition costs	—			(1,219		)	—			—		—
Amortization of value of insurance in force acquired	—			(194		)	—			—		—
Decrease to pre-tax operating income	$	—		$	(1,412	)	$	—		$	—	$	—

Life Segment
Amortization of unearned revenue reserve reported in interest sensitive product charges and other income	$	—		$	114		$	(2,244	)	$	—	$	—
Amortization of deferred sales inducements reported in interest sensitive product benefits	—			3			468			—		—
Amortization of deferred sales inducements reported in traditional life insurance benefits	—			—			69			—		—
Amortization of deferred acquisition costs	—			(274		)	7,453			—		—
Changes in certain product reserves reported in interest sensitive product benefits	—			(3,211		)	(6,073		)	—		—
Decrease to pre-tax operating income	$	—		$	(3,368	)	$	(327	)	$	—	$	—

Corporate and Other Segment
Amortization of unearned revenue reserve reported in interest sensitive product charges	$	—		$	183		$	(419	)	$	—	$	—
Amortization of deferred sales inducements reported in interest sensitive product benefits	—			(13		)	67			—		—
Amortization of deferred acquisition costs	—			(1,037		)	1,595			—		—
Changes in certain product reserves reported in interest sensitive product benefits	—			(54		)	(230		)	—		—
Increase (decrease) to pre-tax operating income	$	—		$	(921	)	$	1,013		$	—	$	—

Total impact of unlocking on pre-tax operating income	$	—		$	(5,701	)	$	686		$	—	$	—


(1)	Operating income is a non-GAAP measure of earnings.



FBL Financial Group, Inc.
Collected Premiums (1)

	Q1 2016				Q2 2016			Q3 2016			Q4 2016			Q1 2017
				(Dollars in thousands)
Annuity
Individual:
Fixed rate:
First year	$	26,903			$	37,574		$	23,243		$	35,967		$	32,624
Renewal	27,583				23,096			18,420			20,485			24,217
Total fixed rate	54,486				60,670			41,663			56,452			56,841
Index annuity	29,137				36,716			31,578			28,115			23,427
Total individual	83,623				97,386			73,241			84,567			80,268
Group	2,052				3,061			2,757			2,705			1,195
Total Annuity	85,675				100,447			75,998			87,272			81,463

Life Insurance
Direct:
Universal life:
First year	3,385				3,971			4,902			5,222			6,301
Renewal	18,155				17,828			16,135			18,039			19,113
Total universal life	21,540				21,799			21,037			23,261			25,414
Participating whole life:
First year	5,171				3,789			4,050			3,167			2,985
Renewal	25,096				24,983			23,144			24,442			24,715
Total participating whole life	30,267				28,772			27,194			27,609			27,700
Term life and other:
First year	2,670				2,515			2,377			2,382			2,442
Renewal	24,451				24,261			24,066			24,689			25,781
Total term life and other	27,121				26,776			26,443			27,071			28,223
Total direct life insurance	78,928				77,347			74,674			77,941			81,337
Reinsurance	(7,215		)		(7,136		)	(7,404		)	(5,584		)	(7,764		)
Total Life Insurance	71,713				70,211			67,270			72,357			73,573

Corporate and Other
Variable, net of reinsurance	15,680				16,218			13,082			13,362			14,733
Accident and health, net of reinsurance	130				38			40			182			101
Total Corporate and Other	15,810				16,256			13,122			13,544			14,834

Total collected premiums	$	173,198			$	186,914		$	156,390		$	173,173		$	169,870


(1)	Collected premiums is a non-GAAP measure of sales production.



FBL Financial Group, Inc.
Other Information

	March 31,				June 30,			September 30,			December 31,			March 31,
	2016				2016			2016			2016			2017
				(Dollars in thousands, except per share data)

Capitalization:
Trust preferred securities, due 2047	$	97,000			$	97,000		$	97,000		$	97,000		$	97,000
Total debt	97,000				97,000			97,000			97,000			97,000

Preferred stock	3,000				3,000			3,000			3,000			3,000
Common stockholders' equity, excluding AOCI	984,192				998,323			1,018,459			1,035,647			1,014,040
Total capitalization, excluding AOCI	1,084,192				1,098,323			1,118,459			1,135,647			1,114,040

Accumulated other comprehensive income	185,918				276,122			292,828			149,555			165,598
Total capitalization, including AOCI	$	1,270,110			$	1,374,445		$	1,411,287		$	1,285,202		$	1,279,638

Common shares outstanding	24,852,306				24,860,675			24,874,659			24,893,955			24,917,960

Book Value per Share:
Excluding AOCI	$	39.60			$	40.16		$	40.94		$	41.60		$	40.70
Including AOCI	47.08				51.26			52.72			47.61			47.34

Debt-to-Capital Ratio:
Excluding AOCI	8.9		%		8.8		%	8.7		%	8.5		%	8.7		%
Including AOCI	7.6				7.1			6.9			7.5			7.6

Debt-to-Capital Ratio with 50% Credit for Trust Preferred Securities:
Excluding AOCI	4.5		%		4.4		%	4.3		%	4.3		%	4.4		%
Including AOCI	3.8				3.5			3.4			3.8			3.8

Class A Common Ownership:
Iowa Farm Bureau Federation	59.4		%		59.4		%	59.4		%	59.3		%	59.3		%
Public	40.6				40.6			40.6			40.7			40.7
	100.0		%		100.0		%	100.0		%	100.0		%	100.0		%



FBL Financial Group, Inc.
Other Information (Continued)

	March 31,		June 30,		September 30,		December 31,		March 31,
	2016		2016		2016		2016		2017

Investment by Type:
Fixed maturity securities	65.4	%	65.1	%	65.1	%	64.1	%	63.7	%
Residential mortgage-backed	5.8		5.3		5.2		5.2		5.2
Commercial mortgage-backed	7.3		7.6		7.4		7.0		7.3
Other asset-backed	7.5		8.3		8.8		9.4		9.2
Mortgage loans	9.6		9.3		9.4		10.0		10.3
Equity securities	1.7		1.7		1.6		1.6		1.7
Other	2.7		2.7		2.5		2.7		2.6

Quality of Fixed Maturity Securities:
AAA, AA, A	65.0	%	64.8	%	63.7	%	63.7	%	63.8	%
BBB	30.7		31.0		31.8		31.9		31.8
BB	2.8		2.8		3.0		2.9		3.1
<BB	1.5		1.4		1.5		1.5		1.3

Agent Strength Totals:
Full time agents and agency managers:
8-state Farm Bureau Property & Casualty channel	1,188		1,213		1,214		1,214		1,186
6 life partner states and Colorado	660		659		656		648		653
	1,848		1,872		1,870		1,862		1,839




	Q1 2016				Q2 2016			Q3 2016			Q4 2016			Q1 2017
Equity Income (Loss), net of related income taxes				(Dollars in thousands)
Equity income (loss):
Low income housing tax credit partnerships	$	(1,539	)		$	(2,508	)	$	(1,811	)	$	(1,689	)	$	(1,805	)
Other equity method investments	311				1,062			1,116			1,001			1,347
	(1,228		)		(1,446		)	(695		)	(688		)	(458		)
Income taxes:
Taxes on equity income (loss)	430				507			242			241			160
Investment tax credits	3,450				3,552			3,581			3,494			3,529
Equity income, net of related income taxes	$	2,652			$	2,613		$	3,128		$	3,047		$	3,231

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