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Share Name | Share Symbol | Market | Type |
---|---|---|---|
FBL Financial Group Inc | NYSE:FFG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 60.99 | 0 | 01:00:00 |
(Mark one)
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[X]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2018
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or
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from____________________ to____________________
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Large accelerated filer [ ]
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Accelerated filer [X]
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Non-accelerated filer [ ]
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Smaller reporting company [ ]
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Emerging growth company [ ]
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PART I.
|
FINANCIAL INFORMATION
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Item 1.
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Financial Statements (Unaudited)
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Consolidated Balance Sheets
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Consolidated Statements of Operations
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|
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Consolidated Statements of Comprehensive Income
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Consolidated Statements of Changes in Stockholders’ Equity
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Consolidated Statements of Cash Flows
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Notes to Consolidated Financial Statements
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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PART II.
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OTHER INFORMATION
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Item 1A.
|
Risk Factors
|
|
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|
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Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
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|
|
Item 6.
|
Exhibits
|
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SIGNATURES
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturities - available for sale, at fair value (amortized cost: 2018 - $6,891,191; 2017 - $6,757,250)
|
$
|
7,246,912
|
|
|
$
|
7,291,967
|
|
Equity securities at fair value (cost: 2018 - $98,307; 2017 - $96,715)
|
103,920
|
|
|
104,145
|
|
||
Mortgage loans
|
968,664
|
|
|
971,812
|
|
||
Real estate
|
1,543
|
|
|
1,543
|
|
||
Policy loans
|
193,413
|
|
|
191,398
|
|
||
Short-term investments
|
30,075
|
|
|
17,007
|
|
||
Other investments
|
44,973
|
|
|
42,371
|
|
||
Total investments
|
8,589,500
|
|
|
8,620,243
|
|
||
|
|
|
|
||||
Cash and cash equivalents
|
13,653
|
|
|
52,696
|
|
||
Securities and indebtedness of related parties
|
130,451
|
|
|
130,240
|
|
||
Accrued investment income
|
82,403
|
|
|
76,468
|
|
||
Amounts receivable from affiliates
|
5,117
|
|
|
3,561
|
|
||
Reinsurance recoverable
|
105,551
|
|
|
108,948
|
|
||
Deferred acquisition costs
|
357,861
|
|
|
302,611
|
|
||
Value of insurance in force acquired
|
7,169
|
|
|
4,560
|
|
||
Current income taxes recoverable
|
44
|
|
|
3,269
|
|
||
Other assets
|
108,293
|
|
|
112,054
|
|
||
Assets held in separate accounts
|
638,751
|
|
|
651,963
|
|
||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
Total assets
|
$
|
10,038,793
|
|
|
$
|
10,066,613
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Liabilities and stockholders’ equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Future policy benefits:
|
|
|
|
||||
Interest sensitive products
|
$
|
5,446,094
|
|
|
$
|
5,299,961
|
|
Traditional life insurance and accident and health products
|
1,762,416
|
|
|
1,750,504
|
|
||
Other policy claims and benefits
|
47,250
|
|
|
44,475
|
|
||
Supplementary contracts without life contingencies
|
317,541
|
|
|
322,630
|
|
||
Advance premiums and other deposits
|
269,378
|
|
|
267,023
|
|
||
Amounts payable to affiliates
|
1,272
|
|
|
1,164
|
|
||
Long-term debt payable to non-affiliates
|
97,000
|
|
|
97,000
|
|
||
Deferred income taxes
|
104,372
|
|
|
131,912
|
|
||
Other liabilities
|
90,532
|
|
|
111,131
|
|
||
Liabilities related to separate accounts
|
638,751
|
|
|
651,963
|
|
||
Total liabilities
|
8,774,606
|
|
|
8,677,763
|
|
||
|
|
|
|
||||
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 24,826,563 shares in 2018 and 24,919,113 shares in 2017
|
153,195
|
|
|
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
|
186,222
|
|
|
284,983
|
|
||
Retained earnings
|
921,663
|
|
|
947,148
|
|
||
Total FBL Financial Group, Inc. stockholders’ equity
|
1,264,152
|
|
|
1,388,792
|
|
||
Noncontrolling interest
|
35
|
|
|
58
|
|
||
Total stockholders’ equity
|
1,264,187
|
|
|
1,388,850
|
|
||
Total liabilities and stockholders’ equity
|
$
|
10,038,793
|
|
|
$
|
10,066,613
|
|
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Interest sensitive product charges
|
$
|
30,098
|
|
|
$
|
29,201
|
|
Traditional life insurance premiums
|
49,497
|
|
|
48,434
|
|
||
Net investment income
|
101,022
|
|
|
100,994
|
|
||
Net realized capital losses
|
(1,747
|
)
|
|
(403
|
)
|
||
Net other-than-temporary impairment losses recognized in earnings
|
(1,295
|
)
|
|
(66
|
)
|
||
Other income
|
4,600
|
|
|
3,760
|
|
||
Total revenues
|
182,175
|
|
|
181,920
|
|
||
|
|
|
|
||||
Benefits and expenses:
|
|
|
|
||||
Interest sensitive product benefits
|
61,345
|
|
|
62,760
|
|
||
Traditional life insurance benefits
|
45,456
|
|
|
42,954
|
|
||
Policyholder dividends
|
2,551
|
|
|
2,553
|
|
||
Underwriting, acquisition and insurance expenses
|
39,577
|
|
|
34,353
|
|
||
Interest expense
|
1,213
|
|
|
1,212
|
|
||
Other expenses
|
5,593
|
|
|
4,151
|
|
||
Total benefits and expenses
|
155,735
|
|
|
147,983
|
|
||
|
26,440
|
|
|
33,937
|
|
||
Income taxes
|
(4,687
|
)
|
|
(10,733
|
)
|
||
Equity income, net of related income taxes
|
1,855
|
|
|
3,231
|
|
||
Net income
|
23,608
|
|
|
26,435
|
|
||
Net loss (income) attributable to noncontrolling interest
|
23
|
|
|
(2
|
)
|
||
Net income attributable to FBL Financial Group, Inc.
|
$
|
23,631
|
|
|
$
|
26,433
|
|
|
|
|
|
||||
Earnings per common share
|
$
|
0.94
|
|
|
$
|
1.05
|
|
Earnings per common share - assuming dilution
|
$
|
0.94
|
|
|
$
|
1.05
|
|
|
|
|
|
||||
Cash dividend per common share
|
$
|
0.46
|
|
|
$
|
0.44
|
|
Special cash dividend per common share
|
$
|
1.50
|
|
|
$
|
1.50
|
|
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net income
|
$
|
23,608
|
|
|
$
|
26,435
|
|
Other comprehensive income (loss) (1)
|
|
|
|
||||
Change in net unrealized investment gains/losses
|
(93,154
|
)
|
|
15,861
|
|
||
Change in underfunded status of postretirement benefit plans
|
262
|
|
|
182
|
|
||
Total other comprehensive income (loss), net of tax
|
(92,892
|
)
|
|
16,043
|
|
||
Total comprehensive income (loss), net of tax
|
(69,284
|
)
|
|
42,478
|
|
||
Comprehensive (income) loss attributable to noncontrolling interest
|
23
|
|
|
(2
|
)
|
||
Total comprehensive income (loss) applicable to FBL Financial Group, Inc.
|
$
|
(69,261
|
)
|
|
$
|
42,476
|
|
(1)
|
Other comprehensive income (loss) is recorded net of deferred income taxes and other adjustments for assumed changes in deferred acquisition costs, value of insurance in force acquired, unearned revenue reserve and policyholder liabilities.
|
|
FBL Financial Group, Inc. Stockholders’ Equity
|
|
|
|
|
||||||||||||||||||
|
Series B Preferred Stock
|
|
Class A and Class B Common Stock
|
|
Accumulated Other Comprehensive Income
|
|
Retained Earnings
|
|
Non-
controlling Interest
|
|
Total Stockholders’ Equity
|
||||||||||||
Balance at January 1, 2017
|
$
|
3,000
|
|
|
$
|
152,975
|
|
|
$
|
149,555
|
|
|
$
|
882,672
|
|
|
$
|
56
|
|
|
$
|
1,188,258
|
|
Net income - three months ended March 31, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
26,433
|
|
|
2
|
|
|
26,435
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
16,043
|
|
|
—
|
|
|
—
|
|
|
16,043
|
|
||||||
Issuance of common stock under compensation plans
|
—
|
|
|
339
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
339
|
|
||||||
Dividends on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
(38
|
)
|
||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(48,341
|
)
|
|
—
|
|
|
(48,341
|
)
|
||||||
Balance at March 31, 2017
|
$
|
3,000
|
|
|
$
|
153,314
|
|
|
$
|
165,598
|
|
|
$
|
860,726
|
|
|
$
|
58
|
|
|
$
|
1,182,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at January 1, 2018
|
$
|
3,000
|
|
|
$
|
153,661
|
|
|
$
|
284,983
|
|
|
$
|
947,148
|
|
|
$
|
58
|
|
|
$
|
1,388,850
|
|
Cumulative effect of change in accounting principle related to net unrealized gains on equity securities
|
—
|
|
|
—
|
|
|
(5,869
|
)
|
|
5,869
|
|
|
—
|
|
|
—
|
|
||||||
Net income - three months ended March 31, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
23,631
|
|
|
(23
|
)
|
|
23,608
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(92,892
|
)
|
|
—
|
|
|
—
|
|
|
(92,892
|
)
|
||||||
Issuance of common stock under compensation plans
|
—
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218
|
|
||||||
Purchase of common stock
|
—
|
|
|
(612
|
)
|
|
—
|
|
|
(6,194
|
)
|
|
—
|
|
|
(6,806
|
)
|
||||||
Dividends on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
(38
|
)
|
||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(48,753
|
)
|
|
—
|
|
|
(48,753
|
)
|
||||||
Balance at March 31, 2018
|
$
|
3,000
|
|
|
$
|
153,267
|
|
|
$
|
186,222
|
|
|
$
|
921,663
|
|
|
$
|
35
|
|
|
$
|
1,264,187
|
|
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
23,608
|
|
|
$
|
26,435
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Interest credited to account balances
|
40,650
|
|
|
40,256
|
|
||
Charges for mortality, surrenders and administration
|
(29,827
|
)
|
|
(28,887
|
)
|
||
Net realized losses on investments
|
3,042
|
|
|
469
|
|
||
Change in fair value of derivatives
|
(534
|
)
|
|
(2,753
|
)
|
||
Increase in liabilities for life insurance and other future policy benefits
|
18,264
|
|
|
17,993
|
|
||
Deferral of acquisition costs
|
(11,293
|
)
|
|
(10,604
|
)
|
||
Amortization of deferred acquisition costs and value of insurance in force
|
10,314
|
|
|
7,598
|
|
||
Change in reinsurance recoverable
|
2,454
|
|
|
(841
|
)
|
||
Provision for deferred income taxes
|
(2,847
|
)
|
|
542
|
|
||
Other
|
(2,211
|
)
|
|
4,590
|
|
||
Net cash provided by operating activities
|
51,620
|
|
|
54,798
|
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
||||
Sales, maturities or repayments:
|
|
|
|
||||
Fixed maturities - available for sale
|
138,254
|
|
|
106,257
|
|
||
Equity securities - available for sale
|
—
|
|
|
744
|
|
||
Mortgage loans
|
10,383
|
|
|
11,024
|
|
||
Derivative instruments
|
4,131
|
|
|
3,052
|
|
||
Policy loans
|
9,133
|
|
|
10,266
|
|
||
Securities and indebtedness of related parties
|
1,596
|
|
|
2,391
|
|
||
Other long-term investments
|
938
|
|
|
7
|
|
||
Acquisitions:
|
|
|
|
||||
Fixed maturities - available for sale
|
(288,677
|
)
|
|
(118,948
|
)
|
||
Equity securities - available for sale
|
(1,389
|
)
|
|
(1,102
|
)
|
||
Mortgage loans
|
(7,186
|
)
|
|
(50,000
|
)
|
||
Derivative instruments
|
(3,219
|
)
|
|
(1,988
|
)
|
||
Policy loans
|
(11,148
|
)
|
|
(9,993
|
)
|
||
Securities and indebtedness of related parties
|
(4,652
|
)
|
|
(3,712
|
)
|
||
Other long-term investments
|
(5,531
|
)
|
|
—
|
|
||
Short-term investments, net change
|
(13,068
|
)
|
|
2,084
|
|
||
Purchases and disposals of property and equipment, net
|
(1,859
|
)
|
|
(2,270
|
)
|
||
Net cash used in investing activities
|
(172,294
|
)
|
|
(52,188
|
)
|
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Financing activities
|
|
|
|
||||
Contract holder account deposits
|
$
|
261,240
|
|
|
$
|
116,760
|
|
Contract holder account withdrawals
|
(124,978
|
)
|
|
(87,929
|
)
|
||
Dividends paid
|
(48,791
|
)
|
|
(48,379
|
)
|
||
Issuance or repurchase of common stock, net
|
(5,840
|
)
|
|
128
|
|
||
Net cash provided by (used in) financing activities
|
81,631
|
|
|
(19,420
|
)
|
||
Decrease in cash and cash equivalents
|
(39,043
|
)
|
|
(16,810
|
)
|
||
Cash and cash equivalents at beginning of period
|
52,696
|
|
|
33,583
|
|
||
Cash and cash equivalents at end of period
|
$
|
13,653
|
|
|
$
|
16,773
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information
|
|
|
|
||||
Cash (paid) received during the period for:
|
|
|
|
||||
Interest
|
$
|
(1,213
|
)
|
|
$
|
(1,213
|
)
|
Income taxes
|
(5
|
)
|
|
2
|
|
Description
|
Date of adoption
|
Effect on our consolidated financial statements or other significant matters
|
Standards adopted:
|
||
Stockholders' Equity
In February 2018, the Financial Accounting Standards Board (FASB) issued guidance allowing a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from changes in the federal income tax rate due to enactment of the Tax Cuts and Jobs Act of 2017 on December 22, 2017 (Tax Act). Accounting guidance requires that deferred tax assets and liabilities, including those associated with components of AOCI, be remeasured during the period new tax laws are enacted, with any changes reflected as a component of income tax expense (benefit). Under the previous guidance, retained earnings would reflect the full amount of the change and AOCI would not be adjusted for the portion of the change related to its components, leaving the unadjusted change “stranded” in AOCI. The new guidance allows AOCI to be adjusted to reclassify these stranded tax effects to retained earnings. |
October 1, 2017
|
The new guidance was effective for 2018, with early adoption permitted. We adopted the new guidance in 2017 by reporting the reclassification in our Consolidated Statement of Stockholders’ Equity. We consider the remeasurement of deferred tax assets and liabilities a provisional estimate, so any adjustments to this estimate during 2018 would result in additional reclassification.
|
Financial instruments - recognition and measurement
In January 2016, the FASB issued guidance that amended certain aspects of the recognition and measurement of financial instruments. The new guidance primarily affected the accounting for equity securities, which are now carried at fair value with valuation changes recognized in the statement of operations rather than as other comprehensive income. The presentation and disclosure requirements for financial instruments and the methodology for assessing the need for a valuation allowance on deferred tax assets resulting from unrealized losses on available-for-sale fixed maturity securities were also revised under the new guidance. The new standard required the use of a modified retrospective method at adoption.
|
January 1, 2018
|
Upon adoption, we reclassified $5.9 million of net unrealized investment gains, net of tax, on our equity securities from accumulated other comprehensive income to retained earnings as a cumulative effect adjustment. Adoption resulted in a decrease to net income of $1.3 million ($0.05 per basic and diluted earnings per share) during the first quarter of 2018.
|
Revenue recognition
In May 2014, the FASB issued guidance that outlined a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Insurance contract and investment related revenue, which make up the majority of our earnings, were specifically excluded from the scope of this guidance. The new guidance was based on the principle that an entity should recognize revenue to reflect the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also required disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. We had the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard.
|
January 1, 2018
|
Our revenues that fall under the scope of the new guidance primarily consist of the net commissions on insurance and investment products we broker for others. We have evaluated those contracts and concluded that there was no change in timing or measurement of revenues, as the historical accounting is consistent with the new guidance. Accordingly, there was no impact from adoption.
|
Standards not yet adopted:
|
||
Leases
In February 2016, the FASB issued a new lease accounting standard, which, for most lessees, will result in a gross-up of the balance sheet. Under the new standard, lessees will recognize the leased assets on the balance sheet and will recognize a corresponding liability for the present value of lease payments over the lease term. The new standard requires the application of judgment and estimates. Also, there are accounting policy elections that may be taken both at transition and for the accounting post-transition, including whether to adopt a short-term lease recognition exemption.
|
January 1, 2019
|
We are currently evaluating the impact of this guidance on our consolidated financial statements. Our most significant lease is for our home office building. See Note 10 of Item 8 of our 2017 Form 10-K for a further description of this lease, including future commitments. Our other leases are primarily shorter term in nature, relating to equipment. Upon adoption we will be required to recognize and measure leases at the beginning of the earliest period presented using the modified retrospective approach.
|
Financial Instruments - credit impairment
In June 2016, the FASB issued guidance amending the accounting for the credit impairment of financial instruments. Under the new guidance, impairment losses are required to be estimated using an expected loss model under which a valuation allowance is established and adjusted over time. The valuation allowance will be based on the probability of loss over the life of the instrument, considering historical, current and forecasted information. The new guidance differs significantly from the incurred loss model used today, and will result in the earlier recognition of impairment losses. The new guidance may also increase the volatility of earnings to the extent actual results differ from the assumptions used in the establishment of the valuation allowance. The financial instruments for which we will be required to use the new model include but are not limited to, mortgage loans, lease receivables and reinsurance recoverables. Our available-for-sale fixed maturities will continue to apply the incurred loss model. However, rather than impairment losses resulting in a permanent reduction of carrying value as they do today, such losses will be in the form of a valuation allowance, which can be increased in the case of future credit losses or decreased should conditions improve. |
January 1, 2020
|
We are currently evaluating the impact of this new guidance on our consolidated financial statements. We believe the most significant impact upon adoption will be the establishment of an additional valuation allowance for our mortgage loan investments. This guidance will be applied using a modified retrospective approach by recording a cumulative effect adjustment to retained earnings as of the beginning of the year of adoption.
|
Available-For-Sale Fixed Maturity Securities by Investment Category
|
|
|
|||||||||||||||||
|
March 31, 2018
|
||||||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Non-credit losses on other-than-temporary impairments (1)
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate (2)
|
$
|
3,353,388
|
|
|
$
|
224,254
|
|
|
$
|
(31,961
|
)
|
|
$
|
3,545,681
|
|
|
$
|
290
|
|
Residential mortgage-backed
|
527,971
|
|
|
31,012
|
|
|
(5,439
|
)
|
|
553,544
|
|
|
594
|
|
|||||
Commercial mortgage-backed
|
784,999
|
|
|
22,428
|
|
|
(14,151
|
)
|
|
793,276
|
|
|
—
|
|
|||||
Other asset-backed
|
796,977
|
|
|
20,347
|
|
|
(3,032
|
)
|
|
814,292
|
|
|
3,350
|
|
|||||
United States Government and agencies
|
22,009
|
|
|
1,333
|
|
|
(130
|
)
|
|
23,212
|
|
|
—
|
|
|||||
States and political subdivisions
|
1,405,847
|
|
|
113,842
|
|
|
(2,782
|
)
|
|
1,516,907
|
|
|
—
|
|
|||||
Total fixed maturities
|
$
|
6,891,191
|
|
|
$
|
413,216
|
|
|
$
|
(57,495
|
)
|
|
$
|
7,246,912
|
|
|
$
|
4,234
|
|
(1)
|
Non-credit losses subsequent to the initial impairment measurement date on other-than-temporary impairment (OTTI) losses are included in the gross unrealized gains and gross unrealized losses columns above. The non-credit loss component of OTTI losses for corporate, residential mortgage-backed, and other asset-backed securities at
March 31, 2018
and residential mortgage-backed and other asset-backed securities at
December 31, 2017
were in an unrealized gain position due to increases in estimated fair value subsequent to initial recognition of non-credit losses on such securities.
|
(2)
|
Corporate securities include hybrid preferred securities with a fair value of
$16.8 million
at
March 31, 2018
and
$17.5 million
at
December 31, 2017
. Corporate securities also include redeemable preferred stock with a fair value of
$22.0 million
at
March 31, 2018
and
$21.7 million
at
December 31, 2017
.
|
Realized Gains (Losses) - Recorded in Income
|
|
|
|
||||
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Realized gains (losses) on sales of investments
|
|
|
|
||||
Fixed maturities:
|
|
|
|
||||
Gross gains
|
$
|
83
|
|
|
$
|
124
|
|
Gross losses
|
—
|
|
|
(527
|
)
|
||
Other long-term investments
|
(13
|
)
|
|
—
|
|
||
|
70
|
|
|
(403
|
)
|
||
Net unrealized losses recognized during the period on equity securities held at the end of the period (1)
|
(1,817
|
)
|
|
—
|
|
||
Net realized losses
|
(1,747
|
)
|
|
(403
|
)
|
||
|
|
|
|
||||
Impairment losses recognized in earnings:
|
|
|
|
||||
Other credit-related (2)
|
(1,295
|
)
|
|
(66
|
)
|
||
Net realized losses on investments recorded in income
|
$
|
(3,042
|
)
|
|
$
|
(469
|
)
|
(1)
|
See Note 1 to our consolidated financial statements for discussion of change in accounting policy for equity securities during the quarter.
|
(2)
|
Amount represents credit-related losses for fixed maturities written down to fair value through income and impairment losses related to investments accounted for under the equity method of accounting, which are included in securities and indebtedness of related parties within our consolidated balance sheets.
|
Mortgage Loans by Collateral Type
|
|
|
|
|
|
|
|
|
||||||
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
Collateral Type
|
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||
Office
|
|
$
|
413,120
|
|
|
42.6
|
%
|
|
$
|
410,090
|
|
|
42.2
|
%
|
Retail
|
|
288,683
|
|
|
29.8
|
|
|
292,257
|
|
|
30.1
|
|
||
Industrial
|
|
205,107
|
|
|
21.2
|
|
|
207,180
|
|
|
21.3
|
|
||
Other
|
|
61,754
|
|
|
6.4
|
|
|
62,285
|
|
|
6.4
|
|
||
Total
|
|
$
|
968,664
|
|
|
100.0
|
%
|
|
$
|
971,812
|
|
|
100.0
|
%
|
Mortgage Loans by Loan-to-Value Ratio
|
|
|
|
|
|
|
|
|
||||||
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
Loan-to-Value Ratio
|
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||
0% - 50%
|
|
$
|
360,416
|
|
|
37.2
|
%
|
|
$
|
334,037
|
|
|
34.4
|
%
|
51% - 60%
|
|
236,382
|
|
|
24.5
|
|
|
258,359
|
|
|
26.6
|
|
||
61% - 70%
|
|
301,469
|
|
|
31.1
|
|
|
297,404
|
|
|
30.6
|
|
||
71% - 80%
|
|
51,621
|
|
|
5.3
|
|
|
63,116
|
|
|
6.5
|
|
||
81% - 90%
|
|
18,776
|
|
|
1.9
|
|
|
18,896
|
|
|
1.9
|
|
||
Total
|
|
$
|
968,664
|
|
|
100.0
|
%
|
|
$
|
971,812
|
|
|
100.0
|
%
|
Mortgage Loans by Year of Origination
|
|
|
|
|
|
|
|
|
||||||
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
Year of Origination
|
|
Carrying Value
|
|
Percent of Total
|
|
Carrying Value
|
|
Percent of Total
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||
2018
|
|
$
|
5,800
|
|
|
0.5
|
%
|
|
$
|
—
|
|
|
—
|
%
|
2017
|
|
212,785
|
|
|
22.0
|
|
|
214,365
|
|
|
22.1
|
|
||
2016
|
|
153,147
|
|
|
15.8
|
|
|
154,359
|
|
|
15.9
|
|
||
2015
|
|
143,457
|
|
|
14.8
|
|
|
144,890
|
|
|
14.9
|
|
||
2014
|
|
77,119
|
|
|
8.0
|
|
|
77,866
|
|
|
8.0
|
|
||
2013 and prior
|
|
376,356
|
|
|
38.9
|
|
|
380,332
|
|
|
39.1
|
|
||
Total
|
|
$
|
968,664
|
|
|
100.0
|
%
|
|
$
|
971,812
|
|
|
100.0
|
%
|
Impaired Mortgage Loans
|
|||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(Dollars in thousands)
|
||||||
Unpaid principal balance
|
$
|
18,927
|
|
|
$
|
19,027
|
|
Less:
|
|
|
|
||||
Related allowance
|
(447
|
)
|
|
(497
|
)
|
||
Carrying value of impaired mortgage loans
|
$
|
18,480
|
|
|
$
|
18,530
|
|
Allowance on Mortgage Loans
|
|||||||
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Balance at beginning of period
|
$
|
497
|
|
|
$
|
713
|
|
Recoveries
|
(50
|
)
|
|
(50
|
)
|
||
Balance at end of period
|
$
|
447
|
|
|
$
|
663
|
|
VIE Investments by Category
|
|
|
|
|
|
|
|
||||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying Value
|
|
Maximum Exposure to Loss
|
|
Carrying Value
|
|
Maximum Exposure to Loss
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
LIHTC
|
$
|
79,176
|
|
|
$
|
80,843
|
|
|
$
|
82,417
|
|
|
$
|
84,103
|
|
Investment companies
|
28,418
|
|
|
63,054
|
|
|
25,335
|
|
|
62,372
|
|
||||
Real estate limited partnerships
|
9,151
|
|
|
20,129
|
|
|
8,589
|
|
|
20,590
|
|
||||
Other
|
728
|
|
|
955
|
|
|
1,182
|
|
|
1,488
|
|
||||
Total
|
$
|
117,473
|
|
|
$
|
164,981
|
|
|
$
|
117,523
|
|
|
$
|
168,553
|
|
Derivatives Instruments by Type
|
|
||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(Dollars in thousands)
|
||||||
Assets
|
|
|
|
||||
Freestanding derivatives:
|
|
|
|
||||
Call options (reported in other investments)
|
$
|
12,760
|
|
|
$
|
14,824
|
|
Embedded derivatives:
|
|
|
|
||||
Modified coinsurance (reported in reinsurance recoverable)
|
1,069
|
|
|
2,125
|
|
||
Interest-only security (reported in fixed maturities)
|
1,852
|
|
|
2,096
|
|
||
Total assets
|
$
|
15,681
|
|
|
$
|
19,045
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Embedded derivatives:
|
|
|
|
||||
Indexed annuity and universal life products (reported in liability for future policy benefits)
|
$
|
28,720
|
|
|
$
|
27,774
|
|
Modified coinsurance agreements (reported in other liabilities)
|
154
|
|
|
268
|
|
||
Total liabilities
|
$
|
28,874
|
|
|
$
|
28,042
|
|
Derivative Income (Loss)
|
|
|
|
||||
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Change in fair value of free standing derivatives:
|
|
|
|
||||
Call options
|
$
|
(1,152
|
)
|
|
$
|
2,365
|
|
Change in fair value of embedded derivatives:
|
|
|
|
||||
Modified coinsurance agreements
|
(943
|
)
|
|
(1,410
|
)
|
||
Interest-only security
|
(35
|
)
|
|
(21
|
)
|
||
Indexed annuity and universal life products
|
2,664
|
|
|
409
|
|
||
Total income from derivatives
|
$
|
534
|
|
|
$
|
1,343
|
|
Fair Values and Carrying Values
|
|||||||||||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Fixed maturities - available for sale
|
$
|
7,246,912
|
|
|
$
|
7,246,912
|
|
|
$
|
7,291,967
|
|
|
$
|
7,291,967
|
|
Equity securities
|
103,920
|
|
|
103,920
|
|
|
104,145
|
|
|
104,145
|
|
||||
Mortgage loans
|
968,664
|
|
|
972,107
|
|
|
971,812
|
|
|
989,503
|
|
||||
Policy loans
|
193,413
|
|
|
232,674
|
|
|
191,398
|
|
|
236,223
|
|
||||
Other investments
|
44,950
|
|
|
46,040
|
|
|
42,318
|
|
|
43,443
|
|
||||
Cash, cash equivalents and short-term investments
|
43,728
|
|
|
43,728
|
|
|
69,703
|
|
|
69,703
|
|
||||
Reinsurance recoverable
|
1,069
|
|
|
1,069
|
|
|
2,125
|
|
|
2,125
|
|
||||
Assets held in separate accounts
|
638,751
|
|
|
638,751
|
|
|
651,963
|
|
|
651,963
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Future policy benefits
|
$
|
4,332,983
|
|
|
$
|
4,142,254
|
|
|
$
|
4,192,367
|
|
|
$
|
4,147,654
|
|
Supplementary contracts without life contingencies
|
317,541
|
|
|
315,625
|
|
|
322,630
|
|
|
327,151
|
|
||||
Advance premiums and other deposits
|
260,967
|
|
|
260,967
|
|
|
259,099
|
|
|
259,099
|
|
||||
Long-term debt
|
97,000
|
|
|
76,388
|
|
|
97,000
|
|
|
78,628
|
|
||||
Other liabilities
|
154
|
|
|
154
|
|
|
268
|
|
|
268
|
|
||||
Liabilities related to separate accounts
|
638,751
|
|
|
636,666
|
|
|
651,963
|
|
|
649,610
|
|
•
|
Level 1 - Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 - Fair values are based on inputs, other than quoted prices from active markets, that are observable for the asset or liability, either directly or indirectly.
|
•
|
Level 3 - Fair values are based on significant unobservable inputs for the asset or liability.
|
•
|
We follow a “pricing waterfall” policy, which establishes the pricing source preference for a particular security or security type. The order of preference is based on our evaluation of the valuation methods used, the source’s knowledge of the instrument and the reliability of the prices we have received from the source in the past. Our valuation policy dictates that fair values are initially sought from third party pricing services. If our review of the prices received from our preferred source indicates an inaccurate price, we will use an alternative source within the waterfall and document the decision. In the event that fair values are not available from one of our external pricing services or upon review of the fair values provided it is determined that they may not be reflective of market conditions, those securities are submitted to brokers familiar with the security to obtain non-binding price quotes. Broker quotes tend to be used in limited circumstances such as for newly issued, private placement corporate bonds and other instruments that are not widely traded. For those securities for which an externally provided fair value is not available, we use cash flow modeling techniques to estimate fair value.
|
•
|
We evaluate third party pricing source estimation methodologies to assess whether they will provide a fair value that approximates a market exit price.
|
•
|
We perform an overall analysis of portfolio fair value movement against general movements in interest rates and spreads.
|
•
|
We compare period-to-period price trends to detect unexpected price fluctuation based on our knowledge of the market and the particular instrument. As fluctuations are noted, we will perform further research that may include discussions with the original pricing source or other external sources to ensure we are in agreement with the valuation.
|
•
|
We compare prices between different pricing sources for unusual disparity.
|
•
|
We meet at least quarterly with our Investment Committee, the group that oversees our valuation process, to discuss valuation practices and observations during the pricing process.
|
(1)
|
During 2018, we invested in a private equity fund totaling
$0.5 million
measured at fair value using net asset value (NAV) per share as a practical expedient, which have not been classified in the fair value hierarchy above per fair value reporting guidance. This fund invests in senior secured middle market loans and has unfunded commitments totaling
$9.5 million
at March 31, 2018. The investment is not currently eligible for redemption.
|
|
December 31, 2017
|
||||||||||
|
Third-party vendors
|
|
Priced
internally
|
|
Total
|
||||||
|
(Dollars in thousands)
|
||||||||||
Corporate securities
|
$
|
4,555
|
|
|
$
|
29,045
|
|
|
$
|
33,600
|
|
Residential mortgage-backed securities
|
9,124
|
|
|
—
|
|
|
9,124
|
|
|||
Commercial mortgage-backed securities
|
85,701
|
|
|
—
|
|
|
85,701
|
|
|||
Other asset-backed securities
|
47,080
|
|
|
6,400
|
|
|
53,480
|
|
|||
Non-redeemable preferred stocks
|
—
|
|
|
7,407
|
|
|
7,407
|
|
|||
Total assets
|
$
|
146,460
|
|
|
$
|
42,852
|
|
|
$
|
189,312
|
|
Percent of total
|
77.4
|
%
|
|
22.6
|
%
|
|
100.0
|
%
|
|
December 31, 2017
|
||||||||
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Weighted Average)
|
||
|
(Dollars in thousands)
|
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
|
|
||
Corporate securities
|
$
|
27,682
|
|
|
Discounted cash flow
|
|
Credit spread
|
|
0.91% - 6.20% (4.17%)
|
Commercial mortgage-backed
|
72,224
|
|
|
Discounted cash flow
|
|
Credit spread
|
|
1.40% - 4.10% (2.50%)
|
|
Non-redeemable preferred stocks
|
7,407
|
|
|
Discounted cash flow
|
|
Credit spread
|
|
2.94% (2.94%)
|
|
Total assets
|
$
|
107,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
||
Future policy benefits - indexed product embedded derivatives
|
$
|
27,774
|
|
|
Discounted cash flow
|
|
Credit risk
Risk margin
|
|
0.40% - 1.60% (0.90%)
0.15% - 0.40% (0.25%)
|
|
March 31, 2017
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
Realized and unrealized gains (losses), net
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Balance, December 31, 2016
|
|
Purchases
|
|
Disposals
|
|
Included in net income
|
|
Included in other compre-hensive income
|
|
Transfers into
Level 3 (1)
|
|
Transfers
out of
Level 3 (1)
|
|
Amort-ization included in net income
|
|
Balance,
March 31, 2017
|
||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Corporate securities
|
$
|
59,119
|
|
|
$
|
—
|
|
|
$
|
(1,298
|
)
|
|
$
|
—
|
|
|
$
|
(705
|
)
|
|
$
|
4,408
|
|
|
$
|
(18,561
|
)
|
|
$
|
(10
|
)
|
|
$
|
42,953
|
|
Residential mortgage-backed securities
|
—
|
|
|
15,307
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
15,307
|
|
|||||||||
Commercial mortgage-backed securities
|
81,434
|
|
|
—
|
|
|
(211
|
)
|
|
—
|
|
|
919
|
|
|
—
|
|
|
(14,544
|
)
|
|
(22
|
)
|
|
67,576
|
|
|||||||||
Other asset-backed securities
|
54,368
|
|
|
12,944
|
|
|
(3,022
|
)
|
|
—
|
|
|
193
|
|
|
7,964
|
|
|
(13,184
|
)
|
|
(10
|
)
|
|
59,253
|
|
|||||||||
Non-redeemable preferred stocks
|
7,411
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,641
|
|
|||||||||
Total assets
|
$
|
202,332
|
|
|
$
|
28,251
|
|
|
$
|
(4,531
|
)
|
|
$
|
—
|
|
|
$
|
636
|
|
|
$
|
12,372
|
|
|
$
|
(46,289
|
)
|
|
$
|
(41
|
)
|
|
$
|
192,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Future policy benefits - indexed product embedded derivatives
|
$
|
15,778
|
|
|
$
|
911
|
|
|
$
|
(318
|
)
|
|
$
|
2,216
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,587
|
|
(1)
|
Transfers into Level 3 represent assets previously priced using an external pricing service with access to observable inputs no longer available and therefore, were priced using non-binding broker quotes. Transfers out of Level 3 include those assets that we are now able to obtain pricing from a third party pricing vendor that uses observable inputs. The fair values of newly issued securities often require additional estimation until a market is created, which is generally within a few months after issuance. Once a market is created, as was the case for the majority of the security transfers out of the Level 3 category above, Level 2 valuation sources become available. There were no transfers between Level 1 and Level 2 during the periods presented above.
|
|
December 31, 2017
|
||||||||||||||
|
Quoted prices in active markets
for identical assets (Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3)
|
|
Total
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Mortgage loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
989,503
|
|
|
$
|
989,503
|
|
Policy loans
|
—
|
|
|
—
|
|
|
236,223
|
|
|
236,223
|
|
||||
Other investments
|
|
|
|
|
28,619
|
|
|
28,619
|
|
||||||
Total assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,254,345
|
|
|
$
|
1,254,345
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Future policy benefits
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,119,880
|
|
|
$
|
4,119,880
|
|
Supplementary contracts without life contingencies
|
—
|
|
|
—
|
|
|
327,151
|
|
|
327,151
|
|
||||
Advance premiums and other deposits
|
—
|
|
|
—
|
|
|
259,099
|
|
|
259,099
|
|
||||
Long-term debt
|
—
|
|
|
—
|
|
|
78,628
|
|
|
78,628
|
|
||||
Liabilities related to separate accounts
|
—
|
|
|
—
|
|
|
649,610
|
|
|
649,610
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,434,368
|
|
|
$
|
5,434,368
|
|
Reconciliation of Outstanding Common Stock
|
|
|
|
|
|
|
|
|
||||||||||||
|
Class A
|
|
Class B
|
|
Total
|
|||||||||||||||
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Outstanding at January 1, 2017
|
24,882,542
|
|
|
$
|
152,903
|
|
|
11,413
|
|
|
$
|
72
|
|
|
24,893,955
|
|
|
$
|
152,975
|
|
Issuance of common stock under compensation plans
|
24,005
|
|
|
339
|
|
|
—
|
|
|
—
|
|
|
24,005
|
|
|
339
|
|
|||
Outstanding at March 31, 2017
|
24,906,547
|
|
|
$
|
153,242
|
|
|
11,413
|
|
|
$
|
72
|
|
|
24,917,960
|
|
|
$
|
153,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Outstanding at January 1, 2018
|
24,919,113
|
|
|
$
|
153,589
|
|
|
11,413
|
|
|
$
|
72
|
|
|
24,930,526
|
|
|
$
|
153,661
|
|
Issuance of common stock under compensation plans
|
6,762
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
6,762
|
|
|
218
|
|
|||
Purchase of common stock
|
(99,312
|
)
|
|
(612
|
)
|
|
—
|
|
|
—
|
|
|
(99,312
|
)
|
|
(612
|
)
|
|||
Outstanding at March 31, 2018
|
24,826,563
|
|
|
$
|
153,195
|
|
|
11,413
|
|
|
$
|
72
|
|
|
24,837,976
|
|
|
$
|
153,267
|
|
(1)
|
Includes the impact of taxes, deferred acquisition costs, value of insurance in force acquired, unearned revenue reserves and policyholder liabilities. See Note 2 to our consolidated financial statements for further information.
|
(2)
|
See Note 1 to our consolidated financial statements for further discussion on this one-time adjustment related to an accounting change.
|
|
Three months ended March 31, 2017
|
||||||||||||||
|
Unrealized Net Investment Gains (Losses) on Available For Sale Securities (1)
|
|
Accumulated Non-Credit Impairment Losses (1)
|
|
Underfunded Status of Postretirement Benefit
Plans
|
|
Total
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Realized capital losses on sales of investments
|
$
|
403
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
403
|
|
Adjustments for assumed changes in deferred acquisition costs, value of insurance in force acquired, unearned revenue reserve and policyholder liabilities
|
163
|
|
|
—
|
|
|
—
|
|
|
163
|
|
||||
Other expenses - change in unrecognized postretirement items:
|
|
|
|
|
|
|
|
|
|||||||
Net actuarial loss
|
—
|
|
|
—
|
|
|
279
|
|
|
279
|
|
||||
Reclassifications before income taxes
|
566
|
|
|
—
|
|
|
279
|
|
|
845
|
|
||||
Income taxes
|
(198
|
)
|
|
—
|
|
|
(98
|
)
|
|
(296
|
)
|
||||
Reclassification adjustments
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
181
|
|
|
$
|
549
|
|
(1)
|
See Note 2 to our consolidated financial statements for further information.
|
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands, except per share data)
|
||||||
Numerator:
|
|
|
|
||||
Net income attributable to FBL Financial Group, Inc.
|
$
|
23,631
|
|
|
$
|
26,433
|
|
Less: Dividends on Series B preferred stock
|
38
|
|
|
38
|
|
||
Income available to common stockholders
|
$
|
23,593
|
|
|
$
|
26,395
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Weighted average shares - basic
|
25,003,691
|
|
|
25,030,462
|
|
||
Effect of dilutive securities - stock-based compensation
|
15,818
|
|
|
21,914
|
|
||
Weighted average shares - diluted
|
25,019,509
|
|
|
25,052,376
|
|
||
|
|
|
|
||||
Earnings per common share
|
$
|
0.94
|
|
|
$
|
1.05
|
|
Earnings per common share - assuming dilution:
|
$
|
0.94
|
|
|
$
|
1.05
|
|
•
|
settlements or judgments arising from lawsuits, net of any recoveries from third parties,
|
•
|
the cumulative effect of changes in accounting principles and
|
•
|
discontinued operations.
|
(1)
|
Amount represents LIHTC equity losses related to changes in tax rates under the Tax Act. See Note 2 to our consolidated financial statements for further information.
|
(2)
|
Amounts are net of adjustments, as applicable, to amortization of unearned revenue reserves, deferred acquisition costs, value of insurance in force acquired, interest sensitive policy reserves and income taxes attributable to these items.
|
(3)
|
Beginning in 2018, amounts include the change in net unrealized gains/losses on equity securities due to a change in accounting guidance. See Note 1 to our consolidated financial statements for additional information.
|
Financial Information Concerning our Operating Segments
|
|||||||
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Pre-tax non-GAAP operating income:
|
|
|
|
||||
Annuity
|
$
|
16,582
|
|
|
$
|
16,421
|
|
Life Insurance
|
10,897
|
|
|
13,749
|
|
||
Corporate and Other
|
1,881
|
|
|
4,162
|
|
||
Total pre-tax non-GAAP operating income
|
29,360
|
|
|
34,332
|
|
||
Income taxes on non-GAAP operating income
|
(1,727
|
)
|
|
(7,344
|
)
|
||
Non-GAAP operating income
|
$
|
27,633
|
|
|
$
|
26,988
|
|
|
|
|
|
||||
Non-GAAP operating revenues:
|
|
|
|
||||
Annuity
|
$
|
57,435
|
|
|
$
|
55,051
|
|
Life Insurance
|
107,727
|
|
|
104,143
|
|
||
Corporate and Other
|
24,111
|
|
|
23,666
|
|
||
|
189,273
|
|
|
182,860
|
|
||
Net realized gains/losses on investments (1) (2)
|
(3,226
|
)
|
|
(481
|
)
|
||
Change in net unrealized gains/losses on derivatives (1)
|
(3,872
|
)
|
|
(459
|
)
|
||
Consolidated revenues
|
$
|
182,175
|
|
|
$
|
181,920
|
|
(1)
|
Amounts are net of adjustments, as applicable, to amortization of unearned revenue reserves, deferred acquisition costs, value of insurance in force acquired, interest sensitive policy reserves and income taxes attributable to these items.
|
(2)
|
Beginning in 2018, amounts include the change in net unrealized gains/losses on equity securities due to a change in accounting guidance. See Note 1 to our consolidated financial statements for additional information.
|
Equity Income (Loss) by Operating Segment
|
|||||||
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Pre-tax equity income (loss):
|
|
|
|
||||
Life Insurance
|
$
|
695
|
|
|
$
|
1,166
|
|
Corporate and Other
|
(1,511
|
)
|
|
(1,624
|
)
|
||
|
(816
|
)
|
|
(458
|
)
|
||
|
|
|
|
||||
Income taxes
|
3,740
|
|
|
3,689
|
|
||
Equity income, net of related taxes, included in non-GAAP operating income
|
2,924
|
|
|
3,231
|
|
||
LIHTC equity losses related to the enactment of the Tax Act (1)
|
(1,069
|
)
|
|
—
|
|
||
Equity income, net of related income taxes
|
$
|
1,855
|
|
|
$
|
3,231
|
|
(1)
|
Amount represents LIHTC equity losses related to changes in tax rates under the Tax Act. Such investments are accounted for under the equity method of accounting with income/loss recorded in arrears. See Note 2 to our consolidated financial statements for further information.
|
Interest Sensitive Product Charges by Segment
|
|||||||
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Annuity
|
|
|
|
||||
Surrender charges and other
|
$
|
1,202
|
|
|
$
|
1,135
|
|
|
|
|
|
||||
Life Insurance
|
|
|
|
||||
Administration charges
|
$
|
4,046
|
|
|
$
|
3,864
|
|
Cost of insurance charges
|
12,537
|
|
|
12,035
|
|
||
Surrender charges
|
681
|
|
|
525
|
|
||
Amortization of policy initiation fees
|
614
|
|
|
664
|
|
||
Total
|
$
|
17,878
|
|
|
$
|
17,088
|
|
|
|
|
|
||||
Corporate and Other
|
|
|
|
||||
Administration charges
|
$
|
1,316
|
|
|
$
|
1,425
|
|
Cost of insurance charges
|
7,140
|
|
|
7,325
|
|
||
Surrender charges
|
23
|
|
|
52
|
|
||
Separate account charges
|
2,145
|
|
|
2,003
|
|
||
Amortization of policy initiation fees
|
394
|
|
|
173
|
|
||
Total
|
$
|
11,018
|
|
|
$
|
10,978
|
|
|
|
|
|
||||
Interest sensitive product charges as included in the Consolidated Statements of Operations
|
$
|
30,098
|
|
|
$
|
29,201
|
|
•
|
Gross Domestic Product increased at an annual rate of 2.3% during the
first quarter
of
2018
based on recent estimates.
|
•
|
U.S. unemployment was estimated to be 4.1% at the end of the
first quarter
of
2018
.
|
•
|
U.S. net farm income is forecast to decrease 6.7% and farm real estate value is estimated to have increased 2.1% during the
first quarter
of
2018
according to recent U.S. Department of Agriculture estimates.
|
•
|
The U.S. 10-year Treasury yield increased during the
first quarter
of
2018
to 2.74% at
March 31, 2018
from 2.40% at
December 31, 2017
.
|
•
|
The impact of the enactment of the Tax Act during December 2017 on the general U.S. economy, business initiatives and consumer demand for our insurance products is uncertain.
|
|
Three months ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||
|
(Dollars in thousands, except per share data)
|
|||||||||
Net income attributable to FBL Financial Group, Inc.
|
$
|
23,631
|
|
|
$
|
26,433
|
|
|
(11
|
)%
|
Adjustments to net income:
|
|
|
|
|
|
|||||
Impact of the Tax Act
|
1,069
|
|
|
—
|
|
|
N/A
|
|
||
Realized gains/losses on investments (1)(2)
|
2,424
|
|
|
554
|
|
|
338
|
%
|
||
Change in net unrealized gains/losses on derivatives (1)
|
509
|
|
|
1
|
|
|
N/A
|
|
||
Non-GAAP operating income (3)
|
$
|
27,633
|
|
|
$
|
26,988
|
|
|
2
|
%
|
|
|
|
|
|
|
|||||
Pre-tax non-GAAP operating income:
|
|
|
|
|
|
|||||
Annuity segment
|
$
|
16,582
|
|
|
$
|
16,421
|
|
|
1
|
%
|
Life Insurance segment
|
10,897
|
|
|
13,749
|
|
|
(21
|
)%
|
||
Corporate and Other segment
|
1,881
|
|
|
4,162
|
|
|
(55
|
)%
|
||
Total pre-tax non-GAAP operating income
|
29,360
|
|
|
34,332
|
|
|
(14
|
)%
|
||
Income taxes on non-GAAP operating income
|
(1,727
|
)
|
|
(7,344
|
)
|
|
(76
|
)%
|
||
Non-GAAP operating income (3)
|
$
|
27,633
|
|
|
$
|
26,988
|
|
|
2
|
%
|
|
|
|
|
|
|
|||||
Earnings per common share - assuming dilution
|
$
|
0.94
|
|
|
$
|
1.05
|
|
|
(10
|
)%
|
Non-GAAP operating income per common share - assuming dilution (3)
|
1.10
|
|
|
1.08
|
|
|
2
|
%
|
||
Effective tax rate on non-GAAP operating income
|
6
|
%
|
|
21
|
%
|
|
|
|||
Average invested assets, at amortized cost (4)
|
$
|
8,271,919
|
|
|
$
|
7,983,600
|
|
|
4
|
%
|
Annualized yield on average invested assets (4)
|
5.19
|
%
|
|
5.30
|
%
|
|
|
(1)
|
Amounts are net of adjustments, as applicable, to amortization of unearned revenue reserves, deferred acquisition costs and value of insurance in force acquired, as well as changes in interest sensitive product reserves and income taxes attributable to these items.
|
(2)
|
Beginning in 2018, amount includes changes in net unrealized gains/losses on equity securities.
|
(3)
|
See Note 9 to our consolidated financial statements for further information on non-GAAP operating income.
|
(4)
|
Average invested assets and annualized yield, including investments held as securities and indebtedness of related parties.
|
Annuity Segment
|
|
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||
|
(Dollars in thousands)
|
|||||||||
Non-GAAP operating revenues:
|
|
|
|
|
|
|||||
Interest sensitive product charges
|
$
|
1,202
|
|
|
$
|
1,135
|
|
|
6
|
%
|
Net investment income
|
56,233
|
|
|
53,916
|
|
|
4
|
%
|
||
Total non-GAAP operating revenues
|
57,435
|
|
|
55,051
|
|
|
4
|
%
|
||
|
|
|
|
|
|
|||||
Non-GAAP operating benefits and expenses:
|
|
|
|
|
|
|||||
Interest sensitive product benefits
|
31,286
|
|
|
29,878
|
|
|
5
|
%
|
||
Underwriting, acquisition and insurance expenses:
|
|
|
|
|
|
|||||
Commissions net of deferrals
|
504
|
|
|
531
|
|
|
(5
|
)%
|
||
Amortization of deferred acquisition costs
|
3,065
|
|
|
2,528
|
|
|
21
|
%
|
||
Amortization of value of insurance in force
|
172
|
|
|
170
|
|
|
1
|
%
|
||
Other underwriting expenses
|
5,826
|
|
|
5,523
|
|
|
5
|
%
|
||
Total underwriting, acquisition and insurance expenses
|
9,567
|
|
|
8,752
|
|
|
9
|
%
|
||
Total non-GAAP operating benefits and expenses
|
40,853
|
|
|
38,630
|
|
|
6
|
%
|
||
Pre-tax non-GAAP operating income (1)
|
$
|
16,582
|
|
|
$
|
16,421
|
|
|
1
|
%
|
Other data
|
|
|
|
|
|
|||||
Annuity premiums collected, direct (2)
|
$
|
78,810
|
|
|
$
|
81,463
|
|
|
(3
|
)%
|
Policy liabilities and accruals, end of period
|
4,462,979
|
|
|
4,232,025
|
|
|
5
|
%
|
||
Average invested assets, at amortized cost
|
4,505,251
|
|
|
4,323,348
|
|
|
4
|
%
|
||
Other investment-related income included in net investment income (3)
|
2,657
|
|
|
600
|
|
|
343
|
%
|
||
Average individual annuity account value
|
3,106,259
|
|
|
2,991,811
|
|
|
4
|
%
|
||
|
|
|
|
|
|
|||||
Earned spread on individual annuity products:
|
|
|
|
|
|
|||||
Weighted average yield on cash and invested assets
|
5.03
|
%
|
|
5.10
|
%
|
|
|
|||
Weighted average crediting rate
|
2.46
|
%
|
|
2.60
|
%
|
|
|
|||
Spread
|
2.57
|
%
|
|
2.50
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Individual annuity withdrawal rate
|
5.4
|
%
|
|
3.7
|
%
|
|
|
(1)
|
See Note 9 to our consolidated financial statements for further information on non-GAAP operating income.
|
(2)
|
Premiums collected is a non-GAAP measure of sales production, see Note 9 to our consolidated financial statements.
|
(3)
|
Includes prepayment fee income and adjustments to the amortization of premium or discounts from changes in our payment speed assumptions.
|
|
Life Insurance Segment
|
|
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||
|
(Dollars in thousands)
|
|||||||||
Non-GAAP operating revenues:
|
|
|
|
|
|
|||||
Interest sensitive product charges and other income
|
$
|
17,980
|
|
|
$
|
16,940
|
|
|
6
|
%
|
Traditional life insurance premiums
|
49,497
|
|
|
48,434
|
|
|
2
|
%
|
||
Net investment income
|
40,250
|
|
|
38,769
|
|
|
4
|
%
|
||
Total non-GAAP operating revenues
|
107,727
|
|
|
104,143
|
|
|
3
|
%
|
||
|
|
|
|
|
|
|||||
Non-GAAP operating benefits and expenses:
|
|
|
|
|
|
|||||
Interest sensitive product benefits:
|
|
|
|
|
|
|||||
Interest and index credits
|
8,393
|
|
|
8,385
|
|
|
—
|
%
|
||
Death benefits and other
|
15,241
|
|
|
14,074
|
|
|
8
|
%
|
||
Total interest sensitive product benefits
|
23,634
|
|
|
22,459
|
|
|
5
|
%
|
||
Traditional life insurance benefits:
|
|
|
|
|
|
|||||
Death benefits
|
23,735
|
|
|
21,667
|
|
|
10
|
%
|
||
Surrender and other benefits
|
10,144
|
|
|
10,429
|
|
|
(3
|
)%
|
||
Increase in traditional life future policy benefits
|
11,578
|
|
|
10,859
|
|
|
7
|
%
|
||
Total traditional life insurance benefits
|
45,457
|
|
|
42,955
|
|
|
6
|
%
|
||
Distributions to participating policyholders
|
2,551
|
|
|
2,553
|
|
|
—
|
%
|
||
Underwriting, acquisition and insurance expenses:
|
|
|
|
|
|
|||||
Commission expense, net of deferrals
|
4,923
|
|
|
4,903
|
|
|
—
|
%
|
||
Amortization of deferred acquisition costs
|
4,436
|
|
|
3,911
|
|
|
13
|
%
|
||
Amortization of value of insurance in force
|
373
|
|
|
375
|
|
|
(1
|
)%
|
||
Other underwriting expenses
|
16,151
|
|
|
14,404
|
|
|
12
|
%
|
||
Total underwriting, acquisition and insurance expenses
|
25,883
|
|
|
23,593
|
|
|
10
|
%
|
||
Total non-GAAP operating benefits and expenses
|
97,525
|
|
|
91,560
|
|
|
7
|
%
|
||
|
10,202
|
|
|
12,583
|
|
|
(19
|
)%
|
||
Equity income, before tax
|
695
|
|
|
1,166
|
|
|
(40
|
)%
|
||
Pre-tax non-GAAP operating income (1)
|
$
|
10,897
|
|
|
$
|
13,749
|
|
|
(21
|
)%
|
Life Insurance Segment - continued
|
|
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||
|
(Dollars in thousands)
|
|||||||||
Other data
|
|
|
|
|
|
|||||
Life premiums collected, net of reinsurance (2)
|
$
|
76,263
|
|
|
$
|
73,573
|
|
|
4
|
%
|
Policy liabilities and accruals, end of period
|
2,918,284
|
|
|
2,808,192
|
|
|
4
|
%
|
||
Life insurance in force, end of period
|
58,543,298
|
|
|
56,416,539
|
|
|
4
|
%
|
||
Average invested assets, at amortized cost (3)
|
2,979,404
|
|
|
2,887,287
|
|
|
3
|
%
|
||
Other investment-related income included in net investment income (4)
|
1,498
|
|
|
121
|
|
|
1,138
|
%
|
||
Average interest sensitive life account value
|
844,559
|
|
|
820,794
|
|
|
3
|
%
|
||
|
|
|
|
|
|
|||||
Interest sensitive life insurance spread:
|
|
|
|
|
|
|||||
Weighted average yield on cash and invested assets (3)
|
5.33
|
%
|
|
5.49
|
%
|
|
|
|||
Weighted average crediting rate
|
3.64
|
%
|
|
3.85
|
%
|
|
|
|||
Spread
|
1.69
|
%
|
|
1.64
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Life insurance lapse and surrender rates
|
4.9
|
%
|
|
5.6
|
%
|
|
|
|||
Death benefits, net of reinsurance and reserves released
|
$
|
26,479
|
|
|
$
|
22,981
|
|
|
15
|
%
|
(1)
|
See Note 9 to our consolidated financial statements for further information on non-GAAP operating income.
|
(2)
|
Premiums collected is a non-GAAP measure of sales production, see Note 9 to our consolidated financial statements.
|
(3)
|
Average invested assets and weighted average yield including investments held as securities and indebtedness of related parties.
|
(4)
|
Includes prepayment fee income and adjustments to the amortization of premium or discounts from changes in our payment speed assumptions.
|
|
Corporate and Other Segment
|
|
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||
|
(Dollars in thousands)
|
|||||||||
Non-GAAP operating revenues:
|
|
|
|
|
|
|||||
Interest sensitive product charges
|
$
|
11,021
|
|
|
$
|
10,978
|
|
|
—
|
%
|
Net investment income
|
8,411
|
|
|
8,768
|
|
|
(4
|
)%
|
||
Other income
|
4,679
|
|
|
3,920
|
|
|
19
|
%
|
||
Total non-GAAP operating revenues
|
24,111
|
|
|
23,666
|
|
|
2
|
%
|
||
|
|
|
|
|
|
|||||
Non-GAAP operating benefits and expenses:
|
|
|
|
|
|
|||||
Interest sensitive product benefits
|
9,342
|
|
|
10,059
|
|
|
(7
|
)%
|
||
Underwriting, acquisition and insurance expenses:
|
|
|
|
|
|
|||||
Commission expense, net of deferrals
|
680
|
|
|
721
|
|
|
(6
|
)%
|
||
Amortization of deferred acquisition costs
|
2,512
|
|
|
637
|
|
|
294
|
%
|
||
Other underwriting expenses
|
1,402
|
|
|
1,098
|
|
|
28
|
%
|
||
Total underwriting, acquisition and insurance expenses
|
4,594
|
|
|
2,456
|
|
|
87
|
%
|
||
Interest expense
|
1,213
|
|
|
1,212
|
|
|
—
|
%
|
||
Other expenses
|
5,593
|
|
|
4,151
|
|
|
35
|
%
|
||
Total non-GAAP operating benefits and expenses
|
20,742
|
|
|
17,878
|
|
|
16
|
%
|
||
|
3,369
|
|
|
5,788
|
|
|
(42
|
)%
|
||
Net loss (income) attributable to noncontrolling interest
|
23
|
|
|
(2
|
)
|
|
(1,250
|
)%
|
||
Equity loss, before tax
|
(1,511
|
)
|
|
(1,624
|
)
|
|
(7
|
)%
|
||
Pre-tax non-GAAP operating income (1)
|
$
|
1,881
|
|
|
$
|
4,162
|
|
|
(55
|
)%
|
Other data
|
|
|
|
|
|
|||||
Average invested assets, at amortized cost (2)
|
$
|
787,264
|
|
|
$
|
772,965
|
|
|
2
|
%
|
Other investment-related income included in net investment income (3)
|
137
|
|
|
350
|
|
|
(61
|
)%
|
||
Average interest sensitive life account value
|
360,586
|
|
|
365,641
|
|
|
(1
|
)%
|
||
Death benefits, net of reinsurance and reserves released
|
5,939
|
|
|
6,885
|
|
|
(14
|
)%
|
||
Estimated impact on pre-tax non-GAAP operating income from separate account performance on amortization of deferred acquisition costs (1)
|
(860
|
)
|
|
931
|
|
|
(192
|
)%
|
(1)
|
See Note 9 to our consolidated financial statements for further information on non-GAAP operating income.
|
(2)
|
Average invested assets including investments held as securities and indebtedness of related parties.
|
(3)
|
Includes prepayment fee income and adjustments to the amortization of premium or discounts from changes in our payment speed assumptions.
|
Equity Income
|
|
|
|
||||
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Pre-tax equity income (loss):
|
|
|
|
||||
LIHTC
|
$
|
(1,652
|
)
|
|
$
|
(1,805
|
)
|
Other equity method investments
|
836
|
|
|
1,347
|
|
||
|
(816
|
)
|
|
(458
|
)
|
||
|
|
|
|
||||
Income taxes
|
|
|
|
||||
Taxes on equity income (loss)
|
171
|
|
|
160
|
|
||
Investment tax credits
|
3,569
|
|
|
3,529
|
|
||
Equity income, net of related taxes, included in non-GAAP operating income
|
2,924
|
|
|
3,231
|
|
||
LIHTC equity losses related to the enactment of the Tax Act (1)
|
(1,069
|
)
|
|
—
|
|
||
Equity income, net of related income taxes
|
$
|
1,855
|
|
|
$
|
3,231
|
|
(1)
|
Amount represents LIHTC equity losses recorded by the partnerships upon enactment of the Tax Act. See Note 2 to our consolidated financial statements for additional information.
|
Impact of Adjustments to Net Income Attributable to FBL
|
|||||||
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Impact of the Tax Act
|
$
|
(1,069
|
)
|
|
$
|
—
|
|
Realized (losses) on investments
|
(1,225
|
)
|
|
(469
|
)
|
||
Change in net unrealized gain/loss on equity securities
|
(1,817
|
)
|
|
—
|
|
||
Change in net unrealized gains/losses on derivatives
|
(1,208
|
)
|
|
(49
|
)
|
||
Offsets: (1)
|
|
|
|
||||
Change in amortization
|
338
|
|
|
253
|
|
||
Reserve change on interest sensitive products
|
199
|
|
|
(590
|
)
|
||
Income tax
|
780
|
|
|
300
|
|
||
Net impact of adjustments to net income
|
$
|
(4,002
|
)
|
|
$
|
(555
|
)
|
Net impact per common share - basic
|
$
|
(0.16
|
)
|
|
$
|
(0.03
|
)
|
Net impact per common share - assuming dilution
|
$
|
(0.16
|
)
|
|
$
|
(0.03
|
)
|
(1)
|
The items excluded from non-GAAP operating income impact the amortization of deferred acquisition costs, value of business acquired and unearned revenue reserve. Certain interest sensitive reserves as well as income taxes are also impacted.
|
Realized Gains (Losses) on Investments
|
|
|
|
||||
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Realized gains (losses) on investments:
|
|
|
|
||||
Realized gains on sales
|
$
|
83
|
|
|
$
|
124
|
|
Realized losses on sales
|
(13
|
)
|
|
(527
|
)
|
||
Change in unrealized gains (losses) on equity securities
|
(1,817
|
)
|
|
—
|
|
||
Total other-than-temporary impairment charges
|
(1,295
|
)
|
|
(66
|
)
|
||
Net realized investment losses
|
$
|
(3,042
|
)
|
|
$
|
(469
|
)
|
Investment Portfolio Summary
|
|
|
|
|
|
|
|
||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
|
Carrying Value
|
|
Percent
|
|
Carrying Value
|
|
Percent
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Fixed maturities - available for sale:
|
|
|
|
|
|
|
|
||||||
Public
|
$
|
5,484,231
|
|
|
63.8
|
%
|
|
$
|
5,510,658
|
|
|
63.9
|
%
|
144A private placement
|
1,534,572
|
|
|
17.9
|
|
|
1,547,097
|
|
|
18.0
|
|
||
Private placement
|
228,109
|
|
|
2.7
|
|
|
234,212
|
|
|
2.7
|
|
||
Total fixed maturities - available for sale
|
7,246,912
|
|
|
84.4
|
|
|
7,291,967
|
|
|
84.6
|
|
||
Equity securities
|
103,920
|
|
|
1.2
|
|
|
104,145
|
|
|
1.2
|
|
||
Mortgage loans
|
968,664
|
|
|
11.2
|
|
|
971,812
|
|
|
11.3
|
|
||
Real estate
|
1,543
|
|
|
—
|
|
|
1,543
|
|
|
—
|
|
||
Policy loans
|
193,413
|
|
|
2.3
|
|
|
191,398
|
|
|
2.2
|
|
||
Short-term investments
|
30,075
|
|
|
0.4
|
|
|
17,007
|
|
|
0.5
|
|
||
Other investments
|
44,973
|
|
|
0.5
|
|
|
42,371
|
|
|
0.2
|
|
||
Total investments
|
$
|
8,589,500
|
|
|
100.0
|
%
|
|
$
|
8,620,243
|
|
|
100.0
|
%
|
(1)
|
Equivalent ratings are based on those provided by nationally recognized rating agencies with some exceptions for certain residential mortgage, commercial mortgage- and asset-backed securities that are based on the expected loss of the security rather than the probability of default. This may result in a final designation being higher or lower than the equivalent credit rating.
|
|
December 31, 2017
|
||||||||||||||||||
|
Total Carrying Value
|
|
Carrying
Value of
Securities
with Gross
Unrealized
Gains
|
|
Gross Unrealized Gains
|
|
Carrying Value of Securities
with Gross Unrealized Losses
|
|
Gross Unrealized Losses
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic industrial
|
$
|
353,351
|
|
|
$
|
336,293
|
|
|
$
|
29,849
|
|
|
$
|
17,058
|
|
|
$
|
(479
|
)
|
Capital goods
|
279,281
|
|
|
271,346
|
|
|
21,624
|
|
|
7,935
|
|
|
(139
|
)
|
|||||
Communications
|
151,763
|
|
|
133,263
|
|
|
12,364
|
|
|
18,500
|
|
|
(862
|
)
|
|||||
Consumer cyclical
|
128,618
|
|
|
117,370
|
|
|
9,118
|
|
|
11,248
|
|
|
(516
|
)
|
|||||
Consumer non-cyclical
|
521,128
|
|
|
461,205
|
|
|
41,221
|
|
|
59,923
|
|
|
(4,684
|
)
|
|||||
Energy
|
462,437
|
|
|
409,768
|
|
|
34,028
|
|
|
52,669
|
|
|
(5,950
|
)
|
|||||
Finance
|
695,604
|
|
|
633,513
|
|
|
50,908
|
|
|
62,091
|
|
|
(1,143
|
)
|
|||||
Transportation
|
103,049
|
|
|
93,921
|
|
|
7,978
|
|
|
9,128
|
|
|
(141
|
)
|
|||||
Utilities
|
814,238
|
|
|
796,782
|
|
|
108,914
|
|
|
17,456
|
|
|
(1,909
|
)
|
|||||
Other
|
178,802
|
|
|
165,971
|
|
|
13,295
|
|
|
12,831
|
|
|
(132
|
)
|
|||||
Total corporate securities
|
3,688,271
|
|
|
3,419,432
|
|
|
329,299
|
|
|
268,839
|
|
|
(15,955
|
)
|
|||||
Mortgage- and asset-backed securities
|
2,055,090
|
|
|
1,549,187
|
|
|
88,999
|
|
|
505,903
|
|
|
(9,727
|
)
|
|||||
United States Government and agencies
|
24,905
|
|
|
17,343
|
|
|
1,606
|
|
|
7,562
|
|
|
(79
|
)
|
|||||
States and political subdivisions
|
1,523,701
|
|
|
1,497,292
|
|
|
141,813
|
|
|
26,409
|
|
|
(1,239
|
)
|
|||||
Total
|
$
|
7,291,967
|
|
|
$
|
6,483,254
|
|
|
$
|
561,717
|
|
|
$
|
808,713
|
|
|
$
|
(27,000
|
)
|
|
|
|
|
December 31, 2017
|
||||||||||||
NAIC Designation
|
|
Equivalent Rating
|
|
Carrying Value of Securities with Gross Unrealized Losses
|
|
Percent of Total
|
|
Gross Unrealized Losses
|
|
Percent of Total
|
||||||
|
|
|
|
(Dollars in thousands)
|
||||||||||||
1
|
|
AAA, AA, A
|
|
$
|
518,748
|
|
|
64.1
|
%
|
|
$
|
(8,638
|
)
|
|
32.0
|
%
|
2
|
|
BBB
|
|
199,529
|
|
|
24.7
|
|
|
(6,927
|
)
|
|
25.6
|
|
||
|
|
Total investment grade
|
|
718,277
|
|
|
88.8
|
|
|
(15,565
|
)
|
|
57.6
|
|
||
3
|
|
BB
|
|
41,488
|
|
|
5.1
|
|
|
(819
|
)
|
|
3.0
|
|
||
4
|
|
B
|
|
37,944
|
|
|
4.7
|
|
|
(8,125
|
)
|
|
30.1
|
|
||
5
|
|
CCC
|
|
4,109
|
|
|
0.5
|
|
|
(1,314
|
)
|
|
4.9
|
|
||
6
|
|
In or near default
|
|
6,895
|
|
|
0.9
|
|
|
(1,177
|
)
|
|
4.4
|
|
||
|
|
Total below investment grade
|
|
90,436
|
|
|
11.2
|
|
|
(11,435
|
)
|
|
42.4
|
|
||
|
|
Total
|
|
$
|
808,713
|
|
|
100.0
|
%
|
|
$
|
(27,000
|
)
|
|
100.0
|
%
|
Mortgage- and Asset-Backed Securities by Collateral Type
|
|||||||||||||||||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||
|
Amortized Cost
|
|
Carrying Value
|
|
Percent
of Fixed Maturities
|
|
Amortized Cost
|
|
Carrying Value
|
|
Percent
of Fixed Maturities
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||
Government agency
|
$
|
234,923
|
|
|
$
|
240,154
|
|
|
3.3
|
%
|
|
$
|
220,385
|
|
|
$
|
230,792
|
|
|
3.2
|
%
|
Prime
|
213,406
|
|
|
224,087
|
|
|
3.1
|
|
|
181,397
|
|
|
194,081
|
|
|
2.7
|
|
||||
Alt-A
|
94,100
|
|
|
107,883
|
|
|
1.5
|
|
|
98,100
|
|
|
111,993
|
|
|
1.5
|
|
||||
Subprime
|
140,252
|
|
|
151,349
|
|
|
2.1
|
|
|
139,826
|
|
|
149,469
|
|
|
2.0
|
|
||||
Commercial mortgage
|
784,999
|
|
|
793,276
|
|
|
10.9
|
|
|
674,076
|
|
|
705,307
|
|
|
9.7
|
|
||||
Non-mortgage
|
642,267
|
|
|
644,363
|
|
|
8.9
|
|
|
662,034
|
|
|
663,448
|
|
|
9.1
|
|
||||
Total
|
$
|
2,109,947
|
|
|
$
|
2,161,112
|
|
|
29.8
|
%
|
|
$
|
1,975,818
|
|
|
$
|
2,055,090
|
|
|
28.2
|
%
|
|
|
December 31, 2017
|
|||||||||||||||||||||||||||||||
|
|
2004 & Prior
|
|
2005 to 2008
|
|
2009 & After
|
|
Total
|
|||||||||||||||||||||||||
NAIC Designation
|
|
Amortized
Cost |
|
Carrying
Value
|
|
Amortized
Cost |
|
Carrying
Value
|
|
Amortized
Cost |
|
Carrying
Value
|
|
Amortized
Cost
|
|
Carrying
Value
|
|||||||||||||||||
|
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||||
1
|
|
$
|
88,773
|
|
|
$
|
91,424
|
|
|
$
|
79,358
|
|
|
$
|
101,123
|
|
|
$
|
303,659
|
|
|
$
|
311,883
|
|
|
$
|
471,790
|
|
|
$
|
504,430
|
|
|
2
|
|
—
|
|
|
—
|
|
|
876
|
|
|
877
|
|
|
—
|
|
|
—
|
|
|
876
|
|
|
877
|
|
|||||||||
3
|
|
—
|
|
|
—
|
|
|
1,697
|
|
|
1,634
|
|
|
—
|
|
|
—
|
|
|
1,697
|
|
|
1,634
|
|
|||||||||
4
|
|
584
|
|
|
592
|
|
|
8,713
|
|
|
8,738
|
|
|
—
|
|
|
—
|
|
|
9,297
|
|
|
9,330
|
|
|||||||||
6
|
—
|
|
11
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
10
|
|
||||||||
Total
|
|
$
|
89,368
|
|
|
$
|
92,026
|
|
|
$
|
90,644
|
|
|
$
|
112,372
|
|
|
$
|
303,659
|
|
|
$
|
311,883
|
|
|
$
|
483,671
|
|
|
$
|
516,281
|
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||
|
|
2004 & Prior
|
|
2005 to 2008
|
|
2009 & After
|
|
Total
|
||||||||||||||||||||||||
NAIC Designation
|
|
Amortized
Cost |
|
Carrying
Value
|
|
Amortized
Cost |
|
Carrying
Value
|
|
Amortized
Cost |
|
Carrying
Value
|
|
Amortized
Cost
|
|
Carrying
Value
|
||||||||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||
1
|
|
$
|
8,878
|
|
|
$
|
9,661
|
|
|
$
|
114,230
|
|
|
$
|
128,907
|
|
|
$
|
515,654
|
|
|
$
|
529,192
|
|
|
$
|
638,762
|
|
|
$
|
667,760
|
|
2
|
|
—
|
|
|
—
|
|
|
35,314
|
|
|
37,547
|
|
|
—
|
|
|
—
|
|
|
35,314
|
|
|
37,547
|
|
||||||||
Total (1)
|
|
$
|
8,878
|
|
|
$
|
9,661
|
|
|
$
|
149,544
|
|
|
$
|
166,454
|
|
|
$
|
515,654
|
|
|
$
|
529,192
|
|
|
$
|
674,076
|
|
|
$
|
705,307
|
|
(1)
|
The commercial mortgage-backed securities (CMBS) portfolio included government agency-backed securities with a carrying value of $608.2 million at
March 31, 2018
and $515.7 million at
December 31, 2017
. Also included in the CMBS are military housing bonds totaling $157.0 million at
March 31, 2018
and $161.1 million at
December 31, 2017
. These bonds are used to fund the construction of multi-family homes on United States military bases. The bonds are backed by a first mortgage lien on residential military housing projects.
|
Period
|
|
(a) Total Number of Shares (or Units) Purchased
|
|
(b) Average Price Paid per Share (or Unit)
|
|
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
|
|||
January 1, 2018 through January 31, 2018
|
|
2,572
|
|
|
$
|
69.98
|
|
|
2,572
|
|
$49,028,863
|
February 1, 2018 through February 28, 2018
|
|
39,116
|
|
|
68.38
|
|
|
39,116
|
|
$46,354,030
|
|
March 1, 2018 through March 31, 2018
|
|
57,624
|
|
|
68.57
|
|
|
57,624
|
|
$50,000,000
|
|
Total
|
|
99,312
|
|
|
$
|
68.54
|
|
|
|
|
|
|
FBL FINANCIAL GROUP, INC.
|
|
|
|
|
|
|
|
|
By
|
/s/ James P. Brannen
|
|
|
James P. Brannen
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
By
|
/s/ Donald J. Seibel
|
|
|
Donald J. Seibel
|
|
|
Chief Financial Officer and Treasurer (Principal Financial Officer)
|
|
|
|
|
By
|
/s/ Anthony J. Aldridge
|
|
|
Anthony J. Aldridge
|
|
|
Chief Accounting Officer (Principal Accounting Officer)
|
1 Year FBL Financial Chart |
1 Month FBL Financial Chart |
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