FBL FINANCIAL GROUP, INC. | |||||||||||||||||
(Exact name of registrant as specified in its charter) | |||||||||||||||||
42-1411715 | |||||||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
5400 University Avenue, | West Des Moines, | Iowa | 50266-5997 | ||||||||||||||
(Address of principal executive offices) | (Zip Code) | ||||||||||||||||
(515) | 225-5400 | ||||||||||||||||
(Registrant’s telephone number, including area code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Class A Common Stock, without par value | FFG | New York Stock Exchange |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: | ||||||||
Title of each class | Outstanding at | |||||||
Class A Common Stock, without par value | ||||||||
Class B Common Stock, without par value | 11,413 |
PART I. | FINANCIAL INFORMATION | |||||||
Item 1. | Financial Statements (Unaudited) | |||||||
Consolidated Balance Sheets | ||||||||
Consolidated Statements of Operations | ||||||||
Consolidated Statements of Comprehensive Income | ||||||||
Consolidated Statements of Changes in Stockholders’ Equity | ||||||||
Consolidated Statements of Cash Flows | ||||||||
Notes to Consolidated Financial Statements | ||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |||||||
Item 4. | Controls and Procedures | |||||||
PART II. | OTHER INFORMATION | |||||||
Item 1A. | Risk Factors | |||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||||
Item 6. | Exhibits | |||||||
SIGNATURES |
September 30, 2020 | December 31, 2019 | ||||||||||
Assets | |||||||||||
Investments: | |||||||||||
Fixed maturities - available for sale, at fair value (amortized cost 2020 - $7,256,832, 2019 - $7,015,269; and allowance for credit losses 2020 - 12,095, 2019 - $0) | $ | 8,244,477 | $ | 7,702,628 | |||||||
Equity securities at fair value (cost: 2020 - $95,409, 2019 - $95,269) | 93,269 | 100,228 | |||||||||
Mortgage loans (net of allowance for credit losses 2020 - 1,924, 2019 - $0) | 972,210 | 1,011,678 | |||||||||
Real estate | 955 | 955 | |||||||||
Policy loans | 197,009 | 201,589 | |||||||||
Short-term investments | 18,434 | 11,865 | |||||||||
Other investments | 55,639 | 62,680 | |||||||||
Total investments | 9,581,993 | 9,091,623 | |||||||||
Cash and cash equivalents | 15,030 | 17,277 | |||||||||
Securities and indebtedness of related parties | 80,494 | 74,791 | |||||||||
Accrued investment income | 76,164 | 72,332 | |||||||||
Amounts receivable from affiliates | 2,421 | 4,357 | |||||||||
Reinsurance recoverable | 112,382 | 107,498 | |||||||||
Deferred acquisition costs | 201,022 | 289,456 | |||||||||
Value of insurance in force acquired | 2,384 | 2,624 | |||||||||
Current income taxes recoverable | 4,786 | 6,427 | |||||||||
Other assets | 159,824 | 167,940 | |||||||||
Assets held in separate accounts | 616,381 | 645,881 | |||||||||
Total assets | $ | 10,852,881 | $ | 10,480,206 |
March 31, 2020 | December 31, 2019 | ||||||
Assets | |||||||
Investments: | |||||||
Fixed maturities - available for sale, at fair value (amortized cost 2020 - $7,115,265, 2019 - $7,015,269; and allowance for credit losses 2020 - $12,146, 2019 - $0) | $ | 7,617,165 | $ | 7,702,628 | |||
Equity securities at fair value (cost: 2020 - $96,882, 2019 - $95,269) | 88,610 | 100,228 | |||||
Mortgage loans (net of allowance for credit losses 2020 - $3,279, 2019 - $0) | 988,854 | 1,011,678 | |||||
Real estate | 955 | 955 | |||||
Policy loans | 202,227 | 201,589 | |||||
Short-term investments | 29,580 | 11,865 | |||||
Other investments | 41,777 | 62,680 | |||||
Total investments | 8,969,168 | 9,091,623 | |||||
Cash and cash equivalents | 17,524 | 17,277 | |||||
Securities and indebtedness of related parties | 77,641 | 74,791 | |||||
Accrued investment income | 77,263 | 72,332 | |||||
Amounts receivable from affiliates | 3,916 | 4,357 | |||||
Reinsurance recoverable | 105,438 | 107,498 | |||||
Deferred acquisition costs | 337,972 | 289,456 | |||||
Value of insurance in force acquired | 2,829 | 2,624 | |||||
Current income taxes recoverable | 7,570 | 6,427 | |||||
Other assets | 168,045 | 167,940 | |||||
Assets held in separate accounts | 525,582 | 645,881 | |||||
Total assets | $ | 10,292,948 | $ | 10,480,206 |
September 30, 2020 | December 31, 2019 | ||||||||||
Liabilities and stockholders’ equity | |||||||||||
Liabilities: | |||||||||||
Future policy benefits: | |||||||||||
Interest sensitive products | $ | 5,747,604 | $ | 5,548,212 | |||||||
Traditional life insurance and accident and health products | 1,881,838 | 1,845,337 | |||||||||
Other policy claims and benefits | 49,409 | 46,883 | |||||||||
Supplementary contracts without life contingencies | 282,715 | 296,915 | |||||||||
Advance premiums and other deposits | 258,165 | 253,458 | |||||||||
Amounts payable to affiliates | 609 | 1,218 | |||||||||
Long-term debt | 97,000 | 97,000 | |||||||||
Deferred income taxes | 187,161 | 152,373 | |||||||||
Other liabilities | 113,744 | 107,013 | |||||||||
Liabilities related to separate accounts | 616,381 | 645,881 | |||||||||
Total liabilities | 9,234,626 | 8,994,290 | |||||||||
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 24,383,110 shares in 2020 and 24,652,802 shares in 2019 | 150,990 | 152,661 | |||||||||
Class B common stock, without par value - authorized 1,500,000 shares, issued and outstanding 11,413 shares in 2020 and 2019 | 72 | 72 | |||||||||
Accumulated other comprehensive income | 529,087 | 354,764 | |||||||||
Retained earnings | 935,080 | 975,260 | |||||||||
Total FBL Financial Group, Inc. stockholders’ equity | 1,618,229 | 1,485,757 | |||||||||
Noncontrolling interest | 26 | 159 | |||||||||
Total stockholders’ equity | 1,618,255 | 1,485,916 | |||||||||
Total liabilities and stockholders’ equity | $ | 10,852,881 | $ | 10,480,206 |
March 31, 2020 | December 31, 2019 | ||||||
Liabilities and stockholders’ equity | |||||||
Liabilities: | |||||||
Future policy benefits: | |||||||
Interest sensitive products | $ | 5,646,263 | $ | 5,548,212 | |||
Traditional life insurance and accident and health products | 1,856,580 | 1,845,337 | |||||
Other policy claims and benefits | 47,713 | 46,883 | |||||
Supplementary contracts without life contingencies | 293,016 | 296,915 | |||||
Advance premiums and other deposits | 254,523 | 253,458 | |||||
Amounts payable to affiliates | 1,015 | 1,218 | |||||
Short-term debt | 10,000 | — | |||||
Long-term debt | 97,000 | 97,000 | |||||
Deferred income taxes | 119,093 | 152,373 | |||||
Other liabilities | 107,841 | 107,013 | |||||
Liabilities related to separate accounts | 525,582 | 645,881 | |||||
Total liabilities | 8,958,626 | 8,994,290 | |||||
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 24,630,777 shares in 2020 and 24,652,802 shares in 2019 | 152,754 | 152,661 | |||||
Class B common stock, without par value - authorized 1,500,000 shares, issued and outstanding 11,413 shares in 2020 and 2019 | 72 | 72 | |||||
Accumulated other comprehensive income | 258,422 | 354,764 | |||||
Retained earnings | 920,032 | 975,260 | |||||
Total FBL Financial Group, Inc. stockholders’ equity | 1,334,280 | 1,485,757 | |||||
Noncontrolling interest | 42 | 159 | |||||
Total stockholders’ equity | 1,334,322 | 1,485,916 | |||||
Total liabilities and stockholders’ equity | $ | 10,292,948 | $ | 10,480,206 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Interest sensitive product charges | $ | 35,420 | $ | 31,135 | $ | 100,049 | $ | 94,935 | |||||||||||||||
Traditional life insurance premiums | 47,792 | 46,982 | 147,429 | 147,361 | |||||||||||||||||||
Net investment income | 105,856 | 101,478 | 291,208 | 316,012 | |||||||||||||||||||
Net realized capital gains (losses) | 1,991 | 696 | (8,657) | 11,230 | |||||||||||||||||||
Change in allowance for credit losses on investments | 1,903 | 0 | (10,855) | 0 | |||||||||||||||||||
Other-than-temporary impairment losses | 0 | (50) | 0 | (919) | |||||||||||||||||||
Other income | 4,883 | 4,417 | 14,647 | 12,501 | |||||||||||||||||||
Total revenues | 197,845 | 184,658 | 533,821 | 581,120 | |||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||
Interest sensitive product benefits | 79,803 | 67,147 | 203,257 | 202,966 | |||||||||||||||||||
Traditional life insurance benefits | 45,529 | 42,877 | 136,849 | 131,512 | |||||||||||||||||||
Policyholder dividends | 1,733 | 2,441 | 5,879 | 7,539 | |||||||||||||||||||
Underwriting, acquisition and insurance expenses | 38,131 | 39,197 | 111,044 | 114,334 | |||||||||||||||||||
Interest expense | 1,212 | 1,213 | 3,638 | 3,637 | |||||||||||||||||||
Other expenses | 7,878 | 5,764 | 22,524 | 18,649 | |||||||||||||||||||
Total benefits and expenses | 174,286 | 158,639 | 483,191 | 478,637 | |||||||||||||||||||
23,559 | 26,019 | 50,630 | 102,483 | ||||||||||||||||||||
Income tax | (2,883) | (1,642) | (5,887) | (13,429) | |||||||||||||||||||
Equity income (loss), net of related income taxes | 277 | 799 | (238) | 2,423 | |||||||||||||||||||
Net income | 20,953 | 25,176 | 44,505 | 91,477 | |||||||||||||||||||
Net (income) loss attributable to noncontrolling interest | 21 | (47) | 165 | (7) | |||||||||||||||||||
Net income attributable to FBL Financial Group, Inc. | $ | 20,974 | $ | 25,129 | $ | 44,670 | $ | 91,470 | |||||||||||||||
Earnings per common share | $ | 0.85 | $ | 1.01 | $ | 1.81 | $ | 3.69 | |||||||||||||||
Earnings per common share - assuming dilution | $ | 0.85 | $ | 1.01 | $ | 1.81 | $ | 3.69 |
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
Revenues: | |||||||
Interest sensitive product charges | $ | 31,720 | $ | 31,266 | |||
Traditional life insurance premiums | 49,308 | 49,392 | |||||
Net investment income | 74,917 | 109,640 | |||||
Net realized capital gains (losses) | (13,401 | ) | 10,157 | ||||
Change in allowance for credit losses on investments | (12,261 | ) | — | ||||
Other-than-temporary impairment losses | — | (869 | ) | ||||
Other income | 4,980 | 3,970 | |||||
Total revenues | 135,263 | 203,556 | |||||
Benefits and expenses: | |||||||
Interest sensitive product benefits | 44,351 | 70,596 | |||||
Traditional life insurance benefits | 46,208 | 46,675 | |||||
Policyholder dividends | 2,529 | 2,534 | |||||
Underwriting, acquisition and insurance expenses | 39,421 | 36,189 | |||||
Interest expense | 1,213 | 1,212 | |||||
Other expenses | 7,421 | 6,250 | |||||
Total benefits and expenses | 141,143 | 163,456 | |||||
(5,880 | ) | 40,100 | |||||
Income tax benefit (expense) | 3,081 | (6,276 | ) | ||||
Equity income, net of related income taxes | 228 | 220 | |||||
Net income (loss) | (2,571 | ) | 34,044 | ||||
Net (income) loss attributable to noncontrolling interest | 56 | (1 | ) | ||||
Net income (loss) attributable to FBL Financial Group, Inc. | $ | (2,515 | ) | $ | 34,043 | ||
Earnings (loss) per common share | $ | (0.10 | ) | $ | 1.37 | ||
Earnings (loss) per common share - assuming dilution | $ | (0.10 | ) | $ | 1.37 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income | $ | 20,953 | $ | 25,176 | $ | 44,505 | $ | 91,477 | |||||||||||||||
Other comprehensive income (1) | |||||||||||||||||||||||
Change in net unrealized investment gains/losses | 47,211 | 103,172 | 173,577 | 314,228 | |||||||||||||||||||
Change in underfunded status of postretirement benefit plans | 250 | 210 | 746 | 629 | |||||||||||||||||||
Total other comprehensive income, net of tax | 47,461 | 103,382 | 174,323 | 314,857 | |||||||||||||||||||
Total comprehensive income, net of tax | 68,414 | 128,558 | 218,828 | 406,334 | |||||||||||||||||||
Comprehensive (income) loss attributable to noncontrolling interest | 21 | (47) | 165 | (7) | |||||||||||||||||||
Total comprehensive income applicable to FBL Financial Group, Inc. | $ | 68,435 | $ | 128,511 | $ | 218,993 | $ | 406,327 |
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
Net income (loss) | $ | (2,571 | ) | $ | 34,044 | ||
Other comprehensive income (loss) (1) | |||||||
Change in net unrealized investment gains/losses | (96,589 | ) | 97,640 | ||||
Change in underfunded status of postretirement benefit plans | 247 | 208 | |||||
Total other comprehensive income (loss), net of tax | (96,342 | ) | 97,848 | ||||
Total comprehensive income (loss), net of tax | (98,913 | ) | 131,892 | ||||
Comprehensive (income) loss attributable to noncontrolling interest | 56 | (1 | ) | ||||
Total comprehensive income (loss) applicable to FBL Financial Group, Inc. | $ | (98,857 | ) | $ | 131,891 |
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 July 1, 2019 | $ | 3,000 | $ | 152,526 | $ | 302,793 | $ | 939,143 | $ | 80 | $ | 1,397,542 | |||||||||||||||||||||||
Net income - three months ended September 30, 2019 | — | — | — | 25,129 | 47 | 25,176 | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | 103,382 | — | — | 103,382 | |||||||||||||||||||||||||||||
Stock-based compensation | — | 112 | — | — | — | 112 | |||||||||||||||||||||||||||||
Dividends on preferred stock | — | — | — | (37) | — | (37) | |||||||||||||||||||||||||||||
Dividends on common stock | — | — | — | (11,838) | — | (11,838) | |||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | 3,000 | $ | 152,638 | $ | 406,175 | $ | 952,397 | $ | 127 | $ | 1,514,337 | |||||||||||||||||||||||
Balance at July 1, 2020 | $ | 3,000 | $ | 152,240 | $ | 481,626 | $ | 930,937 | $ | (42) | $ | 1,567,761 | |||||||||||||||||||||||
Net income - three months ended September 30, 2020 | — | — | — | 20,974 | (21) | 20,953 | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | 47,461 | — | — | 47,461 | |||||||||||||||||||||||||||||
Stock-based compensation | — | (184) | — | — | — | (184) | |||||||||||||||||||||||||||||
Purchase of common stock | — | (994) | — | (4,597) | — | (5,591) | |||||||||||||||||||||||||||||
Dividends on preferred stock | — | — | — | (37) | — | (37) | |||||||||||||||||||||||||||||
Dividends on common stock | — | — | — | (12,197) | — | (12,197) | |||||||||||||||||||||||||||||
Receipt related to noncontrolling interest | — | — | — | — | 89 | 89 | |||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | 3,000 | $ | 151,062 | $ | 529,087 | $ | 935,080 | $ | 26 | $ | 1,618,255 |
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, 2019 | $ | 3,000 | $ | 152,724 | $ | 91,318 | $ | 937,097 | $ | 120 | $ | 1,184,259 | |||||||||||
Cumulative effect of change in accounting principle related to leases | — | — | — | 595 | — | 595 | |||||||||||||||||
Net income - three months ended March 31, 2019 | — | — | — | 34,043 | 1 | 34,044 | |||||||||||||||||
Other comprehensive income | — | — | 97,848 | — | — | 97,848 | |||||||||||||||||
Stock-based compensation | — | 202 | — | — | — | 202 | |||||||||||||||||
Purchase of common stock | — | (410 | ) | — | (4,167 | ) | — | (4,577 | ) | ||||||||||||||
Dividends on preferred stock | — | — | — | (38 | ) | — | (38 | ) | |||||||||||||||
Dividends on common stock | — | — | — | (48,812 | ) | — | (48,812 | ) | |||||||||||||||
Balance at March 31, 2019 | $ | 3,000 | $ | 152,516 | $ | 189,166 | $ | 918,718 | $ | 121 | $ | 1,263,521 | |||||||||||
Balance at January 1, 2020 | $ | 3,000 | $ | 152,733 | $ | 354,764 | $ | 975,260 | $ | 159 | $ | 1,485,916 | |||||||||||
Cumulative effect of change in accounting principle related to current expected credit loss | — | — | — | (2,685 | ) | — | (2,685 | ) | |||||||||||||||
Net loss - three months ended March 31, 2020 | — | — | — | (2,515 | ) | (56 | ) | (2,571 | ) | ||||||||||||||
Other comprehensive loss | — | — | (96,342 | ) | — | — | (96,342 | ) | |||||||||||||||
Stock-based compensation | — | 245 | — | — | — | 245 | |||||||||||||||||
Purchase of common stock | — | (152 | ) | — | (657 | ) | — | (809 | ) | ||||||||||||||
Dividends on preferred stock | — | — | — | (38 | ) | — | (38 | ) | |||||||||||||||
Dividends on common stock | — | — | — | (49,333 | ) | — | (49,333 | ) | |||||||||||||||
Disbursements related to noncontrolling interest | — | — | — | — | (61 | ) | (61 | ) | |||||||||||||||
Balance at March 31, 2020 | $ | 3,000 | $ | 152,826 | $ | 258,422 | $ | 920,032 | $ | 42 | $ | 1,334,322 |
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, 2019 | $ | 3,000 | $ | 152,724 | $ | 91,318 | $ | 937,097 | $ | 120 | $ | 1,184,259 | |||||||||||||||||||||||
Cumulative effect of change in accounting principle related to leases | — | — | — | 595 | — | 595 | |||||||||||||||||||||||||||||
Net income - nine months ended September 30, 2019 | — | — | — | 91,470 | 7 | 91,477 | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | 314,857 | — | — | 314,857 | |||||||||||||||||||||||||||||
Stock-based compensation | — | 324 | — | — | — | 324 | |||||||||||||||||||||||||||||
Purchase of common stock | — | (410) | — | (4,167) | — | (4,577) | |||||||||||||||||||||||||||||
Dividends on preferred stock | — | — | — | (112) | — | (112) | |||||||||||||||||||||||||||||
Dividends on common stock | — | — | — | (72,486) | — | (72,486) | |||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | 3,000 | $ | 152,638 | $ | 406,175 | $ | 952,397 | $ | 127 | $ | 1,514,337 | |||||||||||||||||||||||
Balance at January 1, 2020 | $ | 3,000 | $ | 152,733 | $ | 354,764 | $ | 975,260 | $ | 159 | $ | 1,485,916 | |||||||||||||||||||||||
Cumulative effect of change in accounting principle related to current expected credit loss | — | — | — | (2,685) | — | (2,685) | |||||||||||||||||||||||||||||
Net income - nine months ended September 30, 2020 | — | — | — | 44,670 | (165) | 44,505 | |||||||||||||||||||||||||||||
Other comprehensive income | — | — | 174,323 | — | — | 174,323 | |||||||||||||||||||||||||||||
Stock-based compensation | — | 126 | — | — | — | 126 | |||||||||||||||||||||||||||||
Purchase of common stock | — | (1,797) | — | (8,203) | — | (10,000) | |||||||||||||||||||||||||||||
Dividends on preferred stock | — | — | — | (112) | — | (112) | |||||||||||||||||||||||||||||
Dividends on common stock | — | — | — | (73,850) | — | (73,850) | |||||||||||||||||||||||||||||
Receipt related to noncontrolling interest | — | — | — | — | 32 | 32 | |||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | 3,000 | $ | 151,062 | $ | 529,087 | $ | 935,080 | $ | 26 | $ | 1,618,255 |
Nine months ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Operating activities | |||||||||||
Net income | $ | 44,505 | $ | 91,477 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Interest credited to account balances | 126,343 | 119,250 | |||||||||
Charges for mortality, surrenders and administration | (98,882) | (94,277) | |||||||||
Net realized (gains) losses on investments | 19,512 | (10,311) | |||||||||
Change in fair value of derivatives | 2,804 | 2,239 | |||||||||
Increase in liabilities for life insurance and other future policy benefits | 60,304 | 49,307 | |||||||||
Deferral of acquisition costs | (25,462) | (31,908) | |||||||||
Amortization of deferred acquisition costs and value of insurance in force | 28,606 | 27,589 | |||||||||
Change in reinsurance recoverable | (4,096) | (994) | |||||||||
Provision for deferred income taxes | (10,838) | 6,051 | |||||||||
Other | 15,269 | (7,130) | |||||||||
Net cash provided by operating activities | 158,065 | 151,293 | |||||||||
Investing activities | |||||||||||
Sales, maturities or repayments: | |||||||||||
Fixed maturities - available for sale | 416,454 | 489,597 | |||||||||
Equity securities | 2,661 | 15,109 | |||||||||
Mortgage loans | 82,394 | 74,970 | |||||||||
Derivative instruments | 14,316 | 9,201 | |||||||||
Policy loans | 29,651 | 27,436 | |||||||||
Securities and indebtedness of related parties | 5,158 | 6,941 | |||||||||
Other long-term investments | 4,144 | 3,686 | |||||||||
Acquisitions: | |||||||||||
Fixed maturities - available for sale | (635,002) | (577,634) | |||||||||
Equity securities | (2,708) | (14,545) | |||||||||
Mortgage loans | (44,850) | (35,202) | |||||||||
Derivative instruments | (2,401) | (14,325) | |||||||||
Policy loans | (25,071) | (30,424) | |||||||||
Securities and indebtedness of related parties | (13,657) | (16,189) | |||||||||
Other long-term investments | (9,671) | (4,397) | |||||||||
Short-term investments, net change | (6,569) | (7,030) | |||||||||
Purchases and disposals of property and equipment, net | (8,135) | (11,886) | |||||||||
Net cash used in investing activities | (193,286) | (84,692) |
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
Operating activities | |||||||
Net income (loss) | $ | (2,571 | ) | $ | 34,044 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Interest credited to account balances | 40,980 | 38,531 | |||||
Charges for mortality, surrenders and administration | (33,127 | ) | (31,201 | ) | |||
Net realized (gains) losses on investments | 25,662 | (9,288 | ) | ||||
Change in fair value of derivatives | 1,567 | (29 | ) | ||||
Increase in liabilities for life insurance and other future policy benefits | 21,183 | 17,507 | |||||
Deferral of acquisition costs | (9,155 | ) | (11,739 | ) | |||
Amortization of deferred acquisition costs and value of insurance in force | 9,597 | 7,774 | |||||
Change in reinsurance recoverable | 688 | (805 | ) | ||||
Provision for deferred income taxes | (6,958 | ) | 1,822 | ||||
Other | (20,186 | ) | (1,923 | ) | |||
Net cash provided by operating activities | 27,680 | 44,693 | |||||
Investing activities | |||||||
Sales, maturities or repayments: | |||||||
Fixed maturities - available for sale | 120,845 | 128,274 | |||||
Equity securities | 699 | — | |||||
Mortgage loans | 35,295 | 24,603 | |||||
Derivative instruments | 9,451 | 2,121 | |||||
Policy loans | 9,913 | 9,095 | |||||
Securities and indebtedness of related parties | 841 | 1,133 | |||||
Other investments | 1,333 | 1,210 | |||||
Acquisitions: | |||||||
Fixed maturities - available for sale | (203,333 | ) | (128,578 | ) | |||
Equity securities | (2,149 | ) | (11,069 | ) | |||
Mortgage loans | (15,750 | ) | (5,650 | ) | |||
Derivative instruments | (5,804 | ) | (4,432 | ) | |||
Policy loans | (10,551 | ) | (10,959 | ) | |||
Securities and indebtedness of related parties | (3,990 | ) | (4,710 | ) | |||
Other long-term investments | (6,100 | ) | (975 | ) | |||
Short-term investments, net change | (17,715 | ) | 4,198 | ||||
Purchases and disposals of property and equipment, net | (1,763 | ) | (4,049 | ) | |||
Net cash provided by (used in) investing activities | (88,778 | ) | 212 |
Nine months ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Financing activities | |||||||||||
Contract holder account deposits | $ | 545,238 | $ | 438,573 | |||||||
Contract holder account withdrawals | (428,170) | (449,211) | |||||||||
Dividends paid | (73,962) | (72,598) | |||||||||
Proceeds from issuance of short-term debt | 10,000 | 20,000 | |||||||||
Repayments of short-term debt | (10,000) | (4,000) | |||||||||
Issuance or repurchase of common stock, net | (10,163) | (5,393) | |||||||||
Other financing activities | 31 | 0 | |||||||||
Net cash provided by (used in) financing activities | 32,974 | (72,629) | |||||||||
Decrease in cash and cash equivalents | (2,247) | (6,028) | |||||||||
Cash and cash equivalents at beginning of period | 17,277 | 19,035 | |||||||||
Cash and cash equivalents at end of period | $ | 15,030 | $ | 13,007 | |||||||
Supplemental disclosures of cash flow information | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | (3,650) | $ | (3,641) | |||||||
Income taxes | (5,556) | (30) | |||||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
Financing activities | |||||||
Contract holder account deposits | $ | 271,542 | $ | 135,844 | |||
Contract holder account withdrawals | (170,003 | ) | (143,456 | ) | |||
Dividends paid | (49,371 | ) | (48,850 | ) | |||
Proceeds from issuance of short-term debt | 10,000 | 4,000 | |||||
Issuance or repurchase of common stock, net | (762 | ) | (5,421 | ) | |||
Other financing activities | (61 | ) | — | ||||
Net cash provided by (used in) financing activities | 61,345 | (57,883 | ) | ||||
Increase (decrease) in cash and cash equivalents | 247 | (12,978 | ) | ||||
Cash and cash equivalents at beginning of period | 17,277 | 19,035 | |||||
Cash and cash equivalents at end of period | $ | 17,524 | $ | 6,057 | |||
Supplemental disclosures of cash flow information | |||||||
Cash (paid) received during the period for: | |||||||
Interest | $ | (1,213 | ) | $ | (1,213 | ) | |
Income taxes | (1,915 | ) | — |
Description | Date of adoption | Effect on our consolidated financial statements or other significant matters | ||||||
Standards adopted: | ||||||||
Leases In February 2016, the FASB issued | January 1, 2019 | Upon adoption using the modified retrospective approach, a cumulative effect adjustment of $0.6 million was recorded to retained earnings, representing the elimination of a deferred gain on a sale-leaseback transaction, and both other assets and other liabilities increased by $7.2 million. We elected the practical expedients provided for under the guidance but did not use hindsight in determining lease term. We have no finance leases and have elected to treat leases with terms of twelve months or less as short-term leases. |
Description | Date of adoption | Effect on our consolidated financial statements or other significant matters | ||||||
Standards adopted: | ||||||||
Financial instruments - credit impairment In June 2016, the FASB issued guidance amending the accounting for the credit impairment of certain financial instruments. Under the new guidance, credit losses are estimated using an expected loss model under which an allowance for credit losses is established and reflected as a charge to earnings. The allowance is based on the probability of loss over the life of the instrument, considering historical, current and forecast information. The new guidance differs significantly from the incurred loss model used historically, and results in the earlier recognition of credit losses. | January 1, 2020 | Upon adoption using the modified retrospective approach, a cumulative effect adjustment of $2.7 million after offsets was recorded to retained earnings as of the first reporting period in which the new guidance was effective. The cumulative effect adjustment arose from the establishment of an allowance for credit losses on our mortgage loan investments totaling $3.1 million and reinsurance recoverable totaling $0.9 million, before offsets. See the discussion that follows for further information. Application of this guidance resulted in | ||||||
Standards not yet adopted: | ||||||||
Targeted improvements: long-duration contracts In August 2018, the FASB issued guidance that will change the accounting for long-duration insurance contracts. The new guidance impacts several facets of the accounting for such contracts including the accounting for future policy benefits associated with traditional non-participating and limited payment insurance contracts as well as for guaranteed minimum benefits and the amortization model used for deferred acquisition costs. Disclosures as well as presentation of financial results will also change under the new guidance. | During the third quarter 2020, the FASB extended the date of adoption one year to January 1, 2023 | We are currently evaluating the impact of this guidance on our consolidated financial statements but expect the impact to the timing of profit emergence for the impacted insurance contracts to be significant. Adoption of certain portions of the guidance may be applied on a modified retrospective basis and others on a full retrospective basis. |
Allowance on Reinsurance Recoverables | |||||||||||
Three months ended September 30, 2020 | Nine months ended September 30, 2020 | ||||||||||
(Dollars in thousands) | |||||||||||
Beginning balance of the allowance for credit losses | $ | 857 | $ | 868 | |||||||
Change in allowance for credit losses | 2 | (9) | |||||||||
Ending balance of the allowance for credit losses | $ | 859 | $ | 859 |
Allowance on Reinsurance Recoverables | |||
Three months ended March 31, 2020 | |||
(Dollars in thousands) | |||
Beginning balance of the allowance for credit losses | $ | 868 | |
Change in allowance for credit losses | 7 | ||
Ending balance of the allowance for credit losses | $ | 875 |
Available-For-Sale Fixed Maturity Securities by Investment Category | |||||||||||||||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains (1) | Gross Unrealized Losses (1) | Allowance for Credit Losses | Fair Value | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||||||||||
Corporate | $ | 3,557,835 | $ | 602,632 | $ | (14,971) | $ | (11,497) | $ | 4,133,999 | |||||||||||||||||||||||||
Residential mortgage-backed | 661,906 | 64,389 | (1,183) | 0 | 725,112 | ||||||||||||||||||||||||||||||
Commercial mortgage-backed | 996,794 | 153,295 | (658) | 0 | 1,149,431 | ||||||||||||||||||||||||||||||
Other asset-backed | 740,677 | 22,502 | (8,590) | (598) | 753,991 | ||||||||||||||||||||||||||||||
United States Government and agencies | 35,086 | 2,962 | (453) | 0 | 37,595 | ||||||||||||||||||||||||||||||
States and political subdivisions | 1,264,534 | 181,171 | (1,356) | 0 | 1,444,349 | ||||||||||||||||||||||||||||||
Total fixed maturities | $ | 7,256,832 | $ | 1,026,951 | $ | (27,211) | $ | (12,095) | $ | 8,244,477 | |||||||||||||||||||||||||
Available-For-Sale Fixed Maturity Securities by Investment Category | ||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains (1) | Gross Unrealized Losses (1) | Allowance for Credit Losses | Fair Value | Amortized Cost | Gross Unrealized Gains (1) | Gross Unrealized Losses (1) | Fair Value | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities: | Fixed maturities: | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate | $ | 3,460,539 | $ | 312,121 | $ | (103,191 | ) | $ | (12,146 | ) | $ | 3,657,323 | Corporate | $ | 3,376,432 | $ | 418,049 | $ | (15,531) | $ | 3,778,950 | |||||||||||||||||||||||||||
Residential mortgage-backed | 624,574 | 44,124 | (14,931 | ) | — | 653,767 | Residential mortgage-backed | 626,663 | 47,654 | (1,929) | 672,388 | |||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 977,147 | 167,839 | (3,344 | ) | — | 1,141,642 | Commercial mortgage-backed | 969,453 | 77,433 | (1,413) | 1,045,473 | |||||||||||||||||||||||||||||||||||||
Other asset-backed | 742,954 | 4,191 | (48,205 | ) | — | 698,940 | Other asset-backed | 697,390 | 19,745 | (2,614) | 714,521 | |||||||||||||||||||||||||||||||||||||
United States Government and agencies | 10,829 | 3,375 | — | — | 14,204 | United States Government and agencies | 12,417 | 1,711 | (5) | 14,123 | ||||||||||||||||||||||||||||||||||||||
States and political subdivisions | 1,299,222 | 152,500 | (433 | ) | — | 1,451,289 | States and political subdivisions | 1,332,914 | 145,125 | (866) | 1,477,173 | |||||||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 7,115,265 | $ | 684,150 | $ | (170,104 | ) | $ | (12,146 | ) | $ | 7,617,165 | Total fixed maturities | $ | 7,015,269 | $ | 709,717 | $ | (22,358) | $ | 7,702,628 |
December 31, 2019 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains (1) | Gross Unrealized Losses (1) | Fair Value | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Fixed maturities: | |||||||||||||||
Corporate | $ | 3,376,432 | $ | 418,049 | $ | (15,531 | ) | $ | 3,778,950 | ||||||
Residential mortgage-backed | 626,663 | 47,654 | (1,929 | ) | 672,388 | ||||||||||
Commercial mortgage-backed | 969,453 | 77,433 | (1,413 | ) | 1,045,473 | ||||||||||
Other asset-backed | 697,390 | 19,745 | (2,614 | ) | 714,521 | ||||||||||
United States Government and agencies | 12,417 | 1,711 | (5 | ) | 14,123 | ||||||||||
States and political subdivisions | 1,332,914 | 145,125 | (866 | ) | 1,477,173 | ||||||||||
Total fixed maturities | $ | 7,015,269 | $ | 709,717 | $ | (22,358 | ) | $ | 7,702,628 |
Available-For-Sale Fixed Maturities by Maturity Date | |||||||||||
September 30, 2020 | |||||||||||
Amortized Cost | Fair Value | ||||||||||
(Dollars in thousands) | |||||||||||
Due in one year or less | $ | 111,399 | $ | 113,532 | |||||||
Due after one year through five years | 596,286 | 632,356 | |||||||||
Due after five years through ten years | 755,949 | 853,418 | |||||||||
Due after ten years | 3,393,821 | 4,016,637 | |||||||||
4,857,455 | 5,615,943 | ||||||||||
Mortgage-backed and other asset-backed | 2,399,377 | 2,628,534 | |||||||||
Total fixed maturities | $ | 7,256,832 | $ | 8,244,477 |
Available-For-Sale Fixed Maturities by Maturity Date | |||||||
March 31, 2020 | |||||||
Amortized Cost | Fair Value | ||||||
(Dollars in thousands) | |||||||
Due in one year or less | $ | 83,447 | $ | 83,726 | |||
Due after one year through five years | 571,783 | 572,846 | |||||
Due after five years through ten years | 786,392 | 817,847 | |||||
Due after ten years | 3,328,968 | 3,648,397 | |||||
4,770,590 | 5,122,816 | ||||||
Mortgage-backed and other asset-backed | 2,344,675 | 2,494,349 | |||||
Total fixed maturities | $ | 7,115,265 | $ | 7,617,165 |
Net Unrealized Gains on Investments in Accumulated Other Comprehensive Income | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
(Dollars in thousands) | |||||||||||
Net unrealized appreciation on: | |||||||||||
Fixed maturities - available for sale | $ | 999,740 | $ | 687,359 | |||||||
Adjustments for assumed changes in amortization pattern of: | |||||||||||
Deferred acquisition costs | (288,239) | (200,227) | |||||||||
Value of insurance in force acquired | (11,102) | (12,498) | |||||||||
Unearned revenue reserve | 27,496 | 18,025 | |||||||||
Adjustments for assumed changes in policyholder liabilities | (46,160) | (30,642) | |||||||||
Provision for deferred income taxes | (143,164) | (97,023) | |||||||||
Net unrealized investment gains | $ | 538,571 | $ | 364,994 |
Net Unrealized Gains on Investments in Accumulated Other Comprehensive Income | |||||||
March 31, 2020 | December 31, 2019 | ||||||
(Dollars in thousands) | |||||||
Net unrealized appreciation on: | |||||||
Fixed maturities - available for sale | $ | 514,046 | $ | 687,359 | |||
Adjustments for assumed changes in amortization pattern of: | |||||||
Deferred acquisition costs | (152,526 | ) | (200,227 | ) | |||
Value of insurance in force acquired | (11,747 | ) | (12,498 | ) | |||
Unearned revenue reserve | 17,362 | 18,025 | |||||
Adjustments for assumed changes in policyholder liabilities | (27,382 | ) | (30,642 | ) | |||
Provision for deferred income taxes | (71,348 | ) | (97,023 | ) | |||
Net unrealized investment gains | $ | 268,405 | $ | 364,994 |
Fixed Maturity Securities with Unrealized Losses by Length of Time without an Allowance for Credit Losses | |||||||||||||||||||||||||||
March 31, 2020 | |||||||||||||||||||||||||||
Less than one year | One year or more | Total | |||||||||||||||||||||||||
Description of Securities | Fair Value | Unrealized Losses (1) | Fair Value | Unrealized Losses (1) | Fair Value | Unrealized Losses (1) | Percent of Total | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||
Corporate | $ | 797,924 | $ | (83,568 | ) | $ | 39,182 | $ | (19,623 | ) | $ | 837,106 | $ | (103,191 | ) | 60.7 | % | ||||||||||
Residential mortgage-backed | 283,851 | (13,927 | ) | 4,956 | (1,004 | ) | 288,807 | (14,931 | ) | 8.8 | |||||||||||||||||
Commercial mortgage-backed | 27,094 | (3,344 | ) | — | — | 27,094 | (3,344 | ) | 2.0 | ||||||||||||||||||
Other asset-backed | 494,386 | (35,401 | ) | 81,185 | (12,804 | ) | 575,571 | (48,205 | ) | 28.3 | |||||||||||||||||
States and political subdivisions | 8,389 | (56 | ) | 2,602 | (377 | ) | 10,991 | (433 | ) | 0.2 | |||||||||||||||||
Total fixed maturities | $ | 1,611,644 | $ | (136,296 | ) | $ | 127,925 | $ | (33,808 | ) | $ | 1,739,569 | $ | (170,104 | ) | 100.0 | % |
Fixed Maturity Securities with Unrealized Losses by Length of Time without an Allowance for Credit Losses | ||||||||||||||||||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Less than one year | One year or more | Total | ||||||||||||||||||||||||||||||||||||||||||
Description of Securities | Fair Value | Unrealized Losses (1) | Fair Value | Unrealized Losses (1) | Fair Value | Unrealized Losses (1) | Percent of Total | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||||||||||||||||||||||
Corporate | $ | 144,426 | $ | (8,045) | $ | 52,160 | $ | (6,926) | $ | 196,586 | $ | (14,971) | 55.0 | % | ||||||||||||||||||||||||||||||
Residential mortgage-backed | 52,098 | (301) | 15,449 | (882) | 67,547 | (1,183) | 4.3 | |||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 30,712 | (658) | 0 | 0 | 30,712 | (658) | 2.4 | |||||||||||||||||||||||||||||||||||||
Other asset-backed | 119,596 | (4,507) | 70,915 | (4,083) | 190,511 | (8,590) | 31.6 | |||||||||||||||||||||||||||||||||||||
United States Government and agencies | 24,894 | (453) | 0 | 0 | 24,894 | (453) | 1.7 | |||||||||||||||||||||||||||||||||||||
States and political subdivisions | 31,084 | (736) | 2,360 | (620) | 33,444 | (1,356) | 5.0 | |||||||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 402,810 | $ | (14,700) | $ | 140,884 | $ | (12,511) | $ | 543,694 | $ | (27,211) | 100.0 | % | ||||||||||||||||||||||||||||||
Fixed Maturity Securities with Unrealized Losses by Length of Time | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Less than one year | One year or more | Total | ||||||||||||||||||||||||||||||||||||||||||
Description of Securities | Fair Value | Unrealized Losses (1) | Fair Value | Unrealized Losses (1) | Fair Value | Unrealized Losses (1) | Percent of Total | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||||||||||||||||||||||
Corporate | $ | 114,520 | $ | (2,476) | $ | 84,719 | $ | (13,055) | $ | 199,239 | $ | (15,531) | 69.5 | % | ||||||||||||||||||||||||||||||
Residential mortgage-backed | 68,743 | (1,435) | 6,941 | (494) | 75,684 | (1,929) | 8.6 | |||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed | 46,537 | (1,266) | 2,610 | (147) | 49,147 | (1,413) | 6.3 | |||||||||||||||||||||||||||||||||||||
Other asset-backed | 112,462 | (519) | 102,439 | (2,095) | 214,901 | (2,614) | 11.7 | |||||||||||||||||||||||||||||||||||||
United States Government and agencies | 0 | 0 | 2,494 | (5) | 2,494 | (5) | 0 | |||||||||||||||||||||||||||||||||||||
States and political subdivisions | 19,367 | (379) | 5,936 | (487) | 25,303 | (866) | 3.9 | |||||||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 361,629 | $ | (6,075) | $ | 205,139 | $ | (16,283) | $ | 566,768 | $ | (22,358) | 100.0 | % |
Fixed Maturity Securities with Unrealized Losses by Length of Time | |||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||
Less than one year | One year or more | Total | |||||||||||||||||||||||||
Description of Securities | Fair Value | Unrealized Losses (1) | Fair Value | Unrealized Losses (1) | Fair Value | Unrealized Losses (1) | Percent of Total | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||||||
Corporate | $ | 114,520 | $ | (2,476 | ) | $ | 84,719 | $ | (13,055 | ) | $ | 199,239 | $ | (15,531 | ) | 69.5 | % | ||||||||||
Residential mortgage-backed | 68,743 | (1,435 | ) | 6,941 | (494 | ) | 75,684 | (1,929 | ) | 8.6 | |||||||||||||||||
Commercial mortgage-backed | 46,537 | (1,266 | ) | 2,610 | (147 | ) | 49,147 | (1,413 | ) | 6.3 | |||||||||||||||||
Other asset-backed | 112,462 | (519 | ) | 102,439 | (2,095 | ) | 214,901 | (2,614 | ) | 11.7 | |||||||||||||||||
United States Government and agencies | — | — | 2,494 | (5 | ) | 2,494 | (5 | ) | — | ||||||||||||||||||
States and political subdivisions | 19,367 | (379 | ) | 5,936 | (487 | ) | 25,303 | (866 | ) | 3.9 | |||||||||||||||||
Total fixed maturities | $ | 361,629 | $ | (6,075 | ) | $ | 205,139 | $ | (16,283 | ) | $ | 566,768 | $ | (22,358 | ) | 100.0 | % |
Available-For-Sale Fixed Maturities Allowance for Credit Losses | ||||||||||||||||||||||||||||||||
Three months ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Corporate | Other ABS | Total | ||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 12,902 | $ | 317 | $ | 13,219 | ||||||||||||||||||||||||||
Additions for credit losses not previously recorded | 0 | 281 | 281 | |||||||||||||||||||||||||||||
Net decrease to previously recorded allowance | (1,405) | 0 | (1,405) | |||||||||||||||||||||||||||||
Ending balance | $ | 11,497 | $ | 598 | $ | 12,095 |
Available-For-Sale Fixed Maturities Allowance for Credit Losses | |||
Three months ended March 31, 2020 | |||
(Dollars in thousands) | |||
Corporate securities: | |||
Beginning balance of the allowance for credit losses | $ | — | |
Additions to the allowance for credit losses on securities for which credit losses were not previously recorded | 12,146 | ||
Ending balance of the allowance for credit losses | $ | 12,146 |
Nine months ended September 30, 2020 | ||||||||||||||||||||||||||||||||
Corporate | Other ABS | Total | ||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||
Additions for credit losses not previously recorded | 13,118 | 598 | 13,716 | |||||||||||||||||||||||||||||
Net decrease to previously recorded allowance | (1,621) | 0 | (1,621) | |||||||||||||||||||||||||||||
Ending balance | $ | 11,497 | $ | 598 | $ | 12,095 |
Mortgage Loans by Collateral Type | ||||||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||
Collateral Type | Amortized Cost | Percent of Total | Amortized Cost | Percent of Total | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Office | $ | 378,177 | 38.8 | % | $ | 417,746 | 41.3 | % | ||||||||||||||||||
Retail | 325,305 | 33.4 | 345,870 | 34.2 | ||||||||||||||||||||||
Industrial | 233,410 | 24.0 | 235,274 | 23.2 | ||||||||||||||||||||||
Apartment | 24,731 | 2.5 | — | — | ||||||||||||||||||||||
Other | 12,511 | 1.3 | 12,788 | 1.3 | ||||||||||||||||||||||
Total | $ | 974,134 | 100.0 | % | $ | 1,011,678 | 100.0 | % |
Mortgage Loans by Collateral Type | ||||||||||||||
March 31, 2020 | December 31, 2019 | |||||||||||||
Collateral Type | Amortized Cost | Percent of Total | Amortized Cost | Percent of Total | ||||||||||
(Dollars in thousands) | ||||||||||||||
Office | $ | 407,723 | 41.1 | % | $ | 417,746 | 41.3 | % | ||||||
Retail | 333,975 | 33.7 | 345,870 | 34.2 | ||||||||||
Industrial | 232,748 | 23.4 | 235,274 | 23.2 | ||||||||||
Apartment | 9,005 | 0.9 | — | — | ||||||||||
Other | 8,682 | 0.9 | 12,788 | 1.3 | ||||||||||
Total | $ | 992,133 | 100.0 | % | $ | 1,011,678 | 100.0 | % |
Mortgage Loans by Geographic Location within the United States | ||||||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||
Region of the United States | Amortized Cost | Percent of Total | Amortized Cost | Percent of Total | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
South Atlantic | $ | 261,291 | 26.8 | % | $ | 288,299 | 28.5 | % | ||||||||||||||||||
Pacific | 165,281 | 17.0 | 164,996 | 16.3 | ||||||||||||||||||||||
East North Central | 137,241 | 14.1 | 117,053 | 11.6 | ||||||||||||||||||||||
Mountain | 104,658 | 10.7 | 96,857 | 9.6 | ||||||||||||||||||||||
West North Central | 98,505 | 10.1 | 108,942 | 10.8 | ||||||||||||||||||||||
East South Central | 78,983 | 8.1 | 81,275 | 8.0 | ||||||||||||||||||||||
West South Central | 65,374 | 6.7 | 76,650 | 7.6 | ||||||||||||||||||||||
Middle Atlantic | 44,625 | 4.6 | 45,687 | 4.5 | ||||||||||||||||||||||
New England | 18,176 | 1.9 | 31,919 | 3.1 | ||||||||||||||||||||||
Total | $ | 974,134 | 100.0 | % | $ | 1,011,678 | 100.0 | % |
Mortgage Loans by Geographic Location within the United States | ||||||||||||||
March 31, 2020 | December 31, 2019 | |||||||||||||
Region of the United States | Amortized Cost | Percent of Total | Amortized Cost | Percent of Total | ||||||||||
(Dollars in thousands) | ||||||||||||||
South Atlantic | $ | 275,752 | 27.8 | % | $ | 288,299 | 28.5 | % | ||||||
Pacific | 168,456 | 17.0 | 164,996 | 16.3 | ||||||||||
East North Central | 126,112 | 12.7 | 117,053 | 11.6 | ||||||||||
West North Central | 101,559 | 10.2 | 108,942 | 10.8 | ||||||||||
Mountain | 95,827 | 9.7 | 96,857 | 9.6 | ||||||||||
East South Central | 80,523 | 8.1 | 81,275 | 8.0 | ||||||||||
West South Central | 67,059 | 6.8 | 76,650 | 7.6 | ||||||||||
Middle Atlantic | 45,337 | 4.6 | 45,687 | 4.5 | ||||||||||
New England | 31,508 | 3.1 | 31,919 | 3.1 | ||||||||||
Total | $ | 992,133 | 100.0 | % | $ | 1,011,678 | 100.0 | % |
Mortgage Loans by Loan-to-Value Ratio | ||||||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||
Loan-to-Value Ratio | Amortized Cost | Percent of Total | Amortized Cost | Percent of Total | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
0% - 50% | $ | 442,913 | 45.5 | % | $ | 412,973 | 40.8 | % | ||||||||||||||||||
51% - 60% | 309,726 | 31.8 | 310,869 | 30.7 | ||||||||||||||||||||||
61% - 70% | 204,359 | 21.0 | 256,280 | 25.4 | ||||||||||||||||||||||
71% - 80% | 17,136 | 1.7 | 31,556 | 3.1 | ||||||||||||||||||||||
Total | $ | 974,134 | 100.0 | % | $ | 1,011,678 | 100.0 | % |
Mortgage Loans by Loan-to-Value Ratio | ||||||||||||||
March 31, 2020 | December 31, 2019 | |||||||||||||
Loan-to-Value Ratio | Amortized Cost | Percent of Total | Amortized Cost | Percent of Total | ||||||||||
(Dollars in thousands) | ||||||||||||||
0% - 50% | $ | 430,798 | 43.4 | % | $ | 412,973 | 40.8 | % | ||||||
51% - 60% | 322,097 | 32.5 | 310,869 | 30.7 | ||||||||||
61% - 70% | 209,801 | 21.1 | 256,280 | 25.4 | ||||||||||
71% - 80% | 29,437 | 3.0 | 31,556 | 3.1 | ||||||||||
Total | $ | 992,133 | 100.0 | % | $ | 1,011,678 | 100.0 | % |
Mortgage Loans by Internal Rating and Year of Origination | ||||||||||||||||||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | 2015 & prior | Total | ||||||||||||||||||||||||||||||||||||||
Internal Rating | Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
A | $ | 44,643 | $ | 56,567 | $ | 119,248 | $ | 191,141 | $ | 136,503 | $ | 386,219 | $ | 934,321 | ||||||||||||||||||||||||||||||
B | — | 11,842 | 1,900 | 3,497 | — | 5,336 | 22,575 | |||||||||||||||||||||||||||||||||||||
C | — | — | 4,495 | — | 3,975 | 4,535 | 13,005 | |||||||||||||||||||||||||||||||||||||
W | — | — | — | — | — | 4,233 | 4,233 | |||||||||||||||||||||||||||||||||||||
Total | $ | 44,643 | $ | 68,409 | $ | 125,643 | $ | 194,638 | $ | 140,478 | $ | 400,323 | $ | 974,134 |
Mortgage Loans by Internal Rating and Year of Origination | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | 2015 & prior | Total | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 & prior | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Internal Rating | Amortized Cost | Internal Rating | Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A | $ | 15,750 | $ | 69,026 | $ | 127,394 | $ | 198,421 | $ | 142,996 | $ | 407,362 | $ | 960,949 | A | $ | 69,319 | $ | 128,334 | $ | 200,283 | $ | 144,311 | $ | 119,724 | $ | 316,079 | $ | 978,050 | |||||||||||||||||||||||||||||||||||||||||||
B | — | — | — | — | — | 5,403 | 5,403 | B | — | — | — | — | — | 7,512 | 7,512 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C | — | — | — | — | — | 21,501 | 21,501 | C | — | — | — | — | — | 21,812 | 21,812 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
W | — | — | — | — | — | 4,280 | 4,280 | W | — | — | — | — | — | 4,304 | 4,304 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 15,750 | $ | 69,026 | $ | 127,394 | $ | 198,421 | $ | 142,996 | $ | 438,546 | $ | 992,133 | Total | $ | 69,319 | $ | 128,334 | $ | 200,283 | $ | 144,311 | $ | 119,724 | $ | 349,707 | $ | 1,011,678 |
December 31, 2019 | ||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 & prior | Total | ||||||||||||||||||||||
Internal Rating | Amortized Cost | |||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
A | $ | 69,319 | $ | 128,334 | $ | 200,283 | $ | 144,311 | $ | 119,724 | $ | 316,079 | $ | 978,050 | ||||||||||||||
B | — | — | — | — | — | 7,512 | 7,512 | |||||||||||||||||||||
C | — | — | — | — | — | 21,812 | 21,812 | |||||||||||||||||||||
W | — | — | — | — | — | 4,304 | 4,304 | |||||||||||||||||||||
Total | $ | 69,319 | $ | 128,334 | $ | 200,283 | $ | 144,311 | $ | 119,724 | $ | 349,707 | $ | 1,011,678 |
Allowance for Credit Losses on Mortgage Loans | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, 2020 | September 30, 2020 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Beginning balance | $ | 2,703 | $ | 3,164 | |||||||||||||
Current period provision for expected credit losses | (779) | (1,240) | |||||||||||||||
Ending balance | $ | 1,924 | $ | 1,924 |
Allowance for Credit Losses on Mortgage Loans | |||
Three months ended March 31, 2020 | |||
(Dollars in thousands) | |||
Beginning balance of the allowance for credit losses | $ | 3,164 | |
Current period provision for expected credit losses | 115 | ||
Ending balance of the allowance for credit losses | $ | 3,279 |
Realized Gains (Losses) - Recorded in Income | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Realized gains (losses) on investments | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||
Gross gains | $ | 237 | $ | 534 | $ | 431 | $ | 3,671 | |||||||||||||||
Gross losses | (11) | 0 | (1,730) | (304) | |||||||||||||||||||
Mortgage loans | 0 | 0 | 0 | 2,778 | |||||||||||||||||||
Other | (49) | 0 | (58) | (4) | |||||||||||||||||||
177 | 534 | (1,357) | 6,141 | ||||||||||||||||||||
Net gains (losses) recognized during the period on equity securities held at the end of the period | 1,814 | 165 | (7,099) | 5,047 | |||||||||||||||||||
Net gains (losses) recognized during the period on equity securities sold during the period | 0 | (3) | (201) | 42 | |||||||||||||||||||
Net gains (losses) recognized during the period on equity securities | 1,814 | 162 | (7,300) | 5,089 | |||||||||||||||||||
Net realized gains (losses) | 1,991 | 696 | (8,657) | 11,230 | |||||||||||||||||||
Credit losses recognized in earnings: | |||||||||||||||||||||||
Other-than-temporary impairment losses | 0 | (50) | 0 | (919) | |||||||||||||||||||
Allowance for credit losses on fixed maturity securities | 1,124 | 0 | (12,095) | 0 | |||||||||||||||||||
Allowance for credit losses on mortgage loans | 779 | 0 | 1,240 | 0 | |||||||||||||||||||
Net realized gains (losses) on investments recorded in income | $ | 3,894 | $ | 646 | $ | (19,512) | $ | 10,311 |
Realized Gains (Losses) - Recorded in Income | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Realized gains (losses) on investments | |||||||
Fixed maturities: | |||||||
Gross gains | $ | 12 | $ | 2,994 | |||
Gross losses | (159 | ) | — | ||||
Mortgage loans | — | 2,778 | |||||
Other | (9 | ) | (4 | ) | |||
(156 | ) | 5,768 | |||||
Net gains (losses) recognized during the period on equity securities held at the end of the period | (13,231 | ) | 4,419 | ||||
Net gains and (losses) recognized during the period on equity securities sold during the period | (14 | ) | (30 | ) | |||
Net gains (losses) recognized during the period on equity securities | (13,245 | ) | 4,389 | ||||
Net realized gains (losses) | (13,401 | ) | 10,157 | ||||
Credit losses recognized in earnings: | |||||||
Other-than-temporary impairment losses | — | (869 | ) | ||||
Fixed maturity allowance for credit losses | (12,146 | ) | — | ||||
Mortgage loan allowance for credit losses | (115 | ) | — | ||||
Net realized gains (losses) on investments recorded in income | $ | (25,662 | ) | $ | 9,288 |
VIE Investments by Category | |||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Carrying Value | Maximum Exposure to Loss | Carrying Value | Maximum Exposure to Loss | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
LIHTC investments | $ | 34,273 | $ | 35,200 | $ | 42,907 | $ | 43,834 | |||||||||||||||
Investment companies | 59,661 | 111,179 | 53,388 | 103,125 | |||||||||||||||||||
Real estate limited partnerships | 9,888 | 15,002 | 9,565 | 15,527 | |||||||||||||||||||
Other | 490 | 490 | 492 | 492 | |||||||||||||||||||
Total | $ | 104,312 | $ | 161,871 | $ | 106,352 | $ | 162,978 |
VIE Investments by Category | |||||||||||||||
March 31, 2020 | December 31, 2019 | ||||||||||||||
Carrying Value | Maximum Exposure to Loss | Carrying Value | Maximum Exposure to Loss | ||||||||||||
(Dollars in thousands) | |||||||||||||||
LIHTC investments | $ | 40,018 | $ | 40,945 | $ | 42,907 | $ | 43,834 | |||||||
Investment companies | 55,522 | 107,523 | 53,388 | 103,125 | |||||||||||
Real estate limited partnerships | 10,075 | 15,379 | 9,565 | 15,527 | |||||||||||
Other | 491 | 491 | 492 | 492 | |||||||||||
Total | $ | 106,106 | $ | 164,338 | $ | 106,352 | $ | 162,978 |
Derivatives Instruments by Type | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
(Dollars in thousands) | |||||||||||
Assets | |||||||||||
Freestanding derivatives: | |||||||||||
Call options (reported in other investments) | $ | 18,376 | $ | 31,469 | |||||||
Embedded derivatives: | |||||||||||
Modified coinsurance (reported in reinsurance recoverable) | 4,054 | 2,327 | |||||||||
Interest-only security (reported in fixed maturities) | 97 | 385 | |||||||||
Total assets | $ | 22,527 | $ | 34,181 | |||||||
Liabilities | |||||||||||
Embedded derivatives: | |||||||||||
Indexed products (reported in liability for future policy benefits) | $ | 95,079 | $ | 76,346 | |||||||
Modified coinsurance (reported in other liabilities) | 326 | 254 | |||||||||
Total liabilities | $ | 95,405 | $ | 76,600 |
Derivatives Instruments by Type | |||||||
March 31, 2020 | December 31, 2019 | ||||||
(Dollars in thousands) | |||||||
Assets | |||||||
Freestanding derivatives: | |||||||
Call options (reported in other investments) | $ | 5,661 | $ | 31,469 | |||
Embedded derivatives: | |||||||
Modified coinsurance (reported in reinsurance recoverable - assumed) | 1,507 | 2,327 | |||||
Modified coinsurance (reported in reinsurance recoverable - ceded) | 149 | — | |||||
Interest-only security (reported in fixed maturities) | 349 | 385 | |||||
Total assets | $ | 7,666 | $ | 34,181 | |||
Liabilities | |||||||
Embedded derivatives: | |||||||
Indexed products (reported in liability for future policy benefits) | $ | 61,071 | $ | 76,346 | |||
Modified coinsurance (reported in other liabilities) | 86 | 254 | |||||
Total liabilities | $ | 61,157 | $ | 76,600 |
Derivative Income (Loss) | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Freestanding derivatives: | |||||||||||||||||||||||
Call options | $ | 7,495 | $ | 1,590 | $ | (1,073) | $ | 14,092 | |||||||||||||||
Embedded derivatives: | |||||||||||||||||||||||
Modified coinsurance | 1,452 | 859 | 1,655 | 2,112 | |||||||||||||||||||
Interest-only security | 44 | (99) | 85 | 17 | |||||||||||||||||||
Indexed products | (9,890) | (5,831) | (3,471) | (18,460) | |||||||||||||||||||
Total loss from derivatives | $ | (899) | $ | (3,481) | $ | (2,804) | $ | (2,239) |
Derivative Income (Loss) | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Freestanding derivatives: | |||||||
Call options | $ | (22,163 | ) | $ | 8,685 | ||
Embedded derivatives: | |||||||
Modified coinsurance | (504 | ) | 633 | ||||
Interest-only security | 24 | 47 | |||||
Indexed products | 21,076 | (9,336 | ) | ||||
Total income (loss) from derivatives | $ | (1,567 | ) | $ | 29 |
Valuation of our Financial Instruments Measured on a Recurring Basis by Hierarchy Levels | |||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Fair Value | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||
Corporate securities | $ | 0 | $ | 4,129,701 | $ | 4,298 | $ | 4,133,999 | |||||||||||||||
Residential mortgage-backed securities | 0 | 717,719 | 7,393 | 725,112 | |||||||||||||||||||
Commercial mortgage-backed securities | 0 | 1,141,289 | 8,142 | 1,149,431 | |||||||||||||||||||
Other asset-backed securities | 0 | 727,998 | 25,993 | 753,991 | |||||||||||||||||||
United States Government and agencies | 27,188 | 10,407 | 0 | 37,595 | |||||||||||||||||||
States and political subdivisions | 0 | 1,444,349 | 0 | 1,444,349 | |||||||||||||||||||
Total fixed maturities | 27,188 | 8,171,463 | 45,826 | 8,244,477 | |||||||||||||||||||
Non-redeemable preferred stocks | 0 | 65,261 | 6,816 | 72,077 | |||||||||||||||||||
Common stocks (1) | 12,084 | 0 | 0 | 12,084 | |||||||||||||||||||
Other investments | 0 | 18,376 | 0 | 18,376 | |||||||||||||||||||
Cash, cash equivalents and short-term investments | 33,464 | 0 | 0 | 33,464 | |||||||||||||||||||
Reinsurance recoverable | 0 | 4,054 | 0 | 4,054 | |||||||||||||||||||
Assets held in separate accounts | 616,381 | 0 | 0 | 616,381 | |||||||||||||||||||
Total assets | $ | 689,117 | $ | 8,259,154 | $ | 52,642 | $ | 9,000,913 | |||||||||||||||
Liabilities | |||||||||||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | 0 | $ | 0 | $ | 95,079 | $ | 95,079 | |||||||||||||||
Other liabilities | 0 | 326 | 0 | 326 | |||||||||||||||||||
Total liabilities | $ | 0 | $ | 326 | $ | 95,079 | $ | 95,405 |
Valuation of our Financial Instruments Measured on a Recurring Basis by Hierarchy Levels | |||||||||||||||
March 31, 2020 | |||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Fair Value | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Assets | |||||||||||||||
Fixed maturities: | |||||||||||||||
Corporate securities | $ | — | $ | 3,647,867 | $ | 9,456 | $ | 3,657,323 | |||||||
Residential mortgage-backed securities | — | 653,767 | — | 653,767 | |||||||||||
Commercial mortgage-backed securities | — | 1,134,437 | 7,205 | 1,141,642 | |||||||||||
Other asset-backed securities | — | 694,208 | 4,732 | 698,940 | |||||||||||
United States Government and agencies | 3,344 | 10,860 | — | 14,204 | |||||||||||
States and political subdivisions | — | 1,451,289 | — | 1,451,289 | |||||||||||
Total fixed maturities | 3,344 | 7,592,428 | 21,393 | 7,617,165 | |||||||||||
Non-redeemable preferred stocks | — | 61,011 | 6,858 | 67,869 | |||||||||||
Common stocks (1) | 11,740 | — | — | 11,740 | |||||||||||
Other investments | — | 5,661 | — | 5,661 | |||||||||||
Cash, cash equivalents and short-term investments | 47,104 | — | — | 47,104 | |||||||||||
Reinsurance recoverable | — | 1,655 | — | 1,655 | |||||||||||
Assets held in separate accounts | 525,582 | — | — | 525,582 | |||||||||||
Total assets | $ | 587,770 | $ | 7,660,755 | $ | 28,251 | $ | 8,276,776 | |||||||
Liabilities | |||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | — | $ | — | $ | 61,071 | $ | 61,071 | |||||||
Other liabilities | — | 86 | — | 86 | |||||||||||
Total liabilities | $ | — | $ | 86 | $ | 61,071 | $ | 61,157 |
Valuation of our Financial Instruments Measured on a Recurring Basis by Hierarchy Levels | |||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Fair Value | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||
Corporate securities | $ | 0 | $ | 3,772,362 | $ | 6,588 | $ | 3,778,950 | |||||||||||||||
Residential mortgage-backed securities | 0 | 672,388 | 0 | 672,388 | |||||||||||||||||||
Commercial mortgage-backed securities | 0 | 1,032,693 | 12,780 | 1,045,473 | |||||||||||||||||||
Other asset-backed securities | 0 | 704,766 | 9,755 | 714,521 | |||||||||||||||||||
United States Government and agencies | 4,821 | 9,302 | 0 | 14,123 | |||||||||||||||||||
States and political subdivisions | 0 | 1,477,173 | 0 | 1,477,173 | |||||||||||||||||||
Total fixed maturities | 4,821 | 7,668,684 | 29,123 | 7,702,628 | |||||||||||||||||||
Non-redeemable preferred stocks | 0 | 67,873 | 6,927 | 74,800 | |||||||||||||||||||
Common stocks (1) | 17,027 | 0 | 0 | 17,027 | |||||||||||||||||||
Other investments | 0 | 31,469 | 0 | 31,469 | |||||||||||||||||||
Cash, cash equivalents and short-term investments | 29,142 | 0 | 0 | 29,142 | |||||||||||||||||||
Reinsurance recoverable | 0 | 2,327 | 0 | 2,327 | |||||||||||||||||||
Assets held in separate accounts | 645,881 | 0 | 0 | 645,881 | |||||||||||||||||||
Total assets | $ | 696,871 | $ | 7,770,353 | $ | 36,050 | $ | 8,503,274 | |||||||||||||||
Liabilities | |||||||||||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | 0 | $ | 0 | $ | 76,346 | $ | 76,346 | |||||||||||||||
Other liabilities | 0 | 254 | 0 | 254 | |||||||||||||||||||
Total liabilities | $ | 0 | $ | 254 | $ | 76,346 | $ | 76,600 |
Valuation of our Financial Instruments Measured on a Recurring Basis by Hierarchy Levels | |||||||||||||||
December 31, 2019 | |||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Fair Value | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Assets | |||||||||||||||
Fixed maturities: | |||||||||||||||
Corporate securities | $ | — | $ | 3,772,362 | $ | 6,588 | $ | 3,778,950 | |||||||
Residential mortgage-backed securities | — | 672,388 | — | 672,388 | |||||||||||
Commercial mortgage-backed securities | — | 1,032,693 | 12,780 | 1,045,473 | |||||||||||
Other asset-backed securities | — | 704,766 | 9,755 | 714,521 | |||||||||||
United States Government and agencies | 4,821 | 9,302 | — | 14,123 | |||||||||||
States and political subdivisions | — | 1,477,173 | — | 1,477,173 | |||||||||||
Total fixed maturities | 4,821 | 7,668,684 | 29,123 | 7,702,628 | |||||||||||
Non-redeemable preferred stocks | — | 67,873 | 6,927 | 74,800 | |||||||||||
Common stocks (1) | 17,027 | — | — | 17,027 | |||||||||||
Other investments | — | 31,469 | — | 31,469 | |||||||||||
Cash, cash equivalents and short-term investments | 29,142 | — | — | 29,142 | |||||||||||
Reinsurance recoverable | — | 2,327 | — | 2,327 | |||||||||||
Assets held in separate accounts | 645,881 | — | — | 645,881 | |||||||||||
Total assets | $ | 696,871 | $ | 7,770,353 | $ | 36,050 | $ | 8,503,274 | |||||||
Liabilities | |||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | — | $ | — | $ | 76,346 | $ | 76,346 | |||||||
Other liabilities | — | 254 | — | 254 | |||||||||||
Total liabilities | $ | — | $ | 254 | $ | 76,346 | $ | 76,600 |
Level 3 Assets by Valuation Source - Recurring Basis | |||||||||||||||||
September 30, 2020 | |||||||||||||||||
Third-party vendors | Priced internally | Fair Value | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Corporate securities | $ | 0 | $ | 4,298 | $ | 4,298 | |||||||||||
Residential mortgage-backed securities | 7,393 | 0 | 7,393 | ||||||||||||||
Commercial mortgage-backed securities | 8,142 | 0 | 8,142 | ||||||||||||||
Other asset-backed securities | 25,993 | 0 | 25,993 | ||||||||||||||
Non-redeemable preferred stocks | 0 | 6,816 | 6,816 | ||||||||||||||
Total assets | $ | 41,528 | $ | 11,114 | $ | 52,642 | |||||||||||
Percent of total | 78.9 | % | 21.1 | % | 100.0 | % |
Level 3 Assets by Valuation Source - Recurring Basis | |||||||||||||||||
December 31, 2019 | |||||||||||||||||
Third-party vendors | Priced internally | Fair Value | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Corporate securities | $ | 0 | $ | 6,588 | $ | 6,588 | |||||||||||
Commercial mortgage-backed securities | 12,780 | 0 | 12,780 | ||||||||||||||
Other asset-backed securities | 8,000 | 1,755 | 9,755 | ||||||||||||||
Non-redeemable preferred stocks | 0 | 6,927 | 6,927 | ||||||||||||||
Total assets | $ | 20,780 | $ | 15,270 | $ | 36,050 | |||||||||||
Percent of total | 57.6 | % | 42.4 | % | 100.0 | % |
Quantitative Information about Level 3 Fair Value Measurements - Recurring Basis | |||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||
Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Corporate securities | $ | 4,298 | Discounted cash flow | Credit spread | 7.50% - 16.49% (12.32%) | ||||||||||||||||||
Commercial mortgage-backed securities | 8,142 | Discounted cash flow | Credit spread | 1.97% - 2.77% (2.44%) | |||||||||||||||||||
Other asset-backed securities | 18,200 | Discounted cash flow | Credit spread | 2.40% - 3.50% (2.94%) | |||||||||||||||||||
Residential mortgage-backed securities | 7,393 | Discounted cash flow | Credit spread | 1.65% (1.65%) | |||||||||||||||||||
Non-redeemable preferred stocks | 6,816 | Discounted cash flow | Credit spread | 4.51% (4.51%) | |||||||||||||||||||
Total assets | $ | 44,849 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | 95,079 | Discounted cash flow | Credit risk Risk margin | 0.50% - 2.00% (1.15%) 0.15% - 0.40% (0.25%) |
Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average) | ||||||||||||||||||||
(Dollars in | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Corporate securities | $ | 6,588 | Discounted cash flow | Credit spread | 2.11% - 5.85% (4.33%) | ||||||||||||||||||
Commercial mortgage-backed securities | 12,780 | Discounted cash flow | Credit spread | 1.18% - 2.22% (1.92%) | |||||||||||||||||||
Other asset-backed securities | 6,000 | Discounted cash flow | Credit spread | 2.15% - 2.30% (2.23%) | |||||||||||||||||||
Non-redeemable preferred stocks | 6,927 | Discounted cash flow | Credit spread | 2.72% (2.72%) | |||||||||||||||||||
Total assets | $ | 32,295 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | 76,346 | Discounted cash flow | Credit risk Risk margin | 0.40% - 1.35% (0.80%) 0.15% -0.40% (0.25%) |
Level 3 Assets by Valuation Source - Recurring Basis | |||||||||||
March 31, 2020 | |||||||||||
Third-party vendors | Priced internally | Fair Value | |||||||||
(Dollars in thousands) | |||||||||||
Corporate securities | $ | 6,983 | $ | 2,473 | $ | 9,456 | |||||
Commercial mortgage-backed securities | 7,205 | — | 7,205 | ||||||||
Other asset-backed securities | 4,732 | — | 4,732 | ||||||||
Non-redeemable preferred stocks | — | 6,858 | 6,858 | ||||||||
Total assets | $ | 18,920 | $ | 9,331 | $ | 28,251 | |||||
Percent of total | 67.0 | % | 33.0 | % | 100.0 | % |
Level 3 Assets by Valuation Source - Recurring Basis | |||||||||||
December 31, 2019 | |||||||||||
Third-party vendors | Priced internally | Fair Value | |||||||||
(Dollars in thousands) | |||||||||||
Corporate securities | $ | — | $ | 6,588 | $ | 6,588 | |||||
Commercial mortgage-backed securities | 12,780 | — | 12,780 | ||||||||
Other asset-backed securities | 8,000 | 1,755 | 9,755 | ||||||||
Non-redeemable preferred stocks | — | 6,927 | 6,927 | ||||||||
Total assets | $ | 20,780 | $ | 15,270 | $ | 36,050 | |||||
Percent of total | 57.6 | % | 42.4 | % | 100.0 | % |
Quantitative Information about Level 3 Fair Value Measurements - Recurring Basis | |||||||||
March 31, 2020 | |||||||||
Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average) | ||||||
(Dollars in thousands) | |||||||||
Assets | |||||||||
Corporate securities | $ | 9,456 | Discounted cash flow | Credit spread | 2.00% - 10.75% (7.03%) | ||||
Commercial mortgage-backed securities | 7,205 | Discounted cash flow | Credit spread | 3.01% - 4.54% (3.93%) | |||||
Non-redeemable preferred stocks | 6,858 | Discounted cash flow | Credit spread | 6.06% (6.06%) | |||||
Total assets | $ | 23,519 | |||||||
Liabilities | |||||||||
Future policy benefits - indexed product embedded derivatives | $ | 61,071 | Discounted cash flow | Credit risk Risk margin | 2.25% - 2.85% (2.50%) 0.15% - 0.40% (0.25%) |
December 31, 2019 | |||||||||
Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average) | ||||||
(Dollars in thousands) | |||||||||
Assets | |||||||||
Corporate securities | $ | 6,588 | Discounted cash flow | Credit spread | 2.11% - 5.85% (4.33%) | ||||
Commercial mortgage-backed securities | 12,780 | Discounted cash flow | Credit spread | 1.18% - 2.22% (1.92%) | |||||
Other asset-backed securities | 6,000 | Discounted cash flow | Credit spread | 2.15% - 2.30% (2.23%) | |||||
Non-redeemable preferred stocks | 6,927 | Discounted cash flow | Credit spread | 2.72% (2.72%) | |||||
Total assets | $ | 32,295 | |||||||
Liabilities | |||||||||
Future policy benefits - indexed product embedded derivatives | $ | 76,346 | Discounted cash flow | Credit risk Risk margin | 0.40% - 1.35% (0.80%) 0.15% - 0.40% (0.25%) |
Level 3 Financial Instruments Changes in Fair Value - Recurring Basis | |||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized and unrealized gains (losses), net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | Purchases | Disposals | Included in net income | Included in other compre-hensive income | Transfers into Level 3 | Transfers out of Level 3 (1) | Amort-ization included in net income | Balance, September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 6,588 | $ | 7,042 | $ | (825) | $ | 0 | $ | (1,198) | $ | 3,283 | $ | (10,592) | $ | 0 | $ | 4,298 | |||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 0 | 12,629 | 0 | 0 | (1) | 0 | (5,235) | 0 | 7,393 | ||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 12,780 | 0 | (299) | 0 | 217 | 0 | (4,556) | 0 | 8,142 | ||||||||||||||||||||||||||||||||||||||||||||
Other asset-backed securities | 9,755 | 30,504 | (138) | 0 | (633) | 761 | (14,255) | (1) | 25,993 | ||||||||||||||||||||||||||||||||||||||||||||
Non-redeemable preferred stocks | 6,927 | 0 | 0 | 0 | (111) | 0 | 0 | 0 | 6,816 | ||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 36,050 | $ | 50,175 | $ | (1,262) | $ | 0 | $ | (1,726) | $ | 4,044 | $ | (34,638) | $ | (1) | $ | 52,642 | |||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | 76,346 | $ | 11,411 | $ | (6,778) | $ | 14,100 | $ | 0 | $ | 0 | $ | 0 | $ | — | $ | 95,079 | |||||||||||||||||||||||||||||||||||
Level 3 Financial Instruments Changes in Fair Value - Recurring Basis | |||||||||||||||||||||||||||||||||||
March 31, 2020 | |||||||||||||||||||||||||||||||||||
Realized and unrealized gains (losses), net | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | Purchases | Disposals | Included in net income | Included in other compre-hensive income | Transfers into Level 3 | Transfers out of Level 3 (1) | Amort-ization included in net income | Balance, March 31, 2020 | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Corporate securities | $ | 6,588 | $ | 6,983 | $ | (352 | ) | $ | — | $ | (154 | ) | $ | — | $ | (3,609 | ) | $ | — | $ | 9,456 | ||||||||||||||
Commercial mortgage-backed securities | 12,780 | — | (98 | ) | — | (920 | ) | — | (4,556 | ) | — | 7,206 | |||||||||||||||||||||||
Other asset-backed securities | 9,755 | 3,054 | (49 | ) | — | (27 | ) | — | (8,000 | ) | (1 | ) | 4,732 | ||||||||||||||||||||||
Non-redeemable preferred stocks | 6,927 | — | — | — | (70 | ) | — | — | — | 6,857 | |||||||||||||||||||||||||
Total assets | $ | 36,050 | $ | 10,037 | $ | (499 | ) | $ | — | $ | (1,171 | ) | $ | — | $ | (16,165 | ) | $ | (1 | ) | $ | 28,251 | |||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | 76,346 | $ | 4,891 | $ | (997 | ) | $ | (19,169 | ) | $ | — | $ | — | $ | — | $ | — | $ | 61,071 |
September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized and unrealized gains (losses), net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2018 | Purchases | Disposals | Included in net income | Included in other compre-hensive income | Transfers into Level 3 | Transfers out of Level 3 (1) | Amort-ization included in net income | Balance, September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 22,011 | $ | 6,000 | $ | (3,172) | $ | 0 | $ | 465 | $ | 0 | $ | (15,230) | $ | (23) | $ | 10,051 | |||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | 0 | 18,378 | 0 | 0 | 0 | 0 | (2,124) | 0 | 16,254 | ||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 67,940 | 2,984 | (280) | 0 | 571 | 0 | (59,918) | 0 | 11,297 | ||||||||||||||||||||||||||||||||||||||||||||
Other asset-backed securities | 3,601 | 20,710 | (977) | 0 | (869) | 0 | (16,710) | 0 | 5,755 | ||||||||||||||||||||||||||||||||||||||||||||
Non-redeemable preferred stocks | 6,862 | 0 | 0 | 0 | 222 | 0 | 0 | 0 | 7,084 | ||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 100,414 | $ | 48,072 | $ | (4,429) | $ | 0 | $ | 389 | $ | 0 | $ | (93,982) | $ | (23) | $ | 50,441 | |||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | 40,028 | $ | 10,956 | $ | (4,848) | $ | 20,710 | $ | 0 | $ | 0 | $ | 0 | $ | — | $ | 66,846 | |||||||||||||||||||||||||||||||||||
March 31, 2019 | |||||||||||||||||||||||||||||||||||
Realized and unrealized gains (losses), net | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2018 | Purchases | Disposals | Included in net income | Included in other compre-hensive income | Transfers into Level 3 | Transfers out of Level 3 (1) | Amort-ization included in net income | Balance, March 31, 2019 | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Corporate securities | $ | 22,011 | $ | 6,000 | $ | (1,262 | ) | $ | — | $ | 212 | $ | — | $ | — | $ | (8 | ) | $ | 26,953 | |||||||||||||||
Commercial mortgage-backed securities | 67,940 | — | (92 | ) | — | 195 | — | (59,918 | ) | — | 8,125 | ||||||||||||||||||||||||
Other asset-backed securities | 3,601 | 5,000 | (83 | ) | — | (869 | ) | — | — | — | 7,649 | ||||||||||||||||||||||||
Non-redeemable preferred stocks | 6,862 | — | — | — | 267 | — | — | — | 7,129 | ||||||||||||||||||||||||||
Total assets | $ | 100,414 | $ | 11,000 | $ | (1,437 | ) | $ | — | $ | (195 | ) | $ | — | $ | (59,918 | ) | $ | (8 | ) | $ | 49,856 | |||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Future policy benefits - indexed product embedded derivatives | $ | 40,028 | $ | 3,479 | $ | (1,169 | ) | $ | 9,553 | $ | — | $ | — | $ | — | $ | — | $ | 51,891 |
Valuation of our Financial Instruments Not Reported at Fair Value by Hierarchy Levels | |||||||||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Fair Value | Carrying Value | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Mortgage loans | $ | 0 | $ | 0 | $ | 1,053,591 | $ | 1,053,591 | $ | 972,210 | |||||||||||||||||||
Policy loans | 0 | 0 | 278,105 | 278,105 | 197,009 | ||||||||||||||||||||||||
Other investments | 0 | 35,061 | 2,404 | 37,465 | 37,263 | ||||||||||||||||||||||||
Total assets | $ | 0 | $ | 35,061 | $ | 1,334,100 | $ | 1,369,161 | $ | 1,206,482 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Future policy benefits | $ | 0 | $ | 0 | $ | 4,706,931 | $ | 4,706,931 | $ | 4,400,006 | |||||||||||||||||||
Supplementary contracts without life contingencies | 0 | 0 | 303,166 | 303,166 | 282,715 | ||||||||||||||||||||||||
Advance premiums and other deposits | 0 | 0 | 251,444 | 251,444 | 251,444 | ||||||||||||||||||||||||
Long-term debt | 0 | 0 | 77,764 | 77,764 | 97,000 | ||||||||||||||||||||||||
Liabilities related to separate accounts | 0 | 0 | 615,361 | 615,361 | 616,381 | ||||||||||||||||||||||||
Total liabilities | $ | 0 | $ | 0 | $ | 5,954,666 | $ | 5,954,666 | $ | 5,647,546 |
Valuation of our Financial Instruments Not Reported at Fair Value by Hierarchy Levels | |||||||||||||||||||
March 31, 2020 | |||||||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Fair Value | Carrying Value | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Assets | |||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | 1,006,459 | $ | 1,006,459 | $ | 988,854 | |||||||||
Policy loans | — | — | 285,733 | 285,733 | 202,227 | ||||||||||||||
Other investments | — | 34,301 | 2,271 | 36,572 | 36,116 | ||||||||||||||
Total assets | $ | — | $ | 34,301 | $ | 1,294,463 | $ | 1,328,764 | $ | 1,227,197 | |||||||||
Liabilities | |||||||||||||||||||
Future policy benefits | $ | — | $ | — | $ | 4,379,568 | $ | 4,379,568 | $ | 4,373,739 | |||||||||
Supplementary contracts without life contingencies | — | — | 297,351 | 297,351 | 293,016 | ||||||||||||||
Advance premiums and other deposits | — | — | 245,971 | 245,971 | 245,971 | ||||||||||||||
Short-term debt | — | — | 10,000 | 10,000 | 10,000 | ||||||||||||||
Long-term debt | — | — | 67,822 | 67,822 | 97,000 | ||||||||||||||
Liabilities related to separate accounts | — | — | 524,537 | 524,537 | 525,582 | ||||||||||||||
Total liabilities | $ | — | $ | — | $ | 5,525,249 | $ | 5,525,249 | $ | 5,545,308 |
December 31, 2019 | |||||||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Fair Value | Carrying Value | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Assets | |||||||||||||||||||
Mortgage loans | $ | — | $ | — | $ | 1,059,073 | $ | 1,059,073 | $ | 1,011,678 | |||||||||
Policy loans | — | — | 256,787 | 256,787 | 201,589 | ||||||||||||||
Other investments | — | 29,534 | 2,215 | 31,749 | 31,211 | ||||||||||||||
Total assets | $ | — | $ | 29,534 | $ | 1,318,075 | $ | 1,347,609 | $ | 1,244,478 | |||||||||
Liabilities | |||||||||||||||||||
Future policy benefits | $ | — | $ | — | $ | 4,381,863 | $ | 4,381,863 | $ | 4,270,073 | |||||||||
Supplementary contracts without life contingencies | — | — | 309,601 | 309,601 | 296,915 | ||||||||||||||
Advance premiums and other deposits | — | — | 245,480 | 245,480 | 245,480 | ||||||||||||||
Long-term debt | — | — | 84,438 | 84,438 | 97,000 | ||||||||||||||
Liabilities related to separate accounts | — | — | 644,691 | 644,691 | 645,881 | ||||||||||||||
Total liabilities | $ | — | $ | — | $ | 5,666,073 | $ | 5,666,073 | $ | 5,555,349 |
December 31, 2019 | |||||||||||||||||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Fair Value | Carrying Value | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Mortgage loans | $ | 0 | $ | 0 | $ | 1,059,073 | $ | 1,059,073 | $ | 1,011,678 | |||||||||||||||||||
Policy loans | 0 | 0 | 256,787 | 256,787 | 201,589 | ||||||||||||||||||||||||
Other investments | 0 | 29,534 | 2,215 | 31,749 | 31,211 | ||||||||||||||||||||||||
Total assets | $ | 0 | $ | 29,534 | $ | 1,318,075 | $ | 1,347,609 | $ | 1,244,478 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Future policy benefits | $ | 0 | $ | 0 | $ | 4,381,863 | $ | 4,381,863 | $ | 4,270,073 | |||||||||||||||||||
Supplementary contracts without life contingencies | 0 | 0 | 309,601 | 309,601 | 296,915 | ||||||||||||||||||||||||
Advance premiums and other deposits | 0 | 0 | 245,480 | 245,480 | 245,480 | ||||||||||||||||||||||||
Long-term debt | 0 | 0 | 84,438 | 84,438 | 97,000 | ||||||||||||||||||||||||
Liabilities related to separate accounts | 0 | 0 | 644,691 | 644,691 | 645,881 | ||||||||||||||||||||||||
Total liabilities | $ | 0 | $ | 0 | $ | 5,666,073 | $ | 5,666,073 | $ | 5,555,349 |
Components of Net Periodic Pension Cost for FBL and Affiliates Combined - Multiemployer Plan | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service cost | $ | 1,304 | $ | 1,138 | $ | 3,911 | $ | 3,412 | |||||||||||||||
Interest cost | 3,142 | 3,318 | 9,425 | 9,955 | |||||||||||||||||||
Expected return on assets | (5,262) | (4,707) | (15,785) | (14,121) | |||||||||||||||||||
Amortization of actuarial loss | 2,789 | 2,228 | 8,368 | 6,685 | |||||||||||||||||||
Net periodic pension cost | $ | 1,973 | $ | 1,977 | $ | 5,919 | $ | 5,931 | |||||||||||||||
FBL Financial Group, Inc. share of net periodic pension costs | $ | 629 | $ | 634 | $ | 1,887 | $ | 1,900 |
Components of Net Periodic Pension Cost for FBL and Affiliates Combined - Multiemployer Plan | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Service cost | $ | 1,304 | $ | 1,137 | |||
Interest cost | 3,142 | 3,318 | |||||
Expected return on assets | (5,262 | ) | (4,707 | ) | |||
Amortization of actuarial loss | 2,789 | 2,229 | |||||
Net periodic pension cost | $ | 1,973 | $ | 1,977 | |||
FBL Financial Group, Inc. share of net periodic pension costs | $ | 629 | $ | 633 |
Components of Net Periodic Pension Cost for FBL and Affiliates Combined - Other Plans | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Service cost | $ | 79 | $ | 117 | |||
Interest cost | 220 | 248 | |||||
Amortization of actuarial loss | 317 | 266 | |||||
Net periodic pension cost | $ | 616 | $ | 631 | |||
FBL Financial Group, Inc. share of net periodic pension costs | $ | 392 | $ | 362 |
Components of Net Periodic Pension Cost for FBL and Affiliates Combined - Other Plans | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service cost | $ | 79 | $ | 117 | $ | 237 | $ | 350 | |||||||||||||||
Interest cost | 220 | 248 | 660 | 744 | |||||||||||||||||||
Amortization of actuarial loss | 317 | 267 | 951 | 800 | |||||||||||||||||||
Net periodic pension cost | $ | 616 | $ | 632 | $ | 1,848 | $ | 1,894 | |||||||||||||||
FBL Financial Group, Inc. share of net periodic pension costs | $ | 392 | $ | 362 | $ | 1,177 | $ | 1,087 |
Dividends | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Class A and B common stock: | |||||||||||||||||||||||
Cash dividends per common share | $ | 0.50 | $ | 0.48 | $ | 1.50 | $ | 1.44 | |||||||||||||||
Special cash dividend per common share | 0 | 0 | 1.50 | 1.50 | |||||||||||||||||||
Total common stock dividends per share | $ | 0.50 | $ | 0.48 | $ | 3.00 | $ | 2.94 | |||||||||||||||
Series B preferred stock dividends per share | $ | 0.0075 | $ | 0.0075 | $ | 0.0225 | $ | 0.0225 |
Dividends | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
Class A and B common stock: | |||||||
Cash dividends per common share | $ | 0.50 | $ | 0.48 | |||
Special cash dividend per common share | 1.50 | 1.50 | |||||
Total common stock dividends per share | $ | 2.00 | $ | 1.98 | |||
Series B preferred stock dividends per share | $ | 0.0075 | $ | 0.0075 |
Reconciliation of Outstanding Common Stock | ||||||||||||||||||||
Class A | Class B | Total | ||||||||||||||||||
Shares | Dollars | Shares | Dollars | Shares | Dollars | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Outstanding at January 1, 2019 | 24,707,402 | $ | 152,652 | 11,413 | $ | 72 | 24,718,815 | $ | 152,724 | |||||||||||
Stock-based compensation | — | 202 | — | — | — | 202 | ||||||||||||||
Purchase of common stock | (66,475 | ) | (410 | ) | — | — | (66,475 | ) | (410 | ) | ||||||||||
Outstanding at March 31, 2019 | 24,640,927 | $ | 152,444 | 11,413 | $ | 72 | 24,652,340 | $ | 152,516 | |||||||||||
Outstanding at January 1, 2020 | 24,652,802 | $ | 152,661 | 11,413 | $ | 72 | 24,664,215 | $ | 152,733 | |||||||||||
Stock-based compensation | 2,500 | 245 | — | — | 2,500 | 245 | ||||||||||||||
Purchase of common stock | (24,525 | ) | (152 | ) | — | — | (24,525 | ) | (152 | ) | ||||||||||
Outstanding at March 31, 2020 | 24,630,777 | $ | 152,754 | 11,413 | $ | 72 | 24,642,190 | $ | 152,826 |
Reconciliation of Outstanding Common Stock | |||||||||||||||||||||||||||||||||||
Class A | Class B | Total | |||||||||||||||||||||||||||||||||
Shares | Dollars | Shares | Dollars | Shares | Dollars | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Outstanding at January 1, 2019 | 24,707,402 | $ | 152,652 | 11,413 | $ | 72 | 24,718,815 | $ | 152,724 | ||||||||||||||||||||||||||
Stock-based compensation | 9,968 | 324 | 0 | 0 | 9,968 | 324 | |||||||||||||||||||||||||||||
Purchase of common stock | (66,475) | (410) | 0 | 0 | (66,475) | (410) | |||||||||||||||||||||||||||||
Outstanding at September 30, 2019 | 24,650,895 | $ | 152,566 | 11,413 | $ | 72 | 24,662,308 | $ | 152,638 | ||||||||||||||||||||||||||
Outstanding at January 1, 2020 | 24,652,802 | $ | 152,661 | 11,413 | $ | 72 | 24,664,215 | $ | 152,733 | ||||||||||||||||||||||||||
Stock-based compensation | 20,452 | 126 | 0 | 0 | 20,452 | 126 | |||||||||||||||||||||||||||||
Purchase of common stock | (290,144) | (1,797) | 0 | 0 | (290,144) | (1,797) | |||||||||||||||||||||||||||||
Outstanding at September 30, 2020 | 24,383,110 | $ | 150,990 | 11,413 | $ | 72 | 24,394,523 | $ | 151,062 |
Accumulated Other Comprehensive Income, Net of Tax and Other Offsets | |||||||||||||||||||||||
Unrealized Net Investment Gains (Losses) on Fixed Maturities Available-for-Sale (1) | Underfunded Status of Postretirement Benefit Plans | ||||||||||||||||||||||
Without Non-Credit Impairment Losses | With Non-Credit Impairment Losses | Total | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Balance at January 1, 2019 | $ | 96,921 | $ | 3,133 | $ | (8,736) | $ | 91,318 | |||||||||||||||
Other comprehensive income (loss) before reclassifications | 317,677 | (972) | 0 | 316,705 | |||||||||||||||||||
Reclassification adjustments | (2,477) | 0 | 629 | (1,848) | |||||||||||||||||||
Balance at September 30, 2019 | $ | 412,121 | $ | 2,161 | $ | (8,107) | $ | 406,175 | |||||||||||||||
Balance at January 1, 2020 | $ | 363,020 | $ | 1,974 | $ | (10,230) | $ | 354,764 | |||||||||||||||
Other comprehensive income (loss) before reclassifications | 163,585 | (275) | (2) | 163,308 | |||||||||||||||||||
Reclassification adjustments | 10,267 | 0 | 748 | 11,015 | |||||||||||||||||||
Balance at September 30, 2020 | $ | 536,872 | $ | 1,699 | $ | (9,484) | $ | 529,087 |
Accumulated Other Comprehensive Income, Net of Tax and Other Offsets | |||||||||||||||
Unrealized Net Investment Gains (Losses) on Fixed Maturities Available-for-Sale (1) | Underfunded Status of Postretirement Benefit Plans | ||||||||||||||
Without Non-Credit Impairment Losses | With Non-Credit Impairment Losses | Total | |||||||||||||
(Dollars in thousands) | |||||||||||||||
Balance at January 1, 2019 | $ | 96,921 | $ | 3,133 | $ | (8,736 | ) | $ | 91,318 | ||||||
Other comprehensive income before reclassifications | 99,871 | 29 | — | 99,900 | |||||||||||
Reclassification adjustments | (2,260 | ) | — | 208 | (2,052 | ) | |||||||||
Balance at March 31, 2019 | $ | 194,532 | $ | 3,162 | $ | (8,528 | ) | $ | 189,166 | ||||||
Balance at January 1, 2020 | $ | 363,020 | $ | 1,974 | $ | (10,230 | ) | $ | 354,764 | ||||||
Other comprehensive income (loss) before reclassifications | (104,594 | ) | (1,550 | ) | — | (106,144 | ) | ||||||||
Reclassification adjustments | 9,555 | — | 247 | 9,802 | |||||||||||
Balance at March 31, 2020 | $ | 267,981 | $ | 424 | $ | (9,983 | ) | $ | 258,422 |
Accumulated Other Comprehensive Income Reclassification Adjustments | |||||||||||||||||||||||
Nine months ended September 30, 2020 | |||||||||||||||||||||||
Unrealized Net Investment Gains (Losses) on Fixed Maturities Available-for-Sale (1) | Underfunded Status of Postretirement Benefit Plans | ||||||||||||||||||||||
Without Non-Credit Impairment Losses | With Non-Credit Impairment Losses | Total | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Realized capital losses on sales of fixed maturity securities | $ | 1,299 | $ | 0 | $ | 0 | $ | 1,299 | |||||||||||||||
Change in allowance for credit losses on fixed maturity securities | 12,095 | — | — | 12,095 | |||||||||||||||||||
Adjustments for assumed changes in deferred acquisition costs, value of insurance in force acquired, unearned revenue reserve and policyholder liabilities | (398) | 0 | 0 | (398) | |||||||||||||||||||
Change in unrecognized postretirement items for net actuarial loss | 0 | 0 | 947 | 947 | |||||||||||||||||||
Reclassifications before income taxes | 12,996 | 0 | 947 | 13,943 | |||||||||||||||||||
Income taxes | (2,729) | 0 | (199) | (2,928) | |||||||||||||||||||
Reclassification adjustments | $ | 10,267 | $ | 0 | $ | 748 | $ | 11,015 |
Nine months ended September 30, 2019 | |||||||||||||||||||||||
Unrealized Net Investment Gains (Losses) on Fixed Maturities Available-for-Sale (1) | Underfunded Status of Postretirement Benefit Plans | ||||||||||||||||||||||
Without Non-Credit Impairment Losses | With Non-Credit Impairment Losses | Total | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Realized capital gains on sales of fixed maturity securities | $ | (3,367) | $ | 0 | $ | 0 | $ | (3,367) | |||||||||||||||
Adjustments for assumed changes in deferred acquisition costs, value of insurance in force acquired, unearned revenue reserve and policyholder liabilities | 232 | 0 | 0 | 232 | |||||||||||||||||||
Change in unrecognized postretirement items for net actuarial loss | 0 | 0 | 797 | 797 | |||||||||||||||||||
Reclassifications before income taxes | (3,135) | 0 | 797 | (2,338) | |||||||||||||||||||
Income taxes | 658 | 0 | (168) | 490 | |||||||||||||||||||
Reclassification adjustments | $ | (2,477) | $ | 0 | $ | 629 | $ | (1,848) |
Accumulated Other Comprehensive Income Reclassification Adjustments | |||||||||||||||
Three months ended March 31, 2020 | |||||||||||||||
Unrealized Net Investment Gains (Losses) on Fixed Maturities Available-for-Sale (1) | Underfunded Status of Postretirement Benefit Plans | ||||||||||||||
Without Non-Credit Impairment Losses | With Non-Credit Impairment Losses | Total | |||||||||||||
(Dollars in thousands) | |||||||||||||||
Realized capital losses on sales of fixed maturity securities | $ | 147 | $ | — | $ | — | $ | 147 | |||||||
Change in allowance for credit losses on fixed maturity securities | 12,146 | — | — | 12,146 | |||||||||||
Adjustments for assumed changes in deferred acquisition costs, value of insurance in force acquired, unearned revenue reserve and policyholder liabilities | (198 | ) | — | — | (198 | ) | |||||||||
Other expenses - net actuarial loss | — | — | 313 | 313 | |||||||||||
Reclassifications before income taxes | 12,095 | — | 313 | 12,408 | |||||||||||
Income taxes | (2,540 | ) | — | (66 | ) | (2,606 | ) | ||||||||
Reclassification adjustments | $ | 9,555 | $ | — | $ | 247 | $ | 9,802 |
Three months ended March 31, 2019 | |||||||||||||||
Unrealized Net Investment Gains (Losses) on Fixed Maturities Available-for-Sale (1) | Underfunded Status of Postretirement Benefit Plans | ||||||||||||||
Without Non-Credit Impairment Losses | With Non-Credit Impairment Losses | Total | |||||||||||||
(Dollars in thousands) | |||||||||||||||
Realized capital gains on sales of fixed maturities | $ | (2,994 | ) | $ | — | $ | — | $ | (2,994 | ) | |||||
Adjustments for assumed changes in deferred acquisition costs, value of insurance in force acquired, unearned revenue reserve and policyholder liabilities | 133 | — | — | 133 | |||||||||||
Other expenses - net actuarial loss | — | — | 263 | 263 | |||||||||||
Reclassifications before income taxes | (2,861 | ) | — | 263 | (2,598 | ) | |||||||||
Income taxes | 601 | — | (55 | ) | 546 | ||||||||||
Reclassification adjustments | $ | (2,260 | ) | $ | — | $ | 208 | $ | (2,052 | ) |
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands, except per share data) | |||||||
Numerator: | |||||||
Net income (loss) attributable to FBL Financial Group, Inc. | $ | (2,515 | ) | $ | 34,043 | ||
Less: Dividends on Series B preferred stock | 38 | 38 | |||||
Income (loss) available to common stockholders | $ | (2,553 | ) | $ | 34,005 | ||
Denominator: | |||||||
Weighted average shares - basic | 24,762,820 | 24,765,277 | |||||
Effect of dilutive securities - stock-based compensation | — | 11,176 | |||||
Weighted average shares - diluted | 24,762,820 | 24,776,453 | |||||
Earnings (loss) per common share | $ | (0.10 | ) | $ | 1.37 | ||
Earnings (loss) per common share - assuming dilution | $ | (0.10 | ) | $ | 1.37 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income attributable to FBL Financial Group, Inc. | $ | 20,974 | $ | 25,129 | $ | 44,670 | $ | 91,470 | |||||||||||||||
Less: Dividends on Series B preferred stock | 37 | 37 | 112 | 112 | |||||||||||||||||||
Income available to common stockholders | $ | 20,937 | $ | 25,092 | $ | 44,558 | $ | 91,358 | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average shares - basic | 24,497,140 | 24,758,639 | 24,660,576 | 24,760,311 | |||||||||||||||||||
Effect of dilutive securities - stock-based compensation | 3,171 | 10,035 | 3,862 | 10,773 | |||||||||||||||||||
Weighted average shares - diluted | 24,500,311 | 24,768,674 | 24,664,438 | 24,771,084 | |||||||||||||||||||
Earnings per common share | $ | 0.85 | $ | 1.01 | $ | 1.81 | $ | 3.69 | |||||||||||||||
Earnings per common share - assuming dilution | $ | 0.85 | $ | 1.01 | $ | 1.81 | $ | 3.69 | |||||||||||||||
Financial Information Concerning our Operating Segments | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Pre-tax adjusted operating income: | |||||||||||||||||||||||
Annuity | $ | 18,916 | $ | 8,121 | $ | 45,852 | $ | 38,420 | |||||||||||||||
Life Insurance | 2,641 | 14,032 | 25,168 | 42,363 | |||||||||||||||||||
Corporate and Other | 829 | 4,939 | 4,754 | 13,853 | |||||||||||||||||||
Total pre-tax adjusted operating income | 22,386 | 27,092 | 75,774 | 94,636 | |||||||||||||||||||
Adjustments to pre-tax adjusted operating income: | |||||||||||||||||||||||
Net realized gains/losses on investments (1) | 4,177 | 557 | (19,118) | 10,075 | |||||||||||||||||||
Change in fair value of derivatives (1) | (2,632) | (666) | (6,161) | 832 | |||||||||||||||||||
Pre-tax net income attributable to FBL Financial Group, Inc. | 23,931 | 26,983 | 50,495 | 105,543 | |||||||||||||||||||
Income tax expense | (2,883) | (1,642) | (5,887) | (13,429) | |||||||||||||||||||
Tax on equity income | (74) | (212) | 62 | (644) | |||||||||||||||||||
Net income attributable to FBL Financial Group, Inc. | $ | 20,974 | $ | 25,129 | $ | 44,670 | $ | 91,470 | |||||||||||||||
Adjusted operating revenues: | |||||||||||||||||||||||
Annuity | $ | 53,352 | $ | 51,241 | $ | 161,543 | $ | 158,186 | |||||||||||||||
Life Insurance | 111,170 | 104,595 | 327,877 | 322,791 | |||||||||||||||||||
Corporate and Other | 22,498 | 23,233 | 68,560 | 69,915 | |||||||||||||||||||
187,020 | 179,069 | 557,980 | 550,892 | ||||||||||||||||||||
Net realized gains/losses on investments (1) | 3,894 | 647 | (19,513) | 10,313 | |||||||||||||||||||
Change in fair value of derivatives (1) | 6,931 | 4,942 | (4,646) | 19,915 | |||||||||||||||||||
Consolidated revenues | $ | 197,845 | $ | 184,658 | $ | 533,821 | $ | 581,120 |
Financial Information Concerning our Operating Segments | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Pre-tax adjusted operating income: | |||||||
Annuity | $ | 12,019 | $ | 15,662 | |||
Life Insurance | 10,267 | 10,092 | |||||
Corporate and Other | 219 | 4,319 | |||||
Total pre-tax adjusted operating income | 22,505 | 30,073 | |||||
Adjustments to pre-tax adjusted operating income: | |||||||
Net realized gains/losses on investments (1) | (25,458 | ) | 9,152 | ||||
Change in fair value of derivatives (1) | (2,582 | ) | 1,153 | ||||
Pre-tax net income attributable to FBL Financial Group, Inc. | (5,535 | ) | 40,378 | ||||
Income tax benefit (expense) | 3,081 | (6,276 | ) | ||||
Tax on equity income | (61 | ) | (59 | ) | |||
Net income (loss) attributable to FBL Financial Group, Inc. | $ | (2,515 | ) | $ | 34,043 | ||
Adjusted operating revenues: | |||||||
Annuity | $ | 54,654 | $ | 52,682 | |||
Life Insurance | 107,215 | 107,258 | |||||
Corporate and Other | 24,040 | 23,128 | |||||
185,909 | 183,068 | ||||||
Net realized gains/losses on investments (1) | (25,666 | ) | 9,289 | ||||
Change in fair value of derivatives (1) | (24,980 | ) | 11,199 | ||||
Consolidated revenues | $ | 135,263 | $ | 203,556 |
Equity Income (Loss) by Operating Segment | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Pre-tax equity income (loss): | |||||||||||||||||||||||
Life Insurance | $ | 299 | $ | 821 | $ | (309) | $ | 2,199 | |||||||||||||||
Corporate and Other | 52 | 190 | 9 | 868 | |||||||||||||||||||
Total pre-tax equity income (loss) | 351 | 1,011 | (300) | 3,067 | |||||||||||||||||||
Income taxes | (74) | (212) | 62 | (644) | |||||||||||||||||||
Equity income (loss), net of related income taxes | $ | 277 | $ | 799 | $ | (238) | $ | 2,423 |
Equity Income by Operating Segment | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Pre-tax equity income: | |||||||
Life Insurance | $ | 375 | $ | 370 | |||
Corporate and Other | (86 | ) | (91 | ) | |||
Total pre-tax equity income | 289 | 279 | |||||
Income taxes | (61 | ) | (59 | ) | |||
Equity income, net of related income taxes | $ | 228 | $ | 220 |
Reconciliation of Traditional Life Insurance Premiums, Net of Reinsurance | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Traditional and universal life insurance premiums collected | $ | 77,666 | $ | 75,043 | $ | 238,774 | $ | 232,442 | |||||||||||||||
Premiums collected on interest sensitive products | (29,882) | (27,488) | (91,057) | (85,384) | |||||||||||||||||||
Traditional life insurance premiums collected | 47,784 | 47,555 | 147,717 | 147,058 | |||||||||||||||||||
Change in due premiums and other | 8 | (573) | (288) | 303 | |||||||||||||||||||
Traditional life insurance premiums as included in the Consolidated Statements of Operations | $ | 47,792 | $ | 46,982 | $ | 147,429 | $ | 147,361 |
Reconciliation of Traditional Life Insurance Premiums, Net of Reinsurance | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Traditional and universal life insurance premiums collected | $ | 82,635 | $ | 78,001 | |||
Premiums collected on interest sensitive products | (31,996 | ) | (28,379 | ) | |||
Traditional life insurance premiums collected | 50,639 | 49,622 | |||||
Change in due premiums and other | (1,331 | ) | (230 | ) | |||
Traditional life insurance premiums as included in the Consolidated Statements of Operations | $ | 49,308 | $ | 49,392 |
Interest Sensitive Product Charges by Segment | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Annuity | |||||||||||||||||||||||
Rider and other product charges | $ | 1,481 | $ | 1,248 | $ | 4,696 | $ | 3,881 | |||||||||||||||
Surrender charges | 295 | 360 | 1,045 | 1,066 | |||||||||||||||||||
Total | 1,776 | 1,608 | 5,741 | 4,947 | |||||||||||||||||||
Life Insurance | |||||||||||||||||||||||
Administration charges | 5,278 | 4,570 | 16,134 | 14,163 | |||||||||||||||||||
Cost of insurance charges | 13,565 | 13,415 | 40,281 | 38,861 | |||||||||||||||||||
Surrender charges | 611 | 698 | 1,942 | 2,037 | |||||||||||||||||||
Amortization of policy initiation fees | 3,789 | 480 | 5,234 | 2,725 | |||||||||||||||||||
Total | 23,243 | 19,163 | 63,591 | 57,786 | |||||||||||||||||||
Corporate and Other | |||||||||||||||||||||||
Administration charges | 1,062 | 1,118 | 3,398 | 3,586 | |||||||||||||||||||
Cost of insurance charges | 7,082 | 6,952 | 21,384 | 21,338 | |||||||||||||||||||
Surrender charges | 6 | 17 | 46 | 78 | |||||||||||||||||||
Separate account charges | 2,025 | 2,115 | 5,947 | 6,067 | |||||||||||||||||||
Amortization of policy initiation fees | 71 | 206 | 709 | 458 | |||||||||||||||||||
Total | 10,246 | 10,408 | 31,484 | 31,527 | |||||||||||||||||||
Impact of net realized gains/losses on investments and change in fair value of derivatives on amortization of unearned revenue reserves | 155 | (44) | (767) | 675 | |||||||||||||||||||
Interest sensitive product charges as included in the Consolidated Statements of Operations | $ | 35,420 | $ | 31,135 | $ | 100,049 | $ | 94,935 |
Interest Sensitive Product Charges by Segment | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Annuity | |||||||
Rider and other product charges | $ | 1,530 | $ | 1,263 | |||
Surrender charges | 356 | 304 | |||||
Total | 1,886 | 1,567 | |||||
Life Insurance | |||||||
Administration charges | 5,443 | 4,667 | |||||
Cost of insurance charges | 13,379 | 12,633 | |||||
Surrender charges | 705 | 621 | |||||
Amortization of policy initiation fees | 852 | 1,067 | |||||
Total | 20,379 | 18,988 | |||||
Corporate and Other | |||||||
Administration charges | 1,184 | 1,236 | |||||
Cost of insurance charges | 7,160 | 7,202 | |||||
Surrender charges | 32 | 24 | |||||
Separate account charges | 2,031 | 1,936 | |||||
Amortization of policy initiation fees | 549 | 7 | |||||
Total | 10,956 | 10,405 | |||||
Impact of net realized gains/losses on investments and change in fair value of derivatives on amortization of unearned revenue reserves | (1,501 | ) | 306 | ||||
Interest sensitive product charges as included in the Consolidated Statements of Operations | $ | 31,720 | $ | 31,266 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||
Net income attributable to FBL Financial Group, Inc. | $ | 20,974 | $ | 25,129 | (17) | % | $ | 44,670 | $ | 91,470 | (51) | % | |||||||||||||||||||||||
Net income adjustments: | |||||||||||||||||||||||||||||||||||
Net realized gains/losses on investments (1) | (3,300) | (440) | 650 | % | 15,103 | (7,960) | (290) | % | |||||||||||||||||||||||||||
Change in fair value of derivatives (1) | 2,079 | 526 | 295 | % | 4,867 | (657) | (841) | % | |||||||||||||||||||||||||||
Adjusted operating income (2) | $ | 19,753 | $ | 25,215 | (22) | % | $ | 64,640 | $ | 82,853 | (22) | % | |||||||||||||||||||||||
Pre-tax adjusted operating income: | |||||||||||||||||||||||||||||||||||
Annuity segment | $ | 18,916 | $ | 8,121 | 133 | % | $ | 45,852 | $ | 38,420 | 19 | % | |||||||||||||||||||||||
Life Insurance segment | 2,641 | 14,032 | (81) | % | 25,168 | 42,363 | (41) | % | |||||||||||||||||||||||||||
Corporate and Other segment | 829 | 4,939 | (83) | % | 4,754 | 13,853 | (66) | % | |||||||||||||||||||||||||||
Total pre-tax adjusted operating income | 22,386 | 27,092 | (17) | % | 75,774 | 94,636 | (20) | % | |||||||||||||||||||||||||||
Income taxes on adjusted operating income | (2,633) | (1,877) | 40 | % | (11,134) | (11,783) | (6) | % | |||||||||||||||||||||||||||
Adjusted operating income (2) | $ | 19,753 | $ | 25,215 | (22) | % | $ | 64,640 | $ | 82,853 | (22) | % | |||||||||||||||||||||||
Earnings per common share - assuming dilution | $ | 0.85 | $ | 1.01 | (16) | % | $ | 1.81 | $ | 3.69 | (51) | % | |||||||||||||||||||||||
Adjusted operating income per common share - assuming dilution (2) | 0.80 | 1.02 | (22) | % | 2.62 | 3.34 | (22) | % | |||||||||||||||||||||||||||
Effective tax rate on adjusted operating income | 12 | % | 7 | % | 15 | % | 12 | % | |||||||||||||||||||||||||||
Average invested assets, at amortized cost net of allowance for credit losses (3) | $ | 8,546,717 | $ | 8,323,273 | 3 | % | |||||||||||||||||||||||||||||
Annualized yield on average invested assets (4) | 4.64 | % | 4.97 | % | |||||||||||||||||||||||||||||||
Other data | |||||||||||||||||||||||||||||||||||
Death benefits, net of reinsurance and reserves released, net of tax | $ | 26,854 | $ | 23,822 | 13 | % | $ | 74,852 | $ | 70,407 | 6 | % | |||||||||||||||||||||||
Impact on adjusted operating income of unlocking deferred acquisition costs, deferred sales inducements, unearned revenue reserve and certain interest sensitive product reserves, net of tax | (5,306) | (2,109) | 152 | (5,306) | (2,109) | 152 | |||||||||||||||||||||||||||||
Estimated impact from separate account performance on amortization of deferred acquisition costs, deferred sales inducements and unearned revenue reserve, net of tax (5) | 1,185 | (158) | (850) | % | (40) | 2,054 | (102) | % | |||||||||||||||||||||||||||
Other investment-related income included in net investment income (1)(6) | 860 | 567 | 52 | % | 1,729 | 2,837 | (39) | % |
Three months ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands, except per share data) | ||||||||||
Net income (loss) attributable to FBL Financial Group, Inc. | $ | (2,515 | ) | $ | 34,043 | (107 | )% | |||
Net income adjustments: | ||||||||||
Net realized gains/losses on investments (1) | 20,112 | (7,230 | ) | (378 | )% | |||||
Change in fair value of derivatives (1) | 2,039 | (911 | ) | (324 | )% | |||||
Adjusted operating income (2) | $ | 19,636 | $ | 25,902 | (24 | )% | ||||
Pre-tax adjusted operating income: | ||||||||||
Annuity segment | $ | 12,019 | $ | 15,662 | (23 | )% | ||||
Life Insurance segment | 10,267 | 10,092 | 2 | % | ||||||
Corporate and Other segment | 219 | 4,319 | (95 | )% | ||||||
Total pre-tax adjusted operating income | 22,505 | 30,073 | (25 | )% | ||||||
Income taxes on adjusted operating income | (2,869 | ) | (4,171 | ) | (31 | )% | ||||
Adjusted operating income (2) | $ | 19,636 | $ | 25,902 | (24 | )% | ||||
Earnings (loss) per common share - assuming dilution | $ | (0.10 | ) | $ | 1.37 | (107 | )% | |||
Adjusted operating income per common share - assuming dilution (2) | 0.79 | 1.04 | (24 | )% | ||||||
Effective tax rate on adjusted operating income | 13 | % | 14 | % | ||||||
Average invested assets, at amortized cost (3) | $ | 8,479,853 | $ | 8,292,919 | 2 | % | ||||
Annualized yield on average invested assets (3) | 4.72 | % | 4.97 | % | ||||||
Other data | ||||||||||
Death benefits, net of reinsurance and reserves released, net of tax | $ | 23,550 | $ | 26,777 | (12 | )% | ||||
Estimated impact from separate account performance on amortization of deferred acquisition costs, deferred sales inducements and unearned revenue reserve, net of tax | (2,686 | ) | 1,738 | (255 | )% | |||||
Other investment-related income included in net investment income (1)(4) | 454 | 1,002 | (55 | )% |
Annuity Segment | ||||||||||
Three months ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands) | ||||||||||
Adjusted operating revenues: | ||||||||||
Interest sensitive product charges | $ | 1,886 | $ | 1,567 | 20 | % | ||||
Net investment income | 52,768 | 51,115 | 3 | % | ||||||
Total adjusted operating revenues | 54,654 | 52,682 | 4 | % | ||||||
Adjusted operating benefits and expenses: | ||||||||||
Interest sensitive product benefits | 33,883 | 28,070 | 21 | % | ||||||
Underwriting, acquisition and insurance expenses: | ||||||||||
Commissions net of deferrals | 421 | 514 | (18 | )% | ||||||
Amortization of deferred acquisition costs | 2,646 | 2,679 | (1 | )% | ||||||
Amortization of value of insurance in force | 175 | 163 | 7 | % | ||||||
Other underwriting expenses | 5,510 | 5,594 | (2 | )% | ||||||
Total underwriting, acquisition and insurance expenses | 8,752 | 8,950 | (2 | )% | ||||||
Total adjusted operating benefits and expenses | 42,635 | 37,020 | 15 | % | ||||||
Pre-tax adjusted operating income | $ | 12,019 | $ | 15,662 | (23 | )% |
Other data | ||||||||||
Annuity premiums collected, direct (1) | $ | 58,099 | $ | 69,506 | (16 | )% | ||||
Policy liabilities and accruals, end of period | 4,528,280 | 4,379,558 | 3 | % | ||||||
Average invested assets, at amortized cost | 4,564,600 | 4,481,499 | 2 | % | ||||||
Other investment-related income included in net investment income (2) | 705 | 1,039 | (32 | )% | ||||||
Average individual annuity account value | 3,179,639 | 3,179,153 | — | % | ||||||
Earned spread on individual annuity products: | ||||||||||
Weighted average yield on cash and invested assets | 4.59 | % | 4.76 | % | ||||||
Weighted average crediting rate | 2.47 | % | 2.53 | % | ||||||
Spread | 2.12 | % | 2.23 | % | ||||||
Individual annuity withdrawal rate | 5.2 | % | 5.6 | % |
Annuity Segment | |||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Adjusted operating revenues: | |||||||||||||||||||||||||||||||||||
Interest sensitive product charges | $ | 1,776 | $ | 1,608 | 10 | % | $ | 5,741 | $ | 4,947 | 16 | % | |||||||||||||||||||||||
Net investment income | 51,576 | 49,633 | 4 | % | 155,802 | 153,239 | 2 | % | |||||||||||||||||||||||||||
Total adjusted operating revenues | 53,352 | 51,241 | 4 | % | 161,543 | 158,186 | 2 | % | |||||||||||||||||||||||||||
Adjusted operating benefits and expenses: | |||||||||||||||||||||||||||||||||||
Interest sensitive product benefits | 25,652 | 28,585 | (10) | % | 90,053 | 87,105 | 3 | % | |||||||||||||||||||||||||||
Underwriting, acquisition and insurance expenses: | |||||||||||||||||||||||||||||||||||
Commissions net of deferrals | 320 | 405 | (21) | % | 1,056 | 1,401 | (25) | % | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs | 3,384 | 8,015 | (58) | % | 8,427 | 13,611 | (38) | % | |||||||||||||||||||||||||||
Amortization of value of insurance in force | 175 | 164 | 7 | % | 525 | 490 | 7 | % | |||||||||||||||||||||||||||
Other underwriting expenses | 4,905 | 5,951 | (18) | % | 15,630 | 17,159 | (9) | % | |||||||||||||||||||||||||||
Total underwriting, acquisition and insurance expenses | 8,784 | 14,535 | (40) | % | 25,638 | 32,661 | (22) | % | |||||||||||||||||||||||||||
Total adjusted operating benefits and expenses | 34,436 | 43,120 | (20) | % | 115,691 | 119,766 | (3) | % | |||||||||||||||||||||||||||
Pre-tax adjusted operating income | $ | 18,916 | $ | 8,121 | 133 | % | $ | 45,852 | $ | 38,420 | 19 | % | |||||||||||||||||||||||
Other data | |||||||||||||||||||||||||||||||||||
Annuity premiums collected, direct (1) | $ | 45,263 | $ | 56,076 | (19) | % | $ | 139,167 | $ | 185,234 | (25) | % | |||||||||||||||||||||||
Policy liabilities and accruals, end of period | 4,561,434 | 4,392,884 | 4 | % | |||||||||||||||||||||||||||||||
Average invested assets, at amortized cost net of allowance for credit losses (2) | 4,613,118 | 4,489,981 | 3 | % | |||||||||||||||||||||||||||||||
Other investment-related income included in net investment income (3) | 1,541 | 699 | 120 | % | 2,840 | 2,245 | 27 | % | |||||||||||||||||||||||||||
Average aggregate individual annuity account value (6) | 3,180,883 | 3,173,145 | — | % | |||||||||||||||||||||||||||||||
Earned spread on individual annuity products: | |||||||||||||||||||||||||||||||||||
Annualized yield on average invested assets (4) | 4.52 | % | 4.72 | % | |||||||||||||||||||||||||||||||
Annualized average crediting rate (5) | 2.49 | % | 2.57 | % | |||||||||||||||||||||||||||||||
Spread | 2.03 | % | 2.15 | % | |||||||||||||||||||||||||||||||
Individual annuity withdrawal rate (7) | 4.4 | % | 5.7 | % | |||||||||||||||||||||||||||||||
Impact of Unlocking on Pre-tax Adjusted Operating Income | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Amortization of deferred sales inducements reported in interest sensitive product benefits | $ | 57 | $ | (195) | $ | 57 | $ | (195) | |||||||||||||||
Amortization of deferred acquisition costs | (1,189) | (4,668) | (1,189) | (4,668) | |||||||||||||||||||
Changes in reserves reported in interest sensitive product benefits | 5,358 | — | 5,358 | — | |||||||||||||||||||
Increase (decrease) to pre-tax adjusted operating income | $ | 4,226 | $ | (4,863) | $ | 4,226 | $ | (4,863) | |||||||||||||||
Life Insurance Segment | ||||||||||
Three months ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands) | ||||||||||
Adjusted operating revenues: | ||||||||||
Interest sensitive product charges and other income | $ | 20,332 | $ | 18,875 | 8 | % | ||||
Traditional life insurance premiums | 49,308 | 49,392 | — | % | ||||||
Net investment income | 37,575 | 38,991 | (4 | )% | ||||||
Total adjusted operating revenues | 107,215 | 107,258 | — | % | ||||||
Adjusted operating benefits and expenses: | ||||||||||
Interest sensitive product benefits: | ||||||||||
Interest and index credits | 7,843 | 8,051 | (3 | )% | ||||||
Death benefits and other | 16,371 | 14,466 | 13 | % | ||||||
Total interest sensitive product benefits | 24,214 | 22,517 | 8 | % | ||||||
Traditional life insurance benefits: | ||||||||||
Death benefits | 26,098 | 24,416 | 7 | % | ||||||
Surrender and other benefits | 10,142 | 9,723 | 4 | % | ||||||
Increase in traditional life future policy benefits | 9,970 | 12,534 | (20 | )% | ||||||
Total traditional life insurance benefits | 46,210 | 46,673 | (1 | )% | ||||||
Distributions to participating policyholders | 2,529 | 2,534 | — | % | ||||||
Underwriting, acquisition and insurance expenses: | ||||||||||
Commission expense, net of deferrals | 4,832 | 4,639 | 4 | % | ||||||
Amortization of deferred acquisition costs | 2,419 | 4,799 | (50 | )% | ||||||
Amortization of value of insurance in force | 370 | 372 | (1 | )% | ||||||
Other underwriting expenses | 16,749 | 16,002 | 5 | % | ||||||
Total underwriting, acquisition and insurance expenses | 24,370 | 25,812 | (6 | )% | ||||||
Total adjusted operating benefits and expenses | 97,323 | 97,536 | — | % | ||||||
9,892 | 9,722 | 2 | % | |||||||
Equity income, before tax | 375 | 370 | 1 | % | ||||||
Pre-tax adjusted operating income | $ | 10,267 | $ | 10,092 | 2 | % |
Life Insurance Segment | |||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Adjusted operating revenues: | |||||||||||||||||||||||||||||||||||
Interest sensitive product charges and other income | $ | 23,180 | $ | 19,032 | 22 | % | $ | 63,404 | $ | 57,404 | 10 | % | |||||||||||||||||||||||
Traditional life insurance premiums | 47,792 | 46,982 | 2 | % | 147,429 | 147,361 | — | % | |||||||||||||||||||||||||||
Net investment income | 40,198 | 38,581 | 4 | % | 117,044 | 118,026 | (1) | % | |||||||||||||||||||||||||||
Total adjusted operating revenues | 111,170 | 104,595 | 6 | % | 327,877 | 322,791 | 2 | % | |||||||||||||||||||||||||||
Adjusted operating benefits and expenses: | |||||||||||||||||||||||||||||||||||
Interest sensitive product benefits: | |||||||||||||||||||||||||||||||||||
Interest and index credits | 11,110 | 8,326 | 33 | % | 28,453 | 25,395 | 12 | % | |||||||||||||||||||||||||||
Death benefits and other | 22,958 | 17,198 | 33 | % | 56,175 | 45,556 | 23 | % | |||||||||||||||||||||||||||
Total interest sensitive product benefits | 34,068 | 25,524 | 33 | % | 84,628 | 70,951 | 19 | % | |||||||||||||||||||||||||||
Traditional life insurance benefits: | |||||||||||||||||||||||||||||||||||
Death benefits | 25,579 | 25,233 | 1 | % | 75,261 | 70,226 | 7 | % | |||||||||||||||||||||||||||
Surrender and other benefits | 7,835 | 9,435 | (17) | % | 25,360 | 29,250 | (13) | % | |||||||||||||||||||||||||||
Increase in traditional life future policy benefits | 12,113 | 8,206 | 48 | % | 36,227 | 32,031 | 13 | % | |||||||||||||||||||||||||||
Total traditional life insurance benefits | 45,527 | 42,874 | 6 | % | 136,848 | 131,507 | 4 | % | |||||||||||||||||||||||||||
Distributions to participating policyholders | 1,733 | 2,441 | (29) | % | 5,879 | 7,539 | (22) | % | |||||||||||||||||||||||||||
Underwriting, acquisition and insurance expenses: | |||||||||||||||||||||||||||||||||||
Commission expense, net of deferrals | 4,547 | 4,487 | 1 | % | 14,041 | 14,305 | (2) | % | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs | 8,404 | (592) | (1,520) | % | 13,888 | 8,551 | 62 | % | |||||||||||||||||||||||||||
Amortization of value of insurance in force | 370 | 372 | (1) | % | 1,110 | 1,116 | (1) | % | |||||||||||||||||||||||||||
Other underwriting expenses | 14,179 | 16,278 | (13) | % | 46,006 | 48,658 | (5) | % | |||||||||||||||||||||||||||
Total underwriting, acquisition and insurance expenses | 27,500 | 20,545 | 34 | % | 75,045 | 72,630 | 3 | % | |||||||||||||||||||||||||||
Total adjusted operating benefits and expenses | 108,828 | 91,384 | 19 | % | 302,400 | 282,627 | 7 | % | |||||||||||||||||||||||||||
2,342 | 13,211 | (82) | % | 25,477 | 40,164 | (37) | % | ||||||||||||||||||||||||||||
Equity income (loss), before tax | 299 | 821 | (64) | % | (309) | 2,199 | (114) | % | |||||||||||||||||||||||||||
Pre-tax adjusted operating income | $ | 2,641 | $ | 14,032 | (81) | % | $ | 25,168 | $ | 42,363 | (41) | % |
Life Insurance Segment - continued | |||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Other data | |||||||||||||||||||||||||||||||||||
Life premiums collected, net of reinsurance (1) | $ | 77,666 | $ | 75,043 | 3 | % | $ | 238,774 | $ | 232,442 | 3 | % | |||||||||||||||||||||||
Policy liabilities and accruals, end of period | 3,184,095 | 3,057,183 | 4 | % | |||||||||||||||||||||||||||||||
Life insurance in force, end of period | 62,695,650 | 61,025,460 | 3 | % | |||||||||||||||||||||||||||||||
Average invested assets, at amortized cost net of allowance for credit losses (2) | 3,237,690 | 3,132,734 | 3 | % | |||||||||||||||||||||||||||||||
Other investment-related income included in net investment income (3) | 103 | 70 | 47 | % | 275 | 1,353 | (80) | % | |||||||||||||||||||||||||||
Average aggregate interest sensitive life account value (8) | 903,703 | 874,574 | 3 | % | |||||||||||||||||||||||||||||||
Interest sensitive life insurance spread: | |||||||||||||||||||||||||||||||||||
Annualized yield on average invested assets (4) | 4.96 | % | 5.25 | % | |||||||||||||||||||||||||||||||
Annualized average crediting rate (5) | 3.88 | % | 3.77 | % | |||||||||||||||||||||||||||||||
Spread | 1.08 | % | 1.48 | % | |||||||||||||||||||||||||||||||
Life insurance lapse and surrender rates (9) | 3.8 | % | 4.6 | % | |||||||||||||||||||||||||||||||
Death benefits, net of reinsurance and reserves released | $26,930 | $25,846 | 4 | % | $ | 78,337 | $ | 72,385 | 8 | % | |||||||||||||||||||||||||
Life Insurance Segment - continued | ||||||||||
Three months ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands) | ||||||||||
Other data | ||||||||||
Life premiums collected, net of reinsurance (1) | $ | 82,635 | $ | 78,001 | 6 | % | ||||
Policy liabilities and accruals, end of period | 3,106,864 | 3,015,751 | 3 | % | ||||||
Life insurance in force, end of period | 61,852,616 | 60,240,261 | 3 | % | ||||||
Average invested assets, at amortized cost (2) | 3,213,376 | 3,107,575 | 3 | % | ||||||
Other investment-related income included in net investment income (3) | 59 | 330 | (82 | )% | ||||||
Average interest sensitive life account value | 896,688 | 869,476 | 3 | % | ||||||
Interest sensitive life insurance spread: | ||||||||||
Weighted average yield on cash and invested assets (2) | 4.99 | % | 5.21 | % | ||||||
Weighted average crediting rate | 3.87 | % | 3.68 | % | ||||||
Spread | 1.12 | % | 1.53 | % | ||||||
Life insurance lapse and surrender rates | 4.5 | % | 4.6 | % | ||||||
Death benefits, net of reinsurance and reserves released | $ | 25,668 | $ | 26,672 | (4 | )% |
Impact of Unlocking on Pre-tax Adjusted Operating Income | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Amortization of unearned revenue reserve reported in interest sensitive product charges and other income | $ | 3,772 | $ | (386) | $ | 3,772 | $ | (386) | |||||||||||||||
Amortization of deferred sales inducements reported in interest sensitive product benefits | (1,207) | 45 | (1,207) | 45 | |||||||||||||||||||
Amortization of deferred sales inducements reported in traditional life insurance benefits | 138 | 69 | 138 | 69 | |||||||||||||||||||
Amortization of deferred acquisition costs | (5,556) | 3,728 | (5,556) | 3,728 | |||||||||||||||||||
Changes in reserves reported in interest sensitive product benefits | (7,270) | (1,062) | (7,270) | (1,062) | |||||||||||||||||||
Increase (decrease) to pre-tax adjusted operating income | $ | (10,123) | $ | 2,394 | $ | (10,123) | $ | 2,394 | |||||||||||||||
Corporate and Other Segment | |||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Adjusted operating revenues: | |||||||||||||||||||||||||||||||||||
Interest sensitive product charges | $ | 10,246 | $ | 10,408 | (2) | % | $ | 31,484 | $ | 31,527 | — | % | |||||||||||||||||||||||
Net investment income | 7,306 | 8,277 | (12) | % | 22,242 | 25,505 | (13) | % | |||||||||||||||||||||||||||
Other income | 4,946 | 4,548 | 9 | % | 14,834 | 12,883 | 15 | % | |||||||||||||||||||||||||||
Total adjusted operating revenues | 22,498 | 23,233 | (3) | % | 68,560 | 69,915 | (2) | % | |||||||||||||||||||||||||||
Adjusted operating benefits and expenses: | |||||||||||||||||||||||||||||||||||
Interest sensitive product benefits | 10,310 | 7,642 | 35 | % | 26,141 | 26,865 | (3) | % | |||||||||||||||||||||||||||
Underwriting, acquisition and insurance expenses: | |||||||||||||||||||||||||||||||||||
Commission expense, net of deferrals | 669 | 720 | (7) | % | 2,003 | 2,170 | (8) | % | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs | 111 | 1,854 | (94) | % | 4,533 | 1,792 | 153 | % | |||||||||||||||||||||||||||
Other underwriting expenses | 1,562 | 1,244 | 26 | % | 5,141 | 3,810 | 35 | % | |||||||||||||||||||||||||||
Total underwriting, acquisition and insurance expenses | 2,342 | 3,818 | (39) | % | 11,677 | 7,772 | 50 | % | |||||||||||||||||||||||||||
Interest expense | 1,212 | 1,213 | — | % | 3,638 | 3,637 | — | % | |||||||||||||||||||||||||||
Other expenses | 7,878 | 5,764 | 37 | % | 22,524 | 18,649 | 21 | % | |||||||||||||||||||||||||||
Total adjusted operating benefits and expenses | 21,742 | 18,437 | 18 | % | 63,980 | 56,923 | 12 | % | |||||||||||||||||||||||||||
756 | 4,796 | (84) | % | 4,580 | 12,992 | (65) | % | ||||||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interest | 21 | (47) | (145) | % | 165 | (7) | (2,457) | % | |||||||||||||||||||||||||||
Equity income, before tax | 52 | 190 | (73) | % | 9 | 868 | (99) | % | |||||||||||||||||||||||||||
Pre-tax adjusted operating income | $ | 829 | $ | 4,939 | (83) | % | $ | 4,754 | $ | 13,853 | (66) | % |
Other data | |||||||||||||||||||||||||||||||||||
Average invested assets, at amortized cost net of allowance for credit losses (2) | $ | 695,909 | $ | 700,558 | (1) | % | |||||||||||||||||||||||||||||
Other investment-related income (loss) included in net investment income (3) | $ | (39) | $ | 116 | (134) | % | (13) | 604 | (102) | % | |||||||||||||||||||||||||
Average aggregate interest sensitive account value (10) | 360,332 | 362,565 | (1) | % | |||||||||||||||||||||||||||||||
Death benefits, net of reinsurance and reserves released | 6,643 | 4,261 | 56 | % | 15,838 | 16,783 | (6) | % | |||||||||||||||||||||||||||
Estimated impact on pre-tax adjusted operating income from separate account performance on amortization of deferred acquisition costs, deferred sales inducements and unearned revenue reserve (11) | 1,500 | (200) | (850) | % | (50) | 2,600 | (102) | % |
Corporate and Other Segment | ||||||||||
Three months ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands) | ||||||||||
Adjusted operating revenues: | ||||||||||
Interest sensitive product charges | $ | 10,956 | $ | 10,405 | 5 | % | ||||
Net investment income | 8,057 | 8,640 | (7 | )% | ||||||
Other income | 5,027 | 4,083 | 23 | % | ||||||
Total adjusted operating revenues | 24,040 | 23,128 | 4 | % | ||||||
Adjusted operating benefits and expenses: | ||||||||||
Interest sensitive product benefits | 7,626 | 10,365 | (26 | )% | ||||||
Underwriting, acquisition and insurance expenses: | ||||||||||
Commission expense, net of deferrals | 699 | 704 | (1 | )% | ||||||
Amortization of deferred acquisition costs | 5,055 | (967 | ) | (623 | )% | |||||
Other underwriting expenses | 1,777 | 1,153 | 54 | % | ||||||
Total underwriting, acquisition and insurance expenses | 7,531 | 890 | 746 | % | ||||||
Interest expense | 1,213 | 1,212 | — | % | ||||||
Other expenses | 7,421 | 6,250 | 19 | % | ||||||
Total adjusted operating benefits and expenses | 23,791 | 18,717 | 27 | % | ||||||
249 | 4,411 | (94 | )% | |||||||
Net (income) loss attributable to noncontrolling interest | 56 | (1 | ) | (5,700 | )% | |||||
Equity income, before tax | (86 | ) | (91 | ) | (5 | )% | ||||
Pre-tax adjusted operating income | $ | 219 | $ | 4,319 | (95 | )% |
Other data | ||||||||||
Average invested assets, at amortized cost (1) | $ | 701,876 | $ | 703,846 | — | % | ||||
Other investment-related income included in net investment income (2) | 4 | 121 | (97 | )% | ||||||
Average interest sensitive life account value | 358,936 | 361,872 | (1 | )% | ||||||
Death benefits, net of reinsurance and reserves released | 4,343 | 7,069 | (39 | )% | ||||||
Estimated impact on pre-tax adjusted operating income from separate account performance on amortization of deferred acquisition costs, deferred sales inducements and unearned revenue reserve | (3,400 | ) | 2,200 | (255 | )% |
Impact of Unlocking on Pre-tax Adjusted Operating Income | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Amortization of unearned revenue reserve reported in interest sensitive product charges | $ | (62) | $ | (94) | $ | (62) | $ | (94) | |||||||||||||||
Amortization of deferred sales inducements reported in interest sensitive product benefits | 51 | 26 | 51 | 26 | |||||||||||||||||||
Amortization of deferred acquisition costs | (150) | (135) | (150) | (135) | |||||||||||||||||||
Changes in reserves reported in interest sensitive product benefits | (659) | 2 | (659) | 2 | |||||||||||||||||||
Decrease to pre-tax adjusted operating income | $ | (820) | $ | (201) | $ | (820) | $ | (201) | |||||||||||||||
— | — |
Components of income tax | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Income tax benefit (expense) | $ | 3,081 | $ | (6,276 | ) | ||
Tax on equity income | (61 | ) | (59 | ) | |||
Income tax offset on net income adjustments | (5,889 | ) | 2,164 | ||||
Income taxes on adjusted operating income | $ | (2,869 | ) | $ | (4,171 | ) | |
Income taxes on adjusted operating income before benefits of LIHTC investments | $ | (3,752 | ) | $ | (5,076 | ) | |
Amounts related to LIHTC investments | 883 | 905 | |||||
Income taxes on adjusted operating income | $ | (2,869 | ) | $ | (4,171 | ) |
Impact of Adjustments to Net Income Attributable to FBL | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Realized gains (losses) on investments and change in fair value of equity securities and derivatives | $ | (28,069 | ) | $ | 10,846 | ||
Offsets: (1) | |||||||
Change in amortization | (176 | ) | (256 | ) | |||
Reserve change on interest sensitive products | 205 | (285 | ) | ||||
Income tax | 5,889 | (2,164 | ) | ||||
Net impact of adjustments to net income | $ | (22,151 | ) | $ | 8,141 | ||
Net impact per common share - basic and assuming dilution | $ | (0.89 | ) | $ | 0.33 |
Realized Gains (Losses) on Investments | |||||||
Three months ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars in thousands) | |||||||
Realized gains (losses) on investments: | |||||||
Realized gains | $ | 12 | $ | 5,772 | |||
Realized losses | (182 | ) | (34 | ) | |||
Change in unrealized gains/losses on equity securities | (13,231 | ) | 4,419 | ||||
Total other-than-temporary impairment losses | — | (869 | ) | ||||
Total allowance for credit losses | (12,261 | ) | — | ||||
Net realized investment gains (losses) | $ | (25,662 | ) | $ | 9,288 |
Components of income tax | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Income tax expense | $ | (2,883) | $ | (1,642) | $ | (5,887) | $ | (13,429) | |||||||||||||||
Income tax benefit (expense) on equity income | (74) | (212) | 62 | (644) | |||||||||||||||||||
Income tax offset on net income adjustments | 324 | (23) | (5,309) | 2,290 | |||||||||||||||||||
Income taxes on adjusted operating income | $ | (2,633) | $ | (1,877) | $ | (11,134) | $ | (11,783) | |||||||||||||||
Income taxes on adjusted operating income before benefits of LIHTC investments | $ | (3,493) | $ | (2,727) | $ | (13,801) | $ | (14,437) | |||||||||||||||
Amounts related to LIHTC investments | 860 | 850 | 2,667 | 2,654 | |||||||||||||||||||
Income taxes on adjusted operating income | $ | (2,633) | $ | (1,877) | $ | (11,134) | $ | (11,783) |
Impact of Adjustments to Net Income Attributable to FBL | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Realized gains (losses) on investments and change in fair value of equity securities and derivatives | $ | 780 | $ | (198) | $ | (26,863) | $ | 11,092 | |||||||||||||||
Offsets: (1) | |||||||||||||||||||||||
Change in amortization | 639 | (343) | 597 | (647) | |||||||||||||||||||
Reserve change on interest sensitive products | 126 | 432 | 987 | 462 | |||||||||||||||||||
Income tax | (324) | 23 | 5,309 | (2,290) | |||||||||||||||||||
Net impact of adjustments to net income | $ | 1,221 | $ | (86) | $ | (19,970) | $ | 8,617 | |||||||||||||||
Net impact per common share - basic and assuming dilution | $ | 0.05 | $ | (0.01) | $ | (0.81) | $ | 0.35 | |||||||||||||||
Realized Gains (Losses) on Investments | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Realized gains (losses) on investments: | |||||||||||||||||||||||
Realized gains | $ | 237 | $ | 534 | $ | 431 | $ | 6,524 | |||||||||||||||
Realized losses | (60) | (3) | (1,989) | (341) | |||||||||||||||||||
Change in unrealized gains/losses on equity securities | 1,814 | 165 | (7,099) | 5,047 | |||||||||||||||||||
Total other-than-temporary impairment losses | — | (50) | — | (919) | |||||||||||||||||||
Total allowance for credit losses | 1,903 | — | (10,855) | — | |||||||||||||||||||
Net realized investment gains (losses) | $ | 3,894 | $ | 646 | $ | (19,512) | $ | 10,311 | |||||||||||||||
Investment Credit Impairment Losses Recognized in Net Income | ||||||||||||||||||||||||||||||
Change in Allowance/Credit Impairment Losses Recognized in Net Income | Change in Allowance/Credit Impairment Losses Recognized in Net Income | |||||||||||||||||||||||||||||
Three months ended March 31, | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||
Corporate securities: | Corporate securities: | |||||||||||||||||||||||||||||
Consumer Products | Consumer Products | $ | 850 | $ | — | $ | (122) | $ | — | |||||||||||||||||||||
Financial | $ | 5,430 | $ | — | Financial | 730 | — | (4,315) | — | |||||||||||||||||||||
Energy | 6,716 | — | Energy | (175) | — | (7,060) | — | |||||||||||||||||||||||
Other asset-backed | — | 869 | Other asset-backed | (281) | — | (598) | (869) | |||||||||||||||||||||||
Securities and indebtedness of related parties | Securities and indebtedness of related parties | — | (50) | — | (50) | |||||||||||||||||||||||||
Mortgage loans | 115 | — | Mortgage loans | 779 | — | 1,240 | — | |||||||||||||||||||||||
Total allowance for credit losses (2020); other-than-temporary impairment losses (2019) reported in net income | $ | 12,261 | $ | 869 | Total allowance for credit losses (2020); other-than-temporary impairment losses (2019) reported in net income | $ | 1,903 | $ | (50) | $ | (10,855) | $ | (919) |
Fixed Maturity Acquisitions Selected Information | ||||||||||||||
Nine months ended September 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Cost of acquisitions: | ||||||||||||||
Corporate | $ | 287,347 | $ | 301,717 | ||||||||||
Mortgage- and asset-backed | 285,243 | 248,185 | ||||||||||||
United States Government and agencies | 25,212 | — | ||||||||||||
Tax-exempt municipals | 55,381 | 27,715 | ||||||||||||
Total | $ | 653,183 | $ | 582,617 | ||||||||||
Effective annual yield | 3.20 | % | 3.90 | % | ||||||||||
Credit quality | ||||||||||||||
NAIC 1 designation | 73.9 | % | 68.9 | % | ||||||||||
NAIC 2 designation | 19.7 | % | 31.1 | % | ||||||||||
Non-investment grade | 6.4 | % | — | % | ||||||||||
Weighted-average life in years | 11.0 | 16.0 |
Fixed Maturity Acquisitions Selected Information | ||||||||
Three months ended March 31, | ||||||||
2020 | 2019 | |||||||
(Dollars in thousands) | ||||||||
Cost of acquisitions: | ||||||||
Corporate | $ | 123,877 | $ | 75,567 | ||||
Mortgage- and asset-backed | 95,381 | 57,951 | ||||||
Tax-exempt municipals | — | 8,060 | ||||||
Total | $ | 219,258 | $ | 141,578 | ||||
Effective annual yield | 3.50 | % | 4.33 | % | ||||
Credit quality | ||||||||
NAIC 1 designation | 66.1 | % | 74.3 | % | ||||
NAIC 2 designation | 24.8 | % | 25.7 | % | ||||
Non-investment grade | 9.1 | % | — | % | ||||
Weighted-average life in years | 7.0 | 15.0 |
Investment Portfolio Summary | |||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Carrying Value | Percent | Carrying Value | Percent | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Fixed maturities - available for sale: | |||||||||||||||||||||||
Public | $ | 6,111,775 | 63.8 | % | $ | 5,763,570 | 63.4 | % | |||||||||||||||
144A private placement | 1,837,248 | 19.2 | 1,699,924 | 18.7 | |||||||||||||||||||
Private placement | 295,454 | 3.1 | 239,134 | 2.6 | |||||||||||||||||||
Total fixed maturities - available for sale | 8,244,477 | 86.1 | 7,702,628 | 84.7 | |||||||||||||||||||
Equity securities | 93,269 | 1.0 | 100,228 | 1.1 | |||||||||||||||||||
Mortgage loans | 972,210 | 10.1 | 1,011,678 | 11.2 | |||||||||||||||||||
Real estate | 955 | — | 955 | — | |||||||||||||||||||
Policy loans | 197,009 | 2.1 | 201,589 | 2.2 | |||||||||||||||||||
Short-term investments | 18,434 | 0.2 | 11,865 | 0.1 | |||||||||||||||||||
Other investments | 55,639 | 0.5 | 62,680 | 0.7 | |||||||||||||||||||
Total investments | $ | 9,581,993 | 100.0 | % | $ | 9,091,623 | 100.0 | % |
Investment Portfolio Summary | |||||||||||||
March 31, 2020 | December 31, 2019 | ||||||||||||
Carrying Value | Percent | Carrying Value | Percent | ||||||||||
(Dollars in thousands) | |||||||||||||
Fixed maturities - available for sale: | |||||||||||||
Public | $ | 5,688,408 | 63.4 | % | $ | 5,763,570 | 63.4 | % | |||||
144A private placement | 1,680,060 | 18.7 | 1,699,924 | 18.7 | |||||||||
Private placement | 248,697 | 2.8 | 239,134 | 2.6 | |||||||||
Total fixed maturities - available for sale | 7,617,165 | 84.9 | 7,702,628 | 84.7 | |||||||||
Equity securities | 88,610 | 1.0 | 100,228 | 1.1 | |||||||||
Mortgage loans | 988,854 | 11.0 | 1,011,678 | 11.2 | |||||||||
Real estate | 955 | — | 955 | — | |||||||||
Policy loans | 202,227 | 2.3 | 201,589 | 2.2 | |||||||||
Short-term investments | 29,580 | 0.3 | 11,865 | 0.1 | % | ||||||||
Other investments | 41,777 | 0.5 | 62,680 | 0.7 | % | ||||||||
Total investments | $ | 8,969,168 | 100.0 | % | $ | 9,091,623 | 100.0 | % |
Credit Quality by NAIC Designation and Equivalent Rating | Credit Quality by NAIC Designation and Equivalent Rating | Credit Quality by NAIC Designation and Equivalent Rating | ||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||
NAIC Designation | Equivalent Rating (1) | Carrying Value | Percent | Carrying Value | Percent | NAIC Designation | Equivalent Rating (1) | Carrying Value | Percent | Carrying Value | Percent | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
1 | AAA, AA, A | $ | 5,279,557 | 69.3 | % | $ | 5,255,079 | 68.2 | % | 1 | AAA, AA, A | $ | 5,572,781 | 67.6 | % | $ | 5,255,079 | 68.2 | % | |||||||||||||||||||||||||||||
2 | BBB | 2,139,645 | 28.1 | 2,268,920 | 29.5 | 2 | BBB | 2,372,784 | 28.8 | 2,268,920 | 29.5 | |||||||||||||||||||||||||||||||||||||
Total investment grade | 7,419,202 | 97.4 | 7,523,999 | 97.7 | Total investment grade | 7,945,565 | 96.4 | 7,523,999 | 97.7 | |||||||||||||||||||||||||||||||||||||||
3 | BB | 146,123 | 1.9 | 123,120 | 1.6 | 3 | BB | 229,223 | 2.7 | 123,120 | 1.6 | |||||||||||||||||||||||||||||||||||||
4 | B | 41,965 | 0.6 | 38,272 | 0.5 | 4 | B | 57,560 | 0.7 | 38,272 | 0.5 | |||||||||||||||||||||||||||||||||||||
5 | CCC | 9,869 | 0.1 | 17,231 | 0.2 | 5 | CCC | 6,097 | 0.1 | 17,231 | 0.2 | |||||||||||||||||||||||||||||||||||||
6 | In or near default | 6 | — | 6 | — | 6 | In or near default | 6,032 | 0.1 | 6 | — | |||||||||||||||||||||||||||||||||||||
Total below investment grade | 197,963 | 2.6 | 178,629 | 2.3 | Total below investment grade | 298,912 | 3.6 | 178,629 | 2.3 | |||||||||||||||||||||||||||||||||||||||
Total fixed maturities - available for sale | $ | 7,617,165 | 100.0 | % | $ | 7,702,628 | 100.0 | % | Total fixed maturities - available for sale | $ | 8,244,477 | 100.0 | % | $ | 7,702,628 | 100.0 | % |
Gross Unrealized Gains and Gross Unrealized Losses by Internal Industry Classification | |||||||||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||||||||
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 | $ | 352,188 | $ | 333,951 | $ | 48,876 | $ | 18,237 | $ | (800) | |||||||||||||||||||
Capital goods | 335,959 | 326,008 | 46,445 | 9,951 | (431) | ||||||||||||||||||||||||
Communications | 159,573 | 154,115 | 27,448 | 5,458 | (160) | ||||||||||||||||||||||||
Consumer cyclical | 189,828 | 180,396 | 22,076 | 9,432 | (1,562) | ||||||||||||||||||||||||
Consumer non-cyclical | 696,098 | 671,180 | 117,952 | 24,918 | (1,631) | ||||||||||||||||||||||||
Energy | 428,390 | 355,180 | 41,031 | 73,210 | (8,136) | ||||||||||||||||||||||||
Finance | 750,292 | 718,757 | 78,703 | 31,535 | (1,451) | ||||||||||||||||||||||||
Transportation | 139,720 | 129,571 | 17,157 | 10,149 | (237) | ||||||||||||||||||||||||
Utilities | 176,811 | 174,535 | 23,975 | 2,276 | (15) | ||||||||||||||||||||||||
Technology | 884,298 | 872,878 | 176,413 | 11,420 | (548) | ||||||||||||||||||||||||
Other | 20,842 | 20,842 | 2,556 | — | — | ||||||||||||||||||||||||
Total corporate securities | 4,133,999 | 3,937,413 | 602,632 | 196,586 | (14,971) | ||||||||||||||||||||||||
Mortgage- and asset-backed securities | 2,628,534 | 2,339,764 | 240,186 | 288,770 | (10,431) | ||||||||||||||||||||||||
United States Government and agencies | 37,595 | 12,701 | 2,962 | 24,894 | (453) | ||||||||||||||||||||||||
States and political subdivisions | 1,444,349 | 1,410,905 | 181,171 | 33,444 | (1,356) | ||||||||||||||||||||||||
Total | $ | 8,244,477 | $ | 7,700,783 | $ | 1,026,951 | $ | 543,694 | $ | (27,211) |
Gross Unrealized Gains and Gross Unrealized Losses by Internal Industry Classification | |||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||
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 | $ | 337,004 | $ | 330,254 | $ | 33,472 | $ | 6,750 | $ | (259) | |||||||||||||||||||
Capital goods | 302,566 | 292,480 | 28,427 | 10,086 | (278) | ||||||||||||||||||||||||
Communications | 143,907 | 139,092 | 17,900 | 4,815 | (453) | ||||||||||||||||||||||||
Consumer cyclical | 154,744 | 145,584 | 12,971 | 9,160 | (357) | ||||||||||||||||||||||||
Consumer non-cyclical | 611,618 | 554,145 | 68,658 | 57,473 | (4,057) | ||||||||||||||||||||||||
Energy | 420,805 | 384,898 | 42,177 | 35,907 | (6,637) | ||||||||||||||||||||||||
Finance | 692,341 | 667,173 | 62,295 | 25,168 | (2,287) | ||||||||||||||||||||||||
Transportation | 129,421 | 116,659 | 11,186 | 12,762 | (415) | ||||||||||||||||||||||||
Utilities | 158,073 | 155,105 | 15,617 | 2,968 | (23) | ||||||||||||||||||||||||
Technology | 804,317 | 770,167 | 123,232 | 34,150 | (765) | ||||||||||||||||||||||||
Other | 24,154 | 24,154 | 2,114 | — | — | ||||||||||||||||||||||||
Total corporate securities | 3,778,950 | 3,579,711 | 418,049 | 199,239 | (15,531) | ||||||||||||||||||||||||
Mortgage- and asset-backed securities | 2,432,382 | 2,092,650 | 144,832 | 339,732 | (5,956) | ||||||||||||||||||||||||
United States Government and agencies | 14,123 | 11,629 | 1,711 | 2,494 | (5) | ||||||||||||||||||||||||
States and political subdivisions | 1,477,173 | 1,451,870 | 145,125 | 25,303 | (866) | ||||||||||||||||||||||||
Total | $ | 7,702,628 | $ | 7,135,860 | $ | 709,717 | $ | 566,768 | $ | (22,358) |
Credit Quality of Available-for-Sale Fixed Maturities with Unrealized Losses | ||||||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||
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 | $ | 326,561 | 60.1 | % | $ | (9,017) | 33.1 | % | |||||||||||||||||||||||
2 | BBB | 97,069 | 17.8 | (5,980) | 22.0 | |||||||||||||||||||||||||||
Total investment grade | 423,630 | 77.9 | (14,997) | 55.1 | ||||||||||||||||||||||||||||
3 | BB | 100,117 | 18.4 | (9,436) | 34.7 | |||||||||||||||||||||||||||
4 | B | 19,942 | 3.7 | (2,778) | 10.2 | |||||||||||||||||||||||||||
6 | In or near default | 5 | — | — | — | |||||||||||||||||||||||||||
Total below investment grade | 120,064 | 22.1 | (12,214) | 44.9 | ||||||||||||||||||||||||||||
Total | $ | 543,694 | 100.0 | % | $ | (27,211) | 100.0 | % |
Gross Unrealized Gains and Gross Unrealized Losses by Internal Industry Classification | |||||||||||||||||||
March 31, 2020 | |||||||||||||||||||
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 | $ | 315,125 | $ | 213,895 | $ | 17,975 | $ | 101,230 | $ | (9,972 | ) | ||||||||
Capital goods | 296,462 | 244,789 | 20,944 | 51,673 | (2,352 | ) | |||||||||||||
Communications | 145,589 | 132,610 | 16,508 | 12,979 | (1,837 | ) | |||||||||||||
Consumer cyclical | 166,559 | 121,146 | 11,343 | 45,413 | (6,045 | ) | |||||||||||||
Consumer non-cyclical | 615,093 | 514,586 | 61,483 | 100,507 | (11,426 | ) | |||||||||||||
Energy | 344,945 | 136,945 | 13,502 | 208,000 | (55,449 | ) | |||||||||||||
Finance | 670,913 | 488,527 | 40,519 | 182,386 | (7,909 | ) | |||||||||||||
Transportation | 131,266 | 98,904 | 8,823 | 32,362 | (3,260 | ) | |||||||||||||
Utilities | 161,218 | 128,891 | 13,877 | 32,327 | (1,993 | ) | |||||||||||||
Technology | 785,525 | 715,296 | 104,734 | 70,229 | (2,948 | ) | |||||||||||||
Other | 24,628 | 24,628 | 2,413 | — | — | ||||||||||||||
Total corporate securities | 3,657,323 | 2,820,217 | 312,121 | 837,106 | (103,191 | ) | |||||||||||||
Mortgage- and asset-backed securities | 2,494,349 | 1,602,877 | 216,154 | 891,472 | (66,480 | ) | |||||||||||||
United States Government and agencies | 14,204 | 14,204 | 3,375 | — | — | ||||||||||||||
States and political subdivisions | 1,451,289 | 1,440,298 | 152,500 | 10,991 | (433 | ) | |||||||||||||
Total | $ | 7,617,165 | $ | 5,877,596 | $ | 684,150 | $ | 1,739,569 | $ | (170,104 | ) |
December 31, 2019 | |||||||||||||||||||
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 | $ | 337,004 | $ | 330,254 | $ | 33,472 | $ | 6,750 | $ | (259 | ) | ||||||||
Capital goods | 302,566 | 292,480 | 28,427 | 10,086 | (278 | ) | |||||||||||||
Communications | 143,907 | 139,092 | 17,900 | 4,815 | (453 | ) | |||||||||||||
Consumer cyclical | 154,744 | 145,584 | 12,971 | 9,160 | (357 | ) | |||||||||||||
Consumer non-cyclical | 611,618 | 554,145 | 68,658 | 57,473 | (4,057 | ) | |||||||||||||
Energy | 420,805 | 384,898 | 42,177 | 35,907 | (6,637 | ) | |||||||||||||
Finance | 692,341 | 667,173 | 62,295 | 25,168 | (2,287 | ) | |||||||||||||
Transportation | 129,421 | 116,659 | 11,186 | 12,762 | (415 | ) | |||||||||||||
Utilities | 158,073 | 155,105 | 15,617 | 2,968 | (23 | ) | |||||||||||||
Technology | 804,317 | 770,167 | 123,232 | 34,150 | (765 | ) | |||||||||||||
Other | 24,154 | 24,154 | 2,114 | — | — | ||||||||||||||
Total corporate securities | 3,778,950 | 3,579,711 | 418,049 | 199,239 | (15,531 | ) | |||||||||||||
Mortgage- and asset-backed securities | 2,432,382 | 2,092,650 | 144,832 | 339,732 | (5,956 | ) | |||||||||||||
United States Government and agencies | 14,123 | 11,629 | 1,711 | 2,494 | (5 | ) | |||||||||||||
States and political subdivisions | 1,477,173 | 1,451,870 | 145,125 | 25,303 | (866 | ) | |||||||||||||
Total | $ | 7,702,628 | $ | 7,135,860 | $ | 709,717 | $ | 566,768 | $ | (22,358 | ) |
Credit Quality of Available-for-Sale Fixed Maturities with Unrealized Losses | ||||||||||||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||||||||
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 | $ | 394,099 | 69.5 | % | $ | (6,932) | 31.0 | % | |||||||||||||||||||||||
2 | BBB | 103,400 | 18.2 | (3,093) | 13.8 | |||||||||||||||||||||||||||
Total investment grade | 497,499 | 87.7 | (10,025) | 44.8 | ||||||||||||||||||||||||||||
3 | BB | 37,184 | 6.6 | (5,096) | 22.9 | |||||||||||||||||||||||||||
4 | B | 22,928 | 4.1 | (1,616) | 7.2 | |||||||||||||||||||||||||||
5 | CCC | 9,150 | 1.6 | (5,621) | 25.1 | |||||||||||||||||||||||||||
6 | In or near default | 7 | — | — | — | |||||||||||||||||||||||||||
Total below investment grade | 69,269 | 12.3 | (12,333) | 55.2 | ||||||||||||||||||||||||||||
Total | $ | 566,768 | 100.0 | % | $ | (22,358) | 100.0 | % |
Available-For-Sale Fixed Maturities with Unrealized Losses by Length of Time | |||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Losses | ||||||||||||||||||||||
Fair Value is Less than 75% of Cost | Fair Value is 75% or Greater than Cost | Fair Value is Less than 75% of Cost | Fair Value is 75% or Greater than Cost | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Three months or less | $ | 3,059 | $ | 218,364 | $ | (918) | $ | (3,878) | |||||||||||||||
Greater than three months to six months | — | 21,955 | — | (290) | |||||||||||||||||||
Greater than six months to nine months | 2,836 | 166,438 | (1,101) | (8,362) | |||||||||||||||||||
Greater than nine months to twelve months | — | 4,858 | — | (151) | |||||||||||||||||||
Greater than twelve months | 5,942 | 147,453 | (2,121) | (10,390) | |||||||||||||||||||
Total | $ | 11,837 | $ | 559,068 | $ | (4,140) | $ | (23,071) |
December 31, 2019 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Losses | ||||||||||||||||||||||
Fair Value is Less than 75% of Cost | Fair Value is 75% or Greater than Cost | Fair Value is Less than 75% of Cost | Fair Value is 75% or Greater than Cost | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Three months or less | $ | — | $ | 255,507 | $ | — | $ | (3,518) | |||||||||||||||
Greater than three months to six months | — | 98,253 | — | (2,093) | |||||||||||||||||||
Greater than six months to nine months | — | 13,944 | — | (464) | |||||||||||||||||||
Greater than nine months to twelve months | — | — | — | — | |||||||||||||||||||
Greater than twelve months | 25,805 | 195,617 | (8,444) | (7,839) | |||||||||||||||||||
Total | $ | 25,805 | $ | 563,321 | $ | (8,444) | $ | (13,914) |
Credit Quality of Available-for-Sale Fixed Maturities with Unrealized Losses | ||||||||||||||||
March 31, 2020 | ||||||||||||||||
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 | $ | 904,365 | 52.0 | % | $ | (62,180 | ) | 36.6 | % | ||||||
2 | BBB | 678,811 | 39.0 | (66,156 | ) | 38.9 | ||||||||||
Total investment grade | 1,583,176 | 91.0 | (128,336 | ) | 75.5 | |||||||||||
3 | BB | 123,293 | 7.1 | (36,241 | ) | 21.3 | ||||||||||
4 | B | 29,937 | 1.7 | (5,526 | ) | 3.2 | ||||||||||
5 | CCC | 3,157 | 0.2 | (1 | ) | — | ||||||||||
6 | In or near default | 6 | — | — | — | |||||||||||
Total below investment grade | 156,393 | 9.0 | (41,768 | ) | 24.5 | |||||||||||
Total | $ | 1,739,569 | 100.0 | % | $ | (170,104 | ) | 100.0 | % |
December 31, 2019 | ||||||||||||||||
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 | $ | 394,099 | 69.5 | % | $ | (6,932 | ) | 31.0 | % | ||||||
2 | BBB | 103,400 | 18.2 | (3,093 | ) | 13.8 | ||||||||||
Total investment grade | 497,499 | 87.7 | (10,025 | ) | 44.8 | |||||||||||
3 | BB | 37,184 | 6.6 | (5,096 | ) | 22.9 | ||||||||||
4 | B | 22,928 | 4.1 | (1,616 | ) | 7.2 | ||||||||||
5 | CCC | 9,150 | 1.6 | (5,621 | ) | 25.1 | ||||||||||
6 | In or near default | 7 | — | — | — | |||||||||||
Total below investment grade | 69,269 | 12.3 | (12,333 | ) | 55.2 | |||||||||||
Total | $ | 566,768 | 100.0 | % | $ | (22,358 | ) | 100.0 | % |
Available-For-Sale Fixed Maturities with Unrealized Losses by Length of Time | |||||||||||||||
March 31, 2020 | |||||||||||||||
Amortized Cost | Gross Unrealized Losses | ||||||||||||||
Fair Value is Less than 75% of Cost | Fair Value is 75% or Greater than Cost | Fair Value is Less than 75% of Cost | Fair Value is 75% or Greater than Cost | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Three months or less | $ | 76,110 | $ | 1,626,219 | $ | (27,556 | ) | $ | (103,257 | ) | |||||
Greater than three months to six months | — | 7,982 | — | (265 | ) | ||||||||||
Greater than six months to nine months | — | 25,685 | — | (2,097 | ) | ||||||||||
Greater than nine months to twelve months | 3,944 | 8,000 | (2,451 | ) | (670 | ) | |||||||||
Greater than twelve months | 43,961 | 117,772 | (17,789 | ) | (16,019 | ) | |||||||||
Total | $ | 124,015 | $ | 1,785,658 | $ | (47,796 | ) | $ | (122,308 | ) |
Available-For-Sale Fixed Maturities with Unrealized Losses by Maturity Date | |||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Carrying Value of Securities with Gross Unrealized Losses | Gross Unrealized Losses | Carrying Value of Securities with Gross Unrealized Losses | Gross Unrealized Losses | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Due in one year or less | $ | 8,038 | $ | (32) | $ | 1,498 | $ | (2) | |||||||||||||||
Due after one year through five years | 31,053 | (1,597) | 17,902 | (3,340) | |||||||||||||||||||
Due after five years through ten years | 42,100 | (3,294) | 32,003 | (478) | |||||||||||||||||||
Due after ten years | 173,733 | (11,857) | 175,633 | (12,582) | |||||||||||||||||||
254,924 | (16,780) | 227,036 | (16,402) | ||||||||||||||||||||
Mortgage- and asset-backed | 288,770 | (10,431) | 339,732 | (5,956) | |||||||||||||||||||
Total | $ | 543,694 | $ | (27,211) | $ | 566,768 | $ | (22,358) |
Available-For-Sale Fixed Maturities with Unrealized Losses by Length of Time | |||||||||||||||
December 31, 2019 | |||||||||||||||
Amortized Cost | Gross Unrealized Losses | ||||||||||||||
Fair Value is Less than 75% of Cost | Fair Value is 75% or Greater than Cost | Fair Value is Less than 75% of Cost | Fair Value is 75% or Greater than Cost | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Three months or less | $ | — | $ | 255,507 | $ | — | $ | (3,518 | ) | ||||||
Greater than three months to six months | — | 98,253 | — | (2,093 | ) | ||||||||||
Greater than six months to nine months | — | 13,944 | — | (464 | ) | ||||||||||
Greater than nine months to twelve months | — | — | — | — | |||||||||||
Greater than twelve months | 25,805 | 195,617 | (8,444 | ) | (7,839 | ) | |||||||||
Total | $ | 25,805 | $ | 563,321 | $ | (8,444 | ) | $ | (13,914 | ) |
Available-For-Sale Fixed Maturities with Unrealized Losses by Maturity Date | |||||||||||||||
March 31, 2020 | December 31, 2019 | ||||||||||||||
Carrying Value of Securities with Gross Unrealized Losses | Gross Unrealized Losses | Carrying Value of Securities with Gross Unrealized Losses | Gross Unrealized Losses | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Due in one year or less | $ | 21,200 | $ | (653 | ) | $ | 1,498 | $ | (2 | ) | |||||
Due after one year through five years | 150,892 | (14,130 | ) | 17,902 | (3,340 | ) | |||||||||
Due after five years through ten years | 199,031 | (25,347 | ) | 32,003 | (478 | ) | |||||||||
Due after ten years | 476,974 | (63,494 | ) | 175,633 | (12,582 | ) | |||||||||
848,097 | (103,624 | ) | 227,036 | (16,402 | ) | ||||||||||
Mortgage- and asset-backed | 891,472 | (66,480 | ) | 339,732 | (5,956 | ) | |||||||||
Total | $ | 1,739,569 | $ | (170,104 | ) | $ | 566,768 | $ | (22,358 | ) |
Mortgage- and Asset-Backed Securities by Collateral Type | |||||||||||||||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Amortized Cost | Carrying Value | Percent of Fixed Maturities | Amortized Cost | Carrying Value | Percent of Fixed Maturities | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Government agency | $ | 213,720 | $ | 244,546 | 3.0 | % | $ | 220,209 | $ | 236,734 | 3.1 | % | |||||||||||||||||||||||
Prime | 387,451 | 411,217 | 5.0 | 338,795 | 357,769 | 4.6 | |||||||||||||||||||||||||||||
Alt-A | 59,959 | 69,997 | 0.8 | 68,483 | 80,732 | 1.0 | |||||||||||||||||||||||||||||
Subprime | 122,109 | 130,323 | 1.6 | 133,410 | 144,485 | 1.9 | |||||||||||||||||||||||||||||
Commercial mortgage | 996,794 | 1,149,431 | 13.9 | 969,453 | 1,045,473 | 13.6 | |||||||||||||||||||||||||||||
Collateralized loan obligation | 227,791 | 223,890 | 2.7 | 186,671 | 185,427 | 2.4 | |||||||||||||||||||||||||||||
Non-mortgage | 391,553 | 399,130 | 4.8 | 376,485 | 381,762 | 5.0 | |||||||||||||||||||||||||||||
Total | $ | 2,399,377 | $ | 2,628,534 | 31.8 | % | $ | 2,293,506 | $ | 2,432,382 | 31.6 | % |
Mortgage- and Asset-Backed Securities by Collateral Type | |||||||||||||||||||||
March 31, 2020 | December 31, 2019 | ||||||||||||||||||||
Amortized Cost | Carrying Value | Percent of Fixed Maturities | Amortized Cost | Carrying Value | Percent of Fixed Maturities | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Government agency | $ | 217,813 | $ | 249,048 | 3.3 | % | $ | 220,209 | $ | 236,734 | 3.1 | % | |||||||||
Prime | 341,574 | 337,448 | 4.4 | 338,795 | 357,769 | 4.6 | |||||||||||||||
Alt-A | 65,376 | 69,667 | 0.9 | 68,483 | 80,732 | 1.0 | |||||||||||||||
Subprime | 127,284 | 123,187 | 1.6 | 133,410 | 144,485 | 1.9 | |||||||||||||||
Commercial mortgage | 977,147 | 1,141,642 | 15.0 | 969,453 | 1,045,473 | 13.6 | |||||||||||||||
Collateralized loan obligation | 192,547 | 173,412 | 2.3 | 186,671 | 185,427 | 2.4 | |||||||||||||||
Non-mortgage | 422,934 | 399,945 | 5.3 | 376,485 | 381,762 | 5.0 | |||||||||||||||
Total | $ | 2,344,675 | $ | 2,494,349 | 32.8 | % | $ | 2,293,506 | $ | 2,432,382 | 31.6 | % |
Residential Mortgage-Backed Securities by NAIC Designation and Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 52,706 | $ | 54,539 | $ | 56,491 | $ | 70,340 | $ | 545,156 | $ | 591,043 | $ | 654,353 | $ | 715,922 | ||||||||||||||||||||||||||||||||||
3 | 214 | 220 | 156 | 171 | — | — | 370 | 391 | ||||||||||||||||||||||||||||||||||||||||||
4 | — | — | 4,123 | 4,789 | — | — | 4,123 | 4,789 | ||||||||||||||||||||||||||||||||||||||||||
5 | — | — | 3,055 | 4,005 | — | — | 3,055 | 4,005 | ||||||||||||||||||||||||||||||||||||||||||
6 | 5 | 5 | — | — | — | — | 5 | 5 | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 52,925 | $ | 54,764 | $ | 63,825 | $ | 79,305 | $ | 545,156 | $ | 591,043 | $ | 661,906 | $ | 725,112 |
Residential Mortgage-Backed Securities by NAIC Designation and Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2004 & Prior | 2005 to 2008 | 2009 & After | Total | 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 | NAIC Designation | Amortized Cost | Carrying Value | Amortized Cost | Carrying Value | Amortized Cost | Carrying Value | Amortized Cost | Carrying Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | $ | 57,884 | $ | 57,509 | $ | 59,951 | $ | 66,667 | $ | 498,226 | $ | 521,120 | $ | 616,061 | $ | 645,296 | 1 | $ | 60,698 | $ | 62,145 | $ | 61,993 | $ | 80,465 | $ | 495,061 | $ | 519,147 | $ | 617,752 | $ | 661,757 | |||||||||||||||||||||||||||||||||||||||||||||||||
2 | — | — | 705 | 533 | — | — | 705 | 533 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | 214 | 199 | 190 | 195 | — | — | 404 | 394 | 3 | 279 | 275 | 1,113 | 1,080 | — | — | 1,392 | 1,355 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | — | — | 4,240 | 4,381 | — | — | 4,240 | 4,381 | 4 | — | — | 4,297 | 5,372 | — | — | 4,297 | 5,372 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | — | — | 3,158 | 3,157 | — | — | 3,158 | 3,157 | 5 | — | — | 3,216 | 3,898 | — | — | 3,216 | 3,898 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | 6 | 6 | — | — | — | — | 6 | 6 | 6 | 6 | 6 | — | — | — | — | 6 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 58,104 | $ | 57,714 | $ | 68,244 | $ | 74,933 | $ | 498,226 | $ | 521,120 | $ | 624,574 | $ | 653,767 | Total | $ | 60,983 | $ | 62,426 | $ | 70,619 | $ | 90,815 | $ | 495,061 | $ | 519,147 | $ | 626,663 | $ | 672,388 |
December 31, 2019 | ||||||||||||||||||||||||||||||||
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 | $ | 60,698 | $ | 62,145 | $ | 61,993 | $ | 80,465 | $ | 495,061 | $ | 519,147 | $ | 617,752 | $ | 661,757 | ||||||||||||||||
3 | 279 | 275 | 1,113 | 1,080 | — | — | 1,392 | 1,355 | ||||||||||||||||||||||||
4 | — | — | 4,297 | 5,372 | — | — | 4,297 | 5,372 | ||||||||||||||||||||||||
5 | — | — | 3,216 | 3,898 | — | — | 3,216 | 3,898 | ||||||||||||||||||||||||
6 | 6 | 6 | — | — | — | — | 6 | 6 | ||||||||||||||||||||||||
Total | $ | 60,983 | $ | 62,426 | $ | 70,619 | $ | 90,815 | $ | 495,061 | $ | 519,147 | $ | 626,663 | $ | 672,388 |
Commercial Mortgage-Backed Securities by NAIC Designation and Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 7,527 | $ | 8,753 | $ | 92,419 | $ | 115,186 | $ | 855,731 | $ | 977,631 | $ | 955,677 | $ | 1,101,570 | ||||||||||||||||||||||||||||||||||
2 | — | — | 41,117 | 47,861 | — | — | 41,117 | 47,861 | ||||||||||||||||||||||||||||||||||||||||||
Total (1) | $ | 7,527 | $ | 8,753 | $ | 133,536 | $ | 163,047 | $ | 855,731 | $ | 977,631 | $ | 996,794 | $ | 1,149,431 |
Commercial Mortgage-Backed Securities by NAIC Designation and Origination Year | Commercial Mortgage-Backed Securities by NAIC Designation and Origination Year | Commercial Mortgage-Backed Securities by NAIC Designation and Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2004 & Prior | 2005 to 2008 | 2009 & After | Total | 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 | NAIC Designation | Amortized Cost | Carrying Value | Amortized Cost | Carrying Value | Amortized Cost | Carrying Value | Amortized Cost | Carrying Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | $ | 7,783 | $ | 9,561 | $ | 93,150 | $ | 119,298 | $ | 834,815 | $ | 961,939 | $ | 935,748 | $ | 1,090,798 | 1 | $ | 7,908 | $ | 8,851 | $ | 93,249 | $ | 110,805 | $ | 826,744 | $ | 880,702 | $ | 927,901 | $ | 1,000,358 | |||||||||||||||||||||||||||||||||||||||||||||||||
2 | — | — | 41,399 | 50,844 | — | — | 41,399 | 50,844 | 2 | — | — | 41,552 | 45,115 | — | — | 41,552 | 45,115 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total (1) | $ | 7,783 | $ | 9,561 | $ | 134,549 | $ | 170,142 | $ | 834,815 | $ | 961,939 | $ | 977,147 | $ | 1,141,642 | Total (1) | $ | 7,908 | $ | 8,851 | $ | 134,801 | $ | 155,920 | $ | 826,744 | $ | 880,702 | $ | 969,453 | $ | 1,045,473 |
December 31, 2019 | ||||||||||||||||||||||||||||||||
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 | $ | 7,908 | $ | 8,851 | $ | 93,249 | $ | 110,805 | $ | 826,744 | $ | 880,702 | $ | 927,901 | $ | 1,000,358 | ||||||||||||||||
2 | — | — | 41,552 | 45,115 | — | — | 41,552 | 45,115 | ||||||||||||||||||||||||
Total (1) | $ | 7,908 | $ | 8,851 | $ | 134,801 | $ | 155,920 | $ | 826,744 | $ | 880,702 | $ | 969,453 | $ | 1,045,473 |
Other Asset-Backed Securities by NAIC Designation and Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 5,466 | $ | 5,194 | $ | 122,061 | $ | 132,948 | $ | 486,476 | $ | 488,522 | $ | 614,003 | $ | 626,664 | ||||||||||||||||||||||||||||||||||
2 | — | — | — | — | 110,216 | 111,540 | 110,216 | 111,540 | ||||||||||||||||||||||||||||||||||||||||||
3 | 152 | 153 | — | — | 11,939 | 11,951 | 12,091 | 12,104 | ||||||||||||||||||||||||||||||||||||||||||
4 | 1,237 | 1,320 | — | — | 1,403 | 1,234 | 2,640 | 2,554 | ||||||||||||||||||||||||||||||||||||||||||
5 | — | — | — | — | 1,727 | 1,129 | 1,727 | 1,129 | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 6,855 | $ | 6,667 | $ | 122,061 | $ | 132,948 | $ | 611,761 | $ | 614,376 | $ | 740,677 | $ | 753,991 |
Other Asset-Backed Securities by NAIC Designation and Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2004 & Prior | 2005 to 2008 | 2009 & After | Total | 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 | NAIC Designation | Amortized Cost | Carrying Value | Amortized Cost | Carrying Value | Amortized Cost | Carrying Value | Amortized Cost | Carrying Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | $ | 5,958 | $ | 5,152 | $ | 127,728 | $ | 127,082 | $ | 496,641 | $ | 462,372 | $ | 630,327 | $ | 594,606 | 1 | $ | 6,188 | $ | 5,981 | $ | 134,272 | $ | 147,913 | $ | 435,077 | $ | 435,779 | $ | 575,537 | $ | 589,673 | |||||||||||||||||||||||||||||||||||||||||||||||||
2 | — | — | — | — | 104,226 | 95,925 | 104,226 | 95,925 | 2 | 1,396 | 1,488 | 1,547 | 1,608 | 113,762 | 116,354 | 116,705 | 119,450 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | 161 | 151 | — | — | 5,165 | 5,170 | 5,326 | 5,321 | 3 | 163 | 160 | — | — | 3,230 | 3,483 | 3,393 | 3,643 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | 1,348 | 1,361 | — | — | — | — | 1,348 | 1,361 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | — | — | — | — | 1,727 | 1,727 | 1,727 | 1,727 | 5 | — | — | — | — | 1,755 | 1,755 | 1,755 | 1,755 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 7,467 | $ | 6,664 | $ | 127,728 | $ | 127,082 | $ | 607,759 | $ | 565,194 | $ | 742,954 | $ | 698,940 | Total | $ | 7,747 | $ | 7,629 | $ | 135,819 | $ | 149,521 | $ | 553,824 | $ | 557,371 | $ | 697,390 | $ | 714,521 |
Other Asset-Backed Securities by NAIC Designation and Origination Year | ||||||||||||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||||||||
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 | $ | 6,188 | $ | 5,981 | $ | 134,272 | $ | 147,913 | $ | 435,077 | $ | 435,779 | $ | 575,537 | $ | 589,673 | ||||||||||||||||
2 | 1,396 | 1,488 | 1,547 | 1,608 | 113,762 | 116,354 | 116,705 | 119,450 | ||||||||||||||||||||||||
3 | 163 | 160 | — | — | 3,230 | 3,483 | 3,393 | 3,643 | ||||||||||||||||||||||||
5 | — | — | — | — | 1,755 | 1,755 | 1,755 | 1,755 | ||||||||||||||||||||||||
Total | $ | 7,747 | $ | 7,629 | $ | 135,819 | $ | 149,521 | $ | 553,824 | $ | 557,371 | $ | 697,390 | $ | 714,521 |
September 30, 2020 | December 31, 2019 | Percentage change | |||||||||||||||
Selected other assets: | |||||||||||||||||
Cash and cash equivalents | 15,030 | 17,277 | (13.0) | % | |||||||||||||
Reinsurance recoverable | 112,382 | 107,498 | 4.5 | % | |||||||||||||
Deferred acquisition costs | 201,022 | 289,456 | (30.6) | % | |||||||||||||
Other assets | 159,824 | 167,940 | (4.8) | % | |||||||||||||
Assets held in separate accounts | 616,381 | 645,881 | (4.6) | % | |||||||||||||
Selected other liabilities: | |||||||||||||||||
Future policy benefits | 7,629,442 | 7,393,549 | 3.2 | % | |||||||||||||
Other policyholder funds | 590,289 | 597,256 | (1.2) | % | |||||||||||||
Deferred income taxes | 187,161 | 152,373 | 22.8 | % | |||||||||||||
Other liabilities | 113,744 | 107,013 | 6.3 | % | |||||||||||||
Liabilities held in separate accounts | 616,381 | 645,881 | (4.6) | % |
March 31, 2020 | December 31, 2019 | Percentage change | ||||||
Selected other assets: | ||||||||
Cash and cash equivalents | 17,524 | 17,277 | 1.4 | % | ||||
Reinsurance recoverable | 105,438 | 107,498 | (1.9 | )% | ||||
Deferred acquisition costs | 337,972 | 289,456 | 16.8 | % | ||||
Other assets | 168,045 | 167,940 | 0.1 | % | ||||
Assets held in separate accounts | 525,582 | 645,881 | (18.6 | )% | ||||
Selected other liabilities: | ||||||||
Future policy benefits | 7,502,843 | 7,393,549 | 1.5 | % | ||||
Other policyholder funds | 595,252 | 597,256 | (0.3 | )% | ||||
Deferred income taxes | 119,093 | 152,373 | (21.8 | )% | ||||
Other liabilities | 107,841 | 107,013 | 0.8 | % | ||||
Liabilities held in separate accounts | 525,582 | 645,881 | (18.6 | )% |
September 30, 2020 | December 31, 2019 | Percentage change | |||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||
Total FBL Financial Group, Inc. stockholders’ equity | $ | 1,618,229 | $ | 1,485,757 | 8.9 | % | |||||||||||
Common stockholders’ equity | 1,615,229 | 1,482,757 | 8.9 | % | |||||||||||||
Book value per share | $ | 66.21 | $ | 60.12 | 10.1 | % | |||||||||||
Less: Per share impact of accumulated other comprehensive income | 21.69 | 14.39 | 50.7 | % | |||||||||||||
Book value per share, excluding accumulated other comprehensive income (1) | $ | 44.52 | $ | 45.73 | (2.6) | % |
March 31, 2020 | December 31, 2019 | Percentage change | ||||||||
(dollars in thousands, except per share data) | ||||||||||
Total FBL Financial Group, Inc. stockholders’ equity | $ | 1,334,280 | $ | 1,485,757 | (10.2 | )% | ||||
Common stockholders’ equity | 1,331,280 | 1,482,757 | (10.2 | )% | ||||||
Book value per share | $ | 54.02 | $ | 60.12 | (10.1 | )% | ||||
Less: Per share impact of accumulated other comprehensive income | 10.48 | 14.39 | (27.2 | )% | ||||||
Book value per share, excluding accumulated other comprehensive income (1) | $ | 43.54 | $ | 45.73 | (4.8 | )% |
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 | ||||||||||||||||||||||
July 1, 2020 through July 31, 2020 | 160,556 | $ | 34.82 | 160,556 | $26,321,519 | |||||||||||||||||||||
August 1, 2020 through August 31, 2020 | — | — | — | $26,321,519 | ||||||||||||||||||||||
September 1, 2020 through September 30, 2020 | — | — | — | $26,321,519 | ||||||||||||||||||||||
Total | 160,556 | $ | 34.82 |
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, 2020 through January 31, 2020 | — | $ | — | — | $36,321,488 | ||||||
February 1, 2020 through February 29, 2020 | — | — | — | $36,321,488 | |||||||
March 1, 2020 through March 31, 2020 | 24,525 | 32.97 | 24,525 | $35,512,900 | |||||||
Total | 24,525 | $ | 32.97 |
31.2+ | |||||
32+ | |||||
101+ | Interactive Data Files formatted in iXBRL (Inline eXtensible Business Reporting Language) from FBL Financial Group, Inc.’s Quarterly Report on Form 10-Q for the period ended | ||||
104 | Cover Page Interactive Data File formatted as iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101. | ||||
+ | Filed herewith | ||||
FBL FINANCIAL GROUP, INC. | ||||||||
By | ||||||||
/s/ Daniel D. Pitcher | ||||||||
Daniel D. Pitcher | ||||||||
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) |