FBL Financial (FFG) 8-K FBL Financial Group Reports Fourth Quarter 2010 Results

FOR IMMEDIATE RELEASE	CONTACT:
Thursday, February 3, 2011	Kathleen Till Stange, Investor Relations Vice President
	(515) 226-6780, Kathleen.TillStange@FBLFinancial.com

FBL Financial Group Reports Fourth Quarter 2010 Results

West Des Moines, Iowa, February 3, 2011 -

Financial Highlights

(Dollars in thousands, except per share data)

	Three months ended December 31,
	2010		2009
Net income attributable to FBL	$	51,632	$	30,992
Operating income	30,301		33,423
Earnings per common share (assuming dilution):
Net income	1.67		1.02
Operating income	0.98		1.10

FBL Financial Group, Inc. (NYSE: FFG) today reported net income attributable to FBL for the fourth quarter of 2010 of $51.6 million, or $1.67 per diluted common share, compared to net income attributable to FBL of $31.0 million, or $1.02 per diluted common share, for the fourth quarter of 2009.

Operating Income⁽¹⁾. Operating income totaled $30.3 million for the fourth quarter of 2010, compared to $33.4 million for the fourth quarter of 2009. Operating income per common share totaled $0.98 in the fourth quarter of 2010, compared to $1.10 in the fourth quarter of 2009. Fourth quarter 2009 results include one-time benefits from gains due to a reinsurance transaction and refinements to reserve estimates. Operating income differs from the GAAP measure, net income attributable to FBL Financial Group, in that it excludes the impact of realized gains and losses on investments and the change in net unrealized gains and losses on derivatives. For further informatio n on this non-GAAP financial measure, please refer to Note (1) and the reconciliation provided within this release.

"FBL Financial Group delivered excellent fourth quarter results with net income of $1.67 per share and operating income of $0.98 per share, reflecting the solid fundamentals of Farm Bureau Life and EquiTrust Life," said James E. Hohmann, Chief Executive Officer of FBL Financial Group, Inc. "In 2010, we further strengthened our capital position, enhanced the profitab ility of our business, achieved record highs in full year net income and operating income and diversified EquiTrust Life's business with the introduction of life insurance products. As we move forward in 2011, we remain focused on maintaining our strong balance sheet and on growing our business and profits in a disciplined manner."

Capital and Liquidity.

•     The company action level risk based capital ratios of FBL Financial Group's life insurance subsidiaries remained at high levels during the fourth quarter. The December 31, 2010 company action level risk based capital ratio was approximately 457 percent for Farm Bureau Life Insurance Company, an increase of 16 points for 2010, and approximately 424 percent for EquiTrust Life Insurance Company, an increase of 48 points for 2010.

•     FBL Financial Group has $100 million of senior notes with affiliates due in the fourth quarter of 2011. FBL is evaluating a number of alternatives to satisfy this obligation, including refinancing with affiliates and/or third parties.

•     FBL Financial Group maintains liquidity in the form of cash, short-term investments and U.S. Government and U.S. Government agency backed securities that could be readily converted to cash. These totaled $1.7 billion as of December 31, 2010.

Product Revenues. Premiums and product charges for the fourth quarter of 2010 totaled $72.2 million compared to $69.0 million in the fourth quarter of 2009. Traditional life insurance premiums increased five percent and interest sensitive and index product charges increased four percent.

Premiums collected⁽²⁾in the fourth quarter of 2010 totaled $307.9 million compared to $180.5 million in the fourth quarter of 2009. The Farm Bureau Life distribution channel had fourth quarter 2010 premiums collected of $150.0 million compared to fourth quarter 200 9 premiums collected of $137.1 million. This reflects a 27 percent increase in traditional annuity sales, an eight percent increase in traditional and universal life insurance sales and a 34 percent decrease in variable sales, reflecting FBL's decision to discontinue variable sales. The EquiTrust Life independent channel had $151.6 million of premiums collected in the fourth quarter of 2010, compared to $39.7 million in the fourth quarter of 2009, reflecting the company's strategy of measured increases in business volume while maintaining a self-sustaining capital position.

Investment Income. Net investment income in the fourth quarter of 2010 totaled $181.4 million compared to $177.6 million in the fourth quarter of 2009. The increase is due to an increase in average invested assets, partially offset by lower investment yields. The annualized yield earned on average invested assets, with securities at cost, was 5.97 percent for the year ended December 31, 2010, compared to 6.09 percent for the year ended December 31, 2009. At December 31, 2010, 94 percent of the fixed maturity securities in FBL Financial Group's investment portfolio were investment grade debt securities.

Derivative Income. FBL Financial Group reported derivative income of $52.7 million in the fourth quarter of 2010 compared to derivative income of $25.7 million in the fourth quarter of 2009. Derivative income includes the impact of the change in value of the underlying market indices on which call options supporting FBL Financial Group's index annuity business are based. At the policy anniversary, gains from call options, if any, are passed on to the policyholder in the form of index credits. In accordance with the accounting rules for derivatives, gains and losses on these call options are offset by index credits and a corresponding change in the value of index product embedded derivatives.

Realized Gains/Losses on Investments. In the fourth quarter of 2010, FBL Financial Group recognized net realized gains on investments of $33.7 million compared to net realized losses on investments of $8.2 million in the fourth quarter of 2009. The net realized gains on investments of $33.7 million are attributable to gains on sales of $40.7 million, losses on sales of $1.8 million and impairments due to credit losses of $5.2 million.

Benefits and Expenses. Benefits and expenses totaled $266.1 million in the fourth quarter of 2010, compared to $233.9 million in the fourth quarter of 2009. The impact of unlocking deferred policy acquisition costs and deferred sales inducements in our Exclusive Annuity- Independent segment reduced benefits and expenses $5.9 mi llion in the fourth quarter of 2010 compared to a $5.9 million increase in the fourth quarter of 2009. Fourth quarter 2009 expenses also include refinements to reserve estimates, which decreased benefit expenses by $12.4 million.

Book Value Increase. As of December 31, 2010, the book value per share of FBL Financial Group common stock totaled $36.95, an increase of 30 percent from $28.49 at December 31, 2009. This reflects positive earnings results as well as improvement in the valuation of FBL Financial Group's investment portfolio. Book value per share, excluding accumulated other comprehensive income (loss)⁽³⁾, increased 10 percent to $35.66 at December 31, 2010.

Further Financial Information. Further information on FBL Financial Group's financial results, including results b y segment, may be found in FBL Financial Group's financial supplement, available on its website, www.fblfinancial.com.

Conference Call. FBL Financial Group will hold a conference call with investors tomorrow, February 4, 2011, at 11:00 a.m. Eastern Time. The call will be webcast over the Internet, and a replay will be available on FBL Financial Group's website, www.fblfinancial.com.

Certain statements in this release concerning FBL Financial Group's prospects for the future are forward-looking statements intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act. These statements generally can be identified by their context, including terms such as “believes,” “anticipates,” “expects,” or similar words. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statement. These risks and uncertainties are detailed in FBL Financial Group's reports filed with the Securities and Exchange Commission and include, but are not limited to, difficult conditions in financial markets and the economy, lack of liquidity and access to capital, investment valuations, interest rate changes, competitive fac tors, the ability to attract and retain sales agents and a decrease in ratings. These forward-looking statements are based on assumptions which FBL Financial Group believes to be reasonable; however, no assurance can be given that the assumptions will prove to be correct.

FBL Financial Group is a holding company whose primary operating subsidiaries are Farm Bureau Life Insurance Company and EquiTrust Life Insurance Company. FBL Financial Group underwrites, markets and distributes life insurance, annuities and mutual funds to individuals and small businesses. In addition, FBL Financial Group manages all aspects of two Farm Bureau affiliated property-casualty insurance companies for a management fee. For more information, please visit www.fblfinancial.com.

- FINANCIAL INFORMATION AND NOTES FOLLOW -

FBL Financial Group, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

	Three months ended December 31,							Year ended December 31,
	2010			2009				2010				2009
Revenues:
Interest sensitive and index product charges	$	30,934		$	29,827			$	119,743			$	158,873
Tr aditional life insurance premiums	41,299			39,191				162,056				155,675
Net investment income	181,399			177,644				721,370				724,653
Derivative income	52,697			25,690				60,574				67,515
Net realized capital gains on sales of investments	38,879			9,078				52,327				47,051
Total other-than-temporary impairment losses	(12,589		)	(17,007		)		(71,469		)		(105,439		)
Non-credit portion in other comprehensive income/loss	7,401			(257		)		49,732				37,523
Net impairment loss recognized in earnings	(5,188		)	(17,264		)		(21,737		)		(67,916		)
Other income	3,776			14,900				14,288				28,735
Total revenues	343,796			279,066				1,108,621			&nbs p;	1,114,586
Benefits and expenses:
Interest sensitive and index product benefits	149,447			118,072			517,367				437,270
Change in value of index product embedded derivatives	(4,710		)	9,865				19,342				148,917
Traditional life insurance benefits	33,418			29,767				137,180				129,550
Policyholder dividends	4,318			4,678				17,571				19,416
Underwriting, acquisition and insurance expenses	72,209			61,031				199,413				233,088
Interest expense	6,120			6,116				24,454				25,280
Other expenses	5,335			4,321				18,954				18,904
Total benefits and expenses	266,137			233,850				934,281				1,012,425
	77,659			45,216				174,340				102,161
Income taxes	(27,210		)	(14,691		)		(59,206		)		(33,219		)
Equity income, net of related income taxes	1,184			449				5,441				750
Net income	51,633			30,974				120,575				69,692
Net loss (gain) attributable to noncontrolling interest	(1		)	18				78				143
Net income attributable to FBL Financial Group, Inc.	$	51,632		$	30,992			$	120,653			$	69,835
Earnings per common share - assuming dilution	$	1.67		$	1.02			$	3.92			$	2.31
Weighted average common shares	30,495,279			30,178,707				30,398,180				30,077,447
Effect of dilutive securities	459,639			231,398				320,436				124,029
Weighted average common shares - diluted	30,954,918			30,410,105				30,718,616				30,201,476
	& nbsp;

(1) Reconciliation of Net Income Attributable to FBL to Operating Income - Unaudited

In addition to net income, FBL Financial Group has consistently utilized operating income, a non-GAAP financial measure commonly used in the life insurance industry, as a primary economic measure to evaluate its financial performance. Operating income equals net income attributable to FBL adjusted to eliminate the impact of realized gains and losses on investments and the change in net unrealized gains and losses on derivatives. FBL uses operating income, in addition to net income, to measure its performance since realized gains and losses on investments and the change in net unrealized gains and losses on derivatives can fluctuate greatly from quarter to quarter. These fluctuations make it difficult to analyze core operating trends. In addition, for derivatives not designated as hedges, there is a mismatch between the valuation of the asset and liability when deriving net income attributable to FBL. This non-GAAP measure is used for goal setting, determining company-wide short-term incentive compensation and evaluating performance on a basis comparable to that used by many in the investment community. FBL believes the combined presentation and evaluation of operating income, together with net income, provides information that may enhance an investor's understanding of FBL's underlying results and profitability. A reconciliation is provided in the following table:

	Three months ended December 31,						Year ended December 31,
	2010			2009			2010			2009
	(Dollars in thousands, except per share data)
Net income attributable to FBL	$	51,632		$	30,992		$	120,653		$	69,835
Adjustments:
Net realized gains/losses on investments (a)	(14,259		)	5,105			(12,455		)	18,060
Change in net unrealized gains/losses on derivatives (a)	(7,072		)	(2,674		)	(2,961		)	2,209
Opera ting income	$	30,301		$	33,423		$	105,237		$	90,104
Operating income per common share - assuming dilution	$	0.98		$	1.10		$	3.42		$	2.98

^(a) Net of adjustments, as applicable, to amortization of unearned revenue reserves, deferred policy acquisition costs, deferred sales inducements, value of insurance in force acquired and income taxes attributable to these items.

(2)Premiums Collected - Net statutory premiums collected, a measure of sales production, is a non-GAAP measure and includes premiums collected from annuities and universal life-type products. For GAAP reporting, these premiums received are not reported a s revenues.

(3) Reconciliation of Book Value Per Share Excluding Accumulated Other Comprehensive Income (Loss) - Unaudited

	December 31, 2010		December 31, 2009
Book value per share	$	36.95	$	28.49
Less: Per share impact of accumulated other comprehensive income (loss)	1.29		(3.89		)
Book value per share, excluding accumulated other comprehensive income (loss)	$	35.66	$	32.38

Book value per share excluding accumulated other comprehensive income (loss) is a non-GAAP financial measure. Accumulated other comprehensive income (loss) totaled $39.9 million at December 31, 2010 and $(118.7) million at December 31, 2009. Since accumulated other comprehensive income (loss) fluctuates from quarter to quarter due to unrealized changes in the fair value of investments caused principally by changes in market interest rates, FBL believes this non-GAAP financial measure provides useful supplemental information.

FBL Financial Group, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)

	December 31, 2010		December 31, 2009
Assets
Investments	$	13,069,742	$	11,653,037
Cash and cash equivalents	4,794		11,690
Deferred policy acquisition costs	812,025		1,101,233
Deferred sales induce ments	259,148		359,771
Other assets	435,341		431,537
Assets held in separate accounts	753,050		702,073
Total assets	$	15,334,100	$	14,259,341
Liabilities and stockholders' equity
Liabilities
Future policy benefits	$	12,008,337	$	11,468,339
Other policy funds, claims and benefits	746,137		731,002
Debt	371,168		371,084
Other liabilities	308,994		115,566
Liabilities related to separate accounts	753,050		702,073
Total liabilities	14,187,686		13,388,064
Stockholders' equity
FBL Financial Group, Inc. stockholders' equity:
Preferred stock	3,000		3,000
Class A common stock	118,165		109,877
Class B common stock	7,522		7,522
Accumulated other comprehensive income (loss)	39,895		(118,730		)
Retained earnings	977,740		869,487
Total FBL Financial Group, Inc. stockholders' equity	1,146,322		871,156
Noncontrolling interest	92		121
Total stockholders' equity	1,146,414		871,277
Total liabilities and stockholders' equity	$	15,334,100	$	14,259,341
Common shares outstanding	30,942,058		30,475,979