FBL Financial 8K Group Reports Third Quarter 2013 Results | FFG 31 Oct 13

Financial Supplement

2013 Third Quarter Report




Corporate Headquarters	FBL Financial Group, Inc.
	5400 University Avenue
	West Des Moines, Iowa 50266-5997
	(515) 225-5400
Financial Inquiries	For more information contact:
	Jim Brannen
	Chief Executive Officer
	Jim.Brannen@FBLFinancial.com
	(515) 225-5631

	Don Seibel
	Chief Financial Officer
	Don.Seibel@FBLFinancial.com
	(515) 226-6399

	Kathleen Till Stange
	Corporate & Investor Relations Vice President
	Kathleen.TillStange@FBLFinancial.com
	(515) 226-6780
Internet Information	FBL Financial Group, Inc.
	www.fblfinancial.com
Stock Symbol	NYSE: FFG
Transfer Agent	American Stock Transfer & Trust Company, LLC
	6201 15th Avenue
	Brooklyn, NY 11219
	http://www.amstock.com



FBL Financial Group, Inc.
Financial Supplement (Unaudited)
September 30, 2013
Table of Contents/Notes

Consolidated Financial Statements:
Consolidated Balance Sheets		2
Consolidated Statements of Comprehensive Income		4
Consolidated Statements of Operating Income, last five quarters		5
Financial Information by Segment:
Segment Information		6
Consolidating Statements of Pre-tax Operating Income		7
Statements of Pre-tax Operating Income, last five quarters:
Annuity Segment		9
Life Insurance Segment		10
Corporate and Other Segment		12
Deferred Acquisition Costs by Segment		13
Collected Premiums, last five quarters		15
Other Information		16

NOTE 1: On December 30, 2011, we sold our wholly-owned subsidiary, EquiTrust Life Insurance Company. We recognized an additional loss on the sale of subsidiary of $2.3 million, net of tax, during the first quarter 2012 as a result of post-closing sales price adjustments. As a result of the sale, our consolidated financial statements are presented to reflect the operations of the component sold as discontinued operations.

In connection with the EquiTrust Life Sale, during the first quarter of 2012, we completed the required redemption of $175.0 million of our long-term debt in accordance with the mandatory redemption provisions of the underlying notes. The make-whole redemption price of $210.9 million, which included repayment of principal, accrued interest and a make-whole premium, was funded from assets held in two irrevocable debt defeasance trusts. The make-whole redemption premium was based on U.S. Treasury yields and considered an embedded derivative with a fair value of $33.1 million at December 31, 2011. The change in fair value during 2012 was offset by the write off of deferred debt issuance costs and reported in other expenses in the consolidated statements of operations. In addition, we began repurchasing stock in the fourth quarter of 2011 under a stock repurchase plan approved by the Board of Directors.

Additional information regarding the impact of adopting the new accounting guidance, the sale of EquiTrust Life and our capital management initiatives can be found in our filings with the SEC.

NOTE 2: In addition to net income, we have consistently used operating income, a non-GAAP financial measure common in the life insurance industry, as a primary economic measure to evaluate our financial performance. Operating income for the periods presented equals net income adjusted to eliminate the impact of realized gains and losses on investments, changes in net unrealized gains and losses on derivatives, discontinued operations and loss on debt redemption associated with disposed operations.

We use operating income, in addition to net income, to measure our performance since realized gains and losses on investments and the change in net unrealized gains and losses on derivatives can fluctuate greatly from quarter to quarter. Also, the discontinued operations and loss on debt redemption are nonrecurring items. These fluctuations make it difficult to analyze core operating trends. A view of our operating performance without the impact of these mismatches and nonrecurring items enhances the analysis of our results. We use operating income for goal setting, determining short-term incentive compensation and evaluating performance on a basis comparable to that used by many in the investment community.

NOTE 3: Certain financial information presented herein may not add due to rounding.

FBL Financial Group, Inc.

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)



	September 30, 2013		December 31, 2012
Assets
Investments:
Fixed maturities - available for sale, at fair value (amortized cost: 2013 - $5,853,234; 2012 - $5,637,608)	$	6,145,472	$	6,265,745
Equity securities - available for sale, at fair value (cost: 2013 - $85,800; 2012 - $82,140)	87,394		86,253
Mortgage loans	573,383		554,843
Real estate	4,093		4,668
Policy loans	175,535		174,254
Short-term investments	55,066		74,516
Other investments	726		371
Total investments	7,041,669		7,160,650

Cash and cash equivalents	6,055		78,074
Securities and indebtedness of related parties	121,163		100,606
Accrued investment income	80,409		69,965
Amounts receivable from affiliates	12,582		3,931
Reinsurance recoverable	96,469		98,238
Deferred acquisition costs	318,566		204,326
Value of insurance in force acquired	22,860		17,154
Current income taxes recoverable	—		6,735
Other assets	67,415		59,238
Assets held in separate accounts	665,252		618,809









Total assets	$	8,432,440	$	8,417,726

FBL Financial Group, Inc.

Consolidated Balance Sheets (Continued)

(Dollars in thousands)



	September 30, 2013		December 31, 2012
Liabilities and stockholders' equity
Liabilities:
Future policy benefits:
Interest sensitive products	$	4,256,635	$	4,050,846
Traditional life insurance and accident and health products	1,501,018		1,457,075
Other policy claims and benefits	41,767		39,072
Supplementary contracts without life contingencies	352,420		361,273
Advance premiums and other deposits	234,292		226,485
Amounts payable to affiliates	—		1,658
Short-term debt payable to non-affiliates	25,000		—
Long-term debt payable to affiliates	—		50,000
Long-term debt payable to non-affiliates	97,000		97,000
Current income taxes	12,908		—
Deferred income taxes	123,644		208,433
Other liabilities	85,906		94,828
Liabilities related to separate accounts	665,252		618,809
Total liabilities	7,395,842		7,205,479

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 24,705,799 shares in 2013 and 24,282,184 shares in 2012	133,791		115,706
Class B common stock, without par value - authorized 1,500,000 shares, issued and outstanding 11,413 shares in 2013 and 1,192,890 shares in 2012	72		7,522
Accumulated other comprehensive income	135,316		289,853
Retained earnings	764,393		796,110
Total FBL Financial Group, Inc. stockholders' equity	1,036,572		1,212,191
Noncontrolling interest	26		56
Total stockholders' equity	1,036,598		1,212,247
Total liabilities and stockholders' equity	$	8,432,440	$	8,417,726

FBL Financial Group, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands, except per share data)



	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Revenues:
Interest sensitive product charges	$	32,270		$	25,638		$	84,369		$	75,060
Traditional life insurance premiums	43,883			41,886			134,875			130,917
Net investment income	93,382			93,482			277,090			269,793
Net realized capital gains on sales of investments	1,458			5,379			12,825			10,669

Total other-than-temporary impairment losses	(5,015		)	(6,208		)	(5,860		)	(21,188		)
Non-credit portion in other comprehensive income	4,250			2,291			4,250			12,070
Net impairment losses recognized in earnings	(765		)	(3,917		)	(1,610		)	(9,118		)
Other income	3,288			2,891			10,698			13,625
Total revenues	173,516			165,359			518,247			490,946

Benefits and expenses:
Interest sensitive product benefits	53,488			48,640			150,411			147,050
Traditional life insurance benefits	39,726			37,473			119,795			116,925
Policyholder dividends	3,244			3,279			9,997			10,893
Underwriting, acquisition and insurance expenses	33,070			39,939			105,429			107,040
Interest expense	1,833			2,007			5,646			5,972
Other expenses	5,037			3,986			14,239			16,492
Total benefits and expenses	136,398			135,324			405,517			404,372
	37,118			30,035			112,730			86,574
Income taxes	(11,962		)	(10,606		)	(36,923		)	(29,620		)
Equity income, net of related income taxes	1,829			1,058			5,669			3,309
Net income from continuing operations	26,985			20,487			81,476			60,263
Discontinued operations:
Loss on sale of subsidiary	—			—			—			(2,252		)
Income (loss) from discontinued operations, net of tax	—			55			—			(709		)
Total income (loss) from discontinued operations	—			55			—			(2,961		)
Net income	26,985			20,542			81,476			57,302
Net loss (gain) attributable to noncontrolling interest	68			(66		)	130			52
Net income attributable to FBL Financial Group, Inc.	$	27,053		$	20,476		$	81,606		$	57,354

Comprehensive income attributable to FBL Financial Group, Inc.	$	(2,419	)	$	75,798		$	(72,931	)	$	167,941

Earnings per common share:
Income from continuing operations	$	1.05		$	0.77		$	3.17		$	2.14
Loss from discontinued operations	—			—			—			(0.10		)
Earnings per common share	$	1.05		$	0.77		$	3.17		$	2.04
Earnings per common share - assuming dilution:
Income from continuing operations	$	1.04		$	0.76		$	3.14		$	2.11
Loss from discontinued operations	—			—			—			(0.10		)
Earnings per common share - assuming dilution	$	1.04		$	0.76		$	3.14		$	2.01

Cash dividends per common share	$	0.15		$	0.10		$	0.37		$	0.30
Special cash dividend per common share	$	2.00		$	—		$	2.00		$	—



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

	Q3 2012			Q4 2012			Q1 2013			Q2 2013			Q3 2013
Operating revenues:
Interest sensitive product charges	$	25,662		$	26,304		$	25,292		$	26,848		$	32,177
Traditional life insurance premiums	41,886			44,169			44,934			46,058			43,883
Net investment income	92,544			91,201			91,402			93,579			94,449
Other income	2,891			3,643			3,714			3,696			3,288
Total operating revenues	162,983			165,317			165,342			170,181			173,797

Benefits and expenses:
Interest sensitive product benefits	48,553			49,355			48,509			48,721			53,438
Traditional life insurance benefits	37,461			39,360			39,798			40,263			39,726
Policyholder dividends	3,279			3,382			3,358			3,395			3,244
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	5,552			6,332			8,184			7,391			5,696
Amortization of deferred acquisition costs	12,977			7,483			6,102			9,462			7,978
Amortization of value of insurance in force acquired	2,562			687			537			782			632
Other underwriting expenses	19,147			18,588			20,105			19,183			19,857
Total underwriting, acquisition and insurance expenses	40,238			33,090			34,928			36,818			34,163
Interest expense	2,007			1,980			1,975			1,838			1,833
Other expenses	3,986			4,054			4,384			4,818			5,037
Total benefits and expenses	135,524			131,221			132,952			135,853			137,441
	27,459			34,096			32,390			34,328			36,356
Income taxes	(9,705		)	(11,321		)	(10,596		)	(11,253		)	(11,694		)
Net loss (gain) attributable to noncontrolling interest	(66		)	31			28			34			68
Equity income, net of related income taxes	1,058			1,374			1,312			2,528			1,829
Operating income	18,746			24,180			23,134			25,637			26,559

Realized gains/losses on investments, net of offsets	1,324			(1,774		)	1,895			4,413			406
Change in net unrealized gains/losses on derivatives, net of offsets	351			158			(63		)	(463		)	88
Net impact of discontinued operations	55			22			—			—			—
Net income attributable to FBL Financial Group, Inc.	$	20,476		$	22,586		$	24,966		$	29,587		$	27,053

Operating income per common share - assuming dilution	$	0.70		$	0.93		$	0.89		$	0.98		$	1.02
Earnings per common share - assuming dilution	$	0.76		$	0.86		$	0.96		$	1.13		$	1.04

Weighted average common shares outstanding (in thousands):
Basic	26,562			25,779			25,598			25,833			25,770
Effect of dilutive securities	305			315			272			243			260
Diluted	26,867			26,094			25,870			26,076			26,030

Operating return on equity, excluding AOCI - last twelve months	8.1		%	8.8		%	9.3		%	9.8		%	10.7		%
Operating return on equity, including AOCI - last twelve months	6.6		%	7.0		%	7.3		%	7.7		%	8.5		%

FBL Financial Group, Inc.

Segment Information

We analyze operations by reviewing financial information regarding our primary products that are aggregated into the Annuity and Life Insurance product segments. In addition, our Corporate and Other segment includes various support operations, corporate capital and other product lines that are not currently underwritten by the Company.

The Annuity segment primarily consists of fixed rate annuities and supplementary contracts (some of which involve life contingencies). Fixed rate annuities provide for tax-deferred savings and supplementary contracts provide for the systematic repayment of funds that accumulate interest. Fixed rate annuities consist primarily of flexible premium deferred annuities, but also include single premium deferred and immediate contracts. With fixed rate annuities, we bear the underlying investment risk and credit interest to the contracts at rates we determine, subject to interest rate guarantees.

The Life Insurance segment consists of whole life, term life and universal life policies. These policies provide benefits upon the death of the insured and may also allow the customer to build cash value on a tax-deferred basis.

The Corporate and Other segment consists of the following corporate items and products/services that do not meet the quantitative threshold for separate segment reporting:



•		investments and related investment income not specifically allocated to our product segments;
•		interest expense;
•		closed blocks of variable annuity, variable universal life insurance and accident and health insurance products;
•		advisory services for the management of investments and other companies;
•		marketing and distribution services for the sale of mutual funds and insurance products not issued by us; and
•		leasing services, primarily with affiliates.

We analyze our segment results based on pre-tax operating income. Accordingly, income taxes are not allocated to the segments. In addition, operating results are reported net of transactions between the segments.

FBL Financial Group, Inc.

Consolidating Statements of Pre-tax Operating Income



Quarter Ended September 30, 2013	Annuity		Life Insurance			Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	279	$	20,831		$	11,067		$	32,177
Traditional life insurance premiums	—		43,883			—			43,883
Net investment income	50,156		35,210			9,083			94,449
Other income	—		(73		)	3,361			3,288
Total operating revenues	50,435		99,851			23,511			173,797

Benefits and expenses:
Interest sensitive product benefits	25,754		19,639			8,045			53,438
Traditional life insurance benefits	—		39,726			—			39,726
Policyholder dividends	—		3,244			—			3,244
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	458		4,407			831			5,696
Amortization of deferred policy acquisition costs	2,748		4,667			563			7,978
Amortization of value of insurance in force acquired	208		424			—			632
Other underwriting expenses	4,840		13,481			1,536			19,857
Total underwriting, acquisition and insurance expenses	8,254		22,979			2,930			34,163
Interest expense	—		—			1,833			1,833
Other expenses	—		—			5,037			5,037
Total benefits and expenses	34,008		85,588			17,845			137,441
	16,427		14,263			5,666			36,356
Net loss attributable to noncontrolling interest	—		—			68			68
Equity loss, before tax	—		—			(1,325		)	(1,325		)
Pre-tax operating income	$	16,427	$	14,263		$	4,409		$	35,099

FBL Financial Group, Inc.

Consolidating Statements of Pre-tax Operating Income (Continued)



Quarter Ended September 30, 2012	Annuity		Life Insurance			Corporate & Other			Consolidated
	(Dollars in thousands)
Operating revenues:
Interest sensitive product charges	$	166	$	13,827		$	11,669		$	25,662
Traditional life insurance premiums	—		41,886			—			41,886
Net investment income	49,301		35,089			8,154			92,544
Other income	—		(57		)	2,948			2,891
Total operating revenues	49,467		90,745			22,771			162,983

Benefits and expenses:
Interest sensitive product benefits	25,717		14,883			7,953			48,553
Traditional life insurance benefits	—		37,461			—			37,461
Policyholder dividends	—		3,279			—			3,279
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	590		4,073			889			5,552
Amortization of deferred acquisition costs	4,124		5,482			3,371			12,977
Amortization of value of insurance in force acquired	2,024		538			—			2,562
Other underwriting expenses	4,899		12,159			2,089			19,147
Total underwriting, acquisition and insurance expenses	11,637		22,252			6,349			40,238
Interest expense	—		—			2,007			2,007
Other expenses	—		—			3,986			3,986
Total benefits and expenses	37,354		77,875			20,295			135,524
	12,113		12,870			2,476			27,459
Net gain attributable to noncontrolling interest	—		—			(66		)	(66		)
Equity loss, before tax	—		—			(644		)	(644		)
Pre-tax operating income	$	12,113	$	12,870		$	1,766		$	26,749



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

	Q3 2012				Q4 2012			Q1 2013			Q2 2013			Q3 2013
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	166			$	212		$	313		$	344		$	279
Net investment income	49,301				48,317			47,794			48,889			50,156
Other income	—				6			—			—			—
Total operating revenues	49,467				48,535			48,107			49,233			50,435

Benefits and expenses:
Interest sensitive product benefits	25,717				25,582			24,679			25,399			25,754
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	590				475			937			595			458
Amortization of deferred acquisition costs	4,124				2,875			2,821			1,160			2,748
Amortization of value of insurance in force acquired	2,024				282			164			369			208
Other underwriting expenses	4,899				4,060			4,825			4,637			4,840
Total underwriting, acquisition and insurance expenses	11,637				7,692			8,747			6,761			8,254
Total benefits and expenses	37,354				33,274			33,426			32,160			34,008
Pre-tax operating income	$	12,113			$	15,261		$	14,681		$	17,073		$	16,427

Selected balance sheet data, securities at cost:
Assets:
Investments	$	3,533,318			$	3,497,525		$	3,498,745		$	3,642,460		$	3,639,855
Deferred acquisition costs	83,269				82,396			82,653			83,352			82,734
Value of insurance in force acquired	9,640				9,307			9,133			8,737			8,531

Liabilities and equity:
Liabilities:
Interest sensitive product reserves	$	3,061,295			$	3,048,797		$	3,053,711		$	3,136,084		$	3,162,323
Other insurance reserves	382,989				383,340			382,600			380,612			377,388
Allocated equity, excluding AOCI	268,654				267,707			261,160			267,269			269,018

Other data:
Number of direct contracts	53,941				53,757			53,594			53,265			53,232

Portfolio yield net of assumed defaults	5.40		%		5.31		%	5.26		%	5.18		%	5.14		%
Credited rate	3.05				3.03			3.00			2.99			2.99
Spread on fixed annuities at end of quarter (1)	2.35		%		2.28		%	2.26		%	2.19		%	2.15		%

Interest sensitive reserve activity:
Individual deferred annuity reserve:
Balance, beginning of period	$	2,302,564			$	2,323,328		$	2,338,272		$	2,376,892		$	2,398,586
Deposits	55,610				54,114			77,115			60,470			56,325
Withdrawals, surrenders and death benefits	(35,560		)		(41,005		)	(40,111		)	(46,431		)	(37,407		)
Net flows	20,050				13,109			37,004			14,039			18,918

Policyholder interest	17,570				17,080			17,230			17,382			17,478
Annuitizations and other	(16,856		)		(15,245		)	(15,614		)	(9,727		)	(10,780		)
Balance, end of period	2,323,328				2,338,272			2,376,892			2,398,586			2,424,202
Other interest sensitive reserves	737,967				710,525			676,819			737,498			738,121
Total interest sensitive product reserves	$	3,061,295			$	3,048,797		$	3,053,711		$	3,136,084		$	3,162,323


(1)	Point-in-time spread at the balance sheet date used by management for decision making, which differs from the spread earned during the reporting period disclosed in the Form 10Q or 10K.



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

	Q3 2012				Q4 2012			Q1 2013			Q2 2013			Q3 2013
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	13,827			$	14,592		$	13,737		$	14,500		$	20,831
Traditional life insurance premiums	41,886				44,169			44,934			46,058			43,883
Net investment income	35,089				34,300			34,729			35,064			35,210
Other income	(57		)		(55		)	(62		)	(69		)	(73		)
Total operating revenues	90,745				93,006			93,338			95,553			99,851

Benefits and expenses:
Interest sensitive product benefits:
Interest credited	7,075				7,827			7,448			7,731			8,057
Death benefits and other	7,808				7,212			9,875			9,631			11,582
Total interest sensitive product benefits	14,883				15,039			17,323			17,362			19,639
Traditional life insurance benefits:
Death benefits	16,261				17,631			18,368			15,680			18,740
Surrender and other benefits	12,220				7,517			9,101			9,064			8,263
Increase in traditional life future policy benefits	8,980				14,212			12,329			15,519			12,723
Total traditional life insurance benefits	37,461				39,360			39,798			40,263			39,726
Policyholder dividends	3,279				3,382			3,358			3,395			3,244
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	4,073				4,971			6,100			5,866			4,407
Amortization of deferred acquisition costs	5,482				4,491			3,022			4,385			4,667
Amortization of value of insurance in force acquired	538				405			373			413			424
Other underwriting expenses	12,159				12,960			13,432			12,866			13,481
Total underwriting, acquisition and insurance expenses	22,252				22,827			22,927			23,530			22,979
Total benefits and expenses	77,875				80,608			83,406			84,550			85,588
Pre-tax operating income	$	12,870			$	12,398		$	9,932		$	11,003		$	14,263

Selected balance sheet data, securities at cost:
Assets:
Investments	$	2,277,934			$	2,315,174		$	2,341,579		$	2,404,847		$	2,462,296
Deferred acquisition costs	194,351				199,266			205,065			209,078			210,818
Value of insurance in force acquired	23,612				23,193			22,796			22,381			21,957

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	668,699			$	686,067		$	707,123		$	736,341		$	761,236
Other insurance reserves	1,595,819				1,615,088			1,633,287			1,649,913			1,660,841
Allocated equity, excluding AOCI	286,382				294,159			279,656			286,444			292,699



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

	Q3 2012				Q4 2012			Q1 2013			Q2 2013			Q3 2013
				(Dollars in thousands)
Other data:
Number of direct policies - traditional life	353,358				355,519			356,408			357,192			356,605
Number of direct policies - universal life	58,958				59,833			60,150			60,533			60,518
Direct face amounts - traditional life	$	39,617,946			$	40,333,397		$	41,017,541		$	41,696,782		$	42,030,894
Direct face amounts - universal life	$	5,666,272			$	5,806,602		$	5,904,084		$	6,007,750		$	6,062,960

Portfolio yield net of assumed defaults	5.83		%		5.74		%	5.58		%	5.53		%	5.49		%
Credited rate	4.12				4.08			4.10			4.08			4.04
Spread on universal life at end of quarter (1)	1.71		%		1.66		%	1.48		%	1.45		%	1.45		%

Interest sensitive reserve activity:
Balance, beginning of period	$	658,735			$	668,699		$	686,067		$	707,123		$	736,341
Deposits	20,703				28,349			33,049			40,014			33,649
Withdrawals and surrenders	(3,688		)		(4,394		)	(4,347		)	(5,064		)	(4,206		)
Net flows	17,015				23,955			28,702			34,950			29,443

Policyholder interest	6,382				7,116			6,773			6,950			7,193
Policy charges	(13,918		)		(15,222		)	(14,714		)	(15,202		)	(15,050		)
Benefits and other	485				1,519			295			2,520			3,309
Balance, end of period	$	668,699			$	686,067		$	707,123		$	736,341		$	761,236


(1)	Point-in-time spread at the balance sheet date used by management for decision making with universal life (excluding products with a secondary guarantee) differs from the spread earned during the reporting period disclosed in the Form 10Q or 10K.



FBL Financial Group, Inc.
Statements of Pre-tax Operating Income
Corporate and Other

	Q3 2012				Q4 2012			Q1 2013			Q2 2013			Q3 2013
Pre-tax Operating Income				(Dollars in thousands)

Operating revenues:
Interest sensitive product charges	$	11,669			$	11,500		$	11,242		$	12,004		$	11,067
Net investment income	8,154				8,584			8,879			9,626			9,083
Other income	2,948				3,692			3,776			3,765			3,361
Total operating revenues	22,771				23,776			23,897			25,395			23,511

Benefits and expenses:
Interest sensitive product benefits	7,953				8,734			6,507			5,960			8,045
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	889				886			1,147			930			831
Amortization of deferred acquisition costs	3,371				117			259			3,917			563
Other underwriting expenses	2,089				1,568			1,848			1,680			1,536
Total underwriting, acquisition and insurance expenses	6,349				2,571			3,254			6,527			2,930
Interest expense	2,007				1,980			1,975			1,838			1,833
Other expenses	3,986				4,054			4,384			4,818			5,037
Total benefits and expenses	20,295				17,339			16,120			19,143			17,845
	2,476				6,437			7,777			6,252			5,666
Net loss (gain) attributable to noncontrolling interest	(66		)		31			28			34			68
Equity income (loss), before tax	(644		)		100			(707		)	(245		)	(1,325		)
Pre-tax operating income	$	1,766			$	6,568		$	7,098		$	6,041		$	4,409

Selected balance sheet data, securities at cost:
Assets:
Investments	$	591,857			$	715,701		$	720,919		$	693,058		$	645,686
Deferred acquisition costs	95,063				94,984			95,286			91,361			92,225
Separate account assets	634,402				618,809			651,474			641,248			665,252

Liabilities and equity:
Liabilities:
Interest sensitive reserves	$	306,249			$	315,982		$	322,497		$	326,726		$	329,495
Other insurance reserves	95,870				99,031			98,270			95,402			95,213
Separate account liabilities	634,402				618,809			651,474			641,248			665,252
Allocated equity, excluding AOCI	359,881				357,472			402,358			414,728			336,539

Rollforward of separate account balances:
Beginning separate account balance	$	617,538			$	634,402		$	618,809		$	651,474		$	641,248
Net premiums	2,127				(1,253		)	5,847			8,214			5,114
Net investment income	33,305				5,433			47,848			2,112			36,448
Charges, benefits and surrenders	(18,568		)		(19,773		)	(21,030		)	(20,552		)	(17,558		)
Ending separate account balance	$	634,402			$	618,809		$	651,474		$	641,248		$	665,252

Other data:
Number of direct contracts - variable annuity	14,088				13,885			13,643			13,458			13,138
Number of direct policies - variable universal life	47,473				46,863			46,311			45,714			45,208
Direct face amounts - variable universal life	$	5,897,007			$	5,813,938		$	5,750,019		$	5,678,574		$	5,603,017



FBL Financial Group, Inc.
Deferred Acquisition Costs by Segment

	Q3 2012				Q4 2012			Q1 2013			Q2 2013			Q3 2013
				(Dollars in thousands)
Annuity
Balance - beginning of period	$	84,712			$	83,269		$	82,396		$	82,653		$	83,352
Capitalization:
Commissions	2,547				2,433			2,909			1,976			1,868
Expenses	306				200			297			220			233
Total capitalization	2,853				2,633			3,206			2,196			2,101
Amortization - operating basis, before impact of unlocking	(4,124		)		(2,875		)	(2,821		)	(2,790		)	(2,748		)
Amortization - unlocking, operating basis	—				—			—			1,630			—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(172		)		(631		)	(128		)	(337		)	29
Balance - end of period	$	83,269			$	82,396		$	82,653		$	83,352		$	82,734

Life Insurance
Balance - beginning of period	$	193,091			$	194,351		$	199,266		$	205,065		$	209,078
Capitalization:
Commissions	3,616				6,699			5,682			5,024			4,027
Expenses	2,292				2,958			3,014			3,134			2,725
Deferral of sales inducements	98				691			393			319			70
Total capitalization	6,006				10,348			9,089			8,477			6,822
Amortization - operating basis, before impact of unlocking	(3,959		)		(4,569		)	(3,080		)	(3,573		)	(4,896		)
Amortization - unlocking, operating basis	(1,554		)		—			—			(959		)	—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	767				(864		)	(210		)	68			(186		)
Balance - end of period	$	194,351			$	199,266		$	205,065		$	209,078		$	210,818

Corporate and Other
Balance - beginning of period	$	98,446			$	95,063		$	94,984		$	95,286		$	91,361
Capitalization:
Commissions	232				284			313			238			144
Deferral of sales inducements	4				15			8			5			1
Total capitalization	236				299			321			243			145
Amortization - operating basis, before impact of unlocking	(549		)		(1,643		)	(283		)	(3,036		)	(499		)
Amortization - unlocking, operating basis	(2,795		)		1,491			—			(926		)	—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	(275		)		(226		)	264			(206		)	1,218
Balance - end of period	$	95,063			$	94,984		$	95,286		$	91,361		$	92,225



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

	Q3 2012				Q4 2012			Q1 2013			Q2 2013			Q3 2013
				(Dollars in thousands)
Total
Balance - beginning of period	$	376,249			$	372,683		$	376,646		$	383,004		$	383,791
Capitalization:
Commissions	6,395				9,416			8,904			7,238			6,039
Expenses	2,598				3,158			3,311			3,354			2,958
Deferral of sales inducements	102				706			401			324			71
Total capitalization	9,095				13,280			12,616			10,916			9,068
Amortization - operating basis, before impact of unlocking	(8,632		)		(9,087		)	(6,184		)	(9,399		)	(8,143		)
Amortization - unlocking, operating basis	(4,349		)		1,491			—			(255		)	—
Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives	320				(1,721		)	(74		)	(475		)	1,061
Balance - end of period	372,683				376,646			383,004			383,791			385,777
Impact of realized/unrealized gains/losses in AOCI	(169,385		)		(172,320		)	(153,936		)	(83,327		)	(67,211		)
Deferred acquisition costs	$	203,298			$	204,326		$	229,068		$	300,464		$	318,566



FBL Financial Group, Inc.
Collected Premiums

	Q3 2012				Q4 2012			Q1 2013			Q2 2013			Q3 2013
				(Dollars in thousands)
Annuity
Individual:
First year	$	35,496			$	28,100		$	41,140		$	30,247		$	33,499
Renewal	21,170				26,112			36,136			29,367			23,172
Total individual	56,666				54,212			77,276			59,614			56,671
Group	4,832				3,516			1,988			2,760			1,706
Total Annuity	61,498				57,728			79,264			62,374			58,377

Life Insurance
Direct:
Universal life:
First year	7,854				13,958			17,944			24,123			19,113
Renewal	12,068				13,286			14,217			14,899			13,815
Total universal life	19,922				27,244			32,161			39,022			32,928
Participating whole life:
First year	2,510				2,753			3,202			2,817			2,922
Renewal	22,950				23,875			24,119			24,968			23,342
Total participating whole life	25,460				26,628			27,321			27,785			26,264
Term life and other:
First year	2,637				2,748			2,915			2,879			2,678
Renewal	18,382				19,406			19,476			19,889			19,992
Total term life and other	21,019				22,154			22,391			22,768			22,670
Total direct life insurance	66,401				76,026			81,873			89,575			81,862
Reinsurance	(4,548		)		(4,726		)	(5,220		)	(5,113		)	(4,915		)
Total Life Insurance	61,853				71,300			76,653			84,462			76,947

Corporate and Other
Variable, net of reinsurance	15,684				16,019			19,478			18,680			14,809
Accident and health, net of reinsurance	36				275			59			39			32
Total Corporate and Other	15,720				16,294			19,537			18,719			14,841

Total collected premiums	$	139,071			$	145,322		$	175,454		$	165,555		$	150,165



FBL Financial Group, Inc.
Other Information

	September 30,				December 31,			March 31,			June 30,			September 30,
	2012				2012			2013			2013			2013
				(Dollars in thousands, except per share data)

Capitalization:
Short-term debt	$	—			$	—		$	—		$	—		$	25,000
Senior notes with affiliates, due 2015	50,000				50,000			50,000			50,000			—
Trust preferred securities, due 2047	97,000				97,000			97,000			97,000			97,000
Total debt	147,000				147,000			147,000			147,000			122,000

Preferred stock	3,000				3,000			3,000			3,000			3,000
Common stockholders' equity, excluding AOCI	914,917				919,338			943,174			968,441			898,256
Total capitalization, excluding AOCI	1,064,917				1,069,338			1,093,174			1,118,441			1,023,256

Accumulated other comprehensive income	288,432				289,853			295,757			164,788			135,316
Total capitalization, including AOCI	$	1,353,349			$	1,359,191		$	1,388,931		$	1,283,229		$	1,158,572

Common shares outstanding	25,933,171				25,475,074			25,563,170			25,614,196			24,717,212

Book Value per Share:
Excluding AOCI	$	35.28			$	36.09		$	36.90		$	37.81		$	36.34
Including AOCI	46.40				47.47			48.47			44.24			41.82

Debt-to-Capital Ratio:
Excluding AOCI	13.8		%		13.7		%	13.4		%	13.1		%	11.9		%
Including AOCI	10.9				10.8			10.6			11.5			10.5

Debt-to-Capital Ratio with 100% Credit for Trust Preferred Securities:
Excluding AOCI	4.7		%		4.7		%	4.6		%	4.5		%	2.4		%
Including AOCI	3.7				3.7			3.6			3.9			2.2

Class A Common Ownership:
Iowa Farm Bureau Federation	59.7		%		60.8		%	60.4		%	60.3		%	59.7		%
Other Farm Bureau entities	6.1				6.2			5.7			5.7			5.9
Public	34.2				33.0			33.9			34.0			34.4
	100.0		%		100.0		%	100.0		%	100.0		%	100.0		%



FBL Financial Group, Inc.
Other Information (Continued)

	September 30,				December 31,			March 31,			June 30,			September 30,
	2012				2012			2013			2013			2013

Quality of Fixed Maturity Securities:
AAA, AA, A	63.2		%		61.9		%	62.2		%	62.7		%	61.9		%
BBB	32.1				32.8			32.8			32.9			33.5
BB	2.9				3.4			3.0			2.6			2.8
<BB	1.8				1.9			2.0			1.8			1.8

Investment by Type:
Fixed maturity securities	63.7		%		64.1		%	65.5		%	66.2		%	66.9		%
Residential mortgage-backed	9.9				9.4			9.0			8.4			7.7
Commercial mortgage-backed	7.3				7.1			6.7			6.3			6.1
Other asset-backed	7.3				6.9			6.3			6.5			6.6
Mortgage loans	7.7				7.8			7.7			8.1			8.1
Equity securities	1.2				1.2			1.1			1.1			1.2
Other	2.9				3.5			3.7			3.4			3.4

Agent Strength Totals:
8-state Farm Bureau Property & Casualty channel	1,148				1,127			1,129			1,111			1,088
7 life partner states (1)	693				687			686			682			681
Total	1,841				1,814			1,815			1,793			1,769

(1) With the commencement of operations of Greenfields Life Insurance Company during the first quarter of 2013, Colorado is now included in our life partner states total.

	Q3 2012				Q4 2012			Q1 2013			Q2 2013			Q3 2013
Equity Income (Loss), net of related income taxes				(Dollars in thousands)
Equity Income (Loss):
Low income housing tax credit partnerships	$	(1,430	)		$	(604	)	$	(1,346	)	$	(1,540	)	$	(1,473	)
Other equity method investments	786				704			639			1,295			148
	(644		)		100			(707		)	(245		)	(1,325		)
Income Taxes:
Taxes on equity income (loss)	225				(35		)	247			87			463
Investment tax credits	1,477				1,309			1,772			2,686			2,691
Equity income (loss), net of related income taxes	$	1,058			$	1,374		$	1,312		$	2,528		$	1,829

FBL Financial (FFG) 8-KFBL Financial Group Reports Third Quarter 2013 Results