FBL Financial Group Reports First Quarter 1999 Results - Adjusted Operating Income Per Share Up 15 Percent to $0.39.Des Moines Des Moines, city, United States Des Moines (dĭ moin`), city (1990 pop. 193,187), state capital and seat of Polk co., S central Iowa, at the junction of the Des Moines and Raccoon rivers; inc. , Iowa--(BUSINESS WIRE)--April 28, 1999-- Financial Highlights (Dollars in thousands, except per share data) -0-
Three Months Ended
March 31,
1999 1998
------------------
Adjusted operating revenues $97,777 $96,844
Adjusted operating income applicable
to common stock 12,891 12,512
Net income applicable to common stock 11,588 13,505
Earnings per common share (assuming
dilution):
Adjusted operating income 0.39 0.34
Net income 0.35 0.37
-0-
FBL Financial Group, Inc. (NYSE: FFG) today announced that
adjusted operating income increased to $12,891,000, a three percent
increase from $12,512,000 in the first quarter of 1998. With the
benefit of a reduction in average common shares outstanding, diluted
adjusted operating income per share rose 15 percent to $0.39 from
$0.34 in the first quarter of 1998.
"We reported solid results this quarter as we worked to ramp up
production from our new alliances. We are excited about the growth
from our alliance partners, which accounted for 15 percent of our
first year variable sales in the first quarter of 1999, up from six
percent in the fourth quarter of 1998," said Tom Gibson, Chief
Executive Officer. "This number continues to grow. So far in the month
of April, first year variable sales from our alliance partners have
made up 24 percent of our total first year variable sales of
$3,766,000. We expect this number to continue to grow as more of our
alliances become active and as more of our partners' agents become
licensed."
Adjusted operating income equals net income adjusted to eliminate
certain items which management believes are not indicative of
operating trends, including the impact of realized gains and losses on
investments and the gain on sale of discontinued operations. Adjusted
operating revenues equals revenues also adjusted to eliminate these
items.
Product Revenues Up Four Percent. Premiums and product charges
for the first quarter of 1999 increased four percent to $36,843,000
from $35,496,000 in the year-ago quarter. Led by sales of variable
products, interest sensitive product charges in the first quarter
increased eight percent to $13,432,000, versus $12,478,000 in the
year-ago quarter. Traditional life insurance and accident and health
premiums totaled $23,411,000 compared to $23,018,000 in the first
quarter of 1998. Total first year variable universal life premiums
collected, not included in revenues in the income statement, increased
12 percent to $3,451,000 from $3,071,000 in the first quarter of 1998.
Total first year variable annuity premiums collected totaled
$4,900,000 in the first quarter of 1999, compared to $5,556,000 in the
year ago quarter. First year variable production from FBL's alliance
partners, net of premiums ceded to the partners, totaled $1,214,000 in
the first quarter of 1999.
Net investment income in the first quarter totaled $55,987,000
compared to $56,070,000 in the year ago quarter. This decrease
reflects a decline in the annualized yield earned on average invested
assets to 7.79% in 1999 from 7.99% in 1998.
Benefits and Expenses. Benefits and expenses totaled $76,864,000
in the first quarter of 1999, compared to $76,462,000 in the year ago
quarter. Included in underwriting, acquisition and insurance expenses
is $315,000 related to Year 2000 modification costs. This compares to
approximately $600,000 incurred in the first quarter of 1998.
Equity Income. Equity income, net of related income taxes,
totaled $204,000 in the first quarter of 1999, compared to a loss of
$302,000 in the year ago quarter. Included in equity income is FBL
Financial's share of income from investments in various partnerships
and joint ventures. Due to the nature of these investments, it is not
unusual to experience fluctuations on a quarter to quarter basis.
Net Income. Diluted net income per common share totaled $0.35
($11,588,000) for the quarter ended March 31, 1999, compared to $0.37
($13,505,000) in the year ago quarter. In the first quarter of 1999,
the Company recognized realized losses on investments totaling
$2,240,000, compared to realized gains on investments of $1,312,000 in
the first quarter of 1998. Net income applicable to common stock for
the quarter ended March 31, 1998 includes $466,000 ($0.02 per share)
of income from discontinued operations related to a property-casualty
subsidiary, which was sold March 31, 1998.
Assets Total $3.6 Billion. The Company's total assets decreased
$12,328,000 during the first quarter to $3.6 billion at March 31,
1999, principally due to a decrease in unrealized appreciation on
fixed maturity securities. The decrease in unrealized appreciation on
fixed maturity securities is the result of an increase in market
interest rates at March 31, 1999 compared to December 31, 1998. At
March 31, 1999, 94 percent of the fixed maturity securities in the
Company's investment portfolio were investment grade debt securities.
The Company's book value per common share decreased to $17.23 at March
31, 1999, from $17.75 at December 31, 1998. Book value per common
share, excluding the impact of recording certain fixed maturity
securities at market value, increased to $16.40 from $16.14 at
December 31, 1998.
Stock Buyback Update. FBL Financial Group has recently
repurchased 297,900 of its common shares. This is approximately 20% of
the $25,000,000 stock repurchase plan which was authorized by the
Board of Directors in November 1998.
The statements in this release concerning the Company's prospects
for the future are forward-looking statements that involve certain
risks and uncertainties, including the continued acceptance of the
Company's insurance products by customers, the continued success of
the Company's marketing efforts, the marketing success of the
Company's alliance partners and the Company's ability to maintain the
production schedule of the alliances. These forward-looking statements
are based on assumptions which FBL Financial Group believe to be
reasonable. No assurance can be given that the assumptions will prove
to be correct, and the difference between assumptions and actual
results could be material.
FBL Financial Group (www.fblfinancial.com) is a holding company
whose primary operating subsidiaries include Farm Bureau Life
Insurance Company, Western Farm Bureau Life Insurance Company and
EquiTrust Life Insurance Company. FBL Financial underwrites, markets
and distributes life insurance, annuities and mutual funds to
individuals and small businesses. FBL Financial's threepronged growth
strategy includes (1) internal growth within its traditional Farm
Bureau distribution network in 14 midwestern and western states, (2)
alliances and consolidations with other Farm Bureau companies and (3)
alternative distribution - opportunities beyond the boundaries of the
Farm Bureau network.
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FBL FBL Full Bell Lines (coin grading) FBL Fly by Light FBL FIATA Bill of Lading FBL Functional Baseline FBL Foundation for a Better Life FBL Federal Barge Lines, Inc. FINANCIAL GROUP, INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . CONSOLIDATED con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share data) Three months ended March 31, 1999 1998 REVENUES ------- ------- Interest sensitive product charges $13,432 $12,478 Traditional life insurance and accident and health premiums 23,411 23,018 Net investment income 55,987 56,070 Realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. (losses) on investments (2,240) 1,312 Other income 4,929 5,284 ------- ------- Total revenues 95,519 98,162 BENEFITS AND EXPENSES Interest sensitive product benefits 29,317 31,873 Traditional life insurance and accident and health benefits 15,753 13,148 Increase in traditional life and accident and health future policy benefits 4,197 5,345 Distributions to participating policyholders 6,439 6,585 Underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. , acquisition and insurance expenses 16,609 15,570 Interest expense 547 370 Other expenses 4,002 3,571 ------- ------- Total benefits and expenses 76,864 76,462 ------- ------- 18,655 21,700 Income taxes (6,035) (7,025) Minority interest in earnings of subsidiaries: Dividends on company-obligated mandatorily Adv. 1. mandatorily - in a manner that cannot be evaded; "the ministry considers that contributions to such a fund should be met from voluntary donations rather than from rates compulsorily levied." compulsorily, obligatorily redeemable Redeemable Eligible for redemption under the terms of an indenture. preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. of subsidiary trust (1,213) (1,213) Other 14 (84) Equity income (loss), net of related income taxes 204 (302) ------- ------- Income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the 11,625 13,076 Discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. : Income from property-casualty operations, net of related income taxes - 287 Gain on disposal of property-casualty operations, net of related income taxes - 179 ------- ------- Net income 11,625 13,542 Dividends on Series B preferred stock (37) (37) ------- ------- Net income applicable to common stock $11,588 $13,505 ======== ======== Earnings per common share: Income from continuing operations $0.35 $0.36 Income from discontinued operations - 0.02 ------- ------- Earnings per common share $0.35 $0.38 ------- ------- Earnings per common share - assuming dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. : Income from continuing operations $0.35 $0.35 Income from discontinued operations - 0.02 ------- ------- Earnings per common share - assuming dilution $0.35 $0.37 ======= ======= FBL FINANCIAL GROUP, INC. RECONCILIATION OF NET INCOME TO ADJUSTED OPERATING INCOME Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (Unaudited) (Dollars in thousands, except per share data) Three months ended March 31, 1999 1998 ------ ------ Net income applicable to common stock $11,588 $13,505 Adjustments: Realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. (gains), net of related adjustments to deferred policy acquisition costs, value of insurance in force acquired, unearned revenue Unearned Revenue When an individual or company receives money for a service or product that has yet to be fulfilled. Notes: For example, prepayment on a lease contract - the revenue is a liability until it has been earned. See also: Earned Income, Passive Income reserve and income taxes 1,303 (814) Gain on disposal of property-casualty operations - (179) -------- -------- Adjusted operating income applicable to common stock $12,891 $12,512 -------- -------- Adjusted operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before per common share - assuming dilution $0.39 $0.34 ======== ======== Weighted average common shares 32,696,694 35,945,204 Effect of dilutive securities 660,743 796,030 -------- -------- Weighted average common shares - diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. 33,357,437 36,741,234 =========== =========== FBL FINANCIAL GROUP, INC. CONDENSED con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. CONSOLIDATED BALANCE SHEETS consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (Unaudited) (Dollars in thousands, except per share data) March 31, December December: see month. 31, 1999 1998 Assets --------- ----------- Investments $3,005,903 $3,031,436 Cash and cash equivalents 4,490 4,516 Deferred policy acquisition costs 211,828 203,581 Other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. 213,367 221,316 Assets held in separate accounts 203,044 190,111 ---------- ---------- Total assets $3,638,632 $3,650,960 ---------- ---------- Liabilities Policy liabilities and accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. $2,373,004 $2,364,342 Other policyholders' funds 253,045 245,758 Debt 34,086 33,197 Other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. 109,391 132,461 Liabilities related to separate accounts 203,044 190,111 ---------- ---------- Total liabilities 2,972,570 2,965,869 Minority interest in subsidiaries 101,503 101,503 Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. 564,559 583,588 ---------- ---------- Total liabilities and stockholders' equity $3,638,632 $3,650,960 ---------- ---------- Book Value Per Share $17.23 $17.75 ---------- ---------- Book Value Per Share (excluding SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 115 adjustment) $16.40 $16.14 ---------- ---------- Common Shares Outstanding 32,585,065 35,705,103 ---------- ---------- |
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