FBL Financial Group Reports First Quarter 2015 Results
Operating Income(1). Operating income totaled \$23.8 million, or \$0.95 per common share, for the first quarter of 2015, compared to \$23.1 million, or \$0.92 per common share, for the first quarter of 2014. First quarter 2015 operating income per share reflects:
- A growing book of profitable business
- Investment fee income of \$0.12 per share, primarily due to commercial mortgage loan and bond prepayments
- Unfavorable mortality results due to a higher number of claims and a higher average claim size
Operating income differs from the GAAP measure, net income attributable to FBL, 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 information on this non-GAAP financial measure, please refer to Note (1) and the reconciliation provided within this release.
"FBL Financial Group had a positive first quarter from many perspectives including earnings, agent productivity and capital, and we continue to build on that momentum," said James P. Brannen, Chief Executive Officer of FBL Financial Group, Inc. "In addition to solid operating and net income, we returned significant capital to shareholders with the payment of our increased regular dividend of \$0.40 per share and a special dividend of \$2.00 per share."
Product Revenues. Premiums and product charges for the first quarter of 2015 totaled \$75.3 million compared to \$72.6 million in the first quarter of 2014. Interest-sensitive product charges increased four percent while traditional life insurance premiums also increased four percent during the quarter. Premiums collected(2) in the first quarter of 2015 totaled \$166.2 million compared to \$178.7 million in the first quarter of 2014. Annuity premiums collected declined 12 percent, while life insurance premiums collected decreased two percent.
Investment Income. Net investment income in the first quarter of 2015 totaled \$98.8 million compared to \$92.6 million in the first quarter of 2014. The increase is due to higher average invested assets as well as higher investment yields, which benefitted from increased prepayment fee income. The annualized yield earned on average invested assets, with securities at amortized cost, was 5.66 percent for the quarter ended March 31, 2015, compared to 5.57 percent for the quarter ended March 31, 2014. Investment fee income totaled \$0.12 per share in the first quarter of 2015, and was primarily due to commercial mortgage loan and bond prepayments. At March 31, 2015, 96 percent of the fixed maturity securities in FBL Financial Group's investment portfolio were investment grade debt securities.
Benefits and Expenses. Benefits and expenses totaled \$145.8 million in the first quarter of 2015, an increase from \$137.0 million in the first quarter of 2014. Death benefits, net of reinsurance and reserves released, increased to \$29.7 million in the first quarter of 2015, compared to \$25.6 million in the first quarter of 2014. By its nature, mortality experience can fluctuate from quarter to quarter.
Net Realized Losses on Investments. In the first quarter of 2015, FBL Financial Group recognized net realized losses on investments of \$0.4 million. The net realized loss on investments of \$0.4 million is attributable to realized gains on sales of \$0.2 million and realized losses on sales of \$0.6 million.
Stock Repurchases. During the first quarter of 2015, FBL did not repurchase any of its Class A or Class B common stock. FBL has \$42.7 million remaining under its current stock repurchase program.
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