Fbl Financial Group Inc 8-k (events Or Changes Between Quarterly Reports) 2009-02-20

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported) February 19, 2009

FBL Financial Group, Inc. (Exact name of registrant as specified in its charter) Iowa (State or other jurisdiction of incorporation)

1-11917 (Commission File Number)

5400 University Avenue, West Des Moines, Iowa (Address of principal executive offices)

42-1411715 (I.R.S. Employer Identification No.)

50266 (Zip Code)

Registrant’s telephone number, including area code (515) 225-5400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02. Results of Operations and Financial Condition On February 19, 2009, FBL Financial Group, Inc. issued a news release reporting its financial results for the three months ended December 31, 2008. The news release is furnished as Exhibit 99.1 hereto and the Financial Supplement as Exhibit 99.2 hereto. This information shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing. Item 7.01.

Regulation FD Disclosure

On February 20, 2009, Standard & Poor’s Ratings Services lowered the counterparty credit and financial strength ratings of FBL Financial Group subsidiaries Farm Bureau Life Insurance Company and EquiTrust Life Insurance Company to “A-.” In addition, it lowered the counterparty credit rating on FBL Financial Group, Inc., the holding company, to “BBB-.” Standard & Poor’s outlook for these ratings is negative. Item 8.01 Other Events On February 19, 2009, FBL Financial Group, Inc. filed a Form S-3/A registration statement for its direct stock purchase plan, FBL Share Direct. This amended registration is subject to being declared effective by the Securities and Exchange Commission (SEC). FBL Share Direct has been in existence since 2001 and provides both current and prospective shareholders with a convenient and economical way of directly purchasing shares of FBL Financial Group Class A common stock and reinvesting dividends. Historically, shares utilized under this plan have been purchased in the open market. With today’s amended filing, this plan now includes a Direct Equity (waiver discount) component, which may be utilized from time to time to issue FBL shares. FBL does not currently have plans to utilize this direct equity feature, but has the flexibility to do so. Future issuances, if any, will depend on market conditions and FBL’s capital and liquidity position. Any utilization of this feature will be reported in FBL’s periodic filings with the SEC. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FBL FINANCIAL GROUP, INC. (Registrant) Date: February 19, 2009

/s/ James P. Brannen James P. Brannen Chief Financial Officer EXHIBIT INDEX Exhibit No. Exhibit 99.1 Exhibit 99.2

Description News release of the registrant dated February 19, 2009 Financial Supplement for the quarter ended December 31, 2008

Exhibit 99.1

FBL Financial Group Reports Fourth Quarter 2008 Results and Declares Quarterly Dividend WEST DES MOINES, Iowa--(BUSINESS WIRE)--February 19, 2009--FBL Financial Group, Inc.: Finan cial High ligh ts (Dollars in thousands, except per share data) T hree months ended December 31, 2008 2007 Net income (loss) Operating income (loss) Earnings (loss) per common share (assuming dilution): Net income (loss) Operating income (loss)

($19,228) (5,276)

$11,883 24,896

(0.64) (0.18)

0.39 0.82

FBL Financial Group, Inc. (NYSE: FFG) today reported a net loss for the fourth quarter of 2008 of $19.2 million, or $0.64 per diluted common

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share, compared to net income of $11.9 million, or $0.39 per diluted common share, for the fourth quarter of 2007. Operating Loss(1). Operating earnings totaled a loss of $5.3 million for the fourth quarter of 2008, compared to operating income of $24.9 million in the fourth quarter of 2007. Operating loss per common share totaled $0.18 in the fourth quarter of 2008 compared to operating income per share of $0.82 in the fourth quarter of 2007. Operating income (loss) differs from the GAAP measure, net income (loss), in that it excludes the impact of realized/unrealized gains and losses on investments, the change in net unrealized gains and losses on derivatives and the cumulative effect of changes in accounting principles. For further information on this non-GAAP financial measure, please refer to Note (1) and the reconciliation provided within this release. Deferred Policy Acquisition Costs Charge. For the fourth quarter of 2008, FBL recorded a pre-tax charge of $29.6 million, or $0.64 per share after tax, in connection with the unlocking of deferred policy acquisition costs and deferred sales inducements (DAC) as well as additional amortization of $5.6 million pre-tax, or $0.12 per share after tax. This unlocking adjustment and increased amortization reflects updated surrender and withdrawal rate assumptions on annuities sold through FBL’s EquiTrust Life independent distribution channel, as well as lower expected profitability for this business. These assumptions were updated to reflect a very recent increase in surrender requests of EquiTrust Life’s index and multi-year guarantee annuity business due to the impact on policy provisions of a dramatic and rapid decrease in U.S. Treasury rates.

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Capital and Liquidity. FBL estimates 2008 year end company action level risk based capital ratio of approximately 416 percent for Farm Bureau Life Insurance Company and approximately 300 percent for EquiTrust Life Insurance Company. In addition, FBL has more than $80 million available at the holding company. FBL maintains liquidity in the form of short-term investments and cash and cash equivalents, which as of year end 2008 totaled over $300 million. These capital and liquidity positions reflect FBL’s steps taken in mid-2008 to slow the pace of sales growth at EquiTrust Life in order to preserve capital and the issuance of $100 million of debt capital in November 2008 from affiliated Farm Bureau entities. As of December 31, 2008, the book value per share of FBL Financial Group common stock, including accumulated other comprehensive loss, was $8.46, compared with $29.98 a year ago. This decline reflects a decrease in the market value of investments resulting primarily from increased spreads due to distressed and volatile financial markets. Book value per share, excluding accumulated other comprehensive loss(2), decreased to $30.00 at December 31, 2008, from $31.19 at December 31, 2007. “2008 was by far the most challenging year financially since FBL’s inception as a public company. Results for the year were disappointing, and reflect recognition of unfavorable financial and economic conditions,” said Chief Executive Officer Jim Noyce. “Despite the challenges brought on by the global economic crisis, our companies are well-capitalized and we have adequate liquidity to fulfill our commitments. In addition, Farm Bureau Life’s 2008 sales were strong and it continues to generate capital. Our Farm Bureau niche customer base is the foundation of our companies and this franchise is solid.” Noyce added, “Looking ahead, we plan to maintain and build upon our capital strength through the management of EquiTrust Life premium levels, strict expense controls and a continual focus on enterprise risk management. These actions are designed to help us navigate through the current challenges and position FBL Financial Group for the future when we return to a more normal environment.” Product Revenues Up. Premiums and product charges for the fourth quarter of 2008 increased seven percent to $71.4 million from $66.9 million in the fourth quarter of 2007. Interest sensitive and index product charges increased nine percent, while traditional life insurance premiums increased four percent. Premiums collected(3) in the fourth quarter of 2008 totaled $346.7 million compared to $629.8 million in the fourth quarter of 2007. The Farm Bureau Life distribution channel had fourth quarter 2008 premiums collected of $136.4 million, an increase of 21 percent, reflecting a 144 percent increase in traditional annuity sales, a three percent increase in traditional and universal life insurance sales and a 43 percent decline in variable sales. The EquiTrust Life independent channel had $204.2 million of premiums collected in the fourth quarter of 2008, a decrease of 60 percent from the fourth quarter of 2007, reflecting the deliberate slowdown in sales in order to preserve capital.

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Investment Income. Net investment income in the fourth quarter of 2008 increased 11 percent to $185.3 million from $166.5 million in the fourth quarter of 2007. This increase is due to an increase in average invested assets resulting primarily from premium inflows from Farm Bureau Life and EquiTrust Life as well as proceeds from additional debt. The annualized yield earned on average invested assets, with securities at cost, was 6.17 percent for the year ended December 31, 2008, compared to 6.19 percent for the same period of 2007. At December 31, 2008, 96 percent of the fixed maturity securities in FBL’s investment portfolio were investment grade debt securities. Derivative Loss. FBL’s derivative loss totaled $37.3 million in the fourth quarter of 2008, compared to derivative loss of $52.2 million in the fourth quarter of 2007. The derivative loss reflects the impact of a decrease in the value of the underlying market indices on which call options supporting FBL’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 (FAS 133), gains and losses on these call options are generally offset by a corresponding change in the value of index product embedded derivatives. Valuation adjustments made under FAS 133 have no relationship to any write-down in value of an invested asset due to credit concerns. Realized/Unrealized Losses on Investments. In the fourth quarter of 2008, FBL recognized realized/unrealized losses on investments of $25.8 million compared to $0.8 million in the fourth quarter of 2007. The realized/unrealized losses on investments of $25.8 million are attributable to gains on sales of $1.0 million, losses on sales of $2.2 million and losses due to securities that were deemed other-than-temporarily impaired of $24.6 million. These other-than-temporary impairments, which after taxes and other offsets total $9.2 million, include write-downs to securities issued by Kaupthing Bank of Iceland, General Motors, Ford Motor Company, Circuit City, AbitibiBowater and others. Benefits and Expenses. Benefits and expenses totaled $229.8 million in the fourth quarter of 2008, compared to $171.7 million in the fourth quarter of 2007. The increase in benefits and expenses is mainly attributable to the increase in DAC amortization from the previously mentioned unlocking charge. In addition, total death benefits increased to $25.8 million in the fourth quarter of 2008 compared to $20.2 million in the year ago quarter. By its nature, mortality experience can fluctuate from quarter to quarter. As previously reported, FBL has taken several actions to reduce expenses in recent months, including workforce reductions, eliminating open positions, streamlining operations and freezing executive salaries. Further Financial Information. Further information on FBL Financial Group’s financial results, including investment detail and results by segment, may be found in FBL's financial supplement, available on FBL's website, www.fblfinancial.com, and in FBL’s 2008 Form 10-K, filed today with the Securities and Exchange Commission. Guidance. Due to volatile market conditions and the extraordinary events affecting financial companies, FBL will not provide 2009 earnings guidance. FBL management will discuss their outlook for the future, overall market conditions and fourth quarter 2008 financial results on their conference call with investors as scheduled below.

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Quarterly Dividend. FBL’s Board of Directors declared a quarterly cash dividend of $0.125 per share on its Class A and Class B common stock. The dividend will be payable on March 31, 2009 to shareholders of record as of March 13, 2009. There are 28,976,158 shares of Class A common stock and 1,192,990 shares of Class B common stock, for a total of 30,169,148 common shares outstanding. Conference Call. The call will be held tomorrow, February 20, 2009, at 11 a.m. Eastern Time. The call will be webcast over the Internet, and a replay will be available on FBL's website, www.fblfinancial.com. Certain statements in this release concerning FBL’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’s reports filed with the Securities and Exchange Commission and include, but are not limited to, the current difficult financial markets, the current state of the economy, lack of liquidity and access to capital, investment valuations, interest rate changes, competitive factors, 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 underwrites, markets and distributes life insurance, annuities and mutual funds to individuals and small businesses. In addition, FBL manages all aspects of two Farm Bureau affiliated property-casualty insurance companies for a management fee. For more information, please visit www.fblfinancial.com.

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. C on solidate d S tate m e n ts of O pe ration s (Unau dite d) (Dollars in thou san ds, e xce pt pe r sh are data) T hree months ended Dec. 31, 2008 2007 REVENUES Interest sensitive and index product charges T raditional life insurance premiums Net investment income Derivative loss Realized/unrealized gains (losses) on investments Other income

$

T otal revenues BENEFITS AND EXPENS ES Interest sensitive and index product benefits Change in value of index product embedded derivatives T raditional life insurance benefits Increase in traditional life future policy benefits Distributions to participating policyholders Underwriting, acquisition and insurance expenses Interest expense Other expenses T otal benefits and expenses Income taxes Minority interest in loss of subsidiaries Equity income (loss), net of related income taxes

33,362 38,002 185,317 (37,261) (25,785) 5,945

$

Year ended Dec. 31, 2008 2007

30,484 $ 127,199 36,419 149,186 166,471 707,872 (52,227) (208,793) (775) (156,309) 6,484 25,310

$ 114,529 144,682 628,031 (4,951) 5,769 26,539

199,580

186,856

644,465

914,599

120,118 (18,334) 23,677 9,744 4,958 77,034 6,204 6,427

105,144 (12,334) 21,132 9,613 5,306 31,978 4,430 6,389

440,430 (189,354) 96,884 43,255 20,064 221,393 19,567 24,104

442,544 (5,907) 90,808 37,682 21,420 161,820 16,666 23,760

229,828

171,658

676,343

788,793

(30,248) 11,028 40 (48)

15,198 (3,800) 52 433

(31,878) 13,662 71 (4)

125,806 (41,051) 49 1,535

Net income (loss)

$

(19,228)

$

Earnings (loss) per common share - assuming dilution

$

(0.64)

$

11,883 $ (18,149) 0.39 $

(0.61)

$

86,339

$

2.84

Weighted average common shares Effect of dilutive securities

29,925,920 -

29,787,324 29,893,909 625,891 -

29,714,262 607,355

Weighted average common shares – diluted

29,925,920

30,413,215 29,893,909

30,321,617

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(1) Reconciliation of Net Income (Loss) to Operating Income (Loss) - Unaudited In addition to net income (loss), FBL Financial Group has consistently utilized operating income (loss), a non-GAAP financial measure commonly used in the life insurance industry, as a primary economic measure to evaluate its financial performance. Operating income (loss) equals net income (loss) adjusted to eliminate the impact of realized/unrealized gains and losses on investments, the change in net unrealized gains and losses on derivatives and the cumulative effect of changes in accounting principles. FBL uses operating income (loss), in addition to net income (loss), to measure its performance since realized/unrealized gains and losses on investments and the change in net unrealized gains and losses on derivatives can fluctuate greatly from quarter to quarter, and the cumulative effect of change in accounting principles is a nonrecurring item. 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 (loss). 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 (loss), together with net income (loss), provides information that may enhance an investor’s understanding of FBL’s underlying results and profitability. A reconciliation of net income (loss) to operating income (loss) is provided in the following table (dollars in thousands, except per share data): T hree months ended Dec. 31, 2008 2007

Year ended Dec. 31, 2008 2007

Net income (loss) Adjustments: Net realized/unrealized (gains) losses on investments (a) Net change in unrealized gains/losses on derivatives (a) Cumulative effect of change in accounting principle

$

11,883 $

(18,149) $

86,339

12,009 1,943 -

213 12,800 -

79,542 (11,801) -

(4,500) 13,500 283

Operating income (loss)

$

(5,276) $

24,896 $

49,592 $

95,622

Operating income (loss) per common share assuming dilution

$

(0.18) $

0.82 $

1.64 $

3.15

Weighted average common shares – diluted, operating income basis

(19,228) $

29,925,920

30,413,215

30,077,104

30,321,617

(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) Reconciliation of Book Value Per Share Excluding Accumulated Other Comprehensive Loss - Unaudited Dec. 31, 2008 Book value per share P er share impact of accumulated other comprehensive loss Book value per share, excluding accumulated other comprehensive loss

$

Dec. 31, 2007

8.46 $ (21.54)

29.98 (1.21)

$ 30.00 $

31.19

Book value per share excluding accumulated other comprehensive loss is a non-GAAP financial measure. Accumulated other comprehensive loss totaled $649.8 million at December 31, 2008 and $36.3 million at December 31, 2007. Since accumulated other comprehensive loss fluctuates from quarter to quarter due to unrealized changes in the fair market value of investments caused principally by changes in market interest rates, FBL believes this non-GAAP financial measure provides useful supplemental information. (3) 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 as revenues.

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. C on de n se d C on solidate d Balan ce S h e e ts (Un au dite d) (Dollars in thou san ds) De c. 31, 2008 Asse ts Investments Cash and cash equivalents Deferred policy acquisition costs Deferred sales inducements Other assets Assets held in separate accounts T otal assets Liabilitie s an d stockh olde rs’ e qu ity P olicy liabilities and accruals Other policyholders’ funds Debt Other liabilities Liabilities related to separate accounts

$

De c. 31, 2007 10,854,059

$

11,067,070

37,710

84,015

1,365,609

991,155

420,147 805,869

321,263 601,618

577,420

862,738

$

14,060,814

$

13,927,859

$

11,933,392

$

10,900,658

682,599 430,451 178,491

608,894 316,930 335,657

577,420

862,738

13,802,353

13,024,877

Minority interest in subsidiaries

96

91

Stockholders’ equity

258,365

902,891

T otal liabilities

T otal liabilities and stockholders’ equity Common Shares Outstanding

$

14,060,814

30,168,879

$

13,927,859

30,019,728

FFG-1 CONTACT: Kathleen Till Stange, 515-226-6780 Investor Relations Vice President [email protected] Exhibit 99.2 INT EGRIT Y FINANCIALST RENGT H OPERAT IONALEXCELLENCE

GRAPHIC

Processed and formatted by SEC Watch - Visit SECWatch.com Finan cialSupple ment De ce m be r 31, 2008

For m ore inform ation contact: Jim Brannen Chief Financial Officer [email protected] T EL: 515.225.5631 Don Seibel Vice President - Finance [email protected] T EL: 515.226.6399 Kathleen T ill Stange Investor Relations Vice President Kathleen.T [email protected] T EL: 515.226.6780

NYS E: FFG www.fblfinancial.com

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. Finan cial S u pple m e n t (Un au dite d) De ce m be r 31, 2008 Table of C on te n ts/Note s

Consolidated Financial Statements: Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Operating Income (Loss), last five quarters Financial Information by Segment: Segment Information Consolidating Statements of P re-tax Operating Income (Loss) Statements of P re-tax Operating Income (Loss), last five quarters: T raditional Annuity - Exclusive Distribution Segment T raditional Annuity - Independent Distribution Segment T raditional and Universal Life Insurance Segment Variable Segment Corporate and Other Segment Deferred P olicy Acquisition Costs by Segment Collected P remiums, last five quarters Other Information

2 4 5 6 7 8 9 10 11 12 13 14 15

NOT E 1: In addition to net income (loss), FBL Financial Group has consistently utilized operating income (loss), a non-GAAP financial measure commonly used in the life insurance industry, as a primary economic measure to evaluate its financial performance. Operating income (loss) for the periods presented equals net income (loss) adjusted to eliminate the impact of: • realized and unrealized gains and losses on investments; • changes in net unrealized gains and losses on derivatives; • the cumulative effect of changes in accounting principles.

We use operating income (loss), in addition to net income (loss), to measure our performance since realized and unrealized 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 cumulative effect of changes in accounting principles is a nonrecurring item. 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 (loss). Specifically, call options relating to our index business are one or two-year assets while the embedded derivative in the index contracts represents the rights of the contract holder to receive index credits over the entire period the index annuities are expected to be in force. For our other embedded derivatives in the product segments and interest rate swaps backing our annuity liabilities, the embedded derivatives are marked to market, but the associated insurance liabilities are not marked to market. A view of our operating performance without the impact of these mismatches and non-recurring items enhances the analysis of our results. We use operating income (loss) 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. NOTE 2: Certain financial information presented herein may not add due to rounding.

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. C on solidate d Balan ce S h e e ts (Un au dite d) (Dollars in thou san ds)

De ce m be r 31, 2008 Asse ts Investments: Fixed maturities - available for sale, at market (amortized cost: 2008 - $10,505,084; 2007 - $9,662,986) Equity securities - available for sale, at market (cost: 2008 - $51,958; 2007 - $22,410) Mortgage loans on real estate Derivative instruments Investment real estate P olicy loans Other long-term investments Short-term investments

$

T otal investments Cash and cash equivalents Securities and indebtedness of related parties Accrued investment income Amounts receivable from affiliates Reinsurance recoverable Deferred policy acquisition costs Deferred sales inducements Value of insurance in force acquired P roperty and equipment, less allowances for depreciation of $63,730 in 2008 and $75,365 in 2007 Current income tax recoverable Deferred income tax benefit Goodwill Collateral held for securities lending and other transactions Other assets Assets held in separate accounts

T otal assets

$ 1

De ce m be r 31, 2007

8,965,443 $

9,522,592

44,863 1,381,854 12,933 2,559 182,421 1,527 262,459

23,633 1,221,573 43,918 2,559 179,490 1,300 72,005

10,854,059

11,067,070

37,710 18,921 136,893 15,791 107,854 1,365,609 420,147 63,121

84,015 19,957 118,827 10,831 123,659 991,155 321,263 41,215

23,074 14,389 305,080 11,170 67,953 41,623 577,420

49,164 7,412 11,170 186,925 32,458 862,738

14,060,814 $

13,927,859

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. C on solidate d Balan ce S h e e ts (C on tin u e d) (Dollars in thou san ds)

De ce m be r 31, 2008 Liabilitie s an d stock h olde rs' e qu ity Liabilities: P olicy liabilities and accruals: Future policy benefits: Interest sensitive and index products T raditional life insurance and accident and health products Unearned revenue reserve Other policy claims and benefits

$

Other policyholders' funds: Supplementary contracts without life contingencies Advance premiums and other deposits Accrued dividends

Amounts payable to affiliates Short-term debt Long-term debt payable to affiliates Long-term debt Deferred income taxes Collateral payable for securities lending and other transactions Other liabilities Liabilities related to separate accounts T otal liabilities

Minority interest in subsidiaries Stockholders’ equity: P referred stock, without par value, at liquidation value – authorized 10,000,000 shares, issued and outstanding 5,000,000 Series B shares Class A common stock, without par value – authorized 88,500,000 shares, issued and outstanding 28,975,889 shares in 2008 and 28,826,738 shares in 2007 Class B common stock, without par value – authorized 1,500,000 shares, issued and outstanding 1,192,990 shares Accumulated other comprehensive loss Retained earnings T otal stockholders’ equity

De ce m be r 31, 2007

10,531,967 1,328,506 34,663 38,256

$

11,933,392

10,900,658

504,885 167,473 10,241

439,441 158,245 11,208

682,599

608,894

247 59,446 100,000 271,005 69,656 108,588 577,420

35 316,930 28,188 202,594 104,840 862,738

13,802,353

13,024,877

96

91

3,000

3,000

104,090

101,221

7,522 (649,758 ) 793,511

7,525 (36,345) 827,490 902,891

258,365

T otal liabilities and stockholders’ equity

$ 2

9,557,073 1,284,068 28,448 31,069

14,060,814

$

13,927,859

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. C on solidate d S tate m e n ts of O pe ration s (Unau dite d) (Dollars in thou san ds, e xce pt pe r sh are data)

Th re e m on ths e n de d De ce m be r 31, 2008 2007 Revenues: Interest sensitive and index product charges T raditional life insurance premiums Net investment income Derivative loss Realized/unrealized gains (losses) on investments Other income

$

T otal revenues Benefits and expenses: Interest sensitive and index product benefits Change in value of index product embedded derivatives T raditional life insurance benefits Increase in traditional life future policy benefits Distributions to participating policyholders Underwriting, acquisition and insurance expenses Interest expense Other expenses T otal benefits and expenses

(25,785) 5,945

30,484 36,419 166,471 (52,227) (775) 6,484

(156,309) 25,310

114,529 144,682 628,031 (4,951) 5,769 26,539

199,580

186,856

644,465

914,599

120,118 (18,334 ) 23,677 9,744 4,958 77,034 6,204 6,427

105,144 (12,334) 21,132 9,613 5,306 31,978 4,430 6,389

440,430 (189,354 ) 96,884 43,255 20,064 221,393 19,567 24,104

442,544 (5,907) 90,808 37,682 21,420 161,820 16,666 23,760

229,828

171,658

676,343

788,793

(31,878 ) 13,662

125,806 (41,051)

33,362 38,002 185,317 (37,261 )

$

Minority interest in loss of subsidiaries Equity income (loss), net of related income taxes

$

15,198 (3,800)

(30,248 ) 11,028

Income taxes

Ye ar e n de d De ce m be r 31, 2008 2007

52 433

40

127,199 149,186 707,872 (208,793 )

$

49 1,535

71

Net income (loss)

$

(48) (19,228 )

$

11,883

$

(4) (18,149 )

$

86,339

Earnings (loss) per common share

$

(0.64 )

$

0.40

$

(0.61 )

$

2.90

Earnings (loss) per common share – assuming dilution

$

(0.64)

$

0.39

$

(0.61)

$

2.84

Cash dividends per common share

$

0.125

$

0.120

$

0.500

$

0.480

3

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. C on solidate d S tate m e n ts of O pe ratin g In com e (Loss) (Dollars in thou san ds, e xce pt pe r sh are data)

Q 4 2007 Operating revenues: Interest sensitive and index product charges T raditional life insurance premiums Net investment income Derivative income (loss) Other income

$

T otal operating revenues

30,492 36,419 166,471 8,937 6,484

Q 1 2008

$

29,206 36,133 168,494 (17,926) 5,865

Q 2 2008

$

31,893 38,769 172,173 (22,155) 6,955

Q 3 2008

$

32,908 36,282 181,888 (24,610) 6,545

Q 4 2008

$

33,350 38,002 185,317 (30,401 ) 5,945

248,803

221,772

227,635

233,013

232,213

118,064 21,132 9,613 5,306

99,147 27,252 11,390 5,270

100,766 22,602 11,037 5,023

106,454 23,353 11,084 4,813

114,096 23,677 9,744 4,958

3,398 24,025 2,068 19,160

3,401 22,436 1,055 19,369

3,348 22,805 569 19,313

3,280 26,706 857 18,928

3,581 51,911 1,044 19,353

48,651 4,430 6,389

46,261 4,451 5,955

46,035 4,448 6,137

49,771 4,464 5,585

75,889 6,204 6,426

T otal benefits and expenses

213,585

199,726

196,048

205,524

240,994

Income taxes Minority interest in loss of subsidiaries Equity income (loss), net of related income taxes

35,218 (10,807) 52 433

22,046 (7,104) 9 117

31,587 (10,307) 7 (159)

27,489 (8,918) 15 86

(8,781 ) 3,513 40 (48 )

24,896

15,068

21,128

18,672

(5,276)

(213) (12,800)

(12,165) 3,535

(42,642) 4,939

(12,726) 5,270

(12,009 ) (1,943 )

Benefits and expenses: Interest sensitive and index product benefits T raditional life insurance Increase in traditional life future policy benefits Distributions to participating policyholders Underwriting, acquisition and insurance expenses: Commission expense, net of deferrals Amortization of deferred policy acquisition costs Amortization of value of insurance in force acquired Other underwriting expenses T otal underwriting, acquisition and insurance expenses Interest expense Other expenses

O pe ratin g in com e (loss) Realized/unrealized losses on investments, net of offsets Change in net unrealized gains/losses on derivatives, net of offsets Ne t in com e (loss)

$

11,883

$

6,438

$

O pe ratin g in com e (loss) pe r com m on sh are - assum ing dilution .

$

0.82

$

0.50

$

Earn ings (loss) pe r com m on sh are - assum ing dilution

$

0.39

$

0.21

$

Weighted average common shares outstanding, operating income (loss) basis (in thousands): Basic 29,787 Effect of dilutive securities 626 Diluted Weighted average common shares outstanding, net income (loss) basis (in thousands): Basic Effect of dilutive securities Diluted

(16,575 )

$

11,216

$

(19,228 )

0.70

$

0.62

$

(0.18 )

(0.56 )

$

0.37

$

(0.64 )

29,860 348

29,892 210

29,900 151

29,926 -

30,413

30,208

30,102

30,051

29,926

29,787 626

29,860 348

29,892 -

29,900 151

29,926 -

30,413

30,208

29,892

30,051

29,926

Operating return on equity, excluding AOCL - last twelve months

10.6%

9.6%

9.2%

8.6%

5.3 %

Operating return on equity, including AOCL - last twelve months

10.7%

10.1%

10.2%

10.2%

7.6 %

4

Processed and formatted by SEC Watch - Visit SECWatch.com

FBL Financial Group, Inc. Segment Information We analyze operations by reviewing financial information regarding products that are aggregated into four product segments. The product segments are (1) Traditional Annuity - Exclusive Distribution ("Exclusive Annuity"), (2) Traditional Annuity - Independent Distribution ("Independent Annuity"), (3) Traditional and Universal Life Insurance and (4) Variable. We also have various support operations and corporate capital that are aggregated into the Corporate and Other segment. The Exclusive Annuity segment primarily consists of fixed rate annuities and supplementary contracts (some of which involve life contingencies) sold through our exclusive agency distribution. 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 Exclusive Annuity segment also includes index annuities. With index annuity products, we bear the underlying investment risk and credit interest in an amount equal to a percentage of the gain in a specified market index, subject to minimum guarantees. The Independent Annuity segment consists of fixed rate and index annuities and supplementary contracts (some of which involve life contingencies) sold through our independent distribution or assumed through coinsurance agreements. The Traditional and Universal 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 Variable segment consists of variable universal life insurance and variable annuity contracts. These products are similar to universal life insurance and traditional annuity contracts, except the contract holder has the option to direct the cash value of the contract to a wide range of investment sub-accounts, thereby passing the investment risk to the contract holder. 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; - accident and health insurance products, primarily a closed block of group policies; - 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 (loss). Accordingly, income taxes are not allocated to the segments. In addition, operating results are generally reported net of any transactions between the segments. 5

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. C on solidating S tate m e n ts of Pre -tax O pe ratin g In com e (Loss)

Q u arte r En de d De ce m be r 31, 2008

Operating revenues: Interest sensitive and index product charges T raditional life insurance premiums Net investment income Derivative loss Other income

Tradition al An n u ity Exclusive

$

T otal operating revenues Benefits and expenses: Interest sensitive and index product benefits T raditional life insurance benefits Increase in traditional life future policy benefits Distributions to participating policyholders Underwriting, acquisition and insurance expenses: Commission expense, net of deferrals Amortization of deferred policy acquisition costs Amortization of value of insurance in force acquired Other underwriting expenses T otal underwriting, acquisition and insurance expenses Interest expense Other expenses T otal benefits and expenses Minority interest in loss of subsidiaries Equity loss, before tax P re-tax operating income (loss)

$

Q u arte r En de d De ce m be r 31, 2007

Operating revenues: Interest sensitive and index product charges T raditional life insurance premiums Net investment income Derivative income Other income T otal operating revenues Benefits and expenses: Interest sensitive and index product benefits T raditional life insurance benefits

Tradition al An n u ity Inde pe n de n t

338 37,467 (663) 104

8,783 106,483 (29,738) -

$

12,256 38,002 35,795 (21)

$

C orporate & O the r

11,973 3,713 416

$

C on solidate d

1,859 5,446

$

33,350 38,002 185,317 (30,401) 5,945

37,246

85,528

86,032

16,102

7,305

232,213

23,573 -

68,003 -

16,168 23,677

6,352 -

-

114,096 23,677

-

-

9,744

-

-

9,744

-

-

4,958

-

-

4,958

-

-

2,831

750

-

3,581

3,700

35,763

5,041

7,407

-

51,911

612 2,136

3,630

432 7,590

5,404

593

1,044 19,353

6,448 -

39,393 -

15,894 -

13,561 111

593 6,204 6,315

75,889 6,204 6,426

30,021

107,396

70,441

20,024

13,112

240,994

7,225 -

(21,868) -

15,591 -

(3,922) -

(5,807) 40 (74)

7,225

Tradition al An n u ity Exclusive

$

$

Tradition al & Unive rsal Life Insu ran ce Variable (Dollars in thou san ds)

$

(21,868)

$

Tradition al An n u ity Inde pe n de n t

259

$

6,399

15,591

$

(3,922)

$

Tradition al & Unive rsal Life Insu ran ce Variable (Dollars in thou san ds) $

11,457

$

(5,841)

(8,781) 40 (74) $

C orporate & O the r

12,377

$

(8,815)

C on solidate d

-

$

30,492

36,861 899 -

86,230 8,038 -

36,419 35,749 -

3,352 201

4,279 6,283

36,419 166,471 8,937 6,484

38,019

100,667

83,625

15,930

10,562

248,803

24,563

74,721

14,238

4,542

-

118,064

-

-

21,132

-

-

21,132

Processed and formatted by SEC Watch - Visit SECWatch.com Increase in traditional life future policy benefits Distributions to participating policyholders Underwriting, acquisition and insurance expenses: Commission expense, net of deferrals Amortization of deferred policy acquisition costs Amortization of value of insurance in force acquired Other underwriting expenses T otal underwriting, acquisition and insurance expenses Interest expense Other expenses T otal benefits and expenses Minority interest in loss of subsidiaries Equity income, before tax P re-tax operating income (loss)

$

-

-

9,613

-

-

9,613

-

-

5,306

-

-

5,306

43 2,111

42 13,339

2,461 5,555

852 3,020

-

3,398 24,025

311

-

1,757

-

-

2,068

2,219

3,103

7,603

5,238

997

19,160

4,684

16,484

17,376

9,110

997

48,651

-

-

-

176

4,430 6,213

4,430 6,389

29,247

91,205

67,665

13,828

11,640

213,585

8,772 -

9,462 -

15,960 -

2,102 -

(1,078) 52 666

35,218 52 666

8,772

$

9,462 6

$

15,960

$

2,102

$

(360)

$

35,936

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. S tate m e n ts of Pre -tax O pe ratin g In com e Tradition al An n u ity - Exclusive Distribution S e gm e n t

Q 4 2007

Q 1 2008

Q 2 2008 Q 3 2008 (Dollars in thou san ds)

Pre -tax O pe ratin g In com e Operating revenues: Interest sensitive and index product charges Net investment income Derivative income (loss): P roceeds from option settlements Cost of money for call options P roceeds from (cost of) interest rate swaps

$

T otal derivative income (loss) Other income T otal operating revenues Benefits and expenses: Interest sensitive and index product benefits Underwriting, acquisition and insurance expenses: Amortization of deferred policy acquisition costs Amortization of value of insurance in force acquired Other underwriting expenses T otal underwriting, acquisition and insurance expenses T otal benefits and expenses P re-tax operating income

259 36,861

$

265 35,538

$

201 35,670

$

190 36,634

165 (98) 832

73 (94) (112)

(113) (869)

(102) (979)

899 -

(133) 26

(982) 114

(1,081) 23

Q 4 2008

$

338 37,467 (93 ) (570) (663 ) 104

38,019

35,696

35,003

35,766

37,246

24,563

23,287

23,051

23,904

23,573

2,111 311 2,262

2,482 534 2,151

2,142 74 2,122

3,624 292 2,081

3,698 612 2,138 6,448

4,684

5,167

4,338

5,997

29,247

28,454

27,389

29,901

30,021

$

8,772

$

7,242

$

7,614

$

5,865

$

7,225

$

2,315,044 80,685 12,949 51,155

$

2,350,332 84,023 12,509 50,485

$

2,364,870 87,211 12,761 67,063

$

2,417,666 88,865 12,265 64,513

$

2,356,310 89,714 11,982 135,170

T otal assets

$

2,459,833

$

2,497,349

$

2,531,905

$

2,583,309

$

2,593,176

Liabilities and equity: Liabilities: Interest sensitive and index product reserves Other insurance reserves Other liabilities

$

1,825,325 392,326 15,362

$

1,842,844 394,576 36,711

$

1,887,174 389,471 27,407

$

1,943,188 387,176 24,514

$

1,971,218 381,838 19,626

Balan ce sh e e t data, se cu ritie s at cost: Assets: Investments Deferred policy acquisition costs Value of insurance in force acquired Other assets

T otal liabilities Allocated equity, excluding AOCL T otal liabilities and equity

2,233,013 226,820 $

O the r data: Number of direct contracts

Spread on direct fixed annuities at end of quarter

Deposits Withdrawals, surrenders and death benefits Net flows P olicyholder interest/index credits Annuitizations and other

$

51,311

Statutory portfolio yield net of assumed defaults Credited rate

Inte re st se n sitive an d in de x produ ct re se rve activity: Individu al de fe rre d ann u ity re se rve : Balan ce , be ginn ing of pe riod

2,459,833

2,274,131 223,218

$

2,497,349

2,304,052 227,853 $

50,926

2,531,905

2,354,878 228,431 $

50,912

2,583,309

2,372,682 220,494 $

51,258

2,593,176

51,439

6.05% 4.35%

5.75% 4.14%

5.76% 4.13%

5.83% 4.12%

5.61% 4.04 %

1.70%

1.61%

1.63%

1.71%

1.57%

1,439,049

$

1,442,520

$

1,457,812

$

1,499,540

$

1,554,250

24,045 (22,659)

43,164 (24,090)

61,848 (20,481)

68,871 (18,710)

1,386

19,074

41,367

50,161

(32,827) 29,451

15,382 (13,297)

14,897 (18,679)

14,701 (14,340)

15,221 (10,672)

15,211 (12,771 )

62,278

Processed and formatted by SEC Watch - Visit SECWatch.com 1,442,520 382,805

Balan ce , e n d of pe riod Other interest sensitive reserves Total in te re st se n sitive an d in de x produ ct re se rve s

$

1,825,325 7

1,457,812 385,032 $

1,842,844

1,499,540 387,634 $

1,887,174

1,554,250 388,938 $

1,943,188

1,586,141 385,077 $

1,971,218

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. S tate m e n ts of Pre -tax O pe ratin g In com e (Loss) Tradition al An n u ity - Inde pe n de n t Distribu tion S e gm e n t

Q 4 2007

Q 1 2008

Pre -tax O pe ratin g In com e (Loss) Operating revenues: Interest sensitive and index product charges Net investment income Derivative income (loss): P roceeds from option settlements Cost of money for call options

$

T otal derivative income (loss) T otal operating revenues Benefits and expenses: Interest sensitive and index product benefits: Interest sensitive product benefits Index product benefits: Interest credited Index credits T otal index product benefits

6,399 86,230

$

Q 2 2008 Q 3 2008 (Dollars in thou san ds)

5,309 90,766

$

7,621 94,605

$

8,754 103,273

Q 4 2008

$

8,783 106,483

38,717 (30,679)

14,341 (32,134)

11,734 (32,907)

8,903 (32,432)

902 (30,640 )

8,038

(17,793)

(21,173)

(23,529)

(29,738 )

100,667

78,282

81,053

88,498

85,528

23,222

25,430

26,681

32,889

35,354

12,034 39,465

13,579 14,525

17,199 10,774

17,479 8,154

30,633 2,016

51,499

28,104

27,973

25,633

32,649

T otal interest sensitive and index product benefits Underwriting, acquisition and insurance expenses: Amortization of deferred policy acquisition costs Other underwriting expenses

74,721

53,534

54,654

58,522

68,003

13,339 3,145

13,011 3,942

13,745 3,760

15,695 3,742

35,764 3,629

T otal underwriting, acquisition and insurance expenses

16,484

16,953

17,505

19,437

39,393

91,205

70,487

72,159

77,959

107,396

T otal benefits and expenses P re-tax operating income (loss)

$

9,462

$

7,795

$

8,894

$

10,539

$

$

6,249,207 468,529 286,849 142,582

$

6,393,489 478,708 292,491 167,015

$

6,817,989 492,540 294,148 188,946

$

7,187,159 501,711 293,524 155,091

$

7,202,047 479,288 277,836 157,133

$

7,147,167

$

7,331,703

$

7,793,623

$

8,137,485

$

8,116,304

$

4,994,736 1,766,735 64,242 21,034

$

5,172,016 1,719,151 89,362 36,972

$

5,602,285 1,678,348 113,368 58,575

$

5,961,338 1,628,748 138,950 29,379

$

5,979,633 1,583,754 145,036 28,658

(21,868 )

Balan ce sh e e t data, se cu ritie s at cost: Assets: Investments Deferred policy acquisition costs Deferred sales inducements Other assets T otal assets Liabilities and equity: Liabilities: Interest sensitive and index product reserves - direct Interest sensitive and index product reserves - assumed Other insurance reserves Other liabilities T otal liabilities Allocated equity, excluding AOCL T otal liabilities and equity O the r data: Number of direct contracts Fixed rate annuitites: Statutory portfolio yield net of assumed defaults Credited rate Spread on direct fixed rate annuities at end of quarter Index annutities: Statutory portfolio yield net of assumed defaults Credited rate/option cost Spread on direct index annuities at end of quarter

6,846,747 300,420 $

7,147,167

73,980

7,017,501 314,202 $

7,331,703

78,241

7,452,576 341,047 $

7,793,623

86,470

7,758,415 379,070 $

8,137,485

92,966

7,737,081 379,223 $

8,116,304

93,769

5.80% 4.86%

5.83% 4.85%

5.85% 4.86%

5.89% 4.88%

5.89 % 4.89 %

0.94%

0.98%

0.99%

1.01%

1.00%

5.74% 3.57%

5.77% 3.56%

5.81% 3.53%

5.83% 3.46%

5.83 % 3.54 %

2.17%

2.21%

2.28%

2.37%

2.29%

Processed and formatted by SEC Watch - Visit SECWatch.com Inte re st se n sitive an d in de x produ ct re se rve activity: Individu al de fe rre d ann u ity re se rve : Balan ce , be ginn ing of pe riod

$

Deposits Withdrawals, surrenders and death benefits Net flows P olicyholder interest/index credits Derivative value change and other

$

$

6,759,976

$

6,889,613

$

7,279,099

$

7,588,549

485,878 (130,841)

303,676 (134,517)

512,448 (151,351)

467,069 (181,175)

355,037

169,159

361,097

285,894

(251,863) (64,839 )

86,470 (12,033)

63,945 (103,467)

58,804 (30,415)

61,130 (37,574)

56,490 (18,511 )

6,759,976 1,495

Balan ce , e n d of pe riod Other interest sensitive reserves Total in te re st se n sitive an d in de x produ ct re se rve s

6,330,502

6,761,471 8

6,889,613 1,554 $

6,891,167

7,279,099 1,534 $

7,280,633

187,024

7,588,549 1,537 $

7,590,086

7,561,689 1,698 $

7,563,387

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. S tate m e n ts of Pre -tax O pe ratin g In com e Tradition al an d Un ive rsal Life Insu ran ce S e gm e n t

Q 4 2007 Pre -tax O pe ratin g In com e Operating revenues: Interest sensitive product charges T raditional life insurance premiums Net investment income Other income

$

T otal operating revenues

11,457 36,419 35,749 -

Q 1 2008 Q 2 2008 Q 3 2008 (Dollars in thousands, except face amounts in millions)

$

11,421 36,133 35,787 21

$

11,781 38,769 35,682 (14)

$

12,229 36,282 36,060 (19)

Q 4 2008

$

12,256 38,002 35,795 (21 )

83,625

83,362

86,218

84,552

86,032

9,146 5,092

9,140 7,245

9,208 8,106

9,230 7,955

9,092 7,076

T otal interest sensitive product benefits T raditional life insurance benefits: Death benefits Surrender and other benefits

14,238

16,385

17,314

17,185

16,168

12,582 8,550

18,433 8,819

12,510 10,092

14,747 8,606

14,885 8,792

T otal traditional life insurance benefits Increase in traditional life future policy benefits Distributions to participating policyholders Underwriting, acquisition and insurance expenses: Commission expense, net of deferrals Amortization of deferred policy acquisition costs Amortization of value of insurance in force acquired Other underwriting expenses

21,132 9,613 5,306

27,252 11,390 5,270

22,602 11,037 5,023

23,353 11,084 4,813

23,677 9,744 4,958

2,461 5,555 1,757 7,603

2,579 4,446 521 7,355

2,461 4,291 495 7,330

2,520 4,378 565 7,014

2,831 5,041 432 7,590

T otal underwriting, acquisition and insurance expenses

17,376

14,901

14,577

14,477

15,894

67,665

75,198

70,553

70,912

Benefits and expenses: Interest sensitive product benefits: Interest credited Death benefits

T otal benefits and expenses P re-tax operating income

70,441

$

15,960

$

8,164

$

15,665

$

13,640

$

15,591

$

2,216,803 230,399 3,806 27,642 66,256

$

2,228,639 233,127 3,861 27,182 78,837

$

2,247,695 237,004 4,104 26,763 82,331

$

2,254,593 240,182 4,237 26,348 87,204

$

2,266,936 245,020 5,582 25,904 76,235

T otal assets

$

2,544,906

$

2,571,646

$

2,597,897

$

2,612,564

$

2,619,677

Liabilities and equity: Liabilities: Interest sensitive reserves Other insurance reserves Other liabilities

$

768,066 1,400,379 66,566

$

768,141 1,416,311 65,445

$

769,503 1,430,396 62,681

$

770,527 1,442,609 66,038

$

771,823 1,455,515 88,361

Balan ce sh e e t data, se cu ritie s at cost: Assets: Investments Deferred policy acquisition costs Deferred sales inducements Value of insurance in force acquired Other assets

T otal liabilities Allocated equity, excluding AOCL T otal liabilities and equity O the r data: Number of direct policies - traditional life Number of direct policies - universal life Direct face amounts - traditional life Direct face amounts - universal life

2,235,011 309,895 $

2,544,906

$ $

332,494 55,218 28,551 4,695

2,249,897 321,749 $

2,571,646

$ $

332,538 54,787 29,088 4,684

2,262,580 335,317 $

2,597,897

$ $

332,545 54,834 29,519 4,733

2,279,174 333,390 $

2,612,564

$ $

333,723 54,648 30,241 4,753

2,315,699 303,978 $

2,619,677

$ $

335,505 55,094 30,998 4,817

Statutory portfolio yield net of assumed defaults Credited rate

6.32% 4.40%

6.30% 4.40%

6.34% 4.40%

6.34% 4.41%

6.30% 4.41 %

Spread on direct universal life at end of quarter

1.92%

1.90%

1.94%

1.93%

1.89%

Inte re st se n sitive re se rve activity: Balan ce , be ginn ing of pe riod

$

766,769

$

768,066

$

768,141

$

769,503

$

770,527

Processed and formatted by SEC Watch - Visit SECWatch.com Deposits Withdrawals and surrenders Net flows P olicyholder interest credited P olicy charges Benefits and other Balan ce , e n d of pe riod Other interest sensitive reserves Total in te re st se n sitive re se rve s

$

14,079 (7,539)

13,395 (7,439)

14,140 (8,066)

13,606 (7,214)

15,013 (8,423 )

6,540

5,956

6,074

6,392

6,590

8,604 (11,328) (2,519)

8,286 (11,263) (2,904)

8,406 (11,560) (1,558)

8,373 (11,790) (1,951)

8,225 (12,042 ) (2,016 )

768,066 -

768,141 -

769,503 -

770,527 -

771,284 539

786,066 9

$

768,141

$

769,503

$

770,527

$

771,823

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. S tate m e n ts of Pre -tax O pe ratin g In com e (Loss) Variable S e gm e n t

Q 4 2007 Pre -tax O pe ratin g In com e (Loss) Operating revenues: Interest sensitive product charges: Variable universal life product charges Variable annuity product charges

$

T otal interest sensitive product charges Net investment income Other income T otal operating revenues Benefits and expenses: Interest sensitive product benefits: Interest credited Death benefits T otal interest sensitive product benefits Underwriting, acquisition and insurance expenses: Commission expense, net of deferrals Amortization of deferred policy acquisition costs Other underwriting expenses T otal underwriting, acquisition and insurance expenses Other expenses T otal benefits and expenses P re-tax operating income (loss)

Balan ce sh e e t data, se cu ritie s at cost: Assets: Investments Deferred policy acquisition costs Deferred sales inducements Other assets Separate account assets T otal assets Liabilities and equity: Liabilities: Interest sensitive reserves Other insurance reserves Other liabilities Separate account liabilities

Rollforward of se parate accou n t balan ce s: Beginning separate account balance Net premiums Net investment loss Charges, benefits and surrenders Ending separate account balance S e parate accou n t balan ce : Balance per financial statements Less: alliance partners' share Add: alliance partner separate account assets on business assumed

O the r data:

$

9,913 2,298

$

9,924 2,366

$

9,550 2,185

Q 4 2008

$

10,187 1,786

12,377 3,352 201

12,211 3,341 383

12,290 3,638 633

11,735 3,565 486

11,973 3,713 416

15,930

15,935

16,561

15,786

16,102

2,003 2,539

2,217 3,724

1,810 3,937

2,048 4,795

2,522 3,830

4,542

5,941

5,747

6,843

6,352

852 3,020 5,238

822 2,497 5,304

790 2,627 5,543

760 3,009 5,508

7,408 5,403

9,110 176

8,623 203

8,960 174

9,277 176

13,561 111

13,828

14,767

14,881

750

16,296

2,102

$

1,168

$

1,680

$

$

215,176 156,055 2,369 11,539 862,738

$

224,408 156,980 2,379 15,909 802,225

$

242,537 157,825 2,449 10,329 794,846

$

221,131 157,849 2,449 15,454 718,501

$

242,222 153,396 2,572 9,262 577,420

$

1,247,877

$

1,201,901

$

1,207,986

$

1,115,384

$

984,872

$

202,211 26,985 39,290 862,738

$

204,965 28,596 38,249 802,225

$

208,607 28,964 70,265 794,846

$

216,715 32,623 33,221 718,501

$

225,539 30,382 32,067 577,420

1,131,224 116,653 $

1,247,877

1,074,035 127,866 $

1,201,901

1,102,682 105,304 $

1,207,986

(510)

20,024

$

T otal liabilities Allocated equity, excluding AOCL T otal liabilities and equity

9,936 2,441

Q 1 2008 Q 2 2008 Q 3 2008 (Dollars in thousands, except face amounts in millions)

$

1,001,060 114,324 $

1,115,384

(3,922 )

865,408 119,464 $

984,872

$

865,557 35,594 (14,608) (23,805)

$

862,738 27,019 (61,229) (26,303)

$

802,225 28,398 (8,707) (27,070)

$

794,846 15,721 (67,251) (24,815)

$

718,501 7,507 (127,551 ) (21,037 )

$

862,738

$

802,225

$

794,846

$

718,501

$

577,420

$

862,738 (22,301) 79,150

$

802,225 (20,932) 79,212

$

794,846 (19,934) 76,143

$

718,501 (17,635) 67,685

$

577,420 (13,940 )

$

919,587

$

860,505

$

851,055

$

768,551

$

53,614 617,094

Processed and formatted by SEC Watch - Visit SECWatch.com Number of direct contracts - variable annuity Number of direct policies - variable universal life Direct face amounts - variable universal life

$

21,041 63,378 7,846 10

$

21,025 62,858 7,804

$

21,072 62,381 7,797

$

20,856 61,861 7,756

20,624 61,319 $

7,698

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. S tate m e n ts of Pre -tax O pe ratin g Loss C orporate an d O the r S e gm e n t

Q 4 2007

Q 1 2008

Pre -tax O pe ratin g Loss Operating revenues: Net investment income Other income

$

T otal operating revenues

4,279 6,283

$

3,062 5,435

Q 2 2008 Q 3 2008 (Dollars in thou san ds)

$

2,578 6,222

$

2,356 6,055

Q 4 2008

$

1,859 5,446

10,562

8,497

8,800

8,411

7,305

997 4,430 6,213

617 4,451 5,752

655 4,448 5,963

583 4,464 5,409

593 6,204 6,315

T otal benefits and expenses

11,640

10,820

11,066

10,456

13,112

Minority interest in loss of subsidiaries Equity income, before tax

(1,078) 52 666

(2,323) 9 180

(2,266) 7 (245)

(2,045) 15 132

(5,807 ) 40 (74 )

Benefits and expenses: Other underwriting and insurance expenses Interest expense Other expenses

P re-tax operating loss

$

Balan ce sh e e t data, se cu ritie s at cost: Assets: Investments Securities and indebtedness of related parties Other assets

$

280,864 19,954 426,436

$

188,101 20,040 451,908

$

153,796 19,602 317,675

$

146,690 19,108 315,941

$

333,281 18,919 245,271

T otal assets

$

727,254

$

660,049

$

491,073

$

481,739

$

597,471

Liabilities and equity: Liabilities: Insurance reserves Debt Other liabilities

$

68,360 316,930 356,423

$

68,710 316,949 316,923

$

66,874 316,967 191,243

$

66,283 350,986 186,532

$

64,319 430,451 217,637

T otal liabilities Minority interest in subsidiaries Equity, excluding AOCL T otal liabilities and equity

(360)

$

741,713 91 (14,550) $

727,254 11

(2,134)

$

702,582 129 (42,662) $

660,049

(2,504)

$

575,084 130 (84,141) $

491,073

(1,898)

$

603,801 122 (122,184) $

481,739

(5,841 )

712,407 96 (115,032 ) $

597,471

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. De fe rre d Policy Acquisition C osts by S e gm e n t

Q 4 2007 Tradition al An n u ity - Exclusive Distribution Deferred policy acquisition costs - beginning of period Capitalization: Commissions Expenses

$

T otal capitalization Amortization - operating basis, before impact of unlocking Amortization - unlocking, operating basis Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives Deferred policy acquisition costs - end of period Tradition al An n u ity - Inde pe n de n t Distribu tion Deferred policy acquisition costs - beginning of period Capitalization: Commissions Expenses

Tradition al & Un ive rsal Life Insu ran ce Deferred policy acquisition costs - beginning of period Capitalization: Commissions Expenses

Variable Deferred policy acquisition costs - beginning of period Capitalization: Commissions Expenses

Total Deferred policy acquisition costs - beginning of period Capitalization: Commissions Expenses

$

84,023

$

87,211

$

88,865

1,844 303

2,774 720

2,798 657

2,532 786

2,573 835

2,147 (2,111) -

3,494 (2,482) -

3,455 (2,142) -

3,318 (3,026) (598)

3,408 (3,698) -

1,093

2,326

1,875

1,960

1,139

$

84,023

$

87,211

$

88,865

$

89,714

$

433,409

$

468,529

$

478,708

$

492,540

$

501,711

31,001 2,176

24,478 1,931

29,263 2,165

26,412 2,043

14,879 1,566

33,177 (13,339) -

26,409 (13,011) -

31,428 (14,453) 708

28,455 (15,695) -

16,445 (19,414) (16,350)

15,282

(3,219)

(3,851)

(3,589)

(3,104 )

$

468,529

$

478,708

$

492,540

$

501,711

$

479,288

$

227,267

$

230,399

$

233,127

$

237,004

$

240,182

4,828 3,850

2,960 3,818

4,017 3,722

3,536 3,531

5,222 4,669

8,678 (5,555) 9

6,778 (4,446) 396

7,739 (4,464) 173 429

7,067 (3,850) (528) 489

9,891 (5,041) (12)

$

230,399

$

233,127

$

237,004

$

240,182

$

245,020

$

154,059

$

156,055

$

156,980

$

157,825

$

157,849

T otal capitalization Amortization - operating basis, before impact of unlocking Amortization - unlocking, operating basis Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives Deferred policy acquisition costs - end of period

80,685

Q 4 2008

80,685

T otal capitalization Amortization - operating basis, before impact of unlocking Amortization - unlocking, operating basis Amortization - realized gains/losses on investments Deferred policy acquisition costs - end of period

$

Q 2 2008 Q 3 2008 (Dollars in thou san ds)

$

T otal capitalization Amortization - operating basis, before impact of unlocking Amortization - unlocking, operating basis Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives Deferred policy acquisition costs - end of period

79,556

Q 1 2008

3,765 969

2,618 893

2,528 755

1,920 825

1,728 714

4,734 (4,277) 1,257

3,511 (2,497) -

3,283 (2,925) 298

2,745 (4,954) 1,945

2,442 (7,408) -

282

(89)

189

288

513

$

156,055

$

156,980

$

157,825

$

157,849

$

153,396

$

894,291

$

935,668

$

952,838

$

974,580

$

988,607

41,438 7,298

32,830 7,362

38,606 7,299

34,400 7,185

24,402 7,784

T otal capitalization Amortization - operating basis, before impact of unlocking Amortization - unlocking, operating basis Amortization - realized gains/losses on investments and unrealized gains/losses on derivatives

48,736 (25,282) 1,257

40,192 (22,436) -

45,905 (23,984) 1,179

41,585 (27,525) 819

32,186 (35,561) (16,350)

Deferred policy acquisition costs - end of period Impact of unrealized gains/losses on investments

935,668 55,487

Deferred policy acquisition costs

16,666

$

991,155

(586)

(1,358)

952,838 136,506 $

1,089,344

(852)

974,580 186,953 $

1,161,533

(1,464)

988,607 279,825 $

1,268,432

967,418 398,191 $

1,365,609

Processed and formatted by SEC Watch - Visit SECWatch.com 12

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. C olle cte d Pre m ium s

Q 4 2007 Tradition al An n u ity - Exclusive Distribution First year - individual Renewal - individual Group T otal T raditional Annuity - Exclusive Distribution

$

14,966 9,335 2,621

Q 1 2008 Q 2 2008 Q 3 2008 (Dollars in thou san ds) $

25,530 18,115 1,703

$

40,234 22,203 1,988

$

55,649 14,603 3,415

Q 4 2008

$

49,262 14,256 2,081

26,922

45,348

64,425

73,667

65,599

Tradition al An n u ity - Inde pe n de n t Distribu tion Fixed rate annuities Index annuities

283,563 221,033

120,928 205,758

378,209 159,998

348,886 147,229

67,820 136,427

T otal direct Reinsurance assumed

504,596 458

326,686 882

538,207 892

496,115 397

204,247 210

T otal T raditional Annuity - Independent Distribution, net of reinsurance

505,054

327,568

539,099

496,512

204,457

2,045 9,920

1,361 9,919

1,628 10,271

1,879 9,167

1,804 9,981

T otal P articipating whole life: First year Renewal

11,965

11,280

11,899

11,046

11,785

3,271 22,656

2,848 23,135

2,860 24,967

3,024 22,330

3,357 22,946

T otal T erm life and other: First year Renewal

25,927

25,983

27,827

25,354

26,303

2,503 11,411

2,595 12,038

2,365 12,015

2,680 12,464

2,774 12,618

13,914

14,633

14,380

15,144

15,392

T otal T raditional and Universal Life Insurance - Exclusive Distribution Reinsurance assumed Reinsurance ceded

51,806 2,905 (4,844)

51,896 2,735 (4,637)

54,106 2,790 (5,025)

51,544 2,692 (4,457)

53,480 2,696 (4,975 )

T otal T raditional and Universal Life Insurance, net of reinsurance

49,867

49,994

51,871

49,779

51,201

Variable Variable annuities: Exclusive distribution: First year Renewal

19,254 6,036

13,217 6,682

12,394 6,919

9,340 4,962

5,791 4,484

25,290

19,899

19,313

14,302

10,275

7,480 1,078

6,385 1,435

4,398 1,524

3,046 737

1,856 721

Tradition al an d Un ive rsal Life Insu ran ce Universal life: First year Renewal

T otal

T otal Alliance channel: First year (1) Renewal (1) T otal T otal variable annuities Variable universal life: Exclusive distribution: First year Renewal T otal Alliance channel: First year (1) Renewal (1) T otal

8,558

7,820

5,922

3,783

2,577

33,848

27,719

25,235

18,085

12,852

2,039 11,302

1,756 11,936

1,118 12,033

1,200 11,209

856 11,096

13,341

13,692

13,151

12,409

11,952

152 529

122 541

96 578

115 514

82 564

681

663

674

629

646

T otal variable universal life T otal Variable Reinsurance ceded

14,022 47,870 (160)

14,355 42,074 (153)

13,825 39,060 (187)

13,038 31,123 (180)

12,598 25,450 (216 )

T otal Variable, net of reinsurance

47,710

41,921

38,873

30,943

25,234

234

63

30

27

258

C orporate an d O the r Accident and health premiums collected, net of reinsurance

Processed and formatted by SEC Watch - Visit SECWatch.com $ 629,787 (1) Amounts are net of portion ceded to and include amounts assumed from alliance partners. 13

$ 464,894

$ 694,298

$

650,928

$ 346,749

Processed and formatted by SEC Watch - Visit SECWatch.com FBL Finan cial Group, In c. O the r Incom e

De ce m be r 31, 2007

March 31, 2008

Ju n e 30, 2008

S e pte m be r 30, 2008

De ce m be r 31, 2008

(Dollars in thou san ds, e xce pt pe r sh are data) C apitaliz ation: Senior Notes, due 2011 Senior notes, due 2014 Senior notes, due 2017 T rust preferred securities Revolving line of credit agreement Short-term note payable

$

$

75,353 98,577 97,000 46,000 -

$

$

75,341 98,608 97,000 46,000 -

$

$

75,329 98,638 97,000 46,000 -

$

$

75,317 98,669 97,000 60,000 20,000

$

$

100,000 75,305 98,700 97,000 59,446 -

T otal debt

316,930

316,949

316,967

350,986

430,451

P referred stock Common stockholders' equity, excluding AOCL

3,000 936,236

3,000 941,372

3,000 922,375

3,000 930,031

3,000 905,123

1,256,166

1,261,321

1,242,342

1,284,017

1,338,574

Total capitaliz ation, e xcluding AO C L Accumulated other comprehensive income loss Total capitaliz ation, inclu ding AO C L

(36,345) $

Common shares outstanding Book Valu e pe r S h are : Excluding AOCL Including AOCL

1,219,821

(137,996) $

30,019,728

$

31.19 29.98

1,123,325

(186,765) $

30,162,058

$

31.21 26.64

1,055,577

(377,151) $

30,163,927

$

30.58 24.39

906,866

(649,758) $

30,173,593

$

30.82 18.32

688,816 30,168,879

$

30.00 8.46

De bt-to-C apital Ratio: Excluding AOCL Including AOCL

25.2 % 26.0

25.1 % 28.2

25.5 % 30.0

27.3 % 38.7

32.2 % 62.5

De bt-to-C apital Ratio with 100% C re dit for Tru st Pre fe rre d S e cu ritie s: Excluding AOCL Including AOCL

17.5 % 18.0

17.4 % 19.6

17.7 % 20.8

19.8 % 28.0

24.9 % 48.4

C lass A C om m on O wn e rship: Iowa Farm Bureau Federation Other Farm Bureau entities P ublic

51.0 % 9.0 40.0

50.7 % 8.9 40.4

50.7 % 8.7 40.6

53.1 % 8.7 38.2

53.1 % 8.7 38.2

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

Q u ality of Fixe d In com e S e cu ritie s: (AAA, AA, A) (BBB) (BB) (
63.6 % 32.6 2.7 1.1

62.0 % 34.1 2.8 1.1

61.7 % 34.4 2.7 1.2

61.7 % 34.6 2.6 1.1

60.0 % 36.2 2.7 1.1

Inve stm e n t by Type : Fixed maturities Residential mortgage-backed Commercial mortgage-backed Asset-backed Mortgage loans Equity securities Other

61.4 % 16.7 5.1 2.3 11.0 0.2 3.3

62.0 % 16.1 5.9 1.8 11.2 0.2 2.8

62.1 % 15.9 6.5 1.5 11.3 0.1 2.6

61.7 % 16.0 6.5 1.4 11.7 0.1 2.6

58.9 % 16.5 5.9 1.3 12.8 0.4 4.2

Age n t Stre n gth Totals: Farm Bureau Life channel: 8-state Farm Bureau Mutual channel 7 Life-only states

1,188 779

1,192 763

1,193 775

1,192 789

1,176 786

T otal Farm Bureau Life channel

1,967

1,955

1,968

1,981

1,962

P ercentage registered representatives:

Processed and formatted by SEC Watch - Visit SECWatch.com Farm Bureau Life channel EquiT rust Life channel: Independent Agents

88.3%

88.6%

19,781

20,726

15

86.9%

22,361

86.4%

23,651

83.9 %

19,098