FBL Financial earnings fall 44%

FBL Financial Group, corporate parent of Farm Bureau Financial Services, reported a 44 percent drop in second-quarter earnings in the wake of its sale of a life insurance subsidiary and a planned reduction in annuity sales.

West Des Moines-based FBL posted net income of $20.3 million, or 73 cents per share, for the three months that ended June 30, down from $36 .2 million, or $1.16 per share, in the second quarter of 2011. Revenue rose to $166 million in the second quarter from $160.2 million in the same quarter last year.

FBL agreed in October 2011 to sell its EquiTrust Life Insurance subsidiary to Guggenheim Partners, a Chicago-based equity firm, for $440 million in cash. EquiTrust Life sells fixed and indexed annuities and life insurance nationally through independent agents and marketing organizations.

FBL, which employs about 1,00o in West Des Moines, said second-quarter net income from continuing operations was $20.3 million, or 73 cents per share, compared with $24.2 million, or 78 cents per share, for the second quarter of 2011. Operating earnings slid 15 percent to $19.9 million in the second quarter from $23.4 million in the same period of 2011.

James Brannen, chief executive officer of FBL Financial Group, said the second-quarter earnings from continuing operations are an indication that the company's focus on its life insurance business is the correct course of action going forward.

"We've been addressing the challenges of the low interest rate environment from several aspects, including emphasizing life insurance sales while deliberately reducing annuity sales," Brannen said. "Our balanced life and annuity product mix and in-force business provides earnings stability in these challenging times."

Brannen was named CEO after the departure of James Hohmann, who stepped down June 30 after three years at the helm of FBL.

Brannen said FBL repurchased 905,542 shares of the company's stock at a cost of $23.7 million during the second quarter using excess capital. He said the company has repurchased 13 percent of total common shares outstanding since Jan. 1.