Management’s Discussion and Analysis of Financial Condition and Results of Operations – InsuranceNewsNet

Overview

First Trinity Financial Corporation ("we" "us", "our", "FTFC" or the "Company")
conducts operations as an insurance holding company emphasizing ordinary life
insurance products and annuity contracts in niche markets.



As an insurance provider, we collect premiums in the current period to pay
future benefits to our policy and contract holders. Our core TLIC and FBLIC
operations include issuing modified premium whole life insurance with a flexible
premium deferred annuity, ordinary whole life, final expense, term and annuity
products to predominately middle income households in the states of Alabama,
Arizona, Arkansas, Colorado, Georgia, Illinois, Indiana, Kansas, Kentucky,
Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, New Mexico, North
Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee,
Texas, Utah, Virginia and West Virginia through independent agents.



We also realize revenues from our investment portfolio, which is a key component
of our operations. The revenues we collect as premiums from policyholders are
invested to ensure future benefit payments under the policy contracts. Life
insurance companies earn profits on the investment spread, which reflects the
investment income earned on the premiums paid to the insurer between the time of
receipt and the time benefits are paid out under policies. Changes in interest
rates, changes in economic conditions and volatility in the capital markets can
all impact the amount of earnings that we realize from our investment portfolio.



Acquisitions



The Company expects to facilitate growth through acquisitions of other life
insurance companies and/or blocks of life insurance and annuity business. In
late December 2008, the Company completed its acquisition of 100% of the
outstanding stock of FLAC for $2,500,000 and had additional acquisition related
expenses of $195,234.

In late December 2011, the Company completed its acquisition of 100% of the
outstanding stock of FBLIC for $13,855,129.

On April 28, 2015, the Company acquired a block of life insurance policies and
annuity contracts according to the terms of an assumption reinsurance agreement
and assumed liabilities of $3,055,916.

In 2019, FTFC’s acquisition of TAI for $250,000 was approved by the Barbados,
West Indies regulators.

Effective January 1, 2020, the Company acquired 100% of the outstanding common
stock of K-TENN Insurance Company ("K-TENN") from its sole shareholder in
exchange for 168,866 shares of FTFC's common stock. The aggregate purchase price
of K-TENN was $1,746,240.



On January 4, 2022, FTFC acquired Royalty Capital Life Insurance Company
("RCLIC") from Royalty Capital Corporation ("Royalty") in exchange for 722,644
shares of FTFC's Class A common stock issued to unrelated parties. Royalty was
dissolved immediately after FTFC acquired RCLIC. On March 1, 2022, the Missouri
Department of Commerce and Insurance approved FTFC's contribution and merger of
RCLIC into FBLIC.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition, results of operations
and liquidity and capital resources is based on our consolidated financial
statements that have been prepared in accordance with U.S. GAAP. Preparation of
these financial statements requires us to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue and expenses. We
evaluate our estimates and assumptions continually, including those related to
investments, deferred acquisition costs, allowance for loan losses from
mortgages, value of insurance business acquired, policy liabilities, regulatory
requirements, contingencies and litigation. We base our estimates on historical
experience and on various other factors and assumptions that we believe are
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.



                                       32
--------------------------------------------------------------------------------




For a description of the Company's critical accounting policies and estimates,
please refer to "Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations - Critical Accounting Policies and
Estimates" in the Company's Annual Report on Form 10-K for the year ended
December 31, 2021.  The Company considers its most critical accounting estimates
to be those applied to investments in fixed maturities securities, mortgage
loans on real estate, deferred policy acquisition costs, value of insurance
business acquired and future policy benefits. There have been no material
changes to the Company's critical accounting policies and estimates since
December 31, 2021.

Recent Accounting Pronouncements

Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial
Instruments

In June 2016, the FASB issued updated guidance (Accounting Standards Update
2016-13) for the accounting for credit losses for financial instruments. The
updated guidance applies a new credit loss model (current expected credit losses
or CECL) for determining credit-related impairments for financial instruments
measured at amortized cost (e.g. reinsurance recoverables, including structured
settlements that are recorded as part of reinsurance recoverables) and requires
an entity to estimate the credit losses expected over the life of an exposure or
pool of exposures. The estimate of expected credit losses should consider
historical information, current information, as well as reasonable and
supportable forecasts, including estimates of prepayments.



The expected credit losses, and subsequent adjustments to such losses, will be
recorded through an allowance account that is deducted from the amortized cost
basis of the financial asset, with the net carrying value of the financial asset
presented on the consolidated balance sheet at the amount expected to be
collected.



The updated guidance also amends the current other-than-temporary impairment
model for available-for-sale debt securities by requiring the recognition of
impairments relating to credit losses through an allowance account and limits
the amount of credit loss to the difference between a security's amortized cost
basis and its fair value. In addition, the length of time a security has been in
an unrealized loss position will no longer impact the determination of whether a
credit loss exists.

The updated guidance was effective for reporting periods beginning after
December 15, 2019. As a Smaller Reporting Company, the effective date was
recently changed and the delayed effective date is now for reporting periods
beginning after December 15, 2022.

Early adoption is permitted for reporting periods beginning after December 15,
2018. Based on the financial instruments currently held by the Company, there
would not be a material effect on the Company's results of operations, financial
position or liquidity if the new guidance had been adopted in the current
accounting period. The impact on the Company's results of operations, financial
position or liquidity at the date of adoption of the updated guidance will be
determined by the financial instruments held by the Company and the economic
conditions at that time.

Intangibles – Goodwill and Other

In January 2017, the FASB issued updated guidance (Accounting Standards Update
2017-04) that eliminates the requirement to calculate the implied fair value of
goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a
goodwill impairment charge. Instead, entities will record an impairment charge
by comparing a reporting unit's fair value with its carrying amount and
recognizing an impairment charge for the excess of the carrying amount over
estimated fair value (i.e., Step 1 of current guidance).



The implied fair value of goodwill is currently determined in Step 2 by
deducting the fair value of all assets and liabilities of the reporting unit
(determined in the same manner as a business combination) from the reporting
unit's fair value as determined in Step 1 (including any corporate-level assets
or liabilities that were included in the determination of the carrying amount
and fair value of the reporting unit in Step 1). The updated guidance requires
an entity to perform its annual, or interim, impairment test by either: (1) an
initial qualitative assessment of factors (such as changes in management, key
personnel, strategy, key technology or customers) that may impact a reporting
unit's fair value and lead to the determination that it is more likely than not
that the reporting unit's fair value is less than its carrying value, including
goodwill (consistent with current guidance), or (2) applying Step 1.



                                       33
--------------------------------------------------------------------------------




The Company adopted this guidance in first quarter 2020. The adoption of this
guidance did not have a material effect on the Company's results of operations,
financial position or liquidity.

Targeted Improvements to the Accounting for Long-Duration Contracts

In August 2018, the FASB issued updated guidance (Accounting Standards Update
2018-12) to the existing recognition, measurement, presentation and disclosure
requirements for long-duration contracts issued by an insurance entity. This
update improves the timeliness of recognizing changes in the liability for
future policy benefits, modifies the rate used to discount future cash flows,
simplifies and improves accounting for certain market-based options or
guarantees associated with deposit (i.e., account balance) contracts, simplifies
the amortization of deferred acquisitions costs and expands required
disclosures. The expanded disclosure requires an insurance entity to provide
disaggregated roll forwards of beginning to ending balances of the following:
liability for future policy benefits, policyholder account balances, market risk
benefits, separate account liabilities and deferred acquisition costs including
disclosure about, changes to and effect of changes for significant inputs,
judgments, assumptions and methods used in measurements.



The updated guidance was effective for reporting periods beginning after
December 15, 2020. As a Smaller Reporting Company, the effective date has been
changed twice and the delayed effective date is now for reporting periods
beginning after December 15, 2024. Early adoption is permitted but not elected
by the Company. With respect to the liability for future policyholder benefits
for traditional and limited-payment contracts and deferred acquisition costs, an
insurance entity may elect to apply the amendments retrospectively as of the
beginning of the earliest period presented.



With respect to the market risk benefits, an insurance entity should apply the
amendments retrospectively as of the beginning of the earliest period presented.
The Company expects that the impact on the Company's results of operations,
financial position and liquidity at the date of adoption of the updated guidance
in 2024 will be determined by the long-duration contracts then held by the
Company and the economic conditions at that time.

Disclosure Framework – Changes to the Disclosure Requirements for Fair Value
Measurement

In August 2018, the FASB issued amendments (Accounting Standards Update 2018-13)
to modify the disclosure requirements related to fair value measurements
including the consideration of costs and benefits of producing the modified
disclosures.

The Company adopted this guidance in first quarter 2020. The adoption of this
guidance did not have a material effect on the Company's results of operations,
financial position or liquidity.

Income Taxes – Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued updated guidance (Accounting Standards Update
2019-12) for the accounting for income taxes. The updated guidance is intended
to simplify the accounting for income taxes by removing several exceptions
contained in existing guidance and amending other existing guidance to simplify
several other income tax accounting matters. The Company adopted this guidance
in first quarter 2021. The adoption of this guidance did not have a material
effect on the Company's results of operations, financial position or liquidity.

Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the FASB issued amendments (Accounting Standards Update 2022-2)
for the accounting of troubled debt restructuring and disclosures. The
amendments introduce new requirements related to certain modifications of
receivables made to borrowers experiencing financial difficulties. The
amendments promulgate that an entity must apply specific loam refinancing and
restructuring guidance to determine whether a modification results in a new loan
or the continuation of an existing loan. The amendments also require that an
entity disclose current-period gross writeoffs by year of origination for
financing receivables and net investment in leases. The amendments in this
guidance are effective for fiscal years beginning after December 15, 2022,
including interim periods and should be applied prospectively. The adoption of
his guidance should not have a material effect on the Company's results of
operations, financial position or liquidity.



                                       34
--------------------------------------------------------------------------------

Business Segments



FASB guidance requires a "management approach" in the presentation of business
segments based on how management internally evaluates the operating performance
of business units. The discussion of segment operating results that follows is
being provided based on segment data prepared in accordance with this
methodology.

Our business segments are as follows:

? Life insurance operations, consisting of the life insurance operations of

TLIC, FBLIC and TAI;

? Annuity operations, consisting of the annuity operations of TLIC, FBLIC and

TAI and

? Corporate operations, which includes the results of the parent company and TMC

    after the elimination of intercompany amounts.




Please see below and Note 4 to the Consolidated Financial Statements for the
three months ended March 31, 2022 and 2021 and as of March 31, 2022 and December
31, 2021 for additional information regarding segment information.

The following is a discussion and analysis of our financial condition, results
of operations and liquidity and capital resources.

FINANCIAL HIGHLIGHTS



Consolidated Condensed Results of Operations for the Three Months Ended March
31, 2022 and 2021



                                  (Unaudited)
                          Three Months Ended March 31,         Amount Change
                            2022                2021          2022 less 2021
Premiums               $     8,228,782      $   6,979,876     $     1,248,906
Net investment
income                       6,448,995          6,148,842             300,153
Net realized
investment gains             1,237,806             52,095           1,185,711
Service fees                    57,540             97,987             (40,447 )
Other income                    58,497             13,774              44,723
Total revenues              16,031,620         13,292,574           2,739,046
Benefits and claims         10,789,536          9,219,254           1,570,282
Expenses                     4,112,525          4,592,764            (480,239 )
Total benefits,
claims and expenses         14,902,061         13,812,018           1,090,043
Income (loss) before
federal income tax
expense (benefit)            1,129,559           (519,444 )         1,649,003
Federal income tax
expense (benefit)              217,024            (58,792 )           275,816
Net income (loss)      $       912,535      $    (460,652 )   $     1,373,187
Net income (loss)
per common share
basic and duluted
Class A common stock   $        0.0964      $     (0.0527 )   $        0.1491
Class B common stock   $        0.0819      $     (0.0448 )   $        0.1267




                                       35

--------------------------------------------------------------------------------




Consolidated Condensed Financial Position as of March 31, 2022 and December 31,
2021



                            (Unaudited)                                 Amount Change
                           March 31, 2022       December 31, 2021       2022 to 2021


Investment assets         $    429,477,295     $       434,120,334     $    (4,643,039 )
Assets held in trust
under coinsurance
agreement                      101,327,251             106,210,246          (4,882,995 )
Other assets                   120,202,729             119,428,354             774,375
Total assets              $    651,007,275     $       659,758,934     $    (8,751,659 )

Policy liabilities        $    474,931,540     $       464,853,615     $    10,077,925
Funds withheld under
coinsurance agreement          101,508,074             106,586,633          (5,078,559 )
Deferred federal income
taxes                            5,694,754               8,966,303          (3,271,549 )
Other liabilities                8,061,627              10,957,832          (2,896,205 )
Total liabilities              590,195,995             591,364,383          (1,168,388 )
Shareholders' equity            60,811,280              68,394,551          (7,583,271 )
Total liabilities and
shareholders' equity      $    651,007,275     $       659,758,934     $    (8,751,659 )

Shareholders' equity
per common share
Class A common stock      $         6.4213     $            7.8186     $       (1.3973 )
Class B common stock      $         5.4581     $            6.6458     $       (1.1877 )

Results of Operations – Three Months Ended March 31, 2022 and 2021

Revenues



Our primary sources of revenue are life insurance premium income and investment
income. Premium payments are classified as first-year, renewal and single. In
addition, realized gains on investment holdings can significantly impact
revenues from period to period.



Our revenues for the three months ended March 31, 2022 and 2021 are summarized
as follows:



                                           (Unaudited)
                                  Three Months Ended March 31,         Amount Change
                                     2022                2021         2022 less 2021
Premiums                        $     8,228,782      $  6,979,876     $     1,248,906
Net investment income                 6,448,995         6,148,842             300,153
Net realized investment gains         1,237,806            52,095           1,185,711
Service fees                             57,540            97,987             (40,447 )
Other income                             58,497            13,774              44,723
Total revenues                  $    16,031,620      $ 13,292,574     $     2,739,046

The $2,739,046 increase in total revenues for the three months ended March 31,
2022 is discussed below.

                                       36
--------------------------------------------------------------------------------

Premiums



Our premiums for the three months ended March 31, 2022 and 2021 are summarized
as follows:



                                      (Unaudited)
                             Three Months Ended March 31,         Amount Change
                                2022                2021         2022 less 2021
Ordinary life first year   $       458,139       $   305,591     $       152,548
Ordinary life renewal              899,975           798,234             101,741
Final expense first year         1,236,375         1,425,313            (188,938 )
Final expense renewal            5,634,293         4,450,738           1,183,555
Total premiums             $     8,228,782       $ 6,979,876     $     1,248,906




The $1,248,906 increase in premiums for the three months ended March 31, 2022 is
primarily due to a $1,183,555 increase in final expense renewal premiums,
$152,548 increase in ordinary life first year premiums and a $101,741 increase
in ordinary life renewal premiums that exceeded a $188,938 decrease in final
expense first year premiums.



The increase in final expense renewal premiums reflects the persistency of prior
years' final expense production. The increase in ordinary life renewal premiums
and ordinary life first year premiums primarily reflects ordinary dollar
denominated life insurance policies sold in the international market by TAI. The
decrease in final expense first year premiums reflects tightening of
underwriting guidelines.



Net Investment Income

The major components of our net investment income for the three months ended
March 31, 2022 and 2021 are summarized as follows:

                                   (Unaudited)
                          Three Months Ended March 31,          Amount Change
                            2022                 2021          2022 less 2021
Fixed maturity
securities             $     1,935,754       $   1,695,894     $       239,860
Preferred stock and
equity securities               65,073              16,999              48,074
Other long-term
investments                  1,311,694           1,282,894              28,800
Mortgage loans               3,778,025           3,748,232              29,793
Policy loans                    43,322              38,618               4,704
Short-term and other
investments                     21,272               9,295              11,977
Gross investment
income                       7,155,140           6,791,932             363,208
Investment expenses           (706,145 )          (643,090 )            63,055
Net investment
income                 $     6,448,995       $   6,148,842     $       300,153




The $363,208 increase in gross investment income for the three months ended
March 31, 2022 is primarily due to the increased investments in fixed maturity
securities held during most of 2022 but sold during March 2022 to acquire higher
yielding investments.



                                       37

--------------------------------------------------------------------------------

Net Realized Investment Gains (Losses)

Our net realized investment gains result from sales of fixed maturity securities
available-for-sale, investment real estate, equity securities and changes in
fair value of equity securities. Our net realized investment gains for the three
months ended March 31, 2022 and 2021 are summarized as follows:



                                              (Unaudited)
                                     Three Months Ended March 31,          Amount Change
                                        2022                2021          2022 less 2021
Fixed maturity securities
available-for-sale:
Sale proceeds / maturities        $     30,949,960      $   2,419,079     $    28,530,881
Amortized cost at sale date             29,725,885          2,381,428          27,344,457
Net realized gains                $      1,224,075      $      37,651     $     1,186,424

Investment real estate:
Sales proceeds                    $         49,371      $           -     $        49,371
Cost at sale date                           53,067                  -              53,067
Net realized loss                 $         (3,696 )    $           -     $        (3,696 )

Equity securities at fair
value:
Sales proceeds                    $              -      $          88     $           (88 )
Cost at sale date                            8,000                 (1 )             8,001
Net realized gains                $         (8,000 )    $          89     $        (8,089 )

Equity securities, changes in
fair value                        $         25,427      $      14,355     $        11,072

Net realized investment gains     $      1,237,806      $      52,095     $     1,185,711






Service Fees

The $40,447 decrease in service fees for the three months ended March 31, 2022
is primarily due to a decrease in fees from Trinity Mortgage Corporation
brokering mortgage loans for a fee to third parties.

                                       38
--------------------------------------------------------------------------------

Total Benefits, Claims and Expenses

Our benefits, claims and expenses are primarily generated from benefit payments,
surrenders, interest credited to policyholders, change in reserves, commissions
and other underwriting, insurance and acquisition expenses. Benefit payments can
significantly impact expenses from period to period.

Our benefits, claims and expenses for the three months ended March 31, 2022 and
2021 are summarized as follows:

                            (Unaudited)
                    Three Months Ended March 31,         Amount Change
                      2022                2021          2022 less 2021
Benefits and
claims
Increase in
future policy
benefits         $     3,214,973      $   2,156,185     $     1,058,788
Death benefits         4,006,240          3,523,718             482,522
Surrenders               315,390            348,906             (33,516 )
Interest
credited to
policyholders          3,176,136          3,118,535              57,601
Dividend,
endowment and
supplementary
life contract
benefits                  76,797             71,910               4,887
Total benefits
and claims            10,789,536          9,219,254           1,570,282
Expenses
Policy
acquisition
costs deferred        (2,852,880 )       (2,829,473 )           (23,407 )
Amortization
of deferred
policy
acquisition
costs                  1,368,983          1,789,823            (420,840 )
Amortization
of value of
insurance
business
acquired                  72,209             75,169              (2,960 )
Commissions            2,661,129          2,872,583            (211,454 )
Other
underwriting,
insurance and
acquisition
expenses               2,863,084          2,684,662             178,422
Total expenses         4,112,525          4,592,764            (480,239 )
Total
benefits,
claims and
expenses         $    14,902,061      $  13,812,018     $     1,090,043

The $1,090,043 increase in total benefits, claims and expenses for the three
months ended March 31, 2022 is discussed below.

Benefits and Claims

The $1,570,282 increase in benefits and claims for the three months ended March
31, 2022 is primarily due to the following:

? $1,058,788 increase in future policy benefits is primarily due to the

increased number of life policies in force and the aging of existing life

    policies.




  ? $482,522 increase in death benefits is primarily due to increased final
    expense death benefits.

Deferral and Amortization of Deferred Acquisition Costs

Certain costs related to the successful acquisition of traditional life
insurance policies are capitalized and amortized over the premium-paying period
of the policies. Certain costs related to the successful acquisition of
insurance and annuity policies that subject us to mortality or morbidity risk
over a period that extends beyond the period or periods in which premiums are
collected and that have terms that are fixed and guaranteed (i.e.,
limited-payment long-duration annuity contracts) are capitalized and amortized
in relation to the present value of actual and expected gross profits on the
policies.



                                       39

--------------------------------------------------------------------------------




These acquisition costs, which are referred to as deferred policy acquisition
costs, include commissions and other successful costs of acquiring policies and
contracts, which vary with, and are primarily related to, the successful
production of new and renewal life insurance policies and annuity contracts.

For the three months ended March 31, 2022 and 2021, capitalized costs were
$2,852,880 and $2,829,473, respectively. Amortization of deferred policy
acquisition costs for the three months ended March 31, 2022 and 2021 were
$1,368,983 and $1,789,823, respectively.

There was a $420,840 decrease in the 2022 amortization of deferred acquisition
costs is primarily due to contacts and polices no longer insured having minimal
deferred cost.

Amortization of Value of Insurance Business Acquired

The cost of acquiring insurance business is amortized over the emerging profit
of the related policies using the same assumptions that were used in computing
liabilities for future policy benefits. Amortization of the value of insurance
business acquired was $72,209 and $75,169 for the three months ended March 31,
2022 and 2021, respectively.



Commissions



Our commissions for the three months ended March 31, 2022 and 2021 are
summarized as follows:



                                      (Unaudited)
                             Three Months Ended March 31,         Amount Change
                                2022                2021         2022 less 2021
Annuity                    $        59,469       $   344,706     $      (285,237 )
Ordinary life first year           492,800           330,720             162,080
Ordinary life renewal               89,929            69,813              20,116
Final expense first year         1,474,665         1,701,441            (226,776 )
Final expense renewal              544,266           425,903             118,363
Total commissions          $     2,661,129       $ 2,872,583     $      (211,454 )




The $211,454 decrease in commissions for the three months ended March 31, 2022
is primarily due to a $285,237 decrease annuity commissions (corresponding to
$5,436,865 of decrease annuity deposits retained) and a $226,776 decrease in
final expense first year commissions (corresponding to $188,938 decreased final
expense first year premiums) that exceed a $162,080 increase in ordinary life
first year commissions (corresponding to $152,548 increased ordinary life first
year premiums) and a $118,363 increase in final expense renewal commissions
(corresponding to $1,183,555 increased final expense renewal premiums) .

Other Underwriting, Insurance and Acquisition Expenses

There was a $178,422 increase in other underwriting, insurance and acquisition
expenses for the three months ended March 31, 2022 is due to increased legal
cost.



Federal Income Taxes



FTFC filed its 2020 consolidated federal income tax return with TLIC, FBLIC and
TMC. Certain items included in income reported for financial statement purposes
are not included in taxable income for the current period, resulting in deferred
income taxes.



For the three months ended March 31, 2022, current federal income tax expense
was $8,270. For the three months ended March 31, 2022 and 2021, deferred federal
income tax expense (benefit) was $208,754 and ($58,792), respectively.



                                       40
--------------------------------------------------------------------------------

Net Income (Loss) Per Common Share Basic and Diluted

For the three months ended March 31, 2022, the net income allocated to the Class
B shareholders is the total net income multiplied by the right to receive
dividends at 85% for Class B shares (85,937) as of the reporting date divided by
the allocated total shares (9,470,277) of Class A shares (9,384,340) and Class B
shares (85,937) as of the reporting date. For the three months ended March 31,
2021, the net income allocated to the Class B shareholders is the total net
income multiplied by the right to receive dividends at 85% for Class B shares
(85,937) as of the reporting date divided by the allocated total shares
(8,747,633) of Class A shares (8,661,696) and Class B shares (85,937) as of the
reporting date.



For the three months ended March 31, 2022, the net income allocated to the Class
A shareholders of $904,254 is the total net income $912,535 less the net income
allocated to the Class B shareholders $8,281. For the three months ended March
31, 2021, the net loss allocated to the Class A shareholders $456,127 is the
total net loss $460,652 less the net loss allocated to the Class B shareholders
$4,525.

The weighted average outstanding common shares basic for the three months ended
March 31, 2022 and 2021 were 9,384,340 and 8,661,696 for Class A shares,
respectively and 101,102 for Class B shares.

Business Segments

The Company has a life insurance segment, consisting of the life insurance
operations of TLIC, FBLIC and TAI, an annuity segment, consisting of the annuity
operations of TLIC, FBLIC and TAI and a corporate segment. Results for the
parent company and the operations of TMC, after elimination of intercompany
amounts, are allocated to the corporate segment.

The revenues and income before federal income taxes from our business segments
for the three months ended March 31, 2022 and 2021 are summarized as follows:



                                                 (Unaudited)
                                         Three Months Ended March 31,         Amount Change
                                           2022                2021          2022 less 2021
Revenues:
Life insurance operations             $     9,948,321      $   8,036,885     $     1,911,436
Annuity operations                          5,905,263          5,041,530             863,733
Corporate operations                          178,036            214,159             (36,123 )
Total                                 $    16,031,620      $  13,292,574     $     2,739,046
Income before federal income taxes:
Life insurance operations             $       (80,665 )    $    (623,469 )   $       542,804
Annuity operations                          1,075,636            205,990             869,646
Corporate operations                          134,588           (101,965 )           236,553
Total                                 $     1,129,559      $    (519,444 )   $     1,649,003




                                       41

--------------------------------------------------------------------------------




The increases and decreases of revenues and profitability from our business
segments for the three months ended March 31, 2022 and 2021 are summarized as
follows:



                                     Life Insurance        Annuity        Corporate
                                       Operations        Operations      Operations         Total
Revenues
Premiums                            $      1,248,906     $         -     $         -     $ 1,248,906
Net investment income                        341,936         (65,927 )        24,144         300,153
Net realized investment gains
(losses)                                     255,777         937,934          (8,000 )     1,185,711
Service fees and other income                 64,817          (8,274 )       (52,267 )         4,276
Total revenue                              1,911,436         863,733         (36,123 )     2,739,046

Benefits and claims
Increase in future policy
benefits                                   1,058,788               -               -       1,058,788
Death benefits                               482,522               -               -         482,522
Surrenders                                   (33,516 )             -               -         (33,516 )
Interest credited to
policyholders                                      -          57,601               -          57,601
Dividend, endowment and
supplementary life contract
benefits                                       4,887               -               -           4,887
Total benefits and claims                  1,512,681          57,601               -       1,570,282
Expenses
Policy acquisition costs deferred
net of amortization                         (484,722 )        40,475               -        (444,247 )
Amortization of value of
insurance business acquired                   (1,481 )        (1,479 )             -          (2,960 )
Commissions                                   73,783        (285,237 )             -        (211,454 )
Other underwriting, insurance and
acquisition expenses                         268,371         182,727        (272,676 )       178,422
Total expenses                              (144,049 )       (63,514 )      (272,676 )      (480,239 )
Total benefits, claims and
expenses                                   1,368,632          (5,913 )      (272,676 )     1,090,043
Income (loss) before federal
income taxes (benefits)             $        542,804     $   869,646     $  

236,553 $ 1,649,003