FBL Financial Group’s Board of Directors has declared a special, one-time cash dividend of $2.00 per share payable on September 13 to Class A and Class B common stockholders of record as of September 6. The total amount of the special dividend payment is estimated to be approximately $51M. FBL Financial Group’s Board of Directors has declared a quarterly cash dividend of 15c per share, payable on September 30 to Class A and Class B common stockholders of record as of September 13. This represents a 36% increase from the prior quarterly dividend of 11c per share paid during June. FBL Financial Group’s Board of Directors has authorized the repurchase of Class B common shares of up to $56.5M. The repurchases will be effected by a tender offer for 99% of all Class B shares outstanding, conditioned upon participation by all Class B stockholders. The tender price will be based upon the average of the closing price of FBL’s Class A common stock for the seven consecutive business days preceding the tender closing date of September 25. The average closing price notwithstanding, there will be a floor under the repurchase price of $45 per share, and a ceiling on the repurchase price of $50 per share. Assuming the special, one-time cash dividend of $2.00 per share is paid prior to the closing date of the tender offer, then the floor price and ceiling price would be reduced by the $2.00 special dividend amount. The repurchase will take place only if all Class B stockholders participate in the tender or agree to have their pro rata share of Class B shares converted to Class A prior to the tender. Additionally, this transaction is conditioned upon approval by the Iowa Insurance Division of a dividend from Farm Bureau Life Insurance Company to the holding company. FBL Financial Group expects to fund these capital transactions using existing funds at the holding company level along with a $120M dividend from Farm Bureau Life Insurance Company to the holding company. This $120M dividend is expected to reduce Farm Bureau Life’s company action level risk based capital ratio by approximately 100 points, resulting in an estimated June 30 pro forma company action level risk based capital ratio of 425%. Following these capital transactions, excess capital at the holding company level is estimated to be approximately $70M. The financial impact to FBL Financial Group is dependent upon the results of the tender offer, but is expected to be marginally accretive to operating income per share and dilutive to book value per share.
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