FBL Financial Group Inc. will use
some of its spare cash to pay out a special dividend totaling $51 million, buy
back $56.5 million in common stock and repay $50 million in debt, the company
The West Des Moines-based
financial service company will pay a special cash dividend of $2 per share in
addition to a regular quarterly cash dividend of 15 cents per share on Sept.
13. The dividends will be payable to both Class A and Class B shareholders of
record as of Sept. 6.
"The return of cash to
shareholders via the special one-time dividend and the increased regular
quarterly cash dividend reinforces our belief in the strength of our Farm
Bureau Life business and our commitment to deploy its strong cash generation in
an effective and efficient manner," James Brannen, FBL's CEO, said
in a release.
Earlier this month, FBL reported
a 29 percent increase in second-quarter operating earnings over the previous
year's period, to $25.6 million.
FBL's board of directors also
authorized a tender offer for 99 percent of Class B common shares of up to
$56.5 million, with a tender price based on the average closing price of FBL's
Class A common stock for the seven business days preceding the tender closing
date of Sept. 25.
And prior to the end of the third
quarter, FBL expects to repay $50 million to two of its affiliate companies
that hold 6.10 percent senior notes due May 3, 2015. The holders of the notes,
Farm Bureau Property & Casualty Insurance Co., and an investment affiliate
of Iowa Farm Bureau Federation, FBL's majority shareholder, each holds a note
for $25 million.
FBL said it expects to fund these
capital transactions using existing funds at the holding company level, along
with a $120 million dividend from Farm Bureau Life Insurance Co. to the holding
company. Following these transactions, excess capital at the holding company
level is estimated to be approximately $70 million.
"Even with these capital transactions, our
balance sheet remains very strong, with considerable financial strength, which
allows for the financial flexibility to take advantage of opportunities as they
arise," Brannen said.