FBL Financial Group Consolidates Operations.

WEST DES MOINES, Iowa--(BUSINESS WIRE)--

FBL Financial Group, Inc. (NYSE: FFG) today announced the pending merger of its subsidiaries, Farm Bureau Life Insurance Company and Western Farm Bureau Life Insurance Company, and the closing of its Denver service center. Additionally, FBL Financial Group held its annual meeting and declared a regular quarterly dividend of $0.0825 per common share.

Merger of Farm Bureau Life and Western Farm Bureau Life. Subject to regulatory approval, FBL Financial Group will consolidate two of its life insurance subsidiaries, Farm Bureau Life and Western Farm Bureau Life. Farm Bureau Life, which will be the surviving entity, is domiciled in the state of Iowa and Western Farm Bureau Life is domiciled in the state of Colorado. The consolidation of these two entities is being accomplished in order to gain administrative efficiencies, save costs and free up capital. Administrative efficiencies and cost savings will result from the elimination of duplicate activities that are currently required, such as regulatory filings, audits, etc. Since operations of the two companies are fully integrated, there is no need for two separate entities. It is anticipated that the required regulatory approvals will be obtained and the merger will be completed during the third quarter of 1999.

Closing of Denver Service Center. FBL Financial Group announced that it will consolidate its Denver, Colorado service center into its West Des Moines, Iowa home office. FBL's Denver service center, which employed 54 full-time employees, has been a processing center for FBL's traditional business since FBL's acquisition of Western Farm Bureau Life in 1994. The underwriting and administrative functions will be transferred to the West Des Moines office, with the anticipated closing date of the Denver office as of July 30, 1999. With the closing of the Denver facility, all life insurance underwriting and administrative services will be performed out of FBL's West Des Moines, Iowa home office.

Tom Gibson, Chief Executive Officer of FBL Financial Group stated, "We made the decisions to consolidate two of our life insurance subsidiaries and close our Denver service center with our focus on the long-term cost savings. While we will incur a charge in the second quarter related to these items, we know that they are good decisions for the long-term. We remain focused on the interests of our shareholders and are committed to future growth and profitability. These transactions will not impact the high quality of service we provide to our agents and customers."

Cost Savings. Pre-tax cost savings from these two transactions are estimated to be $0.5 million for the second half of 1999 and $1.4 million annually beginning in 2000. The expected pre-tax savings are the result of reduced salary, benefits, rent and overhead expenses. Approximately 26 positions are expected to be eliminated as a result of the closing of the Denver service center. Life operations salaried employees have been offered opportunities in West Des Moines. Those individuals not transferring to West Des Moines will receive a severance package if they continue to work to an agreed-upon date.

Restructuring costs of approximately $0.9 million, primarily relating to severance benefits and lease expenses associated with closing the Denver service center, are expected to be charged to income in the second quarter of 1999. Severance benefits vary based on position and tenure with the Company. FBL has a lease commitment for the Denver office space until May 2007. While FBL expects to sublease this space beginning August 1, 1999, certain costs relating primarily to tenant improvements and broker commissions are expected.

Annual Meeting Held. During the annual meeting, FBL Financial Group shareholders elected three Class A Directors and 18 Class B Directors to one year terms ending at the annual meeting in 2000. Shareholders also approved the appointment of Ernst & Young LLP as independent auditors for the current year.

Quarterly Dividend Declared. Following the annual meeting at the regularly scheduled board meeting, the Board of Directors declared a quarterly cash dividend of $.0825 per share to owners of Class A and Class B common stock. The dividend will be payable on June 30, 1999 to shareholders of record as of June 15, 1999. There are 31,252,134 shares of Class A common stock and 1,192,990 shares of Class B common stock, for a total of 32,445,124 shares outstanding.

The statements in this release concerning the Company's expected cost savings and closing costs are forward-looking statements that involve certain risks and uncertainties, including the number of employees who transfer to the West Des Moines office, the number of employees who quit work early without earning their severance package and the ability to sublease the Denver office space in a timely manner and at a rate greater than or equal to the rate charged to FBL. These forward-looking statements are based on assumptions which FBL Financial Group believe to be reasonable. No assurance can be given that the assumptions will prove to be correct, and the difference between assumptions and actual results could be material.

FBL Financial Group (www.fblfinancial.com) is a holding company whose primary operating subsidiaries include Farm Bureau Life Insurance Company, Western Farm Bureau Life Insurance Company and EquiTrust Life Insurance Company. FBL Financial Group underwrites, markets and distributes life insurance, annuities and mutual funds to individuals and small businesses. FBL Financial Group's three-pronged growth strategy includes (1) internal growth within its traditional Farm Bureau distribution network in 14 midwestern and western states, (2) alliances and consolidations with other Farm Bureau companies and (3) alternative distribution - opportunities beyond the boundaries of the Farm Bureau network.