North Coast Life Announces Agreement in Principle with GPM Life

SPOKANE, Wash.--(BUSINESS WIRE)--North Coast Life Insurance Company (Pink Sheets: NCLI) (Pink Sheets: NCLIP) announced today that it has reached an oral agreement in principle with Government Personnel Mutual Life Insurance Company (“GPM Life”) pursuant to which:

• GPM Life will purchase 763,017 authorized but unissued shares of common stock of North Coast Life, at the price of $7.66 per share, and a surplus debenture in the principal amount of $469,115, at par.
• North Coast Life will use the proceeds it receives from the sale of the common stock and the surplus debenture to redeem all of the 360,791 outstanding shares of its Series A preferred stock, at the stated redemption price equal to $10 per share plus accrued and unpaid dividends, whether or not declared. (As of the date of this announcement, the redemption price would be approximately $17.50 per outstanding share of Series A preferred stock.)
• Following the redemption of the Series A preferred stock (and subject to the approval of the holders of North Coast Life’s common stock at a special meeting of shareholders to be called for such purpose), a newly-created Washington subsidiary of GPM Life will be merged with and into North Coast Life, with the result that North Coast Life will then become a wholly-owned subsidiary of GPM Life. Holders of issued and outstanding shares of common stock of North Coast Life (other than GPM Life) will receive $7.66 per share for their common stock in the merger.

The transactions, which are expected to be completed by the end of the second quarter of 2012, are subject to the execution of definitive documents and approval by the Office of the Washington Insurance Commissioner and the California Department of Insurance.

GPM Life is a mutual life insurance company headquartered in San Antonio, Texas. At December 31, 2011, it had admitted assets of approximately $834 million, net insurance in force of approximately $5.4 billion, and an A.M. Best rating of A-.

Robert J. Ogden, North Coast Life’s president, said, “Today’s announcement is an important milestone in a process that began in October 2010 with the signing of a non-binding letter of intent and continued throughout all of last year as GPM Life conducted its due diligence investigation of our company. We believe the terms of the transactions are fair and reasonable to all of North Coast Life’s shareholders and we look forward to working with GPM Life in the coming weeks to formalize the transaction documents and proceed to obtaining the regulatory approvals.”