Vesta to Acquire Florida Select; $64.5 Million Deal Is Immediately Accretive to Earnings

Apr 18, 2001, 01:00 ET from Vesta Insurance Group, Inc.

    BIRMINGHAM, Ala., April 18 /PRNewswire/ -- Vesta Insurance Group, Inc.
 (NYSE:   VTA) announced today that it has entered into a definitive agreement to
 acquire Florida Select Insurance Holdings, Inc., the holding company for the
 eighth largest insurer of homeowners and residential property policies in
 Florida, for approximately $64.5 million.  The transaction will close
 following regulatory approval.
     In 2000, Florida Select recorded approximately $10.7 million in pre-tax
 income from approximately $61 million in gross written premium.  Florida
 Select began operations in 1996 in conjunction with the depopulation of the
 Florida Residential Property and Casualty Joint Underwriting Association.
 A.M. Best rates Florida Select as "B++" (Very Good).
     "The acquisition of Florida Select presents an opportunity for Vesta to
 grow in a profitable market," said James E. Tait, Chairman of Vesta.  "The
 addition of Florida Select is expected to be immediately accretive to earnings
 in fiscal year 2001," said Tait.
     Vesta is considering financing alternatives -- including utilizing credit
 facilities, internally generated funds, a follow-on offering of its common
 stock, or a combination of these alternatives -- to fund the transaction.
     "Florida Select has been a profitable company since its inception," said
 Norman W. Gayle, III, President of Vesta.  "Steve Korducki, Florida Select's
 President and CEO, has done an outstanding job of growing the business and
 assembling a top-notch management team.  We are excited about the
 opportunities ahead and we are especially looking forward to working with
 Steve and the rest of the Florida Select management team."
 
     About Vesta Insurance Group, Inc.
     Vesta Insurance Group, Inc., headquartered in Birmingham, Ala., is a
 holding company for a group of insurance and financial services companies that
 offer a wide range of consumer-based products.
 
     This news release does not constitute an offer to sell any securities.
     This news release indicates management's beliefs, plans or objectives with
 respect to the transaction announced herein including the timing of
 completion, its accretive effect on earnings and continuation of current
 management.  These indications, whether expressed or implied, are only
 predictions and should be considered "forward-looking statements" under
 applicable securities laws.  You should be aware that Vesta's actual
 operations and financial performance may differ materially from those
 reflected in these forward-looking statements.   Some of the factors that
 could affect the forward-looking statements contained herein include, without
 limitation, that we may not obtain the requisite regulatory approval to
 acquire control of the insurance companies involved in the transaction, that
 earnings resulting from these acquisitions may be less than management
 anticipates and that current management may not continue to manage the
 acquired companies.  Please refer to the documents Vesta files from time to
 time with the Securities and Exchange Commission, specifically Vesta's most
 recent Form 10-K and Exhibit 99.1 attached thereto, which contains and
 identifies additional important factors that could cause the actual results to
 differ materially from those contained in the projections or forward-looking
 statements.
 
 

SOURCE Vesta Insurance Group, Inc.
    BIRMINGHAM, Ala., April 18 /PRNewswire/ -- Vesta Insurance Group, Inc.
 (NYSE:   VTA) announced today that it has entered into a definitive agreement to
 acquire Florida Select Insurance Holdings, Inc., the holding company for the
 eighth largest insurer of homeowners and residential property policies in
 Florida, for approximately $64.5 million.  The transaction will close
 following regulatory approval.
     In 2000, Florida Select recorded approximately $10.7 million in pre-tax
 income from approximately $61 million in gross written premium.  Florida
 Select began operations in 1996 in conjunction with the depopulation of the
 Florida Residential Property and Casualty Joint Underwriting Association.
 A.M. Best rates Florida Select as "B++" (Very Good).
     "The acquisition of Florida Select presents an opportunity for Vesta to
 grow in a profitable market," said James E. Tait, Chairman of Vesta.  "The
 addition of Florida Select is expected to be immediately accretive to earnings
 in fiscal year 2001," said Tait.
     Vesta is considering financing alternatives -- including utilizing credit
 facilities, internally generated funds, a follow-on offering of its common
 stock, or a combination of these alternatives -- to fund the transaction.
     "Florida Select has been a profitable company since its inception," said
 Norman W. Gayle, III, President of Vesta.  "Steve Korducki, Florida Select's
 President and CEO, has done an outstanding job of growing the business and
 assembling a top-notch management team.  We are excited about the
 opportunities ahead and we are especially looking forward to working with
 Steve and the rest of the Florida Select management team."
 
     About Vesta Insurance Group, Inc.
     Vesta Insurance Group, Inc., headquartered in Birmingham, Ala., is a
 holding company for a group of insurance and financial services companies that
 offer a wide range of consumer-based products.
 
     This news release does not constitute an offer to sell any securities.
     This news release indicates management's beliefs, plans or objectives with
 respect to the transaction announced herein including the timing of
 completion, its accretive effect on earnings and continuation of current
 management.  These indications, whether expressed or implied, are only
 predictions and should be considered "forward-looking statements" under
 applicable securities laws.  You should be aware that Vesta's actual
 operations and financial performance may differ materially from those
 reflected in these forward-looking statements.   Some of the factors that
 could affect the forward-looking statements contained herein include, without
 limitation, that we may not obtain the requisite regulatory approval to
 acquire control of the insurance companies involved in the transaction, that
 earnings resulting from these acquisitions may be less than management
 anticipates and that current management may not continue to manage the
 acquired companies.  Please refer to the documents Vesta files from time to
 time with the Securities and Exchange Commission, specifically Vesta's most
 recent Form 10-K and Exhibit 99.1 attached thereto, which contains and
 identifies additional important factors that could cause the actual results to
 differ materially from those contained in the projections or forward-looking
 statements.
 
 SOURCE  Vesta Insurance Group, Inc.