AUSTIN, Texas, May 6 /PRNewswire-FirstCall/ -- Citizens, Inc. reported net income of $1.6 million or $0.03 per basic and diluted share of Class A common stock for the quarter ended March 31, 2010, compared to net income of $4.4 million or $0.07 per basic and $0.03 per diluted share of Class A common stock during the same period in 2009.
Total revenues for the first quarter of 2010 were $43.8 million compared to $44.7 million in 2009. A decrease of 1.8%, due primarily to a loss of $0.1 million related to the change in the fair value of the Company's stock warrants in 2010 compared to revenue of $2.1 million in the first quarter of 2009. Total revenues, excluding fair value adjustments, increased 3.3% for the three months ended in 2010 compared to 2009, primarily due to an increase in premiums and net investment income.
First quarter 2010 premiums increased 2.8% to $35.2 million from $34.2 million during the same period in 2009, primarily related to life renewal premiums. The acquisition of Integrity Capital Insurance Company in the first quarter of 2009 resulted in approximately $0.2 million of premium revenue compared to approximately $0.5 million for the same period in 2010.
Net investment income increased 7.8% during the first quarter of 2010 to $8.3 million compared to $7.7 million in the first quarter of 2009. The increase was due primarily to higher invested assets held in the current year compared to 2009 as a result of investing new premium income, as well as overcoming the significant amount of calls and the lag in reinvesting those funds during 2009. Investment income from debt securities accounted for approximately 84.9% of total investment income for the three months ended March 31, 2010, with 98.6% of this portfolio held in investment grade securities.
Claims and surrenders increased to $15.5 million in the first quarter of 2010 compared to $14.8 million in the first quarter of 2009, primarily due to an increase in surrender benefits on policies that are past the surrender charge period. Underwriting, acquisition and insurance expenses decreased from $7.3 million during the first three months of 2009 to $7.0 million in 2010, largely related to a decrease in legal fees associated with the Integrity Capital Corporation acquisition and a decrease in audit and assurance fees.
Assets increased to $940.4 million at March 31, 2010, compared to $927.3 million at December 31, 2009. Total invested assets grew 2.2% from $671.3 million at December 31, 2009 to $685.9 million at March 31, 2010. Stockholders' equity also increased 2.9% from $216.1 million at December 31, 2009 to $222.3 million at March 31, 2010.
Citizens, Inc. will host a conference call to discuss its first quarter 2010 operating results at 10:00 a.m. Central Standard Time on Friday, May 7, 2010, hosted by Kay Osbourn, Chief Financial Officer and other members of the Citizens, Inc. management team. To participate in the Citizens, Inc. conference call, please dial (877) 355-2902 and when prompted, enter confirmation code 6727366 and press #. It is recommended you dial in 3-5 minutes before the call is scheduled to begin. A recording of the conference call will be available on Citizens' website at http://www.citizensinc.com/ in the Investor Information section under News Release & Publications, following the call.
About Citizens, Inc.
Citizens, Inc. is a financial services company listed on the New York Stock Exchange under the symbol CIA. The Company utilizes a three-pronged strategy for growth based upon worldwide sales of U.S. Dollar-denominated whole life cash value insurance policies, sales of life insurance products in the U.S. and the acquisition of other U.S.-based life insurance companies. Citizens' Class A common stock closed at $6.97 on May 5, 2010.
Information herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as "may," "will," "expect," "anticipate" or "continue" or comparable words. In addition, all statements other than statements of historical facts that address activities that the Company expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of the Company, particularly its Form 10-K for the fiscal year ended December 31, 2009, its quarterly reports on Form 10-Q and its current reports on Form 8-K, for the meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management. The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in the Company's expectations. The Company also disclaims any duty to comment upon or correct information that may be contained in reports published by the investment community.
CITIZENS, INC. COMPARATIVE CONSOLIDATED FINANCIAL HIGHLIGHTS (In thousands, except per share amounts) OPERATING STATEMENTS -------------------- (Unaudited) Three Months Ended March 31, 2010 2009 ---- ---- Revenues Premiums $35,190 34,227 Net investment income 8,349 7,742 Realized gains, net 59 301 Decrease (increase) in fair value of warrants (114) 2,105 Other income 348 283 --- --- Total revenues 43,832 44,658 ------ ------ Benefits and Expenses Insurance benefits paid or provided: Claims and surrenders 15,457 14,807 Increase in future policy benefit reserves 9,545 7,758 Policyholders' dividends 1,570 1,462 ----- ----- Total insurance benefits paid or provided 26,572 24,027 Commissions 8,128 8,035 Other underwriting, acquisition and insurance expenses 6,973 7,309 Capitalization of deferred policy acquisition costs (5,383) (5,057) Amortization of deferred policy acquisition costs 4,332 3,692 Amortization of cost of customer relationships acquired and other intangibles 838 866 --- --- Total benefits and expenses 41,460 38,872 ------ ------ Income before Federal income tax 2,372 5,786 Federal income tax expense 767 1,409 --- ----- Net income $1,605 4,377 ====== ===== Net income applicable to common stock $1,605 3,199 ====== ===== Basic earnings per share of Class A common stock $0.03 0.07 ===== ==== Diluted earnings per share of Class A common stock $0.03 0.03 ===== ==== Weighted average shares of Class A outstanding - basic and diluted 48,686 46,112 ====== ====== Book value per share $4.47 3.71 ===== ==== CITIZENS, INC. CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS (In thousands) BALANCE SHEET ------------- Assets March 31, December 31, ------ 2010 2009 ---- ---- Investments: (Unaudited) Fixed maturities available-for- sale, at fair value $404,330 385,579 Fixed maturities held-to-maturity, at amortized cost 202,938 206,909 Equity securities available-for- sale, at fair value 34,721 33,477 Mortgage loans on real estate 1,622 1,533 Policy loans 33,082 32,096 Real estate held for sale 2,719 2,825 Real estate held for investment 6,452 6,305 Other long-term investments 41 86 Short-term investments - 2,510 --- Total investments 685,905 671,320 Cash and cash equivalents 48,023 48,625 Accrued investment income 8,682 7,455 Reinsurance recoverable 11,346 11,587 Deferred policy acquisition costs 116,614 115,570 Cost of customer relationships acquired 33,829 34,728 Goodwill 17,160 17,160 Other intangible assets 1,039 1,046 Federal income tax receivable 1,390 4,023 Property and equipment, net 6,432 6,018 Due premiums, net 8,400 8,960 Prepaid expenses 907 - Other assets 645 834 --- --- Total assets $940,372 927,326 ======== ======= (Continued) CITIZENS, INC. CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS (In thousands) BALANCE SHEET, continued ------------------------ Liabilities and Stockholders' Equity March 31, December 31, ------------------------------------ 2010 2009 ---- ---- (Unaudited) Liabilities: Policy liabilities: Future policy benefit reserves: Life insurance $601,506 592,358 Annuities 38,698 37,882 Accident and health 6,206 6,399 Dividend accumulations 5,698 5,621 Premiums paid in advance 21,263 20,373 Policy claims payable 10,767 10,222 Other policyholders' funds 7,994 8,105 ----- ----- Total policy liabilities 692,132 680,960 Commissions payable 2,118 2,434 Deferred federal and state income tax 8,846 8,052 Payable for securities in process of settlement 1,753 6,000 Warrants outstanding 1,933 1,819 Other liabilities 11,248 11,986 Total liabilities 718,030 711,251 Commitments and contingencies Stockholders' equity: Common stock: Class A 256,703 256,703 Class B 3,184 3,184 Retained deficit (36,487) (38,092) Accumulated other comprehensive income: Unrealized gains on securities, net of tax 9,953 5,291 ----- ----- 233,353 227,086 Treasury stock, at cost (11,011) (11,011) ------- ------- Total stockholders' equity 222,342 216,075 ------- ------- Total liabilities and stockholders' equity $940,372 927,326 ======== ======= For further information contact: Joshua G. Arnold Vice President, Investor Relations 1-512-837-7100
Citizens, Inc.
CONTACT: Joshua G. Arnold, Vice President, Investor Relations, of
Citizens, Inc., +1-512-837-7100
Web Site: http://www.citizensinc.com/
