Citizens, Inc. First Quarter Earnings Results

AUSTIN, Texas, May 6 /PRNewswire-FirstCall/ -- Citizens, Inc. (NYSE: CIA) 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 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.

SOURCE Citizens, Inc.