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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 3, 2024
COMMISSION FILE NUMBER: 000-16509
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CITIZENS, INC.
(Exact name of registrant as specified in its charter)

Colorado84-0755371
(State or other jurisdiction of incorporation)
(I.R.S. Employer Identification No.)
11815 Alterra Pkwy, Suite 1500, Austin, TX 78758
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number: (512) 837-7100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Class A Common StockCIANew York Stock Exchange
(Title of each class)(Trading Symbol)(Name of each exchange on which registered)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter). ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐  





Item 1.01    Entry into a Material Definitive Agreement

On May 3, 2024, Citizens, Inc. (the “Company”) entered into the First Amendment to Credit Agreement with Regions Bank (the “Lender”) in order to renew and extend the credit facility provided under the Credit Agreement entered into between the Company and Lender in May 2021 (the Credit Agreement, as amended by the First Amendment to Credit Agreement is referred to as the “Credit Facility”). The Credit Facility was renewed on substantially the same terms as the original Credit Agreement and continues to provide a $20,000,000 senior secured revolving credit facility. The Company has not borrowed under the Credit Facility to date.

The proceeds of any loan provided to the Company under the Credit Facility may be used for working capital and general corporate purposes. Revolving loans may be requested by the Company in aggregate minimum principal amounts of $500,000 per loan and may be, at the Company’s election, either “Base Rate” loans or “Adjusted Term SOFR” loans. The Company may prepay advances under the Credit Facility in whole or in part (with minimum prepayments of at least $500,000) at any time without penalty or premium. Amounts prepaid may be reborrowed. The Company will be required to make specified prepayments in the event outstanding borrowings under the Credit Facility exceed the revolving commitment or the borrowing base.

The Company is required to pay the Lender a quarterly commitment fee based on the unused portion of the credit facility. The Company may request a decrease to the revolving commitment in minimum aggregate amounts of $5,000,000.

Obligations under the Credit Facility continue to be secured by substantially all of the assets of the Company other than the equity interests it owns in its subsidiaries and other limited exceptions. The Credit Facility contains customary events of default and financial, affirmative and negative covenants, including but not limited to restrictions on indebtedness, liens, investments, asset dispositions and restricted payments.

The Credit Facility matures on May 5, 2027 and may be terminated prior to that upon 3 business days notice by the Company.

The above summary of the Credit Facility does not purport to be complete and is subject to, and is qualified in its entirety by, reference to the complete text of the First Amendment to Credit Agreement, a copy of which will be filed as an exhibit to the Company’s quarterly report on Form 10-Q for the quarter ending June 30, 2024.

Item 2.02     Results of Operations and Financial Conditions

On May 7, 2024, the Company issued a press release regarding its financial results for the quarter ended March 31, 2024. A copy of the Company’s press release is attached hereto as Exhibit 99.1.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 2.03    Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant
The information under Item 1.01 is incorporated herein by reference to the extent responsive to Item 2.03.


Item 9.01Financial Statements and Exhibits
(d)Exhibits
104Inline XBRL for the cover page of this Current Report on Form 8-K



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


CITIZENS, INC.
By:/s/ Jeffery P. Conklin
Vice President, Chief Financial Officer, Chief Investment Office and Treasurer
Date: May 7, 2024


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Citizens, Inc. Reports First Quarter 2024 Financial Results

AUSTIN, TX – May 7, 2024 – Citizens, Inc. (NYSE: CIA), a leading diversified financial services company specializing in life, living benefits and final expense insurance, today reported results for the first quarter ended March 31, 2024.

“We are thrilled with our continued exceptional execution in the first quarter to our strategic roadmap designed to deliver sustainable increased book value per share and enhanced operating results. Customers in large and underserved markets are embracing our innovative new products on their path toward financial security. First year premiums have increased year-over-year for six consecutive quarters,” said Company Vice Chairman and CEO, Gerald W. Shields. “We remain fully committed to persistent and profitable growth, as evidenced by our positive net cash from operations annually since 2004.”

“Looking ahead, we expect continued sales growth in 2024 leading to strong profit growth in the full year 2025. We believe we’re well positioned to drive long-term value creation for our shareholders. Our competitive advantages in growing niche markets globally, rapid expansion of the sales force, and profitable product development expertise, coupled with our intense focus on strong execution on our clear growth opportunities, has provided us with great confidence in our outlook,” concluded Shields.

Key First Quarter and Recent Business Highlights
Record setting quarter for Citizens, including:
•Highest amount of insurance issued ever in a quarter - Insurance issued increased 61% to $274.5 million in Q1 2024 compared to the same period in 2023, primarily from sales of our new products and an increase in producing agents.
•Record insurance in force; over $5 billion of insurance in force at March 31, 2024.
•Record number of agents - increased global network of producing agents in Q1 2024, an increase of 20% at the end of Q1 2024 compared to December 31, 2023.
•First analyst research reports published on Citizens. Reports issued by Sidoti & Company and Singular Research.

First Quarter 2024 Financial Highlights
•Total revenues increased 3% to $57.7 million in Q1 2024, from $55.9 million in the year-ago quarter.
•First year life and A&H premiums increased 42% in Q1 2024, the sixth consecutive quarter of year-over-year growth in first year premiums, driven by new domestic growth and new products.
•Net income of $4.5 million, $0.09 per fully diluted Class A share, in Q1 2024, from $4.9 million, $0.10 in Q1 2023.
•Positive net cash provided by operating activities of $6.8 million in Q1 2024. The Company has had positive net cash provided by operating activities annually since 2004.
•Cash and cash equivalents of $23.2 million and no debt at March 31, 2024.
•Book value per Class A share of $3.94 increased 28% over the year-ago quarter. Book value per Class A share excluding accumulated other comprehensive income (loss) (AOCI) of $5.95 increased 10% over the year-ago quarter.

2024 Milestones
For 2024, the Company has set the following milestones:
•Increase first year life and A&H premium revenues at least 6%
•Improve policyholder retention metrics at least 4%
•Expand global network of producing agents at least 20%
•Introduce 2 to 3 new products or major product enhancements. Citizens delivered a new product in Q1 2024


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First Quarter 2024 Performance and Highlights

Total revenues increased 3% to $57.7 million in Q1 2024, from $55.9 million in the year-ago quarter with significant growth in the Life Insurance segment, where first year premiums increased by 77% from first quarter 2023. First year life and A&H premiums increased 42% to $5.9 million in Q1 2024 compared to the same year-ago period, driven by new products including new domestic final expense insurance products, and an increased number of producing agents. Renewal premiums were $32.7 million in the first quarter of 2024, compared to $34.0 million in the same year-ago period. This decrease was primarily due to the Company’s strategic exit from its Louisiana property insurance business on June 30, 2023, which negatively impacted the Home Service Insurance segment premium revenue in Q1 2024 as compared to the prior year quarter, and to a lesser extent, the residual impact of the levels of surrenders and matured endowments over the last several years.

Total benefits and expenses increased by $3.6 million to $52.8 million in the first quarter of 2024, from $49.2 million in the same year-ago period. The increase was primarily due to higher claims and surrender benefits paid, specifically death claims resulting from the increase in policies issued over the past few years, and contractually matured endowments.

As a result of the higher benefits and expenses, net income for the first quarter of 2024 was $4.5 million, or $0.09 per fully diluted Class A share, a decrease from net income of $4.9 million, or $0.10 per fully diluted Class A share, in the prior year quarter.

Investments
Net investment income for the first quarter of 2024 increased to $17.5 million compared to $17.1 million in the prior year period, driven by higher income from fixed maturity securities resulting from rising interest rates and growth in the Company’s limited partnership asset base. The average pre-tax yield on the investment portfolio was 4.6% in the first quarter of 2024, an increase of 9 basis points compared to the prior year same period.

Investment related gain of $1.0 million for the first quarter of 2024 compared to a $0.3 million loss in the first quarter of 2023. The improvement was primarily due to changes in fair market value in the Company’s limited partnership portfolio.

The carrying value of the Company’s fixed maturity securities investment portfolio at March 31, 2024 was $1.2 billion, the same as December 31, 2023.

Cash Flow/Capital/Share Repurchase
Positive net cash provided by operating activities was $6.8 million in Q1 2024. The Company has had positive net cash provided by operating activities annually since 2004 reflecting the strength and consistency of the Company’s liquidity. The Company had cash and cash equivalents of $23.2 million and no debt at March 31, 2024.

The Board of Directors is confident in the Company’s strategy and future and authorized a share repurchase program in May 2022 under which the Company may repurchase up to $8 million of its outstanding shares of Class A common stock. $4.4 million of available repurchases remain on the current authorization at March 31, 2024.

About Citizens, Inc.
Citizens, Inc. (NYSE: CIA) is a diversified financial services company providing life, living benefits and final expense insurance and other financial products to individuals and small businesses in the U.S., Latin America, and Asia. Through its customer-centric growth strategy, Citizens offers innovative products to address the evolving needs of its customers in their native languages of English, Spanish, Portuguese, and Mandarin. The Company operates two primary segments: Life Insurance, where internationally the Company is a market leader in U.S. Dollar denominated life insurance and where it is growing in niche

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markets in the United States through its final expense products distributed through white-label and established distribution channels, and Home Service Insurance, which operates primarily in the U.S. Gulf coast region. For more information about Citizens, please visit the website at www.citizensinc.com and LinkedIn.

Explanatory Notes on Use of Non-GAAP Measures

Adjusted Operating Income
Adjusted Operating Income is a non-GAAP measure that is computed as pre-tax GAAP operating income with discrete adjustments that exclude net investment related gains (losses) and income (loss) from ceased businesses. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods, by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends. Management believes the pre-tax metric is a more useful comparison than the post-tax metric, as the Company’s effective tax rate can fluctuate significantly from quarter-to-quarter.

Adjusted Book Value Per Class A Common Share
Adjusted book value per Class A common share is a non-GAAP measure that is calculated by dividing actual Class A common stockholders’ equity, excluding AOCI, by the number of Class A common shares outstanding at the end of the period. Management believes this metric is meaningful, as it allows investors to evaluate underlying book value growth by excluding the impact of interest rate volatility.


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Selected Consolidated Financial Data
As of and for the periods endedThree Months Ended
March 31,
(In thousands, except per share data)20242023
Balance sheet data
Total assets$1,665,663 1,638,481 
Total liabilities1,470,480 1,484,190 
Total stockholders' equity195,183 154,291 
Life insurance in force, net4,404,254 4,297,228 
Operating items
Insurance premiums$38,673 38,249 
Net investment income17,487 17,074 
Investment related gains (losses), net963 (288)
Total revenues57,712 55,914 
Claims and surrenders33,113 30,299 
Other general expenses11,338 11,260 
Total benefits and expenses52,787 49,199 
Income before federal income tax
4,925 6,715 
Federal income tax expense
383 1,843 
Net income
4,542 4,872 
Per share data
Book value per share$3.94 3.09 
Diluted income per Class A share
0.09 0.10 



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Definition of Reported Segments
The Company is comprised of two operating business segments and other non-insurance enterprises as detailed below. The insurance operations are the Company's primary focus and are the lead income generators of the business.

Life Insurance – The Life Insurance segment primarily issues U.S. dollar-denominated ordinary whole life insurance and endowment policies predominantly sold to non-U.S. residents located principally in Latin America and the Pacific Rim. Domestically, we are licensed in 40 U.S. states and sell whole life final expense insurance and life insurance with living benefits and critical illness products. These products are sold primarily through independent marketing organizations.

Home Service Insurance – The Home Service Insurance segment provides final expense life insurance policies marketed to middle- and lower-income households, and whole life products with higher allowable face values in Louisiana, Mississippi, and Arkansas. These products are sold through independent agents and funeral homes.

Selected Segment Financial Data
As of and for the periods endedThree Months Ended
March 31,
(In thousands)20242023
LIFE INSURANCE SEGMENT
Balance sheet data
Total assets$1,270,247 1,234,151 
Operating items
Insurance premiums$27,861 26,207 
Net investment income13,686 13,311 
Investment related gains (losses), net1,086 (437)
Total revenues43,139 39,960 
Claims and surrenders27,364 24,439 
Total benefits and expenses37,339 33,588 
Income before federal income tax
5,800 6,372 
HOME SERVICE INSURANCE SEGMENT
Balance sheet data
Total assets$359,740 348,890 
Operating items
Insurance premiums$10,812 12,042 
Net investment income3,537 3,470 
Investment related gains (losses), net(91)99 
Total revenues14,258 15,611 
Claims and surrenders5,749 5,860 
Total benefits and expenses13,635 14,278 
Income before federal income tax
623 1,333 


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GAAP to Non-GAAP Reconciliation

Reconciliation of Adjusted Income Before Federal Income Tax
For the periods endedThree Months Ended
March 31,
Unaudited (In thousands)20242023
Income before federal income tax
$4,925 6,715 
Less:
Investment related gains (losses)963 (288)
Property insurance business income
5 54 
Adjusted income before federal income tax
$3,957 6,949 

Reconciliation of Stockholders' Equity and Book Value per Class A Common Share
As of March 31,
Unaudited (In thousands, except per share data)20242023
Stockholders' equity, end of period$195,183 154,291 
Less: Accumulated other comprehensive income (loss) (AOCI)(99,770)(115,465)
Stockholders' equity, end of period, excluding AOCI$294,953 269,756 
Book value per Class A common share - diluted$3.94 3.09 
Less: Per share impact of AOCI(2.01)(2.32)
Book value per Class A common share - diluted, excluding AOCI $5.95 5.41 

Forward-Looking Statements
This press release 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", “believe”, “project”, "intends," "continue" or comparable words. Such forward-looking statements may relate to the Company’s expectations regarding its business performance, operational strategy, capital expenditures, technological changes, regulatory actions, and other financial and operational measures. 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. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements. The risks, uncertainties and assumptions that are involved in our forward-looking statements include, but are not limited to the risk factors discussed in our most recently filed periodic reports on Form 10-K and Form 10-Q. 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. Accordingly, you should not unduly rely on these forward-looking statements. 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. Investor Relations Contacts

Darrow Associates Investor Relations
Jeff Christensen and Matt Kreps
Email: CIA@darrowir.com (Jeff and Matt)
Phone: 703-297-6917 (Jeff) and 214-597-8200 (Matt)

v3.24.1.u1
Cover
May 03, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date May 03, 2024
Entity File Number 000-16509
Entity Registrant Name CITIZENS, INC.
Entity Incorporation, State or Country Code CO
Entity Tax Identification Number 84-0755371
Entity Address, Address Line One 11815 Alterra Pkwy, Suite 1500
Entity Address, City or Town Austin
Entity Address, State or Province TX
Entity Address, Postal Zip Code 78758
City Area Code 512
Local Phone Number 837-7100
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock
Trading Symbol CIA
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000024090
Amendment Flag false
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