AUSTIN, Texas, March 12 /PRNewswire-FirstCall/ -- Citizens, Inc.
(NYSE: CIA) reported a net loss of $15.7 million or $(0.42) per
share of Class A common stock for the year ended December 31, 2008.
The decrease in earnings was primarily due to an
other-than-temporary impairment of $23.5 million on the Company's
equity securities. Also contributing to the decrease in earnings
was property losses incurred by Security Plan Fire Insurance
Company (SPFIC) from Hurricanes Gustav and Ike in the amount of
$845,000 net of tax and a loss from the increase in fair value of
warrants associated with the Company's preferred stock. Total
revenues for 2008 were $146.7 million, a 13.5% decrease over 2007
revenues of $169.6 million, because of the impairment of equity
securities. Premium income grew 3.3% to $141.3 million in 2008,
compared to $136.7 million in 2007. The 2008 increase was
attributable to the new international business written in 2007 and
2008 in the Life Insurance segment, which had $102.0 million of
premium income during the year. Additionally, we continue to
experience strong persistency in our international life business,
which contributed further to the increase. First year premium in
the Life Insurance segment increased slightly in 2008 over the 2007
level. The Company's Home Service Insurance segment generated $39.3
million in premium income in 2008 compared to $39.5 million in
2007. The decrease was largely due to increased reinsurance cost in
our property and casualty subsidiary. Net investment income
decreased slightly during 2008 to $30.5 million, compared to $30.7
million during 2007 due primarily to lower income earned on mutual
funds. Cash and investments grew substantially during 2008;
however, investment income was only marginally up due to the
depressed interest rate environment. Claims and surrenders
increased 11.2% from $50.6 million in 2007 to $56.3 million in
2008. The 2008 increase primarily related to an increase in
property claims in SPFIC from Hurricanes Gustav and Ike, as well as
an increase in death claims, surrender expense and endowments in
the Life Insurance segment. Underwriting, acquisition and insurance
expenses increased slightly to $28.6 million in 2008 from $27.6
million during 2007, largely due to an increase in payroll expenses
and increased fees for international shipping. For the three months
ended December 31, 2008, the Company had a net loss of $20.6
million or $(0.49) per share of Class A common stock, compared to
net income of $5.9 million or $0.10 per diluted share of Class A
common stock for the same period in 2007, primarily due to the
impairment recognized on the Company's equity mutual funds. Total
revenues for the three months ended December 31, 2008 decreased to
$23.3 million from $48.8 million for the same period in 2007. Life
insurance premium production contributed to a 3.8% increase in
premium income during the three months ended December 31, 2008 to
$39.4 million, from $37.9 million during the fourth quarter of
2007. Assets increased 5.6% to $832.3 million at December 31, 2008,
compared to $787.9 million at December 31, 2007, due primarily to
growth in the Company's insurance portfolio as well as the
acquisition of Ozark National Life Insurance Company. Investments
decreased to $569.3 million at December 31, 2008 from $585.3
million at December 31, 2007, because of the lower valuation of the
Company's investment portfolio due to the current economic
conditions; however, cash increased by $42.7 million. At December
31, 2008, 70.5% of our fixed maturity securities were invested in
U.S. Government-sponsored enterprises or securities backed by the
U.S. Government. The following table outlines the credit ratings of
the Company's fixed income portfolio as of December 31, 2008.
Credit Ratings Carrying Value Percentage -------------- ----------
(In thousands) AAA and U.S. Government $379,547 78.2 % AA 37,263
7.7 A 56,043 11.6 BBB 7,217 1.5 BB and other 5,085 1.0 ----- ---
Totals $485,155 100.0 % -------- ----- Stockholders' equity
decreased to $171.5 million at December 31, 2008, from $176.2
million at December 31, 2007, largely due to capital contributions
from the Company's preferred stock investors, offset by the net
loss during the period. During the fourth quarter of 2008, Citizens
completed its acquisition of Ozark National Life Insurance Company,
which is an extension of our Home Service business in Arkansas and
a provider of final expense whole life insurance. The Company also
completed its acquisition of Integrity Capital Corporation in
exchange for shares of Citizens, Inc. Class A common stock in the
first quarter of 2009. Integrity Capital is the parent of Integrity
Capital Insurance Company, an Indiana life insurance company. The
transaction is valued at $8.4 million. Citizens, Inc. will hold a
conference call to discuss its fourth quarter 2008 operating
results at 10:00 a.m. Central Standard Time on Friday, March 13,
2009, to be hosted by Rick D. Riley, Vice Chairman and President,
Tom Kopetic, Chief Financial Officer and other members of the
Citizens, Inc. management team. To participate in the conference
call, dial (888) 742-8686 and when prompted enter confirmation code
#8442219. It is recommended you dial in 3-5 minutes before the call
is scheduled to begin. About Citizens, Inc. Citizens, Inc. is a
financial services insurance holding company listed on the New York
Stock Exchange, trading symbol CIA. It plans to achieve $1 billion
in assets, $250 million in revenues and $10 billion of life
insurance in force by 2010, via the worldwide sale of U.S.
Dollar-denominated whole life cash value insurance policies,
coupled with the acquisition of other life insurance companies.
Citizens, Inc. Class A common stock closed at $6.92 on March 12,
2009. 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,
2007, 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. FOR FURTHER
INFORMATION CONTACT: Randall H. Riley Vice President, Investor
Relations 512-837-7100 CITIZENS, INC. COMPARATIVE CONSOLIDATED
FINANCIAL HIGHLIGHTS (In thousands, except per share amounts)
OPERATING STATEMENTS (Unaudited) Years ended Three-Months ended
December 31, December 31, --------------- ------------ 2008 2007
2008 2007 ---- ---- ---- ---- Revenues Premium income $141,297
136,748 39,382 37,945 Net investment income 30,478 30,743 7,991
9,258 Realized losses, net (23,812) (94) (23,602) (4) Decrease
(increase) in fair value of warrants (2,662) 828 (988) 1,324 Other
income 1,372 1,412 520 245 ----- ----- --- --- Total revenues
146,673 169,637 23,303 48,768 ------- ------- ------ ------
Benefits and Expenses Insurance benefits paid or provided: Claims
and surrenders 56,253 50,571 14,590 12,671 Increase in future
policy benefit reserves 37,117 36,420 12,173 12,440 Policyholders'
dividends 6,865 6,401 2,275 2,067 ----- ----- ----- ----- Total
insurance benefits paid or provided 100,235 93,392 29,038 27,178
Commissions 35,984 35,641 10,078 9,349 Other underwriting,
acquisition and insurance expenses 28,611 27,583 7,368 6,631
Capitalization of deferred policy acquisition costs (24,109)
(26,210) (7,233) (6,728) Amortization of deferred policy
acquisition costs 15,650 12,530 4,121 3,040 Amortization of cost of
customer relationships acquired and other intangibles 2,897 3,203
742 726 Total benefits and expenses 159,268 146,139 44,114 40,196
------- ------- ------ ------ Income (loss) before Federal income
tax (12,595) 23,498 (20,811) 8,572 Federal income tax expense
(benefit) 3,112 6,941 (191) 2,638 ----- ----- ----- ----- Net
income (loss) $(15,707) 16,557 (20,620) 5,934 ========= ======
======== ===== Net income (loss) applicable to common stockholders
$(18,263) 14,555 (21,375) 5,449 ========= ====== ======== =====
Basic earnings (loss) per share of Class A common stock $(0.42)
0.35 (0.49) 0.13 ======= ==== ====== ==== Diluted earnings (loss)
per share of Class A common stock $(0.42) 0.35 (0.49) 0.10 =======
==== ====== ==== BALANCE SHEETS -------------- December 31,
December 31, 2008 2007 ---- ---- Total assets $832,276 787,909
Total invested assets 569,252 585,296 Stockholders' equity 171,541
176,157 DATASOURCE: Citizens, Inc. CONTACT: Randall H. Riley, Vice
President, Investor Relations of Citizens, Inc., +1-512-837-7100
Web Site: http://www.citizensinc.com/
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