EX-99.8 2 c97779exv99w8.htm EXHIBIT 99.8 Exhibit 99.8
Exhibit 99.8
(CITIZENS INC. LOGO)
News Release
For further information contact:
Joshua G. Arnold
Vice President, Investor Relations
FOR IMMEDIATE RELEASE
CITIZENS, INC. REPORTS YEAR-END RESULTS
Austin, Texas — March 10, 2010 — Citizens, Inc. (NYSE: CIA) reported net income of $17.3 million or $0.31 basic and diluted earnings per share of Class A common stock for the year ended December 31, 2009 compared to a net loss of $15.7 million or $0.42 basic and diluted losses per share of Class A common stock for the year ended December 31, 2008. The increase in earnings primarily resulted from realized gains of $8.0 million for the year ended December 31, 2009 compared to a realized loss of $23.8 million for the year ended December 31, 2008, as well as the change in fair value of the Company’s warrants resulting in a gain of $3.2 million at December 31, 2009 compared to a loss of $2.7 million at 2008.
Premium income totaled $40.8 million and $39.4 million for the three months ended December 31, 2009 and 2008 and $147.3 million and $141.3 million for the years ended December 31, 2009 and 2008, respectively. The increase in premium revenue related to higher renewal premiums in the Life Insurance segment, which increased 6.8% from $84.0 million up to $89.7 million for the years ended December 31, 2008 and 2009. Despite the increased premium income, the Company experienced lower new policy sales in 2009 as our international Life Insurance segment business slowed compared to 2008 levels. The Home Service premium revenue grew 5.1% to $41.3 million in 2009 compared to $39.3 million in 2008. A full year of premiums related to Ozark National Life Insurance Company (“ONLIC”) were included in 2009 totaling $3.9 million, which was purchased in the fourth quarter of 2008.
Net investment income declined in 2009, with $7.9 million and $8.0 million reported for the three months ended December 31, 2009 and 2008 and $29.6 million and $30.5 million for the years ended 2009 and 2008, respectively. Net investment income declined, despite the growth in the investment portfolio from $569.3 million to $671.3 million as of December 31, 2008 and 2009. The investment yield on fixed maturity and equity securities, which comprises approximately 93.2% of total invested assets, was adversely impacted by the historically low interest rates. In addition, the Company experienced significant call activity, primarily in the Life Insurance segment portfolio, which resulted in funds reinvested into lower yielding securities.
The Company recognized gains of $5.2 million compared to losses of $23.6 million for the three months ended December 31, 2009 and 2008 and gains of $8.0 million and losses of $23.8 million for the years ended December 31, 2009 and 2008, respectively. The gains in the current year resulted from sales opportunities created by market recovery of fixed maturity and equity securities as contrasted to the significant other-than-temporary impairment losses recorded in 2008 on equity mutual fund investments. Additional other-than-temporary impairments of $0.3 million were recorded in 2009, due to the continued decline in fair values on acquired securities related to the ONLIC acquisition. These losses are netted with the reported gains.
The Company reported higher surrender expense in 2009 compared to 2008, with $5.5 million and $4.4 million for the three months and $19.7 million and $15.2 million for the years ended December 31, 2009 and 2008, respectively. The surrender activity is most notably related to older policies that are beyond the surrender charge period and consequently reflect the maturing nature of the international Life Insurance segment business.
P.O. Box 149151  •  Austin, Texas 78714-9151   •   Phone 512 837-7100   •  Fax: 512-836-9334
email: PR@citizensinc.com   •   web site: www.citizensinc.com

 

 

 

Assets increased 11.4% to $927.3 million at December 31, 2009, compared to $832.3 million at December 31, 2008, due primarily to growth in the Company’s investment portfolio. Investments increased to $671.3 million at December 31, 2009 from $569.3 million at December 31, 2008, due to continued strong cash flows from operations that have been invested predominately in fixed maturities, and the higher valuation of the Company’s investment portfolio due to the improved economic conditions, as well as the inclusion of recently acquired Integrity Capital and ONLIC.
Stockholders’ equity increased to $216.1 million at December 31, 2009, from $171.5 million at December 31, 2008, largely due to income earned during the year and the market improvement related to securities in the available-for-sale portfolio as well as the conversion of the Company’s preferred stock into common equity.
Citizens, Inc. will host a conference call to discuss its 2009 year-end operating results at 10:00 a.m. Central Standard Time on Thursday, March 11, 2010, hosted by Rick D. Riley, Vice Chairman and President, Kay Osbourn, Chief Financial Officer and other members of the Citizens, Inc. management team. To participate, please dial (888) 742-8686 and when prompted enter confirmation code #8442219. It is recommended you dial in 3 to 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 expects to achieve its goal, established nearly a decade ago, to reach $1 billion in assets by the end of 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’ Class A common stock closed at $7.04 on March 10, 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,” “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, 2008, 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
                                 
    Years ended     Three-Months ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
Revenues
                                
Premium income
   $ 147,280       141,297       40,786       39,382  
Net investment income
     29,602       30,478       7,869       7,991  
Realized gains (losses), net
     8,040       (23,812 )     5,213       (23,602 )
Decrease (increase) in fair value of warrants
     3,154       (2,662 )     73       (988 )
Other income
     904       1,372       108       520  
 
                        
Total revenues
     188,980       146,673       54,049       23,303  
 
                        
 
                                
Benefits and Expenses
                                
 
                                
Insurance benefits paid or provided:
                                
Claims and surrenders
     59,988       56,253       15,734       14,590  
Increase in future policy benefit reserves
     40,790       37,117       12,769       12,173  
Policyholders’ dividends
     6,680       6,865       1,938       2,275  
 
                        
Total insurance benefits paid or provided
     107,458       100,235       30,441       29,038  
 
                                
Commissions
     35,536       35,984       10,074       10,078  
Other underwriting, acquisition and insurance expenses
     28,340       28,611       6,451       7,368  
Capitalization of deferred policy acquisition costs
     (23,656 )     (24,109 )     (7,399 )     (7,233 )
Amortization of deferred policy acquisition costs
     17,202       15,650       5,487       4,121  
Amortization of cost of customer relationships acquired and other intangibles
     3,494       2,897       864       742  
 
                        
Total benefits and expenses
     168,374       159,268       45,918       44,114  
 
                        
 
                                
Income (loss) before Federal income tax
     20,606       (12,595 )     8,131       (20,811 )
 
                                
Federal income tax expense (benefit)
     3,266       3,112       504       (191 )
 
                        
 
                                
Net income (loss)
   $ 17,340       (15,707 )     7,627       (20,620 )
 
                        
 
                                
Net income (loss) applicable to common stockholders
   $ 14,835       (18,263 )     7,627       (21,375 )
 
                        
 
                                
Basic and diluted earnings (loss) per share of Class A common stock
   $ 0.31       (0.42 )     0.16       (0.48 )
 
                        
Basic and diluted earnings (loss) per share of Class B common stock
   $ 0.15       (0.21 )     0.08       (0.24 )
 
                        
Weighted average shares of Class A common stock outstanding — basic and diluted
     47,554       43,365       48,687       44,094  
 
                        
Book value per share
   $ 4.35       3.68                  
 
                            

 

 

 

CITIZENS, INC.
COMPARATIVE CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
BALANCE SHEET
                 
    Years ended  
    December 31,  
Assets   2009     2008  
 
                
Investments:
                
Fixed maturities available-for-sale, at fair value (cost: $389,195 and $494,034 in 2009 and 2008, respectively)
   $ 385,579       485,155  
Fixed maturities held to maturity, at amortized cost (fair value: $199,676 in 2009)
     206,909       —  
Equity securities available-for-sale, at fair value (cost: $25,899 and $42,908 in 2009 and 2008, respectively)
     33,477       43,000  
Mortgage loans on real estate
     1,533       339  
Policy loans
     32,096       28,955  
Real estate held for sale
     2,825       4,156  
Real estate held for investment (less $374 and $283 accumulated depreciation in 2009 and 2008, respectively)
     6,305       4,717  
Other long-term investments
     86       680  
Short-term investments
     2,510       2,250  
 
            
Total investments
     671,320       569,252  
 
                
Cash and cash equivalents
     48,625       63,792  
Accrued investment income
     7,455       7,423  
Reinsurance recoverable
     11,587       13,241  
Deferred policy acquisition costs
     115,570       109,114  
Cost of customer relationships acquired
     34,728       33,805  
Goodwill
     17,160       15,687  
Other intangible assets
     1,046       1,073  
Federal income tax receivable
     4,023       2,090  
Property and equipment, net
     6,018       6,466  
Due premiums, net (less $1,644 and $2,217 allowance for doubtful accounts in 2009 and 2008)
     8,960       8,958  
Other assets
     834       1,375  
 
            
Total assets
   $ 927,326       832,276  
 
            
(Continued)

 

 

 

CITIZENS, INC.
COMPARATIVE CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
BALANCE SHEET, continued
                 
    Years ended  
    December 31,  
Liabilities and Stockholders’ Equity   2009     2008  
Liabilities:
                
Future policy benefit reserves:
                
Life insurance
   $ 592,358     $ 547,621  
Annuities
     37,882       34,025  
Accident and health
     6,399       7,442  
Dividend accumulations
     5,621       4,795  
Premiums paid in advance
     20,373       18,566  
Policy claims payable
     10,222       9,318  
Other policyholders’ funds
     8,105       7,929  
 
            
Total policy liabilities
     680,960       629,696  
Commissions payable
     2,434       2,350  
Deferred federal and state income taxes
     8,052       3,951  
Payable for securities in process of settlement
     6,000       —  
Warrants outstanding
     1,819       4,973  
Other liabilities
     11,986       12,052  
 
            
Total liabilities
     711,251       653,022  
 
            
Commitments and contingencies (Notes 5 and 8)
                
Cumulative convertible preferred stock — Series A
                
(Series A-1 — $1,000 stated value per share, 6,250 shares issued, authorized and outstanding in 2008; Series A-2 — $935 stated value per share, 5,000 shares authorized, 4,014 shares issued and outstanding in 2008)
     —       7,713  
 
            
Stockholders’ equity:
                
Common stock:
                
Class A, no par value, 100,000,000 shares authorized, 51,822,497 shares issued in 2009 and 48,781,753 shares issued in 2008, including shares in treasury of 3,135,738 in 2009 and 2008
     256,703       240,511  
Class B, no par value, 2,000,000 shares authorized, 1,001,714 shares issued and outstanding in 2009 and 2008
     3,184       3,184  
Retained deficit
     (38,092 )     (55,432 )
Accumulated other comprehensive income (loss):
                
Unrealized gains (losses) on securities, net of tax
     5,291       (5,711 )
 
            
 
     227,086       182,552  
Treasury stock, at cost
     (11,011 )     (11,011 )
 
            
Total stockholders’ equity
     216,075       171,541  
 
            
Total liabilities and stockholders’ equity
   $ 927,326       832,276