8-K

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 6, 2010

CITIZENS, INC.

(Exact name of registrant as specified in its charter)

COLORADO	0-16509	84-0755371
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

400 East Anderson Lane Austin, Texas	78752
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (512) 837-7100

Not Applicable

(Former name or former address, if changed since last report.)

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Item 8.01 Other Events	1
Item 9.01 Financial Statements and Exhibits	1
Signature	2
Exhibit Index	3
Ex — 99.8 News Release issued by Citizens, Inc. on May 6, 2010
Exhibit 99.8

SECTION 8 — OTHER EVENTS

Item 8.01 Other Events.

On May 6, 2010, Citizens, Inc. (“Citizens”) issued a news release (the “Release”) reporting, among other things, results for its first quarter 2010 earnings. A copy of the Release is included as Exhibit 99.8 to this Current Report on Form 8-K and incorporated herein by reference. Citizens also announced that it would hold a conference call to discuss its financial results at 10:00 a.m. Central Standard Time on Friday May 7, 2010.

The information in this report is being furnished, not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to Item 2.02 of Form 8-K will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits:

99.8 News Release issued by Citizens, Inc. on May 6, 2010.

1

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/ Rick D. Riley
	Rick D. Riley, Vice Chairman and President

Date: May 6, 2010

2

EXHIBIT INDEX

Exhibit No.	Description
99.8	News Release issued by Citizens, Inc. on May 6, 2010

3

EX-99.8

Exhibit 99.8

For further information contact:
Joshua G. Arnold
Vice President, Investor Relations

FOR IMMEDIATE RELEASE

CITIZENS, INC. FIRST QUARTER EARNINGS RESULTS

Austin, Texas — May 6, 2010 — 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.

-More-

4

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.

-More-

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.

5

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

6

CITIZENS, INC.
CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands)

BALANCE SHEET

	March 31,		December 31,
	2010		2009
	(Unaudited)
Assets
Investments:
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)

7

CITIZENS, INC.
CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands)

BALANCE SHEET, continued

	March 31,			December 31,
	2010			2009
	(Unaudited)
Liabilities and Stockholders’ Equity
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

8