8-K

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): August 9, 2005

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)

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

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

Section 2 — Financial Information
Item 2.02 Results of Operations and Financial Condition.
Section 9 — Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
Signature
Exhibit Index
EX — 99.4 News Release Issued by Citizens, Inc. on August 9, 2005.

SECTION 2 — FINANCIAL INFORMATION

     ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 9, 2005, Citizens, Inc. (“Citizens”) issued a news release (the “Release”) reporting, among other things, results for the six and three months ended June 30, 2005. A copy of the Release is included as Exhibit 99.4 to this Current Report on Form 8-K and incorporated herein by reference.

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.

SECTION 9 — FINANCIAL STATEMENTS

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a)	Financial Statements of businesses acquired:
	Not applicable.
(b)	Pro Forma financial information:
	Not applicable.
(c)	Exhibits:
	The following exhibit is included with this Current Report on Form 8-K:

Exhibit No.	Description
99.4	News Release Issued by Citizens, Inc. on August 9, 2005.

SIGNATURE

     Pursuant to the requirement 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/ Mark A. Oliver
      Mark A. Oliver, President

Date: August 11, 2005

Exhibit Index

Exhibit No.	Description
99.4	News Release Issued by Citizens, Inc. on August 9, 2005.

EX-99.4

Exhibit 99.4

CITIZENS, INC. REPORTS RESULTS THROUGH JUNE 2005

Austin, Texas — August 9, 2005 — Citizens, Inc. (NYSE: CIA) reported net income of $2.7 million or $0.05 per share for the six months ended June 30, 2005, compared to net income of $1.3 million, or $0.03 per share, for the same period in 2004. The growth resulted from significant increases in revenues, primarily relating to the October 2004 acquisition of Security Plan Life Insurance Company (Security Plan).

Total revenues increased 64.9% in the first six months of 2005 to $69.3 million compared to the same period of 2004 when revenues were $42.0 million, due to the acquisition of Security Plan and an increase in new life insurance business written. Premium income was $56.8 million for the first half of 2005, a 68.4% increase over the same period of 2004 when premiums equaled $33.8 million. Net investment income increased 49.8% during the first half of 2005 to $11.5 million from $7.7 million in 2004, and claims and surrenders increased from $16.3 million for the six months ended June 30, 2004 to $25.9 million for the same period in 2005, both increases primarily due to Security Plan. Underwriting and insurance expenses increased 76.5% from $7.6 million in 2004 to $13.4 million in 2005 due to the acquisition of Security Plan and the increased new business. Amortization of cost of customer relationships acquired increased 83.5% from $1.4 million in the first six months of 2004 to $2.5 million in the first six months of 2005. The Company recorded approximately 34 million of cost of customer relationships acquired when it bought Security Plan.

For the three months ended June 30, 2005, the Company earned net income of $362,000 or $0.00 per share, compared to $885,000 or $0.02 per share for the same period in 2004. The decline in second quarter income resulted primarily from a charge of $492,000 relating to the change in fair value of options and warrants issued in conjunction with a private placement of $12.5 million of preferred stock in 2004, and an increase in effective tax rate caused by the non-deductibility of the charge.

Total revenues increased 56.2% to $34.2 million, compared to the same quarter of 2004 when revenues were $21.9 million. Premium income was $28.3 million for the quarter, a 59.5% increase over the same period in 2004 when premiums equaled $17.7 million. Net investment income increased 50.5% in the quarter to $5.7 million from $3.8 million in the second quarter of 2004. Claims and surrenders increased to $13.2 million from $7.6 million for the three months ended June 30, 2005 compared to the same period in 2004, the increase resulting primarily from the acquisition of Security Plan. Economies of scale achieved through consolidation of the administration of companies acquired over the past two years, contributed to a 10.7% decline in insurance expenses for the second quarter compared to the first quarter of 2005. Federal income tax expense was at an effective rate of 50% for the second quarter of 2005 since the loss from the increase in fair value of options and warrants was not tax deductible.

Assets decreased slightly to $648.7 million at June 30, 2005, compared to $661.2 million at December 31, 2004. The decline in assets reflected the repayment of the Company’s $30.0 million term loan in April 2005. Stockholders’ equity increased from $135.1 million at December 31, 2004 to $141.2 million at June 30, 2005 due to $3.4 million of unrealized gains, net of tax, in the

Company’s bond portfolio and the income earned during the period. Although the Federal Reserve has consistently increased short-term interest rates during the year, long-term rates have decreased slightly, resulting in unrealized gains as of June 30, 2005.

About Citizens, Inc.

Citizens, Inc., parent of Citizens, Inc. Financial Group, a financial services investment company listed on the New York Stock Exchange, symbol CIA, 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 is included in the Russell 2000® Index, which measures the performance of the largest companies, based on market capitalization, in the U.S. stock market. Citizens’ Class A common stock closed at $6.99 on August 8, 2005.

Additional information is available about the Company on its web site: www.citizensinc.com.

###

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, 2004 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
OPERATING STATEMENTS

	(Unaudited)						(Unaudited)
	Six-Months Ended						Three-Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Premiums and Other Revenues
Premium income	$	55,376,961		$	31,989,705		$	27,592,963		$	16,868,103
Annuity and Univeral life considerations		1,465,064			1,769,820			669,691			852,583
Net investment income		11,479,198			7,664,332			5,703,241			3,790,004
Realized gains		615,675			256,385			546,548			217,173
Increase in fair value of options and warrants		(57,212	)					(491,618	)
Other income		381,800			310,407			174,039			157,823
Total revenues	$	69,261,486		$	41,990,649		$	34,194,864		$	21,885,686
Benefits and Expenses
Insurance benefits paid or provided:
Claims and surrenders		25,932,708			16,289,378			13,223,023			7,644,032
Increase in future policy benefit reserves		12,114,555			7,239,869			6,516,058			4,563,623
Policyholders’ dividends		2,077,100			1,730,013			1,206,932			998,824
Total benefits paid or provided		40,124,363			25,259,260			20,946,013			13,206,479
Commissions		15,490,093			8,262,533			8,157,702			4,489,225
Other underwriting, acquisition and insurance expenses		13,445,894			7,619,171			6,342,176			4,182,936
Capitalization of deferred policy acquisition costs		(10,995,982	)		(7,998,504	)		(5,974,897	)		(4,356,772	)
Amortization of deferred policy acquisition costs		4,624,376			4,968,304			2,653,276			2,319,749
Amortization of cost of customer relationships acquired		2,495,931			1,360,613			1,346,005			635,254
Loss (gain) on coinsurance agreements		—			610,613			—			(23,848	)
Total benefits and expenses	$	65,184,675		$	40,081,392		$	33,470,275		$	20,453,023
Income before federal income tax	$	4,076,811		$	1,909,257		$	724,589		$	1,432,663
Federal income tax expense		1,355,000			652,566			362,264			547,715
Net income	$	2,721,811		$	1,256,691		$	362,325		$	884,948

INCOME PER SHARE
(UNAUDITED)

Net income per share	$	0.05	$	0.03	$	0.00	$	0.02
Weighted average shares outstanding		38,381,685		38,317,079		38,393,453		38,317,079

BALANCE SHEETS

	(Unaudited)		(Unaudited)				(Unaudited)		(Unaudited)
	June 30,		March 31,		December 31,		September 30,		June 30,
	2005		2005		2004		2004		2004
Total assets	$	648,699,840	$	680,725,559	$	661,211,562	$	413,595,750	$	390,673,658
Total invested assets	$	462,623,378	$	464,766,647	$	475,801,943	$	230,817,292	$	235,325,072
Stockholder’s equity	$	141,234,652	$	134,405,978	$	135,131,079	$	130,875,442	$	124,528,654