Schedule II Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2011

Schedule II - Condensed Financial Information of Registrant [Abstract]

Schedule II - Condensed Financial Information of Registrant

Schedule II

Condensed Financial Information of Registrant

CITIZENS, INC. (Parent Company)

Balance Sheets

	At December 31,
	2011			2010
	(In thousands)
Assets
Investment in subsidiaries (1)	$	197,646			180,015
Fixed maturities available-for-sale, at fair value		35,299			18,453
Fixed maturities held-to-maturity, at amortized cost		151			-
Equity securities available-for-sale, at fair value		926			-
Mortgage loans on real estate		485			492
Real estate and other long-term investments		6,468			6,550
Cash		16,494			23,508
Accrued investment income		384			174
Accounts receivable from subsidiaries (1)		2,517			2,436
Other assets		763			828
Total assets	$	261,133			232,456
Liabilities and Stockholders' Equity
Liabilities:
Accrued expense and other liabilities	$	4,997			3,235
Liabilities for options and warrants		451			1,587
Total liabilities	$	5,448			4,822
Stockholders' equity:
Common stock:
Class A	$	258,548			256,703
Class B		3,184			3,184
Accumulated retained deficit		(14,208	)		(22,581	)
Unrealized investment gains on securities held by parent and subsidiaries, net of tax		19,172			1,339
Treasury stock		(11,011	)		(11,011	)
Total stockholders' equity		255,685			227,634
Total liabilities and stockholders' equity	$	261,133			232,456

(1) Eliminated in consolidation.

See accompanying report of independent registered public accounting firm.

Condensed Financial Information of Registrant

CITIZENS, INC. (Parent Company)

Statements of Operations

	Years Ended December 31,
	2011		2010			2009
	(In thousands)
Revenues:
Management service fees (1)	$	28,560		29,153			29,885
Investment income		822		423			164
Decrease in fair value of warrants		1,136		232			3,154
Other		-		-			2
Realized investment gains (losses)		18		(53	)		40
Total revenues		30,536		29,755			33,245
Expenses:
General		26,418		26,529			27,907
Taxes		1,671		1,608			1,363
Total expenses		28,089		28,137			29,270
Income before equity in income of consolidated subsidiaries		2,447		1,618			3,975
Equity in income of consolidated subsidiaries		5,928		13,893			13,365
Net income	$	8,375		15,511			17,340

(1) Eliminated in consolidation.

See accompanying report of independent registered public accounting firm.

Condensed Financial Information of Registrant

CITIZENS, INC. (Parent Company)

Statements of Cash Flows

	Years Ended December 31,
	2011			2010			2009
	(In thousands)
Cash flows from operating activities:
Net income	$	8,375			15,511			17,340
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment losses (gains)		(18	)		53			(40	)
Equity in net income of consolidated subsidiaries		(5,928	)		(13,893	)		(13,365	)
Decrease in fair value of options and warrants		(1,136	)		(232	)		(3,154	)
Accrued expenses and other liabilities		1,762			845			(204	)
Amortization of premiums and discounts on fixed maturities		165			96			-
Depreciation		249			227			252
Change in accrued investment income		(210	)		(164	)		48
Decrease (increase) in receivable from subsidiaries		(81	)		1,552			758
Other		(246	)		(295	)		868
Net cash provided by operating activities		2,932			3,700			2,503
Cash flows from operating activities:
Purchase of fixed maturities, held-to-maturity		(1,156	)		-			-
Calls of fixed maturities, held-to-maturity		1,000			-			-
Purchase of fixed maturities, available-for-sale		(24,794	)		(18,254	)		(3,000	)
Maturities of fixed maturities, available-for-sale		8,725			1,750			5,550
Purchase of equity securities, available-for-sale		(1,000	)		-			-
Sale of real estate and other long-term investments		16			61			212
Purchase of other long-term investments and property and equipment		(154	)		(437	)		(2,021	)
Maturity of short-term investments		-			-			2,250
Capital contribution to subsidiary		-			-			(1,000	)
Net cash provided by (used by) investment activities		(17,363	)		(16,880	)		1,991
Cash flows from financing activities:
Dividend from subsidiary		6,800			19,800			-
Warrants exercised		1,843			-			70
Purchase of the Company's stock from affiliates		(1,226	)		(4,314	)		-
Net cash provided by financing activities		7,417			15,486			70
Net increase (decrease) in cash		(7,014	)		2,306			4,564
Cash at beginning of year		23,508			21,202			16,638
Cash at end of year	$	16,494			23,508			21,202

See accompanying report of independent registered public accounting firm.