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Citizens, Inc. Reports Second Quarter 2024 Financial Results

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Citizens, Inc. (NYSE: CIA) reported strong Q2 2024 results, with total revenues increasing 6% to $62.1 million. The company achieved record-setting performance, including the highest amount of insurance issued ever in a quarter at $295.2 million, up 86% year-over-year. Direct first year life and A&H premiums increased 85%, marking the seventh consecutive quarter of year-over-year growth. The global network of producing agents expanded by 45% since December 31, 2023. Despite higher expenses, Citizens reported net income of $4.0 million, or $0.08 per fully diluted Class A share. The company maintains a strong financial position with $26.3 million in cash and no debt. Book value per Class A share increased 30% over the year-ago quarter to $3.85.

Citizens, Inc. (NYSE: CIA) ha riportato risultati solidi per il secondo trimestre del 2024, con un incremento del 6% nei ricavi totali, arrivati a 62,1 milioni di dollari. L'azienda ha raggiunto prestazioni record, inclusa la maggior somma di assicurazioni emesse mai in un trimestre, pari a 295,2 milioni di dollari, con un aumento dell'86% rispetto all'anno precedente. I premi diretti di vita e A&H del primo anno sono aumentati dell'85%, segnando il settimo trimestre consecutivo di crescita anno su anno. La rete globale di agenti produttivi è cresciuta del 45% rispetto al 31 dicembre 2023. Nonostante le spese più elevate, Citizens ha registrato un utile netto di 4,0 milioni di dollari, equivalenti a 0,08 dollari per azione di Classe A completamente diluita. L'azienda mantiene una forte posizione finanziaria con 26,3 milioni di dollari in contante e senza debiti. Il valore contabile per azione di Classe A è aumentato del 30% rispetto al trimestre dell'anno precedente, raggiungendo 3,85 dollari.

Citizens, Inc. (NYSE: CIA) reportó resultados sólidos en el segundo trimestre de 2024, con un aumento del 6% en los ingresos totales, alcanzando 62,1 millones de dólares. La empresa logró un rendimiento récord, que incluye la mayor cantidad de seguros emitidos jamás en un trimestre, con 295,2 millones de dólares, un incremento del 86% respecto al año anterior. Las primas directas de seguro de vida y A&H del primer año aumentaron un 85%, marcando el séptimo trimestre consecutivo de crecimiento interanual. La red global de agentes productores se expandió en un 45% desde el 31 de diciembre de 2023. A pesar de los costos más altos, Citizens reportó un ingreso neto de 4,0 millones de dólares, o 0,08 dólares por acción Clase A totalmente diluida. La empresa mantiene una sólida posición financiera con 26,3 millones de dólares en efectivo y sin deudas. El valor en libros por acción Clase A aumentó un 30% en comparación con el trimestre del año anterior, alcanzando 3,85 dólares.

Citizens, Inc. (NYSE: CIA)는 2024년 2분기 강력한 실적을 발표했습니다. 총 수익이 6% 증가하여 6210만 달러에 달했습니다. 이 회사는 기록적인 성과를 달성했으며, 분기별 보험 발행액이 2억 9520만 달러로 역대 최대치에 도달했으며, 이는 전년 대비 86% 증가한 수치입니다. 첫 해의 직접 생명 및 A&H 보험료는 85% 증가하여, 전년 대비 7분기 연속 성장을 기록했습니다. 글로벌 생산 에이전트 네트워크는 2023년 12월 31일 이후 45% 성장했습니다. 비용이 증가했음에도 불구하고 Citizens는 400만 달러의 순이익, 즉 0.08달러의 완전 희석된 A 클래스 주당 순이익을 보고했습니다. 이 회사는 2630만 달러의 현금을 보유하고 있으며, 부채가 없습니다. A 클래스 주당 장부 가치는 전년 동기 대비 30% 증가하여 3.85달러에 달했습니다.

Citizens, Inc. (NYSE: CIA) a rapporté de solides résultats au deuxième trimestre 2024, avec une augmentation de 6 % des revenus totaux, atteignant 62,1 millions de dollars. L'entreprise a réalisé des performances record, y compris le montant d'assurance le plus élevé jamais émis en un trimestre, s'élevant à 295,2 millions de dollars, soit une hausse de 86 % par rapport à l'année précédente. Les primes directes de première année en vie et A&H ont augmenté de 85 %, marquant le septième trimestre consécutif de croissance d'une année sur l'autre. Le réseau mondial d'agents producteurs s'est développé de 45 % depuis le 31 décembre 2023. Malgré des dépenses plus élevées, Citizens a rapporté un bénéfice net de 4,0 millions de dollars, soit 0,08 dollar par action de Classe A pleinement diluée. L'entreprise maintient une solide position financière avec 26,3 millions de dollars en liquidités et aucune dette. La valeur comptable par action de Classe A a augmenté de 30 % par rapport au trimestre de l'année précédente, atteignant 3,85 dollars.

Citizens, Inc. (NYSE: CIA) berichtete über starke Ergebnisse im 2. Quartal 2024, mit einem Anstieg der Gesamterlöse um 6% auf 62,1 Millionen US-Dollar. Das Unternehmen erzielte eine Rekordleistung, einschließlich der höchsten jemals in einem Quartal ausgegebenen Versicherungssumme von 295,2 Millionen US-Dollar, was einem Anstieg von 86% im Vergleich zum Vorjahr entspricht. Die direkten Prämien für Lebens- und A&H-Versicherungen im ersten Jahr stiegen um 85%, was das siebte aufeinanderfolgende Quartal mit jährlichem Wachstum markiert. Das globale Netzwerk der produzierenden Agenten erweiterte sich seit dem 31. Dezember 2023 um 45%. Trotz höherer Ausgaben berichtete Citizens von einem Nettogewinn von 4,0 Millionen US-Dollar, oder 0,08 US-Dollar pro vollständig verwässerter Klasse A-Aktie. Das Unternehmen hat eine starke Finanzposition mit 26,3 Millionen US-Dollar in bar und ohne Schulden. Der Buchwert pro Klasse A-Aktie stieg im Vergleich zum Vorjahresquartal um 30% auf 3,85 US-Dollar.

Positive
  • Record-setting insurance issued of $295.2 million in Q2 2024, up 86% year-over-year
  • Total revenues increased 6% to $62.1 million in Q2 2024
  • Direct first year life and A&H premiums increased 85% in Q2 2024
  • Global network of producing agents expanded by 45% since December 31, 2023
  • Book value per Class A share increased 30% over the year-ago quarter to $3.85
  • Positive net cash provided by operating activities of $4.6 million in Q2 2024
  • Strong financial position with $26.3 million in cash and no debt
Negative
  • Income before federal income tax decreased to $3.3 million in Q2 2024 from $6.0 million in Q2 2023
  • Net income decreased to $4.0 million ($0.08 per share) in Q2 2024 from $6.1 million ($0.12 per share) in Q2 2023
  • Total benefits and expenses increased by $6.3 million to $58.8 million in Q2 2024
  • $3.5 million increase in general expenses due to accrual of legal fees in trade secret lawsuit

Insights

Citizens, Inc.'s Q2 2024 results show strong growth in key areas, despite some challenges. The 86% increase in insurance issued to $295.2 million and the 85% rise in first-year premiums are particularly impressive. These metrics, along with the 45% growth in producing agents since year-end 2023, suggest robust future revenue potential.

However, the decrease in net income from $6.1 million to $4.0 million year-over-year is concerning. This decline is primarily due to increased expenses, including a $3.5 million accrual for legal fees. The company's ability to manage these costs will be important for future profitability.

The 30% increase in book value per Class A share to $3.85 is a positive sign for shareholders. With $26.3 million in cash and no debt, Citizens appears to have a solid financial foundation for continued growth.

Citizens' strategic focus on niche markets and new product development is paying off, as evidenced by the record-setting insurance issued and growing agent network. The company's success in expanding its global footprint and introducing new products, particularly in the domestic final expense insurance market, demonstrates its ability to identify and capitalize on growth opportunities.

The consistent year-over-year growth in first-year premiums for seven consecutive quarters is a strong indicator of sustainable revenue growth. However, flat renewal premiums suggest potential challenges in customer retention or product pricing that need to be addressed.

The company's positive net cash from operations since 2004 is impressive, indicating a resilient business model. As Citizens continues to expand, maintaining this operational efficiency will be important for long-term success in the competitive insurance industry.

Citizens' performance in Q2 2024 reflects a company in a growth phase, with significant investments in expansion and new product development. The 85% increase in direct first-year life and A&H premiums indicates strong market acceptance of their new offerings, particularly in the domestic final expense insurance segment.

The company's ability to grow its agent network by 45% in just six months is remarkable and suggests effective recruitment and training strategies. This expanded distribution network should drive continued sales growth, although it may also lead to increased operational costs in the short term.

The introduction of analyst coverage by Sidoti & Company and Singular Research is a positive development, potentially increasing market visibility and investor interest. However, investors should closely monitor the company's ability to translate its impressive sales growth into sustained profitability, especially given the recent increase in expenses.

Austin, Texas--(Newsfile Corp. - August 6, 2024) - Citizens, Inc. (NYSE: CIA), a leading diversified financial services company specializing in life, living benefits and final expense insurance, today reported results for the second quarter ended June 30, 2024.

"We are excited to report strong sales momentum and exceptional execution in the second quarter. Our strategic roadmap is designed to deliver improved operating results and sustainable growth in book value per share. Insurance issued increased 86% in Q2 2024, a great example of a leading indicator for our revenue as these sales transition to renewals. First year premiums have increased year-over-year for seven consecutive quarters," said Jon Stenberg, President and Chief Executive Officer. "We remain fully committed to persistent and profitable growth, as evidenced by our positive net cash from operations annually since 2004."

"As we look ahead, we expect continued sales growth in 2024 leading to strong profit growth in the full year 2025. We believe we're well positioned to drive long-term value creation for our shareholders, supported by our robust global business model. Our strong performance in the first half of this year, combined with our competitive advantages in expanding niche markets globally, rapid sales force expansion, and expertise in profitable product development, reinforces great confidence in our outlook," concluded Stenberg.

Key Second Quarter and Recent Business Highlights

Record setting results and highlight accomplishments for Citizens, including:

  • Highest amount of insurance issued ever in a quarter - insurance issued was $295.2 million in Q2 2024, an 86% increase compared to the same period in 2023, primarily from sales of our new products and an increase in producing agents. This comes on the heels of a record-setting first quarter - insurance issued increased 61% in Q1 2024 compared to the same period in 2023.
  • Record insurance in force - over $5.1 billion of direct insurance in force at June 30, 2024.
  • Record number of agents - increased global network of producing agents, up 45% since December 31, 2023, up 20% in Q1 2024 and up 21% in Q2 2024.
  • First analyst research reports published on Citizens. Reports issued by Sidoti & Company and Singular Research.

Second Quarter 2024 Financial Highlights

  • Total revenues increased 6% to $62.1 million in Q2 2024, from $58.5 million in the year-ago quarter.
  • Direct first year life and A&H premiums increased 85% in Q2 2024, the seventh consecutive quarter of year-over-year growth in first year premiums, driven by new domestic growth and new products.
  • Income before federal income tax of $3.3 million in Q2 2024, from $6.0 million in Q2 2023. Adjusted income before federal income tax of $7.1 million in Q2 2024 from $6.4 million in Q2 2023.
  • Net income of $4.0 million, $0.08 per fully diluted Class A share, in Q2 2024, from $6.1 million, $0.12 in Q2 2023.
  • Positive net cash provided by operating activities of $4.6 million in Q2 2024. The Company has had positive net cash provided by operating activities annually since 2004.
  • Cash and cash equivalents of $26.3 million and no debt at June 30, 2024.
  • Book value per Class A share of $3.85 increased 30% over the year-ago quarter. Book value per Class A share excluding accumulated other comprehensive income (loss) (AOCI) of $6.02 increased 8% over the year-ago quarter.

2024 Milestones

For 2024, the Company has set the following milestones:

  • Increase first year premium revenues at least 25%
  • Expand global network of producing agents at least 20%
  • Introduce 2 to 3 new products or major product enhancements. Citizens delivered a new product in Q1 2024

Second Quarter 2024 Performance and Highlights

Total revenues increased 6% to $62.1 million in Q2 2024, from $58.5 million in the year-ago quarter with significant growth in the Life Insurance segment, where direct first year premiums increased by 132% from second quarter 2023. Direct first year life and A&H premiums increased 85% to $7.9 million in Q2 2024 compared to the same year-ago period, driven by new products including new domestic final expense insurance products, and an increased number of producing agents. Direct renewal life and A&H premiums were flat in the second quarter of 2024 compared to the same year-ago period.

Total benefits and expenses increased by $6.3 million to $58.8 million in the second quarter of 2024, from $52.5 million in the same year-ago period. The increase was primarily due to higher matured endowments and a $3.5 million increase in general expenses due to accrual of legal fees awarded to certain defendants in the trade secret lawsuit.

Because of the increase in total benefits and expenses, income before federal income tax of $3.3 million decreased in Q2 2024, from $6.0 million in Q2 2023. Adjusted income before federal income tax of $7.1 million increased in Q2 2024, from $6.4 million in Q2 2023. Adjusted income before federal income tax adjusts for discrete items. Adjusted income before federal income tax is a financial measure not presented in accordance with generally accepted accounting principles ("GAAP") (a "non-GAAP Financial Measure"). Please see the table "GAAP to Non-GAAP Reconciliation" in this news release.

As a result of the higher benefits and expenses and accrued legal fees, net income for the second quarter of 2024 was $4.0 million, or $0.08 per fully diluted Class A share, a decrease from net income of $6.1 million, or $0.12 per fully diluted Class A share, in the prior year quarter.

Investments

Net investment income for the second quarter of 2024 increased to $17.5 million compared to $17.2 million in the prior year period, driven by higher income from fixed maturity securities resulting from rising interest rates and growth in the Company's limited partnership asset base. The average pre-tax yield on the investment portfolio was 4.6% in the second quarter of 2024, an increase of 8 basis points compared to the prior year same period.

The carrying value of the Company's fixed maturity securities investment portfolio at June 30, 2024 was $1.2 billion, the same as December 31, 2023.

Cash Flow/Capital/Share Repurchase

Positive net cash provided by operating activities was $4.6 million in Q2 2024. The Company has had positive net cash provided by operating activities annually since 2004 reflecting the strength and consistency of the Company's liquidity. The Company had cash and cash equivalents of $26.3 million and no debt at June 30, 2024.

About Citizens, Inc.

Citizens, Inc. (NYSE: CIA) is a diversified financial services company providing life, living benefits and final expense insurance and other financial products to individuals and small businesses in the U.S., Latin America, and Asia. Through its customer-centric growth strategy, Citizens offers innovative products to address the evolving needs of its customers in their native languages of English, Spanish, Portuguese, and Mandarin. The Company operates two primary segments: Life Insurance, where internationally the Company is a market leader in U.S. Dollar denominated life insurance and where it is growing in niche markets in the United States through its final expense products distributed through white-label and established distribution channels, and Home Service Insurance, which operates primarily in the U.S. Gulf coast region. For more information about Citizens, please visit the website at www.citizensinc.com and LinkedIn.

Explanatory Notes on Use of Non-GAAP Measures

Adjusted Operating Income

Adjusted Operating Income is a non-GAAP measure that is computed as pre-tax GAAP operating income with discrete adjustments that exclude net investment related gains (losses), income (loss) from ceased businesses and other special items not indicative of operating trends. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods, by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends. Management believes the pre-tax metric is a more useful comparison than the post-tax metric, as the Company's effective tax rate can fluctuate significantly from quarter-to-quarter.

Adjusted Book Value Per Class A Common Share

Adjusted book value per Class A common share is a non-GAAP measure that is calculated by dividing actual Class A common stockholders' equity, excluding AOCI, by the number of Class A common shares outstanding at the end of the period. Management believes this metric is meaningful, as it allows investors to evaluate underlying book value growth by excluding the impact of interest rate volatility.

Selected Consolidated Financial Data

As of and for the periods endedThree Months Ended
June 30,
Six Months Ended
June 30,
(In thousands, except per share data)2024202320242023
Balance sheet data    
  Total assets$1,662,4731,623,9941,662,4731,623,994
  Total liabilities1,471,0041,477,1481,471,0041,477,148
  Total stockholders' equity191,469146,846191,469146,846
  Life insurance in force, net4,449,8264,347,6834,449,8264,347,683
    
Operating items    
  Insurance premiums$42,55939,72681,23277,975
  Net investment income17,54017,24135,02734,315
  Investment related gains (losses), net(253)703710415
  Total revenues62,08458,527119,796114,441
    
  Claims and surrenders34,53032,77667,64363,075
  Other general expenses16,63912,26827,97723,528
  Total benefits and expenses58,78252,483111,569101,682
    
  Income before federal income tax3,3026,0448,22712,759
  Federal income tax expense(657)(82)(274)1,761
  Net income3,9596,1268,50110,998
    
Per share data    
  Book value per share$3.852.963.852.96
  Diluted income per Class A share0.080.120.170.22

 

Definition of Reported Segments

The Company is comprised of two operating business segments and other non-insurance enterprises as detailed below. The insurance operations are the Company's primary focus and are the lead income generators of the business.

Life Insurance - The Life Insurance segment primarily issues U.S. dollar-denominated ordinary whole life insurance and endowment policies predominantly sold to non-U.S. residents located principally in Latin America and the Pacific Rim. Domestically, we are licensed in 41 U.S. states and sell whole life final expense insurance and life insurance with living benefits and critical illness products. These products are sold primarily through independent marketing organizations.

Home Service Insurance - The Home Service Insurance segment provides final expense life insurance policies marketed to middle- and lower-income households, and whole life products with higher allowable face values in Louisiana, Mississippi, and Arkansas. These products are sold through independent agents and funeral homes. 

Selected Segment Financial Data

As of and for the periods endedThree Months Ended
June 30,
Six Months Ended
June 30,
(In thousands)2024202320242023
LIFE INSURANCE SEGMENT    
Balance sheet data    
 Total assets$1,263,5441,227,4591,263,5441,227,459
    
Operating items    
  Insurance premiums$31,60528,77359,46654,980
  Net investment income13,81213,49827,49826,809
  Investment related gains (losses), net(279)738807301
  Total revenues47,35643,86590,49583,825
    
  Claims and surrenders29,16926,96856,53351,407
  Total benefits and expenses39,88436,39277,22369,980
    
  Income before federal income tax7,4727,47313,27213,845
    
HOME SERVICE INSURANCE SEGMENT
Balance sheet data     
  Total assets$357,731347,417357,731347,417
    
Operating items    
  Insurance premiums$10,95410,95321,76622,995
  Net investment income3,5293,4507,0666,920
  Investment related gains (losses), net23(12)(68)87
  Total revenues14,52614,39228,78430,003
    
  Claims and surrenders5,3615,80811,11011,668
  Total benefits and expenses13,11513,76826,75028,046
    
  Income before federal income tax1,4116242,0341,957

 

GAAP to Non-GAAP Reconciliation

Reconciliation of Adjusted Income Before Federal Income Tax

For the periods endedThree Months Ended
June 30,
Six Months Ended
June 30,
Unaudited (In thousands)2024202320242023
Income before federal income tax$3,3026,0448,22712,759
 Less:    
   Investment related gains (losses)(253)703710415
   Property insurance business income (loss)(76)(1,059)(71)(1,004)
   Legal fee accrual(3,500)-(3,500)-
Adjusted income before federal income tax$7,1316,40011,08813,348

 

Reconciliation of Stockholders' Equity and Book Value per Class A Common Share

As of June 30,
Unaudited (In thousands, except per share data)20242023
Stockholders' equity, end of period$191,469146,846
   Less: Accumulated other comprehensive income (loss) (AOCI)(107,924)(128,363)
Stockholders' equity, end of period, excluding AOCI$299,393275,209
  
Book value per Class A common share - diluted$3.852.96
   Less: Per share impact of AOCI(2.17)(2.59)
Book value per Class A common share - diluted, excluding AOCI $6.025.55

 

Forward-Looking Statements

This press release 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", "believe", "project", "intends," "continue" or comparable words. Such forward-looking statements may relate to the Company's expectations regarding its business performance, operational strategy, capital expenditures, technological changes, regulatory actions, and other financial and operational measures. 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. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements. The risks, uncertainties and assumptions that are involved in our forward-looking statements include, but are not limited to the risk factors discussed in our most recently filed periodic reports on Form 10-K and Form 10-Q. 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. Accordingly, you should not unduly rely on these forward-looking statements. 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. Investor Relations Contacts
Darrow Associates Investor Relations
Jeff Christensen and Matt Kreps
Email: CIA@darrowir.com (Jeff and Matt)
Phone: 703-297-6917 (Jeff) and 214-597-8200 (Matt)

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219035

FAQ

What was Citizens' (CIA) insurance issued amount in Q2 2024?

Citizens (CIA) reported a record-setting insurance issued amount of $295.2 million in Q2 2024, representing an 86% increase compared to the same period in 2023.

How did Citizens' (CIA) total revenues change in Q2 2024?

Citizens' (CIA) total revenues increased by 6% to $62.1 million in Q2 2024, compared to $58.5 million in the same quarter of the previous year.

What was Citizens' (CIA) net income for Q2 2024?

Citizens (CIA) reported a net income of $4.0 million, or $0.08 per fully diluted Class A share, for Q2 2024.

How much did Citizens' (CIA) direct first year life and A&H premiums grow in Q2 2024?

Citizens' (CIA) direct first year life and A&H premiums increased by 85% in Q2 2024 compared to the same period in the previous year.

What is Citizens' (CIA) book value per Class A share as of Q2 2024?

Citizens' (CIA) book value per Class A share was $3.85 as of Q2 2024, representing a 30% increase over the year-ago quarter.

Citizens, Inc.

NYSE:CIA

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Insurance - Life
Life Insurance
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