Citizens Reports Fourth Quarter and Full Year 2021 Financial Results
Citizens, Inc. (NYSE: CIA) reported a significant increase in net income, reaching $38.1 million in Q4 2021, up from $1.5 million in Q4 2020. For the entire year, net income was $36.8 million, rebounding from an $11.0 million loss in 2020. Renewal premiums rose 4% year-over-year to $44.7 million, while total claims and surrenders decreased 17%. Total assets stood at $1.9 billion with no debt. The company reported an increase in book value per class A share to $6.41, marking a 20% increase from Q3 2021.
- Net income for Q4 2021 increased to $38.1 million from $1.5 million in Q4 2020.
- Full-year net income improved to $36.8 million compared to an $11.0 million loss in 2020.
- Renewal premiums rose 4% year-over-year to $44.7 million.
- Total assets were $1.9 billion with no debt.
- Book value per class A share increased by 20% from Q3 2021.
- Goodwill impairment of $12.6 million recorded due to low interest rates.
- Pre-tax net income would have shown a gain of $5.8 million excluding impairment, indicating underlying operational challenges.
- First-year premiums decreased to $4.7 million from $5.3 million in Q4 2020.
- Q4 2021 net income increased to
$38.1 million , compared to$1.5 million in Q4 2020; full year net income increased to$36.8 million compared to$11.0 million loss in 2020 - Q4 2021 renewal premiums increased
4% year-over-year to$44.7 million , driven by growth across Life Insurance and Home Service Insurance segments - Q4 2021 total claims and surrenders decreased
17% year-over-year - Total assets of
$1.9 billion at December 31, 2021 with no debt - Book value per class A share at December 31, 2021 of
$6.41 increased20% and8% , respectively, from September 30, 2021 and December 31, 2020
AUSTIN, Texas, March 11, 2022 /PRNewswire/ -- Citizens, Inc. (NYSE: CIA) today reported financial results for the quarter and year ended December 31, 2021.
Net income for the fourth quarter of 2021 totaled
Net income for the year ended December 31, 2021 totaled
Management Commentary
"The fourth quarter marked a solid finish to a transformational year for Citizens," said Company vice chairman and CEO, Gerald W. Shields. "Operationally, our strategic initiatives to improve policy retention resulted in renewal premiums in our Life Insurance segment increasing for the first time in three years. Additionally, our new product introductions, strategic pricing campaigns, and enhanced recruitment efforts drove significant growth in first year premiums for the full year. Overall, our financial and operational performance in 2021 reflects the execution of our strategy to transform our business, products, and customer base, which we believe will translate to sustainable growth and profitability over the long term."
Fourth Quarter of 2021 Financial Highlights
Net income for the fourth quarter of 2021 totaled
In the fourth quarter of 2021, the Company released
Total premium revenue in the fourth quarter of 2021 increased
Renewal premiums for the fourth quarter of 2021 increased
First year premium revenues for the fourth quarter of 2021 were
Total claims and surrenders for the fourth quarter of 2021 decreased
General expenses for the fourth quarter of 2021 decreased by
1 See "Financial Measures Excluding Goodwill Impairment" below for a reconciliation to our GAAP financial results. |
Fourth Quarter of 2021 Segment Performance and Highlights
Life Insurance
Total premium revenue in the Life Insurance segment was
Total claims and surrenders were down
Home Service Insurance
Total premium revenue in Home Service Insurance grew
Policies issued in the quarter declined
Claims and Surrenders decreased
Full Year 2021 Operating Highlights
Net income for the full year 2021 was
Total insurance in force for 2021 increased for the first time in four years, driven by
First-year premiums in 2021 increased
Claims and surrender benefits for the full year decreased by
General expenses for 2021 decreased
Full Year 2021 Segment Performance and Highlights
Life Insurance
Overall premium revenue decreased by
The number of policies issued and first year premiums in 2021 increased
Renewal premiums decreased
Claims and surrenders benefit for 2021 declined
Home Service Insurance
Overall premium revenue increased
First year premiums in 2021 grew
Renewal premiums in 2021 grew
Claims and surrenders benefit for 2021 grew
Investments
Net investment income was
Investment related gains contributing to earnings were
Net investment income was
Investment related gains contributing to earnings were
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, life insurance product sales in the U.S. and final expense and limited liability property product sales in the U.S.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as "future," "anticipates," "believes," "estimates," "intends," "plans," "predicts," "will," "would," "could," "can," "may," and similar terms. Such forward-looking statements may relate to the Company's expectations regarding the impact of the COVID-19 pandemic, business performance, operational strategy and other financial and operational measures. 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 assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law. You should be aware that factors not referred to herein could affect the accuracy of our forward-looking statements and use caution and common sense when considering our forward-looking statements.
Contact Information
Investors
Matt Glover and Matthew Hausch
Gateway Group, Inc.
(949) 574-3860
CIA@gatewayir.com
Selected Consolidated Financial Data | ||||
For the periods ended as of | Three months ended | Year ended | ||
(In thousands except share data) | 2021 | 2020 | 2021 | 2020 |
Balance sheet data | ||||
Total assets | $ 1,854,511 | $ 1,843,420 | $ 1,854,511 | $ 1, 843,420 |
Total liabilities | 1,533,940 | 1,542,475 | 1,533,940 | 1,542,475 |
Total stockholders' equity | 320,571 | 300,945 | 320,571 | 300,945 |
Life insurance in force | 4,165,921 | 4,141,968 | 4,165,921 | 4,141,968 |
Operating items | ||||
Insurance premiums | $ 49,543 | $ 48,408 | $ 174,728 | $ 175,329 |
Net investment income | 15,477 | 15,116 | 61,495 | 60,197 |
Investment related gains | 3,714 | 833 | 10,991 | 1,502 |
Total Revenues | 69,921 | 64,968 | 250,546 | 238,856 |
Claims and Surrenders | 28,034 | 33,984 | 119,735 | 121,145 |
Other general expenses | 9,943 | 11,666 | 43,370 | 53,669 |
Goodwill impairment | 12,624 | - | 12,624 | - |
Total benefits and expenses | 76,734 | 67,317 | 257,324 | 251,173 |
Income (loss) before federal income tax | (6,813) | (2,349) | (6,688) | (12,317) |
Federal income tax benefit | 44,950 | 3,887 | 43,475 | 1,329 |
Net income (loss) | 38,137 | 1,538 | 36,787 | (10,988) |
Per share data | ||||
Book value per share | $ 6.41 | $ 5.96 | $ 6.41 | $ 5.96 |
Basic earnings (loss) per share of Class A | 0.77 | 0.03 | 0.74 | (0.22) |
Diluted earnings (loss) per share of Class A | 0.77 | 0.03 | 0.73 | (0.22) |
Definition of Reported Segments
The Company operates in two business segments as detailed below.
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. These products are sold through independent marketing consultants. A new whole life product was introduced in Florida in 2021.
Home Service Insurance – The Home Service Insurance segment provides final expense life insurance and property 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 | ||||
For the periods ended as of | Three months ended | Year ended | ||
(In thousands) | 2021 | 2020 | 2021 | 2020 |
LIFE INSURANCE SEGMENT | ||||
Total assets | $ 1,390,392 | $ 1,381,723 | $ 1,390,392 | $ 1,381,723 |
Operating items | ||||
Insurance premiums | $ 36,659 | $ 37,055 | $ 126,058 | $ 129,201 |
Net investment income | 11,748 | 11,553 | 47,216 | 45,885 |
Investment related gains | 3,435 | 81 | 9,176 | 1,340 |
Total revenues | 53,062 | 49,300 | 185,812 | 178,232 |
Claims and Surrenders | 22,024 | 27,742 | 91,390 | 93,813 |
Total benefits and expenses | 60,851 | 49,119 | 184,894 | 168,338 |
Income (loss) before federal income tax | (7,789) | 181 | 918 | 9,894 |
HOME SERVICE INSURANCE SEGMENT | ||||
Total assets | $ 407,603 | $ 385,931 | $ 407,603 | $ 385,931 |
Operating items | ||||
Insurance premiums | $ 12,884 | $ 11,353 | $ 48,670 | $ 46,128 |
Net investment income | 3,398 | 3,263 | 13,224 | 13,051 |
Investment related gains | 225 | 628 | 618 | 223 |
Total revenues | 16,511 | 15,244 | 62,519 | 59,421 |
Claims and Surrenders | 6,010 | 6,242 | 28,345 | 27,332 |
Total benefits and expenses | 14,228 | 15,517 | 64,555 | 62,891 |
Income (loss) before federal income tax | 2,283 | (273) | (2,036) | (3,470) |
Financial Measures Excluding Goodwill Impairment
From time-to-time, the Company's financial results include certain financial measures not derived in accordance with generally accepted accounting principles ("GAAP"). Non-GAAP financial measures should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purposes of analyzing operating performance, financial position or cash flows. However, the Company believes providing additional information in the form of non-GAAP measures that exclude the unusual, non-recurring goodwill impairment outlined below is beneficial to the users of its financial statements in evaluating the Company's current operating results in relation to past periods.
In the fourth quarter of 2021, the Company performed a goodwill impairment test which reflected that the fair value of the Life Insurance segment was lower than the carrying value, due to the tax benefit (which increased the carrying value) and continued low interest rate environment. As a result, as of December 31, 2021, the company wrote-off the goodwill in the Life Insurance segment and recognized an expense of
Reconciliation of Adjusted Pre-Tax and After-Tax Net Income (Loss) | ||
For the periods ended as of | Three months ended | |
(In thousands) | 2021 | 2020 |
GAAP Income (loss) before federal income tax | $ (6,813) | $ (2,349) |
Goodwill impairment | 12,624 | - |
Adjusted income (loss) before federal income tax | 5,811 | (2,349) |
Federal income tax benefit | 44,950 | 3,887 |
Adjusted Net income | 50,761 | 1,538 |
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SOURCE Citizens, Inc.
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