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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): August 4, 2023
COMMISSION FILE NUMBER: 000-16509
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CITIZENS, INC.
(Exact name of registrant as specified in its charter)

Colorado84-0755371
(State or other jurisdiction of incorporation)
(I.R.S. Employer Identification No.)
11815 Alterra Pkwy, Suite 1500, Austin, TX 78758
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number: (512) 837-7100
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:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Class A Common StockCIANew York Stock Exchange
(Title of each class)(Trading Symbol)(Name of each exchange on which registered)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter). ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐  





Item 2.02     Results of Operations and Financial Conditions

On August 4, 2023, Citizens, Inc. (the “Company”) issued a press release regarding the Company’s financial results for the quarter ended June 30, 2023. A copy of the Company’s press release is attached hereto as Exhibit 99.1.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.


Item 9.01Financial Statements and Exhibits
(d)Exhibits
104Inline XBRL for the cover page of this Current Report on Form 8-K



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/ Gerald W. Shields
Chief Executive Officer and President
Date: August 4, 2023



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Citizens, Inc. Reports Second Quarter 2023 Financial Results

AUSTIN, TX – August 4, 2023 – Citizens, Inc. (NYSE: CIA), a leading diversified financial services company specializing in life, living benefits, and final expense insurance, today reported financial results for the second quarter ended June 30, 2023.

Second Quarter 2023 Financial Highlights
•Net income increased to $6.1 million in Q2 2023, from $2.5 million in Q2 2022. Earnings per share increased to $0.12 in Q2 2023, from $0.05 in the year-ago quarter.
•Total revenues increased to $58.5 million in Q2 2023, from $53.7 million in the year-ago quarter.
•First year premiums increased 3% in Q2 2023, the third consecutive quarter of year-over-year growth in first year premiums, driven by new products and focused marketing campaigns.
•Cash, cash equivalents, and short-term investments of $21.2 million and no debt at June 30, 2023.
•Book value per Class A share of $2.96 increased 20% over the year-ago quarter. Book value per Class A share excluding accumulated other comprehensive income (loss) (AOCI) of $5.55 increased 12% over the year-ago quarter.

Recent Business Highlights
•Added additional white-label partnership to deliver unique products through established fast-growing distribution channels.
•Insurance issued increased 22% in the first six months of 2023 compared to the same period in 2022.
•AM Best initiated financial strength and credit ratings on Citizens, Inc.’s subsidiary, CICA Life Insurance Company of America. AM Best’s ratings recognize CICA’s strength of balance sheet and outlook.

Management Commentary
“We continue to make significant progress on our strategic roadmap and innovation efforts designed to drive increased book value per share and enhanced operating results. Improved performance in the second quarter demonstrates our unique ability to expand our reach and portfolio through a dedicated focus on customer needs in important underserved markets,” said Company Vice Chairman and CEO, Gerald W. Shields. “First year premiums have increased year-over-year for three consecutive quarters, reflecting significant success in building our distribution capabilities and profitable product development expertise. Our rapid introduction of new products continues to generate strong demand, a major contributor to the persistent expansion of our customer base. Looking ahead, our strategic progress, financial strength, and our competitive advantages in growing niche markets fuel the next chapters of our sustainable, long-term growth and profitability.”

Second Quarter 2023 Performance and Highlights

Net income for the second quarter of 2023 totaled $6.1 million, or $0.12 per fully diluted Class A share, increased from net income of $2.5 million, or $0.05 per fully diluted Class A share, in the prior year quarter. Adjusted operating income before taxes totaled $6.4 million for the

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second quarter of 2023, compared to $8.5 million in the same period in 2022, primarily due to higher operating costs related to strategic growth initiatives, moving the international business from Bermuda to Puerto Rico and higher total insurance benefits paid or provided, partially offset by higher net investment income.

Total revenues increased 9% to $58.5 million in the second quarter of 2023, compared to the same year-ago period. The increase was driven by the improved fair value of limited partnership investments, higher first year premium sales and net investment income, partially offset by lower renewal year premium revenues.

First year premiums increased 3% to $4.3 million in the second quarter of 2023 compared to the same year-ago period, with growth in both the Life Insurance and Home Service Insurance segments. Despite higher first year premium revenues, life insurance premium revenues decreased 4% in the second quarter of 2023 to $39.3 million, compared to the same period in 2022, due to lower renewal premiums.

Renewal premiums were $35.4 million in the second quarter of 2023, compared to $38.0 million in the same year-ago period. The decrease was due in part to the residual impact of higher surrenders experienced in prior years, increased matured endowments as expected based on contractual maturity dates, and the Company’s strategic exit from the property insurance business on June 30, 2023.

Total benefits and expenses increased by $2.7 million to $52.5 million in the second quarter of 2023, from $49.8 million in the same year-ago period. The increase was due to higher surrenders on policies nearing maturity that no longer carry surrender fees an increase in the number of contractual matured endowments, as well as higher operating costs related to strategic growth initiatives, costs related to moving the international business from Bermuda to Puerto Rico and higher employee benefit costs.

Investments
Net investment income for the second quarter of 2023 increased $1.3 million to $17.2 million, or 8%, compared to the prior year period. The increase in net investment income was 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 4.5%, an increase of 27 basis points compared to the second quarter of 2022.

Investment related gains of $0.7 million for the second quarter of 2023 compared to a $5.0 million loss in the second quarter of 2022. The improvement was primarily due to changes in fair market value in the Company’s limited partnership portfolio.

The carrying value of the Company’s fixed maturity securities investment portfolio at June 30, 2023 was $1.2 billion, a 2% decrease compared to the same year ago period. The decrease reflects the impact of interest rate sensitivity on the fair value of the Company’s fixed maturity securities.


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Return Capital to Shareholders
The Board of Directors authorized a share repurchase program in May 2022 under which the Company may repurchase up to $8 million of its outstanding shares of Class A common stock. $4.6 million of available repurchases remain on the current authorization.

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 Spanish, Portuguese, and Mandarin. The Company operates two primary segments: Life Insurance, where the Company is a market leader in US Dollar denominated life insurance and accident and health insurance in growing niche markets in the United States, Latin America, and Asia and Home Services, 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.

Adoption of New Accounting Standard
Effective January 1, 2023, the Company adopted Accounting Standard Update ("ASU") No. 2018-12, which amended the accounting and disclosure requirements related to targeted improvements to the accounting for long-duration contracts, or LDTI. All prior periods presented have been recast in accordance with the new standard.

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 and loss from ceased businesses and unusual items. Management believes that 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 that 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.


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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)2023202220232022
Balance sheet data
Total assets$1,623,994 1,634,209 1,623,994 1,634,209 
Total liabilities1,477,148 1,510,885 1,477,148 1,510,885 
Total stockholders' equity146,846 123,324 146,846 123,324 
Life insurance in force, net4,347,683 4,218,214 4,347,683 4,218,214 
Operating items
Insurance premiums$39,726 42,224 77,975 81,588 
Net investment income17,241 15,892 34,315 31,379 
Investment related gains (losses), net703 (5,016)415 (5,598)
Total revenues58,527 53,734 114,441 109,091 
Claims and surrenders32,776 27,097 63,075 55,531 
Other general expenses12,268 10,400 23,528 21,430 
Total benefits and expenses52,483 49,768 101,682 97,947 
Income (loss) before federal income tax6,044 3,966 12,759 11,144 
Federal income tax expense (benefit)(82)1,474 1,761 2,203 
Net income (loss)6,126 2,492 10,998 8,941 
Per share data
Book value per share$2.96 2.46 2.96 2.46 
Diluted income (loss) per Class A share0.12 0.05 0.22 0.18 



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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. These products are sold through independent marketing consultants.

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)2023202220232022
LIFE SEGMENT
Balance sheet data
Total assets$1,227,459 1,222,509 1,227,459 1,222,509 
Operating items
Insurance premiums$28,773 29,834 54,980 56,765 
Net investment income13,498 12,347 26,809 24,318 
Investment related gains (losses), net738 (3,984)301 (4,277)
Total revenues43,865 38,830 83,825 78,527 
Claims and surrenders26,968 21,568 51,407 43,026 
Total benefits and expenses36,392 35,494 69,980 69,327 
Income (loss) before federal income tax7,473 3,336 13,845 9,200 
HOME SERVICE SEGMENT
Balance sheet data
Total assets$347,417 357,542 347,417 357,542 
Operating items
Insurance premiums$10,953 12,390 22,995 24,823 
Net investment income3,450 3,283 6,920 6,527 
Investment related gains (losses), net(12)(925)87 (1,167)
Total revenues14,392 14,749 30,003 30,184 
Claims and surrenders5,808 5,529 11,668 12,505 
Total benefits and expenses13,768 12,747 28,046 26,104 
Income (loss) before federal income tax624 2,002 1,957 4,080 

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GAAP to Non-GAAP Reconciliation

Reconciliation of Adjusted Income (Loss) Before Federal Income Tax
For the periods endedThree Months Ended
June 30,		Six Months Ended
June 30,
Unaudited (In thousands)2023202220232022
Income (loss) before federal income tax$6,044 3,966 12,759 11,144 
Less:
Investment related gains (losses)703 (5,016)415 (5,598)
Property insurance business income (loss)(1,059)458 (1,004)932 
Adjusted income (loss) before federal income tax$6,400 8,524 13,348 15,810 


Reconciliation of Stockholders' Equity and Book Value per Class A Common Share
As of June 30,
Unaudited (In thousands, except per share data)20232022
Stockholders' equity, end of period$146,846 123,324 
Less: Accumulated other comprehensive income (loss) (AOCI)(128,363)(125,552)
Stockholders' equity, end of period, excluding AOCI$275,209 248,876 
Book value per Class A common share - diluted$2.96 2.46 
Less: Per share impact of AOCI(2.59)(2.50)
Book value per Class A common share - diluted, excluding AOCI $5.55 4.96 

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 the impact of the COVID-19 pandemic, 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

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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.

Contact Information

Investors
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)

v3.23.2
Cover
Aug. 04, 2023
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Aug. 04, 2023
Entity File Number 000-16509
Entity Registrant Name CITIZENS, INC.
Entity Incorporation, State or Country Code CO
Entity Tax Identification Number 84-0755371
Entity Address, Address Line One 11815 Alterra Pkwy, Suite 1500
Entity Address, City or Town Austin
Entity Address, State or Province TX
Entity Address, Postal Zip Code 78758
City Area Code 512
Local Phone Number 837-7100
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock
Trading Symbol CIA
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000024090
Amendment Flag false
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