UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to COMMISSION FILE NUMBER: 000-16509 CITIZENS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) ...

EXHIBIT 99.1 Citizens, Inc. Reports Second Quarter 2025 Financial Results "The critical steps in our strategic roadmap to accelerate growth are delivering tangible results. For eleven consecutive quarters, Citizens has driven year-over-year growth in first year premiums. The expansion of our product offerings and distribution channels led to our highest-ever total direct insurance in force of $5.35 billion. Our producing agents have increased by 53% since the second quarter of 2024, and up 28% from 2024 yea ...

Company Overview - Citizens, Inc. is a diversified financial services company specializing in life, living benefits, and final expense insurance, serving individuals and small businesses in the U.S., Latin America, and Asia [5] - The company operates two primary segments: Life Insurance and Home Service Insurance, with a focus on innovative products and customer-centric growth strategies [5] Index Inclusion - Citizens, Inc. has been selected to rejoin the Russell 3000® index and the Russell 2000® index effective June 30, 2025, as part of the 2025 Russell indexes reconstitution [1][3] - Membership in the Russell 3000® Index signifies automatic inclusion in the large-cap Russell 1000® Index or small-cap Russell 2000® Index, enhancing visibility among institutional and retail investors [3] Financial Performance - The company reported its highest-ever total direct insurance in force of $5.28 billion, reflecting its commitment to profitable growth and capital management [4] - Citizens, Inc. has maintained positive cash flow from operations annually since 2004, indicating strong operational performance [4] Industry Context - Russell indexes are widely utilized by investment managers and institutional investors, with approximately $10.6 trillion in assets benchmarked against the Russell US indexes as of June 2024 [2] - FTSE Russell, the global index provider, calculates thousands of indexes covering 98% of the investable market globally, with about $18.1 trillion benchmarked to its indexes [6]

Summary of Conference Call for Citizens Inc. (CIA) Company Overview - Citizens Inc. is a diversified financial services company providing life, living benefits, and final expense insurance, along with other financial products to individuals and small businesses in the US, Latin America, and Asia [1][4] - The company is based in Austin, Texas, with a significant presence in Puerto Rico and operations in South America and Taiwan [5] Key Financial Metrics - The company has approximately $1.7 billion in assets [6] - In 2024, two-thirds of sales came from the US, while one-third came from international markets [6][7] - Citizens Inc. was noted as the fastest-growing mature life insurance company in the US in 2024 [7] Growth Strategies - The company is focusing on domestic growth strategies in the US, South Central America, and emerging Asian markets [4] - There has been a dramatic increase in the number of independent agents, growing from a few hundred to over 8,000 agents [6][10] - The company has entered the domestic final expense market, which has been a significant driver of growth [11] Operational Challenges - Despite a 49% growth in first-year premiums, the first-quarter net income was lower compared to the previous year due to initial market entry costs [12] - The company is focused on building operational capacity ("building the factory") to support future growth, which involves upfront expenses that will lead to revenue growth in subsequent years [13] International Expansion - Currently, about 10% of in-force revenue comes from Asia, primarily Taiwan, with plans to expand into other Asian markets such as Hong Kong, Thailand, and Indonesia by 2026 [16][17] - The company aims to solidify its growth plans in South America and the Caribbean, targeting countries with low current exposure [17] Product Development - Citizens Inc. is looking to expand its product offerings beyond life insurance to include investment products and living benefits [11][20] - The company plans to diversify its product categories, which currently include life insurance, investment-focused products, and living benefits [22][23] Client Retention and Revenue Streams - The current business model is primarily transactional, with clients typically purchasing one product [20] - Future strategies include expanding product offerings to existing clients to increase revenue per client [20] Conclusion - Citizens Inc. is positioned for growth with a strong focus on expanding its agent network, entering new markets, and diversifying its product offerings, despite facing initial operational challenges and the need for upfront investments [12][15][20]

Financial Performance - Net income before federal income tax decreased to a loss of $1.8 million in 2025 from income of $4.9 million in 2024[141] - Total revenues decreased to $55,652,000 in Q1 2025 from $57,712,000 in Q1 2024, primarily due to a $3.9 million decrease in investment related gains[167] - Income before federal income tax for the Life Insurance segment dropped to $243,000 in Q1 2025 from $5,800,000 in Q1 2024, mainly due to decreased investment related gains[188] - Home Service Insurance segment income before federal income tax fell to $0.12 million in Q1 2025 from $0.62 million in Q1 2024, a decrease of 80.6%[200] Premium Revenue - Total premium revenues increased by $1.1 million in the three months ended March 31, 2025, but were offset by a $2.5 million increase in total insurance benefits paid or provided[142] - Direct premium revenue increased 8% in the three months ended March 31, 2025, to $42.4 million from $39.1 million in the same period in 2024[147] - Direct first year premiums increased 49%, to $8.8 million in the three months ended March 31, 2025, compared to $5.9 million in the same period in 2024[148] - Total life and A&H premiums increased to $39,797,000 in Q1 2025 from $38,675,000 in Q1 2024, reflecting strong first year sales[168] - Total international premiums increased to $28.79 million in Q1 2025 from $27.80 million in Q1 2024, representing a growth of 3.6%[194] - Domestic premiums surged to $5.79 million in Q1 2025, up from $2.32 million in Q1 2024, marking a significant increase of 149.5%[194] Insurance Benefits and Claims - Total insurance benefits paid increased to $37,575,000 in Q1 2025 from $35,120,000 in Q1 2024, with claims and surrenders rising to $40,098,000[174] - Claims and surrenders benefits increased by 21% from $33,113,000 in Q1 2024 to $40,098,000 in Q1 2025, influenced by matured endowment policies[175] - Total claims and surrenders in the Life Insurance segment rose to $34.14 million in Q1 2025, compared to $27.36 million in Q1 2024, an increase of 24.8%[196] - Death claim benefits decreased to $1.27 million in Q1 2025 from $1.99 million in Q1 2024, a decline of 36.3%[196] Investment Performance - Investment-related losses included a $3.1 million loss in the quarter ended March 31, 2025, related to BlackRock's write-down of its Global Renewable Power Fund III[140] - Net investment income decreased slightly to $17,377,000 in Q1 2025 from $17,487,000 in Q1 2024, with an annualized yield on average invested assets at 4.52%[170] - Investment related losses of $2,894,000 were recorded in Q1 2025, compared to gains of $963,000 in Q1 2024, primarily due to a non-cash write-down of Blackrock ESG investment[171] - Investment-related losses amounted to $2.7 million in Q1 2025, compared to gains of $1.1 million in Q1 2024, indicating a negative shift in investment performance[194] Operating Expenses - Operating expenses increased due to continued investment in business growth and higher costs associated with the equity compensation program[154] - Other general expenses rose by 12% to $12,693,000 in Q1 2025 from $11,338,000 in Q1 2024, driven by strategic growth initiatives[181] - Other general expenses increased due to costs associated with continued investment in the growth of CICA domestic, impacting overall profitability[198] Assets and Capital - Total assets amounted to $1.7 billion, with total direct insurance in force of $5.28 billion and total investments of $1.4 billion[142] - The carrying value of fixed maturity securities increased to $1.25 billion as of March 31, 2025, from $1.22 billion at December 31, 2024, reflecting a growth of 2.0%[211] - Cash and cash equivalents decreased to $18.36 million as of March 31, 2025, down from $29.27 million at December 31, 2024, a decline of 37.4%[210] - The company had no debt as of March 31, 2025, and anticipates meeting its cash needs through cash generated by insurance operations and invested assets[225] - The company has adequate capital resources and the ability to obtain additional capital to support liquidity requirements[234] Regulatory and Strategic Actions - The company is investigating options to reduce regulatory capital and liquidity risk due to rapid growth in first-year sales exceeding current resources[244] - Regulatory capital requirements may affect the company's ability to access capital from insurance operations, necessitating potential cash contributions to subsidiaries[242] - A coinsurance agreement with RGA was entered into in Q2 2024, ceding 50% of final expense business to alleviate expense strain[240] - As of March 31, 2025, domestic insurance subsidiaries were above the required minimum risk-based capital (RBC) levels, with CICA Domestic above 350%[243] - CICA International exceeded the required minimum capital of $750,000 and maintained a premium to surplus ratio of 7 to 1 as of March 31, 2025[245] Cash Flow - Cash provided by operating activities was $0.7 million for the three months ended March 31, 2025, indicating a positive cash flow from operations[227] - Net cash outflows from investing activities totaled $11.4 million for the three months ended March 31, 2025, with $17.5 million spent on fixed maturity securities[228] Future Outlook - The company anticipates continued increases in matured endowment benefits throughout 2025, following a $6.6 million rise in Q1 2025[176] - Approximately 18% of the endowments in force will mature in the next five years, totaling about 6% of the in-force business as of March 31, 2025[236] - Surrender benefits slightly increased in the first three months of 2025, continuing a trend of higher-than-usual surrenders over the last several years[237] - Death benefit payments decreased in the three months ended March 31, 2025, indicating a potential liquidity concern due to higher than expected mortality rates[238] - CICA Domestic sales have significantly increased since Q3 2023, leading to higher commission payments and liquidity concerns[239]

Financial Performance - Total revenues for Q1 2025 were $55.7 million, down from $57.7 million in Q1 2024, while adjusted total revenues increased to $58.5 million from $56.7 million[6]. - The company reported a loss before federal income tax of $1.8 million in Q1 2025, a decline from a profit of $4.9 million in Q1 2024, primarily due to a $3.9 million decrease in investment-related gains[10]. - Adjusted after-tax operating income was $1.0 million, or $0.02 per fully diluted Class A share, down from $3.6 million, or $0.07 per share, in the prior year[11]. - For the three months ended March 31, 2025, the company reported an adjusted income before federal income tax of $1,107,000, a decrease of 72% compared to $3,957,000 in the same period of 2024[34]. - The net loss for the three months ended March 31, 2025, was $1,623,000, compared to a net income of $4,542,000 in the same period of 2024[36]. - The adjusted after-tax operating income for the three months ended March 31, 2025, was $1,005,000, down 72% from $3,649,000 in 2024[37]. - The basic and diluted adjusted earnings per share of Class A common stock were $0.02 for the three months ended March 31, 2025, compared to $0.07 in 2024[37]. Revenue and Premium Growth - Direct first year life and accident & health (A&H) premiums rose by 49% in Q1 2025 compared to the same quarter last year, driven by new product sales and an expanded agent network[7]. - Total direct insurance in force reached a record $5.28 billion, representing a 5% increase from the previous year[7]. - The number of producing agents increased by 50% since March 31, 2024, contributing to premium growth[7]. Expenses and Cash Flow - Total benefits and expenses rose to $57.4 million in Q1 2025, up from $52.8 million in the prior year, mainly due to higher insurance benefits paid[9]. - The company maintained positive net cash from operating activities of $0.7 million in Q1 2025, continuing a trend of positive cash flow since 2004[14]. - Net investment income for Q1 2025 was $17.4 million, slightly down from $17.5 million in the same quarter last year[13]. Shareholder Equity and Book Value - Book value per Class A share increased to $4.37 at March 31, 2025, up 11% from $3.94 a year earlier[11]. - Stockholders' equity at the end of the period was $218,139,000, an increase of 11.7% from $195,183,000 in 2024[39]. - The book value per Class A common share - diluted increased to $4.37 in 2025 from $3.94 in 2024, representing an increase of 10.9%[39]. - The company reported accumulated other comprehensive income (loss) of $(87,074,000) as of March 31, 2025, compared to $(99,770,000) in 2024[39]. Forward-Looking Statements - The company anticipates future performance and operational strategies may be impacted by various risks and uncertainties, as outlined in their forward-looking statements[40]. - The company has no obligation to update any forward-looking statements as a result of new information or future events[40]. Share Information - The weighted average shares of Class A outstanding - diluted increased to 50,912 in 2025 from 50,561 in 2024[37].

International Operations and Risks - Approximately 67% of the company's direct insurance premiums are generated from policyholders in foreign countries, primarily in Latin America and the Pacific Rim [76]. - The company faces significant international regulatory risks, as it does not register to do business in foreign countries and relies on independent consultants for sales [77]. - The company only sells U.S. dollar-denominated products, which may be adversely affected by currency control laws in foreign countries [81]. - Political instability in many operating countries could negatively impact policyholder premium payments and new product sales [82]. - The company has developed an anti-money laundering program to mitigate risks associated with high-risk jurisdictions, such as Colombia and Venezuela [86]. Financial and Liquidity Risks - Higher than expected policyholder claims related to unforeseen events, such as pandemics, could severely disrupt operations and financial condition [95]. - Unanticipated early policyholder withdrawals or surrenders pose a liquidity risk, potentially leading to increased volatility in results [96]. - The company faces potential liquidity risks if policyholders with mature policies opt for lump sum distributions at higher levels than anticipated, particularly with a significant amount of aging endowment products reaching maturity [97]. - Unanticipated early withdrawals or greater than expected lump sum distributions could force the company to sell investments or seek third-party financing, adversely affecting liquidity and financial condition [98]. - The company is subject to regulatory risks that could impact cash flow and financial condition, including the need to maintain minimum capital and surplus requirements [104][109]. - A capital maintenance agreement with the Colorado Division of Insurance requires the company to ensure that CICA Domestic's Risk-Based Capital (RBC) remains above 350%, which could strain capital resources [111]. - The company pays advance commissions on some insurance products, which increases expenses and reduces statutory capital until commissions are recouped, potentially leading to cash flow strain [112]. - The company’s ability to pay dividends or service payments is dependent on its insurance subsidiaries, which are subject to regulatory approval and minimum capital requirements [113]. Market and Economic Conditions - Economic conditions such as inflation or recession could lead to decreased new sales and increased lapses, adversely affecting premium revenue and benefit expenses [120]. - Market volatility, particularly declining equity markets, negatively impacted the fair market value of equity securities, leading to investment-related losses that adversely affected GAAP operating revenue and profitability [122]. - Low or declining interest rates have led to reduced net investment income and low yields due to reinvestment in lower interest rate bonds [122]. - Rising interest rates may reduce the market values of fixed income assets, leading to material unrealized losses and negatively affecting stockholders' equity [122]. Distribution and Sales Risks - The company relies on a small number of foreign agencies for distribution, which may impact its ability to attract effective sales representatives [83]. - The company relies heavily on independent marketing agencies for product distribution, and any loss of these relationships could negatively impact sales and policy retention [100]. - A downgrade by rating agencies could limit the ability to attract independent insurance agencies and reduce product attractiveness to consumers [119]. Technology and Cybersecurity Risks - The company relies on its technology systems to operate its business, and any failure in these systems could materially adversely impact business operations and financial condition [131]. - Significant resources are devoted to maintaining and enhancing information technology systems to protect against cybersecurity risks [128]. - The company may face litigation and financial losses from cyber risks that exceed its insurance policy limits [130]. Shareholder and Regulatory Considerations - The company has approximately 83,000 shareholders, with about 40% holding less than 100 shares each, which may complicate obtaining approval for corporate actions [132]. - The Class A common stock is not registered in any foreign country, which could negatively impact its price if foreign regulatory authorities impose penalties [133]. - Insurance laws in the jurisdictions where the company's insurance subsidiaries are domiciled may discourage takeovers and business combinations that shareholders might consider beneficial [134].

Revenue Growth - Total annual premium revenue grew for the first time since 2017, with insurance issued exceeding $1.1 billion, a 54% increase from 2023 [3] - Total revenues for the full year 2024 were $245.0 million, up from $240.7 million in 2023, while adjusted total revenues increased to $247.6 million from $239.9 million [6] - Direct first year life and A&H premiums increased by 71% in 2024, driven by growth in both domestic and international markets [10] - Total direct insurance in force reached over $5.2 billion at December 31, 2024, marking a significant increase from $4.9 billion in 2023 [7] - The global network of producing agents increased by 72% since December 31, 2023, contributing to sales growth [7] Income and Profitability - Income before federal income tax for the full year 2024 was $15.0 million, down from $26.2 million in 2023, primarily due to a non-cash decrease in investment related gains [10] - Net income for the full year 2024 was $14.9 million, or $0.29 per fully diluted Class A share, compared to $24.4 million, or $0.48 per share in 2023 [10] - Income before federal income tax for the Life Insurance Segment was $5,258, a decline of 36.0% compared to $8,226 in 2023 [27] Cash Flow and Liquidity - Positive net cash provided by operating activities was $31.9 million in 2024, compared to $22.1 million in 2023, reflecting consistent liquidity strength [10] Book Value and Equity - Book value per Class A share increased by 21% over the year-ago to $4.21, while adjusted book value per share excluding AOCI increased by 5% to $6.14 [10] - Book value per Class A common share, diluted, increased to $4.21, up from $3.47 in 2023, reflecting a growth of 21.3% [33] - Stockholders' equity, excluding accumulated other comprehensive income (AOCI), was $306,320, compared to $290,284 in 2023, marking an increase of 5.5% [33] Segment Performance - Total benefits and expenses in the Life Insurance Segment increased to $44,055, up from $43,083, indicating a rise of 2.3% [27] - Total revenues for the Life Insurance Segment decreased to $49,313, down 3.9% from $51,309 in 2023 [27] - Insurance premiums in the Life Insurance Segment rose to $38,522, a 6.9% increase from $36,017 in the same period last year [27] - The Home Service Insurance Segment reported total revenues of $13,977, down 8.6% from $15,295 in 2023 [27] Future Outlook - The company plans to introduce 2 to 3 new products or major product enhancements, achieving product enhancement and two new products in 2024 [10] - The company anticipates continued focus on operational strategy and market expansion, with forward-looking statements indicating potential growth opportunities [34]

Financial Performance - Total revenues for the three months ended September 30, 2024, increased to $61,731,000, up from $59,390,000 in the same period of 2023, representing a growth of 3.8%[22] - Net income for the three months ended September 30, 2024, was $2,790,000, slightly up from $2,698,000 in the same period of 2023, indicating a growth of 3.4%[22] - Total revenues for the nine months ended September 30, 2024, reached $181,527 thousand, an increase from $173,831 thousand in the same period of 2023, representing a growth of approximately 4.0%[130] - Life insurance premiums for the nine months ended September 30, 2024, were $91,667 thousand, compared to $86,128 thousand for the same period in 2023, reflecting a growth of about 6.0%[130] - The net investment income for the nine months ended September 30, 2024, was $52,404 thousand, up from $51,687 thousand in the prior year, indicating a slight increase of approximately 1.4%[130] Assets and Liabilities - Total assets as of September 30, 2024, amounted to $1,735,809,000, an increase from $1,668,928,000 at the end of 2023, marking a growth of 4.0%[21] - Total liabilities increased to $1,528,236,000 as of September 30, 2024, compared to $1,496,799,000 at the end of 2023, reflecting a rise of 2.1%[21] - The company’s retained earnings increased to $53,441,000 as of September 30, 2024, up from $42,150,000 at the end of 2023, indicating a growth of 26.8%[21] Investments - The company reported a total of $1,445,109,000 in total investments as of September 30, 2024, up from $1,402,347,000 in 2023, which is an increase of 3.0%[20] - Fixed maturity securities accounted for 86.2% of total cash and invested assets, totaling $1,273,497 thousand as of September 30, 2024[42] - The total cash and invested assets increased to $1,477,491 thousand as of September 30, 2024, compared to $1,429,344 thousand at the end of 2023[42] Income and Expenses - The total comprehensive income for the nine months ended September 30, 2024, was $34,763,000, compared to $24,073,000 in 2023, reflecting an increase of 44.1%[22] - The total benefits and expenses for the nine months ended September 30, 2024, were $156,431 thousand, an increase from $154,431 thousand in the same period of 2023[130] - The company accrued approximately $5 million in potential liabilities related to a trade secret lawsuit, pending the outcome of an appeal[111] Insurance Operations - The Life Insurance segment issued endowment contracts and ordinary whole life insurance, while the Home Service Insurance segment focused on middle- and lower-income markets[123][124] - The company entered into a coinsurance agreement with RGA Reinsurance Company, allowing RGA to reinsure 50% of its newly written final expense business, enhancing capacity for growth[101] - The Home Service Insurance segment reported a loss of $80,000 for the three months ended September 30, 2024, compared to a loss of $443,000 in the same period of 2023[190] Policy Benefits and Reserves - The present value of expected future policy benefits for the Life Insurance segment was $1,226,514 at the end of the period, compared to $1,168,472 at the beginning of the year, indicating an increase of about 5%[84] - The total life insurance reserves increased to $1,236,873,000 as of September 30, 2024, from $1,147,601,000 in the previous year, marking an increase of approximately 7.8%[89] - Future policy benefit reserves increased due to higher sales and persistency, reflecting the liability for expected future policy benefits[183] Cash Flow and Operating Activities - The company reported a net cash provided by operating activities of $21,092 thousand for the nine months ended September 30, 2024, an increase from $15,444 thousand in the prior year, marking a growth of 36.1%[26] - The company experienced a net cash used in investing activities of $13,334 thousand for the nine months ended September 30, 2024, compared to $18,471 thousand in 2023, showing a reduction of 27.8%[27] Market and Growth Strategies - The company continues to focus on expanding its market presence and enhancing its product offerings to drive future growth[88] - First-year premiums in the Life Insurance segment nearly doubled quarter-over-quarter and year-to-date compared to 2023, driven by the expansion of domestic distribution[148] - The Life Insurance segment growth was driven by new domestic final expense products, which accounted for over 50% of insurance issued, and international whole life products, which made up 68% of total international insurance issued[170]

Financial Performance - Total revenues increased 4% to $61.7 million in Q3 2024, compared to $59.4 million in Q3 2023[4] - Net income for Q3 2024 was $2.8 million, or $0.05 per fully diluted Class A share, compared to $2.7 million, or $0.05 per share, in Q3 2023[9] - Income before federal income tax for the three months ended September 2024 was $3,037,000, down from $4,641,000 for the same period in 2023, representing a decrease of 34.5%[23] - Adjusted income before federal income tax for the nine months ended September 2024 was $13,301,000, compared to $19,041,000 for the same period in 2023, reflecting a decline of 30.4%[23] Insurance Metrics - Insurance issued reached a record $307.6 million in Q3 2024, a 75% increase year-over-year, marking the fourth consecutive quarter of record insurance issued[3] - Direct first year life and A&H premiums increased 70% to $8.8 million in Q3 2024, continuing eight consecutive quarters of year-over-year growth[4] - Total direct insurance in force reached $5.2 billion as of September 30, 2024, up from $4.8 billion a year earlier[3] Agent Growth - The number of producing agents increased by 86% since December 31, 2023, and by 57% since March 31, 2024[3] Cash Flow and Equity - Positive net cash provided by operating activities was $9.7 million in Q3 2024, with the company maintaining positive cash flow since 2004[11] - Stockholders' equity as of September 2024 was $207,573,000, an increase from $152,747,000 as of September 2023, indicating a growth of 36%[24] - The company’s stockholders' equity, excluding accumulated other comprehensive income (AOCI), was $302,256,000 as of September 2024, compared to $279,414,000 in September 2023, reflecting a growth of 8.1%[24] Book Value - Book value per Class A share increased 35% to $4.16 compared to the same quarter last year[4] - Book value per Class A common share, diluted, excluding AOCI, increased to $6.06 as of September 2024 from $5.63 as of September 2023, marking an increase of 7.6%[24] Future Outlook - The company aims to increase first year premium revenues by at least 25% in 2024, with a year-to-date increase of 66% as of September 30, 2024[5] - The company anticipates continued operational strategy adjustments and capital expenditures in the upcoming quarters, although specific projections are not guaranteed[25] - The company has not provided specific guidance for future performance but acknowledges potential risks and uncertainties that may affect outcomes[25] Legal and Investment - Legal fee accruals for the nine months ended September 2024 included a charge of $3,500,000, which was not present in the same period in 2023[23] - The company reported investment-related gains of $1,537,000 for the nine months ended September 2024, compared to losses of $477,000 for the same period in 2023[23] Property Insurance Performance - The company’s property insurance business reported a loss of $74,000 for the nine months ended September 2024, compared to a loss of $1,164,000 for the same period in 2023, indicating an improvement[23]