Financial Performance - Net income before federal income tax for Q3 2025 increased to $4.5 million from $3.0 million in Q3 2024, driven by a $1.1 million increase in total revenues and a $0.4 million decrease in total benefits and expenses [157]. - Year-to-date net income before federal income tax for the nine months ended September 30, 2025 decreased to $9.6 million from $11.3 million in the same period in 2024 [157]. - Total revenues for the nine months ended September 30, 2025 were $183.546 million, up from $181.527 million in 2024, reflecting a growth of 1.1% [186]. - Total income before federal income tax for the three months ended September 30, 2025, was $4.479 million, an increase of 47.5% compared to $3.037 million in the same period of 2024 [208]. Premiums and Insurance - Direct premium revenue increased 4% in Q3 2025 to $46.6 million from $44.7 million in Q3 2024, and increased 6% year-to-date to $135.3 million from $127.7 million [164]. - Direct first year premiums increased 8% in Q3 2025 to $9.5 million from $8.8 million in Q3 2024, and increased 23% year-to-date to $27.8 million from $22.6 million [165]. - The company issued $777.6 million in new insurance in the first nine months of 2025, reflecting growth in its in-force business [180]. - Life Insurance segment revenues for the three months ended September 30, 2025, totaled $47.582 million, slightly up from $47.345 million in 2024, driven by a $0.607 million increase in premiums [209]. - The Life Insurance segment's total premiums for the nine months ended September 30, 2025, were $94.582 million, an increase of 3.2% from $91.667 million in 2024 [213]. Claims and Expenses - Claims and surrenders increased to $124.594 million for the nine months ended September 30, 2025, up from $104.121 million in 2024, representing a 19.7% rise [193]. - Total benefits and expenses for the nine months ended September 30, 2025 were $173.940 million, compared to $170.263 million in 2024 [192]. - Claims and surrenders in the Life Insurance segment rose to $38.603 million for the three months ended September 30, 2025, up from $30.083 million in 2024, primarily due to increased matured endowments [221]. - Death claim benefits for the three months ended September 30, 2025, were $4,273,000, down 17.0% from $5,154,000 in the same period of 2024 [228]. Investment Performance - The company experienced a $3.3 million decrease in investment-related gains and losses primarily due to the BlackRock write-down [157]. - Net investment income increased by $1.7 million in Q3 2025, aided by a one-time dividend of $1.7 million from a limited partnership investment [170]. - Net investment income for the nine months ended September 30, 2025 was $53.663 million, compared to $52.404 million in 2024, marking a 2.4% increase [188]. - Investment related losses for the Life Insurance segment were $2.063 million for the three months ended September 30, 2025, compared to gains of $0.936 million in the same period of 2024 [218]. Assets and Capital - Total assets as of September 30, 2025 were $1.7 billion, with total direct insurance in force of $5.4 billion and total investments of $1.4 billion [159]. - The company's cash and invested assets as of September 30, 2025, amounted to $1.4 billion, with 88% invested in fixed maturity securities [231]. - The carrying value of fixed maturity securities increased to $1.27 billion as of September 30, 2025, from $1.22 billion at December 31, 2024, reflecting interest rate sensitivity [233]. - The company had no debt as of September 30, 2025, and anticipates meeting short-term and long-term cash needs through cash generated from insurance operations and invested assets [247]. Regulatory and Strategic Considerations - The company is subject to regulatory capital requirements that could affect its ability to access capital from insurance operations [263]. - CICA Domestic's required commission payments may exceed current resources due to significant growth in first year sales, prompting the exploration of additional capital options [265]. - CICA International exceeded the required minimum capital of $750,000 and maintained a premium to surplus ratio of 7 to 1 as of September 30, 2025 [266]. - The company entered into a coinsurance reinsurance agreement with RGA in the second quarter of 2024, ceding 50% of its final expense business to alleviate expense strain [261].

Market Performance - The S&P/ASX 200 closed at 8,894.80 on November 3, 2025, marking a 0.1% increase from the opening value of 8,881.90 [2][9] - The index experienced a decline of 0.5% during the day, closing at 8,838.40 as of 2346 GMT [1][9] - The benchmark finished 0.4% higher in October, despite a recent loss of 1.78% over the last five days [1][9] Sector Performance - Financial stocks declined by 0.6%, with major lenders Commonwealth Bank of Australia (CBA) and National Australia Bank falling by 0.8% and 0.6%, respectively [8][9] - Real estate and heavyweight financial stocks were significant contributors to the market's decline [1][9] Top Gainers - Megaport Limited (MP1) led the S&P/ASX 200 with a gain of 7.59%, closing at $17.71 [5][9] - HMC Capital Limited (HMC) increased by 4.84% to $3.25, while Catalyst Metals Limited (CYL) rose by 4.12% to $7.07 [5][9] - Life360 Inc. (360) advanced 3.22% to finish at $51.36, and Champion Iron Limited (CIA) added 2.89%, closing at $5.70 [5][9] Top Losers - Lynas Rare Earths Limited (LYC) led the decliners, dropping 8.07% to $14.02 [6][9] - Steadfast Group Limited (SDF) fell by 6.97% to $5.21, and Pilbara Minerals Limited (PLS) slipped 5.15% to $3.13 [6][9] - Guzman y Gomez Limited (GYG) declined 4.98% to $25.39, while Deep Yellow Limited (DYL) rounded out the biggest losers with a 4.46% drop to $1.72 [6][9] Economic Outlook - The Reserve Bank of Australia (RBA) is expected to maintain interest rates in its upcoming policy decision, with the next anticipated rate cut in 2026 [7][9] - Recent hawkish comments from Federal Reserve officials have negatively impacted investor sentiment [7][9] - Westpac, the third-largest lender by market value, reported a decline in annual profit due to rising costs and competitive margin pressures, leading to a 0.7% drop in its shares [8][9]

Summary of Citizens Inc. Conference Call (October 22, 2025) Company Overview - Citizens Inc. trades on the NYSE under the ticker symbol CIA and operates as 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 U.S., Latin America, and Asia [1][2] - The company has approximately 250 employees and policyholders in 75 countries, with over 3,000 producing agents, a significant increase from previous years [2] Financial Performance - Citizens Inc. reported $1.7 billion in assets and over $5 billion in insurance in force [2] - The company experienced substantial growth, with domestic sales increasing from less than $20 million in 2023 to nearly $50 million in 2024, marking it as the fastest-growing mature life insurance company in the U.S. [6][7] Strategic Initiatives - The company is preparing for a high level of matured endowment benefit payments expected in 2025 by developing new products to retain funds and protect policyholders [4][5] - Citizens Inc. has focused on expanding its agent network, increasing from less than 1,000 producing agents in 2023 to over 3,000 [6][10] - The company emphasizes the importance of agent training and retention to drive growth, with a focus on providing a superior experience to agents [12] Product Development - Citizens Inc. is investing in new systems to enhance speed to market for product development, indicating a shift from offering static products to being more responsive to market demands [8] - The company plans to introduce a variety of new products in the coming years to cater to evolving market needs [8] Competitive Advantages - A key competitive advantage is the ability to white label products, allowing major agencies to sell products under their own branding, which has contributed to 60% of the domestic final expense business [11] - The company aims to improve agent ergonomics, making it easier for agents to work with them, thereby fostering loyalty and increasing business volume [12][14] Future Outlook - Citizens Inc. is in growth mode, with plans to expand into Asia and additional U.S. states, indicating a proactive approach to market expansion [15] - The leadership expresses optimism about the company's trajectory and looks forward to providing updates on future developments [15]

Company Overview - Champion Iron has a nameplate capacity of 15 million tonnes per annum (mtpa) of high-purity 66.2% Fe iron ore concentrate[18] - The company's enterprise value is approximately C$2.5 billion with EBITDA of C$348 million over the last 12 months[19] - Management ownership is 9.0% and the government of Québec owns 8.3%[19] Green Steel Transition - Steelmaking represents approximately 10% of global CO2 emissions, with 85% of these emissions generated by the reduction and smelting of iron ore[24] - DRI production grew at a compounded annual growth rate of 6.2% since 2020, while crude steel production saw a slight decline[32] - Europe has invested approximately €14.6 billion to support 15 DRI/EAF projects[35] Product Quality and Market Position - Champion's DRPF project is expected to produce a market-leading DR quality product with 69% Fe[42] - Australia's major iron ore producers' average contaminants increased by 12% over the last decade[47] - Bloom Lake's emission intensity is 8.95 kg of CO2 per tonne of iron ore produced[49] Recent Results and Financials - FY25 production was 13.8M wmt, representing 92.2% of Bloom Lake's nameplate capacity of 15M wmt[54] - FY25 saw record annual iron ore concentrate sales of 13.5M dmt, a 15.9% year-over-year increase[65] - Total cash cost for FY25 was $78.3/dmt[68] - The company has $176.1 million in cash and cash equivalents and $185.3 million in working capital as of June 30, 2025[73] Growth Initiatives - The DRPF project is progressing as scheduled, with commissioning planned to start in December 2025 and commercial shipments expected in the first half of calendar 2026[92] - Cumulative investments in the DRPF project totaled $387.0 million as of June 30, 2025, out of an estimated total capital expenditure of $470.7 million[92] - Nippon Steel and Sojitz made initial cash contributions of $68.6M to Kami Iron Mine Partnership for a 49% interest in the Kami Project[98]

Core Insights - Citizens, Inc. provided a positive business update highlighting its growth and operational initiatives during a webcast on September 24, 2025 [1][4] - The company aims to deliver sustainable growth in premiums, adjusted profits, and adjusted book value per share through its strategic roadmap [2] Growth Initiatives - Citizens reported record-setting results, with total direct insurance in force reaching $5.35 billion as of June 30, 2025, an increase of 4.4% compared to the same period in 2024 [7] - Direct first year life and accident & health (A&H) premiums increased by 20% in Q2 2025 compared to the same quarter in the previous year, marking eleven consecutive quarters of year-over-year growth in first year premiums [7] - The company has seen renewal premium growth in Q2 2025, driven by strong first year sales in 2024 [7] - Citizens expanded its global network of producing agents by 53% since June 30, 2024, and by 28% since December 31, 2024, achieving a record number of agents [7] Business Model and Market Position - Citizens operates as a diversified financial services company specializing in life, living benefits, and final expense insurance, serving customers in the U.S., Latin America, and Asia [8] - The company is a market leader in U.S. Dollar denominated life insurance and is growing in niche markets in the U.S. through its final expense products [8] - Citizens' customer-centric growth strategy includes offering innovative products in multiple languages, including English, Spanish, Portuguese, and Mandarin [8]

Summary of Citizens Inc. Conference Call Company Overview - Citizens Inc. is a diversified financial services company listed on the NYSE under the ticker CIA, providing life, living benefits, and final expense insurance, along with other financial products to individuals and small businesses in the U.S., Latin America, and Asia [1][4] Core Business Insights - Citizens Inc. positions itself as a high-growth life insurance company, despite being 50 years old, aiming to combine the safety of a U.S.-based life insurance company with growth potential [5][39] - The company has approximately 250 employees and over 3,000 producing agents, with a significant increase in agent numbers from a few hundred in previous years [6][18] - The company has $1.7 billion in assets and over $5 billion in enforced policies, generating $173 million in premium revenue in 2024 [7][8] Revenue Breakdown - About one-third of revenue comes from the U.S., while two-thirds is generated internationally, with significant growth in U.S. sales in 2024 [9][10] - The company has expanded its domestic life insurance operations from five states to 43, with plans to reach 49 states, excluding New York due to regulatory complexities [11][20] Market Strategy - Citizens Inc. has successfully penetrated the South American market, leveraging over 50 years of experience in the region, which many U.S. companies have avoided [10][11] - The company has launched a new product targeting the domestic final expense market, which is largely underserved, focusing on ease of sale for agents and clients [12][30] - A unique white-label strategy allows agency partners to sell customized products under their own branding, contributing to 60% of domestic final expense sales [13][35] Growth Opportunities - The company sees potential in expanding its knowledge of Latin markets into the U.S. to serve the large underserved Latin population [16][25] - Internationally, Citizens Inc. is exploring opportunities in countries like Indonesia, Laos, Cambodia, and Thailand, aiming for cost-effective market entry [33][34] Financial Health - Citizens Inc. has maintained a record number of global producing agents, up 53% from the previous year, and has achieved growth without incurring debt [18][19] - The company has a low-risk balance sheet with mortality-related liabilities and a strong investment portfolio managed with global reinsurers [21] Future Outlook - The company anticipates a peak in maturity payments from policies sold in the early 2000s but is focused on growing other business segments to offset this [38] - Citizens Inc. aims to set the stage for long-term revenue growth through its sales strategies, likening its model to a subscription service that compounds revenue over time [40][41] Key Takeaways - Citizens Inc. is positioned as a unique player in the life insurance market, combining growth with stability, and is actively expanding both domestically and internationally [39][42] - The company’s innovative strategies, such as the white-label product offering and focus on underserved markets, are expected to drive future growth [12][35]

Company Overview - Citizens Inc specializes in international life and endowment products and domestic final expense insurance in niche markets globally[11] - The company has over 250 employees, more than 3,300 producing agents, and $1.7 billion in assets[12] - Gross insurance in-force reached a highest-ever of $5.35 billion[12] - In 2024, premium revenue was diversified, with 34% from Taiwan, 15% from the United States, and smaller percentages from other countries[12] - The company rejoined the Russell 3000® and Russell 2000® indexes in June 2025[12] Financial Performance and Growth - The company's stock price increased 76% compared to the S&P 500 increase of 19% in the 12-month period ended 9/8/25[30] - Total revenues reached $65.1 million in Q2 2025, up from $62.1 million in the year-ago quarter[89] - Direct first-year life and A&H premiums increased by 20% in Q2 2025[37, 89] - Book value per share (GAAP) grew 18% year-over-year[97] Strategic Initiatives - The company's strategic roadmap focuses on driving revenue and EPS growth[26] - The company has increased its global network of producing agents by 53% since Q2 2024[19, 37] - The company is expanding its licenses to 43 underpenetrated U S states and Washington, DC[15, 19, 44]

Company Overview - Citizens (CIA) shares increased by 5.4% to close at $5.89, with a notable trading volume, and have gained 11.4% over the past four weeks [1] - The company is positioned for growth due to a solid customer base, strong presence in underserved markets, streamlined sales processes, and new product introductions [1] Financial Strength - Citizens has a low-risk business model and a strong balance sheet supported by a prudent investment portfolio, reserves, and liquidity, enhancing its financial flexibility [2] - The company has no debt and has access to a $20 million line of credit [2] Earnings Expectations - Citizens is expected to report quarterly earnings of $0.06 per share, reflecting a year-over-year increase of 20%, with revenues projected at $63.46 million, up 4.2% from the previous year [2] - The consensus EPS estimate for Citizens has remained unchanged over the last 30 days, indicating stability in earnings expectations [4] Industry Context - Citizens operates within the Zacks Insurance - Life Insurance industry, where Jackson Financial (JXN) also operates, showing a 1.2% increase in its last trading session [4] - Jackson Financial's consensus EPS estimate has remained unchanged at $5.23, representing a 13.7% increase year-over-year, and it holds a Zacks Rank of 2 (Buy) [5]

Core Viewpoint - Citizens, Inc. will hold a business update conference call and webcast on September 24, 2025, to discuss company developments and respond to questions from analysts and investors [1][2]. Company Overview - Citizens, Inc. (NYSE: CIA) is a diversified financial services company that specializes in life, living benefits, and final expense insurance, serving individuals and small businesses in the U.S., Latin America, and Asia [3]. - The company operates two primary segments: Life Insurance, where it is a market leader in U.S. Dollar denominated life insurance, and Home Service Insurance, primarily in the U.S. Gulf coast region [3]. - Citizens employs a customer-centric growth strategy, offering innovative products in multiple languages including English, Spanish, Portuguese, and Mandarin [3]. - The company's stock is included in the Russell 2000® and Russell 3000® indexes [3].

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial information, including financial statements and related notes [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Citizens, Inc. and its subsidiaries, including balance sheets, statements of operations and comprehensive income (loss), statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial components [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Assets | $1,712,500 | $1,685,325 | | Total Liabilities | $1,483,474 | $1,474,970 | | Total Stockholders' Equity | $229,026 | $210,355 | - Fixed maturity securities available-for-sale increased to **$1,242,271 thousand** at June 30, 2025, from **$1,220,961 thousand** at December 31, 2024[9](index=9&type=chunk) [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section details the company's revenues, expenses, net income, and other comprehensive income over specific periods | Metric (In thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $65,086 | $62,084 | $120,738 | $119,796 | | Net Income (Loss) | $6,459 | $3,959 | $4,836 | $8,501 | | Basic and Diluted EPS (Class A) | $0.13 | $0.08 | $0.10 | $0.17 | | Other Comprehensive Income (Loss) | $3,419 | $(8,154) | $12,310 | $10,231 | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section outlines changes in the company's equity, including net income, comprehensive income, and stock compensation | Metric (In thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Total Stockholders' Equity | $210,355 | $229,026 | | Net Income (Loss) (Six Months) | $57,062 (Retained Earnings) | $61,898 (Retained Earnings) | | Other Comprehensive Income (Loss) (Six Months) | $(95,965) | $(83,655) | - Stock-based compensation contributed **$1,525 thousand** to stockholders' equity during the six months ended June 30, 2025[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $4,218 | $11,376 | | Net cash used in investing activities | $(6,635) | $(10,201) | | Net cash used in financing activities | $(4,183) | $(1,828) | | Net increase (decrease) in cash and cash equivalents | $(6,600) | $(653) | | Cash and cash equivalents at end of period | $22,671 | $26,344 | [Notes to Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations and disclosures supporting the consolidated financial statements [(1) FINANCIAL STATEMENTS](index=10&type=section&id=(1)%20FINANCIAL%20STATEMENTS) This note describes the company's reportable segments and the types of insurance products offered within each - The Company operates through two reportable segments: **Life Insurance** (CICA Domestic and CICA International) and **Home Service Insurance** (SPLIC and MGLIC)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - CICA Domestic issues ordinary whole life, final expense, and life products with living benefits in the U.S., while CICA International offers U.S. dollar-denominated endowment and whole life products to non-U.S. residents[31](index=31&type=chunk)[32](index=32&type=chunk) - The Home Service Insurance segment focuses on middle- and lower-income markets in Louisiana, Mississippi, and Arkansas, providing small face amount whole life, industrial life, pre-need policies, and critical illness policies[33](index=33&type=chunk) [(2) ACCOUNTING PRONOUNCEMENTS](index=11&type=section&id=(2)%20ACCOUNTING%20PRONOUNCEMENTS) This note discusses the impact of new accounting standards on the company's financial disclosures - The Company is evaluating ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures," effective for annual periods after December 15, 2026, which will impact disclosures but not financial condition or results of operations[39](index=39&type=chunk) [(3) INVESTMENTS](index=11&type=section&id=(3)%20INVESTMENTS) This note details the company's investment portfolio, including fixed maturity and equity securities | Investment Category (In thousands) | June 30, 2025 (Amount) | June 30, 2025 (%) | December 31, 2024 (Amount) | December 31, 2024 (%) | | :--------------------------------- | :--------------------- | :---------------- | :------------------------- | :-------------------- | | Fixed maturity securities | $1,242,271 | 86.5% | $1,220,961 | 86.0% | | Equity securities | $5,478 | 0.4% | $5,447 | 0.4% | | Policy loans | $69,648 | 4.8% | $71,216 | 5.0% | | Other long-term investments | $96,424 | 6.7% | $93,604 | 6.6% | | Cash and cash equivalents | $22,671 | 1.6% | $29,271 | 2.0% | | Total cash and invested assets | $1,436,492 | 100.0% | $1,420,499 | 100.0% | | Fixed Maturity Securities (In thousands) | June 30, 2025 (Gross Unrealized Losses) | December 31, 2024 (Gross Unrealized Losses) | | :--------------------------------------- | :-------------------------------------- | :------------------------------------------ | | Total fixed maturity securities | $170,242 | $185,741 | - The Company recorded **no credit valuation losses** on fixed maturity securities for the three and six months ended June 30, 2025 and 2024[48](index=48&type=chunk) - As of June 30, 2025, **98.6%** of the fair value of the fixed maturity securities portfolio was rated investment grade, with unrealized losses primarily due to noncredit-related factors like changes in credit spreads and rising interest rates[51](index=51&type=chunk)[52](index=52&type=chunk) [(4) FAIR VALUE MEASUREMENTS](index=15&type=section&id=(4)%20FAIR%20VALUE%20MEASUREMENTS) This note explains the methodologies and inputs used to determine the fair value of financial instruments - Fixed maturity securities are primarily classified as **Level 2 assets** (**$1.2 billion**, **92.0%** of total financial assets at fair value) and valued using third-party pricing sources[67](index=67&type=chunk) - Equity securities are classified as **Level 1 assets**, with fair values based on quoted market prices[68](index=68&type=chunk) - Limited partnerships, policy loans, residential mortgage loans, and annuity liabilities are generally classified as **Level 3**, with fair values estimated using NAV per share or discounted cash flows with unobservable inputs[69](index=69&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk) [(5) DEFERRED POLICY ACQUISITION COSTS AND COST OF INSURANCE ACQUIRED](index=20&type=section&id=(5)%20DEFERRED%20POLICY%20ACQUISITION%20COSTS%20AND%20COST%20OF%20INSURANCE%20ACQUIRED) This note details balances and changes in deferred policy acquisition costs and cost of insurance acquired | Metric (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Consolidated DAC balance | $208,944 | $199,635 | | Consolidated COIA balance | $9,269 | $9,446 | - DAC capitalization decreased for the six months ended June 30, 2025, compared to the prior year, mainly due to increased ceding commissions and expenses from a full six months of reinsurance with RGA, partially offset by higher first-year sales[83](index=83&type=chunk) [(6) POLICYHOLDERS' LIABILITIES](index=22&type=section&id=(6)%20POLICYHOLDERS%27%20LIABILITIES) This note outlines policyholder obligations, including future policy benefit reserves and policyholder funds | Policy Liabilities (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total future policy benefit reserves | $1,171,356 | $1,173,105 | | Total policyholders' funds | $255,779 | $245,020 | | Weighted-Average Duration (In years) | June 30, 2025 (Life Insurance) | June 30, 2025 (Home Service Insurance) | | :----------------------------------- | :----------------------------- | :------------------------------------- | | Permanent (current discount rate) | 8.5 | 14.2 | | Permanent Limited Pay (current discount rate) | 7.6 | 13.1 | | Weighted-Average Interest Rate (%) | June 30, 2025 (Life Insurance) | June 30, 2025 (Home Service Insurance) | | :--------------------------------- | :----------------------------- | :------------------------------------- | | Permanent (current discount rate) | 5.12% | 5.62% | | Permanent Limited Pay (current discount rate) | 5.12% | 5.58% | [(7) REINSURANCE](index=29&type=section&id=(7)%20REINSURANCE) This note describes reinsurance arrangements and their impact on insurance in force and recoverable amounts - CICA International increased its retention amount for new policies to **$250,000** from **$100,000** as of April 1, 2025[103](index=103&type=chunk) - CICA Domestic entered a coinsurance agreement with RGA Reinsurance Company in Q2 2024, reinsuring **50%** of its newly written final expense business[103](index=103&type=chunk) | Reinsurance Metric (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Net life insurance in force | $4,500,351 | $4,409,718 | | Reinsurance recoverable | $9,400 | $6,900 | [(8) COMMITMENTS AND CONTINGENCIES](index=30&type=section&id=(8)%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses the company's financial commitments and potential contingent liabilities - CICA International is committed to fund investments up to **$10.5 million** related to limited partnerships as of June 30, 2025[109](index=109&type=chunk) - The Company renewed its **$20 million** senior secured revolving credit facility with Regions Bank, maturing May 5, 2027, and had not borrowed any funds as of June 30, 2025[110](index=110&type=chunk)[113](index=113&type=chunk) [(9) STOCKHOLDERS' EQUITY AND RESTRICTIONS](index=31&type=section&id=(9)%20STOCKHOLDERS%27%20EQUITY%20AND%20RESTRICTIONS) This note details stockholders' equity composition and regulatory capital requirements for insurance subsidiaries - As of August 1, 2025, the Registrant had **50,245,367 shares** of Class A common stock outstanding[4](index=4&type=chunk) | EPS (Class A Common Stock) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :----------------------------- | :----------------------------- | | Basic and diluted | $0.10 | $0.17 | - All domestic insurance subsidiaries exceeded minimum NAIC regulatory capital requirements at June 30, 2025, with CICA Domestic's RBC above **350%**[119](index=119&type=chunk) - CICA International exceeded Puerto Rico's minimum capital of **$750,000** and premium to surplus ratio of **7 to 1** at June 30, 2025[120](index=120&type=chunk) [(10) SEGMENT AND OTHER OPERATING INFORMATION](index=32&type=section&id=(10)%20SEGMENT%20AND%20OTHER%20OPERATING%20INFORMATION) This note provides financial performance and operational details for the company's distinct business segments - The Life Insurance segment issues endowment and whole life contracts to non-U.S. residents and whole life, final expense, and living benefits products in the U.S.[122](index=122&type=chunk) - The Home Service Insurance segment focuses on lower-income markets in Louisiana, Mississippi, and Arkansas, offering small face amount whole life, industrial life, pre-need policies, and critical illness policies[123](index=123&type=chunk) | Income (Loss) Before Federal Income Tax (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------------- | :----------------------------- | :----------------------------- | | Life Insurance | $8,391 | $13,272 | | Home Service Insurance | $1,727 | $2,034 | | Other Non-Insurance Enterprises | $(4,991) | $(7,079) | | Total Earned Premiums by Country (In thousands) | Six Months Ended June 30, 2025 | | :---------------------------------------------- | :----------------------------- | | United States | $33,483 | | Colombia | $13,015 | | Taiwan | $7,053 | | Venezuela | $6,672 | | Ecuador | $6,566 | | Argentina | $5,019 | [(11) INCOME TAXES](index=38&type=section&id=(11)%20INCOME%20TAXES) This note details income tax expense, effective tax rates, and deferred tax assets and liabilities | Effective Tax Rate (%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Tax benefit effective rates | 5.7% | (3.3)% | - CICA International benefits from a Puerto Rico tax exemption decree, freezing the income tax rate at **0%** on taxable earnings up to **$1.2 million** and **4%** on earnings exceeding **$1.2 million**[136](index=136&type=chunk) - Valuation allowances on capital deferred tax assets were **$4.8 million** at June 30, 2025, and **$5.0 million** at June 30, 2024[137](index=137&type=chunk) - The Company is assessing the impact of the newly enacted One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements[138](index=138&type=chunk) [(12) OTHER COMPREHENSIVE INCOME (LOSS)](index=38&type=section&id=(12)%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) This note presents components of other comprehensive income (loss) and their impact on accumulated balances | Accumulated Other Comprehensive Income (Loss) (In thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------------------------------- | :------------ | :---------------- | | Balance, net of tax | $(83,655) | $(95,965) | | Other Comprehensive Income (Loss) Components (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------- | :----------------------------- | :----------------------------- | | Unrealized gains (losses) on fixed maturity securities, net | $18,828 | $(27,027) | | Change in current discount rate for liability for future policy benefits | $(4,586) | $39,517 | [(13) RELATED PARTY TRANSACTIONS](index=39&type=section&id=(13)%20RELATED%20PARTY%20TRANSACTIONS) This note confirms no material changes in routine related party transactions during the reporting period - No material changes occurred in routine related party transactions (management service agreements, tax sharing, inter-company dividends, and capital contributions) during the six months ended June 30, 2025[142](index=142&type=chunk) [(14) SUBSEQUENT EVENTS](index=39&type=section&id=(14)%20SUBSEQUENT%20EVENTS) This note reports significant events occurring after the balance sheet date but before financial statement issuance - No other significant subsequent events requiring recognition or disclosure were identified through the report issuance date[143](index=143&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key drivers, segment performance, investment strategies, and liquidity management, along with forward-looking statements and critical accounting policies [Forward-Looking Statements](index=40&type=section&id=Forward-Looking%20Statements) This section cautions that the report contains statements about future expectations subject to risks and uncertainties - The report contains forward-looking statements subject to risks and uncertainties, and the Company assumes no obligation to revise or update them, except as required by law[145](index=145&type=chunk)[146](index=146&type=chunk) [Objective of Our Management's Discussion and Analysis](index=40&type=section&id=Objective%20of%20Our%20Management%27s%20Discussion%20and%20Analysis) This section outlines the MD&A's purpose: to provide insights into financial changes and future performance trends - The MD&A aims to provide investors with information to assess material changes in financial condition (December 31, 2024, to June 30, 2025) and results of operations (three and six months ended June 30, 2025, compared to 2024), and to discuss trends affecting future performance[148](index=148&type=chunk) [Overview](index=40&type=section&id=Overview) This section describes Citizens, Inc.'s business, product offerings, and operating segments - Citizens, Inc. provides insurance products with living and death benefits, specializing in individual whole life, endowment, and final expense insurance in niche markets globally[149](index=149&type=chunk) - Revenues are primarily derived from life insurance premiums and net investment income, with expenses including sales costs, operating expenses, and income taxes[150](index=150&type=chunk) - The Company operates in two segments: **Life Insurance** (CICA Domestic and CICA International) and **Home Service Insurance** (Security Plan Life Insurance Company)[151](index=151&type=chunk) [Events That Impacted Our Business](index=41&type=section&id=Events%20That%20Impacted%20Our%20Business) This section highlights significant events and factors that have influenced the company's business operations - The business has been impacted by factors described in the 2024 Form 10-K Risk Factors and events in the Form 10-Q for Q1 2025, including a BlackRock write-down[152](index=152&type=chunk) [Financial Highlights](index=41&type=section&id=Financial%20Highlights) This section summarizes key financial performance indicators and significant changes during the reporting period | Metric (In millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------- | :------ | :------ | :------- | :------- | | Net income before federal income tax | $6.9 | $3.3 | $5.1 | $8.2 | - The increase in Q2 net income before tax was driven by a **$0.8 million** increase in total premium revenue, a **$2.7 million** increase in investment-related gains, and a **$3.2 million** decrease in general expenses (due to a prior-year legal fee), partially offset by increased insurance benefits and stock unit grant expenses[153](index=153&type=chunk) - The decrease in YTD net income before tax was due to a **$1.2 million** decrease in investment-related gains (BlackRock write-down) and a **$4.8 million** increase in insurance benefits, partially offset by a **$2.0 million** increase in total premium revenue and a **$1.8 million** decline in other general expenses[153](index=153&type=chunk) - As of June 30, 2025, total assets were **$1.7 billion**, total direct insurance in force was **$5.35 billion**, and diluted earnings per share of Class A common stock for the six months was **$0.10**[155](index=155&type=chunk) [The Factors that Drive our Operating Results](index=43&type=section&id=The%20Factors%20that%20Drive%20our%20Operating%20Results) This section identifies primary elements influencing financial performance, including sales, investments, and expenses - Primary drivers of operating results include sales and product mix, premium revenues, investments, claims and surrenders, operating expenses, and actuarial assumptions[163](index=163&type=chunk) - Product mix is trending towards newer whole life products (international and domestic) with smaller margins, replacing higher-margin endowment products, a trend expected to continue[158](index=158&type=chunk) - Direct first-year premiums increased **32%** for the six months ended June 30, 2025, driven by sales of newer products and an increased number of producing agents, primarily in CICA Domestic final expense business[161](index=161&type=chunk) - Net investment income decreased slightly due to lower income from limited partnership investments[166](index=166&type=chunk) - Matured endowments increased as expected, while death claim benefits decreased due to lower volume and the RGA coinsurance agreement[167](index=167&type=chunk) - Operating expenses decreased due to a **$3.5 million** legal fee expense incurred in the prior year, despite continued investment in growth and higher equity compensation costs[169](index=169&type=chunk) [Our Operating Segments](index=46&type=section&id=Our%20Operating%20Segments) This section provides an overview of the company's distinct business segments and their performance drivers | Segment | Six Months Ended June 30, 2025 (Amount of Insurance Issued) | Six Months Ended June 30, 2024 (Amount of Insurance Issued) | | :-------------------- | :------------------------------------------ | :------------------------------------------ | | Life Insurance | $393,859,068 | $446,188,231 | | Home Service Insurance | $123,403,197 | $123,431,074 | | Total | $517,262,265 | $569,619,305 | - CICA International benefited from increased sales of its whole life product, accounting for **67%** of total insurance issued in that segment, leading to higher policy face amounts[176](index=176&type=chunk) - Home Service Insurance segment's growth is impacted by inflation on the cost of living, affecting new sales among lower-income individuals[177](index=177&type=chunk) - Overall insurance in force growth is impacted by persistency rates, policy maturities, and surrenders[180](index=180&type=chunk) [Consolidated Results of Operations](index=47&type=section&id=Consolidated%20Results%20of%20Operations) This section analyzes the company's overall financial performance, including revenues, benefits, and expenses [Revenues](index=47&type=section&id=Revenues) This section details sources and changes in total revenues, including premiums and investment income | Revenue (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $65,086 | $62,084 | $120,738 | $119,796 | | Total Life and A&H premiums | $43,388 | $42,559 | $83,185 | $81,234 | | Net investment income | $17,169 | $17,540 | $34,546 | $35,027 | | Investment related gains (losses), net | $2,408 | $(253) | $(486) | $710 | - Direct first-year premiums increased **20%** and **32%** for the three and six months ended June 30, 2025, respectively, driven by sales of newer products and expanded domestic distribution[183](index=183&type=chunk) - Investment related losses for the six months ended June 30, 2025, were primarily due to a non-cash write-down of the BlackRock ESG investment[185](index=185&type=chunk) [Benefits and Expenses](index=49&type=section&id=Benefits%20and%20Expenses) This section analyzes the company's insurance benefits paid, claims, surrenders, and operating expenses | Benefits and Expenses (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total benefits and expenses | $58,172 | $58,782 | $115,611 | $111,569 | | Claims and surrenders | $40,220 | $34,530 | $80,318 | $67,643 | | Other general expenses | $13,459 | $16,639 | $26,152 | $27,977 | | Amortization of deferred policy acquisition costs | $4,613 | $4,273 | $9,260 | $8,311 | - Matured endowment benefits significantly increased for both three and six months ended June 30, 2025, as many endowment policies reached contractual maturity dates, with continued increases expected throughout 2025[188](index=188&type=chunk)[189](index=189&type=chunk) - Death claim benefits decreased due to lower volume and the coinsurance agreement with RGA[188](index=188&type=chunk) - Other general expenses decreased due to a **$3.5 million** legal fee incurred in the prior year, despite ongoing costs for strategic growth initiatives and equity compensation[193](index=193&type=chunk) [Segment Operations](index=50&type=section&id=Segment%20Operations) This section provides a detailed analysis of financial performance and key drivers for each operating segment [Life Insurance](index=51&type=section&id=Life%20Insurance) This section analyzes the Life Insurance segment's financial performance, including income, revenues, and benefits | Metric (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Income before federal income tax | $8,391 | $13,272 | | Total Revenues | $92,080 | $90,495 | | Total Benefits and Expenses | $83,689 | $77,223 | - Income before federal income tax decreased for the six months ended June 30, 2025, primarily due to a **$0.9 million** decrease in investment-related gains (BlackRock write-down) and a **$5.0 million** increase in insurance benefits paid (matured endowments)[203](index=203&type=chunk) - Direct premiums increased by **$6.1 million** for the six months ended June 30, 2025, driven by sales of newer products and an increased number of producing agents, primarily in CICA Domestic[205](index=205&type=chunk) - Sales in Taiwan are declining due to distribution agency difficulties, regulatory challenges, and geopolitical shifts, while Venezuela faces headwinds from the strength of the US dollar[208](index=208&type=chunk) | Claims and Surrenders (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Matured endowment benefits | $35,531 | $21,476 | | Death claim benefits | $2,177 | $3,184 | [Home Service Insurance](index=54&type=section&id=Home%20Service%20Insurance) This section analyzes the Home Service Insurance segment's financial performance, including income, revenues, and premiums | Metric (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Income before federal income tax | $1,727 | $2,034 | | Total Revenues | $28,295 | $28,784 | | Total Benefits and Expenses | $26,568 | $26,750 | - Income before federal income tax decreased for the six months ended June 30, 2025, due to investment-related losses, partially offset by lower insurance benefits paid[216](index=216&type=chunk) | Premiums (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :----------------------------- | :----------------------------- | | Total life and A&H premiums | $21,388 | $21,768 | - Life and A&H premiums slightly declined due to strategic actions to improve sales quality and persistency (leading to a decrease in agent sales force) and external economic pressures like inflation[218](index=218&type=chunk) - Death claim benefits decreased slightly due to lower volume of reported claims[219](index=219&type=chunk) [Other Non-Insurance Enterprises](index=56&type=section&id=Other%20Non-Insurance%20Enterprises) This section analyzes other non-insurance enterprises' financial performance, focusing on income or loss before tax | Metric (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Loss before federal income tax | $(4,991) | $(7,079) | - The decreased loss was primarily due to lower other general expenses, specifically a **$3.5 million** legal fee expense incurred in the prior year, partially offset by increased equity incentive compensation costs[220](index=220&type=chunk) [Investments](index=56&type=section&id=Investments) This section discusses the company's investment portfolio, including fixed maturity securities, cash, and other investments | Investment Category (In thousands) | June 30, 2025 (Amount) | June 30, 2025 (%) | December 31, 2024 (Amount) | December 31, 2024 (%) | | :--------------------------------- | :--------------------- | :---------------- | :------------------------- | :-------------------- | | Total fixed maturity securities | $1,242,271 | 86.5% | $1,220,961 | 86.0% | | Cash and cash equivalents | $22,671 | 1.6% | $29,271 | 2.0% | | Other investments | $171,550 | 11.9% | $170,267 | 12.0% | | Total cash, cash equivalents and invested assets | $1,436,492 | 100.0% | $1,420,499 | 100.0% | - The carrying value of fixed maturity securities increased to **$1.24 billion** at June 30, 2025, from **$1.22 billion** at December 31, 2024, primarily due to interest rate sensitivity on fair value[224](index=224&type=chunk) - The weighted average credit rating of the fixed maturity securities portfolio remained **'A'** at both June 30, 2025, and December 31, 2024[224](index=224&type=chunk) - The municipal fixed maturity security portfolio totaled **$271.3 million** at June 30, 2025, with significant concentrations in Texas (**21%**) and California (**16%**) issuers[226](index=226&type=chunk)[230](index=230&type=chunk) - Gross unrealized losses on available-for-sale fixed maturity securities decreased to **$170.2 million** at June 30, 2025, from **$185.7 million** at December 31, 2024, due to a decrease in average market interest rates[236](index=236&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet financial obligations and manage capital, including cash flows and credit facilities | Capital Resources (In thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Fixed maturity securities | $1,242,271 | $1,220,961 | | Cash and cash equivalents | $22,671 | $29,271 | - Cash provided by operating activities was **$4.2 million** for the six months ended June 30, 2025[240](index=240&type=chunk) - The Company has a **$20 million** senior secured revolving credit facility with Regions Bank, which was undrawn as of June 30, 2025, providing additional liquidity[244](index=244&type=chunk) - Approximately **19%** of endowments in force (**6%** of total in force business) will mature in the next five years, with the highest level in 2025, posing a liquidity risk if policyholders elect lump sum distributions[249](index=249&type=chunk) - High levels of surrenders persist due to factors like expired surrender charges, increasing interest rates, and inflationary pressures[250](index=250&type=chunk) - Rapid growth in first-year sales of products with advance commissions creates liquidity strain, partially offset by the RGA coinsurance agreement[252](index=252&type=chunk) - All domestic insurance subsidiaries exceeded minimum NAIC RBC levels, and CICA International exceeded Puerto Rico's minimum capital requirements at June 30, 2025[255](index=255&type=chunk)[257](index=257&type=chunk) [Critical Accounting Policies](index=62&type=section&id=Critical%20Accounting%20Policies) This section identifies the accounting policies that require significant judgment and estimation by management - The critical accounting policies remain consistent with those described in the 2024 Form 10-K[260](index=260&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Citizens, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is not required to provide information for this item as it is a smaller reporting company[261](index=261&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=63&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on management's assessment of the effectiveness of disclosure controls and procedures - Management, including the principal executive officer and principal financial officer, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[263](index=263&type=chunk) [Changes in Internal Control Over Financial Reporting](index=63&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports any material changes in internal control over financial reporting during the period - No material changes in the Company's internal control over financial reporting occurred during the three months ended June 30, 2025[264](index=264&type=chunk) [PART II. OTHER INFORMATION](index=64&type=section&id=Part%20II.%20OTHER%20INFORMATION) This section includes additional disclosures not covered in financial information, such as legal proceedings and exhibits [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms that there have been no material developments in legal proceedings during the three months ended June 30, 2025, from those previously disclosed - No material developments in legal proceedings occurred during the three months ended June 30, 2025[268](index=268&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes in the company's risk factors during the three months ended June 30, 2025 - No material changes in risk factors occurred during the three months ended June 30, 2025[269](index=269&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds to disclose - None[270](index=270&type=chunk) [Item 3. Defaults Upon Senior Securities](index=64&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there are no defaults upon senior securities to report - Not applicable[271](index=271&type=chunk) [Item 4. Mine Safety Disclosures](index=64&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Not applicable[272](index=272&type=chunk) [Item 5. Other Information](index=64&type=section&id=Item%205.%20Other%20Information) This section reports no other information, specifically noting that no directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements - No directors or executive officers adopted or terminated any Rule 10b5-1(c) trading arrangements during the three months ended June 30, 2025[275](index=275&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, certifications, and XBRL documents - Exhibits include Restated and Amended Articles of Incorporation, Amended and Restated Bylaws, CEO and CFO certifications (Sarbanes-Oxley Act), and Inline XBRL documents[277](index=277&type=chunk)