Citizens(US:CIA)2025-11-06 21:16Financial 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].