Citizens, Inc. Reports First Quarter 2024 Financial Results
Citizens, Inc. reported strong first quarter financial results for 2024, showcasing record insurance issued, high revenue growth, and positive net cash flow. The company remains committed to sustainable growth and value creation for shareholders, with a focus on product innovation, sales expansion, and profitable development. Key highlights include a 3% revenue increase, $4.5 million net income, and significant growth in life and A&H premiums.
Record setting quarter with highest insurance issued ever - $274.5 million in Q1 2024
Total revenues increased by 3% to $57.7 million in Q1 2024
First year life and A&H premiums increased by 42% in Q1 2024
Positive net cash provided by operating activities of $6.8 million in Q1 2024
Book value per Class A share increased by 28% to $3.94 in Q1 2024
Net income decreased to $4.5 million in Q1 2024 from $4.9 million in Q1 2023
Renewal premiums decreased to $32.7 million in Q1 2024 compared to $34.0 million in the year-ago quarter
Higher benefits and expenses led to a decrease in net income for Q1 2024
Insights
Austin, Texas--(Newsfile Corp. - May 7, 2024) - Citizens, Inc. (NYSE: CIA), a leading diversified financial services company specializing in life, living benefits and final expense insurance, today reported results for the first quarter ended March 31, 2024.
"We are thrilled with our continued exceptional execution in the first quarter to our strategic roadmap designed to deliver sustainable increased book value per share and enhanced operating results. Customers in large and underserved markets are embracing our innovative new products on their path toward financial security. First year premiums have increased year-over-year for six consecutive quarters," said Company Vice Chairman and CEO, Gerald W. Shields. "We remain fully committed to persistent and profitable growth, as evidenced by our positive net cash from operations annually since 2004."
"Looking ahead, we expect continued sales growth in 2024 leading to strong profit growth in the full year 2025. We believe we're well positioned to drive long-term value creation for our shareholders. Our competitive advantages in growing niche markets globally, rapid expansion of the sales force, and profitable product development expertise, coupled with our intense focus on strong execution on our clear growth opportunities, has provided us with great confidence in our outlook," concluded Shields.
Key First Quarter and Recent Business Highlights
Record setting quarter for Citizens, including:
- Highest amount of insurance issued ever in a quarter - Insurance issued increased
61% to$274.5 million in Q1 2024 compared to the same period in 2023, primarily from sales of our new products and an increase in producing agents. - Record insurance in force; over
$5 billion of insurance in force at March 31, 2024. - Record number of agents - increased global network of producing agents in Q1 2024, an increase of
20% at the end of Q1 2024 compared to December 31, 2023. - First analyst research reports published on Citizens. Reports issued by Sidoti & Company and Singular Research.
First Quarter 2024 Financial Highlights
- Total revenues increased
3% to$57.7 million in Q1 2024, from$55.9 million in the year-ago quarter. - First year life and A&H premiums increased
42% in Q1 2024, the sixth consecutive quarter of year-over-year growth in first year premiums, driven by new domestic growth and new products. - Net income of
$4.5 million ,$0.09 per fully diluted Class A share, in Q1 2024, from$4.9 million ,$0.10 in Q1 2023. - Positive net cash provided by operating activities of
$6.8 million in Q1 2024. The Company has had positive net cash provided by operating activities annually since 2004. - Cash and cash equivalents of
$23.2 million and no debt at March 31, 2024. - Book value per Class A share of
$3.94 increased28% over the year-ago quarter. Book value per Class A share excluding accumulated other comprehensive income (loss) (AOCI) of$5.95 increased10% over the year-ago quarter.
2024 Milestones
For 2024, the Company has set the following milestones:
- Increase first year life and A&H premium revenues at least
6% - Improve policyholder retention metrics at least
4% - Expand global network of producing agents at least
20% - Introduce 2 to 3 new products or major product enhancements. Citizens delivered a new product in Q1 2024
First Quarter 2024 Performance and Highlights
Total revenues increased
Total benefits and expenses increased by
As a result of the higher benefits and expenses, net income for the first quarter of 2024 was
Investments
Net investment income for the first quarter of 2024 increased to
Investment related gain of
The carrying value of the Company's fixed maturity securities investment portfolio at March 31, 2024 was
Cash Flow/Capital/Share Repurchase
Positive net cash provided by operating activities was
The Board of Directors is confident in the Company's strategy and future and authorized a share repurchase program in May 2022 under which the Company may repurchase up to
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 English, Spanish, Portuguese, and Mandarin. The Company operates two primary segments: Life Insurance, where internationally the Company is a market leader in U.S. Dollar denominated life insurance and where it is growing in niche markets in the United States through its final expense products distributed through white-label and established distribution channels, and Home Service Insurance, 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.
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) and income (loss) from ceased businesses. Management believes 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 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.
Selected Consolidated Financial Data
| As of and for the periods ended | Three Months Ended | ||
| (In thousands, except per share data) | 2024 | 2023 | |
| Balance sheet data | |||
| Total assets | $ | 1,665,663 | 1,638,481 |
| Total liabilities | 1,470,480 | 1,484,190 | |
| Total stockholders' equity | 195,183 | 154,291 | |
| Life insurance in force, net | 4,404,254 | 4,297,228 | |
| Operating items | |||
| Insurance premiums | $ | 38,673 | 38,249 |
| Net investment income | 17,487 | 17,074 | |
| Investment related gains (losses), net | 963 | (288) | |
| Total revenues | 57,712 | 55,914 | |
| Claims and surrenders | 33,113 | 30,299 | |
| Other general expenses | 11,338 | 11,260 | |
| Total benefits and expenses | 52,787 | 49,199 | |
| Income before federal income tax | 4,925 | 6,715 | |
| Federal income tax expense | 383 | 1,843 | |
| Net income | 4,542 | 4,872 | |
| Per share data | |||
| Book value per share | $ | 3.94 | 3.09 |
| Diluted income per Class A share | 0.09 | 0.10 | |
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. Domestically, we are licensed in 40 U.S. states and sell whole life final expense insurance and life insurance with living benefits and critical illness products. These products are sold primarily through independent marketing organizations.
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 ended | Three Months Ended March 31, | ||
| (In thousands) | 2024 | 2023 | |
| LIFE INSURANCE SEGMENT | |||
| Balance sheet data | |||
| Total assets | $ | 1,270,247 | 1,234,151 |
| Operating items | |||
| Insurance premiums | $ | 27,861 | 26,207 |
| Net investment income | 13,686 | 13,311 | |
| Investment related gains (losses), net | 1,086 | (437) | |
| Total revenues | 43,139 | 39,960 | |
| Claims and surrenders | 27,364 | 24,439 | |
| Total benefits and expenses | 37,339 | 33,588 | |
| Income before federal income tax | 5,800 | 6,372 | |
| HOME SERVICE INSURANCE SEGMENT | |||
| Balance sheet data | |||
| Total assets | $ | 359,740 | 348,890 |
| Operating items | |||
| Insurance premiums | $ | 10,812 | 12,042 |
| Net investment income | 3,537 | 3,470 | |
| Investment related gains (losses), net | (91) | 99 | |
| Total revenues | 14,258 | 15,611 | |
| Claims and surrenders | 5,749 | 5,860 | |
| Total benefits and expenses | 13,635 | 14,278 | |
| Income before federal income tax | 623 | 1,333 | |
GAAP to Non-GAAP Reconciliation
Reconciliation of Adjusted Income Before Federal Income Tax
| For the periods ended | Three Months Ended March 31, | ||
| Unaudited (In thousands) | 2024 | 2023 | |
| Income before federal income tax | $ | 4,925 | 6,715 |
| Less: | |||
| Investment related gains (losses) | 963 | (288) | |
| Property insurance business income | 5 | 54 | |
| Adjusted income before federal income tax | $ | 3,957 | 6,949 |
Reconciliation of Stockholders' Equity and Book Value per Class A Common Share
| As of March 31, | |||
| Unaudited (In thousands, except per share data) | 2024 | 2023 | |
| Stockholders' equity, end of period | $ | 195,183 | 154,291 |
| Less: Accumulated other comprehensive income (loss) (AOCI) | (99,770) | (115,465) | |
| Stockholders' equity, end of period, excluding AOCI | $ | 294,953 | 269,756 |
| Book value per Class A common share - diluted | $ | 3.94 | 3.09 |
| Less: Per share impact of AOCI | (2.01) | (2.32) | |
| Book value per Class A common share - diluted, excluding AOCI | $ | 5.95 | 5.41 |
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 its 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 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.
Citizens, Inc. Investor Relations Contacts
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)
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/208270
FAQ
What was the total revenue increase in Q1 2024?
What was the net income in Q1 2024?
How much cash and cash equivalents did the Company have at March 31, 2024?
What was the increase in first year life and A&H premium revenues set for 2024?
