8-K: Citizens, Inc. Reports Increased Insurance Issuance and Revenue Growth in 2024

Citizens, Inc. announces growth in total annual premium revenue for the first time since 2017, driven by strategic initiatives and new product offerings.

Summary

• Citizens, Inc. reported its full year and fourth quarter 2024 financial results on March 13, 2025.
• Total revenues for 2024 were $245.0 million, up from $240.7 million in 2023.
• Adjusted total revenues for 2024 were $247.6 million, compared to $239.9 million in the previous year.
• For Q4 2024, total revenues were $63.5 million, down from $66.9 million in Q4 2023, but adjusted total revenues increased to $67.6 million from $65.6 million.
• Income before federal income tax for the full year was $15.0 million, a decrease from $26.2 million in 2023.
• Adjusted income before federal income tax for the year was $21.3 million, compared to $26.6 million in the prior year.
• The company issued over $1.1 billion in insurance in 2024, a 54% increase from 2023.
• Total direct insurance in force reached over $5.2 billion.
• The company is now licensed in 43 U.S. states and Washington, D.C.
• The company expects continued sales growth leading to revenue and profit growth in 2025 and stronger growth in 2026.
• Book value per Class A share increased 21% year-over-year to $4.21.
• Positive net cash provided by operating activities was $31.9 million for the full year 2024.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive due to revenue growth and increased insurance issuance, but tempered by a decrease in income and some negative impacts from investment losses and legal fees.

Positives

• Total annual premium revenue grew for the first time since 2017.
• Insurance issued increased 54% to over $1.1 billion in 2024.
• Total direct insurance in force reached over $5.2 billion.
• First year premiums increased year-over-year for the ninth consecutive quarter in Q4 2024.
• The global network of producing agents increased by 72% since December 31, 2023.
• Direct first year life and A&H premiums increased 71% in 2024.
• Book value per Class A share increased 21% over the year-ago.
• Positive net cash provided by operating activities of $31.9 million in the full year 2024 compared to $22.1 million in 2023.
• The company is now licensed in 43 U.S. states and Washington, D.C., up from 39 at 2023 year-end.

Negatives

• Income before federal income tax decreased to $15.0 million in 2024 from $26.2 million in 2023.
• Net income decreased to $14.9 million in 2024 from $24.4 million in 2023.
• Direct renewal premiums were $40.7 million in Q4 2024, compared to $41.6 million in the same year-ago period.

Risks

• The company's forward-looking statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially.
• A $3.4 million decrease in investment related gains (losses) mostly related to a write-down of the BlackRock fund impacted income before federal income tax.
• The non-cash accrual of $3.5 million in legal fees awarded to certain defendants in the trade secret lawsuit impacted income before federal income tax.
• An $11.5 million increase in total insurance benefits paid or provided offset the increase in total premium revenues.

Future Outlook

The company expects continued sales growth leading to revenue and profit growth in the full year 2025 and stronger growth in full year 2026. They believe they are well positioned to drive long-term value creation for shareholders.

Management Comments

• 'We are thrilled that our total annual premium revenue grew for the first time since 2017, reflecting the success of our growth-oriented strategic initiatives,' said Jon Stenberg, President and Chief Executive Officer.
• Stenberg also stated that the company remains fully committed to persistent and profitable growth and capital management.
• Stenberg concluded that the company's strong performance in 2024 reinforces great confidence in their outlook.

Industry Context

Citizens, Inc. operates in the diversified financial services industry, specializing in life, living benefits, and final expense insurance. The company's growth in insurance issuance and expansion into new states reflects a competitive strategy to capture market share in niche segments.

Comparison to Industry Standards

• It is difficult to compare Citizens, Inc. directly to industry standards without more specific information on their niche markets and product offerings.
• However, the company's growth in first-year premiums and agent network expansion suggests a successful sales and distribution strategy compared to competitors in similar segments.
• Companies like National Western Life Group and American National might be considered peers, but their specific financial results and business models would need to be analyzed for a more accurate comparison.

Legal Proceedings

• The non-cash accrual of $3.5 million in legal fees awarded to certain defendants in the trade secret lawsuit impacted income before federal income tax.

Stakeholder Impact

• Shareholders can expect continued focus on growth and value creation.
• Customers will benefit from innovative products and expanded service offerings.
• Employees will see opportunities from the company's growth and expansion.

Next Steps

• Citizens management plans to present at the Emerging Growth Virtual Conference on March 27, 2025.

Key Dates