Citizens Inc. (CIA, Financial) filed Quarterly Report for the period ended 2009-03-31.
Citizens Inc. operates primarily as an insurance holding company. Citizens Inc. has a market cap of $300.8 million; its shares were traded at around $6.59 with and P/S ratio of 2.
Realized gains, net. The Company realized net gains of $301,000 at March 31, 2009 compared to gains of $16,000 for the same period in 2008. In 2009, the Company sold securities for gains of $412,000 during the quarter which were offset by losses of $111,000 relating to other-than-temporary impairments.
Change in Fair Value of Warrants. The Company recognized $2.1 million of revenues in the first quarter of 2009 compared to a loss of $0.5 million for the same period in 2008 resulting from adjusting the warrant liability to fair value. The Company adjusts the warrant liability at each reporting date to reflect the current fair value of warrants computed based upon the Companys stock value calculated using the Black-Scholes option pricing model. As the stock value increases and decreases, the warrant liability also increases and decrease in the same manner. The adjustment to fair value is recorded as an increase or decrease in fair value of warrants on the income statement.
Claims and Surrenders. As noted in the table below, claims and surrenders increased from $13.1 million in the first quarter of 2008 to $14.8 million during the same period in 2009.
Federal Income Tax. The effective tax rate for the first quarter of 2009 was 24.4%, versus 37.6% in the first quarter of 2008. The rate variance from the statutory rate of 35% is due to the fact that the changes in fair value of our Class A common stock warrants which resulted in a gain of $2.1 million and a loss of $0.5 million for the first quarter of 2009 and 2008, respectively, are not tax effected. Additionally, the Company recorded an additional valuation allowance of $135,000 in the first quarter of 2009 related to other-than-temporary impairments recognized in the quarter.
Commissions. Commission expense increased to $4.5 million at March 31, 2009 compared to $4.3 million in 2008 as a result of increased premium revenue as noted above.
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Citizens Inc. operates primarily as an insurance holding company. Citizens Inc. has a market cap of $300.8 million; its shares were traded at around $6.59 with and P/S ratio of 2.
Highlight of Business Operations:
Premium Income. Premium income during the first quarter of 2009 increased to $34.2 million from $32.7 million during the same period in 2008 primarily from life renewal premiums representing good persistency. In addition, the first quarter of 2009 includes premiums of approximately $0.7 million relating to the acquisitions of Integrity Capital Insurance Company (ICIC) and Ozark National Life Insurance Company (ONLIC), which are new acquisitions and, therefore not included in the first quarter of 2008.Realized gains, net. The Company realized net gains of $301,000 at March 31, 2009 compared to gains of $16,000 for the same period in 2008. In 2009, the Company sold securities for gains of $412,000 during the quarter which were offset by losses of $111,000 relating to other-than-temporary impairments.
Change in Fair Value of Warrants. The Company recognized $2.1 million of revenues in the first quarter of 2009 compared to a loss of $0.5 million for the same period in 2008 resulting from adjusting the warrant liability to fair value. The Company adjusts the warrant liability at each reporting date to reflect the current fair value of warrants computed based upon the Companys stock value calculated using the Black-Scholes option pricing model. As the stock value increases and decreases, the warrant liability also increases and decrease in the same manner. The adjustment to fair value is recorded as an increase or decrease in fair value of warrants on the income statement.
Claims and Surrenders. As noted in the table below, claims and surrenders increased from $13.1 million in the first quarter of 2008 to $14.8 million during the same period in 2009.
Federal Income Tax. The effective tax rate for the first quarter of 2009 was 24.4%, versus 37.6% in the first quarter of 2008. The rate variance from the statutory rate of 35% is due to the fact that the changes in fair value of our Class A common stock warrants which resulted in a gain of $2.1 million and a loss of $0.5 million for the first quarter of 2009 and 2008, respectively, are not tax effected. Additionally, the Company recorded an additional valuation allowance of $135,000 in the first quarter of 2009 related to other-than-temporary impairments recognized in the quarter.
Commissions. Commission expense increased to $4.5 million at March 31, 2009 compared to $4.3 million in 2008 as a result of increased premium revenue as noted above.
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