Citizens Inc. (CIA, Financial) filed Quarterly Report for the period ended 2010-03-31.
Citizens Inc. has a market cap of $321.3 million; its shares were traded at around $6.6 with a P/E ratio of 26.4 and P/S ratio of 1.8.
Net Investment Income. Net investment income increased to $8.3 million during the first quarter of 2010 compared to $7.7 million during the same period in 2009. The increase is due to higher invested assets held in the current year compared to 2009 as a result of investing new premium income, as well as the significant amount of calls and the lag in reinvesting those funds during 2009, which had the effect of depressing investment yields in 2009. Investment income from debt securities accounted for approximately 84.9% of total investment income for the three months ended March 31, 2010. We continue to invest primarily in bonds of U.S. Government-sponsored enterprises, such as FNMA and FHLMC, which comprise 64% of the total fixed maturity portfolio based on amortized cost. Corporate holdings of fixed maturity investments increased by $13.6 million, or 12%, based upon amortized costs from December 31, 2009 to March 31, 2010.
Investment income related to equity securities decreased from $0.3 million for the three months ended March 31, 2009 to $0.1 million in 2010. This decrease resulted from the disposal of equity securities primarily related to the ONLIC acquired portfolio with some loss from the disposal of SPLICs mutual funds. Other investment income decreased to $0.4 million in 2010 compared to $0.8 million in 2009 as the Company had received a lawsuit settlement of $0.2 million in 2009 resulting from a defaulted bond investment.
Realized Gains, Net. The Company realized net gains of $59,000 at March 31, 2010 compared to gains of $301,000 for the same period in 2009. The Company recorded a mortgage loan valuation allowance of $45,000 during the first quarter of 2010 on a non-performing loan. 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.
Other Underwriting, Acquisition and Insurance Expenses. These expenses decreased to $7.0 million for the first three months in 2010 compared to $7.3 million in 2009. The decrease is mainly due to a decrease of $0.2 million in legal fees, which are primarily associated with the 2009 acquisition of ICC. These acquisition costs are expensed as incurred, and will vary depending upon our level of acquisition activity. Additionally, auditing fees were lower.
Federal Income Tax. The effective tax rate for the first quarter of 2010 was 32.3% versus 24.4% in the first quarter of 2009. 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 loss of $0.1 million and a gain of $2.1 million for the first quarter of 2010 and 2009, respectively, are not tax effected. 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.
Read the The complete Report
Citizens Inc. has a market cap of $321.3 million; its shares were traded at around $6.6 with a P/E ratio of 26.4 and P/S ratio of 1.8.
Highlight of Business Operations:
Premium Income. Premium income during the first quarter of 2010 increased to $35.2 million from $34.2 million during the same period in 2009, primarily related to life renewal premiums indicating favorable persistency. The acquisition of ICIC in the first quarter of 2009 resulted in approximately $0.2 million of premium revenue compared to approximately $0.5 million for the same period in 2010.Net Investment Income. Net investment income increased to $8.3 million during the first quarter of 2010 compared to $7.7 million during the same period in 2009. The increase is due to higher invested assets held in the current year compared to 2009 as a result of investing new premium income, as well as the significant amount of calls and the lag in reinvesting those funds during 2009, which had the effect of depressing investment yields in 2009. Investment income from debt securities accounted for approximately 84.9% of total investment income for the three months ended March 31, 2010. We continue to invest primarily in bonds of U.S. Government-sponsored enterprises, such as FNMA and FHLMC, which comprise 64% of the total fixed maturity portfolio based on amortized cost. Corporate holdings of fixed maturity investments increased by $13.6 million, or 12%, based upon amortized costs from December 31, 2009 to March 31, 2010.
Investment income related to equity securities decreased from $0.3 million for the three months ended March 31, 2009 to $0.1 million in 2010. This decrease resulted from the disposal of equity securities primarily related to the ONLIC acquired portfolio with some loss from the disposal of SPLICs mutual funds. Other investment income decreased to $0.4 million in 2010 compared to $0.8 million in 2009 as the Company had received a lawsuit settlement of $0.2 million in 2009 resulting from a defaulted bond investment.
Realized Gains, Net. The Company realized net gains of $59,000 at March 31, 2010 compared to gains of $301,000 for the same period in 2009. The Company recorded a mortgage loan valuation allowance of $45,000 during the first quarter of 2010 on a non-performing loan. 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.
Other Underwriting, Acquisition and Insurance Expenses. These expenses decreased to $7.0 million for the first three months in 2010 compared to $7.3 million in 2009. The decrease is mainly due to a decrease of $0.2 million in legal fees, which are primarily associated with the 2009 acquisition of ICC. These acquisition costs are expensed as incurred, and will vary depending upon our level of acquisition activity. Additionally, auditing fees were lower.
Federal Income Tax. The effective tax rate for the first quarter of 2010 was 32.3% versus 24.4% in the first quarter of 2009. 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 loss of $0.1 million and a gain of $2.1 million for the first quarter of 2010 and 2009, respectively, are not tax effected. 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.
Read the The complete Report
