Citizens, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenues were $60.4 million in Q2 2026, a decline from $65.1 million in Q2 2025, primarily due to a $3.9 million decrease in investment-related gains (losses).
• Adjusted total revenues were $61.9 million in Q2 2026, down from $62.7 million in Q2 2025, driven by decreased other income.
• The Company reported a net loss of $0.4 million ($0.01 loss per fully diluted Class A share) in Q2 2026, compared to net income of $6.5 million ($0.13 income per fully diluted Class A share) in Q2 2025.
• Adjusted net income was $0.8 million ($0.01 adjusted income per fully diluted Class A share) in Q2 2026, down from $4.2 million ($0.08 adjusted income per fully diluted Class A share) in Q2 2025.
• Total benefits and expenses increased to $60.9 million in Q2 2026 from $58.2 million in Q2 2025; this increase was driven by a $7.7 million rise in future policy benefit reserves, which offset a $6.5 million decrease in claims and surrenders.
• Total assets were $1.8 billion as of June 30, 2026.
• Cash and cash equivalents were $17.0 million with no debt outstanding at June 30, 2026.
• Net cash provided by operating activities was $1.7 million in Q2 2026; the Company has generated positive net cash from operations every year since 2004.
• Book value per Class A share was $4.64 on June 30, 2026, an increase from $4.56 on June 30, 2025, marking the fourteenth consecutive quarter of year-over-year growth.
• Adjusted book value per Class A share (excluding AOCI) was $6.44 on June 30, 2026, up from $6.22 on June 30, 2025.
• Total investment income was $18.1 million in Q2 2026, up from $17.9 million in Q2 2025, while net investment income decreased to $17.0 million from $17.2 million due to higher limited partnership investment expenses.
• The average annualized yield on the investment portfolio was 4.41% in Q2 2026, down from 4.50% in the prior year.
• The carrying value of the total investment portfolio was $1.4 billion at June 30, 2026, remaining relatively flat from June 30, 2025.

Business Segments and Product Lines

• Direct insurance premiums were $48.1 million in Q2 2026, up from $46.4 million in Q2 2025, driven by sales of newer product offerings and expanded distribution in the Domestic Insurance segment.
• Direct first-year premiums have increased year-over-year for fifteen consecutive quarters.
• Direct renewal premiums grew in Q2 2026, driven by strong sales in prior periods resulting in a higher number of policies paying renewal premiums.
• The International Insurance segment reported total revenues of $39.7 million in Q2 2026, down from $45.9 million in Q2 2025, with direct insurance premiums of $28.9 million compared to $29.3 million in the prior year.
• The Domestic Insurance segment reported total revenues of $20.5 million in Q2 2026, up from $19.0 million in Q2 2025, with direct insurance premiums of $19.2 million compared to $17.1 million in the prior year.
• Premium growth in the Domestic Insurance segment was constrained by unfavorable persistency.
• High levels of surrenders and matured endowments in the International Insurance segment have reduced the number of policies remaining in force and paying renewal premiums.
• The global network of producing agents increased by 6% since June 30, 2025.

Risks and Challenges

• Investment market fluctuations and increases in future policy benefit reserves significantly affected second-quarter results.
• Unfavorable persistency in the Domestic Insurance segment constrained premium growth.
• A high level of surrenders and matured endowments in the International Insurance segment over recent years has reduced the policy count paying renewal premiums.
• Other income is expected to decline as matured endowment benefits decrease contractually.
• Future policy benefit reserves increased by $7.7 million due to growth in the Domestic Insurance segment and the release of a comparatively large amount of reserves in the prior year period for matured endowments.

Management Commentary and Tone

• Jon Stenberg, President and CEO, stated that underlying indicators of future growth continued to advance, citing the fifteenth consecutive quarter of year-over-year direct first-year premium growth and fourteen consecutive quarters of book value per share growth.
• Management emphasized that targeted investments in the strategic roadmap are designed to drive clear growth of premiums and adjusted book value per share while delivering long-term value.
• The Company expects reduced levels of matured endowment benefit payments during the remainder of 2026 and over the next few years as fewer contracts expire.
• Management expects positive net cash provided by operating activities for the remainder of 2026 as the level of matured endowment benefit payments continues to decline.

Other Key Points

• The Company operates two primary segments: International Insurance (U.S. dollar-denominated life insurance and endowment policies for non-U.S. residents) and Domestic Insurance (final expense and life insurance with living benefits for U.S. households).
• Citizens, Inc. stock is included in the Russell 2000® and Russell 3000® indexes.
• The Company provides non-GAAP measures including Adjusted Total Revenues, Adjusted Net Income, and Adjusted Book Value Per Share to exclude investment-related gains/losses and AOCI impacts.
• Key growth initiatives include increasing first-year premium revenues, expanding penetration in new and existing countries, introducing new products or enhancements, and enhancing agent and client servicing platforms.