Citizens, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Total revenues increased 3.5% year-over-year to $65 million in Q3 2026 from $62.8 million in Q3 2025, driven by a $1.5 million increase in premium revenue and a $2.6 million increase in investment-related gains.
• Adjusted total revenues, excluding investment-related gains, decreased 0.8% to $63.6 million in Q3 2026 from $64.1 million in Q3 2025.
• Net loss was $0.4 million ($0.01 loss per fully diluted Class A share) in Q3 2026, compared to net income of $2.4 million ($0.04 income per fully diluted Class A share) in Q3 2025.
• Adjusted net income was $1 thousand ($0.00 per fully diluted Class A share) in Q3 2026, down from $3.4 million ($0.07 per fully diluted Class A share) in Q3 2025.
• Total assets were $1.7 billion as of September 30, 2026, compared to $1.74 billion in the prior year period.
• Book value per Class A share was $4.37 on September 30, 2026, down from $4.49 on September 30, 2025.
• Adjusted book value per Class A share (excluding AOCI) increased to $6.44 on September 30, 2026, from $6.26 on September 30, 2025.
• Net investment income decreased to $18.1 million in Q3 2026 from $19.1 million in Q3 2025, primarily due to a $1.7 million discrete dividend received in the prior year.
• The average annualized yield on the investment portfolio was 4.48% in Q3 2026.
• The carrying value of the total investment portfolio was $1.4 billion at September 30, 2026, remaining relatively flat from the prior year.
• Cash and cash equivalents were $17.6 million with no debt outstanding as of September 30, 2026.
• Net cash provided by operating activities was $13 million in Q3 2026; the company has reported positive annual net cash provided by operating activities every year since 2004.
• Total benefits and expenses increased to $64.9 million in Q3 2026 from $58.3 million in Q3 2025.
• Claims and surrenders decreased $13.2 million to $31.1 million in Q3 2026 from $44.3 million in Q3 2025, attributed to expected contractual decreases in matured endowments.
• Future policy benefit reserves increased $16.3 million in Q3 2026, primarily reflecting additional reserves for the growing in-force business in the Domestic Insurance segment and lower reserve releases from matured endowments compared to the prior year.

Guidance and Future Outlook

• Management expects endowment maturities to become a smaller factor over time as fewer contracts expire, following a peak in 2025.
• The company anticipates reduced levels of matured endowment maturities in 2026 and over the next few years.
• Other income related to supplemental contracts is expected to decline as contractual obligations for matured endowment benefits decrease.
• The company aims to deliver sustainable growth in premiums, adjusted net income, and adjusted book value per share through its strategic roadmap.

Business Segments and Product Lines

• Direct insurance premiums increased 7% to $50 million in Q3 2026 from $46.6 million in Q3 2025.
• Direct first-year premiums increased year-over-year for sixteen consecutive quarters.
• The Domestic Insurance segment saw direct insurance premiums increase to $20.4 million in Q3 2026 from $17.4 million in Q3 2025.
• The International Insurance segment reported direct insurance premiums of $29.7 million in Q3 2026, up from $29.2 million in Q3 2025.
• The Domestic Insurance segment reported a loss before federal income tax of $0.9 million in Q3 2026, compared to income of $6.6 million in Q3 2025.
• The International Insurance segment reported income before federal income tax of $3.5 million in Q3 2026, compared to a loss of $0.1 million in Q3 2025.
• The network of domestic producing agents increased 12% since September 30, 2025.
• Premium growth in the Domestic Insurance segment was constrained by unfavorable persistency, while the International Insurance segment was impacted by high levels of surrenders and matured endowments.
• The company is investing in a modern technology ecosystem, moving to third-party, cloud-based platforms to strengthen insurance processing, underwriting, and policy administration capabilities.

Market and Competitive Landscape

• Citizens, Inc. operates in the life, living benefits, and final expense insurance markets, serving individuals and small businesses in the U.S., Latin America, and Asia.
• The International Insurance segment is a market leader in U.S. dollar-denominated life insurance.
• The Domestic Insurance segment is growing in niche markets in the United States through final expense products distributed via white-label and established channels.
• The company offers products in English, Spanish, Portuguese, and Mandarin.
• Citizens' stock is included in the Russell 2000® and Russell 3000® indexes.

Risks and Challenges

• Premium growth in the Domestic Insurance segment was constrained by unfavorable persistency.
• The International Insurance segment has faced high levels of surrenders and matured endowments in recent years, reducing the number of policies remaining in force.
• Net investment income is subject to fluctuations in investment market values and the receipt of discrete dividends.
• Future policy benefit reserves are subject to changes in accounting estimates, such as the $1.7 million decrease in ceded reserve credit resulting from the use of enhanced data sources.
• Forward-looking statements involve risks and uncertainties, including regulatory actions, technological changes, and market fluctuations, which may cause actual results to differ materially from expectations.

Management Commentary and Tone

• Jon Stenberg, President and CEO, stated that premium growth, distribution expansion, and cash generation continued to strengthen, highlighting the momentum of the domestic insurance business.
• Management noted that the comparison with the prior year was tougher due to substantial reserve releases tied to matured endowment payments in Q3 2025.
• Stenberg expressed pleasure with the direction of premium growth and confidence that endowment maturities will become a smaller factor over time.
• Management views the investment in a modern technology ecosystem as an important step to accelerate premium growth, increase adjusted book value per share, and deliver long-term value.
• The tone reflects confidence in the long-term growth strategy despite short-term volatility in net income and book value per share.

Other Key Points

• Citizens, Inc. plans to participate in the Sidoti Virtual Conference on December 9 and 10, 2026, including a fireside chat webcast on December 9 at 11:30 ET.
• The company operates two primary segments: International Insurance and Domestic Insurance.
• Non-GAAP measures provided include Adjusted Total Revenues, Adjusted Net Income, Adjusted Income Per Share, and Adjusted Book Value Per Share, which exclude investment-related gains/losses and other discrete items.
• The company has had positive annual net cash provided by operating activities every year since 2004.
• Investors can access the webcast and slide presentation on the Company's Investor Relations website under the Events tab.