FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------
(Mark One)
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1997
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from: to
Commission file number: 1-11714
---------------------------------
CITIZENS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-3178765
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
440 Lincoln Street, Worcester, Massachusetts 01653
(Address of principal executive offices) (Zip Code)
(508) 855-1000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes [ X ] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date: 35,269,100
Shares of Common Stock Outstanding, as of May 1, 1997.
1
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TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Shareholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 8 - 12
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 14
2
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PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
CITIZENS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
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(Unaudited)
Three Months Ended
(In millions, except per share data) March 31,
1997 1996
-------------------
Revenues
Net premiums written $ 211.9 $ 215.9
Change in unearned premiums, net
of prepaid reinsurance premiums 2.0 11.4
--------- ---------
Net premiums earned 209.9 204.5
Net investment income 23.6 19.6
Net realized gains on investments 19.7 14.7
Other income 1.5 0.5
--------- ---------
Total revenues 254.7 239.3
--------- ---------
Expenses
Losses and loss adjustment expenses 158.5 155.5
Policy acquisition and other underwriting expenses 58.3 53.8
Policyholders' dividends 1.6 1.8
--------- ---------
Total expenses 218.4 211.1
--------- ---------
Income before federal income taxes 36.3 28.2
Federal income tax expense 7.9 5.7
--------- ---------
Net Income $ 28.4 $ 22.5
========= =========
Per share data
Net income $ 0.80 $ 0.63
========= =========
Dividends declared to shareholders $ 0.05 $ 0.05
========= =========
Weighted average shares outstanding 35.3 35.8
========= =========
The accompanying notes are an integral part of these financial statements
</TABLE>
3
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<TABLE>
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CITIZENS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except per share data) March 31, December 31,
1997 1996
---------------------------
Assets
Investments:
Debt securities available-for-sale, at fair value $ 1,426.7 $ 1,398.3
(Amortized cost of $1,419.6 and $1,366.9)
Equity securities available-for-sale, at fair value 138.5 192.3
(Cost of $94.8 and $132.3)
Other investments, at fair value (Cost of $13.2 in 14.3 14.6
1997 and 1996) ---------- -----------
Total investments 1,579.5 1,605.2
Cash and cash equivalents 46.9 36.1
Accrued investment income 24.5 25.3
Premiums receivable 142.0 140.3
Reinsurance recoverable on paid and unpaid balances 468.3 476.8
Prepaid reinsurance premiums 60.1 62.8
Deferred policy acquisition expenses 54.6 54.3
Deferred federal income taxes 39.5 25.4
Other assets 75.8 76.8
---------- -----------
Total assets $ 2,491.2 $ 2,503.0
========== ===========
Liabilities and Shareholders' Equity
Liabilities:
Reserve for losses and loss adjustment expenses $ 1,224.1 $ 1,238.5
Unearned premiums 361.6 362.3
Other liabilities 151.1 147.7
---------- -----------
Total liabilities 1,736.8 1,748.5
---------- -----------
Shareholder's Equity
Series A preferred stock, $0.01 par value per share;
authorized 10.0 million shares; none issued or
outstanding in 1997 and 1996 - -
Common stock, par value $0.01 per share;
authorized 100.0 million shares; issued 36.1 0.4 0.4
million shares
Additional paid-in capital 156.1 156.1
Retained earnings 579.1 552.5
Unrealized appreciation on investments, net of
deferred federal income taxes 33.8 60.5
Treasury stock, at cost (0.8 million shares in 1997 (15.0) (15.0)
and 1996) ---------- -----------
Total shareholder's equity 754.4 754.5
---------- -----------
Total liabilities and shareholder's equity $ 2,491.2 $ 2,503.0
========== ===========
The accompanying notes are an integral part of these financial statements
</TABLE>
4
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<TABLE>
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CITIZENS CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
Three Months Ended
(In millions, except per share data ) March 31,
1997 1996
---------------------
Preferred stock
Balance at beginning and end of period - -
---------- -----------
Common stock
Balance at beginning and end of period $ 0.4 $ 0.4
---------- -----------
Additional paid-in capital
Balance at beginning and end of period 156.1 156.1
---------- -----------
Retained earnings
Balance at beginning and end of period 552.5 475.5
Net income 28.4 22.5
Dividends declared to shareholders (1.8) (1.8)
---------- -----------
Balance at end of period 579.1 496.2
---------- -----------
Unrealized appreciation on investments, net
Balance at beginning of period 60.5 54.7
Depreciation during the period (40.9) (22.9)
Benefit for deferred federal income taxes 14.2 8.0
---------- -----------
Balance at end of period 33.8 39.8
---------- -----------
Treasury stock
Balance at beginning of period (15.0) (3.9)
Shares purchased at cost - (2.2)
---------- -----------
Balance at end of period (15.0) (6.1)
---------- -----------
Total shareholders' equity $ 754.4 $ 686.4
========== ===========
The accompanying notes are an integral part of these financial statements
</TABLE>
5
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<TABLE>
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CITIZENS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
(In millions, except per share data ) March 31,
1997 1996
--------------------
Cash flows from operating activities
Net income $ 28.4 $ 22.5
Adjustments to reconcile net income to
net cash provided by operating activities:
Net realized gains on investments (19.7) (14.7)
Deferred federal income tax provision 0.1 3.3
Change in assets and liabilities:
Deferred policy acquisition expenses (0.3) (1.7)
Premiums and notes receivable, net of reinsurance (0.5) (8.8)
premiums
Unearned premiums, net of prepaid reinsurance 1.9 11.4
premiums
Reserve for losses and loss adjustment expenses, (5.9) (2.3)
net of reinsurance recoverable
Other, net (1.6) (8.4)
---------- ----------
Net cash provided by operating activities 2.4 1.3
---------- ----------
Cash flows from investing activities
Proceeds from sale of available-for-sale debt 128.6 138.9
securities
Proceeds from available-for-sale debt securities 32.8 23.1
maturing or called
Proceeds from sale of available-for-sale equity 59.6 57.9
securities and other investments
Purchases of available-for-sale debt securities (214.2) (237.6)
Purchases of sale of available-for-sale equity (3.0) (17.8)
securities and other investments
Change in net receivable from securities 6.7 42.5
transactions not settled
Other investing activities (0.3) (0.5)
---------- ----------
Net cash provided by investing activities 10.2 6.5
---------- ----------
Cash flows from financing activities
Dividends paid to shareholders (1.8) (1.8)
Treasury stock purchased, at cost - (2.2)
---------- ----------
Net cash used for financing activities (1.8) (4.0)
---------- ----------
Change in cash and cash equivalents 10.8 3.8
Cash and cash equivalents at beginning of period 36.1 59.1
---------- ----------
Cash and cash equivalents at end of period $ 46.9 $ 62.9
========== ==========
The accompanying notes are an integral part of these financial statements
</TABLE>
6
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CITIZENS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of
Citizens Corporation ("the Company") have been prepared in accordance
with generally accepted accounting principles applicable to stock
property and casualty insurance companies for interim financial
information and with the requirements of Form 10-Q. The financial
statements should be read in conjunction with the financial statements
included in the Company's Annual Report on Form 10-K, for the year
ended December 31, 1996.
In the opinion of management, the financial statements reflect all
adjustments of a normal recurring nature necessary for a fair
presentation of the interim periods. Interim results are not
necessarily indicative of results expected for the entire year. These
financial statements should be read in conjunction with the Company's
1996 Annual Report to Shareholders, as filed on Form 10-K with the
Securities and Exchange Commission.
2. Earnings per Share
Earnings per share are based on the weighted average number of common
shares and common share equivalents. The Board of Directors authorized
the repurchase of 1.8 million shares or slightly less than five
percent of its issued common stock and has purchased a total of 0.8
million shares since the implementation of the repurchase program in
1995. As of March 31, 1997, the Company is holding these shares as
treasury stock for the purpose of funding current and future stock
option awards and for other purposes.
Recently the FASB issued Statement of Financial Accounting Standards
No. 128, Earnings Per Share, which supersedes APB Opinion No. 15,
Earnings Per Share. This standard replaces the primary EPS
requirements with a basic EPS computation and requires a dual
presentation of basic and diluted EPS for those companies with complex
capital structures. The Company intends to adopt the standards of
Statement No. 128 for financial statements issued after December 15,
1997. The impact of this statement is expected to be immaterial on
the Company's EPS calculation.
7
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PART I - FINANCIAL INFORMATION
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The results of operations for Citizens Corporation and subsidiaries
(the Company) include the accounts of Citizens Corporation (Citizens),
a non-insurance holding company, and its wholly-owned subsidiaries,
Citizens Insurance Company of America, Citizens Insurance Company of
Ohio, and Citizens Insurance Company of the Midwest (collectively
Citizens Operations), and Citizens Management Inc., which is wholly-
owned by Citizens Insurance Company of America.
Results of Operations
- ---------------------
Net income
Net income for the quarter ended March 31, 1997, was $28.4 million, or
$0.80 per common share, compared to $22.5 million, or $0.63 per common
share, for the quarter ended March 31, 1996. Excluding realized gains
and losses, net of taxes, net income increased $2.7 million, to $15.6
million, for the quarter ended March 31, 1997. The increase in net
income is primarily attributable to an increase in realized gains and
investment income, partially offset by a slight increase in
underwriting loss. Realized gains were $19.7 million during the first
quarter of 1997, versus $14.7 million during the first quarter of
1996, an increase of $5.0 million. Net realized gains primarily
reflect sales of equity securities in both periods. Investment
income increased 20.4%, to $23.6 million during the first quarter of
1997, versus $19.6 million in 1996. This was due to a 6.2% increase
in average invested assets and to an increase in average yields on
fixed maturity securities from 5.9% to 6.8%. Total underwriting loss
increased from $6.6 million in the first quarter of 1996 to $7.4
million in the first quarter of 1997, reflecting an increase in
catastrophe losses from $4.8 million to $5.4 million.
Revenues
Net premiums earned increased $5.4 million, or 2.6%, to $209.9
million, for the quarter ended March 31, 1997, resulting from an $8.6
million increase in the Company's personal lines partially offset by a
$3.2 million decrease in the Company's commercial lines. The overall
growth is due to increases in net premiums earned of $3.4 million in
Ohio and Indiana resulting from expansion in these states, to a $3.0
million decrease in premiums ceded to the Michigan Catastrophic Claims
Association (MCCA), and to increases in personal automobile and
homeowners rates. These factors were partially offset by rate
reductions in the workers' compensation line where competitive
conditions continue in Michigan.
8
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Segment Results
- ---------------
Personal segment
Personal segment premiums represented 68.5% and 66.1% of total net
premiums earned for the quarters ended March 31, 1997, and 1996,
respectively.
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-------------------------
For the Quarters Ended 1997 1996
March 31 (in millions) -------------------------
Net premiums earned $ 143.7 $ 135.1
Losses and loss adjustment expenses 113.8 107.4
Policy acquisition and other underwriting expenses 39.5 36.4
--------- ---------
Underwriting loss $ (9.6) $ (8.7)
========= =========
</TABLE>
Personal segment net premiums earned increased $8.6 million, or 6.4%,
to $143.7 million for the quarter ended March 31, 1997, from $135.1
million for the quarter ended March 31, 1996. This increase is
primarily attributable to a decrease in premiums ceded to the MCCA and
to increases in personal automobile and homeowners rates. The non-
recurring decrease in premiums ceded to MCCA was a result of a lower
surcharge effective January 1, 1997 for personal automobile policies
written. These factors were partially offset by a 2.0% decrease in
policies in forces in the personal automobile line since March 31,
1996, attributable to continued strong competition in Michigan.
The personal segment underwriting loss was $9.6 million and $8.7
million for the quarters ended March 31, 1997 and 1996, respectively.
Catastrophe losses increased $1.2 million over the prior year first
quarter, primarily in the homeowners line. Policy acquisition and
other underwriting expenses increased $3.1 million, or 8.5%, to $39.5
million, reflecting the growth in net premiums earned and increased
technology expenses in 1997.
Commercial segment
Commercial segment premiums represented 31.5% and 33.9% of total net
premiums earned for the quarters ended March 31, 1997 and 1996,
respectively.
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------------------------
For the Quarters Ended 1997 1996
March 31 (in millions) ------------------------
Net premiums earned $ 66.2 $ 69.4
Losses and loss adjustment expenses 44.7 48.1
Policy acquisition and other underwriting expenses 17.7 17.4
Policyholders' dividends 1.6 1.8
---------- ----------
Underwriting profit $ 2.2 $ 2.1
========== ==========
</TABLE>
9
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Commercial segment net premiums earned decreased $3.2 million, or
4.6%, to $66.2 million for the quarter ended March 31, 1997 from $69.4
million for the quarter ended March 31, 1996. This decrease is
attributable to decreases in rates for workers' compensation,
resulting from continued competitive conditions in Michigan in this
line. Rates in the workers' compensation line were decreased 6.4% and
8.7% effective June 1, 1996 and March 1, 1997, respectively.
Management believes competitive conditions in Michigan in the workers'
compensation line may impact future growth in net premiums earned.
The commercial segment underwriting profit was $2.2 million and $2.1
million for the quarters ended March 31, 1997 and 1996, respectively.
Losses and LAE in the workers' compensation line decreased $5.7
million, or 28.9%, to $14.0 million primarily as a result of favorable
claims activity in prior accident years. Policy acquisition and other
underwriting expenses increased $0.3 million, or 1.7%, to $17.7
million, reflecting increased technology expenses in 1997.
Reserve for Losses and Loss Adjustment Expenses
- -----------------------------------------------
The Company regularly updates its reserve estimates as new information
becomes available and further events occur which may impact the
resolution of unsettled claims. Changes in prior reserve estimates
are reflected in results of operations in the year such changes are
determined to be needed and recorded. The table below provides a
reconciliation of the beginning and ending reserve for unpaid losses
and LAE as follows:
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For the period ended March 31 (in millions) 1997 1996
--------------------------
Reserve for losses and LAE, beginning of period $ 1,238.5 $ 1,291.6
Reserve for losses and LAE, net of reinsurance
recoverable:
Provision for insured events of the current 179.0 163.6
period
Decrease in provision for insured events of (20.5) (8.1)
prior years ------------ ------------
Total incurred losses and LAE 158.5 155.5
Payments, net of reinsurance recoverable:
Losses and LAE attributable to insured events of 57.9 56.1
current period
Losses and LAE attributable to insured events of 104.7 95.0
prior years ------------ ------------
Total payments 162.6 151.1
Change in reinsurance recoverable on unpaid losses (10.3) 13.9
----------- ------------
Reserve for losses and LAE, end of period $ 1,224.1 $ 1,309.9
============ ============
</TABLE>
As part of an ongoing process, the reserves have been re-estimated for
all prior accident years and were decreased by $20.5 million, and $8.1
million, for the quarters ended March 31, 1997 and 1996, respectively.
The favorable reserve development in both years primarily reflects the
initiatives taken by the Company to manage medical costs in both
automobile lines and the workers' compensation line, as well as the
impact of the Michigan Supreme Court ruling on workers' compensation
indemnity payments, which decreases the maximum amount to be paid for
indemnity cases on all existing and future claims.
10
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The company regularly reviews its reserving techniques, its overall
reserving position and its reinsurance. Based on (i) review of
historical data, legislative enactments, judicial decisions, legal
developments in impositions of damages, changes in political attitudes
and trends in general economic conditions, (ii) review of per claim
information, (iii) historical loss experience of the Company and the
industry, (iv) the relatively short-term nature of most policies and
(v) internal estimates of required reserves, management believes that
adequate provision has been made for loss reserves. However,
establishment of appropriate reserves is an inherently uncertain
process and there can be no certainty that current established
reserves will prove adequate in light of subsequent actual experience.
A significant change to the estimated reserves could have a material
impact on the results of operations.
Investment Results
- ------------------
Net investment income before taxes was $23.6 million and $19.6 million
for the quarters ended March 31, 1997 and 1996, respectively. The
increase is the result of the Company's portfolio shift from equity
securities to higher yielding debt securities, including longer
duration and non-investment grade securities. The average pre-tax
yields on debt securities were 6.8% in 1997 and 5.9% in 1996. Net
investment income after taxes was $19.8 million and $16.2 million for
the quarters ended March 31, 1997 and 1996, respectively. Net
realized gains on investments before taxes were $19.7 million and
$14.7 million during the first quarter of 1997 and 1996 respectively.
Net realized gains in 1997 and 1996 primarily resulted from sales of
appreciated equity securities.
Investment Portfolio
- --------------------
The Company's investment portfolio decreased $25.7 million, to
$1,579.5 million during the quarter, from $1,605.2 million at December
31, 1996. Debt securities increased $28.4 million, to $1,426.7
million, from $1,398.3 million, and represented 90.3% and 87.1% of the
carrying value of all investments at March 31, 1997 and December 31,
1996, respectively. This increase is consistent with the Company's
strategy of increasing the level of debt securities in the portfolio.
This was accomplished by reducing the level of equities in the
portfolio, which resulted in a $53.8 million decrease in equity
securities to $138.5 million in the first quarter of 1997. Tax-exempt
securities represented 66.7% of total debt securities at March 31,
1997 compared to 69.9% at December 31, 1996. The Company may make
modest extensions in portfolio incremental credit risk and adjustments
to its taxable and tax-exempt positions in the future to seek to
maximize after tax income
The unrealized appreciation in the investment portfolio at March 31,
1997 was $51.9 million compared to $92.8 million at December 31, 1996.
Unrealized depreciation in the quarter was $24.3 million for bonds,
and unrealized depreciation on equity securities and other investments
was $16.6 million.
Liquidity and Capital Resources
- -------------------------------
Liquidity describes the ability of a company to generate sufficient
cash flows to meet the cash requirements of business operations. As a
holding company, Citizens' primary source of cash for payment of
dividends to its shareholders is dividends from its insurance
subsidiaries, which are subject to limitations imposed by state
regulators. Such limitations require that dividends be paid only out
of statutory earned surplus (unassigned funds) and a restriction on
the payment of "extraordinary" dividends without prior approval of the
state authorities.
Underwriting and investing, typically the two distinct, but not
separate operations in an insurance company, are the sources of cash
for Citizens Insurance. The primary sources of cash are premiums
collected, investment income and maturing investments. Primary cash
outflows are paid losses and LAE, policy acquisition expenses, other
underwriting expenses, and purchases of investments. Cash outflows
related to claim losses and LAE can be variable because of
uncertainties surrounding settlement dates for unpaid losses and the
potential for large losses either individually or in the aggregate.
Accordingly, the Company's strategy is to monitor available cash and
short-term investment balances in relation to projected cash needs by
matching the maturities of its investments to expected payments of
current and long-term liabilities.
Net cash provided by operating activities, for the quarter ended March
31, 1997, was $2.4 million compared to $1.3 million in the prior year
period.
11
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Net cash provided by investing activities for the Company was $10.2
million and $6.5 million for the first quarters ended 1997 and 1996,
respectively. The increase in net cash provided by investing
activities was attributable to decreased purchases of debt securities.
Net cash used for financing activities for the Company was $1.8
million and $4.0 million, for the first quarters of 1997 and 1996,
respectively. This decrease in net cash used for financing activities
was due to the repurchase of $2.2 million of treasury stock in 1996.
Shareholders' equity was $754.4 million at March 31, 1997, compared to
$754.5 million at December 31, 1996, both $21.39 per share resulting
from higher net income offset by unrealized depreciation on
investments. Changes in shareholders' equity related to the
unrealized values of underlying portfolio investments will continue to
be volatile as market prices of debt securities fluctuate with changes
in the interest rate environment.
The Company expects to continue to pay dividends in the foreseeable
future. However, payment of future dividends is subject to the Board
of Directors' approval and is dependent, among other things, upon
earnings and the financial condition of the Company.
Based on current trends, the Company expects to continue to generate
sufficient positive operating cash to meet all short-term and long-
term cash requirements. The Company maintains a high degree of
liquidity within the investment portfolio in fixed maturity
investments, common stock and short-term investments.
Forward-Looking Statements
- --------------------------
The Company wishes to caution readers that the following important
factors, among others, in some cases have affected and in the future
could affect, the Company's actual results and could cause the
Company's actual results for 1997 and beyond to differ materially from
those expressed in any forward-looking statements made by, or on
behalf of, the Company. When used in the MD&A discussion, the words
"believes," "anticipated," "expects" and similar expressions are
intended to identify forward-looking statements. See "Important
Factors Regarding Forward-Looking Statements" filed as Exhibit 99.1 to
the Company's 1996 Annual Report to Shareholders and incorporated
herein by reference.
Factors that may cause actual results to differ materially from those
contemplated or projected, forecast, estimated or budgeted in such
forward looking statements include among others, the following
possibilities: (i) adverse catastrophe experience and severe weather;
(ii) adverse loss development for events the Company insured in prior
years; (iii) heightened competition, including the intensification of
price competition, the entry of new competitors, and the introduction
of new products by new and existing competitors; (iv) adverse state
and federal legislation, including decreases in rates, limitations on
premium levels, increases in minimum capital and reserve requirements,
benefit mandates, limitations on the ability to manage care and
utilization, and tax treatment of insurance products; (v) changes in
interest rates causing a reduction of investment income or in the
market value of interest rate sensitive investments; (vi) failure to
obtain new customers, retain existing customers or reductions in
policies in force by existing customers; (vii) higher service,
administrative, or general expense due to the need for additional
advertising, marketing, administrative or management information
systems expenditures; (viii) loss or retirement of key executives;
(ix) increases in medical costs, including increases in utilization,
costs of medical services, pharmaceuticals, durable medical equipment
and other covered items; (x) termination of provider contracts or
renegotiation at less cost-effective rates or terms of payment; (xi)
changes in the Company's liquidity due to changes in asset and
liability matching; (xii) restrictions on insurance underwriting,
based on certain criteria, (xiii) adverse changes in the ratings
obtained by independent rating agencies such as Moody's, Standard and
Poors and A.M. Best.
12
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PART II - OTHER INFORMATION
ITEM 6
Exhibits and Reports on Form 8-K
(a) Exhibits
EX-11 Statement regarding computation of per share earnings.
EX-27 Financial Data Schedule
.
(b) Reports on Form 8-K
None
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Citizens Corporation
Registrant
Dated May 14, 1997 /s/ John F.O'Brien
------------------------------------------
John F. O'Brien
President and Chief Executive Officer, and
Chairman of the Board
Dated May 14, 1997 /s/ Edward J.Parry, III
------------------------------------------
Edward J. Parry, III
Vice President, Chief Financial Officer,
Treasurer and Principal Accounting Officer
14
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<TABLE>
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Exhibit 11
CITIZENS CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
For the Periods Ended March 31, 1997 and 1996
(in millions, except per share data)
Quarter Ended
March 31,
----------------
1997 1996
----------------
Primary:
Average shares outstanding 35.3 35.8
Net effect of dilutive stock options based on the treasury
stock method using average market price - -
----------------
TOTALS 35.3 35.8
================
Net income available to shareholders $ 28.4 $ 22.5
================
Per share amount $ 0.80 $ 0.63
Fully diluted:
Average shares outstanding 35.3 35.8
Net effect of dilutive stock options based on the treasury
stock method using average market price - -
----------------
TOTALS 35.3 35.8
================
Net income available to shareholders $ 28.4 $ 22.5
================
Per share amount $ 0.80 $ 0.63
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<DEBT-HELD-FOR-SALE> 1427
<DEBT-CARRYING-VALUE> 1420
<DEBT-MARKET-VALUE> 1427
<EQUITIES> 139
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 1580
<CASH> 47
<RECOVER-REINSURE> 12
<DEFERRED-ACQUISITION> 55
<TOTAL-ASSETS> 2491
<POLICY-LOSSES> 1224
<UNEARNED-PREMIUMS> 362
<POLICY-OTHER> 4
<POLICY-HOLDER-FUNDS> 6
<NOTES-PAYABLE> 0
0
0
<COMMON> 0
<OTHER-SE> 754
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210
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<PROVISION-PRIOR> (21)
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</TABLE>