Citizens Inc. revenues climb.

AUSTIN, Texas--(BUSINESS WIRE)--Nov. 15, 1996--Citizens Inc. (ASE:CIA), announced that revenues for the nine-month period ended Sept. 30, 1996 increased to $46.2 million, a 24.2% increase over the same period in 1995 when revenues were $37.2 million.

Net income trailed the previous year, amounting to $1.3 million, or $0.07 per share compared to $2.2 million, or $0.12 per share the prior year.

Premium income increased by 22.2% to $39.3 million during the first three quarters of 1996, compared to $32.2 million for the same period in 1995. Increased international sales of the company's U.S. dollar denominated whole life products, as well as the sales generated in the U.S. by American Liberty Life, acquired in September 1995, fueled the increase in premiums.

Investment income grew to $6.6 million, compared to $4.9 million in 1995, an increase of 34.4%. This latter increase reflects returns on the company's larger asset base. Net income in 1996 has trailed the prior year due to expense increases resulting from recent acquisitions and policy surrenders due to economic downturns in overseas markets.

Earnings for the third quarter were $646,000 or $.03 per share, compared to $901,000, or $.05 per share for the same period in 1995. Revenues during the period increased to $14.6 million from $11.6 million as the result of renewing premium income and the premiums acquired through the acquisition of American Liberty Life Insurance Co. The increased expense associated with consolidation of American Liberty's operations into Citizens, which was completed during the quarter, was the primary reason for the decline in earnings. Management expects to achieve significant expense reductions as a result of economies of scale beginning in the last quarter of the year.

Total assets increased from $205.5 million at Dec. 31, 1995 to $214.2 million at Sept. 30, 1996 due to the merger of Insurance Investors & Holding Co. of Peoria, Ill., which was consummated during March 1996. Stockholders' equity grew to $66.8 million as a result of the acquisition of Insurance Investors for shares of the company's Class A common stock and improvement in the market value of the company's bond portfolio.

The company announced in October that a definitive agreement had been reached to acquire American Investment Network Inc. of Jackson, Miss., parent of United Security Life Insurance Co. The transaction is expected to close in early 1997. -0-

                            Citizens Inc.
           Comparative Consolidated Financial Highlights
                        Operating Statements

                             (Unaudited)               (Unaudited)
                           Nine Months Ended        Three Months Ended
                               Sept. 30,                 Sept. 30,
                           1996         1995         1996         1995

Premiums and Other
 Revenues
Premium income       $39,301,429  $32,166,889  $14,619,278  $11,661,236
Net investment income  6,582,091    4,898,497    2,177,548    1,774,243
Other                    272,703       90,229      179,468      (14,681)
Total revenues       $46,156,223  $37,155,615  $16,976,294  $13,420,798

Benefits and Expenses
Increase in future policy
 benefit reserves     $6,549,858   $7,355,554   $2,541,236   $2,395,711
Claims and surrenders 19,283,265   13,791,382    7,319,704    4,797,568
Policyholder dividends 1,733,240    1,780,506      629,079      667,099
Commissions            8,630,952    7,558,495    3,182,045    2,307,494
Underwriting and
 insurance expenses    6,374,934    4,413,629    1,973,659    1,514,144
Net change in deferred
 policy acquisition
 costs                      (507)  (1,936,106)     225,904     (308,932)
Other                  1,409,606      734,891      221,830      321,936
Total benefits and
 expenses            $43,981,348  $33,698,351  $16,093,457  $11,695,020
Operating income       2,174,875    3,457,264      882,837    1,725,778

Realized gains (losses)
 on investments           93,376      (94,193)      80,667      (63,851)
Income before federal
 income tax           $2,268,251   $3,363,071     $963,504   $1,661,927

Federal income tax
 expense              $   956,253  $1,171,149   $  317,969  $   760,661
Net income            $ 1,311,998  $2,191,922   $  645,535  $   901,266


                                         Income Per Share

Operating income per share  $0.12       $0.18        $0.05        $0.09
Net income per share        $0.07       $0.12        $0.03        $0.05
Average shares
 outstanding           19,497,613  19,322,743   19,497,613   19,322,743


                                     Balance Sheets

                         Sept. 30,       June 30,       March 31,
                           1996           1996            1996
Total assets           $214,192,098   $208,953,204    $204,685,825
Total invested assets  $134,231,444   $130,970,187    $128,219,922
Stockholders' equity   $ 66,760,232   $ 65,687,839    $ 64,259,767

                         Dec. 31,       Sept. 30,
                           1995           1995
Total assets           $205,486,247   $199,336,938
Total invested assets  $130,024,739   $124,165,312
Stockholders' equity   $ 64,712,990   $ 62,407,967

CONTACT: Citizens Inc., Austin

Mark A. Oliver, 512/837-7100