What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 211 added, 180 removed, 526 unchanged (43% of the section changed)

14 unchanged sentences

We refer to our Management’s Discussion and Analysis of Financial Condition and Results of Operations as our “MD&A”.

The objective of our MD&A is to provide investors with information in order to assess the material changes in our financial condition from December 31, 2024 to June 30, 2025 and the material changes in our results of operations for the three and six months ended June 30, 2025 as compared to the same periods in 2024.

The objective of our MD&A is to provide investors with information in order to assess the material changes in our financial condition from December 31, 2024 to September 30, 2025 and the material changes in our results of operations for the three and nine months ended September 30, 2025 as compared to the same periods in 2024.

We also discuss in the MD&A any trends that we believe may materially affect our future operations or financial condition.

7 unchanged sentences

In addition to paying and reserving for insurance benefits that we pay to our policyholders, our expenses consist primarily of the costs of selling our insurance products (e.g., commissions, underwriting, marketing expenses), operating expenses and income taxes.

June 30, 2025 | 10-Q 37

September 30, 2025 | 10-Q 39

CITIZENS, INC.

12 unchanged sentences

FINANCIAL HIGHLIGHTS

Net income before federal income tax in the three months ended June 30, 2025 increased to $6.9 million from $3.3 million in the three months ended June 30, 2024.

The factors that drove this increase were:

• $0.8 million increase in total premium revenue;

• $2.7 million increase in investment related gains and losses;

• $3.2 million decrease in general expenses due to a $3.5 million legal fee expense incurred in the second quarter of 2024;

Net income before federal income tax in the three months ended September 30, 2025 increased to $4.5 million from $3.0 million in the three months ended September 30, 2024 due to a $1.1 million increase in total revenues and a $0.4 million decrease in total benefits and expenses.

The primary factors that drove these changes were:

• $1.7 million increase in net investment income;

• $1.0 million increase in other income related to issuance of supplemental contracts;

partially offset by:

• $2.3 million increase in insurance benefits paid or provided due to increased matured endowments in our international business;

• $0.7 million increase in expenses related to restricted stock unit grants.

Net income before federal income tax in the six months ended June 30, 2025 decreased to $5.1 million from $8.2 million in the same period in 2024.

• $2.1 million decline in investment related gains and losses primarily related to the BlackRock write-down.

Net income before federal income tax in the nine months ended September 30, 2025 decreased to $9.6 million from $11.3 million in the same period in 2024.

The factors that drove this decrease were:

3 unchanged sentences

• $2.4 million increase in total premium revenue;

• $1.8 million decline in other general expenses.

At June 30, 2025

• $1.7 million increase in other income.

At September 30, 2025

• Total assets of $1.7 billion

4 unchanged sentences

• Adjusted book value per share of Class A common stock of $6.26 1

• Diluted earnings per share of Class A common stock for the six months ended of $0.10

• Diluted earnings per share of Class A common stock for the nine months ended of $0.14

1 Adjusted book value per of Class A common share is a non-GAAP measure that is calculated by dividing actual Class A common stockholders’ equity, excluding AOCI, by the number of Class A common shares outstanding at the end of the period.

June 30, 2025 | 10-Q 38

September 30, 2025 | 10-Q 40

CITIZENS, INC.

3 unchanged sentences

• Sales of our products and the premiums we receive from these sales

• Investments

• Investments and the income that they generate

• Claims and surrenders

13 unchanged sentences

Throughout the MD&A, we refer to "direct" premiums as all premiums received and "net" or "total" premiums as all premiums received less premiums ceded to RGA Reinsurance Company ("RGA") and our other reinsurers.

Direct premium revenue increased 6% in the three months ended June 30, 2025, to $46.4 million from $43.9 million in the three months ended June 30, 2024 and increased 7% in the six months ended June 30, 2025, to $88.8 million from $83.0 million in the six months ended June 30, 2024.

Direct premium revenue increased 4% in the three months ended September 30, 2025, to $46.6 million from $44.7 million in the three months ended September 30, 2024 and increased 6% in the nine months ended September 30, 2025, to $135.3 million from $127.7 million in the nine months ended September 30, 2024.

This increase was driven by sales of CICA Domestic products.

First Year Premiums.

Direct first year premiums increased 20% in the three months ended June 30, 2025, to $9.4 million from $7.9 million in the three months ended June 30, 2024 and increased 32%, to $18.3 million in the six months ended June 30, 2025, compared to $13.8 million in the six months ended June 30, 2024, including 42% growth in our Life Insurance segment, driven by sales of our newer products and an increased number of producing agents.

Direct first year premiums increased 8% in the three months ended September 30, 2025, to $9.5 million from $8.8 million in the three months ended September 30, 2024 and increased 23%, to $27.8 million in the nine months ended September 30, 2025, compared to $22.6 million in the nine months ended September 30, 2024, including 29% growth in our Life Insurance segment, driven by sales of our newer products and an increased number of producing agents.

First year premium growth was primarily in our new CICA Domestic final expense business.

June 30, 2025 | 10-Q 39

September 30, 2025 | 10-Q 41

CITIZENS, INC.

1 unchanged sentence

Renewal Premiums.

Our direct renewal premium revenues in the three and six months ended June 30, 2025 increased primarily due to strong sales in 2024 leading to higher number of policies paying renewal premiums in the current periods.

Our direct renewal premium revenues in the three and nine months ended September 30, 2025 increased primarily due to strong sales in 2024 leading to higher number of policies paying renewal premiums in the current periods.

Investment Income.

Our net investment income decreased slightly for the three and six months ended June 30, 2025 compared to the same prior year periods, due primarily to lower investment income from our limited partnership investments.

Our net investment income increased for the three and nine months ended September 30, 2025 compared to the same prior year periods.

In the three-month period, we received a one-time dividend of $1.7 million from one of our limited partnership investments due to the sale of one of its assets.

Additionally, we have begun investing in investment grade private placement fixed income securities and structured notes where we expect higher returns;

this investment strategy led to slightly higher net investment income in the three and nine month periods.

Claims and Surrenders.

1 unchanged sentence

The three largest components of this expense are reflected in the graphs below.

In the three and six months ended June 30, 2025 compared to the prior year periods,

In the three and nine months ended September 30, 2025 compared to the prior year periods,

• death claim benefits decreased in our Life Insurance segment due to a combination of lower volume of claims and our coinsurance agreement with RGA alleviating some of our liability to pay these claims than in the prior year periods,

• surrenders decreased slightly, and

• surrenders were relatively flat, and

• matured endowments increased as expected as many of our endowment policies reach their contractual maturity dates.

June 30, 2025 | 10-Q 40

September 30, 2025 | 10-Q 42

CITIZENS, INC.

3 unchanged sentences

Operating expenses are meaningful to gain an understanding of how we manage our business, including among other things, salaries, benefits and spending on growth initiatives.

Our operating expenses decreased in the three and six months ended June 30, 2025 as compared to the prior year periods.

Despite continued investment in the growth of our business and higher costs associated with our equity compensation program as a result of increased stock price and additional participants, this expense was lower due to the accrual of $3.5 million in legal fees in the prior year.

Our operating expenses increased in the three months ended September 30, 2025, but decreased in the nine month period as compared to the prior year periods.

Despite continued investment in the growth of our business and higher costs associated with our equity compensation program as a result of increased stock price and additional participants, this expense was lower in the nine month period due to the accrual of $3.5 million in legal fees in the prior year.

These were fees awarded to certain defendants in the trade secret lawsuit.

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Our results will be affected to the extent there is a variance between our actuarial assumptions and actual experience.

We expect to see a rebalancing in our mix of business arising due to the anticipated volume of maturities in our international endowment business, as well as continued domestic growth in the Life Insurance segment, which has

June 30, 2025 | 10-Q 41

September 30, 2025 | 10-Q 43

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

been discussed previously.

Our current profitability is affected by how closely actual experience matches our actuarial assumptions for these shifts, and by the amount of reserves we must hold.

Actuarial assumptions are continually monitored and updated at least annually to reflect overall experience as well as emerging trends.

Additionally, the best estimate assumptions are updated every year in our third quarter and are reflected on our income statement as a policyholder liability remeasurement gain or loss.

In the third quarter of 2025, this review results in favorable changes to mortality, lapse, and accrual assumptions in our Home Service segment and in CICA Domestic, consistent with emerging trends in Company experience.

Conversely, this review resulted in additional reserves in our international business from better than expected retention of our endowment products.

Excluding the impact of assumption changes, the Company's results for actual variances from expected experience for the nine months ended September 30, 2025 was $1.5 million net remeasurement loss and for the nine months ended September 30, 2024 was a $2.6 million net measurement loss.

OUR OPERATING SEGMENTS

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The amount of direct insurance, number of policies, and average face amounts for life policies issued during the periods indicated are shown below.

Six Months Ended June 30, 2025 2024

Nine Months Ended September 30, 2025 2024

Issued Number of

9 unchanged sentences

Total $ 777,602,014 50,288 $ 877,259,334 49,275

In the first six months of 2025, we issued $517.3 million in new insurance as we continued to grow our inforce business with our newer products tailored to our specific markets.

In our Life Insurance segment, implementation of new initiatives in CICA Domestic, including use of information to enhance underwriting decisions with additional medical and lab data from third parties, resulted in higher sales of products with lower policy f ace amounts i n the first six months of 2025 as compared to the prior year, which led to a lower amount of insurance issued.

CICA International benefited from increased sales of our whole life product, which accounted for 67% of total insurance issued in CICA International for the six months ended June 30, 2025.

In the first nine months of 2025, we issued $777.6 million in new insurance as we continued to grow our inforce business with our newer products tailored to our specific markets.

In our Life Insurance segment, implementation of new initiatives in CICA Domestic, including use of information to enhance underwriting decisions with additional medical and lab data from third parties, resulted in sales of products with lower policy f ace amounts , which led to a lower amount of insurance issued despite a higher number of policies issued.

CICA International benefited from increased sales of our whole life product, which accounted for 66% of total insurance issued in CICA International for the nine months ended September 30, 2025.

This product tends to have higher policy face amounts than our older endowment products, leading to an increase in insurance issued internationally.

Insurance issued in our Home Service Insurance segment decreased slightly for the six months ended June 30, 2025 compared to the prior year period.

We continue our strategic actions intended to improve sales quality and persistency.

These improvements did result in higher insurance issued in the second quarter of 2025 when compared to the second quarter of 2024.

We also believe growth is being impacted by inflation on the cost of living, which has affected new sales since the customer demographic is primarily lower-income individuals.

June 30, 2025 | 10-Q 42

Insurance issued in our Home Service Insurance segment increased 2% for the nine months ended September 30, 2025 compared to the prior year period.

We continue our strategic actions intended to improve sales quality and persistency, which resulted in higher insurance issued.

We believe growth in this segment is being impacted by inflation on the cost of living, which has affected new sales since the customer demographic is primarily lower-income individuals.

September 30, 2025 | 10-Q 44

CITIZENS, INC.

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Our revenues are generated primarily by life insurance premiums and investment income from invested assets.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

6 unchanged sentences

Total revenues $ 62,808 61,731 183,546 181,527

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands)

9 unchanged sentences

$ 43,303 42,913 126,488 124,147

June 30, 2025 | 10-Q 43

September 30, 2025 | 10-Q 45

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

Our first year direct premiums increased 20% and 32% in the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024, due to sales of our newer products in our Life Insurance segment and expanded domestic distribution.

Renewal premiums increased from strong first year sales in 2024 in our Life Insurance segment leading to higher number of policies paying renewal premiums in the first half of 2025, which more than offset the impacts from the high level of surrenders during the last few years and increasing matured endowment benefits paid in the international portion of our Life Insurance segment.

Reinsurance premiums ceded increased in the three and six months ended June 30, 2025 compared to the same periods in 2024 due to a coinsurance agreement we entered into with RGA in the second quarter of 2024.

Our first year direct premiums increased 8% and 23% in the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024, due to sales of our newer products in our Life Insurance segment and expanded domestic distribution.

Renewal premiums increased from strong first year sales in 2024 in our Life Insurance segment leading to higher number of policies paying renewal premiums in 2025, which more than offset the impact from the high level of surrenders during the last few years and increasing matured endowment benefits paid in the international portion of our Life Insurance segment.

Reinsurance premiums ceded increased in the three and nine months ended September 30, 2025 compared to the same periods in 2024 due to the coinsurance agreement we entered into with RGA in the second quarter of 2024.

Net Investment Income.

A summary of our net investment income and annualized net investment income performance is as follows:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands, except for %) 2025 2024 2025 2024

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Our net fixed maturity investment portfolio, primarily invested in callable securities, has faced challenges as many securities were called between 2019 and 2021, necessitating reinvestment in low interest rate fixed maturity assets, which impact net investment income and yields.

In order to enhance yields, we are investing in new opportunities, including investment grade private placement fixed income securities and other asset classes, while maintaining a prudent risk profile.

In order to enhance yields, we are investing in new opportunities, including investment grade private placement fixed income securities and structured notes, while maintaining a prudent risk profile.

Gross investment income from long-term investments increased as we received a $1.7 million dividend from one limited partnership investment due to a sale of one of its assets.

Investment Related Gains (Losses), Net.

We recorded investment related gains of $2.4 million and losses of $0.5 million during the three and six months ended June 30, 2025, respectively, compared to investment related losses of $0.3 million and gains of $0.7 million during the same prior year periods.

The losses are primarily related to the non-cash write-down of our BlackRock ESG investment that occurred in first quarter 2025.

We recorded investment related losses of $1.3 million and $1.7 million during the three and nine months ended September 30, 2025, respectively, compared to investment related gains of $0.8 million and $1.5 million during the same prior year periods.

The losses are primarily related to the non-cash write-down of our BlackRock ESG investment during 2025.

We did not sell this investment;

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Other income consists primarily of supplemental contracts issued to international policyholders in our Life Insurance segment upon the surrender or maturity of their original policies.

Supplemental contracts offer our policyholders the opportunity to leave their cash with us and be paid interest at a guaranteed rate or receive an annuity, at their option.

June 30, 2025 | 10-Q 44

Supplemental contracts offer our

September 30, 2025 | 10-Q 46

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MANAGEMENT'S DISCUSSION & ANALYSIS

policyholders the opportunity to leave their cash with us and be paid interest at a guaranteed rate or receive an annuity, at their option.

BENEFITS AND EXPENSES

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

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Claims and Surrenders.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

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Total claims and surrenders $ 44,276 36,478 124,594 104,121

Death claim benefits decreased in the three and six months ended June 30, 2025 compared to the same periods in 2024 due to both lower volume and our coinsurance agreement with RGA, which alleviates some of our liability to pay death claims.

Death claim benefits decreased in the three and nine months ended September 30, 2025 compared to the same periods in 2024 due to both lower volume and our coinsurance agreement with RGA, which alleviates some of our liability to pay death claims.

We did not have this agreement during the first quarter of 2024.

Many of our endowment policies are reaching their contractual maturity dates and thus matured endowment benefits increased in the three and six months ended June 30, 2025 compared to the prior year periods.

Many of our endowment policies are reaching their contractual maturity dates and thus matured endowment benefits increased in the three and nine months ended September 30, 2025 compared to the prior year periods.

We anticipated these increases in 2025 based upon the scheduled maturity of the contracts.

We expect continued year-over-year increases in matured endowment benefits throughout 2025, then expect the matured endowment benefits to remain at elevated, but slightly lower levels over the next few years, as more of these contracts expire.

June 30, 2025 | 10-Q 45

We expect continued year-over-year increases in matured endowment benefits throughout the remainder of 2025, then expect the

September 30, 2025 | 10-Q 47

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MANAGEMENT'S DISCUSSION & ANALYSIS

matured endowment benefits to remain at elevated, but slightly lower levels over the next few years, as more of these contracts expire.

Increase (Decrease) in Future Policy Benefit Reserves.

Future policy benefit reserves reflect the liability established to provide for the payment of policy benefits that we expect to pay in the future and thus generally increase when we have a larger in force block of business due to higher sales and better persistency (i.e., more policies on which we expect to pay future benefits) and decrease when we have lower sales and persistency.

In the three and six months ended June 30, 2025, the change in future policy benefit reserves decreased as compared to the prior year periods despite the increase in our inforce business, due to the amount of reserves released in connection with matured endowments.

In the three and nine months ended September 30, 2025, the change in future policy benefit reserves decreased significantly as compared to the prior year periods despite the increase in our inforce business, due to the amount of reserves released in connection with matured endowments.

Policyholder Liability Remeasurement (Gain) Loss.

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On a quarterly basis, we review actual versus expected experience in such quarter, which is reported as a policyholder liability remeasurement gain (if better performance than assumptions) or loss (if lower performance than assumptions).

Additionally, the best estimate assumptions are updated every year in our third quarter and are reflected on our income statement as a policyholder liability remeasurement gain or loss.

Commission expenses are a cost of acquiring business, as commissions are the primary compensation paid to our independent consultants and independent agents for selling our products.

First year commission rates are higher than renewal commission rates and thus commissions fluctuate directly in relation to first year sales.

Although first year sales increased in the three and six months ended June 30, 2025 as compared to the same periods in 2024, commissions decreased in the second quarter of 2025 and were flat in the six month ended June 30, 2025 due to our coinsurance agreement with RGA where they share in commission expenses.

Although first year sales increased in the three and nine months ended September 30, 2025 as compared to the same periods in 2024, commissions decreased in the three and nine months ended September 30, 2025 due to our coinsurance agreement with RGA where they share in commission expenses.

Other General Expenses.

Total general expenses decreased $3.2 million and $1.8 million, respectively, in 2025 compared to the same periods in 2024.

Although we continue to incur costs related to our strategic growth initiatives and costs incurred associated with our equity compensation program due to higher stock price and additional participants, we incurred a $3.5 million legal fee in the prior year periods due to the trade secret lawsuit.

Total general expenses increased $1.2 million in the three months ended September 30, 2025 and decreased $0.6 million in the nine months ended September 30, 2025 compared to the same periods in 2024.

Although we continue to incur costs related to our strategic growth initiatives and costs incurred associated with our equity compensation program due to higher stock price and additional participants, we incurred a $3.5 million legal fee in the second quarter of 2024 due to the trade secret lawsuit.

We continue to work on managing controllable operating expenses while investing in growth initiatives.

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We capitalize costs related to successful sales of our insurance products, which include certain commissions, policy issuance costs, and underwriting and agency expenses.

These costs vary based upon amounts of premiums received related to new and renewal business.

Capitalized DAC decreased in the three and six months ended June 30, 2025, which is in line with the increases in new sales activity.

Significantly lower amounts are capitalized related to renewal business in correlation with the lower commissions paid on that business compared to first year business, which has higher commission rates.

These costs vary based upon amounts of premiums received and ceded related to new and renewal business.

Amortization of Deferred Policy Acquisition Costs.

Amortization of DAC increased in the three and six months ended June 30, 2025, compared to the same periods in 2024.

Amortization of DAC increased in the three and nine months ended September 30, 2025, compared to the same periods in 2024.

DAC is amortized on a constant level basis over the expected term of the related contracts to approximate straight-line amortization.

Federal Income Tax.

Tax expense increased for the three and nine months ended September 30, 2025 resulting in effective tax rates of 46.0% and 24.5% for the three and nine months ended September 30, 2025, compared to 8.1% and (0.2)% for the same periods in 2024.

The increase in the current quarter primarily reflects higher taxable U.S.

income and discrete tax adjustments recorded during the period.

Excluding the discrete tax adjustments for the period, the effective tax rate for the period would be 24.6%.

In the three months ended September 30, 2025, the Company recognized a $0.8 million return-to-provision true-up related to 2024 Subpart F income adjustments from partnership investments, which increased tax expense for the quarter.

The Company's tax rate was impacted by differences between our effective tax rate and the statutory tax rate resulting from income and expense items that are treated differently for financial reporting and tax purposes.

In addition, CICA International is considered a controlled foreign corporation for federal tax purposes and CICA International's activity gives rise to taxable income in the U.S.

as Subpart F Income, which is treated as a

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permanent tax difference and therefore included in the Company's effective tax rate calculation.

See Part I, Item 1, Note 11 .

Income Taxes in the notes to our consolidated financial statements herein.

SEGMENT OPERATIONS

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The Company's Other Non-Insurance Enterprises include non-insurance operations such as IT and corporate-support functions, which are included in the table presented below to properly reconcile the segment information with the consolidated financial statements of the Company.

June 30, 2025 | 10-Q 46

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The following table sets forth income (loss) before federal income tax by segment during the periods indicated.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

6 unchanged sentences

$ 4,479 3,037 9,606 11,264

September 30, 2025 | 10-Q 49

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

LIFE INSURANCE

Detailed results of operations in the Life Insurance segment for the periods indicated are as follows:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

20 unchanged sentences

$ 3,535 4,416 11,926 17,688

June 30, 2025 | 10-Q 47

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

In the three months ended June 30, 2025, the $0.7 million increase in income before federal income tax was driven by higher first year and renewal premiums and an increase in investment related gains (losses) partially offset by higher claims and surrenders due to the matured endowments in CICA International.

In the three months ended September 30, 2025, income before federal income tax in the Life Insurance segment decreased by $0.9 million despite higher first year and renewal direct premiums, higher other income due to supplemental contracts and higher net investment income.

This decrease was driven by a $3.0 million decrease in investment related gains and losses and a $1.4 million increase in insurance benefits paid or provided due to increased matured endowments in CICA International.

Commissions were lower despite higher first year sales due to our CICA Domestic coinsurance agreement with RGA.

In the six months ended June 30, 2025, income before federal income tax decreased despite a $2.3 million increase in premiums driven by a $0.9 million decrease in investment related gains and losses primarily related to the BlackRock write-down;

In the nine months ended September 30, 2025, income before federal income tax decreased despite a $2.9 million increase in premiums, higher other income and higher net investment income.

The decrease was driven by a $3.9 million decrease in investment related gains and losses primarily related to the BlackRock write-down;

and a $6.4 million increase in insurance benefits paid or provided due to increased matured endowments in CICA International.

September 30, 2025 | 10-Q 50

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

Life Insurance segment premium breakout is detailed below.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

5 unchanged sentences

Total premiums $ 32,785 32,201 94,582 91,667

Direct premiums increased by $2.6 million and $6.1 million in the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024.

The increase was driven by sales of our newer products and an increased number of producing agents, primarily in CICA Domestic.

Direct premiums increased by $2.0 million and $8.1 million in the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

The increase was driven by sales of our newer products, including our newly launched single premium product designed specifically for the international market, which aims to attract business that is reaching maturity, and an increased number of producing agents selling our final expense products in CICA Domestic.

Ceded reinsurance premiums increased due to the CICA Domestic coinsurance agreement with RGA entered into in the second quarter of 2024.

June 30, 2025 | 10-Q 48

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

While CICA Domestic drove the significant increase in first year premiums, life insurance premiums are generated largely from our international policyholders living in almost 80 different countries across the globe.

The following table sets forth our premiums by location for the three and six months ended June 30, 2025 and 2024.

Three Months Ended Six Months Ended

June 30, June 30,

The following table sets forth our premiums by location for the three and nine months ended September 30, 2025 and 2024.

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

1 unchanged sentence

Colombia $ 7,088 6,512 20,103 18,538

Ecuador 3,527 3,421 10,093 9,610

Taiwan 3,031 3,520 10,084 11,679

Venezuela 3,258 3,828 9,930 10,806

Ecuador 3,366 3,145 6,566 6,189

Argentina 3,180 2,790 8,199 7,561

8 unchanged sentences

Sales in Taiwan have been declining recently due to succession related difficulties within our primary distribution agency in Taiwan, regulatory challenges and geopolitical shift.

We are also starting to face some headwinds in Venezuela that may affect premiums revenues, due to the strength of the US dollar compared to the local currency and their difficulties to obtain dollars.

We are facing some headwinds in Venezuela that may affect premiums revenues, due to the strength of the US dollar compared to the local currency and their difficulties to obtain dollars.

Net Investment Income.

Our net investment income increased for the three and nine months ended September 30, 2025 compared to the same prior year periods.

In the three-month period, we received a one-time dividend of $1.7

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million from one of our limited partnership investments due to the sale of one of its assets.

Additionally, we have begun investing in investment grade private placement fixed income securities and structured notes;

this investment strategy led to slightly higher net investment income in the three and nine month periods.

Investment Related Gains (Losses), Net.

We recorded investment related gains of $2.6 million and losses of $0.1 million during the three and six months ended June 30, 2025, respectively, compared to investment related losses of $0.3 million and gains of $0.8 million during the same prior year periods.

We recorded investment related losses of $2.1 million and $2.2 million during the three and nine months ended September 30, 2025, respectively, compared to investment related gains of $0.9 million and $1.7 million during the same prior year periods.

These fluctuations in investment-related gains and losses were primarily influenced by changes in the estimated fair market value of our limited partnership investments.

Notably, the loss for the six months ending June 30, 2025, was largely attributed to a write-down in the estimated fair market value of our ESG BlackRock investment.

Notably, the loss for the both three and nine months ending September 30, 2025, was largely attributed to a write-down in the estimated fair market value of our ESG BlackRock investment.

This decline was significant enough to outweigh the gains from other investments.

Other Income.

Other income consists primarily of supplemental contracts issued to international policyholders upon the surrender or maturity of their original policies.

Supplemental contracts offer our policyholders the opportunity to leave their cash with us and be paid interest at a guaranteed rate or receive an annuity, at their option.

Claims and Surrenders.

The following table sets forth our primary claims and surrender benefits paid within our Life Insurance segment for the three and six months ended June 30, 2025 compared to the same periods in 2024.

Three Months Ended Six Months Ended

June 30, June 30,

The following table sets forth our primary claims and surrender benefits paid within our Life Insurance segment for the three and nine months ended September 30, 2025 compared to the same periods in 2024.

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

6 unchanged sentences

Total claims and surrenders $ 38,603 30,083 107,968 86,616

June 30, 2025 | 10-Q 49

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The majority of our claims and surrender benefits in our Life Insurance segment were related to payment of surrender benefits and matured endowment benefits in CICA International.

1 unchanged sentence

We expect elevated trends to continue over the next few years but at a reduced level when compared to 2025.

Death claim benefits decreased for the three and six months ended June 30, 2025, compared to the prior year periods due to a combination of lower volume and our coinsurance agreement with RGA alleviating some of our liability to pay these claims.

Mortality experience is closely monitored and these amounts were within expected levels.

Death claim benefits decreased for the three and nine months ended September 30, 2025, compared to the prior year periods due to a combination of lower volume and our coinsurance agreement with RGA alleviating some of our liability to pay these claims.

Increase (Decrease) in Future Policy Benefit Reserves.

The change in future policy benefit reserves for the three and six months ended June 30, 2025 and 2024 was the result of reserves released due to surrenders and higher matured endowment benefits.

These releases were partially offset by increases in reserves due to new insurance issued and the reserves that increase on our in force block of business nearing maturity.

The change in future policy benefit reserves for the three and nine months ended September 30, 2025 and 2024 was the result of reserves released due to surrenders and higher matured endowment benefits.

These releases were partially offset by increases in reserves due to new insurance issued and the reserves that increase on our in force block of business.

September 30, 2025 | 10-Q 52

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

HOME SERVICE INSURANCE

Detailed results of operations for the Home Service Insurance segment for the periods indicated are as follows:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

21 unchanged sentences

$ 2,978 (80) 4,705 1,954

June 30, 2025 | 10-Q 50

Income before federal income tax in the three and nine months ended September 30, 2025 increased to $3.0 million and $4.7 million from a loss before federal income tax of $0.1 million and income of $2.0 million in the same prior year periods.

The factors that drove these increases were mainly investment related gains as well as lower claims and surrenders.

These drivers coupled with a favorable policyholder liability remeasurement stemming primarily from revised mortality and accrual assumptions.

September 30, 2025 | 10-Q 53

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

Income before federal income tax in the three months ended June 30, 2025 increased to $1.6 million from $1.4 million in the three months ended June 30, 2024.

The factors that drove this increase were lower insurance benefits paid and provided and commissions, partially offset by investment related losses.

Income before federal income tax in the six months ended June 30, 2025 decreased to $1.7 million from $2.0 million in the same period in 2024.

The factors that drove this decrease were investment related losses partially offset by lower insurance benefits paid and provided.

Home Service Insurance segment life and A&H premium breakout is detailed below.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

6 unchanged sentences

$ 10,518 10,712 31,906 32,480

Our life and A&H premiums in the Home Service segment slightly declined in the three and six months ended June 30, 2025 compared to the same prior year periods.

The decrease is largely due to strategic actions intended to improve sales quality and persistency, which actions led to a decrease in our agent sales force as we focus on long term improvements.

Our first year sales in the second quarter of 2025 did increase over the first quarter of 2025, we believe from our strategy beginning to show positive results.

Additionally, we believe external economic pressures, such as inflation, have impacted revenue in this segment disproportionately.

Our life and A&H premiums in the Home Service segment slightly declined in the three and nine months ended September 30, 2025 compared to the same prior year periods.

We believe external economic pressures, such as inflation, have impacted revenue in this segment disproportionately.

Claims and Surrenders.

Payments of claims and surrender benefits, which are the largest portion of our expenses, are summarized as follows:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands) 2025 2024 2025 2024

7 unchanged sentences

The majority of claims and surrender benefits in our Home Service Insurance segment are death claim benefits.

Death claim benefits decreased slightly in the three and six months ended June 30, 2025 compared to the same prior year periods due primarily to lower volume of reported claims.

Mortality experience is closely monitored by the Company as a key performance indicator and fluctuates from quarter-to-quarter based on reported claims.

June 30, 2025 | 10-Q 51

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

Death claim benefits decreased slightly in the three and nine months ended September 30, 2025 compared to the same prior year periods due primarily to lower volume of reported claims.

OTHER NON-INSURANCE ENTERPRISES

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In thousands)

6 unchanged sentences

Revenue in this operating unit consists primarily of net investment income and investment related gains or losses, while expenses consist of other general expenses related to corporate functions.

The primary reason for the decreased loss before federal income tax in the three and six months ended June 30, 2025 compared to the same period in 2024 is lower other general expenses due to a $3.5 million legal fee expense incurred in the second quarter of 2024, partially offset by increase in costs incurred related to our equity incentive compensation program due to additional participants as well as an increased stock price, which increases our expense taken upon vesting of prior year grants.

For the three months ending September 30, 2025, the elevated loss before federal income tax compared to the equivalent period in 2024

September 30, 2025 | 10-Q 54

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

is mainly due to higher general expenses.

These expenses rose as a result of additional participants in our equity incentive compensation program and a higher share price, which led to greater costs recognized as these awards vest.

Conversely, the reduction in loss before federal income tax for the nine months ended September 30, 2025, versus the same period in 2024, is primarily the result of lower general expenses.

The decrease is mostly due to a significant $3.5 million legal fee incurred during the second quarter of 2024, which did not recur in 2025, though this was somewhat counterbalanced by increased expenses related to the equity incentive compensation program, as previously described.

Our investments are an integral part of our business success, as we invest the majority of premiums collected to pay for future benefits and rely on net investment income of our ongoing operations.

Our cash and invested assets at June 30, 2025 were $1.4 billion, of which 87% was invested in fixed maturity securities, all of which are classified as available-for-sale.

Our cash and invested assets at September 30, 2025 were $1.4 billion, of which 88% was invested in fixed maturity securities, all of which are classified as available-for-sale.

We closely monitor the duration of our fixed maturity investments, and investment purchases and sales are executed with the objective of having adequate funds available to satisfy our insurance obligations.

The following table sets forth the carrying value of our investments by investment category and cash, cash equivalents and the percentage of each to total cash, cash equivalents and invested assets.

Carrying Value June 30, 2025 December 31, 2024

Carrying Value September 30, 2025 December 31, 2024

(In thousands, except for %) Amount % Amount %

16 unchanged sentences

Total cash, cash equivalents and invested assets $ 1,448,994 100.0 % $ 1,420,499 100.0 %

(1) Includes $112.8 million and $113.4 million of securities guaranteed by third parties at June 30, 2025 and December 31, 2024, respectively.

(1) Includes $109.0 million and $113.4 million of securities guaranteed by third parties at September 30, 2025 and December 31, 2024, respectively.

(2) Includes $94.6 million and $92.8 million of U.S.

Government-sponsored enterprises at June 30, 2025 and December 31, 2024, respectively.

June 30, 2025 | 10-Q 52

Government-sponsored enterprises at September 30, 2025 and December 31, 2024, respectively.

The carrying value of the Company’s fixed maturity securities investment portfolio at September 30, 2025 was $1.27 billion compared to $1.22 billion at December 31, 2024.

This increase primarily reflects the impact of interest rate sensitivity on the fair value of our fixed maturity securities.

The distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of September 30, 2025 did not materially change from December 31, 2024 – the weighted average was “A” at both dates.

Cash and cash equivalents decreased as of September 30, 2025 from December 31, 2024 and fluctuates from period-to-period primarily due to the timing of operating and investing activities.

September 30, 2025 | 10-Q 55

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The carrying value of the Company’s fixed maturity securities investment portfolio at June 30, 2025 was $1.24 billion compared to $1.22 billion at December 31, 2024.

This increase primarily reflects the impact of interest rate sensitivity on the fair value of our fixed maturity securities.

The distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of June 30, 2025 did not materially change from December 31, 2024 – the weighted average was “A” at both dates.

Cash and cash equivalents decreased as of June 30, 2025 from December 31, 2024 and fluctuates from period-to-period primarily due to the timing of operating and investing activities.

Other long-term investments increased by $2.8 million as of June 30, 2025 from December 31, 2024 due to additional funding and changes in the fair market value of our limited partnership investments.

As of September 30, 2025, other long-term investments declined by $7.9 million compared to December 31, 2024, primarily because one investment was exited.

This reduction was partially counterbalanced by further capital contributions to other investments and the impact of changes in the fair market value of our limited partnership holdings.

Obligations of States and Political Subdivisions

The Company’s fixed maturity securities investment portfolio at June 30, 2025 and December 31, 2024 included $271.3 million and $268.3 million, respectively, of securities that are obligations of states and political subdivisions, including municipalities (collectively referred to as the municipal fixed maturity security portfolio).

The Company’s fixed maturity securities investment portfolio at September 30, 2025 and December 31, 2024 included $267.8 million and $268.3 million, respectively, of securities that are obligations of states and political subdivisions, including municipalities (collectively referred to as the municipal fixed maturity security portfolio).

The Company's municipal fixed maturity security portfolio includes third-party guarantees.

Detailed below is a presentation by the Nationally Recognized Statistical Rating Organization ("NRSRO") rating of these holdings by funding type as of June 30, 2025.

Detailed below is a presentation by the Nationally Recognized Statistical Rating Organization ("NRSRO") rating of these holdings by funding type as of September 30, 2025.

General Obligation Special Revenue Other Total % Based on Amortized

18 unchanged sentences

Total $ 60,664 60,998 195,236 220,735 11,884 11,901 267,784 293,634 100.0 %

June 30, 2025 | 10-Q 53

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The table below shows the categories in which the Company held investments in special revenue fixed maturity securities that were greater than 10% of fair value based upon the Company's total municipal fixed maturity security portfolio at June 30, 2025.

(In thousands, except for %) Fair

4 unchanged sentences

Transportation 32,469 39,570 12.1

The Company's municipal fixed maturity security portfolio is spread across many states, however, municipal fixed maturity securities from Texas and California comprise the most significant concentration of the total municipal fixed maturity security portfolio as of June 30, 2025.

The Company holds 21% and 16% of its municipal fixed maturity security portfolio in Texas and California issuers, respectively, as of June 30, 2025.

There were no other states or individual issuer holdings that represented or exceeded 10% of the total municipal fixed maturity security portfolio as of June 30, 2025.

The table below represents the Company's detailed exposure to municipal fixed maturity securities by credit rating in Texas at June 30, 2025.

September 30, 2025 | 10-Q 56

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

maturity security portfolio as of September 30, 2025.

The Company holds 21% and 17% of its municipal fixed maturity security portfolio in Texas and California issuers, respectively, as of September 30, 2025.

There were no other states or individual issuer holdings that represented or exceeded 10% of the total municipal fixed maturity security portfolio as of September 30, 2025.

The table below represents the Company's detailed exposure to municipal fixed maturity securities by credit rating in Texas at September 30, 2025.

General Obligation Special Revenue Other Total

11 unchanged sentences

Texas state and political subdivision fixed maturity securities excluding third-party guarantees:

AAA $ 5,350 5,302 — — — — 5,350 5,302

AA 7,062 6,985 3,296 3,317 — — 10,358 10,302

3 unchanged sentences

Total $ 25,910 25,772 31,308 37,709 — — 57,218 63,481

June 30, 2025 | 10-Q 54

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The table below represents the Company's detailed exposure to municipal fixed maturity securities by credit rating in California at June 30, 2025.

The table below represents the Company's detailed exposure to municipal fixed maturity securities by credit rating in California at September 30, 2025.

General Obligation Special Revenue Other Total

11 unchanged sentences

A 1,324 1,650 10,414 12,079 — — 11,738 13,729

BBB — — 1,199 1,535 — — 1,199 1,535

BB and other 1,691 1,655 20,405 23,919 2,552 2,735 24,648 28,309

Total $ 3,469 3,751 38,389 45,737 2,552 2,735 44,410 52,223

September 30, 2025 | 10-Q 57

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

IMPAIRMENT CONSIDERATIONS RELATED TO INVESTMENTS IN FIXED MATURITY AND EQUITY SECURITIES

The Company assesses available-for-sale ("AFS") fixed maturity securities in an unrealized loss position for expected credit losses.

The Company did not record any credit valuation allowances on fixed maturity securities in either of the three and six months ended June 30, 2025 or 2024.

Gross unrealized losses on AFS fixed maturity securities amounted to $170.2 million as of June 30, 2025 and $185.7 million as of December 31, 2024.

This decrease in gross unrealized losses during 2025 was a result of the decrease in average market interest rates at the end of 2025 as compared to 2024.

The Company did not record any credit valuation allowances on fixed maturity securities in either of the three and nine months ended September 30, 2025 or 2024.

Gross unrealized losses on AFS fixed maturity securities amounted to $150.6 million as of September 30, 2025 and $185.7 million as of December 31, 2024.

This decrease in gross unrealized losses during 2025 was a result of the decrease in average market interest rates in 2025 as compared to 2024.

Information on both unrealized and realized gains and losses by category is set forth in Part I, Item 1, Note 3.

3 unchanged sentences

(In thousands)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Fixed maturity securities $ 1,270,045 1,220,961

4 unchanged sentences

From time to time, we may raise capital by selling shares in our SIP (as defined below) and we may also access our Credit Facility if needed (also as described below).

Citizens had no debt as of June 30, 2025.

Citizens had no debt as of September 30, 2025.

Cash from Operating Activities.

Cash provided by or used in operating activities is an important liquidity metric because it reflects, during a given period, the amount of cash generated that is available to pay our operating

June 30, 2025 | 10-Q 55

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

expenses, invest in our business or make strategic acquisitions.

Cash provided by operating activities was $4.2 million in the six months ended June 30, 2025.

Cash provided by or used in operating activities is an important liquidity metric because it reflects, during a given period, the amount of cash generated that is available to pay our operating expenses, invest in our business or make strategic acquisitions.

Cash provided by operating activities was $8.9 million in the nine months ended September 30, 2025.

Cash used in Investing Activities.

1 unchanged sentence

The investing activities fluctuate from period to period due to timing of securities activities such as calls, maturities and reinvestment of those funds.

Net cash outflows from investing activities totaled $6.6 million in the six months ended June 30, 2025.

Net cash outflows from investing activities totaled $11.2 million in the nine months ended September 30, 2025.

89% of total investments consist of marketable fixed maturity securities classified as available-for-sale that could be readily converted to cash for liquidity needs.

8 unchanged sentences

These laws and regulations require, among other things, that our insurance subsidiaries maintain minimum solvency or premium to surplus ratio requirements, which limit the amount of dividends that can be paid to the holding company.

September 30, 2025 | 10-Q 58

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The regulations also require approval of our service agreements with the applicable regulatory authority in order to prevent insurance subsidiaries from moving large amounts of cash to the less regulated holding company.

11 unchanged sentences

As we have discussed, we have been growing our domestic business by developing new products and expanding our distribution channels, which has led to an increase in first year direct premiums (i.e.

, new sales) of 71% from the year ended December 31, 2023 to the year ended December 31, 2024, and 32% from the six months ended June 30, 2024 to the six months ended June 30, 2025.

, new sales) of 71% from the year ended December 31, 2023 to the year ended December 31, 2024, and 23% from the nine months ended September 30, 2024 to the nine months ended September 30, 2025.

When selling new policies, we incur upfront policy acquisition costs, such as agent commission payments.

4 unchanged sentences

We believe that we have adequate capital resources and ability to obtain additional capital, if needed, to support the short-term and longer-term liquidity requirements of our insurance operations.

See Contractual Obligations and Off-

June 30, 2025 | 10-Q 56

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

balance Sheet Arrangements in our 2024 Form 10-K and below for a discussion of known and estimated cash needs.

See Contractual Obligations and Off-balance Sheet Arrangements in our 2024 Form 10-K and below for a discussion of known and estimated cash needs.

Cash flow projections and cash flow tests under various market interest rate scenarios are performed annually to assist in evaluating liquidity needs and adequacy.

5 unchanged sentences

Our endowment products have contractual maturity dates and provide the policyholder with alternatives once the policy matures - they can choose to take a lump sum payout, leave the money on deposit at interest with the Company or purchase another insurance policy.

Approximately 19% of the endowments in force will mature in the next five years, totaling approximately 6% of our in force business as of June 30, 2025.

Approximately 15% of the endowments in force will mature in the next five years, totaling approximately 5% of our in force business as of September 30, 2025.

The highest level of maturities will occur this year.

2 unchanged sentences

Alternatively, if the policyholders were to leave the money on deposit with the Company at interest, our profitability could be impacted if the product guaranteed rate is higher than the market rate we are earning on our investments.

We currently anticipate that our available operating cash flow and capital resources will be adequate to meet our needs for funds, but we are closely monitoring our policyholder behavior patterns, and in 2024, introduced a new product designed to allow policyholders with maturing endowments to purchase a new life insurance policy.

September 30, 2025 | 10-Q 59

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

2024, introduced a new product designed to allow policyholders with maturing endowments to purchase a new life insurance policy.

In order to mitigate the risk of early policyholder surrenders, we include provisions in our insurance policies, such as surrender charges, that help limit and discourage early withdrawals, but as many of our older policies have reached the age where surrender charges have expired or significantly decreased, we have experienced high levels of surrenders in the past several years.

5 unchanged sentences

Our product pricing assumes a certain mortality rate and thus a primary liquidity concern is the risk of higher than expected mortality experience.

Our death benefit payments decreased in the six ended June 30, 2025.

Our death benefit payments decreased in the nine months ended September 30, 2025.

Another significant use of cash is payment of commissions.

4 unchanged sentences

We may also seek other options, such as loans at the holding company level (from the Credit Facility or otherwise) that would allow us to reduce the liquidity risk should CICA Domestic's required commission payments exceed current resources.

June 30, 2025 | 10-Q 57

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

See Part I, Item 1, Note 8.

7 unchanged sentences

Additionally, we have a Capital Maintenance Agreement between Citizens and CICA Domestic, Citizens' wholly-owned subsidiary domiciled in Colorado, which would require Citizens to contribute capital to CICA Domestic in order to maintain a RBC level above 350%.

At June 30, 2025, our domestic insurance subsidiaries were above the required minimum RBC levels and CICA Domestic was above 350%.

At September 30, 2025, our domestic insurance subsidiaries were above the required minimum RBC levels and CICA Domestic was above 350%.

September 30, 2025 | 10-Q 60

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

For CICA Domestic, commission advances are non-admitted assets, which means we need capital to "replace" these assets in order to maintain required regulatory capital levels.

4 unchanged sentences

CICA International is required to maintain a minimum of $750,000 in capital and maintain a premium to surplus ratio of 7 to 1.

At June 30, 2025, CICA International exceeded the required minimum capital and related ratio.

At September 30, 2025, CICA International exceeded the required minimum capital and related ratio.

Any capital that Citizens is required to contribute to its insurance subsidiaries would negatively impact the holding Company's capital resources and liquidity.

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

As of June 30, 2025, we have no additional contractual obligations or off-balance sheet arrangements other than those described in Part I, Item 1, Note 8.

As of September 30, 2025, we have no additional contractual obligations or off-balance sheet arrangements other than those described in Part I, Item 1, Note 8.

Commitments and Contingencies in the notes to our consolidated financial statements herein and in Part II, Item 7, Contractual Obligations and Off-Balance Sheet Arrangements in our 2024 Form 10-K .

3 unchanged sentences

Summary of Significant Accounting Policies of our consolidated financial statements in our 2024 Form 10-K continue to describe the significant judgments and estimates used in the preparation of our consolidated financial statements.

June 30, 2025 | 10-Q 58

CITIZENS, INC.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis