CNFL Citizens Financial (MM)

LOUISVILLE, Ky., March 24 /PRNewswire-FirstCall/ -- Citizens Financial Corporation (NASDAQ:CNFL) today reported net income in the year ended December 31, 2005 of $324,000 or $0.19 per share, compared to a net income of $256,000 or $0.15 per share in 2004 and net income in the quarter ended December 31, 2005 of $168,000 or $0.10 per share compared to a net income for the same quarter in 2004 of $1,092,000 or $0.65 per share. Premium income decreased 8.3% to $25,656,000 from 2004 while total revenues decreased 10.2% to $33,530,000. The pre-tax loss from operations, which excludes net realized investment gains and losses, amounted to $(456,000) in 2005 compared to a pre- tax loss of $(2,662,000) (including $1,190,000 of non-recurring litigation costs and $636,000 of other nonrecurring expenses) in 2004. Net realized investment gains were $780,000 and $50,000 for the year and quarter ended December 31, 2005, while such amounts were $2,868,000 and $1,664,000 for the respective 2004 periods. Shareholders' equity decreased 11.7% to $17,437,000 as of year-end, with unrealized after-tax investment losses of approximately $2,642,000. The 2005 increase in pretax income of $118,000 results from the positive effects of: (a) an increase in investment and other income of $577,000, (b) a decrease in policyholder benefits and commissions of $2,934,000, (c) a decrease in general expenses and depreciation of $864,000, and (d) a decrease in amortization of deferred policy acquisition costs and value of insurance acquired of $236,000, offset by a decrease in acquisition costs deferred of $63,000, offset by the negative effects of: (e) a decrease in premiums and other considerations of $2,317,000, or 8.3% (Preneed decreased $1,937,000, dental decreased $545,000, home service decreased $135,000, other health decreased $150,000, while broker life increased $450,000 (including new final expense premiums of $324,000)), (f) a decrease in net realized investment gains of $2,088,000, and (g) an increase in interest expense of $25,000. Detailed financial information is available in the Company's Annual Report on Form 10-K for the year filed today with the Securities and Exchange Commission, which can be accessed at http://www.citizensfinancialcorp.com/. Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements involve uncertainties and are based on management's current expectations. For a discussion of factors that could cause actual results to differ from those described in the forward-looking statements, and a detailed discussion of the Company's insurance operations, asset quality, capital adequacy, debt, liquidity and factors affecting future performance, see the Company's Form 10- K for 2005. Citizens Financial is the Louisville-based parent of Citizens Security Life Insurance Company. Citizens Financial Corporation Results in tabular form: Quarter ended December 31 2005 2004 Segment Revenues $ 7,770,000 $ 7,948,000 Net realized investment gains $ 50,000 $ 1,664,000 Total Revenues $ 7,820,000 $ 9,612,000 Net Income $ 168,000 $ 1,092,000 Net Income Per share $ 0.10 $ 0.65 Year ended December 31 2005 2004 Segment Revenues $ 32,750,000 $ 34,490,000 Net realized investment gains $ 780,000 $ 2,868,000 Total Revenues $ 33,530,000 $ 37,359,000 Net Income $ 324,000 $ 256,000 Net Income Per share $ 0.19 $ 0.15 Selected Financial Position Data at December 31 2005 2004 Total Assets $ 153,281,000 $ 157,271,000 Notes Payable $ 5,375,000 $ 5,792,000 Shareholders' Equity $ 17,437,000 $ 19,754,000 Shareholders' Equity per share $ 10.43 $ 11.82 DATASOURCE: Citizens Financial Corporation CONTACT: Len E. Schweitzer, Chief Financial Officer of Citizens Financial Corporation, +1-502-244-2420 Web site: http://www.citizensfinancialcorp.com/

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