Welcome to the Citizens Incorporated Conference Call reporting on Second Quarter 2014 Results. Today’s conference is being recorded. At this time all participants are in a listen-only mode. After formal remarks there will be a question-and-answer session. (Operator Instructions) I’ll now turn the call over to Ms. Osbourn. You may begin.

Thank you, Lauren. Good morning welcome to our earnings conference call. I am Kay Osbourn, Citizens Chief Financial Officer. Joining me on the call today are Rick Riley, our Vice Chairman and President; Geoff Kolander, our Executive Vice President and Corporate Secretary and General Counsel and Larry Carson, Financial Reporting and Tax. Before I turn the call over to Rick for opening remarks, let me get a few formalities out of the way. First yesterday we issued our earnings release and filed our 10-Q, both are available on our website at citizensinc.com. Second, during today's call we will discuss the expected performance of Citizens, Inc. which constitutes forward-looking information within the meaning of the Private Securities Litigation Act. Please see the earnings release and our SEC filings which are incorporated by reference into this call for information on the risks and uncertainties that may cause actual results to differ materially from forward-looking information we provide. We are not responsible for transcripts of this call made by independent third party. Finally, a reconciliation of non-GAAP information as required by Regulation G was provided with the release and also is available on our website. Rick?

Welcome and good morning we appreciate the opportunity to share with you on the call this morning. We reported in our second quarter results the increase in premium revenues primarily related to our life segment we’re seeing a continuing strong renewal premium income growth and first year premium increase to complement that growth. Also our investment income was up continuing improvement in the overall yield in that particular revenue element. On a downside, we did have some unfavorable claim experience during the second quarter, which we’ll review in more detail as we go through the call. On a positive side our surrender expenses in the life segment were notably lower during the quarter. So overall, we – I think those items actually kind of offset or muted one another. But the other element from an overview point of view as we continue to work on operational integration of the Magnolia Guaranty Life Insurance Company acquisition that was completed in the first quarter of this year. And all that is progressing on well and smoothly. Now, lets talk a little bit about the insurance operations more specifically the life insurance segment which accounts for the most significant portion of year-to-date premium growth, predominantly that segment is made up of international business and I would just start by talking a little bit about what we’ve seen in the international economies where we’re working and frankly there is quite a contrast in the Latin American market, which is the dominant part of our international marketplace, Argentina has a very difficult and challenging economic environment these days in 2014, lot of I guess really upheaval taking place within that economy not all together difference in what they experienced a decade, decade and half ago. Venezuela on the other hands up, got inflation up nearly…

Thank you, Rick. Our insurance premium rose in this segment 5.7% and 5.4% for the three and the six months in 2014 compared to 2013. This is driven by an increase of 7.6% for the three months and an increase of 5.9% for the six months of renewal premiums. Renewals accounted for over 86% of total premiums in 2014 for the three and six months periods. The top three international countries contributing to our premium increased are consistent with the 2013 performance as Rick, indicated our first year premiums were down for the three months ended by 7.4% but they were actually up for the six months by 2.7% compared to the prior year. A death claims in 2014 increased with higher reported amounts for the three and six months compared to 2013, surrender expense decreased for the three months ended by 12.6% and increased for the six months by 3% and 2014 when its compared to 2013. Our surrenders have remained relatively level at approximately 0.6% of total ordinary enforced over the past several years and/or within expected levels. Commissions as a percent of premiums varied from period-to-period as we pay higher commissions on first year business than we do on renewal business. But renewal business accounts for the majority of our revenues in the premium side. First year premiums accounted for 14% of total premiums for the six months in 2014 compared to 14.3% noted in the prior year. Our general expenses were relatively unchanged between 2014 and 2013 and now we’ll turn to the home service segments for their earnings update.

The home service premiums are essentially flat year-to-date and not all together different than what we have experienced in the past although they are having a solid year of collections and process there is working well. The – we have had and seen no adverse weather related impact like we saw on early part of the 2013 from weather advance in Louisiana area although I would note that we’re currently in the middle of the annual hurricane season that runs through October. And again that deal is primarily with the property and casualty subsidiary which is relatively smaller part of the overall component here but we do like to make sure that we’ve got that discussed and addressed as part of these calls. Summers are usually a slow and interrupted collection process in the home service market however this year with a more moderate summer thus far and the activities that we’ve seen we are hopeful that August won’t be the downturn that we normally see collections wise but again if that happens we typically see it cover it back up in September and as we get only into the fall. So let’s more just color on where we’re year-to-date we think things are progressing well in that particular segment in terms of how it’s operating. The other dimension which really is more growth aspect of what’s going on in that particular Home Service segment has do with the Magnolia Guaranty Life Insurance Company, the acquisition in Mississippi, which was a strategic acquisition and it does have a little bit different to make intuited really driven more through the funeral home agent that as opposed to the traditional Home Service distribution model that gives you that steady plan that is used over the years and the home service marketplace there in Louisiana. We do expect growth and our anticipating continued improvement and expansion into the Mississippi marketplace as a result of that acquisition.

Okay, Rick. Premiums for the three months and six months in 2014 contained 700,000 and 900,000 respectively of premium revenue related to Magnolia Guaranty Life and net acquisitions without those premiums, the home service segment that has no real premium growth between 2014 and 2013, as Rick indicated. Death claims reported increased for the three months and six months ended in 2014 compared with 2013 amounts, we did experienced lower persistency in this block, which is impacting amortization of deferred acquisition cost, which are up in the current period that’s still over within expectations for this business. Property claims as noted were lower in 2014, primarily due to weather related claims in 2013 unfortunately did not repeat in the current year. And high anticipating highlights on these segment results and I would point to back to our filed Form 10-Q for full discussion of the financial results. And with that we’re going to turn now to our investment performance overview.

The investment income continue to increase both through organic growth as well as just improvement in overall yield results in 2014, I think we were up from a low during this low interest rate period of the 3.6% in that range somewhere to as of this particular year-to-date point of 4.21% improvement. So, our investment activities have continued to be focused upon yields to call, yields to maturity with probable durations being a key part of that consideration while preference in our desire continues to be towards the shorter-terms, shorter-term is commenced but once we evaluate – the committee evaluates all aspects of the, given investment opportunity then decisions are made to really on a multifaceted basis as far as where we’ll put the funds. New money rates in the shorter-term periods are run in 3% to 4% and five to eight years span of time, 4.5% when you get near 15 years, 4.5 plus. And then when you get out beyond 20 years, if you make any – if we make investments out of the direction there certainly over 5%. And we’ve seen some year-to-date as you get out beyond that 20-year point near 6%. As far as the portfolio diversification – we will shift it over the last several years away from US government agencies and paper that is government guaranteed. U.S. government guaranteed towards taxable municipal paper. And then some corporate utility issues, but we’ve made a few government, US government agency paper purchases but those in the corporate utility issues are both fairly limited in terms of what we are doing the majority relates in the taxable muni area. The timing of investments and the churning of some of the invested assets has certainly slowdown as rates have bottomed out and began to move backup somewhat, although this morning I noted the 10-year treasury was down lowest pointed its been all year, I think 2.3 range, 2.34 or something like that. Although had, by the time I think the meeting started as it begun to move backup. But again with the lower rate environment and the challenges (inaudible) presented us, we just continue to be very patient and selective with the focusing on higher quality and preferred yield levels being the thing that generates most interest on our part in terms of committing the funds over the long-term. We expect to see the portfolio continue to grow through our premium production and growth of the business and we expect yield trends currently to continue upward. Although, I think at a slower phase given some of the volatility that we’ve seen again this year in the lower ranges of the interest rate scenario. Kay?

Thanks, Rick. There were no other temporary impairment charges recorded this quarter based upon our review. Our portfolio remains with almost 96% of our holdings and investment quality BBB are better in 2014. We have increased our AA and BBB rating holdings from year-end 2013, reported amounts as we have invested primarily in state municipals and utility related corporates as Rick has indicated. We are exposed to interest rate risk due to this significant amount of our investment portfolio invested in fixed maturity securities. As market rates change our fair value of these investments will increase and decrease as the current market rate compares to the stated coupon rates. The net unrealized gains on our fixed maturity bond portfolio was $5.1 million at December 31, 2013 compared to a net unrealized gain of $40.4 million at June 30, 2014 as rates decreased on the ten year treasury from 3% in December up 2013 to 2.5% in the current period end. We typically hold our investments to maturity and have 73.9% classified as available for sale as that’s based on the amortized cost, which is reported at fair value with changes in market interest rates flowing through comprehensive income and we hold 26.1% categorized that’s helped o maturity and reported and amortize cost. We did realize net losses of $100,000 in three months and six months ended due to the sale of one equity bond mutual fund in the current period as our intent to hold this investment change due to circumstances that arose in the quarter. Our equity portfolio represents 5.6% of our total investments at June 30, 2014 with 95.2% invested in diversified equity and bond mutual funds. Our balance sheets remain strong for our insurance entities, there are no significant changes in the RBC ratio of those companies from what we’ve reported in the 10-K at December 31, 2013 and they are well above the minimum. And with that I’ll turn it back to Rick.

Historically Citizens growth has been driven by acquisition transactions have been a integral part of that and in addition to the sales that we have products both here in the United States as well as internationally. They are nothing new to report here on acquisition activities although I would simply reiterate that we constantly or routinely looking at opportunities and we do have active dialog going with different scenarios, but nothing that’s available to be reported or talk about at this point in time. The Magnolia Guaranty transaction that we completed and closed in March of this year. We anticipate that entity will contribute approximately $300,000 to the net operating income impact for all of 2014. Our electronic systems integration work is about to be completed and we anticipate really within the next week to ten days completing that integration are at least the conversion effort from one operating environment to another. So, we will be ramping up the full integration and simulation of that acquisition into our normal operations as we go through the third quarter period and as we finished the year, we will continue to work make streamlining an additional operational adjustments over in that environment. Again, we said I think earlier that we do see growth coming there and we do anticipate additional activities there in Mississippi. As a conclusion, our outlook remains positive, we are very healthy strong capitalize – strongly capitalized insurance operation. We have a very strong presence in the markets that -- the niche markets, where we target. And we look forward to being able to continue to expand and grow our business through those markets. Citizens remains interested in grow through acquisitions and we do have the capacity to do more transactions and we will be focused on identifying additional opportunities as we go forward. Lauren, I think we’re ready at this point to take questions.

Thank you sir (Operator Instructions) And there are no signals at this time sir.

Thank you, Lauren. At this point we appreciate it again; we appreciate you joining the call. Thank you very much. We will conclude the call on that note.

This concludes today’s conference. Thank you for your participation.