~~Citizens~~UNITED Financial Corporation and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Six Months Ended June 30 2004 2003 ------------------------------------------------------------------------ -------------------- -------------------- Revenues: Premiums and other considerations $ 14,900,716 $ 18,323,113 Premiums ceded (632,872) (532,602) ------------------------------------------------------------------------ -------------------- -------------------- Net premiums earned 14,267,844 17,790,511 Net investment income 3,339,977 2,751,839 Net realized investment gains (losses) 289,757 (164,728) Other income 95,351 112,076 ------------------------------------------------------------------------ -------------------- -------------------- Total Revenues 17,992,929 20,489,698 Policy Benefits and Expenses: Policyholder benefits 11,298,072 10,682,128 Policyholder benefits ceded (541,006) (555,852) ------------------------------------------------------------------------ -------------------- -------------------- Net benefits 10,757,066 10,126,276 Increase in net benefit reserves 1,237,438 3,956,813 Interest credited on policyholder deposits 338,432 345,572 Commissions 2,540,636 3,388,237 General expenses 3,764,740 3,425,195 Interest expense 177,826 189,609 Policy acquisition costs deferred (634,455) (1,137,316) Amortization of deferred policy acquisition costs and value of insurance acquired 806,132 989,370 ------------------------------------------------------------------------ -------------------- -------------------- Total Policy Benefits and Expenses 18,987,815 21,283,756 ------------------------------------------------------------------------ -------------------- -------------------- Loss before income tax (994,886) (794,058) Income tax benefit (12,604) (141,000) ------------------------------------------------------------------------ -------------------- -------------------- Net Loss $ (982,282) $ (653,058) ------------------------------------------------------------------------ -------------------- -------------------- Net Loss per Common Share, basic and diluted $ (0.58) $ (0.39) ------------------------------------------------------------------------ -------------------- -------------------- See Notes to Condensed Consolidated Financial Statements.STATES

~~Citizens~~SECURITIES ~~Financial~~AND ~~Corporation~~EXCHANGE and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30 2004 2003 ------------------------------------------------------------------------ -------------------- -------------------- Revenues: Premiums and other considerations $ 7,506,098 $ 9,084,178 Premiums ceded (310,822) (271,307) ------------------------------------------------------------------------ -------------------- -------------------- Net premiums earned 7,195,276 8,812,871 Net investment income 1,716,296 1,377,850 Net realized investment gains 61,571 111,435 Other income 48,762 55,723 ------------------------------------------------------------------------ -------------------- -------------------- Total Revenues 9,021,905 10,357,879 Policy Benefits and Expenses: Policyholder benefits 5,746,093 5,424,917 Policyholder benefits ceded (273,574) (321,841) ------------------------------------------------------------------------ -------------------- -------------------- Net benefits 5,472,519 5,103,076 Increase in net benefit reserves 788,757 2,274,626 Interest credited on policyholder deposits 183,404 180,687 Commissions 1,217,065 1,694,569 General expenses 2,014,904 1,613,123 Interest expense 87,238 97,401 Policy acquisition costs deferred (285,687) (557,774) Amortization of deferred policy acquisition costs and value of insurance acquired 392,736 339,911 ------------------------------------------------------------------------ -------------------- -------------------- Total Policy Benefits and Expenses 9,870,936 10,745,619 ------------------------------------------------------------------------ -------------------- -------------------- Loss before income tax (849,031) (387,740) Income tax (benefit) 23,644 (68,000) ------------------------------------------------------------------------ -------------------- -------------------- Net Loss $ (872,675) $ (319,740) ------------------------------------------------------------------------ -------------------- -------------------- Net Loss per Common Share, basic and diluted $ (0.52) $ (0.19) ------------------------------------------------------------------------ -------------------- -------------------- See Notes to Condensed Consolidated Financial Statements.COMMISSION

~~Citizens Financial Corporation and Subsidiaries Condensed Consolidated Statements of Financial Condition June 30~~Washington, December 31, 2004 2003 ------------------------------------------------------------------------ -------------------- -------------------- ASSETS (Unaudited) Investments: Securities available for sale, at fair value: Fixed maturities (amortized cost of $104,345,690 and $104,768,393 in 2004 and 2003, respectively) $ 104,147,222 $ 108,640,262 Equity securities (cost of $13,481,909 and $8,061,783 in 2004 and 2003, respectively) 16,372,069 11,336,964 Investment real estate 3,067,389 3,162,223 Policy loans 4,454,320 4,409,301 Short-term investments 642,748 642,748 ------------------------------------------------------------------------ -------------------- -------------------- Total Investments 128,683,748 128,191,498 Cash and cash equivalents 3,741,831 8,588,896 Accrued investment income 1,752,425 1,685,776 Reinsurance recoverable 2,696,948 2,834,222 Premiums receivable 241,885 256,140 Property and equipment 1,538,537 2,640,579 Deferred policy acquisition costs 10,471,919 10,325,660 Value of insurance acquired 2,910,684 3,119,609 Goodwill 755,782 755,782 Federal income tax receivable --- 421,676 Other assets 232,118 60,494 ------------------------------------------------------------------------ -------------------- -------------------- Total Assets $ 153,025,877 $ 158,880,332 ------------------------------------------------------------------------ -------------------- -------------------- See Notes to Condensed Consolidated Financial StatementsD.C. 20549

~~Citizens~~FORM ~~Financial Corporation and Subsidiaries Condensed Consolidated Statements of Financial Condition June 30, December 31, 2004 2003~~ 10------------------------------------------------------------------------ -------------------- -------------------- LIABILITIES AND SHAREHOLDERS' EQUITY (Unaudited) Liabilities: Policy Liabilities: Future policy benefits $ 110,507,549 $ 109,383,695 Policyholder deposits 15,338,670 15,530,824 Policy and contract claims 1,781,614 1,663,249 Unearned premiums 258,153 249,572 Other 228,149 310,464 ------------------------------------------------------------------------ -------------------- -------------------- Total Policy Liabilities 128,114,135 127,137,804 Note payable - bank 3,475,002 4,133,335 Note payable - related party 3,000,000 3,000,000 Accrued expenses and other liabilities 1,356,512 1,805,934 Deferred federal income tax 48,651 1,969,850 ------------------------------------------------------------------------ -------------------- -------------------- Total Liabilities 135,994,300 138,046,923 Commitments and Contingencies Shareholders' Equity: Common stock, 6,000,000 shares authorized; 1,685,228 and 1,685,228 shares issued and outstanding in 2004 and 2003, respectively 1,685,228 1,685,228 Additional paid-in capital 7,170,321 7,170,321 Accumulated other comprehensive income 1,775,939 4,595,473 Retained earnings 6,400,089 7,382,387 ------------------------------------------------------------------------ -------------------- -------------------- Total Shareholders' Equity 17,031,577 20,833,409 ------------------------------------------------------------------------ -------------------- -------------------- Total Liabilities and Shareholders' Equity $ 153,025,877 $ 158,880,332 ------------------------------------------------------------------------ -------------------- -------------------- See Notes to Condensed Consolidated Financial Statements.Q

~~Citizens~~X ~~Financial~~QUARTERLY ~~Corporation~~REPORT ~~and~~PURSUANT ~~Subsidiaries~~TO ~~Condensed~~SECTION ~~Consolidated~~13 ~~Statements~~OR ~~of Cash Flows~~ 15(~~Unaudited~~d) ~~Six~~OF ~~Months~~THE ~~Ended~~SECURITIES ~~June~~EXCHANGE 30ACT ~~2004~~OF 2003 ------------------------------------------------------------------------ -------------------- -------------------- Cash Flows from Operations: Net loss $ (982,282) $ (653,058) Adjustments to reconcile net loss to cash from operations: Increase in benefit reserves 1,132,435 3,831,180 Increase (decrease) in claim liabilities 118,365 (85,452) Decrease (increase) in reinsurance recoverable 137,274 (4,571) Interest credited on policyholder deposits 315,996 345,572 Provision for amortization and depreciation, net of deferrals 297,977 188,922 Amortization of premium and accretion of discount on securities purchased, net 14,044 60,313 Net realized investment (gains) losses (289,757) 164,728 Increase in accrued investment income (66,649) (136,771) Change in other assets and liabilities (644,459) (20,630) Decrease (increase) in deferred federal income tax liability 1,541 (141,000) Increase in federal income taxes receivable (48,582) (60,000) ------------------------------------------------------------------------ -------------------- -------------------- Net Cash provided by (used in) Operations (14,097) 3,489,233 Cash Flows from Investment Activities: Cost of securities acquired (23,427,698) (33,376,076) Investments sold or matured 19,016,146 31,113,919 Investment management fees (355,241) (4,597) Additions to real estate -- (17,670) (Additions) reductions to property and equipment, net 1,012,810 (5,071) Other investing activities, net 87,497 (79,433) ------------------------------------------------------------------------ -------------------- -------------------- Net Cash used in Investment Activities (3,666,486) (2,368,928) Cash Flows from Financing Activities: Policyholder deposits 276,968 308,623 Policyholder withdrawals (785,117) (833,851) Payments on notes payable - bank (658,333) (987,500) Repurchase of common stock -- (7,759) ------------------------------------------------------------------------ -------------------- -------------------- Net Cash used in Financing Activities (1,166,482) (1,520,487) ------------------------------------------------------------------------ -------------------- -------------------- Net Decrease in Cash and Cash Equivalents (4,847,065) (400,182) Cash and Cash Equivalents at Beginning of Period 8,588,896 6,699,171 ------------------------------------------------------------------------ -------------------- -------------------- ------------------------------------------------------------------------ -------------------- -------------------- Cash and Cash Equivalents at End of Period $3,741,831 $ 6,298,989 ------------------------------------------------------------------------ -------------------- -------------------- See Notes to Condensed Consolidated Financial Statements.1934

~~-------------------------------~~For ~~-------------------------------~~the ~~Three~~quarterly ~~Months~~period ~~Ended~~ended ~~June~~March 3031, Six Months Ended June 30, --------------- --------------- --------------- --------------- COMPREHENSIVE INCOME: 2004 2003 2004 2003 ------------------------------------------------- --------------- --------------- --------------- --------------- Net Loss $ (872,675) $ (319,740) $ (982,282) $ (653,058) Net unrealized gains (losses) on securities (4,191,038) 2,420,849 (2,819,534) 2,839,083 ------------------------------------------------- --------------- --------------- --------------- --------------- Comprehensive Income (Loss) $ (5,063,713) $ 2,101,109 $ (3,801,816) $ 2,186,025 ------------------------------------------------- --------------- --------------- --------------- ---------------2007

------------------------------- ------------------------------- Three Months Ended June 30, Six Months Ended June 30, --------------- --------------- --------------- --------------- REVENUE: 2004 2003 2004 2003 ------------------------------------------------- --------------- --------------- --------------- --------------- Home Service Life $ 2,345,217 $ 2,259,771 $ 4,586,813 $ 4,547,712 Broker Life 3,388,451 1,367,436 2,992,999 2,831,642 Preneed Life 635,017 4,193,478 5,017,029 8,335,085 Dental 2,318,403 2,090,956 4,507,041 4,238,216 Other Health 273,246 334,803 599,290 701,771 ------------------------------------------------- --------------- --------------- --------------- --------------- Segment Totals 8,960,334 10,246,444 17,703,172 20,654,426 Net realized investment gains (losses) 61,571 111,435 289,757 (164,728) ------------------------------------------------- --------------- --------------- --------------- --------------- Total Revenue $9,021,905 $ 10,357,879 $ 17,992,929 $ 20,489,698 ------------------------------------------------- --------------- --------------- --------------- ---------------or

~~-------------------------------~~_ ~~-------------------------------~~TRANSITION ~~Three~~REPORT ~~Months~~PURSUANT ~~Ended~~TO ~~June~~SECTION ~~30,~~13 ~~Six~~OR ~~Months~~15(d) ~~Ended~~OF ~~June~~THE ~~30,~~SECURITIES ~~---------------~~EXCHANGE ~~---------------~~ACT ~~---------------~~OF --------------- NET INVESTMENT INCOME: 2004 2003 2004 2003 ------------------------------------------------- --------------- --------------- --------------- --------------- Home Service Life $ 466,654 $ 377,689 $ 894,163 $ 774,031 Broker Life 643,110 511,544 1,206,983 1,052,651 Preneed Life 576,522 466,522 1,180,701 876,356 Dental 9,354 5,096 17,698 11,733 Other Health 20,656 16,999 40,432 37,068 ------------------------------------------------- --------------- --------------- --------------- --------------- Segment Totals $ 1,716,296 $1,377,850 $ 3,339,977 $2,751,839 ------------------------------------------------- --------------- --------------- --------------- ---------------1934

~~-------------------------------~~For ~~-------------------------------~~the ~~Three~~transition ~~Months~~period Ended June 30, Six Months Ended June 30, --------------- --------------- --------------- --------------- SEGMENT PROFIT (LOSS): 2004 2003 2004 2003 ------------------------------------------------- --------------- --------------- --------------- --------------- Home Service Life $ 55,612 $ (35,157) $ (61,497) $ 86,710 Broker Life (321,048) (240,873) (466,630) (175,664) Preneed Life (213,085) (257,999) (290,225) (379,411) Dental (246,349) 63,984 (172,393) 205,896 Other Health (98,494) 68,271 (116,072) (177,252) ------------------------------------------------- --------------- --------------- --------------- --------------- Segment Totals (823,364) (401,774) (1,106,817) (439,721) Net realized investment gains (losses) 61,571 111,435 289,757 (164,728) Interest expense 87,238 97,401 177,826 189,609 ------------------------------------------------- --------------- --------------- --------------- --------------- Loss before Federal Income Tax $ (849,031) $ (387,740) $ (994,886) $ (794,058) ------------------------------------------------- --------------- --------------- --------------- ---------------from __________ to __________

~~-------------------------------~~Commission ~~-------------------------------~~file ~~Three~~number ~~Months Ended June 30, Six Months Ended June 30,~~ 0--------------- --------------- --------------- --------------- DEPRECIATION AND AMORTIZATION: 2004 2003 2004 2003 ------------------------------------------------- --------------- --------------- --------------- --------------- Home Service Life $ 100,117 $ 175,994 $ 234,077 $ 351,978 Broker Life 114,977 86,170 198,182 285,707 Preneed Life 196,953 131,698 426,358 450,373 Dental 11,817 14,231 27,970 28,525 Other Health 24,147 3,506 47,107 16,162 ------------------------------------------------- --------------- --------------- --------------- --------------- Segment Totals $ 448,011 $ 411,599 $ 933,694 $1,132,745 ------------------------------------------------- --------------- --------------- --------------- ---------------20148

~~------------------------------~~CITIZENS ~~-------------------------------~~FINANCIAL Three Months Ended June 30, Six Months Ended June 30, -------------- --------------- --------------- --------------- NET PREMIUMS EARNED Total Change Total Change ------------------------------------- -------------- --------------- --------------- --------------- Home Service Life $ 1,865,307 $ (1,507) $ 3,667,124 $ (75,033) Broker Life 730,065 (105,148) 1,778,591 42,472 Preneed Life 2,039,119 (1,668,954) 3,775,586 (3,647,451) Dental 2,308,784 223,130 4,488,839 262,834 Other Health 252,001 (65,116) 557,704 (105,489) ------------------------------------- -------------- --------------- --------------- --------------- Segment Totals $ 7,195,276 $ (1,617,595) $14,267,844 $(3,522,667) ------------------------------------- -------------- --------------- --------------- ---------------CORPORATION

(Exact name of registrant as specified in its charter)

Kentucky	61-1187135
(State of Incorporation)	(I.R.S. Employer Identification No.)

12910 Shelbyville Road, Louisville, Kentucky 40243

(Address of principal executive offices)

(502) 244-2420

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ___

Accelerated filer ___

Non-accelerated filer

X .

Indicate by check mark whether the registrant is a shell company (as determined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes No X

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Class A Stock 1,588,011 as of May 10, 2007.

The date of this Report is May 11, 2007.

Part I – Financial Information; Item 1 – Financial Statements

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