SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1996
Commission File No. 33-98090
CITIZENS COMMUNITY BANCORP, INC.
A Florida Corporation (IRS Employer Identification No. 65-0614044)
650 East Elkcam Circle
Marco Island, Florida 34146
(941) 389-1800
Securities Registered Pursuant to Section 12(b)
of the Securities Exchange Act of 1934:
NONE
Securities Registered Pursuant to Section 12(g)
of the Securities Exchange Act of 1934:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 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 _____
----
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and will not be contained, to the best of
Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
Revenues for the fiscal year ended December 31, 1996: $ 809,500
The aggregate market value of the common stock of the Registrant held by
nonaffiliates of the Registrant (487,585 shares) on March 14, 1997 was
approximately $3,247,000. As of such date, no organized trading market existed
for the common stock of the Registrant. The aggregate market value was computed
by reference to recent trading activity of the common stock of the registrant at
$9.00 per share. For the purposes of this response, directors, officers and
holders of 5% or more of the Registrant's common stock are considered the
affiliates of the Registrant at that date.
The number of shares outstanding of the Registrant's Common Stock, as of March
14, 1997: 772,950 shares of $0.01 par value common stock.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Annual Report to Shareholders for the Fiscal
Year ended December 31, 1996.
(Part II)
2. Portions of Proxy Statement for the 1997 Annual Meeting of
Shareholders. (Part III)
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TABLE OF CONTENTS
Consolidated--Citizens Community Bancorp, Inc. and Affiliates
NOTE: Certain information required by Form 10-KSB is incorporated by
reference from the 1996 Annual Report and 1997 Annual Meeting Proxy Statement as
indicated below. Only that information expressly incorporated by reference is
deemed filed with the Commission.
<TABLE>
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PART I Page Number
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<S> <C> <C> <C>
Item 1 Business..................................................................... 3
Item 2 Properties................................................................... 11
Item 3 Legal Proceedings............................................................ 11
Item 4 Submission of Matters to a Vote of Security Holders -........................ 11
PART II
Item 5 Market for Common Equity and Related Stockholder Matters..................... 1(1)
Item 6 Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................................... 5 (1)
Item 7 Financial Statements and Supplementary Data.................................. 13( 1)
Item 8 Changes in and disagreements with Accountants on
Accounting and Financial Disclosure -- None
PART III
Item 9 Directors and Executive Officers of the Registrant:.......................... 2(2)
Item 10 Executive Compensation....................................................... 6(2)
Item 11 Security Ownership of Certain Beneficial Owners and Management............... 2(2)
Item 12 Certain Relationships and Related Transactions............................... 12
PART IV
Item 13 Exhibits, Financial Statement Schedules, and Reports on Form 8-K............. 13
</TABLE>
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(1) These items are incorporated by reference from the Company's
1996 Annual Report
(2) The material required by Items 9 through 11 is hereby
incorporated by reference from the Company's definitive proxy
statement pursuant to Instruction G of Form 10-KSB.
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PART I
ITEM 1. - BUSINESS
Description
General
Citizens Bancorp, Inc. (the "Company") is a registered bank holding company
under the federal Bank Holding Company Act of 1956, as amended, and owns 100% of
the issued and outstanding common stock of Citizens Community Bank of Florida,
Marco Island, Florida (the "Bank"). The Company was incorporated under the laws
of the State of Florida on May 22, 1995 to acquire 100 percent of the shares to
be issued by the Bank during its organizational stage and to enhance the Bank's
ability to serve its future customers' requirements for financial services. The
Company provides flexibility for expansion of the Company's banking business
through acquisition of other financial institutions and provision of additional
banking-related services which the traditional commercial bank may not provide
under present laws.
The Bank is a full service commercial bank, without trust powers. The Bank
offers a full range of interest-bearing and noninterest-bearing accounts,
including commercial and retail checking accounts, negotiable order of
withdrawal ("NOW") accounts, money market accounts, individual retirement
accounts, regular interest bearing statement savings accounts, certificates of
deposit, commercial loans, real estate loans, home equity loans and
consumer/installment loans. In addition, the Bank provides such consumer
services as U.S. Savings Bonds, travelers checks, safe deposit boxes, bank by
mail services, direct deposit services, automatic teller services, and secondary
mortgage loan origination services.
Market Area
The primary service area for the Bank encompasses approximately 24 square miles
in the geographic center of Marco Island, Collier County, Florida and includes
the entire city of Marco Island, Isle of Capri and Goodland. Competition among
financial institutions in this area is intense. There are 6 commercial banking
offices and 1 savings and loan office within the primary service area of the
Bank. Most of these offices are branches of or are, affiliated with major bank
holding companies.
The Bank is in competition with existing area financial institutions other than
commercial banks and savings and loan associations, including insurance
companies, consumer finance companies, brokerage houses, credit unions and other
business entities which have over the years, engaged more and more in providing
services which have historically been traditional banking services. Due to the
growth of the Collier County area in general and the Bank's primary service area
in partricular, it is anticipated that competition will increase because of new
entrants to the market.
Investments
As of December 31, 1996, investment securities, federal funds sold and
interest-earning deposits in other banks comprised approximately 41.1% of the
Company's assets and net loans comprised approximately 48.4% of the Company's
assets. The Company has invested primarily in obligations of the United States
or obligations guaranteed as to principal and interest by the United States,
other taxable securities and in time deposits and notes of commercial banks. In
addition, the Company enters into Federal Funds transactions with its principal
correspondent banks, and acts as a seller of such funds.
Loan Portfolio
The Bank engages in a full complement of lending activities, including the
originating and purchasing of commercial, consumer/installment and real estate
loans.
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Commercial lending is directed principally toward businesses whose demands for
funds fall within the Bank's legal lending limits and which are potential
deposit customers of the bank. This category of loans includes loans made to
individual, partnership or corporate borrowers, and obtained for a variety of
business purposes. Particular emphasis is placed on loans to small and
medium-sized businesses. The Bank's real estate loans consist of residential and
commercial first and second mortgage loans.
The Bank's consumer loans consist primarily of installment loans to individuals
for personal, family and household purposes, including automobile loans to
individuals and pre-approved lines of credit. This category of loans also
includes term loans secured by second mortgages on the residences of borrowers
for a variety of purposes including home improvements, education and other
personal expenditures.
The Bank's general practice is not to accrue interest on loans delinquent over
ninety days unless fully secured and in the process of collection. The accrued
and unpaid interest is reversed against current income and thereafter interest
is recognized only to the extent payments are received. Non-accrual loans are
restored to accrual basis when interest and principal payments are current and
prospects for recovery are no longer in doubt.
As of December 31, 1996, there were no loans where known information about
possible credit problems of borrowers causes management to have serious doubts
as to the ability of such borrowers to comply with the present loan repayment
terms.
The majority of the Company's loans are secured by real estate in Collier
County, Florida, where the Bank is located. Accordingly, the ultimate
collectibility of a substantial portion of the loan portfolio is susceptible to
changes in market conditions in this County.
Loan Loss Reserves
In considering the adequacy of the Company's allowance for loan losses,
management has considered that as of December 31, 1996, 61.8% of outstanding
loans are in the commercial loan category, including loans secured by commercial
real estate. Commercial loans are generally considered by management as having
greater risk than other categories of loans in the Company's loan portfolio.
However, the majority of these commercial loans at December 31, 1996 were made
on a secured basis, with collateral consisting primarily of real estate,
accounts receivable, inventory, assignment of mortgages and equipment.
Management believes that the secured condition of the preponderant portion of
its commercial loan portfolio reduces any risk of loss inherently present in
commercial loans.
The Company's consumer loan portfolio at December 31, 1996 consisted primarily
of lines of credit and installment loans secured by automobiles, boats and other
consumer goods. Management believes that the risk associated with these types of
loans has been adequately provided for in the loan loss reserve.
Residential real estate mortgage loans constitute 35.8% of outstanding loans at
December 31, 1996. Management considers these loans to have minimal risk due to
the fact that these loans represent conventional residential real estate
mortgages where the amount of the original loan does not exceed 80% of the
appraisal value of the collateral or is otherwise covered by private mortgage
insurance.
The Company's Board of Directors monitors the loan portfolio monthly in order to
enable it to evaluate the adequacy of the allowance for loan losses. In addition
to reviews by regulatory agencies and the Company's certified public
accountants, the services of outside consultants have been engaged to assist in
the evaluation of credit quality and loan administration. These professionals
compliment the system implemented by the Company which identifies potential
problem credits as early as possible, categorizes the credits as to risk and
includes a reporting process to monitor the progress of the credits.
The allowance for loan losses represents the cumulative total of monthly
provisions for loan losses plus recoveries of amounts previously charged off,
less net charge-offs. The allowance for loan losses is established through a
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provision for loan losses charged to expense. Loans are charged off against the
allowance when management believes the collectibility of principal is unlikely.
The monthly provision for loan losses is based on management's judgment, after
considering known and inherent risks in the portfolio, past loss experience of
the Company, adverse situations that may affect the borrower's ability to repay,
assumed values of the underlying collateral securing the loans, the current and
prospective financial condition of the borrower, and the prevailing and
anticipated economic condition of the local market.
The Company maintains the allowance for loan losses at a level sufficient to
absorb all estimated losses in the loan portfolio. The allowance for loan losses
is made up of two primary components: (i) amounts allocated to loans based on
collateral type and (ii) amounts allocated for loans reviewed on an individual
basis in accordance with a credit risk grading system. The above table presents
an allocation of the entire allowance for loan losses among various loan
classifications and sets forth the percentage of loans in each category to total
loans.
Management does not anticipate that the future new loan charge-off rates for
loans will be materially different from the historic net charge-off rates
experienced by the Company.
Deposits
The Bank offers a full range of interest-bearing and noninterest-bearing
accounts, including commercial and retail checking accounts, negotiable order of
withdrawal ("NOW") accounts, money market accounts, individual retirement
accounts, regular interest-bearing statement savings accounts and certificates
of deposit with fixed rates and a range of maturity date options. The sources of
deposits are residents, businesses and employees of businesses within the Bank's
market area, obtained through the personal solicitation of the Bank's officers
and directors, direct mail solicitation and advertisements published in the
local media. The Bank pays competitive interest rates on time and savings
deposits up to the maximum permitted by law or regulation. In addition, the Bank
has implemented a service charge fee schedule competitive with other financial
institutions in the Bank's market area, covering such matters as maintenance
fees on checking accounts, per item processing fees, returned check charges and
the like.
Correspondent Banking
Correspondent banking involves the providing of services by one bank to another
bank which cannot provide that service for itself from an economic or practical
standpoint. The Bank purchases correspondent services offered by larger banks,
including check collections, purchase or sale of Federal Funds, security
safekeeping, investment services, coin and currency supplies, overline and
liquidity loan participations and sales of loans to or participations with
correspondent banks.
The Bank sells loan participations to correspondent banks with respect to loans
which exceed the Bank's lending limit of approximately $891,000. For the fiscal
year ended December 31, 1996, the bank had sold loan participations totalling
approximately $460,000.
Data Processing
The Bank has a data processing servicing agreement with First National Bank of
Omaha, Nebraska. This servicing agreement provides for the Bank to receive a
full range of data processing services including an automated general ledger,
deposit accounting, commercial, real estate and installment lending data
processing, central information file ("CIF") and ATM processing. The data
processing servicing agreement provides for the Bank to pay a monthly fee based
on the type, kind and volume of data processing services provided, priced at a
stipulated rate schedule.
Employees
The Bank currently employs 10 full time and 3 part time persons, including 3
officers. The Bank will hire additional persons as needed.
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Monetary Policies
The results of operations of the Bank are affected by credit policies of
monetary authorities, particularly the Federal Reserve Board. The instruments of
monetary policy employed by the Federal Reserve Board include open market
operations in U.S. Government securities, changes in the discount rate on member
bank borrowings, changes in reserve requirements against member bank deposits
and limitations on interest rates which member banks may pay on time and savings
deposits. In view of changing conditions in the national economy and in the
money market, as well as the effect of action by monetary and fiscal
authorities, including the Federal Reserve Board, no prediction can be made as
to possible future changes in interest rates, deposit levels, loan demand, or
the business and earnings of the Bank.
Supervision and Regulation
The Company and the Bank operate in a highly regulated environment, and their
business activities are governed by statute, regulation and administrative
policies. The business activities of the Company and the Bank are supervised by
a number of federal regulatory agencies, including the Federal Reserve Board,
the Florida Department of Banking and Finance ("Department") and the Federal
Deposit Insurance Corporation ("FDIC").
The Company is regulated by the Federal Reserve Board under the federal Bank
Holding Company Act, which requires every bank holding company to obtain the
prior approval of the Federal Reserve Board before acquiring more than 5% of the
voting shares of any bank or all or substantially all of the assets of a bank,
and before merging or consolidating with another bank holding company. The
Federal Reserve Board (pursuant to regulation and published policy statements)
has maintained that a bank holding company must serve as a source of financial
strength to its subsidiary banks. In adhering to the Federal Reserve Board
Policy, the Company may be required to provide financial support for a
subsidiary bank at a time when, absent such Federal Reserve Board policy, the
Company may not deem it advisable to provide such assistance.
A bank holding company is generally prohibited from acquiring control of any
company which is not a bank and from engaging in any business other than the
business of banking or managing and controlling banks. However, there are
certain activities which have been identified by the Federal Reserve Board to be
so closely related to banking as to be a proper incident thereto and thus
permissible for bank holding companies.
As a state bank, the Bank is subject to the supervision of the Department, the
FDIC and the Federal Reserve Board. With respect to expansion, the Bank may
establish branch offices anywhere within the State of Florida. The Bank is also
subject to the Florida banking and usury laws restricting the amount of interest
which it may charge in making loans or other extensions of credit. In addition,
the bank, as a subsidiary of the Company, is subject to restrictions under
federal law in dealing with the Company and other affiliates, if any. These
restrictions apply to extensions of credit to an affiliate, investments in the
securities of an affiliate and the purchase of assets from an affiliate.
Loans and extensions of credit by state banks are subject to legal lending
limitations. Under state law, a state bank may grant unsecured loans and
extensions of credit in an amount up to 15% of its unimpaired capital and
surplus to any person. In addition, a state bank may grant additional loans and
extensions of credit to the same person up to 10% of its unimpaired capital and
surplus, provided that the transactions are fully secured. This 10% limitation
is separate from, and in addition to, the 15% limitation for unsecured loans.
Loans and extensions of credit may exceed the general lending limit if they
qualify under one of several exceptions.
Both the Company and the Bank are subject to regulatory capital requirements
imposed by the Federal Reserve Board, the FDIC and the Department. Both the
Federal Reserve Board and the FDIC have established risk-based capital
guidelines for bank holding companies and banks which make regulatory capital
requirements more sensitive to differences in risk profiles of various banking
organizations. The capital adequacy guidelines issued by the Federal Reserve
Board are applied to bank holding companies on a consolidated basis with the
banks owned by the holding company. The FDIC's risk capital guidelines apply
directly to state banks regardless of whether they are a subsidiary of a bank
holding company. Both agencies' requirements (which are substantially similar)
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provide that banking organizations must have capital equivalent to 8% of
weighted risk assets. The risk weights assigned to assets are based primarily on
credit risks. Depending upon the riskiness of a particular asset, it is assigned
to a risk category. For example, securities with an unconditional guarantee by
the United States government are assigned to the lowest risk category. A risk
weight of 50% is assigned to loans secured by owner-occupied one to four family
residential mortgages. The aggregate amount of assets assigned to each risk
category is multiplied by the risk weight assigned to that category to determine
the weighted values, which are added together to determine total risk-weighted
assets. At December 31, 1996, the Company's total risk-based capital and Tier 1
ratio were 13.9% and 13.0%, respectively. Both the Federal Reserve Board and the
FDIC have also implemented new minimum capital leverage ratios to be used in
tandem with the risk-based guidelines in assessing the overall capital adequacy
of bank and bank holding companies. Under these rules, banking institutions are
required to maintain a ratio of 3% "Tier 1" capital to total assets (net of
goodwill). Tier 1 capital includes common stockholders equity, noncumulative
perpetual preferred stock and minority interests in the equity accounts of
consolidated subsidiaries.
Both the risk-based capital guidelines and the leverage ratio are minimum
requirements, applicable only to top-rated banking institutions. Institutions
operating at or near these levels are expected to have well-diversified risk,
excellent asset quality, high liquidity, good earnings and in general, have to
be considered strong banking organizations, rated composite 1 under the CAMEL
rating system for banks or the BOPEC rating system for bank holding companies.
Institutions with lower ratings and institutions with high levels of risk or
experiencing or anticipating significant growth would be expected to maintain
ratios 100 to 200 basis points above the stated minimums.
On September 1, 1995 the, the Federal Reserve Board and the FDIC proposed the
agencies adopted an interest rate risk assessment method for determining a
bank's capital needs using a model to be adopted by the agencies. The final rule
does not set a supervisory threshold which defines whether a bank has an above
normal level of interest-rate risk exposure. Instead, the agencies published on
the same date a proposed Policy Statement which includes a supervisory model for
measuring and assessing interest rate exposure. The agencies indicated that
prior to establishing an explicit supervisory threshold above which additional
capital would be required, they intend first to collect industry data and
evaluate the level of interest rate risk exposure existing in the banking
industry. Under the proposed Policy, small, well-managed banks are provided with
an exemption from the provisions of the Policy statement. Banks with total
assets of less than $300 million and with a CAMEL rating of either "1" or "2"
will be exempt from the requirements of the Policy if the sum of 30% of the
bank's fixed and floating-rate loans and securities that have contractual
maturity or repricing dates between 1 and 5 years, and 100% of the bank's fixed-
and floating-rate loans and securities that have contractual maturity or
repricing dates beyond 5 years, is less than or equal to 30% of the bank's total
assets. No final Policy has been adopted by the Agencies and until the final
Policy has been adopted by the agencies, no estimate of the proposed Policy's
impact on the Company can be made.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (or FDICIA),
created five "capital categories" ("well capitalized, " "adequately
capitalized," "undercapitalized," "significantly undercapitalized" and
"critically undercapitalized") which are defined in the Act and which are used
to determine the severity of corrective action the appropriate regulator may
take in the event an institution reaches a given level of undercapitalization.
For example, an institution which becomes "undercapitalized" must submit a
capital restoration plan to the appropriate regulator outlining the steps it
will take to become adequately capitalized. Upon approving the plan, the
regulator will monitor the institution's compliance. Before a capital
restoration plan will be approved, any entity controlling a bank (i.e., holding
companies) must guarantee compliance with the plan until the institution has
been adequately capitalized for four consecutive calendar quarters. The
liability of the holding company is limited to the lesser of five percent of the
institution's total assets or the amount which is necessary to bring the
institution into compliance with all capital standards. In addition,
"undercapitalized" institutions will be restricted from paying management fees,
dividends and other capital distributions, will be subject to certain asset
growth restrictions and will be required to obtain prior approval from the
appropriate regulator to open new branches or expand into new lines of business.
As an institution drops to lower capital levels, the extent of action to be
taken by the appropriate regulator increases, restricting the types of
transactions in which the institution may engage and ultimately providing for
the appointment of a receiver for certain institutions deemed to be critically
undercapitalized.
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The FDICIA required each federal banking agency to prescribe for all insured
depository institutions and their holding companies standards relating to
internal controls, information systems and audit systems, loan documentation,
credit underwriting, interest rate risk exposure, asset growth, and
compensation, fees and benefits and such other operational and managerial
standards as the agency deems appropriate. In addition, the federal banking
regulatory agencies were required to prescribe by regulation standards
specifying: (i) maximum classified assets to capital ratios; (ii) minimum
earnings sufficient to absorb losses without impairing capital; (iii) to the
extent feasible, a minimum ratio of market value to book value for publicly
traded shares of depository institutions or the depository institution holding
companies; and (iv) such other standards relating to asset quality, earnings and
valuation as the agency deems appropriate. Finally, each federal banking agency
was required to prescribe standards for employment contracts and other
compensation arrangements of executive officers, employees, directors and
principal stockholders of insured depository institutions that would prohibit
compensation and benefits and other arrangements that are excessive or that
could lead to a material financial loss for the institution. If an insured
depository institution or its holding company fails to meet any of its standards
described above, it will be required to submit to the appropriate federal
banking agency a plan specifying the steps that will be taken to cure the
deficiency. If an institution fails to submit an acceptable plan or fails to
implement the plan, the appropriate federal banking agency will require the
institution or holding company, to correct the deficiency and until corrected,
may impose restrictions on the institution or the holding company including any
of the restrictions applicable under the prompt corrective action provisions of
the FDICIA. The Federal banking agencies final rule implementing the safety and
soundness provisions of the FDICIA was effective on August 9, 1995.
The FDICIA also required each appropriate federal banking agency to adopt
uniform regulations prescribing standards for extensions of credit secured by
real estate or made for the purpose of financing the construction of
improvements on real estate. In prescribing these standards, the banking
agencies considered the risk posed to the deposit insurance funds by real estate
loans, the need for safe and sound operation of insured depository institutions
and the availability of credit. The FDIC and the other federal banking agencies
adopted uniform regulations implementing such standards, effective March, 1993.
In response to the directive issued under the Act, the regulators have adopted
regulations which, among other things, prescribe the capital thresholds for each
of the five capital categories established by the Act. The following table
reflects the capital thresholds:
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Total Risk - Tier 1 Risk - Tier 1
Based Capital Based Capital Leverage
Ratio Ratio Ratio
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Well capitalized (1) 10% 6% 5%
Adequately capitalized (1) 8% 4% 4% (2)
Undercapitalized (3) less than 8% less than 4% less than 4%
Significantly Undercapitalized (3) less than 6% less than 3% less than 3%
Critically Undercapitalized -- -- less than 2%
</TABLE>
(1) An institution must meet all three minimums.
(2) 3% for composite 1-rated institutions, subject to appropriate federal
banking agency guidelines.
(3) An institution falls into this category if it is below the specified
capital level for any of the three capital measures.
The Act also provided that banks be required to meet new safety and soundness
standards. In order to comply with the Act, the Federal Reserve Board, and the
FDIC, adopted a final Rule effective, August 9, 1995 which institutes guidelines
defining operational and managerial standards relating to internal controls,
loan documentation, credit underwriting, interest rate exposure, asset growth,
director and officer compensation, asset quality, earnings and stock valuation.
Both the capital standards and the safety and soundness standards which the Act
was to implement were designed to bolster and protect the deposit insurance
fund.
As a state bank, the bank is subject to examination and review by the
Department. The Bank submits to the Department quarterly reports of condition,
as well as such additional reports as may be required by the state banking laws.
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Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994, existing restrictions on interstate acquisitions of banks by bank
holding companies were repealed on September 29, 1995, such that the
Company and any other bank holding company located in Florida would be able
to acquire any Florida-based bank, subject to certain deposit percentage
and other restrictions. The legislation also provides that, unless an
individual state elects beforehand either (i) to accelerate the effective
date or (ii) to prohibit out-of-state banks from operating interstate
branches within its territory, on or after June 1, 1997, adequately
capitalized and managed bank holding companies will be able to consolidate.
De novo branching by an out-of-state bank would be permitted only if it is
expressly permitted by the laws of the host state. The authority of a bank
to establish and operate branches within a state will continue to be
subject to applicable state branching laws. During its 1996 Legislative
Session the Florida Legislature adopted Legislation which will permit
interstate branching effective June 1, 1997.
As a bank holding company, the Company is required to file with the Federal
Reserve Board an annual report of its operations at the end of each fiscal
year and such additional information as the Federal Reserve Board may
require pursuant to the Act. The Federal Reserve Board may also make
examinations of the Company and each of its subsidiaries.
The scope of regulation and permissible activities of the Company and the
Bank is subject to change by future federal and state legislation.
ITEM 2. - DESCRIPTION OF PROPERTY
The Bank commenced business operations on March 10, 1996 in a temporary
facility located at 604 Elkham Circle, Marco Island, Florida. On January
13, 1997 the Bank occupied its new permanent facility located at the same
site. The Company's headquarters was also relocated to this facility. The
facility is a one-story modern bank building consisting of 4,500 square
feet. The Bank has filed a branch application to locate a branch office at
5101 East Tamiami Trail, Naples, Florida. This facility is owned by the
Company and consists of a 2 story mixed use office facility. The first
floor, consisting of 3,900 square feet, will be occupied by the Bank.
ITEM 3. - LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or the
Bank is a party or of which any of their properties are subject; nor are
there material proceedings known to the Company to be contemplated by any
governmental authority; nor are there material proceedings known to the
Company, pending or contemplated, in which any director, officer, affiliate
or any principal security holder of the Company, or any associate of any of
the foregoing is a party or has an interest adverse to the Company or the
Bank.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None
PART II
ITEM 5. - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
During the period covered by this report and to date, there has been no
established public trading market for the Company's Common Stock.
As of March 14, 1997, the approximate number of holders of record of the
Company's Common Stock was 620.
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To date, the Company has not paid any dividends on its Common Stock. It is
the present policy of the Board of Directors of the Company to reinvest
earnings for such period of time as is necessary to ensure the success of
the operations of the Company and of the Bank. There are no current plans
to initiate payment of cash dividends, and future dividend policy will
depend on the Bank's earnings, capital requirements, financial condition
and other factors considered relevant by the Board of Directors of the
Company.
The Bank is restricted in its ability to pay dividends under Florida
banking laws and by regulations of the Federal Deposit Insurance
Corporation. Pursuant to Section 658.37, a state bank may not pay dividends
from its capital. All dividends must be paid out of net profits then on
hand, after charging off bad debts, depreciation, and other worthless
assets. Payment of dividends out of net profits is further limited by
Federal regulation which prohibits the payment of dividends if such payment
would bring the Bank's capital below required levels.
ITEM 6. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company hereby incorporates by reference the section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 5 through 12 of the 1996 Annual Report to Shareholders
for the year ended December 31, 1996 filed as an Exhibit under Item 13
herein.
ITEM 7. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company hereby incorporates by reference the Report of the Independent
Auditors and the Consolidated Financial Statements contained in the 1996
Annual Report to Shareholders for the year ended December 31, 1996 filed as
an Exhibit under Item 13 herein.
ITEM 8. - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE MATTERS - None
PART III
ITEM 9. - DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
The Company hereby incorporates by reference the sections entitled
"Election of Directors" and "Board of Directors Meeting" contained at pages
2 and 6 of the Proxy Statement filed as an Exhibit under Item 13 herein.
ITEM 10. - EXECUTIVE COMPENSATION
The Company hereby incorporates by reference the section entitled
"Executive Compensation" contained at pages 6 and 7 of the Proxy Statement
filed as an Exhibit under Item 13 herein.
ITEM 11. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
The Company hereby incorporates by reference the sections entitled
"Election of Directors" and "Certain Shareholders" contained at page 2 of
the Proxy Statement filed as an Exhibit under Item 13 herein.
10
<PAGE>
(b) Security Ownership of Management
The Company hereby incorporates by reference the section entitled "Election
of Directors" contained at pages 2 through 6 of the Proxy Statement filed
as an Exhibit under Item 13 herein.
(c) Changes in Control
The Company is not aware of any arrangements, including any pledge by any
person of securities of the Company, the operation of which may at a
subsequent date result in a change of control of the Company.
ITEM 12. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Bank has no outstanding loans to the Company's directors, executive
officers, their associates and members of the immediate families of such
directors and executive officers.
ITEM 13. - EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. The following exhibits are filed with or incorporated by
reference into this report. The exhibits which are denominated by an
asterisk (*) were previously filed as a part of, and are hereby
incorporated by reference from the Company's Registration Statement on Form
-SB-2 under the Securities Act of 1933 for the Company, as effective with
the Securities and Exchange Commission on December 7, 1995, Registration
No. 33-98090 (referred to as "Registration Statement"). The exhibit numbers
correspond to the exhibit numbers in the referenced documents.
11
<PAGE>
Exhibit No. Description of Exhibit
- ----------- ----------------------
*3.1 Amended and Restated Articles of Incorporation of the
Company (Registration Statement)
*3.2 By-laws of the Company (Registration Statement)
*4.1 Specimen Common Stock Certificate (Registration
Statement)
*4.2 Specimen Warrant Certificate (Registration Statement)
*4.4 Company's Warrant Plan (Registration Statement)
22.1 The Company's 1997 Annual Meeting Proxy Statement.
22.2 The Company's 1996 Annual Report for the year ended
December 31, 1996.
(b) Reports on Form 8-K. The Company did not file any reports
-------------------- on Form 8-K during the last quarter of 1996.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Citizens Community Bancorp, Inc.
Dated: March 25, 1997 By: /s/ Richard Storm, Jr.
-----------------------
Richard Storm, Jr.
Chairman of the Board
Dated: March 25, 1997 By: /s/ Stephen A. McLaughlin
--------------------------
Stephen A. McLaughlin
Senior Vice President
(Chief Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
/s/ Diane M. Beyer March 25, 1997
- --------------------
DIANE M. BEYER
Class I Director
/s/ Joel M. Cox, Sr. March 25, 1997
- --------------------
JOEL M. COX, SR.
Class I Director
/s/James S. Hagedorn March 25, 1997
- --------------------
JAMES S. HAGEDORN
Class I Director
/s/W. Terrell Upson March 25, 1997
- --------------------
W. TERRELL UPSON
Class I Director
/s/Thomas B. Garrison March 25, 1997
- --------------------
THOMAS B. GARRISON
Class II Director
March 25, 1997
- --------------------
PAUL F. JANSSENS-LENS
Class II Director
13
<PAGE>
/s/ Dennis J. Lynch March 25, 1997
- --------------------
DENNIS J. LYNCH
Class II Director
/s/ Heidi J. Mayerhofer March 25, 1997
- --------------------
HEIDI J. MAYERHOFER
Class III Director
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
The Company's Proxy Statement and 1996 Annual Report are included as Exhibits
22.1 and 22.2 of this filing.
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,354
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,688
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 2,240
<INVESTMENTS-MARKET> 2,243
<LOANS> 12,261
<ALLOWANCE> 145
<TOTAL-ASSETS> 25,028
<DEPOSITS> 17,885
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,179
<LONG-TERM> 0
0
0
<COMMON> 7
<OTHER-SE> 5,957
<TOTAL-LIABILITIES-AND-EQUITY> 25,028
<INTEREST-LOAN> 323
<INTEREST-INVEST> 119
<INTEREST-OTHER> 298
<INTEREST-TOTAL> 740
<INTEREST-DEPOSIT> 277
<INTEREST-EXPENSE> 283
<INTEREST-INCOME-NET> 457
<LOAN-LOSSES> 145
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 915
<INCOME-PRETAX> (533)
<INCOME-PRE-EXTRAORDINARY> (533)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (342)
<EPS-PRIMARY> (.51)
<EPS-DILUTED> (.51)
<YIELD-ACTUAL> 6.6
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 145
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 29, 1997
-----------------------------------------------------
Solicitation and Voting of Proxies
This Proxy Statement and the accompanying Proxy are being furnished to
shareholders of Citizens Community Bancorp, Inc. ("Citizens" or the "Company"),
the parent company of Citizens Community Bank of Florida (the "Bank") in
connection with the solicitation of proxies by the Board of Directors to be used
at the Company's Annual Meeting of Shareholders ("Annual Meeting") or any
adjournment thereof, which will be held on Tuesday, April 29, 1997, at 4:00
p.m., Eastern Time at The Olde Marco Inn, 100 Palm Street, Marco Island,
Florida.
Regardless of the number of shares of common stock owned, it is
important that shareholders be represented by Proxy or in person at the Annual
Meeting. Shareholders are requested to vote by completing the enclosed Proxy and
returning it signed and dated in the enclosed postage prepaid envelope.
Shareholders are urged to indicate the way they wish to vote in the space
provided on the Proxy. Proxies solicited by the Board of Directors of the
Company will be voted in accordance with the directions given therein. Where no
instructions are indicated, proxies will be voted "FOR" the management director
nominees set forth below, and "FOR" ratification of the appointment of Hacker,
Johnson, Cohen & Grieb as the independent auditors of Citizens for the fiscal
year ending December 31, 1997.
Revocation of Proxy
A shareholder's presence at this Annual Meeting will not automatically
revoke his or her Proxy. Shareholders may revoke a Proxy at any time prior to
its exercise by filing with the Secretary of the Company a written notice of
revocation, by delivering to the Company a duly executed Proxy bearing a later
date, or by attending this Annual Meeting and voting in person.
Voting Securities
The securities which may be voted at this Annual Meeting consist of
shares of common stock of Citizens ("Common Stock") with each share entitling
its owner to one vote for the election of directors and any other matters that
may come before the Annual Meeting. The close of business on March 14, 1997, has
been fixed by the Board of Directors as the record date ("Record Date") for the
determination of shareholders entitled to notice of and to vote at this Annual
Meeting and any adjournment thereof. The total number of shares of the Company's
Common Stock outstanding on the record date was 772,950 shares, which are held
by approximately 620 shareholders.
The presence, in person or by Proxy, of at least a majority of the
total number of outstanding shares of Common Stock is necessary to constitute a
Page 1
<PAGE>
quorum at the Annual Meeting. In the event there are not sufficient votes for a
quorum to approve any Proposal at the time of the Annual Meeting, this Annual
Meeting may be adjourned in order to permit further solicitation of proxies.
Certain Shareholders
As of March 14, 1997, no persons or apparent groups of persons, other
than Officers or Directors of the Company or the Bank, are known by management
to own beneficially five percent or more of the outstanding shares of Citizens'
Common Stock.
PROPOSAL I -- ELECTION OF DIRECTORS
The Board of Directors of Citizens is composed of ten members, divided
into three classes. The terms of each class are staggered so that approximately
one-third of the directors are elected each year. There are three Class II
Directors and three Class III Directors who, by virtue of their class, are not
required to be elected this year. The Board has nominated four Class I Directors
who will be elected to a three-year term to stand for election at this Annual
Meeting.
Management's nominees to fill the terms are Diane M. Beyer, Joel M.
Cox, Sr., James S. Hagedorn, and W. Terrell Upson, each of whom are presently
directors of Citizens.
It is intended that the proxies solicited by the Board of Directors
will be voted "FOR" the election of said nominees. If any nominee is unable to
serve, the shares represented by all valid proxies will be voted for the
election of such substitute as the Board may recommend. At this time the Board
of Directors knows of no reason why any nominee might not be able to serve.
The Board of Directors recommends that shareholders vote "FOR" election
of the nominees.
The following table describes the period that each board member and
each nominee has served as a director of Citizens, his position and offices held
with the Company, his principal occupation or employment, and further contains
information as of March 14, 1997, with respect to the beneficial ownership (as
such term is defined under the Rules and Regulations of the Securities Exchange
Commission) of the Company's Common Stock held by each nominee, each director,
and all directors as a group.
Page 2
<PAGE>
<TABLE>
<CAPTION>
Amount and nature Percent
Name, age, principal Current of Beneficial of Class
occupation, directorships, Director Term Ownership of Including
and business experience since Expires Common Stock Warrants(1)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management's Nominees for Three-Year Term:
Class I Directors
Diane M. Beyer, Age 57 1995 1997 5,800(2) .75%
Director, Citizens Community Bank
of Florida since 1995. Human
Resources Consultant since 1993.
Joel M. Cox, Sr., Age 52 1995 1997 28,500(3) 3.64%
Chairman and Director, Citizens
Community Bank of Florida since 1995.
Acting CEO Citizens Community
Bank of Florida May 1996 through
March 1997. Vice President and
Director of Cox's Insurance Agency
since 1985.
James S. Hagedorn, Age 54 1996 1997 10,000(4) 1.29%
Director, Citizens Community Bank
of Florida since 1996. CEO of
Citizens Community Bank of Florida
since March 1997. President and
Director of Waterside Development
Corp. 1995-Present. Chairman, President,
and CEO The Merchant Bank of Florida,
Brandon, Florida 1986-1994. President
the Merchant Bancorporation of Florida
1986-1994.
W. Terrell Upson, Age 58 1995 1997 3,300(5) 0.42%
Director, Citizens Community Bank
of Florida since 1995. President,
Citizens Community Bank of Florida
since May 1996. Managing Director of
the Summerlin Group, Inc. of Ft.
Myers 1995-96. Senior Vice
President of Corporate Banking for
BancFlorida from 1992 to 1995.
Page 3
<PAGE>
Amount and nature
Name, age, principal Current of Beneficial
occupation, directorships, Director Term Ownership of Percent
and business experience since Expires Common Stock of Class(1)
- ----------------------------------------------------------------------------------------------------------------
Board Members Not Standing for Election
Class II Directors
Thomas B. Garrison, Age 50 1995 1998 11,750(6) 1.50%
Director, Citizens Community Bank
of Florida since 1995. Network
Technology Manager for Barron-Collier
Companies since 1988.
Paul F. Janssens-Lens, Age 41 1995 1998 74,795(7) 9.39%
Director, Citizens Community Bank
of Florida since 1995. Co-Founder and
President of Soft-Art, Inc. since 1983.
President and Owner of Appletree
Management Corporation since 1994.
Dennis Lynch, Age 54 1995 1998 29,250(8) 3.74%
Director, Citizens Community Bank of
Florida since 1995. Owner and President
of Dennis J. Lynch and Associates, a
commercial real estate sales agency
since 1979.
Class III Directors
Heidi J. Mayerhofer, Age 33 1995 1999 5,285(9) 0.68%
Director, Citizens Community Bank
of Florida since 1995. Co-owner and
Manager of Konrads Seafood and Grille
Room since 1992. Co-owner and
Manager of the Bavarian Inn Restaurant
since 1986.
Page 4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Amount and nature
Name, age, principal Current of Beneficial
occupation, directorships, Director Term Ownership of Percent
and business experience since Expires Common Stock of Class(1)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stephen A. McLaughlin, Age 50 1995 1999 30,000(10) 3.83%
Director, Citizens Community Bank of
Florida since 1995. Vice President-
Administration, Citizens Community Bank
of Florida since October 1996. Secretary/
Treasurer of Citizens Community Bancorp,
Inc. since April 1996. Owner and Operator
of Stillwater Land & Lumber Limited,
a Maine based real estate sales and
consulting firm since 1980.
Richard Storm, Jr., Age 55 1995 1999 210,540(11) 25.13%
Director, Citizens Community Bank
of Florida since 1995. Owner and
President of Storm & Company, Inc.
since 1990. Managing General Partner
of Cumberland Associates since 1985.
</TABLE>
(1) Percentage computed on 772,950 shares issued and outstanding as of the
record date of March 14, 1997, on an individual basis, plus 332,050 shares
subject to presently exercisable stock purchase warrants issued in
connection with the Company's stock offering, for a total of 1,005,000
beneficial shares.
(2) Includes 1,600 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company's initial stock offering
and 4,200 shares owned jointly by Mrs. Beyer and her spouse.
(3) Includes 9,300 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company's initial stock offering;
10,000 shares owned by the Joel M. Cox Revocable Trust for which Mr. Cox
is trustee; 5,500 shares held by the Hare & Company as trustee FBO for Mr.
Cox; 3,100 shares held by Cox's Insurance of which Mr. Cox is the owner;
500 shares owned by Mrs. Cox, and 100 shares owned by Mrs. Cox for Mr. and
Mrs. Greene.
(4) Includes 9,000 shares owned jointly by Mr. Hagedorn and his spouse; 500
shares held by Robert W. Baird & Co. as trustee FBO James S. Hagedorn IRA;
and 500 shares held by Robert W. Baird & Co. as trustee FBO for Mr.
Hagedorn's spouse.
(5) Includes 1,100 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company's initial stock offering
and 2,200 shares owned individually.
(6) Includes 2,250 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company's initial stock offering;
5,800 shares owned individually by Mr. Garrison; 3,200 shares held by his
individual retirement account; and 500 shares held by his wife's
individual retirement account.
Page 5
<PAGE>
(7) Includes 23,265 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company's initial stock offering;
and 51,530 shares owned jointly by Mr. Janssens-Lens and his spouse.
(8) Includes 9,750 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company's initial stock offering;
14,500 shares held by his individual retirement account; and 5,000 shares
held by his wife's individual retirement account.
(9) Includes 1,725 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company's initial stock offering;
3,450 shares owned jointly by Mrs. Mayerhofer and her spouse; and 110
shares held jointly with her children, Andrew and Alexis Mayerhofer.
(10) Includes 10,000 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company's initial stock offering;
7,500 shares owned individually by Mr. McLaughlin; 4,000 shares held by
the Stillwater Land & Lumber Limited Pension Plan of which Mr. McLaughlin
is the administrator and sole beneficiary; and 8,500 shares held by the
Stillwater Land & Lumber Limited Profit Sharing Plan of which Mr.
McLaughlin is the administrator and sole beneficiary.
(11) Includes 69,365 shares subject to presently exercisable stock purchase
warrants issued in connection with the Company's initial stock offering;
87,405 shares owned individually by Mr. Storm; 10,000 shares owned jointly
by Mr. Storm and his spouse; 1,500 shares owned by Storm & Company; 26,500
shares held by the Richard Storm Profit Sharing Plan; 5,000 shares owned
by the Kathleen Storm Profit Sharing Plan; 270 shares owned by his wife,
Kathleen Storm; and 15,000 held by US Clearing FBO Richard Storm, Jr.
profit sharing plan.
Board of Directors Meetings
During the year ended December 31, 1996, the Board of Directors held 15
meetings. No director of the Company attended fewer than 75% of the total
meetings of the Board of Directors except for Mr. Janssens-Lens who prior to the
1996 Annual Meeting was still awaiting final Federal Reserve Board approval to
serve as a Director. Approval was received in March 1996.
Committees of the Board of Directors
The Board of Directors of the Company conducts business through the
following standing Committees: Executive Committee and Audit Committee.
Executive Compensation
No officer of Citizens or the Bank received cash compensation in excess
of $100,000 for the year ended December 31, 1996. W. Terrell Upson, President
and Director of the Company and President and Chief Lending Officer of the Bank
receives a base salary of $62,500 per year beginning January 1, 1997. In
addition, Mr. Upson has options to purchase 15,000 shares at $9 per share
pursuant to the 1996 Incentive Stock Option Plan of Citizens Community Bancorp,
Inc., none of which are currently exercisable.
Page 6
<PAGE>
Benefits
Insurance: Citizens' full-time officers and employees are provided
hospitalization, major medical, short- and long-term disability, dental
insurance, and term life insurance under group plans on generally the same basis
to all full-time employees.
Bonuses: Neither the Company nor the Bank has an established bonus
policy for employees. Based upon Employment Agreements between W. Terrell Upson
with the Bank, the Board of Directors may pay any one or more of them an
incentive bonus based upon the attainment of profit and growth goals established
by the Board for the Bank. The payment of any bonus is at the sole discretion of
the Board of Directors.
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF
AUDITORS FOR FISCAL YEAR ENDING DECEMBER 31, 1997
Citizens' independent auditors for the fiscal year ended December 31,
1996, were Hacker, Johnson, Cohen & Grieb. The Board of Directors has appointed
Hacker, Johnson, Cohen & Grieb to be its independent auditors for the fiscal
year ending December 31, 1997, subject to shareholder ratification.
The Board of Directors recommends that shareholders vote "FOR" the
ratification of the appointment of Hacker, Johnson, Cohen & Grieb as
independent auditors for the fiscal year ending December 31, 1997.
Solicitation
The cost of soliciting proxies on behalf of the Board of Directors for
the Annual Meeting will be borne by Citizens. Proxies may be solicited by
directors, officers, or regular employees of the Company or the Bank in person
or by telephone, telegraph, or mail.
Shareholder Proposals
In order to be eligible for inclusion in Citizens' Proxy material for
next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such Annual Meeting must be received at the Corporate Office of the
Company, 650 East Elkcam Circle, Marco Island, Florida 34145 on or before
January 26, 1998. Proposals must comply with the provisions of 17 C.F.R. Section
240.14a-8 ("Rule 14a") of the rules and regulations of the Securities and
Exchange Commission in order to be included in the Company's Proxy materials.
New business may be taken up at the Annual Meeting, provided the
proposal is stated in writing and filed with the Secretary of the Company at
least five (5) days before the Annual Meeting. Any shareholder may make any
Page 7
<PAGE>
other proposal at the Annual Meeting and the same may be discussed and
considered, but unless stated in writing and filed with the Company's Secretary
by the above date, such proposal shall be laid over for action at an adjourned
Annual Meeting or at a Special Meeting taking place 30 or more days thereafter.
This provision does not prevent the consideration and approval or disapproval at
the Annual Meeting of reports of officers, directors, and committees. In
connection with such reports, however, no new business shall be acted upon at
such Annual Meeting unless stated and filed as provided herein.
Financial Statements
The Bank's 1996 Annual Report containing audited financial statements
for the year ending December 31, 1996, accompany this Proxy Statement.
Other Matters
The Board of Directors knows of no other matters to be brought before
the Annual Meeting. If other matters should, however, come before the Annual
Meeting, it is the intention of the persons named in the enclosed Revocable
Proxy to vote the Proxy in accordance with their judgment and in the best
interest of the Company.
Citizens Community Bancorp, Inc.
Marco Island, Florida
March 28, 1997
Page 8
<PAGE>
CITIZENS COMMUNITY BANCORP, INC.
1996 ANNUAL REPORT
<PAGE>
1996 ANNUAL REPORT
Contents Page
Corporate Profile and General Information........................... 1
Common Stock Prices and Dividends................................... 1
Consolidated Financial Highlights................................... 2
Message from the Chairman and President............................. 3
Selected Financial Data............................................. 4
Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 5-12
Consolidated Financial Statements................................... 13-27
Independent Auditors' Report........................................ 28
Officers and Directors.............................................. 29
<PAGE>
CORPORATE PROFILE
Citizens Community Bancorp, Inc. (the "Holding Company") was incorporated on May
24, 1995. The Holding Company owns 100% of the outstanding common stock of
Citizens Community Bank of Florida (the "Bank") (collectively the "Company").
The Holding Company was organized simultaneously with the Bank and its only
business is the ownership and operation of the Bank. The Bank is a Florida
state-chartered commercial bank and is insured by the Federal Deposit Insurance
Corporation. The Bank opened for business on March 8, 1996, and provides
community banking services to businesses and individuals in Collier County,
Florida. The Company has adopted a fiscal year ending December 31. At December
31, 1996, the Company operated one retail banking office in Marco Island,
Florida and had total assets of $25 million and total stockholders' equity of
$5.96 million.
GENERAL INFORMATION
Annual Meeting The Annual Meeting of the
Stockholders will be held at the Old Marco
Inn located at 100 Palm Street, Marco
Island, Florida at 4:00 P.M., Tuesday, April
29, 1997.
Form 10-K A copy of the Form 10-K, as filed with the
Securities and Exchange Commission, may be
obtained by stockholders without charge upon
written request to the Director of
Stockholder Relations, Citizens Community
Bancorp, Inc., 650 East Elkcam Circle, Marco
Island, Florida 34145.
Transfer Agent and Registrar Citizens Community
Bancorp, Inc. 650 East Elkcam Circle Marco
Island, Florida 34145
Corporate Counsel Igler & Dougherty, P.A. 1501 Park
Avenue East Tallahassee, Florida 32301
Independent Auditors Hacker, Johnson, Cohen & Grieb
Certified Public Accountants 500 North
Westshore Boulevard Tampa, Florida 33609
COMMON STOCK PRICES AND DIVIDENDS
The Company's common stock is not actively traded but was recently sold in a
public offering for $9.00 per share. The Company has never paid cash dividends.
Future dividends, if any, will be determined by the Board of Directors.
As of February 28, 1997, the Company had 617 holders of record of common stock.
1
<PAGE>
CONSOLIDATED FINANCIAL HIGHLIGHTS
At December 31, 1996 or For the Year Then Ended
(Dollars in thousands, except per share figures)
At Year End:
Assets.................................................. $25,027
Loans, net.............................................. $12,116
Securities.............................................. $ 2,240
Deposits................................................ $17,885
Stockholders' equity.................................... $ 5,964
Book value per share.................................... $ 8.43
Shares outstanding...................................... 707,610
Equity-to-assets ratio.................................. 23.83%
Nonperforming assets-to-total assets ratio.............. NIL
For The Year:
Interest income......................................... 740
Net loss................................................ (342)
Loss per share.......................................... (.51)
Return on average assets................................ (2.71)%
Return on average equity................................ (10.35)%
Average equity-to-average assets ratio.................. 26.16%
Noninterest expenses to average assets.................. 7.24
Average Yield
or Rate
During the
Year Ended
December 31,
------------
1996
----
Yields and Rates:
Loan portfolio.......................................... 8.39%
Securities.............................................. 5.78
Other interest-earnings assets.......................... 5.62
All interest-earnings assets............................ 6.61
Deposits and borrowings................................. 4.28
Interest-rate spread (1)................................ 2.33
Net yield on average interest earning assets (2)........ 4.08
- -----------------
(1) Average yield on all interest-earning assets less average rate paid on
all interest-bearing liabilities.
(2) Net interest income divided by average interest-earning assets.
(3) Information for 1995 is not presented because the Company was in its
organization stage and it is not meaningful in relation to the 1996
information.
2
<PAGE>
MESSAGE FROM THE CHAIRMAN AND PRESIDENT
3
<PAGE>
SELECTED FINANCIAL DATA
At December 31, 1996 or for the Year then Ended
(Dollars in thousands, except per share figures)
At Year End:
Cash and cash equivalents $ 8,042
Securities 2,240
Loans, net 12,116
All other assets 2,630
---------
Total assets $ 25,028
=========
Deposit accounts 17,885
All other liabilities 1,179
Stockholders' equity 5,964
---------
Total liabilities and stockholders' equity $ 25,028
=========
For the Year:
Total interest income 740
Total interest expense 283
---------
Net interest income 457
Provision for loan losses 145
---------
Net interest income after provision for loan losses 312
---------
Noninterest income 70
Noninterest expenses 915
---------
Loss before income tax credit (533)
Income tax credit (191)
---------
Net loss $ (342)
=========
Net loss per share $ (.51)
=========
Weighted-average number of shares outstanding 665,812
=========
Ratios and Other Data:
Return on average assets (2.71)%
Return on average equity (10.35)%
Average equity to average assets 26.16%
Interest-rate spread during the period 2.86%
Net yield on average interest-earning assets 7.14%
Noninterest expenses to average assets 7.24%
Ratio of average interest-earning assets to average
interest-bearing liabilities 1.57
Nonperforming loans and foreclosed real estate
as a percentage of total assets at end of year NIL
Allowance for credit losses as a percentage
of total loans at end of year 1.18%
Total number of banking offices 1
Total shares outstanding at end of year 707,610
Book value per share at end of year $ 8.43
(1) Information for 1995 is not presented because the Company was in its
organization stage and it is not meaningful in relation to the 1996
information.
4
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Year Ended December 31, 1996
General
Citizens Community Bancorp, Inc. (the "Holding Company") was incorporated on May
24, 1995. The Holding Company owns 100% of the outstanding common stock of
Citizens Community Bank (the "Bank") (collectively the "Company"). The Holding
Company was organized simultaneously with the Bank and its only business is the
ownership and operation of the Bank. The Bank is a Florida state-chartered
commercial bank and is insured by the Federal Deposit Insurance Corporation. The
Bank opened for business on March 8, 1996, and provides community banking
services to businesses and individuals in Collier County, Florida.
Regulation and Legislation
As a state-chartered commercial bank, the Company is subject to extensive
regulation by the Florida Department of Banking and Finance ("Florida DBF") and
the Federal Deposit Insurance Corporation ("FDIC"). The Bank files reports with
the Florida DBF and the FDIC concerning its activities and financial condition,
in addition to obtaining regulatory approvals prior to entering into certain
transactions such as mergers with or acquisitions of other financial
institutions. Periodic examinations are performed by the Florida DBF and the
FDIC to monitor the Bank's compliance with the various regulatory requirements.
Credit Risk
The Company's primary business is making commercial, business, consumer, and
real estate loans. That activity entails potential loan losses, the magnitude of
which depend on a variety of economic factors affecting borrowers which are
beyond the control of the Company. While the Company has instituted underwriting
guidelines and credit review procedures to protect the Company from avoidable
credit losses, some losses will inevitably occur. The Company had no
nonperforming assets at December 31, 1996, and has no charge-off experience.
The following table presents information regarding the Company's total allowance
for losses as well as the allocation of such amounts to the various categories
of loans (dollars in thousands):
At December 31, 1996
--------------------
Loans to Total
--------------
Amount Loans
------ -----
Commercial real estate loans $ 62 31%
Residential real estate loans 22 36
Commercial loans 55 31
Consumer loans 6 2
---- ----
Total allowance for loan losses $145 100%
==== ====
The allowance for credit losses represented 1.18% of the total loans outstanding
at December 31, 1996.
5
<PAGE>
The following table sets forth the composition of the Company's loan portfolio
at December 31, 1996:
% of
Amount Total
------ -----
(in thousands)
Commercial real estate $3,758 31%
Residential real estate 4,384 36
Commercial 3,815 31
Consumer 305 2
------ ------
12,262 100%
===
Less:
Deferred fees (1)
Allowance for credit losses (145)
--------
Loans, net $ 12,116
========
Liquidity and Capital Resources
The Company's primary source of cash during the year ended December 31, 1996 was
from the proceeds from the sale of common stock of $6.3 million and net deposit
inflows of $17.9 million. Cash was used primarily to purchase investment
securities, to originate loans and to fund construction of a permanent building.
At December 31, 1996, the Company had outstanding commitments to originate loans
totaling $1.8 million. At December 31, 1996, the Bank exceeded its regulatory
liquidity requirements.
The following table sets forth the carrying value of the Company's securities
portfolio:
At December 31,
1996
(in thousands)
Securities held to maturity:
U.S. Treasury securities $1,743
U.S. Government agency securities 497
------
$ 2,240
=======
The following table sets forth, by maturity distribution, certain information
pertaining to the securities held to maturity portfolio as follows (dollars in
thousands):
<TABLE>
<CAPTION>
After One Year
One Year or Less to Five Years Total
---------------- ------------- -----
Carrying Average Carrying Average Carrying Average
Value Yield Value Yield Value Yield
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
December 31, 1996:
U.S. Treasury securities $ 247 6.00% $ 1,496 5.78% $1,743 5.80%
U.S. Government
agency securities 497 5.80 -- -- 497 5.80
------ ---- ----- ---- ------ ----
Total $ 744 5.88% $ 1,496 5.78% $2,240 5.80%
====== ==== ====== ==== ====== ====
</TABLE>
6
<PAGE>
Results of Operations
The operating results of the Company depend primarily on its net interest
income, which is the difference between interest income on interest-earning
assets and interest expense on interest-bearing liabilities, consisting
primarily of deposits. Net interest income is determined by the difference
between yields earned on interest-earning assets and rates paid on
interest-bearing liabilities ("interest-rate spread") and the relative amounts
of interest-earning assets and interest-bearing liabilities. The Company's
interest-rate spread is affected by regulatory, economic, and competitive
factors that influence interest rates, loan demand, and deposit flows. In
addition, the Company's net earnings are also affected by the level of
nonperforming loans and foreclosed real estate, as well as the level of its
noninterest income, and its noninterest expenses, such as salaries and employee
benefits, occupancy and equipment costs and income taxes.
The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend income of the Company from
interest-earning assets and the resultant average yield; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average costs; (iii) net interest/dividend income; (iv) interest rate spread;
(v) net interest margin. Average balances are based on average daily balances.
Year Ended December 31, 1996
----------------------------
Interest Average
Average and Yield/
Balance Dividends Rate
------- --------- ----
Interest-earning assets:
Loans $ 3,842 323 8.39%
Securities 2,052 119 5.78
Other interest-earning assets 5,306 298 5.62
----- --- ----
Total interest-earning assets 11,200 740 6.61
----
Noninterest-earning assets 1,443
-----
Total assets $12,643
======
Interest-bearing liabilities:
Demand, money market and NOW deposits 4,087 148 3.62
Savings 163 5 2.99
Certificates of deposit 2,296 124 5.39
Other 66 6 9.42
------ ----
Total interest-bearing liabilities 6,612 283 4.28
----
Noninterest-bearing liabilities 2,724
Stockholders' equity 3,307
----
Total liabilities and
stockholders' equity $12,643
======
Net interest/dividend income $ 457
====
Interest-rate spread 2.33%
====
Net interest margin 4.08%
====
Ratio of average interest-earning
assets to average
interest-bearing liabilities 1.57
====
7
<PAGE>
Regulatory Capital Requirements
Under FDIC regulations, the Bank is required to meet certain minimum regulatory
capital requirements. This is not a valuation allowance and has not been created
by charges against earnings. It represents a restriction on stockholders'
equity.
Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the table
below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined). Management believes, as of December 31, 1996, that the Bank
meets all capital adequacy requirements to which it is subject.
<TABLE>
<CAPTION>
For Well
For Capital Capitalized
Actual Adequacy Purposes: Purposes
------ ------------------ --------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
(dollars in thousands)
As of December 31, 1996:
Total capital (to Risk
<S> <C> <C> <C> <C> <C> <C>
Weighted Assets) $ 3,890 30.80% $ 1,011 8.00% $ 1,264 10.0%
Tier I Capital (to Risk
Weighted Assets) 3,747 29.65 505 4.00 758 6.0
Tier I Capital
(to Average Assets) 3,747 19.46 770 4.00 963 5.0
</TABLE>
Asset and Liability Management
As part of its asset and liability management, the Company has emphasized
establishing and implementing internal asset-liability decision processes, as
well as communications and control procedures to aid in managing the Company's
earnings. Management believes that these processes and procedures provide the
Company with better capital planning, asset mix and volume controls,
loan-pricing guidelines, and deposit interest-rate guidelines which should
result in tighter controls and less exposure to interest-rate risk.
The matching of assets and liabilities may be analyzed by examining the extent
to which such assets and liabilities are "interest rate sensitive" and by
monitoring an institution's interest rate sensitivity "gap." An asset or
liability is said to be interest rate sensitive within a specific time period if
it will mature or reprice within that time period. The interest-rate sensitivity
gap is defined as the difference between interest-earning assets and
interest-bearing liabilities maturing or repricing within a given time period.
The gap ratio is computed as RSA/RSL. A gap ratio of 1.0% represents perfect
matching. A gap is considered positive when the amount of interest-rate
sensitive assets exceeds interest-rate sensitive liabilities. A gap is
considered negative when the amount of interest-rate sensitive liabilities
exceeds interest-rate sensitive assets. During a period of rising interest
rates, a negative gap would adversely affect net interest income, while a
positive gap would result in an increase in net interest income. During a period
of falling interest rates, a negative gap would result in an increase in net
interest income, while a positive gap would adversely affect net interest
income.
In order to minimize the potential for adverse effects of material and prolonged
increases in interest rates on the results of operations, the Company's
management continues to monitor asset and liability management policies to
better match the maturities and repricing terms of its interest-earning assets
and interest-bearing liabilities. Such policies have consisted primarily of: (i)
emphasizing the origination of adjustable-rate loans; (ii) maintaining a stable
core deposit base; and (iii) maintaining a significant portion of liquid assets
(cash and short-term securities).
8
<PAGE>
The following table sets forth certain information relating to the Company's
interest-earning assets and interest-bearing liabilities at December 31, 1996
that are estimated to mature or are scheduled to reprice within the period shown
(dollars in thousands):
<TABLE>
<CAPTION>
More More
One than One than Five
Year Year and Years and Over
or Less than Less than Ten
Less Five Years Ten Years Years Total
---- ---------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
Mortgage and commercial loans (1):
Commercial loans $ 65 2,655 1,095 -- 3,815
Commercial real estate loans 566 2,677 515 -- 3,758
Residential mortgage loans 3,056 1,201 52 75 4,384
Consumer loans 16 273 16 -- 305
-------- -------- -------- -------- --------
Total loans 3,703 6,806 1,678 75 12,262
-------- -------- -------- -------- --------
Federal funds sold 6,688 -- -- -- 6,688
Securities (2) 744 1,496 -- -- 2,240
-------- -------- -------- -------- --------
Total rate-sensitive assets $ 11,135 8,302 1,678 75 21,190
======== ======== ======== ======== ========
Deposit accounts (3):
Money market deposits 418 -- -- -- 418
NOW deposits 8,311 -- -- -- 8,311
Savings deposits 360 -- -- -- 360
Certificates of deposit 3,116 3,314 -- -- 6,430
-------- -------- -------- -------- --------
Total rate-sensitive liabilities 12,205 3,314 -- -- 15,519
======== ======== ======== ======== ========
GAP (repricing differences) (1,070) 4,988 1,678 75 5,671
-------- -------- -------- -------- --------
Cumulative GAP (1,070) 3,918 5,596 5,671
-------- -------- -------- --------
Cumulative GAP/total assets (4.3)% 15.7% 22.4% 22.7%
======== ======== ======== ========
</TABLE>
(1) In preparing the table above, adjustable-rate loans are included in the
period in which the interest rates are next scheduled to adjust rather
than in the period in which the loans mature. Fixed-rate loans are
scheduled, including repayment, according to their maturities.
(2) Securities are scheduled through the maturity dates.
(3) Money market, NOW, and savings deposits are regarded as ready
accessible withdrawable accounts. All other time deposits are scheduled
through the maturity dates.
9
<PAGE>
The following table reflects the contractual principal repayments by period of
the Company's loan portfolio at December 31, 1996 (in thousands):
Commercial
Residential Real
Years Ending Commercial Mortgage Estate Consumer
December 31, Loans Loans Loans Loans Total
------------ ----- ----- ----- ----- -----
1997 $1,738 1,326 566 16 3,646
1998 64 87 -- 103 254
1999 272 412 -- 23 707
2000-2001 1,026 605 2,227 147 4,005
2002-2003 645 -- 450 16 1,111
2004 & beyond 70 1,954 515 -- 2,539
------ ------ ------ ------ ------
Total $3,815 4,384 3,758 305 12,262
====== ====== ====== ====== ======
Of the $8.6 million of loans due after 1997, 95% of such loans have fixed
interest rates and 5% have adjustable interest rates.
The following table sets forth total loans originated and repaid during 1996:
Year Ended
December 31,
------------
1996
----
(in thousands)
Originations:
Commercial loans $ 3,855
Commercial real estate loans 3,797
Residential mortgage loans 4,384
Consumer loans 305
-------
Total loans originated 12,341
Principal reductions 79
-------
Increase (decrease) in total loans $12,262
=======
10
<PAGE>
The following table shows the distribution of, and certain other information
relating to, the Company's deposit accounts by type (dollars in thousands):
At December 31, 1996
--------------------
% of
Amount Deposits
------ --------
Demand deposits $ 2,366 13.23%
NOW deposits 8,311 46.47
Money market deposits 418 2.34
Savings deposits 360 2.01
------- ------
Subtotal 11,455 64.05
Certificate of deposits:
4.00% - 4.99% 447 2.50
5.00% - 5.99% 4,966 27.77
6.00% - 6.99% 1,017 5.68
------- ------
Total certificates of deposit (1) 6,430 35.95
------- ------
Total deposit $17,885 100.0%
======= ======
(1) Included individual retirement accounts ("IRAs) totaling $253,000 at
December 31, 1996, all of which are in the form of certificates of
deposit.
The following table presents by various interest rates categories the amounts of
certificates of deposit at December 31, 1996 which mature during the periods
indicated (in thousands):
Year Ending December 31,
------------------------
1997 1998 1999 2000 2001 Total
---- ---- ---- ---- ---- -----
4.00% - 4.99% $ 447 -- - -- - 447
5.00% - 5.99% 2,568 2,386 - 12 - 4,966
6.00% - 6.99% 100 917 - -- - 1,017
------ ------ - ------ - ------
Total certificates of deposit $3,115 3,303 - 12 - 6,430
====== ===== ==== ==== ==== ======
Jumbo certificates ($100,000 and over) mature as follows (in thousands):
December 31,
------------
1996
----
Due three months or less $ --
Due over three months to six months 507
Due over six months to one year 260
Due over one year 700
------
$1,467
======
11
<PAGE>
Results of Operations
Year Ended December 31, 1996
General. Net loss for the year ended December 31, 1996 was $(342,295) or $(.51)
per share. During the year ended December 31, 1996 the Bank had not
achieved the average asset size necessary to operate profitably.
Interest Income and Expense. Interest income totalled $739,796 for the year
ended December 31, 1996. Interest income earned on loans was $322,538.
The average loan portfolio balance for the year ended December 31, 1996
was $3.8 million and the weighted average yield was 8.4%.
Interest on securities was $118,531. The average investment securities
portfolio was $2.1 million with a weighted average yield of 5.8%.
Interest on federal funds sold and deposits in banks totalled $298,727.
The average balance of these assets was $4.5 million with a weighted
average yield of 6.7%.
Interest expense on deposit accounts amounted to $276,691 for the year
ended December 31, 1996. The weighted average cost of deposits was
4.23%.
Provisionfor Loan Losses. The provision for loan losses is charged to earnings
to bring the total allowance to a level deemed appropriate by
management and is based upon the volume and type of lending conducted
by the Company, industry standards, the amount of nonperforming loans
and general economic conditions, particularly as they relate to the
Company's market areas, and other factors related to the collectibility
of the Company's loan portfolio. The provision for the year ended
December 31, 1996 was $145,000.
Other Expense. Other expense totalled $914,927 for the year ended December
31, 1996. Compensation and benefits was the largest, amounting to
$332,124.
Income Taxes. The Company recognized a credit for income taxes as well as a
deferred tax asset because management believes it is more likely than
not the Company will be able to generate taxable income in the future
to offset these amounts.
12
<PAGE>
<TABLE>
<CAPTION>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Balance Sheets
At December 31,
---------------
1996 1995
---- ----
<S> <C> <C>
Assets
Cash and due from banks $ 1,353,777 42,366
Federal funds sold 6,688,000 --
------------ ------------
Total cash and cash equivalents 8,041,777 42,366
Securities held to maturity 2,240,290 --
Loans, net of allowance for loan losses of $145,000 12,115,911 --
Premises and equipment, net 2,293,140 677,789
Accrued interest receivable and other asset 132,406 146,998
Deferred income taxes 204,000 13,000
------------ ------------
Total assets $ 25,027,524 880,153
============ ============
Liabilities and Stockholders' Equity
Liabilities:
Demand deposits 2,366,487 --
Savings and NOW deposits 8,670,357 --
Money market deposits 417,775 --
Time deposits 6,430,485 --
------------ ------------
Total deposits 17,885,104 --
Official checks 579,703 --
Due to organizers -- 239,000
Mortgage payable 525,000 593,806
Accrued interest payable and other liabilities 73,534 49,031
------------
Total liabilities 19,063,341 881,837
------------ ------------
Commitments (Note 7)
Stockholders' Equity:
Preferred stock, $.01 value, 2,000,000 shares authorized,
none and 210 shares issued and outstanding in 1996 and 1995 -- 21,000
Common stock, $.01 par value 8,000,000 shares authorized
707,610 shares issued and outstanding 7,076 --
Additional paid-in capital 6,322,086 --
Accumulated deficit (364,979) (22,684)
------------ ------------
Total stockholders' equity (deficit) 5,964,183 (1,684)
------------ ------------
Total liabilities and stockholders' equity (deficit) $ 25,027,524 880,153
============ =======
See Accompanying Notes to Consolidated Financial Statements.
13
</TABLE>
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
Period From
May 24, 1995
(Incorporation)
Year Ended to
December 31, December 31,
------------ ------------
1996 1995
---- ----
Interest income:
Loans $ 322,538 --
Securities 118,531 --
Federal funds sold 254,864 --
Deposits in banks 43,863 --
--------- ---------
Total interest income 739,796 --
--------- ---------
Interest expense:
Deposits 276,691 --
Mortgage 6,182 5,796
--------- ---------
Total interest expense 282,873 5,796
--------- ---------
Net interest income (expense) 456,923 (5,796)
Provision for loan losses 145,000 --
--------- ---------
Net interest income (expense)
after provision for loan losses 311,923 (5,796)
--------- ---------
Noninterest income:
Other service charges and fees 57,412 --
Other 12,297 --
--------- ---------
Total noninterest income 69,709 --
--------- ---------
Noninterest expense:
Compensation and benefits 332,124 19,940
Occupancy and equipment 153,548 732
Advertising 20,491 --
Organizational expenses 100,079 --
Professional fees 35,257 --
Office supplies 68,982 --
Data processing 33,765 --
Other 170,681 9,216
--------- ---------
Total noninterest expens 914,927 29,888
--------- ---------
Loss before income tax benefit (533,295) (35,684)
Income tax benefit (191,000) (13,000)
--------- ---------
Net loss $(342,295) (22,684)
========= =========
Loss per share $ (.51) --
========= =========
Weighted-average number of common shares outstanding 665,812 --
========= =========
See Accompanying Notes to Consolidated Financial Statements.
14
<PAGE>
<TABLE>
<CAPTION>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
Additional Total
Preferred Common Paid-In Accumulated Stockholders'
Stock Stock Capital Deficit Equity
<S> <C> <C> <C> <C> <C>
Balance, May 24, 1995 $ -- -- -- --
Sale of preferred stock 21,000 -- -- -- 21,000
Net loss -- -- -- (22,684) (22,684)
---------- ---------- ---------- ---------- ----------
Balance at December 31, 1995 21,000 -- -- (22,684) (1,684)
Redemption of 210 shares of
preferred stock (21,000) -- -- -- (21,000)
Issuance of 707,610 shares of
common stock net of
$39,328 of offering
costs -- 7,076 6,322,086 -- 6,329,162
Net loss -- -- -- (342,295) (342,295)
---------- ---------- ---------- ---------- ----------
Balance December 31, 1996 $ -- 7,076 6,322,086 (364,979) 5,964,183
========== ========== ========== ========== ==========
See Accompanying Notes to Consolidated Financial Statements.
15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
Period From
May 24, 1995
(Incorporation)
Year Ended to
December 31, December 31,
------------ ------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (342,295) (22,684)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 73,610 --
Provision for loan losses 145,000 --
Credit for deferred income taxes (191,000) (13,000)
Amortization of loan fees,
premiums and discounts (19,340) --
Increase in accrued interest
receivable and other assets 14,592 (117,191)
Increase in accrued interest
payable and other liabilities 24,503 49,031
------------ ------------
Net cash used in operating activities (294,930) (103,844)
------------ ------------
Cash flows from investing activities:
Purchase of securities held to maturity (5,220,309) --
Maturities of securities held to maturity 3,000,000 --
Net increase in loans (12,261,552) --
Purchase of premises and equipment (1,163,961) (74,462)
------------ ------------
Net cash used in investing activities (15,645,822) (74,462)
------------ ------------
Cash flows from financing activities:
Net increase in noninterest-bearing demand,
savings and NOW deposits 11,454,619 --
Net increase in time deposits 6,430,485 --
Net increase in official checks 579,703 --
Advances from organizers -- 239,000
Repayment of advances from organizers (239,000) --
Stock offering costs -- (39,328)
Issuance of preferred stock -- 21,000
Redemption of preferred stock (21,000) --
Sale of common stock 6,329,162 --
Payment of mortgage payable (593,806) --
------------ ------------
Net cash provided by
financing activities 23,940,163 220,672
------------ ------------
Net increase in cash and cash equivalents 7,999,411 42,366
Cash and cash equivalents at beginning of period 42,366 --
------------ ------------
Cash and cash equivalents at end of period $ 8,041,777 42,366
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 233,273 5,796
============ ============
Income taxes $ -- --
============ ============
Noncash transactions-
Issuance of mortgage payable
for acquisition of property $ 525,000 593,806
============ ============
See Accompanying Notes to Consolidated Financial Statements.
16
</TABLE>
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
For the Year Ended December 31, 1996 and the Period
from May 24, 1995 (incorporation) to December 31, 1995
(1) Summary of Significant Accounting Policies
Organization. Citizens Community Bancorp, Inc. (the "Holding Company") was
incorporated on May 24, 1995. The Holding Company owns 100% of the
outstanding common stock of Citizens Community Bank of Florida (the "Bank")
(collectively the "Company"). The Holding Company was organized
simultaneously with the Bank and its only business is the ownership and
operation of the Bank. The Bank is a Florida state-chartered commercial
bank and is insured by the Federal Deposit Insurance Corporation. The Bank
opened for business on March 8, 1996 and provides community banking
services to businesses and individuals in Collier County, Florida. The
Company has adopted a fiscal year ending December 31.
Basisof Presentation. The accompanying consolidated financial statements of the
Company include the accounts of the Holding Company and the Bank. All
significant intercompany accounts and transactions have been eliminated in
consolidation. The accounting and reporting practices of the Company
conform to generally accepted accounting principles and to general
practices within the banking industry.
Estimates. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents. For purposes of the presentation in the statement of
cash flows, cash and cash equivalents are defined as those amounts included
in the accompanying balance sheet captions "cash and due from banks and
federal funds sold."
Securities Held to Maturity. United States government treasury and agency
securities for which the Company has the positive intent and ability to
hold to maturity are reported at cost, adjusted for amortization of
premiums and accretion of discounts which are recognized in interest income
using the interest method over the period to maturity.
Loans Receivable. Loans receivable that management has the intent and ability to
hold for the foreseeable future or until maturity or pay-off are reported
at their outstanding principal adjusted for any charge-offs, the allowance
for loan losses, and any deferred fees or costs on originated loans and
unamortized premiums or discounts on purchased loans.
Loan origination fees and certain direct origination costs are capitalized
and recognized as an adjustment of the yield of the related loan.
The accrual of interest on impaired loans is discontinued when, in
management's opinion, the borrower may be unable to meet payments as they
become due. When interest accrual is discontinued, all unpaid accrued
interest is reversed. Interest income is subsequently recognized only to
the extent cash payments are received.
(continued)
17
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(1) Summary of Significant Accounting Policies, Continued
LoansReceivable, Continued. The allowance for loan losses is increased by
charges to income and decreased by charge-offs (net of recoveries).
Management's periodic evaluation of the adequacy of the allowance is based
on the Company's past loan loss experience, known and inherent risks in the
portfolio, adverse situations that may affect the borrower's ability to
repay, the estimated value of any underlying collateral, and current
economic conditions.
Income Taxes. Deferred tax assets and liabilities are reflected at currently
enacted income tax rates applicable to the period in which the deferred tax
assets or liabilities are expected to be realized or settled. As changes in
tax laws or rates are enacted, deferred tax assets and liabilities are
adjusted through the provision for income taxes.
Premises and Equipment. Premises and equipment are stated at cost less
accumulated depreciation. Depreciation expense is computed on the
straight-line basis over the estimated useful life of each type of asset.
Advances from Organizers. Certain of the Company's organizers made
noninterest-bearing advances of $239,000 to the Company. These amounts were
used to fund organizational and other costs incurred by the Holding Company
and the Bank. The advances were repaid to the organizers on February 7,
1996 from the proceeds of the Company's common stock offering.
Off-Balance-Sheet Instruments. In the ordinary course of business the Company
has entered into off-balance-sheet financial instruments consisting of
commitments to extend credit. Such financial instruments are recorded in
the financial statements when they are funded.
Advertising. The Company expenses all media advertising as incurred.
Loss Per Share. Loss per share is calculated by dividing net loss by the
weighted average number of shares of common stock outstanding during the
year.
(continued)
18
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(2) Debt Securities
Debt securities have been classified in the balance sheet according to
management's intent. The carrying amount of securities and their approximate
fair values at December 31, 1996 are as follows:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
Held to Maturity:
U.S. Treasuries $1,743,345 10,069 2,251 1,751,163
U.S. Government agencies 496,945 -- 5,079 491,866
---------- ---------- ----------
$2,240,290 10,069 7,330 2,243,029
========== ========== ========== ==========
</TABLE>
There were no sales of debt securities in 1996.
The scheduled maturities of debt securities at December 31, 1996 are as
follows:
Held to Maturity
----------------
Amortized Fair
Cost Value
---- -----
Due in one or less $ 744,088 736,918
Due after one through five years 1,496,202 1,506,111
---------- ----------
$2,240,290 2,243,029
========== ==========
(3) Loans
The components of loans in the balance sheet are as follows:
At December 31,
---------------
1996
----
Commercial real estate $ 3,757,335
Residential real estate 4,384,301
Commercial 3,814,584
Consumer 305,332
------------
12,261,552
Less:
Deferred fees (641)
Allowance for credit losses (145,000)
------------
Loans, net $ 12,115,911
============
(continued)
19
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(3) Loans, Continued
An analysis of the change in the allowance for loan losses follows:
Year Ended
December 31,
------------
1996
----
Beginning balance $ --
Provision for credit losses 145,000
Charge-offs --
Recoveries --
--------
$ 145,000
=========
The Company had no impaired loans in 1996.
(4) Premises and Equipment
A summary of premises and equipment follows:
At December 31,
---------------
1996 1995
---- ----
Land $ 931,056 677,789
Bank premises 536,576 --
Construction in progress 696,276 --
Furniture, fixtures and equipment 163,566 --
---------- ----------
Total, at cost 2,327,474 677,789
Less accumulated depreciation 34,334 --
---------- ----------
Premises and equipment, net $2,293,140 677,789
========== ==========
(continued)
20
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(5) Deposits
Time deposits included the following amounts:
At December 31,
---------------
1996
----
Certificates of Deposit $100,000 and over $1,467,284
Certificates of Deposit under $100,000 4,963,201
----------
$6,430,485
==========
A schedule of maturities of certificates of deposit follows:
Year Ending
December 31, Amount
------------ ------
1997 $3,115,611
1998 3,303,280
2000 11,594
----------
$6,430,485
==========
(6) Mortgage Payable
The Company has a note payable collateralized by a mortgage on a future branch
site. The note bears interest at 8% and is payable based on a 20 year
amortization with a balloon payment due 2001.
(7) Financial Instruments
The Company is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments are commitments to extend credit and may
involve, to varying degrees, elements of credit and interest-rate risk in
excess of the amount recognized in the balance sheet. The contract amounts
of these instruments reflect the extent of involvement the Company has in
these financial instruments.
The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit is
represented by the contractual amount of those instruments. The Company
uses the same credit policies in making commitments as it does for
on-balance-sheet instruments.
(continued)
21
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(7) Financial Instruments, Continued
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since some of the commitments are
expected to expire without being drawn upon, the total commitment amounts do
not necessarily represent future cash requirements. The Company evaluates
each customer's credit worthiness on a case-by-case basis. The amount of
collateral obtained if deemed necessary by the Company upon extension of
credit is based on management's credit evaluation of the counterparty.
A summary of the notional amounts of the Company's financial instruments,
with off balance sheet risk at December 31, 1996 follows:
Unfunded loan commitments at variable rates $1,760,000
==========
Available lines of credit $ 58,000
==========
(8) Credit Risk
The Company grants the majority of its loans to borrowers throughout Collier
County, Florida. Although the Company has a diversified loan portfolio, a
significant portion of its borrowers' ability to honor their contracts is
dependent upon the economy in Collier County, Florida.
(9) Income Taxes
The income tax benefit consisted of the following:
Year Ended December 31,
-----------------------
1996 1995
---- ----
Deferred:
Federal $(163,000) (11,000)
Stat (28,000) (2,000)
--------- ---------
Total deferred benefi $(191,000) (13,000)
========= =========
The income tax benefit is different than that computed by applying the
federal statutory rate of 34% in 1996, as indicated in the following
analysis:
<TABLE>
<CAPTION>
1996 1995
---- ----
% of % of
Pretax Pretax
Amount Loss Amount Loss
------ ---- ------ ----
<S> <C> <C> <C> <C>
Income tax benefit at statutory Federal
income tax rate $(181,320) (34.0)% $ (12,132) (34.0)%
Increase (decreases) resulting from
State taxes, net of federal tax benefit (18,480) (3.4) (1,300) (3.6)
Other 8,800 1.6 432 1.2
--------- ---- --------- ----
$(191,000) (35.8)% $ (13,000) (36.4)%
========= ==== ========= ====
</TABLE>
(continued)
22
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(9) Income Taxes, Continued
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are
presented below.
At December 31,
---------------
1996 1995
---- ----
Deferred tax asset:
Allowance for credit losse $ 45,000 --
Contribution 1,000 --
Net operating loss 158,000 13,000
-------- --------
Gross deferred tax asset 204,000 13,000
Less valuation allowance -- --
-------- --------
Net deferred tax asset $204,000 13,000
======== ========
At December 31, 1996, the Company had net operating loss carryforwards for
federal and state income tax purposes as follows:
Year Expires
2010 $ 36,000
2011 386,000
--------
$422,000
========
(10) Incentive Stock Option Plan
The Company established an Incentive Stock Option plan for officers and
employees and reserved 100,000 shares of common stock for the plan and
during 1996, the Company granted stock options to its officers and
employees to purchase 15,500 shares of the Company's common stock. Under
the President's employment contract, the Company also granted stock options
to purchase 10,000 shares.
Average Aggregate
Per Share Number of Option
Price Shares Price
----- ------ -----
Outstanding at December 31, 1995 -- -- --
Options granted 9.00 25,500 $229,500
------ --------
Outstanding at December 31, 1996 9.00 25,500 $229,500
==== ====== ========
(continued)
23
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(10)Incentive Stock Option Plan, Continued These options are exercisable as
follows:
Year Ending
-----------
1997 $ 7,100
1998 9,100
1999 3,100
2000 3,100
2001 3,100
------
25,500
======
The Company uses Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," which establishes financial
accounting and reporting standards for stock-based employee compensation
plans. As permitted by this Statement, the Company has elected to utilize
the intrinsic value method of accounting defined in APB Opinion No. 25. Due
to the exercise price of the options approximating the market value of the
common stock at the date of grant, no compensation expense has been
recognized in the consolidated statements of operations.
In order to calculate the fair value of the options, it was assumed that the
risk-free interest rate was 6.0%, there would be no dividends paid by the
Company over the exercise period, the expected life of the options would be
the entire exercise period and stock volatility would be zero due to the
lack of an active market for the stock. The following information pertains
to the fair value of the options granted to purchase common stock in 1996:
1996
Weighted-average grant-date fair value of options
issued during the year $95,137
======
The proforma results and the actual results are the same because no options
vested in 1996.
(11) Stockholders' Equity
The Company is subject to certain restrictions on the amount of dividends that
it may declare without prior regulatory approval.
As of December 31, 1996, the Company has sold 707,610 shares of common stock
for an aggregate of $6,368,490. The Company incurred $39,328 in offering
expenses relating to their public offering of the Company's common stock
and warrants. Offering expenses were deducted from the proceeds received
from the sale of common stock and warrants.
(continued)
24
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(11) Stockholders' Equity, Continued
During the initial offering period shares were offered in units with a unit
consisting of one share of common stock and one warrant. Each warrant
entitles the holder thereof to purchase 1/2 of one share of additional
common stock for $9.00 per share during the 24 month period following the
effective date of registration of the shares. As of December 31, 1996 there
were 670,000 warrants outstanding entitling the holders to purchase 335,000
shares of the Company's stock. No warrants have been exercised.
The Company is offering common stock to depositors of the Bank. Each depositor
who opens a deposit account with a balance of $1,000 or more may purchase
up to 500 shares of common stock at $9.00 per share. This offer expires
March 8, 1997.
(12) Regulatory Matters
The Holding Company and the Bank are subject to various regulatory capital
requirements administered by various regulatory banking agencies. Failure
to meet minimum capital requirements can initiate certain mandatory and
possibly additional discretionary actions by regulators that, if
undertaken, could have a direct material effect on the Company's financial
statements. Under capital adequacy guidelines and the regulatory framework
for prompt corrective action, the Bank must meet specific capital
guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off-balance-sheet items as calculated under
regulatory accounting practices. The Bank's capital amounts and
classification are also subject to qualitative judgements by the regulators
about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital (as defined in the regulations) to
risk- weighted assets (as defined), and of Tier I capital (as defined) to
average assets (as defined). Management believes, as of December 31, 1996,
that the Company meets all capital adequacy requirements to which it is
subject.
As of December 31, 1996, the most recent notification from the regulatory
authorities categorized the Bank as well capitalized under the regulatory
framework for prompt corrective action. To be categorized as well
capitalized the Bank must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage ratios as set forth in the table. There are
no conditions or events since that notification that management believes
have changed the Bank's category. The Bank's actual capital amounts and
ratios are also presented in the table (dollars in thousands).
<TABLE>
<CAPTION>
For Well
For Capital Capitalized
Actual Adequacy Purposes: Purposes:
------ ------------------ ---------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1996:
Total capital (to Risk
Weighted Assets) $3,890 30.80% $1,011 8.00% $1,264 10.0%
Tier I Capital (to Risk
Weighted Assets) 3,747 29.65 505 4.00 758 6.0
Tier I Capital
(to Average Assets) 3,747 19.46 770 4.00 963 5.0
(continued)
</TABLE>
25
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(13) Parent Company Only Financial Information
The Holding Company's financial information is as follows at December 31, 1996
and 1995 and for the year ended December 31, 1996 and for the period from
May 24, 1995 (incorporation) to December 31, 1995:
Condensed Balance Sheets
(In thousands)
At December 31,
1996 1995
Assets
Cash $ 1,313 42
Loans receivable 661 --
Investment in subsidiary 3,747 --
Premises and equipment, net 754 678
Other assets 23 160
------- -------
Total assets $ 6,498 880
======= =======
Liabilities and Stockholders' Equity
Mortgage payable 525 594
Advances from organizers -- 239
Liabilities 9 49
Stockholders' equity 5,964 (2)
------- -------
Total liabilities and stockholders' equity $ 6,498 880
======= =======
Condensed Statements of Operations
(In thousands)
1996 1995
------- -------
Revenues $ 69 --
Expenses (78) (23)
------- -------
Loss before loss of subsidiary (9) (23)
Loss of subsidiary (333) --
------- -------
Net loss $ (342) (23)
======= =======
(continued)
26
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued
(13) Parent Company Only Financial Information, Continued
<TABLE>
<CAPTION>
Condensed Statements of Cash Flows
(In thousands)
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (342) (23)
Adjustments to reconcile net loss to net cash from
operating activities:
Equity in undistributed loss of subsidiaries 333 --
Net (increase) decrease in other assets 137 (130)
(Decrease) increase in other liabilities (40) 49
Depreciation 3 --
------- -------
Net cash provided by (used in) operating activities 91 (104)
------- -------
Cash flows from investing activities-
Purchase of property and equipment, net of disposals 446 (75)
Net increase in loans receivable (661) --
Repayment of mortgage note payable (594) --
------- -------
Net cash used in investing activities (809) (75)
------- -------
Cash flows from financing activities:
Net proceeds from issuance of common stock 6,329 --
Sale of (retire) preferred stock (21) 21
Advances from organizers -- 239
Stock offering costs -- (39)
Repayment of advances from organizers (239) --
Investment in subsidiary (4,080) --
------- -------
Net cash (used in) provided by financing activities 1,989 221
------- -------
Net (decrease) increase in cash and cash equivalents 1,271 42
Cash and cash equivalents at beginning of the year 42 --
-------
Cash and cash equivalents at end of year $ 1,313 42
======= =======
27
</TABLE>
<PAGE>
Independent Auditors' Report
Board of Directors
Citizens Community Bancorp, Inc.
Marco Island, Florida:
We have audited the accompanying consolidated balance sheets of Citizens
Community Bancorp, Inc. and Subsidiary (the "Company") at December 31, 1996 and
1995, and the related statements of operations, changes in stockholders' equity,
and cash flows for the year ended December 31, 1996 and for the period from May
24, 1995 (incorporation) to December 31, 1995. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company at
December 31, 1996 and 1995, and the results of its operations and its cash flows
for the year ended December 31, 1996 and for the period from May 24, 1995
(incorporation) to December 31, 1995, in conformity with generally accepted
accounting principles.
HACKER, JOHNSON, COHEN & GRIEB
Tampa, Florida
February 12, 1997
28
<PAGE>
DIRECTORS AND OFFICERS
CITIZENS COMMUNITY BANCORP, INC.
OFFICERS
Richard Storm, Jr.
Chairman and Chief Executive Officer
Joel M. Cox, Sr.
Vice Chairman
W. Terrell Upson
President
Stephen A. McLaughlin
Secretary - Treasurer and
Chief Financial Officer
DIRECTORS
Richard Storm, Jr.
Chairman and Chief Executive Officer
Joel M. Cox, Sr.
Vice Chairman and Vice President
and Director of Cox's
Insurance Agency
W. Terrell Upson
President
Stephen A. McLaughlin
Secretary-Treasurer and
Chief Financial Officer
James S. Hagedorn
Vice Chairman and Chief Executive
Officer of Citizens
Community Bank
Diane M. Beyer
Humane Resources Consultant
Thomas B. Garrision
Network Technology Manager
for Barron-Collier
Companies
Paul Janssens-Lens
Co-Founder and President of
Soft-Art, Inc. and President
and Owner of Appletree Management
Corporation
Dennis J. Lynch
Owner and President of
Dennis J. Lynch and Associates,
a commercial real estate sales agency
Heidi I. Mayerhofer
Co-owner and Manager of
Konrads Seafood and Grille
Room
CITIZENS COMMUNITY BANK OF FLORIDA
OFFICERS
Joel M. Cox, Sr.
Chairman
James S. Hagedorn
Vice Chairman and Chief Executive Officer
W. Terrell Upson
President and Chief Lending Officer
Stephen A. McLaughlin
Vice President-Administration,
Secretary to the Board
Susanne Bartlett
Vice President-Cashier
DIRECTORS
Joel M. Cox, Sr.
Chairman
James S. Hagedorn
Vice Chairman
Stephen A. McLaughlin
Secretary to the Board
W. Terrell Upson
Diane M. Beyer
Thomas B. Garrison
Paul Janssens-Lens
Dennis J. Lynch
Heidi I. Mayerhofer
Richard Storm, Jr.
29
<PAGE>
o
