<PAGE> 1
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 1
TO
FORM 10-KSB/A
[X] Annual report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For fiscal year ended DECEMBER 31, 1998
[ ] Transition report under Section 13 or 15 (d) of the Exchange Act
For the transition period from _________ to
Commission file number 333-07914
---------
CITIZENS EFFINGHAM BANCSHARES, INC.
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
GEORGIA 58-2357619
- ------------------------------- ----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
802 SOUTH LAUREL STREET
POST OFFICE BOX 379
SPRINGFIELD, GA 31329
----------------------------------------
(Address of Principal Executive Offices)
(912) 754-0754
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 there is no disclosure of delinquent fliers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or a
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB { X }
State issuer's revenues for its most fiscal year: $487,769
--------
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the stock was
sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days: $3,718,000 AS OF MARCH 31, 1999.
-------------------------------
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: COMMON STOCK $1 PAR VALUE, 512,000
SHARES OUTSTANDING AT MARCH 23, 1999 ----------------------------------
- ------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE: NONE
Transitional Small Business Disclosure Format (check one): Yes No X
---- ----
PURSUANT TO THE INSTRUCTIONS TO FORM 10-KSB OF THE EXCHANGE ACT BY
NON-REPORTING ISSUERS, THE COMPANY IS AMENDING ITS FORM 10-KSB TO INCLUDE AS
EXHIBITS 99.1 AND 99.2 THE PROXY STATEMENT AND ANNUAL REPORT TO SHAREHOLDERS
<PAGE> 2
ITEM 13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<S> <C>
3.1 Articles of Incorporation.(1)
3.2 Bylaws.(1)
4.1 Instruments Defining the Rights of Security Holders. See
Articles of Incorporation at Exhibit 3.1 hereto and Bylaws
at Exhibit 3.2 hereto.
10.1 Lot/Land Purchase and Sale Agreement, dated as of July 8,
1997, between Citizens Effingham Partnership (predecessor to
the Company) and 21 Center Partnership.(1)
10.2 Land Sales Contract, dated June 25, 1997, among Citizens Effingham Partnership (predecessor
to the Company), Robert L. Wiggins, Jr., Ira Keith Wiggins and W. H. Johnson.(1)
10.3* Employment Agreement, dated as of February 12, 1997 among the organizers of the Company and
Harry H. Shearouse.(2)
21.1 Subsidiaries of Citizens Effingham Bancshares, Inc.(3)
24.1 Power of Attorney (appears on the signature pages to this Annual Report on Form 10-KSB).(3)
27.1 Financial Data Schedule. (3)
99.1 Proxy Statement for Annual Meeting of Shareholders to be held May 18, 1999
99.2 Annual Report to Shareholders for year ended December 31, 1998
</TABLE>
--------------------
* Compensatory plan or arrangement.
(1) Incorporated herein by reference to Exhibit 10.1 to the
Company's Registration Statement, as amended, on Form S-1,
Registration No. 333-07914, filed November 17, 1997.
(2) Incorporated herein by reference to Exhibit 10.5 to the
Company's Registration Statement, as amended, on Form S-1,
Registration No. 333-07914, filed November 17, 1997.
(3) Previously filed with the Company's Annual Report on Form
10-KSB
(b) Reports on Form 8-K filed in the fourth quarter of 1997: None.
2
<PAGE> 3
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS.
The Company completed its initial offering of its common stock on March
13, 1998 pursuant to its Registration Statement on Form S-1, Registration No.
333-14355. The Company intends to hold its annual meeting of shareholders on May
11, 1999. The Company will file its Proxy Statement and Annual Report to
Shareholders with the Securities and Exchange Commission on or before the date
such items are mailed to shareholders.
3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of Section 13 or 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 EFFINGHAM BANCSHARES, INC.
By: /s/ Harry H. Shearouse
----------------------
Harry H. Shearouse
President, Chairman of the Board,
Treasurer and Director
Date: April 29, 1999
--------------
4
<PAGE> 5
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Harry H. Shearouse President, Chairman of the April 29, 1999
- -------------------------------- Board, Treasurer and Director
Harry H. Shearouse (Principal Executive Officer)
/s/ Carolyn B. Williamson* Chief Financial Officer April 29, 1999
- -------------------------------- (Principal Financial and
Carolyn B. Williamson Accounting Officer)
/s/ Jon G. Burns* Director April 29, 1999
- --------------------------------
Jon G. Burns
/s/ Charles E. Hartzog* Director April 29, 1999
- --------------------------------
Charles E. Hartzog
/s/ Philip M. Heidt* Director April 29, 1999
- --------------------------------
Philip M. Heidt
/s/ W. Harvey Kieffer* Director April 29, 1999
- --------------------------------
W. Harvey Kieffer
/s/ C. Murray Kight* Director April 29, 1999
- --------------------------------
C. Murray Kight
/s/ Thomas C. Strickland, Jr.* Director April 29, 1999
- --------------------------------
Thomas C. Strickland, Jr.
/s/ Mariben M. Thompson* Director April 29, 1999
- --------------------------------
Mariben M. Thompson
/s/ Thomas O. Triplett, Sr.* Director April 29, 1999
- --------------------------------
Thomas O. Triplett, Sr.
/s/ J. Terrell Webb* Director April 29, 1999
- --------------------------------
J. Terrell Webb
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C> <C>
/s/ H. Mitchell Weitman* Director April 29, 1999
- --------------------------------
H. Mitchell Weitman
/s/ Wendel H. Wilson* Director April 29, 1999
- --------------------------------
Wendel H. Wilson
*By: /s/ Harry H. Shearouse
----------------------------
Harry H. Shearouse, as
attorney-in-fact
</TABLE>
6
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
3.1 Articles of Incorporation.(1)
3.2 Bylaws.(1)
4.1 Instruments Defining the Rights of Security Holders. See
Articles of Incorporation at Exhibit 3.1 hereto and Bylaws
at Exhibit 3.2 hereto.
10.1 Lot/Land Purchase and Sale Agreement, dated as of July 8,
1997, between citizens Effingham Partnership (predecessor to
the Company) and 21 Center Partnership.(1)
10.2 Land Sales Contract, dated June 25, 1997, among Citizens
Effingham Partnership (predecessor to the Company), Robert
L. Wiggins, Jr., Ira Keith Wiggins and W. H. Johnson.(1)
10.3* Employment Agreement, dated as of February 12, 1997 among
the organizers of the Company and Harry H. Shearouse.(2)
21.1 Subsidiaries of Citizens Effingham Bancshares, Inc.(3)
24.1 Power of Attorney (appears on the signature pages to this
Annual Report on Form 10-KSB).(3)
27.1 Financial Data Schedule (for SEC use only).(3)
99.1 Proxy Statement for Annual Meeting of Shareholders to be
held May 18, 1999
99.2 Annual Report to Shareholders for year ended December 31,
1998
</TABLE>
- --------------------
* Compensatory plan or arrangement.
(1) Incorporated herein by reference to Exhibit 10.1 to the Company's
Registration Statement, as amended, on Form S-1, Registration No.
333-07914, filed November 17, 1997.
(2) Incorporated herein by reference to Exhibit 10.5 to the Company's
Registration Statement, as amended, on Form S-1, Registration No.
333-07914, filed November 17, 1997.
(3) Previously filed with the Company's Annual Report on Form 10-KSB
7
<PAGE> 1
CITIZENS EFFINGHAM BANCSHARES, INC.
802 South Laurel Street
Springfield, Georgia 31329
(912) 754-0754
April 27, 1999
To the Shareholders of Citizens Effingham Bancshares, Inc.:
You are cordially invited to attend the annual meeting of shareholders
of Citizens Effingham Bancshares, Inc. (the "Company") to be held at Citizens
Bank of Effingham, 802 South Laurel Street, Springfield, Georgia 31329, on
Tuesday, May 18, 1999 at 6:00 p.m. The official Notice of the Meeting and the
Proxy Statement of management of the Company accompany this letter.
The principal business of the meeting will be to elect four persons to
serve as directors for a term of three years and to review the operations of the
Company and its wholly-owned subsidiary, Citizens Bank of Effingham.
We cannot take any action at the meeting unless the holders of a
majority of the outstanding shares of Common Stock of the Company are
represented, either in person or by proxy. Therefore, whether or not you plan to
attend the meeting, please mark, date and sign the enclosed form of proxy, and
return it to the Company in the envelope provided as soon as possible.
Sincerely,
/s/ Harry H. Shearouse
President and Chief Executive Officer
April 27, 1999
<PAGE> 2
CITIZENS EFFINGHAM BANCSHARES, INC.
802 South Laurel Street
Springfield, Georgia 31329
(912) 754-0754
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 18, 1999
To the Shareholders of Citizens Effingham Bancshares, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of
Citizens Effingham Bancshares, Inc. (the "Company") will be held on Tuesday, May
18, 1999, at 6:00 p.m. at Citizens Bank of Effingham, 802 South Laurel Street,
Springfield, Georgia 31329 for the following purposes:
(1) To elect four persons to serve as directors for a three-year
term; and
(2) To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April
23,1999, as the record date for the determination of shareholders entitled to
notice of and to vote at the meeting or any adjournment.
To ensure that the greatest number of shareholders will be present
either by person or by proxy, we ask that you mark, date, sign and return the
enclosed form of proxy as soon as possible. If you attend the meeting in person,
you may revoke your proxy at the meeting and vote in person. You may revoke your
proxy any time before the proxy is exercised.
By Order of the Board of Directors,
/s/ Harry H. Shearouse
President and Chief Executive Officer
April 27, 1999
<PAGE> 3
CITIZENS EFFINGHAM BANCSHARES, INC.
802 South Laurel Street
Springfield, Georgia 31329
(912) 754-0754
----------------------------------------------------------
PROXY STATEMENT FOR 1999 ANNUAL MEETING
----------------------------------------------------------
VOTING
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Citizens Effingham Bancshares, Inc. (the
"Company") for use at the Annual Meeting of Shareholders to be held on Tuesday,
May 18, 1999, and at any adjournments thereof. In addition to this solicitation
by mail, the officers and employees of the Company and its wholly-owned
subsidiary, Citizens Bank of Effingham (the "Bank"), without additional
compensation, may solicit proxies in favor of the proposal (discussed below), if
deemed necessary, by personal contact, letter, telephone or other means of
communication. Brokers, nominees and other custodians and fiduciaries will be
requested to forward proxy solicitation material to the beneficial owners of the
shares of the Company's common stock, where appropriate, and the Company will
reimburse them for their reasonable expenses incurred in connection with the
transmittals. The Company will bear the cost of solicitation of proxies for the
Annual Meeting.
This Proxy Statement and the form of proxy are first being mailed to
shareholders on or about April 27, 1999. If the enclosed form of proxy is
properly executed, returned, and not revoked, it will be voted in accordance
with the specifications made by the shareholder. If the form of proxy is signed
and returned but specifications are not made, the proxy will be voted FOR the
election of the nominees to the Board of Directors.
You can revoke your proxy at any time before it is voted by delivering
to Harry H. Shearouse, President and Chief Executive Officer of the Company, at
the main office of the Company, either a written revocation of the proxy or a
duly executed proxy bearing a later date or by attending the meeting and voting
in person.
The Board of Directors fixed the close of business on April 23, 1999 as
the record date for determining the shareholders who are entitled to notice of
and to vote at the meeting. As of the close of business on the record date, the
authorized common stock, $1.00 par value (the "Common Stock"), of the Company
consisted of 20,000,000 shares, with 512,000 shares issued and outstanding. Each
issued and outstanding share is entitled to one vote. The Articles of
Incorporation of the Company authorize the Company to issue 10,000,000 shares of
preferred stock, of which no shares are issued and outstanding.
Directors are elected by a plurality of the shares present in person or
by proxy and entitled to vote. Only those votes actually cast will be counted
for the purpose of determining whether a particular nominee received sufficient
votes to be elected. Accordingly, any abstentions and broker non-votes,
<PAGE> 4
which occur when a broker submits a proxy card without exercising discretionary
voting authority on a non-routine matter, will not be included in vote totals
and will not be considered in determining the outcome of the vote.
Approval of any other matter that may properly come before the Annual
Meeting requires the affirmative vote of a majority of shares of Common Stock
present in person or by proxy and entitled to vote on such matter. Abstentions
will be counted in determining the minimum number of votes required for approval
and will, therefore, have the effect of negative votes. Broker non-votes will
not be counted as votes for or against approval of any other matter properly
brought before the Annual Meeting.
DIRECTORS AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Board recommends that the shareholders elect the nominees
identified below as Director Nominees. The Company's Articles of Incorporation
provide that the Board of Directors of the Company will be divided into three
classes, Class I, Class II and Class III, each of which is as nearly equal in
number as possible. The directors in each class serve for staggered terms of
three years each. The following table sets forth for each nominee and each
continuing director: (a) his or her name, (b) his or her age at December 31,
1998, (c) how long he or she has been a director of the Company, (d) his or her
position(s) with the Company, and (e) his or her principal occupation and recent
business experience.
CLASS I - DIRECTOR NOMINEES
For Three-Year Term Expiring 2002
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY
NAME (AGE) DIRECTOR SINCE AND BUSINESS EXPERIENCE
- ---------- -------------- -----------------------
<S> <C> <C>
Jon G. Burns (46) 1997 Owner and Operator of B&S Feed and Farm
Supply
Charles E. Hartzog (62) 1997 Retired Banker
Philip M. Heidt (50) 1997 Owner of Heidt Real Estate Services, Inc.,
which operates Century 21/Heidt Realty
W. Harvey Kieffer (56) 1997 Owner and Operator of Kieffer Carter
Construction Company
</TABLE>
2
<PAGE> 5
CLASS II - CONTINUING DIRECTORS
Term Expiring 2000
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY
NAME (AGE) DIRECTOR SINCE AND BUSINESS EXPERIENCE
- ---------- -------------- -----------------------
<S> <C> <C>
Harry H. Shearouse* (52) 1997 President, Chief Executive Officer of the
Company and President of the Bank
C. Murray Kight (66) 1997 Real Estate Developer
Thomas C. Strickland, Jr. (56) 1997 Owner and Operator of Strickland Funeral
Home, Inc. and Real Estate Developer
Mariben M. Thompson (58) 1997 Real Estate and Diversified Investor
</TABLE>
CLASS III - CONTINUING DIRECTORS
Term Expiring 2001
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY
NAME (AGE) DIRECTOR SINCE AND BUSINESS EXPERIENCE
- ---------- -------------- -----------------------
<S> <C> <C>
Thomas O. Triplett, Sr. (63) 1997 Retired Banker and Former Legislator
J. Terrell Webb (68) 1997 Retired Pharmacist
H. Mitchell Weitman (52) 1997 Owner and Operator of Weitman Pharmacy, Inc.
Wendel H. Wilson (54) 1997 Certified Public Accountant, Managing
Partner of Wilson & Kessler, C.P.A.
</TABLE>
- ------------------
*Mr. Shearouse served as Vice President of First National Bank of Effingham from
1992 until 1997. Mr. Shearouse is the only executive officer of the Company.
SECURITY OWNERSHIP OF 5% BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of the Company's
Common Stock beneficially owned as of April 23, 1999 by each director of the
Company and all executive officers and directors as a group. As of April 23,
1999, the Company did not have any shareholders who beneficially owned more than
5% of the shares of the Company's outstanding Common Stock. The information
shown below is based upon information furnished to the Company by the named
persons. Unless otherwise indicated, each person is the record owner and has
sole voting and investment power with respect to his or her shares.
Information relating to beneficial ownership of the Company is based
upon "beneficial ownership" concepts described in rules promulgated under the
Securities Exchange Act of 1934, as amended. Under these rules a person is
deemed to be a "beneficial owner" of a security if that person has or shares
"voting power" or "investment power." Voting power includes the power to vote or
direct the voting of the security, and investment power includes the power to
dispose of or to direct the disposition
3
<PAGE> 6
of the security. Under the rules, more than one person may be deemed to be a
beneficial owner of the same securities. A person is also deemed to be a
beneficial owner of any security as to which that person has the right to
acquire beneficial ownership within sixty (60) days from the record date.
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS NUMBER OF SHARES OF CLASS
---------------- ---------------- --------
<S> <C> <C>
(A) DIRECTORS
Jon G. Burns 20,000 (1) 3.91%
5829 Clyo Kildare Road
Newington, GA 30446
Charles E. Hartzog 12,500 2.44%
P. O. Box 433
Springfield, GA 31329
Philip M. Heidt 8,350 (2) 1.63%
2954 Springfield Egypt Road
Springfield, GA 31329
W. Harvey Kieffer 7,500 1.46%
308 Merion Road
Rincon, GA 31326
C. Murray Kight 20,000 3.91%
P. O. Box 323
Springfield, GA 31329
Harry H. Shearouse (3) 10,000 1.95%
610 Stillwell Road
Springfield, GA 31329
Thomas C. Strickland, Jr. 16,850 (4) 3.29%
P. O. Box 295
Springfield, GA 31329
Mariben M. Thompson 5,000 0.98%
P. O. Box 129
Guyton, GA 31312
Thomas O. Triplett, Sr. 5,000 0.98%
400 Lake Tomacheechee Drive
Rincon, GA 31326
J. Terrell Webb 20,000 3.91%
904 North Ash Street
Springfield, GA 31329
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS NUMBER OF SHARES OF CLASS
---------------- ---------------- --------
<S> <C> <C>
H. Mitchell Weitman 5,000 0.98%
P. O. Box 188
Springfield, GA 31329
Wendel H. Wilson 10,000 1.95%
930 Old Dixie Highway
Springfield, GA 31329
(B) ALL DIRECTORS AND EXECUTIVE 140,200 27.38%
OFFICERS, AS A GROUP (12 PERSONS)
</TABLE>
- -------------------------
(1) Consists of (i) 15,000 shares owned directly by Mr. Burns and (ii)
5,000 shares owned by Mr. Burns' children as to which beneficial
ownership is shared.
(2) Consists of (i) 7,500 shares owned directly by Mr. Heidt and (ii) 850
shares held by Mr. Heidt's spouse as to which beneficial ownership is
shared.
(3) Mr. Shearouse is the only executive officer of the Company.
(4) Consists of (i) 3,850 shares owned directly by Mr. Strickland, (ii)
6,950 shares held in an IRA account for the benefit of Mr. Strickland,
(iii) 1,050 shares held in a profit sharing plan for the benefit of Mr.
Strickland, (iv) 1,300 shares held by Mr. Strickland's spouse as to
which beneficial ownership is shared, (v) 270 shares held in an IRA
account for the benefit of Mr. Strickland's spouse as to which
beneficial ownership is shared, and (vi) 3,430 shares held in a profit
sharing plan for the benefit of Mr. Strickland's spouse as to which
beneficial ownership is shared.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and the Bank have banking and other business transactions
in the ordinary course of business with directors and officers of the Company
and the Bank and their affiliates, including members of their families,
corporations, partnerships or other organizations in which the directors and
officers may have a controlling interest. These transactions are on
substantially the same terms (including price, interest rate and collateral) as
those prevailing at the same time for comparable transactions with unrelated
parties. In the opinion of management, these transactions do not involve more
than the normal risk of collectibility or present other unfavorable features to
the Company or the Bank. Additionally, these transactions are approved by a
majority of the directors, including a majority of the disinterested directors.
On August 7, 1997, Century 21/Heidt Realty, a Georgia general
partnership, comprised of directors Philip M. Heidt, W. Harvey Kieffer, C.
Murray Kight and Thomas C. Strickland, Jr., entered into a contract with the
Citizens Effingham Partnership (the predecessor to the Company) to sell the
parcel of land upon which the Rincon branch is located. Two independent
appraisals of the parcel, one by Coastal Area Appraisal Services dated June 23,
1997 and the other by Johnnie Ganem Realty &
5
<PAGE> 8
Appraisal Co. dated July 18, 1997, each valued the parcel at $225,000, the price
for which the land was sold. Century 21/Heidt Realty made no real estate
commission on the sale.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has selected the accounting firm of Thigpen Jones & Seaton
CPA to serve as auditors for the Company for the current year. The firm of
Thigpen Jones & Seaton CPA also served as the Company's auditors since 1997. A
representative of the firm is expected to be present at the meeting and will be
given the opportunity to make a statement if he or she desires to do so and will
be available to respond to appropriate questions from shareholders.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters that
may be brought before the meeting. If, however, any matter other than the
election of directors, or matters incidental thereto, should properly come
before the meeting, votes will be cast pursuant to the proxies in accordance
with the best judgment of the proxyholders.
If you cannot be present in person, you are requested to complete,
sign, date and return the enclosed proxy promptly. An envelope has been provided
for that purpose. No postage is required if mailed in the United States.
April 27, 1999
6
<PAGE> 9
CITIZENS EFFINGHAM BANCSHARES, INC.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 18, 1999
The undersigned hereby appoints Harry H. Shearouse or C. Murray Kight or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them or either of them to represent and to vote, as designated
below, all of the Common Stock of Citizens Effingham Bancshares, Inc. (the
"Company"), which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Shareholders (the "Annual Meeting") to be held
at the main office of Citizens Bank of Effingham, located at 802 South Laurel
Street, Springfield, Georgia 31329 and at any adjournments thereof, upon the
proposal described in the accompanying Notice of the Annual Meeting and the
Proxy Statement relating to the Annual Meeting, receipt of which are hereby
acknowledged.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSAL.
PROPOSAL: To elect the four (4) persons listed below to serve as directors of
the Company for a term of three years:
<TABLE>
<S> <C> <C> <C>
Jon G. Burns Philip M. Heidt
Charles E. Hartzog W. Harvey Kieffer
[ ] FOR all nominees listed above (except as [ ] WITHHOLD authority to vote for all nominees
indicated below) listed above
</TABLE>
INSTRUCTION: To withhold authority for any individual nominee, mark "FOR" above
and write the nominee's name in this space
- --------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION TO THE CONTRARY
IS INDICATED, IT WILL BE VOTED FOR THE PROPOSAL.
DISCRETIONARY AUTHORITY IS HEREBY CONFERRED
AS TO ALL OTHER MATTERS WHICH MAY COME
BEFORE THE ANNUAL MEETING.
If stock is held in the name of more than one person, all holders must
sign. Signatures should correspond exactly with the name or names appearing on
the stock certificate(s). When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer.
If a partnership, please sign in partnership name by authorized person.
--------------------------------------------
Signature(s) of Shareholder(s)
[LABEL] --------------------------------------------
Name(s) of Shareholders(s)
Date: , 1999
---------------------------------
(Be sure to date your Proxy)
Please mark, sign and date this Proxy, and return it in the enclosed
return-addressed envelope. No postage necessary.
I WILL __________ WILL NOT __________ ATTEND THE ANNUAL SHAREHOLDERS MEETING.
PLEASE RETURN PROXY AS SOON AS POSSIBLE
<PAGE> 1
EXHIBIT 99.2
CITIZENS EFFINGHAM
BANCSHARES, INC.
and
Subsidiary
[CITIZENS BANK LOGO]
1998
ANNUAL REPORT
(FDIC LOGO) (LENDER LOGO)
<PAGE> 2
PRESIDENT'S MESSAGE
Dear Stockholders:
It is exciting for us to report to you the financial results of your bank
as of December 31, 1998. These results represent the expenses incurred during
the organization and opening of our Springfield office on September 8, 1998 and
our Rincon office on November 2, 1998.
We have been extremely pleased with the response we have received from
our market area. We have experienced substantial growth in both our deposits and
loans, as you can see from the financial information we are providing to you.
The Bank is well capitalized when compared to established ratios used to measure
adequate capitalization. The net loss we experienced at year end was anticipated
and reflects a substantial amount of our pre-opening and start up expenses. In
addition, $195,000 was placed in our Allowance for Loan Losses account based on
currant loan growth. Our goal is, of course, to reach profitability as soon as
possible in order for us to return shareholder value to you.
We are extremely proud of our officers and staff and are confident that
we have positioned ourselves to provide our banking products efficiently and
with quality customer service.
We do appreciate your continued support and invite you to call us if you
have questions or we can meet any of your banking needs.
Sincerely,
Harry H. Shearouse
President/CEO
<PAGE> 3
CITIZENS EFFINGHAM BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
1998
<S> <C>
ASSETS
Cash and due from banks $ 1,283,185
Federal funds sold 4,240,000
------------
Total cash and cash equivalents 5,523,185
------------
Loans, net of unearned income 12,922,815
Less - allowance for loan losses (195,000)
------------
Loans, net 12,727,815
------------
Bank premises and equipment, net 1,971,213
Other assets 102,409
------------
TOTAL ASSETS $ 20,324,622
============
LIABILITIES AND SHAREHOLDER'S EQUITY
Deposits:
Non-interest bearing $ 2,026,091
Interest bearing 13,726,366
------------
Total deposits 15,752,457
Accrued expenses and liabilities 65,579
------------
Total liabilities 15,818,036
------------
Commitments and contingencies
Shareholders' Equity:
Common Stock, $1 par value, authorized
20,000,000 shares, issued and outstanding
512,000 shares 512,000
Paid-in capital surplus 4,608,000
Accumulated deficit (392,769)
Deficit accumulated during development stage (220,645)
------------
Total shareholders' equity 4,506,586
------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 20,324,622
============
</TABLE>
<PAGE> 4
CITIZENS EFFINGHAM BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
1998
<S> <C>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans $ 242,607
Income on federal funds sold 103,354
Other Interest 132,231
---------
Total interest income 478,192
---------
INTEREST EXPENSE:
Deposits 143,762
Long-term debt 16,738
---------
Total interest expense 160,500
---------
Net interest income before loan losses 317,692
Less - provision for loan losses 195,000
---------
Net interest income after provision for loan
losses 122,692
---------
NONINTEREST INCOME:
Service charges on deposit accounts 8,661
Other income 916
---------
Total noninterest income 9,577
---------
NONINTEREST EXPENSES:
Salaries 311,695
Employee benefits 18,887
Net occupancy expenses 21,386
Equipment rental &depreciation of equipment 47,389
Organization expenses 76,478
Other expenses 176,756
---------
Total noninterest expense 652,591
---------
LOSS BEFORE INCOME TAXES (520,322)
Less - provision for income taxes --
---------
NET LOSS $(520,322)
=========
EARNING (LOSS) PER SHARE:
Basic $ (1.02)
=========
Diluted $ (1.02)
=========
</TABLE>
<PAGE> 5
CITIZENS EFFINGHAM BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Additional accumulated
Common Paid-in during Accumulated
Stock Capital development deficit Total
----- ------- ----------- ------- -----
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1997 $ -- $ -- $ (93,092) $ -- $ (93,092)
-----------
Comprehensive income:
Net Loss -- -- (127,553) (392,769) (520,322)
Valuation allowance adjustment on
securities available for sale -- -- -- -- --
----------
Total comprehensive income (520,322)
----------
Initial issuance of stock 512,000 4,608,000 -- -- 5,120,000
-------- ---------- --------- --------- ----------
BALANCE, DECEMBER 31, 1998 $512,000 $4,608,000 $(220,645) $(392,769) $4,506,586
======== ========== ========= ========= ==========
</TABLE>
<PAGE> 6
DIRECTORS
Jon G. Burns
Charles E. Hartzog
Philip M. Heidt
W. Harvey Kieffer
C. Murray Kight
Harry H. Shearouse
Thomas C. Strickland, Jr.
Mariben M. Thompson
Thomas O. Triplett, Sr.
J. Terrell Webb
H. Mitchell Weitman
Wendel H. Wilson
OFFICERS
Harry H. Shearouse - President/CEO
Jerry G. Freyermuth - Senior Vice President
Carolyn B. Williamson - Senior Vice President
Wendell L. Sikes - Vice President
STAFF
Alana Brewton
Joni Beckrink
Tammy Dodd
Angela Duff
Judy Exley
Jerrie Gnann
Barbara Graham
Terri Jeffries
Pam Jerald
Betty Long
Lorrie Morgan
Jill Riner
Susan Tillison
Lisa Woodcock
