<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year end December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from_________________ to__________________
Commission file Number 0-10535
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION
401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CITIZENS BANKING CORPORATION
One Citizens Banking Center
328 South Saginaw Street
Flint, Michigan 48502
<PAGE> 2
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date June 22, 1998 /s/ Gary P. Drainville
-------------------------------- ------------------------
Gary P. Drainville
Chairman, Pension/401(k)
Administration Committee
/s/ Kurt A. Schulze
------------------------
Kurt A. Schulze
Secretary, Pension/401(k)
Administration Committee
1
<PAGE> 3
<TABLE>
<CAPTION>
Exhibit EXHIBIT INDEX Form 11-K
No. Exhibit Page No.
- ---------------- ---------------------------------------------------------- -----------
<S> <C> <C>
13 Citizens Banking Corporation Amended and Restated Section (1)
401(k) Plan 1997 Annual Report
23 Consents of Independent Accountants (1)
</TABLE>
(1) Exhibit included on the following pages of this Annual Report on Form 11K
filing.
2
<PAGE> 1
EXHIBIT 13
Financial Statements
and Other Financial Information
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Years ended December 31, 1997, 1996 and 1995
with Report of Independent Auditors
[ERNST & YOUNG LLP LOGO]
<PAGE> 2
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Financial Statements
and Other Financial Information
December 31, 1997
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors....................................................................... 1
Financial Statements and Schedule
Statement of Assets Available for Plan Benefits...................................................... 3
Statement of Changes in Assets Available for Plan Benefits........................................... 5
Notes to Financial Statements........................................................................ 8
Other Financial Information
Schedule of Assets Held for Investment............................................................... 15
Schedule of Reportable Transactions.................................................................. 21
</TABLE>
<PAGE> 3
Report of Independent Auditors
Administrative Committee
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
We have audited the accompanying statements of assets available for plan
benefits of the Citizens Banking Corporation Amended and Restated Section 401(k)
Plan as of December 31, 1997 and 1996, and the related statements of changes in
assets available for plan benefits for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Plan'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 audit 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 financial statements referred to above present fairly, in
all material respects, the assets available for plan benefits of the Plan at
December 31, 1997 and 1996, and the changes in its assets available for plan
benefits for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental Schedule of Assets
Held for Investment as of December 31, 1997 and Schedule of Reportable
Transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The fund information in the
Statements of Assets Available for Plan Benefits and changes in Assets Available
for Plan Benefits is presented for purposes of additional analysis rather than
to present the assets available for benefits and changes in assets available of
each fund. The supplemental schedules and fund information have been subjected
to the auditing procedures applied in our audit of the 1997 financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the 1997 financial statements taken as a whole.
/s/ Ernst & Young
May 8, 1998
<PAGE> 4
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Statement of Assets Available for Plan Benefits, With Fund Information
December 31, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------------
401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS
------------------------------------------------------------------------------
CITIZENS
INTERMEDIATE BANKING MONEY
INCOME EQUITY CORPORATION BALANCED MARKET
FUNDS FUNDS STOCK FUNDS FUNDS PAYSOP
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value
(cost--$73,603,990):
Marketable:
Common stocks:
Citizens Banking Corporation $57,772,010 $ 3,811,767 $270,963
Mutual funds $7,298,364 $22,568,421 21,473,846
U.S. Government securities 1,309,079 2,651,005
Money market account 159,043 2,635,830 238,339 1,070,929 $1,511,863
------------------------------------------------------------------------------
Total investments 8,766,486 25,204,251 58,010,349 29,007,547 1,511,863 270,963
Receivables:
Loans to participants
Accrued income 63,026 220,592 1,352 478,905 7,236 37
Contributions - Employer 8,716 39,342 38,760 22,814 4,501
Contributions - Employee 10,884 40,980 52,324 16,053 2,705
Other 8,144 10,587 15,674 4,071 157
------------------------------------------------------------------------------
90,770 311,501 108,110 521,843 14,599 37
Cash 1 (400) (11,236) 12,019 431 1,014
------------------------------------------------------------------------------
Assets available for plan benefits $8,857,257 $25,515,352 $58,107,223 $29,541,409 $1,526,893 $272,014
==============================================================================
<CAPTION>
FUND INFORMATION
--------------------------
PARTICIPANT
DIRECTED
SEGREGATED PARTICIPANT
FUNDS LOAN FUND TOTAL
----------------------------------------
<S> <C> <C> <C>
ASSETS
Investments at fair value
(cost--$73,603,990):
Marketable:
Common stocks:
Citizens Banking Corporation $ 61,854,740
Mutual funds 51,340,631
U.S. Government securities $1,291,245 5,251,329
Money market account 156,541 5,772,545
----------------------------------------
Total investments 1,447,786 124,219,245
Receivables:
Loans to participants $3,131,766 3,131,766
Accrued income 26,682 797,830
Contributions - Employer 114,133
Contributions - Employee 122,946
Other 38,633
----------------------------------------
26,682 3,131,766 4,205,308
Cash 60,911 62,740
----------------------------------------
Assets available for plan benefits $1,535,379 $3,131,766 $128,487,293
========================================
</TABLE>
See accompanying notes.
3
<PAGE> 5
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Statement of Assets Available for Plan Benefits, With Fund Information
December 31, 1996
<TABLE>
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------------
401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS
----------------------------------------------------------------
CITIZENS
INTERMEDIATE BANKING MONEY
INCOME EQUITY CORPORATION BALANCED MARKET PARTICIPANT
FUNDS FUNDS STOCK FUNDS FUNDS LOAN FUND TOTAL
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value
(cost--$53,386,080):
Marketable:
Common stocks:
Citizens Banking Corporation $33,607,885 $ 186,638 $33,794,523
Mutual funds $7,326,545 $16,346,630 15,105,760 38,778,935
Money market account 365,035 100,009 171,595 1,189,212 $1,295,617 3,121,468
--------------------------------------------------------------------------------------------
Total investments 7,691,580 16,446,639 33,779,480 16,481,610 1,295,617 75,694,926
Receivables:
Loans to participants $3,491,573 3,491,573
Accrued income 35,986 154,444 622 291,887 5,617 488,556
--------------------------------------------------------------------------------------------
35,986 154,444 622 291,887 5,617 3,491,573 3,980,129
Cash 7,761 18,881 31,876 7,274 1,867 67,659
--------------------------------------------------------------------------------------------
Assets available for plan benefits $7,735,327 $16,619,964 $33,811,978 $16,780,771 $1,303,101 $3,491,573 $79,742,714
============================================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 6
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Statement of Changes in Assets Available for Plan Benefits,
With Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------------
401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS
------------------------------------------------------------------------------
CITIZENS
INTERMEDIATE BANKING MONEY
INCOME EQUITY CORPORATION BALANCED MARKET
FUNDS FUNDS STOCK FUNDS FUNDS PAYSOP
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends:
Citizens Banking Corporation $ 1,243,324 $ 50,778 $ 2,977
Other $ 436,933 $ 3,172,687 1,810,032
Interest income 109,018 28,982 15,185 188,660 $ 85,514 247
------------------------------------------------------------------------------
Total investment income 545,951 3,201,669 1,258,509 2,049,470 85,514 3,224
Contributions:
Employer 192,593 577,543 870,604 218,308 43,806
Employee 332,599 1,198,367 1,644,533 469,298 72,985
------------------------------------------------------------------------------
525,192 1,775,910 2,515,137 687,606 116,791
------------------------------------------------------------------------------
1,071,143 4,977,579 3,773,646 2,737,076 202,305 3,224
DEDUCTIONS
Benefit payments to participants (1,712,961) (3,597,259) (6,641,964) (4,825,476) (1,065,642) (16,998)
Transfers (net) (71,372) 1,670,756 (973,284) (689,579) 743,415
------------------------------------------------------------------------------
(1,784,333) (1,926,503) (7,615,248) (5,515,055) (322,227) (16,998)
Net realized and unrealized appreciation
(depreciation) in fair value of
investments:
Realized 1,224 2,258,955 2,366,077 5,208,469 12,184
Unrealized 111,900 (535,660) 21,061,610 (2,481,985) 88,806
------------------------------------------------------------------------------
113,124 1,723,295 23,427,687 2,726,484 100,990
------------------------------------------------------------------------------
Net increase (600,066) 4,774,371 19,586,085 (51,495) (119,922) 87,216
Transfer in from CB Financial Retirement
Savings Plan 1,721,996 4,121,017 4,709,160 12,812,133 343,714 184,798
Assets available for plan benefits at
beginning of year 7,735,327 16,619,964 33,811,978 16,780,771 1,303,101
------------------------------------------------------------------------------
Assets available for plan benefits at
end of year $8,857,257 $25,515,352 $58,107,223 $29,541,409 $1,526,893 $272,014
==============================================================================
<CAPTION>
FUND INFORMATION
---------------------------
PARTICIPANT
DIRECTED
SEGREGATED PARTICIPANT
FUNDS LOAN FUND TOTAL
---------------------------------------
<S> <C> <C> <C>
ADDITIONS
Investment income:
Dividends:
Citizens Banking Corporation $ 1,297,079
Other 5,419,652
Interest income $ 106,971 $ 314,998 849,575
---------------------------------------
Total investment income 106,971 314,998 7,566,306
Contributions:
Employer 1,902,854
Employee 3,717,782
---------------------------------------
5,620,636
---------------------------------------
106,971 314,998 13,186,942
DEDUCTIONS
Benefit payments to participants (953,670) (18,813,970)
Transfers (net) (5,131) (674,805)
---------------------------------------
(958,801) (674,805) (18,813,970)
Net realized and unrealized appreciation
(depreciation) in fair value of
investments:
Realized 1,452 9,848,361
Unrealized 9,039 18,253,710
---------------------------------------
10,491 28,102,071
---------------------------------------
Net increase (841,339) (359,807) 22,475,043
Transfer in from CB Financial Retirement
Savings Plan 2,376,718 26,269,536
Assets available for plan benefits at
beginning of year 3,491,573 79,742,714
---------------------------------------
Assets available for plan benefits at
end of year $1,535,379 $3,131,766 $128,487,293
=======================================
</TABLE>
See accompanying notes.
5
<PAGE> 7
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Statement of Changes in Assets Available for Plan Benefits, With Fund
Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
FUND INFORMATION
--------------------------------------------------------------------------------
401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS
-------------------------------------------------------------------
CITIZENS
INTERMEDIATE BANKING MONEY
INCOME EQUITY CORPORATION BALANCED MARKET PARTICIPANT
FUNDS FUNDS STOCK FUNDS FUNDS LOAN FUND TOTAL
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends:
Citizens Banking Corporation $ 1,034,439 $ 42,400 $ 1,076,839
Other $ 407,751 $ 1,655,200 791,681 2,854,632
Interest income 45,817 6,532 8,098 28,068 $ 38,384 $ 312,530 439,429
---------------------------------------------------------------------------------------------
Total investment income 453,568 1,661,732 1,042,537 862,149 38,384 312,530 4,370,900
Contributions:
Employer 217,502 480,314 860,841 193,353 31,661 1,783,671
Employee 427,806 904,531 1,612,177 358,535 53,291 3,356,340
---------------------------------------------------------------------------------------------
645,308 1,384,845 2,473,018 551,888 84,952 5,140,011
---------------------------------------------------------------------------------------------
1,098,876 3,046,577 3,515,555 1,414,037 123,336 312,530 9,510,911
DEDUCTIONS
Benefit payments to participants (736,023) (1,185,012) (1,960,209) (2,295,048) (58,285) (6,234,577)
Transfers (net) (733,539) 479,708 191,327 (533,994) 761,712 (165,214) -
---------------------------------------------------------------------------------------------
(1,469,562) (705,304) (1,768,882) (2,829,042) 703,427 (165,214) (6,234,577)
Net realized and unrealized
appreciation (depreciation) in fair value of
investments:
Realized (51,407) 45,286 (137,242) 1,163,177 1,019,814
Unrealized (136,607) 1,213,065 1,983,579 (80,070) 2,979,967
---------------------------------------------------------------------------------------------
(188,014) 1,258,351 1,846,337 1,083,107 3,999,781
---------------------------------------------------------------------------------------------
Net increase (558,700) 3,599,624 3,593,010 (331,898) 826,763 147,316 7,276,115
Assets available for plan
benefits at beginning of year 8,294,027 13,020,340 30,218,968 17,112,669 476,338 3,344,257 72,466,599
---------------------------------------------------------------------------------------------
Assets available for plan
benefits at end of year $ 7,735,327 $16,619,964 $33,811,978 $16,780,771 $1,303,101 $3,491,573 $79,742,714
=============================================================================================
</TABLE>
See accompanying notes.
6
<PAGE> 8
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Statement of Changes in Assets Available for Plan Benefits,
With Fund Information
Year ended December 31, 1995
<TABLE>
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------------
401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS
-----------------------------------------------------------------------------
CITIZENS
INTERMEDIATE BANKING MONEY
INCOME EQUITY CORPORATION BALANCED MARKET
FUNDS FUNDS STOCK FUNDS FUNDS
----------------- --------------- ---------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends:
Citizens Banking Corporation $ 862,527 $ 44,820
Other $ 344,448 $ 1,023,703 931,796
Interest income 122,597 6,004 9,779 40,373 $ 17,856
----------------------------------------------------------------------------
Total investment income 467,045 1,029,707 872,306 1,016,989 17,856
Contributions:
Employer 258,391 438,912 829,509 187,379 31,335
Employee 435,127 828,556 1,679,571 425,983 64,759
----------------------------------------------------------------------------
693,518 1,267,468 2,509,080 613,362 96,094
----------------------------------------------------------------------------
1,160,563 2,291,175 3,381,386 1,630,351 113,950
DEDUCTIONS
Benefit payments to participants (566,942) (731,615) (1,541,002) (978,682) (67,543)
Transfers (net) (373,458) 524,924 480,169 (563,521) 194,481
----------------------------------------------------------------------------
220,163 2,090,484 2,320,553 88,148 240,888
Net realized and unrealized appreciation
(depreciation) in fair value of
investments:
Realized (5,094) 163 (19,539) 825,568
Unrealized 442,292 1,860,212 1,946,681 963,906
----------------------------------------------------------------------------
437,198 1,860,375 1,927,142 1,789,474
----------------------------------------------------------------------------
Net increase 657,361 3,950,859 4,247,695 1,877,622 240,888
Assets available for plan benefits at
beginning of year 7,636,666 9,069,481 25,971,273 15,235,047 235,450
============================================================================
Assets available for plan benefits at end
of year $ 8,294,027 $ 13,020,340 $ 30,218,968 $ 17,112,669 $ 476,338
============================================================================
<CAPTION>
FUND INFORMATION
----------------
PARTICIPANT
LOAN FUND TOTAL
--------------- ------------
<S> <C> <C>
ADDITIONS
Investment income:
Dividends:
Citizens Banking Corporation $ 907,347
Other 2,299,947
Interest income $ 277,975 474,584
----------------------------
Total investment income 277,975 3,681,878
Contributions:
Employer 1,745,526
Employee 43,260 3,477,256
----------------------------
43,260 5,222,782
----------------------------
321,235 8,904,660
DEDUCTIONS
Benefit payments to participants (3,885,784)
Transfers (net) (262,595)
----------------------------
58,640 5,018,876
Net realized and unrealized appreciation
(depreciation) in fair value of
investments:
Realized 801,098
Unrealized 5,213,091
----------------------------
6,014,189
----------------------------
Net increase 58,640 11,033,065
Assets available for plan benefits at
beginning of year 3,285,617 61,433,534
============================
Assets available for plan benefits at end
of year $ 3,344,257 $ 72,466,599
============================
</TABLE>
See accompanying notes.
<PAGE> 9
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements
December 31, 1997
1. DESCRIPTION OF THE PLAN
The Citizens Banking Corporation Amended and Restated Section 401(k) Plan (Plan)
is a defined contribution plan which includes a 401(k) salary deferral feature.
The Plan covers substantially all employees of Citizens Banking Corporation
(Corporation) and its banking subsidiaries including salaried employees and
hourly employees with over 1,000 hours of credited service. At December 31, 1997
there were 1,791 participants in the Plan. Participants may contribute on a
before-tax basis up to 15% of their annual base compensation (not to exceed
$9,500 for 1997) and on an after-tax basis up to 10% of their base compensation.
Participants may direct their contributions into either an intermediate income,
equity, balanced, money market or Citizens Banking Corporation stock fund and
may elect to change the percentage directed to each fund quarterly. On July 1,
1997 the assets of the CB Financial Corporation Retirement Savings Plan were
transferred into the Plan. All participant contributions are fully vested.
Under the Plan, the participating subsidiaries can also make employer matching
contributions of 100% on the first 3% and 50% on the next 3% of a participant's
base compensation (excluding bonuses, overtime and fringe benefits actually paid
for the year) such that the maximum employer matching contributions for any such
participant would be 4.5% of a participant's base compensation. In addition, a
retiree medical savings account was established for each participant. One third
of the employer matching contribution is automatically directed into this
account. Employees may not borrow against any monies residing in this account.
These matching contributions are fully vested after three years of service or
upon normal or early retirement, death or disability. All administrative costs
of the plan are paid by the Corporation. For the 1997 plan year, matching
provisions applicable to participants of the former CB Financial Corporation
Retirement Savings Plan were based on provisions under the former CB Financial
Corporation Retirement Savings Plan. The maximum matching contribution for these
participants was 25% of the first 6% of a participant's compensation (including
commissions and overtime paid for the year) such that the maximum employer
matching contribution for any such participant would be 1.5% of a participant's
compensation.
8
<PAGE> 10
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
The Corporation has the right under the Plan to discontinue such annual
contributions. Citizens Banking Corporation has the right to terminate the Plan
at any time. In the event of a termination of the Plan, the net assets of the
Plan are to be set aside for the payment of vested benefits.
2. SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS
Marketable investments are stated at aggregate fair value. Securities traded on
a national securities exchange are valued at the last reported sales price on
the last business day of the Citizens Banking Corporation Amended and Restated
Section 401(k) Plan (Plan) year. Investments traded in the over-the-counter
market and listed securities for which no sale was reported on that date are
valued at the average of the last reported bid and ask prices.
Loans to participants represent qualifying interest-bearing loans from
individual accounts that are valued at the amount of outstanding principal.
Unrealized appreciation or depreciation in the aggregate fair value of
investments represents the change in the difference between aggregate fair value
and the cost of investments. The realized gain or loss on sale of investments is
the difference between the proceeds received and the specific cost of
investments sold. Such amounts are different than the related amounts reported
on Form 5500 which are computed as the difference between the proceeds received
and the revalued cost which is defined as the fair value at the beginning of the
year, or cost, if acquired during the year.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
9
<PAGE> 11
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The Plan's investments are administered by the Citizens Bank Trust Department.
The Plan's investment fund options consist of the following:
The Intermediate Income Funds include:
The Golden Oak Intermediate-Term Income Fund,
The Federal National Mortgage Association Fund, and
U.S. Treasury Notes.
The Equity Funds consist of:
The Golden Oak Diversified Growth Fund,
The Golden Oak Value Portfolio Fund,
The Baron Asset Fund,
The Harbor International Fund,
The Harbor Capital Appreciation Fund,
The Heartland Value Fund,
The MAS Funds Value Portfolio
The Frank Russell Quantitative Fund,
The Frank Russell Diversified Fund, and
The Frank Russell Special Growth Fund.
The Balanced Fund includes:
The Golden Oak Diversified Growth Fund,
The Golden Oak Intermediate Income Fund,
The Golden Oak Value Portfolio Fund,
The Harbor International Fund,
The Harbor Capital Operation Fund,
The Heartland Value Fund,
The MAS Funds Value Portfolio,
The Federal National Mortgage Association Fund, and
U.S. Treasury Notes.
The Money Market Funds are comprised of:
The SEI Daily Income Trust Treasury II Fund and
The Golden Oak Prime Obligation Class A Fund.
10
<PAGE> 12
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
During each of the three years in the period ended December 31, 1997, the Plan's
investments (including investment bought, sold as well as held during the year)
appreciated (depreciated) in fair value by $28,102,071, $3,999,781, and
$6,014,189, as follows:
<TABLE>
<CAPTION>
NET
APPRECIATION
(DEPRECIATION) FAIR VALUE
IN FAIR VALUE AT END COST AT END
DURING YEAR OF YEAR OF YEAR
-----------------------------------------------------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1997
Fair value as determined by quoted
market price:
Common stocks:
Domestic:
Citizens Banking
Corporation $25,026,513 $ 61,854,740 $17,697,892
Other 250,183
Foreign stocks 14,512
Mutual funds 2,746,834 51,340,631 44,893,258
U.S. Government Securities 64,029 5,251,329 5,240,295
Money market account 5,772,545 5,772,545
-----------------------------------------------------
$28,102,071 $124,219,245 $73,603,990
=====================================================
YEAR ENDED DECEMBER 31, 1996
Fair value as determined by quoted
market price:
Common stocks:
Domestic:
Citizens Banking
Corporation $ 1,835,646 $ 33,794,523 $16,240,448
Mutual funds 2,170,005 38,778,935 34,024,164
U.S. Government securities (5,870)
Money market account 3,121,468 3,121,468
-----------------------------------------------------
$ 3,999,781 $ 75,694,926 $53,386,080
=====================================================
</TABLE>
11
<PAGE> 13
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NET
APPRECIATION
(DEPRECIATION) FAIR VALUE
IN FAIR VALUE AT END COST AT END
DURING YEAR OF YEAR OF YEAR
-------------------------------------------------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
Fair value as determined by quoted
market price:
Common stocks:
Domestic:
Citizens Banking
Corporation $2,026,742 $31,520,363 $14,899,489
Other 649,235
Mutual funds 3,304,475 33,816,866 31,065,247
U.S. Government securities 29,690 962,627 1,006,240
Corporate bonds and notes 4,047 38,508 38,508
Money market account 2,330,720 2,330,720
----------------------------------------------------
$6,014,189 $68,669,084 $49,340,204
====================================================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------------------
1997 1996 1995
-----------------------------------------------------------
<S> <C> <C> <C>
Realized gain:
Proceeds on disposition $62,865,295 $23,113,326 $30,489,733
Cost 53,016,934 22,093,512 29,688,635
-------------------------------------------------
9,848,361 1,019,814 801,098
Unrealized gain 18,253,710 2,979,967 5,213,091
-------------------------------------------------
$28,102,071 $ 3,999,781 $ 6,014,189
=================================================
</TABLE>
12
<PAGE> 14
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The fair value of individual investments representing 5% or more of the plan's
assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 31
1997 1996
--------------------------------------
<S> <C> <C>
Citizens Banking Corporation, 1,792,891 and
1,072,842 shares of common stock in 1997 and
1996, respectively $61,854,740 $33,794,523
Frank Russell Quantitative Equity Fund 6,425,439 4,734,967
Golden Oak FDS Intermediate Income Fund 15,811,526 13,123,579
Harbor International Fund 8,678,101 5,946,590
</TABLE>
The Plan invests certain fund assets in the Golden Oak series of mutual funds.
Citizens Bank, a subsidiary of Citizens Banking Corporation, serves as the
investment advisor to these funds. The mutual fund portfolios were established
pursuant to the provisions of the Investment Company Act of 1940. Investments
within these portfolios were made in accordance with the applicable Department
of Labor rules and regulations concerning the investment of qualified plan
assets into mutual funds wherein the investment advisor to the portfolio is a
party-in-interest with respect to the plan.
4. INCOME TAX STATUS
The Internal Revenue Service ruled August 2, 1995 that the Plan qualifies under
Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the related
trust is not subject to tax under present income tax law. Once qualified, the
Plan is required to operate in conformity with the IRC and the Employee
Retirement Income Security Act of 1974 to maintain its qualification. The
Administrative Committee is not aware of any course of action or series of
events that have occurred that might adversely affect the Plan's qualified
status.
13
<PAGE> 15
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
5. BENEFIT PAYABLE
Assets available for plan benefits include amounts allocated for approved
distributions. Such balances amounted to $8,595,436 and $2,116,700 at December
31, 1997 and 1996, respectively. Such amounts are shown as a liability on the
Plan's Form 5500.
6. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has developed a plan to modify its internal information
technology to be ready for the year 2000 and has begun converting critical data
processing systems. The project also includes determining whether third party
service providers have reasonable plans in place to become year 2000 compliant.
The Plan Sponsor currently expects the project to be substantially complete by
early 1999. The Plan Sponsor does not expect this project to have a significant
effect on plan operations.
14
<PAGE> 16
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Employer ID #38-2378932
Plan #002
Item 27(a)--Schedule of Assets Held for Investment
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common stocks:
*Citizens Banking Corporation 1,792,891 shares $17,697,892 $61,854,740
--------------------------------------
Total common stock 17,697,892 61,854,740
Mutual Funds:
*Golden Oak Diversified Growth Funds 162,221.52 units 1,844,264 2,001,817
*Golden Oak Intermediate Income Fund 1,584,321.07 units 15,714,911 15,811,526
*Golden Oak Value Portfolio Fund 212,700.45 units 2,030,000 1,999,383
Baron Asset Fund 14,621.60 units 566,056 709,301
Harbor International Fund 241,999.00 units 6,195,909 8,678,101
Harbor Capital Appreciation Fund 60,926.80 units 1,573,466 1,795,517
Heartland Value Fund 52,960.49 units 1,670,720 1,793,773
MAS Funds Value Portfolio 113,063.63 units 1,764,942 2,023,831
Frank Russell Quantitative Equity Fund 174,439.57 units 5,007,115 6,425,439
Frank Russell Diversified Fund 140,889.59 units 5,384,923 6,148,430
Frank Russell Special Growth Fund 86,472.39 units 3,140,952 3,953,513
--------------------------------------
Total Mutual Funds 44,893,258 51,340,631
</TABLE>
15
<PAGE> 17
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Employer ID #38-2378932
Plan #002
Item 27(a)--Schedule of Assets Held for Investment (continued)
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Securities:
Federal National Mortgage Association $75,000 principal amount, 8.55%, due
August 30, 1999 $ 74,344 $ 78,211
Federal National Mortgage Association $25,000 principal amount, 6.85%, due
April 5, 2004 25,809 26,086
U.S. Treasury Note $297,000 principal amount, 7.875%, due
January 15, 1998 301,469 297,279
U.S. Treasury Note $80,000 principal amount, 8.125%, due
February 15, 1998 77,450 80,225
U.S. Treasury Note $360,000 principal amount, 7.875%, due
April 15, 1998 366,566 362,477
U.S. Treasury Note $100,000 principal amount, 9.00%, due
May 15, 1998 105,797 101,250
U.S. Treasury Note $50,000 principal amount, 5.125%, due
June 30, 1998 49,258 49,938
U.S. Treasury Note $400,000 principal amount, 5.25%, due
July 31, 1998 399,652 399,376
</TABLE>
16
<PAGE> 18
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Employer ID #38-2378932
Plan #002
Item 27(a)--Schedule of Assets Held for Investment (continued)
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Securities (continued):
U.S. Treasury Note $180,000 principal amount, 9.25%, due
August 15, 1998 $ 193,106 $ 183,938
U.S. Treasury Note $50,000 principal amount, 4.75%, due
October 31, 1998 49,844 49,625
U.S. Treasury Note $120,000 principal amount, 8.875%, due
November 15, 1998 125,250 123,187
U.S. Treasury Note $455,000 principal amount, 5.50%, due
February 28, 1999 452,559 454,149
U.S. Treasury Note $35,000 principal amount, 5.875%, due
March 31, 1999 34,682 35,098
U.S. Treasury Note $200,000 principal amount, 9.125%, due
May 15, 1999 213,125 208,938
U.S. Treasury Note $415,000 principal amount, 6.375%, due
July 15, 1999 425,348 419,411
U.S. Treasury Note $25,000 principal amount, 6.875%, due
August 31, 1999 25,508 25,469
</TABLE>
17
<PAGE> 19
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Employer ID #38-2378932
Plan #002
Item 27(a)--Schedule of Assets Held for Investment (continued)
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Securities (continued):
U.S. Treasury Note $200,000 principal amount, 7.875%, due
November 15, 1999 $ 198,125 $ 207,688
U.S. Treasury Note $255,000 principal amount, 6.375%, due
January 15, 2000 259,734 258,348
U.S. Treasury Note $15,000 principal amount, 6.875%, due
March 31, 2000 15,272 15,375
U.S. Treasury Note $75,000 principal amount, 5.50%, due
April 15, 2000 73,482 74,719
U.S. Treasury Note $25,000 principal amount, 6.75%, due
April 30, 2000 25,266 25,570
U.S. Treasury Note $57,000 principal amount, 6.25%, due
May 31, 2000 56,243 57,713
U.S. Treasury Note $300,000 principal amount, 6.125%, due
July 31, 2000 295,484 303,000
</TABLE>
18
<PAGE> 20
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Employer ID #38-2378932
Plan #002
Item 27(a)--Schedule of Assets Held for Investment (continued)
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Securities (continued):
U.S. Treasury Note $40,000 principal amount, 6.25%, due
August 31, 2000 $ 39,705 $ 40,525
U.S. Treasury Note $200,000 principal amount, 6.125%, due
September 30, 2000 203,844 202,126
U.S. Treasury Note $35,000 principal amount, 5.625%, due
February 28, 2001 34,431 34,935
U.S. Treasury Note $335,000 principal amount, 6.375%, due
March 31, 2001 331,908 341,281
U.S. Treasury Note $20,000 principal amount, 6.25%, due
April 30, 2001 20,013 20,313
U.S. Treasury Note $310,000 principal amount, 7.50%, due
November 15, 2001 335,128 328,795
</TABLE>
19
<PAGE> 21
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Employer ID #38-2378932
Plan #002
Item 27(a)--Schedule of Assets Held for Investment (continued)
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Securities (continued):
U.S. Treasury Note $435,000 principal amount, 6.375%, due
August 15, 2002 $ 431,893 $ 446,284
---------------------------------
Total U.S. Government Securities 5,240,295 5,251,329
Money Market Accounts:
SEI Daily Income Trust Treasury II $1,689,989 principal amount 1,689,989 1,689,989
*Golden Oak Prime Obligation Class A $4,082,556 principal amount 4,082,556 4,082,556
---------------------------------
Total Money Market Accounts 5,772,545 5,772,545
---------------------------------
Total investments $73,603,990 $124,219,245
=================================
</TABLE>
*Party-in-interest to the Plan.
20
<PAGE> 22
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Employer ID #38-2378932
Plan #002
Item 27(d)--Schedule of Reportable Transactions
Year ended December 31, 1997
<TABLE>
<CAPTION>
EXPENSE
DESCRIPTION OF ASSET (INCLUDING INCURRED
INTEREST RATE AND MATURITY IN PURCHASE SELLING LEASE WITH
IDENTITY OF PARTY INVOLVED CASE OF A LOAN) PRICE PRICE RENTAL TRANSACTION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Category iii) A series of transactions
with respect to the same issue which
amount in the aggregate to more than
5% of the current value of total plan
assets:
Citizens Banking Corporation 90 purchases, 138,856.68 shares
purchased $ 4,816,351
86 sales, 133,467.52 shares sold $ 4,683,584
Golden Oak FDS Prime Obligation 438 purchases, 17,446,997 units
Money Market--Class A purchased 17,446,997
166 sales, 16,485,909 units sold 16,485,909
SEI Daily Income Trust Treasury II 257 purchases, 15,772,594 units
purchased 15,772,594
89 sales, 14,082,605 units sold 14,082,605
<CAPTION>
CURRENT
VALUE OF
DESCRIPTION OF ASSET (INCLUDING COST ASSET OF NET
INTEREST RATE AND MATURITY IN OF TRANSACTION GAIN
IDENTITY OF PARTY INVOLVED CASE OF A LOAN) ASSET DATE (LOSS)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Category iii) A series of transactions
with respect to the same issue which
amount in the aggregate to more than
5% of the current value of total plan
assets:
Citizens Banking Corporation 90 purchases, 138,856.68 shares
purchased $ 4,816,351 $ 4,816,351
86 sales, 133,467.52 shares sold 3,199,689 4,683,584 $ 1,483,895
Golden Oak FDS Prime Obligation 438 purchases, 17,446,997 units
Money Market--Class A purchased 17,446,997 17,446,997
166 sales, 16,485,909 units sold 16,485,909 16,485,909 -
SEI Daily Income Trust Treasury II 257 purchases, 15,772,594 units
purchased 15,772,594 15,772,594
89 sales, 14,082,605 units sold 14,082,605 14,082,605 -
</TABLE>
Commissions and fees related to purchase and sales of investments are included
in the cost of the investment or proceeds from the sale.
There were no transactions reportable under categories i), ii) or iv).
21
<PAGE> 1
EXHIBIT 23
CONSENTS OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 33-28354 dated April 26, 1989 and Form S-8 No. 333-09455 dated
August 2, 1996) pertaining to the Citizens Banking Corporation Amended and
Restated Section 401(k) Plan of our report dated May 8, 1998, with respect to
the financial statements and schedules of the Citizens Banking Corporation
Amended and Restated Section 401(k) Plan included in this annual report (Form
11-K) for the year ended December 31, 1997.
/s/ Ernst & Young
Detroit, Michigan
June 22, 1998
