U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended September 30, 1995 Commission file number 0-12425
Citizens Bancshares, Inc.
(Exact name of small business issuer as specified in its charter)
Louisiana 72-0759135
(State or other jurisdiction of (I.R.S. Employer Identification)
incorporation or organization)
841 West Main Street, Ville Platte, La. 70586
(Address of principal executive offices)
Issuer's telephone number, including area code 318-363-5643
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, and
(2) had been subject to such filing requirements for the past 90 days.
Yes (x) No ( )
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Number of
Class of Common Stock Shares Outstanding As of
Common Stock $5 Par Value 115,000 September 30, 1995
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
INDEX
PART I. FINANCIAL INFORMATION PAGE
Condensed Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994..............3
Condensed Consolidated Statements of Income -
Nine and Three months ended September 30, 1995
and September 30, 1994................................4
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 30, 1995 and
September 30, 1994....................................5
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................................6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...............................8
Item 6. Exhibits and Reports of Form 8-K................8
PART I. CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 (UNAUDITED) AND DECEMBER 31, 1994 (AUDITED)
(in thousands of dollars)
SEPT 30, 1995 DEC 31, 1994
ASSETS
Cash and due from banks $ 2,816 $ 1,799
Federal Funds Sold 2,975 2,325
CASH AND CASH EQUIVALENTS 5,791 4,124
Interest-bearing deposits in other banks 3,753 3,961
Investment securities
Held to maturity (estimated fair values 9,501 13,024
of $9,615 and $12,893)
Available-for-Sale, at fair value 24,383 17,070
TOTAL SECURITIES 33,884 30,094
Loans, 38,317 35,274
Unearned income ( 551) ( 550)
Allowance for possible loan losses ( 839) ( 774)
NET LOANS 36,927 33,950
Premises and equipment, net 876 602
Other real estate 59 --
Accrued interest receivable 839 830
Deferred Tax Asset -- 348
Other assets 618 255
TOTAL ASSETS $82,747 $74,164
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Demand $ 7,813 $ 7,206
Savings and NOW Accounts 12,360 11,588
Certificate of deposit and other
time deposits $100,000 or more 18,286 17,259
Other time deposits 36,383 31,646
TOTAL DEPOSITS 74,842 67,699
Accrued interest 430 324
Other liabilities 160 93
TOTAL LIABILITIES 75,432 68,116
SHAREHOLDERS' EQUITY
Common Stock $5 par value, 300,000
shares authorized, 115,000 shares
issued and outstanding 575 575
Capital surplus 825 825
Retained earnings 5,911 5,186
Unrealized (loss) on Available-for-Sale
Securities, net of applicable deferred
income taxes 4 (538)
TOTAL SHAREHOLDERS' EQUITY 7,315 6,048
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $82,747 $74,164
The accompanying notes are an integral part of these financial statements.
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
NINE AND THREE MONTHS ENDED SEPTEMBER 30,1995 AND 1994
(in thousands of dollars, except per share data)
NINE MONTHS THREE MONTHS
ENDED ENDED
9/30/95 9/30/94 9/30/95 9/30/94
Interest income
Interest and fees on loans $ 2,592 $ 2,352 $ 921 $ 814
Interest on investment securities
U.S. Treasury Securities 291 360 87 120
Obligations of other U.S. Government 1,006 675 361 228
agencies and corporations
Obligations of states and political 149 128 53 43
subdivisions
Interest on federal funds sold 163 95 47 34
Interest on deposits in other banks 175 153 59 49
TOTAL INTEREST INCOME 4,376 3,763 1,528 1,288
Interest expense
Interest on deposits
Savings and NOW accounts 270 269 89 89
Certificates and other time deposits
$100,000 and more 731 550 264 196
Other time deposits 1,365 986 500 332
TOTAL INTEREST EXPENSE 2,366 1,805 853 617
Net interest income 2,010 1,958 675 671
Provision for Possible Loan Losses 75 45 45 15
Net interest income after provision
for possible loan losses 1,935 1,913 630 656
Service Charge on deposit accounts 268 233 95 75
Other income 157 102 29 34
Salaries & Employee Benefits 648 551 226 177
Other expense 698 618 194 204
Income before income taxes 1,014 1,079 334 384
Income tax expense 289 317 72 115
Net Income $ 725 $ 762 $ 262 $ 269
Net income per share of common stock $ 6.30 $ 6.62 $ 2.28 $ 2.34
The accompanying notes are an integral part of these financial statements.
CITIZENS BANCSHARES, INC AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994
SEPT SEPT
30, 1995 30, 1994
Cash flows from operating activities:
Net Income $ 727 $ 762
Adjustments to reconcile net income to
net cash provided by operating activities -
Provision for possible loan losses 75 50
Depreciation 31 33
Net (accretion) of investment securities (40) (42)
(Gain) on ivestment securities (1) --
(Gain) on sale of other real estate -- --
(Increase) decrease in interest receivable (9) 40
(Increase) in other assets (35) (55)
Increase (decrease) in interest payable 106 (52)
Increase (decrease) in other liabilities 67 (136)
Net cash provided by operating activities 921 595
Cash flows from investing activities:
Proceeds from maturities and calls of
investment securities 8317 7,876
Purchase of investment securities (11,191) (8,777)
Decrease in interest-bearing
deposits in other banks 208 1,084
Purchase of Bank Branch (361) --
Proceeds from sales of other real estate -- --
(Increase) in loans (3,070) (2,132)
Purchase of premises and equipment (300) (33)
Net cash (used) by investing activities (6,397) (1,982)
Cash flows from financing activities:
Increase in deposits 7,143 1,322
Net cash provided by financing activities 7,143 1,322
Net increase in cash and cash equivalents 1,667 (65)
Cash and cash equivalents, beginning of year 4,124 4,443
Cash and cash equivalents, end of period $ 5,791 $ 4,378
Cash paid for income taxes $ 250 $ 315
Cash paid for interest expense $ 2,260 $ 1,856
Other real estate acquired in satisfaction
of loans $ 59 $ --
Total Increase (decrease) in Fair Value of
Securities Available for Sale $ 821 $ (558)
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1995
GENERAL STATEMENT
Citizens Bank, Ville Platte, Louisiana (The Bank) is a commercial banking
institution formed in 1975 under the banking laws of the State of
Louisiana. The Bank conducts business at a main office located in the City
of Ville Platte, Louisiana and at branch offices located in the Town of
Mamou, Louisiana and the Village of Pine Prairie, Louisiana. The Bank
offers a full range of traditional commercial banking services, including
demand, savings, and time deposits, consumer, commercial, agriculture, and
real estate loans, safe-deposit boxes, and access to two retail credit card
plans, "VISA and MASTER CARD". Drive-in facilities are located at all
banking locations.
The Bank is the 100% owned and consolidated subsidiary of Citizens
Bancshares, Inc. of Ville Platte, Louisiana (the Company). The Company
owns no other company.
The purpose of this narrative is to provide additional information that one
may use to gain a more complete perspective on the operation of Citizens
Bank as a commercial banking enterprise. Comments included herein should
be read and taken into consideration along with other specific financial
information given within this report. It is also noted that these comments
may represent information that would not be otherwise available from the
financial statements alone.
FINANCIAL CONDITION
The Bank's total assets increased during the first nine months of 1995 from
$74,165,000 to $82,747,000, a $8,582,000 or 11.57% increase. Most of this
increase took place in the first quarter of 1995 due to the ac
quisition of the Pine Prairie Branch which was purchased on January 12,
1995 from American Security Bank of Ville Platte, Louisiana. With about
80% of the deposits remaining with Citizens Bank, the acquisition has
provided growth opportunities and new customer relationships for the Bank.
In comparing the first two quarter of 1995 to the third quarter of 1995,
the bank's total assets increased by $462,000 or about 1%.
Earings assets, which include loans, investments securities, federal funds
sold, and deposits in other banks were $78,378,000, a 10.23% increase from
1994 year end earning assets of $71,103,000.
Nonaccrual loans, which are loans on which the interest recognition has
been suspended until received because of doubts as to the borrowers'
ability to repay principal and interest, were $ 0 at September 30, 1995.
Loans which are 90 days or over past due and still accruing interest
totaled $205,593 at September 30, 1995. Past Due loans to total loans for
September 30, 1995 was 2.38% and loan to deposit ratio was 50.46%.
The Allowance for Possible Loan Losses at September 30, 1995 was $839,011.
Management maintains an allowance for possible loan losses at a level
considered to be adequate to provide for possible loan losses. At
September 30, 1995, the loan loss reserve to total loans was 2.22%.
$75,000 has been added to the allowance by charges against income during
the first nine months of 1995. Total charge-offs as of September 30, 1995
were $39,274 and recoveries of charge-offs totaled $29,182.
As the Bank's primary source of funds, deposits, both time and demand,
increased $7,143,000 or 10.55% during the first nine months of 1995. Non-
interest-bearing deposits increased $607,000, and interest-bearing deposits
increased $6,536,000. With the continue decrease in interest rates,
management finds that most depositors are staying short and feels pressured
with the competitor rates being offered by local brokerage firms.
The primary functions of asset/liability management are to assure adequate
liquidity and maintaince of appropriate balance between
interest-earning assets and interest-bearing liabilities. Liquidity
management involves the ability to meet cash flow requirements of
customers. With the Bank's asset/liability management program, most loan
and deposit changes can be anticipated and provided for without an adverse
impact on earnings. The Bank's liquidity ratio at September 30, 1995 was
54.71%.
RESULTS OF OPERATIONS
The Bank's net income for the nine months ended September 30, 1995 was
$725,000 or $6.30 per share. At September 30, 1995, net return on assets
was 1.18% and the net return on equity was 11.89%.
Noninterest income, which consists of service charges and fees on financial
services, was $425,000 for the first nine months of 1995, a $90,000
increase from the first nine months of 1994. Most of this increase is
attributed to the gain on sale of assets in which $55,000 was credited to
income for the adjustment of land acquired in exchange to fair value in
accordance with the Official of Financial Institution.
Noninterest expense for the first nine months of 1995 increased by $177,000
as compared to the first nine months of 1994. Salaries and employee
benefits, the largest component of non-interest expense, increased by
$98,000 as a result of additional staff to meet the branch acquisition and
internal growth of Citizens Bank. With a 15 year amortization for the
premium paid for the acquisition of the Pine Prairie Branch, $19,000 has
been expense as of September 30, 1995.
Computer & Courier Service has increased by $13,000 as a result of
additional reporting required for the Pine Prairie Branch.
At September 30, 1995, the bank's ratios were as follows:
Capital to Asset 8.85%
Risk Based 19.73%
Tier 1 17.79%
Leverage Ratio 8.48%
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Legal proceedings involving the Bank are limited to
proceedings arising from normal business activities,
none of which are considered material.
Item 6. Exhibits and Reports on Form 8-K
(a) Part II Exhibits: none
(b) The Company has not filed any reports on Form 8-K
during the quarter ended September 30, 1995.
SIGNATURES
Pursuant to the requirements 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 BANCSHARES, INC.
CARL W. FONTENOT
PRESIDENT & CEO
WAYNE VIDRINE
EXECUTIVE VICE PRES.-TREASURER
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