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 March 31, 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 March 31, 1995
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
INDEX
PART I. FINANCIAL INFORMATION PAGE
Condensed Consolidated Balance Sheets -
March 31, 1995 and December 31, 1994 ..................3
Condensed Consolidated Statements of Income -
Three months ended March 31, 1995 and 1994 ............4
Condensed Consolidated Statements of Cash Flows -
Three months ended March 31, 1995 and 1994 ............5
Notes to Consolidated Financial Statements...............6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations ............................................7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ..............................9
Item 6. Exhibits and Reports on Form 8-K ...............9
PART I. CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 (UNAUDITED) AND DECEMBER 31, 1994 (AUDITED)
(in thousands of dollars)
MARCH 31, 1995 DECEMBER 31,1994
ASSETS
Cash and due from banks $ 2,331 $ 1,799
Federal funds Sold 4,575 2,325
CASH AND CASH EQUIVALENTS 6,906 4,124
Interest-bearing deposits in other banks 3,664 3,961
Investment securities
Held to maturity (estimated fair values 10,640 13,024
of $10,628 and $12,893)
Available-for-Sale, at fair value 23,399 17,069
TOTAL SECURITIES 34,039 30,094
Loans, 35,603 35,274
Unearned income ( 558) ( 550)
Allowance for possible loan losses ( 790) ( 774)
NET LOANS 34,255 33,950
Premises and equipment, net 764 602
Other real estate - -
Deferred tax asset 142 348
Accrued interest receivable 785 830
Other assets 648 254
TOTAL ASSETS $81,203 $74,165
LIABILITIES
Deposits
Demand $ 8,496 $ 7,206
Savings and NOW Accounts 13,018 11,588
Certificate of deposit and other
time deposits $100,000 or more 17,407 17,259
Other time deposits 35,275 31,646
TOTAL DEPOSITS 74,196 67,699
Accrued interest 306 324
Other liabilities 206 93
TOTAL LIABILITIES 74,708 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 5,370 5,186
Unrealized (loss) on Available-for-Sale
Securities, net of applicable deferred
income taxes (275) (538)
TOTAL SHAREHOLDERS' EQUITY 6,495 6,048
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $81,203 $74,164
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands of dollars, except per share data)
THREE MONTHS ENDED
3/31/95 3/31/94
Interest income
Interest, including fees $ 821 $ 757
Interest on investment securities
U.S. Treasury securities 102 107
Obligations of other U.S. Government
agencies and corporations 298 228
Obligations of states and political
subdivisions 46 43
Interest on federal funds sold 61 30
Interest on deposits in other banks 58 52
TOTAL INTEREST INCOME 1,386 1,217
Interest expense
Interest on deposits
Savings and NOW accounts 121 89
Certificates and other time deposits
$100,000 and more 218 168
Other time deposits 372 333
Other interest expense - -
TOTAL INTEREST EXPENSE 711 590
Net interest income 675 627
Provision for possible loan losses 15 15
Net interest income after provision
for possible loan losses 660 612
Other Service Charges DDA's 50 49
Other income 75 58
Salaries 214 180
FDIC Assessment 38 38
Other expense 220 173
Income before income taxes 313 328
Income tax expense 129 104
Net Income $ 184 $ 224
Net income per share of common stock $ 1.60 $ 1.95
CITIZENS BANCSHARES, INC AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
MARCH 31, 1995 AND MARCH 31, 1994
March March
31, 1995 31, 1994
Cash flows from operating activities:
Net Income $ 184 $ 224
Adjustments to reconcile net income to
net cash provided by operating activities -
Provision for possible loan losses 15 15
Depreciation 11 11
Net (accretion) of investment securities (7) (20)
(Gain) on ivestment securities (1) --
(Gain) on sale of other real estate -- --
Decrease in interest receivable 45 95
(Increase) in other assets (13) (29)
(Decrease) in interest payable (18) (78)
Increase in other liabilities 114 126
Net cash provided by operating activities 330 344
Cash flows from investing activities:
Proceeds from maturities and calls of
investment securities 2,825 4,479
Purchase of investment securities (6,409) (5,322)
Decrease in interest-bearing
deposits in other banks 297 (497)
Purchase of Bank Branch (380) --
Proceeds from sales of other real estate 130 --
(Increase) in loans (340) (25)
Purchase of premises and equipment (168) (20)
Net cash (used) by investing activities (4,045) (1,385)
Cash flows from financing activities:
Increase in deposits 6,497 3,222
Net cash provided by financing activities 6,497 3,222
Net increase in cash and cash equivalents 2,782 2,181
Cash and cash equivalents, beginning of year 4,124 4,443
Cash and cash equivalents, end of period $ 6,906 $ 6,624
Cash paid for income taxes $ --- $ ---
Cash paid for interest expense $ 729 $ 668
Other real estate acquired in satisfaction
of loans $ -- $ --
Total Increase (decrease) in Fair Value of
Securities Available for Sale $ 398 $ (195)
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
(1) The interim financial statements are prepared pursuant to the
requirements for reporting on Form 10-QSB. The December 31,
1994 balance sheet data was derived from audited financial
statements but does not include all disclosures required by
generally accepted accounting principles. The interim financial
statements and notes thereto should be read in conjunction with
the financial statements and notes included in the Company's
latest annual report on Form 10-KSB. In the opinion of
management, the interim financial statements reflect all
adjustments of a normal recurring nature necessary for a fair
statement of the results for interim periods. The current
period results of operations are not necessarily indicative of
results which ultimately will be reported for the full year
ended December 31, 1995.
(2) As of January 1, 1994, the Company adopted the Financial
Accounting Standards Board Statement Number 115 (FASB 115),
"Accounting for Certain Investments in Debt and Equity
Securities". Under FASB 115, the Company has classified its
investment securities into two categories, held-to-maturity and
available-for-sale. Securities considered as held-to-maturity
generally include all municipal and US Treasury and Government
Agencies maturing within two years, which the Company has both
the positive intent and ability to hold until maturity.
Available-for-sale securities are those not considered held-to-
maturity. Held-to-maturity securities are carried at amortized
cost and are $10,640,000 at March 31, 1995 and $13,024,000 at
December 31, 1994. Available-for-sale securities are carried at
their fair value at March 31, 1995 of $23,399,000, which
includes a net unrealized loss of $417,000 from their amortized
cost of $23,816,000. The net unrealized loss net of a deferred
tax benefit of $142,000 is carried as a reduction of
stockholders' equity of $275,000.
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 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 a branch 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 three months of 1995
from $74,165,000 to $81,203,000, a $7,038,000 or 9.49% increase. Most
of this increase is the result of the acquisition 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.
Earning assets, which include loans, investment securities, federal
funds sold, and deposits in other banks were $77,323,000, a 8.75%
increase from 1994 year end earning assets of $71,103,000.
The Allowance for Possible Loan Losses at March 31, 1995 was $790,000.
Management maintains an allowance for possible loan losses at a level
considered to be adequate to provide for possible loan losses. At March
31, 1995, the loan loss reserve to total loans was 2.25%. A total of
$15,000 has been added to the allowance by charges against income during
the first three months of 1195. Total charge-offs as of March 31, 1995
were $12,780 with recoveries being $13,806.
Deposits, both time and demand, represents the chief source of funds for
the bank. Deposits at March 31, 1995, were $74,196, representing a
increase of $6,497 or 9.60% from year end 1994 total deposits of
$67,699. $3,639 of the increase was in time deposits less than
$100,000. Management finds that depositors are staying short-term 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 maintain an 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 March 31, 1995 was 57.07%.
RESULTS OF OPERATIONS
The Bank's net income for the first quarter of 1995 was $184,000 or
$1.60 per share as compared to $224,000 or $1.95 per share for the same
period in 1994. At March 31, 1995, net return on assets were 0.92% and
net return on equity 9.74%. The decrease in income for the quarter
ended March 31, 1995, appears principally attributable to period
acquisition costs included in noninterest expense.
Noninterest income, which consists of service charges and fees on
financial services, was $126,000 for the first three months of 1995, a
$19,000 increase from the first three months of 1994.
Noninterest expense for the first three months of 1995 increased by
$81,000 as compared to the first three months of 1994. Salaries and
employee benefits increased by $34,000 in the first three months of
1995. This increase is the result of additional staff due to the
acquisition and growth of Citizens Bank. Other expenses which had
large increases were computer and courier service and customer check
charges waivers. With the acquisition of the new branch, Citizens Bank
agreed to pay the cost of new check orders to replace existing American
Security Bank checks.
At March 31, 1995, the bank's ratios were as follows:
Capital to Asset 9.19%
Risk Based 20.34%
Tier 1 18.34%
Leverage Ratio 8.33%
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 March 31, 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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