SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
(x) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Fee Required)
For the Fiscal Year Ended December 31, 1995
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No fee required)
For the transition period from to
Commission file number 0-12425
CITIZENS BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-0759135
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
P.O. Box 598
Ville Platte, Louisiana 70586-0598
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (318) 363-5643
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange
Title of each class: on which registered:
None None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $5.00 par value per share
(Title of Class)
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 filers 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 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 recent year. $ 6,446,720
State the aggregate market value of the voting stock held by non-
affiliates* of the Registrant as of March 15, 1996 (based on $13.00 per
share).
$591,318
Indicate the number of shares outstanding of each of the Registrant's
classes of Common Stock as of the latest practicable date.
Common Stock, $5.00 par value, 115,000 shares outstanding as of March
15, 1995.
DOCUMENTS INCORPORATED BY REFERENCE:
Part of Form 10-KSB
Documents Incorporated into which Incorporated
Definitive Proxy Statement Part III
for the 1996 Annual
Meeting of Shareholders
1995 Annual Report to Shareholders Part II
*For the purposes of this computation only, shares held by directors,
executive officers, and principal shareholders have been excluded.
Transitional Small Business Disclosure Format: yes no x
FORM 10-KSB CROSS REFERENCE INDEX
PART I PAGE
ITEM 1 BUSINESS....................................................4
SUPPLEMENTAL FINANCIAL INFORMATION:
INVESTMENT SECURITIES.......................................8
LOANS.......................................................9
LOAN MATURITY AND INTEREST RATE SENSITIVITY.................9
INTEREST RATE SENSITIVITY AND LIQUIDITY....................10
RISK ELEMENTS..............................................11
ALLOWANCE FOR POSSIBLE LOAN LOSSES.........................12
DEPOSITS...................................................14
RETURN ON EQUITY AND ASSETS................................14
RATE/VOLUME ANALYSIS.......................................15
AVERAGE BALANCE SHEETS AND NET INTEREST YIELD ANALYSIS.....16
ITEM 2 PROPERTIES.................................................18
ITEM 3 LEGAL PROCEEDINGS..........................................18
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........18
PART II
ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS........................................19
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.........................*
ITEM 7 FINANCIAL STATEMENTS .......................................*
CONSOLIDATED BALANCE SHEETS.................................*
CONSOLIDATED STATEMENTS OF INCOME...........................*
CONSOLIDATED STATEMENTS OF CASH FLOWS.......................*
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY..*
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS..................*
REPORT OF INDEPENDENT AUDITORS..............................*
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE........................20
PART III
ITEM 9 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.........**
ITEM 10 EXECUTIVE COMPENSATION.....................................**
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.............................................**
ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............**
PART IV
ITEM 13 EXHIBITS AND REPORTS ON FORM 8-K...........................20
SIGNATURES.................................................21
* INCORPORATED BY REFERENCE TO CITIZENS BANCSHARES, INC. ANNUAL REPORT
** INCORPORATED BY REFERENCE TO CITIZENS BANCSHARES, INC. PROXY STATEMENT
PART I.
ITEM 1. BUSINESS
GENERAL
Citizens Bancshares, Inc. (the "Company") is a Louisiana business
corporation and a one-bank holding company registered under the federal
Bank Holding Company act of 1956. It was formed in 1983 primarily for the
purpose of holding all of the outstanding stock of Citizens Bank (the
"Bank"), which is the Company's sole subsidiary.
The Bank was formed in 1975 under the banking laws of the State of
Louisiana. The Bank conducts a general commercial banking business through
its main office at Ville Platte, Louisiana and branch offices in Mamou,
Louisiana, and Pine Prairie, Louisiana, all of which are in Evangeline
Parish, Louisiana. The Bank offers a full range of traditional commercial
banking services, including demand, savings and time deposits, consumer,
commercial and real estate loans, safe-deposit boxes and access to two
retail credit plans -- "VISA" and "MASTERCARD". The Bank does not offer
trust services. Drive-in banking facilities are located at all banking
locations.
COMPETITION
The Bank competes actively with national and state banks and savings and
loan institutions in Louisiana for all types of loans and deposits. The
Bank competes for loans with other financial institutions, such as
insurance companies, real estate investment trusts, savings and loans,
small loan companies, credit unions and certain government agencies. There
are 6 financial institutions in Evangeline Parish with a total of 12
banking offices.
EMPLOYEES
As of December 31, 1995, the Company and the Bank had approximately 36
full-time equivalent employees. The Company has no salaried employees,
although certain executive officers hold parallel positions with the Bank.
No employees are represented by unions or other bargaining units, and
management considers its relations with employees to be satisfactory.
SUPERVISION AND REGULATION
General
The Company and the Bank are extensively regulated under both federal and
state laws. To the extent that the following information describes
particular statutory provisions, it is qualified in its entirety by
reference to the particular statutory and regulatory provisions. Any
change in applicable law or regulation may have a material effect on the
business and prospects of the Company.
The Company
The Company is a bank holding company within the meaning of the Bank
Holding Company Act of 1956, as amended (the "Act"), and, as such, is
subject to the provisions of the Act and to regulation and supervision by
the Board of Governors of the Federal Reserve System (the "Board"). The
Company is required to file with the Board annual reports containing such
information as the Board may require pursuant to the Act and also is
subject to periodic examination by the Board.
Under the Act, a bank holding company may not acquire more than 5% of the
voting shares, or substantially all the assets, of any bank without the
prior approval of the Board.
The Act also limits, with certain exceptions, the business in which a bank
holding company may engage, directly or through subsidiaries, to banking,
managing or controlling banks, and furnishing or performing activities so
closely related to banking or managing or controlling banks as to be a
proper incident thereto. In determining whether a particular activity is
a proper incident to banking or managing or controlling banks, the Board
must consider whether its performance by an affiliate of a bank holding
company can reasonably be expected to produce benefits to the public, such
as greater convenience, increased competition or gains in efficiency that
outweigh possible adverse effects, such as undue concentrations of
resources, decreased or unfair competition, conflicts of interest or other
unsound banking practices.
The Board has adopted regulations implementing the provisions of
the Act with respect to the activities of bank holding companies. Whether
or not a particular non-banking activity is permitted under the Act, the
Board is authorized to require a bank holding company to terminate any
activity or to divest itself of any non-banking subsidiary if its actions
represent unsafe or unsound practices or violations of law.
Under the Act, a bank holding company and its subsidiaries are prohibited
from engaging in certain tie-in arrangements in connection with the
extension of credit, the lease or sale of property or provision of any
services.
The Federal Deposit Insurance Corporation Improvement Act of 1991 ( the
"1991 Act") subject bank holding companies as well as banks to
significantly increased regulation and supervision. Among other things,
the 1991 Act provides that undercapitalized institutions, as defined by
regulatory authorities, must submit recapitalization plans, and a parent
company of such an institution must either (1) guarantee the institution's
compliance with the capital plan, up to an amount equal to the lesser of
five percent of the institution's assets at the time it becomes
undercapitalized or the amount of the capital deficiency when the
institution fails to comply with the plan, or (2) suffer certain adverse
consequences such as a prohibition of dividends by the parent company to
its shareholders.
The Company is also subject to the Louisiana Bank Holding Company Act, as
amended (the "Louisiana Act") which, among other things, provided that a
bank holding company and its subsidiaries may not engage in any insurance
activity in which a bank may not engage. The Louisiana Commissioner of
Financial Institutions is authorized to administer the Louisiana Act and
to issue orders and regulations thereunder.
Federal and Louisiana laws provide for the enforcement of any pro rate
assessment of shareholders of a bank to cover impairment of capital stock
by sale, to the extent necessary, of the stock of any assessed shareholder
failing to pay the assessment. The Company, as shareholder of the Bank,
is subject to these provisions.
The Bank
Both federal and state laws extensively regulate various aspects of the
banking business, including requirements regarding the maintenance of
reserves against deposits, limitations on the rates that can be charged on
loans or paid on deposits, branching and restrictions on the nature and
amounts of loans and investments that can be made.
As a state bank, the Bank is subject to the supervisory authority of the
Louisiana Commissioner of Financial Institutions, whose office conducts
periodic examinations of the Bank. As a federally insured bank, the Bank
is also subject to supervision and regulation by the Federal Deposit
Insurance Corporation (the "FDIC"). The foregoing regulation is primarily
intended to protect the Bank's creditors and depositors rather than the
Company's security holders.
Under certain circumstances, regulatory authorities may prohibit the
payment of dividends by a bank or its parent holding company.
The 1991 Act and regulations promulgated thereunder classify banks into
five categories generally relating to their regulatory capital ratios and
institute a system of supervisory actions indexed to a bank's particular
classification. Generally, banks that are classified as "well
capitalized," or "adequately capitalized" are not subject to the
supervisory actions specified in the 1991 Act for prompt corrective action,
but may be restricted from taking certain actions that will lower their
classification. Banks classified as "undercapitalized," significantly
undercapitalized," or "critically undercapitalized" are subject to
restrictions in supervisory actions of increasing stringency based on the
level of classification.
Under present regulation, the Bank is "well capitalized." While such a
classification would exclude the Bank from the restrictions and actions
envisioned by the prompt corrective action provisions of the 1991 Act, the
regulatory agencies have broad powers under other provisions of federal law
that would permit them to place restrictions on the Bank or to take other
supervisory action regardless of such classification.
SUPPLEMENTAL FINANCIAL INFORMATION
Supplemental financial information for Citizens Bancshares, Inc. and
subsidiary is set forth below and on the following pages:
INVESTMENT SECURITIES
Maturities and weighted average yields on investments as of December
31, 1995:
Held-to-Maturity Available-for-Sale
U.S. Treasury Securities
Within 1 year $ 1,599,431 4.70% $ 749,938 5.37%
After 1 but within 5 years 599,223 5.83% 2,268,421 5.93%
$ 2,198,654 5.01% $ 3,018,359 5.79%
U.S. Government Securities
Within 1 year 1,238,720 5.82% 7,604,805 4.40%
After 1 but within 5 years 1,346,438 5.76% 11,481,890 5.83%
$ 2,585,158 5.79% $ 19,086,695 5.33%
State and Political subdivisions
With 1 year 585,438 5.46% --- ---
After 1 but within 5 years 2,826,382 5.83% --- ---
After 5 but within 10 years 1,166,772 6.17% --- ---
After 10 years --- ---- --- ---
$ 4,578,592 5.87% $ --- ---
Mortgaged-backed securities 332,812 5.50% $ 3,119,068 7.09%
$ 9,695,216 5.64% $ 25,224,122 5.67%
The above weighted average yields on tax exempt obligations are not
computed on a tax equivalent basis. Yields on available-for-sale
securities are computed on historial amortized cost.
No securities of any single issuer which totaled 10% or more of
shareholders equity were held at December 31, 1995.
LOANS
A distribution of the loan portfolio at December 31, 1995 and 1994 is
summarized as follows:
1995 1994
Commercial $ 7,922,988 21.96% $ 7,490,587 22.06%
Municipal 118,742 0.33% 232,949 0.69%
Real Estate - Mortgage 18,014,597 49.92% 15,747,855 46.38%
Agricultural 3,211,438 8.90% 4,092,847 12.06%
Consumer 8,157,081 22.61% 7,683,081 22.63%
Overdrafts 17,399 0.05% 26,974 0.08%
37,442,245 103.77% 35,274,293 103.90%
Unearned income (526,102) (1.46%) (550,465) (1.62%)
Allowance for possible loan loss (832,044) (2.31%) (774,056) (2.28%)
$36,084,099 100.00% $33,949,772 100.00%
LOAN MATURITY AND INTEREST RATE SENSITIVITY
Maturities of commercial and agricultural loans at December 31, 1995 are
summarized below:
Over
One Year One to Over Five
Total or Less Five Yrs Years
Commercial $7,922,988 $6,533,427 $1,374,268 $ 15,293
Agricultural 3,211,438 2,928,006 135,036 148,396
Commercial and Agricultural loans due after one (1) year that have fixed
and adjustable rates are as follows:
Fixed Adjustable
Total Rates Rates
Commercial $1,389,561 $1,389,561 $ 0
Agricultural 283,432 283,432 0
INTEREST RATE SENSITIVITY AND LIQUIDITY
The following table shows the interest rate sensitivity gaps for
different time periods and the cumulative interest rate sensitivity gaps
for the same periods as of December 31, 1995. Loans for which the accrual
of interest has been discontinued and overdrafts have not been included.
1-3 4-6 7-12 13-18 19-24 OVER
FLOAT MTHS MTHS MTHS MTHS MTHS 2 YRS TOTAL
Securities $3,148 $2,764 $5,936 $4,003 $4,136 $14,749 $34,736
Fixed Loans $1,197 $6,225 $5,012 $7,906 $1,800 $2,170 $ 4,692 $29,002
Floating
Loans $ 285 $5,127 $ 434 $2,015 $ 7,861
Fed Funds &
CD $3,575 $1,089 $1,586 $ 892 $ 198 $ 7,340
$5,057 $15,589 $9,796 $16,749 $6,001 $6,306 $19,441 $78,939
CD's & IRA's
> 100M $ 331 $ 4,316 $4,475 $6,595 $1,111 $ 700 $ 300 $17,828
CD's & IRA's
< 100M $ 822 $14,675 $8,586 $8,062 $2,805 $1,647 $ 121 $36,718
IMM ACCTS $2,904 $ 2,904
CHRISTMAS CLUB $ 34 $ 34
SAVINGS &
NOW $ 128 $ 9,627 $ 9,755
$4,185 $18,991 $13,061 $14,657 $3,916 $2,381 $10,048 $67,239
GAP $ 872 $(3,404) $(3,265) $ 2,092 $2,085 $3,925 $ 9,393 $11,700
CUMULATIVE
GAP $ 872 $(2,530) $(5,795) $(3,703)$(1,618)$2,307 $11,700
RISK ELEMENTS
The following summarizes nonperforming loans at December 31, 1995 and 1994:
1995 1994
Nonaccrual Loans $ 35,900 $ 76,203
Loans past due 90 days or more as to
principal or interest and still
accruing interest 155,180 117,467
Restructured loans not included above 245,135 258,621
$436,215 $452,291
Interest on such loans, had they remained current and in accordance with
their original terms, would have been:
1995 1994
Nonaccruals $ 5,742 $ 2,112
Restructured 31,175 33,973
$ 36,917 $ 36,085
Interest collected on nonaccrual and restructured loans amounted to $26,459
for 1995 and $25,646 for 1994.
Other nonperforming assets are: 1995 1994
Real estate and other assets acquired
in satisfaction of loans $28,288 $ ---
NONACCRUAL POLICY:
Citizens Bank follows a close policy in scrutinizing past due loans and
their placement in nonaccrual status, as dictated by the Bank's loan policy.
Policy dictates that any loan delinquent for a period of ninety (90) days,
unless the collateral supporting the loan is sufficient to cover the accrued
interest in addition to the principal balance and in process of collection,
will be placed in nonaccrual status. Such loans are not charged-off;
however, interest is no longer accruing. Accrued interest is charged against
either interest income or the allowance for possible loan losses at the time
a loan becomes nonaccrual, depending on the reporting period in which such
interest had accrued.
The officers' Loan Committee reviews the Bank's nonaccrual listing
monthly and determines whether a loan should remain on nonaccrual status, be
returned to accruing status, or be charged-off. The Board of Directors is
provided a listing of nonaccrual loans at its monthly meetings. After
review, the Board recommends to management to take any appropriate steps
for collection and/or measures to protect the Bank's position.
ALLOWANCE FOR POSSIBLE LOAN LOSSES
A detail of the activity in the allowance for possible loan losses for the
past two (2) years and its relationship to year-end loans outstanding follows:
1995 1994
Allowance of possible loan losses af January 1 $774,056 $719,590
Loans charged off:
Commercial 20,011 9,634
Municipal --- ---
Real estate - Mortgage --- 17,535
Agricultural --- ---
Consumer 35,184 31,064
Other (overdrafts) 3,647 1,816
Total Charged-Off 58,842 60,049
Recoveries:
Commercial 9,729 8,603
Municipal --- ---
Real estate - Mortgage --- 22,931
Agricultural --- ---
Consumer 25,923 21,176
Other (overdrafts) 1,178 1,805
Total Recoveries 36,830 54,515
Net loans charged off 22,012 5,534
Provision charged to operating expense 80,000 60,000
Allowance at December 31 $832,044 $774,056
Loans outstanding at December 31 $36,916,143 $34,723,828
Average Loans outstanding for the year $36,291,281 $33,951,127
Ratio of net charge-offs to average loans
outstanding 0.06% 0.02%
Ratio of allowance to loans outstanding
at year end 2.25% 2.23%
The provision for possible loan losses which is charged to income from
operations, is based upon the changes in the loan portfolio, the amount of
net loan losses incurred and management's estimates of potential future
losses based on several factors including, but not limited to, current
economic conditions, loan portfolio composition, nonaccrual loans, problem
loans, and prior loan loss experience. The provision for possible loan
losses was $80,000 in 1995 and $60,000 in 1994. The increased provisions
for possible loan losses during 1995 is the result of an increase in loan
demand.
The allowance for possible loan losses at December 31, 1995 was approximately
$832,000 or 2.25% of net loans outstanding, compared to approximately
$774,000 or 2.23% of net loans outstanding at December 31, 1994. It is
management's opinion that the allowance for possible loan losses at
December 31, 1995 is adequate, based upon the Bank's aggressive charge-off
and collection practices.
The following chart represents management's estimate of the manner in which
the allowance for possible loan losses might be allocated to categories of
loans if the Company was required to do so under generally accepted
accounting principles uniformly applied. The reader is cautioned that, in
the opinion of management, it is not possible to predict with complete
accuracy what amount of the allowance will be required to absorb future
losses in each category. Furthermore, under generally accepted accounting
principles as well as regulations promulgated by federal and state banking
regulatory agencies, the entire allowance is available to absorb losses
in all categories, so the critical function of the allowance is to be
adequate in view of the aggregate risk of all losses.
An allocation of the allowance for possible loan losses by major
categories of loans follows:
1995 1994
Percent of Percent of
Allowance loans in each Allowance loans in each
Amount category to Amount category to
total loans total loans
Commercial 282,954 21.16% 124,193 21.24%
Municipal --- .32% --- .66%
Real Estate --- 48.11% 226,032 44.64%
Agriculture --- 8.58% --- 11.60%
Installment 497,515 21.78% 400,429 21.78%
Other 51,575 .05% 23,404 .08%
$832,044 100.00% $ 774,056 100.00%
DEPOSITS
The following is a distribution of average deposits for the two
years ended December 31:
1995 1994
Demand Deposits $ 8,091,530 $ 7,082,504
Savings and NOW Accounts 12,638,837 12,459,136
Time Deposits, $100,00 or more 17,842,121 17,106,308
Other Time Deposits 35,616,512 32,789,883
$74,189,000 $69,437,831
The following is a maturity distribution of certificate of deposits
of $100,000 or more as of December 31:
1995 1994
Three months and under $ 4,646,569 $ 7,230,499
Over three through six months 4,475,273 4,393,670
Over six through twelve months 6,594,978 5,525,359
Over twelve months 2,112,432 109,185
$17,829,252 $17,258,713
RETURN ON EQUITY AND ASSETS
1995 1994
Return on average assets 1.10% 1.42%
Return on average equity 12.90% 19.89%
Dividend payout ratio 6.39% 2.80%
Average equity to average assets 8.53% 7.12%
RATE/VOLUME ANALYSIS
A comparative analysis of the increases and decreases in the major
categories of interest income and expense resulting from changes in rate
and volume for the periods indicated follows. Changes which are not due
solely to rate or volume have been allocated proportionally.
1995/1994 1994/1993
Due to Due to
Rate Volume Total Rate Volume Total (in
thousand of dollars)
Interest earning assets:
Interest bearing deposits $82 ($54) 28 $18 ($18) $0
Federal Funds Sold 64 24 88 38 ( 19) 19
U.S. Treasury Securities 32 (132) (100) (22) 48 26
U.S. Government Securities 173 289 462 (79) 91 12
State & Municipal (1) (1) 48 47 (34) 27 (7)
Loans, net 102 222 324 (185) 145 (40)
Total interest income (1) 452 397 849 (264) 274 10
Interest bearing funds:
Savings & NOW accounts 1 5 6 (23) (8) (31)
Time deposits $100,000> 209 33 242 (18) 77 59
Other Time Deposits 429 123 552 (86) 75 (11)
Other int. bearing liab. 0 0 0 0 (2) (2)
Total interest expense 639 161 800 (127) 142 15
Net interest income (1) (187) 236 49 (137) 132 (5)
(1) Fully taxable equivalent basis using a 34% tax rate.
AVERAGE BALANCES, INTEREST and AVERAGE RATES
The following table shows the major consolidated assets and
liabilities, together with their respective interest amounts and rates
earned or paid by the Company. Cash basis and renegoiated loans are
included in the averages to determine an effective yield on all loans.
The average balances are principally daily averages.
Int. Avg Int. Avg
Inc. Yield Inc. Yield
Avg. Bal Exp Rate Avg. Bal Exp. Rate
1995 1994
Earning Assets
Int. bearing deps. $3,689 233 6.32 $4,790 205 4.28
Federal Funds sold 3,834 220 5.74 3,296 132 4.00
U.S. Treasury 7,232 369 5.10 9,856 469 4.76
U.S. Government 23,487 1,370 5.83 18,246 908 4.98
State & Municipal (1) 3,802 309 8.13 3,207 262 8.17
Loans, net 35,492 3,466 9.77 33,199 3,142 9.46
Total earning assets 77,536 5,967 7.70 72,594 5,118 7.05
Cash & due from banks 2,002 1,827
Premises & equipment 812 621
Other assets 1,404 965
Total assets $81,754 $76,007
Liabilities and
Shareholders Equity
Int. bearing funds
Savings & NOW $12,639 359 2.84 $12,459 353 2.83
Time Dep. $100,000 17,842 982 5.50 17,106 740 4.33
Other Time Deps. 35,616 1,893 5.32 32,790 1,341 4.09
Total int. bearing 66,097 3,234 4.89 62,355 2,434 3.90
Demand deposits 8,092 7,082
Accr. interest
& other liab. 590 461
Total Liabilities 74,779 69,898
Shareholders'equity 6,975 6,109
Total liab. & equity
Total Liabilities &
Sharholders Equity $81,754 $76,007
Net int income, taxable
equivalent basis 2,733 2,684
Taxable equivalent adjustment 105 90
2,628 2,594
Spread 2.81 3.15
Net interest yield (1) 3.52 3.70
(1) Fully taxable equivalent basis using 34% tax rate.
ITEM 2. PROPERTIES
The Bank's
main office is located at 841 West Main Street, Ville Platte, Louisiana.
This property includes the Bank's parking lot containing 60 parking
places. The Bank's office building is approximately 5600 square feet
and includes staff and storage rooms and drive-up facilities.
One of the Bank's branch office is located at 601 Poinciana Avenue,
Mamou, Louisiana. This property includes the branch office's parking
lot containing 30 parking spaces. The branch office building is
approximately 3600 square feet and contains staff and storage rooms and
drive-up facilities.
The other Bank's branch office is located at Sanders & Hwy 13, Pine
Prairie, Louisiana. This property includes the branch office's parking
lot containing 20 parking spaces. The branch office building is
approximately 2400 square feet and contains staff and storage rooms and
drive-in facilities.
ITEM 3. LEGAL PROCEEDINGS
Other than normal and routine collection matters in which demand
letters, lawsuits filed seeking personal judgment or mortgage
foreclosures and/or real estate as well as proofs of claim in bankruptcy
and/or reorganization proceedings, none of which are considered to be of
a material nature, the Company and its subsidiary are not engaged in any
litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters voted upon by the shareholders of the Company
during the fourth quarter of 1995.
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
There is no established public trading market for the Company's
common stock. The primary market area for the Company's common stock is
Evangeline Parish. All sales of the Company's common stock that have
come to the attention of management during 1995 and 1994 have occurred
at $11-$15 per share. Such prices reflect only those limited number of
transactions that have come to the attention of management, and other
transactions may have occurred at higher or lower sales prices during
the periods indicated. No assurance can be given that such prices
represent the actual market value of the Company's common stock.
The approximate number of holders of record of each class of the
Company's equity securities as of March 15, 1996 was as follows:
Title of Class Number of Record Holders
Common Stock - $5.00 par value 448
Dividend History and Restrictions
The Board of Directors has declared cash dividends in 1989, 1990, 1991,
1992, 1993, 1994 and 1995. These dividends were declared and paid to
shareholders in December of each year. 1989 dividend - .10 per share,
1990 dividend - .12 per share, 1991 dividend - .15 per share, 1992
dividend - .18 per share, 1993 dividend - .25 per share, 1994 dividend -
.50 per share and 1995 dividend - .50 per share. Management currently
expects that cash dividends will be paid in the future years at
approximately the same rate as in the past with a small increase per
year, should the profits allow.
Prior approval of the Commissioner of the Louisiana Office of Financial
Institutions is required for the Bank to pay dividends if the total of
all dividends declared and paid during any one year would exceed the
total of net profits of that year combined with the net profits of the
immediately preceding year.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information appearing in the Company's 1995 Annual Report is
incorporated herein by reference in response to this item.
ITEM 7. FINANCIAL STATEMENTS
The information appearing in the Company's 1995 Annual Report is
incorporated herein by reference in response to this item.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no disagreements with our independent accountants
on any matter of accounting principles or practice, financial statement
disclosure or auditing scope or procedure.
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference to Citizens Bancshares, Inc. Proxy
Statement.
ITEM 10. EXECUTIVE COMPENSATION
Incorporated by reference to Citizens Bancshares, Inc. Proxy
Statement.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference to Citizens Bancshares, Inc. Proxy
Statement.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference to Citizens Bancshares, Inc. Proxy
Statement.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 Regulation S-B:
Exhibit 13 - 1995 Annual Report to Shareholders
Exhibit 27 - Financial Data Schedule
Other exhibits have been omitted because they are either not
applicable or have been filed in previous reports.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the last quarter of 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused the report to be
signed on its behalf by the undersigned, thereunto duly authorized.
March 26, 1996 CITIZENS BANCSHARES, INC.
Date REGISTRANT
s/Carl W. Fontenot
Carl W. Fontenot
President & Director
s/Wayne Vidrine
Wayne Vidrine
Treasurer
s/Fredrick Phillips
Fredrick Phillips
Director
s/JB Veillon
J.B. Veillon
Director
s/Otis Fontenot
Otis Fontenot
Director
s/Eugene Fontenot
Eugene S. Fontenot
Director
1 9 9 5 A N N U A L R E P O R T
CITIZENS BANCSHARES, INC. AND SUBSIDIARY
VILLE PLATTE, LOUISIANA
<PAGE>
PRESIDENT'S MESSAGE
March 14, 1996
Dear Shareholder:
On behalf of Citizens Bancshares, Inc. (the "Holding Company")
and Citizens Bank, Ville Platte, Louisiana, (the "Bank"), the
Board of Directors and I express our appreciation to you, our
shareholders and customers, for the support, faith, and
confidence you have entrusted to us, and we provide assurances of
continued expansion of quality services and products.
Citizens Bancshares, Inc. and Citizens Bank, Ville Platte,
Louisiana, have again experienced a year of excellent earnings
with an asset growth of over $9 million. The loan portfolio
increased by over $2.1 million. Increases in assets, and in
particular loan portfolio increases, demonstrate the Bank's
commitment to Evangeline Parish and to the needs of its citizens.
In 1995, the Bank opened the Pine Prairie Branch which has
developed beyond expectations. The Bank is pleased to have added
the Pine Prairie community to its full service area. Since
opening the Branch in January, 1995, deposits there have
increased by 37 percent.
The Board of Directors has approved the renovation and expansion
of the Bank's main office in Ville Platte. The renovation and
expansion project is scheduled to begin this year and will
provide needed space to accommodate increased operations and to
continue personal, quality services to our customers. Upon
completion of the project, we plan to make new products and
services available to our customers.
Again, we say THANK YOU for allowing Citizens Bank to serve you,
and we ask for your continued support and ideas to help us better
serve you and the Evangeline Parish community.
Sincerely,
Carl W. Fontenot
President & CEO
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL STATEMENT
For a comprehensive review of financial condition and results of
operations of Citizens Bancshares, Inc. (the Company), this
discussion and analysis should be reviewed along with the
information and financial statements presented elsewhere in this
report. The Company is a one-bank holding company whose sole
subsidiary is Citizens Bank, Ville Platte, Louisiana (the Bank).
Citizens Bank, Ville Platte, Louisiana is a commercial banking
institution formed in 1975 under the banking laws of the State of
Louisiana. The Bank operates a main office located in the City of
Ville Platte, Louisiana and also operates branch facilities 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 MASTERCARD. Drive-in facilities are located at
all banking locations.
FINANCIAL CONDITION
Total assets increased by $9,005,877 to $83,169,621, a 12.14%
increase over the year-end 1994 total assets level. This
increase is primarily attributable to the acquisition of the Pine
Prairie Branch which was purchased in January, 1995 from the
American Security Bank of Ville Platte, Louisiana. With
approximately $5,000,000 of the deposits remaining with Citizens
Bank, the acquisition has provided new growth opportunities and
customer relationships for the Bank.
Earning assets, which include loans, investment securities,
federal funds sold, and deposits in other banks were 94.20% of
total assets.
Loans constitute a primary source of income for the Bank. The
Bank desires to make all sound loans its resources will permit.
This lending objective is specifically articulated in the Bank's
written Loan Policy and its written Community Reinvestment Act
Policy. As of December 31, 1995, loans comprised 46.06% of the
Bank's total earning assets. In 1995, the Bank adopted Financial
Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan", which did not have a material effect on
the financial condition of the Bank.
The Bank maintains an allowance for loan losses against which
impaired or uncollectible loans are charged. The balance in the
allowance for loan losses was $832,044 as of December 31, 1995,
which represented 2.25% of total loans outstanding on that date,
and which constituted an increase of $57,988 when compared to the
prior year-end balance. Provisions to the allowance for loan
losses, which were charged to net income of 1995, totaled
$80,000. Management evaluates the adequacy of the allowance for
loan losses on a monthly basis by monitoring the balance in total
loans as well as the past due, nonaccrual, classified, and other
problem loans. On the basis of this evaluation, the allowance
for loan losses is considered adequate to meet possible future
charges for losses in the existing loan portfolio.
Interest income on loans is recognized on the accrual basis for
performing loans. These performing loans included past due loans
which comprised 2.98% of total loans at December 31, 1995; of the
past due loans, 0.39% are 90 days or more past due and continuing
to accrue interest. For nonperforming loans for which doubt
exists as to the borrowers' ability to repay principal and
interest, interest accrual is terminated and interest income is
recognized as collected; this group of nonperforming loans is
referred to as nonaccrual loans and totaled $35,900 at December
31, 1995.
Another primary source of income is interest on investment
securities. The Bank's investment objectives and activities are
guided by a written Investment Policy. The Investment Policy
directs that, to the extent not needed to meet loan demand, funds
be invested to earn maximum returns with minimum risks, and
established liquidity guidelines be observed. Under Financial
Accounting Standards Board Statement No. 115, the Bank
categorizes and accounts for debt securities investments as
either "held-to-maturity" or "available-for-sale"; no investment
securities are held in trading accounts. At December 31, 1995,
securities classified as "held-to-maturity" had an amortized
cost/recorded value of $9,695,216 and a fair value of $9,849,466;
securities classified as "available-for-sale" had a fair/recorded
value of $25,224,122 and an amortized cost of $25,040,392.
The Bank's primary source of funds is customer deposits. Total
customer deposits increased by $7,312,651 in 1995; this increase
was mainly attributed to the acquisition of the Pine Prairie
Branch in January, 1995. The Bank's noninterest-bearing deposit
accounts increased by $566,630 to $7,772,981 at December 31,
1995; the Bank's interest-bearing deposits increased by
$6,746,021 to $67,238,641 at December 31, 1995. The Bank's
customers continue to select interest-bearing deposit accounts
over noninterest-bearing deposit accounts; this trend impacts on
the Bank's net interest income and net income.
RESULTS OF OPERATIONS
The Company reported a net income of $900,138 or $7.83 per
average share outstanding for the year ending December 31, 1995.
Net return on assets was 1.11% and net return on equity was
11.07%.
Net interest income is the Company's principal source of revenue
and is measured by the difference between interest income earned
on loans and investments and interest expense incurred on
deposits. The Company's net interest income for December 31,
1995 increased $33,000 or 3.67%.
Noninterest income, which consists primarily of service charges,
fees on financial services, and investment security transactions,
was $585,168 as of December 31, 1995, as compared to $471,980 as
of December 31, 1994. The most significant increase is
attributed primarily to the $54,999 credit to provision for real
estate writedown for land which had been acquired in a prior year
through foreclosure and was exchanged by the Company for other
land which the Company will use in its banking operations. In
accordance with guidance in the AICPA's Statement of Position
92-3, "Accounting for Foreclosed Assets", the carrying amount of
the property was increased by reducing the related valuation
allowance by $54,999, with a corresponding credit to income. The
new carrying amount at no time exceeded the foreclosed property's
original cost. This foreclosed property plus $15,000 cash was
exchanged for the new property with a fair value of $70,000, and
accounted for in accordance with APB Opinion 29 for such
nonmonetary exchanges.
Noninterest expense as of December 31, 1995 increased by $255,018
as compared to the same period in 1994. Salaries and employee
benefits, the largest component of noninterest expense, increased
$136,633 in 1995. This increase is the result of normal
increases in staff salaries and additional staff needed for the
Pine Prairie Branch. Occupancy expenses increased $47,020 in
1995 as a result of normal increases and the added cost of
operations in the new Pine Prairie Branch.
LIQUIDITY
The primary functions of asset/liability management are to assure
adequate liquidity and maintain an appropriate spread between
interest-earning assets and interest-bearing liabilities.
Liquidity management involves the ability to meet cash flow
requirements of customers who may be either depositors wanting to
withdraw funds or borrowers needing assurance that sufficient
funds will be available to meet their credit needs. Major
elements of the Bank's overall liquidity management capabilities
and financial resources are (1) core deposits, (2) closely
managed maturity structure of loans and deposits, (3) sale and
maturity of assets (primarily investment securities), and, if
necessary, (4) extensions of credit, including federal funds
purchased and securities sold under repurchase agreements. 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 liquidity ratio for the Bank at
year end was 56.75%.
CAPITAL ADEQUACY
Primary capital (shareholders' equity plus a portion of the
allowance for loan losses) as a percent of adjusted total assets
is one of the standard measures of capital adequacy used by bank
regulators. This and other capital measurement ratios serve as
the underlying basis for evaluating the Bank's capital adequacy
and for determining the Bank's insurance fund deposit assessment
charges. As of December 31, 1995, the Bank's ratios were as
follows:
Capital to Assets 9.10%
Risk Based Capital 20.66%
Tier 1 Capital 18.71%
Leverage Ratio 8.68%
The Bank's primary federal regulator, the Federal Deposit
Insurance Corporation (FDIC), annually evaluates the Bank's
capital adequacy and periodically evaluates the Bank's compliance
procedures and asset quality as the basis for assigning the
insurance fund assessment; the objective of a financial
institution is to receive the minimum insurance fund assessment.
In November 1995, the Bank was advised that, based on the FDIC
classification, the assessment for 1996 would be the statutorily
established minimum assessment. For 1995, the Bank's assessment
had also been set at the minimum assessment level. In September
1995, the FDIC retroactively reduced the 1995 minimum insurance
asset rate and refunded over charges to insurance fund premiums
paid for the first and second quarters of 1995. This refund was
applied to the 1995 FDIC assessment expense account. The 1995
assessment rate reduction increased 1995's pretax income by
approximately $68,000.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
of Citizens Bancshares, Inc.
We have audited the accompanying consolidated statements of
financial condition of Citizens Bancshares, Inc. and its
subsidiary as of December 31, 1995 and 1994, and the related
consolidated statements of income, shareholders' equity, and cash
flows for the years then ended. These consolidated financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated
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 consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Citizens Bancshares, Inc. and its
subsidiary as of December 31, 1995 and 1994, and the results of
their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.
BASIL M. LEE And COMPANY,
Certified Public Accountants
Baton Rouge, Louisiana
January 19, 1996
<PAGE>
CITIZENS BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1995 AND 1994
1995 1994
ASSETS
Cash and due from banks $ 2,497,883 $ 1,799,306
Federal funds sold 3,575,000 2,325,000
Cash and cash equivalents 6,072,883 4,124,306
Interest-bearing deposits in banks 3,765,000 3,961,000
Securities available-for-sale, at
fair value 25,224,122 17,069,462
Securities held-to-maturity (fair
value of $9,849,466 in 1995 and
$12,892,846 in 1994) 9,695,216 13,024,376
Loans receivable, net of allowance
for loan losses of $832,044 in
1995 and $774,056 in 1994 36,084,099 33,949,772
Accrued interest receivable 867,653 830,068
Premises and equipment 850,043 602,089
Foreclosed real estate, net of
allowances of $26,849 in 1995
and $174,275 in 1994 28,288 -
Deferred tax asset - 348,416
Other assets 582,317 254,255
Total assets $83,169,621 $74,163,744
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Demand deposits $ 7,772,981 $ 7,206,351
Savings, NOW and money market
accounts 12,693,385 11,587,859
Time deposits $100,000 and more 17,829,252 17,258,713
Other time deposits 36,716,004 31,646,048
Total deposits 75,011,622 67,698,971
Accrued interest payable 480,450 323,988
Deferred tax liability 19,576 -
Accrued expenses and other
liabilities 105,655 92,873
Total liabilities 75,617,303 68,115,832
Shareholders' equity
Common stock, $5 par value,
300,000 shares authorized,
115,000 shares issued and
outstanding 575,000 575,000
Additional paid-in capital 825,000 825,000
Retained earnings
6,028,906 5,186,268
Net unrealized appreciation (depre-
ciation) on available-for-sale
securities, net of tax of $63,576
in 1995 and $277,335 in 1994 123,412 (538,356)
Total shareholders' equity 7,552,318 6,047,912
Total liabilities and share-
holders' equity $83,169,621 $74,163,744
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
CITIZENS BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995 AND 1994
1995 1994
Interest income
Loans receivable $3,465,717 $3,141,863
U. S. Treasury securities 368,750 469,307
Other U. S. Government agencies and
corporations 1,369,908 907,817
States and political subdivisions 204,362 172,744
Federal funds sold 219,909 131,756
Deposits with banks 232,906 204,741
Total interest income 5,861,552 5,028,228
Interest expense
Deposits
Savings, NOW and money market
accounts 359,441 352,925
Time deposits $100,000 and more 982,218 739,998
Other time deposits 1,892,805 1,341,216
Total interest expense 3,234,464 2,434,139
Net interest income 2,627,088 2,594,089
Provision for loan losses 80,000 60,000
Net interest income after provision
for loan losses 2,547,088 2,534,089
Noninterest income
Service charges on deposit accounts 384,659 344,418
Insurance commissions 72,780 78,646
Net realized gains on sales of availa-
ble-for-sale securities 12,221 316
Credit to provision for foreclosed
real estate 54,999 -
Other income 60,509 48,600
Total noninterest income 585,168 471,980
Noninterest expense
Salaries and employee benefits 1,001,911 865,278
Occupancy and equipment expense 193,122 146,102
Computer and courier 128,072 111,473
Stationery and supplies 63,568 59,610
Professional fees 88,122 68,251
FDIC assessment 80,830 154,762
Other expense 323,367 218,498
Total noninterest expense 1,878,992 1,623,974
Income before income taxes 1,253,264 1,382,095
Income tax expense 353,126 386,568
Net income $ 900,138 $ 995,527
Net income per share of common stock $ 7.83 $ 8.66
Average shares outstanding 115,000 115,000
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
CITIZENS BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995 AND 1994
Net
Unrealized
Apprecia-
tion
(Deprecia-
Addi- tion) on Total
tional Available- Share-
Common Paid-in Retained for-Sale holders'
Stock Capital Earnings Securities Equity
Balance at
Decem-
ber 31,
1993 $575,000 $825,000 $4,248,241 $ - $5,648,241
Net unrea-
lized
appre-
ciation
at Janu-
ary 1,
1994, due
to adop-
tion of
S.F.A.S.
115, net
of taxes
of
$49,333 - - - 95,764 95,764
Net income
for 1994 - - 995,527 - 995,527
Cash divi-
dends
paid -
$0.50 per
share - - (57,500) - (57,500)
Net changes
in unrea-
lized
appre-
ciation
(depre-
ciation)
on availa-
ble-for-
sale
securi-
ties,
net of
taxes of
$326,668 - - - (634,120) (634,120)
Balance at
Decem-
ber 31,
1994 575,000 825,000 5,186,268 (538,356) 6,047,912
Net income
for 1995 - - 900,138 - 900,138
Cash divi-
ends
paid -
$0.50 per
share - - (57,500) - (57,500)
Net changes
in unrea-
lized
appre-
ciation
(deprecia-
tion) on
available-
for-sale
securi-
ties, net
of taxes
of
$340,911 - - - 661,768 661,768
Balance at
Decem-
ber 31,
1995 $575,000 $825,000 $6,028,906 $ 123,412 $7,552,318
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
CITIZENS BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995 AND 1994
1995 1994
Cash flows from operating activities
Net income $ 900,138 $ 995,527
Adjustments to reconcile net
income to net cash provided by
operating activities -
Deferred tax expense 27,081 4,401
Depreciation and amortization 78,338 48,894
Provision for loan losses 80,000 60,000
Net realized (gains) on availa-
ble-for-sale securities (12,221) (316)
Provision (credit) for losses
on foreclosed real estate (54,999) -
Net (accretion) amortization of
securities (54,242) 42,384
(Gain) on sales of foreclosed
real estate - (600)
(Increase) in accrued interest
receivable (37,585) (86,684)
(Increase) in other assets (353,395) (107,834)
Increase in accrued interest
payable 156,462 8,650
Increase in accrued expenses
and other liabilities 12,782 24,728
Net cash provided by operating
activities 742,359 989,150
Cash flows from investing activities
Net decrease in interest-bearing
deposits in banks 196,000 1,372,000
Purchases of available-for-sale
securities (10,599,149) (5,549,095)
Proceeds from maturities of availa-
ble-for-sale securities 3,489,635 3,369,229
Purchases of held-to-maturity
securities (4,976,634) (4,293,609)
Proceeds from maturities of held-
to-maturity securities 8,329,790 6,021,000
Net (increase) in loans (2,274,617) (2,234,544)
Proceeds from sales of foreclosed
real estate 32,000 16,600
Net purchases of premises and equip-
ment (245,958) (31,721)
Net cash (used) by investing activi-
ties (6,048,933) (1,330,140)
Cash flows from financing activities
Net increase in demand, savings, NOW
and money market accounts 1,672,156 46,426
Net increase in time deposits
$100,000 and more 570,539 1,827,621
Net increase (decrease) in other
time deposits 5,069,956 (1,793,943)
Dividends paid (57,500) (57,500)
Net cash provided by financing
activities 7,255,151 22,604
Net increase (decrease) in cash
and cash equivalents 1,948,577 (318,386)
Cash and cash equivalents at begin-
ning of year 4,124,306 4,442,692
Cash and cash equivalents at end of
year $ 6,072,883 $ 4,124,306
Interest paid $ 3,078,002 $ 2,425,489
Income taxes paid $ 350,450 $ 391,191
Foreclosed real estate acquired in
satisfaction of loans $ 60,290 $ 15,500
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
CITIZENS BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of Citizens Bancshares,
Inc. (the "Company") and its subsidiary are based on generally
accepted accounting principles and conform to predominant banking
industry practices. Citizens Bank, Ville Platte, Louisiana (the
"Bank") is wholly owned by the Company. The following is a
summary of the significant accounting policies:
Principles of consolidation. The consolidated financial
statements of the Company include the accounts of the Company and
its subsidiary. All material intercompany transactions and
accounts have been eliminated.
Nature of operations. The Bank provides a variety of financial
services to individual and business customers through its three
offices in Evangeline Parish, Louisiana, which is primarily an
agricultural area. The Bank's primary deposit products are
checking and savings accounts and certificates of deposit. Its
primary lending products are agricultural, real estate, and
consumer loans.
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
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
Material estimates that are particularly susceptible to
significant change relate to the determination of the allowance
for losses on loans and the valuation of real estate acquired in
connection with foreclosures or in satisfaction of loans. In
connection with the determination of the allowances for losses on
loans and foreclosed real estate, management obtains independent
appraisals for significant properties.
While management uses available information to recognize losses
on loans and foreclosed real estate, future additions to the
allowances may be necessary based on changes in local economic
conditions, which depends heavily on the agricultural industry.
In addition, regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowances
for losses on loans and foreclosed real estate. Such agencies
may require the Bank to recognize additions to the allowances
based on their judgments about information available to them at
the time of their examination. Because of these factors, it is
reasonably possible that the allowances for losses on loans and
foreclosed real estate may change materially in the near term.
Investment securities. Under Statement of Financial Accounting
Standards Number 115, "Accounting for Certain Investments in Debt
and Equity Securities," investment securities are classified in
two categories and accounted for as follows:
Held-to-Maturity. Bonds and notes for which the Bank has
the positive intent and ability to hold to maturity are
reported at cost, adjusted for amortization of premiums and
accretion of discounts which are recognized in interest
income using the interest method over the period to
maturity.
Available-for-Sale. Securities available-for-sale consist
of bonds and notes not classified as securities
held-to-maturity.
Declines in the fair value of individual held-to-maturity and
available-for-sale securities below their cost that are other
than temporary result in write-downs of the individual securities
to their fair value. The related write-downs are included in
earnings as realized losses. Unrealized holding gains and
losses, net of tax, on securities available-for-sale are reported
as a net amount in a separate component of shareholders' equity
until realized. Gains and losses on the sale of securities
available-for-sale are determined using the
specific-identification method.
Loans receivable and allowance for loan losses. Loans are stated
at the amount of unpaid principal reduced by unearned income and
the allowance for loan losses. Unearned income on discounted
loans is recognized as income over the term of the loans using a
method that approximates the interest method. Interest on other
loans is calculated by using the simple interest method on daily
balances of the principal amount outstanding. Loans are
generally placed on nonaccrual when a loan is specifically
determined to be impaired or when principal or interest is
delinquent for ninety days or more. Interest income generally is
not recognized on specific impaired loans unless the likelihood
of further loss is remote. Interest payments received on such
loans are applied as a reduction of the loan principal balance.
The allowance for loan losses represents an amount which, in
management's judgment, will be adequate to absorb possible losses
on existing loans that may become uncollectible. The amount of
the allowance is based on management's evaluation of the
collectibility of the loan portfolio, including the nature of the
portfolio, credit concentrations, trends in historical loss
experience, specific impaired loans, and economic conditions.
Allowances for impaired loans are generally determined based on
collateral values. Ultimate losses may vary from current
estimates. The allowance is increased by a provision for loan
losses, which is charged to expense, and reduced by charge-offs,
net of recoveries.
Premises and equipment. Premises and equipment are stated at
cost less accumulated depreciation computed principally on the
straight-line method over the estimated useful lives of the
assets. Expenditures for repairs and maintenance are charged to
expense as incurred. Upon retirement or disposal, the cost and
related depreciation are removed from the accounts and gain or
loss, if any, is reflected in the income statement.
Foreclosed real estate. Properties acquired in satisfaction of
indebtedness to the Bank are carried at the lower of cost or
estimated fair market value, based on appraisals and other
relevant factors. Estimated holding periods vary, but are
generally subject to a maximum of ten years. Subsequent write
downs, revenues and expenditures, except capital expenditures,
are charged to operations.
Income taxes. Provision for deferred income taxes is made as a
result of temporary differences between financial and taxable
bases of assets and liabilities. The differences relate
principally to depreciation of office buildings and equipment,
the provision for real estate losses, accretion of discounts on
investment securities and the provision for loan losses.
Earnings per share. Earnings per share are calculated on the
basis of the weighted average number of shares outstanding.
Cash equivalents. For purposes of the statement of cash flows,
the Company considers due from bank accounts and federal funds
sold to be cash equivalents.
Fair values of financial instruments. Statement of Financial
Accounting Standards number 107, "Disclosures about Fair Value of
Financial Instruments", requires disclosure of fair value
information about financial instruments, whether or not
recognized in the statement of financial condition. In cases
where quoted market prices are not available, fair values are
based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the
assumptions used, including the discount rate and estimates of
future cash flows. In that regard, the derived fair value
estimates cannot be substantiated by comparison to independent
markets and, in many cases, could not be realized in immediate
settlement of the instruments. Statement 107 excludes certain
financial instruments and all nonfinancial instruments from its
disclosure requirements. Accordingly, the aggregate fair value
amounts presented do not represent the underlying value of the
Company.
Dividends. Prior approval of the Commissioner of the Louisiana
Office of Financial Institutions is required for the Bank to pay
dividends if the total of all dividends declared and paid during
any one year would exceed the total of net profits of that year
combined with the net profits from the immediately preceding
year.
Reclassifications. Certain reclassifications have been made to
the prior years' financial statements which have no effect on net
income as previously reported, to conform to current year
reporting.
RESTRICTIONS ON CASH AND DUE FROM BANKS
The Bank is required to maintain average reserve balances by the
Federal Reserve Bank. The average amounts of these reserve
balances for the years ended December 31, 1995 and 1994 were
approximately $204,000 and $168,000, respectively.
INVESTMENT SECURITIES
The amortized cost and estimated fair values of investments in
debt securities are as follows:
December 31, 1995
Securities Gross Gross Estimated
available- Amortized Unrealized Unrealized Fair
for-sale: Cost Gains Losses Value
U. S. Treasury
securities $ 2,995,133 $ 26,671 $ 3,445 $ 3,018,359
U. S. Govern-
ment agen-
cies and
corporations 19,001,281 142,478 57,064 19,086,695
Mortgage-backed
securities 3,043,978 84,027 8,937 3,119,068
$25,040,392 $ 253,176 $ 69,446 $25,224,122
Securities
held-to-
maturity:
U. S. Treasury
securities $ 2,198,654 $ 10,704 $ 202 $ 2,209,156
U. S. Govern-
ment agen-
cies and
corporations 2,585,158 25,702 8,944 2,601,916
Obligations of
states and
political
subdivisions 4,578,592 131,919 5,981 4,704,530
Mortgage-backed
securities 332,812 1,052 - 333,864
$ 9,695,216 $ 169,377 $ 15,127 $ 9,849,466
Securities
pledged to
secure pub-
lic deposits
and for
other pur-
poses $ 4,507,308 $ 4,530,117
December 31, 1994
Securities Gross Gross Estimated
available- Amortized Unrealized Unrealized Fair
for-sale: Cost Gains Losses Value
U. S. Treasury
securities $ 2,302,791 $ - $ 100,643 $ 2,202,148
U. S. Govern-
ment agen-
cies and
corporations 14,775,322 250 675,661 14,099,911
Mortgage-backed
securities 807,039 245 39,882 767,402
$17,885,152 $ 495 $ 816,186 $17,069,461
Securities
held-to-
maturity:
U. S. Treasury
securities $ 6,535,898 $ 182 $ 103,097 $ 6,432,983
U. S. Govern-
ment agen-
cies and
corporations 3,102,478 1,392 25,170 3,078,700
Obligations of
states and
political sub-
divisions 3,386,000 51,416 56,253 3,381,163
$13,024,376 $ 52,990 $ 184,520 $12,892,846
Securities
pledged to
secure public
deposits and
for other
purposes $ 3,609,130 $ 3,566,947
The following is a summary of maturities of securities
available-for-sale and held-to-maturity as of December 31, 1995:
Securities Securities
available-for-sale held-to-maturity
Contractual Amortized Estimated Amortized Estimated
maturities: Cost Fair Value Cost Fair Value
Due in one
year or less $ 8,725,501 $ 8,704,096 $ 3,423,584 $ 3,447,585
Due after one
year through
five years 13,270,913 13,400,958 4,545,430 4,623,310
Due after five
years through
ten years - - 1,393,390 1,444,707
Mortgage-backed
securities 3,043,978 3,119,068 332,812 333,864
$25,040,392 $25,224,122 $ 9,695,216 $ 9,849,466
Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
Proceeds from calls of investments in debt securities during 1995
and 1994 were $3,651,500 and $3,100,000. Gross gains of $12,221
and $316 were realized on those dispositions in 1995 and 1994,
respectively.
LOANS RECEIVABLE
Most of the Bank's loan customers are in Evangeline Parish,
Louisiana and its adjacent parishes. Major classifications of
loans at December 31 are as follows:
1995 1994
Commercial $ 7,922,988 $ 7,490,587
Agricultural 3,211,438 4,092,847
Real estate - mortgage 18,014,597 15,747,855
Municipal 118,742 232,949
Consumer 8,157,081 7,683,081
Overdrafts 17,399 26,974
37,442,245 35,274,293
Unearned income (526,102) (550,465)
Allowance for possible loan losses (832,044) (774,056)
Loans, net $36,084,099 $33,949,772
Changes in the allowance for possible loan losses for the years
1995 and 1994 were:
1995 1994
Balance, beginning of year $774,056 $719,590
Provision charged to operations 80,000 60,000
Loans charged off (58,842) (60,049)
Recoveries 36,830 54,515
Balance, end of year $832,044 $774,056
The Company adopted Statement of Financial Accounting Standards
number 114, "Accounting by Creditors for Impairment of a Loan",
in 1995, which did not have a material effect on financial
condition or the results of operations. At December 31, 1995,
loans totaling $171,495 were specifically classified as impaired.
Of the total impaired loans at December 31, 1995, $171,495 had a
related allowance for loan losses of $36,552. The average
balance of these loans in 1995 was approximately $172,000. In
1995, interest income recognized on impaired loans was
approximately $10,224. No commitments to loan additional funds
to borrowers of impaired loans were outstanding at December 31,
1995.
At December 31, 1994, loans on which the accrual of interest has
been discontinued amounted to $76,203. Interest lost and
interest collected on these nonaccrual loans in 1994 approximated
$2,112 and $0, respectively. Loans that were past due ninety
days or more and still accruing interest at December 31, 1994
totaled $117,467.
RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Bank has loans, deposits
and other transactions with its executive officers, directors and
organizations with which such persons are associated. Such
transactions are on substantially the same terms, including
interest rates and collateral, as those prevailing at the time
for comparable transactions with others. The aggregate amounts
of loans to such related parties as of December 31, 1995 and 1994
were $959,499 and $935,981, respectively. An analysis of
activity of these loans in 1995 and 1994 follows:
1995 1994
Balance, beginning of year $ 935,981 $ 930,781
New loans 1,243,610 1,133,777
Repayments (1,220,092) (1,128,577)
Balance, end of year $ 959,499 $ 935,981
Deposits held by the Bank at December 31, 1995 and 1994 for these
related parties were $3,460,004 and $2,884,640. During the years
ended December 31, 1995 and 1994, legal fees were paid to a
director in the amounts of $23,946 and $16,347.
PREMISES AND EQUIPMENT
Major classifications of these assets at December 31, 1995 and
1994 are as follows:
1995 1994
Land $ 241,230 $ 164,230
Buildings 714,759 537,737
Furniture and equipment 377,680 330,743
Automobiles 37,216 37,216
1,370,885 1,069,926
Accumulated depreciation (520,842) (467,837)
Premises and equipment, net $ 850,043 $ 602,089
FORECLOSED REAL ESTATE
Real estate which was acquired through loan foreclosures totaled
$28,288 and $0 at December 31, 1995 and 1994, respectively.
Foreclosed real estate is presented net of an allowance for
losses. A summary of activity in the allowance follows:
1995 1994
Balance, beginning of year $174,275 $232,909
Losses charged to the allowance (92,427) (58,634)
Credit to provision for foreclosed
real estate (54,999) -
Balance, end of year $ 26,849 $174,275
FINANCIAL INSTRUMENTS
The Bank is a party to financial instruments with off-balance
sheet risk in the normal course of business to meet the financing
needs of its customers. These financial instruments include
commitments to extend credit and standby letters of credit, which
involve credit risk in excess of the amounts recognized in the
balance sheets. The Bank's exposure to credit loss in the event
of nonperformance by the other party to these financial
instruments is represented by the contractual amounts of the
instruments. The Bank uses the same credit policies in
making commitments and conditional obligations as it does for
on-balance sheet instruments, including collateral or other
security to support the financial instruments.
At December 31, 1995 and 1994, commitments to extend credit
totaled $1,336,334 and $1,291,747. These commitments are
agreements to lend to a customer as long as there is no violation
of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since many of the
commitments may expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash
requirements.
At December 31, 1995 and 1994, commitments under standby letters
of credit totaled $340,230 and $366,080. Standby letters of
credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. The
credit risk involved in issuing letters of credit is essentially
the same as that involved in extending loans to customers.
The estimated fair values of the Company's financial instruments
at December 31, 1995 are as follows:
Carrying Fair
Amount Value
Financial assets:
Cash and due from banks $ 2,497,883 $ 2,498,000
Federal funds sold 3,575,000 3,575,000
Securities available-for-sale 25,224,122 25,224,000
Securities held-to-maturity 9,695,216 9,849,000
Loans receivable 36,084,099 36,024,000
Financial liabilities:
Deposits 75,011,622 75,197,000
Unrecognized financial instruments:
Commitments to extend credit - 2,000
Standby letters of credit - 3,000
The following methods and assumptions were used by the Company in
estimating fair values of financial instruments:
Cash, due from banks, and federal funds sold. The carrying
amount is a reasonable estimate of fair value.
Securities. Fair value is based on quoted market price, if
available. If a quoted market price is not available, fair value
is estimated using quoted market prices for similar securities.
Loans receivable. The fair value is estimated by discounting the
estimated future cash flows using the current rates at which
similar loans would be made to borrowers with similar credit
ratings and for the same remaining maturities.
Deposits. The fair value of demand, savings, NOW and money
market accounts is the amount payable on demand at the reporting
date. The fair value of fixed-maturity time deposits is
estimated using the rates currently offered for deposits of
similar remaining maturities.
Commitments to extend credit and standby letters of credit. The
fair value is estimated using the fees currently charged to enter
into similar agreements, taking into account the remaining terms
of the agreements and the present creditworthiness of the
counterparties.
INCOME TAXES
The income tax expense included in the consolidated statements of
income consists of:
1995 1994
Current expense $326,045 $382,167
Deferred expense 27,081 4,401
$353,126 $386,568
The effective income tax rates were 28.2% and 28.0% in 1995 and
1994, respectively. The differences between the effective tax
rates and the statutory federal income tax rates were:
1995 1994
Statutory federal income tax rates 34.0% 34.0%
Nontaxable income (6.0%) (5.0%)
Nondeductible expenses 1.2% 2.1%
Charitable contribution of appreciated
property (1.3%) (3.0%)
Other 0.3% (0.1%)
28.2% 28.0%
At December 31, 1995 and 1994, a net deferred tax asset
(liability) of $(19,576) and $348,416 was recorded which
consisted of:
1995 1994
Net depreciation (appreciation) on
securities available-for-sale $(63,576) $277,335
Provision for possible loan losses 98,253 78,537
Provision for real estate losses 9,128 59,254
Deferred compensation expense 10,238 13,983
Depreciation expense (74,106) (72,482)
Accretion of discounts on investments (24,666) (8,211)
Tax basis over book value of land 25,153 -
$(19,576) $348,416
No valuation allowance was recorded to reduce the deferred tax
asset at December 31, 1994.
COMMITMENTS AND CONTINGENCIES
On October 7, 1994, the Bank entered into an agreement to
purchase a branch bank of an unrelated bank in Pine Prairie,
Louisiana, including land, building, furniture and equipment, and
customer deposit accounts. The purchase was consummated on
January 11, 1995 for a price of $520,000, including $140,000 for
the physical assets and $380,000 as a premium on approximately
$5,500,000 in deposit accounts. The premium is being amortized
for fifteen years under the straight-line method.
At December 31, 1995 and 1994, the Bank had available unused
federal funds lines of credit with other banks totaling
$1,750,000. The lines are unsecured and have variable interest
rates based on the lending bank's daily federal funds rates.
In December, 1995, the Bank contracted with a company to develop
and implement a planned expansion of the main office. No plans
and cost estimates have been submitted to Bank management for
review and approval. Management expects construction to begin
sometime in 1996.
DEPOSITS
At December 31, 1995, the scheduled maturities of time deposits
are as follows:
$100,000 Other time
and more deposits
1996 $15,718,699 $32,142,698
1997 1,810,553 4,452,466
1998 300,000 120,840
$17,829,252 $36,716,004
REGULATORY MATTERS
The Bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory, and
possible discretionary, actions by regulators that, if
undertaken, could have a direct material effect on the Bank's
financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must
meet specific capital guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain
off-balance sheet items as calculated under regulatory accounting
practices. The Bank's capital amounts and classification are
also subject to qualitative judgments by the regulators about
components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital
adequacy require the Bank to maintain minimum amounts and ratios
of total and Tier 1 capital, as defined in the regulations, to
risk-weighted assets, as defined, and of Tier 1 capital to
average assets, as defined. Management believes, as of December
31, 1995, that the Bank meets all capital adequacy requirements
to which it is subject.
As of December 31, 1995, the most recent notification from the
Federal Deposit Insurance Corporation categorized the Bank as
well capitalized under the regulatory framework for prompt
corrective action. To be categorized as well capitalized, the
Bank must maintain a total risk-based capital ratio of 10% or
higher, Tier 1 risk-based capital ratio of 6% or higher, and Tier
1 leverage capital ratio of 5% or higher. No conditions or
events have occurred since that notification that management
believes have changed the Bank's category.
PARENT COMPANY STATEMENTS
The financial statements of Citizens Bancshares, Inc. (parent
company only) follow:
STATEMENTS OF FINANCIAL CONDITION
December 31,
1995 1994
ASSETS
Investment in subsidiary at equity in
underlying net assets - Citizens
Bank, Ville Platte, Louisiana $7,548,589 $6,045,473
Cash and cash equivalents 3,729 2,439
Total assets $7,552,318 $6,047,912
LIABILITIES AND SHAREHOLDERS' EQUITY
Total liabilities $ - $ -
Common stock 575,000 575,000
Capital surplus 825,000 825,000
Retained earnings 6,028,906 5,186,268
Net unrealized appreciation (depre-
ciation) on available-for-sale
securities of subsidiary, net of
taxes 123,412 (538,356)
Total shareholders' equity 7,552,318 6,047,912
Total liabilities and sharehold-
ers' equity $7,552,318 $6,047,912
STATEMENTS OF INCOME
Years ended December 31,
1995 1994
INCOME
Equity in undistributed net income
of bank subsidiary $ 841,348 $ 936,356
Dividends from bank subsidiary 61,000 60,000
902,348 996,356
EXPENSES
Other 2,210 829
2,210 829
Net income $ 900,138 $ 995,527
STATEMENTS OF CASH FLOWS
Years ended December 31,
1995 1994
Cash flows from operating activities
Net income $ 900,138 $ 995,527
Adjustments to reconcile net income
to net cash provided by operating
activities -
Equity in undistributed net
income of bank (841,348) (936,356)
Net cash provided by operating activi-
ties 58,790 59,171
Cash flows from investing activities - -
Cash flows from financing activities
Dividends paid (57,500) (57,500)
Net cash (used) by financing activi-
ties (57,500) (57,500)
Net increase in cash and cash equiva-
lents 1,290 1,671
Cash and cash equivalents, beginning of
year 2,439 768
Cash and cash equivalents, end of year $ 3,729 $ 2,439
BANK FINANCIAL STATEMENTS
The statements of financial condition and statements of income
for Citizens Bank, Ville Platte, Louisiana (bank only) follow:
STATEMENTS OF FINANCIAL CONDITION
December 31,
1995 1994
ASSETS
Cash and due from banks $ 2,497,883 $ 1,799,306
Federal funds sold 3,575,000 2,325,000
Interest-bearing deposits in banks 3,765,000 3,961,000
Investment securities 34,919,338 30,093,837
Loans, net of unearned discount 36,916,143 34,723,828
Allowance for possible loan losses (832,044) (774,056)
Premises and equipment, net 850,043 602,089
Other real estate 28,288 -
Deferred tax asset - 348,416
Accrued interest receivable 867,653 830,068
Other assets 582,317 254,256
Total assets $83,169,621 $74,163,744
LIABILITIES AND SHAREHOLDER'S EQUITY
Demand deposits $ 7,776,710 $ 7,208,790
Savings, NOW and money market
deposits 12,693,385 11,587,859
Certificates and other time deposits 54,545,256 48,904,761
Accrued interest payable 480,450 323,988
Deferred tax liability 19,576 -
Other liabilities 105,655 92,873
Common stock 575,000 575,000
Capital surplus 4,000,000 2,000,000
Retained earnings 2,850,177 4,008,829
Net unrealized appreciation (deprecia-
tion) on securities available-for-
sale, net of taxes 123,412 (538,356)
Total liabilities and share-
holder's equity $83,169,621 $74,163,744
STATEMENTS OF INCOME
Years ended December 31,
1995 1994
INCOME
Interest income
Loans $3,465,717 $3,141,863
Investment securities 1,943,020 1,549,868
Federal funds sold 219,909 131,756
Deposits with banks 232,906 204,741
5,861,552 5,028,228
Interest expense
Deposits 3,234,464 2,434,138
Net interest income 2,627,088 2,594,090
Provision for loan losses 80,000 60,000
Net interest income after provision
for loan losses 2,547,088 2,534,090
Noninterest income 585,168 471,979
Noninterest expense 1,876,782 1,623,145
Income tax expense 353,126 386,568
Net income $ 902,348 $ 996,356
<PAGE>
DESCRIPTION OF BUSINESS
Citizens Bancshares, Inc. (the "Company") is a Louisiana business
corporation and a one-bank holding company registered under the
federal Bank Holding Company Act of 1956. It was formed in 1983
primarily for the purpose of holding all of the outstanding stock
of Citizens Bank, Ville Platte, LA (the "Bank"), which is the
Company's sole subsidiary.
The Bank was formed under the banking laws of the State of
Louisiana. The Bank conducts a general commercial banking
business through its main office in Ville Platte, Louisiana and
branch offices in Mamou, Louisiana and Pine Prairie, Louisiana.
The Bank offers a full range of traditional commercial banking
services, including demand, savings and time deposits, consumer,
commercial and real estate loans, safe-deposit boxes and access
to two retail credit plans -- "VISA" and "Mastercard". The Bank
does not offer trust services. Drive-in banking facilities are
located at all banking locations.
The Bank competes actively with national and state banks and
savings and loan institutions in Louisiana for all types of loans
and deposits. The Bank competes for loans with other financial
institutions, such as insurance companies, real estate investment
trusts, savings and loans, small loan companies, credit unions
and certain government agencies.
As of December 31, 1995, the Company and the Bank had
approximately 36 full time equivalent employees. The Company has
no salaried employees, although certain executive officers hold
parallel positions with the Bank. No employees are represented
by unions or other bargaining units, and management considers its
relations with employees to be satisfactory.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Citizens Bancshares, Inc. stock is not listed on any stock
exchange or over-the-counter markets. The below transaction
prices reflect only a limited number of transactions that have
come to the attention of management. No assurance can be given
that such prices represent the actual market value of the
Company's common stock. At December 31, 1995, there were 448
holders of record of the Company's common stock.
1995 1994
Per share stock transactions High Low High Low
First quarter $13 $11 $13 $11
Second quarter 13 11 13 11
Third quarter 15 12 15 12
Fourth quarter 15 12 15 12
Dividends per share $0.50 $0.50
The annual report of Citizens Bancshares, Inc. and subsidiary as
filed with the Securities and Exchange Commission on Form 10-KSB
is available on request to any shareholder free of charge by
writing to Carl Fontenot, President, Citizens Bancshares, Inc.,
P. O. Box 598, 841 W. Main, Ville Platte, Louisiana, 70586.
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Directors and the principal executive officers
of the Company and its only subsidiary, Citizens
Bank, Ville Platte, Louisiana
are as follows:
NAME PRINCIPAL OCCUPATION
Curley Courville Director of the Bank since
1975; Director of the
Company since 1983; Retired
investor
Carl W. Fontenot Director of the Bank since
1975; Director of the
Company since 1983;
President and C.E.O. of
Citizens Bank and Citizens
Bancshares, Inc.
Eugene S. Fontenot Director & Secretary of the
Bank since 1975; Director &
Secretary of the Company
since 1983; Owner and
President of Euco Finance
Co., Inc.
J. Jake Fontenot Director of the Bank since
1977; Director of the
Company since 1983; Attorney
at Law
Otis Fontenot Director of the Bank since
1975; Director of the
Company since 1983; Retired
planter
Fredrick Phillips Director of the Bank since
1975; Director of the
Company since 1983; Owner of
F. Phillips General
Contractors, Inc.
J. B. Veillon Director & Vice-Pres. of the
Bank since 1975; Director &
Vice-Pres. of the Company
since 1983; Retired retailer
Roderick Young Director of the Bank since
1977; Director of the
Company since 1983; Owner of
R & R Auto Parts
Jules Hebert Director of the Bank since
1980; Director of the
Company since 1983; Owner
and President of Farmers Gas
Co., Inc., propane and
butane gas distributor
Wayne Vidrine Executive Vice President and
Cashier of Citizens Bank;
Treasurer of Citizens
Bancshares, Inc.
Stephen P. Mayeux Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 2498
<INT-BEARING-DEPOSITS> 3765
<FED-FUNDS-SOLD> 3575
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 25224
<INVESTMENTS-CARRYING> 9695
<INVESTMENTS-MARKET> 9849
<LOANS> 36916
<ALLOWANCE> 832
<TOTAL-ASSETS> 83170
<DEPOSITS> 75012
<SHORT-TERM> 0
<LIABILITIES-OTHER> 606
<LONG-TERM> 0
0
0
<COMMON> 575
<OTHER-SE> 6977
<TOTAL-LIABILITIES-AND-EQUITY> 83170
<INTEREST-LOAN> 3466
<INTEREST-INVEST> 1943
<INTEREST-OTHER> 453
<INTEREST-TOTAL> 5862
<INTEREST-DEPOSIT> 3234
<INTEREST-EXPENSE> 3234
<INTEREST-INCOME-NET> 2628
<LOAN-LOSSES> 80
<SECURITIES-GAINS> 12
<EXPENSE-OTHER> 1879
<INCOME-PRETAX> 1253
<INCOME-PRE-EXTRAORDINARY> 900
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 900
<EPS-PRIMARY> 7.83
<EPS-DILUTED> 7.83
<YIELD-ACTUAL> 3.39
<LOANS-NON> 36
<LOANS-PAST> 155
<LOANS-TROUBLED> 245
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 774
<CHARGE-OFFS> 59
<RECOVERIES> 37
<ALLOWANCE-CLOSE> 832
<ALLOWANCE-DOMESTIC> 832
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
