SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - QSB
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) TO THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) TO THE EXCHANGE ACT
For the transition period from ____________ to _____________
Commission File No: 0 - 14535
CITIZENS BANCSHARES CORPORATION
(Name of small business issuer in its charter)
Georgia 58 - 1631302
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
175 John Wesley Dobbs Avenue, N.E., Atlanta, Georgia 30303
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (404) 659 - 5959
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 90 days. Yes X No .
State the number of shares outstanding if each of the issuer's classes of common
equity as of the latest practicable date: 2,164,065 shares of Common Stock,
$1.00 par value, outstanding on November 1, 1998.
Part I. Financial Information:
Citizens Bancshares Corporation and Subsidiaries
Consolidated Balance Sheets
September 30, 1998 and December 31, 1997
(unaudited-amounts in thousands, except per share amounts)
ASSETS
1998 1997
Cash and due from banks $ 10,123 10,637
Interest bearing deposits 13,153 857
Federal funds sold 37 3,456
Investment securities:
Held to maturity 16,441 13,164
Available for sale 23,177 21,740
Other Investments 1,271 2,000
Total investments 40,889 36,904
Loans, net of unearned income 119,195 121,414
Less allowance for loan losses 1,746 1,752
Loans, net 117,449 119,662
Loans held for sale 364 623
Premises and equipment, net 6,094 5,844
Cash value of life insurance 3,985 3,640
Other assets 3,816 4,122
Total assets $ 195,910 185,745
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing $ 45,330 43,633
Interest-bearing 128,655 120,311
Total deposits 173,985 163,944
Treasury, tax and loan account 48 195
Short-term debt 1,478 1,851
Long-term debt - 585
Other liabilities 1,977 2,349
Total liabilities 177,488 168,924
Shareholders' equity:
Common stock-$1 par value. Authorized
5,000,000 shares; issued and
outstanding 2,164,065 shares 2,164 2,164
Additional Paid-In Capital 6,174 6,174
Accumulated other comprehensive income 845 643
Retained earnings 9,239 7,840
Total shareholders' equity 18,422 16,821
Total liabilities and
shareholders' equity $ 195,910 185,745
Citizens Bancshares Corporation and Subsidiaries
Consolidated Statements of Earnings and Comprehensive Income
(unaudited-amounts in thousands, except per share amounts)
Three Months Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
<TABLE>
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans, including fees $ 2,888 2,921 8,585 8,329
Investment securities:
Taxable 469 613 1,431 2,148
Tax-exempt 110 37 234 168
Interest bearing deposits 119 13 420 22
Federal funds sold 17 21 99 137
Total interest income 3,603 3,605 10,769 10,804
INTEREST EXPENSE:
Deposits 1,260 1,185 3,737 3,703
Other borrowed funds 23 60 52 127
Long-term debt - 15 17 45
Total interest expense 1,283 1,260 3,806 3,875
Net interest income 2,320 2,345 6,963 6,929
Provision for loan losses 75 75 125 165
Net interest income after provision
for loan losses 2,245 2,270 6,838 6,764
NONINTEREST INCOME:
Service charges on
deposit accounts 1,046 1,143 3,030 3,197
Commission and fees 758 400 2,128 936
Other operating income 205 134 705 597
Total noninterest income 2,009 1,677 5,863 4,730
NONINTEREST EXPENSE:
Salaries and employee benefits 1,773 1,997 5,392 5,913
Net occupancy and equipment 666 634 1,962 1,785
Other operating expenses 1,196 1,059 3,433 3,230
Total other expense 3,635 3,690 10,787 10,928
Earnings before income taxes 619 257 1,914 566
Income tax expense 169 78 515 162
Net earnings $ 450 179 1,399 404
Net earnings 450 179 1,399 404
Other comprehensive income, net of tax
Unrealized holding gains arising
during the period 201 69 214 157
Less: reclassification adjustment
for gains included in net earnings - (13) (12) (13)
Comprehensive income 651 235 1,601 548
Net earnings per common share $ 0.21 0.08 0.65 0.19
Average outstanding shares 2,164 2,164 2,164 2,164
</TABLE>
Citizens Bancshares Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Nine months ended September 30, 1998 and 1997
(unaudited-amounts in thousands, except per share amounts)
1998 1997
Cash flows from operating activities
Net earnings $ 1,399 404
Adjustments to reconcile net earnings
to net cash provided by operating activities
Provision for loan losses 125 165
Depreciation and amortization 867 859
Provision for deferred taxes (3) 4
Amortization (accretion), net 2 (10)
Accretion (amortization) of deferred loan fees 52 30
Gain on investments (12) (13)
Loss on sale of assets 228 -
Increase in other assets (1,103) (3,786)
Increase in accrued expenses and other liabilities (372) 189
Net cash (used) provided by operating activities 1,183 (2,158)
Cash flows from investing activities:
Proceeds from maturities of investment securities
held to maturity 7,488 8,501
Proceeds from maturities of investment securities
available for sale 11,185 11,411
Purchases of investment securities held to maturity (789) -
Purchases of investment securities available for sale (22,296) (6,616)
Net decrease ( increase) in other investments 729 (1,130)
Net decrease (increase) in loans 2,218 (5,522)
Purchases of premises and equipment (1,122) (1,111)
Proceeds from sale of real estate acquired through
foreclosure 831 95
Net cash (used) provided by investing activities (1,756) 5,628
Cash flows from financing activities:
Net increase (decrease) in demand deposits 1,697 (14,449)
Net increase in time and savings deposits 8,344 (1,840)
Net (decrease) increase in short-term debt (373) 1,100
Principal payment on long-term debt (585) (135)
Proceeds from sale of stock - 261
Dividends paid - (28)
Net (decrease) increase in treasury,
tax and loan account (147) 45
Net cash provided (used) by financing activities 8,936 (15,046)
Net increase (decrease) in cash and cash equivalents 8,363 (11,576)
Cash and cash equivalents at beginning of period 14,950 23,327
Cash and cash equivalents at end of period $ 23,313 11,751
Supplemental disclosures of cash paid during the period for:
Interest $ 4,010 3,867
Income taxes $ 695 112
Supplemental disclosures of noncash transactions:
Real estate acquired through foreclosure $ 118 836
CITIZENS BANCSHARES CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
September 30, 1998 and 1997
(unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited statements have been prepared pursuant to the rules
and regulations for reporting on Form 10 - QSB. Accordingly, certain
disclosures required by generally accepted accounting principles are not
included herein. These interim statements should be read in conjunction with
the financial statements and notes thereto included in the company's latest
Annual Report on Form 10 - KSB.
On January 30, 1998, Citizens Bancshares Corporation ( the "Company" ) and
First Southern Bancshares, Inc. (" First Southern"), a bank holding company
that wholly owned one bank and a non-bank subsidiary, merged. The Company
exchanged 1.508 shares of its common stock to acquire each share of First
Southern common stock. The transaction was a tax-free exchange. The merger
was accounted for as a pooling of interest with the Company being the
surviving entity. The financial statements of the Company for the
three and nine month periods ended September 30, 1998 have been restated to
include First Southern.
First Southern also owned FSB Mortgage Services, Inc. ("FSB Mortgage") which
originates residential mortgages through a variety of products. The mortgage
subsidiary is now wholly owned by the Company and has changed its name to
Citizens Trust Bank Mortgage Services, Inc. ("CTB Mortgage") to reflect this
affiliation.
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries, Citizens Trust Bank ( the "Bank" ) and CTB
Mortgage. The Bank has a wholly owned subsidiary, Atlanta Mortgage Brokerage
and Servicing Co., whose accounts are also included. All significant
intercompany accounts and transactions have been eliminated in consolidation.
The consolidated financial statements of Citizens Bancshares Corporation and
Subsidiaries ( the "Company" ) as of September 30, 1998 and for the three
and nine month periods ended September 30,1998 and 1997 are unaudited. In
the opinion of management, all adjustments necessary for a fair presentation
of the financial position and results of operations and cash flows for the
three month period have been included. All adjustments are of a normal
recurring nature.
2. ACCOUNTING AND REGULATORY MATTERS
IMPAIRED LOANS
Management considers a loan to be impaired when, based on current information
and events, it is probable that all amounts due according to the contractual
terms of the loan will not be collected. Impaired loans are measured based
on the present value of expected
future cash flows, discounted at the loan?s effective interest rate, or at
the loan's observable market price, or the fair value of the collateral if
the loan is collateral dependent.
Loans are generally placed on nonaccrual status when the full and timely
collection of principal or interest becomes uncertain or the loan becomes
contractually in default for 90 days or more as to either principal or
interest unless the loan is well collateralized and in the process of
collection. When a loan is placed on nonaccrual status, current period
accrued and uncollected interest is charged to interest income on loans unless
management feels the accrued interest is recoverable through the liquidation
of collateral. Interest income, if any, on nonaccrual loans is generally
recognized on the cash basis.
At September 30, 1998, the recorded investment in loans that are considered
to be impaired was approximately $814,000, a decrease of $416,000 from
December 31, 1997. At September 30, 1998 and December 3, 1998 the related
allowance for loan losses for each of these loans was approximately $116,000
and $244,000, respectively. For the three and nine month periods ended
September 30, 1998, the Company recognized approximately $6,000 and $13,000
in interest income on these impaired loans on an accrual basis, respectively.
NONPERFORMING ASSETS
Nonperforming assets include nonperforming loans, real estate acquired through
foreclosure and repossessed assets. Nonperforming loans consist of loans
which are past due with respect to principal or interest more than 90 days
or have been placed on nonaccrual status.
With the exception of the loans included within nonperforming assets in the
table below, management is not aware of any loans classified for regulatory
purposes as loss, doubtful, substandard, or special mention that have not
been disclosed which(1) represent or result from trends or uncertainties
which management reasonably expects will materially impact future operating
results, liquidity, or capital resources, or (2) represent any information on
material credits of which management is aware that causes management to have
serious doubts as to the abilities of such borrowers to comply with the loan
repayment terms.
Nonperforming loans increased approximately $1,040,000 to $2,152,000 at
September 30, 1998, from $1,112,000 at December 31, 1997. Nonperforming
assets represented 1.92% of loans, net of unearned income and real estate
acquired through foreclosure at September 30, 1998 as compared to 1.79% at
December 31, 1997.
3. IMPACT OF NEW ACCOUNTING STANDARDS
The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" ("SFAS 130") as of January 1, 1998.
Accounting principles generally require that recognized revenue, expenses,
gains and losses be included in net income. Although certain changes in
assets and liabilities, such as unrealized gains and losses on available-for
- - -sale securities are reported as a separate component of the equity
section of the balance sheet, such items, along with net income, are
components of comprehensive income. The adoption of SFAS 130 had no effect
on the Company's net income or shareholders' equity.
In June 1997, Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131") was issued. SFAS 131 establishes annual and interim reporting
standards for an enterprise's business segments and related disclosures about
its products, services, geographic areas and major customers. Adoption of
this statement will not impact the Company's consolidated financial position,
results of operations or cash flows. The Company will adopt this Statement
in its annual financial statements for the year ending December 31, 1998.
In February 1998, Statement of Financial Accounting Standards No. 132,
"Employers' Disclosures about Pensions and Other Postretirement Benefits"
("SFAS 132") was issued. SFAS 132 standardizes the disclosure requirements
for pensions and other postretirement benefits to the extent practicable,
requires additional information on changes in the benefit obligations and
fair values of plan assets that will facilitate financial analysis, and
eliminates certain disclosures that are no longer useful. SFAS 132 is
effective for fiscal years beginning after December 15, 1997. The Statement
is not expected to have an effect on the Company's financial statements.
In June 1998, Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133")
was issued. SFAS 133 establishes standards for derivative instruments and
hedging activities and requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and
measure those instruments at fair value. This statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. The Statement
is not expected to have an effect on the Company's financial statements.
4. RESTATEMENT
During the third quarter of 1998, the Company's management discovered that
certain of its equity securities had not been recorded in compliance with
SFAS 115. The effect on the December 31, 1997 financial statements related
to the correction was to increase investment securities available for sale
and stockholders' equity by $944,396 and $611,751, respectively, with the
offset affecting deferred taxes. Comprehensive income for the three and
nine month periods ended September 30, 1997 was $235,000 and $548,000,
respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
INTRODUCTION
Citizens Bancshares Corporation ( the "Company" ), a one-bank holding company,
provides a full range of commercial banking services to individual and
corporate customers in metropolitan Atlanta through its wholly owned
subsidiary, Citizens Trust Bank ( the "Bank" ). The Bank operates under a
state charter and serves its customers through ten full service branches.
The following discussion is of the Company's financial condition as of
September 30, 1998 and the changes in the financial condition and results of
operations for the three and nine month periods ended September 30, 1998 and
1997.
RESULTS OF OPERATIONS
Net Interest Income:
Net interest income represents the excess of income received on interest-
earning assets and interest paid on interest-bearing liabilities. Net
interest income for the nine month period ended September 30, 1998 increased
approximately $34,000 compared to the same period in 1997. The combination
of higher volume and lower rates on interest earning assets and interest
bearing liabilities caused the Company's net interest margin to remain
relatively stable at 5.58% for the period ended September 30, 1998 compared
to 1997.
Noninterest income:
Noninterest income increased approximately $332,000 or 20% for the three
month period ended September 30, 1998 and approximately $1,133,000 or 24% for
the nine month period ended September 30, 1998 as compared to the same period
in 1997. The increase in noninterest income is due primarily to an increase
in commissions and fees on mortgage loans of approximately $1,192,000, as a
result of an increase in the volume of loan closings.
Noninterest expense:
Noninterest expense decreased approximately $141,000 for the nine month
period ended September 30, 1998 as compared to the same period in 1997. The
decrease is attributable to a combination of a decrease in salaries and
employee benefits of $521,000, an increase in occupancy expense and other
operating expense of $177,000 and $203,000, respectively. The decrease in
salaries and employee benefit costs is attributed to a reduction in staff
due to the merger. The Mortgage Company relocated which accounts for the
increase in occupancy expense. Other operating expense increased because
the Company outsourced its data processing services during the second quarter.
Net earnings:
The Company had net earnings of approximately $450,000 or $0.21 per share and
$1,399,000 or $0.65 per share for the three and nine month periods ended
September 30, 1998 as compared to $179,000 and $404,000 or $0.08 and $0.19
per share in 1997. The $995,000 increase in net earnings as compared to 1997
is attributable to an increase in noninterest income of approximately
$1,133,000 and a decrease in noninterest expense of approximately $141,000.
LIQUIDITY
Liquidity is a bank's ability to meet deposit withdrawals, while also
providing for the credit needs of customers. In the normal course of business,
the Company's cash flow is generated from interest and fees on loans and
other interest-earning assets. The Company continues to meet liquidity needs
primarily through the sale of federal funds and managing the maturities of
investment securities. At September 30,1998, approximately 9% of the
investment portfolio matures within the next year, 41% after one year but
before five years. In addition, interest bearing deposits and federal funds
sold averaged approximately $9.5 and $2.6 million, respectively, during the
nine month period ended September 30, 1998. The Company is a member of the
Federal Home Loan Bank of Atlanta, the Federal Reserve System and maintains
relationships with several correspondent banks and, thus, could obtain funds
on short notice. Company management closely monitors and maintains
appropriate levels of interest-earning assets and interest-bearing liabilities,
so that maturities of assets are such that adequate funds are provided to meet
customer withdrawals and loan demand.
CAPITAL RESOURCES
Quantitive measures established by regulation to ensure capital adequacy
require the Company to maintain minimum amounts and ratios of total and Tier
1 capital to risk weighted assets, and Tier 1 capital to average assets. As of
September 30, 1998, the Company?s total and Tier 1 capital to risk weighted
assets and Tier 1 to average assets were 14%, 13% and 9% respectively.
Management believes, as of September 30, 1998, that the Company meets all
capital adequacy requirements to which it is subject.
Year 2000 Processing Risk
The Board and management consider the Year 2000 ("Y2K") computer processing
risk to be a very serious risk for the banking and financial services
industry in particular and for all businesses which depend on computer
hardware and software to perform the critical functions of their businesses.
Y2K computer processing risk is defined as the risk associated with computer
hardware or software that fails to process data or to operate in the manner
for which it was designed as a result of century date changes. This risk
encompasses hardware and software owned, leased, licensed or otherwise used
by the Company and the Bank or by vendors upon which the Company and the Bank
depend for mission-critical functions or by customers with which the Company
and the Bank have a material relationship. In the third quarter of 1997, the
Board established a Y2K Policy and Y2K Compliance Committee. The Committee
is headed by senior management, meets monthly and regularly reports
to the Audit and Compliance Committee of the Board and to the full Board.
The Company and Bank do not use proprietary computer hardware or software.
Therefore, they depend upon outsourced data processing services and third
party software. Management has identified all mission critical
hardware and software applications and is following the general guidelines
promulgated by the FDIC to assure that all mission critical applications will
be renovated, with testing in progress, by December 31, 1998, or contingency
plans will be in the process of implementation. At this time, the servicing
vendors appear to have completed their assessments and have described to the
Bank their time lines for renovation and testing. Management has no reason to
believe at this time, that all mission critical applications for the Bank and
Company will not be adequately addressed by our vendor's plans.
Management is currently reviewing all of the Bank's significant commercial
loan relationships to determine how much Y2K risk may exist in the Bank's
customer base. To the extent that such risk is identified, management is
requesting such customers to develop their own compliance strategy and will
require those customers to keep us informed of their progress. Management's
current plans are to help customers understand the risk involved to share the
Company's strategies and to encourage those customers to satisfy their
compliance requirements on timelines that are consistent with those of the
Company and the Bank. The Bank's credit review processes have been modified
to address this risk. The Bank's contingency plans for customers who fail to
adequately address this risk may include but will not be limited to,
requiring such customers to pay off their loans.
The Company and the Bank are in the process of initiating communications with
all suppliers and vendors to determine the potential impact of such third
party's failure to remediate their own Y2K issues. These third parties
include other financial institutions, office supply vendors and telephone,
electric and other utility companies. The Company and the Bank are
encouraging its counterparts, vendors and customers to conduct their own Y2K
assessments and to take appropriate steps to become Y2K compliant.
There can be no assurances that all hardware and software that the Company
and the Bank will use or that their customers, other vendors and utility
companies will use will be Y2K compliant. The Company's and the Bank's
customers, other vendors and utility companies may be negatively affected by
the Y2K issue and any difficulties incurred by them in solving the Y2K issues
could negatively affect their ability to perform their agreements with
the Company and the Bank.
As part of their normal business practice, the Company and the Bank maintain
contingency plans to follow in the event of emergency situations, some of
which could arise from Y2K-related problems. The Company and the Bank are in
the process of formulating a detailed Y2K contingency plan which will assess
several possible scenarios to which the Company may be required to react.
The foregoing are forward-looking statements reflecting management's current
assessments and estimates with respect to the Company's Y2K compliance
efforts and the impact of Y2K issues on the Company's business and
operations. Various factors could cause actual plans and results to differ
materially from those contemplated by such assessments, estimates and
forward-looking statements, many of which are beyond control of the Company.
Some of these factors include, but are not limited to, representations by the
Company's and Bank's vendors and customers, technological advances, economic
considerations and customers perceptions. The Y2K compliance program is an
ongoing process involving continual evaluation and may be subject to change
in response to new developments.
The costs of implementing Y2K solutions on mission critical systems have not
been fully determined as of the date of this report. The Bank's local area
computer network was already budgeted for upgrade in 1998 to workstations
and file-servers that will be Y2K ready. The budget for these upgrades is
approximately $500,000.
Selected Statistical Information
NONPERFORMING ASSETS
The table below presents a summary of the Company's nonperforming assets at
September 30, 1998 and December 31, 1997.
1998 1997
(Amounts in thousands, except
financial ratios)
Nonperforming assets:
Nonperforming loans:
Nonaccrual loans $ 775 1,005
Past-due loans 1,377 107
Nonperforming loans 2,152 1,112
Real estate acquired through foreclosure 137 1,075
Total nonperforming assets $ 2,289 2,187
Ratios:
Nonperforming loans to loans, net of
unearned income 1.81% .92
Nonperforming assets to loans(net of unearned
income) and real estate acquired through
foreclosure 1.92% 1.79
Nonperforming assets to total assets 1 .17% 1.18
Allowance for loan losses to
Nonperforming loans 81.13% 157.55
Allowance for loan losses to
nonperforming assets 76.28% 80.11
Interest income on nonaccrual loans which would have been reported for the
three and nine month periods ended September 30, 1998 totaled approximately
$18,000 and $61,000. The Company recorded approximately $22,000 in income
on these loans for the nine month period ended September 30, 1998.
ALLOWANCE FOR LOAN LOSSES
The following table summarize loans, changes in the allowance for loans
losses arising from loans charged off, recoveries on loans previously charged
off by loan category, and additions to the allowance which have been charged
to operating expense as of and for the periods ended September 30, 1998 and
December 31, 1997.
1998 1997
Loans, net of unearned income $ 119,195 121,414
Average loans, net of unearned income and the
allowance for loan losses $ 118,565 115,657
Allowance for loans losses at the
beginning of year $ 1,752 1,806
Loans charged off:
Commercial, financial, and agricultural 110 68
Real estate- mortgage 35 169
Installment loans to individuals 188 436
Total loans charged off 333 673
Recoveries of loans previously charged off:
Commercial, financial, and agricultural 13 84
Real estate- mortgage 68 85
Installment loans to individuals 121 149
Total loans recovered 202 318
Net loans charged off 131 355
Additions to allowance for loan losses
charged to operating expense 125 301
Allowance for loan losses at period end $ 1,746 1,752
Ratio of net loans charged off to average
loans, net of unearned income and the allowance
for loan losses .11% .31
Allowance for loan losses to loans, net of
unearned income 1.46% 1.44
Credit reviews of the loan portfolio designed to identify potential charges
to the allowance for loan losses, as well as to determine the adequacy of
the allowance for loan losses, are made on a continuous basis throughout the
year. These reviews are conducted by management, lending officers, and
independent third parties. These reviews are also reviewed by the Board of
Directors, who consider such factors as the financial strength of borrowers,
the value of applicable collateral, past loan loss experience, anticipated
loan losses, growth in the loan portfolio, and other factors including
prevailing and anticipated economic conditions. Management believes the
allowance for loan losses is adequate at September 30, 1998.
A substantial portion of the Company's loan portfolio is secured by real
estate in the metropolitan Atlanta market. Accordingly, the ultimate
collectibility of a substantial portion of the Company's loan portfolio is
susceptible to changes in market conditions in the metropolitan Atlanta area
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not aware of any material pending legal proceedings to which
the Company or its subsidiary is a party or to which any of their property
is subject.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
Pursuant to Rule 14a-4(c)(1) promulgated under the Securities Exchange Act of
1934, as amended, shareholders desiring to present a proposal for
consideration at the Company's 1999 Annual Meeting of Shareholders must notify
the Company in writing at its principal office at 175 John Wesley Dobbs
Avenue, NE., Atlanta, Georgia 30303 of the contents of such proposal no later
than March 12, 1999 . Failure to timely submit such a proposal will enable
the proxies appointed by management to exercise their discretionary voting
authority when the proposal is raised at the Annual Meeting of Shareholders
without any discussion of the matter in the proxy statement.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CITIZENS BANCSHARES CORPORATION
Date: November 16, 1998 By: /s/ James E. Young
James E. Young
President and Chief Executive Officer
Date: November 16, 1998 By: /s/ Willard C. Lewis
Willard C. Lewis
Senior Executive Vice President and
Chief Operating Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 10,127
<INT-BEARING-DEPOSITS> 13,153
<FED-FUNDS-SOLD> 37
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 22,085
<INVESTMENTS-CARRYING> 16,441
<INVESTMENTS-MARKET> 0
<LOANS> 119,195
<ALLOWANCE> 1,746
<TOTAL-ASSETS> 195,910
<DEPOSITS> 173,985
<SHORT-TERM> 1,478
<LIABILITIES-OTHER> 1,977
<LONG-TERM> 0
0
0
<COMMON> 2,164
<OTHER-SE> 6,174
<TOTAL-LIABILITIES-AND-EQUITY> 195,910
<INTEREST-LOAN> 8585
<INTEREST-INVEST> 1665
<INTEREST-OTHER> 519
<INTEREST-TOTAL> 10,769
<INTEREST-DEPOSIT> 3,737
<INTEREST-EXPENSE> 3,806
<INTEREST-INCOME-NET> 6,963
<LOAN-LOSSES> 125
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 69
<INCOME-PRETAX> 1,914
<INCOME-PRE-EXTRAORDINARY> 1,914
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,399
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
<YIELD-ACTUAL> 5.58
<LOANS-NON> 775
<LOANS-PAST> 1,377
<LOANS-TROUBLED> 39
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,752
<CHARGE-OFFS> 333
<RECOVERIES> 202
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
