Mail Stop 4561
August 16, 2005
By U.S. Mail and facsimile to 404-653-2877
Samuel J. Cox
Chief Financial Officer
Citizens Bancshares Corporation
75 Piedmont Avenue, N.E.,
Atlanta, Georgia 30302
Re: Citizens Bancshares Corporation
Form 10-K for the Fiscal Year Ended December 31, 2004
Forms 10-Q for the Quarters Ended March 31, 2005 and June 30, 2005
File No. 000-14535
Dear Mr. Cox:
We have limited our review of your filing to the issue we
have
addressed in our comments. Where indicated, we think you should
revise your document in response to these comments. If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the Fiscal Year Ended December 31, 2004
Note 8 - Income Taxes, page 61
1. We note that you have a full valuation allowance for all state
tax
carryforwards since management considers it more likely than not
that
all related deferred tax assets will not be realized. Please tell
us
how you determined that a full valuation allowance was needed
considering the possible sources of taxable income described by
paragraph 21 of SFAS 109. In your response, please provide
quantification supporting how you determined the amount of the
valuation allowance as of December 31, 2004 and why you did not
adjust the allowance in 2004.
Form 10-Q for the Fiscal Quarter Ended June 30, 2005
Management`s Discussion and Analysis - Investment Securities, page
13
2. We note that you recorded a $346,000 million other-than-
temporary
impairment relating to certain perpetual preferred stock
investments
in two government sponsored enterprises during June, 2005. Your
unrealized equity security losses were $349,680 and $231,400 at
December 31, 2004 and 2003, respectively. Please supplementally
tell
us how you were able to conclude that no other-than-temporary
impairment relating to these securities existed as of or prior to
December 31, 2004. In your response, please provide
quantification
supporting how you determined the recognized $346,000 impairment
and
tell us how long each security was in an unrealized loss position.
Please refer to the specific relevant guidance in SFAS No.115 and
SAB
Topic 5:M in your response.
* * * * *
Please respond to these comments within 10 business days or
tell us when you will provide us with a response. Please file
your
response on EDGAR. Detailed cover letters greatly facilitate our
review. Please understand that we may have additional comments
after
reviewing your amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Matthew Komar (Staff Accountant) at (202)
551-
3781 or me at (202) 551-3490 if you have questions regarding
comments on the financial statements and related matters.
Sincerely,
Don Walker
Senior Assistant
Chief Accountant
Samuel J. Cox
Citizens Bancshares Corporation
August 16, 2005
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