U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended September 30, 1996 Commission file number 0-12425
Citizens Bancshares, Inc.
(Exact name of small business issuer as specified in its charter)
Louisiana 72-0759135
(State or other jurisdiction of (I.R.S. Employer Identification)
incorporation or organization)
841 West Main Street, Ville Platte, La. 70586
(Address of principal executive offices)
Issuer's telephone number, including area code 318-363-5643
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months, and
(2) had been subject to such filing requirements for the past 90 days.
Yes (x) No ( )
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Number of
Class of Common Stock Shares Outstanding As of
Common Stock $5 Par Value 115,000 September 30, 1996
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
INDEX
PART I. FINANCIAL INFORMATION PAGE
Condensed Consolidated Balance Sheets -
September 30, 1996 and December 31, 1995..............3
Condensed Consolidated Statements of Income -
Nine and Three months ended September 30, 1996
and September 30, 1995................................4
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 30, 1996 and
September 30, 1995....................................5
Notes to Consolidated Financial Statements..............6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................................7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...............................9
Item 6. Exhibits and Reports of Form 8-K................9
PART I. CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(in thousands of dollars)
SEPT 30, 1996 DEC 31, 1995
ASSETS
Cash and due from banks $ 1,958 $ 2,498
Federal Funds Sold 4,375 3,575
CASH AND CASH EQUIVALENTS 6,333 6,073
Interest-bearing deposits in banks 3,568 3,765
Investment securities
Held to maturity (estimated fair values 9,513 9,695
of $9,663 and $9,849)
Available-for-Sale, at fair value 23,840 25,224
TOTAL SECURITIES 33,353 34,919
Loans, 42,904 37,444
Unearned income ( 482) ( 527)
Allowance for possible loan losses ( 855) ( 832)
NET LOANS 41,567 36,085
Premises and equipment, net 965 850
Foreclosed real estate 18 28
Accrued interest receivable 883 868
Deferred Tax Asset 95 --
Other assets 518 582
TOTAL ASSETS $87,300 $83,170
LIABILITIES
Deposits
Demand deposits $ 8,350 $ 7,773
Savings, NOW & money market accounts 11,854 12,693
Time deposits $100,000 or more 19,910 17,829
Other time deposits 38,394 36,717
TOTAL DEPOSITS 78,508 75,012
Accrued interest payable 481 480
Deferred tax liability -- 20
Other liabilities 170 106
TOTAL LIABILITIES 79,159 75,618
SHAREHOLDERS' EQUITY
Common Stock $5 par value, 300,000
shares authorized, 115,000 shares
issued and outstanding 575 575
Additional paid-in capital 825 825
Retained earnings 6,839 6,029
Unrealized (loss) gain on Available-for-Sale
Securities, net of applicable deferred
income taxes (98) 123
TOTAL SHAREHOLDERS' EQUITY 8,141 7,552
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $87,300 $83,170
The accompanying notes are an integral part of these financial statements.
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
NINE AND THREE MONTHS ENDED SEPTEMBER 30,1996 AND 1995
(in thousands of dollars, except per share data)
NINE MONTHS THREE MONTHS
ENDED ENDED
9/30/96 9/30/95 9/30/96 9/30/95
Interest income
Interest and fees on loans $ 2,859 $ 2,592 $1,022 $ 921
Interest on investment securities
U.S. Treasury Securities 223 291 75 87
Obligations of other U.S. Government 1,105 1,006 369 361
agencies and corporations
Obligations of states and political 197 149 68 53
subdivisions
Interest on federal funds sold 179 163 45 47
Interest on deposits in other banks 163 175 51 59
TOTAL INTEREST INCOME 4,726 4,376 1,630 1,528
Interest expense
Interest on deposits
Savings and NOW accounts 265 270 88 89
Certificates and other time deposits
$100,000 and more 802 731 259 264
Other time deposits 1,583 1,365 551 500
TOTAL INTEREST EXPENSE 2,650 2,366 898 853
Net interest income 2,076 2,010 732 675
Provision for Possible Loan Losses 53 75 23 45
Net interest income after provision
for possible loan losses 2,023 1,935 709 630
Service Charge on deposit accounts 294 268 100 95
Other income 133 157 48 29
Salaries & Employee Benefits 698 648 253 226
Other expense 607 698 212 194
Income before income taxes 1,145 1,014 392 334
Income tax expense 338 289 111 72
Net Income $ 807 $ 725 $ 281 $ 262
Net income per share of common stock $ 7.02 $ 6.30 $ 2.44 $ 2.28
The accompanying notes are an integral part of these financial statements.
CITIZENS BANCSHARES, INC AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
SEPT SEPT
30, 1996 30, 1995
Cash flows from operating activities:
Net Income $ 811 $ 727
Adjustments to reconcile net income to
net cash provided by operating activities -
Provision for possible loan losses 53 75
Depreciation 40 31
Net (accretion) of investment securities (27) (40)
(Gain) on sale of other real estate (18) --
(Increase) in interest receivable (16) (9)
(Increase) in other assets (400) (396)
(Decrease) increase in interest payable (1) 105
Increase in other liabilities 64 67
Net cash provided by operating activities 506 560
Cash flows from investing activities:
Proceeds from maturities and calls of
investment securities 14,155 8,317
Purchase of investment securities (13,722) (11,191)
(Decrease) increase in interest-bearing
deposits in other banks (197) 208
Proceeds from sales of other real estate 158 --
(Increase) in loans (3,982) (3,070)
Purchase of premises and equipment (155) (300)
Net cash (used) by investing activities (3,743) (6,036)
Cash flows from financing activities:
Increase in deposits 3,497 7,143
Net cash provided by financing activities 3,497 7,143
Net increase in cash and cash equivalents 260 1,667
Cash and cash equivalents, beginning of year 6,073 4,124
Cash and cash equivalents, end of period $ 6,333 $ 5,791
Cash paid for income taxes $ 305 $ 250
Cash paid for interest expense $ 2,649 $ 2,260
Other real estate acquired in satisfaction
of loans $ 151 $ 59
Total Increase (decrease) in Fair Value of
Securities Available for Sale $ (336) $ 821
CITIZENS BANCSHARES,INC.
CITIZENS BANK, VILLE PLATTE, LOUISIANA
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
(1) The interim financial statements are prepared pursuant to the
requirements for reporting on Form 10-QSB. The December 31, 1995
balance sheet data was derived from audited financial statements
but does not include all disclosures required by generally
accepted accounting principles. The interim financial statements
and notes thereto should be read in conjunction with the
financial statements and notes included in the Company's latest
annual report on Form 10-KSB. In the opinion of management, the
interim financial statements reflect all adjustments of a normal
recurring nature necessary for a fair statement of the results
for interim periods. The current period results of operations
are not necessarily indicative of results which ultimately will
be reported for the full year ended December 31, 1996.
(2) On January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
Statement No. 121 requires that long-lived assets and certain
identifiable intangibles to be held and used by the Company be
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. Measurement of an impairment loss on these assets
is based on fair value. In addition, long-lived assets and
certain identifiable intangibles to be disposed of are required
to be reported at the lower of carrying amount or fair value less
costs to sell. The adoption of this statement did not have a
material effect on the financial position as of September 30,
1996 or the results of operations for the three and nine
month periods then ended.
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1996
GENERAL STATEMENT
For a comprehensice review of financial condition and results of operations
of Citizens Bancshares, Inc. (the Company), this discussion and anaylsis
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 VISA and MASTERCARD. Drive-in facilities are
located at all banking locations.
FINANCIAL CONDITION
The Bank's total assets increased during the first nine months of 1996 from
$83,170,000 to $87,300,000, a $4,130,000 or 4.97% increase attributable
primarily to a $5,482,000 increase in loans. At September 30, 1996 the
bank's loan to deposit ratio was 54.04%.
Earings assets, which include loans, investments securities, federal funds
sold, and deposits in other banks were $82,863,000, a 5.77% increase from
1995 year end earning assets of $78,344,000. At September 30, 1996, the
Bank's yield on earning assets was 7.55%. Securities classified as "held-
to-maturity" had an amortized cost/recorded value of $9,513,000 and a fair
value of $9,663,000; securities classifed as "available-for-sale" had a
fair recorded value of $23,840,000 and an amortized cost of $23,989,000 at
September 30, 1996.
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 $855,000 as of September 30, 1996, which represents a 2.02% of
total loans outstanding on that date. Provisions to the allowance for loan
losses, which were charged to net income of 1996, totaled $53,000.
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. At
September 30, 1996 past due loans to total loans were 1.11% and charge-off
loans to total was 0.15%.
As the Bank's primary source of funds, deposits, both time and demand,
increased by $3,496,000 or 4.66% during the first nine months of 1996.
The primary functions of asset/liability management are to assure adequate
liquidity and maintaince of appropriate balance between
interest-earning assets and interest-bearing liabilities. Liquidity
management involves the ability to meet cash flow requirements of
customers. With the Bank's asset/liability management program, most loan
and deposit changes can be anticipated and provided for without an adverse
impact on earnings. The Bank's liquidity ratio at September 30, 1996 was
51.48%.
RESULTS OF OPERATIONS
The Bank reported a net income of $807,000 or $7.02 per average share
outstanding for the first nine months of 1996. Net return on assets was
1.25% and net return on equity was 11.93%.
At September 30, 1996, the bank's ratios were as follows:
Capital to Asset 9.50%
Risk Based 19.60%
Tier 1 18.35%
Leverage Ratio 9.16%
CITIZENS BANCSHARES, INC. AND
CITIZENS BANK, VILLE PLATTE, LOUISIANA
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Legal proceedings involving the Bank are limited to
proceedings arising from normal business activities,
none of which are considered material.
Item 6. Exhibits and Reports on Form 8-K
(a) Part II Exhibits: none
(b) The Company has not filed any reports on Form 8-K
during the quarter ended September 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITIZENS BANCSHARES, INC.
CARL W. FONTENOT
PRESIDENT & CEO
WAYNE VIDRINE
EXECUTIVE VICE PRES.-TREASURER