UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 000-25221
CITIZENS HOLDING COMPANY
(exact name of Registrant as specified in its charter)
MISSISSIPPI 64-0666512
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
521 Main Street, Philadelphia, MS 39350
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 601-656-4692
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
------------------- ----------------
Common Stock, $.20 par value American Stock Exchange
Securities registered pursuant to section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K. [_]
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding at March 8, 2002
Common stock, $.20 par value 4,963,125 Shares
The aggregate market value of the voting stock held by non-affiliates of
the Registrant on March 11, 2002 was $63,420,011.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference to Part
II and III of the Form 10-K: 2001 Annual Report to Shareholders (Part II) and
the Definitive Proxy Statement dated March 22, 2002 for Registrant's Annual
Meeting of Stockholders to be held April 23, 2002 (Part III).
CITIZENS HOLDING COMPANY
FORM 10-K
INDEX
PAGE
----
PART I
ITEM 1. BUSINESS............................................................................................. 1
ITEM 2. PROPERTIES........................................................................................... 16
ITEM 3. LEGAL PROCEEDINGS.................................................................................... 18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................................................. 18
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS............................. 18
ITEM 6. SELECTED FINANCIAL DATA.............................................................................. 19
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS................ 20
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........................................... 20
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.......................................................... 20
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE................. 21
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT................................................... 21
ITEM 11. EXECUTIVE COMPENSATION............................................................................... 21
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....................................... 21
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................................................... 21
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K...................................... 21
SIGNATURES.................................................................................................... 23
CITIZENS HOLDING COMPANY
FORM 10-K
PART I
In addition to historical information, this report contains statements
which constitute forward-looking statements and information which are based on
management's beliefs, plans, expectations, assumptions and on information
currently available to management. The words "may," "should," "expect,"
"anticipate," "intend," "plan," "continue," "believe," "seek," "estimate," and
similar expressions used in this report that do not relate to historical facts
are intended to identify forward-looking statements. These statements appear in
a number of places in this report, including, but not limited to, statements
found in Item 1 "Business" and in Item 7 "Management's Discussion and Analysis
of Financial Condition and Results of Operations." The Corporation notes that a
variety of factors could cause the actual results or experience to differ
materially from the anticipated results or other expectations described or
implied by such forward-looking statements. The risks and uncertainties that may
affect the operation, performance, development and results of the Corporation's
and the Bank's business include, but are not limited to, the following: (a) the
risk of adverse changes in business conditions in the banking industry generally
and in the specific markets in which the Corporation operates; (b) changes in
the legislative and regulatory environment that negatively impact the
Corporation and Bank through increased operating expenses; (c) increased
competition from other financial institutions; (d) the impact of technological
advances; (e) expectations about the movement of interest rates, including
actions that may be taken by the Federal Reserve Board in response to changing
economic conditions; (f) changes in asset quality and loan demand; (g)
expectations about overall economic strength and the performance of the economy
in the Corporation's market area; and (h) other risks detailed from time to time
in the Corporation's filings with the Securities and Exchange Commission. The
Corporation does not undertake any obligation to update or revise any
forward-looking statements subsequent to the date on which they are made.
ITEM 1. BUSINESS
BACKGROUND
Citizens Holding Company (the "Corporation") is a one-bank holding
company that holds 97.44% of the outstanding shares of The Citizens Bank of
Philadelphia, Mississippi (the "Bank"). The Corporation was incorporated under
Mississippi law on February 16, 1982, at the direction of the Board of Directors
of the Bank in order to facilitate the Bank's adoption of a one-bank holding
company structure.
The Bank was opened on February 8, 1908 as The First National Bank of
Philadelphia. In 1917, the Bank surrendered its national charter and obtained a
state charter at which time the name of the Bank was changed to The Citizens
Bank of Philadelphia, Mississippi. At December
31, 2001, the Bank was the largest bank headquartered in Neshoba County with
total assets of $426,684,787 and total deposits of $360,065,165.
The principal executive offices of both the Corporation and the Bank
are located at 521 Main Street, Philadelphia, Mississippi 39350 and its
telephone number is (601) 656-4692. All references hereinafter to the activities
or operations of the Corporation reflect the Corporation's activities or
operations through the Bank.
In July 2001, the Corporation purchased two branches of Union Planters
National Bank located in Forest and Decatur, Mississippi. This acquisition had
the effect of adding $30,506,745 in assets, including $11,703,517 in loans, and
$30,284,185 in deposits.
The Corporation has signed an Agreement and Plan of Share Exchange to
purchase CB&T Capital Corporation and Citizens Bank & Trust Company in
Louisville, Mississippi in the second quarter of 2002. This acquisition will add
approximately $70 million in assets to the Corporation.
OPERATIONS
The Corporation, through the Bank, engages in a wide range of
commercial and personal banking activities, including accepting demand deposits,
savings and time deposit accounts, making secured and unsecured loans, issuing
letters of credit, originating mortgage loans, and providing personal and
corporate trust services; and provides certain services that are closely related
to commercial banking such as credit life insurance and title insurance for its
loan customers.
Revenues from the Corporation's lending activities constitute the
largest component of the Corporation's operating revenues. Such lending
activities include commercial, real estate, installment (direct and indirect)
and credit card loans. The Corporation's primary lending area is East Central
Mississippi, specifically Neshoba, Newton, Leake, Scott, Attala, Lauderdale and
Kemper counties and contiguous counties. The Corporation extends out-of-area
credit only to borrowers who are considered to be low risk, and only on a very
limited basis.
This seven county lending area is mainly rural with Meridian, at 41,036
in population, being the largest city. Agriculture and some light industry are a
big part of the economy of this area. The largest employer in the Corporation's
service area is the Mississippi Band of Choctaw Indians with their schools,
manufacturing plants and their main source of income, The Silverstar Casino and
Resort (the "Casino"). The Casino and its related services employs approximately
2,500 people from the Corporation's service area.
The Corporation has in the past and intends to continue to make most
types of real estate loans, including, but not limited to, single and
multi-family housing, farm, residential and commercial construction and
commercial real estate loans. Historically, approximately 62.6% of
the Corporation's loan portfolio has been attributed to this category of
lending. Another 16.6% of the Corporation's loan portfolio has been comprised of
commercial, industrial and agricultural production loans, with consumer loans
making up the remaining 20.8% of the total loan portfolio.
The Corporation's loan personnel have the authority to extend credit
under guidelines established and approved by the Board of Directors. Any
aggregate credit that exceeds the authority of the loan officer is forwarded to
the loan committee for approval. The loan committee is composed of various Bank
directors, including the Chairman. All aggregate credits that exceed the loan
committee's lending authority are presented to the full Board of Directors for
ultimate approval or denial. The loan committee not only acts as an approval
body to ensure consistent application of the Corporation's loan policy, but also
provides valuable insight through the communication and pooling of knowledge,
judgment and experience of its members.
Of course, all loans in the Corporation's portfolio are subject to risk
based on the economy in the Corporation's area and also that of the nation.
However, because the Corporation's local economy has been strong and
unemployment has remained at historic lows, management continues to believe that
general risk levels are low.
In addition to lending services, the Corporation provides a wide range
of personal and corporate trusts and trust-related services, which include its
serving as executor of estates, as trustee under testamentary and inter vivos
trusts and various pension and other employee benefit plans, as the guardian of
the estates of minors and incompetents, and as escrow agent under various
agreements.
The Corporation offers discount brokerage services through First
Tennessee Bank.
In 1996, the Corporation opened the Westside building in Philadelphia,
Mississippi, replacing a smaller drive-up only facility. In early 1998, the
Corporation opened a new full service facility in Kosciusko, Mississippi.
The Corporation also expanded its ability to offer its customers
broader options with their mortgage loan needs in 1999 with the acquisition of
the assets of Three D Mortgage Company, with locations in Philadelphia and
Kosciusko, Mississippi. The Corporation's Mortgage Department originates
mortgage loans that are sold to the secondary market.
Through such innovations as its VISA Checkcard program, the 24 Hour
Phone Teller and its Internet site (http://www.thecitizensbankphila.com), the
-------------------------------------
Corporation's customers have the ability to have easy and convenient access to
their funds and account balances 24 hours a day, 7 days a week. Additionally,
the Internet site enables the Corporation's customers to review their accounts
in detail, make transfers between their accounts and pay bills from anywhere in
the world.
EXECUTIVE OFFICERS OF THE REGISTRANT
From 1978 until the present, Steve Webb, who is 69 years old, has
served as President and Chief Executive Officer of the Corporation. Mr. Webb has
served as Chief Executive Officer of the Bank since 1997 and served as President
of the Bank from 1978 until January 2002. Mr. Webb has served as a member of the
Board of Directors of the Corporation since 1982 and of the Bank since 1970. Mr.
Webb has served as Chairman of the Board of both the Bank and Corporation since
1997.
Greg L. McKee, who is 40 years old, has been President and Chief
Operating Officer of the Bank since January 2002 and a member of the Boards of
both the Corporation and the Bank since 2001. Previous to this, he served as
Executive Vice-President of the Bank from 2001 to 2002, Senior Vice-President of
the Bank from 2000 to 2001, Vice-President of the Bank from 1992 to 2000,
Assistant Vice-President from 1989 to 1992, and Assistant Cashier from 1984 to
1989.
Robert T. Smith, who is 50 years old, has been employed by the Bank
since 1986 and has been in his current position of Senior Vice-President and
Chief Financial Officer since January 2001. Prior to January 2001, Mr. Smith
held the title of Vice-President and Controller from 1987 until 2001 and
Assistant Vice-President from 1986 to 1987. In addition to his position with the
Bank, Mr. Smith was elected to serve as Treasurer of the Corporation in February
1996.
EMPLOYEES
The Corporation has no compensated employees. At December 31, 2001, the
Bank employed 168 full-time employees and 26 part-time employees. The Bank is
not a party to any collective bargaining agreements, and employee relations are
considered to be good.
SUPERVISION AND REGULATION
The Bank is chartered under the banking laws of the State of
Mississippi and is subject to the supervision of, and is regularly examined by,
the Department of Banking and Consumer Finance and the FDIC. The Corporation is
a registered bank holding company within the meaning of the Bank Holding Company
Act ("BHC Act"), and is subject to the supervision of the Federal Reserve Board
("FRB"). Certain legislation and regulations affecting the businesses of the
Corporation and the Bank are discussed below.
General.
The FRB requires the Corporation to maintain certain levels of capital.
The FRB also has the authority to take enforcement action against any bank
holding company that engages in any unsafe or unsound practice or that violates
certain laws, regulations, or conditions imposed in
writing by the FRB.
Capital Standards.
The FRB, FDIC and other federal banking agencies have established
risk-based capital adequacy guidelines intended to provide a measure of capital
adequacy that reflects the degree of risk associated with a bank's operations.
A banking organization's risk-based capital ratios are obtained by
dividing its qualifying capital by its total risk-adjusted assets and
off-balance sheet items. Since December 31, 1992, the federal banking agencies
have required a minimum ratio of qualifying total capital to risk-adjusted
assets and off-balance sheet items of 8%, and a minimum ratio of Tier 1 capital
to risk-adjusted assets and off-balance sheet items of 4%.
In addition to the risk-based guidelines, federal banking regulators
require banking organizations to maintain a minimum amount of Tier 1 capital to
total assets, referred to as the leverage ratio. For a banking organization
rated in the highest of the five categories used by regulators to rate banking
organizations, the minimum leverage ratio of Tier 1 capital to total assets is
3%.
Prompt Corrective Action and Other Enforcement Mechanisms.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") requires each federal banking agency to take prompt corrective action
to resolve the problems of insured depository institutions, including but not
limited to those that fall below one or more of the prescribed minimum capital
ratios. The law requires each federal banking agency to promulgate regulations
defining the following five categories in which an insured depository
institution will be placed, based on the level of its capital ratios:
well-capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized. The Corporation and Bank are
classified as well capitalized under these guidelines.
Safety and Soundness Standards.
FDICIA also implemented certain specific restrictions on transactions
and required the regulators to adopt overall safety and soundness standards for
depository institutions related to internal control, loan underwriting and
documentation, and asset growth. Among other things, FDICIA limits the interest
rates paid on deposits by undercapitalized institutions, the use of brokered
deposits and the aggregate extension of credit by a depository institution to an
executive officer, director, principal shareholder or related interest, and
reduces deposit insurance coverage for deposits offered by undercapitalized
institutions for deposits by certain employee benefits accounts.
Restrictions on Dividends and Other Distributions.
The power of the board of directors of an insured depository
institution to declare a cash dividend or other distribution with respect to
capital is subject to statutory and regulatory restrictions which limit the
amount available for such distribution depending upon the earnings, financial
condition and cash needs of the institution, as well as general business
conditions.
The Corporation's ability to pay dividends depends in large part on the
ability of the Bank to pay dividends to the Corporation. Certain provisions of
state law restrict the payment of dividends by a Mississippi state bank. In
addition, the Bank must obtain the prior approval of the Mississippi Department
of Banking and Consumer Finance for the payment of any dividend.
FDIC Insurance Assessments.
The FDIC has established several mechanisms to increase funds to
protect deposits insured by the Bank Insurance Fund ("BIF") and the Savings
Association Insurance Fund ("SAIF"), both of which are administered by the FDIC.
The Bank's deposits are insured through BIF except for those deposits the Bank
acquired from the Resolution Trust Corporation in April, 1994. This acquisition
consisted of one branch of the former Security Federal Savings and Loan in
Kosciusko, Mississippi, and these deposits remain insured through SAIF.
Interstate Banking and Branching.
On September 29, 1994, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Act") was signed into law. The
Interstate Act effectively permits nationwide banking.
Interstate branching by consolidation of banks was permitted beginning
June 1, 1997, except in states that have passed legislation prior to that date
"opting-out" of interstate branching. If a state opted-out prior to June 1,
1997, then banks located in that state may not participate in interstate
branching. Effective May 1, 1997, Mississippi "opted in" to the interstate
branching provision of the Interstate Act.
Community Reinvestment Act.
The revised Community Reinvestment Act ("CRA") regulations emphasize an
assessment of actual performance rather than of the procedures followed by a
bank, to evaluate compliance with the CRA. Overall CRA compliance continues to
be rated across a four-point scale from "outstanding" to "substantial
noncompliance," and continues to be a factor in review of applications to merge,
to establish new branches or for the formation of bank holding companies.
Different evaluation methods are used depending on the asset size of the bank.
The FDIC examined the Bank on June 1, 1999 and again most recently on
August 21, 2001, for its performance under the CRA. The Bank was rated
Satisfactory during both of these examinations. No discriminatory practices or
illegal discouragement of applications were found.
Impact of Monetary Policies.
Banking is a business that depends on interest rate differentials. In
general, the difference between the interest paid by a bank on its deposits and
other borrowings, and the interest rate earned by banks on loans, securities and
other interest-earning assets comprises the major source of banks' earnings.
Thus, the earnings and growth of banks are subject to the influence of economic
conditions generally, both domestic and foreign, and also to the monetary and
fiscal policies of the United States and its agencies. The nature and timing of
any future changes in such policies and their impact on the Corporation cannot
be predicted.
COMPETITION
The banking business is a highly competitive business. The
Corporation's market area consists principally of Neshoba, Newton, Leake, Scott,
Attala, Lauderdale and Kemper Counties in Mississippi, although the Corporation
also competes with other financial institutions in those counties and in
surrounding counties in Mississippi in obtaining deposits and providing many
types of financial services. The Corporation competes with larger regional banks
for the business of companies located in the Corporation's market area. A
healthy economy, such as the Corporation's market area is experiencing, invites
certain challenges, especially that of competition.
All financial institutions today are faced with the challenge of
competing for customers' deposits, and the Corporation is no exception. The
Corporation competes with savings and loan associations, credit unions,
production credit associations, federal land banks, finance companies, personal
loan companies, money market funds and other non-depository financial
intermediaries. Many of these financial institutions have resources many times
greater than those of the Corporation. In addition, new financial intermediaries
such as money-market mutual funds and large retailers are not subject to the
same regulations and laws that govern the operation of traditional depository
institutions.
Recent changes in federal and state law have resulted in, and are
expected to continue to result in, increased competition. The reductions in
legal barriers to the acquisition of banks by out-of-state bank holding
companies resulting from implementation of the Interstate Act and other recent
and proposed changes are expected to continue to further stimulate competition
in the markets in which the Corporation operates, although it is not possible to
predict the extent or timing of such increased competition.
Currently, there are approximately fourteen different financial
institutions in the Corporation's market area competing for the same customer
base. Despite these challenges, the Corporation has not only been able to
maintain its market share, but has actually increased its share in recent years.
ITEM 2. PROPERTIES
The Corporation, through the Bank, currently operates from its main office in
downtown Philadelphia, and from 15 additional branches in Neshoba, Newton,
Leake, Scott, Attala, Lauderdale and Kemper counties, all located in
Mississippi. Information about these branches is set forth in the table below:
Banking
Location/ Functions
Name of Office Telephone Number Offered
Main Office 521 Main Street Full Service
Philadelphia, Mississippi Trust
(601) 656-4692
Eastside Branch 585 East Main Street Drive-up
Philadelphia, Mississippi
(601) 656-4976
Westside Branch 912 West Beacon Street Full Service
Philadelphia, Mississippi 24 Hour Teller
(601) 656-4978
Northside Branch 720 Pecan Avenue Deposits
Philadelphia, Mississippi 24 Hour Teller
(601) 656-4977
Pearl River Branch 110 Choctaw Town Center Full Service
Philadelphia, Mississippi 24 Hour Teller
(601) 656-4971
Union Branch Corner of Horne & Bank Full Service
Union, Mississippi
(601) 774-9231
Carthage Main Office 219 West Main Street Full Service
Carthage, Mississippi
(601) 267-4525
Crossroads Branch Highways 35 & 16 Drive-up
Carthage, Mississippi
(601) 267-4525
Madden Branch Highway 488 Deposits
Madden, Mississippi
(601) 267-7366
Sebastopol Branch Main Street Loans
Sebastopol, Mississippi Deposits
(601) 625-7447
DeKalb Branch Corner of Main & Bell Full Service
DeKalb, Mississippi
(601) 743-2115
Kosciusko Branch 775 North Jackson Avenue Full Service
Kosciusko, Mississippi 24-hour Teller
(601) 289-4356
Scooba Branch 1048 Johnston Street Full Service
Scooba, Mississippi
(601) 476-8431
Meridian Branch 2209 E Hwy 45 North Loans
Meridian, Mississippi Deposits
(601) 693-8367
Decatur Branch 15520 Highway 15 South Full Service
Decatur, Mississippi
(601) 635-2321
Forest Branch 247 Woodland Drive North Full Service
Forest, Mississippi
(601) 469-3424
The Bank owns its main office and its branch offices, except for the Pearl
River Branch Office and the Meridian Branch Office, which are leased. The main
office facility, originally occupied in 1966, is used solely by the Corporation
and the Bank. This facility contains approximately 20,000 square feet and houses
the executive offices and all operations related departments of the Corporation.
The other branches range in size from nearly 4,000 square feet to 1,000 square
feet.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than routine
litigation incidental to their business, to which either the Corporation or the
Bank is a party or to which any of their property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to the Company's shareholders during the
fourth quarter of 2001.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
Market Price.
The Corporation's Common Stock is traded on the American Stock Exchange
("AMEX") under the symbol "CIZ." The stock began trading on the AMEX on October
19, 1999 and prior to that date was sold by private transactions between
parties. On December 31, 2001, the Common Stock's closing price was $16.60.
Dividends Declared
2000 High Low (per common share)
- -----------------------------------------------------------------------------------
January - March $13.67 $11.17 $0.067
April - June 11.17 10.13 0.067
July - September 12.00 10.75 0.067
October - December 11.59 10.92 0.083
Dividends Declared
2001 High Low (per common share)
- -----------------------------------------------------------------------------------
January - March $11.17 $10.33 $0.083
April - June 11.83 10.77 0.100
July - September 13.17 11.50 0.100
October - December 16.60 12.17 0.100
Per share information included in the above table has been adjusted to
reflect the three-for-two (3:2) common stock split effective January 2, 2002.
On March 11, 2002, the shares of Common Stock were held of record by
approximately 458 shareholders.
Dividends
- ---------
Dividends, retroactively adjusted to give effect to the three-for-two stock
split, totaled $0.383 per share for 2001 compared to $0.284 in 2000 and $.213 in
1999. These dividends reflect a 35% increase in 2001 over 2000 and a 33%
increase in 2000 over 1999.
The Corporation declares dividends on a quarterly basis in March, June,
September and December with payment following at the end of the month in which
the dividend was declared.
Funds for the payment by the Corporation of cash dividends are obtained
from dividends received by the Corporation from the Bank. Accordingly, the
declaration and payment of dividends by the Corporation depend upon the Bank's
earnings and financial condition, general economic conditions, compliance with
regulatory requirements, and other factors.
ITEM 6. SELECTED FINANCIAL DATA
FIVE YEAR SUMMARY OF CONSOLIDATED STATEMENTS AND RELATED STATISTICS
(amounts in Thousands, Except Percent and Per Share Data)
(Per Share Data adjusted for 3:2 split of January 2, 2002)
2001 2000 1999 1998 1997
----------------------------------------------------------------------
Summary of Earnings
- -------------------
Total Interest Income $ 29,119 $ 28,638 $ 25,476 $ 23,956 $ 21,588
Total Interest Expense 13,399 14,064 10,974 10,860 9,659
Provision for loan losses 1,123 918 849 846 740
Non-interest income 3,980 3,285 3,122 2,897 2,990
Non-interest expense 10,308 8,772 8,361 7,948 7,046
Income tax expense 2,558 2,635 2,793 2,487 2,561
Net Income 5,711 5,534 5,621 4,712 4,490
Per Share Data
- --------------
Earnings-basic $ 1.15 $ 1.12 $ 1.13 $ 0.95 $ 0.91
Earnings-diluted $ 1.15 $ 1.11 $ 1.13 $ 0.95 $ 0.91
Cash dividends $ 0.383 $ 0.283 $ 0.213 $ 0.160 $ 0.113
Book value at year end $ 9.51 $ 8.74 $ 7.57 $ 7.15 $ 6.29
Selected Year End Actual Balances
- ---------------------------------
Loans, net of unearned income $264,278 $252,022 $234,349 $211,349 $194,304
Allowance for possible loan losses (3,375) (3,325) (3,100) (2,900) (2,700)
Investment securities 122,567 103,533 102,451 91,539 67,292
Total assets 427,213 382,800 362,790 334,232 286,634
Deposits 359,309 289,908 284,462 282,242 248,984
Long term borrowings 14,629 10,000 10,000 10,000 -
Shareholders' equity 47,182 43,377 37,546 35,455 31,220
Selected Year End Average Balances
- ----------------------------------
Loans, net of unearned income $255,185 $244,307 $221,165 $202,228 $186,843
Allowance for possible loan losses (3,335) (3,198) (2,974) (2,701) (2,523)
Investment securities 106,632 102,325 97,219 79,401 70,023
Total assets 403,881 374,439 347,613 314,896 279,961
Deposits 327,536 290,704 288,176 268,514 242,459
Long term borrowings 14,815 10,000 10,000 7,630 3
Shareholders' equity 47,664 40,701 37,603 33,513 28,920
Selected Ratios
- ---------------
Return on average assets 1.41% 1.48% 1.62% 1.50% 1.60%
Return on average equity 11.98% 13.60% 14.95% 14.08% 15.24%
Dividend payout ratio 33.31% 25.41% 18.84% 16.85% 12.52%
Equity to year end assets 11.04% 11.33% 10.35% 10.61% 10.89%
Total risk-based capital to
risk-adjusted assets 18.40% 18.88% 18.52% 18.13% 17.02%
Leverage capital ratio 10.51% 11.61% 11.06% 10.61% 10.46%
Efficiency ratio 51.32% 47.20% 45.48% 48.01% 45.56%
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information on the Management's Discussion and Analysis of Financial
Condition and Results of Operations as of December 31, 2001, 2000, and 1999,
required by this Item 7 can be found under the headings "Management's Discussion
and Analysis of Financial Condition and Results of Operations as of December 31,
2001, 2000 and 1999" and "Consolidated Financial Statements" in the 2001 Annual
Report to Shareholders, a copy of which is filed as an Exhibit to this Annual
Report on Form 10-K. Such information is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information on the Quantitative and Qualitative Disclosures about Market
Risk, required by this Item 7A can be found under the headings "Quantitative and
Qualitative Disclosures about Market Risk" in the 2001 Annual Report to
Shareholders, a copy of which is filed as an Exhibit to this Annual Report on
Form 10-K. Such information is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information on Financial Statements and Supplementary Data required by this
Item 8 can be found under the headings "Management's Discussion and Analysis of
Financial Condition and Results of Operations as of December 31, 2001, 2000 and
1999", "Consolidated Financial Statements" and "Quarterly Financial Trends" in
the 2001 Annual Report to Shareholders, a copy of which is filed as an Exhibit
to this Annual Report on Form 10-K. Such information is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding the Directors and Executive Officers of the
Registrant required by this Item 10 can be found under the headings "Executive
Officers of the Registrant" in Item I of this Form 10-K and "Section 16(a)
Beneficial Ownership Reporting Compliance" and "Board of Directors" in the
Corporation's Definitive Proxy Statement filed with the Securities and Exchange
Commission on March 22, 2002, relating to its 2002 Annual Meeting of
Shareholders. Such information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information regarding the Executive Compensation paid by the Registrant
required by this Item 11 can be found under the headings "Executive
Compensation", "Compensation of the Board of Directors", "Stock Performance
Graph" and "Compensation Committee Interlocks and Insider Participation" in the
Corporation's Definitive Proxy Statement filed with the Securities and Exchange
Commission on March 22, 2002, relating to its 2002 Annual Meeting of
Shareholders. Such information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding Security Ownership of Certain Beneficial Owners and
Management can be found under the headings "Security Ownership of Directors,
Nominees and Executive Officers" and "Security Ownership of Certain Beneficial
Owners" in the Corporation's Definitive Proxy Statement filed with the
Securities and Exchange Commission on March 22, 2002, relating to its 2002
Annual Meeting of Shareholders. Such information is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding Certain Relationships and Related Transactions can be
found under the headings "Indebtedness of Related Parties" and "Interests of the
Board of Directors" in the Corporation's Definitive Proxy Statement filed with
the Securities and Exchange Commission on March 22, 2002, relating to its 2002
Annual Meeting of Shareholders. Such information is incorporated herein by
reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements
Consolidated Financial Statements and Supplementary Information for
years ended December 31, 1999, 2000 and 2001, which include the
following:
(i) Independent Auditor's Report
(ii) Consolidated Statements of Financial Condition
(iii) Consolidated Statements of Income
(iv) Consolidated Statements of Comprehensive Income
(v) Consolidated Statements of Changes in Shareholders' Equity
(vi) Consolidated Statements of Cash Flows
(vii) Notes to Consolidated Financial Statements
(b) Reports on Form 8-K.
The following reports on form 8-K were filed by the Corporation during
the last quarter of the period covered by this Form 10-K:
On October 29, 2001, the Corporation filed on Form 8-K under Item
7(a) and Item 9 a press release announcing a three-for-two stock split
payable December 31, 2001 to the Corporation's shareholders of record
December 14, 2001.
On October 30, 2001, the Corporation filed on Form 8-K under Item
7(a) and Item 9 a press release announcing the financial results of
the Corporation for the quarter ended September 30, 2001.
(c) Exhibits required by Item 601 of Regulation S-K
3(i) Amended Articles of Incorporation of the Corporation *
3(ii) Amended and Restated Bylaws of the Corporation *
4 Rights Agreement between Citizens Holding Company *
and The Citizens Bank of Philadelphia, Mississippi
10 Directors' Deferred Compensation Plan - Form of Agreement *
10(a) Citizens Holding Company 1999 Directors' Stock *
Compensation Plan
10(b) Citizens Holding Company 1999 Employees' Long-Term *
Incentive Plan
13 2001 Annual Report to Shareholders
21 Subsidiaries of Registrant *
* Filed as an exhibit to the Form 10 Registration Statement of the
Corporation (File No. 000-25221) filed on December 30, 1998 and incorporated
herein by reference, and also filed as an exhibit to Amendment No. 1 to Form 10
Registration Statement of the Corporation (File No. 000-25221) filed on June 21,
1999 and incorporated herein by reference.
(d) Financial Statement Schedules.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
By: /s/ Steve Webb By: /s/ Robert T. Smith
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STEVE WEBB ROBERT T. SMITH
CHAIRMAN, CHIEF EXECUTIVE TREASURER
OFFICER, PRESIDENT AND DIRECTOR
DATE: March 12, 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:
SIGNATURES CAPACITIES DATE
/s/ Steve Webb Chairman of the Board March 12, 2002
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/s/ Donald L. Kilgore Director March 12, 2002
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/s/ Herbert A. King Director March 12, 2002
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/s/ Greg L. McKee Director March 12, 2002
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/s/ M. G. Bond Director March 12, 2002
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/s/ Don Fulton Director March 12, 2002
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/s/ W. W. Dungan Director March 12, 2002
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/s/ David A. King Director March 12, 2002
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/s/ William M. Mars Director March 12, 2002
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/s/ George R. Mars Director March 12, 2002
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