SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year end December 31, 2001
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file Number 0-10535
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A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
CITIZENS BANKING CORPORATION
AMENDED AND RESTATED SECTION
401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CITIZENS BANKING CORPORATION
One Citizens Banking Center
328 South Saginaw Street
Flint, Michigan 48502
Citizens Banking Corporation
Index to Form 11-K
FINANCIAL INFORMATION
Financial Statements and Supplemental Schedule for Citizens Banking
Corporation's Amended And Restated Section 401(k) Plan ................. 3
SIGNATURES .................................................................. 17
EXHIBIT INDEX ............................................................... 18
2
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Citizens Banking Corporation Amended and Restated Section 401(k) Plan
December 31, 2001 and 2000 and Year ended December 31, 2001
with Report of Independent Auditors
3
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Financial Statements
and Supplemental Schedule
December 31, 2001 and 2000 and
Year ended December 31, 2001
CONTENTS
Report of Independent Auditors................................................1
Financial Statements
Statements of Assets Available for Benefits...................................2
Statement of Changes in Assets Available for Benefits.........................3
Notes to Financial Statements.................................................4
Supplemental Schedule
Schedule H, Line 4i -- Schedule of Assets (Held at End of Year)..............10
Report of Independent Auditors
Administrative Committee
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
We have audited the accompanying statements of assets available for benefits of
the Citizens Banking Corporation Amended and Restated Section 401(k) Plan as of
December 31, 2001 and 2000, and for the related statements of changes in assets
for the year ended December 31, 2001. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the 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 financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 2001 and 2000, and the changes in its assets available for benefits for the
year ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental Schedule of Assets
(Held at End of Year) as of December 31, 2001, is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department for Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. This supplemental schedule is the responsibility of
the Plan's management. The supplemental schedule has been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
June 14, 2002
1
Citizens Banking Corporation Amended
And Restated Section 401(k) Plan
Statements of Assets Available for Benefits
DECEMBER 31
2001 2000
------------------- -----------------
ASSETS
Investments, at fair value:
Common stock:
Citizens Banking Corporation $ 53,575,112 $ 57,738,187
Mutual funds 73,211,155 80,434,981
Money market account 9,458,132 5,217,709
Loans to participants 3,311,436 3,327,833
------------------- -----------------
Total investments 139,555,835 146,718,710
Receivables:
Contributions -- Employer - 120,350
Contributions -- Employee - 222,384
------------------- -----------------
Total receivables - 342,734
------------------- -----------------
Assets available for benefits $ 139,555,835 $ 147,061,444
=================== =================
See accompanying notes.
2
Citizens Banking Corporation Amended
And Restated Section 401(k) Plan
Statement of Changes in Assets Available for Benefits
Year ended December 31, 2001
ADDITIONS
Investments income:
Dividends:
Citizens Banking Corporation $ 1,988,813
Other 2,701,095
Interest income 310,384
----------------
Total investment income 5,000,292
Contributions:
Employer 3,181,139
Employee 6,110,610
----------------
9,291,749
Transfers from other plans (Note 3) -
DEDUCTIONS
Benefit payments to participants (14,569,876)
Management fees (66,405)
----------------
(14,636,281)
Net realized and unrealized (depreciation) appreciation
in fair value of investments (Note 4) (7,161,369)
----------------
Net (decrease) increase (7,505,609)
Assets available for benefits at beginning of year 147,061,444
----------------
Assets available for benefits at end of year $ $139,555,835
================
See accompanying notes.
3
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
December 31, 2001 and 2000
1. DESCRIPTION OF THE PLAN
The following description provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
The Citizens Banking Corporation Amended and Restated Section 401(k) Plan (the
"Plan") is a defined contribution plan which includes a 401(k) salary deferral
feature. The Plan covers substantially all employees of Citizens Banking
Corporation (the "Corporation") and its banking subsidiaries.
Effective January 1, 2001, the plan was amended to reduce the hours of required
service to become eligible, salaried employees are eligible for the Plan on the
first business day of the calendar quarter coincident with or following their
date of hire. Additionally, hourly employees are eligible for the Plan on the
first business day of the month coincident with or next following the completion
of ninety consecutive days of employment with the Corporation in which the
employee is credited with at least 180 hours of credited service. If an hourly
employee fails to be credited with at least 180 hours of credited service in the
first ninety days of employment, he shall commence participation in the Plan on
the first day of the month following any calendar quarter in which he is
credited with at least 180 hours of credited service. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
In 2001 and 2000, participants were able to contribute up to 15% of their annual
salary, not to exceed the annual IRS limitation of $10,500. On an after-tax
basis employees may contribute up to 10% of their compensation.
The Corporation will match the participant's pre-tax contribution up to 6% of
the participant's compensation (includes regular base salary or wages,
commissions, overtime, shift premiums, incentive pay and referral pay). The
Corporation will match 100% on the first 3% of pre-tax salary deferral and 50%
on the next 3% of pre-tax salary deferral, for a total of a 75% match on a 6%
pre-tax salary deferral. In addition, a retiree medical savings account was
established for each participant. One third of the employer matching
contribution is automatically directed into this account. Employees may not
borrow against any monies residing in this account.
Participants are immediately vested in their contributions and the Corporation's
matching contributions plus actual earnings thereon. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's account. Participants direct the investment of their accounts,
inclusive of the employer contribution balance, among the investments offered by
the Plan.
4
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Participants may borrow from their fund accounts a minimum of $2,000 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account balance.
Loan terms range from 1-5 years or up to 15 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's account and
bear interest at a rate commensurate with local prevailing rates as determined
quarterly by the plan administrator. Principal and interest is paid ratably
through monthly payroll deductions.
On termination of service, death, disability, or retirement, the participant
will elect to receive, defer, or rollover a single lump-sum amount equal to the
vested value of his or her account.
All administrative expenses of the Plan are paid by the Corporation.
Although it has not expressed any intent to do so, the Corporation has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
2. SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS
Investments are stated at aggregate fair value. Securities traded on a national
securities exchange are valued at the last reported sales price on the last
business day of the year; investments traded in the over-the-counter market and
listed securities for which no sale was reported on that date are valued at the
average of the last reported bid and ask prices. The shares of registered
investment companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year-end.
The participant loans are valued at their outstanding balances, which
approximate fair value.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
5
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
3. PLAN MERGER
Effective January 1, 2000, $28,771,209 which represented all remaining net
assets of three former F&M Bank Plans, was transferred to the Citizens Banking
Corporation Amended and Restated Section 401(k) Plan, at that time the three
former F&M Bank Plans merged out of existence. The three plans included
$25,575,883 of the former F&M Employees Retirement Savings Plan and Trust,
$3,018,933 of the former F&M Bank Woodruff Employee Stock Ownership Plan and
Trust, and $176,393 of the former Community Bank of Elkhorn 401(k) Profit and
Sharing Plan.
4. INVESTMENTS
During the year ended December 31, 2001, the Plan's investments (including
investments purchased, sold as well as held during the year) (depreciated)
appreciated in fair value as determined by quoted market prices as follows:
Common stock:
Citizens Banking Corporation $ 6,412,767
Mutual funds (13,574,136)
----------------
$ (7,161,369)
================
6
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
4. INVESTMENTS (CONTINUED)
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
DECEMBER 31
2001 2000
----------------- -----------------
**Citizens Banking Corporation Common Stock $53,575,112 $57,738,187
**Golden Oak Prime Obligation Class A 9,458,132 *
**Golden Oak Value Portfolio Fund 7,215,613 7,498,904
**Golden Oak Diversified Growth Fund 7,097,946 10,104,444
Invesco Balanced Fund 18,368,816 24,829,673
Janus Advisor International Retirement Class Fund 7,908,996 *
Janus Overseas Fund * 10,548,100
*Investment does not represent 5% or more of fair value of the Plan's net
assets.
**Party-in-interest.
The Plan invests certain fund assets in the Golden Oak series of mutual funds.
Citizens Bank, a subsidiary of Citizens Banking Corporation, serves as the
investment advisor to these funds. The mutual fund portfolios were established
pursuant to the provisions of the Investment Company Act of 1940. Investments
within these portfolios were made in accordance with the applicable Department
of Labor rules and regulations concerning the investment of qualified plan
assets into mutual funds wherein the investment advisor to the portfolio is a
party-in-interest with respect to the plan.
7
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
4. INVESTMENT (CONTINUED)
The following is a summary of transactions (at cost) with parties-in-interest:
CITIZENS
BANKING GOLDEN OAK GOLDEN GOLDEN OAK GOLDEN OAK
CORP. PRIME OAK VALUE DIVERSIFIED GOLDEN OAK SMALL GOLDEN OAK
COMMON OBLIGATION PORTFOLIO GROWTH INTERMEDIATE CAPITAL INTERNATIONAL
STOCK CLASS A FUND FUND INCOME FUND FUND EQUITY FUND
------------- ------------ ----------- ------------ -------------- ------------ --------------
BALANCE AT
JANUARY 1, 2000 $27,970,973 $3,412,105 $7,262,646 $ 8,487,798 $6,020,748 $3,477,921 $
-
TRANSFERS FROM
OTHER PLANS 7,657,529 2,128,369 22,403 1,683,134 - 804,931 -
PURCHASES IN 2000 8,014,401 4,262,690 2,065,482 5,427,238 1,322,215 1,398,843 145,681
SALES IN 2000 8,600,071 4,585,455 1,480,863 1,938,035 1,723,830 912,291 3,030
------------- ------------ ----------- ------------ -------------- ------------ --------------
BALANCE AT
DECEMBER 31, 2000 35,042,832 5,217,709 7,869,668 13,660,135 5,619,133 4,769,404 142,651
------------- ------------ ----------- ------------ -------------- ------------ --------------
PURCHASES IN 2001 6,469,346 10,776,226 2,347,801 2,179,166 2,873,695 2,793,165 332,141
SALES IN 2001 11,377,048 6,535,802 1,610,292 3,522,996 1,810,669 1,345,462 46,693
------------- ------------ ----------- ------------ -------------- ------------ --------------
BALANCE AT
DECEMBER 31, 2001 $30,135,130 $9,458,133 $8,607,177 $12,316,305 $6,682,159 $6,217,107 $428,099
============= ============ =========== ============ ============== ============ ==============
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated May 25, 1999, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Subsequent to the issuance of the determination letter,
the Plan was amended and restated in its entirety. Once qualified, the plan is
required to operate in conformity with the Code to maintain its qualification.
The Plan Administrator believes the Plan is operating in compliance with the
applicable requirements of the Code and, therefore believes that the Plan is
qualified and the related trust is tax exempt.
8
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Notes to Financial Statements (continued)
6. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of assets available for benefits per the
financial statements to the Form 5500:
DECEMBER 31
2001 2000
----------------------------------
Net assets available for benefits per the financial
statements $139,555,835 $147,061,444
Amounts allocated to withdrawn participants (801,374) -
----------------------------------
Net assets available for benefits per the Form 5500 $138,754,461 $147,061,444
==================================
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
YEAR ENDED
DECEMBER 31,
2001
------------
Benefits paid to participants per the financial
statements $ 14,569,876
Add:
Amounts allocated on Form 5500 to withdrawn
participants at December 31, 2001 801,374
Less:
Amounts allocated on Form 5500 to withdrawn
participants at December 31, 2000 -
------------
Benefits paid to participants per the Form 5500 $ 15,371,250
============
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
year-end but not yet paid.
9
Supplemental Schedule
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Employer ID #38-2378932
Plan #002
Schedule H, Line 4i - Schedule of Assets
(Held at End of Year)
December 31, 2001
DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, CURRENT
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock:
*Citizens Banking Corporation 1,628,138 Shares $ 53,575,112
-----------------
Total Common Stock 53,575,112
Mutual Funds:
*Golden Oak Diversified Growth Fund 831,141 Units 7,097,946
*Golden Oak Intermediate Income Fund 689,623 Units 6,916,915
*Golden Oak Value Portfolio Fund 915,687 Units 7,215,613
*Golden Oak Small Capital Fund 571,724 Units 6,734,906
*Golden Oak International Equity Fund 56,669 Units 390,449
AIM Mid-Cap Equity Fund 47,440 Units 1,131,445
American Growth Fund 123,900 Units 2,937,677
Berger Mid-Cap Value Fund 86,175 Units 1,461,534
Fidelity Advisor Mortgage Securities Fund 140,985 Units 1,535,330
*Invesco Small Company Growth Fund 495,995 Units 6,021,378
*Invesco Balanced Fund 1,255,558 Units 18,368,816
10
Citizens Banking Corporation Amended
and Restated Section 401(k) Plan
Employer ID #38-2378932
Plan #002
Schedule H, Line 4i - Schedule of Assets
(Held at End of Year) (continued)
December 31, 2001
DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, CURRENT
LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Mutual Funds (continued):
Janus Advisor International Retirement
Class Fund 322,290 Units $ 7,908,996
State Street Global Advisors S&P 500
Index Fund 290,177 Units 5,490,150
--------------
Total Mutual Funds 73,211,155
Money Market Account:
*Golden Oak Prime Obligation Class A $9,458,132 principal amount 9,458,132
--------------
Total Money Market Account 9,458,132
Participant Loans Interest rate range: 5.75% - 10.5%;
with various maturity dates $ - 3,311,436
=====================================
$ 139,555,835
==============
11
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date June 25, 2002 /s/ Marilyn K. Allor
-------------------------------- ---------------------------
Marilyn K. Allor
Acting Chairperson, Pension/401(K)
Administration Committee
/s/Kurt A. Schulze
---------------------------
Kurt A. Schulze
Secretary, Pension/401(k)
Administration Committee
17
Citizens Banking Corporation
EXHIBIT INDEX
(FILED AS PART OF THIS REPORT ON FORM 11-K)
Exhibit Form 11-K
No. Exhibit Page No.
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23 Consent of Independent Accountant 19
18