SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________ to ___________.
Commission file number: 0-24611
A. Full title of the plan and address of the plan, if different from that
of the issuer named below:
Citizens Financial Services, FSB Employees' Savings & Profit Sharing Plan and
Trust
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CFS Bancorp, Inc.
707 Ridge Road
Munster, Indiana 46371
REQUIRED INFORMATION
Financial Statements. The following financial statements and schedules
are filed as part of this annual report for the Citizens Financial Services,
FSB Employees' Savings & Profit Sharing Plan and Trust (the "Plan") and appear
immediately after the signature page hereof:
Report of Independent Auditors
Statements of Net Assets Available for Benefits
Statements of Changes in Net Assets Available for Benefits
Notes to Financial Statements
Supplementary Schedules:
Schedule of Assets Held for Investment Purposes at End of
Year
Exhibits. The following exhibit is filed as part of this annual report:
Consent of independent public accountants
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees for the Plan have duly caused this annual report to be
signed by the undersigned hereunto duly authorized.
CITIZENS FINANCIAL SERVICES,
FSB EMPLOYEES' SAVINGS &
PROFIT SHARING PLAN AND TRUST
June 12, 2002 By: /s/ Thomas F. Prisby
-----------------------------
Thomas F. Prisby
Plan Administrator
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Citizens Financial Services, FSB
Employees' Savings & Profit Sharing Plan and Trust
Financial Statements and Supplemental Schedule
Years ended December 31, 2001 and 2000
Contents
Reports of Independent Auditors........................... 1
Financial Statements
Statements of Net Assets Available for Benefits........... 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements............................. 4
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of
Year).................................................... 8
Report of Independent Auditors
Plan Administrators
Citizens Financial Services, FSB Employees'
Savings & Profit Sharing Plan and Trust
We have audited the accompanying statements of net assets
available for benefits of Citizens Financial Services, FSB
Employees' Savings & Profit Sharing Plan and Trust as of
December 31, 2001 and 2000, and the related statement of
changes in net assets available for benefits for the years
then ended. 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 misstatements. 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 net assets
available for benefits of the Plan at December 31, 2001 and
2000, and the changes in its net assets available for
benefits for the years then ended, 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 purposes of
additional analysis and is not a required part of the
financial statements but is supplementary information
required by the Department of 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.
/s/ Ernst & Young LLP
June 14, 2002
1
Citizens Financial Services, FSB
Employees' Savings & Profit Sharing Plan and Trust
Statements of Net Assets Available for Benefits
December 31
2001 2000
-----------------------------
Assets
Investments, at fair value:
CFS Bancorp, Inc. common stock $4,768,735 $4,150,950
Mutual funds 4,091,383 3,825,869
Short-term investment fund 117,240 131,514
Participant loans 260,519 243,238
-----------------------------
Total investments 9,237,877 8,351,571
Receivables:
Employer's contribution 12,754 9,713
Participants' contributions 34,879 36,154
Dividends 29,908 34,955
Other 5,138 16,130
-----------------------------
Total receivables 82,679 96,952
-----------------------------
Total assets 9,320,556 8,448,523
Liabilities
Accounts payable 3,974 38,411
-----------------------------
Net assets available for benefits $9,316,582 $8,410,112
=============================
See notes to financial statements.
2
Citizens Financial Services, FSB
Employees' Savings & Profit Sharing Plan and Trust
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
2001 2000
------------------------------
Additions
Contributions:
Participants $ 706,124 $ 773,819
Employer 250,799 264,460
------------------------------
Total contributions 956,923 1,038,279
Investment income:
Dividend and interest income 149,665 173,634
Net realized and unrealized
appreciation in fair value of
investments 1,082,392 489,069
------------------------------
Total investment income 1,232,057 662,703
Total additions 2,188,980 1,700,982
Deductions
Distributions to participants 1,234,649 1,161,610
Administrative expenses 44,954 40,098
------------------------------
Total deductions 1,279,603 1,201,708
------------------------------
Net additions before assets
transferred 909,377 499,274
Assets transferred out, net (2,907) (2,965)
------------------------------
Net increase in assets available
for benefits 906,470 496,309
Net assets available for benefits
at beginning of year 8,410,112 7,913,803
------------------------------
Net assets available for benefits
at end of year $9,316,582 $8,410,112
==============================
See notes to financial statements.
3
Citizens Financial Services, FSB
Employees' Savings & Profit Sharing Plan and Trust
Notes to Financial Statements
December 31, 2001 and 2000
1. Description of the Plan
The following description of the Citizens Financial
Services, FSB Employees' Savings & Profit Sharing Plan and
Trust (the Plan) is provided for general information
purposes only. Participants should refer to the Plan
document for more complete information.
General
The Plan, adopted by Citizens Financial Services, FSB (the
Bank) on April 30, 1998 and effective on May 1, 1998, is a
single employer defined-contribution plan. Effective March
1, 2000, the Suburban Federal Savings 401(k) Plan was merged
into the Plan. Eligible participants of Suburban Federal
Savings, FSB became participants in the Plan and were
granted credit for certain prior service under the terms of
the Plan for purposes of eligibility and vesting. The Plan
allows all employees of the Bank and its subsidiaries to
participate after meeting certain age and service
requirements. To be eligible to participate in the Plan, an
employee must have attained the age of 21 and completed
1,000 hours of service during a 12 consecutive month period.
The Plan is subject to certain provisions of the Employee
Retirement Income Security Act of 1974 (ERISA) and is
intended to qualify as a salary reduction plan under Section
401(k) of the Internal Revenue Code, as amended by the Tax
Reform Act of 1986 (the Code).
Contributions
The Bank contributes and allocates to each participant's
account the amount withheld from each participant's
compensation (employee contributions) pursuant to his or her
elective deferral agreement and within a range specified by
the Plan. The Bank matches 50% of participant's
contributions to the Plan up to the first 6% of each
participant's contributions. The Employer may make
discretionary contributions to the Plan. Upon enrollment,
participants may direct their contributions, and related
matching contributions, in any of the Plan's investment
options.
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Citizens Financial Services, FSB
Employees' Savings & Profit Sharing Plan and Trust
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participant Accounts
Each participant's account is credited with the
participant's contribution, the Bank's matching contribution
and an allocation of Plan earnings. Plan earnings from each
investment fund option are allocated to participants based
on their proportionate share of total assets in that
investment fund option.
Vesting
Participants immediately vest in both their employee
contributions and the Bank's matching contributions and any
related earnings thereon.
Payment of Benefits
Payment of benefits to a participant who terminates
employment or becomes disabled may be made in a lump sum, in
annual installments over a specified period, or rolled into
another qualified plan. A participant also may elect to
defer distribution of his or her account until attaining age
70 1/2.
Payment of benefits to the beneficiary of a deceased
participant may also be made in the form of a lump sum
payment, annual installments over a specified period, or
rolled into another qualified plan.
Participant Loans
Under the Plan, participants may borrow up to one-half of
their account balance in any amount between $1,000 and
$50,000. The rate of interest for the term of the loan will
be established as of the loan date, and shall be a
reasonable rate of interest generally comparable to the
rates of interest then in effect at a major banking
institution. The repayment period is between 1 and 15 years
for loans used exclusively for the purchase of a primary
residence or 1 and 5 years for all other loans, at the
participant's option. Repayments are made through payroll
deductions. When a loan is made, the amount borrowed is
transferred from the participant's deposit account to the
participant's loan account. Loan repayments, including
interest, are immediately invested in the participant's
deposit account. A loan administrative fee of $50.00
origination fee, plus a $40.00 annual administrative fee
will be deducted from the participant's account.
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Citizens Financial Services, FSB
Employees' Savings & Profit Sharing Plan and Trust
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect
amounts reported in the financial statements and
accompanying notes. Actual results may differ from those
estimates.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Mutual
funds are valued at quoted market prices which represent the
net asset value of shares held by the Plan at year-end. The
common stock is valued at its quoted market price.
Participant notes receivable are valued at cost which
approximates fair value.
Purchases and sales of securities are recorded on a trade
date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the declaration date.
Payment of Benefits
Benefits are recorded when paid.
3. Investments
In conjunction with the Bank's conversion from a mutual to a
stock form of ownership, the Plan utilized existing funds to
purchase common stock of CFS Bancorp, Inc., the Bank's
Holding Company (the Company). At the date of conversion,
the Plan purchased 307,232 shares of stock at $10.00 per
share for participants indicating a desire to purchase stock
in the Company. Additional employee and Bank contributions
and cash dividends are utilized to purchase additional
shares on a regular basis.
At December 31, 2001 and 2000, the Plan was the beneficial
owner of 332,316 shares and 388,393 shares of Company common
stock, respectively. The fair value of this stock at
December 31, 2001 and 2000, was $14.3500 per share and
$10.6875 per share, respectively.
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Citizens Financial Services, FSB
Employees' Savings & Profit Sharing Plan and Trust
Notes to Financial Statements (continued)
3. Investments (continued)
During 2001 and 2000, the Plan's investments (including
investments purchased, sold as well as held during the year)
appreciated (depreciated) in fair value as determined by
quoted market prices as follows:
Year ended December 31
2001 2000
-----------------------------
CFS Bancorp, Inc. common stock $1,267,789 $494,535
Mutual funds (185,397) (5,466)
-----------------------------
$1,082,392 $489,069
=============================
The fair value of individual investments that represent 5%
or more of the Plan's net assets is as follows:
2001 2000
-----------------------------
CFS Bancorp, Inc. common stock $4,768,735 $4,150,950
Pentegra S&P 500 Stock Fund 1,297,436 1,342,982
Pentegra S&P Midcap Stock Fund 936,503 837,095
Pentegra Stable Value Fund 773,074 669,472
4. Plan Termination
Although it has not expressed any intent to do so, the Bank
has the right under the Plan to discontinue its contribution
at any time and to terminate the Plan, subject to the
provisions of ERISA at any time.
5. Tax Status
The Plan has received a determination letter from the
Internal Revenue Service dated September 22, 1999, stating
that the Plan is qualified under Section 401 (a) of the
Code, and therefore the related trust is exempt from
taxation. The Plan was amended subsequent to the IRS
determination letter. Once qualified, the Plan is required
to operate in conformity with the Code to maintain its
qualification. The Plan administrator believes the Plan is
being operated in compliance with the applicable
requirements of the Code, and therefore believes that the
Plan is qualified and the related trust is tax exempt.
7
Supplemental Schedule
Citizens Financial Services, FSB
Employees' Savings & Profit Sharing Plan and Trust
Schedule H, Line 4i - Schedule of Assets (Held
at End of Year)
EIN No. 13-3381592
Plan No. 2
December 31, 2001
Identity of Issue, Borrower, Current
or Similar Party Description Value
- -----------------------------------------------------------------------------
CFS Bancorp, Inc. common stock* 332,316 Shares $4,768,735
Pentegra Income Plus Asset Allocation
Fund 3,481 Shares 45,703
Pentegra Growth & Income Asset
Allocation Fund 14,454 Shares 188,049
Pentegra Growth Asset Allocation Fund 9,761 Shares 122,506
Pentegra International Stock Fund 10,700 Shares 101,585
Pentegra S&P Midcap Stock Fund 50,215 Shares 936,503
Pentegra S&P 500 Stock Fund 84,744 Shares 1,297,436
Pentegra Government Bond Fund 6,907 Shares 101,458
Pentegra Stable Value Fund 58,288 Shares 773,074
Pentegra Money Market Fund 144,789 Shares 144,789
Pentegra 500 Value Stock Fund 6,041 Shares 60,897
Pentegra 500 Growth Stock Fund 13,360 Shares 114,361
Pentegra Russell 2000 Stock Fund 17,553 Shares 205,021
Collective Short Term Investment Fund 117,240 Shares 117,240
Participant loans 6.0% to 10.5% interest rate 260,519
----------
$9,237,876
==========
*Denotes party-in-interest.
8