Shareholder Information
ATTENTION SHAREHOLDERS:
There will be an annual shareholders’ meeting on May 27, 2009 at 10:30am at the Loudermilk Conference Center, 40 Courtland Street, N. E., Atlanta, Georgia.
Click here for more details.
Message to Our Stockholders
Sincere greetings to you all. At the very outset of this communication, we want to say thanks for your continued support and confidence despite a challenging year in a very tough economic environment. We also want to thank all of our associates who continued to work diligently throughout 2008 to ensure positive results and another year of profitability. We are proud of them and think you should be as well.
We are pleased to report to you that the net income for Citizens Bancshares Corporation and its wholly-owned subsidiary, Citizens Trust Bank, for the fiscal year ended December 31, 2008 amounted to $1,023,000. This compares unfavorably to the $2,856,000 earned in fiscal 2007 and represents a decline of 64.2%. While disappointed by the earnings decline, it is important to note that we were able to maintain significant profitability despite stiff headwinds.
At the beginning of 2008, it was already apparent that the year would present significant challenges to almost every sector of the economy, particularly banking. Indeed, during 2008, we witnessed a steady decline in economic conditions to the point of what most of the nation’s economists described as the deepest recession in more than forty years. It came as a surprise that the weak economy would claim the likes of such financial giants as Merrill Lynch, Wachovia, Washington Mutual, Indy Mac Bank, Countrywide Mortgage, Bear Stearns, and Lehman Brothers.
Smaller community banks, like Citizens Trust Bank were not spared the fallout from the economic decline as eight banks in Georgia were closed in the last year. Despite such grim news, your company’s management, staff and board of directors worked hard to ensure the safety and soundness of your investment and confidence in our ability to weather the storm.
As some of our customers began to experience difficulty in meeting their loan payment obligations to us, we began adding to the bank’s reserve for possible loan losses. In fact, by year-end 2008, we had charged a total of $2.5 million against earnings to fund the increase in the loss reserve, where no such allocation was required in fiscal 2007. At December 31, 2008, the allowance for loan loss was $4,659,000 or 2.17% of total loans. The company and its auditors consider our allowance for loan losses to be adequate.
On a good note, 2008 did bring growth in the company’s total assets. During the fiscal period, total assets increased by almost $10 million to $348,095,000. In addition, we announced that we had entered into an agreement with The Peoples Bank to acquire $50,000,000 in deposits and the financial center of its branch located in downtown Lithonia, Georgia. While the transaction was not completed until the first quarter of 2009, the growth in deposits and the addition of some 2,500 new customers bode well for the future of your company.
As you know, the federal government has found it necessary to intervene and provide stimulus to the economy to foster a speedier economic recovery. In October of 2008, the government announced that it would provide capital to some of the nation’s banks so that they could continue to support economic stability. Only banks, determined by banking regulators to have a viable future were eligible to receive such funds under the Troubled Asset Relief Program (TARP). Citizens Bancshares Corporation was the first bank in Georgia, with total assets less than $1 billion, to be approved for this important investment. Again, the transaction under which the company received $7.4 million in new capital was not completed until the first quarter of 2009.
This transaction served to strengthen our capital position. While already a “well capitalized” financial institution as defined by banking regulators at year-end 2008, the additional capital positions us well to absorb the impact of a continued weak economy and fully participate in the economic recovery when it occurs.
There is still uncertainty regarding the depth of the recession and its duration. However, Citizens Bancshares Corporation remains a strong financial institution with a bright future. Therefore, it is with pleasure that we advise you that the board of directors has declared a dividend on common stock of $0.19 per share, payable on April 30, 2009 to shareholders of record as of the close of business on April 10, 2009.
Thank you again for your continued confidence. We are as certain as ever that we will be able to continue to effectively manage your company and enhance shareholder value.
James E. Young President & CEO |
Ray M. Robinson Chairman of the Board |
