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Shareholder Information
President's Message
Click here to view an electronic copy of Citizens Bancshares Corporation 2006 Annual Report.
Message to Our Stockholders
Greetings and thank you for your continued support of Citizens Bancshares Corporation and its wholly-owned subsidiary,
It is with pleasure that we share with you the record financial results of our efforts on your behalf. We were successful in gaining new customers as we saw our deposits increase by some $14 million, or 5.6% higher than that reported at year-end 2005. This deposit growth allowed us to restructure our balance sheet to be slightly less rate sensitive. Growth in the loan portfolio was more of a challenge as the fierce competition for commercial loans caused us to miss our commercial loan growth targets. However, because of a renewed internal sales culture, we saw good growth in consumer lending. Overall, our net loans grew by a modest $2.3 million. Our focus in 2006 was on profitability, yet we were still able to grow our total assets by 2% to $335 million. Total interest income for the year increased by 9.25% to $21.6 million. However, our interest expense grew at a faster pace of 34.8% to $7.3 million reflecting the industry-wide margin squeeze caused by higher rates paid for deposits than could be passed along to borrowers. To counter the negative impact of the narrowed net interest margin, management focused on increased efficiency throughout the year. As a result, our non-interest expense declined 6.8% or $1.1 million when compared to 2005.
The efforts of your board, management and staff resulted in an outstanding year with net income rising by a remarkable 28% to a record $3.0 million which compares very favorably to the $2.3 million of net income reported for 2005. As a result of our successful operations during 2006, the board of directors has declared a dividend of 19 cents per share to stockholders of record as of April 10, 2007, a 12% increase over the 17 cents per share paid last year.
We are pleased to report to you that in June 2005, Cynthia Day was named Senior Executive Vice President & Chief Operating Officer of Citizens Bancshares Corporation and its wholly owned subsidiary, Citizens Trust Bank. Ms. Day joined Citizens Trust Bank as Executive Vice President, Director of Management Services in 2003 after Citizens Trust Bank acquired Citizens Federal Savings Bank (Birmingham, AL) where Ms. Day was Chief Operating Officer. As Chief Operating Officer of your company, Ms. Day is responsible for financial accounting, consumer banking, marketing, compliance, human resources and bank operations. Her appointment makes her the first female Chief Operating Officer in the Bank's 85 year history.
Thank you again for your continued support. Although challenges continue for most all banks in this highly regulated industry, we are confident in our ability to compete effectively and continue to enhance shareholder value.
Ray M. Robinson James E. Young
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Citizens Trust Bank. 2006 was a challenging year for the banking industry characterized by an unfavorable interest rate environment, a higher cost of funds and strong competition for market share. In Georgia, our headquarters state, there were no less than fifteen new banks created in 2006; and more than half of those were started in Atlanta. We began the year with a strategic plan to re-introduce the CTB brand to the market place. Like other observers, we witnessed the continued growth in population of the Metro-Atlanta area. However, we also recognized that most of the newcomers were not familiar with Citizens Trust Bank and its stellar 85 year history of community economic empowerment and reinvestment. In addition, we needed to continue to capitalize on our presence in Birmingham, Alabama; a market we entered in 2003 with the acquisition of Citizens Federal Savings Bank. With the assistance of an outside marketing consultant, we embarked upon an external campaign to affirm that our products and services were as beneficial to the consumer and small business owner as any offered by our competitors. We also conducted an internal campaign to recommit ourselves to the excellent delivery of those products and services in an efficient manner.
