11-K 1 elevenk.txt FORM 11-K 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 2 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. 4 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. 5 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. 6 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