-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E+qfmxHUOcITh5RZhXNc7T9KGETEdrTwyOEPlCjOCJ05pS38hSnU968pugrT9Zfo 5NmOdmcaIg/YjNbZCBkCSQ== 0000950124-98-003613.txt : 19980629 0000950124-98-003613.hdr.sgml : 19980629 ACCESSION NUMBER: 0000950124-98-003613 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980626 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS BANKING CORP CENTRAL INDEX KEY: 0000351077 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 382378932 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-10535 FILM NUMBER: 98655331 BUSINESS ADDRESS: STREET 1: ONE CITIZENS BANKING CTR STREET 2: 328 SOUTH SAGINAW STREET CITY: FLINT STATE: MI ZIP: 48502 BUSINESS PHONE: 8107667500 MAIL ADDRESS: STREET 1: 1 CITIZENS BANKING CENTER STREET 2: 328 SOUTH SAGINAW STREET CITY: FLINT STATE: MI ZIP: 48502 11-K 1 FORM 11-K 1 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, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from_________________ to__________________ Commission file Number 0-10535 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 2 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 22, 1998 /s/ Gary P. Drainville -------------------------------- ------------------------ Gary P. Drainville Chairman, Pension/401(k) Administration Committee /s/ Kurt A. Schulze ------------------------ Kurt A. Schulze Secretary, Pension/401(k) Administration Committee 1 3
Exhibit EXHIBIT INDEX Form 11-K No. Exhibit Page No. - ---------------- ---------------------------------------------------------- ----------- 13 Citizens Banking Corporation Amended and Restated Section (1) 401(k) Plan 1997 Annual Report 23 Consents of Independent Accountants (1)
(1) Exhibit included on the following pages of this Annual Report on Form 11K filing. 2 EX-13 2 EXHIBIT 13 1 EXHIBIT 13 Financial Statements and Other Financial Information Citizens Banking Corporation Amended and Restated Section 401(k) Plan Years ended December 31, 1997, 1996 and 1995 with Report of Independent Auditors [ERNST & YOUNG LLP LOGO] 2 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Financial Statements and Other Financial Information December 31, 1997 CONTENTS Report of Independent Auditors....................................................................... 1 Financial Statements and Schedule Statement of Assets Available for Plan Benefits...................................................... 3 Statement of Changes in Assets Available for Plan Benefits........................................... 5 Notes to Financial Statements........................................................................ 8 Other Financial Information Schedule of Assets Held for Investment............................................................... 15 Schedule of Reportable Transactions.................................................................. 21
3 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 plan benefits of the Citizens Banking Corporation Amended and Restated Section 401(k) Plan as of December 31, 1997 and 1996, and the related statements of changes in assets available for plan benefits for each of the three years in the period ended December 31, 1997. 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 generally accepted auditing standards. 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 plan benefits of the Plan at December 31, 1997 and 1996, and the changes in its assets available for plan benefits for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental Schedule of Assets Held for Investment as of December 31, 1997 and Schedule of Reportable Transactions for the year then ended are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the financial statements. The fund information in the Statements of Assets Available for Plan Benefits and changes in Assets Available for Plan Benefits is presented for purposes of additional analysis rather than to present the assets available for benefits and changes in assets available of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in our audit of the 1997 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1997 financial statements taken as a whole. /s/ Ernst & Young May 8, 1998 4 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Statement of Assets Available for Plan Benefits, With Fund Information December 31, 1997
FUND INFORMATION ------------------------------------------------------------------------------ 401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS ------------------------------------------------------------------------------ CITIZENS INTERMEDIATE BANKING MONEY INCOME EQUITY CORPORATION BALANCED MARKET FUNDS FUNDS STOCK FUNDS FUNDS PAYSOP ------------------------------------------------------------------------------ ASSETS Investments at fair value (cost--$73,603,990): Marketable: Common stocks: Citizens Banking Corporation $57,772,010 $ 3,811,767 $270,963 Mutual funds $7,298,364 $22,568,421 21,473,846 U.S. Government securities 1,309,079 2,651,005 Money market account 159,043 2,635,830 238,339 1,070,929 $1,511,863 ------------------------------------------------------------------------------ Total investments 8,766,486 25,204,251 58,010,349 29,007,547 1,511,863 270,963 Receivables: Loans to participants Accrued income 63,026 220,592 1,352 478,905 7,236 37 Contributions - Employer 8,716 39,342 38,760 22,814 4,501 Contributions - Employee 10,884 40,980 52,324 16,053 2,705 Other 8,144 10,587 15,674 4,071 157 ------------------------------------------------------------------------------ 90,770 311,501 108,110 521,843 14,599 37 Cash 1 (400) (11,236) 12,019 431 1,014 ------------------------------------------------------------------------------ Assets available for plan benefits $8,857,257 $25,515,352 $58,107,223 $29,541,409 $1,526,893 $272,014 ============================================================================== FUND INFORMATION -------------------------- PARTICIPANT DIRECTED SEGREGATED PARTICIPANT FUNDS LOAN FUND TOTAL ---------------------------------------- ASSETS Investments at fair value (cost--$73,603,990): Marketable: Common stocks: Citizens Banking Corporation $ 61,854,740 Mutual funds 51,340,631 U.S. Government securities $1,291,245 5,251,329 Money market account 156,541 5,772,545 ---------------------------------------- Total investments 1,447,786 124,219,245 Receivables: Loans to participants $3,131,766 3,131,766 Accrued income 26,682 797,830 Contributions - Employer 114,133 Contributions - Employee 122,946 Other 38,633 ---------------------------------------- 26,682 3,131,766 4,205,308 Cash 60,911 62,740 ---------------------------------------- Assets available for plan benefits $1,535,379 $3,131,766 $128,487,293 ========================================
See accompanying notes. 3 5 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Statement of Assets Available for Plan Benefits, With Fund Information December 31, 1996
FUND INFORMATION ------------------------------------------------------------------------------ 401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS ---------------------------------------------------------------- CITIZENS INTERMEDIATE BANKING MONEY INCOME EQUITY CORPORATION BALANCED MARKET PARTICIPANT FUNDS FUNDS STOCK FUNDS FUNDS LOAN FUND TOTAL -------------------------------------------------------------------------------------------- ASSETS Investments at fair value (cost--$53,386,080): Marketable: Common stocks: Citizens Banking Corporation $33,607,885 $ 186,638 $33,794,523 Mutual funds $7,326,545 $16,346,630 15,105,760 38,778,935 Money market account 365,035 100,009 171,595 1,189,212 $1,295,617 3,121,468 -------------------------------------------------------------------------------------------- Total investments 7,691,580 16,446,639 33,779,480 16,481,610 1,295,617 75,694,926 Receivables: Loans to participants $3,491,573 3,491,573 Accrued income 35,986 154,444 622 291,887 5,617 488,556 -------------------------------------------------------------------------------------------- 35,986 154,444 622 291,887 5,617 3,491,573 3,980,129 Cash 7,761 18,881 31,876 7,274 1,867 67,659 -------------------------------------------------------------------------------------------- Assets available for plan benefits $7,735,327 $16,619,964 $33,811,978 $16,780,771 $1,303,101 $3,491,573 $79,742,714 ============================================================================================
See accompanying notes. 4 6 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Statement of Changes in Assets Available for Plan Benefits, With Fund Information Year ended December 31, 1997
FUND INFORMATION ------------------------------------------------------------------------------ 401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS ------------------------------------------------------------------------------ CITIZENS INTERMEDIATE BANKING MONEY INCOME EQUITY CORPORATION BALANCED MARKET FUNDS FUNDS STOCK FUNDS FUNDS PAYSOP ------------------------------------------------------------------------------ ADDITIONS Investment income: Dividends: Citizens Banking Corporation $ 1,243,324 $ 50,778 $ 2,977 Other $ 436,933 $ 3,172,687 1,810,032 Interest income 109,018 28,982 15,185 188,660 $ 85,514 247 ------------------------------------------------------------------------------ Total investment income 545,951 3,201,669 1,258,509 2,049,470 85,514 3,224 Contributions: Employer 192,593 577,543 870,604 218,308 43,806 Employee 332,599 1,198,367 1,644,533 469,298 72,985 ------------------------------------------------------------------------------ 525,192 1,775,910 2,515,137 687,606 116,791 ------------------------------------------------------------------------------ 1,071,143 4,977,579 3,773,646 2,737,076 202,305 3,224 DEDUCTIONS Benefit payments to participants (1,712,961) (3,597,259) (6,641,964) (4,825,476) (1,065,642) (16,998) Transfers (net) (71,372) 1,670,756 (973,284) (689,579) 743,415 ------------------------------------------------------------------------------ (1,784,333) (1,926,503) (7,615,248) (5,515,055) (322,227) (16,998) Net realized and unrealized appreciation (depreciation) in fair value of investments: Realized 1,224 2,258,955 2,366,077 5,208,469 12,184 Unrealized 111,900 (535,660) 21,061,610 (2,481,985) 88,806 ------------------------------------------------------------------------------ 113,124 1,723,295 23,427,687 2,726,484 100,990 ------------------------------------------------------------------------------ Net increase (600,066) 4,774,371 19,586,085 (51,495) (119,922) 87,216 Transfer in from CB Financial Retirement Savings Plan 1,721,996 4,121,017 4,709,160 12,812,133 343,714 184,798 Assets available for plan benefits at beginning of year 7,735,327 16,619,964 33,811,978 16,780,771 1,303,101 ------------------------------------------------------------------------------ Assets available for plan benefits at end of year $8,857,257 $25,515,352 $58,107,223 $29,541,409 $1,526,893 $272,014 ============================================================================== FUND INFORMATION --------------------------- PARTICIPANT DIRECTED SEGREGATED PARTICIPANT FUNDS LOAN FUND TOTAL --------------------------------------- ADDITIONS Investment income: Dividends: Citizens Banking Corporation $ 1,297,079 Other 5,419,652 Interest income $ 106,971 $ 314,998 849,575 --------------------------------------- Total investment income 106,971 314,998 7,566,306 Contributions: Employer 1,902,854 Employee 3,717,782 --------------------------------------- 5,620,636 --------------------------------------- 106,971 314,998 13,186,942 DEDUCTIONS Benefit payments to participants (953,670) (18,813,970) Transfers (net) (5,131) (674,805) --------------------------------------- (958,801) (674,805) (18,813,970) Net realized and unrealized appreciation (depreciation) in fair value of investments: Realized 1,452 9,848,361 Unrealized 9,039 18,253,710 --------------------------------------- 10,491 28,102,071 --------------------------------------- Net increase (841,339) (359,807) 22,475,043 Transfer in from CB Financial Retirement Savings Plan 2,376,718 26,269,536 Assets available for plan benefits at beginning of year 3,491,573 79,742,714 --------------------------------------- Assets available for plan benefits at end of year $1,535,379 $3,131,766 $128,487,293 =======================================
See accompanying notes. 5 7 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Statement of Changes in Assets Available for Plan Benefits, With Fund Information Year ended December 31, 1996
FUND INFORMATION -------------------------------------------------------------------------------- 401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS ------------------------------------------------------------------- CITIZENS INTERMEDIATE BANKING MONEY INCOME EQUITY CORPORATION BALANCED MARKET PARTICIPANT FUNDS FUNDS STOCK FUNDS FUNDS LOAN FUND TOTAL --------------------------------------------------------------------------------------------- ADDITIONS Investment income: Dividends: Citizens Banking Corporation $ 1,034,439 $ 42,400 $ 1,076,839 Other $ 407,751 $ 1,655,200 791,681 2,854,632 Interest income 45,817 6,532 8,098 28,068 $ 38,384 $ 312,530 439,429 --------------------------------------------------------------------------------------------- Total investment income 453,568 1,661,732 1,042,537 862,149 38,384 312,530 4,370,900 Contributions: Employer 217,502 480,314 860,841 193,353 31,661 1,783,671 Employee 427,806 904,531 1,612,177 358,535 53,291 3,356,340 --------------------------------------------------------------------------------------------- 645,308 1,384,845 2,473,018 551,888 84,952 5,140,011 --------------------------------------------------------------------------------------------- 1,098,876 3,046,577 3,515,555 1,414,037 123,336 312,530 9,510,911 DEDUCTIONS Benefit payments to participants (736,023) (1,185,012) (1,960,209) (2,295,048) (58,285) (6,234,577) Transfers (net) (733,539) 479,708 191,327 (533,994) 761,712 (165,214) - --------------------------------------------------------------------------------------------- (1,469,562) (705,304) (1,768,882) (2,829,042) 703,427 (165,214) (6,234,577) Net realized and unrealized appreciation (depreciation) in fair value of investments: Realized (51,407) 45,286 (137,242) 1,163,177 1,019,814 Unrealized (136,607) 1,213,065 1,983,579 (80,070) 2,979,967 --------------------------------------------------------------------------------------------- (188,014) 1,258,351 1,846,337 1,083,107 3,999,781 --------------------------------------------------------------------------------------------- Net increase (558,700) 3,599,624 3,593,010 (331,898) 826,763 147,316 7,276,115 Assets available for plan benefits at beginning of year 8,294,027 13,020,340 30,218,968 17,112,669 476,338 3,344,257 72,466,599 --------------------------------------------------------------------------------------------- Assets available for plan benefits at end of year $ 7,735,327 $16,619,964 $33,811,978 $16,780,771 $1,303,101 $3,491,573 $79,742,714 =============================================================================================
See accompanying notes. 6 8 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Statement of Changes in Assets Available for Plan Benefits, With Fund Information Year ended December 31, 1995
FUND INFORMATION ----------------------------------------------------------------------------- 401(K) PARTICIPANT - DIRECTED INVESTMENT FUNDS ----------------------------------------------------------------------------- CITIZENS INTERMEDIATE BANKING MONEY INCOME EQUITY CORPORATION BALANCED MARKET FUNDS FUNDS STOCK FUNDS FUNDS ----------------- --------------- ---------------- --------------- -------------- ADDITIONS Investment income: Dividends: Citizens Banking Corporation $ 862,527 $ 44,820 Other $ 344,448 $ 1,023,703 931,796 Interest income 122,597 6,004 9,779 40,373 $ 17,856 ---------------------------------------------------------------------------- Total investment income 467,045 1,029,707 872,306 1,016,989 17,856 Contributions: Employer 258,391 438,912 829,509 187,379 31,335 Employee 435,127 828,556 1,679,571 425,983 64,759 ---------------------------------------------------------------------------- 693,518 1,267,468 2,509,080 613,362 96,094 ---------------------------------------------------------------------------- 1,160,563 2,291,175 3,381,386 1,630,351 113,950 DEDUCTIONS Benefit payments to participants (566,942) (731,615) (1,541,002) (978,682) (67,543) Transfers (net) (373,458) 524,924 480,169 (563,521) 194,481 ---------------------------------------------------------------------------- 220,163 2,090,484 2,320,553 88,148 240,888 Net realized and unrealized appreciation (depreciation) in fair value of investments: Realized (5,094) 163 (19,539) 825,568 Unrealized 442,292 1,860,212 1,946,681 963,906 ---------------------------------------------------------------------------- 437,198 1,860,375 1,927,142 1,789,474 ---------------------------------------------------------------------------- Net increase 657,361 3,950,859 4,247,695 1,877,622 240,888 Assets available for plan benefits at beginning of year 7,636,666 9,069,481 25,971,273 15,235,047 235,450 ============================================================================ Assets available for plan benefits at end of year $ 8,294,027 $ 13,020,340 $ 30,218,968 $ 17,112,669 $ 476,338 ============================================================================ FUND INFORMATION ---------------- PARTICIPANT LOAN FUND TOTAL --------------- ------------ ADDITIONS Investment income: Dividends: Citizens Banking Corporation $ 907,347 Other 2,299,947 Interest income $ 277,975 474,584 ---------------------------- Total investment income 277,975 3,681,878 Contributions: Employer 1,745,526 Employee 43,260 3,477,256 ---------------------------- 43,260 5,222,782 ---------------------------- 321,235 8,904,660 DEDUCTIONS Benefit payments to participants (3,885,784) Transfers (net) (262,595) ---------------------------- 58,640 5,018,876 Net realized and unrealized appreciation (depreciation) in fair value of investments: Realized 801,098 Unrealized 5,213,091 ---------------------------- 6,014,189 ---------------------------- Net increase 58,640 11,033,065 Assets available for plan benefits at beginning of year 3,285,617 61,433,534 ============================ Assets available for plan benefits at end of year $ 3,344,257 $ 72,466,599 ============================
See accompanying notes. 9 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Notes to Financial Statements December 31, 1997 1. DESCRIPTION OF THE PLAN The Citizens Banking Corporation Amended and Restated Section 401(k) Plan (Plan) is a defined contribution plan which includes a 401(k) salary deferral feature. The Plan covers substantially all employees of Citizens Banking Corporation (Corporation) and its banking subsidiaries including salaried employees and hourly employees with over 1,000 hours of credited service. At December 31, 1997 there were 1,791 participants in the Plan. Participants may contribute on a before-tax basis up to 15% of their annual base compensation (not to exceed $9,500 for 1997) and on an after-tax basis up to 10% of their base compensation. Participants may direct their contributions into either an intermediate income, equity, balanced, money market or Citizens Banking Corporation stock fund and may elect to change the percentage directed to each fund quarterly. On July 1, 1997 the assets of the CB Financial Corporation Retirement Savings Plan were transferred into the Plan. All participant contributions are fully vested. Under the Plan, the participating subsidiaries can also make employer matching contributions of 100% on the first 3% and 50% on the next 3% of a participant's base compensation (excluding bonuses, overtime and fringe benefits actually paid for the year) such that the maximum employer matching contributions for any such participant would be 4.5% of a participant's base compensation. 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. These matching contributions are fully vested after three years of service or upon normal or early retirement, death or disability. All administrative costs of the plan are paid by the Corporation. For the 1997 plan year, matching provisions applicable to participants of the former CB Financial Corporation Retirement Savings Plan were based on provisions under the former CB Financial Corporation Retirement Savings Plan. The maximum matching contribution for these participants was 25% of the first 6% of a participant's compensation (including commissions and overtime paid for the year) such that the maximum employer matching contribution for any such participant would be 1.5% of a participant's compensation. 8 10 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) The Corporation has the right under the Plan to discontinue such annual contributions. Citizens Banking Corporation has the right to terminate the Plan at any time. In the event of a termination of the Plan, the net assets of the Plan are to be set aside for the payment of vested benefits. 2. SIGNIFICANT ACCOUNTING POLICIES VALUATION OF INVESTMENTS Marketable 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 Citizens Banking Corporation Amended and Restated Section 401(k) Plan (Plan) 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. Loans to participants represent qualifying interest-bearing loans from individual accounts that are valued at the amount of outstanding principal. Unrealized appreciation or depreciation in the aggregate fair value of investments represents the change in the difference between aggregate fair value and the cost of investments. The realized gain or loss on sale of investments is the difference between the proceeds received and the specific cost of investments sold. Such amounts are different than the related amounts reported on Form 5500 which are computed as the difference between the proceeds received and the revalued cost which is defined as the fair value at the beginning of the year, or cost, if acquired during the year. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles 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. 9 11 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS The Plan's investments are administered by the Citizens Bank Trust Department. The Plan's investment fund options consist of the following: The Intermediate Income Funds include: The Golden Oak Intermediate-Term Income Fund, The Federal National Mortgage Association Fund, and U.S. Treasury Notes. The Equity Funds consist of: The Golden Oak Diversified Growth Fund, The Golden Oak Value Portfolio Fund, The Baron Asset Fund, The Harbor International Fund, The Harbor Capital Appreciation Fund, The Heartland Value Fund, The MAS Funds Value Portfolio The Frank Russell Quantitative Fund, The Frank Russell Diversified Fund, and The Frank Russell Special Growth Fund. The Balanced Fund includes: The Golden Oak Diversified Growth Fund, The Golden Oak Intermediate Income Fund, The Golden Oak Value Portfolio Fund, The Harbor International Fund, The Harbor Capital Operation Fund, The Heartland Value Fund, The MAS Funds Value Portfolio, The Federal National Mortgage Association Fund, and U.S. Treasury Notes. The Money Market Funds are comprised of: The SEI Daily Income Trust Treasury II Fund and The Golden Oak Prime Obligation Class A Fund. 10 12 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) During each of the three years in the period ended December 31, 1997, the Plan's investments (including investment bought, sold as well as held during the year) appreciated (depreciated) in fair value by $28,102,071, $3,999,781, and $6,014,189, as follows:
NET APPRECIATION (DEPRECIATION) FAIR VALUE IN FAIR VALUE AT END COST AT END DURING YEAR OF YEAR OF YEAR ----------------------------------------------------------- YEAR ENDED DECEMBER 31, 1997 Fair value as determined by quoted market price: Common stocks: Domestic: Citizens Banking Corporation $25,026,513 $ 61,854,740 $17,697,892 Other 250,183 Foreign stocks 14,512 Mutual funds 2,746,834 51,340,631 44,893,258 U.S. Government Securities 64,029 5,251,329 5,240,295 Money market account 5,772,545 5,772,545 ----------------------------------------------------- $28,102,071 $124,219,245 $73,603,990 ===================================================== YEAR ENDED DECEMBER 31, 1996 Fair value as determined by quoted market price: Common stocks: Domestic: Citizens Banking Corporation $ 1,835,646 $ 33,794,523 $16,240,448 Mutual funds 2,170,005 38,778,935 34,024,164 U.S. Government securities (5,870) Money market account 3,121,468 3,121,468 ----------------------------------------------------- $ 3,999,781 $ 75,694,926 $53,386,080 =====================================================
11 13 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
NET APPRECIATION (DEPRECIATION) FAIR VALUE IN FAIR VALUE AT END COST AT END DURING YEAR OF YEAR OF YEAR ------------------------------------------------------- YEAR ENDED DECEMBER 31, 1995 Fair value as determined by quoted market price: Common stocks: Domestic: Citizens Banking Corporation $2,026,742 $31,520,363 $14,899,489 Other 649,235 Mutual funds 3,304,475 33,816,866 31,065,247 U.S. Government securities 29,690 962,627 1,006,240 Corporate bonds and notes 4,047 38,508 38,508 Money market account 2,330,720 2,330,720 ---------------------------------------------------- $6,014,189 $68,669,084 $49,340,204 ====================================================
YEAR ENDED DECEMBER 31 ----------------------------------------------------------- 1997 1996 1995 ----------------------------------------------------------- Realized gain: Proceeds on disposition $62,865,295 $23,113,326 $30,489,733 Cost 53,016,934 22,093,512 29,688,635 ------------------------------------------------- 9,848,361 1,019,814 801,098 Unrealized gain 18,253,710 2,979,967 5,213,091 ------------------------------------------------- $28,102,071 $ 3,999,781 $ 6,014,189 =================================================
12 14 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The fair value of individual investments representing 5% or more of the plan's assets are as follows:
DECEMBER 31 1997 1996 -------------------------------------- Citizens Banking Corporation, 1,792,891 and 1,072,842 shares of common stock in 1997 and 1996, respectively $61,854,740 $33,794,523 Frank Russell Quantitative Equity Fund 6,425,439 4,734,967 Golden Oak FDS Intermediate Income Fund 15,811,526 13,123,579 Harbor International Fund 8,678,101 5,946,590
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. 4. INCOME TAX STATUS The Internal Revenue Service ruled August 2, 1995 that the Plan qualifies under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the related trust is not subject to tax under present income tax law. Once qualified, the Plan is required to operate in conformity with the IRC and the Employee Retirement Income Security Act of 1974 to maintain its qualification. The Administrative Committee is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 13 15 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Notes to Financial Statements (continued) 5. BENEFIT PAYABLE Assets available for plan benefits include amounts allocated for approved distributions. Such balances amounted to $8,595,436 and $2,116,700 at December 31, 1997 and 1996, respectively. Such amounts are shown as a liability on the Plan's Form 5500. 6. YEAR 2000 ISSUE (UNAUDITED) The Plan Sponsor has developed a plan to modify its internal information technology to be ready for the year 2000 and has begun converting critical data processing systems. The project also includes determining whether third party service providers have reasonable plans in place to become year 2000 compliant. The Plan Sponsor currently expects the project to be substantially complete by early 1999. The Plan Sponsor does not expect this project to have a significant effect on plan operations. 14 16 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Employer ID #38-2378932 Plan #002 Item 27(a)--Schedule of Assets Held for Investment December 31, 1997
DESCRIPTION OF INVESTMENT INCLUDING IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE - ------------------------------------------------------------------------------------------------------------------------------------ Common stocks: *Citizens Banking Corporation 1,792,891 shares $17,697,892 $61,854,740 -------------------------------------- Total common stock 17,697,892 61,854,740 Mutual Funds: *Golden Oak Diversified Growth Funds 162,221.52 units 1,844,264 2,001,817 *Golden Oak Intermediate Income Fund 1,584,321.07 units 15,714,911 15,811,526 *Golden Oak Value Portfolio Fund 212,700.45 units 2,030,000 1,999,383 Baron Asset Fund 14,621.60 units 566,056 709,301 Harbor International Fund 241,999.00 units 6,195,909 8,678,101 Harbor Capital Appreciation Fund 60,926.80 units 1,573,466 1,795,517 Heartland Value Fund 52,960.49 units 1,670,720 1,793,773 MAS Funds Value Portfolio 113,063.63 units 1,764,942 2,023,831 Frank Russell Quantitative Equity Fund 174,439.57 units 5,007,115 6,425,439 Frank Russell Diversified Fund 140,889.59 units 5,384,923 6,148,430 Frank Russell Special Growth Fund 86,472.39 units 3,140,952 3,953,513 -------------------------------------- Total Mutual Funds 44,893,258 51,340,631
15 17 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Employer ID #38-2378932 Plan #002 Item 27(a)--Schedule of Assets Held for Investment (continued) December 31, 1997
DESCRIPTION OF INVESTMENT INCLUDING IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Government Securities: Federal National Mortgage Association $75,000 principal amount, 8.55%, due August 30, 1999 $ 74,344 $ 78,211 Federal National Mortgage Association $25,000 principal amount, 6.85%, due April 5, 2004 25,809 26,086 U.S. Treasury Note $297,000 principal amount, 7.875%, due January 15, 1998 301,469 297,279 U.S. Treasury Note $80,000 principal amount, 8.125%, due February 15, 1998 77,450 80,225 U.S. Treasury Note $360,000 principal amount, 7.875%, due April 15, 1998 366,566 362,477 U.S. Treasury Note $100,000 principal amount, 9.00%, due May 15, 1998 105,797 101,250 U.S. Treasury Note $50,000 principal amount, 5.125%, due June 30, 1998 49,258 49,938 U.S. Treasury Note $400,000 principal amount, 5.25%, due July 31, 1998 399,652 399,376
16 18 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Employer ID #38-2378932 Plan #002 Item 27(a)--Schedule of Assets Held for Investment (continued) December 31, 1997
DESCRIPTION OF INVESTMENT INCLUDING IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Government Securities (continued): U.S. Treasury Note $180,000 principal amount, 9.25%, due August 15, 1998 $ 193,106 $ 183,938 U.S. Treasury Note $50,000 principal amount, 4.75%, due October 31, 1998 49,844 49,625 U.S. Treasury Note $120,000 principal amount, 8.875%, due November 15, 1998 125,250 123,187 U.S. Treasury Note $455,000 principal amount, 5.50%, due February 28, 1999 452,559 454,149 U.S. Treasury Note $35,000 principal amount, 5.875%, due March 31, 1999 34,682 35,098 U.S. Treasury Note $200,000 principal amount, 9.125%, due May 15, 1999 213,125 208,938 U.S. Treasury Note $415,000 principal amount, 6.375%, due July 15, 1999 425,348 419,411 U.S. Treasury Note $25,000 principal amount, 6.875%, due August 31, 1999 25,508 25,469
17 19 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Employer ID #38-2378932 Plan #002 Item 27(a)--Schedule of Assets Held for Investment (continued) December 31, 1997
DESCRIPTION OF INVESTMENT INCLUDING IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Government Securities (continued): U.S. Treasury Note $200,000 principal amount, 7.875%, due November 15, 1999 $ 198,125 $ 207,688 U.S. Treasury Note $255,000 principal amount, 6.375%, due January 15, 2000 259,734 258,348 U.S. Treasury Note $15,000 principal amount, 6.875%, due March 31, 2000 15,272 15,375 U.S. Treasury Note $75,000 principal amount, 5.50%, due April 15, 2000 73,482 74,719 U.S. Treasury Note $25,000 principal amount, 6.75%, due April 30, 2000 25,266 25,570 U.S. Treasury Note $57,000 principal amount, 6.25%, due May 31, 2000 56,243 57,713 U.S. Treasury Note $300,000 principal amount, 6.125%, due July 31, 2000 295,484 303,000
18 20 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Employer ID #38-2378932 Plan #002 Item 27(a)--Schedule of Assets Held for Investment (continued) December 31, 1997
DESCRIPTION OF INVESTMENT INCLUDING IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Government Securities (continued): U.S. Treasury Note $40,000 principal amount, 6.25%, due August 31, 2000 $ 39,705 $ 40,525 U.S. Treasury Note $200,000 principal amount, 6.125%, due September 30, 2000 203,844 202,126 U.S. Treasury Note $35,000 principal amount, 5.625%, due February 28, 2001 34,431 34,935 U.S. Treasury Note $335,000 principal amount, 6.375%, due March 31, 2001 331,908 341,281 U.S. Treasury Note $20,000 principal amount, 6.25%, due April 30, 2001 20,013 20,313 U.S. Treasury Note $310,000 principal amount, 7.50%, due November 15, 2001 335,128 328,795
19 21 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Employer ID #38-2378932 Plan #002 Item 27(a)--Schedule of Assets Held for Investment (continued) December 31, 1997
DESCRIPTION OF INVESTMENT INCLUDING IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, FAIR LESSOR OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Government Securities (continued): U.S. Treasury Note $435,000 principal amount, 6.375%, due August 15, 2002 $ 431,893 $ 446,284 --------------------------------- Total U.S. Government Securities 5,240,295 5,251,329 Money Market Accounts: SEI Daily Income Trust Treasury II $1,689,989 principal amount 1,689,989 1,689,989 *Golden Oak Prime Obligation Class A $4,082,556 principal amount 4,082,556 4,082,556 --------------------------------- Total Money Market Accounts 5,772,545 5,772,545 --------------------------------- Total investments $73,603,990 $124,219,245 =================================
*Party-in-interest to the Plan. 20 22 Citizens Banking Corporation Amended and Restated Section 401(k) Plan Employer ID #38-2378932 Plan #002 Item 27(d)--Schedule of Reportable Transactions Year ended December 31, 1997
EXPENSE DESCRIPTION OF ASSET (INCLUDING INCURRED INTEREST RATE AND MATURITY IN PURCHASE SELLING LEASE WITH IDENTITY OF PARTY INVOLVED CASE OF A LOAN) PRICE PRICE RENTAL TRANSACTION - ------------------------------------------------------------------------------------------------------------------------------------ Category iii) A series of transactions with respect to the same issue which amount in the aggregate to more than 5% of the current value of total plan assets: Citizens Banking Corporation 90 purchases, 138,856.68 shares purchased $ 4,816,351 86 sales, 133,467.52 shares sold $ 4,683,584 Golden Oak FDS Prime Obligation 438 purchases, 17,446,997 units Money Market--Class A purchased 17,446,997 166 sales, 16,485,909 units sold 16,485,909 SEI Daily Income Trust Treasury II 257 purchases, 15,772,594 units purchased 15,772,594 89 sales, 14,082,605 units sold 14,082,605 CURRENT VALUE OF DESCRIPTION OF ASSET (INCLUDING COST ASSET OF NET INTEREST RATE AND MATURITY IN OF TRANSACTION GAIN IDENTITY OF PARTY INVOLVED CASE OF A LOAN) ASSET DATE (LOSS) - ---------------------------------------------------------------------------------------------------------------------------- Category iii) A series of transactions with respect to the same issue which amount in the aggregate to more than 5% of the current value of total plan assets: Citizens Banking Corporation 90 purchases, 138,856.68 shares purchased $ 4,816,351 $ 4,816,351 86 sales, 133,467.52 shares sold 3,199,689 4,683,584 $ 1,483,895 Golden Oak FDS Prime Obligation 438 purchases, 17,446,997 units Money Market--Class A purchased 17,446,997 17,446,997 166 sales, 16,485,909 units sold 16,485,909 16,485,909 - SEI Daily Income Trust Treasury II 257 purchases, 15,772,594 units purchased 15,772,594 15,772,594 89 sales, 14,082,605 units sold 14,082,605 14,082,605 -
Commissions and fees related to purchase and sales of investments are included in the cost of the investment or proceeds from the sale. There were no transactions reportable under categories i), ii) or iv). 21 EX-23 3 EXHIBIT 23 1 EXHIBIT 23 CONSENTS OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 33-28354 dated April 26, 1989 and Form S-8 No. 333-09455 dated August 2, 1996) pertaining to the Citizens Banking Corporation Amended and Restated Section 401(k) Plan of our report dated May 8, 1998, with respect to the financial statements and schedules of the Citizens Banking Corporation Amended and Restated Section 401(k) Plan included in this annual report (Form 11-K) for the year ended December 31, 1997. /s/ Ernst & Young Detroit, Michigan June 22, 1998 -----END PRIVACY-ENHANCED MESSAGE-----