13E-3

(Name, Address and Telephone Number of Person(s) Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement)

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: x

Check the following box if the filing is a final amendment reporting the results of the transaction ¨

(*)The filing fee was determined based upon the product of (a) the estimated 93,750 shares of common stock proposed to be acquired from shareholders in the merger to which this Rule 13e-3 Transaction Statement relates and (b) the merger consideration of $32.00 per share of common stock (the “Total Consideration”).

¨ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the “Schedule 13E-3”) is being filed by Henderson Citizens Bancshares, Inc., a Texas corporation and registered bank holding company (the “Company”), in connection with the proposed merger (the “merger”) of HCB Merger Corp., a newly-formed, wholly-owned subsidiary of the Company (the “merger subsidiary”), with and into the Company, with the Company being the surviving corporation to the merger. The merger will be effectuated pursuant to an Agreement and Plan of Merger, dated as of February 23, 2003 (the “merger agreement”), between the Company and merger subsidiary, as it may be amended from time to time.

Subject to the terms of the merger agreement, (i) each share of the Company’s common stock, par value $5.00 per share (“Company stock”), held of record by a shareholder who owns, as of the effective date of the merger, fewer than 500 shares of Company stock, will be converted into the right to receive $32.00 in cash from the Company, and (ii) each share of the Company stock held of record by a shareholder who owns, as of the effective date of the merger, 500 or more shares of Company stock, will not be effected by the merger and will remain a validly issued and outstanding share of Henderson Citizens stock after the merger. This Schedule 13E-3 is being filed with the Securities and Exchange Commission concurrently with a preliminary proxy statement filed by the Company pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which the holders of the common stock will be given notice of a special meeting of shareholders of the Company (the “special meeting”) at which such holders will be asked to approve the merger and the merger agreement, and to transact any other business properly brought before the special meeting. The following cross reference sheet is being supplied pursuant to General Instruction F to Schedule 13E-3 and included in this Schedule 13E-3. A copy of the merger agreement is attached as Appendix A to the preliminary proxy statement filed by the Company contemporaneously herewith, (including all annexes thereto, the “proxy statement”). The proxy statement is attached hereto as Exhibit (a)(1).

The information contained in the proxy statement is hereby expressly incorporated herein by reference and the responses to each item are qualified in their entirety by reference to the information contained in the proxy statement. As of the date hereof, the proxy statement is in preliminary form and is subject to completion or amendment. This Schedule 13E-3 will be amended to reflect such completion or amendment of the proxy statement.

All parenthetical references under the various Items contained in this Schedule 13E-3 are references to the corresponding Items contained in Regulation M-A under the Exchange Act.

The information set forth in the proxy statement under “Summary Term Sheet” is incorporated herein by reference.

(a) The name of the Company is Henderson Citizens Bancshares, Inc. The address of the principal executive offices of the Company is 201 West Main Street, Henderson, Texas 75653. The Company is a registered bank holding company under the Bank Holding Company Act of 1956, as amended. The information set forth in the proxy statement under “Summary Term Sheet – The Parties” and “The Parties” is incorporated herein by reference.

(b) The information set forth in the proxy statement under “Summary Term Sheet – Vote Required; Record Date” and “The Special Meeting – Who Can Vote at the Special Meeting” is incorporated herein by reference.

(c)-(d) The information set forth in the proxy statement under “Financial Information – Per Share Market Prices and Dividend Information” is incorporated herein by reference.

(f) The information set forth in the proxy statement under “Financial Information – Henderson Citizens Common Stock Repurchase Information” is incorporated herein by reference.

(a)-(c) The information set forth under “Notice of Special Meeting of Shareholders, “Summary Term Sheet – The Parties” The Parties” and “The Parties – Directors and Executive Officers of Henderson Citizens” is incorporated herein by reference.

During the last five years, neither the Company nor, to its knowledge, any of the directors or executive officers thereof has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which any such person was or is subject to a judgment, decree, or final order enjoining further violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of those laws. Each executive officer and director of the Company is a citizen of the United States of America.

(a) The following information is incorporated by reference from the proxy statement: “Summary Term Sheet,” “Special Factors – Background of the Merger” “Special Factors – Purpose and Reasons for the Merger,” “The Special Meeting – Vote Required,” “Special Factors – Certain Effects of the Merger,” “Special Factors – Effect of the Merger on Shareholders,” “Special Factors – Anticipated Accounting Treatment,” “Special Factors – Certain U.S. Federal Income Tax Consequences,” and “The Merger Agreement –Conversion of Shares in the Merger.”

(c) The following information is incorporated by reference from the proxy statement: “Summary Term Sheet,” “Special Factors – Background of the Merger,” “Special Factors – Certain Effects of the Merger,” “Special Factors – Effect of the Merger on Shareholders,” and

(d) The information set forth in the proxy statement under “Summary Term Sheet – Dissenters’ and Appraisal Rights” and “Special Factors – Dissenters’ and Appraisal Rights” is incorporated herein by reference.

(e) The information set forth in the proxy statement under “Special Factors – Recommendation of the Board of Directors; Fairness of the Merger Proposal” is incorporated herein by reference.

(b)-(c) The information set forth in the proxy statement under “Special Factors – Background of the Merger” and “Special Factors – Conduct of Henderson Citizens’ Business After the Merger” is incorporated herein by reference.

(b) The information set forth in the proxy statement under “Special Factors – Conduct of Henderson Citizens’ Business After the Merger” is incorporated herein by reference.

(c)(1)-(8) The information set forth in the proxy statement under “Summary Term Sheet,” “Special Factors – Background of the Merger,” “Special Factors – Conduct of Henderson Citizens’ Business After the Merger,” “Special Factors – Certain Effects of the Merger,” “Financial Information – Per Share Market Prices and Dividend Information” and “The Merger Agreement” is incorporated herein by reference.

(a) The information set forth in the proxy statement under “Summary Term Sheet,” “Special Factors – Background of the Merger,” and “Special Factors – Purpose and Reasons for the Merger” is ncorporated herein by reference.

(b) The information set forth in the proxy statement under “Special Factors – Background of the Merger” is incorporated herein by reference.

(c) The information set forth in the proxy statement under “Summary Term Sheet,” “Special Factors – Background of the Merger,” and “Special Factors – Purpose and Reasons for the Merger” is incorporated herein by reference.

(d) The information set forth in the proxy statement under “Special Factors – Certain Effects of the Merger,” “Special Factors – Effect of the Merger on Shareholders,” “Special Factors – Certain U.S. Federal Income Tax Consequences,” and “Special Factors – Conduct of Henderson Citizens’ Business After the Merger” is incorporated herein by reference.

(a)-(e) The information set forth in the proxy statement under “Summary Term Sheet,” “Special Factors – Background of the Merger,” and “Special Factors – Purpose and Reasons for the Merger,” “Special Factors – Recommendation of the Board of Directors; Fairness of the Merger Proposal” and “Special Factors – Opinion of Financial Advisor” is incorporated herein by reference.

(a)-(b) The information set forth in the proxy statement under “Summary Term Sheet – Source of Funds, Financing of the Merger,” “Special Factors – Background of the Merger,” “Special Factors – Recommendation of the Board of Directors; Fairness of the Merger Proposal,” and “Special Factors – Opinion of Financial Advisor,” “The Merger Agreement – Conditions to the Completion of the Merger” and Appendix B is incorporated herein by reference.

(c) The information set forth in the proxy statement under “Special Factors – Opinion of Financial Advisor” is incorporated herein by reference.

(a)-(b) The information set forth in the proxy statement under “Special Factors – Certain Effects of the Merger – Financial Effects of the Merger; Financing of the Merger” is incorporated herein by reference.

(c) The information set forth in the proxy statement under “Special Factors – Fees and Expenses,” and “Financial Information – Pro Forma Financial Statements” is incorporated herein by reference.

(d) The information set forth in the proxy statement under “Special Factors – Certain Effects of the Merger – Financial Effects of the Merger; Financing of the Merger” is incorporated by reference herein.

(a) The information set forth in the proxy statement under “The Parties – Security Ownership of Certain Beneficial Owners and Management” is incorporated herein by reference.

(b) Nelwyn Richadrson, Secretary to the Company, purchased 1,500 shares, on March 13,

2003, at a per share price of $32.00 per share in a private, negotiated transaction. The Company is not aware of any other transactions by executive officers, directors or controlling persons of the Company in the last 60 days.

(d)-(e) The information set forth in the proxy statement under “Special Factors – Recommendation of the Board of Directors; Fairness of the Merger Proposal” is incorporated herein by reference.

(a) The audited financial statements are included with and incorporated in the proxy statement from the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. The information in the proxy statement referred to in “Documents Incorporated by Reference” and “Where You Can Find More Information” is incorporated herein by reference.

The Company does not calculate a ratio of earnings to fixed charges in its regularly prepared financial statements.

(b) The information set forth in the proxy statement under “Summary Financial Information – Summary Unaudited Pro Forma Financial Information of Henderson Citizens” and “Pro Forma Financial Information” is incorporated herein by reference.

(a)-(b) The information set forth in the proxy statement under “The Special Meeting – Solicitation of Proxies” is incorporated herein by reference.

The information contained in the proxy statement, including all appendices attached thereto, is incorporated herein by reference.

(a)(i) Preliminary Proxy Statement on Schedule 14A of the Company, including all appendices thereto, as filed with the Securities and Exchange Commission on May 8, 2003.

(a)(iii) Letter to Shareholders, dated February 21, 2003, and Related Press Release issued by the Company on February 23, 2003.

(b) Commercial Variable Rate Revolving Note, dated May 1, 2003, entered into between Henderson Citizens Delaware Bancshares, Inc. and TIB—The Independent BankersBank.

(c)(i) Opinion of The Bank Advisory Group, LLC, dated , 2003 (a form of which is included as Appendix B to the Company’s Preliminary Proxy Statement filed as part of the Schedule 14A included as Exhibit (a)(i) to this Schedule 13E-3).

(c)(ii) Cash Fair Evaluation of the Common Stock of Henderson Citizens Bancshares, Inc. prepared by The Bank Advisory Group, Inc., and delivered to the Company’s Board of Directors.

(d) Agreement and Plan of Merger, dated as of February 23, 2003, by and between the Company and merger subsidiary (included as Appendix A to the Company’s Proxy Statement filed as part of the Schedule 14A included as Exhibit (a)(i) to this Schedule 13E-3).

(f) Articles 5.11 through 5.13 of the Texas Business Corporation Act (included as Appendix C to the Company’s Proxy Statement filed as part of the Schedule 14A included as Exhibit (a)(i) to this Schedule 13E-3).

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct.

HENDERSON CITIZENS BANCSHARES, INC.

		/s/ Milton S. McGee, Jr.
By:		Milton S. McGee, Jr., President and CEO

HCB MERGER CORP.

		/s/ Milton S. McGee, Jr.
By:		Milton S. McGee, Jr., President and CEO


a.	x	The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.

b.	¨	The filing of a registration statement under the Securities Act of 1933.

*Transaction Valuation()**		Amount of Filing Fee
3,000,000		$242.70

Exhibit Number		Description

(a)(i)		Preliminary Proxy Statement on Schedule 14A of the Company, as filed with the Securities and Exchange Commission on May 8, 2003.

(a)(ii)		Form of Proxy.

(a)(iii)		Letter to Shareholders, dated February 21, 2003, and Related Press Release issued by the Company on February 23, 2003.

(b)		Commercial Variable Rate Revolving Note, dated May 1, 2003, that Henderson Citizens Delaware Bancshares, Inc. entered into with TIB – The Independent BankersBank.

(c)(i)		Form of Opinion of The Bank Advisory Group, LLC, dated , 2003 (included as Appendix B to the Company’s Proxy Statement filed as part of the Schedule 14A included as Exhibit (a)(i) to this Schedule 13E-3).

(c)(ii)		Cash Fair Evaluation of the Common Stock of Henderson Citizens Bancshares, Inc. prepared by The Bank Advisory Group, Inc., and delivered to the Company’s Board of Directors.

(d)		Agreement and Plan of Merger, dated as of February 23, 2003, by and between the Company and merger subsidiary (included as Appendix A to the Company’s Proxy Statement filed as part of the Schedule 14A included as Exhibit (a)(i) to this Schedule 13E-3).

(e)		Articles 5.11 through 5.13 of the Texas Business Corporation Act (included as Appendix C to the Company’s Proxy Statement filed as part of the Schedule 14A included as Exhibit (a)(i) to this Schedule 13E-3).


c.	¨	A tender offer.

d.	¨	None of the above.