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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
December 19, 2002
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Date of Report (Date of earliest event reported)
CITIZENS FINANCIAL CORPORATION
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(Exact name of registrant as specified in charter)
KENTUCKY 0-20148 61-1187135
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(State of incorporation) (Commission File Number) (IRS Employer
Identification No.)
CITIZENS FINANCIAL CORPORATION
12910 SHELBYVILLE ROAD
LOUISVILLE, KENTUCKY 40243
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(Address of principal executive offices)
Registrant's telephone number, including area code: (502) 244-2420
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On December 19, 2002, the Registrant announced that management
had been granted the authority to spend an additional $250,000 to repurchase
shares of its common stock in open-market or privately-negotiated transactions
from time to time. The new authorization is in addition to $1,200,000 authorized
in 1998, of which $1,192,772 has been expended. Prices paid will not exceed the
most recent book value of the common stock. Management will determine the number
of shares to be purchased and the timing of purchases in its discretion based
upon a number of factors, including the common stock's market price and market
conditions, and is not limited by a timetable or minimum price policy. The
Registrant may discontinue or suspend the repurchase program at any time.
Open-market purchases will be conducted in accordance with applicable SEC rules.
Repurchased shares will be used for general corporate purposes. The new
authorization required approval from the Registrant's bank lender, which was
received on December 19, 2002.
Also on December 19, 2002, the Registrant borrowed $2,000,000 on
a subordinated basis from Darrell R. Wells, an officer, director and
shareholder, that it then contributed to the capital of its principal
subsidiary, Citizens Security Life Insurance Company. The contribution was made
to ensure that Citizens Security's capital strength, as measured by A.M. Best
and other rating agencies, is maintained. The loan is unsecured and has a
maturity of June 30, 2005. Initially, it bears interest payable at six (6)
percent on the first day of each calendar quarter (beginning January 1, 2003).
The rate will adjust on each interest payment date so as to equal the greater of
one (1) percent over its bank lender's prime rate on that date or six (6)
percent Pursuant to a subordination agreement required by the bank lender, the
Registrant will not be permitted to pay principal on the loan except with the
approval of the bank lender or to pay interest on the loan at any time a default
exists under its loan from the bank lender or certain agreements between Mr.
Wells and the bank lender. The Registrant's failure to make a payment to Mr.
Wells that is prohibited by the subordination agreement will not constitute a
default under the loan from Mr. Wells. Mr. Wells is the Registrant's principal
shareholder, chairman of its Board of Directors and President and Chief
Executive Officer.
Also on December 19, 2002, the Registrant's bank lender agreed to
amend its loan agreement with the Registrant to permit the loan from Mr. Wells,
to give the loan favorable treatment for the purpose of calculating the
Registrant's compliance with certain of its financial covenants in the loan
agreement, and to permit the additional common stock repurchases described
above.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS, AND EXHIBITS
(c). Exhibits
99 Press Release issued December 19, 2002
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CITIZENS FINANCIAL CORPORATION
Registrant
Date: January 6, 2003 /s/ LANE A. HERSMAN
Lane A. Hersman
Executive Vice President and Chief
Operating Officer
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