cfc 8k 91906
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
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Date
of Report (Date of earliest event report) September
19, 2006
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CITIZENS
FINANCIAL CORPORATION
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(Exact
name of registrant as specified in its
charter)
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KENTUCKY
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0-20148
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61-1187135
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(State
of incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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12910
SHELBYVILLE ROAD
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LOUISVILLE,
KENTUCKY 40243
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(Address
of principal executive offices)
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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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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
]
Written communications pursuant to Rule 425 under the securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17CFR
240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17
CFR
240.13e-4(c))
Section
1 - Registrant’s Business and Operations
Item
1.01. Entry into a Material Definitive Agreement.
On
September 19, 2006, the Registrant borrowed $370,000 on a subordinated basis
from Darrell R. Wells, an executive officer, director and shareholder of the
Registrant. These funds are to be used for working capital purposes, including
commercial bank debt service, and to permit maintaining the Registrant’s
existing investment portfolio and other liquidity. The loan is unsecured and
has
a maturity of June 30, 2007. Initially, the loan bears interest at nine and
one-quarter percent (9.25%) per annum payable on the first day of each calendar
quarter (beginning October 1, 2006). The rate will adjust on each interest
payment date so as to equal the greater of six percent (6%) or one percent
(1%)
over its bank lender’s prime rate on that date. 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. Subject to the subordination agreement, upon a default, Mr. Wells may,
at
his option, accelerate the entire principal balance of and all accrued interest
on the loan and increase the rate of interest applicable to the entire unpaid
principal balance of the loan by four percent (4%).
This
loan
is on the same terms, in all material respects, as a $1,000,000 loan from Mr.
Wells to the Registrant dated December 23, 2003 and a $2,000,000 loan from
Mr.
Wells to the Registrant dated December 19, 2002, both of which loans were
previously amended to extend the maturity date thereof to June 30, 2006, as
well
as a $500,000 loan from Mr. Wells to the Registrant dated September 28, 2005
and
a $500,000 loan from Mr. Wells to the Registrant dated December 23, 2005, all
of
which loans were amended and consolidated on March 23, 2006 to further extend
the maturity date thereof to June 30, 2007, a $360,000 loan from Mr. Wells
to
the Registrant dated March 29, 2006, and a $400,000 loan from Mr. Wells to
the
Registrant dated July 7, 2006. A copy of the promissory note for the amended
and
consolidated loans from Mr. Wells was filed as Exhibit 10.29 to the Registrant’s
Form 10-K for the year ended December 31, 2005, a copy of the promissory note
for the March 29, 2006 loan was filed as Exhibit 10.30 to the Registrant’s Form
8-K dated as of such date, and a copy of the promissory note for the July 7,
2006 loan was filed as Exhibit 10.32 to the Registrant’s Form 8-K dated as of
such date. Mr. Wells is the Registrant’s principal shareholder, chairman of its
Board of Directors, and President and Chief Executive Officer.
A
copy of
the promissory note for the loan from Mr. Wells is attached hereto as Exhibit
10.34, and is incorporated by reference herein.
Section
2 - Financial Information
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of the Registrant.
(a) On
September 19, 2006, the Registrant borrowed $370,000 on a subordinated basis
from Darrell R. Wells, an executive officer, director and shareholder of the
Registrant. The loan is unsecured and has a maturity of June 30,
2007.
See
the
disclosures under Item 1.01 above for the other material terms of the loan
from
Mr. Wells.
Section
9 - Financial Statements and Exhibits
Item
9.01. Financial Statements and Exhibits.
(c)
Exhibits
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Exhibit
Number
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Description of Exhibit
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10.34
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Promissory
Note ($370,000) to Darrell R. Wells dated as of September 19,
2006
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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.
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Citizens
Financial Corporation
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Registrant
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Date:
September 19, 2006
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By: Len
E. Schweitzer
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/s/
Len E. Schweitzer
Vice
President and
Chief
Financial Officer
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INDEX
TO EXHIBITS
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Exhibit
Number
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Description
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10.34
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Promissory
Note ($370,000) to Darrell R. Wells dated as of September 19,
2006
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