1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 24, 1998 CITIZENS BANCSHARES, INC. (Exact name of registrant as specified in its charter) Ohio 0-8209 34-1372535 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 10 East Main Street Salineville, Ohio 43945 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (330) 679-2328 N/A (Former name or former address, if changed since last report) Item 5. Other Events This current report on Form 8-K, including the investor materials, contains forward-looking statements that involve risk and uncertainty. It should be noted that a variety of factors could cause the combined company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the combined company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development, growth projections and results of the combined company's business include, but are not limited to, the growth of the economy, interest rate movements, timely development by the combined company of technology enhancements for its products and operating systems, the impact of competitive products, services and pricing, customer business requirements, Congressional legislation, acquisition cost savings and revenue enhancements and similar matters. Readers of this report are cautioned not to place undue reliance on forward-looking statements which are subject to influence by the named risk factors and unanticipated future events. Actual results, accordingly, may differ materially from management expectations.

2 On July 22, 1998, Citizens Bancshares, Inc. ("Citizens"), Mid Am, Inc. ("Mid Am") and The Ohio Bank ("Ohio Bank") announced the signing of a definitive agreement to merge (the "Merger"). Citizens and Mid Am previously announced on May 21, 1998 that they will combine in a merger-of-equals transaction. In addition, on July 23, 1998, in connection with the transactions contemplated by the Merger, Citizens and Ohio Bank entered into a stock option agreement in which Citizens was granted the option to purchase up to 5.42% of Ohio Bank common stock. Under the terms of the Merger, Ohio Bank shareholders will receive 63.25 (the "Exchange Ratio") shares of Citizens common stock for each Ohio Bank share owned as of the closing. The Merger will be a tax-free exchange of common stock and will be accounted for as a "pooling of interests." The Merger has been approved unanimously by the Board of Directors of each of Citizens and Ohio Bank. The Merger is subject to approval by the shareholders of Ohio Bank and is subject to certain regulatory approvals. Following the Merger, Ohio Bank will become a wholly owned subsidiary of the yet-to-be-named Citizens/Mid Am entity, an Ohio bank holding company. Ohio Bank will maintain its headquarters in Findlay, Ohio and will operate under the name "The Ohio Bank." After completion of the merger-of-equals transaction between Citizens and Mid Am, and as soon as reasonably practicable after consummation of the Merger and the receipt of all necessary regulatory approvals, two Mid Am affiliate banks, specifically American Community Bank, N.A. ("Americom") and Amerifirst Bank, N.A. ("Amerifirst"), will be merged into Ohio Bank, and five branch offices of Mid American National Bank & Trust Company ("Mid Am Bank") will be transferred to Ohio Bank. In addition, one of Mid Am's affiliates, First National Bank Northwest Ohio ("First National"), will be merged into Mid Am Bank. Members of the Board of Directors of First National will join the board of Mid Am Bank. The Board of Directors of Ohio Bank will consist of members of the Ohio Bank board, as well as members of the boards of Americom and Amerifirst. Ohio Bank will also gain three Board seats on the new Citizens/Mid Am bank holding company. Item 7. Exhibits. 99.1 Text of Press Release, dated July 22, 1998, issued by Citizens, Mid Am and Ohio Bank. 99.2 Investor presentation materials used by Citizens, Mid Am and Ohio Bank on July 22, 1998 related to the proposed Merger. -2-

3 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 BANCSHARES, INC. By: /s/ Marty E. Adams ----------------------------------- Name: Marty E. Adams Title: President and Chief Executive Officer Date: July 24, 1998 -3-

1 Exhibit 99.1 FOR IMMEDIATE RELEASE THE OHIO BANK TO AFFILIATE WITH CITIZENS BANCSHARES, INC. AND MID AM, INC. July 22, 1998, Citizens Bancshares, Inc., (Salineville, Ohio NASDAQ: CICS ("Citizens") and Mid Am, Inc., (Bowling Green, Ohio, NASDAQ: MIAM) ("Mid Am") and The Ohio Bank, Findlay, Ohio ("Ohio Bank") announced today the signing of a definitive agreement to merge. Citizens and Mid Am had previously announced on May 21, 1998, a merger of equals transaction to create a bank with assets approximating $4 billion. Ohio Bank represents a significant addition that will result in the company being the 7th largest bank headquartered in Ohio. Under the terms of the agreement, Ohio Bank shareholders will receive 63.25 shares of Citizens common stock for each Ohio Bank share owned as of the closing. Based on the closing price of Citizens common stock on July 20, 1998, the exchange ratio represents an aggregate value of approximately $191 million. The transaction is structured as a tax-free exchange of stock, will be accounted for as a "pooling of interests", and is expected to close by December 31, 1998. Management anticipates that the acquisition will be accretive to the combined company's earnings per share by the end of the first year of combined operations. It is currently expected that a one-time, pre-tax restructuring charge of approximately $5 million will be incurred in the fourth quarter of 1998 in connection with the acquisition. As a result of the efficiencies gained in the transaction, annualized pre-tax cost savings of approximately $4 million are anticipated in direct relation to the Ohio Bank transaction. Following the affiliation, Ohio Bank will become a wholly owned subsidiary of the yet-to-be-named Citizens/Mid Am, an Ohio bank holding company. The bank will maintain its headquarters in Findlay, Ohio, and will operate under the name The Ohio Bank. In addition, two Mid Am affiliate banks, specifically American Community Bank, N.A., based in Lima ("Americom") and Amerifirst Bank, N.A., headquartered in Xenia ("Amerifirst") will become part of Ohio Bank as will five branch offices of Mid American National Bank & Trust Company, which are located in Ohio Bank's market. The resulting Findlay-based Ohio Bank will have assets of about $1.2 billion.

2 Jack W. Donaldson, President and Chief Executive Officer of Ohio Bank, views the merger as a "natural evolution of Ohio Bank." "We will continue to employ the community bank concept of exceptional service from exceptional people with the added resources of a larger institution," Donaldson said. He added, "it is a great opportunity for our 250 plus employees and we are happy that the Ohio Bank name will survive and that our loyal customers will enjoy increased product offerings and services, which will accompany our positive growth". Richard R. Hollington, Jr., will continue to serve as Chairman of Ohio Bank, and Jack W. Donaldson will continue as President and Chief Executive Officer. The Board of Directors of Ohio Bank will consist of members of the Ohio Bank board and members of the boards of Americom and Amerifirst. Additionally, Ohio Bank will gain three Board seats on the new holding company, one of which will participate on the Board's Executive Committee. "We are extremely fortunate to have the opportunity to forge a partnership with The Ohio Bank, which is by all measures an outstanding organization," stated Marty E. Adams, President and CEO of Citizens. "Over the 111 years of its presence in Findlay, The Ohio Bank has established itself as a market leader and a responsible corporate citizen, and we look forward to the continuation of their proud heritage together," he continued. Concurrently, Mid Am, Inc.'s Bryan-based bank, First National Bank Northwest Ohio ("First National"), will be merged into Mid Am Bank. Members of the Board of Directors of First National will join the board of Mid Am Bank, ensuring representation from First National's important market area. "The combination of Americom and Amerifirst into The Ohio Bank and the joining of First National with Mid Am Bank represents an exciting new stage in the course of our company's growth," commented David R. Francisco, President and COO of Mid Am. "We will continue to be deeply committed to the communities of Lima, Xenia and Bryan through a continued operational presence and local banking center boards." Ohio bank is a full service commercial bank with over $600 million in assets, $53 million in shareholder equity, 18 branches and 250 employees. Ohio Bank has the number one market share in Hancock and Putnam counties, its principal market area. -2-

3 Citizens is a $1.8 billion bank holding company and the parent of Freedom Financial Life Insurance Company; Freedom Express, Inc.; The citizens Banking Company, which has 48 banking locations in six Ohio counties and one location in Hancock County, West Virginia; and Century National Bank, which has 12 banking locations in two Pennsylvania counties. Mid Am is a diversified financial services holding company head-quartered in Bowling Green, Ohio. The Company's banking affiliates include Mid American National Bank and Trust Company, Toledo, Ohio; First National Bank Northwest Ohio, Bryan, Ohio; American Community Bank, N.A., Lima, Ohio; Amerifirst Bank, N.A., Xenia, Ohio; and Adrian State Bank, Adrian, Michigan. The Company's financial service affiliates include Mid Am Recovery Services, Inc., Clearwater, Florida; MFI Investment Corp., Bryan, Ohio; Mid Am Credit Corp., Columbus, Ohio; Mid Am Private Trust, N.A., Cincinnati, Ohio; Mid Am Financial Services, Inc., Carmel, Indiana; Simplicity Mortgage Consultants, Marion, Indiana; Mid Am Title Insurance Agency, Inc., Adrian, Michigan; and Mid Am Information Services, Inc., Bowling Green, Ohio. CONTACTS RICHARD R. HOLLINGTON, III MARTY E. ADAMS DAVID R. FRANCISCO Chief Operating Officer President and CEO President and COO The Ohio Bank Citizens Bancshares, Inc. Mid Am, Inc. 419/424-2027, Ext. 2107 330/679-2328, Ext. 2801 419/327-6305 ******* The information contained in this press release contains forward-looking statements regarding expected future financial performance which are not historical facts and which involve risks and uncertainties. Actual results and performance could differ materially from those contemplated by these forward-looking statements. -3-

4 THE CITIZENS BANKING COMPANY, INC. & MID AM, INC. & OHIO BANK, INC. PRO FORMA BRANCH LOCATIONS [Map Of Ohio Counties With Pro Forma Branch Locations] ------------------------------ PRO FORMA BRANCH LOCATIONS -------------------------- __ Mid Am, Inc. __ Ohio Bank, Inc. __ Citizens Bancshares, Inc. ------------------------------

1 Exhibit 99.2 ================================================================================ Citizens Bancshares, Inc. & Ohio Bank SYNOPSIS OF MERGER JULY 22, 1998 ================================================================================ This current report on Form 8-K, including the investor materials filed as an exhibit hereto, contains forward-looking statements that involve risk and uncertainty. It should be noted that a variety of factors could cause the combined company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the combined company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development, growth projections and results of the combined company's business include, but are not limited to, the growth of the economy, interest rate movements, timely development by the combined company of technology enhancements for its products and operating systems, the impact of competitive products, services and pricing, customer based requirements, Congressional legislation, acquisition cost savings and revenue enhancements and similar matters. Readers of this report are cautioned not to place undue reliance on forward-looking statements which are subject to influence by the named risk factors and unanticipated future events. Actual results, accordingly, may differ materially from management expectations.

2 TRANSACTION DESCRIPTION - TERM SHEET ================================================================================ <TABLE> <S> <C> STRUCTURE: Ohio Bank will be merged into an interim bank formed by Citizens in a stock-for-stock transaction and will become affiliated with the yet-to-be-named Citizens/Mid Am entity Tax-free exchange of common stock accounted for as a "pooling of interests" EXCHANGE RATIO: Fixed Exchange ratio of 63.25 Citizens shares for each share of Ohio Bank PRO FORMA DILUTED SHARES OUTSTANDING 41.5 million PRO FORMA HOLDING CO. Combined assets: $4.6 billion Combined market capitalization: $1.5 billion FRANCHISE REORGANIZATION Current Mid Am affiliates American Community Bank and Amerifirst Bank as well as five Mid Am bank branches will be merged into Ohio Bank EXPECTED CLOSING Fourth quarter 1998, subject to regulatory and shareholder approval </TABLE>

3 MERGER BENEFITS ================================================================================ * Acquisition creates a $4.6B asset size Ohio-based commercial banking franchise with approximately $1.5B in market capitalization * Pre-tax cost savings of approximately $4.0mm will result in accretion to Citizens/Mid Am previously projected 1999 EPS of approximately $2.00 * Ohio Bank provides market overlap with Mid Am (leading market share in Putnam and Hancock counties) * Accelerates realization of non-bank revenue diversification strategy due to larger customer base

4 PRO FORMA CITIZENS BANCSHARES, INC. BRANCH LOCATIONS [MAP OF OHIO COUNTIES WITH BRANCH LOCATIONS] BRANCH LOCATIONS: ----------------- __ Citizens Bancshares, Inc. with Mid Am __ Ohio Bank

5 -------------------------------------------------------------------------------- THE OHIO BANK (dollar values in thousands except share data) -------------------------------------------------------------------------------- <TABLE> <S> <C> <C> BALANCE SHEET ITEMS (AS OF 3/31/98): ------------------------------------------------------------ Total Assets - $590,722 Total Deposits - $530,981 Total Equity - $50,601 [MAP OF OHIO COUNTIES WITH MARKET SHARE RANKS] INCOME STATEMENT ITEMS (AS OF 3/31/98): ------------------------------------------------------------ ROAA (LQA)- 1.18% ROAE (LQA)- 13.58% Efficiency Ratio (Mar. Qtr.)- 62.08% Diluted EPS (LQA) - $82.17 MARKET SHARE RANK ------------------------------------------------------------ <S> <C> 1. Hancock, OH - #1 5. Franklin, OH - #11 TRANSACTION PRICING INFORMATION: 2. Putnam, OH - #1 6. Cuyahoga, OH - #22 ------------------------------------------------------------ 3. Wyandot, OH - #6 4. Seneca, OH - #10 Deal Price (63.25 Exchange)- $2,205.84 Deal Value - $191 mm Deal Price/Tan. Book Value - 392% Deal Price/LQA EPS - 27.81x BRANCH DETAIL ------------------------------------------------------------ <S> <C> # of Offices 18 Avg. Deposits per Office - $29,499 </TABLE>

6 ------------------------------------------------------------------------------- CITIZENS BANCSHARES, INC. (dollar values in thousands except share data) ------------------------------------------------------------------------------- <TABLE> <S> <C> <C> BALANCE SHEET ITEMS (AS OF 3/31/98): --------------------------------------------- [Map of Market Share Rank] Total Assets - $1,785,682 Total Deposits - $1,401,967 Total Equity - $157,578 INCOME STATEMENT ITEMS (AS OF 3/31/98): --------------------------------------------- ROAA (LQA) - 1.54% ROAE (LQA) - 17.45% Efficiency Ratio (Mar. Qtr) - 49.90% Diluted EPS (LQA) - $1.56 MARKET SHARE RANK (TOTAL COUNTY DEPOSITS greater than $900mm) ------------------------------- 1. Jefferson, OH - #1 2. Columbiana, OH - #1 MARKET INFORMATION: 3. Beaver, PA - #3 -------------------------------------------- 4. Belmont, OH - #7 5. Stark, OH - #7 Stock Price (Close 7/20/98) - $36.38 6. Mahoning, OH - #8 Market Capitalization - $645,260 7. Butler, PA - #16 Price/Tangible Book Value - $405.97% Price/LQA EPS - 23.32X BRANCH DETAIL: ------------------------------- # of Offices - 62 Avg. Deposits per Office - $23,366 </TABLE>

7 ------------------------------------------------------------------------------- MID AM, INC. (dollar values in thousands except share data) ------------------------------------------------------------------------------- <TABLE> <S> <C> <C> BALANCE SHEET ITEMS (AS OF 3/31/98): --------------------------------------------- [Map of Market Share Rank] Total Assets - $2,239,113 Total Deposits - $1,781,482 Total Equity - $163,231 INCOME STATEMENT ITEMS (AS OF 3/31/98): --------------------------------------------- ROAA (LQA) - 1.34% ROAE (LQA) - 17.62% Efficiency Ratio (Mar. Qtr) - 70.28% Diluted EPS (LQA) - $1.24 MARKET SHARE RANK (TOTAL COUNTY DEPOSITS greater than $900mm) ------------------------------- 1. Wood, OH - #1 2. Greene, OH - #5 MARKET INFORMATION: 3. Lenawee, MI - #6 -------------------------------------------- 4. Allen, OH - #6 5. Lucas, OH - #8 Stock Price (Close 7/20/98) - $27.25 6. Warren, OH - #20 Market Capitalization - $636,379 7. Montgomery, OH - #17 Price/Tangible Book Value - $414.13% Price/LQA EPS - 22.0X BRANCH DETAIL: ------------------------------- # of Offices - 84 Avg. Deposits per Office - $23,441 </TABLE>

8 CONTRIBUTION ANALYSIS =============================================================================== Citizens' Financials Include Century Acquisition (Pooling Accounting) <TABLE> Citizens* Mid Am Ohio Bank Quarter Ended Quarter Ended Quarter Ended Pro Forma Assets 31-Mar-98 31-Mar-98 31-Mar-98 31-Mar-98 ----------- ------------- ------------- ------------- --------- <S> <C> <C> <C> <C> Securities 534,198 460,738 164,822 1,159,758 Loans, Net 1,128,046 1,591,468 407,763 3,127,277 Intangibles 8,701 8,586 4,042 21,329 Other Assets 114,737 178,321 14,095 307,153 --------------------------- ---------- ----------- ---------- --------- Total Assets $1,785,682 $2,239,113 $590,722 4,615,517 =========================== ========== =========== ========== ========= Liabilities ----------- Deposits 1,401,967 1,781,482 530,981 3,714,430 Borrowings 210,821 269,400 3,322 483,543 Other Liabilities 15,316 25,000 5,818 46,134 --------------------------- ---------- ----------- ---------- --------- Total Liabilities $1,628,104 $2,075,882 $540,121 4,244,107 =========================== ========== =========== ========== ========= Total Shareholders' Equity $157,578 $163,231 $50,601 371,419 --------------------------- ---------- ----------- ---------- --------- Total Liabilities & Equity $1,785,682 $2,239,113 $590,722 4,615,517 =========================== ========== =========== ========== ========= Net Income (Mar. Qtr. Annualized) 27,520 29,772 6,584 63,876 =========================== ========== =========== ========== ========= Net Income (Last Twelve Months) 24,238 28,757 6,319 59,314 =========================== ========== =========== ========== ========= <FN> ------------------------------------------------ *Earnings Exclude One-Time Deal Related Expenses </TABLE>