<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: ..................................June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ...................to ..........................
Commission File Number: ................................................0-25980
First Citizens Banc Corp
------------------------
(Exact name of Registrant as specified in its charter)
Ohio 34-1558688
---- ----------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
100 East Water Street, Sandusky, Ohio 44870
----------------------------------------------
(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code: (419) 625-4121
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes
-----
No
-----
Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date.
Common Stock, no par value
Outstanding at August 6, 1996
3,051,504 common shares
<PAGE> 2
<TABLE>
<CAPTION>
FIRST CITIZENS BANC CORP
Index
<S> <C> <C>
PART I. Financial Information
Item 1. Financial Statements:(Unaudited)
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995..........................................................3
Consolidated Statements of Income
Three and six months ended June 30, 1996 and 1995............................................4
Consolidated Statements of Shareholders' Equity
Three and six months ended June 30, 1996 and 1995............................................5
Consolidated Statements of Cash Flows
Six months ended June 30, 1996 and 1995......................................................6
Notes to Consolidated Financial Statements....................................................7-13
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations...................................................................14-17
PART II. Other Information
Item 1. Legal Proceedings ..............................................................................18
Item 2. Changes in Securities ..........................................................................18
Item 3. Defaults upon Senior Securities ................................................................18
Item 4. Submission of Matters to a Vote of Security Holders ............................................18
Item 5. Other Information ..............................................................................19
Item 6. (a) Exhibits ...................................................................................19
(b) Reports on Form 8-K ........................................................................19
Signatures ............................................................................................21
</TABLE>
<PAGE> 3
FIRST CITIZENS BANC CORP
Consolidated Balance Sheet
<TABLE>
<CAPTION>
(Unaudited)
June 30 December 31
Assets 1996 1995
------------- -------------
<S> <C> <C>
Cash and due from banks $ 13,315,532 $ 16,295,910
Federal funds sold 8,260,000 7,915,000
Investment and Mortgage-backed securities (Note 2)
Available-for-sale 58,072,053 57,711,219
Held-to-maturity 12,939,159 16,735,757
------------- -------------
Total investment securities 71,011,212 74,446,976
Loans (Note 3) 196,908,192 195,868,543
Less: Allowance for loan losses (Note 4) (2,652,105) (2,602,000)
------------- -------------
Net Loans 194,256,087 193,266,543
Office premises and equipment, net 6,448,285 6,458,747
Accrued interest receivable 2,467,919 2,369,641
Goodwill 1,780,233 1,881,000
Other assets 1,754,781 1,428,084
------------- -------------
Total assets $ 299,294,049 $ 304,061,901
============= =============
Liabilities
Deposits
Non-interest bearing deposits $ 23,063,893 $ 29,147,854
Interest-bearing deposits,
including certificates of deposit 214,240,070 213,194,330
------------- -------------
Total deposits 237,303,963 242,342,184
Federal Home Loan Bank borrowings 16,238,762 16,789,953
Securities sold under agreements to repurchase 8,143,860 8,434,050
U. S. Treasury interest-bearing demand notes payable 1,660,012 319,380
Accrued interest, taxes and other expenses 1,448,270 2,369,543
------------- -------------
Total liabilities 264,794,867 270,255,110
Shareholders' Equity
Capital Stock, no par value; 10,000,000 shares authorized,
3,051,504 shares issued and outstanding 15,257,520 15,257,520
Retained Earnings 19,384,578 18,160,292
Unrealized gain/(loss) on securities available for sale (142,916) 388,979
------------- -------------
Total shareholders' equity 34,499,182 33,806,791
------------- -------------
Total liabilities and shareholders' equity $ 299,294,049 $ 304,061,901
============= =============
</TABLE>
See notes to interim consolidated financial statements. Page 3
<PAGE> 4
FIRST CITIZENS BANC CORP
Consolidated Statements of Income (Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------- ------------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $4,218,431 $4,122,281 $ 8,428,496 $ 8,042,790
Interest and dividends on investment securities
U. S. Treasury securities and obligations
of U.S. government corporations & agencies 551,938 638,079 1,104,096 1,298,715
Obligations of states and political subdivisions 365,965 410,374 742,909 834,946
Other securities 60,298 25,695 139,928 53,070
Interest on federal funds sold 103,777 123,789 216,570 225,862
Other interest income 58,491 0 116,772 0
--------- --------- ---------- ---------
Total interest income 5,358,900 5,320,218 10,748,771 10,455,383
Interest Expense:
Interest on deposits 1,971,774 1,964,311 3,982,990 3,760,597
Interest on FHLB borrowings 234,980 250,311 473,875 503,942
Interest on other borrowings 72,482 88,052 160,918 180,595
--------- --------- ---------- ---------
Total interest expense 2,279,236 2,302,674 4,617,783 4,445,134
--------- --------- ---------- ---------
Net Interest Income 3,079,664 3,017,544 6,130,988 6,010,249
Provision for loan losses 79,500 83,000 149,000 156,000
--------- --------- ---------- ---------
Net interest income after provision for loan losses 3,000,164 2,934,544 5,981,988 5,854,249
Noninterest income:
Computer center service charges and retail sales 533,245 414,800 1,055,236 831,107
Service charges on deposit accounts 120,907 122,922 237,427 207,747
Investment security gain/(loss) 10,350 2,500 15,850 2,500
Other operating income 196,333 210,991 368,984 390,690
--------- --------- ---------- ---------
Total noninterest income 860,835 751,213 1,677,497 1,432,044
Noninterest expenses:
Salaries and wages and employee benefits 1,308,190 1,272,856 2,616,964 2,519,620
Net occupancy expense 137,494 130,983 272,188 262,898
Equipment 156,794 121,353 308,810 273,029
FDIC Premiums 1,500 138,407 2,500 276,815
Franchise Tax 106,852 123,535 219,309 241,984
Professional Fees 134,815 137,469 261,931 266,746
Other operating expenses 626,398 597,068 1,222,233 1,107,612
--------- --------- ---------- ---------
Total noninterest expenses 2,472,043 2,521,671 4,903,935 4,948,704
--------- --------- ---------- ---------
Income before federal income taxes 1,388,956 1,164,086 2,755,550 2,337,589
Federal income taxes 387,969 286,616 760,759 579,424
--------- --------- ---------- ---------
Net Income $1,000,987 $ 877,470 $ 1,994,791 $ 1,758,165
========== ========== =========== ===========
Per share data (based on 3,051,504 shares)
Earnings per share $ 0.33 $ 0.29 $ 0.65 $ 0.58
========== ========== =========== ===========
Dividends declared $ 0.1275 $ 0.0000 $ 0.2525 $ 0.2250
========== ========== =========== ===========
<FN>
See notes to interim consolidated financial statements Page 4
</TABLE>
<PAGE> 5
FIRST CITIZENS BANC CORP
Consolidated Statements of Shareholders' Equity (Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------------- ----------------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Balance at beginning of period $ 34,212,506 $32,103,889 $ 33,806,791 $ 31,910,252
Net earnings 1,000,987 877,470 1,994,791 1,758,165
Cash dividends (389,067) 0 (770,505) (687,058)
Market adjustment on securities
available for sale (325,244) 0 (531,895) 0
------------ ----------- ------------ ------------
Balance at end of period $ 34,499,182 $32,981,359 $ 34,499,182 $ 32,981,359
============ =========== ============ ============
<FN>
See notes to interim consolidated financial statements Page 5
</TABLE>
<PAGE> 6
FIRST CITIZENS BANC CORP
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
---------------------------
1996 1995
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 1,994,791 $ 1,758,165
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 307,090 281,659
Amortization of goodwill 100,767 100,767
Provision for loan losses 149,000 156,000
Change in deferred loan fees (5,619) (30,799)
Net amortization of investment security premiums and discounts 65,331 71,804
Change in accrued interest receivable (98,278) 130,460
Increase in other assets (326,697) (578,543)
Change in accrued interest, taxes and other expenses (647,267) 312,939
------------ ------------
Net cash from operating activities 1,539,118 2,202,452
------------ ------------
Cash Flows from Investing Activities:
Maturities and calls of investment securities, held-to-maturity 3,766,546 13,873,031
Purchases of investment securities, held-to-maturity 0 (8,496,952)
Maturities and calls of investment securities, available-for-sale 6,191,462 45,358
Purchases of investment securities, available-to-sale (7,393,476) 0
Loans made to customers, net of principal collected (1,132,925) (4,710,846)
Change in federal funds sold (345,000) (4,764,000)
Purchases of office premises and equipment (296,628) (418,128)
------------ ------------
Net cash from investing activities 789,979 (4,471,537)
------------ ------------
Cash Flows from Financing Activities:
Repayments of FHLB borrowings (551,191) (521,126)
Change in federal funds purchased 0 0
Change in deposits (5,038,221) (1,891,832)
Change in securities sold under agreements to repurchase (290,190) (651,318)
Change in U. S. Treasury interest-bearing demand notes payable 1,340,632 591,610
Cash dividends paid (770,505) (687,057)
------------ ------------
Net cash from financing activities (5,309,475) (3,159,723)
------------ ------------
Decrease in cash and due from banks (2,980,378) (5,428,808)
Cash and due from banks at beginning of period 16,295,910 19,127,275
------------ ------------
Cash and due from banks at end of period $ 13,315,532 $ 13,698,467
============ ============
Supplemental disclosures:
Cash paid during the period for:
Interest $ 4,780,528 $ 4,329,287
============ ============
Federal Income taxes $ 705,000 $ 365,000
============ ============
<FN>
See notes to interim consolidated financial statements Page 6
</TABLE>
<PAGE> 7
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- -------------------------------------------------------------------------------
(1) Consolidated Financial Statements
The consolidated financial statements include the accounts of First
Citizens Banc Corp (Corporation) and it wholly-owned subsidiaries, The
Citizens Banking Company (Citizens), The Castalia Banking Company
(Castalia), SCC Resources, Inc. (SCC), and R. A. Reynolds Appraisal
Service, Inc. (Reynolds). All significant intercompany balances and
transactions have been eliminated in consolidation.
The consolidated balance sheets as of June 30, 1996 and December 31, 1995;
the consolidated statements of income for the three month periods ended
June 30, 1996 and 1995, and for the six month periods ended June 30, 1996
and 1995; the consolidated statement of shareholders equity for the three
months ended June 30, 1996 and 1995, and for the six month periods ended
June 30, 1996 and 1995; and the consolidated statement of cash flow for the
six month periods ended June 30, 1996 and 1995 have been prepared by the
Corporation without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present
fairly the Corporation's financial position as of June 30, 1996 and its
results of operations and changes in cash flows for the periods ended June
30, 1996 and 1995 have been made. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
The results of operations for the period ended June 30, 1996 are not
necessarily indicative of the operating results for the full year.
Reference is made to the accounting policies of the Corporation described
in the notes to financial statements contained in the Corporations's 1995
annual report. The Corporation has consistently followed these policies in
preparing this form 10-Q.
Page 7
<PAGE> 8
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- -------------------------------------------------------------------------------
(2) Investment and Mortgage-backed Securities
The gross unrealized gains and losses of the investment and mortgage-backed
securities, as presented in the consolidated balance sheets at June 30,
1996 and December 31,1995 are as follows:
<TABLE>
<CAPTION>
June 30, 1996
Gross Gross
Amortized Unrealized Unrealized Estimated Fair
AVAILABLE FOR SALE Cost Gains Losses Value
----------- --------- ------------ ---------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and $38,016,253 $ 66,704 ($449,194) $37,633,763
obligations of U.S. government
corporations and agencies
Obligations of state and political 16,808,682 359,312 (192,511) 16,975,484
subdivisions
Other securities, including mortgage- 3,463,657 0 (850) 3,462,807
backed securities
----------- --------- ------------ -----------
$58,288,592 $ 426,016 ($642,555) $58,072,053
=========== ========= ============ ===========
</TABLE>
<TABLE>
<CAPTION>
June 30, 1996
Gross Gross
Amortized Unrealized Unrealized Estimated Fair
HELD TO MATURITY Cost Gains Losses Value
----------- --------- ------------ ---------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and $ 1,000,000 $ 24,063 $ 0 $ 1,024,063
obligations of U.S. government
corporations and agencies
Obligations of state and political 8,353,912 200,563 (13,256) 8,541,219
subdivisions
Other securities, including mortgage- 3,585,247 8,963 (33,884) 3,560,325
backed securities
----------- --------- ------------ -----------
$12,939,159 $ 233,589 ($ 47,140) $13,125,607
=========== ========= ============ ===========
</TABLE>
Page 8
<PAGE> 9
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1995
Gross Gross
Amortized Unrealized Unrealized Estimated Fair
AVAILABLE FOR SALE Cost Gains Losses Value
----------- --------- ------------ ---------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and $37,032,554 $ 210,723 ($105,141) $37,138,136
obligations of U.S. government
corporations and agencies
Obligations of state and political 16,714,307 556,352 (72,822) 17,197,837
subdivisions
Other securities, including mortgage- 3,374,996 250 0 3,375,246
backed securities
----------- --------- ------------ -----------
$57,121,857 $ 767,325 ($177,963) $57,711,219
=========== ========= ========= ===========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
Gross Gross
Amortized Unrealized Unrealized Estimated Fair
HELD TO MATURITY Cost Gains Losses Value
----------- --------- ------------ -----------
<S> <C> <C> <C> <C>
U.S. Treasury securities and $ 1,500,000 $ 51,719 $ 0 $ 1,551,719
obligations of U.S. government
corporations and agencies
Obligations of states and political 10,380,035 312,217 (12,466) 10,679,786
subdivisions
Other securities, including mortgage- 4,855,722 27,928 (16,215) 4,867,435
backed securities
----------- --------- ------------ -----------
$16,735,757 $ 391,864 ($28,681) $17,098,940
=========== ========= ============ ===========
</TABLE>
Page 9
<PAGE> 10
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- -------------------------------------------------------------------------------
The amortized cost and estimated fair value of debt securities at June 30, 1996,
by contractual maturity , are shown below. Actual maturities may differ from
contractual maturities because issuers may have the right to call or prepay
obligations.
<TABLE>
<CAPTION>
Amortized Cost Estimated Fair
Value
<S> <C> <C>
AVAILABLE FOR SALE
Due in one year or less $12,347,502 $12,411,185
Due after one year through five years 31,826,169 31,599,004
Due after five years through ten years 9,847,594 9,811,627
Due after ten years 803,661 787,430
Mortgage-backed securities 51,907 51,057
Other securities 3,411,750 3,411,750
----------- -----------
Total securities available for sale $58,288,583 $58,072,053
=========== ===========
HELD TO MATURITY
Due in one year or less $ 2,993,640 $ 3,006,180
Due after one year through five years 6,360,269 6,559,099
Mortgage-backed securities 3,585,250 3,560,026
----------- -----------
Total securities held to maturity $12,939,159 $13,125,305
=========== ===========
</TABLE>
No securities were sold during 1996. Securities called or settled by the issuer
in 1996 resulted in gains of $15,850.
Investment securities with a carrying value of approximately $31,826,000 and
$40,118,000 were pledged as of June 30, 1996 and December 31, 1995,
respectively, to secure public deposits, other deposits and liabilities as
required by law.
(3) Loans
Page 10
<PAGE> 11
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- -------------------------------------------------------------------------------
Loans as presented in the consolidated balance sheets are comprised of the
following classifications:
<TABLE>
<CAPTION>
6/30/96 12/31/95
------------- --------------
<S> <C> <C>
Commercial & agriculture $ 41,952,087 $ 45,024,037
Real estate - mortgage 125,230,404 120,782,608
Real estate - construction 1,212,117 1,129,624
Consumer loans 28,392,887 28,983,885
Credit card and other 1,284,406 1,117,305
Deferred Loan Fees (1,163,709) (1,168,916)
------------- -------------
Total loans $ 196,908,192 $ 195,868,543
============= =============
</TABLE>
(4) Allowance for Loan Losses
A summary of the activity in the allowance for loan losses for the six
months ended June 30, 1996 and June 30, 1995 is as follows:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Balance January 1, $ 2,602,000 $ 2,390,000
Loans Charged Off (167,931) (90,000)
Recoveries of Loans 69,036 75,000
Provision for loan losses 149,000 156,000
----------- -----------
Balance June 30, $ 2,652,105 $ 2,531,000
=========== ===========
</TABLE>
Page 11
<PAGE> 12
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- -------------------------------------------------------------------------------
Information regarding impaired loans is as follows for the six months
ended June 30.
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Average investment in impaired loans $2,126,587 $3,384,000
Interest income recognized on impaired loans including $ 68,281 $ 114,344
interest income recognized on cash basis
Interest income recognized on impaired loans on cash basis $ 2,338 $ 10,402
</TABLE>
Information regarding impaired loans at June 30, 1996 and December 31, 1995 is
as follows:
<TABLE>
<CAPTION>
6/30/96 12/31/95
----------- ----------
<S> <C> <C>
Balance impaired loans $1,698,000 $2,338,000
Less portion for which no allowance for loan losses is $ 0 $1,205,000
allocated
Portion of impaired loan balance for which an allowance for $1,698,000 $1,133,000
credit losses is allocated
Portion of allowance for loan losses allocated to the $ 416,000 $ 268,000
impaired loan balance
</TABLE>
(5) Commitments, Contingencies and Off-balance Sheet Risk
The Bank subsidiaries are parties to financial instruments with off-balance
sheet risk in the normal course of business to meet financing needs of their
customers. These include commitments to make or purchase loans, undisbursed
lines of credit, undisbursed credit card balances and letters of credit. The
Banks' exposure to credit loss in the event of nonperformance by the other party
to the financial instrument is represented by the contractual amount of those
instruments. The Banks follow the same credit policy to make such commitments as
they use for loans recorded on the balance sheet. Since many commitments to make
loans expire without being used, the amount does not necessarily represent
future cash commitments. Collateral obtained relating to the commitments is
determined using management's credit evaluation of the borrower and may include
real estate, vehicles, business
Page 12
<PAGE> 13
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- -------------------------------------------------------------------------------
assets, deposits and other items. The Banks do make fixed rate loan commitments
for short periods of time. However, such commitments were immaterial as of June
30, 1996 and December 31, 1996.
Commitments to extend credit and letters of credit approximated the following
amounts at June 30, 1996 and December 31, 1995.
<TABLE>
<CAPTION>
Contract Amount
---------------
June 30, 1996 December 31, 1995
------------- -----------------
<S> <C> <C>
Commitment to extend credit:
Lines of credit and construction loans $12,158,000 $11,164,000
Credit cards 4,108,000 3,583,000
Letters of credit 560,000 377,000
----------- -----------
$16,826,000 $15,124,000
</TABLE>
Citizens and Castalia are required to maintain certain reserve balances on hand
in accordance with the Federal Reserve Board requirements. The average reserve
balance maintained in accordance with such requirements for the periods ended
June 30, 1996 and December 31, 1995 approximated $1572,000 and $1,700,000
respectively.
In the normal course of business, the Corporation and its subsidiaries are
involved in various legal actions, but in the opinion of management and its
legal counsel, ultimate disposition of such legal matters is not expected to
have a material adverse effect on the consolidated financial statements.
Page 13
<PAGE> 14
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Form 10-Q
- -------------------------------------------------------------------------------
Introduction
- ------------
The following discussion focuses on the consolidated financial condition of
First Citizens Banc Corp at June 30, 1996, compared to December 31, 1995 and the
consolidated results of operations for the three and six month periods ended
June 30, 1996 compared to the same periods in 1995. This discussion should be
read in conjunction with the consolidated financial statements and footnotes
included in this Form 10-Q.
The registrant is not aware of any trends, events or uncertainties that will
have, or are reasonably likely to have, a material effect on the liquidity,
capital resources, or operations except as discussed herein. Also, the
registrant is not aware of any current recommendation by regulatory authorities
which would have such effect if implemented.
Financial Condition
- -------------------
Total assets of the Corporation at June 30, 1996 totalled $299,294,049 compared
to $304,061,901 at December 31, 1995. This was an decrease of $4,767,852 or 1.6
percent. Within the structure of the assets, total investment securities have
decreased $3,435,764 since December 31, 1995, and net loans have increased
$989,544 since December 31, 1995.
At June 30, 1996, $12,939,159 or 18.2 percent of the investment portfolio was
classified as held-to-maturity. The remainder, $58,072,053 or 81.8 percent, was
classed as available-for-sale. Investment securities decreased $3,435,764 or 4.6
percent from December 31, 1995. The decrease in the balances of the portfolio is
a result of maturities of securities.
Net loans at June 30, 1996 increased $989,544 or .5 percent from year end 1995.
At June 30, 1996, the loan to deposit ratio was 81.9 percent compared to 79.3
percent at December 31, 1995. This is reflective of the lack of deposit growth
in the market along with increased loan demand in the second quarter of 1996.
At June 30, 1996, the allowance for loan losses as a percent of total loans was
1.35 percent compared to 1.33 percent at December 31, 1995. For the six months
of operations of 1996, $149,000 was placed into the allowance from earnings
compared to $156,000 for the same period of 1995. Net charge offs for the first
six months of 1996 were $99,000 compared to $15,000 for the same period of 1995.
Impaired loans at June 30, 1996 totalled $1,698,000 or 0.86 percent of the loan
portfolio compared to $2,338,000 or 1.2 percent of the loan portfolio at
December 31, 1995.
Total deposits at June 30, 1996 decreased $5,038,221 from year end 1995.
Non-interest bearing
Page 14
<PAGE> 15
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Form 10-Q
- -------------------------------------------------------------------------------
deposits, representing demand deposit balances, decreased $6,083,961 from year
end 1995. Interest bearing deposits, including savings and time deposits,
increased $1,045,740 from year end 1995. Within the structure of interest
bearing deposits there continues to be a shift from lower cost savings deposits
to higher cost time certificates. The year to date 1996 average balance of
savings deposits has decreased $5,836,000 compared to the average balance of the
same period for 1995. The current average rate of these deposits is 2.8 percent.
The year to date 1996 average balance of time certificates has increased
$4,321,000 compared to the average balance for the same period for 1995. The
current average rate on these deposits is 5.1 percent.
Other borrowed funds have increased $499,251 from December 31, 1995 to June 30,
1996. Federal Home Loan Bank borrowings have decreased $551,191 as a result of
scheduled paydowns. Securities sold under agreements to repurchase have
decreased $290,190 and U.S. Treasury Tax Demand Notes have increased $1,340,632.
Shareholders' equity at June 30, 1996 was $34,499,182 which was 11.5 percent of
total assets. Shareholders' equity at December 31, 1995 was $33,806,791 which
was 11.1 percent of total assets. The increase in shareholders' equity was
represented by earnings of $1,994,791 less dividends of $770,505 and less the
decrease in the unrealized gain on securities available for sale of $531,895.
Total outstanding shares for the period December 31, 1995 to May 7, 1996 were
762,876. On May 8, 1996, the corporation paid a 300 percent stock dividend,
increasing the number of shares to 3,051,504. The company paid cash dividends on
February 1, 1996 at the rate of $.125 per share, and on May 1, 1996 at the rate
of $.1275 per share, after adjusting for the 300 percent stock split, effected
in the form of a stock dividend, on May 8, 1996.
Results of Operations
- ---------------------
Net earnings for the quarter ended June 30, 1996 were $1,000,987 or $.33 per
common share compared to $877,470 or $.29 per common share for the same period
in 1995. This was an increase of $123,517 or 14.1 percent. Net earnings for the
six month period ended June 30, 1996 were $1,994,791 or $.65 per common share
compared to $1,758,165 or $.58 per common share for the same period in 1995.
This was an increase of $236,626 or 13.5 percent.
Net interest income for the second quarter 1996 totalled $3,079,664 compared to
$3,017,544 for the second quarter of 1995. This was an increase of $62,120 or
2.1 percent. Net interest income for the first six months of 1996 totalled
$6,130,988 compared to $6,010,249 for the first six months of 1995. This was an
increase of $120,739 or 2.0 percent. Total interest income for the first six
months of 1996 has increased $293,388 or 2.8 percent compared to the same period
of 1995. The average rate on earning assets on a tax equivalent basis for the
first six months of 1996 was 8.1 percent
Page 15
<PAGE> 16
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Form 10-Q
- -------------------------------------------------------------------------------
compared to 7.9 percent for the same period of 1995. Total interest expense for
the first six months of 1996 has increased $172,649 or 3.9 percent compared to
the same period of 1995. The net interest margin on a tax equivalent basis for
the first six months was 4.7 percent for both periods ended June 30, 1996 and
1995.
Noninterest income for the second quarter 1996 totalled $860,835 compared to
$751,213 for the second quarter 1995. This was an increase of $109,622 or 14.6
percent and attributed to increases in revenue from the computer operations of
$118,445 and decreased other operating income of $17,158. Noninterest income for
the first six months of 1996 totalled $1,677,497 compared to $1,432,044 for the
same period in 1995. This was an increase of $245,453 or 17.1 percent and
attributed to increases in revenue from the computer operations of $224,129,
increased service charge on deposit accounts of $29,680, increased investment
security gain of $13,350 and decreased other operating income of $21,706.
Noninterest expenses for the second quarter 1996 totalled $2,472,043 compared to
$2,521,671 for the second quarter 1995. This was an decrease of $49,628 or 2.0
percent. Noninterest expenses for the first six months of 1996 totalled
$4,903,935 compared to $4,948,704 for the first six months of 1995. This was an
decrease of $44,769 or .90 percent. The largest monetary increase in non-
interest expense is in employee benefits, which increased $67,736 or 18.4
percent for the first six months of 1996 compared to the same period of 1995.
The increase in employee benefits is due to increased health insurance of
$70,850. FDIC premiums for the first six months of 1996 have decreased $274,315
from the same period in 1995, reflecting the current premium structure for well
capitalized institutions.
Federal Income Taxes
- --------------------
The federal income tax expense for the second quarter 1996 totalled $387,969
compared to $286,616 for the second quarter 1995. This was an increase of
$101,353 or 35.4 percent. The increase in the federal income taxes is a result
of the increase in total earnings before taxes of $224,870 and a decrease in tax
exempt earnings of $44,409. The federal income tax expense for the first half of
1996 totalled $760,759 compared to $579,424 for the first half of 1995. This was
an increase of $181,335 or 31.3 percent. The increase in the federal income
taxes is a result of the increase in total earnings before taxes of $417,961 and
a decrease in tax exempt earnings of $92,037.
Page 16
<PAGE> 17
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Form 10-Q
- -------------------------------------------------------------------------------
Capital Resources
- -----------------
Shareholders equity totalled $34,499,182 at June 30, 1996 compared to
$33,806,791 at December 31, 1995. All of the capital ratios exceed the
regulatory minimum guidelines as identified in the following table:
<TABLE>
<CAPTION>
Corporation Ratios Regulatory
6/30/96 12/31/95 Minimums
------- -------- --------
<S> <C> <C> <C>
Tier I Risk Based Capital 21.25% 19.87% 4.00%
Total Risk Based Capital 22.51% 21.13% 8.00%
Leverage Ratio 10.84% 10.25% 4.00-5.00%
</TABLE>
The payment of cash dividends has been changed from a semi-annual (January and
July) to a quarterly basis (February, May, August, and November). Cash dividends
paid of $.125 per common share on February 1, 1996 and $.1275 per common share
to be payable on May 1, 1996 are comparable to the January 1995 dividend of
$.225 per common share. This effectively represents an increase of $.0275
increase.
Capital expenditures totalled $296,628 for the first six months of 1996 compared
to $418,128 for the same period of 1995.
Liquidity
- ---------
Liquidity as it relates to the banking entities of the Corporation is the
ability to meet the cash demand and credit needs of its customers. For the first
six months of 1996 the Banks maintained a federal funds sold position that
averaged $8,290,000. In addition, the Banks, through their respective
correspondent banks maintain federal funds borrowing lines totalling $11,500,000
and the banks have total borrowing availability at the Federal Home Loan Bank of
Cincinnati of $9,561,239 at June 30, 1996. Finally, 81.8 percent of the
Corporation's investment and mortgage-backed investment portfolio has been
classified as available for sale which provides additional liquidity.
Page 17
<PAGE> 18
First Citizens Banc Corp
Other Information
Form 10-Q
Part II - Other Information
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
The shareholders of First Citizens Banc Corp authorized on April 16,
1996, the change from $20.00 par value common stock to no par common
stock for First Citizens Banc Corp common shares.
The shareholders of First Citizens Banc Corp also authorized on April
16, 1996, the number of authorized common shares of First Citizens Banc
Corp increased from 5,000,000 to 10,000,000.
On April 16, 1996, the board of directors of First Citizens Banc Corp
authorized a 300 percent stock dividend on First Citizens Banc Corp
common stock payable May 8, 1996 to shareholders of record April 23,
1996. As a result of the stock dividend, the number of outstanding
shares of common stock increased from 762,876 to 3,051,504.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
First Citizens Banc Corp held its annual meeting on April 16, 1996, for
the purpose of considering and voting on 1.) the election of four class
II directors to serve for terms of three years, 2.) the ratification and
appointment of Crowe, Chizek & Co. as independent auditors for the
calendar year 1996, and 3.) amending the Corporation's Articles of
Incorporation to reclassify all outstanding, and all authorized but
unissued shares of the Corporation's common stock from $20.00 par shares
to no par shares, and to increase the authorized number of common shares
which the corporation may issue to 10,000,000 no par shares. Four
directors, Mary Lee G. Close, Richard B. Fuller, George L. Mylander and
Richard O. Wagner were nominated for reelection and were subsequently
reelected as directors. No other issues were brought before the meeting.
Page 18
<PAGE> 19
ITEM 4. (CONTINUED)
The summary of the voting of 762,876 common shares outstanding were as
follows:
<TABLE>
<CAPTION>
Director Candidate For Against Not Voted
-----------------
<S> <C> <C> <C>
Mary Lee G. Close 570,126 1,520 191,230
Richard B. Fuller 569,860 1,786 191,230
George L. Mylander 569,850 1,796 191,230
Richard O. Wagner 570,126 1,520 191,230
Accounting Firm
---------------
Crowe, Chizek & Co. 571,546 0 191,330
Common Share Change
-------------------
Change to No Par and Increase 568,738 2,808 191,330
Authorized Shares
</TABLE>
ITEM 5. OTHER INFORMATION - None
ITEM 6. (A) EXHIBITS - Item No. 27 Financial Data Schedule ...............21
(B) REPORTS ON FORM 8-K - None
Page 19
<PAGE> 20
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, The
registrant has caused this report to be signed on its behalf the undersigned
thereunto duly authorized.
First Citizens Banc Corp
/s/ David A. Voight August 9, 1996
------------------- --------------
David A. Voight Date
President
/s/ James O. Miller August 9, 1996
------------------- --------------
James O. Miller Date
Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 13,315,532
<INT-BEARING-DEPOSITS> 214,240,070
<FED-FUNDS-SOLD> 8,260,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 58,072,053
<INVESTMENTS-CARRYING> 58,288,592
<INVESTMENTS-MARKET> 58,072,053
<LOANS> 196,908,192
<ALLOWANCE> (2,652,105)
<TOTAL-ASSETS> 299,294,049
<DEPOSITS> 237,303,963
<SHORT-TERM> 9,803,872
<LIABILITIES-OTHER> 1,448,270
<LONG-TERM> 16,238,762
<COMMON> 15,257,520
0
0
<OTHER-SE> 19,241,662
<TOTAL-LIABILITIES-AND-EQUITY> 299,294,049
<INTEREST-LOAN> 8,428,496
<INTEREST-INVEST> 2,203,503
<INTEREST-OTHER> 116,772
<INTEREST-TOTAL> 10,748,771
<INTEREST-DEPOSIT> 3,982,990
<INTEREST-EXPENSE> 4,617,783
<INTEREST-INCOME-NET> 6,130,988
<LOAN-LOSSES> 149,000
<SECURITIES-GAINS> 15,850
<EXPENSE-OTHER> 4,903,935
<INCOME-PRETAX> 2,755,550
<INCOME-PRE-EXTRAORDINARY> 2,755,550
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,994,791
<EPS-PRIMARY> 0.65
<EPS-DILUTED> 0.65
<YIELD-ACTUAL> 7.78
<LOANS-NON> 1,260,000
<LOANS-PAST> 733,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,126,587
<ALLOWANCE-OPEN> 2,602,000
<CHARGE-OFFS> 167,931
<RECOVERIES> 69,036
<ALLOWANCE-CLOSE> 2,652,105
<ALLOWANCE-DOMESTIC> 2,652,105
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
