<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:.........................September 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 November 12, 1996
3,051,504 common shares
<PAGE> 2
FIRST CITIZENS BANC CORP
Index
<TABLE>
<CAPTION>
PART I. Financial Information
<S> <C>
ITEM 1. Financial Statements:(Unaudited)
Consolidated Balance Sheets
September 30, 1996 and December 31, 1995.............................................3
Consolidated Statements of Income
Three and nine months ended September 30, 1996 and 1995..............................4
Consolidated Statements of Shareholders' Equity
Three and nine months ended September 30, 1996 and 1995..............................5
Consolidated Statements of Cash Flows
Nine months ended September 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 .................................18-19
ITEM 5. Other Information ...................................................................19-20
ITEM 6. (a) Exhibits ...........................................................................21
(b) Reports on Form 8-K ................................................................21
SIGNATURES ....................................................................................22
</TABLE>
<PAGE> 3
FIRST CITIZENS BANC CORP
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(Unaudited)
September 30 December 31
Assets 1996 1995
---------------- ----------------
<S> <C> <C>
Cash and due from banks $ 12,953,420 $ 16,295,910
Federal funds sold 9,450,000 7,915,000
Investment and mortgage-backed securities (Note 2)
Available-for-sale 59,342,986 57,711,219
Held-to-maturity 11,359,219 16,735,757
---------------- ----------------
Total investment and mortgage-backed securities 70,702,205 74,446,976
Loans (Note 3) 200,251,342 195,868,543
Less: Allowance for loan losses (Note 4) (2,648,865) (2,602,000)
---------------- ----------------
Net Loans 197,602,477 193,266,543
Office premises and equipment, net 6,205,207 6,458,747
Accrued interest receivable 2,177,319 2,369,641
Goodwill 1,729,849 1,881,000
Other assets 1,902,270 1,428,084
---------------- ----------------
Total assets $ 302,722,747 $ 304,061,901
================ ================
Liabilities
Deposits
Non-interest bearing deposits $ 21,331,989 $ 29,147,854
Interest-bearing deposits,
including certificates of deposit 217,169,912 213,194,330
---------------- ----------------
Total deposits 238,501,901 242,342,184
Federal Home Loan Bank borrowings 15,957,237 16,789,953
Securities sold under agreements to repurchase 9,499,799 8,434,050
U. S. Treasury interest-bearing demand notes payable 1,857,538 319,380
Accrued interest, taxes and other expenses 1,667,491 2,369,543
---------------- ----------------
Total liabilities 267,483,966 270,255,110
Shareholders' Equity
Capital Stock, no par value; 10,000,000 shares authorized, 3,051,504 shares
issued and outstanding at September 30, 1996; $20.00 par value;
5,600,000 shares authorized,
762,876 shares issued and outstanding at December 31, 1995 15,257,520 15,257,520
Retained Earnings 19,998,483 18,160,292
Unrealized gain/(loss) on securities available for sale (17,222) 388,979
---------------- ----------------
Total shareholders' equity 35,238,781 33,806,791
---------------- ----------------
Total liabilities and shareholders' equity $ 302,722,747 $ 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 Nine months ended
September 30, September 30,
-------------------------- ---------------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $ 4,312,625 $ 4,234,242 $12,741,121 $12,278,597
Interest and dividends on investment securities
U. S. Treasury securities and obligations
of U.S. government corporations & agencies 571,728 540,740 1,675,824 1,643,011
Obligations of states and political subdivisions 343,840 400,428 1,086,749 1,235,374
Other securities 50,330 104,616 190,258 334,126
Interest on federal funds sold 155,447 176,458 372,017 402,320
Other interest income 59,878 53,364 176,650 159,067
----------- ----------- ----------- -----------
Total interest income 5,493,848 5,509,848 16,242,619 16,052,495
Interest Expense:
Interest on deposits 1,983,765 2,052,096 5,966,755 5,812,693
Interest on FHLB borrowings 231,010 246,559 704,885 750,501
Interest on other borrowings 107,984 115,564 268,902 297,724
----------- ----------- ----------- -----------
Total interest expense 2,322,759 2,414,219 6,940,542 6,860,918
----------- ----------- ----------- -----------
Net Interest Income 3,171,089 3,095,629 9,302,077 9,191,577
Provision for loan losses 89,500 83,000 238,500 239,000
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 3,081,589 3,012,629 9,063,577 8,952,577
Noninterest income:
Computer center service charges and retail sales 501,171 460,657 1,556,407 1,291,764
Service charges on deposit accounts 127,464 121,722 364,891 329,469
Investment security gain/(loss) 2,000 2,000 17,850 4,500
Other operating income 220,420 220,451 589,404 525,441
----------- ----------- ----------- -----------
Total noninterest income 851,055 804,830 2,528,552 2,151,174
Noninterest expenses:
Salaries and wages and employee benefits 1,315,957 1,275,687 3,932,921 3,795,307
Net occupancy expense 141,857 166,642 414,045 409,182
Equipment 158,310 141,240 467,120 414,269
FDIC Premiums 1,000 73,374 3,500 350,189
Franchise Tax 100,417 107,683 319,726 349,667
Professional Fees 140,359 133,431 402,290 400,176
Other operating expenses 667,319 574,271 1,889,552 1,702,241
----------- ----------- ----------- -----------
Total noninterest expenses 2,525,219 2,472,328 7,429,154 7,421,031
----------- ----------- ----------- -----------
Income before federal income taxes 1,407,425 1,345,131 4,162,975 3,682,720
Federal income taxes 396,825 362,832 1,157,584 942,256
----------- ----------- ----------- -----------
Net Income $ 1,010,600 $ 982,299 $ 3,005,391 $ 2,740,464
=========== =========== =========== ===========
Per share data (based on 3,051,504 shares)
Earnings per share $ 0.33 $ 0.32 $ 0.98 $ 0.90
=========== =========== =========== ===========
Dividends declared $ 0.1300 $ 0.4875 $ 0.3825 $ 0.7125
=========== =========== =========== ===========
</TABLE>
See notes to interim consolidated financial statements Page 4
<PAGE> 5
FIRST CITIZENS BANC CORP
Consolidated Statement of Shareholders' Equity (Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
---------------------------- -----------------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Balance at beginning of period $ 34,499,182 $ 32,981,359 $ 33,806,791 $ 31,910,252
Net income 1,010,600 982,299 3,005,391 2,740,464
Cash dividends (396,696) (1,487,608) (1,167,200) (2,174,666)
Market adjustment on securities
available for sale 125,695 0 (406,200) 0
------------ ------------ ------------ ------------
Balance at end of period $ 35,238,781 $ 32,476,050 $ 35,238,781 $ 32,476,050
============ ============ ============ ============
</TABLE>
See notes to interim consolidated financial statements Page 5
<PAGE> 6
FIRST CITIZENS BANC CORP
Consolidated Statement of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
-----------------------------------
1996 1995
Cash Flows from Operating Activities:
<S> <C> <C>
Net Income $ 3,005,391 $ 2,740,464
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of office premises and equipment 458,325 442,808
Gain on disposal of office premises and equipment (2,343) 0
Amortization of goodwill 151,151 151,151
Provision for loan losses 238,500 239,000
Gains on investment securities (17,850) (4,500)
Change in deferred loan fees (1,698) (39,635)
Net amortization of investment security premiums and discounts 97,783 98,097
Change in accrued interest receivable 192,322 (180,681)
Change in other assets (474,186) (195,675)
Change in accrued interest, taxes and other expenses (492,796) 704,132
-------------- --------------
Net cash from operating activities 3,154,599 3,955,161
Cash Flows from Investing Activities:
Maturity of deposits in other bank 0 0
Maturities and calls of investment securities, held-to-maturity 5,340,226 17,483,486
Purchases of investment securities, held-to-maturity (9,891,620) (10,494,193)
Maturities and calls of investment securities, available-for-sale 7,600,777 60,358
Loans made to customers, net of principal collected (4,572,736) (7,855,572)
Change in federal funds sold (1,535,000) (6,218,000)
Proceeds from the sale of office premises and equipment 325,000 0
Purchases of office premises and equipment (527,442) (598,704)
-------------- --------------
Net cash from investing activities (3,260,795) (7,622,625)
Cash Flows from Financing Activities:
Proceeds from FHLB borrowings 0 0
Repayments of FHLB borrowings (832,717) (787,100)
Change in federal funds purchased 0 0
Change in deposits (3,840,283) (573,331)
Change in securities sold under agreements to repurchase 1,065,749 (922,074)
Change in U. S. Treasury interest-bearing demand notes payable 1,538,157 1,171,631
Cash dividends paid (1,167,200) (2,174,666)
-------------- --------------
Net cash from financing activities (3,236,294) (3,285,540)
Increase (decrease) in cash and due from banks (3,342,490) (6,953,004)
Cash and due from banks at beginning of period 16,295,910 19,127,275
-------------- --------------
Cash and due from banks at end of period $ 12,953,420 $ 12,174,271
============== ==============
Supplemental disclosures:
Cash paid during the period for:
Interest $ 7,085,265 $ 6,640,148
============== ==============
Federal income taxes $ 1,105,000 $ 655,000
============== ==============
</TABLE>
See notes to interim consolidated financial statements Page 6
<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 September 30, 1996 and December
31, 1995; the consolidated statements of income for the three month
periods ended September 30, 1996 and 1995, and for the nine month
periods ended September 30, 1996 and 1995; the consolidated statements
of shareholders' equity for the three months ended September 30, 1996
and 1995, and for the nine month periods ended September 30, 1996 and
1995; and the consolidated statements of cash flows for the nine month
periods ended September 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 September
30, 1996 and its results of operations and changes in cash flows for
the periods ended September 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 September 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 amortized cost, gross unrealized gains, gross unrealized losses and
estimated fair values of the investment and mortgage-backed securities,
as presented in the consolidated balance sheets at September 30, 1996
and December 31, 1995 are as follows:
<TABLE>
<CAPTION>
September 30, 1996
Gross Gross
Amortized Unrealized Unrealized Estimated
AVAILABLE FOR SALE Cost Gains Losses Fair Value
----------------- ----------------- -------------- ---------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $39,001,848 $52,666 ($326,266) $38,728,248
Obligations of state and political
subdivisions 16,901,151 376,507 (128,301) 17,149,357
Other securities, including mortgage-
backed securities 3,466,081 0 (700) 3,465,381
----------------- ----------------- ------------- ------------
$59,369,080 $429,173 ($455,267) $59,342,986
=========== ======== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
September 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
obligations of U.S. government
corporations and agencies $1,000,000 $22,500 $0 $1,022,500
Obligations of state and political
subdivisions 7,470,533 171,163 (8,757) 7,632,939
Other securities, including mortgage-
backed securities 2,888,686 7,602 (21,166) 2,875,122
---------------- ---------------- ---------------- -----------------
$11,359,219 $201,265 ($29,923) $11,530,561
=========== ======== ========= ===========
</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
obligations of U.S. government
corporations and agencies $37,032,554 $210,723 ($105,141) $37,138,136
Obligations of state and political
subdivisions 16,714,307 556,352 (72,822) 17,197,837
Other securities, including mortgage-
backed securities 3,374,996 250 0 3,375,246
------------- -------------- ----------------- ---------------
$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
obligations of U.S. government
corporations and agencies $1,500,000 $51,719 $0 $1,551,719
Obligations of states and political
subdivisions 10,380,035 312,217 (12,466) 10,679,786
Other securities, including mortgage-
backed securities 4,855,722 27,928 (16,215) 4,867,435
------------- -------------- ----------------- ---------------
$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 September 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>
Estimated Fair
Amortized Cost Value
<S> <C> <C>
AVAILABLE FOR SALE
Due in one year or less $16,346,362 $16,386,816
Due after one year through five years 29,193,340 29,115,600
Due after five years through ten years 9,348,414 9,367,976
Due after ten years 1,014,883 1,007,214
Mortgage-backed securities 50,631 49,930
Other securities 3,415,450 3,415,450
---------------------- ----------------------
Total securities available for sale $59,369,080 $59,342,986
====================== ======================
HELD TO MATURITY
Due in one year or less $2,550,446 $2,563,760
Due after one year through five years 5,920,087 6,091,680
Mortgage-backed securities 2,888,686 2,875,121
---------------------- ----------------------
Total securities held to maturity $11,359,219 $11,530,561
====================== ======================
</TABLE>
No securities were sold during 1996 or 1995. Securities called or settled by the
issuer resulted in gains of $17,850 for the nine months ended September 30, 1996
and $4,500 for the nine months ended September 30, 1995.
Investment securities with a carrying value of approximately $36,963,000 and
$31,826,000 were pledged as of September 30, 1996 and December 31, 1995,
respectively, to secure public deposits, other deposits and liabilities as
required by law.
Page 10
<PAGE> 11
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- --------------------------------------------------------------------------------
(3) Loans
Loans as presented in the consolidated balance sheets are comprised of
the following classifications:
<TABLE>
<CAPTION>
9/30/96 12/31/95
-------------- -------------
<S> <C> <C>
Commercial & agriculture $ 41,353,731 $ 45,024,037
Real estate - mortgage 126,920,636 120,782,608
Real estate - construction 2,250,334 1,129,624
Consumer loans 28,986,926 28,983,885
Credit card and other 1,906,933 1,117,305
Deferred Loan Fees (1,167,218) (1,168,916)
-------------- -------------
Total loans $200,251,342 $195,868,543
============ ============
</TABLE>
(4) Allowance for Loan Losses
A summary of the activity in the allowance for loan losses for the nine
months ended September 30, 1996 and September 30, 1995 is as follows:
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Balance January 1, $2,602,000 $2,390,000
Loans Charged Off (288,831) (174,000)
Recoveries of Loans 97,196 116,000
Provision for loan losses 238,500 239,000
------------ ------------
Balance September 30, $2,648,865 $2,571,000
========== ==========
</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 nine months
ended September 30.
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Average investment in impaired loans $1,984,408 $3,232,167
Interest income recognized on impaired loans
including interest income recognized on cash
basis $102,421 $225,644
Interest income recognized on impaired loans
on cash basis $2,338 $13,115
Information regarding impaired loans at September 30, 1996 and December 31, 1995
is as follows:
9/30/96 12/31/95
------------ ------------
Balance impaired loans $1,558,000 $2,338,000
Less portion for which no allowance for loan
losses is allocated $0 $1,205,000
Portion of impaired loan balance for which an
allowance for credit losses is allocated $1,558,000 $1,133,000
Portion of allowance for loan losses allocated to
the impaired loan balance $389,000 $268,000
</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
Page 12
<PAGE> 13
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- --------------------------------------------------------------------------------
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 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 September 30, 1996 and December
31, 1996.
Commitments to extend credit and letters of credit approximated the following
amounts at September 30, 1996 and December 31, 1995.
<TABLE>
<CAPTION>
Contract Amount
---------------
September 30, 1996 December 31, 1995
------------------ -----------------
Commitment to extend credit:
<S> <C> <C>
Lines of credit and construction loans $13,637,000 $11,164,000
Credit cards 4,239,000 3,583,000
Letters of credit 552,000 377,000
-------------------- ------------------
$18,428,000 $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
September 30, 1996 and December 31, 1995 approximated $1,673,000 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 September 30, 1996, compared to December 31, 1995
and the consolidated results of operations for the three and nine month periods
ended September 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 September 30, 1996 totalled $302,722,747
compared to $304,061,901 at December 31, 1995. This was an decrease of
$1,339,154 or 0.4 percent. Within the structure of the assets, total investment
and mortgage-backed securities have decreased $3,744,771 since December 31,
1995, and net loans have increased $4,335,934 since December 31, 1995.
At September 30, 1996, $59,342,986 or 83.9 percent of the investment portfolio
was classified as available-for-sale. The remainder, $11,359,219 or 16.1
percent, was classified as held-to-maturity. The investment and mortgage-backed
securities decrease of 5.0 percent from December 31, 1995 is a result of
maturities of securities.
Net loans at September 30, 1996 increased 2.2 percent from year end 1995. At
September 30, 1996, the loan to deposit ratio was 82.9 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 third quarter of 1996.
At September 30, 1996, the allowance for loan losses as a percent of total loans
was 1.32 percent compared to 1.33 percent at December 31, 1995. For the nine
months of operations of 1996, $238,500 was placed into the allowance from
earnings compared to $239,000 for the same period of 1995. Net charge offs for
the first nine months of 1996 were $192,000 compared to $58,000 for the same
period of 1995. Impaired loans at September 30, 1996 totalled $1,558,000 or 0.79
percent of the loan portfolio compared to $2,338,000 or 1.2 percent of the loan
portfolio at December 31, 1995.
Page 14
<PAGE> 15
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Form 10-Q
- --------------------------------------------------------------------------------
Total deposits at September 30, 1996 decreased $3,840,283 from year end 1995.
Non-interest bearing deposits, representing demand deposit balances, decreased
$7,815,865 from year end 1995. Interest bearing deposits, including savings and
time deposits, increased $3,975,582 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 $5,262,000 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 $2,842,000 compared to the average balance for the same period for
1995. The current average rate on these deposits is 5.2 percent.
Other borrowed funds have increased $1,771,191 from December 31, 1995 to
September 30, 1996. Federal Home Loan Bank borrowings have decreased $832,716 as
a result of scheduled paydowns. Securities sold under agreements to repurchase
have increased $1,065,749 and U.S. Treasury Tax Demand Notes have increased
$1,538,158.
Shareholders' equity at September 30, 1996 was $35,238,781 which was 11.6
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 $3,005,391 less dividends of
$1,167,200 and less the change in the unrealized gain on securities available
for sale of $406,201. 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. Additionally, at
the Corporation's annual meeting on April 16, 1996, the articles of
incorporation were amended to change the $20.00 par common stock to no par
common stock and to increase the number of authorized shares from 5,000,000 to
10,000,000. The company paid cash dividends on February 1, 1996 at the rate of
$.1250 per share, 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. On August 1, 1996, the company paid a dividend at the
rate of $.1300 per share. The outstanding shares on September 30, 1996 were
3,051,504.
Results of Operations
- ---------------------
Net earnings for the quarter ended September 30, 1996 were $1,010,600 or $.33
per common share compared to $982,299 or $.32 per common share for the same
period in 1995. This was an increase of $28,301 or 2.9 percent. Net earnings for
the nine month period ended September 30, 1996 were $3,005,391 or $.98 per
common share compared to $2,740,464 or $.90 per common share for the same period
in 1995. This was an increase of $264,917 or 9.7 percent.
Net interest income for the third quarter 1996 totalled $3,171,089 compared to
$3,095,629 for the
Page 15
<PAGE> 16
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Form 10-Q
- --------------------------------------------------------------------------------
third quarter of 1995. This was an increase of $75,460 or 2.4 percent. Net
interest income for the first nine months of 1996 totalled $9,302,077 compared
to $9,191,577 for the first nine months of 1995. This was an increase of
$110,500 or 1.2 percent. Total interest income for the first nine months of 1996
has increased $190,124 or 1.2 percent compared to the same period of 1995. The
average rate on earning assets on a tax equivalent basis for the first nine
months of 1996 was 8.1 percent compared to 8.0 percent for the same period of
1995. Total interest expense for the first nine months of 1996 has increased
$79,334 or 1.2 percent compared to the same period of 1995. The net interest
margin on a tax equivalent basis for the first nine months was 4.7 percent for
both periods ended September 30, 1996 and 1995.
Noninterest income for the third quarter 1996 totalled $851,055 compared to
$804,830 for the third quarter 1995. This was an increase of $46,225 or 5.7
percent and attributed to increases in revenue from the computer operations of
$40,514 and increased service charges on deposit accounts of $5,742. Noninterest
income for the first nine months of 1996 totalled $2,528,552 compared to
$2,151,174 for the same period in 1995. This was an increase of $377,378 or 17.5
percent and attributed to increases in revenue from the computer operations of
$264,643, increased service charge on deposit accounts of $35,422, increased
investment security gain of $13,350 and increased other operating income of
$63,963.
Noninterest expenses for the third quarter 1996 totalled $2,525,219 compared to
$2,472,328 for the third quarter 1995. This was an increase of $52,891 or 2.1
percent. Noninterest expenses for the first nine months of 1996 totalled
$7,429,154 compared to $7,421,031 for the first nine months of 1995. This was an
increase of $8,123 or .1 percent. The largest monetary increase in noninterest
expense is in employee benefits, which increased $137,614 or 3.6 percent for the
first nine months of 1996 compared to the same period of 1995. The increase in
employee benefits is due to increased health insurance of $61,467. FDIC premiums
for the first nine months of 1996 have decreased $346,689 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 third quarter 1996 totalled $396,825
compared to $362,832 for the third quarter 1995. This was an increase of $33,993
or 9.4 percent. The increase in the federal income taxes is a result of the
increase in total earnings before taxes of $62,294 and a decrease in tax exempt
earnings of $56,588. The federal income tax expense for the first nine months of
1996 totalled $1,157,584 compared to $942,256 for the first nine months of 1995.
This
Page 16
<PAGE> 17
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Form 10-Q
- --------------------------------------------------------------------------------
was an increase of $215,328 or 22.9 percent. The increase in the federal income
taxes is a result of the increase in total earnings before taxes of $480,255 and
a decrease in tax exempt earnings of $148,625.
Capital Resources
- -----------------
Shareholders equity totalled $35,238,781 at September 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
9/30/96 12/31/95 Minimums
------- -------- --------
<S> <C> <C> <C>
Tier I Risk Based Capital 21.76% 19.87% 4.00%
Total Risk Based Capital 23.01% 21.13% 8.00%
Leverage Ratio 10.90% 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 $527,442 for the first nine months of 1996
compared to $598,704 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
nine months of 1996 the Banks maintained a federal funds sold position that
averaged $9,373,000. 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 $9,842,763 at September 30, 1996. Finally, 83.9 percent of the
Corporation's investment and mortgage-backed investment portfolio has been
classified as available for sale which provides additional liquidity.
Page17
<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>
For Against Not Voted
Director Candidate
- ------------------
<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 568,738 2,808 191,330
Increase Authorized Shares
</TABLE>
ITEM 5. OTHER INFORMATION
The Citizens Banking Company of Sandusky, Ohio, a subsidiary
of First Citizens Banc Corp has entered into an Agreement of
Purchase and Assumption, dated October 2, 1996, with EST
National Bank of Elyria, Ohio. Citizens proposes to purchase,
from EST National Bank , banking offices located at 4416 Milan
Road, Sandusky, Ohio, 24 Main Street, Berlin Heights, Ohio,
and an ATM located within the Sandusky Mall at 4314 Milan
Road, Sandusky, Ohio. Citizens proposes to assume deposit
liabilities of the above banking offices totalling
approximately $18,000,000. These deposits are comprised of
approximately $4,000,000 in the Sandusky banking office and
approximately $14,000,000 in the Berlin Heights banking
office.
From the cash proceeds of $18,000,000 the Citizens will
purchase the assets represented by the real estate located at
4416 Milan Road, Sandusky, Ohio 44870 and 24 Main Street,
Berlin Heights, Ohio 44814, respectively, the contents of the
banking offices, and the stand-alone ATM located at 4314 Milan
Road, Sandusky, Ohio 44870
Page 19
<PAGE> 20
for the sum of $956,000. From the cash proceeds Citizens will
also pay to EST National Bank an amount equal to 10.25 percent
of the aggregate sum of the deposits on the date of closing.
This amount will equal approximately $1,845,000.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ITEM 6. (A) EXHIBITS - Item No. 27 Financial Data Schedule.....................................20
(B) REPORTS ON FORM 8-K - None
</TABLE>
Page 20
<PAGE> 21
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 November 13, 1996
David A. Voight Date
President
/s/ James O. Miller November 13, 1996
James O. Miller Date
Senior Vice President
Page 21
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000944745
<NAME> FIRST CITIZENS BANC CORP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 12,953,420
<INT-BEARING-DEPOSITS> 217,169,912
<FED-FUNDS-SOLD> 9,450,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 59,342,986
<INVESTMENTS-CARRYING> 11,359,219
<INVESTMENTS-MARKET> 11,530,561
<LOANS> 200,251,342
<ALLOWANCE> 2,648,865
<TOTAL-ASSETS> 302,722,747
<DEPOSITS> 238,501,901
<SHORT-TERM> 11,357,337
<LIABILITIES-OTHER> 1,667,491
<LONG-TERM> 15,957,237
<COMMON> 15,257,520
0
0
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 302,722,747
<INTEREST-LOAN> 12,741,121
<INTEREST-INVEST> 3,324,848
<INTEREST-OTHER> 176,650
<INTEREST-TOTAL> 16,242,619
<INTEREST-DEPOSIT> 5,966,755
<INTEREST-EXPENSE> 6,940,542
<INTEREST-INCOME-NET> 9,302,077
<LOAN-LOSSES> 238,500
<SECURITIES-GAINS> 17,850
<EXPENSE-OTHER> 7,429,154
<INCOME-PRETAX> 4,162,975
<INCOME-PRE-EXTRAORDINARY> 4,162,975
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,005,391
<EPS-PRIMARY> .98
<EPS-DILUTED> .98
<YIELD-ACTUAL> 7.79
<LOANS-NON> 859,000
<LOANS-PAST> 761,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,558,000
<ALLOWANCE-OPEN> 2,602,000
<CHARGE-OFFS> 288,831
<RECOVERIES> 97,196
<ALLOWANCE-CLOSE> 2,648,865
<ALLOWANCE-DOMESTIC> 2,648,865
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
