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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 3, 1997
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First Citizens Banc Corp
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(Exact name of registration as specified in its charter)
Ohio 0-25980 34-1558688
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(State or other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
100 E. Water Street, P. O. Box 5016, Sandusky, Ohio 44870
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(Address of principal executive offices)
Registrant's telephone number, including area code: (419) 625-4121
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N/A
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(Former name of former address, if changed since last report)
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ITEM 5. FIRST CITIZENS BANC CORP AND
THE FARMERS STATE BANK SIGN DEFINITIVE MERGER AGREEMENT
Sandusky, Ohio - First Citizens Banc Corp (Nasdaq Bulletin Board
("FCZA")) and The Farmers State Bank of New Washington ("Farmers") jointly
announced today the signing of a definitive agreement for the affiliation of
Farmers with First Citizens. First Citizens, having total assets of $309,236,000
at March 31, 1997, is the parent company for The Citizens Banking Company, The
Castalia Banking Company, SCC Resources, Inc., and R. A. Reynolds Appraisal
Services, Inc., and is headquartered in Sandusky, Ohio. Farmers, a commercial
bank located in New Washington, Ohio, having total assets at March 31, 1997 of
$153,900,000, is expected to become a separate operating subsidiary of First
Citizens and operate under its current name and charter. Farmers operates
banking offices in New Washington, Tiro, and Chatfield in Crawford County; Green
Camp in Marion County; and Richwood in Union County.
Under the terms of the agreement, First Citizens will exchange 6.5
shares (the "Exchange Ratio") of its common stock for each of the 200,000 shares
of Farmers outstanding stock. Based on the closing bid price of First Citizens
on July 1, 1997 of $34.50, the transaction would be valued at approximately
$44.85 million, or $224.25 per share of Farmers stock. The merger, which will be
accounted for as a pooling of interests, is expected to be consummated during
January 1998, pending Farmers and First Citizens shareholder approval,
regulatory approval and other customary conditions of closing. The transaction
is expected to be a tax-free reorganization for federal income tax purposes.
First Citizens currently plans to add additional personnel, equipment,
ATMs and other operating improvements to Farmers. In addition, First Citizens
expects to offer additional loan, deposit, securities brokerage, and trust
products not currently offered to Farmers customers. With the added operating
expenditures, and excluding the expected revenue enhancements, First Citizens
estimates that the transaction will be neutral to earnings per share in the
first year following the acquisition and will improve its earnings growth rate
in the future.
David A. Voight, President of First Citizens, stated, "We are very
excited about this opportunity to expand into new markets through this merger
with Farmers. We are impressed with the way in which the management and Board of
Directors has operated Farmers and served their communities over the years. We
look forward to welcoming the Farmers customers and employees."
Dorothy L. Robey, President of Farmers, stated, "We believe that this
transaction will benefit our shareholders, customers and employees. Having First
Citizens stock will enhance the liquidity for our shareholders. Also, our
customers can expect us to offer additional banking products and services, and
our employees can grow and prosper as part of a larger company. As part of First
Citizens, we will be in a stronger competitive position in the years ahead."
McDonald & Company Securities, Inc. is serving as First Citizens'
financial advisor and Austin Associates, Inc. is serving as Farmers' financial
advisor in connection with the transaction.
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FIRST CITIZENS BANC CORP'S ACQUISITION OF THE FARMERS STATE BANK
SUMMARY FACT SHEET
ANNOUNCEMENT DATE: July 3, 1997
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DEAL STRUCTURE: Pooling of interests
- -------------- Tax-free exchange
Due diligence completed
Definitive agreement signed
$500,000 break-up fee
Farmers option to terminate transaction if FCZA
stock falls below $26.80
TERMS: 6.5 shares of First Citizens common for each share
- ----- of Farmers.
TIMING: Subject to normal regulatory approval and shareholder
- ------ approval by both companies.
Closing expected by February 1, 1998.
PRICING: Purchase price per share * $224.25
- ------- Estimated transaction value * $44.85 million
First Citizens shares issued 1,300,000
* based upon the closing bid price on July 1, 1997 of
$34.50
TRANSACTION RATIONALE:
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o Logical contiguous expansion into complementary market.
o Expands First Citizens' market area to three additional counties:
Crawford, Union, and Richland.
o Farmers has the leading market share in Crawford County with
17.1% of total deposits.
o First Citizens will have the opportunity to enhance Farmers' net
interest margin through a reduction in Farmers' liquidity levels.
At March 31, 1997, Farmers had a loan to deposit ratio of only
44.3%.
o First Citizens will be able to improve Farmers' noninterest
revenues through the addition of trust, securities brokerage,
ATMs and expanded demand deposit products which are currently not
offered to Farmers customers.
o With the planned operating expense increases and not considering
any of the expected revenue enhancements, First Citizens projects
the transaction will be neutral to earnings per share in the
first year following the acquisition and improved earnings growth
rate in the future.
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SIGNATURE:
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
First Citizens Banc Corp
Dated: July 3, 1997 /s/ David A. Voight
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David A. Voight, President
