<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:...................................March 31, 1997
[ ] 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 May 13, 1997
3,051,504 common shares
<PAGE> 2
FIRST CITIZENS BANC CORP
Index
<TABLE>
<CAPTION>
PART I. Financial Information
<S> <C> <C>
ITEM 1. Financial Statements:
Consolidated Balance Sheets (unaudited)
March 31, 1997 and December 31, 1996..............................3
Consolidated Statements of Income (unaudited)
Three months ended March 31, 1997 and 1996........................4
Consolidated Statement of Shareholders' Equity (unaudited)
Three months ended March 31, 1997 and 1996........................5
Consolidated Statement of Cash Flows (unaudited)
Three months ended March 31, 1997 and 1996........................6
Notes to Consolidated Financial Statements (Unaudited).............7-14
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................15-18
PART II. Other Information
ITEM 1. Legal Proceedings....................................................19
ITEM 2. Changes in Securities................................................19
ITEM 3. Defaults upon Senior Securities......................................19
ITEM 4. Submission of Matters to a Vote of Security Holders..................19
ITEM 5. Other Information....................................................19
ITEM 6. (a) Exhibits.........................................................19
SIGNATURES .................................................................20
</TABLE>
<PAGE> 3
FIRST CITIZENS BANC CORP
Consolidated Balance Sheet
<TABLE>
<CAPTION>
(Unaudited)
December 31,
Assets March 31, 1997 1996
-------------- -------------
<S> <C> <C>
Cash and due from banks $ 13,753,871 $ 11,615,060
Federal funds sold 8,148,000 8,521,000
Securities (Note 3)
Available-for-sale 59,526,663 58,971,155
Held-to-maturity 9,238,939 9,789,977
------------- -------------
Total investment securities 68,765,602 68,761,132
Loans (Notes 4) 206,754,828 205,127,385
Less: Allowance for possible loan losses (Note 5) (2,681,049) (2,642,000)
------------- -------------
Net Loans 204,073,779 202,485,385
Office premises and equipment, net 7,271,064 6,373,506
Accrued interest receivable 2,077,305 1,823,667
Intangible assets 3,092,047 1,679,465
Other assets 2,054,395 1,518,404
------------- -------------
Total assets $ 309,236,063 $ 302,777,619
============= =============
Liabilities
Deposits
Interest bearing $ 219,738,583 $ 215,873,075
Noninterest bearing 29,129,771 24,624,624
------------- -------------
Total deposits 248,868,354 240,497,699
Federal Home Loan Bank borrowings 15,382,102 15,671,686
Securities sold under agreements to repurchase 6,180,638 9,157,032
U. S. Treasury interest-bearing demand notes payable 1,897,262 1,388,979
Accrued interest, taxes and other expenses 2,132,572 1,634,915
------------- -------------
Total liabilities 274,460,928 268,350,311
Commitments and contingencies (Note 6)
Shareholders' Equity
Common stock, no par value, 10,000,000 shares authorized,
3,051,504 shares issued and outstanding 15,257,520 15,257,520
Retained Earnings 19,489,418 19,005,014
Unrealized gain on securities available for sale 28,197 164,774
------------- -------------
Total shareholders' equity 34,775,135 34,427,308
------------- -------------
Total liabilities and shareholders' equity $ 309,236,063 $ 302,777,619
============= =============
</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
March 31,
-------------------------
1997 1996
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $4,381,966 $4,210,065
Interest and dividends on securities
Taxable 648,566 640,603
Nontaxable 341,412 376,944
Interest on federal funds sold 122,087 112,793
Other interest income 1,024 1,266
---------- ----------
Total interest income 5,495,055 5,341,671
INTEREST EXPENSE:
Interest on deposits 2,003,429 2,011,216
Interest on FHLB borrowings 222,949 238,895
Interest on other borrowings 73,788 88,436
---------- ----------
Total interest expense 2,300,166 2,338,547
---------- ----------
NET INTEREST INCOME 3,194,889 3,003,124
PROVISION FOR LOAN LOSSES (Note 5) 98,500 69,500
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,096,389 2,933,624
NONINTEREST INCOME:
Computer center service charges and retail sales 576,742 521,991
Service charges on deposit accounts 129,409 116,520
Security gain/(loss) 6,250 5,500
Other operating income 213,324 220,851
---------- ----------
Total noninterest income 925,725 864,862
NONINTEREST EXPENSE:
Salaries, wages and benefits 1,419,562 1,308,774
Net occupancy expense 142,763 134,694
Equipment 178,624 152,016
FDIC Premiums 7,705 1,000
Franchise Tax 109,058 112,457
Professional Fees 131,920 127,116
Other operating expenses 772,565 595,835
---------- ----------
Total noninterest expense 2,762,197 2,431,892
---------- ----------
Income before taxes 1,259,917 1,366,594
Provision for Income Taxes 348,302 372,790
---------- ----------
Net Income $ 911,615 $ 993,804
========== ==========
Per share data (based on 3,051,504 shares)
Earnings per share $ 0.30 $ 0.33
Dividends declared $ 0.14 $ 0.13
</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
March 31,
---------------------------------
1997 1996
<S> <C> <C>
Balance at beginning of period $34,427,308 $33,806,791
Net earnings 911,615 993,804
Cash dividends (427,211) (381,438)
Market adjustment on securities
available for sale (136,577) (206,651)
------------ ------------
Balance at end of period $34,775,135 $34,212,506
============ ============
</TABLE>
See notes to interim consolidated financial statements Page 5
<PAGE> 6
FIRST CITIZENS BANC CORP
Consolidated Statement of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
-----------------------------
1997 1996
<S> <C> <C>
Cash flows from operating activities
Net Income $ 911,615 $ 993,804
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of office premises and equipment 157,253 146,512
Amortization of goodwill 81,512 50,384
Provision for loan losses 98,500 25,838
Change in deferred loan fees (12,282) (14,043)
Net amortization of security premiums and discounts 32,811 34,856
Change in accrued interest receivable (253,638) 255,346
Change in other assets (535,991) (461,083)
Change in accrued interest, taxes and other expenses 540,364 (267,717)
------------ ------------
Net cash from operating activities 1,020,144 763,897
Cash flows from investing activities
Maturities and calls of securities, held-to-maturity 542,219 2,196,541
Maturities and calls of securities, available-for-sale 3,094,740 2,265,278
Purchases of securities, available-to-sale (3,881,185) (2,202,356)
Loans made to customers, net of principal collected (1,674,612) 2,672,113
Change in federal funds sold 373,000 (923,000)
Purchases of office premises and equipment (98,666) (159,029)
------------ ------------
Net cash from investing activities (1,644,504) 3,849,547
Cash flows from financing activities
Branch acquisition 12,153,945 0
Repayments of FHLB borrowings (289,584) (273,638)
Net change in deposits (6,205,868) (2,456,334)
Change in securities sold under agreements to repurchase (2,976,394) (4,406,516)
Change in U. S. Treasury interest-bearing demand notes payable 508,283 913,336
Cash dividends paid (427,211) (381,438)
------------ ------------
Net cash from financing activities 2,763,171 (6,604,590)
------------ ------------
Net change in cash and cash equivalents 2,138,811 (1,991,146)
Cash and due from banks at beginning of period 11,615,060 16,295,910
------------ ------------
Cash and due from banks at end of period $ 13,753,871 $ 14,304,764
============ ============
Supplemental disclosures:
Cash paid during the period for:
Interest $ 2,276,508 $ 2,343,374
Income taxes 0 $ 95,000
</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 March 31, 1997 and December 31,
1996; the consolidated statements of income for the three month periods
ended March 31, 1997 and 1996; the consolidated statement of
shareholders' equity for the three months ended March 31, 1997 and
1996; and the consolidated statement of cash flows for the three month
periods ended March 31, 1997 and 1996 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 March 31,
1997 and its results of operations and changes in cash flows for the
periods ended March 31, 1997 and 1996 have been made. The accompanying
consolidated financial statements have been prepared in accordance with
instructions of form 10-Q and therefore, 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 March 31, 1997
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
Corporation's 1996 annual report. The Corporation has consistently
followed these policies in preparing this form 10-Q.
The provision for income taxes is based on the effective tax rate
expected to be applicable for the entire year. The corporation follows
the liability method of accounting for income taxes. The liability
method provides that deferred tax assets and liabilities are recorded
based on the difference between the tax basis of assets and liabilities
and their carrying amounts for financial reporting purposes, using
enacted tax rates.
Statement of Financial Accounting Standards ("SFAS") No. 125,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities",was issued by the Financial Accounting
Standards Board ("FASB") in 1996. It revises the accounting for
transfers of financial assets, such as loans and securities, and for
distinguishing between sales and secured borrowings. It was originally
effective for some transactions in 1997 and others in 1998. SFAS No.
127, "Deferral of the Effective Date of Certain Provisions of FASB
Statement No. 125" was issued in December 1996. SFAS No. 127 defers for
one year the
Page 7
<PAGE> 8
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- --------------------------------------------------------------------------------
effective date of provisions related to securities lending, repurchase
agreements and other similar transactions. The remaining portions of
SFAS No. 125 will continue to be effective January 1, 1997. SFAS No.
125 did not have a material impact on the Corporation's financial
statements.
In March 1997, the FASB issued SFAS No. 128, "Earnings Per Share" which
is effective for the financial statements for periods ending after
December 15, 1997, including interim periods. SFAS No. 128 simplifies
the calculation of earnings per share by replacing primary EPS with
basic EPS. It also requires dual presentation of basic EPS and diluted
EPS for entities with complex capital structures. Basic EPS includes no
dilution and is computed by dividing income available to common
shareholders by the weighted-average common shares outstanding for the
period. Diluted EPS reflects the potential dilution of securities that
could share in earnings such as stock options, warrants or other common
stock equivalents. All prior period EPS data will be restated to
conform with the new presentation.
(2) Branch Acquisition
On January 21, 1997, Citizens acquired from EST National Bank of
Elyria, Ohio, certain assets including cash and premises and equipment
and assumed certain deposit and other liabilities of two branch banking
offices. The transaction was accounted for as a purchase, and
accordingly, the acquired assets and liabilities have been recorded
based on their respective market values at the date acquisition. A
summary of the assets acquired and the liabilities assumed are as
follows:
<TABLE>
<CAPTION>
ASSETS LIABILITIES
<S> <C> <C> <C>
Cash and cash equivalents $12,153,945 Noninterest bearing deposits $4,559,545
Premises and equipment 956,145 Interest bearing deposits 10,016,978
------------------
Identified intangible assets 1,494,094 Total deposits 14,576,523
------------------
Total assets $14,604,184
==================
Other liabilities 27,661
------------------
Total liabilities $14,604,184
==================
</TABLE>
Page 8
<PAGE> 9
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- --------------------------------------------------------------------------------
(3) Securities
The gross unrealized gains and losses of securities as presented in the
consolidated balance sheets at March 31, 1997 and December 31,1996 are
as follows:
<TABLE>
<CAPTION>
March 31, 1997
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 $37,037,977 $10,505 ($256,584) $36,791,898
Obligations of state and political
subdivisions 18,836,155 374,797 (85,118) 19,125,834
Other securities, including mortgage-
backed securities 3,609,809 (878) 3,608,931
----------------- ----------------- ----------------- ------------------
$59,483,941 $385,302 ($342,580) $59,526,663
=========== ======== ========== ===========
<CAPTION>
March 31, 1997
Gross Gross
Amortized Unrealized Unrealized Estimated Fair
HELD TO MATURITY Cost Gains Losses Value
----------------- ----------------- ----------------- ------------------
<S> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $1,000,000 $16,563 $1,016,563
Obligations of state and political
subdivisions 6,005,141 113,631 ($7,788) 6,110,984
Other securities, including mortgage-
backed securities 2,233,798 5,815 (14,087) 2,225,526
----------------- ----------------- ----------------- ------------------
$9,238,939 $136,009 ($21,875) $9,353,073
========== ======== ========= ==========
</TABLE>
Page 9
<PAGE> 10
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 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
obligations of U.S. government
corporations and agencies $37,000,835 $58,526 ($155,293) $36,904,068
Obligations of state and political
subdivisions 18,109,603 433,174 (86,282) 18,456,495
Other securities, including mortgage-
backed securities 3,611,060 (468) 3,610,592
----------------- ----------------- ----------------- ------------------
$58,721,498 $491,700 ($242,043) $58,971,155
=========== ======== ========== ===========
<CAPTION>
December 31, 1996
Gross Gross
Amortized Unrealized Unrealized Estimated Fair
HELD TO MATURITY Cost Gains Losses Value
----------------- ----------------- ----------------- ------------------
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $1,000,000 $23,125 $1,023,125
Obligations of states and political
subdivisions 6,329,284 141,366 ($7,318) 6,463,332
Other securities, including mortgage-
backed securities 2,460,693 12,007 (10,648) 2,462,052
----------------- ----------------- ----------------- ------------------
$9,789,977 $176,498 ($17,966) $9,948,509
========== ======== ========= ==========
</TABLE>
Page 10
<PAGE> 11
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 March 31,
1997, 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
AVAILABLE FOR SALE
<S> <C> <C>
Due in one year or less $15,084,048 $15,060,227
Due after one year through five years 29,201,785 29,229,390
Due after five years through ten years 10,552,276 10,588,959
Due after ten years 1,036,023 1,039,156
Mortgage-backed securities 48,559 47,681
Other securities 3,561,250 3,561,250
----------- -----------
Total securities available for sale $59,483,941 $59,526,663
=========== ===========
HELD TO MATURITY
Due in one year or less $4,178,500 $4,225,650
Due after one year through five years 2,826,641 2,901,897
Mortgage-backed securities 2,233,798 2,225,526
----------- -----------
Total securities held to maturity $9,238,939 $9,353,073
=========== ===========
</TABLE>
No securities were sold during the three months ended March 31, 1997 or
1996. Securities called or settled by the issuer resulted in gains of
$6,250 for the three months ended March 31, 1997 and $5,500 for the
three months ended March 31, 1996.
Securities with a carrying value of approximately $38,955,000 and
$33,650,000 were pledged as of March 31, 1997 and December 31, 1996,
respectively, to secure public deposits, other deposits and liabilities
as required by law.
Page 11
<PAGE> 12
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- --------------------------------------------------------------------------------
(4) Loans
Loans as presented in the consolidated balance sheet are comprised of
the following classifications:
<TABLE>
<CAPTION>
3/31/97 12/31/96
-------------- ---------------
<S> <C> <C>
Commercial and agriculture $40,055,751 $42,038,299
Real estate - mortgage 134,083,729 131,491,632
Real estate - construction 1,829,605 2,079,810
Consumer 30,214,799 29,232,380
Credit card and other 1,723,340 1,449,945
Deferred loan fees (1,152,399) (1,164,681)
-------------- ---------------
Total loans $206,754,828 $205,127,397
============ ============
</TABLE>
(5) Allowance for Loan Losses
A summary of the activity in the allowance for loan losses for the
three months ended March 31, 1997 and March 31, 1996 is as follows:
<TABLE>
<CAPTION>
1997 1996
------------ -------------
<S> <C> <C>
Balance January 1, $2,642,000 $2,602,000
Loans charged off (115,635) (72,863)
Recoveries 56,184 29,201
Provision for loan losses 98,500 69,500
------------ -------------
Balance March 31, $2,681,049 $2,627,838
========== ==========
</TABLE>
Page 12
<PAGE> 13
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- --------------------------------------------------------------------------------
Information regarding impaired loans is as follows for the three months ended
March 31.
<TABLE>
<CAPTION>
1997 1996
------------- --------------
<S> <C> <C>
Average investment in impaired loans $1,883,000 $2,340,000
Interest income recognized on impaired loans
including interest income recognized on cash
basis $42,366 $31,804
Interest income recognized on impaired loans
on cash basis $42,366 $31,804
</TABLE>
Information regarding impaired loans at March 31, 1997 and December 31, 1996 is
as follows:
<TABLE>
<CAPTION>
3/31/97 12/31/96
------------- --------------
<S> <C> <C>
Balance impaired loans $1,883,000 $1,982,000
Less portion for which no allowance for loan
losses is allocated --- ---
Portion of impaired loan balance for which an
allowance for credit losses is allocated 1,883,000 1,982,000
Portion of allowance for loan losses allocated to
the impaired loan balance 471,000 495,000
</TABLE>
(6) 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
Page 13
<PAGE> 14
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
- --------------------------------------------------------------------------------
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 March 31, 1997
and December 31, 1996.
Commitments to extend credit and letters of credit approximated the
following amounts at March 31, 1997 and December 31, 1996.
<TABLE>
Contract Amount
---------------
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Commitment to extend credit:
Lines of credit and construction loans $13,597,000 $14,081,000
Credit cards 4,171,000 4,235,000
Letters of credit 297,000 62,000
--------------- ---------------
$18,065,000 $18,378,000
</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 March 31, 1997 and December 31, 1996 approximated
$1,720,000 and $1,702,000 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 14
<PAGE> 15
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 March 31, 1997, compared to December 31, 1996 and
the consolidated results of operations for the three month period ending March
31, 1997 compared to the same period in 1996. 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.
In addition to the historical information contained herein, the following
discussion contains forward- looking statements that involve risks and
uncertainties. Economic circumstances, the Corporation's operations, and the
Corporation's actual results could differ significantly from those disclosed in
forward-looking statements. Some of the factors that could cause or contribute
to such differences are discussed herein but also include changes in the economy
and interest rates in the nation and in the Corporation's general market area.
Some of the forward-looking statements included herein are the statements
regarding the following:
1. Management's determination of the amount of loan loss allowance and
the amount of the loan loss provision;
2. The sufficiency of the Corporation's liquidity and capital reserves
See Exhibit 99, which is incorporated herein by reference.
Financial Condition
- -------------------
Total assets of the Corporation at March 31, 1997 totalled $309,236,063 compared
to $302,777,619 at December 31, 1996. This was an increase of $6,458,444 or 2.1
percent. Within the structure of the assets, net loans have increased $1,588,394
since December 31, 1996. Office premises and equipment have increased $887,558
and intangible assets have increased $1,412,582 since December 31, 1996. The
increase in these two areas is attributable to the acquisition of two branches
by The Citizens Banking Company.
Page 15
<PAGE> 16
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Form 10-Q
- --------------------------------------------------------------------------------
At March 31, 1997, $59,526,663 or 86.6 percent of the portfolio was classified
as available-for-sale. The remainder of $9,238,939 was classified as
held-to-maturity. Securities remained nearly the same, increasing only $4,470
from December 31, 1996. As of March 31, 1997, the net unrealized gain of the
available-for-sale portfolio was $42,722 compared to $249,657 at December 31,
1996. The decrease in the net unrealized gain reflects changes in market values
due to the current interest rate environment.
Total loans at March 31, 1997 increased $1,627,443 or 0.8 percent from year end
1996. At March 31, 1997, the net loan to deposit ratio was 82.0 percent compared
to 84.2 percent at December 31, 1996.
This is reflective of the increase in deposits acquired in the purchase of two
branches exceeding the loan growth during the first quarter of 1997.
At March 31, 1997, the allowance for loan losses as a percent of total loans was
1.30 percent compared to 1.29 percent at December 31, 1996. For the three months
of operations of 1997, $98,500 was placed into the allowance from earnings
compared to $69,500 for the same period of 1996. Net charge offs for the first
three months of 1997 were $59,451 compared to $43,662 for the same period of
1996. Impaired loans at March 31, 1997 totalled $1,883,000 or 0.9 percent of the
loan portfolio compared to $1,982,000 or 1.0 percent of the loan portfolio at
December 31, 1996.
Total deposits at March 31, 1997 increased $8,370,655 from year-end 1996.
Noninterest bearing deposits, representing demand deposit balances, increased
$4,505,147 from year-end 1996. Interest bearing deposits, including savings and
time deposits, decreased $3,865,508 from year-end 1996. The year to date 1997
average balance of savings deposits has increased $1,240,000 compared to the
average balance of the same period for 1996. The current average rate of these
deposits is 2.81 percent. The year to date 1997 average balance of time
certificates has increased $1,451,000 compared to the average balance for the
same period for 1996. The current average rate on these deposits is 5.15
percent.
Other borrowed funds have decreased $2,757,695 from December 31, 1996 to March
31, 1997. Federal Home Loan Bank borrowings have decreased $289,584 as a result
of scheduled paydowns. Securities sold under agreements to repurchase have
decreased $2,976,394 and U.S. Treasury Tax Demand Notes have increased $508,283.
Shareholders' equity at March 31, 1997 was $34,775,135 which was 11.2 percent of
total assets. Shareholders' equity at December 31, 1996 was $34,427,308 which
was 11.4 percent of total assets. The increase in shareholders' equity was
represented by earnings of $911,615 less dividends of $427,211 and less the
decrease in the unrealized gain on securities available for sale of $136,577.
Page 16
<PAGE> 17
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Form 10-Q
- -------------------------------------------------------------------------------
The company paid a cash dividend February 1, 1997 at the rate of $.14 per share.
Total outstanding shares for the period December 31, 1996 to March 31, 1997 were
3,051,504.
Results of Operations
- ---------------------
Net income for the quarter ended March 31, 1997 were $911,615 or $.30 per common
share compared to $993,804 or $.33 per common share for the same period in 1996.
This was an decrease of $82,189 or 8.3 percent.
Net interest income for the first quarter 1997 totalled $3,194,889 compared to
$3,003,124 for the first quarter of 1996. This was an increase of $191,765 or
6.4 percent. Total interest income for the first three months of 1997 has
increased $153,384 or 2.9 percent compared to the same period of 1996. The
average rate on earning assets on a tax equivalent basis for the first three
months of 1997 was 8.01 percent compared to 7.81 percent for the same period of
1996. Total interest expense for the first three months of 1997 has decreased
$38,381 or 1.6 percent compared to the same period of 1996. The average rate on
paying liabilities for the first three months of 1997 was 3.84 percent compared
to 3.99 percent for the same period of 1996. The net interest margin on a tax
equivalent basis for the first three months was 4.74 percent for the three month
period ended March 31, 1997 and 4.67 percent for the same period ended March 31,
1996.
Noninterest income for the first quarter 1997 totalled $925,725 compared to
$864,862 for the first quarter 1996. This was an increase of $60,863 or 7.0
percent and mainly attributed to increases in revenue from the computer
operations of $54,751, increased service charges on deposit accounts of $12,889,
and decreased other operating income of $7,527.
Noninterest expense for the first quarter 1997 totalled $2,762,197 compared to
$2,431,892 for the first quarter 1996. This was an increase of $330,305 or 13.6
percent. The single largest monetary increase in noninterest expense is in
salaries, wages and employee benefits which increased $110,788 for the first
three months of 1997 or 8.5 percent compared to the same period of 1996. The
increase in salaries, wages and employee benefits is associated with the
acquisition of two new branches.
Provision for Income Taxes
- --------------------------
The provision for income taxes for the first quarter 1997 totalled $348,302
compared to $372,790 for the first quarter 1996. This was an decrease of $24,488
or 6.6 percent. The decrease in the federal income taxes is a result of the
decrease in total income before taxes of $106,677.
Page 17
<PAGE> 18
First Citizens Banc Corp
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Form 10-Q
- -------------------------------------------------------------------------------
Capital Resources
- -----------------
Shareholders equity totalled $34,775,135 at March 31, 1997 compared to
$34,427,308 at December 31, 1996. All of the capital ratios exceed the
regulatory minimum guidelines as identified in the following table:
<TABLE>
<CAPTION>
Corporation Ratios Regulatory
3/31/97 12/31/96 Minimums
------- -------- --------
<S> <C> <C> <C>
Tier I Risk Based Capital 19.73% 20.75% 4.00%
Total Risk Based Capital 20.99% 22.20% 8.00%
Leverage Ratio 10.20% 10.64% 5.00%
</TABLE>
The Corporation paid cash dividends of $.14 per common share on February 1, 1997
compared to the February 1996 dividend of $.13 per common share.
Capital expenditures totalled $1,054,811 for the first three months of 1997
compared to $159,029 for the same period of 1996. The capital expenditures for
the first three months of 1997 include $956,145 of premises and equipment
acquired in the purchase of two branches.
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
three months of 1997 the Banks maintained a federal funds sold position that
averaged $9,314,000 In addition, the Banks, through their respective
correspondent banks maintain federal funds borrowing lines totalling $6,500,000
and the Banks have total borrowing availability at the Federal Home Loan Bank of
Cincinnati of $10,417,898 at March 31, 1997. Finally, 86.6% of the Corporation's
security portfolio has been classified as available for sale which provides
additional liquidity.
Page 18
<PAGE> 19
First Citizens Banc Corp
Other Information
Form 10-Q
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Part II - Other Information
<S> <C>
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. (A) EXHIBIT NO. 27 Financial Data Schedule.................................22
(B) EXHIBIT NO. 99 Safe Harbor Under the Private Securities Litigation Reform
Act of 1995
(B) REPORTS ON FORM 8-K - None
</TABLE>
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 May 13, 1997
- ---------------------------------------------- ------------
David A. Voight Date
President
/s/ James O. Miller May 13, 1997
- ----------------------------------------------- ------------
James O. Miller Date
Senior Vice President
Page 20
<PAGE> 21
First Citizens Banc Corp
Index to Exhibits
Form 10-Q
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Exhibit
Number Description Page Number
- ------ ----------- -----------
<C> <C> <C>
27 Financial Data Schedule 22
99 Safe Harbor Under the Private Securities Incorporated by reference to Exhibit
Litigation Reform Act of 1995 99 to Annual Report on Form 10-K
for the Year Ended December 31,
1996 filed by the registrant on
February 24, 1997
</TABLE>
Page 21
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000944745
<NAME> FIRST CITIZENS BANC CORP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 13,753,871
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,148,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 59,526,663
<INVESTMENTS-CARRYING> 9,238,939
<INVESTMENTS-MARKET> 9,353,073
<LOANS> 204,073,779
<ALLOWANCE> 2,681,049
<TOTAL-ASSETS> 309,236,063
<DEPOSITS> 248,868,354
<SHORT-TERM> 8,077,900
<LIABILITIES-OTHER> 2,132,572
<LONG-TERM> 15,382,102
<COMMON> 15,257,520
0
0
<OTHER-SE> 19,517,615
<TOTAL-LIABILITIES-AND-EQUITY> 309,236,063
<INTEREST-LOAN> 4,381,966
<INTEREST-INVEST> 989,978
<INTEREST-OTHER> 123,111
<INTEREST-TOTAL> 5,495,055
<INTEREST-DEPOSIT> 2,003,429
<INTEREST-EXPENSE> 2,300,166
<INTEREST-INCOME-NET> 3,194,889
<LOAN-LOSSES> 98,500
<SECURITIES-GAINS> 6,250
<EXPENSE-OTHER> 2,762,197
<INCOME-PRETAX> 1,259,917
<INCOME-PRE-EXTRAORDINARY> 911,615
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 911,615
<EPS-PRIMARY> .30
<EPS-DILUTED> .30
<YIELD-ACTUAL> 4.74
<LOANS-NON> 496,000
<LOANS-PAST> 1,159,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,642,000
<CHARGE-OFFS> 115,635
<RECOVERIES> 56,184
<ALLOWANCE-CLOSE> 2,681,049
<ALLOWANCE-DOMESTIC> 2,681,049
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,550,000
</TABLE>
