<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, 1998
[ ] 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 issuer's classes of
common stock, as of the latest practicable date.
Common Stock, no par value
Outstanding at November 13, 1998
4,263,401 common shares
<PAGE> 2
FIRST CITIZENS BANC CORP
Index
<TABLE>
<CAPTION>
<S> <C> <C>
PART I. Financial Information
ITEM 1. Financial Statements:
Consolidated Balance Sheets (unaudited)
September 30, 1998 and December 31, 1997..........................................................3
Consolidated Statements of Income (unaudited)
Three and nine months ended September 30, 1998 and 1997...........................................4
Consolidated Statement of Shareholders' Equity (unaudited)
For the periods ended December 31, 1996 and 1997 and September 30, 1998...........................5
Consolidated Statement of Cash Flows (unaudited)
Nine months ended September 30, 1998 and 1997.....................................................6
Notes to Consolidated Financial Statements (unaudited).............................................7-16
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................................................17-22
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk........................................23-24
PART II. Other Information
ITEM 1. Legal Proceedings....................................................................................25
ITEM 2. Changes in Securities and Use of Proceeds............................................................25
ITEM 3. Defaults Upon Senior Securities......................................................................25
ITEM 4. Submission of Matters to a Vote of Security Holders..................................................25
ITEM 5. Other Information....................................................................................25
ITEM 6. Exhibits and Reports on Form 8-K.....................................................................25
SIGNATURES ...................................................................................................26
</TABLE>
<PAGE> 3
FIRST CITIZENS BANC CORP
Consolidated Balance Sheet
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
Assets 1998 1997
------------- -------------
<S> <C> <C>
Cash and due from banks $ 19,264,852 $ 17,695,634
Federal funds sold 15,805,000 17,600,000
Interest-bearing deposits 248,282 347,282
Securities
Available-for-sale 160,805,044 137,217,076
Held-to-maturity (Estimated Fair Value of $2,242,436 at
September 30, 1998 and $6,796,389 at December 31, 1997) 2,218,580 6,737,206
------------- -------------
Total securities 163,023,624 143,954,282
Loans held for sale 341,780 690,998
Loans 285,104,034 292,445,109
Less: Allowance for possible loan losses (4,681,443) (4,707,051)
------------- -------------
Net Loans 280,422,591 287,738,058
Office premises and equipment, net 7,503,978 7,562,988
Intangible assets 2,620,475 2,870,011
Accrued interest and other assets 5,779,020 5,659,119
------------- -------------
Total assets $ 495,009,602 $ 484,118,372
============= =============
Liabilities
Deposits
Noninterest-bearing deposits 38,577,020 36,836,226
Interest-bearing deposits $ 367,798,938 $ 365,347,015
------------- -------------
Total deposits 406,375,958 402,183,241
Federal Home Loan Bank borrowings 13,555,089 14,488,034
Securities sold under agreements to repurchase 16,106,432 7,779,346
U. S. Treasury interest-bearing demand notes payable 1,047,368 3,375,458
Accrued interest, taxes and other expenses 3,833,596 5,092,858
------------- -------------
Total liabilities 440,918,443 432,918,937
Shareholders' Equity
Common stock, no par value; 10,000,000 shares authorized,
4,263,401 shares issued and outstanding 23,257,520 23,257,520
Retained earnings 27,309,578 25,514,853
Unrealized gain on securities available for sale 3,524,061 2,427,062
------------- -------------
Total shareholders' equity 54,091,159 51,199,435
------------- -------------
Total liabilities and shareholders' equity $ 495,009,602 $ 484,118,372
============= =============
</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,
----------------------------------- -----------------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 6,029,336 $ 6,294,921 $ 18,335,628 $ 7,875,587
Interest and dividends on securities
Taxable 1,780,788 1,653,305 4,961,311 5,170,164
Nontaxable 541,086 540,951 1,559,154 1,652,529
Interest on federal funds sold 254,504 127,749 707,354 359,955
Other interest income 1,902 33,707 31,251 72,660
--------------- -------------- ------------- -------------
Total interest income 8,607,616 8,650,633 25,594,698 25,130,895
INTEREST EXPENSE
Interest on deposits 4,031,569 3,879,202 11,982,405 11,240,356
Interest on FHLB borrowings 197,124 214,547 604,656 656,196
Interest on other borrowings 164,730 119,383 416,263 289,110
--------------- -------------- ------------- -------------
Total interest expense 4,393,423 4,213,132 13,003,324 12,185,662
--------------- -------------- ------------- -------------
NET INTEREST INCOME 4,214,193 4,437,501 12,591,374 12,945,233
PROVISION FOR LOAN LOSSES 83,000 697,844 299,000 1,014,344
--------------- -------------- ------------- -------------
NET INTEREST INCOME AFTER 4,131,193 3,739,657 12,292,374 11,930,889
PROVISION FOR LOAN LOSSES
NONINTEREST INCOME
Computer center data processing fees 445,379 543,849 1,264,074 1,654,239
Service charges on deposit accounts 246,750 166,124 714,577 619,710
Security gain 1,000 175,056 20,580 146,384
Gain on sale of loans 73,112 0 153,016 0
Other operating income 297,351 335,787 872,624 808,152
--------------- -------------- ------------- -------------
Total noninterest income 1,063,592 1,220,816 3,024,871 3,228,485
NONINTEREST EXPENSE
Salaries, wages and benefits 1,806,712 1,713,423 5,231,574 5,107,330
Net occupancy expense 110,377 204,986 437,797 536,244
Equipment 186,402 200,426 540,532 591,976
FDIC premiums 68,306 12,003 92,837 35,743
State franchise tax 152,131 159,274 491,501 470,472
Professional fees 234,652 289,592 937,006 662,661
Other operating expenses 1,011,976 906,014 2,802,766 2,604,100
--------------- -------------- ------------- -------------
Total noninterest expense 3,570,556 3,485,718 10,534,013 10,008,526
--------------- -------------- ------------- -------------
Income before taxes 1,624,229 1,474,755 4,783,232 5,150,848
Provision for income taxes 448,654 359,000 1,338,097 1,351,316
--------------- -------------- ------------- -------------
Net income $ 1,175,575 $ 1,115,755 $ 3,445,135 $ 3,799,532
=============== ============== ============= =============
Per share data (based on 4,263,401 shares)
Earnings per share $ 0.28 $ 0.26 $ 0.81 $ 0.89
=============== ============== ============= =============
Dividends declared $ 0.1500 $ 0.1400 $ 0.4500 $ 0.4200
=============== ============== ============= =============
</TABLE>
See notes to interim consolidated financial statements Page 4
<PAGE> 5
FIRST CITIZENS BANC CORP
Condensed Consolidated Statement of Shareholders' Equity (Unaudited)
Form 10-Q
<TABLE>
<CAPTION>
Accumulated
Other Total
Common Stock Retained Comprehensive Comprehensive Shareholders'
Amount Earnings Income Income Equity
Balances, January 1, 1996
<S> <C> <C> <C> <C> <C>
As previously reported $15,257,520 $18,160,292 $ 388,979 $33,806,791
Restate capital structure for pooling of
interests 8,000,000 4,291,053 464,761 12,755,814
Balances, January 1, 1996
As restated 23,257,520 22,451,345 853,740 46,562,605
Net income 5,568,238 $5,568,238 5,568,238
Other comprehensive income, net of tax:
Unrealized gain/(loss) on securities (42,341) (42,341) (42,341)
----------
Comprehensive income $5,525,897
==========
Cash dividends
($1.02 per share) (3,120,163) (3,120,163)
Cash dividend declared Farmers, prior
to merger (280,000) (280,000)
----------- ----------- ---------- -----------
Balance, December 31, 1996 23,257,520 24,619,420 811,399 48,688,339
Net income 4,440,544 $4,440,544 4,440,544
Other comprehensive income, net of tax:
Unrealized gain/(loss) on securities 1,615,663 1,615,663 1,615,663
----------
Comprehensive income $6,056,207
==========
Cash dividends
($1.07 per share) (3,265,111) (3,265,111)
Cash dividend declared Farmers, prior
to merger (280,000) (280,000)
----------- ----------- ---------- -----------
Balance, December 31, 1997 $23,257,520 $25,514,853 2,427,062 $51,199,435
Net income 3,445,135 $3,445,135 3,445,135
Other comprehensive income, net of tax:
Unrealized gain/(loss) on securities 1,096,999 1,096,999 1,096,999
----------
Comprehensive income $4,542,134
==========
Cash paid for fractional shares (3,451) (3,451)
Cash dividends
($.45 per share) (1,554,959) (1,554,959)
Cash dividend declared Farmers, prior
to merger (92,000) (92,000)
----------- ----------- ---------- -----------
Balance, September 30, 1998 $23,257,520 $27,309,578 $3,524,061 $54,091,159
=========== =========== ========== ===========
</TABLE>
See notes to interim consolidated financial statements Page 5
<PAGE> 6
FIRST CITIZENS BANC CORP
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
-------------------------------
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 3,445,135 $ 3,799,532
Adjustments to reconcile net earnings to net cash
from operating activities:
Depreciation and amortization of office premises and equipment 587,545 561,030
Amortization of intangible assets 249,536 249,553
Provision for loan losses 299,000 1,014,344
Loans originated for sale (5,857,897) 0
Proceeds from sale of loans 6,289,875 0
Gain on sale of loans (153,016) 0
Security gains, net (20,580) (146,384)
Change in deferred loan fees (135,250) (28,537)
Net amortization of security premiums and discounts 224,515 109,886
Change in accrued interest receivable and other assets (49,645) (876,366)
Change in accrued interest, taxes and other expenses (1,649,659) (1,075,387)
------------ ------------
Net cash from operating activities 3,229,559 3,607,671
------------ ------------
Cash flows from investing activities:
Maturity of deposits in other bank 99,000 591,000
Purchases of securities, held-to-maturity 0 (327,784)
Maturities and calls of securities, held-to-maturity 4,511,872 3,567,023
Purchases of securities, available-for-sale (58,755,209) (12,210,267)
Maturities and calls of securities, available-for-sale 36,457,456 17,015,676
Sale of securities, available-for-sale 5,591,374
Net change in loans 7,151,717 (26,055,256)
Change in federal funds sold 1,795,000 (1,141,000)
Proceeds from sale of property and equipment 64,436 0
Purchases of office premises and equipment (592,971) (297,636)
------------ ------------
Net cash from investing activities (9,268,699) (13,266,870)
------------ ------------
Cash flows from financing activities:
Cash and cash equivalents received from branch acquisition 0 12,153,945
Repayments of FHLB borrowings (932,945) (881,404)
Change in deposits 4,192,717 358,759
Change in securities sold under agreements to repurchase 8,327,086 (263,611)
Change in U. S. Treasury interest-bearing demand notes payable (2,328,090) 1,088,404
Cash dividends paid, including cash paid in lieu of fractional shares (1,650,410) (1,281,632)
------------ ------------
Net cash from financing activities 7,608,358 11,174,461
------------ ------------
Net change in cash and due from banks 1,569,218 1,515,262
Cash and due from banks at beginning of period 17,695,634 14,146,432
------------ ------------
Cash and due from banks at end of period $ 19,264,852 $ 15,661,694
============ ============
Supplemental disclosures:
Cash paid during the period for:
Interest $ 13,538,096 $ 12,714,686
============ ============
Federal Income taxes $ 1,030,000 $ 1,390,500
============ ============
</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), The Farmers State Bank of New Washington (Farmers), 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, 1998 and December
31, 1997; the consolidated statements of income for the three and nine
month periods ended September 30, 1998 and 1997; the consolidated
statement of shareholders' equity for the nine months ended September
30, 1998 and the years ended December 31, 1997 and 1996; and the
consolidated statement of cash flows for the nine month periods ended
September 30, 1998 and 1997 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, 1998 and its
results of operations and changes in cash flows for the periods ended
September 30, 1998 and 1997 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 September 30,
1998 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 1997 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
at enacted tax rates based on the difference between the tax basis of
assets and liabilities and their carrying amounts for financial
reporting purposes, referred to as "temporary differences." A valuation
allowance, if needed, reduces deferred tax assets to the amount
expected to be realized.
Certain items in the 1997 financial statements have been reclassified
to correspond with the 1998 presentation.
Page 7
<PAGE> 8
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
The Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards ("SFAS") No. 125, "Accounting for
Transfers and Servicing, of Financial Assets and Extinguishments of
Liabilities" 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. SFAS No. 127, "Deferral of the Effective
Date of Certain Provisions of FASB Statement No. 125", was issued in
December 1996. SFAS No. 127 deferred for one year the effective date of
provisions related to securities lending, repurchase agreements and
other similar transactions. The remaining portions of SFAS No. 125
continued to be effective January 1, 1997. SFAS No. 125 did not have a
material impact on the Corporation's financial statements.
First Citizens adopted on January 1, 1998, SFAS No. 130, "Reporting
Comprehensive Income," issued by the FASB in June 1997. SFAS No. 130
establishes standards for reporting and display of comprehensive income
and its components (revenues, expenses, gains and losses) in a full set
of general-purpose financial statements. SFAS No. 130 requires all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in the financial
statement that is displayed with the same prominence as other financial
statements. It does not require a specific format for that financial
statement but requires that an enterprise display an amount
representing total comprehensive income for the period in that
financial statement.
SFAS No. 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b)
display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in capital in the
equity section of a statement of financial position.
The Corporation elected to present comprehensive income and the
accumulated balance in the Consolidated Statement of Shareholders'
Equity for interim reporting purposes. The table below presents the
reclassification adjustments related to comprehensive income.
Reclassification adjustments are needed when an item is included in the
net income in one period and comprehensive income in another accounting
period.
Page 8
<PAGE> 9
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income $ 1,175,575 $ 1,115,755 $ 3,445,135 $ 3,799,532
Unrealized gain arising in period 516,484 670,584 1,117,579 999,496
Net realized gain recognized in other comprehensive income (1,000) (175,056) (20,580) (146,384)
Net unrealized gain recognized in other comprehensive income 515,484 495,528 1,096,999 853,112
----------- ----------- ----------- -----------
Comprehensive income $ 1,691,059 $ 1,611,283 $ 4,542,134 $ 4,652,644
=========== =========== =========== ===========
</TABLE>
In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments
of an Enterprise and Related Information." This Statement significantly
changes the way that public business enterprises report information
about operating segments in annual financial statements and requires
that those enterprises report selected information about reportable
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and
services, geographic areas and major customers. SFAS No. 131 uses a
"management approach" to disclose financial and descriptive information
about an enterprise's reportable operating segments which is based on
reporting information the way that management organizes the segments
within the enterprise for making operating decisions and assessing
performance. For many enterprises, the management approach will likely
result in more segments being reported. In addition, SFAS No. 131
requires significantly more information to be disclosed for each
reportable segment than is presently being reported in annual financial
statements. The Statement also requires that selected information be
reported in interim financial statements. SFAS No. 131 is effective for
financial statements for periods beginning after December 15, 1997. No
additional disclosure under SFAS No. 131 was required for the
Corporation.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits". SFAS No. 132 amends
disclosure requirements of previous pension and other postretirement
benefit accounting standards by requiring additional disclosures about
such plans as well as eliminating some disclosures no longer considered
useful. SFAS No. 132 also allows greater aggregation of disclosures for
employers with multiple defined benefit plans. SFAS No. 132 will be
effective for 1998 and is not expected to have a significant impact on
the Corporation's financial statements.
Page 9
<PAGE> 10
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 requires companies to
record derivatives on the balance sheet as assets or liabilities,
measured at fair value. Gains or losses resulting from changes in the
values of those derivatives would be accounted for depending on the use
of the derivative and whether it qualifies for hedge accounting. The
key criterion for hedge accounting is that the hedging relationship
must be highly effective in achieving offsetting changes in fair value
or cash flows. SFAS No. 133 does not allow hedging of a security which
is classified as held-to-maturity, accordingly, upon adoption of SFAS
No. 133, companies may reclassify any security from held-to-maturity to
available-for-sale if they wish to be able to hedge the security in the
future. SFAS No. 133 is effective for fiscal years beginning after June
15, 1999 with early adoption encouraged for any fiscal quarter
beginning July 1, 1998 or later, with no retroactive application.
(2) Securities
The amortized cost, gross unrealized gains and losses and estimated
fair values of securities as presented in the consolidated balance
sheets at September 30, 1998 and December 31, 1997 are as follows:
<TABLE>
<CAPTION>
September 30, 1998
Gross Gross
AVAILABLE FOR SALE Amortized Unrealized Unrealized Estimated Fair
Cost Gain Losses Value
---------------- -----------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations
of U.S. Government corporations and agencies $ 74,092,915 1,262,057 $ (97,965) $ 75,257,007
Obligations of state and political subdivisions 44,580,426 1,686,278 (2,429) 46,264,275
Corporate bonds 13,654,631 163,788 (1,052) 13,817,367
Equity securities 2,737,909 2,219,319 (29,755) 4,927,473
Other securities, including mortgage-backed securities 20,399,445 146,977 (7,500) 20,538,922
------------ ----------- ------------- ------------
$155,465,326 $ 5,478,419 $ (138,701) $160,805,044
============ =========== ============= ============
</TABLE>
Page 10
<PAGE> 11
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
<TABLE>
<CAPTION>
September 30, 1998
Gross Gross
HELD TO MATURITY Amortized Unrealized Unrealized Estimated Fair
Cost Gains Losses Value
---------- ---------- ---------- --------------
<S> <C> <C> <C> <C>
Obligations of state and political
subdivisions $1,643,244 $ 17,653 $ 0 $1,660,897
Other securities, including mortgage-
backed securities 575,336 6,283 (80) 581,539
---------- -------- ----------- ----------
$2,218,580 $ 23,936 $ (80) $2,242,436
========== ======== =========== ==========
December 31, 1997
Gross Gross
AVAILABLE FOR SALE Amortized Unrealized Unrealized Estimated Fair
Cost Gains Losses Value
------------ ----------- ------------- --------------
U.S. Treasury securities and obligations of
U.S. Government corporations and
agencies $ 72,157,416 $ 308,423 $ (179,531) $ 72,286,308
Obligations of state and political
subdivisions 33,328,474 1,274,319 (16,135) 34,586,658
Corporate bonds 4,551,174 29,706 (8,371) 4,572,509
Equity securities 3,234,209 2,460,081 (20,116) 5,674,174
Other securities, including mortgage-
backed securities 20,093,479 38,300 (34,352) 20,097,427
------------ ----------- ------------- ------------
$133,364,752 $ 4,110,829 $ (258,505) $137,217,076
============ =========== ============= ============
</TABLE>
Page 11
<PAGE> 12
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
<TABLE>
<CAPTION>
December 31, 1997
Gross Gross
HELD TO MATURITY Amortized Unrealized Unrealized Estimated Fair
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 $ 2,500 $ 0 $1,002,500
Obligations of state and political
subdivisions 4,004,519 50,389 (5,613) 4,049,295
Other securities, including mortgage-
backed securities 1,732,687 13,974 (2,067) 1,744,594
---------- -------- ----------- ----------
$6,737,206 $ 66,863 $ (7,680) $6,796,389
========== ======== =========== ==========
</TABLE>
The amortized cost and estimated fair value of debt securities at September 30,
1998, 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>
AVAILABLE FOR SALE Amortized Estimated Fair
Cost Value
------------ ------------
<S> <C> <C>
Due in one year or less $ 19,850,318 $ 19,927,815
Due after one year through five years 87,940,028 89,824,850
Due after five years through ten years 24,047,803 25,070,356
Due after ten years 489,823 515,628
Other securities, including mortgage-backed securities 20,399,445 20,538,922
Equity securities 2,737,909 4,927,473
------------ ------------
Total securities available for sale $155,465,326 $160,805,044
============ ============
HELD TO MATURITY Amortized Estimated Fair
Cost Value
------------ ------------
Due in one year or less $ 1,288,244 $ 1,294,798
Due after one year through five years 355,000 366,099
Other securities, including mortgage-backed securities 575,336 581,539
Total securities held to maturity $ 2,218,580 $ 2,242,436
============ ============
</TABLE>
Page 12
<PAGE> 13
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
No securities were sold during the nine months ended September 30, 1998.
Proceeds from sales of securities available for sale totaled $5,591,000
resulting in gross gains of $29,374 and gross losses of $48,313. Securities
called or settled by the issuer resulted in gains of $20,580 for the nine months
ended September 30, 1998 and $6,250 for the nine months ended September 30,
1997. In addition, the Corporation recorded gains of $159,073 through September
30, 1997 from recoveries of securities previously written off.
Securities with a carrying value of approximately $57,310,000 and $48,318,000
were pledged as of September 30, 1998 and December 31, 1997, respectively, to
secure public deposits, other deposits and liabilities as required by law.
(3) Loans
Loans as presented in the consolidated balance sheets are comprised of
the following classifications:
<TABLE>
<CAPTION>
9/30/1998 12/31/1997
<S> <C> <C>
Commercial and Agriculture $ 54,148,056 $ 57,016,939
Real Estate - mortgage 182,060,239 189,731,147
Real Estate - construction 2,238,737 3,922,768
Consumer 46,609,406 41,863,624
Credit card and other 1,493,560 1,693,798
Deferred loan fees (1,167,770) (1,303,020)
Unearned interest (278,194) (480,147)
------------- -------------
Total $ 285,104,034 $ 292,445,109
============= =============
</TABLE>
Page 13
<PAGE> 14
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(4) Allowance for Loan Losses
A summary of the activity in the allowance for loan losses for the nine
months ended September 30, 1998 and September 30, 1997 is as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Balance January 1, $ 4,707,051 $ 3,935,038
Loans charged-off (495,288) (392,069)
Recoveries 170,680 151,969
Provision for loan losses 299,000 1,014,344
----------- -----------
Balance September 30, $ 4,681,443 $ 4,709,282
=========== ===========
</TABLE>
Information regarding impaired loans is as follows for the nine months ended
September 30.
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Average investment in impaired loans $3,854,452 $2,912,887
Interest income recognized on impaired loans
including interest income recognized on cash 187,394 122,138
basis
Interest income recognized on impaired loans
on cash basis 187,394 122,138
</TABLE>
Information regarding impaired loans at September 30, 1998 and December 31, 1997
is as follows:
<TABLE>
<CAPTION>
9/30/98 12/31/97
<S> <C> <C>
Balance impaired loans $2,748,898 $4,335,220
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 2,748,898 4,335,220
Portion of allowance for loan losses allocated to
the impaired loan balance 784,345 1,253,779
</TABLE>
Page 14
<PAGE> 15
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(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 consolidated balance
sheets. 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 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, 1998 and December
31, 1997.
Commitments to extend credit and letters of credit approximated the
following amounts at September 30, 1998 and December 31, 1997.
<TABLE>
<CAPTION>
Contract Amount
---------------
September 30, December 31,
1998 1997
------------- ------------
<S> <C> <C>
Commitment to extend credit:
Lines of credit and construction loans $24,958,000 $20,308,000
Credit cards 3,184,000 3,169,000
Letters of credit 863,000 667,000
----------- -----------
$29,005,000 $24,144,000
=========== ===========
</TABLE>
The Banks 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, 1998 and December 31, 1997 approximated
$2,136,000 and $1,682,000 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 15
<PAGE> 16
First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(6) Acquisitions
Effective April 28, 1998, the Corporation merged with The Farmers State
Bank of New Washington ("Farmers"), headquartered in New Washington,
Ohio, in a transaction accounted for as a pooling of interests. First
Citizens issued approximately 1.2 million shares of common stock to the
shareholders of Farmers based upon an exchange ratio of 6.06 shares of
First Citizens for each outstanding share of Farmers common stock. The
historical financial statements have been restated to show First
Citizens and Farmers on a combined basis. Separate results of
operations for First Citizens and Farmers are as follows:
<TABLE>
<CAPTION>
Nine months
Three months ended Three months
ended September September 30, ended March
30, 1997 1997 31, 1998
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Net Interest Income
First Citizens $3,323,878 $ 9,712,670 $3,229,420
Farmers 1,113,623 3,232,563 1,030,436
---------- ----------- ----------
Combined $4,437,501 $12,945,233 $4,259,856
========== =========== ==========
Net Income
First Citizens $ 979,673 $ 2,807,910 $ 899,232
Farmers 136,082 991,622 361,187
---------- ----------- ----------
Combined $1,115,755 $ 3,799,532 $1,260,419
========== =========== ==========
</TABLE>
Page 16
<PAGE> 17
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, 1998, compared to December 31, 1997
and the consolidated results of operations for the three and nine month periods
ending September 30, 1998 compared to the same periods in 1997. 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 a material 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 September 30, 1998 totaled $495,009,602
compared to $484,118,372 at December 31, 1997. This was an increase of
$10,891,230 or 2.2 percent. Within the structure of the assets, net loans have
decreased $7,315,467 or 2.5 percent since December 31, 1997, due in part to slow
loan growth. In addition, two large commercial loans, totaling approximately
$2,925,000, paid off since December 31, 1997. Finally, the Corporation now
selling mortgages on the secondary market. For the first nine months of 1998,
loans originated for sale totaled $5,857,897. Loans held-for-sale decreased
$349,218, or 50.5 percent from December 31,
Page 17
<PAGE> 18
First Citizens Banc Corp
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q
1997. At September 30, 1998, the net loan to deposit ratio was 69.0 percent
compared to 71.5 percent at December 31, 1997.
At September 30, 1998, $160,805,044, or 98.6 percent of the portfolio was
classified as available-for-sale. The remainder of $2,218,580 was classified as
held-to-maturity. Securities increased $19,069,342 from December 31, 1997. With
loan demand being slow, additional securities have been purchased to gain
additional yield over fed funds.
For the nine months of operations of 1998, $299,000 was placed into the
allowance from earnings compared to $1,014,344 for the same period of 1997.
Provisions to the reserve are down for three reasons. First, loan volume is
down. With the loan volume down, general reserves are also reduced. The second
reason is that impaired loans are also down. Impaired loans at September 30,
1998 totaled $2,748,898, or 0.96 percent of the loan portfolio compared to
$4,335,220, or 1.5 percent of the loan portfolio at December 31, 1997. Each
impaired loan has a specific reserve amount associated with it. As with loan
volume, when impaired loans decrease, so will the reserve. Finally, the
increased provision expense for 1997 was based on the results of an independent
loan review at Farmers which management contracted to be performed in response
to the Memorandum of Understanding. The loan review results indicated that
internal procedures for loan underwriting and documentation standards had not
been sufficient to keep pace with the rapid expansion in loan volume. As a
result, the credit quality of new loan originations in 1997 has deteriorated and
perfection of Farmers security interest was not always well documented. Even
though the majority of new loans are secured by residential real estate, which
typically carry a lower risk of loss than other loans, management felt it
prudent to increase the provision for loan losses until the results from recent
improvements in lending procedures had time to become effective. Management has
taken aggressive action to correct lending deficiencies by adopting a new loan
policy, improving the loan approval process, contracting for the assistance of
experienced loan underwriters and by implementing a standardized loan document
preparation system. These improvements are expected to reduce the need for
future large provisions to the allowance for loan losses. Net charge-offs for
the first nine months of 1998 were $324,608 compared to $240,100 for the same
period of 1997. Although the provision to the reserve for loan losses is down,
the ratio of allowance to total loans increased slightly. The September 30, 1998
allowance for loan losses as a percent of total loans was 1.64 percent compared
to 1.61 percent at December 31, 1997.
Office premises and equipment have decreased $59,010 and intangible assets have
decreased $249,536 since December 31, 1997. The decrease in office premises and
equipment is attributed to new purchases of $592,971, less proceeds from the
sale of equipment of $64,436 and depreciation of $587,545.
Total deposits at September 30, 1998 increased $4,192,717 from year-end 1997.
Noninterest-bearing
Page 18
<PAGE> 19
First Citizens Banc Corp
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q
deposits, representing demand deposit balances, increased $1,740,794 from
year-end 1997. Interest-bearing deposits, including savings and time deposits,
increased $2,451,923 from year-end 1997. The year to date 1998 average balance
of savings deposits has decreased $8,145,000 compared to the average balance of
the same period for 1997. The current average rate of these deposits is 2.91
percent. The year to date 1998 average balance of time certificates has
increased $18,666,000 compared to the average balance for the same period for
1997. The current average rate on these deposits is 5.48 percent. The average
balance of certificates of deposit increased because of the introduction of a
new certificate product, as well as pricing strategies employed to generate
deposit growth. In addition to the new money generated in the certificates of
deposit, substantial dollars shifted from savings to the higher yielding
certificates.
Other borrowed funds have increased $5,066,051 from December 31, 1997 to
September 30, 1998. Federal Home Loan Bank borrowings have decreased $932,945 as
a result of scheduled paydowns. Securities sold under agreements to repurchase
have increased $8,327,086 and U.S. Treasury Tax Demand Notes have decreased
$2,328,090.
Shareholders' equity at September 30, 1998 was $54,091,159, which was 10.9
percent of total assets. Shareholders' equity at December 31, 1997 was
$51,199,435, which was 10.6 percent of total assets. The increase in
shareholders' equity was represented by earnings of $3,445,135 less dividends of
$1,650,410 plus the increase in the unrealized gain on securities available for
sale of $1,096,999. The company paid cash dividends on February 1, 1998, May 1,
1998 and on August 1, 1998, each at the rate of $.15 per share. Both the
February 1, 1998 and the May 1, 1998 dividends were payable to shareholders of
record prior to the merger with Farmers. Farmers paid a dividend of $92,000 in
1998 prior to the merger. The August 1, 1998 dividend was payable to
shareholders of record after the merger with Farmers. Total outstanding shares
at September 30, 1998 were 4,263,401.
Results of Operations
- ---------------------
Net income for the quarter ended September 30, 1998 was $1,175,575, or $.28 per
common share compared to $1,115,755, or $.26 per common share for the same
period in 1997. This was a increase of $59,820, or 5.4 percent. Net earnings for
the nine months ended September 30, 1998 were $3,445,135, or $.81 per common
share compared to $3,799,532, or $.89 per common share for the same period in
1997. This was a decrease of $354,397, or 9.3 percent. Some of the reasons for
the changes are explained below.
Net interest income for the third quarter 1998 totaled $4,131,193 compared to
$3,739,657 for the third quarter of 1997. This was an increase of $223,308 or
5.0 percent. Total interest income for the first nine months of 1998 has
increased $463,803 or 1.8 percent compared to the same period of
Page 19
<PAGE> 20
First Citizens Banc Corp
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q
1997. The average rate on earning assets on a tax equivalent basis for the first
nine months of 1998 was 7.61 percent and 7.80 percent for the first nine months
of 1997. Total interest expense for the first nine months of 1998 has increased
$817,662 or 6.7 percent compared to the same period of 1997. This increase is
due mainly to an increase in interest on deposits of $742,049. The average rate
on paying liabilities for the first nine months of 1998 was 4.45 percent
compared to 4.32 percent for the same period of 1997. The net interest margin on
a tax equivalent basis was 3.88 percent for the nine-month period ended
September 30, 1998 and 4.16 percent for the same period ended September 30,
1997.
Noninterest income for the third quarter 1998 totaled $1,063,592 compared to
$1,220,816 for the third quarter 1997, an decrease of $157,224 or 12.9 percent.
Revenue from computer operations decreased $98,470 due mainly to SCC Resources,
Inc. selling its microcomputer division. Gain on securities for the quarter
decreased $174,056 and other operating income decreased $38,436. However,
increases in service charges on deposit accounts of $80,626, increased gain on
the sale of loans of $73,112 helped offset these decreases. Noninterest income
for the first nine months of 1998 totaled $3,024,871 compared to $3,228,485 for
the same period of 1997. The net decrease in noninterest income of $203,614 or
6.3 percent, can be attributed to decreases in revenue from the computer
operations of $390,165, increased service charges on deposit accounts of
$94,867, increased gains on the sale of loans of $153,016, decreased gains on
securities of $125,804 and increased other operating income of $64,472.
Noninterest expense for the third quarter 1998 totaled $3,570,556 compared to
$3,485,718 for the third quarter 1997. This was an increase of $84,838 or 2.4
percent. Year-to-date, noninterest expense has increased $525,487 or 5.3 percent
from $10,008,526 in 1997 to $10,534,013 in 1998. The largest change in
noninterest expense was in professional fees. Professional fees increased
$274,345, due mainly to one-time costs incurred in the purchase of Farmers.
Provision for Income Taxes
- --------------------------
The provision for income taxes for the third quarter of 1998 totaled $448,654
compared to $359,000 for the third quarter of 1997. This was a decrease of
$89,654 or 24.9 percent. The increase in the federal income taxes is a result of
the increase in total income before taxes of $149,474. The provision for income
taxes year-to-date for 1998 totaled $1,338,097 compared to $1,351,316
year-to-date for 1997. This was a decrease of $13,219 or 1.0 percent.
Page 20
<PAGE> 21
Capital Resources
- -----------------
Shareholders equity totaled $54,091,159 at September 30, 1998 compared to
$51,199,435 at December 31, 1997. All of the capital ratios exceed the
regulatory minimum guidelines as identified in the following table:
<TABLE>
<CAPTION>
Corporation Ratios Regulatory
9/30/98 12/31/97 Minimums
------- -------- --------
<S> <C> <C> <C>
Tier I Risk Based Capital 16.50% 17.45% 4.00%
Total Risk Based Capital 17.76% 18.83% 8.00%
Leverage Ratio 9.81% 9.47% 5.00%
</TABLE>
The Corporation paid cash dividends of $.15 per common share each on February 1,
1998, May 1, 1998 and August 1, 1998 compared to $.14 per common share each on
February 1, 1997, May 1, 1997 and August 1, 1997. Year-to-date 1998 dividends
have increased $.03 per common share from year-to-date 1997.
Capital expenditures totaled $592,971 for the first nine months of 1998 compared
to $1,253,781 for the same period of 1997. The capital expenditures for the
first nine 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
nine months of 1998 the Banks maintained a federal funds sold position that
averaged $17,168,000. In addition, the Banks, through their respective
correspondent banks, maintain federal funds borrowing lines totaling $28,950,000
and the Banks have total borrowing availability at the Federal Home Loan Bank of
Cincinnati of $12,244,911 at September 30, 1998. Finally, 98.6% of the
Corporation's security portfolio has been classified as available for sale,
which provides additional liquidity.
Year 2000 Issue
- ---------------
First Citizens Banc Corp realizes that the year 2000 challenge is a serious
problem for not only itself and other banks but for all organizations. Many
computer systems that use dates to calculate any number of computations,
functions, and a vast number of commands may begin to fail prior to or
Page 21
<PAGE> 22
First Citizens Banc Corp
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q
on the start of the new year 2000. It is critical to the continuing operations
of First Citizens Banc Corp that all its systems that are sensitive to the Year
2000 date change be identified and changed before any adverse situations occur.
First Citizens Banc Corp's definition of Year 2000 Compliant is the capability
of sustaining minimal business disruptions, readiness of system applications and
preparation for response and recovery as necessary. System applications are
considered Year 2000 ready when they continue to produce the same
understandable, accurate and predictable results, regardless of the date.
The Year 2000 Plan is broken into 5 separate parts. Each part is important to
the end result of being 2000 compliant. Upon completion of the plan all items
will have been examined and corrected (or documented as a exception). The phases
are as follows: awareness, assessment, renovation, validation, and
implementation.
The awareness phase involves identifying the Year 2000 problem, gaining
executive level support for recognizing the importance of the problem, and
developing a team and strategy for handling the problem. First Citizens Banc
Corp has appointed Year 2000 Directors and established Year 2000 Teams and an
Executive Y2K Committee. To help inform our customer and our community of the
Year 2000 issue we have sent brochures out to our customers and held information
seminars that were open to the public.
The assessment phase involves identifying the size and complexity of the problem
as it relates to First Citizens Banc Corp, including identifying all software,
hardware, systems, and internal and external interdependencies that are affected
by the century change. From the regulatory perspective, this also includes
identifying the resources needed, the time frames, and the processes necessary
to handle the Year 2000 problem. Assessment lists have been completed listing
those items that are Year 2000 susceptible, prioritizing them as to their
importance. Maintaining this list and contact with all necessary vendors is an
ongoing process. Questionnaires were sent out to loan and deposit customers to
help address our credit and liquidity risks.
The renovation phase involves programming or reprogramming systems, hardware and
software upgrades, system replacements, and related changes that we will have to
make to prepare all systems for the turn of the century. This includes ongoing
contact with any third-party servicers or software providers that the bank may
be using. First Citizens Banc Corp is having all incompliant hardware and
software either updated or replaced.
The validation phase is essentially the testing phase to determine that all
upgrades or reprogrammed systems, as well as other systems that are believed to
be Year 2000 compliant, are truly ready for the date change to January 1, 2000.
First Citizens Banc Corp is developing a test plan to verify that all hardware
and software in use will be ready for the Year 2000.
Page 22
<PAGE> 23
First Citizens Banc Corp
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q
The implementation phase involves certification that existing systems are ready
to go, and that any new systems or changes to existing systems are compliant
with the turn of the century requirements. Active involvement of all departments
and teams will monitor new and existing items to insure that a smooth transition
into the Year 2000 and beyond is achieved.
In anticipation of potential Year 2000 problems, the Corporation has addressed
both preventative measures and corrective actions. Management has set a maximum
budget of $281,100 for Year 2000 related issues. Year-to-date through
September 30, 1998, $18,534 has been spent on solutions for possible problems.
In addition to the dollars spent, specific contingency plans are in place for
all mission critical items. Mission critical items are the programs that must
be in place in order for the Corporation to continue operations with minimal
business disruptions. The contingency plans vary widely and range from manual
report preparation to telephone authorization of funds transfer to reliance on
vendor's contingencies where no other alternative exists.
ITEM 3.
Quantitative and Qualitative Disclosures about Market Risk
- ----------------------------------------------------------
The Corporation's primary market risk exposure is interest rate risk and, to a
lesser extent, liquidity risk. The Banks do not maintain a trading account for
any class of financial instrument and the Corporation is not affected by foreign
currency exchange rate risk or commodity price risk. Due to the basis in
equities held by Farmers being so much less than the current fair value at this
time, the Corporation is not subject to significant equity price risk.
Interest rate risk is the risk that the Corporation's financial condition will
be adversely affected due to movements in interest rates. The Corporation, like
other financial institutions, is subject to interest rate risk to the extent
that its interest-earning assets reprice differently than interest-bearing
liabilities. The income of financial institutions is primarily derived from the
excess of interest earned on interest-earning assets over interest paid on
interest-bearing liabilities. One of the Corporation's principal financial
objectives is to achieve long-term profitability while reducing its exposure to
fluctuations in interest rates. Accordingly, the Corporation places great
importance on monitoring and controlling interest rate risk.
There are several methods employed by the Corporation to monitor and
control interest rate risk. One such method is using gap analysis. The gap is
defined as the repricing variance between rate sensitive assets and rate
sensitive liabilities within certain periods. The repricing can occur due to
changes in rates on variable products as well as maturities of interest-earning
assets and interest-
Page 23
<PAGE> 24
First Citizens Banc Corp
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q
bearing liabilities. A high ratio of interest sensitive liabilities, generally
referred to as a negative gap, tends to benefit net interest income during
periods of falling rates as the average rate on interest-bearing liabilities
falls faster than the average rate earned on interest-earning assets. The
opposite holds true in during periods of rising rates. The Corporation attempts
to minimize the interest rate risk through management of the gap in order to
achieve consistent shareholder return. The Corporation's Assets and Liability
Management Policy is to maintain a laddered gap position. One strategy is to
originate variable rate loans tied to market indices. Such loans reprice as the
underlying market index changes. Currently, approximately 54.2% of the
Corporation's loan portfolio reprices on at least an annual basis. The
Corporation also invests excess funds in federal funds that mature and reprice
daily.
The Corporation's 1997 annual report details a table, which provides information
about the Banks financial instruments that are sensitive to changes in interest
rates as of December 31, 1997. The table is based on information and assumptions
set forth in the notes. The Corporation believes the assumptions are reasonable.
For loans, securities and liabilities with contractual maturities, the table
represents principal cash flows and weighted average interest rate. For variable
rate loans the contractual maturity and weighted average interest rate were used
with an explanatory footnote as to repricing periods. For liabilities without
contractual maturities such as demand and savings deposits, a decay rate was
utilized to match their most likely withdrawal behavior. Since the
Asset/Liability mix of Farmers is similar to that of First Citizens, management
believes that no events have occurred since December 31, 1997 which would
significantly change the ratio of rate sensitive liabilities for the given time
horizon.
Page 24
<PAGE> 25
First Citizens Banc Corp
Other Information
Form 10-Q
Part II - Other Information
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
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 .......................28
(b) EXHIBIT NO. 99 Safe Harbor under the Private Securities
Litigation Reform Act of 1995
(c) REPORTS ON FORM 8-K - Incorporated by reference. Originally filed
on May 13, 1998 and subsequently amended on July 10, 1998.
Page 25
<PAGE> 26
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 12, 1998
- ----------------------------- -----------------
David A. Voight Date
President
/s/ James O. Miller November 12, 1998
- ----------------------------- -----------------
James O. Miller Date
Executive Vice President
Page 26
<PAGE> 27
First Citizens Banc Corp
Index to Exhibits
Form 10-Q
<TABLE>
<CAPTION>
Exhibit
Number Description Page Number
- ------- ----------- -----------
<S> <C> <C>
27 Financial Data Schedule 28
99 Safe Harbor Under the Private Securities Incorporated by reference to Exhibit 99 to
Litigation Reform Act of 1995 Annual Report on Form 10-K for the Year Ended
December 31, 1997 filed by the registrant on
March 25, 1998
</TABLE>
Page 27
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000944745
<NAME> FIRST CITIZENS BANC CORP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-01-1998
<CASH> 19,264,852
<INT-BEARING-DEPOSITS> 248,282
<FED-FUNDS-SOLD> 15,805,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 160,805,044
<INVESTMENTS-CARRYING> 2,218,580
<INVESTMENTS-MARKET> 2,242,436
<LOANS> 280,422,591
<ALLOWANCE> 4,681,443
<TOTAL-ASSETS> 495,009,602
<DEPOSITS> 406,375,958
<SHORT-TERM> 17,153,800
<LIABILITIES-OTHER> 3,833,596
<LONG-TERM> 13,555,089
0
0
<COMMON> 23,257,520
<OTHER-SE> 30,833,639
<TOTAL-LIABILITIES-AND-EQUITY> 495,009,602
<INTEREST-LOAN> 18,335,628
<INTEREST-INVEST> 6,520,465
<INTEREST-OTHER> 738,605
<INTEREST-TOTAL> 25,594,698
<INTEREST-DEPOSIT> 11,982,405
<INTEREST-EXPENSE> 13,003,324
<INTEREST-INCOME-NET> 12,591,374
<LOAN-LOSSES> 299,000
<SECURITIES-GAINS> 20,580
<EXPENSE-OTHER> 10,534,013
<INCOME-PRETAX> 4,783,232
<INCOME-PRE-EXTRAORDINARY> 3,445,135
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,445,135
<EPS-PRIMARY> .81
<EPS-DILUTED> .81
<YIELD-ACTUAL> 3.65
<LOANS-NON> 1,842,000
<LOANS-PAST> 37,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,707,051
<CHARGE-OFFS> 495,288
<RECOVERIES> 170,680
<ALLOWANCE-CLOSE> 4,681,443
<ALLOWANCE-DOMESTIC> 4,681,443
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,052,445
</TABLE>
