Form 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2010


o		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 or organization)		(I.R.S. Employer Identification Number)


100 East Water Street, Sandusky, Ohio		44870

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (419) 625-4121

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):


Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company þ
		(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common Shares, no par value, outstanding at November 8, 2010 — 7,707,917 shares

Part I — Financial Information

ITEM 1. Financial Statements

FIRST CITIZENS BANC CORP

Consolidated Balance Sheets (Unaudited)

(In thousands, except share data)


	September 30,			December 31,
	2010			2009
ASSETS
Cash and due from financial institutions	$	26,105		$	26,942
Federal funds sold		42,000			—

Cash and cash eqivalents		68,105			26,942
Securities available for sale		189,954			207,292
Loans, net of allowance of $21,600 and $15,271		764,335			775,547
Other securities		15,272			15,382
Premises and equipment, net		18,388			19,702
Accrued interest receivable		5,389			5,425
Goodwill		21,720			21,720
Core deposit and other intangibles		5,578			6,492
Bank owned life insurance		12,202			11,848
Other assets		15,421			12,462

Total assets	$	1,116,364		$	1,102,812


LIABILITIES
Deposits
Noninterest-bearing	$	153,518		$	140,659
Interest-bearing		749,403			715,393

Total deposits		902,921			856,052
Federal Home Loan Bank advances		50,334			85,364
Securities sold under agreements to repurchase		22,610			21,920
U. S. Treasury interest-bearing demand note payable		754			2,394
Subordinated debentures		29,427			29,427
Accrued expenses and other liabilities		11,365			8,858

Total liabilities		1,017,411			1,004,015


SHAREHOLDERS’ EQUITY
Preferred stock, no par value, 200,000 shares authorized, 23,184 shares issued		23,129			23,117
Common stock, no par value, 20,000,000 shares authorized, 8,455,881 shares issued		114,447			114,447
Retained deficit		(20,271	)		(17,774	)
Treasury stock, 747,964 shares at cost		(17,235	)		(17,235	)
Accumulated other comprehensive loss		(1,117	)		(3,758	)

Total shareholders’ equity		98,953			98,797


Total liabilities and shareholders’ equity	$	1,116,364		$	1,102,812

See notes to interim unaudited consolidated financial statements

Page 3

FIRST CITIZENS BANC CORP

Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)


	Three months ended						Nine months ended
	September 30,						September 30,
	2010			2009			2010			2009
Interest and dividend income
Loans, including fees	$	11,092		$	11,546		$	33,440		$	35,179
Taxable securities		1,448			1,649			4,464			5,085
Tax-exempt securities		444			437			1,392			1,219
Federal funds sold and other		13			7			23			30

Total interest income		12,997			13,639			39,319			41,513

Interest expense
Deposits		1,721			2,512			5,587			8,485
Federal Home Loan Bank advances		598			703			1,953			2,050
Subordinated debentures		212			332			631			1,058
Other		16			36			57			208

Total interest expense		2,547			3,583			8,228			11,801

Net interest income		10,450			10,056			31,091			29,712
Provision for loan losses		6,100			3,452			14,440			8,216

Net interest income after provision for loan losses		4,350			6,604			16,651			21,496

Noninterest income
Service charges		1,197			1,270			3,410			3,589
Net gain on sale of securities		7			19			22			72
ATM fees		472			411			1,344			1,234
Trust fees		457			381			1,378			1,118
Bank owned life insurance		116			117			354			360
Computer center data processing fees		61			72			195			311
Other		210			169			565			762

Total noninterest income		2,520			2,439			7,268			7,446

Noninterest expense
Salaries and wages		3,744			3,162			10,384			10,105
Benefits		846			526			2,574			1,899
Net occupancy expense		604			580			1,841			1,769
Equipment expense		365			426			1,132			1,463
Contracted data processing		200			251			687			809
FDIC assessment		395			424			1,183			1,589
State franchise tax		237			265			764			827
Professional services		689			437			1,776			1,355
Amortization of intangible assets		305			322			914			967
ATM expense		177			185			537			552
Marketing		188			157			563			471
Other operating expenses		1,516			1,828			4,899			5,461

Total noninterest expense		9,266			8,563			27,254			27,267

Income (loss) before taxes		(2,396	)		480			(3,335	)		1,675
Income tax expense (benefit)		(1,003	)		(19	)		(1,719	)		48

Net Income (loss)	$	(1,393	)	$	499		$	(1,616	)	$	1,627

Preferred stock dividends	$	289		$	289		$	867		$	650

Net income (loss) available to common shareholders	$	(1,682	)	$	210		$	(2,483	)	$	977

Earnings per common share, basic and diluted	$	(0.22	)	$	0.03		$	(0.32	)	$	0.13

See notes to interim unaudited consolidated financial statements

Page 4

FIRST CITIZENS BANC CORP

Consolidated Statements of Shareholders’ Equity (Unaudited)

Form 10-Q

(In thousands, except share data)


															Accumulated
	Preferred Stock				Common Stock										Other			Total
	Outstanding				Outstanding				Retained			Treasury			Comprehensive			Shareholders’
	Shares		Amount		Shares		Amount		Deficit			Stock			Income/(Loss)			Equity

Balance, January 1, 2010		23,184	$	23,117		7,707,917	$	114,447	$	(17,774	)	$	(17,235	)	$	(3,758	)	$	98,797

Net loss		—		—		—		—		(1,616	)		—			—			(1,616	)

Change in unrealized gain/(loss) on securities available for sale, net of reclassifications and tax effects		—		—		—		—		—			—			2,641			2,641

Amortization of discount on preferred stock		—		12		—		—		(12	)		—			—			—

Preferred stock dividend		—		—		—		—		(869	)		—			—			(869	)


Balance, September 30, 2010		23,184	$	23,129		7,707,917	$	114,447	$	(20,271	)	$	(17,235	)	$	(1,117	)	$	98,953

See notes to interim unaudited consolidated financial statements

Page 6

FIRST CITIZENS BANC CORP

Condensed Consolidated Statement of Cash Flows (Unaudited)
(In thousands)


	Nine months ended
	September 30,
	2010			2009

Net cash from operating activities	$	13,093		$	11,684

Cash flows from investing activities
Maturities and calls of securities, available-for-sale		81,010			78,162
Purchases of securities, available-for-sale		(59,386	)		(126,252	)
Purchases of other securities		—			(76	)
Sale of other securities		110			917
Loans made to customers, net of principal collected		(4,713	)		(122	)
Proceeds from sale of other real estate owned		903			769
Proceeds from sale of property		1,174			1
Net purchases of office premises and equipment		(1,048	)		(501	)

Net cash from investing activities		18,050			(47,102	)


Cash flows from financing activities
Net change in short-term FHLB advances		(5,000	)		(7,000	)
Repayment of long-term FHLB advances		(30,030	)		(2,607	)
Proceeds from long-term FHLB advances		—			20,000
Net change in deposits		46,869			40,687
Change in securities sold under agreements to repurchase		690			(4,762	)
Change in U. S. Treasury interest-bearing demand note payable		(1,640	)		(2,518	)
Repayment of long-term debt		—			(20,500	)
Issuance of preferred stock and common stock warrant		—			23,184
Dividends paid		(869	)		(2,423	)

Net cash from financing activities		10,020			44,061


Net change in cash and due from banks		41,163			8,643
Cash and cash equivalents at beginning of period		26,942			26,649

Cash and cash equivalents at end of period	$	68,105		$	35,292


Cash paid during the period for:
Interest	$	8,617		$	12,526
Income taxes	$	900		$	425
Supplemental cash flow information:
Transfer of loans from portfolio to other real estate owned	$	1,368		$	1,929

See notes to interim unaudited consolidated financial statements

Page 7

First Citizens Banc Corp

Notes to Interim Consolidated Financial Statements (Unaudited)

Form 10-Q

(Amounts in thousands, except share data)

(1) Consolidated Financial Statements

Nature of Operations and Principles of Consolidation: The Consolidated Financial Statements include the accounts of First Citizens Banc Corp (FCBC) and its wholly-owned subsidiaries: The Citizens Banking Company (Citizens), First Citizens Insurance Agency, Inc., and Water Street Properties, Inc. (Water St.). First Citizens Capital LLC (FCC) is wholly-owned by Citizens and holds inter-company debt that is eliminated in consolidation. The operations of FCC are located in Wilmington, Delaware. First Citizens Investments, Inc. (FCI) is wholly-owned by Citizens and holds and manages Citizens securities portfolio and is eliminated in consolidation. The operations of FCI are located in Wilmington, Delaware. The above companies together are referred to as the Corporation. Intercompany balances and transactions are eliminated in consolidation. SCC Resources, Inc. (SCC) was a subsidiary that provided item processing services to Citizens and other financial institutions. On June 30, 2009, SCC was merged with Citizens, but continues to provide item processing services.

The consolidated financial statements 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, 2010 and its results of operations and changes in cash flows for the periods ended September 30, 2010 and 2009 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 in the United States of America have been omitted. The results of operations for the period ended September 30, 2010 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 2009 annual report. The Corporation has consistently followed these policies in preparing this Form 10-Q.

The Corporation provides financial services through its offices in the Ohio counties of Erie, Crawford, Champaign, Franklin, Logan, Summit, Huron, Ottawa, and Richland. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customer’s ability to repay their loans is dependent on the real estate and general economic conditions in the area. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions and Federal Funds sold. First Citizens Insurance Agency Inc. was formed to allow the Corporation to participate in commission revenue generated through its third party insurance agreement. Insurance commission revenue is less than 1.0% of total revenue through September 30, 2010. Water St. revenue was less than 1.0% of total revenue through September 30, 2010. Management considers the Corporation to operate primarily in one reportable segment, banking.

Page 8

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, impairment of goodwill, fair values of financial instruments, deferred taxes and pension obligations are particularly subject to change.

Income Taxes: Income tax expense is based on the effective tax rate expected to be applicable for the entire year. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

New Accounting Pronouncements:

In March 2010, the FASB issued ASU 2010-11, Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. ASU 2010-11 provides clarification and related additional examples to improve financial reporting by resolving potential ambiguity about the breadth of the embedded credit derivative scope exception in ASC 815-15-15-8. ASU 2010-11 is effective at the beginning of the first fiscal quarter beginning after June 15, 2010. The adoption of this guidance is not expected to have a significant impact on the Corporation’s financial statements.

In April 2010, the FASB issued ASU 2010-18, Receivables (Topic 310): Effect of a Loan Modification When the Loan is a Part of a Pool that is Accounted for as a Single Asset — a consensus of the FASB Emerging Issues Task Force. ASU 2010-18 clarifies the treatment for a modified loan that was acquired as part of a pool of assets. Refinancing or restructuring the loan does not make it eligible for removal from the pool, the FASB said. The amendment will be effective for loans that are part of an asset pool and are modified during financial reporting periods that end July 15, 2010 or later. The adoption of this guidance is not expected to have a significant impact on the Corporation’s financial statements.

Impact of Not Yet Effective Authoritative Accounting Pronouncements

In April 2010, the FASB issued ASU 2010-13, Compensation — Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades. ASU 2010-13 provides guidance on the classification of a share-based payment award as either equity or a liability. A share-based payment that contains a condition that is not a market, performance, or service condition is required to be classified as a liability. ASU 2010-13 is effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2010 and is not expected to have a significant impact on the Corporation’s financial statements.

Page 9

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

In July 2010, FASB issued ASU No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. ASU 2010-20 is intended to provide additional information to assist financial statement users in assessing an entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses. The disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The amendments in ASU 2010-20 encourage, but do not require, comparative disclosures for earlier reporting periods that ended before initial adoption. However, an entity should provide comparative disclosures for those reporting periods ending after initial adoption. The Corporation is currently evaluating the impact the adoption of the standard will have on the Corporation’s financial position or results of operations.

In August, 2010, the FASB issued ASU 2010-21, Accounting for Technical Amendments to Various SEC Rules and Schedules. This ASU amends various SEC paragraphs pursuant to the issuance of Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules, and Codification of Financial Reporting Policies and is not expected to have a significant impact on the Corporation’s financial statements.

In August, 2010, the FASB issued ASU 2010-22, Technical Corrections to SEC Paragraphs — An announcement made by the staff of the U.S. Securities and Exchange Commission. This ASU amends various SEC paragraphs based on external comments received and the issuance of SAB 112, which amends or rescinds portions of certain SAB topics and is not expected to have a significant impact on the Corporation’s financial statements.

Page 10

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

(2) Securities

Available for sale securities at September 30, 2010 and December 31, 2009 were as follows:


			Gross		Gross
	Amortized		Unrealized		Unrealized
September 30, 2010	Cost		Gains		Losses			Fair Value
U.S. Treasury securities and obligations of U.S. government agencies	$	55,766	$	876	$	(4	)	$	56,638
Obligations of states and political subdivisions		57,325		2,743		(23	)		60,045
Mortgage-backed securities		70,563		2,185		(152	)		72,596

Total debt securities		183,654		5,804		(179	)		189,279

Equity securities		481		195		—			676

Total	$	184,135	$	5,999	$	(179	)	$	189,955


			Gross		Gross
	Amortized		Unrealized		Unrealized
December 31, 2009	Cost		Gains		Losses			Fair Value
U.S. Treasury securities and obligations of U.S. government agencies	$	90,296	$	401	$	(1,147	)	$	89,550
Obligations of states and political subdivisions		51,701		1,023		(304	)		52,420
Mortgage-backed securities		62,997		1,663		(14	)		64,646

Total debt securities		204,994		3,087		(1,465	)		206,616

Equity securities		481		195		—			676

Total	$	205,475	$	3,282	$	(1,465	)	$	207,292

Page 11

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

The fair value of securities at September 30, 2010, by contractual maturity, is shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Securities not due at a single maturity date, primarily mortgage-backed securities and equity securities are shown separately.


Available for sale	Fair Value
Due in one year or less	$	2,244
Due after one year through five years		6,556
Due after five years through ten years		19,960
Due after ten years		87,923
Mortgage-backed securities		72,596
Equity securities		676

Total securities available for sale	$	189,955

Gains from securities called or settled by the issuer during the quarter ended September 30, 2010 were $23. Gains from securities called or settled by the issuer during the quarter ended September 30, 2009 were $72.

Securities with a carrying value of approximately $160,796 and $164,804 were pledged as of September 30, 2010 and December 31, 2009, respectively, to secure public deposits, other deposits and liabilities as required by law.

Page 12

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

Securities with unrealized losses at September 30, 2010 and December 31, 2009 not recognized in income are as follows.


	12 Months or less					More than 12 months					Total
September 30, 2010	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss

U.S. Treasury securities and obligations of U.S. government agencies	$	996	$	(4	)	$	—	$	—		$	996	$	(4	)
Obligations of states and political subdivisions		724		(4	)		2,303		(19	)		3,027		(23	)
Mortgage-backed securities		16,746		(152	)		—		—			16,746		(152	)


Total temporarily impaired	$	18,466	$	(160	)	$	2,303	$	(19	)	$	20,769	$	(179	)


	12 Months or less					More than 12 months					Total
December 31, 2009	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss

U.S. Treasury securities and obligations of U.S. government agencies	$	58,384	$	(1,147	)	$	—	$	—		$	58,384	$	(1,147	)
Obligations of states and political subdivisions		12,000		(241	)		2,574		(63	)		14,574		(304	)
Mortgage-backed securities		3,283		(14	)		—		—			3,283		(14	)


Total temporarily impaired	$	73,667	$	(1,402	)	$	2,574	$	(63	)	$	76,241	$	(1,465	)

There are twenty-five securities in the portfolio with unrealized losses. Unrealized losses on securities have not been recognized into income because the issuers’ securities are of high credit quality, management has the intent and ability to hold these securities for the foreseeable future, and the decline in fair value is largely due to market yields increasing across the municipal sector partly due to higher risk premiums associated with municipal insurers. The fair value is expected to recover as the securities approach their maturity date or reset date. The Corporation does not intend to sell until recovery and does not believe selling will be required before recovery.

Page 13

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

(3) Loans

Loan balances were as follows:


	September 30,			December 31,
	2010			2009
Commercial and agriculture	$	82,339		$	96,298
Commercial real estate		346,941			335,653
Real estate — mortgage		307,921			314,552
Real estate — construction		37,236			30,068
Consumer		12,378			14,250
Other		479			231
Leases		—			82

Total loans		787,294			791,134
Allowance for loan losses		(21,600	)		(15,271	)
Deferred loan fees		(1,359	)		(316	)

Net loans	$	764,335		$	775,547

(4) Allowance for Loan Losses

A summary of the activity in the allowance for loan losses for the three and nine months ended September 30, 2010 and 2009 was as follows:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2010			2009			2010			2009
Balance beginning of period	$	18,932		$	12,224		$	15,271		$	8,862
Loans charged-off		(4,085	)		(1,775	)		(9,030	)		(3,683	)
Recoveries		653			148			919			654
Provision for loan losses		6,100			3,452			14,440			8,216

Balance June 30,	$	21,600		$	14,049		$	21,600		$	14,049

Page 14

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

Information regarding impaired loans was as follows for the three and nine month periods ended September 30:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2010		2009		2010		2009
Average investment in impaired loans	$	20,749	$	19,142	$	20,549	$	20,242

Interest income recognized on impaired loans including interest income recognized on cash basis		136		219		540		562

Interest income recognized on impaired loans on cash basis		136		219		540		562

Information regarding impaired loans at September 30, 2010 and December 31, 2009 was as follows:


	September 30,			December 31,
	2010			2009
Balance impaired loans	$	19,391		$	22,736

Less portion for which no allowance for loan losses is allocated		(5,283	)		(12,856	)


Portion of impaired loan balance for which an allowance for credit losses is allocated	$	14,108		$	9,880


Portion of allowance for loan losses allocated to impaired loans	$	4,004		$	3,326

Nonperforming loans were as follows:


	September 30, 2010		December 31, 2009

Loans past due over 90 days still on accrual	$	800	$	514
Nonaccrual	$	23,843	$	25,198

Page 15

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

Nonperforming loans and impaired loans are defined differently. Some loans may be included in both categories, whereas other loans may only be included in one category. A loan is considered non-performing if it is maintained on a cash basis because of deterioration in the borrower’s financial condition, where payment in full of principal or interest is not expected and where the principal and interest have been in default for 90 days, unless the asset is both well-secured and in process of collection. Restructured loans (loans restructured for credit reasons at a below-market interest rate) are also considered non-performing. A loan is considered impaired when it is probable that all of the interest and principal due will not be collected according to the terms of the contractual agreement.

(5) Earnings per Common Share:

Basic earnings per share are net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under stock options, computed using the treasury stock method.


	Three months ended September 30,					Nine months ended September 30,
	2010			2009		2010			2009
Basic
Net income (loss)	$	(1,393	)	$	499	$	(1,616	)	$	1,627
Preferred stock dividends		289			289		867			650

Net income (loss) available to common shareholders	$	(1,682	)	$	210	$	(2,483	)	$	977


Weighted average common shares outstanding		7,707,917			7,707,917		7,707,917			7,707,917


Basic earnings per common share	$	(0.22	)	$	0.03	$	(0.32	)	$	0.13


Diluted
Net income (loss)	$	(1,393	)	$	499	$	(1,616	)	$	1,627
Preferred stock dividends		289			289		867			650

Net income (loss) available to common shareholders	$	(1,682	)	$	210	$	(2,483	)	$	977

Weighted average common shares outstanding for basic earnings per common share		7,707,917			7,707,917		7,707,917			7,707,917
Add: Dilutive effects of assumed exercises of stock options		—			—		—			—


Average shares and dilutive potential common shares outstanding		7,707,917			7,707,917		7,707,917			7,707,917


Diluted earnings per common share	$	(0.22	)	$	0.03	$	(0.32	)	$	0.13

Stock options for 29,500 shares of common stock and warrants for 469,312 shares of common stock were not considered in computing diluted earnings per common share for the three-month periods ended September 30, 2010 and September 30, 2009 because they were anti-dilutive.

Page 16

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

(6) Commitments, Contingencies and Off-Balance Sheet Risk

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection are issued to meet customers’ financing needs. These are agreements to provide credit or to support the credit of others, as long as the conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of commitment. The contractual amount of financial instruments with off-balance-sheet risk was as follows for September 30, 2010 and December 31, 2009:


	Contract Amount
	September 30, 2010				December 31, 2009
	Fixed		Variable		Fixed		Variable
	Rate		Rate		Rate		Rate
Commitment to extend credit:
Lines of credit and construction loans	$	4,036	$	99,089	$	2,136	$	98,420
Overdraft protection		—		12,493		—		12,617
Letters of credit		301		1,600		52		1,974

	$	4,337	$	113,182	$	2,188	$	113,011

Commitments to make loans are generally made for a period of one year or less. Fixed rate loan commitments included in the table above had interest rates ranging from 3.25% to 9.50% at September 30, 2010 and 3.25% to 9.50% at December 31, 2009. Maturities extend up to 30 years.

Citizens is 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 was $3,438 on September 30, 2010 and $2,515 on December 31, 2009.

Page 17

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

(7) Pension Information

Net periodic pension expense was as follows:


	Three months ended						Nine months ended
	September 30						September 30
	2010			2009			2010			2009
Service cost	$	210		$	207		$	630		$	621
Interest cost		190			190			570			570
Expected return on plan assets		(151	)		(255	)		(453	)		(765	)
Other components		65			17			194			51

Net periodic pension cost	$	314		$	159		$	941		$	477

The total amount of contributions expected to be paid by the Corporation in 2010 total $2,016, compared to $1,000 in 2009.

(8) Stock Options

Options to buy stock may be granted to directors, officers and employees under the Corporation’s Stock Option and Stock Appreciation Rights Plan, which provides for issue of up to 225,000 options. The exercise price of stock options is determined based on the market price of the Corporation’s common stock at the date of grant. The maximum option term is ten years, and options normally vest after three years.

The Corporation did not grant any stock options during the first nine months of 2010 and 2009, nor did any no stock options become vested during the first nine months of 2010 and 2009.

Page 18

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

The following table details stock options outstanding:


	Outstanding Options
			Weighted
			Average	Weighted
			Remaining	Average
			Contractual	Exercise
Exercise price	Number		Life	Price
$20.50		19,500	1 yrs. 9 mos.	$	20.50
$35.00		10,000	2 yrs. 6.5 mos.		35.00

Outstanding at quarter-end		29,500	2 yrs. 0 mos.	$	25.42

The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of our common stock as of the reporting date. As of September 30, 2010 and December 31, 2009, the aggregate intrinsic value of outstanding stock options was $0.

(9) Fair Value Measurement

ASC Topic 820 establishes a fair value hierarchy about the assumptions used to measure fair value. The topic describes three levels of inputs that may be used to measure fair value. Level 1: Quoted prices or identical assets in active markets that are identifiable on the measurement date; Level 2: Significant other observable inputs, such as quoted prices for similar assets, quoted prices in markets that are not active and other inputs that are observable or can be corroborated by observable market data; Level 3: Significant unobservable inputs that reflect the Corporation’s own view about the assumptions that market participants would use in pricing an asset.

Securities: The fair values of securities available for sale are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

Impaired loans: The fair value of impaired loans is determined using the fair value of collateral for collateral dependent loans. The Corporation uses appraisals and other available data to estimate the fair value of collateral (Level 2 inputs).

Page 20

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

Assets measured at fair value are summarized below.


	Fair Value Measurements at September 30, 2010 Using:
	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Assets:	(Level 1)		(Level 2)		(Level 3)

Assets measured at fair value on a recurring basis:

U.S. Treasury securities and obligations of U.S. Government agencies	$	—	$	56,638	$	—
Obligations of states and political subdivisions		—		60,045		—
Mortgage-backed securities		—		72,596		—
Equity securities		676		—		—

Assets measured at fair value on a nonrecurring basis:

Impaired Loans	$	—	$	15,387	$	—
Other Real Estate Owned		—		2,248		—
Mortgage Servicing Rights		—		44		—


	Fair Value Measurements at December 31, 2009 Using:
	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Assets:	(Level 1)		(Level 2)		(Level 3)

Assets measured at fair value on a recurring basis:

U.S. Treasury securities and obligations of U.S. Government agencies	$	—	$	89,550	$	—
Obligations of states and political subdivisions		—		52,420		—
Mortgage-backed securities		—		64,646		—
Equity securities		676		—		—

Assets measured at fair value on a nonrecurring basis:

Impaired Loans	$	—	$	19,410	$	—
Other Real Estate Owned		—		1,834		—
Mortgage Servicing Rights		—		78		—

Page 21

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

The carrying amount and fair values of financial instruments not previously presented were as follows.


	September 30, 2010						December 31, 2009
	Carrying						Carrying
	Amount			Fair Value			Amount			Fair Value
Financial Assets:
Cash and due from financial institutions	$	26,105		$	26,105		$	26,942		$	26,942
Federal funds sold		42,000			42,000			—			—
Loans, net of allowance for loan losses		764,335			785,033			775,547			796,783
Accrued interest receivable		5,578			5,578			5,425			5,425

Financial Liabilities:
Deposits		(902,921	)		(904,737	)		(856,052	)		(863,156	)
Federal Home Loan Bank advances		(50,334	)		(51,277	)		(85,364	)		(82,353	)
U.S. Treasury interest-bearing demand note payable		(754	)		(754	)		(2,394	)		(2,394	)
Securities sold under agreement to repurchase		(22,610	)		(22,610	)		(21,920	)		(21,920	)
Subordinated debentures		(29,427	)		(20,246	)		(29,427	)		(14,501	)
Accrued interest payable		(744	)		(744	)		(466	)		(466	)

The fair value approximates carrying amount for all items except those described below. The fair value for securities is based on quoted market values for the individual securities or for equivalent securities. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the cash flow analysis or underlying collateral values. Fair value of debt is based on current rates for similar financing. The fair value of off-balance-sheet items is based on the current fees or cost that would be charged to enter into or terminate such arrangements and are considered nominal.

For certain homogeneous categories of loans, such as some residential mortgages, credit card receivables, and other consumer loans, fair value is estimated using the quoted market prices for securities backed by similar loans, adjusted for differences in loan characteristics. The fair value of other types of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Page 22

First Citizens Banc Corp
Notes to Interim Consolidated Financial Statements (Unaudited)
Form 10-Q
(Amounts in thousands, except share data)

(10) Participation in the Treasury Capital Purchase Program

On January 23, 2009, the Corporation completed the sale to the U.S. Treasury of $23,184 of newly-issued non-voting preferred shares as part of the Capital Purchase Program (CPP) enacted by the U.S. Treasury as part of the Troubled Assets Relief Program (TARP) under the Emergency Economic Stabilization Act of 2008 (EESA). To finalize the Corporation’s participation in the CPP, the Corporation and the Treasury entered into a Letter Agreement, dated January 23, 2009, including the Securities Purchase Agreement — Standard Terms attached thereto. Pursuant to the terms of the Securities Purchase Agreement, the Corporation issued and sold to Treasury (1) 23,184 shares of Fixed Rate Cumulative Perpetual Preferred Shares, Series A, each without par value and having a liquidation preference of $1,000 per share (Series A Preferred Shares), and (2) a Warrant to purchase 469,312 common shares of the Corporation, each without par value, at an exercise price of $7.41 per share. The Warrant has a ten-year term. All of the proceeds from the sale of the Series A Preferred Shares and the Warrant by the Corporation to the U.S. Treasury under the CPP qualify as Tier 1 capital for regulatory purposes. Under the standardized CPP terms, cumulative dividends on the Series A Preferred Shares will accrue on the liquidation preference at a rate of 5% per annum for the first five years, and at a rate of 9% per annum thereafter, but will be paid only if, as and when declared by the Corporation’s Board of Directors. The Series A Preferred Shares have no maturity date and rank senior to the common shares with respect to the payment of dividends and distributions and amounts payable upon liquidation, dissolution and winding up of the Corporation.

Page 23

First Citizens Banc Corp
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-Q
(Amounts in thousands, except share data)


ITEM 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The following discussion focuses on the consolidated financial condition of the Corporation at September 30, 2010 compared to December 31, 2009 and the consolidated results of operations for the three and nine month periods ended September 30, 2010 compared to the same periods in 2009. This discussion should be read in conjunction with the consolidated financial statements and footnotes included in this Form 10-Q.

Forward-Looking Statements

When used in this Form 10-Q or future filings by the Corporation with the Securities and Exchange Commission, in press releases or other public or shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “believe,” or similar expressions are intended to identify “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Corporation wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and to advise readers that various factors, including regional and national economic conditions, changes in levels of market interest rates, credit risks of lending activities and competitive and regulatory factors, could affect the Corporation’s financial performance and could cause the Corporation’s actual results for future periods to differ materially from those anticipated or projected. The Corporation does not undertake, and specifically disclaims, any obligation to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except to the extent required by law.

Financial Condition

Total assets of the Corporation at September 30, 2010 were $1,116,364 compared to $1,102,812 at December 31, 2009, an increase of $13,552, or 1.2 percent. The increase in total assets was mainly attributed to increases in cash and cash equivalents, primarily overnight federal funds sold. Total liabilities at September 30, 2010 were $1,017,411 compared to $1,004,015 at December 31, 2009, an increase of $13,396, or 1.3 percent. The increase in total liabilities was mainly attributed to increases in noninterest-bearing deposits and interest-bearing deposits, which was partially offset by decreases in Federal Home Loan Bank advances.

Net loans have decreased $11,212 or 1.4 percent since December 31, 2009. Commercial real estate and real estate construction portfolios increased by $11,288 and $7,168 respectively, since December 31, 2009. The commercial and agricultural, real estate and consumer loan portfolios decreased $13,959, $6,631 and $1,872, respectively. The current increase in commercial real estate loans is mainly due to calling efforts by the commercial lending officers and increased opportunities from our larger markets, while the current increase in real estate construction loans is mainly due two large credits. The current decrease in commercial and agriculture loans is the result of several large loans being paid down or paid off, that outpaced demand for new loans. The current decrease in real estate and consumer loans is mainly the result of a decline in the housing market and the Corporation’s decision to originate and sell the majority of mortgage loans in the secondary market.

Page 24

First Citizens Banc Corp
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-Q
(Amounts in thousands, except share data)

The Corporation had no loans held for sale at September 30, 2010 or December 31, 2009. At September 30, 2010, the net loan to deposit ratio was 84.7 percent compared to 90.6 percent at December 31, 2009. This ratio declined in 2010 due to increased deposits.

For the first nine months of operations in 2010, $14,440 was placed into the allowance for loan losses from earnings, compared to $8,216 in the same period of 2009. In general, the increase in provision can be attributed to the economic downturn and high unemployment rates in our market area, which have impaired the ability of our customers to make payments on their loans. Net charge-offs have increased to $8,111, compared to $3,029 in 2009. For the year the Corporation has charged off two hundred one loans. The primary reason for elevated net charge-offs is the continued down market we are enduring. Seventy Real Estate Mortgages totaling $2,983 net of recoveries, or 1.0 percent of that loan category, were charged off in the first nine months of the year. Likewise, thirty-three Commercial Real Estate loans totaling $2,845 net of recoveries, or 0.8 percent of the category and twenty-nine Commercial and Agriculture loans totaling $1,552 net of recoveries, or 1.9 percent of the category were charged off thus far in 2010. While sixty-seven Consumer loans were charged off, the net amount charged off was only $222, or 1.8 percent of Consumer loans. Nonperforming loans have decreased by $1,069, of which $286 was due to increased loans past due 90 days but still accruing, offset by a decrease in loans on nonaccrual status of $1,355. Impaired loans decreased, from $22,736 at December 31, 2009 to $19,391 at September 30, 2010. Each of these factors was considered by management as part of the examination of both the level and mix of the allowance by loan type as well as the overall level of the allowance. Management specifically evaluates loans that are impaired, or graded as doubtful by the internal grading function for estimates of loss. To evaluate the adequacy of the allowance for loan losses to cover probable losses in the portfolio, management considers specific reserve allocations for identified portfolio loans, reserves for delinquencies and historical reserve allocations. The composition and overall level of the loan portfolio and charge-off activity are also factors used to determine the amount of the allowance for loan losses.

Management analyzes commercial and commercial real estate loans, with balances of $350 or larger, on an individual basis and classifies a loan as impaired when an analysis of the borrower’s operating results and financial condition indicates that underlying cash flows are not adequate to meet its debt service requirements. Often this is associated with a delay or shortfall in payments of 90 days or more. In addition, loans held for sale and leases are excluded from consideration as impaired. Loans are generally moved to nonaccrual status when 90 days or more past due. Impaired loans or portions thereof, are charged-off when deemed uncollectible. The September 30, 2010 allowance for loan losses as a percent of total loans was 2.75 percent compared to 1.93 percent at December 31, 2009.

Page 25

First Citizens Banc Corp
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-Q
(Amounts in thousands, except share data)

The available for sale security portfolio decreased by $17,338, from $207,292 at December 31, 2009, to $189,954 at September 30, 2010. The decrease is the result of securities scheduled to mature in time with FHLB advances related to the pre-funding FHLB advance strategy made during the third quarter of 2009. The Corporation continued utilizing letters of credit from the Federal Home Loan Bank (FHLB) to replace maturing securities that were pledged for public entities. As of September 30, 2010, the Corporation was in compliance with all pledging requirements.

Bank owned life insurance (BOLI) increased $354 from December 31, 2009 to September 30, 2010 due to income earned on the investment. BOLI was purchased in 2006 as an alternative to replacing maturing securities, and is being used to help recover healthcare, group term life, and 401(k) expenses.

Office premises and equipment, net, have decreased $1,314 from December 31, 2009 to September 30, 2010, as a result of depreciation of $1,188 and disposals of $1,174 offset by new purchases of $1,048.

Total deposits at September 30, 2010 increased $46,869 from year-end 2009. Noninterest-bearing deposits increased $12,859 from year-end 2009 while interest-bearing deposits, including savings and time deposits, increased $34,010 from December 31, 2009. The interest-bearing deposit increase was due to increases in interest-bearing demand accounts, savings accounts and the Corporation’s participation in the Certificate of Deposit Account Registry Service (CDARS). This service allows the Corporation’s large depositors to access full Federal Deposit Insurance Corp. (FDIC) insurance on deposits of up to $50 million. Interest-bearing demand accounts increased $4,730 from year end 2009, mainly in interest-bearing public funds. Savings accounts increased $29,277 from year end 2009, which included increases of $4,198 in statement savings, $9,919 in money market savings and $16,990 in public fund money market savings. CDARS accounts increased $7,199 from year end 2009. The year to date average balance of total deposits increased $17,257 compared to the average balance of the same period in 2009. The increase in average balance is due to increases of $15,832 in demand deposit accounts, $8,479 in statement savings accounts, $14,275 in money market savings, $13,331 in CDARS accounts and $17,655 in public fund money market savings offset by decreases of $18,665 in time certificates and $24,609 in brokered deposits.

Total borrowed funds have decreased $35,980 from December 31, 2009 to September 30, 2010. At September 30, 2010, the Corporation had $50,334 in outstanding Federal Home Loan Bank advances compared to $85,364 at December 31, 2009. The Corporation had two FHLB advances mature during the nine months ended September 30, 2010. The first matured on March 12, 2010, in the amount of $15,000. This advance had terms of thirty-six months with a fixed rate of 4.78%. The second matured on September 20, 2010, in the amount of $15,000. This advance had terms of forty-two months with a fixed rate of 4.66%. Neither advance was replaced. In addition, during the first half of 2010 overnight advances in the amount of $5,000 were paid off. Securities sold under agreements to repurchase, which tend to fluctuate due to timing of deposits, have increased $690 and U.S. Treasury Tax Demand Notes have decreased $1,640 from December 31, 2009 to September 30, 2010.

Page 26

First Citizens Banc Corp
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-Q
(Amounts in thousands, except share data)

Shareholders’ equity at September 30, 2010 was $98,953, or 8.9 percent of total assets, compared to $98,797 at December 31, 2009, or 9.0 percent of total assets. The increase in shareholders’ equity resulted from the increase in the market value of securities available for sale, net of tax, of $2,642 less losses of $1,616 and preferred dividends paid of $869. Total outstanding common shares at September 30, 2010 and at September 30, 2009 were 7,707,917. Under the Corporation’s stock repurchase program, the Corporation is authorized to buy up to 5.0 percent of the total common shares outstanding. However, the Corporation has participated in the U.S. Treasury’s Capital Purchase Program (CPP), which was announced by the U.S. Treasury on October 14, 2008 as part of the Troubled Asset Relief Program (“TARP”) established under the Emergency Economic Stabilization Act of 2008 (EESA). On January 23, 2009, the Corporation issued to the U.S. Treasury $23,184,000 of cumulative perpetual preferred shares (Senior Preferred Shares), with a liquidation preference of $1,000 per share, and a warrant to purchase 469,312 of the Corporation’s common shares at an exercise price of $7.41 (which is equal to 15% of the aggregate amount of the Senior Preferred Shares purchased by the U.S. Treasury). As a participant in the CPP, the Corporation is required to comply with a number of restrictions and provisions, including limits on executive compensation, stock redemptions and the declaration and payment of dividends. Due to these restrictions, the Corporation is precluded from repurchasing its common shares without the approval of the U.S. Treasury for a period of three years.

Results of Operations

Nine Months Ended September 30, 2010 and 2009

The Corporation had a net loss of $1,616 for the nine months ended September 30, 2010, a decrease of $3,243 from net income of $1,627 for the first nine months of 2009. Basic and diluted earnings per common share were $(0.32) for the first nine months of 2010, compared to $0.13 for the same period in 2009. The primary reasons for the changes in net income are explained below.

Net interest income for the first nine months of 2010 was $31,091, an increase of $1,379 or 4.6 percent from $29,712 in the first nine months of 2009. Net interest income, the difference between interest income earned on interest-earning assets and interest expense incurred on interest-bearing liabilities, is the most significant component of the Corporation’s earnings. Net interest income is affected by changes in volume, rates and composition of interest-earning assets and interest-bearing liabilities. Average earning assets increased 1.7 percent from the first nine months last year from organic growth. Average loans for the first nine months of 2010 decreased 0.1 percent compared to the first nine months of 2009. The Corporation’s net interest margin for the nine months ended September 30, 2010 and 2009 was 3.96% and 3.85%, respectively. Net interest margin increased 11 basis points as net interest income increased 4.6 percent while average earning assets increased 1.7 percent.

Page 27

First Citizens Banc Corp
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-Q
(Amounts in thousands, except share data)

The Corporation provides for loan losses through regular provisions to the allowance for loan losses. The provision is affected by net charge-offs on loans and changes in specific and general allocations required on the allowance for loan losses. Provisions for loan losses totaled $14,440 for the first nine months of 2010, compared to $8,216 for the same period in 2009. The Corporation’s provision for loan losses increased during 2010 as both net charge-offs and specific and general reserves required increased as a result of continued deterioration in local economic conditions. At the beginning of 2008, the Corporation reduced the period of time for which it reviewed loan charge-offs from three years to two years. Management believes the higher volume of loan charge-offs in the last two years are more indicative of future losses in the loan portfolio, and this trend continues in the first nine months of 2010.

Non-interest income for the first nine months of 2010 was $7,268, a decrease of $178 or 2.4 percent from $7,446 for the same period of 2009. Service charge fee income for the first nine months of 2010 was $3,410, down $179 or 5.0 percent over the same period of 2009. The decline is related to a reduced number of accounts using our overdraft services resulting in a decrease in overdraft income. Additionally, there was a decrease in the average fees collected per account. Trust fee income was $1,378, up $260 or 23.3 percent over the same period in 2009. The increase is related to the recoveries in the financial markets and the related effect on assets under management, as well as a general increase in assets under management. ATM fee income for the first nine months of 2010 was $1,344, up $110 or 8.9 percent over the first nine months of 2009. This increase can be attributed to a 25 percent increase in foreign transaction fees charged during the first quarter of 2010. Computer center item processing fee income for the first nine months of 2010 has declined by $116 or 37.3 percent over the same period of 2009. Fewer items processed in general, and fewer paper items processed, led to this decline. Bank owned life insurance contributed $354 to non-interest income during the first nine months of 2010. Net gain on sale of securities was $22, down $50, or 69.5 percent over the same period of 2009. Other non-interest income was $565, down $197 or 25.9 percent over the same period in 2009. This decrease is due to the resolution, during the first quarter in 2009, of three loans obtained in a merger which resulted in income of $237. These loans were recorded at fair value at the time of the merger and subsequently settled at a higher value.

Non-interest expense for the nine months of 2010 was $27,254, a decrease of $13, from $27,267 reported for the same period of 2009. Salary and other employee costs were $12,958, up $954 or 8.0 percent as compared to the same period of 2009. This increase is mainly due to a change in staffing and higher health care costs for the first nine months of 2010. The number of full-time equivalent employees increased during the first nine months of 2010 to 294.59, up 8.25, compared to the same period of 2009. Occupancy and equipment costs were $2,973, down $259 or 8.0 percent compared to the same period in 2009. Contracted data processing costs were $687, down $122, or 15.1 percent compared to last year. State franchise taxes decreased by $63 compared to the same period of 2009. Amortization expense decreased $53, or 5.5 percent from the nine months of 2009, as a result of scheduled amortization of intangible assets associated with mergers. FDIC assessments were down by $406 during the first nine months of 2010 compared to the same period of 2009. The decrease is due to the Special Emergency Assessment charged by the FDIC in 2009, but not in 2010. Professional service costs were $1,776, up $421 or 31.1 percent compared to the same period in 2009. The increase is due to consulting services for loan work outs and core banking software analysis and an increase related to hiring a consulting firm to assist with the resolution of certain larger collection items. Marketing expense accruals increased this year by $92 to $563 to accommodate planned advertising initiatives. ATM expenses were $537, down $15 or 2.7 percent compared to the same period in 2009. Other operating expenses were $4,899, down $562 or 10.3 percent compared to the same period of 2009. This decrease is mainly the result of the following: losses sustained on the sale of OREO properties decreased by $254, courier expenses decreased by $105, and trust data processing decreased by $27 compared to the first nine months of 2009.

Page 28

First Citizens Banc Corp
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-Q
(Amounts in thousands, except share data)

Income tax benefit for the first nine months of 2010 totaled $1,719 compared to an income tax expense of $48 for the first nine months of 2009. This was a decrease of $1,767. The decrease in the federal income taxes is mainly a result of total nontaxable securities income being a larger percentage of income before taxes, coupled with the large increase in loan loss provision this year.

Three Months Ended September 30, 2010 and 2009

The Corporation had a net loss of $1,393 for the three months ended September 30, 2010, a decrease of $1,892 from net income of $499 for the third quarter of 2009. Basic and diluted earnings per common share were $(0.22) for the third quarter of 2010, compared to basic and diluted income per common share of $0.03 for the same period in 2009. The primary reasons for the changes in net income are explained below.

Net interest income for the third quarter of 2010 was $10,450, an increase of $394 or 3.9 percent from $10,056 in the third quarter of 2009. Net interest income, the difference between interest income earned on interest-earning assets and interest expense incurred on interest-bearing liabilities, is the most significant component of the Corporation’s earnings. Net interest income is affected by changes in volume, rates and composition of interest-earning assets and interest-bearing liabilities. Average earning assets increased 2.1 percent from the third quarter last year from organic growth. Average loans for the quarter changed very little compared to the third quarter of 2009. The Corporation’s net interest margin for the three months ended September 30, 2010 and 2009 was 3.95% and 3.87%, respectively. Net interest margin increased 8 basis points as net interest income increased 3.9 percent while average earning assets increased 2.1 percent.

The Corporation provides for loan losses through regular provisions to the allowance for loan losses. The provision is affected by net charge-offs on loans and changes in specific and general allocations required on the allowance for loan losses. Provisions for loan losses totaled $6,100 for the third quarter of 2010, compared to $3,452 for the same period of 2009. The Corporation’s provision for loan losses increased during 2010 as both net charge offs and specific and general reserves required increased as a result of deterioration in local economic conditions. Management believes the higher volume of loan charge-offs in the last two years are more indicative of future losses in the loan portfolio, and this trend continued during the third quarter of 2010.

Page 29

First Citizens Banc Corp
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-Q
(Amounts in thousands, except share data)

Non-interest income for the third quarter of 2010 was $2,520, an increase of $81 or 3.3 percent from $2,439 in the third quarter of 2009. Service charge fee income for the third quarter of 2010 was $1,197, down $73 or 5.7 percent over the same period of 2009. The decline is related to a reduced number of accounts using our overdraft services resulting in a decrease in overdraft income. Additionally, there was a decrease in the average fees collected per account. Trust fee income was $457, up $76 or 19.9 percent over the same period in 2009. The increase is related to the recoveries in the financial markets and the related effect on assets under management, as well as a general increase in assets under management. ATM fee income for the third quarter of 2010 was $472, up $61 or 14.8 percent over the third quarter of 2009. ATM income increased due to a 25 percent increase in foreign transaction fees charged during the first quarter of 2010. Item processing fee income for the third quarter of 2010 was $61, down $11 or 15.3 percent over the third quarter of 2009. Fewer items processed in general, and fewer paper items processed, led to this decline. Bank owned life insurance contributed $116 to non-interest income during the third quarter of 2010. Net gain on sale of securities was $7, down $12, or 63.2 percent over the same period of 2009. Other non-interest income was $210, up $41 over the same period in 2009.

Non-interest expense for the third quarter of 2010 was $9,266, an increase of $703 or 8.2 percent, from $8,563 reported for the same quarter of 2009. Salary and other employee costs were $4,590, up $902 or 24.5 percent as compared to the third quarter of 2009. This increase is mainly due to a change in staffing and higher health care costs for the first nine months of 2010. Occupancy costs were $604, up $24 or 4.1 percent compared to the same period of 2009. Equipment expenses were $365, down $61 or 14.3 percent compared to the same period of 2009. Contracted data processing costs were $200, down $51, or 20.3 percent compared to last year, due to renegotiated rates on our core processing system. State franchise taxes decreased by $28 compared to the same period in 2009. Amortization expense decreased $17, or 5.3 percent from the third quarter in 2009, as a result of scheduled amortization of intangible assets associated with mergers. FDIC assessments were down by $29 during the third quarter in 2010 compared to the same period in 2009. Professional service costs were $689, up $252 or 57.7 percent compared to the same period in 2009. The increase is due to consulting services related to core processing system assessment and contract renegotiations. Other operating expenses were $1,881, down $289 or 13.3 percent compared to the same period in 2009. This decrease is mainly the result of the following: telephone expenses decreased by $27, OREO expenses decreased by $148, courier expenses decreased by $45 compared to first nine months of 2009.

Income tax benefit for the third quarter of 2010 totaled $1,003 compared to an income tax benefit of $19 for the same period of 2009. This was an increase of $984. The increase in the federal income tax benefit is mainly a result of total nontaxable securities income being a larger percentage of income before taxes.

Page 30

First Citizens Banc Corp
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-Q
(Amounts in thousands, except share data)

Capital Resources

Shareholders’ equity totaled $98,953 at September 30, 2010 compared to $98,797 at December 31, 2009. The increase in shareholders’ equity resulted primarily from a $2,641 net change in the unrealized gain on securities. This was offset by preferred dividends paid of $869 and year-to-date losses of $1,616. All of the Corporation’s capital ratios exceeded the regulatory minimum guidelines as of September 30, 2010 and December 31, 2009 as identified in the following table:


	Total Risk
	Based			Tier I Risk			Leverage
	Capital			Based Capital			Ratio
Corporation Ratios — September 30, 2010		15.3	%		14.1	%		9.7	%
Corporation Ratios — December 31, 2009		14.3	%		13.0	%		9.6	%
For Capital Adequacy Purposes		8.0	%		4.0	%		4.0	%
To Be Well Capitalized Under Prompt Corrective Action Provisions		10.0	%		6.0	%		5.0	%

The Corporation did not pay a cash dividend on its common shares during the first three quarters of 2010. The Corporation paid a dividend of $.15 per common share on February 1, 2009, $.07 per common share on May 1, 2009 and $.01 per common share on August 1, 2009. The Corporation also paid a 5% cash dividend on its preferred shares of $290 each on February 16, 2010, May 17, 2010 and August 16, 2010.

Liquidity

Citizens maintains a conservative liquidity position. All securities are classified as available for sale. Securities with maturities of one year or less totaled $2,244, or 1.2 percent of the total security portfolio. The available for sale portfolio helps to provide the Corporation with the ability to meet its funding needs. The Consolidated Statements of Cash Flows (Unaudited) contained in the consolidated financial statements detail the Corporation’s cash flows from operating activities resulting from net earnings.

Page 31

First Citizens Banc Corp
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Form 10-Q
(Amounts in thousands, except share data)

Cash from operations for the quarter ended September 30, 2010 was $13,093. This includes a net loss of $1,616 plus net adjustments of $14,709 to reconcile net earnings to net cash provided by operations. Cash from investing activities was $18,050 for the nine months ended September 30, 2010. The use of cash from investing activities is primarily due to securities purchases. Cash received from maturing and called securities totaled $81,010. This increase in cash was offset by the purchase of securities of $59,386 and loans made to customers, net of principal collected of $4,713. Cash from financing activities in the first nine months of 2010 totaled $10,020. A major source of cash for financing activities is the net change in deposits. Cash provided by the net change in deposits was $46,869 in the first nine months of 2010. The large increase in deposits was primarily due to increases in noninterest-bearing deposits, money market savings accounts, public money market savings accounts and CDARS accounts, which added $12,859, $9,919, $16,990 and $7,199, respectively, in deposits during the first nine months of 2010. Cash was used mainly by the decreases in FHLB overnight funds and a maturity of two FHLB long-term advances of $5,000 and $30,000, respectively. Cash from operating activities and financing activities exceeded cash from investing activities by $5,063. Cash and cash equivalents increased from $26,942 at December 31, 2009 to $68,105 at September 30, 2010 as a result of the increase in cash during the first nine months.

Future loan demand of Citizens may be funded by increases in deposit accounts, proceeds from payments on existing loans, the maturity of securities, and the sale of securities classified as available for sale. Additional sources of funds may also come from borrowing in the Federal Funds market and/or borrowing from the FHLB. Citizens, through its correspondent banks, maintains federal funds borrowing lines totaling $10,000. As of September 30, 2010, Citizens had total credit availability with the FHLB of $115,915 of which $50,334 was outstanding.

Page 32

First Citizens Banc Corp
Form 10-Q
(Amounts in thousands, except share data)

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. All of the Corporation’s transactions are denominated in U.S. dollars with no specific foreign exchange exposure.

Interest-rate risk is the exposure of a banking organization’s financial condition to adverse movements in interest rates. Accepting this risk can be an important source of profitability and shareholder value. However, excessive levels of interest-rate risk can pose a significant threat to the Corporation’s earnings and capital base. Accordingly, effective risk management that maintains interest-rate risk at prudent levels is essential to the Corporation’s safety and soundness.

Evaluating a financial institution’s exposure to changes in interest rates includes assessing both the adequacy of the management process used to control interest-rate risk and the organization’s quantitative level of exposure. When assessing the interest-rate risk management process, the Corporation seeks to ensure that appropriate policies, procedures, management information systems and internal controls are in place to maintain interest-rate risk at prudent levels with consistency and continuity. Evaluating the quantitative level of interest rate risk exposure requires the Corporation to assess the existing and potential future effects of changes in interest rates on its consolidated financial condition, including capital adequacy, earnings, liquidity and, where appropriate, asset quality.

The Federal Reserve Board, together with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, adopted a Joint Agency Policy Statement on interest-rate risk, effective June 26, 1996. The policy statement provides guidance to examiners and bankers on sound practices for managing interest-rate risk, which will form the basis for ongoing evaluation of the adequacy of interest-rate risk management at supervised institutions. The policy statement also outlines fundamental elements of sound management that have been identified in prior Federal Reserve guidance and discusses the importance of these elements in the context of managing interest-rate risk. Specifically, the guidance emphasizes the need for active board of director and senior management oversight and a comprehensive risk-management process that effectively identifies, measures, and controls interest-rate risk. Financial institutions derive their income primarily from the excess of interest collected over interest paid. The rates of interest an institution earns on its assets and owes on its liabilities generally are established contractually for a period of time. Since market interest rates change over time, an institution is exposed to lower profit margins (or losses) if it cannot adapt to interest-rate changes. For example, assume that an institution’s assets carry intermediate- or long-term fixed rates and that those assets were funded with short-term liabilities. If market interest rates rise by the time the short-term liabilities must be refinanced, the increase in the institution’s interest expense on its liabilities may not be sufficiently offset if assets continue to earn at the long-term fixed rates. Accordingly, an institution’s profits could decrease on existing assets because the institution will have either lower net interest income or, possibly, net interest expense. Similar risks exist when assets are subject to contractual interest-rate ceilings, or rate sensitive assets are funded by longer-term, fixed-rate liabilities in a decreasing-rate environment.

Page 33

First Citizens Banc Corp
Form 10-Q
(Amounts in thousands, except share data)

Several techniques may be used by an institution to minimize interest-rate risk. One approach used by the Corporation is to periodically analyze its assets and liabilities and make future financing and investment decisions based on payment streams, interest rates, contractual maturities, and estimated sensitivity to actual or potential changes in market interest rates. Such activities fall under the broad definition of asset/liability management. The Corporation’s primary asset/liability management technique is the measurement of the Corporation’s asset/liability gap, that is, the difference between the cash flow amounts of interest sensitive assets and liabilities that will be refinanced (or repriced) during a given period. For example, if the asset amount to be repriced exceeds the corresponding liability amount for a certain day, month, year, or longer period, the institution is in an asset sensitive gap position. In this situation, net interest income would increase if market interest rates rose or decrease if market interest rates fell. If, alternatively, more liabilities than assets will reprice, the institution is in a liability sensitive position. Accordingly, net interest income would decline when rates rose and increase when rates fell. Also, these examples assume that interest rate changes for assets and liabilities are of the same magnitude, whereas actual interest rate changes generally differ in magnitude for assets and liabilities.

Several ways an institution can manage interest-rate risk include selling existing assets or repaying certain liabilities; matching repricing periods for new assets and liabilities, for example, by shortening terms of new loans or securities; and hedging existing assets, liabilities, or anticipated transactions. An institution might also invest in more complex financial instruments intended to hedge or otherwise change interest-rate risk. Interest rate swaps, futures contracts, options on futures, and other such derivative financial instruments often are used for this purpose. Because these instruments are sensitive to interest rate changes, they require management expertise to be effective. The Corporation has not purchased derivative financial instruments in the past and does not currently intend to purchase such instruments in the near future. Financial institutions are also subject to prepayment risk in falling rate environments. For example, mortgage loans and other financial assets may be prepaid by a debtor so that the debtor may refinance its obligations at new, lower rates. Prepayments of assets carrying higher rates reduce the Corporation’s interest income and overall asset yields. A large portion of an institution’s liabilities may be short-term or due on demand, while most of its assets may be invested in long-term loans or securities. Accordingly, the Corporation seeks to have in place sources of cash to meet short-term demands. These funds can be obtained by increasing deposits, borrowing, or selling assets. FHLB advances and wholesale borrowings may also be used as important sources of liquidity for the Corporation.

The following table provides information about the Corporation’s financial instruments that were sensitive to changes in interest rates as of December 31, 2009 and September 30, 2010, based on certain prepayment and account decay assumptions that management believes are reasonable. The table shows the changes in the Corporation’s net portfolio value (in amount and percent) that would result from hypothetical interest rate increases of 200 basis points and 100 basis points and an interest rate decrease of 100 basis points at September 30, 2010 and December 31, 2009. The Corporation had no derivative financial instruments or trading portfolio as of December 31, 2009 or September 30, 2010. Expected maturity date values for interest-bearing core deposits were calculated based on estimates of the period over which the deposits would be outstanding. The Corporation’s borrowings were tabulated by contractual maturity dates and without regard to any conversion or repricing dates.

Page 34

First Citizens Banc Corp
Form 10-Q
(Amounts in thousands, except share data)

Net Portfolio Value


	September 30, 2010								December 31, 2009
Change in	Dollar		Dollar			Percent			Dollar		Dollar			Percent
Rates	Amount		Change			Change			Amount		Change			Change
+200bp		137,496		(1,883	)		-1	%		143,173		(6,648	)		-4	%
+100bp		141,792		2,413			2	%		151,656		1,835			1	%
Base		139,379		—			—			149,821		—			—
-100bp		156,171		16,792			12	%		157,937		8,116			5	%

The change in net portfolio value from December 31, 2009 to September 30, 2010, is primarily a result of two factors. The yield curve has shifted downward since the end of the year and both the mix and overall size of assets and funding sources have changed. Assets have increased and the mix also shifted away from securities toward cash. Funding sources increased while the funding mix shifted from borrowed money to deposits. Beyond the change in the base level of net portfolio value, overall projected movements, given specific changes in rates, would lead similar changes in the net portfolio value as the end of 2009, but slightly larger in magnitude for both rates up and rates down. In the case of rates down, the magnitude of change is actually more than slight. A 100 basis point upward movement in rates would lead to a faster decrease in the fair value of liabilities, compared to assets, which would lead to an increase in the net portfolio value. This effect is opposite for a 200 basis point movement in rates, due to projected changes related to the investment portfolio. A downward change in rates would lead to an increase in the net portfolio value as the fair value of liabilities would increase much more slowly than the fair value of the asset portfolio.

Page 35

First Citizens Banc Corp
Form 10-Q
(Amounts in thousands, except share data)

ITEM 4. Controls and Procedures Disclosure

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of September 30, 2010, were effective.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Corporation’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the Corporation’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

Page 36

First Citizens Banc Corp
Other Information
Form 10-Q

Part II — Other Information

Item 1. Legal Proceedings

There are no pending legal proceedings to which the Corporation or any of its subsidiaries is a party or to which any of their property is subject, except for routine legal proceedings to which Citizens is a party incidental to its banking business. The Corporation considers none of those proceedings to be material.

Item 1A. Risk Factors

There are certain risks and uncertainties in our business that could cause our actual results to differ materially from those anticipated. A detailed discussion of our risk factors is included in “Item 1A. Risk Factors” of Part I of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2009. The following information updates certain of our risk factors and should be read in conjunction with the risk factors disclosed in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2009.

Changes in local and national economic conditions could adversely affect our earnings, as our borrowers’ ability to repay loans and the value of the collateral securing our loans decline.

Our success depends to a significant extent upon local and national economic conditions, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, money supply and other factors beyond our control can adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings and our capital. Because we have a significant amount of real estate loans, additional decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings and cash flows. The vast majority of the loans made by Citizens are to individuals and businesses located in Ohio. As a result, a significant continued decline in the economy in Ohio could have a materially adverse effect on our financial condition and results of operations.

The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act may significantly affect the business activities of the Corporation.

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The Dodd-Frank Act represents a sweeping reform of the regulatory framework for depository institutions, bank and thrift holding companies and other U.S. financial institutions. The Dodd-Frank Act includes a broad range of legislation intended to strengthen oversight and regulation of banks and nonbank financial institutions, enhance regulation of over-the-counter derivatives and asset-backed securities, imposes corporate governance and executive compensation reforms on all public companies, creates new requirements for hedge fund and private equity fund advisers and establishes new rules for credit rating agencies. Certain of the provisions of the Dodd-Frank Act may significantly affect the business activities of the Corporation. However, the Dodd-Frank Act is the most far-reaching financial services law ever signed into law, and its enactment marks only the beginning of a process that will take months, if not years, to fully develop. Many of the significant provisions of the Dodd-Frank Act have extended implementation periods and delayed effective dates, and will require regulatory action and rulemaking by federal regulatory authorities to either implement the standards set out in the legislation or adopt new standards. As a result, the full scope and effect of the Dodd-Frank Act on the U.S. financial system may not be known for several years, and the Corporation cannot predict the extent to which the business activities of the Corporation could be affected by this legislation.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Page 37

First Citizens Banc Corp

Index to Exhibits

Form 10-Q

Exhibits


Exhibit			Description	Location
	3.1	(a)	Articles of Incorporation, as amended, of First Citizens Banc Corp.	Filed as Exhibit 3.1 to First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2005, filed on March 16, 2006 and incorporated herein by reference.
	3.1	(b)	Certificate of Amendment by Shareholders or Members as filed with the Ohio Secretary of State on January 12, 2009, evidencing the adoption by the shareholders of First Citizens Banc Corp on January 5, 2009 of an amendment to Article FOURTH to authorize the issuance of up to 200,000 preferred shares, without par value.	Filed as Exhibit 3.1(b) to First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2008, filed on March 16, 2009 and incorporated herein by reference.
	3.1	(c)	Certificate of Amendment by Directors or Incorporators to Articles, filed with the Ohio Secretary of State on January 21, 2009, evidencing adoption of an amendment by the Board of Directors of First Citizens Banc Corp to Article FOURTH to establish the express terms of the Fixed Rate Cumulative Perpetual Preferred Shares, Series A, of First Citizens.	Filed as Exhibit 3.1 to First Citizens Banc Corp’s Current Report on Form 8-K dated and filed January 26, 2009, and incorporated herein by reference.
	3.2		Amended and Restated Code of Regulations of First Citizens Banc Corp (adopted April 17, 2007).	Filed as Exhibit 3.2 to First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2008, filed on March 16, 2009 and incorporated herein by reference.
	31.1		Rule 13a-14(a)/15-d-14(a) Certification of Chief Executive Officer.	Included herewith
	31.2		Rule 13a-14(a)/15-d-14(a) Certification of Chief Financial Officer.	Included herewith
	32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Included herewith
	32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Included herewith

Page 40


PART I. Financial Information

Item 1. Financial Statements:

Consolidated Balance Sheets (Unaudited) September 30, 2010 and December 31, 2009			3

Consolidated Statements of Income (Unaudited) Three and nine months ended September 30, 2010 and 2009			4

Consolidated Statements of Comprehensive Income (Unaudited) Three and nine months ended September 30, 2010 and 2009			5

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) Nine months ended September 30, 2010			6

Condensed Consolidated Statement of Cash Flows (Unaudited) Nine months ended September 30, 2010 and 2009			7

Notes to Interim Consolidated Financial Statements (Unaudited)			8-23

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			24-32

Item 3. Quantitative and Qualitative Disclosures about Market Risk			33-35

Item 4. Controls and Procedures			36

PART II. Other Information

Item 1. Legal Proceedings			37

Item 1A. Risk Factors			37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			37

Item 3. Defaults upon Senior Securities			37

Item 4. [Removed and Reserved]			38

Item 5. Other Information			38

Item 6. Exhibits			38

Signatures			39

Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2


	Three months ended						Nine months ended
	September 30,						September 30,
	2010			2009			2010			2009
Net income (loss)	$	(1,393	)	$	499		$	(1,616	)	$	1,627

Unrealized holding gains on available for sale securities		883			2,160			4,002			1,891
Reclassification adjustment for gains and (losses) recognized in income		(7	)		19			(22	)		72


Net unrealized gains		876			2,179			3,980			1,963
Tax effect		(298	)		(741	)		(1,353	)		(667	)

Total other comprehensive gain		578			1,438			2,627			1,296

Comprehensive income (loss)	$	(815	)	$	1,937		$	1,011		$	2,923


Exhibit No. 31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
Exhibit No. 31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
Exhibit No. 32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit No. 32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


First Citizens Banc Corp

/s/ James O. Miller James O. Miller		November 9, 2010 Date
President, Chief Executive Officer

/s/ Todd A. Michel Todd A. Michel		November 9, 2010 Date
Senior Vice President, Controller

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents