-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N0jI6btF9S9Ylzxi8F1tby3Ovsw4ZVisXCHUYAHfYEcC82jRm+4rLeTor0Yd4i0n CblQq0cIh+7LOqq13u7U1w== 0000950152-96-006115.txt : 19961118 0000950152-96-006115.hdr.sgml : 19961118 ACCESSION NUMBER: 0000950152-96-006115 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST CITIZENS BANC CORP /OH CENTRAL INDEX KEY: 0000944745 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 341558688 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-25980 FILM NUMBER: 96664152 BUSINESS ADDRESS: STREET 1: 100 EAST WATER ST STREET 2: P O BOX 5016 CITY: SANDUSKY STATE: OH ZIP: 44870 BUSINESS PHONE: 4196254121 MAIL ADDRESS: STREET 1: 100 EAST WATER ST STREET 2: P O BOX 5016 CITY: SANDUSKY STATE: OH ZIP: 44870 10-Q 1 FIRST CITIZEN'S BANCORP QUARTERLY REPORT 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended:.........................September 30, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from................to................... Commission File Number:.....................................0-25980 First Citizens Banc Corp ------------------------ (Exact name of Registrant as specified in its charter) Ohio 34-1558688 ---- ---------- State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification Number) 100 East Water Street, Sandusky, Ohio 44870 ----------------------------------------------------- (Address of principle executive offices) (Zip Code) Registrant's telephone number, including area code: (419) 625-4121 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X Yes ------ No ------ Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date. Common Stock, no par value Outstanding at November 12, 1996 3,051,504 common shares 2 FIRST CITIZENS BANC CORP Index
PART I. Financial Information ITEM 1. Financial Statements:(Unaudited) Consolidated Balance Sheets September 30, 1996 and December 31, 1995.............................................3 Consolidated Statements of Income Three and nine months ended September 30, 1996 and 1995..............................4 Consolidated Statements of Shareholders' Equity Three and nine months ended September 30, 1996 and 1995..............................5 Consolidated Statements of Cash Flows Nine months ended September 30, 1996 and 1995........................................6 Notes to Consolidated Financial Statements............................................7-13 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...........................................................14-17 PART II. Other Information ITEM 1. Legal Proceedings ......................................................................18 ITEM 2. Changes in Securities ..................................................................18 ITEM 3. Defaults upon Senior Securities ........................................................18 ITEM 4. Submission of Matters to a Vote of Security Holders .................................18-19 ITEM 5. Other Information ...................................................................19-20 ITEM 6. (a) Exhibits ...........................................................................21 (b) Reports on Form 8-K ................................................................21 SIGNATURES ....................................................................................22
3 FIRST CITIZENS BANC CORP Consolidated Balance Sheets
(Unaudited) September 30 December 31 Assets 1996 1995 ---------------- ---------------- Cash and due from banks $ 12,953,420 $ 16,295,910 Federal funds sold 9,450,000 7,915,000 Investment and mortgage-backed securities (Note 2) Available-for-sale 59,342,986 57,711,219 Held-to-maturity 11,359,219 16,735,757 ---------------- ---------------- Total investment and mortgage-backed securities 70,702,205 74,446,976 Loans (Note 3) 200,251,342 195,868,543 Less: Allowance for loan losses (Note 4) (2,648,865) (2,602,000) ---------------- ---------------- Net Loans 197,602,477 193,266,543 Office premises and equipment, net 6,205,207 6,458,747 Accrued interest receivable 2,177,319 2,369,641 Goodwill 1,729,849 1,881,000 Other assets 1,902,270 1,428,084 ---------------- ---------------- Total assets $ 302,722,747 $ 304,061,901 ================ ================ Liabilities Deposits Non-interest bearing deposits $ 21,331,989 $ 29,147,854 Interest-bearing deposits, including certificates of deposit 217,169,912 213,194,330 ---------------- ---------------- Total deposits 238,501,901 242,342,184 Federal Home Loan Bank borrowings 15,957,237 16,789,953 Securities sold under agreements to repurchase 9,499,799 8,434,050 U. S. Treasury interest-bearing demand notes payable 1,857,538 319,380 Accrued interest, taxes and other expenses 1,667,491 2,369,543 ---------------- ---------------- Total liabilities 267,483,966 270,255,110 Shareholders' Equity Capital Stock, no par value; 10,000,000 shares authorized, 3,051,504 shares issued and outstanding at September 30, 1996; $20.00 par value; 5,600,000 shares authorized, 762,876 shares issued and outstanding at December 31, 1995 15,257,520 15,257,520 Retained Earnings 19,998,483 18,160,292 Unrealized gain/(loss) on securities available for sale (17,222) 388,979 ---------------- ---------------- Total shareholders' equity 35,238,781 33,806,791 ---------------- ---------------- Total liabilities and shareholders' equity $ 302,722,747 $ 304,061,901 ================ ================
See notes to interim consolidated financial statements. Page 3 4 FIRST CITIZENS BANC CORP Consolidated Statements of Income (Unaudited)
Three months ended Nine months ended September 30, September 30, -------------------------- --------------------------- 1996 1995 1996 1995 Interest Income: Interest and fees on loans $ 4,312,625 $ 4,234,242 $12,741,121 $12,278,597 Interest and dividends on investment securities U. S. Treasury securities and obligations of U.S. government corporations & agencies 571,728 540,740 1,675,824 1,643,011 Obligations of states and political subdivisions 343,840 400,428 1,086,749 1,235,374 Other securities 50,330 104,616 190,258 334,126 Interest on federal funds sold 155,447 176,458 372,017 402,320 Other interest income 59,878 53,364 176,650 159,067 ----------- ----------- ----------- ----------- Total interest income 5,493,848 5,509,848 16,242,619 16,052,495 Interest Expense: Interest on deposits 1,983,765 2,052,096 5,966,755 5,812,693 Interest on FHLB borrowings 231,010 246,559 704,885 750,501 Interest on other borrowings 107,984 115,564 268,902 297,724 ----------- ----------- ----------- ----------- Total interest expense 2,322,759 2,414,219 6,940,542 6,860,918 ----------- ----------- ----------- ----------- Net Interest Income 3,171,089 3,095,629 9,302,077 9,191,577 Provision for loan losses 89,500 83,000 238,500 239,000 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 3,081,589 3,012,629 9,063,577 8,952,577 Noninterest income: Computer center service charges and retail sales 501,171 460,657 1,556,407 1,291,764 Service charges on deposit accounts 127,464 121,722 364,891 329,469 Investment security gain/(loss) 2,000 2,000 17,850 4,500 Other operating income 220,420 220,451 589,404 525,441 ----------- ----------- ----------- ----------- Total noninterest income 851,055 804,830 2,528,552 2,151,174 Noninterest expenses: Salaries and wages and employee benefits 1,315,957 1,275,687 3,932,921 3,795,307 Net occupancy expense 141,857 166,642 414,045 409,182 Equipment 158,310 141,240 467,120 414,269 FDIC Premiums 1,000 73,374 3,500 350,189 Franchise Tax 100,417 107,683 319,726 349,667 Professional Fees 140,359 133,431 402,290 400,176 Other operating expenses 667,319 574,271 1,889,552 1,702,241 ----------- ----------- ----------- ----------- Total noninterest expenses 2,525,219 2,472,328 7,429,154 7,421,031 ----------- ----------- ----------- ----------- Income before federal income taxes 1,407,425 1,345,131 4,162,975 3,682,720 Federal income taxes 396,825 362,832 1,157,584 942,256 ----------- ----------- ----------- ----------- Net Income $ 1,010,600 $ 982,299 $ 3,005,391 $ 2,740,464 =========== =========== =========== =========== Per share data (based on 3,051,504 shares) Earnings per share $ 0.33 $ 0.32 $ 0.98 $ 0.90 =========== =========== =========== =========== Dividends declared $ 0.1300 $ 0.4875 $ 0.3825 $ 0.7125 =========== =========== =========== ===========
See notes to interim consolidated financial statements Page 4 5 FIRST CITIZENS BANC CORP Consolidated Statement of Shareholders' Equity (Unaudited)
Three months ended Nine months ended September 30, September 30, ---------------------------- ----------------------------- 1996 1995 1996 1995 Balance at beginning of period $ 34,499,182 $ 32,981,359 $ 33,806,791 $ 31,910,252 Net income 1,010,600 982,299 3,005,391 2,740,464 Cash dividends (396,696) (1,487,608) (1,167,200) (2,174,666) Market adjustment on securities available for sale 125,695 0 (406,200) 0 ------------ ------------ ------------ ------------ Balance at end of period $ 35,238,781 $ 32,476,050 $ 35,238,781 $ 32,476,050 ============ ============ ============ ============
See notes to interim consolidated financial statements Page 5 6 FIRST CITIZENS BANC CORP Consolidated Statement of Cash Flows (Unaudited)
Nine months ended September 30, ----------------------------------- 1996 1995 Cash Flows from Operating Activities: Net Income $ 3,005,391 $ 2,740,464 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization of office premises and equipment 458,325 442,808 Gain on disposal of office premises and equipment (2,343) 0 Amortization of goodwill 151,151 151,151 Provision for loan losses 238,500 239,000 Gains on investment securities (17,850) (4,500) Change in deferred loan fees (1,698) (39,635) Net amortization of investment security premiums and discounts 97,783 98,097 Change in accrued interest receivable 192,322 (180,681) Change in other assets (474,186) (195,675) Change in accrued interest, taxes and other expenses (492,796) 704,132 -------------- -------------- Net cash from operating activities 3,154,599 3,955,161 Cash Flows from Investing Activities: Maturity of deposits in other bank 0 0 Maturities and calls of investment securities, held-to-maturity 5,340,226 17,483,486 Purchases of investment securities, held-to-maturity (9,891,620) (10,494,193) Maturities and calls of investment securities, available-for-sale 7,600,777 60,358 Loans made to customers, net of principal collected (4,572,736) (7,855,572) Change in federal funds sold (1,535,000) (6,218,000) Proceeds from the sale of office premises and equipment 325,000 0 Purchases of office premises and equipment (527,442) (598,704) -------------- -------------- Net cash from investing activities (3,260,795) (7,622,625) Cash Flows from Financing Activities: Proceeds from FHLB borrowings 0 0 Repayments of FHLB borrowings (832,717) (787,100) Change in federal funds purchased 0 0 Change in deposits (3,840,283) (573,331) Change in securities sold under agreements to repurchase 1,065,749 (922,074) Change in U. S. Treasury interest-bearing demand notes payable 1,538,157 1,171,631 Cash dividends paid (1,167,200) (2,174,666) -------------- -------------- Net cash from financing activities (3,236,294) (3,285,540) Increase (decrease) in cash and due from banks (3,342,490) (6,953,004) Cash and due from banks at beginning of period 16,295,910 19,127,275 -------------- -------------- Cash and due from banks at end of period $ 12,953,420 $ 12,174,271 ============== ============== Supplemental disclosures: Cash paid during the period for: Interest $ 7,085,265 $ 6,640,148 ============== ============== Federal income taxes $ 1,105,000 $ 655,000 ============== ==============
See notes to interim consolidated financial statements Page 6 7 First Citizens Banc Corp Notes to Interim Consolidated Financial Statements (Unaudited) Form 10-Q - -------------------------------------------------------------------------------- (1) Consolidated Financial Statements The consolidated financial statements include the accounts of First Citizens Banc Corp (Corporation) and it wholly-owned subsidiaries, The Citizens Banking Company (Citizens), The Castalia Banking Company (Castalia), SCC Resources, Inc. (SCC), and R. A. Reynolds Appraisal Service, Inc. (Reynolds). All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated balance sheets as of September 30, 1996 and December 31, 1995; the consolidated statements of income for the three month periods ended September 30, 1996 and 1995, and for the nine month periods ended September 30, 1996 and 1995; the consolidated statements of shareholders' equity for the three months ended September 30, 1996 and 1995, and for the nine month periods ended September 30, 1996 and 1995; and the consolidated statements of cash flows for the nine month periods ended September 30, 1996 and 1995 have been prepared by the Corporation without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the Corporation's financial position as of September 30, 1996 and its results of operations and changes in cash flows for the periods ended September 30, 1996 and 1995 have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. The results of operations for the period ended September 30, 1996 are not necessarily indicative of the operating results for the full year. Reference is made to the accounting policies of the Corporation described in the notes to financial statements contained in the Corporations's 1995 annual report. The Corporation has consistently followed these policies in preparing this form 10-Q. Page 7 8 First Citizens Banc Corp Notes to Interim Consolidated Financial Statements (Unaudited) Form 10-Q - -------------------------------------------------------------------------------- (2) Investment and Mortgage-Backed Securities The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of the investment and mortgage-backed securities, as presented in the consolidated balance sheets at September 30, 1996 and December 31, 1995 are as follows:
September 30, 1996 Gross Gross Amortized Unrealized Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Fair Value ----------------- ----------------- -------------- --------------- U.S. Treasury securities and obligations of U.S. government corporations and agencies $39,001,848 $52,666 ($326,266) $38,728,248 Obligations of state and political subdivisions 16,901,151 376,507 (128,301) 17,149,357 Other securities, including mortgage- backed securities 3,466,081 0 (700) 3,465,381 ----------------- ----------------- ------------- ------------ $59,369,080 $429,173 ($455,267) $59,342,986 =========== ======== ========== ===========
September 30, 1996 Gross Gross Amortized Unrealized Unrealized Estimated Fair HELD TO MATURITY Cost Gains Losses Value ----------------- ----------------- ----------------- ------------------ U.S. Treasury securities and obligations of U.S. government corporations and agencies $1,000,000 $22,500 $0 $1,022,500 Obligations of state and political subdivisions 7,470,533 171,163 (8,757) 7,632,939 Other securities, including mortgage- backed securities 2,888,686 7,602 (21,166) 2,875,122 ---------------- ---------------- ---------------- ----------------- $11,359,219 $201,265 ($29,923) $11,530,561 =========== ======== ========= ===========
Page 8 9 First Citizens Banc Corp Notes to Interim Consolidated Financial Statements (Unaudited) Form 10-Q - --------------------------------------------------------------------------------
December 31, 1995 Gross Gross Amortized Unrealized Unrealized Estimated Fair AVAILABLE FOR SALE Cost Gains Losses Value ------------- -------------- ----------------- --------------- U.S. Treasury securities and obligations of U.S. government corporations and agencies $37,032,554 $210,723 ($105,141) $37,138,136 Obligations of state and political subdivisions 16,714,307 556,352 (72,822) 17,197,837 Other securities, including mortgage- backed securities 3,374,996 250 0 3,375,246 ------------- -------------- ----------------- --------------- $57,121,857 $767,325 ($177,963) $57,711,219 =========== ======== ========== ===========
December 31, 1995 Gross Gross Amortized Unrealized Unrealized Estimated Fair HELD TO MATURITY Cost Gains Losses Value ------------- -------------- ----------------- --------------- U.S. Treasury securities and obligations of U.S. government corporations and agencies $1,500,000 $51,719 $0 $1,551,719 Obligations of states and political subdivisions 10,380,035 312,217 (12,466) 10,679,786 Other securities, including mortgage- backed securities 4,855,722 27,928 (16,215) 4,867,435 ------------- -------------- ----------------- --------------- $16,735,757 $391,864 ($28,681) $17,098,940 =========== ======== ========= ===========
Page 9 10 First Citizens Banc Corp Notes to Interim Consolidated Financial Statements (Unaudited) Form 10-Q - -------------------------------------------------------------------------------- The amortized cost and estimated fair value of debt securities at September 30, 1996, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.
Estimated Fair Amortized Cost Value AVAILABLE FOR SALE Due in one year or less $16,346,362 $16,386,816 Due after one year through five years 29,193,340 29,115,600 Due after five years through ten years 9,348,414 9,367,976 Due after ten years 1,014,883 1,007,214 Mortgage-backed securities 50,631 49,930 Other securities 3,415,450 3,415,450 ---------------------- ---------------------- Total securities available for sale $59,369,080 $59,342,986 ====================== ====================== HELD TO MATURITY Due in one year or less $2,550,446 $2,563,760 Due after one year through five years 5,920,087 6,091,680 Mortgage-backed securities 2,888,686 2,875,121 ---------------------- ---------------------- Total securities held to maturity $11,359,219 $11,530,561 ====================== ======================
No securities were sold during 1996 or 1995. Securities called or settled by the issuer resulted in gains of $17,850 for the nine months ended September 30, 1996 and $4,500 for the nine months ended September 30, 1995. Investment securities with a carrying value of approximately $36,963,000 and $31,826,000 were pledged as of September 30, 1996 and December 31, 1995, respectively, to secure public deposits, other deposits and liabilities as required by law. Page 10 11 First Citizens Banc Corp Notes to Interim Consolidated Financial Statements (Unaudited) Form 10-Q - -------------------------------------------------------------------------------- (3) Loans Loans as presented in the consolidated balance sheets are comprised of the following classifications:
9/30/96 12/31/95 -------------- ------------- Commercial & agriculture $ 41,353,731 $ 45,024,037 Real estate - mortgage 126,920,636 120,782,608 Real estate - construction 2,250,334 1,129,624 Consumer loans 28,986,926 28,983,885 Credit card and other 1,906,933 1,117,305 Deferred Loan Fees (1,167,218) (1,168,916) -------------- ------------- Total loans $200,251,342 $195,868,543 ============ ============
(4) Allowance for Loan Losses A summary of the activity in the allowance for loan losses for the nine months ended September 30, 1996 and September 30, 1995 is as follows:
1996 1995 ------------ ------------ Balance January 1, $2,602,000 $2,390,000 Loans Charged Off (288,831) (174,000) Recoveries of Loans 97,196 116,000 Provision for loan losses 238,500 239,000 ------------ ------------ Balance September 30, $2,648,865 $2,571,000 ========== ==========
Page 11 12 First Citizens Banc Corp Notes to Interim Consolidated Financial Statements (Unaudited) Form 10-Q - -------------------------------------------------------------------------------- Information regarding impaired loans is as follows for the nine months ended September 30.
1996 1995 ------------ ------------ Average investment in impaired loans $1,984,408 $3,232,167 Interest income recognized on impaired loans including interest income recognized on cash basis $102,421 $225,644 Interest income recognized on impaired loans on cash basis $2,338 $13,115 Information regarding impaired loans at September 30, 1996 and December 31, 1995 is as follows: 9/30/96 12/31/95 ------------ ------------ Balance impaired loans $1,558,000 $2,338,000 Less portion for which no allowance for loan losses is allocated $0 $1,205,000 Portion of impaired loan balance for which an allowance for credit losses is allocated $1,558,000 $1,133,000 Portion of allowance for loan losses allocated to the impaired loan balance $389,000 $268,000
(5) Commitments, Contingencies and Off-balance Sheet Risk The Bank subsidiaries are parties to financial instruments with off-balance sheet risk in the normal course of business to meet financing needs of their customers. These include commitments to make or purchase loans, undisbursed lines of credit, undisbursed credit card balances and letters of credit. The Banks' exposure to credit loss in the event of nonperformance by the other party to the financial instrument is represented by the contractual amount of those instruments. The Banks follow the same credit policy to make such commitments as they use for loans recorded on the balance sheet. Since many commitments to make loans expire without being used, the amount does not necessarily Page 12 13 First Citizens Banc Corp Notes to Interim Consolidated Financial Statements (Unaudited) Form 10-Q - -------------------------------------------------------------------------------- represent future cash commitments. Collateral obtained relating to the commitments is determined using management's credit evaluation of the borrower and may include real estate, vehicles, business assets, deposits and other items. The Banks do make fixed rate loan commitments for short periods of time. However, such commitments were immaterial as of September 30, 1996 and December 31, 1996. Commitments to extend credit and letters of credit approximated the following amounts at September 30, 1996 and December 31, 1995.
Contract Amount --------------- September 30, 1996 December 31, 1995 ------------------ ----------------- Commitment to extend credit: Lines of credit and construction loans $13,637,000 $11,164,000 Credit cards 4,239,000 3,583,000 Letters of credit 552,000 377,000 -------------------- ------------------ $18,428,000 $15,124,000
Citizens and Castalia are required to maintain certain reserve balances on hand in accordance with the Federal Reserve Board requirements. The average reserve balance maintained in accordance with such requirements for the periods ended September 30, 1996 and December 31, 1995 approximated $1,673,000 and $1,700,000 respectively. In the normal course of business, the Corporation and its subsidiaries are involved in various legal actions, but in the opinion of management and its legal counsel, ultimate disposition of such legal matters is not expected to have a material adverse effect on the consolidated financial statements. Page 13 14 First Citizens Banc Corp Management's Discussion and Analysis of Financial Condition and Results of Operations Form 10-Q - -------------------------------------------------------------------------------- Introduction - ------------ The following discussion focuses on the consolidated financial condition of First Citizens Banc Corp at September 30, 1996, compared to December 31, 1995 and the consolidated results of operations for the three and nine month periods ended September 30, 1996 compared to the same periods in 1995. This discussion should be read in conjunction with the consolidated financial statements and footnotes included in this Form 10-Q. The registrant is not aware of any trends, events or uncertainties that will have, or are reasonably likely to have, a material effect on the liquidity, capital resources, or operations except as discussed herein. Also, the registrant is not aware of any current recommendation by regulatory authorities which would have such effect if implemented. Financial Condition - ------------------- Total assets of the Corporation at September 30, 1996 totalled $302,722,747 compared to $304,061,901 at December 31, 1995. This was an decrease of $1,339,154 or 0.4 percent. Within the structure of the assets, total investment and mortgage-backed securities have decreased $3,744,771 since December 31, 1995, and net loans have increased $4,335,934 since December 31, 1995. At September 30, 1996, $59,342,986 or 83.9 percent of the investment portfolio was classified as available-for-sale. The remainder, $11,359,219 or 16.1 percent, was classified as held-to-maturity. The investment and mortgage-backed securities decrease of 5.0 percent from December 31, 1995 is a result of maturities of securities. Net loans at September 30, 1996 increased 2.2 percent from year end 1995. At September 30, 1996, the loan to deposit ratio was 82.9 percent compared to 79.3 percent at December 31, 1995. This is reflective of the lack of deposit growth in the market along with increased loan demand in the third quarter of 1996. At September 30, 1996, the allowance for loan losses as a percent of total loans was 1.32 percent compared to 1.33 percent at December 31, 1995. For the nine months of operations of 1996, $238,500 was placed into the allowance from earnings compared to $239,000 for the same period of 1995. Net charge offs for the first nine months of 1996 were $192,000 compared to $58,000 for the same period of 1995. Impaired loans at September 30, 1996 totalled $1,558,000 or 0.79 percent of the loan portfolio compared to $2,338,000 or 1.2 percent of the loan portfolio at December 31, 1995. Page 14 15 First Citizens Banc Corp Management's Discussion and Analysis of Financial Condition and Results of Operations Form 10-Q - -------------------------------------------------------------------------------- Total deposits at September 30, 1996 decreased $3,840,283 from year end 1995. Non-interest bearing deposits, representing demand deposit balances, decreased $7,815,865 from year end 1995. Interest bearing deposits, including savings and time deposits, increased $3,975,582 from year end 1995. Within the structure of interest bearing deposits there continues to be a shift from lower cost savings deposits to higher cost time certificates. The year to date 1996 average balance of savings deposits has decreased $5,262,000 compared to the average balance of the same period for 1995. The current average rate of these deposits is 2.8 percent. The year to date 1996 average balance of time certificates has increased $2,842,000 compared to the average balance for the same period for 1995. The current average rate on these deposits is 5.2 percent. Other borrowed funds have increased $1,771,191 from December 31, 1995 to September 30, 1996. Federal Home Loan Bank borrowings have decreased $832,716 as a result of scheduled paydowns. Securities sold under agreements to repurchase have increased $1,065,749 and U.S. Treasury Tax Demand Notes have increased $1,538,158. Shareholders' equity at September 30, 1996 was $35,238,781 which was 11.6 percent of total assets. Shareholders' equity at December 31, 1995 was $33,806,791 which was 11.1 percent of total assets. The increase in shareholders' equity was represented by earnings of $3,005,391 less dividends of $1,167,200 and less the change in the unrealized gain on securities available for sale of $406,201. Total outstanding shares for the period December 31, 1995 to May 7, 1996 were 762,876. On May 8, 1996, the corporation paid a 300 percent stock dividend, increasing the number of shares to 3,051,504. Additionally, at the Corporation's annual meeting on April 16, 1996, the articles of incorporation were amended to change the $20.00 par common stock to no par common stock and to increase the number of authorized shares from 5,000,000 to 10,000,000. The company paid cash dividends on February 1, 1996 at the rate of $.1250 per share, on May 1, 1996 at the rate of $.1275 per share, after adjusting for the 300 percent stock split, effected in the form of a stock dividend, on May 8, 1996. On August 1, 1996, the company paid a dividend at the rate of $.1300 per share. The outstanding shares on September 30, 1996 were 3,051,504. Results of Operations - --------------------- Net earnings for the quarter ended September 30, 1996 were $1,010,600 or $.33 per common share compared to $982,299 or $.32 per common share for the same period in 1995. This was an increase of $28,301 or 2.9 percent. Net earnings for the nine month period ended September 30, 1996 were $3,005,391 or $.98 per common share compared to $2,740,464 or $.90 per common share for the same period in 1995. This was an increase of $264,917 or 9.7 percent. Net interest income for the third quarter 1996 totalled $3,171,089 compared to $3,095,629 for the Page 15 16 First Citizens Banc Corp Management's Discussion and Analysis of Financial Condition and Results of Operations Form 10-Q - -------------------------------------------------------------------------------- third quarter of 1995. This was an increase of $75,460 or 2.4 percent. Net interest income for the first nine months of 1996 totalled $9,302,077 compared to $9,191,577 for the first nine months of 1995. This was an increase of $110,500 or 1.2 percent. Total interest income for the first nine months of 1996 has increased $190,124 or 1.2 percent compared to the same period of 1995. The average rate on earning assets on a tax equivalent basis for the first nine months of 1996 was 8.1 percent compared to 8.0 percent for the same period of 1995. Total interest expense for the first nine months of 1996 has increased $79,334 or 1.2 percent compared to the same period of 1995. The net interest margin on a tax equivalent basis for the first nine months was 4.7 percent for both periods ended September 30, 1996 and 1995. Noninterest income for the third quarter 1996 totalled $851,055 compared to $804,830 for the third quarter 1995. This was an increase of $46,225 or 5.7 percent and attributed to increases in revenue from the computer operations of $40,514 and increased service charges on deposit accounts of $5,742. Noninterest income for the first nine months of 1996 totalled $2,528,552 compared to $2,151,174 for the same period in 1995. This was an increase of $377,378 or 17.5 percent and attributed to increases in revenue from the computer operations of $264,643, increased service charge on deposit accounts of $35,422, increased investment security gain of $13,350 and increased other operating income of $63,963. Noninterest expenses for the third quarter 1996 totalled $2,525,219 compared to $2,472,328 for the third quarter 1995. This was an increase of $52,891 or 2.1 percent. Noninterest expenses for the first nine months of 1996 totalled $7,429,154 compared to $7,421,031 for the first nine months of 1995. This was an increase of $8,123 or .1 percent. The largest monetary increase in noninterest expense is in employee benefits, which increased $137,614 or 3.6 percent for the first nine months of 1996 compared to the same period of 1995. The increase in employee benefits is due to increased health insurance of $61,467. FDIC premiums for the first nine months of 1996 have decreased $346,689 from the same period in 1995, reflecting the current premium structure for well capitalized institutions. Federal Income Taxes - -------------------- The federal income tax expense for the third quarter 1996 totalled $396,825 compared to $362,832 for the third quarter 1995. This was an increase of $33,993 or 9.4 percent. The increase in the federal income taxes is a result of the increase in total earnings before taxes of $62,294 and a decrease in tax exempt earnings of $56,588. The federal income tax expense for the first nine months of 1996 totalled $1,157,584 compared to $942,256 for the first nine months of 1995. This Page 16 17 First Citizens Banc Corp Management's Discussion and Analysis of Financial Condition and Results of Operations Form 10-Q - -------------------------------------------------------------------------------- was an increase of $215,328 or 22.9 percent. The increase in the federal income taxes is a result of the increase in total earnings before taxes of $480,255 and a decrease in tax exempt earnings of $148,625. Capital Resources - ----------------- Shareholders equity totalled $35,238,781 at September 30, 1996 compared to $33,806,791 at December 31, 1995. All of the capital ratios exceed the regulatory minimum guidelines as identified in the following table:
Corporation Ratios Regulatory 9/30/96 12/31/95 Minimums ------- -------- -------- Tier I Risk Based Capital 21.76% 19.87% 4.00% Total Risk Based Capital 23.01% 21.13% 8.00% Leverage Ratio 10.90% 10.25% 4.00-5.00%
The payment of cash dividends has been changed from a semi-annual (January and July) to a quarterly basis (February, May, August, and November). Cash dividends paid of $.125 per common share on February 1, 1996 and $.1275 per common share to be payable on May 1, 1996 are comparable to the January 1995 dividend of $.225 per common share. This effectively represents an increase of $.0275 increase. Capital expenditures totalled $527,442 for the first nine months of 1996 compared to $598,704 for the same period of 1995. Liquidity - --------- Liquidity as it relates to the banking entities of the Corporation is the ability to meet the cash demand and credit needs of its customers. For the first nine months of 1996 the Banks maintained a federal funds sold position that averaged $9,373,000. In addition, the Banks, through their respective correspondent banks maintain federal funds borrowing lines totalling $11,500,000 and the banks have total borrowing availability at the Federal Home Loan Bank of Cincinnati of $9,842,763 at September 30, 1996. Finally, 83.9 percent of the Corporation's investment and mortgage-backed investment portfolio has been classified as available for sale which provides additional liquidity. Page17 18 FIRST CITIZENS BANC CORP Other Information Form 10-Q Part II - Other Information ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES The shareholders of First Citizens Banc Corp authorized on April 16, 1996, the change from $20.00 par value common stock to no par common stock for First Citizens Banc Corp common shares. The shareholders of First Citizens Banc Corp also authorized on April 16, 1996, the number of authorized common shares of First Citizens Banc Corp increased from 5,000,000 to 10,000,000. On April 16, 1996, the board of directors of First Citizens Banc Corp authorized a 300 percent stock dividend on First Citizens Banc Corp common stock payable May 8, 1996 to shareholders of record April 23, 1996. As a result of the stock dividend, the number of outstanding shares of common stock increased from 762,876 to 3,051,504. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS First Citizens Banc Corp held its annual meeting on April 16, 1996, for the purpose of considering and voting on 1.) the election of four class II directors to serve for terms of three years, 2.) the ratification and appointment of Crowe, Chizek & Co. as independent auditors for the calendar year 1996, and 3.) amending the Corporation's Articles of Incorporation to reclassify all outstanding, and all authorized but unissued shares of the Corporation's common stock from $20.00 par shares to no par shares, and to increase the authorized number of common shares which the corporation may issue to 10,000,000 no par shares. Four directors, Mary Lee G. Close, Richard B. Fuller, George L. Mylander and Richard O. Wagner were nominated for reelection and were subsequently reelected as directors. No other issues were brought before the meeting. Page 18 19 ITEM 4. (CONTINUED) The summary of the voting of 762,876 common shares outstanding were as follows:
For Against Not Voted Director Candidate - ------------------ Mary Lee G. Close 570,126 1,520 191,230 Richard B. Fuller 569,860 1,786 191,230 George L. Mylander 569,850 1,796 191,230 Richard O. Wagner 570,126 1,520 191,230 Accounting Firm - --------------- Crowe, Chizek & Co. 571,546 0 191,330 Common Share Change - ------------------- Change to No Par and 568,738 2,808 191,330 Increase Authorized Shares
ITEM 5. OTHER INFORMATION The Citizens Banking Company of Sandusky, Ohio, a subsidiary of First Citizens Banc Corp has entered into an Agreement of Purchase and Assumption, dated October 2, 1996, with EST National Bank of Elyria, Ohio. Citizens proposes to purchase, from EST National Bank , banking offices located at 4416 Milan Road, Sandusky, Ohio, 24 Main Street, Berlin Heights, Ohio, and an ATM located within the Sandusky Mall at 4314 Milan Road, Sandusky, Ohio. Citizens proposes to assume deposit liabilities of the above banking offices totalling approximately $18,000,000. These deposits are comprised of approximately $4,000,000 in the Sandusky banking office and approximately $14,000,000 in the Berlin Heights banking office. From the cash proceeds of $18,000,000 the Citizens will purchase the assets represented by the real estate located at 4416 Milan Road, Sandusky, Ohio 44870 and 24 Main Street, Berlin Heights, Ohio 44814, respectively, the contents of the banking offices, and the stand-alone ATM located at 4314 Milan Road, Sandusky, Ohio 44870 Page 19 20 for the sum of $956,000. From the cash proceeds Citizens will also pay to EST National Bank an amount equal to 10.25 percent of the aggregate sum of the deposits on the date of closing. This amount will equal approximately $1,845,000.
ITEM 6. (A) EXHIBITS - Item No. 27 Financial Data Schedule.....................................20 (B) REPORTS ON FORM 8-K - None
Page 20 21 Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, The registrant has caused this report to be signed on its behalf the undersigned thereunto duly authorized. First Citizens Banc Corp /s/ David A. Voight November 13, 1996 David A. Voight Date President /s/ James O. Miller November 13, 1996 James O. Miller Date Senior Vice President Page 21 EX-27 2 EXHIBIT 27
9 0000944745 FIRST CITIZENS BANC CORP 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 12,953,420 217,169,912 9,450,000 0 59,342,986 11,359,219 11,530,561 200,251,342 2,648,865 302,722,747 238,501,901 11,357,337 1,667,491 15,957,237 15,257,520 0 0 0 302,722,747 12,741,121 3,324,848 176,650 16,242,619 5,966,755 6,940,542 9,302,077 238,500 17,850 7,429,154 4,162,975 4,162,975 0 0 3,005,391 .98 .98 7.79 859,000 761,000 0 1,558,000 2,602,000 288,831 97,196 2,648,865 2,648,865 0 0
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