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: June 30, 2006

OR

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 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. Yesþ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of Exchange Act).
Large accelerated filer o Accelerated filer þ Non-accelerated filer o

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 Stock, no par value
Outstanding at August 9, 2006
5,471,300 common shares

FIRST CITIZENS BANC CORP
Index

PART I. Financial Information
Item 1.	Financial Statements:
	Consolidated Balance Sheets (unaudited) June 30, 2006 and December 31, 2005	3
	Consolidated Statements of Income (unaudited) Three and six months ended June 30, 2006 and 2005	4
	Consolidated Statements of Comprehensive Income (unaudited) Three and six months ended June 30, 2006 and 2005	5
	Condensed Consolidated Statement of Shareholders’ Equity (unaudited) Six months ended June 30, 2006 and 2005	6
	Condensed Consolidated Statement of Cash Flows (unaudited) Six months ended June 30, 2006 and 2005	7
	Notes to Consolidated Financial Statements (unaudited)	8-19
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20-28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28-31
Item 4.	Controls and Procedures	31-32
PART II. Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults upon Senior Securities	33
Item 4.	Submission of Matters to a Vote of Security Holders	33-34
Item 5.	Other Information	34
Item 6.	Exhibits	34
Signatures		35
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-99.1

FIRST CITIZENS BANC CORP
Consolidated Balance Sheets
(In thousands, except share data)

	(Unaudited)
	June 30,			December 31,
	2006			2005
ASSETS
Cash and due from financial institutions	$	20,798		$	20,261
Federal funds sold		—			25,510
Securities available for sale		114,756			126,126
Securities held to maturity (Fair value of $6 in 2006 and $8 in 2005)		6			8
Loans, net of allowance of $8,571 and $9,212		537,496			514,770
Other securities		10,784			10,540
Premises and equipment, net		10,955			12,151
Premises and equipment, net — held for sale		840			—
Accrued interest receivable		4,808			4,395
Goodwill		26,093			26,093
Core deposit and other intangibles		3,629			3,965
Bank owned life insurance		10,047			—
Other assets		7,937			7,117
Total assets	$	748,149		$	750,936
LIABILITIES
Deposits
Noninterest-bearing	$	92,556		$	98,314
Interest-bearing		471,475			478,791
Total deposits		564,031			577,105
Federal Home Loan Bank advances		51,271			30,539
Securities sold under agreements to repurchase		15,438			16,472
U. S. Treasury interest-bearing demand note payable		490			2,391
Notes payable		7,000			7,000
Subordinated debentures		25,000			25,000
Accrued expenses and other liabilities		6,864			5,319
Total liabilities		670,094			663,826
SHAREHOLDERS’ EQUITY
Common stock, no par value, 10,000,000 shares authorized, 6,112,264 shares issued		68,430			68,430
Retained earnings		26,512			27,939
Treasury stock, 640,964 and 310,862 shares at cost		(15,214	)		(7,623	)
Accumulated other comprehensive loss		(1,673	)		(1,636	)
Total shareholders’ equity		78,055			87,110
Total liabilities and shareholders’ equity	$	748,149		$	750,936

See notes to interim consolidated financial statements

Page 3

FIRST CITIZENS BANC CORP
Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)

	Three months ended June 30,					Six months ended June 30,
	2006		2005			2006		2005
Interest and dividend income
Loans, including fees	$	10,307	$	9,222		$	19,736	$	18,000
Taxable securities		1,005		988			2,030		2,010
Tax-exempt securities		209		250			431		502
Federal funds sold and other		54		165			291		198
Total interest income		11,575		10,625			22,488		20,710
Interest expense
Deposits		2,618		1,973			5,053		3,820
Federal Home Loan Bank advances		332		247			573		505
Subordinated debentures		454		395			889		768
Other		293		204			553		353
Total interest expense		3,697		2,819			7,068		5,446
Net interest income		7,878		7,806			15,420		15,264
Provision for loan losses		270		269			540		679
Net interest income after provision for loan losses		7,608		7,537			14,880		14,585
Noninterest income
Computer center data processing fees		244		233			469		486
Service charges		751		897			1,496		1,779
Net loss on sale of securities		—		(10	)		—		(18	)
Net gain on sale of loans		4		20			12		65
ATM fees		177		172			337		333
Trust fees		328		255			626		502
Gain on branch sale		—		—			—		766
Bank owned life insurance		47		—			47		—
Other		71		233			461		403
Total noninterest income		1,622		1,800			3,448		4,316
Noninterest expense
Salaries and wages		2,880		2,960			5,618		5,891
Benefits		816		733			1,498		1,529
Net occupancy expense		352		394			758		825
Equipment expense		311		330			635		631
Contracted data processing		198		320			484		671
State franchise tax		172		265			384		529
Professional services		317		367			692		657
Amortization of intangible assets		168		190			336		354
ATM expense		114		141			221		274
Stationery and supplies		99		115			198		281
Courier		165		167			318		309
Other operating expenses		1,114		1,252			2,471		2,515
Total noninterest expense		6,706		7,234			13,613		14,466
Income before taxes		2,524		2,103			4,715		4,435
Income tax expense		786		632			1,452		1,348
Net Income	$	1,738	$	1,471		$	3,263	$	3,087
Earnings per share, basic	$	0.32	$	0.25		$	0.59	$	0.53
Earnings per share, diluted	$	0.32	$	0.25		$	0.59	$	0.53
Weighted average basic common shares		5,471,300		5,807,336			5,572,682		5,807,369
Weighted average diluted common shares		5,471,300		5,809,271			5,573,209		5,809,967

See notes to interim consolidated financial statements

Page 4

FIRST CITIZENS BANC CORP
Consolidated Comprehensive Income Statements (Unaudited)
(In thousands)

	Three months ended						Six months ended
	June 30,						June 30,
	2006			2005			2006			2005
Net income	$	1,738		$	1,471		$	3,263		$	3,087
Unrealized holding gains and (losses) on available for sale securities		(131	)		717			(56	)		(828	)
Reclassification adjustment for (gains) and losses later recognized in income		—			10			—			18
Net unrealized gains and (losses)		(131	)		727			(56	)		(810	)
Tax effect		44			(248	)		19			275
Total other comprehensive income (loss)		(87	)		479			(37	)		(535	)
Comprehensive income	$	1,651		$	1,950		$	3,226		$	2,552

See notes to interim consolidated financial statements

Page 5

FIRST CITIZENS BANC CORP
Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)
(In thousands, except share data)

												Accumulated
	Common Stock											Other			Total
	Outstanding					Retained			Treasury			Comprehensive			Shareholders’
	Shares			Amount		Earnings			Stock			Income/(Loss)			Equity
Balance, January 1, 2005		5,807,402		$	68,430	$	27,781		$	(7,494	)	$	(504	)	$	88,213
Net income		—			—		3,087			—			—			3,087
Change in unrealized (loss) on securities available for sale, net of reclassifications and tax effects		—			—		—			—			(535	)		(535	)
Cash dividends declared ($.78 per share)		—			—		(4,879	)		—			—			(4,879	)
Purchase of treasury stock		(6,000	)		—		—			(129	)		—			(129	)
Balance, June 30, 2005		5,801,402		$	68,430	$	25,989		$	(7,623	)	$	(1,039	)	$	85,757
Balance, January 1, 2006		5,801,402		$	68,430	$	27,939		$	(7,623	)	$	(1,636	)	$	87,110
Net income		—			—		3,263			—			—			3,263
Change in unrealized (loss) on securities available for sale, net of reclassifications and tax effects		—			—		—			—			(37	)		(37	)
Cash dividends declared ($.78 per share)		—			—		(4,690	)		—			—			(4,690	)
Purchase of treasury stock, at cost		(330,102	)		—		—			(7,591	)		—			(7,591	)
Balance, June 30, 2006		5,471,300		$	68,430	$	26,512		$	(15,214	)	$	(1,673	)	$	78,055

See notes to interim consolidated financial statements

Page 6

FIRST CITIZENS BANC CORP
Condensed Consolidated Statement of Cash Flows (Unaudited)
(In thousands)

	Six months ended June 30,
	2006			2005
Net cash from operating activities	$	3,239		$	3,114
Cash flows from investing activities
Maturities and calls of securities, held-to-maturity		2			2
Maturities and calls of securities, available-for-sale		20,364			16,865
Purchases of securities, available-for-sale		(9,466	)		(3,405	)
Purchases of securities Federal Reserve Bank Stock		(16	)		—
Purchase of Bank owned life insurance		(10,000	)		—
Loans made to customers, net of principal collected		(23,050	)		18,325
Loans sold from portfolio		—			9,505
Proceeds from sale of OREO properties		109			566
Change in federal funds sold		25,510			(7,611	)
Proceeds from sale of property and equipment		149			—
Net purchases of office premises and equipment		(280	)		(1,188	)
Net cash from investing activities		3,322			33,059
Cash flows from financing activities
Repayment of FHLB borrowings		(15,073	)		(166	)
Net change in short-term FHLB advances		35,805			—
Net change in deposits		(13,074	)		(21,357	)
Change in securities sold under agreements to repurchase		(1,034	)		(684	)
Change in U. S. Treasury interest-bearing demand note payable		(1,901	)		(615	)
Cash paid in branch sale		—			(11,303	)
Purchases of treasury stock		(7,591	)		(129	)
Dividends paid		(3,156	)		(3,252	)
Net cash from financing activities		(6,024	)		(37,506	)
Net change in cash and due from banks		537			(1,333	)
Cash and due from banks at beginning of period		20,261			25,661
Cash and due from banks at end of period	$	20,798		$	24,328
Cash paid during the period for:
Interest	$	7,089		$	5,413
Income taxes	$	700		$	1,495
Supplemental cash flow information:
Transfer of loans from portfolio to other real estate owned	$	343		$	112
Fixed assets transferred to held for sale	$	840		$	—

See notes to interim 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

The consolidated financial statements include the accounts of First Citizens Banc Corp (FCBC) and its wholly-owned subsidiaries: The Citizens Banking Company (Citizens), SCC Resources, Inc. (SCC), First Citizens Title Insurance Agency, Inc. (Title Agency), First Citizens Insurance Agency, Inc. (Insurance Agency), and Water Street Properties, Inc. (Water St.). Additionally, the consolidated financial statements include Citizens wholly-owned subsidiary, Mr. Money Finance Company (Mr. Money). The above companies together are referred to as the Corporation. Intercompany balances and transactions are eliminated in consolidation.

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 June 30, 2006 and its results of operations and changes in cash flows for the periods ended June 30, 2006 and 2005 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 accounting principles generally accepted in the United States of America have been omitted. The results of operations for the period ended June 30, 2006 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 2005 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, Huron, Marion, 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. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions and Federal Funds sold. In 2006, SCC provided item processing for six financial institutions in addition to Citizens. SCC accounted for 2.4% of the Corporation’s total revenues. Mr. Money provides consumer finance loans and real estate loans that the Banks would not normally provide to B and C credits at a rate commensurate with the risk and accounted for approximately 0.9% of the Corporation’s total revenue. First Citizens Title Insurance Agency Inc. was formed to provide customers with a seamless mortgage product with improved service. 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 was less than 1.0% of total revenue for the period ended June 30, 2006. Water St. Properties, Inc. was formed to hold repossessed assets of FCBC’s subsidiaries. Water St. revenue was less than 1.0% of total revenue through June 30, 2006. Management considers

Page 8

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

the Corporation to operate primarily in one reportable segment, banking. 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, fair values of financial instruments, and status of contingencies are particularly subject to change.

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.

Adoption of New Accounting Standards: The Corporation adopted Statement of Financial Accounting Standards (“SFAS”) No. 123R “Accounting for Stock-Based Compensation” on January 1, 2006. The Corporation has elected to adopt SFAS No. 123R using the “modified prospective” method and accordingly will not restate prior period results.

SFAS No. 123R requires that compensation expense be recognized for all stock options granted after the date of adoption and for all stock options that become vested after the date of adoption. Prior to January 1, 2006, the Corporation accounted for its stock option plans under the recognition and measurement principles of Accounting Principles Board Opinion (“APB”) No. 25 “Accounting for Stock Issued to Employees” and related interpretations. Under APB No. 25, no stock-based employee compensation cost was reflected in net income as all options granted under the Corporation’s stock option plan had an exercise price equal to the market value of the underlying common stock on the grant date.

The Corporation did not grant any stock options during the first six months of 2006 and 2005. Additionally, no stock options became vested during the first six months of 2006 and 2005. The adoption of SFAS No. 123R on January 1, 2006 has had no impact on the Corporation’s net income for the second quarter or year-to-date of 2006. Additionally, since the Corporation did not grant any stock options during the first two quarters of 2005, there is no pro forma stock-based employee compensation expense for the first two quarters of 2005.

Page 9

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

A summary of the activity in the plan is as follows:

	Six months ended				Six months ended
	June 30, 2006				June 30, 2005
	Total options outstanding				Total options outstanding
			Weighted				Weighted
			Average				Average
			Price				Price
	Shares		Per Share		Shares		Per Share
Outstanding at beginning of year		39,000	$	25.44		40,800	$	25.44
Granted		—		—		—		—
Exercised		—		—		—		—
Forfeited		—		—		—		—
Options outstanding, end of period		39,000	$	25.44		40,800	$	25.44
Options exercisable, end of period		39,000	$	25.44

There were no options exercisable as of June 30, 2005.

The following table details stock options outstanding:

	June 30, 2006		December 31, 2005
Stock options vested and currently exercisable
Number		39,000		39,000
Weighted average exercise price	$	25.44	$	25.44
Aggregate intrinsic value (in thousands)	$	—	$	—
Weighted average remaining life	6 yrs. 3 mos.		6 yrs. 9 mos.

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.

     New Accounting Pronouncements:

In March 2006, the FASB issued Statement of Financial Accounting Standards No. 156, Accounting for Servicing of Financial Assets: an amendment of FASB Statement No. 140 (FAS 140 and FAS 156). FAS 140 establishes, among other things, the accounting for all separately recognized servicing assets and servicing liabilities. This Statement amends FAS 140 to require that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. This Statement permits, but does not require, the subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value. Under this Statement, an entity can elect subsequent fair value measurement to account for its separately recognized servicing assets and servicing liabilities. Adoption of this Statement is required as of the beginning of the first fiscal year

Page 10

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

that begins after September 15, 2006. This pronouncement will not have a material impact on the Corporations’ financial statements.

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in tax positions. This Interpretation requires that the Corporation recognize in the financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 are effective as of the beginning of our 2007 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Corporation is currently evaluating the impact of adopting FIN 48 on its financial statements.

(2) Securities

Securities at June 30, 2006 and December 31, 2005 were as follows:

	June 30, 2006
			Gross Unrealized		Gross Unrealized
Available for sale	Fair Value		Gains		Losses
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	90,597	$	—	$	(1,383	)
Obligations of states and political subdivisions		19,494		138		(147	)
Mortgage-back securities		4,184		1		(144	)
Total debt securities	$	114,275	$	139	$	(1,674	)
Equity securities		481		—		—
	$	114,756	$	139	$	(1,674	)

Page 11

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

	June 30, 2006
			Gross Unrecognized		Gross Unrecognized
Held to Maturity	Amortized Cost		Gains		Losses		Fair Value
Mortgage-backed securities	$	6	$	—	$	—	$	6

	December 31, 2005
			Gross Unrealized		Gross Unrealized
Available for sale	Fair Value		Gains		Losses
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	97,815	$	—	$	(1,531	)
Obligations of states and political subdivisions		22,809		247		(89	)
Mortgage-back securities		5,021		11		(117	)
Total debt securities		125,645		258		(1,737	)
Equity securities		481		—		—
Total	$	126,126	$	258	$	(1,737	)

	December 31, 2005
			Gross Unrecognized		Gross Unrecognized
Held to Maturity	Amortized Cost		Gains		Losses		Fair Value
Mortgage-backed securities	$	8	$	—	$	—	$	8

Page 12

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

The amortized cost and fair value of securities at June 30, 2006, by contractual maturity, are 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	$	61,036
Due after one year through five years		43,768
Due after five years through ten years		2,975
Due after ten years		2,312
Mortgage-backed securities		4,184
Equity securities		481
Total securities available for sale	$	114,756

Held to maturity	Amortized Cost		Estimated Fair Value
Mortgage-backed securities	$	6	$	6

Proceeds from sales of securities, gross realized gains and gross realized losses were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2006		2005			2006		2005
Proceeds	$	—	$	—		$	—	$	—
Gross gains		—		—			—		—
Gross losses		—		—			—		(10	)
Security (losses) due to calls prior to maturity		—		(10	)		—		(8	)

Securities with a carrying value of approximately $96,661 and $107,459 were pledged as of June 30, 2006 and December 31, 2005, respectively, to secure public deposits, other deposits and liabilities as required by law.

Page 13

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 June 30, 2006 and December 31, 2005 not recognized in income are as follows.

June 30, 2006	12 Months or less				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss		Value		Loss		Value		Loss
U.S. Treasury securities and	$	22,326	$	234	$	68,271	$	1,149	$	90,597	$	1,383
obligations of U.S. government agencies
Obligations of states and political subdivisions		4,304		73		2,843		74		7,147		147
Mortgage-backed securities		3,684		136		431		8		4,115		144
Total temporarily impaired	$	30,314	$	443	$	71,545	$	1,231	$	101,859	$	1,674

December 31, 2005	12 Months or less				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss		Value		Loss		Value		Loss
U.S. Treasury securities and	$	23,522	$	332	$	74,293	$	1,199	$	97,815	$	1,531
obligations of U.S. government agencies
Obligations of states and political subdivisions		5,101		48		1,994		41		7,095		89
Mortgage-backed securities		3,740		117		—		—		3,740		117
Total temporarily impaired	$	32,363	$	497	$	76,287	$	1,240	$	108,650	$	1,737

Unrealized losses on securities have not been recognized into income because the issuers’ bonds 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 increase in market interest rates. The fair value is expected to recover as the securities approach their maturity date or reset date.

Page 14

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

(3) Loans

Loans at June 30, 2006 and December 31, 2005 were as follows:

	6/30/2006			12/31/2005
Commercial and Agriculture	$	65,978		$	65,903
Commercial real estate		204,105			195,983
Real Estate — mortgage		223,882			206,411
Real Estate — construction		27,750			29,712
Consumer		23,461			25,268
Credit card and other		677			632
Leases		424			615
Total loans		546,277			524,524
Allowance for loan losses		(8,571	)		(9,212	)
Deferred loan fees		(210	)		(542	)
Net loans	$	537,496		$	514,770

(4) Allowance for Loan Losses

A summary of the activity in the allowance for loan losses was as follows for the three and six months ended June 30.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
Balance beginning of period	$	9,023		$	12,289		$	9,212		$	11,706
Loans charged-off		(1,074	)		(697	)		(1,781	)		(1,157	)
Recoveries		352			460			600			1,093
Provision for loan losses		270			269			540			679
Balance June 30,	$	8,571		$	12,321		$	8,571		$	12,321

Page 15

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 six months ended June 30.

	Three Months				Six Months
	Ended June 30,				Ended June 30,
	2006		2005		2006		2005
Average investment in impaired loans	$	11,227	$	17,450	$	12,041	$	16,777
Interest income recognized on impaired loans including interest income recognized on cash basis		125		140		255		261
Interest income recognized on impaired loans on cash basis		125		126		255		247

Information regarding impaired loans at June 30, 2006 and December 31, 2005 was as follows:

	6/30/06			12/31/05
Balance impaired loans	$	9,548		$	13,669
Less portion for which no allowance for loan losses is allocated		(807	)		—
Portion of impaired loan balance for which an allowance for credit losses is allocated	$	8,741		$	13,669
Portion of allowance for loan losses allocated to impaired loans	$	4,310		$	4,827

Nonperforming loans were as follows:

	6/30/06		12/31/05
Loans past due over 90 days still on accrual	$	1,192	$	331
Nonaccrual	$	8,298	$	14,401

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.

Page 16

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

5) Earnings per Common Share:

Basic earnings per share is 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 June 30,				Six months ended June 30,
	2006		2005		2006		2005
Basic
Net Income	$	1,738	$	1,471	$	3,263	$	3,087
Weighted average common shares outstanding		5,471,300		5,807,336		5,572,682		5,807,369
Basic earnings per common share	$	0.32	$	0.25	$	0.59	$	0.53
Diluted
Net Income	$	1,738	$	1,471	$	3,263	$	3,087
Weighted average common shares outstanding for basic earnings per common share		5,471,300		5,807,336		5,572,682		5,807,369
Add: Dilutive effects of assumed exercises of stock options		—		1,935		527		2,598
Average shares and dilutive potential common shares outstanding		5,471,300		5,809,271		5,573,209		5,809,967
Diluted earnings per common share	$	0.32	$	0.25	$	0.59	$	0.53

Stock options for 13,300 shares of common stock, for the six months ended June 30, 2006, and stock options for 39,000 shares of common stock for the quarter ended June 30, 2006 were not considered in computing diluted earnings per common because they were antidilutive. Stock options for 13,900 shares of common stock for both the six months ended and quarter ended June 30, 2005 were not considered in computing diluted earnings per common because they were antidilutive.

Page 17

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 June 30, 2006 and December 31, 2005.

	Contract Amount
	2006				2005
	Fixed		Variable		Fixed		Variable
	Rate		Rate		Rate		Rate
Commitment to extend credit:
Lines of credit and construction loans	$	10,994	$	60,484	$	9,785	$	63,564
Overdraft protection		—		8,126		—		9,450
Letters of credit		120		3,552		42		3,411
	$	11,114	$	72,162	$	9,827	$	76,425

Commitments to make loans are generally made for a period of one year or less, but may extend up to 30 years. Fixed rate loan commitments referred to above had interest rates ranging from 4.00% to 10.75% at June 30, 2006 and 4.37%to 11.50% at December 31, 2005.

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 for the periods ended June 30, 2006 and December 31, 2005 approximated $3,972 and $5,024.

Page 18

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 for:

	Three months ended June 30						Six months ended June 30
	2006			2005			2006			2005
Service cost	$	231		$	178		$	462		$	356
Interest cost		147			122			294			245
Expected return on plan assets		(118	)		(96	)		(236	)		(193	)
Other components		32			12			64			24
Net periodic pension cost	$	292		$	216		$	584		$	432

The total amount of contributions expected to be paid by the Corporation in 2006 total $630, compared to $672 in 2005.

Page 19

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. Managements Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The following discussion focuses on the consolidated financial condition of First Citizens Banc Corp at June 30, 2006, compared to December 31, 2005 and the consolidated results of operations for the three month and six month periods ending June 30, 2006 compared to the same periods in 2005. This discussion should be read in conjunction with the consolidated financial statements and footnotes included in this Form 10-Q.

The registrant is not aware of any trends, events or uncertainties that will have, or are reasonably likely to have, a material effect on the liquidity, capital resources, or operations except as discussed herein. Also, the registrant is not aware of any current recommendation by regulatory authorities, which would have a material effect if implemented.

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 effect 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.

Financial Condition

Total assets of the Corporation at June 30, 2006 totaled $748,149 compared to $750,936 at December 31, 2005, which was a decrease of $2,787. This decrease in total assets is detailed the following paragraphs.

Net loans have increased $22,726, or 4.4 percent since December 31, 2005. The commercial real estate portfolio increased by $8,122, the residential real estate portfolio increased $17,471, and the commercial and agriculture portfolio increased $75. Residential construction loans decreased $1,962 while consumer, leases, and other loans decreased $1,953. In the first quarter of 2006, the Corporation introduced two loan programs on a limited basis, one for commercial loans, and one for residential mortgages. Both programs offered competitive

Page 20

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)

rates as well as the waiving of certain fees on the loans added to the loan portfolio. During the second quarter of 2006, the Corporation continued a modified residential mortgage program. This program, as well as the two used in the first quarter, enabled the Corporation to increase the size of our residential and commercial real estate portfolios. Similar programs may be utilized in future periods. The decline in the installment loan portfolio is partially due to consumers consolidating their consumer loans with home equity lines of credit and/or first or second mortgages at other financial institutions or lending institutions. Also, with products such as same as cash loans, there are alternatives in the market place that are being used by consumers rather than the traditional consumer lending that the Corporation offers. In an effort to offset this decline in the installment loan portfolio, the Corporation has introduced new consumer lending products and expects to use these products to begin growing the consumer loan portfolio. With the new products being introduced, a new rate structure for consumer loans has been developed. This rate structure is designed to provide higher yields on the Corporation’s consumer portfolio in 2006.

The Corporation had no loans held for sale at June 30, 2006 or December 31, 2005. At June 30, 2006, the net loan to deposit ratio increased to 95.3 percent compared to 89.2 percent at December 31, 2005, primarily due to the continued increase in the loan portfolio.

For the six months of operations in 2006, $540 was placed into the allowance for loan losses from earnings compared to $679 for the same period of 2005. The decrease in the provision was due to the reserve at FCBC. In 2005, FCBC placed $123 into its reserve for a participated loan during the first six months of 2005. In the first quarter of 2006, this participated loan had been paid off, and no reserves were needed for the FCBC loan portfolio. The amount placed into Citizens was equivalent to the amount placed into the reserve during the first six months of 2005. An increase in net charge-offs of $1,117 was experienced from 2005 to 2006 due primarily to two reasons. Recoveries were greater in 2005 due to the Corporation having a $429 loan recovery. In 2006, the Corporation had an increase of $624 in loans charged-off. This increase was due to loans charged-off in the commercial loan portfolio. Non-accrual loans decreased $6,103 from December 31, 2005 to June 30, 2006. This decrease was primarily due to the restructuring of one commercial credit. As of June 30, 2006, impaired loans have decreased $4,121 from December 31, 2005 again, primarily due to the restructuring of one commercial credit. Efforts are continually made to examine 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, the pooling of commercial credits risk graded 5 and 6 that are not individually examined, and general reserves, which are based on a rolling average of historical net charge-offs. The composition and overall level of the loan portfolio are also factors used to determine the amount of the allowance for loan losses.

Management analyzes commercial and commercial real estate loans on an individual basis and classifies a loan as impaired when an analysis of the borrower’s operating results and

Page 21

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)

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. Smaller-balance homogeneous loans are evaluated for impairment in total. Such loans include residential first mortgage loans secured by one- to four-family residences, residential construction loans and consumer automobile, boat, home equity and credit card loans. 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. These loans are also often considered impaired. Impaired loans, or portions thereof, are charged-off when deemed uncollectible. The June 30, 2006 allowance for loan losses as a percent of total loans was 1.57 percent compared to 1.76 percent at December 31, 2005.

At June 30, 2006, available for sale securities totaled $114,756 compared to $126,126 at December 31, 2005, a decrease of $11,370. The decrease in securities was due to paydowns, calls, and maturities of its portfolio. The Corporation has begun to use letters of credit from the Federal Home Loan Bank (FHLB) to replace maturing securities that were pledged for public entities. The use of the letters of credit have allowed the Corporation to use these funds to help fund the increase in the loan portfolio as a result of the loan programs described in a previous section as well as the purchase of Bank Owned Life Insurance (BOLI). Bank stocks increased $244 from December 31, 2005, due to Federal Home Loan Bank (FHLB) dividends received and a purchase of Federal Reserve Bank (FRB) stock.

Office premises and equipment, net, have decreased $1,196 from December 31, 2005 to June 30, 2006. The decrease in office premises and equipment is mainly attributed to the reclassification of assets of $840 to office premises and equipment, net, held for sale. The $840 is attributable to a branch that was closed in a prior year. The remaining change of $356 was due to new purchases of $280, depreciation of $487 and disposals of $149. In the first quarter of 2006, SCC Resources, Inc. sold a building that had been used for storage for SCC and Citizens.

In the second quarter of 2006, the Corporation purchased $10,000 of BOLI thru the reduction in Federal Funds Sold and the decline in the security portfolio. The purchase in BOLI is alternative to replacing maturing securities. The yield to be earned on the BOLI is expected to exceed what the Corporation could earn by replacing maturing securities.

Total deposits at June 30, 2006 decreased $13,074 from year-end 2005. Noninterest-bearing deposits decreased $5,758 from year-end 2005. Interest-bearing deposits, including savings and time deposits, decreased $7,316 from year-end 2005. The interest-bearing deposit decline was due primarily to a decline in savings balances, as customers have used funds from savings to invest in other, higher yielding financial instruments. The year to date average balance of total deposits decreased $47,961 compared to the average balance of the same period 2006. This decrease in average balance was due primarily to declines in savings and time-deposit balances. Time-deposits decreased as customers continued to seek higher yielding time-deposit instruments in Citizens’ market area. Citizens offers competitive rates on their time-deposits, but generally will not pay an above-market-rate to prevent deposits

Page 22

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)

from leaving Citizens. Also, Citizens did experience a decline in deposits as a result of the merger with FNB Financial Corporation in the fourth quarter of 2004, as it has experienced in previous acquisitions. The year-to-date 2006 average balance of savings deposits has decreased $20,255 compared to the average balance of the same period for 2005. The current average rate of these deposits was 0.43 percent at June 30, 2006 compared to 0.41 at June 30, 2005. The year-to-date 2006 average balance of time certificates has decreased $15,368 compared to the average balance for the same period for 2005. Additionally, the year-to-date 2006 average balances compared to the same period in 2005 of demand deposits increased $653, while N.O.W. accounts decreased $5,483, and Money Market Savings decreased $7,363.

Total borrowed funds have increased $17,797 from December 31, 2005 to June 30, 2006. At June 30, 2006, the Corporation had $51,271 in outstanding FHLB advances compared to $30,539 at December 31, 2005. The FHLB advances outstanding at June 30, 2006 included $35,805 in overnight advances. During the second quarter of 2006, the Corporation paid off a $15,000, 24 month, 3.03% advance. The Corporation had notes outstanding with other financial institutions totaling $7,000 at both June 30, 2006 and December 31, 2005. These notes were primarily used to fund the loan portfolio at Mr. Money Finance Company. Securities sold under agreements to repurchase, which tend to fluctuate, have decreased $1,034 and U.S. Treasury Tax Demand Notes have decreased $1,901 from December 31, 2005 to June 30, 2006.

Shareholders’ equity at June 30, 2006 was $78,055, or 10.4 percent of total assets, compared to $87,110 at December 31, 2005, or 11.6 percent of total assets. The decrease in shareholders’ equity resulted from earnings of $3,263, less dividends paid of $3,156, dividends declared of $1,534, purchases of treasury stock through a tender offer of $7,413, additional treasury stock repurchases of $178, and the decrease in the market value of securities available for sale, net of tax, of $37. The Corporation paid a cash dividend on February 1, 2006 and May 1, 2006, and February 1, 2005 and May 1, 2005 at a rate of $.28 per share. Total outstanding shares at June 30, 2006 were 5,471,300.

Results of Operations

Six Months Ended June 30, 2006 and 2005

Net income for the six months ended June 30, 2006 was $3,263, or $.59 per diluted share compared to $3,087 or $.53 per diluted share for the same period in 2005. This was an increase of $176, or 5.7 percent. Some of the reasons for the changes are explained below.

Total interest income for the first six months of 2006 increased $1,778, or 8.6 percent compared to the same period in 2005. The average rate on earning assets on a tax equivalent basis for the first six months of 2006 was 6.71 percent and 5.73 percent for the first six months of 2005. The increase in yield is due to the change in the interest rate environment in which the Corporation has operated in 2006. Continued interest rate increases in 2006 have had a positive effect on the Corporation’s earning asset portfolio. The earning asset portfolio most

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)

affected by the rate increases was the Corporation’s variable real estate portfolio. Both the residential and commercial real estate portfolio had increases in interest income during the first six months of 2006 compared to the first six months of 2005. Total interest expense for the first six months of 2006 has increased by $1,622, or 29.8 percent compared to the same period of 2005. The increase of interest expense is due to the increase in the interest rates in 2006, which offset the decline in deposit balances from 2005. Interest on deposits increased $1,233 compared to 2005, as the average rate paid on deposits increased from 1.54% in 2005 to 2.13% in 2006. Interest expense on FHLB borrowings increased $68 compared to the first six months of 2005 primarily due to the increase in balance of advances in 2006. Interest expense on subordinated debentures increased $121 in the first six months of 2006 compared to the first six months of 2005 as the rate paid on these securities increased in 2006. Interest on other borrowings increased $200 as rates increased during 2006. The average rate on interest-bearing liabilities for the first six months of 2006 was 2.53 percent compared to 1.77 percent for the same period of 2005. The net interest margin on a tax equivalent basis was 4.63 percent for June 30, 2006 and 4.44 percent for June 30, 2005.

Noninterest income for the first six months of 2006 totaled $3,448, compared to $4,316 for the same period of 2005, a decrease of $868. In the first quarter of 2005, the Corporation had a $766 gain on the sale of two branches, which it did not have in 2006. Service charges paid to Citizens decreased $283 compared to 2005 due to two reasons. First, the Corporation had fewer deposit accounts at June 30, 2006 compared to June 30, 2005. Secondly, the customer base has become more aware of overdrafts and the charges for these overdrafts. Citizens will be updating its fee structure on deposit products in the third quarter in efforts to increase its service charge revenue. Revenue from computer operations decreased slightly in 2006, down $17 from first half of 2005 as the number of financial institutions for which processing was done for decreased. Net gain on sale of loans was $53 less than in 2005 due to the number of loans sold to FNMA declining in 2006, as the Corporation has moved to keeping more real estate loans in its portfolio. Trust fees grew $124 in the first half of 2006 compared to the same period in 2005 as the assets under Trust management continued to grow. In 2006, with the purchase of BOLI, the Corporation had income on its purchase of this asset of $47. Other non-interest income increased $58 compared to 2005, primarily due to one item. In the first quarter of 2006, the Corporation sold a building that had been used as a storage facility for a $148 gain which offset slight decrease in various other non-interest income items.

Noninterest expense for the six months ended June 30, 2006 totaled $13,613 compared to $14,466 for the same period in 2005. This was a decrease of $853, or 5.9 percent. Salaries and wages decreased $273, or 4.6 percent compared to the first six months of 2005. The decrease in salaries was attributable to the Corporation’s reorganization efforts completed in the third quarter of 2005. Benefits decreased $31, as the Corporation’s self-insured health plan costs decreased due to the reorganization completed in 2005. Net occupancy expense decreased $67 for the first six months of 2006, compared to the first six months of 2005. This decrease is primarily due to two reasons. First, Mr. Money had a reduction of rental payments for a branch that was closed. Second, Citizens purchased a branch that had been rented in 2005.

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)

Equipment expense increased $4 as a result of an increase in costs for maintenance and installation of equipment at Citizens. Computer processing expense decreased by $187 compared to last year primarily due to the cost savings as a result of the reorganizing of the two banking subsidiaries of the Corporation into one bank. State franchise taxes decreased $145 compared to the first six months in 2005 as the equity position of Citizens decreased from previous year end. Professional services expenses increased for the first six months of 2006 compared to the same period in 2005 by $35. The primary cause of this increase is due to legal costs paid to complete the tender offer in the first quarter of 2006. Citizens monitors ATM profitability, usage, and other factors to determine the effectiveness of our ATM’s. As a result of this analysis, some machines were taken out of service, which led to ATM expense decreasing $53 compared to 2005. Stationery and supplies decreased $83 from 2005. In the first quarter of 2006, the Corporation did not have to buy items such as letterhead, envelopes, teller stamps and other items as it did in 2005 due to a merger completed at the end of 2004. Finally, other operating expenses decreased $44 from 2005 to 2006.

Income tax expense for the first six months of 2006 totaled $1,452 compared to $1,348 for the first six months of 2005. This was an increase of $104, or 7.7 percent. The increase in the federal income taxes is a result of the increase in total income before taxes of $280. The effective tax rates were comparable for the six-month periods ended June 30, 2006 and June 30, 2005, at 30.8% and 30.4%, respectively.

Three Months Ended June 30, 2006 and 2005

Net income for the three months ended June 30, 2006 was $1,738 or $.32 per diluted share compared to $1,471 or $.25 per diluted share for the same period in 2005. This was an increase of $267, or 18.2 percent. Some of the reasons for the changes are explained below.

Total interest income for the second quarter of 2006 increased $950, or 8.9 percent compared to the same period in 2005. The average rate on earning assets on a tax equivalent basis for the second quarter of 2006 was 6.93 percent and 5.76 percent for the second quarter of 2005. The increase in yield in the second quarter, as for the first six months, is due to the change in the interest rate environment in which the Corporation has operated in 2006. Continued interest rate increases in the second quarter 2006 have had a positive effect on the Corporations earning asset portfolio. Interest and fees on loans increased $1,085, or 11.8 percent compared to the same period in 2005. This increase is due to the continued increase in average yield of the loan portfolio. Interest on securities decreased $24 in the second quarter 2006 compared to the second quarter of 2005 due to the Corporation allowing maturing securities to roll-off the security portfolio. Total interest expense for the second quarter of 2006 increased $878, or 31.1 percent compared to the same period of 2005. The increase of interest expense is due to the increase in the interest rate paid on the deposit balances as well as the Corporations borrowings. Interest on deposits increased $645 compared to 2005, as the rate paid on deposits increased from 1.52% in 2005 to 2.22% in 2006. Interest expense on FHLB borrowings increased $85 compared to the second quarter of 2005 primarily due to the increase in rate paid on the overnight borrowings the Corporation has

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)

been using to fund the loan growth and the purchase of BOLI. Interest on subordinated debentures increased $59 as the rate increased compared to the rate paid during the second quarter 2005. Interest on other borrowings increased $89 as rates increased during the second quarter of 2006 on the Corporation’s other borrowings. The average rate on interest-bearing liabilities for the second quarter of 2006 was 2.64 percent compared to 1.74 percent for the same period of 2005. The net interest margin on a tax equivalent basis was 4.75 percent for June 30, 2006 and 4.54 percent for June 30, 2005.

Noninterest income for the second quarter of 2006 totaled $1,622, compared to $1,800 for the same period of 2005, a decrease of $178. Service charge fees decreased $146 in the second quarter 2006 compared to the same period in 2005, as the number of deposit accounts declined as did the fees generated from overdrafts. Citizens is in the stage of developing new deposit products to help grow the deposit accounts of the Bank. These products are expected to be launched in the fourth quarter of 2006. Trust fees increased $73 as the Trust department continued to grow its asset portfolio in the second quarter of 2006 compared to the second quarter of 2005. ATM fees, net gain on sale of securities, and computer processing fees all increased slightly in the second quarter 2006 compared to the second quarter 2005. BOLI income totaled $47 for the second quarter of 2006. The reason for purchasing BOLI is stated in a previous section. Other fees declined $162 for the second quarter 2006 compared to the same period in 2005. There were three main reasons for this decline. First, several other real estate owned properties were either sold at a loss or had a write-down of their fair value during the second quarter of 2006. This resulted in losses of approximately $73 compared to 2005. Secondly, the Bank did not sell as many mortgages on the secondary market, resulting in $30 less income booked on the sale of these mortgages. Finally, in 2005 the Corporation sold its affiliated appraisal company. In 2005, this company added $52 in fees to other income.

Noninterest expense for the quarter ended June 30, 2006 totaled $6,706 compared to $7,234 for the same period in 2005. This was a decrease of $528, or 7.3 percent. Salaries and wages decreased $80, or 2.7 percent compared to the first six months of 2005. The decrease in salaries was attributable to the Corporation’s reorganization efforts completed in the third quarter of 2005. Benefits increased $83 in the second quarter of 2006 compared to the second quarter 2005. The primary increase in benefits is due to the increase in the costs of the Corporation defined pension plan. For the second quarter, the cost of the plan increased $95 compared to the second quarter of 2005. Net occupancy expense decreased $42 for the second quarter of 2006 compared to the second quarter 2005. This decline was primarily due to a decrease in building, repair and maintenance costs compared to 2005, as in the second quarter of 2005 a remodeling project in New Washington was completed raising costs in 2005. The remodeling project at First Citizens also led to an increase in equipment expense in the second quarter of 2005. In 2006, without these extra costs, equipment expense decreased $19. Computer processing expense decreased by $122 during the second quarter of 2006 compared to the second quarter of 2005 primarily due to benefiting from reorganizing the two banking subsidiaries into one bank. State franchise taxes decreased $93 compared to the second quarter of 2005 as the equity position of Citizens decreased from the

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)

second quarter of 2005. Professional services expenses decreased during the second quarter 2006 compared to the second quarter 2005. This decrease was primarily due to the reduction in legal costs paid in 2005 for impaired loans acquired in the merger completed in 2004. The Corporation’s amortization of intangible assets decreased slightly as did the courier expense and stationery and supplies compared to the second quarter of 2005. The number of ATM’s in use during the second quarter of 2006 decreased compared to the same period in 2005, causing a reduction in expense of $27. Finally, other operating expenses decreased $138 in the second quarter 2006 compared to the same period in 2005. Within other expenses, director fees at the Bank decreased $49 in the second quarter of 2006. With the reorganization of the two banks, the number of directors, as well as the number of meetings both decreased, resulting in less expense. Expenses related to charging-off deposit accounts decreased $44 during the second quarter of 2006 compared to the second quarter 2005. Finally, advertising expenses decreased $22 in the second quarter of 2006 compared to the same period in 2005. In 2005, the Corporation used advertising to promote its newly acquired branches in the merger at the end of 2004. In 2006, these branches were securely based in their markets, which resulted in less advertising dollars needing to be spent on the new branches.

Income tax expense for the second quarter totaled $786 compared to $632 for the same period in 2005. This was an increase of $154, or 24.4 percent. The effective tax rates were comparable for the three-month periods ended June 30, 2006 and June 30, 2005, were 31.1% and 30.1%, respectively.

Capital Resources

Shareholders’ equity totaled $78,055, at June 30, 2006 compared to $87,110 at December 31, 2005. All of the capital ratios exceed the regulatory minimum guidelines as identified in the following table:

										To Be Well
										Capitalized
										Under Prompt
							For Capital			Corrective
	Corporation Ratios						Adequacy			Action
	6/30/06			12/31/05			Purposes			Provisions
Tier I Risk Based Capital		10.6	%		12.6	%		4.0	%		6.0	%
Total Risk Based Capital		14.3	%		16.1	%		8.0	%		10.0	%
Leverage Ratio		8.3	%		9.2	%		4.0	%		5.0	%

The decline in the capital ratios from year end is primarily a result of the tender offer completed in the first quarter of 2006.

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 paid a cash dividend of $.28 per common share on February 1, 2005 and 2006, and May 1, 2005 and 2006.

Liquidity

Citizens maintains a conservative liquidity position. Within the security portfolio, all but $6 of securities are classified as available for sale. At June 30, 2006, securities with maturities of one year or less totaled $61,036, or 53.2% 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 contained in the consolidated financial statements detail the Corporation’s cash flows from operating activities resulting from net earnings.

Cash from operations for the six months ended June 30, 2006 was $3,239. This includes net income of $3,263 plus net adjustments of $(24) to reconcile net earnings to net cash provided by operations. Cash from investing activities was $3,322 the six months ended June 30, 2006. Maturing securities were allowed to roll-off the portfolio without being replaced. Federal funds sold decreased as these funds were used to fund the growth in the loan portfolio as well as funding the purchase of BOLI. Cash from financing activities in the first six months of 2006 totaled $(6,024). This decrease in cash is primarily due to four reasons. First, the Citizens had run-off on their deposit accounts. Secondly, the tender offer that was completed in the first quarter of 2006 decreased cash by $(7,591). Third, a $15,000 advance from the FHLB matured during the second quarter of 2006. Finally, the payments of two dividends decreased the amount of cash from financing activities. These decreases in cash were offset by the borrowing of overnight advances from the FHLB of $35,805. Cash from investing activities was greater than cash from operating and financing activities by $537, which resulted in an increase in cash and cash equivalents to $20,798.

Future loan demand of Citizens may be funded by increases in deposit accounts, proceeds from payments on existing loans, the maturity of securities, the issuances of trust preferred obligations, 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 $35,000. As of June 30, 2006, Citizens had total credit availability with the FHLB of $138,270 of which $51,283 was outstanding.

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.

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)

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.

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,

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)

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. 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 refund its obligations at new, lower rates. The Corporation has not purchased derivative financial instruments in the past and does not intend to purchase such instruments in the near future. 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. Also, 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 are sensitive to changes in interest rates as of December 31, 2005 and June 30, 2006, based on certain prepayment and account decay assumptions that management believes are reasonable. The Corporation had no derivative financial instruments or trading portfolio as of December 31, 2005 or June 30, 2006. 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 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)

Net Portfolio Value

	June 30, 2006								December 31, 2005
Change in	Dollar		Dollar			Percent			Dollar		Dollar			Percent
Rates	Amount		Change			Change			Amount		Change			Change
+200bp		75,791		(16,215	)		-18	%		90,619		(15,108	)		-14	%
+100bp		85,495		(6,511	)		-7	%		100,427		(5,300	)		-5	%
Base		92,006		—			—			105,727		—		—
-100bp		96,284		4,278			5	%		108,052		2,325			2	%
-200bp		98,044		6,038			7	%		108,427		2,700			3	%

The relatively minor change in net portfolio value from December 31, 2005 to June 30, 2006, is primarily a result of two factors. The yield curve remains very flat after a parallel shift upward from the end of the year. Short-term interest rates increased slightly more than long-term rates. As a result, the Corporation has seen a decrease in the base level of net portfolio value, due to a decrease in the fair value of loans, a decrease in the fair value of investments, partially offset by a decrease in the fair value of deposits.

ITEM 4. Controls and Procedures Disclosure

Evaluation of Disclosure Controls and Procedures

The Corporation maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Corporation’s reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this quarterly report, an evaluation was carried out under the supervision and with the participation of First Citizens Banc Corp’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(e) and 15d-14(e) under the Securities Exchange Act of 1934). Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are, to the best of their knowledge, effective to ensure that information required to be disclosed by First Citizens Banc Corp in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

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)

Subsequent to the date of their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that subsequent to their evaluation, there were no significant changes in First Citizens Banc Corp’s internal control or in other factors that could significantly affect its internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

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 32

First Citizens Banc Corp
Signatures
Form 10-Q

Part II — Other Information

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

There were no material changes to the risk factors as presented in the Corporation’s annual report on Form 10-K for the year ended December 31, 2005.

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

During the first half of 2006, the Corporation purchased shares of common stock as follows:

					Total Number of		Maximum Number
	Total				Shares Purchased as		(or Approximate Dollar
	Number		Average		Part of Publicly		Value) of Shares (Units)
	of Shares		Price Paid		Announced Plans or		that May Yet Be Purchased
Period	Purchased		per Share		Programs		Under the Plans or Programs
January 1, 2006 — January 31, 2006*		—		N/A		—		N/A
February 1, 2006 — February 28, 2006		322,322	$	23.00		322,322		—
March 1, 2006 — June 30, 2006		—		N/A		—		N/A
Total		322,322	$	23.00		323,322		—

* On January 11, 2006, the Corporation announced the commencement of a tender offer for its common shares. Under the terms of the offer, the Corporation offered to repurchase up to 500,000 common shares at a price of $23.00 per share. The tender offer expired on February 24, 2006.

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 18, 2006, for the purpose of considering and voting on the following:

1.) To elect four Class III directors to serve terms of three years or until their successors are elected and qualified.

Page 33

First Citizens Banc Corp
Signatures
Form 10-Q

     The summary of the voting of common shares outstanding was as follows:

Director Candidate	For		Withheld
Blythe A. Friedley		4,537,995.22		146,210.09
W. Patrick Murray		4,532,082.22		152,123.09
Robert L. Ransom		4,513,828.07		170,337.23
Daniel J. White		4,507,258.07		176,947.23

The following directors’ terms of office continued after the meeting:

Laurence A. Bettcher, Robert L. Bordner, Ronald E. Dentinger, George L. Mylander, Allen R. Nickles, Leslie D. Stoneham, David A. Voight, J. George Williams.

Item 5. Other Information

     None

Item 6. (a) Exhibit No. 31.1 Certification of Chief Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

(b) Exhibit No. 31.2 Certification of Chief Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

(c) 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.

(d) 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.

(e) Exhibit No. 99.1 Power of Attorney

Page 34

First Citizens Banc Corp
Signatures
Form 10-Q

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 David A. Voight President , Chief Executive Officer	August 9, 2006 Date
/s/ James O. Miller James O. Miller Executive Vice President	August 9, 2006 Date

Page 35

First Citizens Banc Corp
Index to Exhibits
Form 10-Q

Exhibits
	2.1	Agreement and Plan of Merger dated as of November 1, 2001 between First Citizens Banc Corp and Independent Community Banc Corp. (filed as Exhibit 2 to the Registration Statement on Form S-4 filed on December 14, 2001 and incorporated herein by reference.)
	2.2	Agreement and Plan of Merger dated as of March 3, 2004 between First Citizens Banc Corp and FNB Financial Corporation (filed as Exhibit 9 to the Registration Statement on Form S-4 filed on July 19, 2004 and incorporated herein by reference.)
	3.1	Articles of Incorporation, as amended, of First Citizens Banc Corp is incorporated by reference to Exhibit 3.1 of First Citizens Banc Corp’s Form 10-K filed on March 16, 2006.
	3.2	Amended Code of Regulations of First Citizens Banc Corp is incorporated by reference to Exhibit 3.2 of First Citizens Banc Corp’s Form 10-K filed on March 16, 2006.
	4.1	Certificate for Registrant’s Common Stock is incorporated by reference to Exhibit 4.1 of First Citizens Banc Corp’s Form 10-K filed on March 16, 2006.
	10.1	First Citizens Banc Corp Stock Option and Stock Appreciation Rights Plan dated April 18, 2000 is incorporated by reference to Exhibit 10.1 of First Citizens Banc Corp’s Form 8-K filed on November 21, 2005.
	10.2	Employment agreement with James E. McGookey (filed as Exhibit 10.2 to the First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 and incorporated herein by reference.)
	10.3	Employment agreement with James L. Nabors II (filed as Exhibit 10.3 to the First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 and incorporated herein by reference.)
	10.4	Employment agreement with George E. Steinemann (filed as Exhibit 10.4 to the First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 and incorporated herein by reference.)
	10.5	Change in Control Agreement — David A. Voight (filed as Exhibit 10.5 to the First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 and incorporated herein by reference.)
	10.6	Change in Control Agreement — James O. Miller(filed as Exhibit 10.6 to the First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 and incorporated herein by reference.)
	10.7	Change in Control Agreement — Charles C. Riesterer (filed as Exhibit 10.7 to the First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 and incorporated herein by reference.)

Page 36

First Citizens Banc Corp
Index to Exhibits
Form 10-Q

Exhibits
	10.8	Change in Control Agreement — Todd A. Michel (filed as Exhibit 10.8 to the First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 and incorporated herein by reference.)
	10.9	Change in Control Agreement — Leroy C. Link (filed as Exhibit 10.9 to the First Citizens Banc Corp’s Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 and incorporated herein by reference.)
	11.1	Statement regarding earnings per share is included in Note 5 to the Consolidated Financial Statements.
	31.1	Rule 13a-14(a)/15-d-14(a) Certification of Chief Executive Officer
	31.2	Rule 13a-14(a)/15-d-14(a) Certification of Chief Financial Officer
	32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	99.1	Power of Attorney

Page 37