-----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, QDwIml/qMifTX2WUKiY18gxbtQeTspW5IHeOB1UDo1RdiDhQeYmdraw/1XgqmDIm GQUr3rbFC0hVdg4rgSxU4Q== 0000950152-96-004023.txt : 19960813 0000950152-96-004023.hdr.sgml : 19960813 ACCESSION NUMBER: 0000950152-96-004023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 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: 96609025 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 CITIZENS BACK CORP 10-Q 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: ..................................June 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 August 6, 1996 3,051,504 common shares 2
FIRST CITIZENS BANC CORP Index PART I. Financial Information Item 1. Financial Statements:(Unaudited) Consolidated Balance Sheets June 30, 1996 and December 31, 1995..........................................................3 Consolidated Statements of Income Three and six months ended June 30, 1996 and 1995............................................4 Consolidated Statements of Shareholders' Equity Three and six months ended June 30, 1996 and 1995............................................5 Consolidated Statements of Cash Flows Six months ended June 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 Item 5. Other Information ..............................................................................19 Item 6. (a) Exhibits ...................................................................................19 (b) Reports on Form 8-K ........................................................................19 Signatures ............................................................................................21
3 FIRST CITIZENS BANC CORP Consolidated Balance Sheet
(Unaudited) June 30 December 31 Assets 1996 1995 ------------- ------------- Cash and due from banks $ 13,315,532 $ 16,295,910 Federal funds sold 8,260,000 7,915,000 Investment and Mortgage-backed securities (Note 2) Available-for-sale 58,072,053 57,711,219 Held-to-maturity 12,939,159 16,735,757 ------------- ------------- Total investment securities 71,011,212 74,446,976 Loans (Note 3) 196,908,192 195,868,543 Less: Allowance for loan losses (Note 4) (2,652,105) (2,602,000) ------------- ------------- Net Loans 194,256,087 193,266,543 Office premises and equipment, net 6,448,285 6,458,747 Accrued interest receivable 2,467,919 2,369,641 Goodwill 1,780,233 1,881,000 Other assets 1,754,781 1,428,084 ------------- ------------- Total assets $ 299,294,049 $ 304,061,901 ============= ============= Liabilities Deposits Non-interest bearing deposits $ 23,063,893 $ 29,147,854 Interest-bearing deposits, including certificates of deposit 214,240,070 213,194,330 ------------- ------------- Total deposits 237,303,963 242,342,184 Federal Home Loan Bank borrowings 16,238,762 16,789,953 Securities sold under agreements to repurchase 8,143,860 8,434,050 U. S. Treasury interest-bearing demand notes payable 1,660,012 319,380 Accrued interest, taxes and other expenses 1,448,270 2,369,543 ------------- ------------- Total liabilities 264,794,867 270,255,110 Shareholders' Equity Capital Stock, no par value; 10,000,000 shares authorized, 3,051,504 shares issued and outstanding 15,257,520 15,257,520 Retained Earnings 19,384,578 18,160,292 Unrealized gain/(loss) on securities available for sale (142,916) 388,979 ------------- ------------- Total shareholders' equity 34,499,182 33,806,791 ------------- ------------- Total liabilities and shareholders' equity $ 299,294,049 $ 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 Six months ended June 30, June 30, ---------------------- ------------------------ 1996 1995 1996 1995 Interest Income: Interest and fees on loans $4,218,431 $4,122,281 $ 8,428,496 $ 8,042,790 Interest and dividends on investment securities U. S. Treasury securities and obligations of U.S. government corporations & agencies 551,938 638,079 1,104,096 1,298,715 Obligations of states and political subdivisions 365,965 410,374 742,909 834,946 Other securities 60,298 25,695 139,928 53,070 Interest on federal funds sold 103,777 123,789 216,570 225,862 Other interest income 58,491 0 116,772 0 --------- --------- ---------- --------- Total interest income 5,358,900 5,320,218 10,748,771 10,455,383 Interest Expense: Interest on deposits 1,971,774 1,964,311 3,982,990 3,760,597 Interest on FHLB borrowings 234,980 250,311 473,875 503,942 Interest on other borrowings 72,482 88,052 160,918 180,595 --------- --------- ---------- --------- Total interest expense 2,279,236 2,302,674 4,617,783 4,445,134 --------- --------- ---------- --------- Net Interest Income 3,079,664 3,017,544 6,130,988 6,010,249 Provision for loan losses 79,500 83,000 149,000 156,000 --------- --------- ---------- --------- Net interest income after provision for loan losses 3,000,164 2,934,544 5,981,988 5,854,249 Noninterest income: Computer center service charges and retail sales 533,245 414,800 1,055,236 831,107 Service charges on deposit accounts 120,907 122,922 237,427 207,747 Investment security gain/(loss) 10,350 2,500 15,850 2,500 Other operating income 196,333 210,991 368,984 390,690 --------- --------- ---------- --------- Total noninterest income 860,835 751,213 1,677,497 1,432,044 Noninterest expenses: Salaries and wages and employee benefits 1,308,190 1,272,856 2,616,964 2,519,620 Net occupancy expense 137,494 130,983 272,188 262,898 Equipment 156,794 121,353 308,810 273,029 FDIC Premiums 1,500 138,407 2,500 276,815 Franchise Tax 106,852 123,535 219,309 241,984 Professional Fees 134,815 137,469 261,931 266,746 Other operating expenses 626,398 597,068 1,222,233 1,107,612 --------- --------- ---------- --------- Total noninterest expenses 2,472,043 2,521,671 4,903,935 4,948,704 --------- --------- ---------- --------- Income before federal income taxes 1,388,956 1,164,086 2,755,550 2,337,589 Federal income taxes 387,969 286,616 760,759 579,424 --------- --------- ---------- --------- Net Income $1,000,987 $ 877,470 $ 1,994,791 $ 1,758,165 ========== ========== =========== =========== Per share data (based on 3,051,504 shares) Earnings per share $ 0.33 $ 0.29 $ 0.65 $ 0.58 ========== ========== =========== =========== Dividends declared $ 0.1275 $ 0.0000 $ 0.2525 $ 0.2250 ========== ========== =========== =========== See notes to interim consolidated financial statements Page 4
5 FIRST CITIZENS BANC CORP Consolidated Statements of Shareholders' Equity (Unaudited)
Three months ended Six months ended June 30, June 30, --------------------------- ---------------------------- 1996 1995 1996 1995 Balance at beginning of period $ 34,212,506 $32,103,889 $ 33,806,791 $ 31,910,252 Net earnings 1,000,987 877,470 1,994,791 1,758,165 Cash dividends (389,067) 0 (770,505) (687,058) Market adjustment on securities available for sale (325,244) 0 (531,895) 0 ------------ ----------- ------------ ------------ Balance at end of period $ 34,499,182 $32,981,359 $ 34,499,182 $ 32,981,359 ============ =========== ============ ============ See notes to interim consolidated financial statements Page 5
6 FIRST CITIZENS BANC CORP Consolidated Statements of Cash Flows (Unaudited)
Six months ended June 30, --------------------------- 1996 1995 Cash Flows from Operating Activities: Net Income $ 1,994,791 $ 1,758,165 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 307,090 281,659 Amortization of goodwill 100,767 100,767 Provision for loan losses 149,000 156,000 Change in deferred loan fees (5,619) (30,799) Net amortization of investment security premiums and discounts 65,331 71,804 Change in accrued interest receivable (98,278) 130,460 Increase in other assets (326,697) (578,543) Change in accrued interest, taxes and other expenses (647,267) 312,939 ------------ ------------ Net cash from operating activities 1,539,118 2,202,452 ------------ ------------ Cash Flows from Investing Activities: Maturities and calls of investment securities, held-to-maturity 3,766,546 13,873,031 Purchases of investment securities, held-to-maturity 0 (8,496,952) Maturities and calls of investment securities, available-for-sale 6,191,462 45,358 Purchases of investment securities, available-to-sale (7,393,476) 0 Loans made to customers, net of principal collected (1,132,925) (4,710,846) Change in federal funds sold (345,000) (4,764,000) Purchases of office premises and equipment (296,628) (418,128) ------------ ------------ Net cash from investing activities 789,979 (4,471,537) ------------ ------------ Cash Flows from Financing Activities: Repayments of FHLB borrowings (551,191) (521,126) Change in federal funds purchased 0 0 Change in deposits (5,038,221) (1,891,832) Change in securities sold under agreements to repurchase (290,190) (651,318) Change in U. S. Treasury interest-bearing demand notes payable 1,340,632 591,610 Cash dividends paid (770,505) (687,057) ------------ ------------ Net cash from financing activities (5,309,475) (3,159,723) ------------ ------------ Decrease in cash and due from banks (2,980,378) (5,428,808) Cash and due from banks at beginning of period 16,295,910 19,127,275 ------------ ------------ Cash and due from banks at end of period $ 13,315,532 $ 13,698,467 ============ ============ Supplemental disclosures: Cash paid during the period for: Interest $ 4,780,528 $ 4,329,287 ============ ============ Federal Income taxes $ 705,000 $ 365,000 ============ ============ 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 June 30, 1996 and December 31, 1995; the consolidated statements of income for the three month periods ended June 30, 1996 and 1995, and for the six month periods ended June 30, 1996 and 1995; the consolidated statement of shareholders equity for the three months ended June 30, 1996 and 1995, and for the six month periods ended June 30, 1996 and 1995; and the consolidated statement of cash flow for the six month periods ended June 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 June 30, 1996 and its results of operations and changes in cash flows for the periods ended June 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 June 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 gross unrealized gains and losses of the investment and mortgage-backed securities, as presented in the consolidated balance sheets at June 30, 1996 and December 31,1995 are as follows:
June 30, 1996 Gross Gross Amortized Unrealized Unrealized Estimated Fair AVAILABLE FOR SALE Cost Gains Losses Value ----------- --------- ------------ --------------- U.S. Treasury securities and $38,016,253 $ 66,704 ($449,194) $37,633,763 obligations of U.S. government corporations and agencies Obligations of state and political 16,808,682 359,312 (192,511) 16,975,484 subdivisions Other securities, including mortgage- 3,463,657 0 (850) 3,462,807 backed securities ----------- --------- ------------ ----------- $58,288,592 $ 426,016 ($642,555) $58,072,053 =========== ========= ============ ===========
June 30, 1996 Gross Gross Amortized Unrealized Unrealized Estimated Fair HELD TO MATURITY Cost Gains Losses Value ----------- --------- ------------ --------------- U.S. Treasury securities and $ 1,000,000 $ 24,063 $ 0 $ 1,024,063 obligations of U.S. government corporations and agencies Obligations of state and political 8,353,912 200,563 (13,256) 8,541,219 subdivisions Other securities, including mortgage- 3,585,247 8,963 (33,884) 3,560,325 backed securities ----------- --------- ------------ ----------- $12,939,159 $ 233,589 ($ 47,140) $13,125,607 =========== ========= ============ ===========
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 $37,032,554 $ 210,723 ($105,141) $37,138,136 obligations of U.S. government corporations and agencies Obligations of state and political 16,714,307 556,352 (72,822) 17,197,837 subdivisions Other securities, including mortgage- 3,374,996 250 0 3,375,246 backed securities ----------- --------- ------------ ----------- $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 $ 1,500,000 $ 51,719 $ 0 $ 1,551,719 obligations of U.S. government corporations and agencies Obligations of states and political 10,380,035 312,217 (12,466) 10,679,786 subdivisions Other securities, including mortgage- 4,855,722 27,928 (16,215) 4,867,435 backed securities ----------- --------- ------------ ----------- $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 June 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.
Amortized Cost Estimated Fair Value AVAILABLE FOR SALE Due in one year or less $12,347,502 $12,411,185 Due after one year through five years 31,826,169 31,599,004 Due after five years through ten years 9,847,594 9,811,627 Due after ten years 803,661 787,430 Mortgage-backed securities 51,907 51,057 Other securities 3,411,750 3,411,750 ----------- ----------- Total securities available for sale $58,288,583 $58,072,053 =========== =========== HELD TO MATURITY Due in one year or less $ 2,993,640 $ 3,006,180 Due after one year through five years 6,360,269 6,559,099 Mortgage-backed securities 3,585,250 3,560,026 ----------- ----------- Total securities held to maturity $12,939,159 $13,125,305 =========== ===========
No securities were sold during 1996. Securities called or settled by the issuer in 1996 resulted in gains of $15,850. Investment securities with a carrying value of approximately $31,826,000 and $40,118,000 were pledged as of June 30, 1996 and December 31, 1995, respectively, to secure public deposits, other deposits and liabilities as required by law. (3) Loans Page 10 11 First Citizens Banc Corp Notes to Interim Consolidated Financial Statements (Unaudited) Form 10-Q - ------------------------------------------------------------------------------- Loans as presented in the consolidated balance sheets are comprised of the following classifications:
6/30/96 12/31/95 ------------- -------------- Commercial & agriculture $ 41,952,087 $ 45,024,037 Real estate - mortgage 125,230,404 120,782,608 Real estate - construction 1,212,117 1,129,624 Consumer loans 28,392,887 28,983,885 Credit card and other 1,284,406 1,117,305 Deferred Loan Fees (1,163,709) (1,168,916) ------------- ------------- Total loans $ 196,908,192 $ 195,868,543 ============= =============
(4) Allowance for Loan Losses A summary of the activity in the allowance for loan losses for the six months ended June 30, 1996 and June 30, 1995 is as follows:
1996 1995 ----------- ----------- Balance January 1, $ 2,602,000 $ 2,390,000 Loans Charged Off (167,931) (90,000) Recoveries of Loans 69,036 75,000 Provision for loan losses 149,000 156,000 ----------- ----------- Balance June 30, $ 2,652,105 $ 2,531,000 =========== ===========
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 six months ended June 30.
1996 1995 ---------- ---------- Average investment in impaired loans $2,126,587 $3,384,000 Interest income recognized on impaired loans including $ 68,281 $ 114,344 interest income recognized on cash basis Interest income recognized on impaired loans on cash basis $ 2,338 $ 10,402
Information regarding impaired loans at June 30, 1996 and December 31, 1995 is as follows:
6/30/96 12/31/95 ----------- ---------- Balance impaired loans $1,698,000 $2,338,000 Less portion for which no allowance for loan losses is $ 0 $1,205,000 allocated Portion of impaired loan balance for which an allowance for $1,698,000 $1,133,000 credit losses is allocated Portion of allowance for loan losses allocated to the $ 416,000 $ 268,000 impaired loan balance
(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 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 Page 12 13 First Citizens Banc Corp Notes to Interim Consolidated Financial Statements (Unaudited) Form 10-Q - ------------------------------------------------------------------------------- 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 June 30, 1996 and December 31, 1996. Commitments to extend credit and letters of credit approximated the following amounts at June 30, 1996 and December 31, 1995.
Contract Amount --------------- June 30, 1996 December 31, 1995 ------------- ----------------- Commitment to extend credit: Lines of credit and construction loans $12,158,000 $11,164,000 Credit cards 4,108,000 3,583,000 Letters of credit 560,000 377,000 ----------- ----------- $16,826,000 $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 June 30, 1996 and December 31, 1995 approximated $1572,000 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 June 30, 1996, compared to December 31, 1995 and the consolidated results of operations for the three and six month periods ended June 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 June 30, 1996 totalled $299,294,049 compared to $304,061,901 at December 31, 1995. This was an decrease of $4,767,852 or 1.6 percent. Within the structure of the assets, total investment securities have decreased $3,435,764 since December 31, 1995, and net loans have increased $989,544 since December 31, 1995. At June 30, 1996, $12,939,159 or 18.2 percent of the investment portfolio was classified as held-to-maturity. The remainder, $58,072,053 or 81.8 percent, was classed as available-for-sale. Investment securities decreased $3,435,764 or 4.6 percent from December 31, 1995. The decrease in the balances of the portfolio is a result of maturities of securities. Net loans at June 30, 1996 increased $989,544 or .5 percent from year end 1995. At June 30, 1996, the loan to deposit ratio was 81.9 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 second quarter of 1996. At June 30, 1996, the allowance for loan losses as a percent of total loans was 1.35 percent compared to 1.33 percent at December 31, 1995. For the six months of operations of 1996, $149,000 was placed into the allowance from earnings compared to $156,000 for the same period of 1995. Net charge offs for the first six months of 1996 were $99,000 compared to $15,000 for the same period of 1995. Impaired loans at June 30, 1996 totalled $1,698,000 or 0.86 percent of the loan portfolio compared to $2,338,000 or 1.2 percent of the loan portfolio at December 31, 1995. Total deposits at June 30, 1996 decreased $5,038,221 from year end 1995. Non-interest bearing Page 14 15 First Citizens Banc Corp Management's Discussion and Analysis of Financial Condition and Results of Operations Form 10-Q - ------------------------------------------------------------------------------- deposits, representing demand deposit balances, decreased $6,083,961 from year end 1995. Interest bearing deposits, including savings and time deposits, increased $1,045,740 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 $5,836,000 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 $4,321,000 compared to the average balance for the same period for 1995. The current average rate on these deposits is 5.1 percent. Other borrowed funds have increased $499,251 from December 31, 1995 to June 30, 1996. Federal Home Loan Bank borrowings have decreased $551,191 as a result of scheduled paydowns. Securities sold under agreements to repurchase have decreased $290,190 and U.S. Treasury Tax Demand Notes have increased $1,340,632. Shareholders' equity at June 30, 1996 was $34,499,182 which was 11.5 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 $1,994,791 less dividends of $770,505 and less the decrease in the unrealized gain on securities available for sale of $531,895. 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. The company paid cash dividends on February 1, 1996 at the rate of $.125 per share, and 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. Results of Operations - --------------------- Net earnings for the quarter ended June 30, 1996 were $1,000,987 or $.33 per common share compared to $877,470 or $.29 per common share for the same period in 1995. This was an increase of $123,517 or 14.1 percent. Net earnings for the six month period ended June 30, 1996 were $1,994,791 or $.65 per common share compared to $1,758,165 or $.58 per common share for the same period in 1995. This was an increase of $236,626 or 13.5 percent. Net interest income for the second quarter 1996 totalled $3,079,664 compared to $3,017,544 for the second quarter of 1995. This was an increase of $62,120 or 2.1 percent. Net interest income for the first six months of 1996 totalled $6,130,988 compared to $6,010,249 for the first six months of 1995. This was an increase of $120,739 or 2.0 percent. Total interest income for the first six months of 1996 has increased $293,388 or 2.8 percent compared to the same period of 1995. The average rate on earning assets on a tax equivalent basis for the first six months of 1996 was 8.1 percent Page 15 16 First Citizens Banc Corp Management's Discussion and Analysis of Financial Condition and Results of Operations Form 10-Q - ------------------------------------------------------------------------------- compared to 7.9 percent for the same period of 1995. Total interest expense for the first six months of 1996 has increased $172,649 or 3.9 percent compared to the same period of 1995. The net interest margin on a tax equivalent basis for the first six months was 4.7 percent for both periods ended June 30, 1996 and 1995. Noninterest income for the second quarter 1996 totalled $860,835 compared to $751,213 for the second quarter 1995. This was an increase of $109,622 or 14.6 percent and attributed to increases in revenue from the computer operations of $118,445 and decreased other operating income of $17,158. Noninterest income for the first six months of 1996 totalled $1,677,497 compared to $1,432,044 for the same period in 1995. This was an increase of $245,453 or 17.1 percent and attributed to increases in revenue from the computer operations of $224,129, increased service charge on deposit accounts of $29,680, increased investment security gain of $13,350 and decreased other operating income of $21,706. Noninterest expenses for the second quarter 1996 totalled $2,472,043 compared to $2,521,671 for the second quarter 1995. This was an decrease of $49,628 or 2.0 percent. Noninterest expenses for the first six months of 1996 totalled $4,903,935 compared to $4,948,704 for the first six months of 1995. This was an decrease of $44,769 or .90 percent. The largest monetary increase in non- interest expense is in employee benefits, which increased $67,736 or 18.4 percent for the first six months of 1996 compared to the same period of 1995. The increase in employee benefits is due to increased health insurance of $70,850. FDIC premiums for the first six months of 1996 have decreased $274,315 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 second quarter 1996 totalled $387,969 compared to $286,616 for the second quarter 1995. This was an increase of $101,353 or 35.4 percent. The increase in the federal income taxes is a result of the increase in total earnings before taxes of $224,870 and a decrease in tax exempt earnings of $44,409. The federal income tax expense for the first half of 1996 totalled $760,759 compared to $579,424 for the first half of 1995. This was an increase of $181,335 or 31.3 percent. The increase in the federal income taxes is a result of the increase in total earnings before taxes of $417,961 and a decrease in tax exempt earnings of $92,037. Page 16 17 First Citizens Banc Corp Management's Discussion and Analysis of Financial Condition and Results of Operations Form 10-Q - ------------------------------------------------------------------------------- Capital Resources - ----------------- Shareholders equity totalled $34,499,182 at June 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 6/30/96 12/31/95 Minimums ------- -------- -------- Tier I Risk Based Capital 21.25% 19.87% 4.00% Total Risk Based Capital 22.51% 21.13% 8.00% Leverage Ratio 10.84% 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 $296,628 for the first six months of 1996 compared to $418,128 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 six months of 1996 the Banks maintained a federal funds sold position that averaged $8,290,000. 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 $9,561,239 at June 30, 1996. Finally, 81.8 percent of the Corporation's investment and mortgage-backed investment portfolio has been classified as available for sale which provides additional liquidity. Page 17 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:
Director Candidate For Against Not Voted ----------------- 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 Increase 568,738 2,808 191,330 Authorized Shares
ITEM 5. OTHER INFORMATION - None ITEM 6. (A) EXHIBITS - Item No. 27 Financial Data Schedule ...............21 (B) REPORTS ON FORM 8-K - None Page 19 20 Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, The registrant has caused this report to be signed on its behalf the undersigned thereunto duly authorized. First Citizens Banc Corp /s/ David A. Voight August 9, 1996 ------------------- -------------- David A. Voight Date President /s/ James O. Miller August 9, 1996 ------------------- -------------- James O. Miller Date Senior Vice President EX-27 2 EXHIBIT 27
9 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 13,315,532 214,240,070 8,260,000 0 58,072,053 58,288,592 58,072,053 196,908,192 (2,652,105) 299,294,049 237,303,963 9,803,872 1,448,270 16,238,762 15,257,520 0 0 19,241,662 299,294,049 8,428,496 2,203,503 116,772 10,748,771 3,982,990 4,617,783 6,130,988 149,000 15,850 4,903,935 2,755,550 2,755,550 0 0 1,994,791 0.65 0.65 7.78 1,260,000 733,000 0 2,126,587 2,602,000 167,931 69,036 2,652,105 2,652,105 0 0
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