Five Year Condensed Consolidated Financial Summary

	2011			2010			2009			2008			2007
Earnings
Net Income/(loss) (000)	$	3,958		$	(1,268	)	$	1,655		$	(38,978	)	$	6,885
Preferred dividends and discount accretion on warrants (000)	$	(1,176	)	$	(1,176	)	$	(955	)	$	—		$	—
Net Income/(loss) available to common shareholders (000)	$	2,782		$	(2,444	)	$	700		$	(38,978	)	$	6,885
Per Common Share (1)
Earnings/(loss) (basic and diluted)	$	0.51		$	(0.16	)	$	0.21		$	(5.06	)	$	1.25
Earnings/(loss), available to common shareholders (basic and diluted)	$	0.36		$	(0.32	)	$	0.09		$	(5.06	)	$	1.25
Book Value	$	13.30		$	12.58		$	12.82		$	9.94		$	16.37
Dividends Paid	$	0.03		$	0.00		$	0.25		$	0.91		$	1.12
Balances
Assets (millions)	$	1,113.0		$	1,100.7		$	1,102.8		$	1,053.6		$	1,119.3
Deposits (millions)	$	901.2		$	892.5		$	856.1		$	809.9		$	839.8
Net Loans (millions)	$	764.0		$	745.6		$	775.5		$	787.8		$	787.4
Shareholders’ Equity (millions)	$	102.5		$	97.0		$	98.8		$	76.6		$	126.2
Performance Ratios
Return on Average Assets		0.35	%		(0.11	%)		0.15	%		(3.54	%)		0.89	%
Return on Average Equity		3.96	%		(1.27	%)		1.68	%		(31.57	%)		8.78	%
Equity Capital Ratio		9.21	%		8.81	%		8.96	%		7.27	%		11.28	%
Net Loans to Deposit Ratio		84.77	%		83.54	%		90.59	%		97.27	%		93.76	%
Loss Allowance to Total Loans		2.71	%		2.84	%		1.93	%		1.11	%		0.93	%

(1) Per share data has been adjusted for the business combination with Futura Banc Corp. in 2007.

Dear Shareholder:

We were pleased to announce net income for 2011 of $3,958,000 or $0.51 per share. This is an improvement of $5,226,000 over last year’s loss of $1,268,000 or $(0.16) per share. The improvement in net earnings per share was the result of a decrease in the impact of items related to the economic downturn. These expenses were $1.17 (pre-tax) per share less than 2010, but they were still $0.47 per share higher than the first year of the crises, 2008.

Economically Related Expenses

	2011		2010		2009		2008
Provision for Loan Losses	$	1.27	$	2.33	$	1.73	$	1.06
FDIC Premium		0.16		0.19		0.26		0.01
Collection and Repossession		0.19		0.20		0.19		0.08
Investment Security Impairment		—		0.07		—		—
Total	$	1.62	$	2.79	$	2.18	$	1.15

The amount added to the reserve for loan losses was significantly lower than in 2010. The number of deteriorating loans appears to have stabilized. The FDIC premiums decreased with the advent of a new way of calculating the premium that benefits smaller banks like us. Collection and repossession expenses remain high compared to pre-crisis costs. While we are very comfortable with our reserve for losses, we still have a historically high number of delinquent and challenged loan accounts to work through. We remain hopeful that these expenses will continue to decrease.

Net Interest Income

Examining the fundamentals of our business, our net interest income, the amount that we make from the spread between the interest cost of deposits and interest income from loans and investments, has remained consistent in spite of the extremely low interest rate environment.

	2011		2010		2009		2008
Net Interest Income per share	$	5.37	$	5.38	$	5.22	$	5.25

Maintaining this net interest income is a major focus for 2012 and beyond. The Federal Reserve indicates that the current low interest rate environment will continue well into 2014. We have seen statistics showing that loan growth in Ohio will be flat. Low rates coupled with increased competition for limited loan growth will put downward pressure on net interest income. To preserve a strong net interest income, we must be attentive to our existing customers while prospecting for solid new loan opportunities. Toward this end, we have shifted our focus from a defensive approach aimed at surviving the great recession to an offensive mindset emphasizing aggressive business development. This involves investment in talented people, additional training, more marketing & advertising, and new products. These investments will increase our noninterest expenses, but, if we take a longer view, it is very important to protect our interest margin during the next few years of low interest rates.

Noninterest Income

The other component of revenue is our noninterest income. Noninterest income per share increased approximately 4% in 2011 and has remained stable over the last four years. 2010 excludes the write-down of an other-than-temporary impairment on an investment security of $(0.07) per share.

	2011		2010		2009		2008
Noninterest Income per share	$	1.35	$	1.30	$	1.31	$	1.29

In spite of regulations that hurt the ability of the banking industry to collect fee income, our service charge income was relatively constant at approximately $4,550,000 and our ATM income increased by approximately $60,000 to $1,814,000. We remain pleased with the contribution that our trust and investment department, Citizens Wealth Management, makes to our income, which increased by approximately $200,000 to $2,063,000. While our results have not materially shown the effects of regulatory attacks on bank fees, we are concerned about the attitude behind these attacks. We certainly do not agree with banks that would charge their customers a significant monthly fee to use their debit cards, but we firmly believe that we should be fairly compensated for the products and services that we provide to our customers

Noninterest Expense

The final component to arrive at net income is noninterest expense, shown here without the economically related issues mentioned above. These expenses were approximately $4.48 per share in 2011. They increased by approximately $0.19 per share from 2010 but remained lower than the $4.65 per share in expenses during 2008. The per share number for 2008 also excludes a noncash write-down of goodwill of $(5.62).

	2011		2010		2009		2008
Noninterest Expense per share	$	4.48	$	4.29	$	4.18	$	4.65

Much of the increase in noninterest expense between 2010 and 2011 was in salary and benefits. We have added several lenders with commercial and agricultural lending experience. This investment has already paid off in our 2011 loan growth. We also added to trust and wealth management staff. We created a marketing and advertising department with an experienced staff. All of these new positions are focused on taking care of existing customers and generating new customers. This is part of our investment in the future. At the same time, we have maintained our staffing in a robust credit evaluation department to thoroughly examine all new loan opportunities and in our asset quality department to continue work on the loans that struggled during the recession. Unfortunately, there are still a number of loan customers who have not enjoyed significant economic improvement and must be monitored. In 2011, we also gave salary increases to employees who had worked very hard to bring us through this challenging time, many of whom had received no salary adjustment for several years. We also experienced increases in health care costs. As a result, for 2012, we increased employee contribution to the health plan and implemented a number of wellness and self help health programs.

Loans and Deposits

Deposits are the raw materials that we work with to generate our interest income.

	2011		2010		2009		2008
Noninterest Bearing Deposits	$	189,382	$	157,529	$	140,659	$	122,141
Interest Bearing Deposits		711,864		734,934		715,393		687,780
Total	$	901,246	$	892,463	$	856,052	$	809,921

We have achieved nice deposit growth over the last four years, with total deposits growing from approximately $809 million in 2008 to $901 million in 2011. Our focus has been on the growth in the number of noninterest bearing accounts. While there are processing costs for noninterest bearing accounts, we have no interest expense, and we have the opportunity for service charge income. To control processing costs, we encourage customers to utilize internet and mobile banking products. We are in the process of revamping our internet site and adding overdraft protection features that we believe our customers will embrace. These efforts are designed to retain and grow noninterest bearing accounts and service charge revenue. We control the total deposits in our interest bearing accounts through pricing.

If we need deposits for loan growth, we can selectively increase the interest that we pay, and vice versa. This process works well for us. We monitor the deposit costs of a group of 9 Ohio banks that reflect our markets. The cost of funding within this group for September 2011 ranged from 0.67% to 1.32%. Our costs were the lowest at 0.67%.

Turning to our use of these deposits, we were able to generate a nice increase in loans during 2011.

	2011		2010		2009		2008
Gross Loans	$	785,268	$	767,323	$	790,818	$	796,651

A major focus for 2011 was increased lending. Our net increase in gross loans was approximately $18,000,000, but to show this increase we also needed to replace the approximately $14,000,000 that we receive in loan payments each month. Through the recession, loan demand has been soft. We have seen statistics indicating that future loan growth in Ohio will be static, at best. This will result in increased competition for loan opportunities and downward pressure on rates. Our increases in the staff engaged in commercial and agricultural lending and in marketing and advertising are intended to address these challenges. We have placed our emphasis on developing new loan relationships and maintaining our existing relationships, all with the purpose of growing our loan business and keeping our interest margin strong. Our retail customer service and loan production staff members have established goals regarding the volume of new business expected from them. We continue to see opportunities in our offices in Dublin and Fairlawn. These areas continue to see a more robust economic improvement.

Outlook for 2012

Our outlook is cautiously optimistic and similar to 2011. When we look at our customer base we see:

• Customers continuing to save and hold cash. There is some movement into the financial markets through our Wealth Management department, but many customers continue to hold cash.

• Our manufacturing customers are doing quite well. Orders appear to be holding well into the year. Some have hired additional workers, but many have adjusted to maintain production with smaller staffs. Some are also having problems finding qualified or experienced workers.

• Our farm customers, for the most part, are doing quite well. Many of our farm lines of credit have not been drawn as the customers have had sufficient cash to fund their own needs.

• Selectively, we have seen demand for funding non-residential construction and non-residential refinancing. These opportunities tend to be more from the Dublin and Fairlawn offices, and we have maintained a disciplined approach to such loans based upon conservative expectations concerning the collateral value and cash flow.

• Housing and 1-4 family mortgages continues to be a significant challenge in all of our markets. The exceptionally low interest rate environment creates refinancing business, but new construction and development is just not there compared with any historic levels. It may take some time for the supply and demand for housing to stabilize.

The CPP Funds

From time to time we are asked about the CPP funds. As most of you know, at the depth of the recession we bolstered our capital by issuing approximately $23,000,000 in preferred stock to the U. S. Treasury. We believe it was important to have strong capital ratios when there were so many economic unknowns. We pay 5% interest on this stock. This rate is fixed through January 2014. This capital, which is held at the holding company level, was used to replace debt, which could not be counted as capital. The net cost to the company was much less than 5%. Many companies have issued additional stock to repay their CPP funds. In this market and at our current stock price, we do not think that this is a desirable option, since it would create substantial dilution to your stock. There are several other options that may be available over time, and we consider this topic regularly.

Our Stock and the Market

We believe there are a number of factors that impact our stock price. Three of these are earnings, dividends, and the general taste for financial stocks in the market. We are pleased with the earnings improvement from 2010 to 2011 and hopeful that this trend will continue. Continuing improvement in economic conditions would certainly contribute to the trend. We paid dividends November 1^st and February 1^st. We understand the importance of dividends to you and realize how dividends may impact our price as reflected in the market. But we also must balance the amount of our dividends with the need to retain earnings to grow the capital of the company for the future. The factor that we cannot control is the general appetite for bank stocks as an investment. The impact of the interest rate environment and the additional regulation of the industry certainly don’t encourage investment in bank stocks. Looking at the KBW bank index for January 3, 2012, 2011, and 2010 the prices were $42.57, $53.00 and $46.54 respectively. We believe this reflects the lack of appeal for banks. But, we also believe this is a short term issue. For economic growth, this country needs a strong banking system, and community banks will play an important role in that system.

Very truly yours,

James O. Miller

President & C.E.O.

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ANNUAL REPORT

CONTENTS

Five –Year Selected Consolidated Financial Data	1
Common Stock and Shareholder Matters	3
General Development of Business	3
Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Quantitative and Qualitative Disclosures about Market Risk	16
Financial Statements
Management’s Report on Internal Control over Financial Reporting	20
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Statements	21
Report of Independent Registered Public Accounting Firm on Financial Statements	22
Consolidated Balance Sheets	23
Consolidated Statements of Operations	24
Consolidated Statements of Changes in Shareholders’ Equity	25
Consolidated Statements of Cash Flow	27
Notes to Consolidated Financial Statements	29

Five-Year Selected Consolidated Financial Data

(Dollars in thousands, except per share data)

	Year ended December 31,
	2011			2010			2009			2008			2007
Statements of income:
Total interest and dividend income	$	48,861		$	51,925		$	55,191		$	62,267		$	49,947
Total interest expense		7,500			10,464			14,918			21,780			20,371
Net interest income		41,361			41,461			40,273			40,487			29,576
Provision for loan losses		9,800			17,940			13,323			8,207			1,020
Net interest income after provision for loan losses		31,561			23,521			26,950			32,280			28,556
Security gains/(losses)		(8	)		212			75			193			(1	)
Other noninterest income		10,450			9,269			9,558			9,463			7,506
Total noninterest income		10,442			9,481			9,633			9,656			7,505
Goodwill impairment		—			—			—			43,291			—
Other noninterest expense		37,198			36,101			35,165			36,254			26,163
Total noninterest expense		37,198			36,101			35,165			79,545			26,163
Income (loss) before federal income taxes		4,805			(3,099	)		1,418			(37,609	)		9,898
Federal income tax expense (benefit)		847			(1,831	)		(237	)		1,369			3,013
Net income (loss)	$	3,958		$	(1,268	)	$	1,655		$	(38,978	)	$	6,885
Preferred stock dividends and discount accretion		1,176			1,176			955			—			—
Net income (loss) available to common shareholders	$	2,782		$	(2,444	)	$	700		$	(38,978	)	$	6,885
Per share of common stock:
Earnings (basic and diluted)	$	0.51		$	(0.16	)	$	0.21		$	(5.06	)	$	1.25
Earnings (basic and diluted) available to common shareholders		0.36			(0.32	)		0.09			(5.06	)		1.25
Dividends		0.03			—			0.25			0.91			1.12
Book value		13.30			12.58			12.82			9.94			16.37
Average common shares outstanding:
Basic		7,707,917			7,707,917			7,707,917			7,707,917			5,505,023
Diluted		7,707,917			7,707,917			7,707,917			7,707,917			5,505,023
Year-end balances:
Loans, net	$	764,011		$	745,555		$	775,547		$	787,789		$	787,386
Securities		220,021			200,296			222,674			167,159			158,920
Total assets		1,112,977			1,100,622			1,102,812			1,053,611			1,119,257
Deposits		901,246			892,463			856,102			809,921			839,820
Borrowings		98,751			103,604			139,105			155,038			145,051
Shareholders’ equity		102,528			96,950			98,797			76,617			126,156
Average balances:
Loans, net	$	741,383		$	765,821		$	777,825		$	791,298		$	579,025
Securities		216,549			212,038			197,826			163,054			118,542
Total assets		1,124,553			1,121,105			1,102,779			1,099,943			780,769
Deposits		910,315			892,773			863,488			808,646			574,133
Borrowings		105,993			117,280			127,793			162,400			118,375
Shareholders’ equity		99,848			99,648			98,454			123,468			78,435

See accompanying notes to consolidated financial statements.

1

Five-Year Selected Ratios

	Year ended December 31,
	2011			2010			2009			2008			2007
Net yield on average interest-earning assets		3.91	%		3.94	%		3.91	%		4.18	%		4.17	%
Return on average total assets		0.35			(0.11	)		0.15			(3.54	)		0.89
Return on average shareholders’ equity		3.96			(1.27	)		1.68			(31.57	)		8.78
Average shareholders’ equity as a percent of average total assets		8.88			8.89			8.97			11.22			10.05
Net loan charge-offs as a percent of average total loans		1.35			1.46			0.87			0.84			0.52
Allowance for loan losses as a percent of loans at year-end		2.71			2.84			1.93			1.11			0.93
Shareholders’ equity as a percent of total year-end assets		9.21			8.81			8.96			7.27			11.28

A copy of the Corporation’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, will be furnished, free of charge, to shareholders, upon written request to the Secretary of First Citizens Banc Corp, 100 East Water Street, Sandusky, Ohio 44870.

See accompanying notes to consolidated financial statements.

2

Common Stock and Shareholder Matters

The common shares of First Citizens Banc Corp (FCBC) trade on The NASDAQ Stock Market under the symbol “FCZA”. As of December 31, 2011, there were 7,707,917 shares outstanding held by approximately 1,349 shareholders of record (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms). Information below is the range of sales prices for each quarter for the last two years.

2011
First Quarter	Second Quarter	Third Quarter	Fourth Quarter
$3.83 to $4.99	$3.70 to $4.25	$3.25 to $4.09	$3.21 to $4.21

2010
First Quarter	Second Quarter	Third Quarter	Fourth Quarter
$4.05 to $5.64	$4.36 to $6.26	$4.00 to $5.30	$3.65 to $4.40

Dividends per share declared on common shares by FCBC were as follows:

	2011		2010
First quarter	$	—	$	—
Second quarter		—		—
Third quarter		—		—
Fourth quarter		0.03		—
	$	0.03	$	—

Information regarding potential restrictions on dividends paid can be found in Note 16 to the Consolidated Financial Statements.

General Development of Business

(Dollars in thousands, except for per share data)

FIRST CITIZENS BANC CORP (FCBC) was organized under the laws of the State of Ohio on February 19, 1987 and is a registered financial holding company under the Gramm-Leach-Bliley Financial Modernization Act of 1999, as amended. FCBC and its subsidiaries are sometimes referred to together as the Corporation. The Corporation’s office is located at 100 East Water Street, Sandusky, Ohio. The Corporation had total consolidated assets of $1,112,977 at December 31, 2011.

THE CITIZENS BANKING COMPANY (Citizens), owned by the Corporation since 1987, opened for business in 1884 as The Citizens National Bank. In 1898, Citizens was reorganized under Ohio banking law and was known as The Citizens Bank and Trust Company. In 1908, Citizens surrendered its trust charter and began operation under its current name. Citizens maintains its main office at 100 East Water Street, Sandusky, Ohio and operates branch banking offices in the following Ohio communities: Sandusky (2), Norwalk (2), Berlin Heights, Huron, Castalia, New Washington, Shelby (3), Willard, Chatfield, Tiro, Greenwich, Plymouth, Shiloh, Akron, Dublin, Hilliard, Plain City, Russells Point, Urbana (2), West Liberty and Quincy. Additionally, Citizens operates a loan production office in Port Clinton, Ohio. Citizens accounted for 99.5% of the Corporation’s consolidated assets at December 31, 2011.

See accompanying notes to consolidated financial statements.

3

FIRST CITIZENS INSURANCE AGENCY INC. (Insurance Agency) was formed to allow the Corporation to participate in commission revenue generated through its third party insurance agreement. Assets of the Insurance Agency were less than one percent of the Corporation’s consolidated assets as of December 31, 2011.

WATER STREET PROPERTIES (Water St.) was formed to hold properties repossessed by FCBC subsidiaries. Water St. accounted for less than one percent of the Corporation’s consolidated assets as of December 31, 2011.

FIRST CITIZENS INVESTMENTS, INC. (FCI) is wholly-owned by Citizens and holds and manages its securities portfolio. The operations of FCI are located in Wilmington, Delaware.

FIRST CITIZENS CAPITAL LLC (FCC) is wholly-owned by Citizens and holds inter-company debt that is eliminated in consolidation. The operations of FCC are located in Wilmington, Delaware.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—As of December 31, 2011 and December 31, 2010 and for the Years Ended December 31, 2011 and 2010

(Dollars in thousands, except per share data)

General

The following paragraphs more fully discuss the significant highlights, changes and trends as they relate to the Corporation’s financial condition, results of operations, liquidity and capital resources as of December 31, 2011 and 2010, and during the two-year period ended December 31, 2011. This discussion should be read in conjunction with the Consolidated Financial Statements and notes to the Consolidated Financial Statements, which are included elsewhere in this report.

Forward-Looking Statements

This report includes forward-looking statements by the Corporation relating to such matters as anticipated operating results, business line results, credit quality expectations, prospects for new lines of business, economic trends (including interest rates) and similar matters. Such statements are based upon the current beliefs and expectations of the Corporation’s management and are subject to risks and uncertainties. While the Corporation believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could prove to be inaccurate, and accordingly, actual results and experience could differ materially from the anticipated results or other expectations expressed by the Corporation in its forward-looking statements. Factors that could cause actual results or experience to differ from results discussed in the forward-looking statements include, but are not limited to, regional and national economic conditions; volatility and direction of market interest rates; credit risks of lending activities; governmental legislation and regulation, including changes in accounting regulation or standards; material unforeseen changes in the financial condition or results of operations of the Corporation’s clients; increases in FDIC insurance premiums and assessments; and other risks identified from time-to-time in the Corporation’s other public documents on file with the Securities and Exchange Commission.

The Corporation is not aware of any trends, events or uncertainties that will have or are reasonably likely to have a material effect on its liquidity, capital resources or operations except as discussed herein. The Corporation does not undertake, and specifically disclaims, any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect any events or circumstances occurring after the date of such statements, except as required by law.

See accompanying notes to consolidated financial statements.

4

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements, and the purpose of this section is to secure the use of the safe harbor provisions.

Financial Condition

At December 31, 2011, total assets were $1,112,977, compared to $1,100,622 at December 31, 2010. The increase in assets is primarily the result of an increase in the investment and loan portfolios, which was partially offset by decreased federal funds sold. Other factors contributing to the change in assets are discussed in the following sections.

At $764,011, net loans have increased from December 31, 2010 by 2.5%. The mix of the loan portfolio shifted in 2011 primarily toward Commercial and Agricultural and Commercial Real Estate. The shift was made up by growth in Commercial and Agricultural, Commercial Real Estate, Real Estate Construction and Credit Card and other of $39,169 and declines in Residential Real Estate and Consumer of $21,224. The decline in the consumer loan portfolio has continued largely as the result of a decline in the housing market and the Corporation’s decision to originate and sell the majority of mortgage loans in the secondary market. Additionally, other products such as same as cash loans and other lending alternatives in the market place are being used by consumers rather than the traditional consumer lending that the Corporation offers. These changes were also the product of management’s approach over the last year and a half. Our focus continues to be more about asset quality. While the primary goal was to try to improve asset quality, a secondary result was that these measures helped preserve liquidity.

Securities available for sale increased by $19,681, or 10.6%, from $184,952 on December 31, 2010 to $204,633 on December 31, 2011. U.S. Treasury securities and obligations of U.S. government agencies decreased $6,003, from $55,707 at December 31, 2010 to $49,704 at December 31, 2011. Obligations of states and political subdivisions available for sale increased $6,267 from 2010 to 2011. Mortgage-backed securities increased by $19,418 to total $87,518 at December 31, 2011. The shift toward Municipals and Mortgage-backed securities was intended to try to gain yield in the portfolio. The Corporation continues to utilize letters of credit from the Federal Home Loan Bank (FHLB) to replace maturing securities that were pledged for public entities. As of December 31, 2011, the Corporation was in compliance with all pledging requirements.

Mortgage-backed securities totaled $87,518 at December 31, 2011 and none are considered unusual or “high risk” securities as defined by regulatory authorities. Of this total, $40,286 are pass-through securities issued by the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) and $47,232 are collateralized by mortgage-backed securities issued or guaranteed by FNMA, FHLMC, or Government National Mortgage Association (GNMA). The average interest rate of the mortgage-backed portfolio at December 31, 2011 was 4.50%. The average maturity at December 31, 2011 was approximately 3.44 years. The Corporation has not invested in any derivative securities.

Securities available for sale had a fair value at December 31, 2011 of $204,633. This fair value includes unrealized gains of approximately $8,416 and unrealized losses of approximately $140. Net unrealized gains totaled $8,276 on December 31, 2011 compared to net unrealized gains of $1,755 on December 31, 2010. The change in unrealized gains is primarily due to changes in market interest rates. Note 2 to the Consolidated Financial Statements provides more information on unrealized gains and losses.

Premises and equipment, net of accumulated depreciation, decreased $355 from December 31, 2010 to December 31, 2011. The decrease in office premises and equipment is attributed to new purchases of $1,244, depreciation of $1,551 and disposals of $48.

Other assets have decreased $3,052 from December 31, 2010 to December 31, 2011. The decrease is primarily the result of decreases in wholesale mortgage receivables and prepaid FDIC assessments.

See accompanying notes to consolidated financial statements.

5

Year-end deposit balances totaled $901,246 in 2011 compared to $892,463 in 2010, an increase of $8,783, or 1.0%. Non-interest bearing demand deposits increased by $31,853, or 20.2%, savings accounts increased by $17,569 and interest bearing demand deposits decreased by $5,009 from 2010 to 2011. Time deposit accounts decreased by $35,631, or 11.0% from 2010 to 2011. A primary factor of the increase in deposits, especially savings, can be attributed to the prolonged, dampened state of the economy. Customers seem to be staying out of the market, spending less and saving more. Average deposit balances for 2011 were $910,315 compared to $892,773 for 2010, an increase of 2.0%. Non-interest bearing deposits averaged $176,435 for 2011, compared to $144,711 for 2010, increasing $31,724, or 21.9%. Savings, NOW, and MMIA accounts averaged $428,043 for 2011 compared to $406,909 for 2010. Average certificates of deposit decreased $35,316 to total an average balance of $305,837 for 2011.

Borrowings from the (FHLB) of Cincinnati were $50,295 at December 31, 2011. The detail of these borrowings can be found in Note 8 to the Consolidated Financial Statements. The balance is nearly unchanged from $50,327 at year-end 2010. The change in balance is the result of principal payments.

Citizens offers repurchase agreements in the form of sweep accounts to commercial checking account customers. These repurchase agreements totaled $19,029 at December 31, 2011 compared to $21,842 at December 31, 2010. Obligations of U.S. government agencies maintained under Citizens’ control are pledged as collateral for the repurchase agreements.

Total shareholders’ equity increased $5,577, or 5.8% during 2011 to $102,528. The change in shareholders’ equity resulted from net income of $3,958, preferred dividends of $1,159, the increase in the market value of securities available for sale, net of tax, of $4,304 and the change in the Corporation’s pension liability, net of tax of ($1,294). For further explanation of these items, see Note 1 and Note 12 to the Consolidated Financial Statements. The Corporation paid a $0.03 per common share dividend in 2011. Total outstanding shares at December 31, 2011 were 7,707,917. The ratio of total shareholders’ equity to total assets was 9.2% at December 31, 2011 compared to 8.8% at December 31, 2010.

Results of Operations

The operating results of the Corporation are affected by general economic conditions, the monetary and fiscal policies of federal agencies and the regulatory policies of agencies that regulate financial institutions. The Corporation’s cost of funds is influenced by interest rates on competing investments and general market rates of interest. Lending activities are influenced by the demand for real estate loans and other types of loans, which in turn is affected by the interest rates at which such loans are made, general economic conditions and the availability of funds for lending activities.

The Corporation’s net income primarily depends on its net interest income, which is the difference between the interest income earned on interest-earning assets, such as loans and securities, and interest expense incurred on interest-bearing liabilities, such as deposits and borrowings. The level of net interest income is dependent on the interest rate environment and the volume and composition of interest-earning assets and interest-bearing liabilities. Net income is also affected by provisions for loan losses, service charges, gains on the sale of assets, other income, noninterest expense and income taxes.

Comparison of Results of Operations for the Years Ended December 31, 2011 and December 31, 2010

Net Income (Loss)

The Corporation’s net income for the year ended December 31, 2011 was $3,958, compared to a net loss of $1,268 for the year ended December 31, 2010. The change in net income was the result of the items discussed in the following sections.

See accompanying notes to consolidated financial statements.

6

Net Interest Income

Net interest income for 2011 was $41,361, a decrease of $100, or .2% from 2010. Although average earning assets increased 0.7% from 2010, market rates in 2011 led to a decline in interest income, mostly in the loan portfolio. This decrease was offset by a decrease in interest expense on interest-bearing liabilities of $2,965, a 0.3% decline. The Corporation continually examines its rate structure to ensure that its interest rates are competitive and reflective of the current rate environment in which it competes.

Total interest income decreased $3,064, or 5.9% for 2011. The decrease was a result of the yield on earning assets more than offsetting the effect of the increase in volume of interest earning assets. Average loans decreased $20,345 from 2010 to 2011. Interest earned on the Corporation’s loan portfolio declined as both the average balances and yield declined. The average balance of the securities portfolio for 2011 compared to 2010 increased $4,511, due to the decline in loans and reallocation from federal funds sold to investments. Interest earned on the security portfolio, including bank stocks, decreased mainly due to decreases in yield. Average balances of Federal Funds sold decreased in 2011 by $10,492. Average balances in interest-bearing deposits increased in 2011 by $33,794.

Total interest expense decreased $2,965, or 28.3% for 2011 compared to 2010. The decrease in interest expense can be attributed to declines in market rates and the corresponding repricing of deposits and other sources of funding. Total average balance of interest-bearing liabilities decreased $25,469 while the average rate decreased 32 basis points in 2011. Average interest-bearing deposits decreased $14,182 from 2010 to 2011. The decrease in average interest-bearing deposits, and a decline in rate of approximately 27 basis points, caused interest expense on deposits to decrease by $2,092. Interest expense on FHLB borrowings decreased $788 due to a decrease in average volume of $10,088 and a decrease in average rate of 76 basis points. The average balance in subordinated debentures did not change from 2010 to 2011, but the rate on these securities decreased 17 basis points, resulting in a decrease in interest expense of $52. Other borrowings decreased $1,278 in balance from 2010 to 2011. The decrease in other borrowings is mainly the result of a decrease in repurchase agreements.

Refer to “Distribution of Assets, Liabilities and Shareholders’ Equity, Interest Rates and Interest Differential” and “Changes in Interest Income and Interest Expense Resulting from Changes in Volume and Changes in Rate” on pages 11 through 13 for further analysis of the impact of changes in interest-bearing assets and liabilities on the Corporation’s net interest income.

See accompanying notes to consolidated financial statements.

7

Provision and Allowance for Loan Losses

The following table contains information relating to the provision for loan losses, activity in and analysis of the allowance for loan losses as of and for each of the two years in the period ended December 31, 2011.

	As of and for year ended December 31,
	2011			2010
Net loan charge-offs	$	10,311		$	11,443
Provision for loan losses charged to expense		9,800			17,940
Net loan charge-offs as a percent of average outstanding loans		1.35	%		1.46	%
Allowance for loan losses	$	21,257		$	21,768
Allowance for loan losses as a percent of year-end outstanding loans		2.71	%		2.84	%
Impaired loans	$	27,380		$	19,173
Impaired loans as a percent of gross year-end loans (1)		3.49	%		2.50	%
Nonaccrual and 90 days or more past due loans	$	27,069		$	24,416
Nonaccrual and 90 days or more past due loans as a percent of gross year-end loans (1)		3.45	%		3.18	%

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

The Corporation’s policy is to maintain the allowance for loan losses at a level sufficient to provide for probable losses incurred in the current portfolio. The Corporation provides for loan losses through regular provisions to the allowance for loan losses. The provision is affected by net charge-offs on loans and changes in specific and general allocations required on the allowance for loan losses. Provisions for loan losses totaled $9,800 and $17,940 in 2011 and 2010 respectively. This contributed to the decrease in the allowance for loan losses by $511 at December 31, 2011, compared to the prior year.

The Corporation’s provision for loan losses decreased during 2011, but remained significant due to the continuing challenging economic conditions and depressed collateral values in our market. As we have continued to strengthen our collection and loan workout process, we have written down the value of problem loans to reflect current conditions. In addition, we have enhanced our review process to assure that loan problems are identified. A number of factors impact the provisions for loan losses, such as the level of higher risk loans in the portfolio, changes in practices related to loans, changes in collateral values and other factors. We continue to actively manage this process and have provided to increase the reserve to assure adequate coverage ratios.

Efforts are continually made to analyze each segment of the loan portfolio and quantify risk to assure that reserves are appropriate for each segment and the allowance overall. Management specifically evaluates loans that are impaired, which includes restructured loans, to estimate potential loss. Management also calculates specific reserve allocations for identified problem loans, and reserves for pools of similar loans. This analysis includes a review of the historical charge-off rates for all loan categories as well as fluctuations and trends in various risk factors that have occurred within the portfolios economic life

See accompanying notes to consolidated financial statements.

8

cycle. The analysis also includes assessment of qualitative factors such as credit trends, unemployment trends, vacancy trends and loan growth. The composition and overall level of the loan portfolio and charge-off activity are also factors used to determine the amount of the allowance for loan losses.

Management analyzes each commercial and commercial real estate loan, with a balance of $350 or larger, on an individual basis and designates a loan as impaired when it is in nonaccrual status or when an analysis of the borrower’s operating results and financial condition indicates that underlying cash flows are not adequate to meet its debt service requirements. In addition, loans held for sale and leases are excluded from consideration as impaired. Loans are generally moved to nonaccrual status when 90 days or more past due. Impaired loans or portions thereof, are charged-off when deemed uncollectible.

Noninterest Income

Noninterest income totaled $10,442 in 2011 compared to $9,481 in 2010, an increase of 10.1%. The significant items contributing to this change are as follows.

Service charges paid to Citizens were fairly flat from 2010 to 2011, down $6. Revenue from computer operations decreased in 2011, down $1 from 2010. Trust fees increased $199 compared to 2010. The increase is related to the recoveries in the financial markets and the related effect on assets under management, as well as a general increase in assets under management. ATM fee income increased in 2011, up $62 from 2010. Revenue from bank owned life insurance increased $171 in 2011 compared to the same period in 2010, which is the result of an additional investment in bank owned life insurance during 2011. Net gain on sales of loans increased in 2011, up $136 from 2010. This is the result of the Corporation’s decision to originate and sell the majority of mortgage loans in the secondary market. Other income increased in 2011, up $620 from 2010. This was the result of the Corporations’ participation in an income tax refund facilitation program, pursuant to which Citizens collected a fee for facilitating, and expediting, payment of refunds to taxpayers.

Noninterest Expense

Noninterest expense totaled $37,198 in 2011, an increase of $1,097, or 3.0% over 2010. The following discussion highlights significant items that resulted in increases or decreases in the components of noninterest expense.

Salaries and wages totaled $15,683 in 2011 compared to $13,923 in 2010, an increase of $1,760. The increase is mainly due to an increase in staffing in the credit and special assets departments and higher commission costs for the year ended 2011. The number of full-time equivalent employees increased during 2011 to 300.0, up 10.0, compared to the same period of 2010. The Corporation’s self-insured health plan costs increased $367 in 2011 as the plan experienced higher health care costs.

Net occupancy expense decreased from 2010 to 2011, down $164. In 2011, the corporation had all of its properties re-assessed, and the results lowered property taxes in 2011. Equipment expense decreased $123, as the cost of repairs and maintenance expense and depreciation expense decreased.

Professional service costs decreased $124 in 2011 compared to the same period in 2010. The decrease is due to consulting services for loan work outs, core banking software analysis and the resolution of certain larger collection items in 2010 that were not recurring in 2011. Marketing expense increased in 2011 by $10. ATM expenses were down $85 compared to the same period in 2010. Other operating expenses were up $16 compared to the same period of 2010. Amortization of intangible assets decreased $56 from 2010, as a result of scheduled amortization of intangible assets associated with mergers.

See accompanying notes to consolidated financial statements.

9

FDIC assessments decreased $358 in 2011 to $1,222, from $1,580 in 2010. The decrease is due to a change in the methodology used to calculate the assessment charged to banks. This change included both a new assessment base and a change in the assessment rate.

Sales of other real estate owned resulted in recognized losses of $425 on the sale of 25 properties in 2011 compared to losses of $320 on the sale of 29 properties in 2010.

Income Tax Expense

Income before federal income taxes amounted to $4,805 in 2011 and ($3,099) in 2010. The Corporation’s income tax expense for 2011 was mainly a result of the decrease in loan loss provision this year, coupled with an increase in total noninterest income. The Corporation’s income tax benefit for 2010 was mainly the result of non-taxable BOLI income and nontaxable securities income being a larger percentage of income before taxes, coupled with the large increase in loan loss provision last year.

See accompanying notes to consolidated financial statements.

10

Distribution of Assets, Liabilities and Shareholders’ Equity,

Interest Rates and Interest Differential

The following table sets forth, for the years ended December 31, 2011 and 2010, the distribution of assets, including interest amounts and average rates of major categories of interest-earning assets and interest-bearing liabilities (Dollars in thousands):

	2011								2010
Assets	Average balance			Interest		Yield/ rate			Average balance			Interest		Yield/ rate
Interest-earning assets:
Loans (1)(2)(3)	$	763,918		$	41,604		5.45	%	$	784,263		$	44,252		5.64	%
Taxable securities (4)		174,366			5,490		3.21	%		168,224			5,813		3.52	%
Non-taxable securities (4)(5)		42,183			1,675		4.10	%		43,814			1,818		4.25	%
Federal funds sold		31,838			19		0.06	%		42,330			39		0.09	%
Interest-bearing deposits in other banks		47,893			73		0.15	%		14,099			3		0.02	%
Total interest-earning assets		1,060,198			48,861		4.62	%		1,052,730			51,925		4.94	%
Noninterest-earning assets:
Cash and due from financial institutions		9,242								8,241
Premises and equipment, net		18,055								19,010
Accrued interest receivable		4,933								5,303
Intangible assets		26,453								27,643
Other assets		11,253								14,540
Bank owned life insurance		16,954								12,080
Less allowance for loan losses		(22,535	)							(18,442	)
Total	$	1,124,553							$	1,121,105

(1) For purposes of these computations, the daily average loan amounts outstanding are net of unearned income and include loans held for sale.

(2) Included in loan interest income are loan fees of $516 in 2011 and $216 in 2010.

(3) Non-accrual loans are included in loan totals and do not have a material impact on the analysis presented.

(4) Average balance is computed using the carrying value of securities. The average yield has been computed using the historical amortized cost average balance for available-for-sale securities.

(5) Interest income is reported on a historical basis without tax-equivalent adjustment.

See accompanying notes to consolidated financial statements.

11

Distribution of Assets, Liabilities and Shareholders’ Equity,

Interest Rates and Interest Differential (Continued)

The following table sets forth, for the years ended December 31, 2011 and 2010, the distribution of liabilities and shareholders’ equity, including interest amounts and average rates of major categories of interest-earning assets and interest-bearing liabilities (Dollars in thousands):

	2011							2010
Liabilities and Shareholders’ Equity	Average balance		Interest		Yield/ rate			Average balance		Interest		Yield/ rate
Interest-bearing liabilities:
Savings and interest-bearing demand accounts	$	428,043	$	824		0.19	%	$	406,909	$	1,526		0.38	%
Certificates of deposit		305,837		4,267		1.40	%		341,153		5,657		1.66	%
Federal Home Loan
Bank advances		54,038		1,606		2.97	%		64,126		2,394		3.73	%
Securities sold under repurchase agreements		20,241		33		0.16	%		21,519		70		0.31	%
Federal funds purchased		18		—		0.00	%		—		—		0.00	%
Subordinated debentures		30,349		770		2.54	%		30,349		817		2.71	%
U.S. Treasury demand notes payable		1,347		—		0.00	%		1,286		—		0.00	%
Total interest- bearing liabilities		839,873		7,500		0.89	%		865,342		10,464		1.21	%
Noninterest-bearing liabilities:
Demand deposits		176,435							144,711
Other liabilities		8,397							11,404
		184,832							156,115
Shareholders’equity		99,848							99,648
Total	$	1,124,553						$	1,121,105
Net interest income and interest rate spread			$	41,361		3.73	%			$	41,461		3.73	%
Net yield on interest- earning assets						3.91	%						3.94	%

See accompanying notes to consolidated financial statements.

12

Changes in Interest Income and Interest Expense

Resulting from Changes in Volume and Changes in Rate

The following table sets forth, for the periods indicated, a summary of the changes in interest income and interest expense resulting from changes in volume and changes in rate.

	2011 compared to 2010
	Increase (decrease) due to:
	Volume(1)			Rate(1)			Net
	(Dollars in thousands)
Interest income:
Loans	$	(1,131	)	$	(1,517	)	$	(2,648	)
Taxable securities		217			(540	)		(323	)
Nontaxable securities		(51	)		(92	)		(143	)
Federal funds sold		(8	)		(12	)		(20	)
Interest-bearing deposits in other banks		20			50			70
Total interest income	$	(953	)	$	(2,111	)	$	(3,064	)
Interest expense:
Savings and interest-bearing demand accounts		76			(778	)		(702	)
Certificates of deposit		(549	)		(841	)		(1,390	)
Federal Home Loan Bank advances		(343	)		(445	)		(788	)
Securities sold under repurchase agreements		(4	)		(33	)		(37	)
Subordinated debentures		—			(47	)		(47	)
Total interest expense	$	(820	)	$	(2,144	)	$	(2,964	)
Net interest income	$	(133	)	$	33		$	(100	)

(1) The change in interest income and interest expense due to changes in both volume and rate, which cannot be segregated, has been allocated proportionately to the change due to volume and the change due to rate.

See accompanying notes to consolidated financial statements.

13

Liquidity and Capital Resources

Citizens maintains a conservative liquidity position. All securities are classified as available for sale. At December 31, 2011, securities with maturities of one year or less, totaled $1,943, or 1.0%, of the total security portfolio. The available for sale portfolio helps to provide Citizens 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 2011 was $20,845. The primary additions to cash from operating activities are from changes in amortization of intangible assets, amortization of securities net of accretion, the provision for loan losses, depreciation, proceeds from sale of loans and changes in prepaid FDIC premiums. The primary use of cash from operating activities is from changes in deferred taxes, security amortization and changes in taxes and other expenses. Cash from investing activities was $(50,288) in 2011. Security and property and equipment purchases along with purchase of BOLI and Loans to customers were offset by security maturities and proceeds from the sale of OREO properties. Cash from financing activities in 2011 totaled $2,540. A major source of cash for financing activities is the net change in deposits. Cash provided by the net change in deposits was $8,783 in 2011. The large increase in deposits was primarily due to increases in noninterest-bearing deposits, statement savings and money market savings accounts, which added $31,853, $10,743 and $8,369, respectively, in deposits during 2011. The primary uses of cash in financing activities include changes in securities sold under repurchase agreements, changes in U.S. Treasury interest-bearing demand notes payable and the payment of dividends. Cash and cash equivalents decreased from $79,030 at December 31, 2010 to $52,127 at December 31, 2011.

Future loan demand of Citizens can 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. As of December 31, 2011, Citizens had total credit availability with the FHLB of $104,608 of which $50,295 was outstanding.

On a separate entity basis, FCBC’s primary source of funds is dividends paid primarily by Citizens. Generally, subject to applicable minimum capital requirements, Citizens may declare a dividend without the approval of the Federal Reserve Bank of Cleveland and the State of Ohio Department of Commerce, Division of Financial Institutions, provided the total dividends in a calendar year do not exceed the total of its profits for that year combined with its retained profits for the two preceding years. At December 31, 2011, Citizens was able to pay dividends to FCBC without obtaining regulatory approval. During 2011, Citizens paid dividends totaling $2,500 to FCBC. This represented roughly half of the Bank’s earnings for the year, thereby accumulating cash at FCBC for general corporate purposes, while also preserving capital at the Citizens.

In addition to the restrictions placed on dividends by banking regulations, the Corporation is subject to restrictions on the payment of dividends as a result of the Corporation’s issuance of $23 million of Senior Preferred Shares and related warrants under the U.S. Department of Treasury’s voluntary CPP on January 23, 2009. As long as the Senior Preferred Shares remain outstanding, the Corporation is permitted to declare and pay dividends on its common shares only if all accrued and unpaid dividends for all past dividend periods on the Senior Preferred Shares are fully paid. In addition, until the third anniversary of the sale of the Senior Preferred Shares, unless such shares have been transferred or redeemed in whole, any increase in dividends on the Corporation’s common shares above the amount of the last quarterly cash dividend per share declared prior to October 14, 2008 ($0.15 per share) will require prior approval of Treasury.

See accompanying notes to consolidated financial statements.

14

The Corporation manages its liquidity and capital through quarterly Asset/Liability Committee (ALCO) meetings. The ALCO discusses issues like those in the above paragraphs as well as others that will affect the future liquidity and capital position of the Corporation. The ALCO also examines interest rate risk and the effect that changes in rates will have on the Corporation. For more information about interest rate risk, please refer to the “Quantitative and Qualitative Disclosures about Market Risk” section.

Capital Adequacy

The Corporation’s policy is, and always has been, to maintain its capital levels above the well capitalized regulatory standards. Under the regulatory capital standards, total capital has been defined as Tier I (core) capital and Tier II (supplementary) capital. The Corporation’s Tier I capital includes shareholders’ equity (net of unrealized security gains and losses) and subordinated debentures (subject to certain limits) while Tier II capital also includes the allowance for loan losses. The definition of risk-adjusted assets has also been modified to include items both on and off the balance sheet. Each item is then assigned a risk weight or risk adjustment factor to determine ratios of capital to risk adjusted assets. The standards require that total capital (Tier I plus Tier II) be a minimum of 8.0% of risk-adjusted assets, with at least 4.0% being in Tier I capital. To be well capitalized, a company must have a minimum of 10.0% of risk adjusted assets, with at least 6.0% being Tier I capital. The Corporation’s total risk-based capital ratios were 15.0% and 15.1% as of December 31, 2011 and 2010, respectively, and 13.2% and 13.8% respectively for Tier I risk-based capital. The Corporation’s participation in the U.S. Treasury’s CPP led to improvement of the Corporation’s capital ratios at December 31, 2010 by adding $23,184 in additional Tier I capital.

Additionally, the Federal Reserve Board has adopted minimum leverage-capital ratios. These standards were established to supplement the previously issued risk based capital standards. The leverage ratio standards use the existing Tier I capital definition, but the ratio is applied to average total assets instead of risk-adjusted assets. The standards require that Tier I capital be a minimum of 4.0% of total average assets for high rated entities such as the Corporation and a minimum of 5.0% of total average assets to be well capitalized. The Corporation’s leverage ratio was 9.2% and 9.3% for December 31, 2011 and 2010, respectively. As with the risk-based capital ratios above, the leverage ratio also improved at December 31, 2010 as a result of the Corporation’s participation in the Treasury’s CPP.

Effects of Inflation

The Corporation’s balance sheet is typical of financial institutions and reflects a net positive monetary position whereby monetary assets exceed monetary liabilities. Monetary assets and liabilities are those which can be converted to a fixed number of dollars and include cash assets, securities, loans, money market instruments, deposits and borrowed funds.

During periods of inflation, a net positive monetary position may result in an overall decline in purchasing power of an entity. No clear evidence exists of a relationship between the purchasing power of an entity’s net positive monetary position and its future earnings. Moreover, the Corporation’s ability to preserve the purchasing power of its net positive monetary position will be partly influenced by the effectiveness of its asset/liability management program. As part of the asset/liability management process, management reviews and monitors information and projections on inflation as published by the Federal Reserve and other sources. This information speaks to inflation as determined by its impact on consumer prices and also the correlation of inflation and interest rates. This information is but one component in an asset liability process designed to limit the impact of inflation on the Corporation. Management does not believe that the effect of inflation on its nonmonetary assets (primarily bank premises and equipment) is material as such assets are not held for resale and significant disposals are not anticipated.

See accompanying notes to consolidated financial statements.

15

Fair Value of Financial Instruments

The Corporation has disclosed the fair value of its financial instruments at December 31, 2011 and 2010 in Note 14 of the Consolidated Financial Statements. The fair value of loans at December 31, 2011 was 102.9% of the carrying value compared to 102.4% at December 31, 2010. The fair value of deposits at December 31, 2011 was 101.2% of the carrying value compared to 100.0% at December 31, 2010.

Contractual Obligations

The following table represents significant fixed and determinable contractual obligations of the Corporation as of December 31, 2011.

Contractual Obligations	One year or less		One to three years		Three to five years		Over five years		Total
Deposits without a stated maturity	$	649,537	$	—	$	—	$	—	$	649,537
Certificates of deposit		170,029		65,674		5,100		10,906		251,709
FHLB advances, securities sold under agreements to repurchase and U.S. Treasury interest- bearing demand note		29,065		32,759		7,500		—		69,324
Subordinated debentures (1)		—		—		—		29,427		29,427
Operating leases		333		584		272		97		1,286

(1) The subordinated debentures consist of $2,000, $2,500, $5,000, $7,500, and $12,500 debentures.

The Corporation has retail repurchase agreements with clients within its local market areas. These borrowings are collateralized with securities owned by the Corporation. See Note 9 of the Consolidated Financial Statements for further detail. The Corporation also has a cash management advance line of credit and outstanding letters of credit with the FHLB. For further discussion, refer to Note 8 of the Consolidated Financial Statements.

Quantitative and Qualitative Disclosures about Market Risk

The Corporation’s primary market risk exposure is interest-rate risk and, to a lesser extent, liquidity risk. All of the Corporation’s transactions are denominated in U.S. dollars with no specific foreign exchange exposure.

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

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

See accompanying notes to consolidated financial statements.

16

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, 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. 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.

See accompanying notes to consolidated financial statements.

17

The following table provides information about the Corporation’s financial instruments that are sensitive to changes in interest rates as of December 31, 2011 and 2010, 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, 2011 or 2010. Expected maturity date values for interest-bearing core deposits were calculated based on estimates of the period over which the deposits would be outstanding. The Corporation’s borrowings were tabulated by contractual maturity dates and without regard to any conversion or repricing dates.

Net Portfolio Value

	December 31, 2011							December 31, 2010
Change in Rates	Dollar Amount		Dollar Change		Percent Change			Dollar Amount		Dollar Change		Percent Change
+200bp	$	135,092	$	669		0	%	$	145,476	$	160		0	%
+100bp		135,299		876		1	%		150,062		4,746		3	%
Base		134,423		—		—			145,316		—		—
-100bp		153,916		19,493		15	%		154,728		9,412		6	%

The change in net portfolio value from December 31, 2010 to December 31, 2011, is primarily a result of two factors. The yield curve has shifted downward and become flatter since the end of the year. Additionally, both the mix and overall size of assets and funding sources have changed. Assets have increased and the mix also shifted away from cash toward loans and securities, which leads to greater volatility. Funding sources also increased while the funding mix shifted from CDs and borrowed money to deposits. The shifts in mixes led to the decrease in the base. Beyond the change in the base level of net portfolio value, overall projected movements, given specific changes in rates, would lead to generally larger changes in the value of assets, but smaller changes in liabilities. The change in the rates up scenarios for both the 200 and 100 basis point movements would lead to a faster decrease in the fair value of liabilities, compared to assets. Accordingly we would see an increase in the net portfolio value. A downward change in rates would lead to an increase in the net portfolio value as the fair value of liabilities would decrease while the fair value of the asset portfolio would increase significantly.

Critical Accounting Policies

Allowance for Loan Losses

The allowance for loan losses is regularly reviewed by management to determine that the amount is considered adequate to absorb probable losses in the loan portfolio. If not, an additional provision is made to increase the allowance. This evaluation includes specific loss estimates on certain individually reviewed loans, the pooling of commercial credits risk graded as special mention and substandard that are not individually examined, and general loss estimates that are based upon the size, quality, and concentration characteristics of the various loan portfolios, adverse situations that may affect a borrower’s ability to repay, and current economic and industry conditions, among other items.

Those judgments and assumptions that are most critical to the application of this accounting policy are assessing the initial and on-going credit-worthiness of the borrower, the amount and timing of future cash flows of the borrower that are available for repayment of the loan, the sufficiency of underlying collateral, the enforceability of third-party guarantees, the frequency and subjectivity of loan reviews and risk ratings, emerging or changing trends that might not be fully captured in the historical loss experience, and charges against the allowance for actual losses that are greater than previously estimated. These judgments and assumptions are dependent upon or can be influenced by a variety of factors including the breadth and depth of experience of lending officers, credit administration and the corporate

See accompanying notes to consolidated financial statements.

18

loan review staff that periodically review the status of the loan, changing economic and industry conditions, changes in the financial condition of the borrower and changes in the value and availability of the underlying collateral and guarantees.

Note 1 and Note 4 in the Notes to Consolidated Financial Statements provide additional information regarding Allowance for Loan Losses.

Goodwill

The Corporation performs an annual evaluation of goodwill for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Management performed an evaluation of the Corporation’s goodwill during the fourth quarter of 2011. In performing its evaluation, management obtained several commonly used financial ratios from pending and completed purchase transactions for banks based in the Midwest. Management used these ratios to determine an implied fair value for the Corporation. The implied fair value exceeded the carrying value including goodwill. Therefore management concluded that goodwill was not impaired and made no adjustment in 2011.

Other-Than-Temporary Impairment of Investment Securities

The Corporation performs a quarterly valuation to determine if a decline in the value of an investment security is other than temporary. Although the term “other than temporary” is not intended to indicate that the decline is permanent, it does indicate that the prospects for a near-term recovery of value are not necessarily favorable, or that there is lack of evidence to support fair values equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other than temporary, the value of the security is reduced and a corresponding charge to earnings is recognized. Management utilizes criteria such as the magnitude and duration of the decline, in addition to the reasons underlying the decline, to determine whether the loss in value is other than temporary.

See accompanying notes to consolidated financial statements.

19

Management’s Report on Internal Control over Financial Reporting

We, as management of First Citizens Banc Corp, are responsible for establishing and maintaining effective internal control over financial reporting that is designed to produce reliable financial statements in conformity with United States generally accepted accounting principles. The system of internal control over financial reporting as it relates to the financial statements is evaluated for effectiveness by management and tested for reliability through a program of internal audits. Actions are taken to correct potential deficiencies as they are identified. Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to financial statement preparation.

Management assessed the Corporation’s system of internal control over financial reporting as of December 31, 2011, in relation to criteria for effective internal control over financial reporting as described in “Internal Control – Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concludes that, as of December 31, 2011, its system of internal control over financial reporting is effective and meets the criteria of the “Internal Control – Integrated Framework”. S.R. Snodgrass, A.C., independent registered public accounting firm, has issued an audit report on the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2011.

Management is responsible for compliance with the federal and state laws and regulations concerning dividend restrictions and federal laws and regulations concerning loans to insiders designated by the FDIC as safety and soundness laws and regulations.

Management has assessed compliance by the Company with the designated laws and regulations relating to safety and soundness. Based on the assessment, management believes that the Company complied, in all significant respects, with the designated laws and regulations related to safety and soundness for the year ended December 31, 2011.

James O. Miller	Todd A. Michel
President, Chief Executive Officer	Senior Vice President, Controller

Sandusky, Ohio

March 8, 2012

See accompanying notes to consolidated financial statements.

20

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

To the Board of Directors and Shareholders

First Citizens Banc Corp

Sandusky, Ohio

We have audited First Citizens Banc Corp and subsidiaries’ internal control over financial reporting as of December 31, 2011 based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). First Citizens Banc Corp’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report on Management’s Assessment of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, First Citizens Banc Corp maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of First Citizens Banc Corp and subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of operations, changes in shareholders’ equity, and cash flows for the years then ended, and our report dated March 8, 2012, expressed an unqualified opinion.

Wexford, Pennsylvania

March 8, 2012

See accompanying notes to consolidated financial statements.

21

Report of Independent Registered Public Accounting Firm on Financial Statements

Board of Directors and Stockholders

First Citizens Banc Corp

Sandusky, Ohio

We have audited the accompanying consolidated balance sheets of First Citizens Banc Corp and subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of operation, shareholders’ equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of First Citizens Banc Corp and subsidiaries as of December 31, 2011 and 2010, and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with U.S. generally accepted accounting principles.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), First Citizens Banc Corp and subsidiaries’ internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 8, 2012, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Wexford, Pennsylvania

March 8, 2012

See accompanying notes to consolidated financial statements.

22

FIRST CITIZENS BANC CORP

CONSOLIDATED BALANCE SHEETS

December 31, 2011 and 2010

(In thousands, except share data)

	2011			2010
ASSETS
Cash and due from financial institutions	$	52,127		$	79,030
Securities available for sale		204,633			184,952
Loans held for sale		598			—
Loans, net of allowance of $21,257 and $21,768		764,011			745,555
Other securities		15,388			15,344
Premises and equipment, net		17,774			18,129
Accrued interest receivable		3,787			4,382
Goodwill		21,720			21,720
Other intangible assets		4,113			5,275
Bank owned life insurance		17,963			12,320
Other assets		10,863			13,915
Total assets	$	1,112,977		$	1,100,622
LIABILITIES
Deposits
Noninterest-bearing	$	189,382		$	157,529
Interest-bearing		711,864			734,934
Total deposits		901,246			892,463
Federal Home Loan Bank advances		50,295			50,327
Securities sold under agreements to repurchase		19,029			21,842
U. S. Treasury interest-bearing demand note payable		—			2,008
Subordinated debentures		29,427			29,427
Accrued expenses and other liabilities		10,452			7,605
Total liabilities		1,010,449			1,003,672
SHAREHOLDERS’ EQUITY
Preferred stock, $1,000 liquidation preference, 200,000 shares authorized, 23,184 shares issued		23,151			23,134
Common stock, no par value, 20,000,000 shares authorized,
8,455,881 shares issued		114,447			114,447
Accumulated deficit		(17,667	)		(20,218	)
Treasury stock, 747,964 shares at cost		(17,235	)		(17,235	)
Accumulated other comprehensive loss		(168	)		(3,178	)
Total shareholders’ equity		102,528			96,950
Total liabilities and shareholders’ equity	$	1,112,977		$	1,100,622

See accompanying notes to consolidated financial statements.

23

FIRST CITIZENS BANC CORP

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2011 and 2010

(In thousands, except per share data)

	2011			2010
Interest and dividend income
Loans, including fees	$	41,604		$	44,252
Taxable securities		5,490			5,813
Tax-exempt securities		1,675			1,818
Federal funds sold and other		92			42
Total interest and dividend income		48,861			51,925
Interest expense
Deposits		5,091			7,183
Federal Home Loan Bank advances		1,606			2,394
Subordinated debentures		770			817
Other		33			70
Total interest expense		7,500			10,464
Net interest income		41,361			41,461
Provision for loan losses		9,800			17,940
Net interest income after provision for loan losses		31,561			23,521
Noninterest income
Computer center item processing fees		256			257
Service charges		4,550			4,556
Net gain (loss) on sale of securities		(8	)		212
Net gain on sale of loans		139			3
ATM fees		1,814			1,752
Trust fees		2,063			1,864
Bank owned life insurance		643			472
Impairment loss on investment securities		—			(575	)
Other		985			940
Total noninterest income		10,442			9,481
Noninterest expense
Salaries, wages and benefits		19,349			17,212
Net occupancy expense		2,195			2,356
Equipment expense		1,399			1,522
Contracted data processing		820			929
FDIC Assessment		1,222			1,580
State franchise tax		969			984
Professional services		1,259			1,383
Amortization of intangible assets		1,162			1,218
ATM expense		603			688
Marketing expense		640			630
Repossession expense		837			944
Loss on sale of fixed assets		46			79
Loss on sale of other real estate owned		425			320
Other operating expenses		6,272			6,256
Total noninterest expense		37,198			36,101
Income (loss) before income taxes (benefit)		4,805			(3,099	)
Income taxes (benefit)		847			(1,831	)
Net income (loss)		3,958			(1,268	)
Preferred stock dividends and discount accretion		1,176			1,176
Net income (loss) available to common shareholders	$	2,782		$	(2,444	)
Earnings per common share, basic and diluted	$	0.36		$	(0.32	)

See accompanying notes to consolidated financial statements.

24

FIRST CITIZENS BANC CORP

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Years ended December 31, 2011 and 2010

(In thousands, except per share data)

		$0000000		$0000000		$0000000		$0000000		$0000000			$0000000			$0000000			$0000000
	Preferred Stock				Common Stock				(Accumulated			Treasury			Accumulated Other Comprehensive			Total Shareholders'
	Shares		Amount		Shares		Amount		deficit)			Stock			Income (Loss)			Equity
Balance, December 31, 2009		23,184	$	23,117		7,707,917	$	114,447	$	(17,774	)	$	(17,235	)	$	(3,758	)	$	98,797
Comprehensive Loss:
Net loss										(1,268	)								(1,268	)
Change in funded status on pension benefits, net of tax																621			621
Unrealized loss on securities available for sale, net of reclassification and tax effects																(41	)		(41	)
Total comprehensive loss																			(688	)
Amortization of discount on preferred stock				17						(17	)								—
Preferred stock dividends										(1,159	)								(1,159	)
Balance, December 31, 2010		23,184	$	23,134		7,707,917	$	114,447	$	(20,218	)	$	(17,235	)	$	(3,178	)	$	96,950

See accompanying notes to consolidated financial statements.

25

FIRST CITIZENS BANC CORP

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)

Years ended December 31, 2011 and 2010

(In thousands, except per share data)

	Preferred Stock				Common Stock				(Accumulated			Treasury			Accumulated Other Comprehensive			Total Shareholders’
	Shares		Amount		Shares		Amount		deficit)			Stock			Income (Loss)			Equity
Balance, December 31, 2010		23,184	$	23,134		7,707,917	$	114,447	$	(20,218	)	$	(17,235	)	$	(3,178	)	$	96,950
Comprehensive Income:
Net income										3,958									3,958
Change in funded status on pension benefits, net of tax																(1,294	)		(1,294	)
Unrealized gain on securities available for sale, net of reclassification and tax effects																4,304			4,304
Total comprehensive income																			6,968
Amortization of discount on preferred stock				17						(17	)								—
Cash dividends ($0.03 per share)										(231	)								(231	)
Preferred stock dividends										(1,159	)								(1,159	)
Balance, December 31, 2011		23,184	$	23,151		7,707,917	$	114,447	$	(17,667	)	$	(17,235	)	$	(168	)	$	102,528

See accompanying notes to consolidated financial statements.

26

FIRST CITIZENS BANC CORP

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2011 and 2010

(In thousands, except per share data)

	2011			2010
Cash flows from operating activities
Net income (loss)	$	3,958		$	(1,268	)
Adjustments to reconcile net income (loss) to net cash from operating activities
Security amortization (accretion), net		2,195			2,590
Depreciation		1,551			1,590
Loss on sale of fixed assets		46			79
Amortization of intangible assets		1,162			1,218
Net realized (gain) loss on sale of securities		8			(212	)
Provision for loan losses		9,800			17,940
Loans originated for sale		(8,852	)		—
Proceeds from sale of loans		8,393			—
Gain on sale of loans		(139	)		(3	)
Loss on sale of OREO properties		425			320
Impairment on investment security		—			575
Bank owned life insurance		(643	)		(472	)
Deferred income taxes		(366	)		(2,642	)
Prepaid FDIC Premium		1,163			1,450
Change in
Net deferred loan fees		529			270
Accrued interest payable		(104	)		(104	)
Accrued interest receivable		595			1,043
Other, net		1,124			(883	)
Net cash from operating activities		20,845			21,491
Cash flows from (used for) investing activities
Securities available for sale
Maturities, prepayments and calls		61,092			94,649
Sales		310			4,525
Purchases		(76,765	)		(79,849	)
Redemption of Federal Reserve stock		83			110
Purchases of Federal Reserve stock		(127	)		(72	)
Purchases of bank owned life insurance		(5,000	)		—
Net loan (originations) repayments		(29,965	)		10,351
Proceeds from sale of OREO properties		1,326			1,149
Property and equipment purchases		(1,244	)		(1,193	)
Proceeds from sale of property and equipment		2			1,176
Net cash from (used for) investing activities		(50,288	)		30,846

See accompanying notes to consolidated financial statements.

27

FIRST CITIZENS BANC CORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Years ended December 31, 2011 and 2010

(In thousands, except per share data)

	2011			2010
Cash flows from (used for) financing activities
Increase in deposits		8,783			36,411
Net change in short-term FHLB advances		—			(5,000	)
Repayment of long-term FHLB advances		(22,532	)		(30,037	)
Proceeds from long-term FHLB advances		22,500			—
Decrease in securities sold under repurchase agreements		(2,813	)		(78	)
Decrease in U.S. Treasury interest-bearing notes payable		(2,008	)		(386	)
Cash dividends paid		(1,390	)		(1,159	)
Net cash from (used for) financing activities		2,540			(249	)
Increase (decrease) in cash and due from financial institutions		(26,903	)		52,088
Cash and due from financial institutions at beginning of year		79,030			26,942
Cash and due from financial institutions at end of year	$	52,127		$	79,030
Supplemental cash flow information:
Interest paid	$	7,604		$	10,568
Income taxes paid	$	1,600		$	650
Supplemental non-cash disclosures:
Transfer of loans from portfolio to other real estate owned	$	1,180		$	1,431

See accompanying notes to consolidated financial statements.

28

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the accounting policies adopted by First Citizens Banc Corp, which have a significant effect on the financial statements.

Nature of Operations and Principles of Consolidation: The Consolidated Financial Statements include the accounts of First Citizens Banc Corp (FCBC) and its wholly-owned subsidiaries: The Citizens Banking Company (Citizens), First Citizens Insurance Agency, Inc., and Water Street Properties, Inc. (Water St.). First Citizens Capital LLC (FCC) is wholly-owned by Citizens and holds inter-company debt. First Citizens Investments, Inc. (FCI) is wholly-owned by Citizens and holds and manages its securities portfolio. The operations of FCI and FCC are located in Wilmington, Delaware. The above companies together are sometimes referred to as the Corporation. Intercompany balances and transactions are eliminated in consolidation.

The Corporation provides financial services through its offices in the Ohio counties of Erie, Crawford, Champaign, Franklin, Logan, Summit, Huron, Ottawa, Madison, Union and Richland. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customer’s ability to repay their loans is dependent on the real estate and general economic conditions in the area. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions and Federal Funds sold. First Citizens Insurance Agency Inc. was formed to allow the Corporation to participate in commission revenue generated through its third party insurance agreement. Insurance commission revenue was less than 1.0% of total revenue for the years ended December 31, 2011 and 2010. Water St. was formed to hold repossessed assets of FCBC’s subsidiaries. Water St. revenue was less than 1% of total revenue for the years ended December 31, 2011 and 2010.

Use of Estimates: To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, impairment of goodwill, fair values of financial instruments, valuation of deferred tax assets, pension obligations and other-than-temporary-impairment of securities are considered material estimates that are particularly susceptible to significant change in the near term.

Cash Flows: Cash and cash equivalents include cash on hand and demand deposits with financial institutions with original maturities fewer than 90 days. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, and federal funds purchased or sold and repurchase agreements.

(Continued)

29

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Interest-Bearing Deposits in Other Financial Institutions: Interest-bearing deposits in other financial institutions mature within one year and are carried at cost.

Securities: Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Equity securities with readily determinable fair values are also classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are based on the amortized cost of the security sold using the specific identification method.

The Corporation follows current accounting guidance related to recognition and presentation of other-than-temporary impairment. This recent accounting guidance amends the recognition guidance for other-than-temporary impairments of debt securities and expands the financial statement disclosures for other-than-temporary impairment losses on debt and equity securities. The recent guidance specifies that (a) if a company does not have the intent to sell a debt security prior to recovery and (b) it is more-likely-than-not that it will not have to sell the debt security prior to recovery; the security would not be considered other-than-temporarily impaired unless there is a credit loss. When an entity does not intend to sell the security, and it is more-likely-than-not, the entity will not have to sell the security before recovery of its cost basis, it will recognize the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. For held-to-maturity debt securities, the amount of an other-than-temporary impairment recorded in other comprehensive income for the noncredit portion of a previous other-than-temporary impairment should be amortized prospectively over the remaining life of the security on the basis of the timing of future estimated cash flows of the security.

As a result of this guidance, the Corporation’s Consolidated Statement of Operations as of December 31, 2011 reflects the full impairment (that is, the difference between the security’s amortized cost basis and fair value) on debt securities that the Corporation intends to sell or would more-likely-than-not be required to sell before the expected recovery of the amortized cost basis. For available-for-sale and held-to-maturity debt securities that management has no intent to sell and believes that it more-likely-than-not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the non-credit loss is recognized in accumulated other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections.

Other securities which include Federal Home Loan Bank (FHLB) stock, Federal Reserve Bank (FRB) stock, Farmer Mac stock (FMS), Bankers’ Bancshares Inc. (BB) stock, and Norwalk Community Development Corp (NCDC) stock are carried at cost.

(Continued)

30

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market and loans that management no longer intends to hold for the foreseeable future, are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Interest income on consumer loans is discontinued when management determines future collection is unlikely. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued, but not received, for loans placed on nonaccrual, is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Purchased Loans: The Corporation purchases individual loans and groups of loans. Purchased loans that show evidence of credit deterioration since origination are recorded at the amount paid (or allocated fair value in a purchase business combination), such that there is no carryover of the seller’s allowance for loan losses. After acquisition, incurred losses are recognized by an increase in the allowance for loan losses.

Purchased loans are accounted for individually or aggregated into pools of loans based on common risk characteristics (e.g., credit score, loan type, and date of origination). The Corporation estimates the amount and timing of expected cash flows for each purchased loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference).

Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected future cash flows is greater than the carrying amount, it is recognized as part of future interest income.

Allowance for Loan Losses: Management establishes the allowance for loan losses based upon its evaluation of the pertinent factors underlying the types and quality of loans in the portfolio. All commercial loans and commercial real estate loans are reviewed on a regular basis with a focus on loans greater than $350. These larger commercial loans and commercial real estate loans that are 90 days past due or in nonaccrual status, are analyzed to determine if they are “impaired”, which means that it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. All loans that are delinquent 90 days and are placed on nonaccrual status are classified unless they are well-secured and in the process of collection. Residential loans 60 days past due, which are still accruing

(Continued)

31

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

interest are classified as substandard as per the Corporation’s asset classification policy. The remaining loans are evaluated and segmented as a part of loans with similar risk characteristics. The Corporation allocates allowances based on the factors described below, which conform to the Corporation’s asset classification policy. In reviewing risk within Citizens loan portfolio, management has determined there to be several different risk rating segments within the loan portfolio. The allowance for loan losses consists of amounts applicable to: (i) the commercial loan portfolio; (ii) the commercial real estate portfolio; (iii) the consumer loan portfolio; (iv) the residential real estate portfolio; and (v) the real estate construction portfolio. Factors considered in this process include general loan terms, collateral, and availability of historical data to support the analysis. Historical loss percentages for each segment are calculated and used as the basis for calculating allowance allocations. Certain economic factors are also considered for trends which management uses to establish the directionality of changes to the unallocated portion of the reserve. Additional information related to economic factors can be found in Note 4.

The Corporation also maintains an unallocated allowance to account for any factors or conditions that may cause a potential loss but are not specifically addressed in the process described above. The Corporation analyzes its loan portfolio each quarter to determine the appropriateness of its allowance for loan losses.

Loan Charge-off Policies: Consumer loans are generally fully or partially charged down to the fair value of collateral securing the asset when the loan is 180 days past due for open-end loans or 120 days past due for closed-end loans, unless the loan is well secured and in the process of collection. All other loans are generally charged down to the net realizable value when the loan is 90 days past due.

Troubled Debt Restructurings: In situations where for economic or legal reasons related to a borrower’s financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered. The related loan is classified as a troubled debt restructuring (TDR). Management strives to identify borrowers in financial difficulty early and work with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate allowance for loans that are identified as impaired through a TDR. These loans are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment. Consumer loans whose terms have been modified in a TDR are also individually analyzed for estimated impairment.

Other Real Estate: Other real estate acquired through or instead of loan foreclosure is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. Other real estate owned included in other assets totaled approximately $1,097 at December 31, 2011 and $1,796 at December 31, 2010.

(Continued)

32

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using both accelerated and straight-line methods over the estimated useful life of the asset, ranging from three to seven years for furniture and equipment and seven to fifty years for buildings and improvements.

Federal Home Loan Bank (FHLB) Stock: Citizens is a member of the FHLB of Cincinnati and as such, is required to maintain a minimum investment in stock of the FHLB that varies with the level of advances outstanding with the FHLB. The stock is bought from and sold to the FHLB based upon its $100 par value. The stock does not have a readily determinable fair value and as such is classified as restricted stock, carried at cost and evaluated for by management. The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) the significance of the decline in net assets of the FHLB as compared to the capital stock amount and the length of time this situation has persisted (b) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance (c) the impact of legislative and regulatory changes on the customer base of the FHLB and (d) the liquidity position of the FHLB.

While the FHLBs have been negatively impacted by the current economic conditions, the FHLB of Cincinnati has reported profits for December 31, 2011, remains in compliance with regulatory capital and liquidity requirements, continues to pay dividends on the stock and make redemptions at the par value. With consideration given to these factors, management concluded that the stock was not impaired at December 31, 2011 or 2010.

Federal Reserve Bank (FRB) Stock: Citizens is a member of the Federal Reserve System. FRB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.

Bank Owned Life Insurance (BOLI): Citizens has purchased bank owned life insurance (BOLI) policies on certain key executives. BOLI is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Goodwill and Other Intangible Assets: Goodwill results from prior business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified.

Other intangible assets consist of core deposit intangibles arising from whole bank and branch acquisitions. These intangible assets are measured at fair value and then amortized on an accelerated method over their estimated useful lives, which range from five to twelve years.

(Continued)

33

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Servicing Rights: Servicing rights are recognized as assets for the allocated value of retained servicing rights on loans sold. Servicing rights are initially recorded at fair value at the date of transfer. The valuation technique used is the present value of estimated future cash flows using current market discount rates. Servicing rights are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates and then, secondarily, prepayment characteristics. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance to the extent that fair value is less than the capitalized asset for the grouping.

Long-term Assets: Premises and equipment, core deposit and other intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Repurchase Agreements: Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by federal deposit insurance.

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.

Stock-Based Compensation: The Corporation recognizes compensation cost relating to stock-based payment transactions in the financial statements. That cost is measured based on the grant date fair value of the stock issued. The Corporation’s compensation cost for all stock awards is calculated and recognized over the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. A Black-Sholes model is used to estimate the fair value of stock options.

Income Taxes: 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.

The Corporation prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information.

A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax

(Continued)

34

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Corporation recognizes interest and/or penalties related to income tax matters in income tax expense.

Retirement Plans: Pension expense is the net of service and interest cost, return on plan assets and amortization of gains and losses not immediately recognized. Employee 401(k) and profit sharing plan expense is the amount of matching contributions. Deferred compensation allocates the benefits over the years of service.

Earnings per Common Share: Basic earnings per share are net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under stock options. Treasury shares are not deemed outstanding for earnings per share calculations.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale and changes in the funded status of the pension plan, which are also recognized as separate components of shareholders’ equity.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank was required to meet regulatory reserve and clearing requirements. These balances do not earn interest.

Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by Citizens to FCBC or by FCBC to shareholders.

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Operating Segments: While the Corporation’s chief decision makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Corporation-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the Corporation’s financial service operations are considered by management to be aggregated in one reportable operating segment.

Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation.

(Continued)

35

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Adoption of New Accounting Standards:

In April 2011, the FASB issued Accounting Standards Update (ASU) 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. The amendments in this Update provide additional guidance or clarification to help creditors in determining whether a creditor has granted a concession and whether a debtor is experiencing financial difficulties for purposes of determining whether a restructuring constitutes a troubled debt restructuring. The amendments in this Update are effective for the first interim or annual reporting period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning annual period of adoption. As a result of applying these amendments, an entity may identify receivables that are newly considered impaired. For purposes of measuring impairment of those receivables, an entity should apply the amendments prospectively for the first interim or annual period beginning on or after June 15, 2011. The Corporation has provided the necessary disclosures in Note 4.

Effect of Newly Issued but Not Yet Effective Accounting Standards:

In October, 2010, the FASB issued ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. This Update addresses the diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral, the amendments are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2011 and are not expected to have a significant impact on the Corporation’s financial statements.

In April 2011, the FASB issued ASU 2011-03, Transfers and Services (Topic 860): Reconsideration of Effective Control for Repurchase Agreements. The main objective in developing this Update is to improve the accounting for repurchase agreements (repos) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The amendments in this Update remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. The amendments in this Update apply to all entities, both public and nonpublic. The amendments affect all entities that enter into agreements to transfer financial assets that both entitle and obligate the transferor to repurchase or redeem the financial assets before their maturity. The guidance in this Update is effective for the first interim or annual period beginning on or after December 15, 2011 and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. This Update is not expected to have a significant impact on the Corporation’s financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The amendments in this Update improve the comparability, clarity, consistency, and transparency of financial reporting and increase the prominence of items reported in other comprehensive income. To increase the prominence of items reported in other comprehensive income and to facilitate convergence of U.S. GAAP and IFRS, the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated. The amendments require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the

(Continued)

36

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. All entities that report items of comprehensive income, in any period presented, will be affected by the changes in this Update. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. For nonpublic entities, the amendments are effective for fiscal years ending after December 15, 2012, and interim and annual periods thereafter. The amendments in this Update should be applied retrospectively, and early adoption is permitted. The Corporation is currently evaluating the impact the adoption of the standard will have on the its position or results of operations.

In September 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other Topics (Topic 350), Testing Goodwill for Impairment. The objective of this Update is to simplify how entities, both public and nonpublic, test goodwill for impairment. The amendments in the Update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Under the amendments in this Update, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. The amendments in this Update apply to all entities, both public and nonpublic, that have goodwill reported in their financial statements and are effective for interim and annual goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. This ASU is not expected to have a significant impact on the Corporation’s financial statements.

In September 2011, the FASB issued ASU 2011-09, Compensation-Retirement Benefits-Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer’s Participation in a Multiemployer Plan. The amendments in this Update will require additional disclosures about an employer’s participation in a multiemployer pension plan to enable users of financial statements to assess the potential cash flow implications relating to an employer’s participation in multiemployer pension plans. The disclosures also will indicate the financial health of all of the significant plans in which the employer participates and assist a financial statement user to access additional information that is available outside the financial statements. For public entities, the amendments in this Update are effective for annual periods for fiscal years ending after December 15, 2011, with early adoption permitted. For nonpublic entities, the amendments are effective for annual periods of fiscal years ending after December 15, 2012, with early adoption permitted. The amendments should be applied retrospectively for all prior periods presented. This ASU is not expected to have a significant impact on the Corporation’s financial statements.

(Continued)

37

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 2—SECURITIES

The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2011
U.S. Treasury securities and obligations of U.S. government agencies	$	49,305	$	399	$	—		$	49,704
Obligations of states and political subdivisions		61,508		5,240		(12	)		66,736
Mortgage-back securities in government sponsored entities		85,063		2,582		(128	)		87,518
Total debt securities		195,876		8,221		(140	)		203,957
Equity securities in financial institutions		481		195		—			676
Total	$	196,357	$	8,416	$	(140	)	$	204,633

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2010
U.S. Treasury securities and obligations of U.S. government agencies	$	55,398	$	616	$	(307	)	$	55,707
Obligations of states and political subdivisions		61,401		483		(1,415	)		60,469
Mortgage-back securities in government sponsored agencies		65,917		2,236		(53	)		68,100
Total debt securities		182,716		3,335		(1,775	)		184,276
Equity securities of financial institutions		481		195		—			676
Total	$	183,197	$	3,530	$	(1,775	)	$	184,952

The amortized cost and fair value of securities at year end 2011 by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

(Continued)

38

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 2—SECURITIES (Continued)

	Available for sale
	Amortized Cost		Fair Value
Due in one year or less	$	1,899	$	1,943
Due from one to five years		18,450		18,718
Due from five to ten years		19,482		20,272
Due after ten years		70,982		75,506
Mortgage-backed securities in government sponsored entities		85,063		87,518
Equity securities in financial institutions		481		676
Total	$	196,357	$	204,633

Securities with a carrying value of $156,114 and $158,940 were pledged as of December 31, 2011 and 2010, respectively, to secure public deposits and other deposits and liabilities as required or permitted by law.

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

	2011			2010
Sale proceeds	$	310		$	4,525
Gross realized gains		—			189
Gains from securities called or settled by the issuer		5			23
Losses from securities called or settled by the issuer		(13	)		—

(Continued)

39

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 2—SECURITIES (Continued)

Debt securities with unrealized losses at year end 2011 and 2010 not recognized in income are as follows.

2011	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Obligations of states and political subdivisions	$	1,309	$	(10	)	$	160	$	(2	)	$	1,469	$	(12	)
Mortgage-backed securities in gov’t sponsored entities		20,915		(128	)		—		—			20,915		(128	)
Total temporarily impaired	$	22,224	$	(138	)	$	160	$	(2	)	$	22,384	$	(140	)

2010	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of U.S. government agencies	$	10,257	$	(307	)	$	—	$	—		$	10,257	$	(307	)
Obligations of states and political subdivisions		34,938		(1,359	)		2,256		(56	)		37,194		(1,415	)
Mortgage-backed securities in gov’t sponsored entities		9,696		(53	)		—		—			9,696		(53	)
Total temporarily impaired	$	54,891	$	(1,719	)	$	2,256	$	(56	)	$	57,147	$	(1,775	)

The Corporation periodically evaluates securities for other-than-temporary impairment. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses that are determined to be temporary in nature are recorded, net of tax, in accumulated other comprehensive income.

(Continued)

40

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 2—SECURITIES (Continued)

The Corporation has assessed each available-for-sale security position for credit impairment. Factors considered in determining whether a loss is temporary include:

• The length of time and the extent to which fair value has been below cost;

• The severity of impairment;

• The cause of the impairment and the financial condition and near-term prospects of the issuer;

• If the Corporation intends to sell the investment;

• If it’s more-likely-than-not the Corporation will be required to sell the investment before recovering its amortized cost basis; and

• If the Corporation does not expect to recover the investment’s entire amortized cost basis (even if the Corporation does not intend to sell the investment).

The Corporation’s review for impairment generally entails:

• Identification and evaluation of investments that have indications of impairment;

• Analysis of individual investments that have fair values less than amortized cost, including consideration of length of time investment has been in unrealized loss position and the expected recovery period;

• Evaluation of factors or triggers that could cause individual investments to qualify as having other-than-temporary impairment; and

• Documentation of these analyses, as required by policy.

At December 31, 2011, the Corporation owns twenty-eight securities which are considered temporarily impaired. The unrealized losses on these 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 changes in market interest rates. The Corporation also considers sector specific credit rating changes in its analysis. The fair value is expected to recover as the securities approach their maturity date or reset date. The Corporation does not intend to sell until recovery and does not believe selling will be required before recovery.

During December 31, 2010, the Corporation did identify one Obligation of States and Political Subdivision for which other-than-temporary impairment did exist. This security was related to and secured by housing units for special-needs persons in a neighboring community. Upon completion of the evaluation process, the security was written down by $575, pretax, and recorded through the Statement of Operations.

(Continued)

41

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 3—LOANS

Loans at year-end were as follows.

	2011			2010
Commercial and agricultural	$	86,395		$	84,913
Commercial real estate		371,852			336,251
Residential real estate		274,995			295,038
Real estate construction		39,790			39,341
Consumer		10,409			11,590
Credit card and other		1,827			190
Total Loans		785,268			767,323
Allowance for loan losses		(21,257	)		(21,768	)
Net loans	$	764,011		$	745,555

Loans to directors and executive officers, including their immediate families and companies in which they are principal owners during 2011 were as follows.

Balance - December 31, 2010	$	9,379
New loans and advances		4,470
Repayments		(2,817	)
Effect of changes to related parties		(110	)
Balance - December 31, 2011	$	10,922

(Continued)

42

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 4—ALLOWANCE FOR LOAN LOSSES

Management has an established methodology to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan losses, the Corporation has segmented certain loans in the portfolio by product type. Loans are segmented into the following pools: Commercial and Agricultural loans, Commercial Real Estate loans, Residential Real Estate loans, Real Estate Construction loans and Consumer loans. Historical loss percentages for each risk category are calculated and used as the basis for calculating allowance allocations. These historical loss percentages are calculated over a three year period for all portfolio segments. Certain economic factors are also considered for trends which management uses to establish the directionality of changes to the unallocated portion of the reserve. The following economic factors are analyzed:

• Changes in lending policies and procedures

• Changes in experience and depth of lending and management staff

• Changes in quality of Bank’s credit review system

• Changes in the nature and volume of the loan portfolio

• Changes in past due, classified and nonaccrual loans and TDRs

• Changes in economic and business conditions

• Changes in competition or legal and regulatory requirements

• Changes in concentrations within the loan portfolio

• Changes in the underlying collateral for collateral dependent loans

The total allowance reflects management’s estimate of loan losses inherent in the loan portfolio at the balance sheet date. The Corporation considers the allowance for loan losses of $21,257 adequate to cover loan losses inherent in the loan portfolio, at December 31, 2011. The following tables present by portfolio segment, the changes in the allowance for loan losses, the ending allocation of the allowance for loan losses and the loan balances outstanding for the period ended December 31, 2011 and December 31, 2010. The changes can be impacted by overall loan volume, adversely graded loans, historical charge-offs and economic factors. In the case of Real Estate Construction loans, a negative provision was made for a couple of reasons. While the total loans for this segment was nearly unchanged from the end of last year, the volume of graded loans for this segment declined. Since the graded loans generally require a greater need for reserves, and the overall volume for this segment did not change, a smaller reserve was calculated to be required. This is represented as a decrease in the provision. Management has reviewed its analysis of the allowance for loan losses and made modifications to the beginning balances in the 2011 table. The analysis at December 31, 2010 was based on information available at the time. Since then we have improved our information systems and management reporting tools to allow us to better segregate the portfolio. In order to consistently provide this information, we have adjusted the beginning balances to correspond with the current methodology. Additionally, the 2010 table has been reclassified to match the presentation in 2011. The allowance related to the unallocated segment was also reduced, mostly due to enhanced procedures for allocating the impact of the economic factors.

(Continued)

43

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 4—ALLOWANCE FOR LOAN LOSSES (Continued)

	Commercial & Agriculture			Commercial Real Estate			Residential Real Estate			Real Estate Construction			Consumer			Unallocated			Total
December 31, 2011
Allowance for loan losses:
Beginning balance	$	3,639		$	9,827		$	4,569		$	2,139		$	726		$	868		$	21,768
Charge-offs		(2,447	)		(4,561	)		(3,748	)		(981	)		(193	)		—			(11,930	)
Recoveries		307			390			429			387			106			—			1,619
Provision		1,377			4,915			4,546			(571	)		80			(547	)		9,800
Ending Balance	$	2,876		$	10,571		$	5,796		$	974		$	719		$	321		$	21,257

	Commercial & Agriculture			Commercial Real Estate			Residential Real Estate			Real Estate Construction			Consumer			Unallocated		Total
December 31, 2010
Allowance for loan losses:
Beginning balance	$	2,957		$	6,042		$	3,917		$	1,109		$	401		$	845	$	15,271
Charge-offs		(2,710	)		(4,653	)		(4,029	)		(799	)		(460	)		—		(12,651	)
Recoveries		303			650			99			—			156			—		1,208
Provision		3,089			7,788			4,582			1,829			629			23		17,940
Ending Balance	$	3,639		$	9,827		$	4,569		$	2,139		$	726		$	868	$	21,768

(Continued)

44

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 4—ALLOWANCE FOR LOAN LOSSES (Continued)

	Commercial & Agriculture		Commercial Real Estate		Residential Real Estate		Real Estate Construction		Consumer		Unallocated		Total
December 31, 2011
Allowance for loan losses:
Ending balance:
Individually evaluated for impairment	$	811	$	2,940	$	336	$	239	$	485	$	—	$	4,811
Ending balance:
Collectively evaluated for impairment	$	2,065	$	7,631	$	5,460	$	735	$	234	$	321	$	16,446
Loan balances outstanding:
Ending Balance	$	86,395	$	371,852	$	274,995	$	39,790	$	12,236			$	785,268
Ending balance:
Individually evaluated for impairment	$	5,258	$	17,700	$	3,846	$	576	$	—			$	27,380
Ending balance:
Collectively evaluated for impairment	$	81,137	$	354,152	$	271,149	$	39,214	$	12,236			$	757,888

(Continued)

45

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 4—ALLOWANCE FOR LOAN LOSSES (Continued)

	Commercial & Agriculture		Commercial Real Estate		Residential Real Estate		Real Estate Construction		Consumer		Unallocated		Total
December 31, 2010
Allowance for loan losses:
Ending balance:
Individually evaluated for impairment	$	1,322	$	1,384	$	355	$	375	$	427	$	—	$	3,863
Ending balance:
Collectively evaluated for impairment	$	2,317	$	8,443	$	4,214	$	1,764	$	299	$	868	$	17,905
Loan balances outstanding:
Ending Balance	$	84,913	$	336,251	$	295,038	$	39,341	$	11,780			$	767,323
Ending balance:
Individually evaluated for impairment	$	5,924	$	7,815	$	2,347	$	1,821	$	1,266			$	19,173
Ending balance:
Collectively evaluated for impairment	$	78,989	$	328,436	$	292,691	$	37,520	$	10,514			$	748,150

(Continued)

46

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 4—ALLOWANCE FOR LOAN LOSSES (Continued)

The following table represents credit exposures by internally assigned risk ratings for the period ended December 31, 2011 and December 31, 2010. The risk rating analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The Corporation’s internal credit risk rating system is based on experiences with similarly graded loans.

The Corporation’s internally assigned grades are as follows:

• Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

• Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

• Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that Citizens will sustain some loss if the deficiencies are not corrected.

• Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

• Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

• Unrated – Generally, consumer loans are not risk-graded, except when collateral is used for a business purpose.

December 31, 2011	Commercial & Agriculture		Commercial Real Estate		Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Pass	$	73,011	$	319,084	$	92,577	$	31,697	$	2,208	$	518,577
Special Mention		4,358		15,321		5,071		702		—		25,452
Substandard		9,026		37,447		17,764		5,067		—		69,304
Doubtful		—		—		—		—		—		—
Ending Balance	$	86,395	$	371,852	$	115,412	$	37,466	$	2,208	$	613,333

December 31, 2010	Commercial & Agriculture		Commercial Real Estate		Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Pass	$	70,825	$	284,083	$	111,248	$	28,815	$	556	$	495,527
Special Mention		2,972		12,674		2,821		937		—		19,404
Substandard		11,116		39,416		16,482		7,492		44		74,550
Doubtful		—		78		—		—		—		78
Ending Balance	$	84,913	$	336,251	$	130,551	$	37,244	$	600	$	589,559

The following tables present performing and nonperforming loans based solely on payment activity for the period ended December 31, 2011 and December 31, 2010 that have not been assigned an internal risk

(Continued)

47

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

grade. Payment activity is reviewed by management on a monthly basis to evaluate performance. Loans are considered to be nonperforming when they become 90 days past due or if management thinks that we may not collect all of our principal and interest. Nonperforming loans also include certain loans that have been modified in Troubled Debt Restructurings (TDRs) where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Corporation’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions due to economic status. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.

December 31, 2011	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	159,291	$	2,324	$	10,027	$	171,642
Nonperforming		292		—		1		293
Total	$	159,583	$	2,324	$	10,028	$	171,935

December 31, 2010	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	162,702	$	2,097	$	11,169	$	175,968
Nonperforming		1,785		—		11		1,796
Total	$	164,487	$	2,097	$	11,180	$	177,764

(Continued)

48

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

Following is a table which includes an aging analysis of the recorded investment of past due loans outstanding as of December 31, 2011 and December 31, 2010.

December 31, 2011	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Loans		Past Due 90 Days and Accruing
Commericial & Agriculture	$	229	$	174	$	509	$	912	$	85,483	$	86,395	$	19
Commercial Real Estate		4,156		1,369		9,466		14,991		356,861		371,852		737
Residential Real Estate		3,614		1,182		6,504		11,300		263,695		274,995		511
Real Estate Construction		—		—		45		45		39,745		39,790		45
Consumer and Other		89		16		2		107		12,129		12,236		2
Total	$	8,088	$	2,741	$	16,526	$	27,355	$	757,913	$	785,268	$	1,314

December 31, 2010	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Loans		Past Due 90 Days and Accruing
Commericial & Agriculture	$	491	$	309	$	1,986	$	2,786	$	82,127	$	84,913	$	904
Commercial Real Estate		3,565		533		4,877		8,975		327,276		336,251		349
Residential Real Estate		3,261		666		7,058		10,985		284,053		295,038		382
Real Estate Construction		258		246		841		1,345		37,996		39,341		581
Consumer and Other		118		39		25		182		11,598		11,780		25
Total	$	7,693	$	1,793	$	14,787	$	24,273	$	743,050	$	767,323	$	2,241

The following table presents loans on nonaccrual status as of December 31, 2011 and December 31, 2010.

	2011		2010
Commericial & Agriculture	$	940	$	2,661
Commercial Real Estate		15,346		8,059
Residential Real Estate		8,915		9,586
Real Estate Construction		567		1,869
Consumer and Other		—		—
Total	$	25,768	$	22,175

(Continued)

49

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 4—ALLOWANCE FOR LOAN LOSSES (Continued)

Loan modifications that are considered troubled debt restructurings completed during the quarters and twelve month periods ended December 31, 2011 were as follows:

	For the Twelve Month Period Ended December 31, 2011
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commericial & Agriculture		3	$	1,506	$	1,506
Commercial Real Estate		3		2,074		2,004
Residential Real Estate		2		180		181
Real Estate Construction		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		8	$	3,760	$	3,691

Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new originations loans, so modified loans present a higher risk of loss than do new origination loans.

During the twelve month period ended December 31, 2011, no loans modified and considered TDRs made during the twelve months previous to December 31, 2011, have defaulted.

(Continued)

50

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 4—ALLOWANCE FOR LOAN LOSSES (Continued)

Impaired Loans: Larger (greater than $350) commercial loans and commercial real estate loans and all TDR’s, are tested for impairment. These loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance.

Nonaccrual Loans: Loans are considered for nonaccrual status upon reaching 90 days delinquency, unless the loan is well secured and in the process of collection, although the Corporation may be receiving partial payments of interest and partial repayments of principal on such loans. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is deducted from interest income.

The following table includes the recorded investment and unpaid principal balances for impaired financing receivables with the associated allowance amount, if applicable as of December 31, 2011 and December 31, 2010.

December 31, 2011	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commericial & Agriculture	$	2,914	$	3,010	$	—	$	1,892	$	217
Commercial Real Estate		3,804		4,739		—		3,678		343
Residential Real Estate		862		953		—		1,468		60
Real Estate Construction		—		—		—		914		—
With an allowance recorded:
Commericial & Agriculture	$	2,344	$	3,645	$	618	$	2,822	$	264
Commercial Real Estate		13,896		16,534		3,094		9,851		925
Residential Real Estate		2,984		4,127		860		2,283		202
Real Estate Construction		576		1,103		239		448		17
Total:
Commericial & Agriculture	$	5,258	$	6,655	$	618	$	4,713	$	481
Commercial Real Estate		17,700		21,273		3,094		13,529		1,268
Residential Real Estate		3,846		5,080		860		3,751		262
Real Estate Construction		576		1,103		239		1,363		17

(Continued)

51

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

December 31, 2010	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commericial & Agriculture	$	2,259	$	2,597	$	—	$	3,129	$	24
Commercial Real Estate		1,849		2,683		—		5,579		11
Residential Real Estate		635		914		—		2,035		31
Real Estate Construction		477		477		—		293		34
Consumer and Other		125		125		—		125		—
With an allowance recorded:
Commericial & Agriculture	$	3,665	$	3,665	$	1,322	$	1,612	$	191
Commercial Real Estate		5,966		5,966		1,384		4,569		256
Residential Real Estate		1,712		1,965		355		1,146		69
Real Estate Construction		1,344		1,344		375		1,377		7
Consumer and Other		1,141		1,166		427		1,145		31
Total:
Commericial & Agriculture	$	5,924	$	6,262	$	1,322	$	4,741	$	215
Commercial Real Estate		7,815		8,649		1,384		10,148		267
Residential Real Estate		2,347		2,879		355		3,181		100
Real Estate Construction		1,821		1,821		375		1,670		41
Consumer and Other		1,266		1,291		427		1,270		31

(Continued)

52

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 5—PREMISES AND EQUIPMENT

Year-end premises and equipment were as follows.

	2011			2010
Land and improvements	$	4,094		$	4,142
Buildings and improvements		19,397			19,259
Furniture and equipment		18,498			17,600
Total		41,989			41,001
Accumulated depreciation		(24,215	)		(22,872	)
Premises and equipment, net	$	17,774		$	18,129

Depreciation expense was $1,551 and $1,590 for 2011 and 2010, respectively.

Rent expense was $322 and $346 for 2011 and 2010, respectively. Rent commitments under non-cancelable operating leases at December 31, 2011 were as follows, before considering renewal options that generally are present.

2012	$	333
2013		315
2014		269
2015		157
2016		115
Thereafter		97
Total	$	1,286

The rent commitments listed above are primarily for the leasing of five financial services branches.

NOTE 6—GOODWILL AND INTANGIBLE ASSETS

The change in the carrying amount of goodwill for the years ended December 31, 2011 and December 31, 2010 is as follows.

	2011		2010
Beginning of year	$	21,720	$	21,720
Impairment		—		—
Other adjustments		—		—
End of year	$	21,720	$	21,720

Management provides an annual evaluation of goodwill for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Management performed an evaluation of the Corporation’s goodwill during the fourth quarter of 2011. In performing its evaluation, management obtained several commonly used financial ratios from pending and completed purchase

(Continued)

53

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 6—GOODWILL AND INTANGIBLE ASSETS (Continued)

transactions for banks based in the Midwest. Management used these ratios to determine an implied market value for the Corporation. The implied market value was then used to determine whether or not additional testing was required. Based on this initial test, management concluded that a more extensive evaluation of the Corporation’s goodwill was needed, and is described below.

The goodwill impairment test was completed by determining the fair value of the Bank on a controlling interest basis. The fair value was considered to be the amount at which the Bank could be sold in a current transaction between willing parties, that is, other than a forced liquidation sale. Four different methods were used to determine the fair value of the Bank. The methods used were the comparable transactions method, the control premium method, the public market peers approach and the discounted cash flow method.

The comparable transaction method starts with acquisition pricing multiples for other purchases completed where the seller shares financial characteristics with the reporting unit, then applies the median of such multiples to the Bank’s financial data. This results in a range of values. Further consideration is given to the Bank’s risk profile by considering things like asset quality and reserve for loan loss coverage ratio. The assumed benefit of the comparable transaction method is its use of information from distinct market transactions that are reflective of “true market conditions.”

The control premium method starts with the current price of the Corporation’s stock and adjusts for premiums paid in recent merger transactions. The premium is simply what the buyer was willing to pay above the trading price to acquire controlling interest in the reporting unit. While the benefit of the control premium method is its use of information from distinct market transactions that are reflective of “true market conditions”, this method was discounted in the overall calculation because the trading price of the Corporation was not considered to be a good indicator of the minority interest in the bank.

The public market peers method is based on the market value of publicly traded banking companies similar to the reporting unit and adjusts for premiums paid in recent merger transactions. Similar to the comparable transaction method, the benefit of control premium method is its use of information from distinct market transactions that are reflective of “true market conditions.”

The discounted cash flow method is based on the present value of future cash flows over a five year period and the projected terminal value at the end of the fifth year. The discount rate used represents the buyer’s perceived required return. This method also relies on projected operations, such as asset growth, profitability and dividend payout ratio. While an acceptable valuation method, the discounted cash flow method is generally assumed to be less beneficial due to its reliance on future performance of the bank and general economic conditions.

While all of the analyses were performed, the approaches were weighted in determining the fair value. At the calculation date of November 30, 2011, the difference of the calculated fair value of the reporting unit of $121,000 exceeded the carrying value of the reporting unit, which was common shareholder’s equity of $107,300, including goodwill. Based on the foregoing analyses, management determined goodwill is not impaired.

(Continued)

54

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 6—GOODWILL AND INTANGIBLE ASSETS (Continued)

Acquired Intangible Assets

Acquired intangible assets were as follows as of year end.

	2011				2010
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Core deposit and other intangibles	$	11,619	$	7,506	$	11,619	$	6,344

Aggregate amortization expense was $1,162 and $1,218 for 2011 and 2010.

Estimated amortization expense for each of the next five years and thereafter is as follows.

		00000000000
2012	$	974
2013		847
2014		769
2015		554
2016		522
Thereafter		447
	$	4,113

NOTE 7—INTEREST-BEARING DEPOSITS

Interest-bearing deposits as of December 31, 2011 and 2010 were as follows.

		0000000000		0000000000
	2011		2010
Demand	$	140,914	$	145,923
Statement and Passbook Savings		282,957		265,388
Certificates of Deposit
In excess of $100		89,305		108,903
Other		162,404		176,737
Individual Retirement Accounts		36,284		37,983
Total	$	711,864	$	734,934

(Continued)

55

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 7—INTEREST-BEARING DEPOSITS (Continued)

Scheduled maturities of certificates of deposit, including IRA’s at December 31, 2011 were as follows.

		000000000000
2012	$	184,530
2013		58,727
2014		28,576
2015		4,155
2016		1,079
Thereafter		10,927
Total	$	287,993

Deposits from principal officers, directors, and their affiliates at year-end 2011 and 2010 were $6,909 and $6,200, respectively.

NOTE 8—FEDERAL HOME LOAN BANK ADVANCES

The Corporation has a $40 million cash management advance line of credit with the FHLB. The Corporation had no outstanding balance on this line as of December 31, 2011 and December 31, 2010. The Corporation also has an $80 million repo advance line with the FHLB with no outstanding balances as of December 31, 2011 and December 31, 2010.

The Corporation has fixed-rate mortgage-matched advances from the FHLB. Mortgage-matched advances are utilized to fund specific fixed-rate loans with certain prepayment of principal permitted without penalty.

At year end, advances from the FHLB were as follows:

		0000000000		0000000000
	2011		2010
Maturities September 2012 through January 2017, fixed rates from 1.49% to 4.85%, averaging 2.38%	$	50,295	$	50,327

Scheduled principal reductions of FHLB advances at December 31, 2011 were as follows.

		000000000000
2012	$	10,036
2013		2,535
2014		30,224
2015		5,000
2016		—
Thereafter		2,500
Total	$	50,295

(Continued)

56

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 8—FEDERAL HOME LOAN BANK ADVANCES (Continued)

In addition to the borrowings, the Corporation has outstanding letters of credit with the FHLB totaling $23,710 at year-end 2011 and $24,700 at year-end 2010 used for pledging to secure public funds. FHLB borrowings and the letters of credit are collateralized by FHLB stock and by $111,007 and $112,540 of residential mortgage loans under a blanket lien arrangement at year-end 2011 and 2010, respectively.

The Corporation had a FHLB maximum borrowing capacity of $104,608 as of December 31, 2011, with remaining borrowing capacity of approximately $30,603. The borrowing arrangement with FHLB is subject to annual renewal. The maximum borrowing capacity is recalculated at least quarterly.

NOTE 9—OTHER BORROWINGS

Information concerning securities sold under agreements to repurchase and treasury tax and loan deposits were as follows.

		00000000000			00000000000
	2011			2010
Average balance during the year	$	21,588		$	22,805
Average interest rate during the year		0.15	%		0.31	%
Maximum month-end balance during the year	$	25,246		$	27,533
Weighted average interest rate at year end		0.16	%		0.29	%

Securities underlying repurchase agreements had a fair value of $19,029 at December 31, 2011 and $21,842 at December 31, 2010.

NOTE 10—SUBORDINATED DEBENTURES

Trusts formed by the Corporation issued floating rate trust preferred securities, in the amounts of $5,000 and $7,500, through special purpose entities as part of pooled offerings of such securities. The Corporation issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The Corporation may redeem the subordinated debentures, in whole but not in part, at face value. In April 2007, the Corporation elected to redeem and refinance the $5,000 floating rate subordinated debenture. The refinancing was done at face value and resulted in a 2.00% reduction in the rate. The new subordinated debenture has a 30 year maturity and is redeemable, in whole or in part, anytime without penalty. The replacement subordinated debenture does not have any deferred issuance cost associated with it. The interest rate at December 31, 2011 on the $7,500 debenture is 3.72% and the $5,000 debenture is 2.15%.

Additionally, the Corporation formed an additional trust that issued $12,500 of 6.05% fixed rate trust preferred securities for five years, then becoming floating rate trust preferred securities, through a special purpose entity as part of a pooled offering of such securities. The Corporation issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The Corporation may redeem the subordinated debentures at face value without penalty. The current rate on the $12,500 subordinated debenture is 2.81%.

(Continued)

57

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 10—SUBORDINATED DEBENTURES (Continued)

Finally, the Corporation acquired two additional trust preferred securities as part of the Futura acquisition. Futura TPF Trust I and Futura TPF Trust II were formed in June of 2005 in the amounts of $2,500 and $1,927, respectively. Futura had issued subordinated debentures to the trusts in exchange for ownership of all of the common security of the trusts and the proceeds of the preferred securities sold by the trusts. The Corporation may redeem the subordinated debentures, in whole or in part, in a principal amount with integral multiples of $1,000, on or after June 15, 2010 at 100% of the principal amount, plus accrued and unpaid interest. The subordinated debentures mature on June 15, 2035. The subordinated debentures are also redeemable in whole or in part from time to time, upon the occurrence of specific events defined within the trust indenture. The current rate on the $2,500 subordinated debenture is variable at 2.21%. In June 2010, the rate on the $1,927 subordinated debenture switched from a fixed rate to a floating rate. The current rate on the $1,927 subordinated debenture is 2.21%.

NOTE 11—INCOME TAXES

Income tax expense was as follows.

		0000000000			0000000000
	2011			2010
Current	$	1,213		$	811
Deferred		(366	)		(2,642	)
Income tax expense	$	847		$	(1,831	)

Effective tax rates differ from the statutory federal income tax rate of 34% due to the following.

		0000000000			0000000000
	2011			2010
Income taxes computed at the statutory federal tax rate	$	1,634		$	(1,053	)
Add (subtract) tax effect of:
Nontaxable interest income, net of nondeductible interest expense		(558	)		(628	)
Dividends received deduction		(1	)		(1	)
Cash surrender value of BOLI		(219	)		(160	)
Other		(9	)		11
Income tax expense	$	847		$	(1,831	)

Tax benefit attributable to security losses totaled $3 in 2011. Tax benefit attributable to security gains totaled $72 in 2010.

(Continued)

58

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 11—INCOME TAXES (Continued)

Year-end deferred tax assets and liabilities were due to the following.

	2011			2010
Deferred tax assets
Allowance for loan losses	$	7,227		$	7,401
Deferred compensation		816			813
Intangible assets		388			593
Pension costs		1,900			1,201
OREO Writedowns		103			101
Impairment losses		195			195
Deferred loan fees		46			—
Other		9			11
Deferred tax asset		10,684			10,315
Deferred tax liabilities
Tax depreciation in excess of book depreciation		(373	)		(525	)
Discount accretion on securities		(77	)		(85	)
Purchase accounting adjustments		(2,111	)		(2,500	)
FHLB stock dividends		(2,249	)		(2,249	)
Deferred loan fees		—			(134	)
Unrealized gain on securities available for sale		(2,814	)		(597	)
Other		(20	)		(1	)
Deferred tax liability		(7,644	)		(6,091	)
Net deferred tax asset	$	3,040		$	4,224

(Continued)

59

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 11—INCOME TAXES (Continued)

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

		00000000000		00000000000
	2011		2010
Balance at January 1	$	—	$	140
Reductions for tax positions of prior years		—		(47	)
Reductions due to statute of limitations		—		(93	)
Balance at December 31	$	—	$	—

The total amount of interest and penalties, net of the related tax benefit, recorded in the income statement for the years ended December 31, 2011 and 2010 was $0, and the amount accrued for interest and penalties at December 31, 2011 and 2010 was $0 and $(10), respectively.

The Corporation and its subsidiaries are subject to U.S. federal income tax as well as income tax of the State of Ohio for all affiliates other than the Bank. The Bank is subject to tax in Ohio based upon its net worth.

There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. During 2010, the Internal Revenue Service has concluded an audit of the Corporation’s tax returns for the year ended 2007 in which there was no change necessary to the Corporation’s tax liability. The Corporation’s federal tax returns for taxable years through 2007 have been closed for purposes of examination by the Internal Revenue Service.

NOTE 12—RETIREMENT PLANS

The Corporation sponsors a savings and retirement 401(k) plan, which covers all employees who meet certain eligibility requirements and who choose to participate in the plan. The matching contribution to the 401(k) plan was $168 in 2011 and $150 in 2010.

The Corporation also sponsors a pension plan which is a noncontributory defined benefit retirement plan for all employees who have attained the age of 20 ¹/2, completed six months of service and work 1,000 or more hours per year. Annual payments, subject to the maximum amount deductible for federal income tax purposes, are made to a pension trust fund. In 2006, the Corporation amended the pension plan to provide that no employee could be added as a participant to the pension plan after December 31, 2006.

(Continued)

60

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 12—RETIREMENT PLANS (Continued)

Information about the pension plan is as follows.

		00000000000			00000000000
	2011			2010
Change in benefit obligation:
Beginning benefit obligation	$	15,008		$	13,884
Service cost		846			841
Interest cost		798			760
Actuarial (gain)/loss		1,244			97
Benefits paid		(962	)		(574	)
Ending benefit obligation		16,934			15,008
Change in plan assets, at fair value:
Beginning plan assets		11,206			8,661
Actual return		71			1,127
Employer contribution		1,152			2,016
Benefits paid		(962	)		(574	)
Administrative expenses		(22	)		(24	)
Ending plan assets		11,445			11,206
Funded status at end of year	$	(5,489	)	$	(3,802	)

Amounts recognized in accumulated other comprehensive income at December 31, consist of:

		00000000000		00000000000
	2011		2010
Unrecognized actuarial loss (net of tax, of $2,900 in 2011 and $2,232 in 2010)	$	5,629	$	4,335

The accumulated benefit obligation for the defined benefit pension plan was $13,684 at December 31, 2011 and $12,194 at December 31, 2010.

(Continued)

61

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 12—RETIREMENT PLANS (Continued)

The components of net periodic pension expense were as follows.

		$0000000			$0000000
	2011			2010
Service cost	$	846		$	841
Interest cost		797			760
Expected return on plan assets		(827	)		(604	)
Net amortization and deferral		342			258
Measurement date change		—			—
Settlement		—			—
Net periodic benefit cost		1,158			1,255
Net loss (gain) recognized in other comprehensive income		1,962			(941	)
Prior service cost (credit)		—			—
Amortization of prior service cost		—			—
Total recognized in other comprehensive income		1,962			(941	)
Total recognized in net periodic benefit cost and other comprehensive income (before tax)	$	3,120		$	314

The estimated net loss and prior service costs for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $437.

The weighted average assumptions used to determine benefit obligations at year-end were as follows.

		$0000000			$0000000
	2011			2010
Discount rate on benefit obligation		4.60	%		5.04	%
Long-term rate of return on plan assets		7.00	%		7.00	%
Rate of compensation increase		3.00	%		3.00	%

The weighted average assumptions used to determine net periodic pension cost were as follows.

		$0000000			$0000000
	2011			2010
Discount rate on benefit obligation		5.04	%		5.15	%
Long-term rate of return on plan assets		7.00	%		7.00	%
Rate of compensation increase		3.00	%		3.00	%

The expectation for long-term rate of return on the pension assets and the expected rate of compensation increases are reviewed periodically by management in consultation with outside actuaries and primary investment consultants. Factors considered in setting and adjusting these rates are historic and projected rates of return on the portfolio and historic and estimated rates of increases of compensation.

(Continued)

62

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 12—RETIREMENT PLANS (Continued)

The Corporation’s pension plan asset allocation at year-end 2011, and 2010, target allocation for 2012, and expected long-term rate of return by asset category are as follows.

	Target Allocation			Percentage of Plan Assets at Year-end
Asset Category	2011			2011			2010
Equity securities		20-50	%		45.9	%		50.6	%
Debt securities		30-60			52.5			43.9
Money market funds		20-30			1.6			5.5
Total					100.0	%		100.0	%

The Corporation developed the pension plan investment policies and strategies for plan assets with its pension management firm. The assets are currently invested in five diversified investment funds, which include three equity funds, one money market fund and one bond fund. The long-term guidelines from above were created to maximize the return on portfolio assets while reducing the risk of the portfolio. The management firm may allocate assets among the separate accounts within the established long-term guidelines. Transfers among these accounts will be at the management firm’s discretion based on their investment outlook and the investment strategies that are outlined at periodic meetings with the Corporation. The expected long-term rate of return on the plan assets is 7.00% in 2011 and 2010. This return is based on the expected return for each of the asset categories, weighted based on the target allocation for each class.

The Corporation expects to contribute $1,355 to its pension plan in 2012. Employer contributions totaled $1,152 in 2011. The increase in the benefit obligation was partially offset by the contributions and the increase in plan assets. This led to a change in funded status from $(3,802) to $(5,489).

Supplemental Retirement Plan

Citizens established a supplemental retirement plan (“SERP”) which covers key members of management in 2011. Participants will receive annually a percentage of their base compensations at the time of their retirement for a maximum of ten years. The liability recorded at December 31, 2011, was $331,239. The expense related to the plan was $331,239 for 2011. No distributions to participants were made in 2011.

(Continued)

63

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 12—RETIREMENT PLANS (Continued)

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2011 and 2010:

	December 31, 2011
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	226	$	—	$	—	$	226
Commodity mutual funds		23		—		—		23
Bond Mutual funds		6,091		—		—		6,091
Equity market funds:
International		677		—		—		677
Large cap		3,651		—		—		3,651
Mid cap		163		—		—		163
Small cap		614		—		—		614
Total assets at fair value	$	11,445	$	—	$	—	$	11,445

	December 31, 2010
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	657	$	—	$	—	$	657
Commodity mutual funds		49		—		—		49
Bond Mutual funds		4,924		—		—		4,924
Equity market funds:
International		772		—		—		772
Large cap		3,835		—		—		3,835
Mid cap		307		—		—		307
Small cap		662		—		—		662
Total assets at fair value	$	11,206	$	—	$	—	$	11,206

Investment in equity securities, debt securities, and money market funds are valued at the closing price reported on the active market on which the individual securities are traded.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

(Continued)

64

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 12—RETIREMENT PLANS (Continued)

Expected benefit payments, which reflect expected future service, are as follows.

2012	$	250
2013		278
2014		433
2015		542
2016		677
2017 through 2021		5,537
Total	$	7,717

NOTE 13—STOCK OPTIONS

Options to buy stock have been granted to directors, officers and employees under the Corporation’s stock option plan, which was approved by shareholders on April 18, 2000 and authorized the Corporation to issue up to 225,000 options. Exercise price is the market price at date of grant. The maximum option term is ten years, and options vest after three years. The Corporation’s stock option plan expired in 2010, and no further stock options may be granted under the plan.

A summary of the activity in the stock option plan is as follows.

	2011				2010
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding at beginning of year		29,500	$	25.42		29,500	$	25.42
Granted		—		—		—		—
Exercised		—		—		—		—
Forfeited		—		—		—		—
Outstanding at end of year		29,500	$	25.42		29,500	$	25.42
Options exercisable at year-end		29,500	$	25.42		29,500	$	25.42

(Continued)

65

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 13—STOCK OPTIONS (Continued)

Options outstanding at year-end 2011 were as follows.

	Outstanding
			Weighted Average Remaining Contractual	Weighted Average Exercise
Exercise price	Number		Life	Price
$20.50		19,500	6 mos.	$	20.50
$35.00		10,000	1 yrs. 3.5 mos.		35.00
Outstanding at year-end		29,500	9 mos.	$	25.42

The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of the common stock as of the reporting date. As of December 31, 2011 and December 31, 2010, there were no options that had intrinsic value.

NOTE 14—FAIR VALUE MEASUREMENT

U.S. generally accepted accounting principles establish a hierarchal disclosure framework associated with the level of observable pricing utilized in measuring assets and liabilities at fair value. The three broad levels defined by the hierarchy are as follows: Level 1: Quoted prices for identical assets in active markets that are identifiable on the measurement date; Level 2: Significant other observable inputs, such as quoted prices for similar assets, quoted prices in markets that are not active and other inputs that are observable or can be corroborated by observable market data; Level 3: Significant unobservable inputs that reflect the Corporation’s own view about the assumptions that market participants would use in pricing an asset.

Securities: The fair values of securities available for sale are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The Corporation also used its own view about the assumptions that market participants would use in pricing certain securities (Level 3 inputs).

(Continued)

66

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 14—FAIR VALUE MEASUREMENT (Continued)

The following table presents the changes in the Level 3 fair value category for the fiscal period ended December 31, 2011. The Corporation classifies financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to the unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable, either directly or indirectly.

Securities available for sale
	2011			2010
Beginning balance January 1,	$	560		$	—
Impairment charge on securities		—			(575	)
Net change in unrealized loss on securities		(43	)		(10	)
Purchases, issuances, calls and settlements		—			—
Transfers in and/or out of Level 3		—			1,145
Ending balance December 31,	$	517		$	560

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

Assets measured at fair value are summarized below.

	Fair Value Measurements at December 31, 2011 Using:
Assets:	(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of U.S. Government agencies	$	—	$	49,704	$	—
Obligations of states and political subdivisions		—		66,219		517
Mortgage-backed securities in government sponsored entities		—		87,518		—
Equity securities in financial institutions		676		—		—
Assets measured at fair value on a nonrecurring basis:
Impaired Loans	$	—	$	—	$	21,062
Other Real Estate Owned		—		—		1,097
Mortgage Servicing Rights		—		60		—

(Continued)

67

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 14—FAIR VALUE MEASUREMENT (Continued)

	Fair Value Measurements at December 31, 2010 Using:
Assets:	(Level 1)		(Level 2)		(Level 3)
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of U.S. Government agencies	$	—	$	55,707	$	—
Obligations of states and political subdivisions		—		59,909		560
Mortgage-backed securities in government sponsored entities		—		68,100		—
Equity securities in financial institutions		676		—		—
Assets measured at fair value on a nonrecurring basis:
Impaired Loans	$	—	$	—	$	15,310
Other Real Estate Owned		—		1,795		—
Mortgage Servicing Rights		—		3		—

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

	December 31, 2011				December 31, 2010
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets:
Cash and due from financial institutions	$	52,127	$	52,127	$	79,030	$	79,030
Loans, net of allowance for loan losses		764,011		785,900		745,555		763,768
Bank Owned Life Insurance		17,963		17,963		12,320		12,320
Accrued interest receivable		3,787		3,787		4,382		4,382
Financial Liabilities:
Deposits		901,246		911,945		892,463		895,950
Federal Home Loan Bank advances		50,295		52,263		50,327		53,162
U.S. Treasury interest-bearing demand note payable		—		—		2,008		2,008
Securities sold under agreement to repurchase		19,029		19,029		21,842		21,842
Subordinated debentures		29,427		26,461		29,427		20,353
Accrued interest payable		258		258		362		362

(Continued)

68

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 14—FAIR VALUE MEASUREMENT (Continued)

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

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

NOTE 15—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 customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk to 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 the commitment.

The contractual amount of financial instruments with off-balance-sheet risk was as follows at year-end.

	2011				2010
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to extend credit:
Lines of credit and construction loans	$	6,913	$	111,710	$	3,161	$	98,083
Overdraft protection		1,320		17,828		—		12,500
Letters of credit		200		424		275		1,288
	$	8,433	$	129,962	$	3,436	$	111,871

Commitments to make loans are generally made for a period of one year or less. Fixed-rate loan commitments included above had interest rates ranging from 2.25% to 15.00% at December 31, 2011 and 3.25% to 9.50% at December 31, 2010. Maturities extend up to 40 years.

Citizens is required to maintain certain reserve balances on hand in accordance with the Federal Reserve Board requirements. The average reserve balance maintained in accordance with such requirements was $998 on September 30, 2011 and $3,585 on December 31, 2010.

(Continued)

69

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 16—CAPITAL REQUIREMENTS AND RESTRICTION ON RETAINED EARNINGS

The Corporation and Citizens are subject to regulatory capital requirements administered by the federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments by the regulators. Failure to meet capital requirements can initiate regulatory action.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2011 and 2010, the most recent regulatory notifications categorized Citizens as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

At December 31, 2011, the Corporation’s and Citizens’ actual capital levels and minimum required levels were as follows.

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Purposes
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2011
Total Capital to risk-weighted assets
Consolidated	$	113,609		15.0	%	$	60,632		8.0	%		n/a		n/a
Citizens		101,686		13.5			60,259		8.0		$	75,323		10.0	%
Tier I (Core) Capital to risk-weighted assets
Consolidated		100,068		13.2			30,324		4.0			n/a		n/a
Citizens		92,133		12.2			30,207		4.0			45,311		6.0
Tier I (Core) Capital to average assets
Consolidated		100,068		9.2			43,650		4.0			n/a		n/a
Citizens		92,133		8.4			43,873		4.0			54,841		5.0

(Continued)

70

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 16—CAPITAL REQUIREMENTS AND RESTRICTION ON RETAINED EARNINGS (Continued)

At December 31, 2010, the Corporation’s and Citizens’ actual capital levels and minimum required levels were as follows.

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Purposes
	Amount		Ratio			Amount		Ratio			Amount		Ratio
2010
Total Capital to risk-weighted assets
Consolidated	$	111,224		15.1	%	$	59,044		8.0	%		n/a		n/a
Citizens		98,232		13.4			58,734		8.0		$	73,417		10.0	%
Tier I (Core) Capital to risk-weighted assets
Consolidated		101,755		13.8			29,537		4.0			n/a		n/a
Citizens		88,902		12.1			29,365		4.0			44,047		6.0
Tier I (Core) Capital to average assets
Consolidated		101,755		9.3			44,002		4.0			n/a		n/a
Citizens		88,902		8.1			43,956		4.0			54,946		5.0

The Corporation’s primary source of funds for paying dividends to its shareholders and for operating expense is the cash accumulated from dividends received from Citizens. Payment of dividends by Citizens to the Corporation is subject to restrictions by Citizens’ regulatory agencies. These restrictions generally limit dividends to the current and prior two years retained earnings as defined by the regulations. In addition, dividends may not reduce capital levels below minimum regulatory requirements.

(Continued)

71

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 17—PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Condensed financial information of FCBC follows.

	December 31,
Condensed Balance Sheets	2011			2010
Assets:
Cash	$	7,612		$	8,339
Securities available for sale		676			676
Investment in bank subsidiary		112,887			105,814
Investment in nonbank subsidiaries		12,535			12,529
Other assets		5,071			3,759
Total assets	$	138,781		$	131,117
Liabilities and Shareholders’ Equity:
Deferred income taxes and other liabilities	$	5,903		$	4,740
Subordinated debentures		30,349			29,427
Preferred stock		23,151			23,134
Common stock		114,447			114,447
Accumulated deficit		(17,667	)		(20,218	)
Treasury Stock		(17,235	)		(17,235	)
Accumulated other comprehensive income (loss)		(168	)		(3,178	)
Total liabilities and shareholders’ equity	$	138,781		$	131,117

	For the years ended December 31,
Condensed Statements of Operations	2011			2010
Dividends from bank subsidiaries	$	2,500		$	—
Interest expense		—			(821	)
Other expense, net		(3,015	)		(2,195	)
Loss before equity in undistributed net earnings of subsidiaries		(515	)		(3,016	)
Income tax benefit		1,025			1,026
Equity in undistributed net earnings of subsidiaries		3,448			722
Net income (loss)	$	3,958		$	(1,268	)

(Continued)

72

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 17—PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Continued)

	For the years ended December 31,
	2011			2010
Condensed Statements of Cash Flows
Operating activities:
Net income (loss)	$	3,958		$	(1,268	)
Adjustment to reconcile net income (loss) to net cash provided by (used for) operating activities:
Change in other assets and other liabilities		153			(706	)
Equity in undistributed net earnings of subsidiaries		(3,448	)		(722	)
Net cash from (used for) operating activities		663			(2,696	)
Financing activities:
Cash dividends paid		(1,390	)		(1,159	)
Net cash used for financing activities		(1,390	)		(1,159	)
Net change in cash and cash equivalents		(727	)		(3,855	)
Cash and cash equivalents at beginning of year		8,339			12,194

NOTE 18—OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) components and related taxes were as follows.

	2011			2010
Unrealized holding gain (loss) on available for sale securities	$	6,514		$	(425	)
Reclassification adjustments for loss recognized in income		8			363
Net unrealized gain (loss)		6,522			(62	)
Pension liability adjustment		(1,962	)		941
Tax effect		(1,550	)		(298	)
Other comprehensive income	$	3,010		$	581

(Continued)

73

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 19—EARNINGS PER SHARE

The factors used in the earnings per share computation follow.

	2011		2010
Basic
Net income (loss) available to common shareholders	$	2,782	$	(2,447	)
Weighted Average common shares outstanding		7,707,917		7,707,917
Basic earnings (loss) per share	$	0.36	$	(0.32	)
Diluted
Net income (loss) available to common shareholders	$	2,782	$	(2,447	)
Weighted average common shares outstanding for basic earnings per common share		7,707,917		7,707,917
Add: dilutive effects of assumed exercise of options		—		—
Average shares and dilutive potential common shares outstanding		7,707,917		7,707,917
Diluted earnings (loss) per share	$	0.36	$	(0.32	)

Basic earnings per common share are calculated by dividing net income by the weighted-average number of common shares outstanding for the period.

Diluted earnings per common share takes into consideration the pro forma dilution of unexercised stock option awards, computed using the treasury stock method.

Stock options for 29,500 shares in 2011 and 2010 were not considered in computing diluted earnings per common share because they were anti-dilutive.

(Continued)

74

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 20—QUARTERLY FINANCIAL DATA (UNAUDITED)

	Interest Income		Net Interest Income		Net Income / (Loss)			Basic Earnings per Common Share			Diluted Earnings per Common Share
2011
First quarter (1)(3)(4)	$	12,414	$	10,372	$	753		$	0.06		$	0.06
Second quarter (1)(2)(3)(4)		12,045		10,153		523			0.03			0.03
Third quarter (1)(3)(4)		12,267		10,439		1,193			0.12			0.12
Fourth quarter (1)(3)(4)		12,135		10,397		1,489			0.15			0.15
2010
First quarter (5)(6)(7)	$	13,173	$	10,200	$	36		$	(0.04	)	$	(0.04	)
Second quarter (5)(6)(7)		13,149		10,441		(259	)		(0.07	)		(0.07	)
Third quarter (5)(6)(7)		12,997		10,450		(1,393	)		(0.22	)		(0.22	)
Fourth quarter (5)(6)(7)		12,606		10,370		728			0.01			0.01

⁽¹⁾  Interest income decreased as loans repriced downward.

⁽²⁾  Interest income decreased due to reversed income related to nonaccrual loans.

⁽³⁾  Interest expense decreased as deposits repriced downward and the deposit mix shifted toward cheaper funding sources.

⁽⁴⁾  Net income increased due to a reduction in provision for loan losses.

⁽⁵⁾  Interest income decreased as loans repriced downward. Loan volume also declined.

⁽⁶⁾  Interest expense decreased as deposits repriced downward and the deposit mix shifted toward cheaper funding sources.

⁽⁷⁾  Net income was reduced by a large provision for loan losses.

(Continued)

75

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

NOTE 21—PARTICIPATION IN THE TREASURY CAPITAL PURCHASE PROGRAM

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

(Continued)

76

FIRST CITIZENS BANC CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2011 and 2010

(Amounts in thousands, except share data)

This page left blank intentionally.

(Continued)

77

First Citizens Banc Corp

Directors
Thomas A. Depler	Allen R. Nickles, CPA, CFE, FCPA, CFF
Attorney, Poland, Depler & Shepherd Co., LPA	Partner, Payne, Nickles, Inc.
Allen R. Maurice	John P. Pheiffer
Attorney, Wagner, Maurice & Davidson Co., LPA	President/Director, Sandusky Bay Development Company
James O. Miller	David A. Voight
Chairman, President & CEO, The Citizens Banking Company President & CEO, First Citizens Banc Corp	Chairman of the Board, First Citizens Banc Corp
	Daniel J. White
W. Patrick Murray	International Business Consultant
Attorney, Murray and Murray Company, LPA	President, Norwalk Furniture
Officers
James O. Miller	Charles C. Riesterer
President, Chief Executive Officer	Senior Vice President
Richard J. Dutton	Paul J. Stark
Senior Vice President	Senior Vice President
James E. McGookey	Kevin J. Jones
Senior Vice President, General Counsel, Corporate Secretary	Auditor
Todd A. Michel
Senior Vice President, Controller

The Citizens Banking Company

Directors
John O. Bacon	W. Patrick Murray
President & CEO, Mack Iron Works Company	Attorney, Murray and Murray Company, LPA
Laurence A. Bettcher	Allen R. Nickles, CPA, CFE, FCPA, CFF
Chairman & CEO, Bettcher Industries, Inc.	Partner, Payne, Nickles, Inc.
Barry W. Boerger	John P. Pheiffer
Self-Employed Farmer	President/Director, Sandusky Bay Development Company
Thomas A. Depler	J. William Springer
Attorney, Poland, Depler & Shepherd Co., LPA	President & CEO, Industrial Nut Corporation
Blythe A. Friedley	David A. Voight
Owner/President, Friedley & Co. Insurance Agency, Inc.	Chairman of the Board, First Citizens Banc Corp
Allen R. Maurice	Daniel J. White
Attorney, Wagner, Maurice & Davidson Co., LPA	International Business Consultant President, Norwalk Furniture
James O. Miller	Gerald B. Wurm
Chairman, President & CEO, The Citizens Banking Company	President, Wurms Woodworking Co., Inc.
President & CEO, First Citizens Banc Corp
Margaret A. Murray
Private Investor
Directors Emeritus
James D. Heckelman	Michael J. Close
President, Dan-Mar Co., Inc.	President & CEO, Balmer Parc, LLC
George L. Mylander
Retired Educator and City Official
Chair Emeritus, Firelands Regional Medical Center

Shareholder Information

The Annual Meeting of the Shareholders of First Citizens Banc Corp will be held at Bowling Green State University, Firelands College, Huron, Ohio, on April 17, 2012, at 10:00 a.m. Notice of the meeting and a proxy statement will be sent to shareholders in a separate mailing.

Transfer Agent	First Citizens Banc Corp
Illinois Stock Transfer Company	100 East Water Street
209 West Jackson Boulevard, Suite 903	Sandusky, Ohio 44870
Chicago, Illinois 60606-6905	Tel: (419) 625-4121
Tel: (312) 427-2953	or 1-888-645-4121 (Toll Free)
or 1-800-757-5755 (Toll Free)	Fax: (419) 627-3359
Fax: (312) 427-2879	www.fcza.com
www.illinoisstocktransfer.com

Citizens Bank Locations			Champaign Bank Locations
Berlin Heights	Norwalk	Shelby	Akron	Urbana
24 E. Main St.	207 Milan Ave.	200 N. Gamble St.	529 N. Cleveland Massillon Rd.	601 Scioto St.
Berlin Heights, Ohio 44814	Norwalk, Ohio 44857	Shelby, Ohio 44875	Akron, Ohio 44333	Urbana, Ohio 43078
419-588-2095	419-744-3162	419-347-5770	330-670-8080	937-653-1186
Castalia	36 E. Seminary St.	156 Mansfield Ave.	Dublin	504 North Main St.
208 S. Washington St.	Norwalk, Ohio 44857	Shelby, Ohio 44875	6400 Perimeter Dr.	Urbana, Ohio 43078
Castalia, Ohio 44824	419-744-3100	419-347-5141	Dublin, Ohio 43016	937-653-1191
419-684-5333			614-210-2448
	Plymouth	60 W. Main St.		West Liberty
Chatfield	49 Sandusky St.	Shelby, Ohio 44875	Hilliard	205 S. Detroit St.
6862 Sandusky Ave.	Plymouth, Ohio 44865	419-342-4010	4501 Cemetery Rd.	West Liberty, Ohio 43357
Chatfield, Ohio 44825	419-687-4081		Hilliard, Ohio 43026	937-465-9050
419-988-2671		Shiloh	614-527-4600
	Port Clinton	23 W. Main St.
Greenwich	185 S. E. Catawba Rd.	Shiloh, Ohio 44878	Plain City
13 Main St.	Port Clinton, Ohio 43452	419-896-2101	320 S. Jefferson Ave.
Greenwich, Ohio 44837	419-732-0565		Plain City, Ohio 43064
419-752-4411		Tiro	614-873-4688
	Sandusky	101 S. Main St
Huron	100 E. Water St.	Tiro, Ohio 44887	Quincy
410 Cleveland Road East	Sandusky, Ohio 44870	419-342-4536	101 S. Miami St.
Huron, Ohio 44839	419-625-4121		Quincy, Ohio 43343
419-433-0328		Willard	937-585-4268
	1907 E. Perkins Ave.	119 Blossom Centre Blvd.
New Washington	Sandusky, Ohio 44870	Willard, Ohio 44890	Russells Point
102 S. Kibler St.	419-625-4123	419-935-0637	330 S. Orchard Island Rd.
New Washington, Ohio 44854			Russells Point, Ohio 43348
419-492-2177	702 W. Perkins Ave.		937-843-9957
	Sandusky, Ohio 44870
	419-625-4122