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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q


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

For the quarterly period ended: June 30, 2008


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

For the transition period from to

Commission File Number: 0-25980

First Citizens Banc Corp

(Exact name of registrant as specified in its charter)


Ohio		34-1558688

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

100 East Water Street, Sandusky, Ohio		44870

(Address of principal executive offices)		(Zip Code)

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

Not applicable

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

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


Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, no par value
Outstanding at August 8, 2008
7,707,917 common shares

Part I — Financial Information

ITEM 1. Financial Statements

FIRST CITIZENS BANC CORP

Consolidated Balance Sheets (Unaudited)

(In thousands, except share data)


	June 30,			December 31,
	2008			2007
ASSETS
Cash and due from financial institutions	$	26,305		$	27,345
Federal funds sold		—			18,408
Securities available for sale		148,446			144,351
Loans, net of allowance of $8,350 and $7,374		796,475			787,386
Other securities		16,063			14,569
Premises and equipment, net		21,110			21,593
Premises and equipment, held for sale		719			719
Accrued interest receivable		6,514			7,142
Goodwill		66,649			66,235
Core deposit and other intangibles		8,507			9,689
Bank owned life insurance		11,125			10,876
Other assets		6,791			10,944


Total assets	$	1,108,704		$	1,119,257


LIABILITIES
Deposits
Noninterest-bearing	$	128,998		$	137,924
Interest-bearing		671,529			701,896

Total deposits		800,527			839,820
Federal Home Loan Bank advances		94,325			64,470
Securities sold under agreements to repurchase		29,706			27,395
U. S. Treasury interest-bearing demand note payable		4,381			2,259
Notes payable		21,500			21,500
Subordinated debentures		29,427			29,427
Accrued expenses and other liabilities		6,939			8,230

Total liabilities		986,805			993,101

SHAREHOLDERS’ EQUITY
Common stock, no par value, 10,000,000 shares authorized, 8,455,881 shares issued		114,365			114,365
Retained earnings		25,005			29,446
Treasury stock, 747,964 shares at cost		(17,235	)		(17,235	)
Accumulated other comprehensive income (loss)		(236	)		(420	)

Total shareholders’ equity		121,899			126,156


Total liabilities and shareholders’ equity	$	1,108,704		$	1,119,257

See notes to interim consolidated financial statements

Page 3

FIRST CITIZENS BANC CORP

Consolidated Statements of Income (Unaudited)

(In thousands, except per share data)


	Three months ended					Six months ended
	June 30,					June 30,
	2008			2007		2008		2007
Interest and dividend income
Loans, including fees	$	13,827		$	10,966	$	28,031	$	21,412
Taxable securities		1,613			1,201		3,329		2,343
Tax-exempt securities		312			164		601		330
Federal funds sold and other		29			7		87		16

Total interest income		15,781			12,338		32,048		24,101
Interest expense
Deposits		3,838			3,349		8,718		6,596
Federal Home Loan Bank advances		813			737		1,565		1,406
Subordinated debentures		411			432		905		895
Other		352			338		850		690

Total interest expense		5,414			4,856		12,038		9,587

Net interest income		10,367			7,482		20,010		14,514
Provision for loan losses		3,176			181		4,182		451

Net interest income after provision for loan losses		7,191			7,301		15,828		14,063
Noninterest income
Computer center data processing fees		200			190		391		388
Service charges		1,170			873		2,324		1,697
Net gain on sale of loans		3			6		5		8
ATM fees		357			209		647		391
Trust fees		501			376		997		755
Bank owned life insurance		121			133		249		274
Other		(14	)		40		296		117

Total noninterest income		2,338			1,827		4,909		3,630
Noninterest expense
Salaries and wages		3,664			2,671		7,273		5,462
Benefits		744			555		1,474		1,355
Net occupancy expense		636			340		1,292		724
Equipment expense		582			261		1,114		524
Contracted data processing		301			191		705		382
State franchise tax		285			222		761		437
Professional services		532			365		956		718
Amortization of intangible assets		337			161		740		322
Courier		171			166		339		316
Other operating expenses		2,323			1,415		4,371		2,915

Total noninterest expense		9,575			6,347		19,025		13,155

Income (loss) before taxes		(46	)		2,781		1,712		4,538
Income tax expense (benefit)		(151	)		811		295		1,309

Net Income	$	105		$	1,970	$	1,417	$	3,229


Earnings per share, basic	$	0.01		$	0.36	$	0.18	$	0.59
Earnings per share, diluted	$	0.01		$	0.36	$	0.18	$	0.59

Weighted average basic common shares		7,707,917			5,430,916		7,707,917		5,442,908
Weighted average diluted common shares		7,707,917			5,430,916		7,707,917		5,442,908

See notes to interim consolidated financial statements

Page 4

FIRST CITIZENS BANC CORP

Consolidated Statements of Shareholders’ Equity (Unaudited)

Form 10-Q

(In thousands, except share data)


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

Balance, January 1, 2007		5,471,300		$	68,430	$	28,634		$	(15,214	)	$	(2,378	)	$	79,472
Net income							3,229									3,229
Change in unrealized gain/(loss) on securities available for sale, net of reclassifications and tax effects													(295	)		(295	)
Cash dividends ($.58 per share)							(3,163	)								(3,163	)
Dividends declared ($.27 per share)							(1,454	)								(1,454	)

Purchase of treasury stock, at cost		(82,000	)							(1,628	)					(1,628	)


Balance, June 30, 2007		5,389,300		$	68,430	$	27,246		$	(16,842	)	$	(2,673	)	$	76,161


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

Balance, January 1, 2008		7,707,917	$	114,365	$	29,446		$	(17,235	)	$	(420	)	$	126,156
Net income						1,417									1,417
Change in unrealized gain/(loss) on securities available for sale, net of reclassifications and tax effects												184			184
Cash dividends ($.56 per share)						(4,316	)								(4,316	)

Dividends declared ($.20 per share)						(1,542	)								(1,542	)


Balance, June 30, 2008		7,707,917	$	114,365	$	25,005		$	(17,235	)	$	(236	)	$	121,899

See notes to interim consolidated financial statements

Page 6

FIRST CITIZENS BANC CORP

Condensed Consolidated Statement of Cash Flows (Unaudited)

(In thousands)


	Six months ended June 30,
	2008			2007

Net cash from operating activities	$	5,721		$	2,561

Cash flows from investing activities
Maturities and calls of securities, held-to-maturity		—			2
Maturities and calls of securities, available-for-sale		30,059			24,897
Purchases of securities, available-for-sale		(33,853	)		(20,038	)
Purchases of securities Federal Reserve Bank Stock		(1,186	)		—
Loans made to customers, net of principal collected		(14,457	)		(30,394	)
Proceeds from sale of OREO properties		175			335
Change in federal funds sold		18,408			—
Proceeds from sale of property and equipment		8			5
Net purchases of office premises and equipment		(509	)		(373	)

Net cash from investing activities		(1,355	)		(25,566	)

Cash flows from financing activities
Repayment of FHLB borrowings		(95	)		(74	)
Net change in short-term FHLB advances		24,950			17,935
Net change in long-term FHLB advances		5,000			30,000
Proceeds from issuance of subordinated debenture		—			5,000
Repayment of subordinated debenture		—			(5,000	)
Net change in deposits		(39,293	)		(14,322	)
Change in securities sold under agreements to repurchase		2,311			(4,405	)
Change in U. S. Treasury interest-bearing demand note payable		2,122			(1,634	)
Cash received in deposit acquisition		3,915			—
Purchases of treasury stock		—			(1,628	)
Dividends paid		(4,316	)		(3,162	)

Net cash from financing activities		(5,406	)		22,710


Net change in cash and due from banks		(1,040	)		(295	)
Cash and due from banks at beginning of period		27,345			17,860

Cash and due from banks at end of period	$	26,305		$	17,565


Cash paid during the period for:
Interest	$	12,461		$	9,471
Income taxes	$	270		$	840

Supplemental cash flow information:
Transfer of loans from portfolio to other real estate owned	$	1,276		$	554

See notes to interim consolidated financial statements

Page 7

First Citizens Banc Corp

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

(1) Consolidated Financial Statements

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), SCC Resources, Inc. (SCC), First Citizens Insurance Agency, Inc., Water Street Properties, Inc. (Water St.) and Champaign Investment Company (CIC). The above companies together are referred to as the Corporation. Intercompany balances and transactions are eliminated in consolidation.

The consolidated financial statements have been prepared by the Corporation without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the Corporation’s financial position as of June 30, 2008 and its results of operations and changes in cash flows for the periods ended June 30, 2008 and 2007 have been made. The accompanying consolidated financial statements have been prepared in accordance with instructions of Form 10-Q, and therefore certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been omitted. The results of operations for the period ended June 30, 2008 are not necessarily indicative of the operating results for the full year. Reference is made to the accounting policies of the Corporation described in the notes to financial statements contained in the Corporation’s 2007 annual report. The Corporation has consistently followed these policies in preparing this Form 10-Q.

The Corporation provides financial services through its offices in the Ohio counties of Erie, Crawford, Huron, Marion, Ottawa, Richland, Summit, Franklin, Madison, Logan, Champaign, Union and Miami. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions and Federal Funds sold. In 2008, SCC provided item processing for four financial institutions in addition to Citizens. SCC accounted for 1.1% of the Corporation’s total revenue through June 30, 2008. First Citizens Insurance Agency Inc. was formed to allow the Corporation to participate in commission revenue generated through its third party insurance agreement. Insurance commission revenue is less than 1.0% of total revenue through June 30, 2008. Water Street Properties, Inc. holds repossessed assets of FCBC’s subsidiary. Water St. revenue was less than 1.0% of total revenue through June 30, 2008. Champaign Investment Company was acquired via the Futura Banc Corporation acquisition and is licensed as a broker and dealer in securities. CIC accounted for less than 1.0% of total revenue through June 30, 2008. The corporation is in the process of dissolving this entity. Management considers the Corporation to operate primarily in one reportable segment, banking. To prepare consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, fair values of financial instruments, and status of contingencies are particularly subject to change.

Page 8

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

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

New Accounting Pronouncements:

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This Statement establishes a fair value hierarchy about the assumptions used to measure fair value and clarifies assumptions about risk and the effect of a restriction on the sale or use of an asset. The standard is effective for fiscal years beginning after November 15, 2007. See Note 9 for additional detail.

In February 2007, the FASB issued Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. The standard provides companies with an option to report selected financial assets and liabilities at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The new standard became effective for the Corporation on January 1, 2008. The impact of the adoption of this standard was immaterial, therefore the Corporation did not elect to apply the standard to any financial assets or liabilities.

In September 2006, the FASB Emerging Issues Task Force finalized Issue No. 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements. This issue requires that a liability be recorded during the service period when a split-dollar life insurance agreement continues after participants’ employment or retirement. The required accrued liability will be based on either the post-employment benefit cost for the continuing life insurance or based on the future death benefit depending on the contractual terms of the underlying agreement. This issue is effective for fiscal years beginning after December 15, 2007. The impact of adoption of EITF 06-4 was immaterial.

Impact of Not Yet Effective Authoritative Accounting Pronouncements

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 161 “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133” (“SFAS No. 161”). SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Management is currently evaluating the impact of SFAS No. 161 on the Corporation’s disclosures.

Page 9

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

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162 “The Heirarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”). This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States. This Statement will be effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411. The adoption of SFAS No. 162 is not expected to impact the Corporation’s consolidated financial statements.

On February 20, 2008, the FASB issued Staff Position FAS 140-3 “Accounting for Transfers of Financial Assets and Repurchase Financing Transactions” (FSP FAS 140-3”) to resolve questions about the accounting for repurchase financings. This FSP is effective for repurchase financings in which the initial transfer is entered into in fiscal years beginning after November 15, 2008. Management is currently evaluating the impact, if any, of FSP FAS 140-3 on the Corporation’s consolidated financial statements.

On April 25, 2008, the FASB issued Staff Position FAS 142-3 “Determination of the Useful Life of Intangible Assets” (“FSP FAS 142-3), which amends the list of factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS No. 142 “Goodwill and Other Intangible Assets.” FSP FAS 140-3 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. Management is currently evaluating the impact, if any, of FSP FAS 140-3 on the Corporation’s consolidated financial statements.

On May 9, 2008, the FASB issued Staff Position APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). FSP APB 14-1 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. The adoption of FSP APB 14-1 is not expected to impact the Corporation’s consolidated financial statements.

On June 16, 2008, the FASB issued Staff Position EITF 03-6-1 “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (FSP EITF 03-6-1”). The FSP addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method described in paragraphs 60 and 61 of FASB Statement No. 128, Earnings per Share. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. The adoption of FSP EITF 03-6-1 is not expected to impact the Corporation’s consolidated financial statements.

Page 10

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

(2) Securities

Available for sale securities at June 30, 2008 and December 31, 2007 were as follows:


			Gross		Gross
			Unrealized		Unrealized
June 30, 2008	Fair Value		Gains		Losses
U.S. Treasury securities and obligations of U.S. Government agencies	$	88,335	$	995	$	(132	)
Obligations of states and political subdivisions		33,188		265		(255	)
Mortgage-backed securities		26,247		232		(78	)

Total debt securities	$	147,770	$	1,492	$	(465	)

Equity securities		676		195		—


	$	148,446	$	1,687	$	(465	)


			Gross		Gross
			Unrealized		Unrealized
December 31, 2007	Fair Value		Gains		Losses
U.S. Treasury securities and obligations of U.S. Government agencies	$	95,723	$	834	$	(13	)
Obligations of states and political subdivisions		28,441		139		(30	)
Mortgage-backed securities		19,706		73		(59	)

Total debt securities		143,870		1,046		(102	)

Equity securities		481		—		—


Total	$	144,351	$	1,046	$	(102	)

Page 11

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

The amortized cost and fair value of securities at June 30, 2008, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Securities not due at a single maturity date, primarily mortgage-backed securities and equity securities are shown separately.


Available for sale	Fair Value
Due in one year or less	$	59,535
Due after one year through five years		44,000
Due after five years through ten years		5,895
Due after ten years		12,093
Mortgage-backed securities		26,247
Equity securities		676

Total securities available for sale	$	148,446

Proceeds from sales of securities during the quarter ended June 30, 2008 totaled $6. There were no proceeds from sales of securities during the quarter ended June 30, 2007. However, the Corporation had a gain of $183 in the first quarter of 2008 from the redemption of shares received on the Initial Public Offering of VISA.

Securities with a carrying value of approximately $125,030 and $121,198 were pledged as of June 30, 2008 and December 31, 2007, respectively, to secure public deposits, other deposits and liabilities as required by law.

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

Securities with unrealized losses at June 30, 2008 and December 31, 2007 not recognized in income are as follows.


	12 Months or less				More than 12 months				Total
June 30, 2008	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss		Value		Loss		Value		Loss

U.S. Treasury securities and obligations of U.S. government agencies	$	17,133	$	132	$	—	$	—	$	17,133	$	132
Obligations of states and political subdivisions		14,988		244		680		11		15,668		255
Mortgage-backed securities		5,938		78		—		—		5,938		78


Total temporarily impaired	$	38,059	$	454	$	680	$	11	$	38,739	$	465


	12 Months or less				More than 12 months				Total
December 31, 2007	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss		Value		Loss		Value		Loss

U.S. Treasury securities and obligations of U.S. government agencies	$	—	$	—	$	3,010	$	13	$	3,010	$	13
Obligations of states and political subdivisions		3,712		11		6,026		19		9,738		30
Mortgage-backed securities		—		—		2,285		59		2,285		59


Total temporarily impaired	$	3,712	$	11	$	11,321	$	91	$	15,033	$	102

Unrealized losses on securities have not been recognized into income because the issuers’ securities are of high credit quality, management has the intent and ability to hold these securities for the foreseeable future, and the decline in fair value is largely due to market yields increasing across the municipal sector partly due to higher risk premiums associated with municipal insurers. The fair value is expected to recover as the securities approach their maturity date or reset date.

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

(3) Loans

Loans at June 30, 2008 and December 31, 2007 were as follows:


	6/30/2008			12/31/2007
Commercial and Agriculture	$	104,982		$	96,385
Commercial real estate		314,248			299,005
Real Estate — mortgage		333,358			343,160
Real Estate — construction		33,846			33,480
Consumer		18,393			20,359
Other		127			2,467
Leases		179			185

Total loans		805,133			795,041
Allowance for loan losses		(8,350	)		(7,374	)
Deferred loan fees		(308	)		(281	)

Net loans	$	796,475		$	787,386

(4) Allowance for Loan Losses

A summary of the activity in the allowance for loan losses for the three and six months ended June 30, 2008 and 2007 was as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Balance beginning of period	$	7,928		$	8,176		$	7,374		$	8,060
Loans charged-off		(2,930	)		(403	)		(3,861	)		(853	)
Recoveries		176			204			655			500
Provision for loan losses		3,176			181			4,182			451

Balance June 30,	$	8,350		$	8,158		$	8,350		$	8,158

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

Information regarding impaired loans was as follows for the three and six months ended June 30:


	Three Months				Six Months
	Ended June 30,				Ended June 30,
	2008		2007		2008		2007
Average investment in impaired loans	$	13,797	$	17,077	$	14,254	$	16,967

Interest income recognized on impaired loans including interest income recognized on cash basis		159		425		426		602

Interest income recognized on impaired loans on cash basis		159		425		426		602

Information regarding impaired loans at June 30, 2008 and December 31, 2007 was as follows:


	June 30,			December 31,
	2008			2007
Balance impaired loans	$	14,629		$	12,965

Less portion for which no allowance for loan losses is allocated		(9,715	)		(6,193	)


Portion of impaired loan balance for which an allowance for credit losses is allocated	$	4,914		$	6,772


Portion of allowance for loan losses allocated to impaired loans	$	1,600		$	2,057

Nonperforming loans were as follows:


	June 30,		December 31,
	2008		2007

Loans past due over 90 days still on accrual	$	5,127	$	2,423
Nonaccrual	$	13,658	$	9,308

Nonperforming loans and impaired loans are defined differently. Some loans may be included in both categories, whereas other loans may only be included in one category.

Page 15

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

(5) Earnings per Common Share:

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


	Three months ended June 30,				Six months ended June 30,
	2008		2007		2008		2007
Basic
Net Income	$	105	$	1,970	$	1,417	$	3,229

Weighted average common shares outstanding		7,707,917		5,430,916		7,707,917		5,442,908


Basic earnings per common share	$	0.01	$	0.36	$	0.18	$	0.59


Diluted
Net Income	$	105	$	1,970	$	1,417	$	3,229

Weighted average common shares outstanding for basic earnings per common share		7,707,917		5,430,916		7,707,917		5,442,908
Add: Dilutive effects of assumed exercises of stock options		—		—		—		—


Average shares and dilutive potential common shares outstanding		7,707,917		5,430,916		7,707,917		5,442,908


Diluted earnings per common share	$	0.01	$	0.36	$	0.18	$	0.59

Stock options for 29,500 shares of common stock were not considered in computing diluted earnings per common share for June 30, 2008 and 39,000 shares of common stock were not considered in computing diluted earnings per common share for June 30, 2007, because they were anti-dilutive.

Page 16

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

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

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection are issued to meet customers financing needs. These are agreements to provide credit or to support the credit of others, as long as the conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of commitment. The contractual amount of financial instruments with off-balance-sheet risk was as follows for June 30, 2008 and December 31, 2007:


	Contract Amount
	June 30, 2008				December 31, 2007
	Fixed		Variable		Fixed		Variable
	Rate		Rate		Rate		Rate

Commitment to extend credit:
Lines of credit and construction loans	$	8,529	$	94,265	$	9,154	$	101,105
Overdraft protection		—		12,573		—		11,393
Letters of credit		65		1,363		97		1,485

	$	8,594	$	108,201	$	9,251	$	113,983

Commitments to make loans are generally made for a period of one year or less. Fixed rate loan commitments above had interest rates ranging from 4.00% to 10.25% at June 30, 2008 and 4.00% to 10.25% at December 31, 2007. Maturities extend up to 30 years.

Citizens is required to maintain certain reserve balances on hand in accordance with the Federal Reserve Board requirements. The average reserve balance maintained in accordance with such requirements was $6,582 on June 30, 2008 and $4,753 on December 31, 2007.

(7) Pension Information

Net periodic pension expense for:


	Three months ended June 30						Six months ended June 30
	2008			2007			2008			2007
Service cost	$	123		$	79		$	349		$	369
Interest cost		113			83			319			382
Expected return on plan assets		(151	)		(82	)		(429	)		(380	)
Other components		10			7			29			31

Net periodic pension cost	$	95		$	87		$	268		$	402

The total amount of contributions expected to be paid by the Corporation in 2008 total $0, compared to $312 in 2007. Effective January 1, 2007, no new employees will be added to the retirement plan.

Page 17

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

(8) Stock Options

Options to buy stock may be granted to directors, officers and employees under the stock option plan, which provides for issue of up to 225,000 options. Exercise price is the market price at date of grant. The maximum option term is ten years, and options normally vest after three years.

The Corporation did not grant any stock options during the first six months of 2008 and 2007. Additionally, no stock options became vested during the first six months of 2008 and 2007.

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


	Six months ended					Six months ended
	June 30, 2008					June 30, 2007
	Total options					Total options
	outstanding					outstanding
				Weighted				Weighted
				Average				Average
				Price				Price
	Shares			Per Share		Shares		Per Share

Outstanding at beginning of year		39,000		$	25.44		39,000	$	25.44
Granted		—			—		—		—
Exercised		—			—		—		—
Forfeited		(9,500	)		25.54		—		—

Options outstanding, end of period		29,500			25.42		39,000		25.44


Options exercisable, end of period		29,500			25.42

The following table details stock options outstanding:

Outstanding Options

Weighted

Average

Weighted

Remaining

Average

Contractual

Exercise

Exercise price

Number

Life

Price

$20.50

19,500

4 yrs. 0 mos.

20.50

$35.00

10,000

4 yrs. 9.5 mos.

35.00

Outstanding at quarter-end

29,500

4 yrs. 3 mos.

25.42

The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of our common stock as of the reporting date. As of June 30, 2008 and December 31, 2007, the aggregate intrinsic value of the stock options was $0.

Page 18

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

(9) Fair Value Measurement

FASB Statement No. 157 establishes a fair value hierarchy about the assumptions used to measure fair value. The statement describes three levels of inputs that may be used to measure fair value. Level 1: Quoted prices or identical assets in active markets that are identifiable on the measurement date; Level 2: Significant other observable inputs, such as quoted prices for similar assets, quoted prices in markets that are not active and other inputs that are observable or can be corroborated by observable market data; Level 3: Significant unobservable inputs that reflect the Corporation’s own view about the assumptions that market participants would use in pricing an asset.

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

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

Assets measured at fair value are summarized below.


	Fair Value Measurements at Reporting Date Using:
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Assets:	June 30, 2008		(Level 1)		(Level 2)		(Level 3)

Available for sale securities	$	148,446	$	—	$	148,446	$	—
Impaired Loans	$	14,629	$	—	$	12,812	$	—

Page 19

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

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

Introduction

The following discussion focuses on the consolidated financial condition of First Citizens Banc Corp at June 30, 2008 compared to December 31, 2007 and the consolidated results of operations for the three and six month periods ending June 30, 2008 compared to the same periods in 2007. This discussion should be read in conjunction with the consolidated financial statements and footnotes included in this Form 10-Q.

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

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

Financial Condition

Total assets of the Corporation at June 30, 2008 were $1,108,704 compared to $1,119,257 at December 31, 2007, a decrease of $10,553, or 0.9 percent. The decrease in total assets was mainly attributed to a decrease in total deposit, offset by an increase in total loans and a decrease in federal funds sold. Additionally, other assets decreased primarily due to an FDIC settlement related to the assumption of Miami Valley Bank deposits.

Page 20

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

Net loans have increased $9,089, or 1.2 percent since December 31, 2007. The commercial real estate, commercial and agricultural, and real estate construction loan portfolios increased by $15,243, $8,597 and $366, respectively. The residential real estate, other loan and lease portfolios decreased $9,802, $2,340 and $6 respectively, while consumer loans decreased a total of $1,966. The current increase in commercial real estate and commercial and agriculture loans is mainly due to lines of credit being drawn upon and aggressive calling efforts by the commercial lending officers. The current decrease in residential real estate and consumer loans is mainly the result of a decline in the housing market. Mortgage loan activity is down and the Corporation is currently selling on the secondary market, the majority of mortgage loans originated.

The Corporation had no loans held for sale at June 30, 2008 or December 31, 2007. At June 30, 2008, the net loan to deposit ratio was 99.5 percent compared to 93.8 percent at December 31, 2007.

For the first six months of operations in 2008, the provision for the allowance loan loss was $4,182, compared to $451 in the six months of 2007. Most of the difference is the second quarter 2008 provision of $3,176. The larger provision was the result of changes to the following factors. Net charge-offs have increased significantly compared to 2007. Although the charged-offs were primarily due to loans already on the watch list, the fact that charge-offs are larger this year led to an increase in the charge-off experience factor, which in turn led to the need for greater provision for loan loss. Nonperforming loans have increased by $6,459, mostly due to increased loans on nonaccrual status and loans delinquent greater than 90 days. Impaired loans also increased, from $12,965 at December 31, 2007 to $14,629 at June 30, 2008. Each of these factors was considered by management as part of the examination of both the level and mix of the allowance by loan type as well as the overall level of the allowance. Management specifically evaluates loans that are impaired, or graded as doubtful by the internal grading function for estimates of loss. To evaluate the adequacy of the allowance for loan losses to cover probable losses in the portfolio, management considers specific reserve allocations for identified portfolio loans, reserves for delinquencies and historical reserve allocations. The composition and overall level of the loan portfolio and charge-off activity are also factors used to determine the amount of the allowance for loan losses.

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

Page 21

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

The June 30, 2008 allowance for loan losses as a percent of total loans was 1.04 percent compared to 0.93 percent at December 31, 2007.

Available for sale securities increased by $4,095 from $144,351 at December 31, 2007 to $148,446 at June 30, 2008. Other securities increased from December 31, 2007, due to Federal Home Loan Bank stock dividends received and the purchase of additional Federal Reserve Bank stock. In addition to securities, the Corporation also utilizes letters of credit from the Federal Home Loan Bank (FHLB) for pledging to public entities. As of June 30, 2008, the Corporation was in compliance with all pledging requirements.

Bank owned life insurance (BOLI) increased $249 from December 31, 2007 due to income earned on the investment. The purchase of BOLI, in 2006, is an alternative to replacing maturing securities, and is being used to help recover costs associated with healthcare, group term life, and 401(k).

Office premises and equipment, net, have decreased $483 from December 31, 2007 to June 30, 2008. The decrease in office premises and equipment is attributed to depreciation of $984 and disposals of $8, offset by new purchases of $509,.

Total deposits at June 30, 2008 decreased $39,293 from year-end 2007. Noninterest-bearing deposits decreased $8,926 from year-end 2007 while interest-bearing deposits, including savings and time deposits, decreased $30,367 from December 31, 2007. The interest-bearing deposit decrease was due primarily to decreases in savings, NOW and certificates of deposit. The decline in NOW and certificate of deposit accounts was mainly due to management’s decision not to pay above market rates for deposits to maintain the Corporation’s interest margin. The year to date average balance of total deposits increased $269,384 compared to the average balance of the same period 2007. This increase in average balance was due to the assumption of $56,448 in deposits in October 2007 and $234,252 in deposits acquired in a merger in December 2007.

Total borrowed funds have increased $34,288 from December 31, 2007 to June 30, 2008. At June 30, 2008, the Corporation had $94,325 in outstanding Federal Home Loan Bank advances compared to $64,470 at December 31, 2007. The FHLB borrowings increased as a result of loan growth and declines in deposits since the end of 2007. In an effort to take advantage of reduced interest rates, the Corporation obtained a long-term FHLB advance in the first quarter of 2008 to replace two maturing advances. The new advance is a $5,000, eighty-four month advance that has a fixed rate of 2.84%, and is callable after thirty-six months. This advance replaced a $3,000 advance that matured on May 29, 2008 with a rate of 5.57% and a $2,000 advance maturing on September 4, 2008 with a rate of 5.36%. The Corporation also had notes outstanding with other financial institutions totaling $21,500 at both June 30, 2008 and December 31, 2007. Securities sold under agreements to repurchase, which tend to fluctuate due to timing of deposits, have increased $2,311 since the end of 2007 and U.S. Treasury Tax Demand Notes have increased $2,122.

Page 22

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

Shareholders’ equity at June 30, 2008 was $121,899, or 11.0 percent of total assets, compared to $126,156 at December 31, 2007, or 11.3 percent of total assets. The decrease in shareholders’ equity resulted from earnings of $1,417, less dividends paid of $4,316, dividends declared of $1,542 and the increase in the market value of securities available for sale, net of tax, of $184. The Corporation paid cash dividends of $.28 per common share on each of February 1, 2008 and May 1, 2008, and paid cash dividends of $.29 per common share on each of February 1, 2007 and May 1, 2007. As a result of additional shares issued in the Futura acquisition, total outstanding shares at June 30, 2008 were 7,707,917 compared to 5,389,300 at June 30, 2007.

In the fourth quarter of 2007, the Corporation reaffirmed the stock repurchase program that was instituted in 2006. Under the program, the Corporation is authorized to buy up to 5.0 percent of the total common shares outstanding. Repurchases under the plan could be made from time to time in the open market, based on stock availability, price and the Company’s financial performance, including capital levels. Therefore, no assurance can be given as to the level or to the timing of shares that could be repurchased.

Results of Operations

Six Months Ended June 30, 2008 and 2007

Net income for the six months ended June 30, 2008 was $1,417, or $.18 per basic and diluted share compared to $3,229 or $.59 per basic and diluted share for the same period in 2007. This was a decrease of $1,812, or 56.1 percent. The decrease in earnings per share is partly due to the greater number of shares outstanding at the end of the second quarter of 2008 compared to the same period in 2007. The Corporation issued 2,343,617 shares in connection with the acquisition of Futura Banc Corporation. Other reasons for the changes are explained below.

Total interest income for the six months of 2008 increased by $7,947, or 33.0 percent compared to the same period in 2007. Net interest income, the difference between interest income earned on interest-earning assets and interest expense incurred on interest-bearing liabilities, is the most significant component of the Corporation’s earnings. Net interest income is affected by changes in volume, rates and composition of interest-earning assets and interest-bearing liabilities. Average earning assets increased 40.3 percent from the first six months of 2007 from a combination of organic growth and an acquisition. Average loans for the first six months of 2008 increased 41.5 percent over the first six months of 2007, with organic growth contributing approximately 3.8 percent, with the remainder due to the acquisition. The Corporation’s net interest margin for the six months ended June 30, 2008 and 2007 was 4.20% and 4.24%, respectively.

Page 23

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

Noninterest income for the first six months of 2008 was $4,909, an increase of $1,279 or 35.2 percent compared to the same period in 2007. The change in non-interest income reflects the impact of acquisitions. Non-interest income growth was most significant in the service charges on deposit accounts, which recorded revenues of $2,324 during the first six months of 2008, an increase of $627 or 36.9 percent from the same period in 2007. The increased revenues were primarily due to higher volumes in deposit accounts from acquisitions. Trust fee income for the first six months of 2008 was $997, up $242 or 32.1 percent over the first six months of 2007, primarily from an acquisition. Bank owned life insurance contributed $249 to non-interest income in the first six months of 2008. ATM fee income for the first six months of 2008 was $647, up $256 or 65.5 percent over the first six months of 2007, primarily from an acquisition. Other non-interest income increased $179 for the first six months of 2008 compared to the same period of 2007, primarily due a $77 increase in the first six months of 2008 in losses sustained on the sale of OREO properties compared to the first six months of 2007. Additionally, the Corporation posted a gain of $183 in the first quarter of 2008, for the redemption of VISA stock.

Noninterest expense for the six months ended June 30, 2008 was $19,025, an increase of $5,870 or 44.6 percent, from $13,155 reported for the same period in 2007. Salaries and other employee costs were $8,747, up $1,930 or 28.3 percent as compared to the first six months of 2007 mainly due to an increase of approximately 68 full-time equivalent employees compared to the first six months of 2007. Employees increased due to the acquisition of Futura Banc Corporation and the assumption of deposits of Miami Valley Bank in the fourth quarter of 2007. The Corporation subsequently purchased one of Miami Valley’s branch banking offices, and retained the employees of that branch. Occupancy and equipment costs were $2,406, up $1,158 or 92.8 percent as a result of the acquisitions. Computer processing costs were $705, up $323 or 84.6 percent compared to the first six months of 2007 as a result of conversion costs associated with acquisitions. State franchise taxes increased $324 compared to the first six months of 2007 as a result of acquisitions as well. Amortization expense for the first half of 2008 increased $418 or 129.8 percent from the same period of 2007 due to the additional intangible assets acquired from the recent merger. Professional services expenses increased $238 or 33.1 percent from the first half of 2007 due to increased post merger legal and audit fees associated with lending activities and from consulting fees for employment searches. Finally, other operating expenses were $4,371, up $1,456 or 49.9 percent as compared to the first half of 2007, primarily a result of merger, integration and restructuring charges recognized from the acquisition of Futura Banc Corporation.

Income tax expense for the first six months of 2008 totaled $295 compared to $1,309 for the first six months of 2007. This was a decrease of $1,014, or 77.5 percent. The decrease in the federal income taxes is a result of the decrease in total income before taxes of $2,826 and a result of a decrease in the effective tax rate. The effective tax rates for the six-month periods ended June 30, 2008 and June 30, 2007 were 17.3% and 28.8%, respectively. Non-taxable BOLI income, non-taxable security income and the second quarter 2008 loss before taxes both led to lower taxable income, and therefore to the decrease in the effective tax rate.

Page 24

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

Three Months Ended June 30, 2008 and 2007

Net income for the three months ended June 30, 2008 was $105, a decrease of $1,865 or 94.7 percent from $1,970 for the same period in 2007. Basic and diluted earnings per common share was $.01 for the three months ended June 30, 2008 compared to $.23 for the same period in 2007. The decrease in earnings per share is partly due to the greater number of shares outstanding at the end of the second quarter of 2008 compared to the same period in 2007. The Corporation issued 2,343,617 shares in connection with the acquisition of Futura Banc Corporation. Other reasons for the changes are explained below.

Total interest income for the second quarter of 2008 increased $3,443, or 27.9 percent compared to the same period in 2007. Average earning assets for the second quarter of 2008 increased 40.5 percent from the three months ended June 30, 2007 from a combination of organic growth and an acquisition. The average rate on earning assets on a tax equivalent basis for the second quarter of 2008 was 6.49% and 7.11% for the second quarter of 2007. The decrease in yield in this year’s second quarter is due to the change in the interest rate environment in which the Corporation has operated in 2008. Total interest expense for the second quarter of 2008 increased $558, or 11.5 percent compared to the same period of 2007. Average interest-bearing liabilities for the second quarter of 2008 increased 45.5 percent from the three months ended June 30, 2007 from an acquisition. The average rate on interest-bearing liabilities for the second quarter of 2008 was 2.54% and was 3.31% for the second quarter of 2007. The decrease in cost in this year’s second quarter is due to the change in the interest rate environment.

Noninterest income for the three months ended June 30, 2008 was $2,338, an increase of $511 or 28.0 percent compared to the three months ended June 30, 2007. The change in non-interest income reflects the impact of acquisitions. Non-interest income growth was most significant in the service charges on deposit accounts, which recorded revenues of $1,170 during the second quarter of 2008, an increase of $297 or 34.0 percent from the same period in 2007. The increased revenues were primarily due to higher volumes in deposit accounts from acquisitions. Trust fee income for the second quarter of 2008 was $501, up $125 or 33.2 percent over the second quarter of 2007, primarily from an acquisition. Bank owned life insurance contributed $121 to non-interest income in the second quarter of 2008. ATM fee income for the second quarter of 2008 was $357, up $148 or 70.8 percent over the same period of 2007, primarily from an acquisition. In the second quarter of 2008, losses sustained on the sale of OREO properties increased $149 compared to the second quarter of 2007.

Noninterest expense for the second quarter of 2008 was $9,575, an increase of $3,228 or 50.9 percent, from $6,347 reported for the same period in 2007. Salaries and other employee costs were $4,408, up $1,182 or 36.6 percent as compared to the same period in 2007 mainly due to an increase of approximately 68 full-time equivalent employees compared to the second quarter of 2007. Employees increased due to the acquisition of Futura Banc Corporation and the assumption of deposits of Miami Valley Bank in the fourth quarter of 2007. The Corporation subsequently purchased one of Miami Valley’s branch banking offices, and retained the employees of that branch. Occupancy and equipment costs were $1,218, up $617 or 102.7 percent as a result of the acquisitions. Computer processing costs were $301, up $110 or 57.6 percent compared to last year’s second quarter as a result of higher processing costs associated with acquisitions.

Page 25

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

State franchise taxes increased $63 compared to the second quarter of 2007 as a result of acquisitions as well. Amortization expense in the second quarter increased $176 or 109.3 percent from the same period of 2007 due to the additional intangible assets acquired from the recent merger. Professional services expenses increased $167 or 45.8 percent from the second quarter of 2007 due to increased post merger legal and audit fees associated with lending activities and from consulting fees for employment searches. Finally, other operating expenses were $2,323, up $908 or 64.2 percent as compared to the second quarter of 2007, primarily a result of the acquisition of Futura Banc Corporation.

Income tax benefit for the second quarter totaled $(151) compared to $811 for the same period in 2007. This was a decrease of $962, or 118.6 percent. The decrease in the federal income taxes is a result of the decrease in total income before taxes of $2,827 and a result of a decrease in the effective tax rate. The effective tax rates for the three-month periods ended June 30, 2008 and June 30, 2007, were (328.3)% and 29.2%, respectively. Non-taxable BOLI income, non-taxable security income and the second quarter 2008 loss before taxes both led to lower taxable income, and therefore to the decrease in the effective tax rate.

Capital Resources

Shareholders’ equity totaled $121,899 at June 30, 2008 compared to $126,156 at December 31, 2007. All of the Corporation’s capital ratios exceeded the regulatory minimum guidelines as of June 30, 2008 and December 31, 2007 as identified in the following table:


										To Be Well
										Capitalized
										Under Prompt
							For Capital			Corrective
	Corporation Ratios						Adequacy			Action
	6/30/2008			12/31/2007			Purposes			Provisions
Tier I Risk Based Capital		7.4	%		7.3	%		4.0	%		6.0	%
Total Risk Based Capital		10.9	%		10.3	%		8.0	%		10.0	%
Leverage Ratio		5.6	%		7.7	%		4.0	%		5.0	%

Page 26

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

The Corporation paid a cash dividend of $.28 per common share on each of February 1, and May 1, 2008, and $.29 per common share on each of February 1 and May 1, 2007. The Corporation also declared a $.20 dividend during the second quarter, payable August 1, 2008. The decrease in the dividend is due to the decrease in earnings the second quarter of 2008, balanced with management’s desire to continue the practice of paying a strong dividend. The Corporation anticipates spreading the impact of the second quarter’s decreased net earnings of several quarters.

Liquidity

All securities are classified as available for sale. At June 30, 2008, securities with maturities of one year or less, totaled $59,535, or 40.1 percent of the total security portfolio. The available for sale portfolio helps to provide the Corporation with the ability to meet its funding needs. The Consolidated Statements of Cash Flows (Unaudited) contained in the consolidated financial statements detail the Corporation’s cash flows from operating activities resulting from net earnings.

Cash from operations for the six months ended June 30, 2008 was $5,721. This includes net income of $1,417 plus net adjustments of $4,304 to reconcile net earnings to net cash provided by operations. Cash from investing activities was $(1,355) for the six months ended June 30, 2008. The use of cash from investing activities is primarily due to loans, securities and the change in federal funds sold. The Corporation had a net decrease in cash of $14,457 during the six months ended June 31, 2008 due to the net growth of the loan portfolio. Cash received from maturing and called securities totaled $30,059. This increase in cash was offset by the purchase of securities of $33,853. Additionally, cash was decreased by the net change in federal funds sold of $18,408. Cash from financing activities in the first six months of 2008 totaled $(5,406). This decrease in cash is primarily due to the net change in deposits. Cash from operating activities and financing activities was less than cash from investing activities by $1,040. Cash and due from banks declined from $27,345 at December 31, 2007 to $26,305 at June 30, 2008, as a result of the decline in cash during the first six months of 2008.

Future loan demand of Citizens may be funded by increases in deposit accounts, proceeds from payments on existing loans, the maturity of securities, the issuances of trust preferred obligations, and the sale of securities classified as available for sale. Additional sources of funds may also come from borrowing in the Federal Funds market and/or borrowing from the FHLB. Citizens maintains federal funds borrowing lines at its correspondent banks totaling $35,000. As of June 30, 2008, Citizens had total credit availability with the FHLB of $165,697, of which $94,325 was outstanding.

Page 27

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

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

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

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

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

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

Page 28

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

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

Several ways an institution can manage interest-rate risk include selling existing assets or repaying certain liabilities; matching repricing periods for new assets and liabilities, for example, by shortening terms of new loans or securities; and hedging existing assets, liabilities, or anticipated transactions. An institution might also invest in more complex financial instruments intended to hedge or otherwise change interest-rate risk. Interest rate swaps, futures contracts, options on futures, and other such derivative financial instruments often are used for this purpose. Because these instruments are sensitive to interest rate changes, they require management expertise to be effective. 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. FHLB advances and wholesale borrowings may also be used as important sources of liquidity for the Corporation.

Page 29

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

The following table provides information about the Corporation’s financial instruments that are sensitive to changes in interest rates as of December 31, 2007 and June 30, 2008, 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, 2007 or June 30, 2008. 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


	June 30, 2008								December 31, 2007
Change in	Dollar		Dollar			Percent			Dollar		Dollar			Percent
Rates	Amount		Change			Change			Amount		Change			Change
+200bp		92,040		(41,062	)		-31	%		118,940		(26,162	)		-18	%
+100bp		116,008		(17,094	)		-13	%		133,346		(11,756	)		-8	%
Base		133,102		—			—			145,102		—			—
-100bp		147,306		(14,204	)		11	%		152,879		7,777			5	%
-200bp		159,217		(26,115	)		20	%		155,417		10,315			7	%

The change in net portfolio value from December 31, 2007 to June 30, 2008, is primarily a result of two factors. First, the short end of the yield curve has moved down, mainly the time frames two years and shorter. Additionally, both the asset and funding mixes have changed. While the assets shifted more toward investments, the funding mix shifted from deposits to borrowed money. As a result, the Corporation has seen a decrease in the base level of net portfolio value. An upward movement in rates would lead to a faster decrease in the fair value of assets, compared to liabilities, which would lead to a decrease in the net portfolio value. Inversely, a downward change in rates would lead to an increase in the net portfolio value as the fair value of assets would increase faster than the fair value of the liabilities. While this is the same general trend in movements as for December 31, 2007, the relative changes will tend to be larger, given the changes in the mix of the assets and funding that we saw in the second quarter of 2008.

Page 30

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

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of June 30, 2008 (the “evaluation date”), an evaluation was carried out under the supervision and with the participation of First Citizens Banc Corp’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the evaluation date, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by First Citizens Banc Corp in reports that it files or submits under the Exchange Act (1) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) is accumulated and communicated to the Corporation’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Corporation’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the Corporation’s fiscal quarter, ended June 30, 2008, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

Page 31

First Citizens Banc Corp
Other Information
Form 10-Q

Part II — Other Information

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

There were no material changes to the risk factors as presented in the Corporation’s annual report on Form 10-K for the year ended December 31, 2007.

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

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submissions of Matters to a Vote of Security Holders

First Citizens Banc Corp held its annual meeting on April 15, 2008, for the purpose of considering and voting on the following proposals. Summaries of the voting results are included following the description of each matter.

1.)

To amend and restate the Corporation’s Code of Regulations to provide shareholders with the option to hold stock in uncertificated form, to clarify the manner of execution of stock certificates and to permit electronic book-entry transfer of stock.


					Broker
For	Against		Abstain		Non-Vote
5,702,348.27		46,626.58		50,651.34		1.00

Page 32

First Citizens Banc Corp
Other Information
Form 10-Q

2.)

To elect seventeen (17) directors to serve one-year terms expiring in 2009 and when their successors are elected and qualified.


Director Candidate	For		Withheld
John O. Bacon		5,685,971.44		96,173.74
Laurence A. Bettcher		5,627,444.82		154,700.37
Barry W. Boerger		5,658,220.64		123,924.55
Thomas A. Depler		5,613,285.49		168,859.69
Blythe A. Friedley		5,668,421.34		113,723.85
James D. Heckelman		5,622,779.64		159,365.55
Allen R. Maurice		5,664,907.82		117,243.37
James O. Miller		5,716,933.07		65,212.12
W. Patrick Murray		5,601,078.48		181,066.71
Allen R. Nickles		5,895,994.25		183,310.94
John P. Pheiffer		5,615,621.00		166,524.18
J. William Springer		5,610,755.44		171,389.75
David A. Voight		5,697,923.07		84,222.12
Richard A. Weidrick		5,658,217.64		123,927.55
Daniel J. White		5,613,409.51		168,735.68
J. George Willams		5,599,432.49		182,712.69
Gerald B. Wurm		5,621,539.64		160,605.55

3.)

To approve proposed fees for non-employee directors.


					Broker
For	Against		Abstain		Non-Vote
5,361,559.04		248,559.55		189,499.60		9.00

Item 5. Other Information

None

Item 6. Exhibits


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

Page 33


PART I. Financial Information

Item 1. Financial Statements:

Consolidated Balance Sheets (Unaudited) June 30, 2008 and December 31, 2007			3

Consolidated Statements of Income (Unaudited) Three and six months ended June 30, 2008 and 2007			4

Consolidated Statements of Comprehensive Income (Unaudited) Three and six months ended June 30, 2008 and 2007			5

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) Six months ended June 30, 2008 and 2007			6

Condensed Consolidated Statement of Cash Flows (Unaudited) Six months ended June 30, 2008 and 2007			7

Notes to Interim Consolidated Financial Statements (Unaudited)			8-19

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			20-27

Item 3. Quantitative and Qualitative Disclosures about Market Risk			28-30

Item 4. Controls and Procedures			31

PART II. Other Information

Item 1. Legal Proceedings			32

Item 1A. Risk Factors			32

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			32

Item 3. Defaults upon Senior Securities			32

Item 4. Submission of Matters to a Vote of Security Holders			32-33

Item 5. Other Information			33

Item 6. Exhibits			33

Signatures			34

Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2


	Three months ended						Six months ended
	June 30,						June 30,
	2008			2007			2008			2007
Net income	$	105		$	1,970		$	1,417		$	3,229

Unrealized holding gains and (losses) on available for sale securities		(1,667	)		(710	)		278			(447	)

Net unrealized gains (losses)		(1,667	)		(710	)		278			(447	)
Tax effect		566			240			(94	)		152

Total other comprehensive gain (loss)		(1,101	)		(470	)		184			(295	)

Comprehensive income (loss)	$	(996	)	$	1,500		$	1,601		$	2,934

	a.		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

	c.		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ James O. Miller

James O. Miller

Date: August 11, 2008

President, Chief Executive Officer

/s/ Todd A. Michel

Todd A. Michel

Date: August 11, 2008

Senior Vice President, Controller


Exhibits

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	1.		I have reviewed this quarterly report on Form 10-Q of First Citizens Banc Corp;

	2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


Signature and Title:		/s/ James O. Miller, President, Chief Executive Officer				Date: August 11, 2008


Signature and Title:		/s/ Todd A. Michel, Senior Vice President, Controller				Date: August 11, 2008

	(1)		The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)		The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.


/s/ James O. Miller James O. Miller
Chief Executive Officer
August 11, 2008


/s/ Todd A. Michel Todd A. Michel Senior Vice President and Controller August 11, 2008