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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
OR
[ ] 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
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FIRST CITIZENS BANC CORP
--------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 34-1558688
- ------------------------------------ ---------------------
State or other jurisdiction of (IRS Employer
incorporation or organization Identification No.)
100 EAST WATER STREET, SANDUSKY, OHIO 44870
- --------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (419) 625 - 4121
---------------------
Securities registered pursuant to Section 12(b) of the Act:
None Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
--------------------------
(Title of Class)
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 [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant based upon the closing market price as of January 31, 2001 was
$64,790,542.
As of January 31, 2001, there were 4,082,619 shares of no par value common stock
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrants 2000 Annual Report to Shareholders are incorporated
by reference into Parts I, II and IV of this Form 10K. Portions of the
registrant's Proxy Statement, to be dated approximately March 16, 2001, are
incorporated by reference into Part III of this Form 10K
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INDEX
PART I
Item 1. Description of Business............................................................................. 1
Item 2. Description of Properties........................................................................... 13
Item 3. Legal Proceedings................................................................................... 13
Item 4. Submission of Matters to a Vote of Security Holders................................................. 13
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters............................... 13
Item 6. Selected Financial Data............................................................................. 13
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operation.......................................................................... 13
Item 7a. Quantitative and Qualitative Disclosures About Market Risk.......................................... 14
Item 8. Financial Statements and Supplementary Data......................................................... 14
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.......................................................................... 14
PART III
Item 10. Directors and Executive Officers of the Registrant.................................................. 14
Item 11. Executive Compensation.............................................................................. 14
Item 12. Security Ownership of Certain Beneficial Owners and Management...................................... 14
Item 13. Certain Relationships and Related Transactions...................................................... 14
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................................... 15
Signatures.................................................................................................... 16
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PART I
ITEM 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS
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 Graham-Leech-Bliley Act of 1999 (GLB Act), as amended. The
Corporation's office is located at 100 East Water Street, Sandusky, Ohio.
The Corporation had total consolidated assets of $489,259 at December 31,
2000. FCBC and its subsidiaries are referred to together as the
Corporation.
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 is an insured
bank under the Federal Deposit Insurance Act. Citizens maintains its main
office at 100 East Water Street, Sandusky, Ohio and operates three branch
banking offices in Perkins Township (Sandusky, Ohio), one branch banking
office in Berlin Heights, Ohio, one branch banking office in Huron, Ohio
and one Loan Production office in Port Clinton, Ohio. This subsidiary
accounts for 60% of the Corporation's consolidated assets at December 31,
2000.
THE FARMERS STATE BANK (Farmers), acquired by the Corporation in 1998, was
organized and chartered under the laws of the State of Ohio in 1916.
Farmers is an insured bank under the Federal Deposit Insurance Act. Farmers
maintains its main office at 102 South Kibler Street, New Washington, Ohio
and operates branch offices in Willard, Ohio and the Ohio villages of
Chatfield, Tiro, Richwood and Green Camp. Farmers accounts for 28% of the
Corporation's consolidated assets at December 31, 2000.
THE CASTALIA BANKING COMPANY (Castalia), owned by the Corporation since
1990, was organized and chartered under the laws of the State of Ohio in
1907. Castalia is an insured bank under the Federal Deposit Insurance Act.
Castalia operates from one location, 208 South Washington Street, Castalia,
Ohio. Castalia, Ohio is located approximately 10 miles from Sandusky, Ohio.
Castalia accounts for 10% of the Corporation's consolidated assets at
December 31, 2000.
SCC RESOURCES INC. (SCC) was organized under the laws of the State of Ohio.
Begun as a joint venture of three local Sandusky, Ohio banks in 1966, SCC
provides item-processing services for financial institutions, including the
Banks, and other nonrelated entities. The Corporation acquired total
ownership of SCC in February 1993. On June 19, 1998, SCC entered into an
agreement with Jack Henry & Associates, Inc. (JHA) to sell all of their
contracts for providing data processing services to community banks. JHA
agreed to pay SCC a fee based upon annual net revenue under a new JHA
contract for each bank that signed a five-year contract with JHA by January
31, 1999. This subsidiary accounts for less than one percent of the
Corporation's consolidated assets as of December 31, 2000.
R. A. REYNOLDS APPRAISAL SERVICE, INC. (Reynolds), owned by the
Corporation since 1993, was organized under the laws of the State of
Ohio in September 1993. Reynolds provides real estate appraisal
services, for lending purposes, to the Banks and to other financial
institutions. Reynolds accounts for less than one percent of the
Corporation's consolidated assets as of December 31, 2000.
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MR. MONEY FINANCE COMPANY (Mr. Money) was formed in year 2000 to provide
consumer-lending products to customers who may not qualify for
conventional commercial bank lending products. Mr. Money has its main
office in Sandusky, Ohio and an office in Norwalk, Ohio. Loans for Mr.
Money come from direct consumer lending to customers, acquisition of
loans from brokers and from home improvement contractors and automobile
dealerships. The primary focus of lending for Mr. Money is in the
mortgage and home improvement type of credits. Mr. Money accounts for
less than three percent of the Corporation's consolidated assets as of
December 31, 2000.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
FCBC is a bank financial holding company. Through the three subsidiary
banks, the Corporation is primarily engaged in the business of commercial
banking, which accounts for substantially all of its revenue, operating
income and assets. Reference is made to the statistical information
regarding the Corporation included elsewhere herein and to items of this
Form 10-K for financial information about the Corporation's banking
business.
(c) NARRATIVE DESCRIPTION OF BUSINESS
GENERAL
The Corporation's primary business is incidental to the three
subsidiary banks. Citizens, Farmers and Castalia, located in Erie,
Crawford, Huron, Union, Marion, Richland and Ottawa Counties, Ohio, conduct
a general banking business that involves collecting customer deposits,
making loans and purchasing securities. The subsidiary banks do not operate
a trust department.
Interest and fees on loans accounted for 67% of total revenue for 2000
and 61% of total revenue for 1999. The primary focus of lending is real
estate mortgages. Residential real estate mortgages comprised 63% of the
total loan portfolio in 2000 and 62% of the total loan portfolio in 1999.
Citizens', Farmers' and Castalia's loan portfolios do not include any
foreign-based loans, loans to lesser-developed countries or loans to FCBC.
On a parent company only basis, FCBC's only source of funds is the
receipt of dividends paid by its subsidiaries, principally the Banks. The
ability of the Banks to pay dividends is subject to limitations under
various laws and regulations and to prudent and sound banking principles.
Generally, subject to certain minimum capital requirements, each Bank may
declare a dividend without the approval of the State of Ohio Division of
Financial Institutions unless the total of the dividends in a calendar year
exceeds the total net profits of the bank for the year combined with the
retained profits of the bank for the two preceding years. Earnings have
been sufficient to support asset growth at the Banks and at the same time
provide funds to FCBC for shareholder dividends.
The Corporation's business is not seasonal, nor is it dependent on a single
or small group of customers.
In the opinion of management, the Corporation does not have exposure to
material costs associated with environmental hazardous waste cleanup.
COMPETITION
The primary market area for Citizens, Farmers and Castalia is Erie and
Crawford counties. A secondary market includes portions of Huron, Union,
Marion, Richland and Ottawa counties. Citizens, Farmers and Castalia are
operated as independent commercial banks in their respective market area.
Traditional financial service competition for the Banks consists of large
regional financial institutions, community banks, thrifts and credit unions
operating within the Corporation's market area. A growing nontraditional
source of competition for loan and deposit dollars comes from captive auto
finance companies, mortgage banking companies, internet banks, brokerage
companies, insurance companies and direct mutual funds.
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EMPLOYEES
FCBC has no employees. The subsidiary companies employ approximately 208
full-time equivalent employees to whom a variety of benefits are provided.
FCBC and its subsidiaries are not parties to any collective bargaining
agreements. Management considers its relationship with its employees to be
good.
SUPERVISION AND REGULATION
On November 12, 1999, President Clinton signed the Graham-Leach-Bliley Act
of 1999 (GLB Act), which is intended to modernize the financial services
industry. The GLB Act sweeps away large parts of a regulatory framework
that had its origins in the Depression Era of the 1930s. Effective March
11, 2000, new opportunities became available for banks, other depository
institutions, insurance companies and securities firms to enter into
combinations that permit a single financial services organization to offer
customers a more complete array of financial products and services.
The GLB Act introduced the concept of functional regulation. Functional
regulation mandates that the Board of Governors of the Federal Reserve
System give deference to the Securities and Exchange Commission and
relevant state securities and insurance authorities with respect to
interpretations and enforcement of activities within their respective
jurisdictions.
The GLB Act provides a federal right to privacy of non-public personal
information of individual customers. Federal regulatory agencies with
primary supervisory authority over numerous financial institutions have
responsibility for implementing this privacy provision. FCBC and its
subsidiaries are also subject to certain state laws that deal with the use
and distribution of non-public personal information.
FCBC, registered as a financial holding company in 2000 and therefore is
subject to the GLB Act. The Federal Reserve Board will serve as the
umbrella regulator for financial holding companies while the financial
holding company's separately regulated subsidiaries will be regulated by
their primary functional regulators. In addition to meeting "well
capitalized" and "well managed" standards, the GLB Act makes satisfactory
or above Community Reinvestment Act compliance for insured depository
institutions necessary in order for them to engage in new financial
activities. Financial subsidiaries of banks may also be formed to engage in
a new range of activities under the GLB Act.
Prior to enactment of the Interstate Banking and Branch Efficiency Act of
1994, neither FCBC nor its subsidiaries could acquire banks outside Ohio,
unless the laws of the state in which the target bank was located
specifically authorized the transaction. The Interstate Banking and Branch
Efficiency Act has eased restrictions on interstate expansion and
consolidation of banking operations by, among other things: (i) permitting
interstate bank acquisitions regardless of host state laws, (ii) permitting
interstate merger of banks unless specific states have opted out of this
provision and (iii) permitting banks to establish new branches outside the
state provided the law of the host state specifically allows interstate
bank branching.
The Federal Reserve Board has adopted risk-based capital guidelines to
evaluate the adequacy of capital of bank holding companies and state member
banks. The guidelines involve a process of assigning various risk weights
to different classes of assets, then evaluating the sum of the
risk-weighted balance sheet structure against the holding company's capital
base. Failure to meet capital guidelines could subject a banking
institution to various penalties, including termination of FDIC deposit
insurance. Both FCBC and its subsidiary Banks had risk-based capital ratios
above minimum requirements at December 31, 2000.
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3
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REGULATION OF BANK SUBSIDIARIES
In addition to regulation of FCBC, FCBC's banking subsidiaries are subject
to federal regulation regarding such matters as reserves, limitations on
the nature and amount of loans and investments, issuance or retirement of
their own securities, limitations on the payment of dividends and other
aspects of banking operations.
As Ohio chartered banks, all three of FCBC's banking subsidiaries,
Citizens, Castalia and Farmers, are supervised and regulated by the State
of Ohio Department of Commerce, Division of Financial Institutions. In
addition, Citizens and Castalia are members of the Federal Reserve System.
All three banks are subject to periodic examinations by the State of Ohio
Department of Commerce, Division of Financial Institutions and Citizens and
Castalia are additionally subject to periodic examinations by the Federal
Reserve Board. These examinations are designed primarily for the protection
of the depositors of the banks and not for their shareholders. In addition,
Mr. Money is supervised and regulated by, and is subject to periodic
examinations by, the State of Ohio Department of Commerce, Division of
Financial Institutions.
The deposits of Citizens, Castalia and Farmers are insured by the Bank
Insurance Fund of the Federal Deposit Insurance Corporation (FDIC), and all
three entities are subject to the Federal Deposit Insurance Act. Farmers is
subject to periodic examinations by the FDIC. Pursuant to the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, a subsidiary of
a financial holding company may be required to reimburse the FDIC for any
loss incurred due to the default of another FDIC insured subsidiary of the
financial holding company or for FDIC assistance provided to such a
subsidiary in danger of default.
EFFECTS OF GOVERNMENT MONETARY POLICY
The earnings of the Banks are affected by general and local economic
conditions and by the policies of various governmental regulatory
authorities. In particular, the Federal Reserve Board regulates money and
credit conditions and interest rates to influence general economic
conditions, primarily through open market acquisitions or dispositions of
United States Government securities, varying the discount rate on member
bank borrowings and setting reserve requirements against member and
nonmember bank deposits. Federal Reserve Board monetary policies have had a
significant effect on the interest income and interest expense of
commercial banks, including the Banks, and are expected to continue to do
so in the future.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
SALES
The Corporation does not have any offices located in a foreign country, nor
do they have any foreign assets, liabilities, or related income and expense
for the years presented.
(e) STATISTICAL INFORMATION
The following section contains certain financial disclosures related to the
Registrant as required under the Securities and Exchange Commission's
Industry Guide 3, "Statistical Disclosures by Bank Holding Companies", or a
specific reference as to the location of the required disclosures in the
Registrant's 2000 Annual Report to Shareholders, portions of which are
incorporated in this Form 10-K by reference.
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4
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I. Distribution of Assets, Liabilities and Shareholders' Equity, Interest
Rates and Interest Differential
Average balance sheet information and the related analysis of net interest
income for the years ended December 31, 2000, 1999 and 1998 is included on pages
12 through 14 - "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 Rates", within
Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Registrant's 2000 Annual Report to Shareholders and is
incorporated into this Item I by reference.
II. Investment Portfolio
The following table sets forth the carrying amount of securities at December 31.
2000 1999 1998
---- ---- ----
(Dollars in thousands)
AVAILABLE FOR SALE
U.S. Treasury securities and obligations
of U.S. Government corporations and agencies $ 48,029 $ 63,224 $ 70,125
Corporate Bonds 5,413 13,012 18,117
Obligations of states and political subdivisions (1) 43,919 52,606 54,404
Other securities, including mortgage-backed securities (1) 18,153 21,413 29,307
----------- ----------- -----------
Total $ 115,514 $ 150,255 $ 171,953
=========== =========== ===========
HELD TO MATURITY
Obligations of states and political subdivisions (1) $ 155 $ 232 $ 355
Other securities, including mortgage-backed securities (1) 123 174 455
----------- ----------- -----------
Total $ 278 $ 406 $ 810
=========== =========== ===========
(1) The Corporation has no securities of an "issuer" where the aggregate
carrying value of such securities exceeded ten percent of shareholders'
equity.
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The following tables set forth the maturities of securities at December 31, 2000
and the weighted average yields of such securities. Maturities are reported
based on stated maturities and do not reflect principal prepayment assumptions.
Maturing
----------------------------------------------------------------
After one After five
Within but within but within
ONE YEAR FIVE YEARS TEN YEARS
-------- ---------- ---------
Amount Yield Amount Yield Amount Yield
------ ----- ------ ----- ------ -----
(Dollars in thousands)
AVAILABLE FOR SALE (4)
U.S. Treasury securities and obligations
of U.S. government corporations
and agencies $ 10,901 5.41% $ 37,128 5.94% $ - -
Obligations of states and political
subdivisions (1) 6,206 4.77 25,445 4.57 12,027 4.51
Other securities (2) 3,037 5.82 2,616 6.12 -
---------- --------- ---------
Total $ 20,145 5.28% $ 65,189 5.41% $ 12,027 4.51%
========== ========= =========
HELD TO MATURITY
Obligations of states and political subdivisions (1) $ 155 4.54% $ - -
Other securities (3) 47 4.50%
--------- ---------
Total $ 155 4.54% $ 47 4.50%
========= =========
(1) Weighted average yields on nontaxable obligations have been computed based
on actual yields stated on the security.
(2) Excludes $11,077 of mortgage-backed securities and $7,076 of equity
securities.
(3) Excludes $76 of mortgage-backed securities.
(4) The weighted average yield has been computed using the historical amortized
cost for available-for-sale securities.
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III. Loan Portfolio
TYPES OF LOANS
The amounts of gross loans outstanding at December 31 are shown in the following
table according to types of loans.
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(Dollars in thousands)
Commercial and agricultural $ 26,416 $ 26,077 $ 24,140 $ 26,657 $ 24,053
Commercial real estate 60,546 48,301 53,804 49,428 44,599
Residential real estate 217,344 178,876 173,789 183,031 165,148
Real estate construction 9,684 4,482 3,493 3,923 3,449
Consumer 29,509 28,106 27,490 28,759 25,949
Leases 590 392 589 736 883
Credit card and other 2,979 3,576 1,426 1,694 1,850
------------ ------------- ------------ ------------ ------------
$ 347,068 $ 289,810 $ 284,731 $ 294,228 $ 265,931
============ ============= ============ ============ ============
Commercial loans are those made for commercial, industrial and professional
purposes to sole proprietorships, partnerships, corporations and other business
enterprises. Agricultural loans are for financing agricultural production,
including all costs associated with growing crops or raising livestock. These
loans may be secured, other than by real estate, or unsecured, requiring one
single repayment or on an installment repayment schedule. The loans involve
certain risks relating to changes in local and national economic conditions and
the resulting effect on the borrowing entities. Secured loans not collateralized
by real estate mortgages maintain a loan-to-value ratio ranging from 50% as in
the case of certain stocks, to 90% in the case of collateralizing with a savings
or time deposit account. Unsecured credit relies on the financial strength and
previous credit experience of the borrower and in many cases the financial
strength of the principals when such credit is extended to a corporation.
Commercial real estate mortgage loans are made predicated on security interest
in real property and secured wholly or substantially by that lien on real
property. Commercial real estate mortgage loans generally maintain a
loan-to-value ratio of 75%.
Residential real estate mortgage loans are made predicated on security interest
in real property and secured wholly or substantially by that lien on real
property. Such real estate mortgage loans are primarily loans secured by one- to
four-family real estate. Residential real estate mortgage loans generally pose
less risk to the Corporation due to the nature of the collateral being less
susceptible to sudden changes in value.
Real estate construction loans are for the construction of new buildings or
additions to existing buildings. Generally, these loans are secured by one- to
four-family real estate. The Corporation controls disbursements.
Consumer loans are made to individuals for household, family and other personal
expenditures. These include the purchase of vehicles or furniture, educational
expenses, medical expenses, taxes or vacation expenses. Consumer loans may be
secured, other than by real estate, or unsecured, generally requiring repayment
on an installment repayment schedule. Consumer loans pose a relatively higher
credit risk. This higher risk is moderated by the use of certain loan value
limits on secured credits and aggressive collection efforts. The collectibility
of consumer loans is influenced by local and national economic conditions.
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10
Credit card loans are made as a convenience to existing customers of the
Corporation. All such loans are made on an unsecured basis, lines over $5,000
require documentation on the financial strength of the borrower. As unsecured
credit, they pose the greatest credit risk to the Corporation.
Letters of credit represent extensions of credit granted in the normal course of
business, which are not reflected in the Corporation's consolidated financial
statements. As of December 31, 2000 and 1999, the Corporation was contingently
liable for $339 and $507 of letters of credit. In addition, the Corporation had
issued lines of credit to customers. Borrowings under such lines of credit are
usually for the working capital needs of the borrower. At December 31, 2000 and
1999, the Corporation had commitments to extend credit in the aggregate amounts
of approximately $32,734 and $27,060. Of these amounts, $28,170 and $23,982
represented lines of credit and construction loans, and $4,564 and $3,078
represented credit card commitments. Such amounts represent the portion of total
commitments that had not been used by customers as of December 31, 2000 and
1999.
MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES
The following table shows the amount of commercial and agricultural, commercial
real estate and real estate construction loans outstanding as of December 31,
2000, which, based on the contract terms for repayments of principal, are due in
the periods indicated. In addition, the amounts due after one year are
classified according to their sensitivity to changes in interest rates.
Maturing
------------------------------------------------------------------
After one
Within but within After
One Year Five Years Five Years Total
-------- ---------- ---------- -----
(Dollars in thousands)
Commercial and agricultural $ 11,748 $ 9,751 $ 4,917 $ 26,416
Commercial real estate 3,450 12,760 44,336 60,546
Real estate construction 899 3,476 5,309 9,684
------------ ------------- ------------ ------------
$ 16,097 $ 25,987 $ 54,562 $ 96,646
============ ============= ============ ============
Interest
Sensitivity
------------------------------
Fixed Variable
Rate Rate
---- ----
(Dollars in thousands)
Due after one but within five years $ 19,795 $ 6,192
Due after five years 17,356 37,206
------------ -------------
$ 37,152 $ 43,398
============ =============
The preceding maturity information is based on contract terms at December 31,
2000 and does not include any possible "rollover" at maturity date. In the
normal course of business, the Corporation considers and acts on the borrower's
request for renewal of loans at maturity. Evaluation of such requests includes a
review of the borrower's credit history, the collateral securing the loan and
the purpose for such request.
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RISK ELEMENTS
The following table presents information concerning the amount of loans at
December 31 that contain certain risk elements.
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(Dollars in thousands)
Loans accounted for on a nonaccrual basis (1) $ 1,368 $ 1,682 $ 1,693 $ 1,969 $ 921
Loans contractually past due 90 days or
more as to principal or interest payments (2) 558 834 1,235 1,717 1,308
Loans whose terms have been renegotiated to provide a
reduction or deferral of interest or principal because
of a deterioration in the financial position of
the borrower (3) 634 693 305 308 --
---------- --------- --------- --------- ---------
Total $ 2,560 $ 3,209 $ 3,233 $ 3,994 $ 2,229
========== ========= ========= ========= =========
Impaired loans included in above totals $ 2,778 $ 994 $ 1,196 $ 864 $ 1,745
Impaired loans not included in above totals 2,374 3,166 2,963 3,571 1,470
---------- --------- --------- --------- ---------
Total impaired loans $ 5,152 $ 4,160 $ 4,159 $ 4,435 $ 3,215
========== ========= ========= ========= =========
There are no loans as of December 31, 2000, other than those disclosed above,
where known information about possible credit problems of borrowers caused
management to have serious doubts as to the ability of such borrowers to comply
with the present loan repayment terms. There are no other interest-bearing
assets that would be required to be disclosed in the table above, if such assets
were loans as of December 31, 2000.
(1) Loans are placed on nonaccrual status when doubt exists as to the
collectibility of the loan, including any accrued interest. With a few
immaterial exceptions, commercial and agricultural, commercial real estate,
residential real estate and construction loans past due 90 days are placed
on nonaccrual unless they are well collateralized and in the process of
collection. Generally, consumer loans are charged-off within 30 days after
becoming past due 90 days unless they are well collateralized and in the
process of collection. Credit card loans are charged-off before reaching
120 days of delinquency. Once a loan is placed on nonaccrual, interest is
then recognized on a cash basis where future collections of principal is
probable.
(2) Excludes loans accounted for on a nonaccrual basis.
(3) Excludes loans accounted for on a nonaccrual basis and loans contractually
past due ninety days or more as to principal or interest payments.
Interest income recognition associated with impaired loans was as follows.
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Interest income on impaired loans, including
interest income recognized on a cash basis $ 344 $ 320 $ 273 $ 227 $ 242
========== ========== ========== ========= ==========
Interest income on impaired loans recognized on
a cash basis $ 344 $ 320 $ 273 $ 182 $ 141
========== ========== ========== ========= ==========
There were no foreign outstandings for any period presented.
No concentrations of loans exceeded 10% of total loans.
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12
IV. Summary of Loan Loss Experience
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
The following table shows the daily average loan balances and changes in the
allowance for loan losses for the years indicated.
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(Dollars in thousands)
Daily average amount of loans,
net of unearned income $ 314,071 $ 284,080 $ 288,108 $ 280,141 $ 250,719
============ ============= ============= ============= ==============
Allowance for possible loan
losses at beginning of year $ 4,274 $ 4,567 $ 4,707 $ 3,935 $ 3,585
Loan charge-offs:
Commercial and agricultural and
commercial real estate 612 63 134 53 90
Real estate mortgage 166 95 40 70 32
Real estate construction - - - - -
Consumer 447 582 490 387 344
Leases - - - - 3
Credit card and other 46 49 61 47 51
------------ ------------- ------------- ------------- --------------
1,271 789 725 557 520
Recoveries of loans previously
Charged-off:
Commercial and agricultural and
commercial real estate 75 29 32 48 41
Real estate mortgage 57 13 31 2 2
Real estate construction - - - - -
Consumer 148 170 133 132 82
Leases - - - - -
Credit card and other 17 17 27 18 12
------------ ------------- ------------- ------------- --------------
297 229 223 200 137
------------ ------------- ------------- ------------- --------------
Net charge-offs (1) (974) (559) (502) (357) (383)
Provision for loan losses (2) 807 267 362 1,129 733
------------ ------------- ------------- ------------- --------------
Allowance for loan losses
at end of year $ 4,107 $ 4,274 $ 4,567 $ 4,707 $ 3,935
============ ============= ============= ============= ==============
Allowance for loan losses
as a percent of loans
at year-end 1.19% 1.48% 1.60% 1.60% 1.48%
======== ======= ======== ======== =======
Ratio of net charge-offs during
the year to average loans
outstanding .31% .20% .17% .13% .15%
======== ======= ======== ======== =======
(1) The amount of net charge-offs fluctuates from year to year due to factors
relating to the condition of the general economy and specific business
segments.
(2) The determination of the balance of the allowance for loan losses is based
on an analysis of the loan portfolio and reflects an amount that, in
management's judgment, is adequate to provide for probable loan losses.
Such analysis is based on a review of specific loans, the character of the
loan portfolio, current economic conditions, past loan loss experience and
such other factors as management believes require current recognition in
estimating probable loan losses.
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13
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
The following table allocates the allowance for loan losses at December 31 to
each loan category. The allowance has been allocated according to the amount
deemed to be reasonably necessary to provide for the probable losses estimated
to be incurred within the following categories of loans at the dates indicated.
2000 1999
---- ----
Percentage Percentage
of loans to of loans to
(Dollars in thousands) Allowance Total Loans Allowance Total Loans
--------- ----------- --------- -----------
Commercial and agricultural $ 316 7.8% $ 531 9.0%
Commercial real estate 969 17.4 152 16.7
Real estate mortgage 1,439 62.6 1,447 61.7
Real estate construction 12 2.8 - 1.6
Consumer 327 8.5 544 9.7
Credit card and other 8 0.8 12 1.2
Leases - 0.1 23 0.1
Unallocated 1,036 1,565
----------- -------- ----------- -------
$ 4,107 100.0% $ 4,274 100.0%
=========== ======== =========== =======
1998 1997
---- ----
Percentage Percentage
of loans to of loans to
Allowance Total Loans Allowance Total Loans
--------- ----------- --------- -----------
Commercial and agricultural and commercial
real estate $ 932 27.4% $ 768 25.9%
Real estate mortgage 1,202 61.0 1,509 62.2
Real estate construction - 1.2 - 1.3
Consumer 784 9.7 377 9.8
Credit card and other 22 0.5 15 0.6
Leases 24 0.2 29 0.2
Unallocated 1,603 2,009
----------- -------- ----------- -------
$ 4,567 100.0% $ 4,707 100.0%
=========== ======== =========== =======
1996
----
Percentage
of loans to
Allowance Total Loans
--------- -----------
Commercial and agricultural and commercial
real estate $ 1,152 25.8%
Real estate mortgage 308 62.1
Real estate construction - 1.3
Consumer 235 9.8
Credit card and other 11 0.7
Leases 35 0.3
Unallocated 2,194
----------- ---------
$ 3,935 100.0%
=========== ========
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DEPOSITS
The average daily amount of deposits (all in domestic offices) and average rates
paid on such deposits is summarized for the years indicated.
2000 1999 1998
------------------------ -------------------------- --------------------------
Average Average Average Average Average Average
Balance Rate Paid Balance Rate Paid Balance Rate Paid
------- --------- ------- --------- ------- ---------
(Dollars in thousands)
Noninterest-bearing
demand deposits $ 44,270 N/A $ 39,123 N/A $ 36,327 N/A
Interest-bearing demand
deposits 58,612 2.71% 49,189 1.36% 40,798 2.12%
Savings, including Money
Market deposit accounts 109,316 2.56% 115,057 2.78 114,282 2.87
Certificates of deposit,
including IRAs 188,723 5.19% 206,296 5.01 212,081 5.55
------------ ------------ ------------
$ 400,921 $ 409,665 $ 403,488
============ ============ ============
Maturities of certificates of deposits and individual retirement accounts of
$100,000 or more outstanding at December 31, 2000 are summarized as follows.
Individual
Certificates Retirement
of Deposits Accounts Total
----------- -------- -----
(Dollars in thousands)
3 months or less $ 13,779 $ 623 $ 14,402
Over 3 through 6 months 7,956 103 8,059
Over 6 through 12 months 6,169 801 6,970
Over 12 months 5,912 793 6,705
----------- ---------- -----------
$ 33,816 $ 2,320 $ 36,136
=========== ========== ===========
SHORT-TERM BORROWINGS
See Note 8 to the consolidated financial statements (located at page 8 of the
Annual Report to Shareholders) and "Distribution of Assets, Liabilities and
Shareholders' Equity, Interest Rates and Interest Differential" (located at
pages 12 and 13 of the Annual Report to Shareholders) for the statistical
disclosures for short-term borrowings for 2000, 1999 and 1998.
RETURN ON EQUITY AND ASSETS
Information required by this section is incorporated by reference to the
information appearing under the caption "Five-Year Selected Consolidated
Financial Data" located on page 1 and 2 of First Citizens Banc Corp's Annual
Report to Shareholders.
- --------------------------------------------------------------------------------
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15
ITEM 2. PROPERTIES
FCBC neither owns nor leases any properties. Citizens maintains its main office
at 100 East Water Street, Sandusky, Ohio, which is also the office of FCBC.
Citizens also owns and operates three branch banking offices in Perkins Township
(Sandusky, Ohio), branch banking office in the Ohio communities of Berlin
Heights and Huron, and a loan production office in Port Clinton, Ohio. Farmers
maintains its main office at 102 South Kibler Street, New Washington, Ohio.
Farmers also owns and operates a branch banking office in the Ohio communities
of Willard, Chatfield, Tiro, Richwood and Green Camp. Castalia owns its main
office located at 208 South Washington Street, Castalia, Ohio. SCC owns its
processing center located at 1845 Superior Street, Sandusky, Ohio. Reynolds
leases offices in downtown Sandusky, Ohio. Mr. Money leases two properties, one
in downtown Sandusky and the other in downtown Norwalk, Ohio.
FCBC has three wholly-owned subsidiary banks, a wholly-owned item processing
company subsidiary, a wholly owned finance company and a wholly-owned real
estate appraisal company subsidiary.
ITEM 3. LEGAL PROCEEDINGS
The Corporation's management is aware of no pending or threatened litigation in
which the Corporation faces potential loss or exposure that will materially
affect the consolidated financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of the fiscal year covered
by this report to a vote of security holders through the solicitation of proxies
or otherwise.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information required by this section is incorporated by reference to the
information appearing under the caption "Common Stock and Stockholder Matters"
located on page 2 and 3 of First Citizens Banc Corp's Annual Report to
Shareholders.
ITEM 6. SELECTED FINANCIAL DATA
Information required by this section is incorporated by reference to the
information appearing under the caption "Five-Year Selected Consolidated
Financial Data" located on page 1 and 2 of First Citizens Banc Corp's Annual
Report to Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION - AS OF DECEMBER 31, 2000 AND DECEMBER
31, 1999 AND FOR THE YEARS ENDING DECEMBER 31, 2000, 1999 AND 1998
"Management's Discussion and Analysis if Financial Condition and Results of
Operations" appears on pages 4 through 16 of First Citizens Banc Corp's 2000
Annual Report to Shareholders and is incorporated herein by reference.
- --------------------------------------------------------------------------------
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16
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and Qualitative Disclosures About Market Risk is incorporated
herein by reference to pages 16 through 18 of First Citizens Banc Corp's 2000
Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA
First Citizens Banc Corp's Report of Independent Auditors and Consolidated
Financial Statements and accompanying notes are listed below and are
incorporated herein by reference to First Citizens Banc Corp's 2000 Annual
Report to Shareholders (Exhibit 13, pages 19 through 45). The supplementary
financial information specified by Item 302 of Regulation S-K, selected
quarterly financial data, is included in Note 19 - "Quarterly Financial Data
(Unaudited)" to the consolidated financial statements found on page 45.
Report of Independent Auditors
Consolidated Balance Sheets
December 31, 2000 and 1999
Consolidated Statements of Income
For the three years ended December 31, 2000
Consolidated Statements of Changes in Shareholders' Equity
For the three years ended December 31, 2000
Consolidated Statements of Cash Flows
For the three years ended December 31, 2000
Notes to Consolidated Financial Statements
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Corporation has had no disagreements with the independent accountants on
matters of accounting principles or financial statement disclosure required to
be reported under this item.
PART III
Information relating to the following items in included in First Citizens Banc
Corp's Proxy statement and Notice of Annual Meeting of Shareholders to be held
Tuesday, April 17, 2001, ("2000 Proxy Statement") dated March 16, 2001, filed
with the Commission on Form DEF 14-A, pursuant to Section 14(A) of the
Securities Exchange Act of 1934 and is incorporated by reference into this Form
10-K Annual Report (Exhibit 22).
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- --------------------------------------------------------------------------------
14
17
ITEM 11. EXECUTIVE COMPENSATION.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS A PART OF THE REPORT
1 FINANCIAL STATEMENTS. The following financial statements, together with
the applicable report of independent auditors, can be located under Item 8
of this Form 10-K.
2 FINANCIAL STATEMENT SCHEDULES. All schedules are omitted because they are
not applicable or the required information is shown in the financial
statements or notes thereto.
3 EXHIBITS
(3)(i) Articles of Incorporation, as amended, of First Citizens Banc Corp
are incorporated by reference to First Citizens Banc Corp's Form
10-K for the year ended December 31, 1999, filed on March 24,
2000.
(3)(ii) Code of Regulations of First Citizens Banc Corp is incorporated by
reference to First Citizens Banc Corp's Form 10-K for the year
ended December 31, 1999, filed on March 24, 2000.
(4) Certificate for Registrant's Common Stock is incorporated by
reference to First Citizens Banc Corp's Form 10-K for the year
ended December 31, 1999, filed on March 24, 2000.
(10) Employment Agreement with Arthur J. Pucci, dated April 3, 2000.
(11) Statement regarding earnings per share is included in Note 1 to
the Consolidated Financial Statements and can be located under
Item 8 of this Form 10-K.
(13) First Citizens Banc Corp 2000 Annual Report to Shareholders
(21) Subsidiaries of the Registrant.
(b) REPORTS ON FORM 8-K. The Company filed no reports on Form 8-K during the
fourth quarter of the year ended December 31, 2000.
- -------------------------------------------------------------------------------
15
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
(Registrant) First Citizens Banc Corp
----------------------------------------------------------------
By /S/ David A. Voight
--------------------------------------------------------
David A. Voight, President (Principal Executive Officer)
By /S/ JAMES O. MILLER
-----------------------------------------------------------------------
James O. Miller, Executive Vice President (Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on March 30, 2001 by the following persons (including a majority
of the Board of Directors of the Registrant) in the capacities indicated:
/S/ Lowell W. Leech /s/ David A. Voight
- ------------------------------------------ -------------------
Lowell W. Leech David A. Voight
Chairman of the Board President, Director
/S/ John L. Bacon /s/ Dean S. Lucal
- ------------------------------------------ -----------------
John L. Bacon Dean S. Lucal
Director Director
/S/ Robert L. Bordner /s/ W. Patrick Murray
- ------------------------------------------ ---------------------
Robert L. Bordner W. Patrick Murray
Director Director
/S/ Mary Lee G. Close /s/ George L. Mylander
- ------------------------------------------ ----------------------
Mary Lee G. Close George L. Mylander
Director Director
/S/ Blythe A. Friedley /s/ Paul H. Pheiffer
- ------------------------------------------ --------------------
Blythe A. Friedley Paul H. Pheiffer
Director Director
/S/ Richard B. Fuller /s/ Richard O. Wagner
- ------------------------------------------ ---------------------
Richard B. Fuller Richard O. Wagner
Director Director
/S/ H. Lowell Hoffman, M.D.
- ---------------------------
H. Lowell Hoffman, M.D.
Director
- -------------------------------------------------------------------------------
16