First Citizens Banc Corp. is a bank financial holding company. Through the 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. The subsidiaries are: The Citizens Banking Company The Farmers State Bank and The Castalia Banking Company. First Citizens Banc Corp. has a market cap of $45.7 million; its shares were traded at around $5.93 with and P/S ratio of 0.6. The dividend yield of First Citizens Banc Corp. stocks is 4.7%. First Citizens Banc Corp. had an annual average earning growth of 5.4% over the past 5 years.
Highlight of Business Operations:Net loans have decreased $4,934, or 0.6 percent since December 31, 2008. The commercial real estate portfolio increased by $6,565. The commercial and agricultural, real estate and real estate construction loan portfolios decreased $2,764, $5,741 and $474, respectively, while consumer loans and leases and other loans portfolios decreased a total of $994, $38 and $33, respectively. The current increase in commercial real estate loans is mainly due to aggressive calling efforts by the commercial lending officers. The current decrease in commercial and agriculture loans is the result of seasonality. The current decrease in real estate and consumer loans is mainly the result of a decline in the housing market and the Corporations decision to originate and sell the majority of mortgage loans on the secondary market.
Total deposits at March 31, 2009 increased $74,426 from year-end 2008. Noninterest-bearing deposits increased $354 from year-end 2008 while interest-bearing deposits, including savings and time deposits, increased $74,072 from December 31, 2008. The interest-bearing deposit increase was due to increases in interest-bearing demand accounts; and savings accounts and the Corporations participation in the Certificate of Deposit Account Registry Service (CDARS). This service allows the Corporations large depositors to access full FDIC insurance on deposits of up to $50 million. Increases in deposits from public entities (such as municipalities and school systems) accounted for an increase of approximately $2,100 in interest-bearing demand accounts. Savings accounts increased $17,100 from year end 2008, which included increases of $3,200 in statement savings, $2,900 in corporate savings, $5,000 in money market savings and $6,000 in public fund money market savings. The year to date average balance of total deposits increased $25,944 compared to the average balance of the same period in 2008. The increase in average balance is due to the Corporations participation in the CDARS program that started late in the fourth quarter of 2008 and has increased interest-bearing deposits by approximately $52,543 during the first quarter of 2009.
Shareholders equity at March 31, 2009 was $99,469, or 8.9 percent of total assets, compared to $76,617 at December 31, 2008, or 7.3 percent of total assets. The increase in shareholders equity resulted from earnings of $759, less dividends paid of $1,227, and the increase in the market value of securities available for sale, net of tax, of $136. Additionally, on January 23, 2009, the Corporation issued $23,184 in preferred stock to the U.S. Treasury. The Corporation paid a cash dividend on February 1, 2009 and February 1, 2008 at a rate of $.15 and $.28 per share, respectively. Total outstanding common shares at March 31, 2009 and at March 31, 2007 were 7,707,917.
Non-interest income for the first quarter of 2009 was $2,387, a decrease of $185 or 7.2 percent from the first quarter 2008. All non-interest income line items declined compared to 2008, except for ATM fees and other noninterest income. The declines in Trust fees of $113 and Service charges of $57 are related to current economic conditions. Net gain on sale of securities declined in 2009 because of a nonrecurring gain related to the redemption of VISA stock of $183 that was posted in 2008. ATM fee income for the first quarter of 2009 was $346, up $56 or 19.3 percent over the first quarter of 2008. This increase can be attributed to a change in ATM processing systems. The change resulted in increased interchange income, along with a $25 incentive to switch. Other non-interest income of $237, related to the resolution of three loans obtained in the Futura merger, was recorded in the first quarter of 2009. These loans were recorded at fair value at the time of the merger and have subsequently been settled at a higher value.
Non-interest expense for the first quarter of 2009 was $9,246, a decrease of $204 or 2.2 percent, from $9,450 reported for the same quarter of 2008. Salary and other employee costs were $4,314, down $24 or 0.6 percent as compared to the first quarter of 2008. The Corporation has instituted a salary freeze for 2009, which has helped keep salary expenses in line with last year. Occupancy and equipment costs were $1,160, down $28 or 2.4 percent compared to the same period of 2008. Computer processing cost were $283, down $121, or 30.0 percent compared to last year as a result of conversion cost associated with acquisitions paid during 2008. State franchise taxes decreased by $187 compared to the same period of 2008. Franchise tax is based on the prior end-of-year capital of the Corporation. The large goodwill impairment charge booked directly led to the decrease in franchise tax. Amortization expense decreased $81, or 20.1 percent from the first quarter of 2008, related to scheduled amortization of intangible assets associated with mergers. FDIC assessment is up by $216. The increase is due to an increase in the assessment rate charged. While the assessment rate increased in 2007, it had been offset by credits received. These credits ran out in the second half of 2008, leading to the increase in the first quarter of 2009 compared to the first quarter of 2008.
Cash from operations for the quarter ended March 31, 2009 was $3,549. This includes net income of $759 plus net adjustments of $2,790 to reconcile net earnings to net cash provided by operations. Cash from investing activities was $(26,114) for the quarter ended March 31, 2009. The use of cash from investing activities is primarily due to securities purchases. Cash received from maturing and called securities totaled $26,955. This increase in cash was offset by the purchase of securities of $55,582. Cash from financing activities in the first quarter of 2009 totaled $65,052. A major source of cash for financing activities is the net change in deposits. Cash provided by the net change in deposits was $74,426 in the first quarter of 2009. The large increase in deposits was primarily due to the Corporations participation in the CDARS program, which added $52,543 in deposits during the first quarter of 2009. Cash was used by the decrease in long-term borrowings of $20,500. Cash of $23,184 was provided from the issuance of Senior Preferred Shares to the U.S. Treasury. Cash from operating activities and financing activities exceeded cash from investing activities by $42,487. Cash and cash eqivalents increased from $26,649 at December 31, 2008 to $69,136 at March 31, 2009 as a result of the increase in cash during the first quarter.
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