UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 30, 2003
First Citizens Banc Corp
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(Exact name of Registrant as specified in its charter)
Ohio 0-25980 34-1558688
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
100 East Water Street, P.O. Box 5016, Sandusky, Ohio 44870
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(Address of principle executive offices)
Registrant's telephone number, including area code: (419) 625-4121
N/A
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(Former name or former address, if changed since last report)
Date of report: December 30, 2003
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ITEM 5. OTHER EVENTS
December 30, 2003
To Our Shareholders:
The correspondence that accompanied your last dividend check disclosed that our
earnings for the third quarter were $.26 per share compared to $.41 for the same
quarter the year before. Our earnings are lower than we would like them to be,
largely due to the continuing pressure on interest margins we are facing in this
interest rate environment. There seems to be consensus that we are at the bottom
of the interest rate cycle, but little consensus on when rates may return to
more normal levels.
Many other financial institutions are facing the same challenges. It is likely
that you have read of some. We do not want to accept the prospect of sharply
lower earnings while we weather this interest rate climate. Therefore,
Management wants to make you aware of actions that we are taking to improve the
long-term earnings of the Corporation:
o We continue to believe that we should resist the temptation to add
quick earnings by loading our loan portfolio with fixed rate loans.
Fixed rates command a premium higher than variable rate, but we can be
forced to live with the fixed rate for a substantial period of time.
We cannot take the risk of a 10-year fixed commitment when we are the
bottom of a rate cycle.
o By monitoring customer activity, we have found that the Citizens'
office on Milan Road in Sandusky has not developed as we expected.
This office, obtained when we acquired the Sandusky and Berlin Heights
customers of First Merit, has problems with access due to traffic and
is within one mile of the Citizens' East Perkins office. We will seek
regulatory approval to close this office in the spring of 2004. This
will allow us to put a greater focus on our three other offices in the
Sandusky market.
o Citizens' new office on Seminary Street in Norwalk has attracted
significant customer activity away from the old Executive Drive
office. The Executive Drive office, a very large facility, was
originally the main office of Home Savings many mergers ago. Since our
Norwalk customers find the other offices more convenient, we will also
seek approval to close the Executive Drive office in the spring of
2004 and concentrate on customer service through our other two Norwalk
facilities.
o Consumer loans and mortgage loans have become a commodity in our
society - available through many sources. While we will continue to
offer these products, we
have shifted our emphasis to commercial lending and have reduced our
staffing in the consumer and mortgage lending areas.
o The First Citizens Corporate operations center is now open and houses
all corporate support and data processing functions. The Corporation
will gain efficiencies by having all operations under one roof, and
the sale of the two banking offices and the old SCC operations
facility should approximately cover the capital investment in the new
facility.
The tough environment for financial institutions is forcing us to take difficult
actions to try to protect your best interests. We regret that some of the
corporate actions will result in job losses and may cause some initial
inconvenience to customers who still utilize the Sandusky and Norwalk offices to
be closed. However, we believe that all of these actions will better position
the Company for the future.
As always we welcome your comments and thoughts.
Very truly yours,
/s/ David A. Voight
David A. Voight
President
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
First Citizens Banc Corp
/s/ James O. Miller December 30, 2003
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James O. Miller Date
Executive Vice President