First Citizens Banc: Results Of Operations

The following excerpt is from the company's SEC filing.

Net interest income for the third quarter of 2013 decreased $111 thousand or 1.1% from the prior year’s third quarter and, for the first nine months decreased $935 thousand or 3.1% when compared to the same period of 2012. The decrease in net interest income was due to a decrease in interest income of $402 thousand or 3.5% and $2.0 million or 5.6% compared to the three and nine-month periods ended 2012, respectively. The decrease in interest income, due primarily to decreased yields, was partially offset by an increase in average loans outstanding of $31.6 million or 4.0% when compared to the third quarter of 2012 and an increase of $39.2 million or 5.1% when compared to the first nine months of 2012. The decline in interest income was further offset by the decrease in interest expense of $291 thousand or 19.4% and $1.0 million or 21.6% compared to the three and nine-month periods ended 2012 respectively. Mr. Miller continued, “Interest income continues to be pressured by repricing of assets at lower rates. Fortunately, we have also been successful at increasing average loans outstanding and changing the mix of our funding sources to reduce interest expense.”

The provision for loan losses for the third quarter and nine-months ended 2013 decreased $1.4 million or 82.4% and $4.5 million or 80.2% compared to the three and nine-month periods ended 2012, respectively. The decrease in provision for loan losses is due to improving asset quality.

Noninterest income increased $377 thousand or 14.0% compared to the prior year’s third quarter and increased $663 thousand or 7.8% when compared to the first nine-months of 2012. The nine-month increase was due to an increase in wealth management revenue of $367 thousand, as well as to several smaller increases. The increase in wealth management revenue is due to both an increase in asset valuations as well as an increase in accounts. Both factors have contributed to an overall 10.3% increase in assets under management of $41.6 million to $446.9 million.

Noninterest expense increased $1.5 million or 16.6% when compared to the prior year’s third quarter and $2.4 million or 8.4% when compared to the first nine months of 2012. The increase in non-interest expense was primarily attributable to an increase in salary and benefit costs, specifically to increased heath insurance costs as well as additional personnel that have been added. Mr. Miller continued, “We have assembled a team that is poised to take us to our goal of $2 billion in assets. While there are some short-term costs, we are confident the results will be forthcoming.”

Total assets increased $10.8 million or 1.0% from December 31, 2012 to September 30, 2013. Total loans increased $4.0 million or 0.5% from December 31, 2012 to September 30, 2013. Mr. Miller continued, “In a stagnant economy as we have seen, the focus of our loan production efforts has been on credit quality and disciplined pricing.”

Total deposits increased $16.1 million or 1.7% from December 31, 2012 to September 30, 2013. Total shareholder’s equity decreased $1.1 million or 1.0% from December 31, 2012 to September 30, 2013. This decrease is primarily due to declines in fair value of investments partially offset by net income.

Nonperforming assets decreased $7.2 million or 19.2% from December 31, 2012 to September 30, 2013. Nonperforming assets to total assets also decreased 65 basis points to 2.65% from December 31, 2012 to September 30, 2013. The decrease in nonperforming assets is largely attributable to the continuing workout of nonperforming loans with delinquent customers. Mr. Miller continued, “We have continued to make progress on improving our asset quality profile. During the third quarter, after careful consideration, we made the decision to sell a pool of non-performing loans totaling approximately $6.5 million so that we can devote our time to working on business development and other corporate initiatives. The loan sale will also result in further improvement in our credit quality ratios in the fourth quarter of 2013. We have charged down the loans to their expected fair value through our allowance for loan losses and were still able to reduce our provision. The loan sale should reduce our nonperforming assets to total assets another 42 basis points.”

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.

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Other recent filings from the company include the following:

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