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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, 1999
[ ] TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to __________________
Commission File Number: 0-25903
IBT BANCORP, INC.
---------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1532164
- ----------------------------------------------------- --------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.
309 Main Street, Irwin, Pennsylvania 15642
- ----------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (724) 863-3100
------------------------
Securities registered pursuant to Section 12(b) of the Act: None
--------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.25 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 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. [ ]
Based on the closing sales price of $27 per share of the registrant's
common stock on February 25, 2000, as reported on the OTC Bulletin Board, the
aggregate market value of voting and non-voting stock held by non-affiliates of
the registrant was approximately $71.7 million.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of 1999 Annual Report to Stockholders (Parts II and IV)
2. Portions of Proxy Statement for the 2000 Annual Meeting of
Stockholders. (Part III)
PART I
Forward-Looking Statements
IBT Bancorp, Inc. (the "Company" or "Registrant") may from time to time
make written or oral "forward-looking statements," including statements
contained in the Company's filings with the Securities and Exchange Commission
(including this Annual Report on Form 10-K and the exhibits thereto), in its
reports to stockholders and in other communications by the Company, which are
made in good faith by the Company pursuant to the "safe harbor" provisions of
the private securities litigation reform act of 1995.
These forward-looking statements involve risks and uncertainties, such
as statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economies in which the Company conducts
operations; the effects of, and changes in, trade, monetary and fiscal policies
and laws, including interest rate policies of the Board of Governors of the
Federal Reserve System, inflation, interest rate, market and monetary
fluctuations; the timely development of and acceptance of new products and
services of the Company and the perceived overall value of these products and
services by users, including the features, pricing and quality compared to
competitors' products and services; the willingness of users to substitute
competitors' products and services for the Company's products and services; the
success of the Company in gaining regulatory approval of its products and
services, when required; the impact of changes in financial services' laws and
regulations (including laws concerning taxes, banking, securities and
insurance); technological changes, acquisitions; changes in consumer spending
and saving habits; and the success of the Company at managing the risks involved
in the foregoing.
The Company cautions that the foregoing list of important factors is
not exclusive. The Company does not undertake to update any forward-looking
statement, whether written or oral, that may be made from time to time by or on
behalf of the Company.
Item 1. Business
- -----------------
General
IBT Bancorp, Inc., a Pennsylvania Corporation, headquartered in Irwin,
Pennsylvania, is the bank holding company for Irwin Bank & Trust Company of
Pennsylvania (the "Bank"). The Company conducts no significant business or
operations of its own other than holding all of the outstanding stock of the
Bank. References to the Company or Registrant used throughout this document
generally refers to the consolidated entity which includes the main operating
company, the Bank, unless the context indicates otherwise.
The Bank was incorporated in 1922 under the laws of Pennsylvania as a
commercial bank under the name "Irwin Savings and Trust Company." The Bank
engages in a full service mortgage, commercial and consumer banking business, as
well as trust and a variety of deposit services provided to its customers. At
December 31, 1999 the Bank operated through its main office, five branch offices
and a loan center as well as through four supermarket branches under the name
"Irwin Bank Extra." The Bank's main office, full service branch offices, loan
center, and supermarket branches are located in the Pennsylvania counties of
Westmoreland and Allegheny. The Bank's web site is "www.irwinbank.com."
Competition
The Registrant's primary market area consists of Westmoreland and
Allegheny counties, Pennsylvania, and is one of many financial institutions
serving this market area. The competition for deposit products comes from other
insured financial institutions such as commercial banks, thrift institutions and
credit unions in the Registrant's market area. Deposit competition also includes
a number of insurance products sold by local agents and investment products such
as mutual funds and other securities sold by local and regional brokers. Loan
competition comes from other insured financial institutions such as commercial
banks, thrift institutions and credit unions.
2
Lending Activities
Analysis of Loan Portfolio
The following table sets forth the composition of the Registrant's loan
portfolio in dollar amounts and in percentages of the respective portfolios at
the dates indicated.
At December 31,
--------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------------- -------------------- -------------------- ------------------- -----------------
$ % $ % $ % $ % $ %
----------- ------- ---------- -------- ---------- ------ --------- -------- ---------- -----
(Dollars in Thousands)
Type of Loans:
- -------------
Mortgage.................. $130,348 49.56 $123,494 51.31 $107,240 48.97 $ 99,118 50.28 $ 87,772 49.00
Installment............... 61,983 23.57 52,418 21.78 45,321 20.69 38,595 19.58 34,389 19.20
Commercial................ 47,294 17.98 45,232 18.79 42,003 19.18 38,517 19.54 35,399 19.76
Home equity credit........ 8,886 3.38 8,588 3.57 8,860 4.05 8,723 4.42 9,457 5.28
PHEAA (1)................. 6,166 2.34 5,043 2.10 4,604 2.10 4,632 2.35 4,589 2.56
Municipal................. 6,347 2.41 3,616 1.50 7,870 3.59 4,733 2.40 4,828 2.70
Credit cards.............. 1,780 .68 1,808 .75 2,022 .93 2,228 1.13 2,119 1.18
Other..................... 210 .08 477 .20 1,081 .49 585 .30 584 .32
-------- ------- -------- ------ ------- ------ ------- ------ -------- ------
Total loans................. 263,014 100.00% 240,676 100.00% 219,001 100.00% 197,131 100.00% 179,137 100.00%
====== ====== ====== ====== ======
Less:
Loans in process.......... -- -- -- -- --
Unearned discount......... -- -- -- 1 10
Deferred loan origination.
fees and costs.......... 146 144 174 213 160
Allowance for loan losses. 2,366 2,228 2,340 2,240 1,969
-------- -------- -------- -------- --------
Total loans, net............ $260,502 $238,304 $216,487 $194,677 $176,998
======== ======== ======== ======== ========
- --------------------
(1) Pennsylvania Higher Education Assistance Authority.
3
Loan Maturity Table. The following table sets forth maturities and
interest rate sensitivity for all categories of loans as of December 31, 1999.
Scheduled repayments are reported in the maturity category in which payment is
due.
Home
Equity PHEAA
Mortgage Credit(2) Installment Commercial (1) Municipal Cards(2) Other Total
--------- ---------- ------------- ------------ --------- ---------- -------- ------ --------
(In Thousands)
1 year or less............. $ 12,121 $ 8,886 $ 11,312 $ 3,298 $ -- $ 6,347 $ 1,780 $ 210 $ 43,954
-------- ------ ------- ------- -------- ------ ------ ---- --------
After 1 year:
1 to 5 years............. 25,947 -- 30,507 11,752 6,166 -- -- -- 74,372
After 5 years............ 92,280 -- 20,164 32,244 -- -- -- -- 144,688
------- ------ ------ ------ ----- ------ ------ ---- -------
Total due after one year... 118,227 -- 50,671 43,996 6,166 -- -- -- 219,060
------- ------ ------- ------ ----- ------ ------ ---- -------
Total amount due........... $130,348 $ 8,886 $ 61,983 $ 47,294 $ 6,166 $ 6,347 $ 1,780 $ 210 $ 263,014
======= ====== ======= ======= ====== ====== ====== ==== ========
- ----------------------
(1) PHEAA loans are sold when repayment begins; assumption is that all PHEAA
loans will mature in 1 to 5 years.
(2) Home equity credit are lines of credit. Home equity credit lines and credit
cards have no stated maturities; therefor they are classified as due in one
year or less.
The following table sets forth, as of December 31, 1999, the dollar
amount of all loans due after December 31, 2000, based upon fixed rates of
interest or floating or adjustable interest rates.
Floating or
Fixed Adjustable
Rates Rates Total
----- ----- -----
(In Thousands)
Mortgage(1) $ 110,844 $ 7,383 $ 118,227
Installment 49,573 1,098 50,671
Commercial 31,828 12,168 43,996
Home equity credit -- -- --
PHEAA -- 6,166 6,166
Municipal -- -- --
Credit Cards -- -- --
Other -- -- --
-------- ------- --------
Total $ 192,245 $ 26,815 $ 219,060
======== ======= ========
- --------------------------
(1) Included in the mortgage loans portfolio are commercial real estate loans.
Commercial real estate loans are fixed rate loans that are primarily
callable loans, which reprice every three, five or ten years, based upon
the interest rate on similar loans at the time of repricing. See "Mortgage
Loans."
Mortgage Loans. The Registrant's primary lending activity consists of
the origination of residential and commercial mortgage loans secured by property
in its primary market area. The mortgage loan portfolio consists of one-to-four
family residential mortgage loans, commercial real estate loans, and
construction loans.
4
The Registrant had approximately $67.9 million of one- to four-family
residential mortgage loans in its mortgage loan portfolio at December 31, 1999.
The Registrant generally originates one- to four-family residential mortgage
loans in amounts of up to 80% of the appraised value of the mortgaged property
without requiring mortgage insurance. The Registrant will originate residential
mortgage loans in an amount up to 95% of the appraised value of a mortgaged
property, however, mortgage insurance for the borrower is required. The
Registrant offers residential fixed rate loans and adjustable rate loans with a
30 year amortization period. Interest rates for adjustable rate loans for
residences adjust every 12 months based upon the weekly average yield on the one
year U.S. Treasury securities, plus a margin of 2.75 percentage points. These
adjustable rate loans have an interest rate cap of 2% per year and 6% over the
life of the loan, and are originated for retention in the portfolio.
Fixed rate loans are underwritten in accordance with Federal National
Mortgage Association ("FNMA") guidelines. Currently, loans underwritten in
accordance with FNMA guidelines are generally sold in the secondary market.
However, the number of saleable loans could vary materially as a result of
market conditions. The Registrant generally charges a higher interest rate if
loans are not saleable under FNMA guidelines. At December 31, 1999, $79.4
million of the Registrant's mortgage portfolio consisted of long-term fixed rate
mortgage loans of which $114,000 were classified as held for sale. The
Registrant does not service any loans that are sold and the Registrant is
generally not liable for these loans (i.e., "nonrecourse loans").
Substantially all of the Registrant's one- to four-family mortgages
include "due on sale" clauses, which are provisions giving the Registrant the
right to declare a loan immediately payable if the borrower sells or otherwise
transfers an interest in the property to a third party.
Property appraisals on real estate securing the Registrant's one- to
four-family residential loans are made by appraisers approved by the Board of
Directors. Appraisals are performed in accordance with applicable regulations
and policies. The Registrant obtains title insurance policies on all purchase
money first mortgage real estate loans originated.
The Registrant's commercial real estate mortgage loans are long-term
loans secured primarily by multi-family dwelling units. Essentially all
originated commercial real estate loans are within the its market area.
Commercial real estate loans are originated at both fixed rate and adjustable
rates of interest. Fixed rate loans are primarily callable loans having terms of
up to 15 years, with principal and interest payments calculated using up to a 20
year amortization period. Callable loans reprice every three, five or ten years
based upon the interest rate on similar loans at the time of repricing. At these
specific time periods, the Registrant has the right but not the obligation to
either accelerate the loan balance or adjust the interest rate of these loans.
Adjustable rate commercial mortgage loans have interest rates set at
the six month U.S. treasury bill rate, plus an upward adjustment of up to 3.75%.
Adjustable rate commercial mortgage loans have terms of up to 20 years and have
no maximum interest rate.
As of December 31, 1999, the Registrant's commercial real estate loans
totaled $51.6 million of the mortgage portfolio. Typically, commercial real
estate loans are originated in amounts up to 75% of the appraised value of the
mortgaged property.
5
The Registrant also originates loans to finance the construction of
one-to four-family dwellings. Generally, the Registrant only makes interim
construction loans to individuals if it also makes the long-term one-to
four-family residential mortgage loan on the property. Interim construction
loans generally have terms of up to nine months with fixed rates of interest. At
December 31, 1999, such loans totaled $8.8 million of the Registrant's total
mortgage loan portfolio.
Construction financing is generally considered to involve a higher
degree of risk of loss than long-term financing on improved, occupied real
estate. Risk of loss on a construction loan is dependent largely upon the
accuracy of the initial estimate of the property's value at completion of
construction and development and the estimated cost (including interest) of
construction. During the construction phase, a number of factors could result in
delays and cost overruns. If the estimate of construction costs proves to be
inaccurate, the Registrant may be required to advance funds beyond the amount
originally committed to permit completion of the development. If the estimate of
value proves to be inaccurate, the Registrant may be confronted, at or prior to
the maturity of the loan, with a project having a value which is insufficient to
assure full repayment.
Installment Loans. Installment loans primarily consist of home equity
term loans and to a lesser extent automobile loans. Home equity loans are
secured primarily by one- to four-family residences. The Registrant originates
these loans with fixed rates with terms of up to 20 years. These loans are
subject to 80% combined loan-to-value limitation, including any outstanding
mortgages or liens. The Registrant originates automobile loans with fixed rates
of interest and terms of up to five years. At December 31, 1999, home equity
loans totaled $62.4 million.
Commercial Loans. Commercial business loans consist of equipment,
accounts receivables, inventory, and other business purpose loans. Such loans
are secured by either the underlying collateral and/or by the personal
guarantees of the borrower.
Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to make repayment from his or her employment and
other income and which are secured by real property whose value tends to be more
easily ascertainable, commercial business loans typically are made on the basis
of the borrower's ability to make repayment from the cash flow of the borrower's
business. As a result, the availability of funds for the repayment of commercial
business loans may be substantially dependent on the success of the business
itself and the general economic environment.
Home Equity Lines of Credit. These revolving home equity lines of
credit are secured primarily by one- to four-family residences. The lines of
credit are subject to an 80% combined loan to value limitation, including all
outstanding mortgages and liens.
Loan Approval Authority and Underwriting. The Registrant establishes
various lending limits for its officers and maintains an officer review
committee. Certain officers generally have authority to approve loans up to
$100,000. Loans between $100,000 and $500,000 are approved by an officers review
committee ("ORC"). The ORC consists of the President and at least four other
officers appointed by the President. All loans over $500,000 are approved by a
majority of the Board of Directors.
Upon receipt of a completed loan application from a prospective
borrower, a credit report is ordered. Income and certain other information is
verified. If necessary, additional financial information may be requested. An
appraisal or other estimate of value of the real estate intended to be used as
security for the proposed loan is obtained. Appraisals are performed by
independent appraisers.
6
Title insurance is generally required on all purchase money real estate
mortgage loans. Borrowers also must obtain fire and casualty insurance. Flood
insurance is also required on loans secured by property that is located in a
flood zone.
Loan Commitments. Written commitments are given to prospective
borrowers on all approved mortgage loans. Generally, the commitment requires
acceptance within 30 days of the date of issuance. At December 31, 1999,
commitments to cover originations of mortgage loans totaled $14.1 million.
Loans to One Borrower. Federal regulations limit loans to one borrower
in an amount equal to 15% of unimpaired capital and unimpaired surplus. If the
loan is secured by readily marketable collateral, the limit is 25% of unimpaired
capital and unimpaired surplus. At December 31, 1999, the Registrant's loan to
one borrower limit was approximately $6.4 million. At December 31, 1999, the
Registrant's largest loan to one borrower was $5.6 million and was secured
primarily by real estate in Westmoreland county. The borrower is a commercial
and residential developer.
Classified Assets. Federal regulations provide for a classification
system for problem assets of insured institutions, including assets previously
treated as "scheduled items." Under this classification system, problem assets
of insured institutions are classified as "substandard," "doubtful" or "loss."
An asset is considered "substandard" if it is inadequately protected by the
current net worth and paying capacity of the obligor or of the collateral
pledged, if any. "Substandard" assets include those characterized by the
"distinct possibility" that the insured institution will sustain "some loss" if
the deficiencies are not corrected. Assets classified as "doubtful" have all the
weaknesses inherent in those classified "substandard," with the added
characteristic that the weaknesses present make "collection of principal in
full," on the basis of currently existing facts, conditions and values, "highly
questionable and improbable." Assets classified as "loss" are those considered
"uncollectible" and of such little value that their continuance as assets
without the establishment of a specific loss reserve is not warranted. Assets
that do not expose the Registrant to risk sufficient to warrant classification
in one of the above categories, but which possess some weakness, are required to
be designated "special mention" by management.
When an insured institution classifies problem assets as either
"substandard" or "doubtful," it may establish allowances for loan losses in an
amount deemed prudent by management. When an insured institution classifies
problem assets as "loss," it is required either to establish an allowance for
losses equal to 100% of that portion of the assets so classified or to charge
off such amount. An institution's determination as to the classification of its
assets and the amount of its allowances is subject to review by the Federal
Deposit Insurance Corporation ("FDIC") which may order the establishment of
additional loss allowances.
At December 31, 1999, the Registrant had a total of $6.8 million and,
$3.0 million, respectively, of the loan portfolio classified as "special
mention" and "substandard". There were no loans classified as "doubtful" or
"loss".
Other Real Estate Owned. Real estate acquired by the Registrant as a
result of foreclosure or by deed in lieu of foreclosure is classified as other
real estate owned until such time as it is sold. When other real estate owned is
acquired, it is recorded at the lower of the unpaid balance of the related loan
or its fair value less disposal costs. Any write-down of other real estate owned
is charged to operations.
7
Allowance for Losses on Loans. It is the policy of management to
provide for losses on unidentified loans in its portfolio in addition to
classified loans. A provision for loan losses is charged to operations based on
management's evaluation of the potential losses that may be incurred in the
Registrant's loan portfolio. Management also periodically performs valuations of
other real estate owned and establishes allowances to reduce book values of the
properties to their net realizable values when necessary.
Management will continue to review the entire loan portfolio to
determine the extent, if any, to which further additional loan loss provisions
may be deemed necessary. There can be no assurance that the allowance for loan
losses will be adequate to cover losses which may be realized in the future. In
addition, there can be no assurance that additional provisions for losses on
loans and other real estate owned will not be required.
Analysis of the Allowance for Loan Losses. The following table sets
forth information with respect to the Registrant's allowance for loan losses at
the dates indicated:
December 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- --------- --------- ---------
(Dollars in Thousands)
Total loans outstanding .................... $ 262,868 $ 240,532 $ 218,827 $ 196,917 $ 178,967
========= ========= ========= ========= =========
Average loans outstanding .................. $ 251,574 $ 226,984 $ 205,399 $ 186,845 $ 163,471
========= ========= ========= ========= =========
Allowance balances (at beginning of period) $ 2,228 $ 2,340 $ 2,240 $ 1,969 $ 1,685
Provision (credit):
Mortgage ................................ 30 30 30 41 38
Installment ............................. 30 30 30 41 38
Commercial .............................. 225 225 225 308 285
Home equity credit ...................... -- -- -- -- --
PHEAA ................................... -- -- -- -- --
Municipal ............................... -- -- -- -- --
Credit cards ............................ 15 15 15 20 19
Other ................................... -- -- -- -- --
Net (charge-offs) recoveries: .............. -- -- -- --
Mortgage ................................. (21) (19) (10) -- --
Installment .............................. (24) (28) (27) (56) (32)
Commercial ............................... (102) (324) (104) (59) (20)
Home equity credit ....................... -- -- (11) -- (25)
PHEAA .................................... -- -- -- -- --
Municipal ................................ -- -- -- -- --
Credit cards ............................. (15) (41) (48) (24) (19)
Other .................................... -- -- -- -- --
--------- --------- --------- --------- ---------
Allowance balance (at end of period) ....... $ 2,366 $ 2,228 $ 2,340 $ 2,240 $ 1,969
========= ========= ========= ========= =========
Allowance for loan losses as a percent
of total loans outstanding ............... .90% 0.93% 1.07% 1.14% 1.10%
========= ========= ========= ========= =========
Net loans charged off as a percent of
average loans outstanding ................ .06% 0.18% 0.10% 0.07% 0.06%
========= ========= ========= ========= =========
8
Allocation of the Allowance For Loan Losses. The following table sets
forth the allocation of the Registrant's allowance for loan losses by loan
category and the percent of loans in each category to total loans at the date
indicated.
At December 31,
---------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------------- ----------------- ----------------- ----------------- ------------------
% of % of % of % of % of
Loans Loans Loans Loans Loans
to Total to Total to Total to Total to Total
Amount Loans Amount Loans Amount Loans Amount Loans Amount Loans
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
(Dollars in Thousands)
At end of period allocated to:
Mortgage $ 603 49.56% $ 604 51.31% $ 565 48.97% $ 588 50.28% $ 508 49.00%
Installment 345 23.57 380 21.78 324 20.69 294 19.58 270 19.20
Commercial 1,293 17.98 1,100 18.79 1,301 19.18 1,224 19.54 1,050 19.76
Home equity credit 54 3.38 44 3.57 45 4.05 43 4.42 47 5.28
PHEAA 9 2.34 8 2.10 7 2.10 7 2.35 7 2.56
Municipal 10 2.41 5 1.50 12 3.59 6 2.40 7 2.70
Credit cards 45 .68 80 .75 71 .93 74 1.13 74 1.18
Other 7 .08 7 .20 15 .49 4 .30 6 .32
------- ------ ----- ------- ----- ------ ----- ------ ----- ------
Total allowance $ 2,366 100.00% $ 2,228 100.00% $ 2,340 100.00% $ 2,240 100.00% $1,969 100.00%
====== ====== ====== ====== ====== ======= ====== ====== ===== ======
9
Nonperforming and Problem Assets
Loan Delinquencies. When a loan becomes 16 days past due, a notice of
nonpayment is sent to the borrower. Telephone collection calls, letters and/or
visits to the borrower are initiated within 16 days of the due date missed in an
effort to resolve the delinquency. Generally, if the loan continues in a
delinquent status for 90 days past due and no repayment plan has been reached,
foreclosure, liquidation or other legal proceedings may be initiated.
Loans are reviewed on a monthly basis and are placed on a non-accrual
status when the loan becomes more than 90 days delinquent and when, in our
opinion, the collection of additional interest is doubtful. Interest accrued and
unpaid at the time a loan is placed on nonaccrual status is charged against
interest income. Subsequent interest payments, if any, are either applied to the
outstanding principal balance or recorded as interest income, depending on the
assessment of the ultimate collectibility of the loan.
Nonperforming Assets. The following table sets forth information
regarding nonaccrual loans and real estate owned, as of the dates indicated. No
loans were categorized as troubled debt restructurings within the meaning of
SFAS 15 and there were no impaired loans within the meaning of SFAS 114, as
amended by SFAS 118.
10
At December 31,
-----------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
(Dollars In Thousands)
Loans accounted for on a non-accrual basis:
Mortgage ................................ $ -- $ -- $ 29 $ -- $ --
Installment ............................. -- -- -- 5 1
Commercial .............................. 91 12 205 114 18
Home equity credit ...................... 60 -- -- -- --
PHEAA ................................... -- -- -- -- --
Municipal ............................... -- -- -- -- --
Credit cards ............................ -- -- -- -- --
Other ................................... -- -- -- -- --
------ ------ ------ ------ ------
Total ..................................... 151 12 234 119 19
------ ------ ------ ------ ------
Accruing loans which are contractually past
due 90 days or more:
Mortgage ................................ 998 788 362 493 703
Installment ............................. 21 3 21 7 53
Commercial .............................. 568 629 631 250 111
Home equity credit ...................... -- -- -- -- --
PHEAA ................................... -- -- -- -- --
Municipal ............................... -- -- -- -- --
Credit cards ............................ 3 8 9 11 11
Other ................................... -- -- -- -- --
------ ------ ------ ------ ------
Total ..................................... 1,590 1,428 1,023 761 878
------ ------ ------ ------ ------
Total non-accrual and accrual loans ....... 1,741 1,440 1,257 880 897
------ ------ ------ ------ ------
Other real estate owned ................... 141 128 37 53 30
------ ------ ------ ------ ------
Other non-performing assets ............... -- -- -- -- --
------ ------ ------ ------ ------
Total non-performing assets ............... $1,882 $1,568 $1,294 $ 933 $ 927
====== ====== ====== ====== ======
Total non-accrual and accrual loans
to net loans ............................ .67% .60% .58% .45% .51%
====== ====== ====== ====== ======
Total non-accrual and accrual loans to
total assets ............................ .39% .35% .34% .27% .30%
====== ====== ====== ====== ======
Total non-performing assets to total assets .42% .38% .35% .28% .31%
====== ====== ====== ====== ======
11
Investment Activities
The Registrant maintains a level of liquid assets, including short-term
securities and certain other investments, which varies depending upon several
factors, including: (i) the yields on investment alternatives, (ii) management's
judgment as to the attractiveness of the yields then available in relation to
other opportunities, (iii) expectation of future yield levels, and (iv)
management's projections as to the short-term demand for funds to be used in
loan origination and other activities. Investment securities, including
mortgage-backed securities, are classified at the time of purchase, based upon
management's intentions and abilities, as securities held to maturity or
securities available for sale. Debt securities acquired with the intent and
ability to hold to maturity are classified as held to maturity and are stated at
cost and adjusted for amortization of premium and accretion of discount, which
are computed using the level yield method and recognized as adjustments of
interest income. All other debt securities are classified as available for sale
to serve principally as a source of liquidity.
Current regulatory and accounting guidelines regarding investment
securities (including mortgage backed securities) require the Registrant to
categorize securities as "held to maturity," "available for sale" or "trading."
As of December 31, 1999, the Registrant had securities classified as "available
for sale" in the amount of $149.1 million and had no securities classified as
"held to maturity" or "trading." Securities classified as "available for sale"
are reported for financial reporting purposes at the fair market value with net
changes in the market value from period to period included as a separate
component of stockholders' equity, net of income taxes. At December 31, 1999,
the Registrant's securities available for sale had an amortized cost of $153.9
million and market value of $149.1 million (unrealized loss of $4.8 million).
Changes in the market value of securities available for sale do not affect the
Company's income. In addition, changes in the market value of securities
available for sale do not affect the Bank's regulatory capital requirements or
its loan-to-one borrower limit.
At December 31, 1999, the Registrant's investment portfolio policy
allowed investments in instruments such as: (i) U.S. Treasury obligations, (ii)
U.S. federal agency or federally sponsored agency obligations, (iii)
mortgage-backed securities, (iv) banker's acceptances, (v) certificates of
deposit, and (vi) investment grade corporate bonds, and commercial paper. The
board of directors may authorize additional investments.
As a source of liquidity and to supplement the Registrant's lending
activities, the Registrant has invested in residential mortgage-backed
securities. Mortgage-backed securities can serve as collateral for borrowings
and, through repayments, as a source of liquidity. Mortgage-backed securities
represent a participation interest in a pool of single-family or other type of
mortgages. Principal and interest payments are passed from the mortgage
originators, through intermediaries (generally quasi-governmental agencies) that
pool and repackage the participation interests in the form of securities, to
investors, like us. The quasi-governmental agencies guarantee the payment of
principal and interest to investors and include the Federal Home Loan Mortgage
Corporation ("FHLMC"), Government National Mortgage Association ("GNMA"), and
Federal National Mortgage Association ("FNMA").
Mortgage-backed securities typically are issued with stated principal
amounts. The securities are backed by pools of mortgages that have loans with
interest rates that are within a set range and have varying maturities. The
underlying pool of mortgages can be composed of either fixed rate or adjustable
rate mortgage loans. Mortgage-backed securities are generally referred to as
mortgage participation certificates or pass-through certificates. The interest
rate risk characteristics of the underlying pool of
12
mortgages (i.e., fixed rate or adjustable rate) and the prepayment risk, are
passed on to the certificate holder. The life of a mortgage-backed pass-through
security is equal to the life of the underlying mortgages. Expected maturities
will differ from contractual maturities due to scheduled repayments and because
borrowers may have the right to call or prepay obligations with or without
prepayment penalties. Mortgage-backed securities issued by FHLMC, GNMA, and FNMA
make up a majority of the pass-through certificates market.
Investment Portfolio. The following table sets forth the carrying value of the
Registrant's investment securities portfolio at the dates indicated:
At December 31
-------------------------------
1999 1998 1997
--------- -------- ---------
(In Thousands)
Securities available for sale:
Obligations of U.S. government agencies ....... $ 90,744 $ 69,540 $ 70,725
Mortgage-backed securities .................... 47,005 33,227 21,611
Obligations of state and political subdivisions 10,536 8,200 6,929
U.S. treasury securities ...................... -- 5,616 6,627
Federal home loan bank stock .................. 1,964 1,308 1,171
Equity securities ............................. 230 249 239
Other securities .............................. 584 638 499
-------- -------- --------
Total securities available for sale ........ 151,063 118,778 107,801
-------- -------- --------
Securities held to maturity:
U.S. government agencies ...................... -- 2,500 5,500
Mortgage-backed securities .................... -- 69 355
-------- -------- --------
Total securities held to maturity .......... -- 2,569 5,855
-------- -------- --------
Total investment and mortgage-backed
securities ............................... $151,063 $121,347 $113,656
======== ======== ========
13
Investment Portfolio Maturities. The following table sets forth certain
information regarding carrying values, weighted average yields, and maturities
of the Registrant's investment securities portfolio as of December 31, 1999.
Actual maturities may differ from contractual maturities as certain instruments
have call features which allow prepayment of obligations.
As of December 31, 1999
----------------------------------------------------------------------------------------------------
After Five More than Total
One Year or Less One to Five Years to Ten Years Ten Years Investment Securities
------------------ ----------------- ---------------- ----------------- ---------------------------
Carrying Average Carrying Average Carrying Average Carrying Average Carrying Average Market
Value Yield Value Yield Value Yield Value Yield Value Yield Value
-------- ------ -------- ----- -------- ---- ------ ------ ------- ------ ------
(Dollars in Thousands)
Obligations of U.S.
government agencies.......... $1,238 5.84% $42,212 6.08% $35,896 6.87% $11,398 7.20% $ 90,744 6.53% $ 90,744
Mortgage-backed securities....... -- -- 23 9.03 1,367 6.72 45,615 6.63 47,005 6.64 47,005
Obligations of state and
political subdivisions (1)... 155 6.10 1,405 5.62 1,497 5.82 7,479 5.08 10,536 5.15 10,536
Federal home loan bank stock..... -- -- -- -- -- -- 1,964 6.00 1,964 6.00 1,964
Equity securities................ -- -- -- -- -- -- 230 6.00 230 6.00 230
Other securities................. -- -- -- -- 31 9.00 553 5.71 584 5.88 584
------ ------- ------- ------- -------- --------
Total....................... $1,393 5.87% $43,640 6.07% $38,791 6.83% $67,239 6.53% $151,063 6.46% $151,063
====== ==== ======= ==== ======= ==== ======= ==== ======== ==== ========
- --------------------
(1) Average yields have not been computed on a tax-equivalent basis.
14
Sources of Funds
General. Deposits are the major source of the Registrant's funds for
lending and other investment purposes. In addition to deposits, the Registrant
derives funds from the amortization, prepayment or sale of loans, maturities of
investment securities and operations. Scheduled loan principal repayments are a
relatively stable source of funds, while deposit inflows and outflows and loan
prepayments are significantly influenced by general interest rates and market
conditions. The Registrant can also borrow from the Federal Home Loan Bank
("FHLB") of Pittsburgh.
Deposits. Consumer and commercial deposits are attracted principally
from within the Registrant's primary market area through the offering of a broad
selection of deposit instruments including checking, regular savings, money
market deposits, term certificate accounts and individual retirement accounts.
Deposit account terms vary according to the minimum balance required, the time
periods the funds must remain on deposit and the interest rate, among other
factors. The Registrant regularly evaluates the internal cost of funds, surveys
rates offered by competing institutions, reviews the Registrant's cash flow
requirements for lending and liquidity and executes rate changes when deemed
appropriate. The Registrant does not obtain funds through brokers, nor does it
solicit funds outside the Commonwealth of Pennsylvania.
The following table indicates the amount of certificates of deposit of
$100,000 or more by time remaining at December 31, 1999 (in thousands).
Three months or less.............................. $ 427
Over three through six months..................... 915
Over six through twelve months.................... 711
Over twelve months................................ 38,780
------
$40,833
=======
Borrowings. Deposits are the primary source of funds for the
Registrant's lending and investment activities as well as for general business
purposes. Should the need arise, the Registrant has a maximum borrowing capacity
with the FHLB of $136.5 million. At December 31, 1999 there were outstanding $22
million of long term FHLB borrowings.
Personnel
As of December 31, 1999, the Registrant had 140 full-time and 52
part-time employees. None of the Registrant's employees are represented by a
collective bargaining group.
Regulation
Set forth below is a brief description of certain laws which relate to
the regulation of the Registrant and the Bank. The description does not purport
to be complete and is qualified in its entirety by reference to applicable laws
and regulations.
Financial Modernization Legislation. On November 12, 1999, President
Clinton signed into law the Gramm-Leach-Bliley Act (the "GLB Act") which,
effective March 11, 2000, permits qualifying bank holding companies to become
financial holding companies and thereby affiliate with securities firms and
insurance companies and engage in other activities that are financial in nature
or incidental to a financial activity. The GLB Act and the implementing
regulation of the Board of Governors of the Federal Reserve
15
System (the "Federal Reserve") define "financial in nature" to include
securities underwriting, dealing and market making; sponsoring and managing
mutual funds and investment companies; insurance underwriting and agency;
merchant banking activities; management consulting services; operation of a
travel agency; and activities that the Federal Reserve has determined to be
closely related to banking. A bank holding company may elect to be treated as a
financial holding company only if all depository institution subsidiaries of the
holding company are and continue to be well-capitalized and well-managed and
have at least a satisfactory rating under the Community Reinvestment Act.
The GLB Act also authorizes national banks to engage, through
"financial subsidiaries," in any activity that is permissible for a financial
holding company and any activity that is determined to be financial in nature or
incidental to a financial activity, except insurance underwriting, real estate
development, real estate investment (except as otherwise permitted by law),
insurance company portfolio investments and merchant banking activities. The
authority of a national bank to invest in a financial subsidiary is subject to a
number of conditions, including, among other things, requirements that the bank
must be well-managed and well-capitalized (after deducting from capital the
bank's outstanding investments in financial subsidiaries). The GLB Act further
provides that a state bank may invest in financial subsidiaries, assuming the
requisite investment authority under state law, subject to the same conditions
that apply to national bank investments in financial subsidiaries.
In addition, the GLB Act enacts a number of consumer protections,
including provisions intended to protect privacy of bank customers' financial
information and provisions requiring disclosure of ATM fees imposed by banks on
customers of other banks.
Bank Holding Company Regulation. The Registrant is regulated by the
Pennsylvania Department of Banking and the Federal Reserve. The Registrant files
with the Federal Reserve an annual report and such additional information as the
Federal Reserve may require. The Registrant is also subject to regular
examination by the Federal Reserve.
The Registrant must obtain the prior approval of the Federal Reserve
before it may acquire all or substantially all of the assets of another bank or
bank holding company, merge or consolidate with another bank holding company, or
acquire direct or indirect ownership or control of any voting shares of any bank
or bank holding company if, after such acquisition, the bank holding company
would directly or indirectly own or control more than 5% of such shares.
As a bank holding company, the Registrant is prohibited, with certain
exceptions, from acquiring direct or indirect ownership or control of more than
5% of the voting shares of a company that is not a bank or a bank holding
company, or from engaging directly or indirectly in activities other than those
of banking, managing or controlling banks, or providing services for its
subsidiaries. The principal exceptions to these prohibitions involve certain
non-bank activities that, by statute or by Federal Reserve regulation or order,
have been identified as activities closely related to the business of banking or
managing or controlling banks.
The GLB Act greatly expands the scope of business activities
permissible for bank holding companies by enacting authority for "financial
holding companies." Effective March 11, 2000, the GLBA Act permits a bank
holding company, upon classification as a financial holding company and assuming
such holding company's subsidiary banks meet certain requirements, to engage in
activities that are defined by statute as "financial in nature" or are approved
by the Federal Reserve as financial in nature or incidental to a financial
activity. See "-- Financial Modernization Legislation."
16
Federal statutes impose restrictions on the ability of a bank holding
company and its nonbank subsidiaries to obtain extensions of credit from its
subsidiary bank, on the subsidiary bank's investments in the stock or securities
of the holding company, and on the subsidiary bank's taking of the holding
company's stock or securities as collateral for loans to any borrower. A bank
holding company and its subsidiaries are also prevented from engaging in certain
tie-in arrangements in connection with any extension of credit, lease or sale of
property, or furnishing of services by the subsidiary bank.
A bank holding company is required to serve as a source of financial
and managerial strength to its subsidiary banks and may not conduct its
operations in an unsafe or unsound manner. In addition, it is the policy of the
Federal Reserve that a bank holding company should stand ready to use available
resources to provide adequate capital to its subsidiary banks during periods of
financial stress or adversity and should maintain the financial flexibility and
capital-raising capacity to obtain additional resources for assisting its
subsidiary banks. A bank holding company's failure to meet its obligations to
serve as a source of strength to its subsidiary banks will generally be
considered by the Federal Reserve to be an unsafe and unsound banking practice
or a violation of the Federal Reserve regulations or both.
The Federal Reserve has adopted capital adequacy guidelines pursuant to
which it assesses the adequacy of capital in examining and supervising a bank
holding company and in analyzing applications to it under the Bank Holding
Company Act. The Federal Reserve's holding company capital adequacy guidelines
are similar to those imposed on the Bank by the FDIC. See "Regulatory Capital
Requirements."
Regulation of the Bank. The Bank is regulated by the Pennsylvania
Department of Banking and the FDIC. The deposits of the Bank are insured by the
FDIC, and the Bank is subject to regulation and regular examination by the
Pennsylvania Department of Banking and the FDIC. The federal and state laws and
regulations applicable to banks regulate, among other things, the scope of their
business, their investments, the reserves required to be kept against deposits,
the timing of the availability of deposited funds and the nature and amount of
and collateral for certain loans. The laws and regulations governing the Bank
are intended primarily for the protection of depositors rather than of
stockholders.
The Bank's deposit accounts are insured by the BIF to a maximum of
$100,000 for each insured account (as defined by statute and regulation). The
Bank is required to pay insurance premiums based on a percentage of its insured
deposits to the FDIC for insurance of its deposits by the BIF. The FDIC also
maintains another insurance fund, the Savings Institution Insurance Fund
("SAIF"), which insures savings association deposits. The FDIC has set the
deposit insurance assessment rates for BIF-member institutions for the first six
months of 2000 at 0% to .027% of insured deposits on an annualized basis, with
the assessment rate for most banks set at 0%. In addition, all FDIC-insured
institutions are required through 2017 to pay assessments to the FDIC at an
annual rate of approximately .0212% of insured deposits to fund interest
payments on bonds issued by the Financing Corporation, an agency of the Federal
government established to recapitalize the predecessor to the SAIF.
Federal laws strictly limit the ability of banks to engage in
transactions with their affiliates, including their bank holding companies. Such
transactions by a subsidiary bank to its parent company or to any nonbank
subsidiary are limited to 10% of a bank subsidiary's capital and surplus and,
with respect to such parent company and all such nonbank subsidiaries, to an
aggregate of 20% of such bank subsidiary's capital and surplus. Further, loans
and extensions of credit generally are required to be secured by eligible
collateral in specified amounts. Federal law also prohibits banks from
purchasing low-quality assets from affiliates.
17
Regulatory Capital Requirements. The FDIC has promulgated capital
adequacy requirements for state banks that, like the Bank, are not members of
the Federal Reserve System, and the FRB has established substantially similar
capital adequacy guidelines applicable to bank holding companies. These capital
regulations impose two sets of capital requirements: risk-based capital rules,
which require the maintenance of specified minimum ratios of capital to
"risk-weighted" assets, and minimum leverage rules, which require banks and bank
holding companies to maintain a specified minimum ratio of capital to total
assets.
The required minimum ratio of total capital to risk-weighted assets
(including off-balance sheet activities, such as standby letters of credit) is
8%. At least half of the total capital is required to be Tier 1 capital,
consisting principally of common shareholders' equity, noncumulative perpetual
preferred stock, a limited amount of cumulative perpetual preferred stock and
minority interests in the equity accounts of consolidated subsidiaries, less
goodwill. The remainder (Tier 2 capital) may consist of a limited amount of
subordinated debt and intermediate-term preferred stock, certain hybrid capital
instruments and other debt securities, perpetual preferred stock and a limited
amount of the general loan loss allowance.
The leverage capital rules of the FDIC and the FRB require
state-chartered banks and bank holding companies, respectively, to maintain a
minimum leverage ratio of Tier 1 capital to total assets of 3% for those banks
and bank holding companies that have the highest regulatory examination ratings
and are not contemplating or experiencing significant growth or expansion. All
other banks and bank holding companies are required to maintain a leverage ratio
of at least 1% to 2% above the 3% stated minimum. At December 31, 1999, the Bank
and the Registrant exceeded all applicable capital requirements.
The Bank is also subject to minimum capital requirements imposed by the
Department on Pennsylvania-chartered depository institution. Under the
Department's regulations, a Pennsylvania bank or savings bank must maintain a
minimum leverage ratio of Tier 1 capital (as defined under the FDIC's capital
adequacy regulation) to total assets of 4%. In addition, the Department has the
supervisory discretion to require a higher leverage ratio for any institution
based on the institution's substandard performance in any of a number of
specified areas. The Bank was in compliance with applicable Pennsylvania capital
requirements at December 31, 1999.
In addition to the federal regulatory capital requirements, the FDIC
has issued a regulation that classifies insured banks by capital levels and
provides that the FDIC will take various prompt corrective actions, including
the imposition of significant operational restrictions, against any bank subject
to its regulation that fails to meet the regulation's capital standards. Under
this prompt corrective action regulation, a "well capitalized" bank is one that
has a total risk-based capital ratio of at least 10%, a Tier 1 risk-based
capital ratio of at least 6%, a leverage capital ratio of 5%, and is not subject
to any order or directive requiring the institution to improve its capital
level. A bank falls within the "adequately capitalized" category if it has a
total risk-based capital ratio of at least 8%, a Tier 1 risk-based capital ratio
of at least 4%, and a leverage capital ratio of at least 4%. Institutions with
lower capital levels are deemed to be "undercapitalized," "significantly
undercapitalized" or "critically undercapitalized," depending on their actual
capital levels. A bank that falls within any of the three undercapitalized
categories is subjected to severe regulatory sanctions under the FDIC prompt
corrective action regulation. At December 31, 1999, the Bank was classified as
"well capitalized."
18
Restrictions on Dividends. The Pennsylvania Banking Code states, in
part, that dividends may be declared and paid only out of accumulated net
earnings and may not be declared or paid unless surplus (retained earnings) is
at least equal to contributed capital. The Bank has not declared or paid any
dividends which cause the Bank's retained earnings to be reduced below the
amount required. Finally, dividends may not be declared or paid if the Bank is
in default in payment of any assessment due the FDIC.
The Federal Reserve has issued a policy statement on the payment of
cash dividends by bank holding companies, which expresses the Federal Reserve's
view that a bank holding company should pay cash dividends only to the extent
that the holding company's net income for the past year is sufficient to cover
both the cash dividends and a rate of earnings retention that is consistent with
the holding company's capital needs, asset quality and overall financial
condition. The Federal Reserve also indicated that it would be inappropriate for
a company experiencing serious financial problems to borrow funds to pay
dividends. Furthermore, under the federal prompt corrective action regulations,
the Federal Reserve may prohibit a bank holding company from paying any
dividends if the holding company's bank subsidiary is classified as
"undercapitalized."
Item 2. Properties
- -------------------
At December 31, 1999, the Registrant operated from its main office,
five branch offices and four supermarket branch offices, all located in
southwestern Pennsylvania. The total net book value of the Registrant's
investment in premises and equipment at December 31, 1999, was approximately
$4.7 million. The main office of the Company and of the Bank and two branch
offices are owned by the Bank and the remaining three branch offices and four
supermarket branch offices are leased by the Bank. These leases have initial
terms of 1 to 20 years, and all leases contain renewal options for additional
years.
Item 3. Legal Proceedings
- --------------------------
The Registrant is periodically involved as a plaintiff or defendant in
various legal actions, such as actions to enforce liens, condemnation
proceedings on properties in which the Registrant holds mortgage interests,
matters involving the making and servicing of mortgage loans and other matters
incident to the Registrant's business. In the opinion of management, none of
these actions individually or in the aggregate is believed to be material to the
financial condition or results of operations of the Registrant.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1999.
19
Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
- --------------------------------------------------------------------------------
Matters
-------
The information contained under the section captioned "Stock Market
Information" in the 1999 Annual Report to Stockholders (the "Annual Report") is
incorporated herein by reference.
Item 6. Selected Financial Data
- --------------------------------
The information contained in the table captioned "Financial Highlights" in
the Annual Report is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
--------------
The information contained in the section captioned "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the Annual
Report is incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
- --------------------------------------------------------------------
The information contained in the section captioned "Market Risk" in the
Annual Report is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
The Registrant's financial statements listed in Item 14 herein are
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- ------------------------------------------------------------------------
Financial Disclosure
--------------------
None.
Part III
Item 10. Directors and Executive Officers of the Registrant
- ------------------------------------------------------------
The information contained under the sections captioned "Section 16(a)
Beneficial Ownership Reporting Compliance" and "Proposal I-- Election of
Directors" and "-- Biographical Information" in the 2000 Proxy Statement are
incorporated herein by reference.
Item 11. Executive Compensation
- --------------------------------
The information contained under the section captioned "Director and
Executive Compensation" in the Proxy Statement is incorporated herein by
reference.
20
Item 12. Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners
Information required by this item is incorporated herein by
reference to the Section captioned "Voting Securities and
Principal Holders Thereof -- Security Ownership of Certain
Beneficial Owners" of the Proxy Statement.
(b) Security Ownership of Management
Information required by this item is incorporated herein by
reference to the sections captioned "Voting Securities and
Principal Holders Thereof -- Security Ownership of Certain
Beneficial Owners" and "Proposal I -- Election of Directors"
of the Proxy Statement.
(c) Management of the Company knows of no arrangements, including
any pledge by any person of securities of the Company, the
operation of which may at a subsequent date result in a change
in control of the registrant.
Item 13. Certain Relationships and Related Transactions
- --------------------------------------------------------
The information required by this item is incorporated herein by
reference to the section captioned "Proposal I -- Election of Directors" and
"Voting Securities and Principal Holders Thereof" of the Proxy Statement.
Part IV
Item 14. Exhibits, Financial Statements, and Reports on Form 8-K
- -----------------------------------------------------------------
(a) Listed below are all financial statements and exhibits filed
as part of this report, and are incorporated by reference.
1. The consolidated statements of financial conditions of IBT
Bancorp, Inc. and subsidiary as of December 31, 1999 and 1998,
and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in
the three year period ended December 31, 1999, together with
the related notes and the independent auditors' report of
Edwards Leap & Sauer, independent accountants.
2. Schedules omitted as they are not applicable.
3. Exhibits
3(i) Articles of Incorporation of IBT Bancorp, Inc.*
3(ii) Bylaws of IBT Bancorp, Inc.*
10 Change In Control Severance Agreement with Charles G. Urtin
10.1 Deferred Compensation Plan For Bank Directors
21
10.2 Retirement Agreement Between Irwin Bank & Trust Co. And
J. Curt Gardner
10.3 Death Benefit Only Deferred Compensation Plan For Bank Directors effective as
of January 1, 1990
10.4 Retirement and Death Benefit Deferred Compensation Plan For
Bank Directors effective as of January 1, 1990
13 Portions of the Annual Report to Shareholders
21 Subsidiaries of IBT Bancorp, Inc.*
27 Financial Data Schedule (electronic filing only)
-------------------------
* Incorporated by reference to the identically numbered exhibits
of the Registrant's Form 10 (file no. 0-25903)
(b) On November 18, 1999, the Company filed a Form 8-K (Item 5) to
announce a stock repurchase plan.
22
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 as of March 22, 2000.
IBT BANCORP, INC.
By: /s/Charles G. Urtin
--------------------------------------------
Charles G. Urtin, Executive Vice President
and Chief Executive Officer
(Duly Authorized Representative)
Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been signed below on March 22, 2000 by the following persons on
behalf of the registrant and in the capacities indicated.
/s/Richard L. Ryan /s/J. Curt Gardner
- ----------------------------------------------- ---------------------------
Richard L. Ryan J. Curt Gardner
Chairman of the Board President and Director
/s/Charles G. Urtin /s/Thomas Beter
- ----------------------------------------------- ---------------------------
Charles G. Urtin, Executive Vice President Thomas Beter
Secretary, Treasurer and Director Director
(Principal Executive, Financial, and Accounting
Officer)
/s/William D. Fawcett /s/Edwin A. Paulone
- ----------------------------------------------- ---------------------------
William D. Fawcett Edwin A. Paulone
Director Director
/s/Robert Rebich, Jr. /s/Grant J. Shevchik
- ----------------------------------------------- ---------------------------
Robert Rebich, Jr. Grant J. Shevchik
Director Director
/s/Robert C. Whisner
- -----------------------------------------------
Robert C. Whisner
Director