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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2004
Commission file number: 2-89573
TOWER BANCORP INC.
(Exact name of registrant as specified in its charter)
Commonwealth of Pennsylvania 25-1445946
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Center Square
Greencastle, Pennsylvania 17225
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code: (717) 597-2137
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 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
1,725,101 shares of common stock outstanding at June 30, 2004.
Page 1 of 23
TOWER BANCORP, INC.
INDEX
Page
PART I - FINANCIAL INFORMATION
Condensed consolidated balance sheets - June 30, 2004
and December 31, 2003 4
Condensed consolidated statements of income - three months
ended June 30, 2004 and 2003 5
Condensed consolidated statements of income - six months
ended June 30, 2004 and 2003 6
Condensed consolidated statements of comprehensive income -
six months ended June 30, 2004 and 2003 7
Condensed consolidated statements of cash flows - six
months ended June 30, 2004 and 2003 8
Notes to condensed consolidated financial statements 9 and 10
Management's discussion and analysis of financial
condition and results of operations 11 and 12
PART II - OTHER INFORMATION 13
Item 6 - Index to Exhibits and Reports on Form 8-K 14 - 15
Signatures 16
Exhibits 17 - 23
Page 2 of 23
PART I - FINANCIAL INFORMATION
Page 3 of 23
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2004 2003
(unaudited) (Audited)*
(000 Omitted)
ASSETS
Cash and due from banks $ 9,988 $ 8,929
Interest bearing balances with banks 580 675
Investment securities available for sale 61,275 63,076
Restricted bank stock 3,087 3,219
Loans 218,935 214,067
Less: reserve for possible loan losses ( 1,766) ( 1,864)
Bank premises, equipment, furniture
and fixtures 4,461 4,158
Accrued interest receivable 901 962
Cash surrender value of life insurance 6,924 6,659
Other assets 910 857
----------- -----------
Total assets $ 305,295 $ 300,738
=========== ===========
LIABILITIES AND CAPITAL
Deposits in domestic offices:
Demand $ 21,927 $ 18,412
Savings 122,182 116,484
Time 70,937 72,069
Federal funds purchased 7,355 0
Liabilities for borrowed money 34,948 47,373
Accrued interest payable 209 204
Other liabilities 6,157 5,758
----------- -----------
Total liabilities 263,715 260,300
----------- -----------
EQUITY CAPITAL
Capital stock, common, authorized 5,000,000
shares; 1,780,100 shares issued 2,225 2,225
Additional paid-in capital 6,782 6,763
Retained earnings 27,138 25,765
Accumulated other comprehensive income 7,216 7,006
Less: cost of treasury stock ( 1,781) ( 1,321)
----------- -----------
Total equity capital 41,580 40,438
----------- -----------
Total liabilities and capital $ 305,295 $ 300,738
=========== ===========
* Condensed from audited financial statements
The accompanying notes are an integral part of these
condensed financial statements.
Page 4 of 23
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2004 and 2003
(UNAUDITED)
2004 2003
(000 Omitted)
Interest Income
Interest & fees on loans $ 2,963 $ 3,094
Interest on investment
securities available for sale 512 551
Interest on deposits with banks 12 18
----------- -----------
Total interest & dividend income 3,487 3,663
----------- -----------
Interest Expense
Interest on deposits 551 705
Interest on borrowed money 438 398
----------- -----------
Total interest expense 989 1,103
----------- -----------
Net interest income 2,498 2,560
Provision for loan losses 90 90
----------- -----------
Net interest income after
provision for loan losses 2,408 2,470
----------- -----------
Other Income
Investment service income 16 5
Service charges on deposit accounts 234 206
Other service charges 107 82
Other operating income 112 91
Investment securities gains (losses) 578 679
----------- -----------
Total other income 1,047 1,063
----------- -----------
Other Expense
Salaries, wages and other benefits 990 913
Occupancy expense of bank premises 111 103
Furniture and fixture expense 127 131
Other operating expenses 810 847
----------- -----------
Total other expenses 2,038 1,994
----------- -----------
Income before taxes 1,417 1,539
Applicable income taxes 373 419
----------- -----------
Net income $ 1,044 $ 1,120
=========== ===========
Earnings per share:
Basic Earnings per share $ 0.60 $ 0.65
Weighted average shares outstanding 1,730,254 1,734,996
Diluted Earnings per share $ 0.59 $ 0.64
Weighted Average Shares Outstanding 1,758,389 1,762,832
The accompanying notes are an integral part of these
condensed financial statements.
Page 5 of 23
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(UNAUDITED)
2004 2003
(000 Omitted)
Interest Income
Interest & fees on loans $ 5,858 $ 6,216
Interest on investment
securities available for sale 1,050 1,076
Interest on deposits with banks 24 41
----------- -----------
Total interest & dividend income 6,932 7,333
----------- -----------
Interest Expense
Interest on deposits 1,095 1,439
Interest on borrowed money 876 775
----------- -----------
Total interest expense 1,971 2,214
----------- -----------
Net interest income 4,961 5,119
Provision for loan losses 180 180
----------- -----------
Net interest income after
provision for loan losses 4,781 4,939
----------- -----------
Other Income
Investment service income 40 66
Service charges on deposit accounts 452 413
Other service charges 210 150
Other operating income 231 202
Investment securities gains (losses) 1,145 1,597
----------- -----------
Total other income 2,078 2,428
----------- -----------
Other Expense
Salaries, wages and other benefits 2,068 1,850
Occupancy expense of bank premises 233 216
Furniture and fixture expense 269 261
Other operating expenses 1,486 1,563
----------- -----------
Total other expenses 4,056 3,890
----------- -----------
Income before taxes 2,803 3,477
Applicable income taxes 738 951
----------- -----------
Net income $ 2,065 $ 2,526
=========== ===========
Earnings per share:
Basic Earnings per share $ 1.19 $ 1.46
Weighted average shares outstanding 1,732,703 1,733,743
Diluted Earnings per share $ 1.17 $ 1.43
Weighted Average Shares Outstanding 1,761,122 1,760,927
The accompanying notes are an integral part of these
condensed financial statements.
Page 6 of 23
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
SIX MONTHS ENDED JUNE 30, 2004 and 2003
(UNAUDITED)
2004 2003
(000 Omitted)
Net income $ 2,065 $ 2,526
--------- ---------
Other comprehensive income:
Unrealized holding gains (losses) 1,463 2,522
Reclassification adjustment for gains
realized in net income ( 1,145) ( 1,597)
--------- ---------
318 925
Tax effect ( 108) ( 314)
--------- ---------
Other comprehensive income (loss) 210 611
--------- ---------
Comprehensive income $ 2,275 $ 3,137
========= =========
The accompanying notes are an integral part of these
condensed financial statements.
Page 7 of 23
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2004 and 2003
(UNAUDITED)
2004 2003
(000 Omitted)
Cash flows from operating activities:
Net income $ 2,065 $ 2,526
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 192 192
Provision for loan losses 180 180
(Gain) on sale of investment securities ( 1,145) ( 1,597)
(Increase) in cash surrender value of
life insurance
( 265) ( 178)
(Increase)Decrease in other assets ( 53) 649
(Increase)Decrease in interest receivable 61 4
Increase (decrease) in interest payable 5 ( 52)
Increase (decrease) in other liabilities 291 48
---------- ----------
Net cash provided by operating activities 1,331 1,772
---------- ----------
Cash flows from investing activities:
Loans (net) ( 5,146) ( 7,131)
Purchases of bank premises, equipment,
furniture, and fixtures
( 495) ( 414)
Interest bearing balances with banks 95 678
Purchases of available for sale securities ( 2,533) ( 10,047)
Maturities/sales of available for sale
securities
5,797 6,303
Redemption (purchase) of restricted bank stock 132 ( 186)
---------- ----------
Net cash (used) by investing activities ( 2,150) ( 10,797)
---------- ----------
Cash flows from financing activities:
Net increase in deposits 8,081 11,313
Debt (net) ( 5,070) ( 1,324)
Cash dividends paid ( 692) ( 1,491)
Purchase of Treasury Stock ( 649) ( 264)
Proceeds from sale of capital stock 208 309
---------- ----------
Net cash provided by financing activities 1,878 8,543
---------- ----------
Net increase (decrease) in cash and
cash equivalents
1,059 ( 482)
Cash and cash equivalents at beginning of year 8,929 8,943
---------- ----------
Cash and cash equivalents at end of period $ 9,988 $ 8,461
========== ==========
The accompanying notes are an integral part of these
condensed financial statements.
Page 8 of 23
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
(UNAUDITED)
Review of Interim Financial Statements
The condensed consolidated financial statements as of and for the
three and six month periods ended June 30, 2004 and 2003 have been
reviewed by independent certified public accountants. Their report on
their review is attached as Exhibit 99 to this 10-Q filing.
Note 1. Basis of Presentation
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present fairly Tower Bancorp, Inc.'s consolidated financial position
as of June 30, 2004 and the results of its operations for the three
and six month periods ended June 30, 2004 and 2003.
The results of operations for the six month period ended
June 30, 2004 and 2003 are not necessarily indicative of the results
to be expected for the full year.
Note 2. Income Taxes
Income tax expense is less than the amount calculated using the
statutory tax rate primarily as a result of tax exempt income earned
from state and municipal securities and loans.
Note 3. Commitments
In the normal course of business, the bank makes various commitments
and incurs certain contingent liabilities which are not reflected in
the accompanying financial statements. These commitments include
various guarantees and commitments to extend credit and the bank does
not anticipate any losses as a result of these transactions.
Note 4. Stock Option Plans
The Corporation applies APB Option 25 and related interpretations in
accounting for its stock option plans. Accordingly, only compensation
cost for the intrinsic value of options has been recognized. Had
compensation cost for the Corporation's stock option plans been
determined based on the fair value at the grant dates for awards under
the plans consistent with the method
Page 9 of 23
Note 4. Stock Option Plans (Continued)
prescribed by FASB Statement No. 123, the Corporation's net income and
earnings per share would have been adjusted to the pro forma amounts
indicated below:
2004 2003
Six Months Ended
June 30
Net income (000) omitted As reported $ 2,065 $ 2,526
Pro forma 2,043 2,514
Basic earnings per share As reported 1.19 1.46
Pro forma 1.18 1.45
Earnings per share As reported 1.17 1.43
assuming dilution Pro forma 1.16 1.43
Page 10 of 23
TOWER BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Net income for the first six months of 2004 was $ 2,065,000 compared to
$ 2,526,000 for the first six months of 2003. Net income on a per share basis
for 2004 was $ 1.19, down $ .27 from the $ 1.46 realized during the first six
months of 2003.
Total interest income for the first six months of 2004 was $ 6,932,000
compared to $ 7,333,000 for the first six months of 2003. Decreases occurred
primarily due to decreases in the yield on earning assets. Investment yields
dropped 31 basis points and loan yields dropped 113 basis points from average
yields realized in the first six months of 2003. Average loan balances at June
30, 2004 increased 14.4% over those at June 30, 2003. Increases from June 30,
2003 were primarily in mortgage and commercial loans, which increased 23.2% and
22.7%, respectively, since June 30, 2003. Earnings on investments for the first
six months decreased 2.4% over totals for the corresponding period in 2003.
Decreases were attributable primarily to the aforementioned rate decreases and
offset by a 17.8% increase in volume of average investments from 2003 totals.
Total interest expense was $ 1,971,000 for the first six months of 2004, a
decrease of $ 243,000 from the $ 2,214,000 reported for the six months of 2003.
Increases in average total deposits has been 9.3% since June 30, 2003. Most of
this growth has occurred in the interest bearing demand deposit accounts.
Average rates on deposits decreased 48 basis points from prior year amounts.
This coupled with the fact that deposit growth has been concentrated in
transaction accounts has caused the bank's cost of funds to decrease 11.7% from
2003 totals. However, asset yields have decreased faster than corresponding
decreases in cost of funds causing the net interest margin for the first six
months of 2004 to drop 62 basis points from the first six months of 2003. The
average loan to deposit ratio was 104.3% at June 30, 2004 compared to 99.7% at
June 30, 2003. Management intends to continue to competitively price its
deposits to maintain desired net interest spreads.
The Bank made a $ 180,000 provision for loan losses during the first six
months of 2004. Net charge-offs were $ 277,000 during the first six months of
2004 compared to $ 105,000 during the first half of 2003, which are well below
peer group averages. Management has significantly expanded its detailed review
of the loan portfolio, which is performed quarterly, in an effort to identify
and more readily act on loans with deteriorating trends. Anticipated losses are
well below the current allowance amount and management is not aware of any
problem loans that are indicative of trends, events, or uncertainties that would
significantly impact future operations, liquidity, or capital.
Page 11 of 23
Management also recognizes the need to maintain an adequate allowance to
meet the constant risks associated with a growing loan portfolio and an
expanding customer base and intends to continue to maintain the allowance at
appropriate levels based on ongoing evaluations of the loan portfolio.
Non-interest income was $ 2,078,000 for the first half of 2004 representing
a 14.4% increase over the first six months of 2003. The decrease was primarily
in security gains, which decreased $ 452,000 for the first six months of 2004.
Noninterest expenses were $ 4,056,000 for the first six months of 2004
compared to $ 3,890,000 for 2003. Increases were primarily in personnel costs
as the bank continues to increase its staff, related benefit increases, and
continued investment in technology and related equipment.
The bank's effective income tax rate was 26.3% and 27.3% for the first six
months of 2004 and 2003, respectively. The statutory marginal tax bracket
remains at 34%. The primary differences between the statutory and effective
rates are due to nontaxable income from municipal investments and tax-free
loans.
Total assets were $ 305,295,000 at June 30, 2004 compared to $ 274,579,000
at June 30, 2003. This represents a growth rate of approximately 11.2%.
Internal capital generation has been the primary method utilized to increase
capital. Total stockholders' equity was $ 41,580,000 at June 30, 2004,
representing 13.6% of total assets compared to $ 34,557,000 at June 30, 2003,
which represented 12.5% of total assets. Risk-based capital ratios continue to
exceed regulatory minimums.
CONTROLS AND PROCEDURES
The Corporation's Chief Executive Officer and Chief Financial Officer
have evaluated the effectiveness of the Corporation's disclosure controls and
procedures (as such term is defined in the Rules 13a-14(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") as of June 30, 2004.
Based on such evaluation, such officers have concluded that, as of June 30,
2004, the Corporation's disclosure controls and procedures are effective in
alerting them on a timely basis to material information relating to the
Corporation (including its consolidated subsidiary) required to be included in
the Corporation's periodic filings under the Exchange Act.
CHANGES IN INTERNAL CONTROLS
There have not been any significant changes in the Corporation's internal
control over financial reporting or in other factors that could significantly
affect such control during the second quarter of 2004.
Page 12 of 23
PART II - OTHER INFORMATION
Page 13 of 23
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
Not applicable
Item 2 - Changes in Securities
ISSUER PURCHASES OF EQUITY SECURITIES
Period (a) (b) (c) (d)
Total Number Average price Total number Maximum
of shares paid per of shares number shares
purchased share purchased as that may yet
part of be purchased
publicly under the
announced plan
plan
April 2004
4/1/2004 29,813
4/14/2004 3,225 $ 41.25 3,225 26,588
4/15/2004 1,276 41.00 1,276 25,312
May 2004
5/14/2004 225 $ 40.90 225 25,087
5/24/2004 1,000 40.85 1,000 24,087
5/27/2004 1,132 40.75 1,132 22,955
June 2004
6/18/2004 1,000 $ 40.70 1,000 21,955
6/23/2004 1,600 40.50 1,600 20,355
6/29/2004 1,000 40.90 1,000 19,355
Total 10,458 $ 40.93 10,458 19,355
Item 3 - Defaults Upon Senior Securities
Not applicable
Item 4 - Submission of Matters to a Vote of Security Holders
Not applicable
Item 5 - Other Information
Not applicable
Item 6 - Index to Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Number Referred to Description
Item 601 of Regulation S-K of Exhibit
31.1 Certification of Chief Executive Officer
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
Page 14 of 23
31.2 Certification of Chief Financial Officer
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
32.1 Certification of Chief Executive Officer
pursuant to 18 U.S.C. Section 1350
32.2 Certification of Chief Financial Officer
pursuant to 18 U.S.C. Section 1350
99 Report of Independent Accountant's
on Interim Financial Statements
(b) Reports on Form 8-K:
Current report on Form 8-K filed with the Commission on June 9,
2004.
Current report on Form 8-K filed with the Commission on July 6,
2004.
Page 15 of 23
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 thereunto duly authorized.
TOWER BANCORP, INC.
(REGISTRANT)
Date: July 30, 2004 /s/ Jeff B. Shank
-----------------------------
Jeff B. Shank, President, CEO
(Principal Executive Officer)
Date: July 30, 2004 /s/Franklin T. Klink, III
-----------------------------
Franklin T. Klink, III
Treasurer
(Principal Accounting Officer)
Page 16 of 23
Exhibit 31.1
CERTIFICATION
I, Jeffrey B. Shank, President/CEO, certify, that:
1. I have reviewed this quarterly report on Form 10-Q of Tower Bancorp,
Inc.
2. Based on my knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and we have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this quarterly report based on such evaluation; and
(c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Page 17 of 23
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the equivalent function):
(a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: July 30, 2004 By: /s/Jeff B. Shank
-------------------------- ----------------------
Jeff B. Shank,
President/CEO
(Principal Executive
Officer)
Page 18 of 23
Exhibit 31.2
CERTIFICATION
I, Franklin T. Klink, III, Treasurer, certify, that:
1. I have reviewed this quarterly report on Form 10-Q of Tower Bancorp,
Inc.
2. Based on my knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and we have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this quarterly report based on such evaluation; and
(c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Page 19 of 23
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
function):
(a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: July 30, 2004 By: /s/Franklin T. Klink, III
-------------------------- ----------------------
Franklin T. Klink, III
Treasurer
(Principal Financial
Officer)
Page 20 of 23
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Tower Bancorp, Inc. (the
"Company") on Form 10-Q for the period ending June 30, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Jeff B.
Shank, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Jeff B. Shank
------------------------------
Chief Executive Officer
July 30, 2004
Page 21 of 23
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Tower Bancorp, Inc. (the
"Company") on Form 10-Q for the period ending June 30, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Franklin T. Klink, III, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Franklin T. Klink, III
------------------------------
Chief Financial Officer
July 30, 2004
Page 22 of 23
EXHIBIT 99
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Tower Bancorp, Inc.
Greencastle, Pennsylvania
We have reviewed the accompanying consolidated balance sheet of Tower
Bancorp, Inc. and Subsidiary as of June 30, 2004 and the related consolidated
statements of income for the three and six month periods ended June 30, 2004 and
2003 and consolidated statements of comprehensive income for the six months
ended June 30, 2004 and 2003 and consolidated statements of cash flows for the
six months ended June 30, 2004 and 2003. These financial statements are the
responsibility of the corporation's management.
We conducted our reviews in accordance with standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with the standards of the Public Company Accounting Oversight Board,
the objective of which is the expression of an opinion regarding the
consolidated financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements for them to
be in conformity with U.S. generally accepted accounting principles.
/s/ Smith Elliott Kearns & Company, LLC
SMITH ELLIOTT KEARNS & COMPANY, LLC
Chambersburg, Pennsylvania
July 30, 2004
Page 23 of 23