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 September 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 by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act).
YES NO X
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
1,721,773 shares of common stock outstanding at September 30, 2004.
Page 1 of 24
TOWER BANCORP, INC.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed consolidated balance sheets - September 30, 2004
and December 31, 2003 4
Condensed consolidated statements of income - three months
ended September 30, 2004 and 2003 5
Condensed consolidated statements of income - nine months
ended September 30, 2004 and 2003 6
Condensed consolidated statements of comprehensive income -
nine months ended September 30, 2004 and 2003 7
Condensed consolidated statements of cash flows - nine
months ended September 30, 2004 and 2003 8
Notes to condensed consolidated financial statements 9 and 10
Item 2 - Management's discussion and analysis of financial
condition and results of operations 11 and 12
Item 3 - Quantitative and qualitative disclosures about
market risk 13
Item 4 - Controls and procedures 13
PART II - OTHER INFORMATION 13
Item 1 - Legal proceedings 15
Item 2 - Changes in securities, use of proceeds and issuer
purchases of equity securities 15
Item 3 - Defaults upon senior securities 15
Item 4 - Submission of matters to a vote of security holders 15
Item 5 - Other information 15
Item 6 - Index to Exhibits and Reports on Form 8-K 15 - 16
Signatures 17
Exhibits 18 - 24
Page 2 of 24
PART I - FINANCIAL INFORMATION
Page 3 of 24
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2004 2003
(Unaudited) (Audited)*
(000 Omitted)
ASSETS
Cash and due from banks $ 10,371 $ 8,929
Interest bearing balances with banks 295 675
Investment securities available for sale 61,389 63,076
Restricted bank stock 3,087 3,219
Loans 225,768 214,067
Less: reserve for possible loan losses ( 1,836) ( 1,864)
Bank premises, equipment, furniture
and fixtures 5,142 4,158
Accrued interest receivable 971 962
Cash surrender value of life insurance 7,004 6,659
Other assets 633 857
----------- -----------
Total assets $ 312,824 $ 300,738
=========== ===========
LIABILITIES AND CAPITAL
Deposits in domestic offices:
Demand $ 24,021 $ 18,412
Savings 126,602 116,484
Time 75,162 72,069
Federal funds purchased 0 0
Liabilities for borrowed money 38,367 47,373
Accrued interest payable 237 204
Other liabilities 5,973 5,758
----------- -----------
Total liabilities 270,362 260,300
----------- -----------
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 27,653 25,765
Accumulated other comprehensive income 7,726 7,006
Less: cost of treasury stock ( 1,924) ( 1,321)
----------- -----------
Total equity capital 42,462 40,438
----------- -----------
Total liabilities and capital $ 312,824 $ 300,738
=========== ===========
Condensed from audited financial statements
The accompanying notes are an integral part of these
condensed financial statements.
Page 4 of 24
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2004 and 2003
(UNAUDITED)
2004 2003
(000 Omitted)
Interest Income
Interest & fees on loans $ 3,055 $ 3,030
Interest on investment
securities available for sale 494 559
Interest on federal funds sold 0 1
Interest on deposits with banks 8 14
----------- -----------
Total interest & dividend income 3,557 3,604
----------- -----------
Interest Expense
Interest on deposits 585 636
Interest on borrowed money 465 424
----------- -----------
Total interest expense 1,050 1,060
----------- -----------
Net interest income 2,507 2,544
Provision for loan losses 90 90
----------- -----------
Net interest income after
provision for loan losses 2,417 2,454
----------- -----------
Other Income
Investment service income ( 6) 0
Service charges on deposit accounts 276 213
Other service charges 114 75
Other operating income 113 20
Investment securities gains (losses) 287 806
----------- -----------
Total other income 784 1,114
----------- -----------
Other Expense
Salaries, wages and other benefits 986 941
Occupancy expense of bank premises 347 310
Furniture and fixture expense 139 130
Other operating expenses 526 581
----------- -----------
Total other expenses 1,998 1,962
----------- -----------
Income before taxes 1,203 1,606
Applicable income taxes 309 438
----------- -----------
Net income $ 894 $ 1,168
=========== ===========
Earnings per share:
Basic Earnings per share $ 0.52 $ 0.67
Weighted average shares outstanding 1,724,023 1,733,893
Diluted Earnings per share $ 0.51 $ 0.66
Weighted Average Shares Outstanding 1,751,983 1,761,644
The accompanying notes are an integral part of these
condensed financial statements.
Page 5 of 24
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(UNAUDITED)
2004 2003
(000 Omitted)
Interest Income
Interest & fees on loans $ 8,913 $ 9,246
Interest on investment
securities available for sale 1,544 1,635
Interest on federal funds sold 0 1
Interest on deposits with banks 32 55
----------- -----------
Total interest & dividend income 10,489 10,937
----------- -----------
Interest Expense
Interest on deposits 1,680 2,075
Interest on borrowed money 1,341 1,199
----------- -----------
Total interest expense 3,021 3,274
----------- -----------
Net interest income 7,468 7,663
Provision for loan losses 270 270
----------- -----------
Net interest income after
provision for loan losses 7,198 7,393
----------- -----------
Other Income
Investment service income 34 0
Service charges on deposit accounts 728 626
Other service charges 324 225
Other operating income 344 288
Investment securities gains (losses) 1,432 2,403
----------- -----------
Total other income 2,862 3,542
----------- -----------
Other Expense
Salaries, wages and other benefits 3,054 2,791
Occupancy expense of bank premises 580 526
Furniture and fixture expense 408 391
Other operating expenses 2,012 2,144
----------- -----------
Total other expenses 6,054 5,852
----------- -----------
Income before taxes 4,006 5,083
Applicable income taxes 1,047 1,389
----------- -----------
Net income $ 2,959 $ 3,694
=========== ===========
Earnings per share:
Basic Earnings per share $ 1.71 $ 2.13
Weighted average shares outstanding 1,729,788 1,733,794
Diluted Earnings per share $ 1.68 $ 2.10
Weighted Average Shares Outstanding 1,758,053 1,761,169
The accompanying notes are an integral part of these
condensed financial statements.
Page 6 of 24
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2004 and 2003
(UNAUDITED)
2004 2003
(000 Omitted)
Net income $ 2,959 $ 3,694
--------- ---------
Other comprehensive income:
Unrealized holding gains (losses) 2,523 2,324
Reclassification adjustment for gains
realized in net income ( 1,432) ( 2,403)
--------- ---------
1,091 ( 79)
Tax effect ( 371) 27
--------- ---------
Other comprehensive income (loss) 720 ( 52)
--------- ---------
Comprehensive income $ 3,679 $ 3,642
=========== ===========
The accompanying notes are an integral part of these
condensed financial statements.
Page 7 of 24
TOWER BANCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months Ended September 30, 2004 and 2003
(UNAUDITED)
2004 2003
(000 Omitted)
Cash flows from operating activities:
Net income $ 2,959 $ 3,694
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 288 288
Provision for loan losses 270 270
(Gain) on sale of investment securities ( 1,432) ( 2,403)
(Increase) in cash surrender value of
life insurance
( 345) ( 266)
(Increase)Decrease in other assets 224 256
(Increase)Decrease in interest ( 9) ( 27)
receivable
Increase (decrease) in interest payable 33 ( 74)
Increase (decrease) in other ( 155) 322
liabilities
---------- ----------
Net cash provided by operating activities 1,833 2,060
---------- ----------
Cash flows from investing activities:
Loans (net) ( 11,999) ( 17,396)
Purchases of bank premises, equipment,
furniture, and fixtures
( 1,272) ( 437)
Interest bearing balances with banks 380 872
Purchases of available for sale securities ( 3,056) ( 12,403)
Maturities/sales of available for sale
securities
7,265 9,020
Redemption (purchase) of restricted bank 132 ( 209)
stock
---------- ----------
Net cash (used) by investing activities ( 8,550) ( 20,553)
---------- ----------
Cash flows from financing activities:
Net increase in deposits 18,820 16,261
Debt (net) ( 9,006) 2,388
Cash dividends paid ( 1,071) ( 1,838)
Purchase of Treasury Stock ( 826) ( 397)
Proceeds from sale of capital stock 242 323
---------- ----------
Net cash provided by financing activities 8,159 16,737
---------- ----------
Net increase (decrease) in cash and cash
equivalents
1,442 ( 1,756)
Cash and cash equivalents at beginning of 8,929 8,943
year
---------- ----------
Cash and cash equivalents at end of period $ 10,371 $ 7,187
========== ==========
The accompanying notes are an integral part of these
condensed financial statements.
Page 8 of 24
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
(UNAUDITED)
Review of Interim Financial Statements
The condensed consolidated financial statements as of and
for the three and nine month periods ended September 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 September
30, 2004 and the results of its operations for the three
and nine month periods ended September 30, 2004 and 2003.
The results of operations for the nine month period ended
September 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 24
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
Nine months Ended
September 30
Net income (000) omitted As reported $ 2,959 $ 3,694
Pro forma 2,937 3,682
Basic earnings per share As reported 1.71 2.13
Pro forma 1.70 2.12
Earnings per share As reported 1.68 2.10
assuming dilution Pro forma 1.67 2.09
Page 10 of 24
TOWER BANCORP, INC.
ITEM 2 -MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS
Net income for the first nine months of 2004 was $ 2,959,000
compared to $ 3,694,000 for the first nine months of 2003. Net
income on a per share basis for 2004 was $ 1.71, down $ .42 from
the $ 2.13 realized during the first nine months of 2003.
Total interest and dividend income for the first nine months
of 2004 was $ 10,489,000 compared to $ 10,937,000 for the first
nine months of 2003. Decreases occurred primarily due to decreases
in the yield on earning assets. Investment yields dropped 10 basis
points and loan yields dropped 93 basis points from average yields
realized in the first nine months of 2003. Average loan balances
at September 30, 2004 increased 13.6% over those at September 30,
2003. Increases from September 30, 2003 were primarily in mortgage
and commercial loans, which increased 20.8% and 21.8%,
respectively, since September 30, 2003. Earnings on investments
for the first nine months decreased 5.6% over totals for the
corresponding period in 2003. Decreases were attributable
primarily to the aforementioned rate decreases and offset by a
12.9% increase in volume of average investments from 2003 totals.
Total interest expense was $ 3,021,000 for the first nine
months of 2004, a decrease of $ 253,000 from the $ 3,274,000
reported for the nine months of 2003. Increase in average total
deposits has been 9.2% since September 30, 2003. Most of this
growth has occurred in the interest bearing demand deposit
accounts. Average rates on deposits decreased 38 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 7.7% from 2003 totals. However, asset
yields have decreased faster than corresponding decreases in cost
of funds causing the net interest margin for the first nine months
of 2004 to drop 50 basis points from the first nine months of 2003.
The average loan to deposit ratio was 103.5% at September 30, 2004
compared to 99.5% at September 30, 2003. Management intends to
continue to competitively price its deposits to maintain desired
net interest spreads.
The Bank made a $ 270,000 provision for loan losses during the
first nine months of 2004. Net charge-offs were $ 297,000 during
the first nine months of 2004 compared to $ 109,000 during the
first nine months of 2003. 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 24
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 $ 2,862,000 for the first nine months
of 2004 representing a 20.6% decrease compared to the first nine
months of 2003. The decrease was primarily in security gains, which
decreased $ 971,000 for the first nine months of 2004.
Non-interest expenses were $ 6,054,000 for the first nine
months of 2004 compared to $ 5,852,000 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 26.1% and 27.3% for
the first nine 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 $ 312,824,000 at September 30, 2004 compared
to $ 283,216,000 at September 30, 2003. This represents a growth
rate of approximately 10.5%. Internal capital generation has been
the primary method utilized to increase capital. Total
stockholders' equity was $ 42,462,000 at September 30, 2004,
representing 13.5% of total assets compared to $ 34,596,000 at
September 30, 2003, which represented 12.2% of total assets. Risk-
based capital ratios continue to exceed regulatory minimums.
Page 12 of 24
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes to the quantitative and
qualitative disclosures made in Tower Bancorp's annual report on
Form 10-K for the year ended December 31, 2003.
ITEM 4 - CONTROLS AND PROCEDURES
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 September 30, 2004.
Based on such evaluation, such officers have concluded that, as of
September 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
third quarter of 2004.
Page 13 of 24
PART II - OTHER INFORMATION
Page 14 of 24
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 Total number Maximum
of shares price of shares number
purchased paid per purchased as shares
share part of that may yet
publicly be purchased
announced under the
plan plan
July 2004
7/01/2004 19,355
7/15/2004 500 $ 40.90 500 18,855
7/21/2004 1,005 40.90 1,005 17,850
August 2004
8/19/2004 400 $ 40.75 400 17,450
8/20/2004 200 40.50 200 17,250
September 2004
9/03/2004 240 $ 40.50 240 17,010
9/09/2004 286 40.40 286 16,724
9/14/2004 1,000 40.45 1,000 15,724
9/22/2004 747 40.40 747 14,977
Total 4,378 $ 40.63 4,378 14,977
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 15 of 24
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
September 8, 2004.
Current report on Form 8-K filed with the Commission on
October 6, 2004.
Page 16 of 24
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: November 8, 2004 /s/ Jeff B. Shank
Jeff B. Shank, President, CEO
(Principal Executive Officer)
Date: November 8, 2004 /s/Franklin T. Klink, III
Franklin T. Klink, III
Treasurer
(Principal Accounting Officer)
Page 17 of 24
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 18 of 24
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: November 8, 2004 By: /s/Jeff B. Shank
Jeff B. Shank,
President/CEO
(Principal Executive
Officer)
Page 19 of 24
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 20 of 24
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: November 8, 2004 By: /s/Franklin T. Klink,III
Franklin T. Klink, III
Treasurer
(Principal Financial
Officer)
Page 21 of 24
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 September 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
November 8, 2004
Page 22 of 24
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 September 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
November 8, 2004
Page 23 of 24
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 September 30, 2004 and
the related consolidated statements of income for the three and
nine month periods ended September 30, 2004 and 2003 and
consolidated statements of comprehensive income for the nine months
ended September 30, 2004 and 2003 and consolidated statements of
cash flows for the nine months ended September 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
November 8, 2004
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