UNITED STATES 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 or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from__________ to __________. Commission file number 2-89283 IOWA FIRST BANCSHARES CORP. (Exact name of registrant as specified in its charter) An Iowa Corporation 42-1211285 (State or other jurisdiction of (I.R.S. Employer incorporation organization) or Identification No.) 300 East Second Street, Muscatine, Iowa 52761 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (319) 263-4221 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None 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. X Yes 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. (X) The aggregate market value of the voting stock held by nonaffiliates of the registrant as of February 28, 2000, was $28,512,525. As of February 28, 2000, 1,536,701 shares of the Registrant's common stock were outstanding. Documents incorporated by reference: Portions of the registrant's 1999 Annual Report are incorporated in Parts I and II of this Form 10-K. Portions of the registrant's Proxy Statement dated March 17, 2000 are incorporated in Part III of this Form 10-K. The Exhibit Index is located on page 11. ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS PART I Item 1. Business Item 2. Properties Item 3. Legal Proceedings Item 4. Submission of Matters to a Vote of Security Holders Table I. Executive Officers of the Registrant PART II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters Item 6. Selected Financial Data Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure PART III Item 10. Directors and Executive Officers of the Registrant Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management Item 13. Certain Relationships and Related Transactions PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K Signatures Index of Exhibits ANNUAL REPORT ON FORM 10-K PART I ITEM 1. BUSINESS. - ------------------ Iowa First Bancshares Corp. (the "Company"), is a bank holding company headquartered in Muscatine, Iowa. The Company owns all the outstanding stock of two national banks in Iowa, First National Bank of Muscatine and First National Bank in Fairfield. On a full-time equivalent basis, year-end employment for the Company and its subsidiary banks totaled 127 employees. First National Bank of Muscatine has a total of five locations in Muscatine, Iowa. The First National Bank in Fairfield has two locations in Fairfield, Iowa. Each bank is engaged in the general commercial banking business and provides full service banking to individuals and businesses, including checking and savings accounts, commercial loans, consumer loans, real estate loans, safe deposit facilities, transmitting of funds, trust services, and such other banking services as are usual and customary for commercial banks. The commercial banking business is highly competitive. Subsidiary banks compete with other commercial banks and with other financial institutions, including savings banks, mortgage banking companies, credit unions and mutual funds. In recent years, competition also has increased from institutions not subject to the same regulatory restrictions as banks and bank holding companies. The operations of the Company and its subsidiary banks are affected by state and federal legislative changes and by policies of various regulatory authorities. The Company is a registered bank holding company under the Bank Holding Company Act of 1956 (the "Act") and is subject to the supervision of, and regulation by, the Board of Governors of the Federal Reserve System (the "Board"). Under the Act, a bank holding company may engage in banking, managing or controlling banks, furnishing or performing services for banks it controls, and conducting activities that the Board has determined to be closely related to banking. National banks are subject to the supervision of, and are examined by, the Office of the Comptroller of the Currency. Both subsidiary banks of the Company are members of the Federal Deposit Insurance Corporation, and as such, are subject to examination thereby. In practice, the primary federal regulator makes regular examinations of each subsidiary bank subject to its regulatory review or participates in joint examinations with other federal regulators. Areas subject to regulation by these authorities include capital levels, the allowance for possible loan losses, investments, loans, mergers, issuance of securities, payment of dividends, establishment of branches, and many other aspects of operations. Statistical information called for by this Item is contained in the Company's 1999 Annual Report to Shareholders which is incorporated by reference (pages 40 - - 51 of this Form 10-K). ITEM 2. PROPERTIES. - -------------------- Since the Company commenced business, its principal executive office has been located at 300 East Second Street, Muscatine, Iowa, which is the principal office of First National Bank of Muscatine, a national banking association and a wholly owned subsidiary of the Company. First National Bank of Muscatine conducts its operations from five facilities located in Muscatine. The main bank is located at 300 East Second Street and is a modern brick and steel building completed in 1979 containing 36,000 square feet of floor space on three floors. The bank owns both the building and the underlying real estate. All administrative functions of the bank are conducted at its main offices. Portions of the building are leased to commercial tenants. During 1997, a branch was opened inside the Wal-Mart Supercenter located on highway 61 at Muscatine. This branch and the Wal-Mart Supercenter were the first of their kind in Iowa. The bank operates this branch under a five year lease agreement with Wal-Mart, with two five year renewal options. Additionally, another new branch facility, which includes drive-through banking services and is located across the alley from the main Muscatine banking headquarters, was completed in the fall of 1997. This branch replaced a previous downtown branch. The bank owns this facility and the underlying real estate. Two locations, in addition to the new Wal-Mart branch, provide banking services outside the Muscatine downtown area. The office at the Muscatine Mall is approximately two miles northeast of the main bank. The facility contains 2,304 square feet of floor space in a one-story concrete and steel building. The facility offers a walk-in lobby and night depository. The three-lane drive-up facility of this branch is located approximately 500 feet west of the branch at the parking lot of the mall. The building, drive-up facilities and real estate are leased. The terms of the lease provide for monthly payments of $2,304 during the current 5-year term of the lease. This lease expired on May 31, 1999. Management is negotiating with the new owners of the Muscatine Mall for construction of a freestanding building on Mall property with a long-term lease arrangement with First National Bank of Muscatine. The bank's southside office at 608 Grandview Avenue is located two miles southwest of the main bank. The office contains 3,600 square feet of floor space and is located in a one-story steel frame, concrete block building. The facility offers a walk-in lobby and three drive-up lanes. The building and underlying real estate are owned by the bank. Portions of the building are leased to commercial tenants. First National Bank in Fairfield conducts its operations from a modern brick and steel building completed in 1968 containing 8,200 square feet of floor space on two floors. The bank owns both the building and the underlying real estate. Portions of the building are leased to commercial tenants. A three-lane drive-up facility is located at the main bank. In the spring of 1997, a new branch facility was opened at Fairfield, Iowa. The building, which is located in a high traffic area in front of the local Wal-Mart store on highway 34, contains several private offices for lending staff and management as well as teller and deposit services, including several drive-through lanes. The Company's facilities are well maintained and are suitable for the Company's business operations. ITEM 3. LEGAL PROCEEDINGS. - --------------------------- The Company has no pending legal proceedings which are material. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. - ------------------------------------------------------------- None. PART I, TABLE I --------------- EXECUTIVE OFFICERS OF THE REGISTRANT ------------------------------------ Family Held Business Experience Name Age Relationship Position Since During Past Five Years - ---------------------------------------------------------------------------------------------------- George A. Shepley 77 None Chairman of the Board 1983 President of the Company, Chief Executive Officer 1983 January 1989 to 1996; Director 1983 Chairman of the Board, Chief Executive Officer of the Company, 1983 to present; Chairman of the Board, 1987 to present, President, 1963 to January 1989, First National Bank of Muscatine; Chairman of the Board, 1986 to present, First National Bank in Fairfield. Kim K. Bartling 42 None Executive Vice President 1996 Executive Vice President, Chief Operating Officer 1996 Chief Operating Officer Treasurer 1988 and Treasurer of the Director 1994 Company, December 1996 to present; Senior Vice President, Chief Financial Officer and Treasurer of the Company, April 1988 to December 1996; Director of the Company since 1994; Director First National Bank of Muscatine, 1989 to present; Executive Vice President and Chief Financial Officer, First National Bank of Muscatine, 1996 to present; Senior Vice President/Chief Financial Officer, First National Bank of Muscatine, 1987 to 1996; Director First National Bank in Fairfield, 1990 to present. D. Scott Ingstad 49 None Vice Chairman 1999 Vice Chairman of the Board, President 1996 October 1999 to present, Director 1990 Director, 1990 to present, President, 1996 to present, of the Company; Director, President and CEO of First National Bank of Muscatine, 1990 to present. Patricia R. 52 None Secretary 1986 Corporate Secretary of Thirtyacre the Company, October 1986 to present. PART II ------- ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER ------------------------------------------------------------------------- MATTERS ------- The brokerage firms of Howe Barnes Investments, Inc. and Mesirow Financial, Inc. make a market for the Company's common stock. High and low common stock prices and dividends for the last two years were: 1999 by Dividend Quarters High Low Per Share - -------------------------------------------------------------------------------- First ..................... $ 32.50 $ 31.00 $ 0.21 Second .................... 32.50 29.50 0.21 Third ..................... 29.50 25.50 0.21 Fourth .................... 27.50 23.88 0.21 Total Dividend Paid ...................... $ 0.84 1998 by Dividend Quarters High Low Per Share - -------------------------------------------------------------------------------- First ..................... $ 31.25 $ 31.00 $ 0.21 Second .................... 32.00 30.00 0.21 Third ..................... 34.00 30.38 0.21 Fourth .................... 32.50 30.50 0.21 Total Dividend Paid ...................... $ 0.84 The above quotations were furnished by the brokerage firms that serve as market makers for the Company's stock. The quotations represent prices between dealers and do not include retail markup, markdown, or commissions. Future dividends are dependent on future earnings, regulatory restrictions (see Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 40 - 51 of this Form 10-K; and Note 9 to the Company's Consolidated Financial Statements in the Company's 1999 Annual Report to Shareholders which is incorporated by reference, pages 30 - 32 of this Form 10-K), capital requirements, and the Company's financial condition. As of February 28, 2000, the Company had approximately 475 shareholders of its outstanding class of common stock. The Iowa First Bancshares Corp. Employee Stock Ownership Plan with 401(k) Provisions is considered one shareholder as all shares owned by this plan are voted by the trustees of said plan unless the vote in question encompasses approval or disapproval of any corporate merger, consolidation, dissolution, or similar transaction. ITEM 6. SELECTED FINANCIAL DATA. - --------------------------------- The information called for by this Item is contained in the Company's 1999 Annual Report to Shareholders which is incorporated by reference (page 39 of this Form 10-K). ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. - ---------------------------------------------------------------------- The information called for by this Item is contained in the Company's 1999 Annual Report to Shareholders which is incorporated by reference (pages 40 - 51 of this Form 10-K). ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. - ----------------------------------------------------- The information called for by this Item is contained in the Company's 1999 Annual Report to Shareholders which is incorporated by reference (pages 18 - 39 of this Form 10-K). 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 called for by this Item is contained in the Company's 1999 Proxy Statement which is incorporated by reference (page 55 of this Form 10-K). Director Compensation - --------------------- The annual retainer that each outside Director of the Company received in 1999 was $5,300. The Company paid $100 for attendance at each committee meeting and special Board of Directors meeting. During 1999, each Director of the Company served as Director and member of committees for subsidiary boards and committees, with the exception of Mr. Carver who served only as a Director of the Company. The annual retainer fee paid to each outside subsidiary Director was $4,000, plus $50 to $150 for attendance at each committee meeting. Executive officers who also serve on the Board of Directors do not receive such retainer or committee fees. ITEM 11. EXECUTIVE COMPENSATION - -------------------------------- The information called for by this Item is contained in the Company's 1999 Proxy Statement which is incorporated by reference (pages 56 - 58 of this Form 10-K). ITEM 12. SECURITY OWNERHSIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - ------------------------------------------------------------------------ The information called for by this Item is contained in the Company's 1999 Proxy Statement which is incorporated by reference (pages 54 and 55 of this Form 10-K). ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. - -------------------------------------------------------- Officers and Directors of the Company and its subsidiaries have had, and may have in the future, banking transactions in the ordinary course of business of the Company's subsidiaries. All such transactions are on substantially the same terms, including interest rates on loans and collateral, as those prevailing at the time for comparable transactions with others, and involve no more than the normal risk of collectibility. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) Documents Filed with This Report: - ------------------------------------- (1) Financial Statements. The following consolidated financial statements of the Company and its subsidiaries are incorporated by reference from the 1999 Annual Report to Shareholders of the Company: Consolidated balance sheets--dated December 31, 1999 and 1998. Consolidated statements of income--years ended December 31, 1999, 1998, and 1997 Consolidated statements of changes in stockholders' equity-- years ended December 31, 1999, 1998, and 1997. Consolidated statements of cash flows--years ended December 31, 1999, 1998, and 1997. Notes to consolidated financial statements. Opinion of independent accountants. (2) Financial Statement Schedules. All schedules are omitted because they are not applicable, are not required, or because the required information is included in the financial statements or the notes thereto. (b) Reports on Form 8-K. No reports on Form 8-K have been filed during the last quarter of the period covered by this report. (c) Exhibits. The following exhibits are attached pursuant to Item 601 of Regulation S-K: (13) Registrant's 1999 Annual Report to Shareholders (20) Registrant's Proxy Statement dated March 17, 2000 (24) Power of Attorney (27) Financial Data Schedule See Exhibit Index on page 11 hereof for a complete list of management contracts and arrangements required by this item and all other Exhibits filed or incorporated by reference as a part of this report. 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. IOWA FIRST BANCSHARES CORP. Date: March 10, 2000 /s/ George A. Shepley -------------- --------------------- George A. Shepley Chairman of the Board Date: March 10, 2000 /s/ Kim K. Bartling -------------- -------------------- Kim K. Bartling, Executive Vice President, Chief Operating Officer, Treasurer and Director (Principal Financial and Accounting Officer) We, the undersigned directors of Iowa First Bancshares Corp. hereby severally constitute George A. Shepley and Kim K. Bartling, and each of them, our true and lawful attorneys with full power to them, and each of them, to sign for us and in our name, the capacities indicated below, Annual Report of From 10-K of Iowa First Bancshares Corp. for the fiscal year ended December 31, 1999, to be filed herewith and any amendments to said Annual Report, and generally do all such things in our name and behalf in our capacities as directors to enable Iowa First Bancshares Corp. to comply with the provisions of the Securities Exchange Act of 1934 as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or either of them, to said Annual Report on Form 10-K and any and all amendments thereto. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Roy J. Carver, Jr. Director February 17, 2000 - ---------------------- ----------------- Roy J. Carver, Jr. /s/ Larry L. Emmert Director February 17, 2000 - ------------------- ----------------- Larry L. Emmert /s/ Craig R. Foss Director February 17, 2000 - ----------------- ----------------- Craig R. Foss /s/ Donald R. Heckman Director February 17, 2000 - --------------------- ----------------- Donald R. Heckman /s/ Dean H. Holst Director February 17, 2000 - ----------------- ----------------- Dean H. Holst /s/ David R. Housley Director February 17, 2000 - -------------------- ----------------- David R. Housley /s/ D. Scott Ingstad Director February 17, 2000 - -------------------- ----------------- D. Scott Ingstad /s/ Victor G. McAvoy Director February 17, 2000 - -------------------- ----------------- Victor G. McAvoy /s/ John "Jay" S. McKee Director February 17, 2000 - ----------------------- ----------------- John "Jay" S. McKee /s/ Beverly J. White Director February 17, 2000 - -------------------- ----------------- Beverly J. White ITEM 14 (a) (3) - INDEX OF EXHIBITS ----------------------------------- Exhibit Page ------- ---- (3) Articles of Incorporation, as amended Incorporated by reference to Exhibit (3) to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996. (10a) Employment Agreement Incorporated by reference to Exhibit (10a) to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. (10b) Change in Control Employment Agreement Incorporated by reference to Exhibit (10b) to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. (13) Registrant's 1999 Annual Report to Shareholders (20) Registrant's Proxy Statement Dated March 17, 2000 (21) Subsidiaries of Registrant Incorporated by reference to Exhibit 21 to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. (24) Power of Attorney (27) Financial Data Schedule