IOWA FIRST BANCSHARES CORP.
300 East Second Street
Muscatine, Iowa 52761
PHONE (319) 263-4221
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Iowa First Bancshares Corp., an Iowa
corporation, will be held at the corporate offices of the Company and its
subsidiary, First National Bank of Muscatine, Muscatine, Iowa, on Thursday,
April 19, 2001, beginning at 2:00 p.m. in order to:
1. Elect three Directors for terms of three years each.
2. Elect one Director for a term of one year.
3. Transact any other business which may be properly brought before the
meeting or any adjournment of the meeting.
Common stockholders of record as of the close of business on March 9, 2001 are
entitled to vote at the meeting.
Even if you plan to attend the meeting, we encourage you to sign and return the
enclosed proxy. If you are unable to attend the meeting because of illness or
any other reason, your vote will still be cast. If you do attend the meeting,
your proxy will automatically be suspended if you elect to vote in person.
We encourage your attendance at this meeting. The Officers and Directors want to
keep you, one of the owners of the Company, informed of its activities and
progress.
March 12, 2001 /s/ George A. Shepley
------------------------
George A. Shepley
Chairman of the Board
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE, AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE. IT IS IMPORTANT THAT
PROXIES BE RETURNED PROMPTLY.
PROXY STATEMENT
General Information Concerning the Solicitation of Proxies
This proxy statement is furnished on March 12, 2001, in connection with the
solicitation by the Board of Directors of the proxies in the accompanying form.
A shareholder who gives a proxy may revoke it at any time prior to its exercise
by filing with the Corporate Secretary a written revocation or a duly executed
proxy bearing a later date. The proxy will be suspended if the shareholder is
present at the meeting and elects to vote in person.
As of March 9, 2001, 1,493,331 shares of common stock were outstanding, each of
which is entitled to one vote at the meeting. Only shareholders of record as of
the close of business on March 9, 2001 will be entitled to notice of and to vote
at the meeting.
The affirmative vote of the holders of a majority of the outstanding shares
entitled to vote is required for adoption of motions and resolutions, except
that changes in voting rights, removal of Directors, amendments to the Articles
of Incorporation, and approval of mergers, consolidations, or partial
liquidations require the affirmative vote of the holders of two-thirds of the
outstanding shares entitled to vote.
Beneficial Owners of Common Stock
The following table sets forth information as of February 28, 2001, with respect
to any person who is known to the Company to be the beneficial owner of more
than 5 percent of the Company's common stock.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- --------------------------------------------------------------------------------
George A. Shepley 116,774 (1) 7.82%
401 Hogan Court
Muscatine, Iowa
(1) Includes 116,474 shares as beneficially owned by Mr. Shepley because the
Company's management believes he has the power to exercise investment
decisions with respect to such shares.
The beneficial ownership of current, continuing and nominated Directors is set
out in the table on the following page. All current Directors and Executive
Officers as a group own beneficially 301,032 shares, which constitutes 20.2
percent of the class.
Election of Directors
At the annual meeting, shareholders will be asked to elect three Directors to
hold office for terms of three years each. Shareholders will also be asked to
elect one Director for a term of one year.
The Board of Directors and management recommend the election of the four
nominees listed herein. The named proxies intend to vote for the election of the
nominees. If, at the time of the meeting, any of such nominees is unable or
declines to serve, the discretionary authority provided in the proxy will be
exercised to vote for a substitute or substitutes, unless otherwise directed.
The Board of Directors has no reason to believe that any substitute nominee or
nominees will be required.
Information Concerning Nominees for Election as Directors
The Board of Directors presently consists of twelve Directors divided into three
classes, with four Directors in each class. Directors of one class are elected
each year to hold office for a three-year term, until their successors are duly
elected and qualified, or until their earlier resignation or removal. The terms
of office of the current Class III Directors will expire on the election of the
Directors at the 2001 annual meeting of shareholders.
The shareholders will be asked to elect three of the four Class III nominees
listed herein for terms of three years or until a successor is elected and
qualified or until his or her earlier resignation or removal. The shareholders
will also be asked to elect one of the Class III nominees, Dean H. Holst, for a
term of one year or until a successor is elected and qualified or until his
earlier resignation or removal. Mr. Holst plans to retire on or before the
expiration of this one year term. If all nominees are elected they will fill all
of the current twelve Directorships.
Certain information is set out below and on the following page with respect to
the four persons nominated by the Board of Directors to serve as Directors and
with respect to the Directors continuing in office for terms expiring in 2002
and 2003. All four Class III nominees are currently Directors of the Company.
IOWA FIRST BANCSHARES CORP.
DIRECTORS
As of February 28, 2001
Nominated Common Stock
For Term -------------------------
Expiring, Amount and
Nominee Position(s) Or Current Nature of Percent
Or Current Held with Director Term Beneficial of
Director the Company Age Since Expires Ownership Class
- ------------------------------------------------------------------------------------------------------------------------------------
Kim K. Bartling Director. Executive Vice President, Chief Operating
Officer and Treasurer of the Company. EVP and
CFO of First National Bank of Muscatine. 43 1994 2003 30,015 2.01%
Roy J. Carver, Jr. Director. 57 1989 2004 * 25,404 1.70%
Larry L. Emmert Director. 59 1993 2003 21,246 1.42%
Craig R. Foss Director. Vice Chairman of the Board, 51 1994 2002 3,360 **
First National Bank in Fairfield.
Donald R. Heckman Director. 62 1984 2002 26,060 1.75%
Dean H. Holst Director. President and CEO, First National
Bank in Fairfield. 61 1985 2002 *** 23,267 1.56%
David R. Housley Director. 49 1999 2003 1,100 **
D. Scott Ingstad Vice Chairman, President and CEO of the Company.
Vice Chairman, President and CEO, First National 50 1990 2002 20,423 1.37%
Bank of Muscatine.
Dr. Victor G. McAvoy Director. 57 1994 2004 * 5,000 **
John "Jay" S. McKee Director. 47 1999 2004 * 510 **
George A. Shepley Chairman of the Board of the Company,
First National Bank of Muscatine and
First National Bank in Fairfield. 78 1983 2003 116,774 7.82%
Beverly J. White Director. 61 1988 2002 21,024 1.41%
<FN>
* Nominated for election to the Board of Directors for a three year term at
the April 19, 2001, annual meeting of shareholders of Iowa First Bancshares
Corp. ** Less than 1 percent of the outstanding stock of the Company.
*** Nominated for election to the Board of Directors for a one year term at the
April 19, 2001, annual meeting of shareholders of Iowa First Bancshares
Corp. Mr. Holst plans to retire on or before the expiration of this one
year term.
</FN>
Shares listed as beneficially owned include, for Directors who are also officers
of the Company, shares held in the Company's retirement plan for the benefit of
such individuals.
The business experience of each nominated and continuing Director is set forth
in the following section. All Directors have held their present position for at
least five years unless otherwise indicated.
Kim K. Bartling. Mr. Bartling has been Executive Vice President, Chief Operating
Officer and Treasurer since December 1996. He has served as Executive Vice
President and Chief Financial Officer of First National Bank of Muscatine since
February 1997. Mr. Bartling served as Senior Vice President, Chief Financial
Officer and Treasurer of the Company and First National Bank of Muscatine
beginning in 1988. Prior to serving in these positions he served as Vice
President/Finance of the Company and First National Bank of Muscatine since
1987. Mr. Bartling is also a Director of the Company, First National Bank of
Muscatine and First National Bank in Fairfield.
Roy J. Carver, Jr. Mr. Carver has been Chairman of the Board of Carver Pump
Company, a manufacturer of industrial pumps used in military and civilian
applications, since 1981. Mr. Carver is also a Director of Bandag, Incorporated,
and Catalyst, Inc., which have classes of securities registered with the
Securities and Exchange Commission.
Larry L. Emmert. Mr. Emmert has been President of Hoffmann, Inc., a general
building contractor located in Muscatine, Iowa, since 1981. Mr. Emmert is also a
Director of First National Bank of Muscatine.
Craig R. Foss. Mr. Foss has been President and a shareholder of the law firm of
Foss, Kuiken, Gookin and Cochran, P.C., Fairfield, Iowa, since 1979. Mr. Foss is
also Vice Chairman of the Board of First National Bank in Fairfield.
Donald R. Heckman. Mr. Heckman is an investor. Prior to retirement, Mr. Heckman
had been Factory Manager of the H. J. Heinz Co. plant located in Muscatine,
Iowa, 1973 to February 1995. This plant produced and warehoused various consumer
products including ketchup, gravy and various sauces. Mr. Heckman is also a
Director of First National Bank of Muscatine.
Dean H. Holst. Mr. Holst has served as President and CEO of First National Bank
in Fairfield since 1985, prior to which he served as Vice President from 1973 to
1985. Mr. Holst is also a Director of the Company and First National Bank in
Fairfield.
David R. Housley. Mr. Housley has served as President of Doran and Ward Printing
Co., a commercial printing company specializing in the printing of packaging
products, for more than ten years. He also has served as President of Master
Muffler and Brake, Inc. for more than fifteen years and Automart Undercar
Distributors for four years. These companies are retail and wholesale suppliers
of mufflers and various other replacement parts for the underside of
automobiles. Mr. Housley became a Director of First National Bank of Muscatine
in February 1999 and a Director of the Company in April 1999.
D. Scott Ingstad. Mr. Ingstad has served as First National Bank of Muscatine's
Vice Chairman of the Board since October 1999, and Director, President and CEO
of First National Bank of Muscatine since 1990. Mr. Ingstad is also Vice
Chairman, as of October 1999, President, since December 1996, and CEO since
January 2001, of the Company. Prior to joining the Company, Mr. Ingstad was
Senior Vice President/ Senior Loan Officer, First National Bank and Trust
Company, Columbia, Missouri, 1989 to 1990 and President and CEO, Commerce Bank
of Harrisonville, NA, Harrisonville, Missouri, 1986 to 1989.
Victor G. McAvoy. Mr. McAvoy has served as President of Muscatine Community
College and Vice-Chancellor of the Eastern Iowa Community College District since
1986. Mr. McAvoy is also a Director of First National Bank of Muscatine.
John "Jay" S. McKee. Mr. McKee has served as Vice President of Finance of McKee
Button Company, a manufacturer of buttons emphasizing the men's dress shirt
market, since 1982. Mr. McKee became a Director of First National Bank of
Muscatine in February 1999 and a Director of the Company in April 1999.
George A. Shepley. Mr. Shepley has been Chairman of the Board of the Company
since 1983. He was CEO of the Company from 1983 through December 2000. Mr.
Shepley served as President of the Company from 1989 until December 1996. He has
served as Chairman of the Board, 1987 to present, President, 1963 to 1989, First
National Bank of Muscatine and Chairman of the Board, 1986 to present, First
National Bank in Fairfield.
Beverly J. White. Mrs. White has served as a Director of Quality Foundry Co.
since 1993 as well as Vice President beginning in 1996. Quality Foundry Co. is a
grey iron foundry specializing in semi-steel castings. Mrs. White also served as
Executive Vice President of Muscatine Development Corporation and Muscatine
Chamber of Commerce from 1990 to 1991 and as a Director of Muscatine Development
Corporation from 1989 to 1990. Mrs. White is also a Director of First National
Bank of Muscatine.
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.
Meetings and Committees of the Board of Directors
The Board of Directors held twelve regular meetings and no special meetings
during the last fiscal year. All incumbent Directors attended at least 75% of
the regular Board of Directors meetings held after each Director was duly
elected and qualified. The annual retainer that each outside Director received
in 2000 was $5,500 plus $125 for each committee meeting attended. Executive
officers who also serve on the Board of Directors do not receive such retainer
or committee fees.
The Company has committees of the Board of Directors, which meet on an "as
needed" basis. The Human Resource Committee met three times; its members are
Mrs. White (Chairperson), Mr. Emmert, Mr. Housley, Mr. McAvoy, and Mr. Shepley.
The Retirement Plan Committee met one time during 2000; its members are Mr.
McAvoy (Chairman), Mr. Emmert, Mrs. White and Mr. Bartling. The Audit Committee
met four times; its members are Mr. Heckman (Chairman), Mr. Housley, Mr. McKee,
Mr. Shepley, and Mrs. White.
Compensation Committee Report
The Human Resource Committee serves as the Company's compensation committee. The
Committee policy is to seek to provide fair and competitive compensation,
encourage the retention of highly qualified individuals and enhance shareholder
value by encouraging increased profitability of the Company. This policy is
intended to align the financial interest of the Company's and subsidiary banks'
officers (including executive officers) with those of the shareholders, as well
as to create an atmosphere that recognizes the contribution and performance of
each officer. In addition to merit-based promotions, the essential components of
the compensation policy for the Company's executive officers are base
compensation, cash bonuses and deferred compensation.
The Committee considers many factors when determining compensation levels for
executive officers. These factors include the extent to which each executive
officer contributes to enhancement of shareholder value and comparisons of the
Company's compensation of executive officers to the compensation paid to
executive officers by other companies in the banking industry, including peer
groups. The Committee also considers the extent to which each executive officer
contributes to attainment of earnings targets for the Company and each
subsidiary. Other factors include the executive officer's contribution to return
on average equity, contribution to maintaining and enhancing earnings per share,
contribution to the profitable growth of the Company, and contribution to
improvements in quality of assets and, thus, quality of earnings. In determining
the base compensation of the executive officers for 2000, the Committee
considered all of the aforementioned factors, as well as an average salary
increase at the subsidiary banks of approximately 3%-4%.
In determining the compensation level for the Chief Executive Officer, the
Committee specifically reviews trends in the Company's earnings per share,
return on average equity, and growth of the balance sheet. It looks at the
overall return to shareholders, including dividends paid and changes in the fair
market value of the Company's stock. The Committee also assesses the CEO's
effectiveness in leadership and communication skills, as demonstrated by the
level at which the subsidiary banks attain their targets for earnings and asset
quality, and the effectiveness of the strategic and operating planning process,
which the CEO leads. During 1999, the Company's earnings per share increased
10.4%, cash dividends declared per share resulted in a yield on beginning of the
year price of 2.7%, total assets grew 7.4%, and total shareholder return was
- -10.2%. Return on average equity was 18.8%. Nonaccrual loans and loans past due
90 days or more decreased $451,000 (45.0%) while net loans increased more than
$16 million or 6.7%.
This report submitted by the Human Resource Committee:
Beverly J. White, Chairperson
Larry L. Emmert
David R. Housley
Victor G. McAvoy
Management Compensation
The following table sets forth the remuneration paid or accrued for the past
three years by the Company and its subsidiaries to the highest paid executive
officers whose 2000 cash compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
Other Annual Restricted Stock Options or LTIP All Other
Name and Principal Salary Bonus Compensation Awards SARs Payouts Compensation
Position(s) Year $ $ $ $ # $ $(1)
- ------------------------------------------------------------------------------------------------------------------------------------
George A. Shepley 2000 206,000 13,133 - - - - - - - - 11,817
Chairman of the Board of the 1999 200,014 10,500 - - - - - - - - 14,716
Company, First National Bank 1998 200,014 22,502 - - - - - - - - 19,478
of Muscatine and First
National Bank in Fairfield; CEO
of the Company
D. Scott Ingstad 2000 173,400 19,074 - - - - - - - - 18,380
Vice Chairman and President 1999 163,500 21,461 - - - - - - - - 14,716
of the Company; Vice Chairman, 1998 155,695 20,046 - - - - - - - - 16,212
President and CEO, First National
Bank of Muscatine
Dean H. Holst 2000 118,277 17,564 - - - - - - - - 14,940
Director of the Company; 1999 116,529 7,735 - - - - - - - - 11,430
Director, President and CEO, 1998 116,529 7,735 - - - - - - - - 11,732
First National Bank in Fairfield
Kim K. Bartling 2000 128,000 11,680 - - - - - - - - 13,894
Director, Executive Vice 1999 116,600 9,329 - - - - - - - - 11,892
President, Chief Operating 1998 110,001 2,788 - - - - - - - - 11,613
Officer and Treasurer of the Company;
Director, EVP and CFO, First National
Bank of Muscatine; Director,
First National Bank in Fairfield
Tim M. Nelson 2000 101,467 9,766 - - - - - - - - 9,179
Executive Vice President 1999 97,333 11,680 - - - - - - - - 9,931
and Senior Loan Officer, 1998 93,013 10,696 - - - - - - - - 9,730
First National Bank of
Muscatine
<FN>
(1) Includes contributions to the employee stock ownership plan with 401(k)
provisions totaling; $11,817 for Mr. Shepley, $11,817 for Mr. Ingstad,
$8,377 for Mr. Holst, $9,694 for Mr. Bartling, and $8,129 for Mr. Nelson in
2000. Also includes matching contributions and interest earnings under the
Company's deferred compensation plan totaling; $0 for Mr. Shepley, $6,563
for Mr. Ingstad, $6,563 for Mr. Holst, $4,200 for Mr. Bartling, and $1,050
for Mr. Nelson in 2000.
</FN>
Audit Committee Report
The Audit Committee assists the Board of Directors in fulfilling its
responsibilities to stockholders concerning the Company's financial reporting
and internal controls, and facilitates open communication among the Audit
Committee, Board of Directors, outside auditors, and management. In discharging
its oversight role, the Audit Committee reviewed and discussed the audited
financial statements contained in the 2000 Annual Report on Form 10-K with the
Company's management and independent auditor. Management is responsible for the
financial statements and the reporting process, including the system of internal
controls. The independent auditor is responsible for expressing an opinion on
the conformity of those financial statements with accounting principles
generally accepted in the United States.
The Committee met privately with the independent auditor, and discussed issues
deemed significant by the auditor, including those required by Statement on
Auditing Standards No. 61 (Communications with Audit Committees). In addition,
the Committee discussed with the independent auditor its independence from Iowa
First Bancshares Corp. and its management, including the matters in the written
disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and considered whether the
provision of non-audit services was compatible with maintaining the auditor's
independence.
In reliance on the reviews and discussions outlined above, the Audit Committee
has recommended to the Board that the audited financial statements be included
in Iowa First Bancshares Corp.'s Annual Report on Form 10-K for the year ended
December 31, 2000, for filing with the SEC.
All members of the Audit Committee meet the independence standards as defined in
the applicable listing standards of the National Association of Securities
Dealers', except Mr. Shepley, who serves as a non-independent director of the
Audit Committee. Mr. Shepley serves as Chairman of the Board and, until January
1, 2001, Chief Executive Officer of the Company. The Board of Directors
determined that the inclusion of Mr. Shepley on the Audit Committee was
appropriate and acceptable because of his extensive industry expertise and
background and is in the best interests of the Company and its shareholders. The
Board of Directors determined that Mr. Shepley's inclusion on the Audit
Committee complies with the conditions stipulated in the NASD independence rules
that allow "one non-independent director" to serve on the Audit Committee of the
Board of Directors under exceptional and limited circumstances. The Audit
Committee does not currently operate under a written charter, but plans to adopt
a written charter in 2001.
This report submitted by the Audit Committee: Donald R. Heckman (Chairman),
David R. Housley, John "Jay" S. McKee, George A. Shepley, and Beverly J. White.
McGladrey & Pullen, LLP's Fees
Audit fees: The aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements for the year ending December
31, 2000 and the review of the financial statements included in the Company's
Forms 10-Q for 2000 filed with the Securities and Exchange Commission was
$66,460.
Financial Information Systems Design and Implementation fees:
No fees were earned by McGladrey & Pullen, LLP for any information technology
service (of the type described in Rule 2-01(c)(4)(ii)(B) of Regulation S-X)
during 2000.
All other fees: The aggregate fees billed for non-audit services rendered by
McGladrey & Pullen, LLP, and its associated entity, RSM McGladrey, Inc., for the
year ending December 31, 2000, was $95,900. The audit committee has considered
whether the provision of these non-audit services is compatible with maintaining
the independence of McGladrey & Pullen, LLP.
Representatives of McGladrey & Pullen, LLP, independent auditors for the
Company, will be present at the annual meeting, will have an opportunity to make
any statement they desire, and will be available to respond to appropriate
questions.
Employee Stock Ownership Plan with 401(k) Provisions
The Company sponsors an employee stock ownership plan with 401(k) provisions. An
employee becomes a participant upon completing a minimum period of employment.
Employee contributions up to 6% of total compensation per employee are matched
by the employer at a rate of 50% of the employee contributed amount.
Additionally, the employer may make discretionary profit-sharing contributions
to the plan; total annual contributions cannot exceed the amount that can be
deducted for federal income tax purposes. Participants may direct investment of
the funds they have contributed to their individual accounts under the plan
utilizing several fixed income and equity investment options. A portion of the
discretionary profit-sharing contributions made by the Company or its
subsidiaries for the participants may be directed for investment in common
shares of the Company. Participant (but not Company) contributions are included
in salary in the Summary Compensation Table. The Company and its subsidiaries
contributed a cash total of $321,389 to this plan for 2000.
Performance Incentive Plans
In addition to base compensation, each executive officer of the Company and the
subsidiaries has specific annual weighted goals which, if attained, will result
in year-end cash performance incentive pay equal to 10% to 18% of base pay. The
maximum annual payment under this incentive plan is 27% of base pay for two
participants and 15% of base pay for all other participants, for substantially
exceeding the goals established. For the year ended December 31, 2000, amounts
paid or accrued under this incentive plan totaled $97,845 which included $71,217
for executive officers of the Company as a group. Also, the Company and
subsidiaries have discretionary performance incentive plans covering a majority
of the officer level employees as well as other specific employees. These plans
encourage improved efficiency and effectiveness of employees by increasing
remuneration as a direct result of individual and organizational goal
attainment. Payments made or accrued under all performance incentive plans,
including the executive officer plan discussed above, totaled $196,354 for 2000.
Executive Employment Agreements
In order to advance the interests of the Company by enabling the Company to
attract and retain the services of key executives upon which the successful
operations of the Company are largely dependent, the Board of Directors tendered
Employment and Change in Control Agreements to D. Scott Ingstad, Dean H. Holst
and Kim K. Bartling. An Employment Agreement was also tendered by the Board of
Directors to Tim M. Nelson. See the Summary Compensation Table for information
regarding the company positions held by these individuals.
The Employment Agreements are for a base term of two years and automatically
renew unless 90 days notice of non-renewal is provided to the other party. If an
executive's employment is terminated prior to the expiration of the Agreement or
by the providing of notice of non-renewal, or if the executive is constructively
discharged (for example, as a result of a reduction in responsibilities or
compensation, or other breach of the Agreement by the Company), the executive is
entitled to a severance benefit of : (1) twelve months base pay; (2) any
vacation pay accrued but not yet taken; (3) an amount equal to the annual
average past three years payment under the Performance Incentive Plan; (4)
reimbursement of a portion of medical premiums paid by the executive such that
the same "cost-sharing" basis provided at the date of termination is maintained.
Upon a change in control, as defined, the Change in Control Agreements become
effective. The executive will, under the Agreement, remain employed by the
Company for three years after the effective date or until executive's normal
retirement date (the Employment Term), whichever is earlier. An executive who is
terminated or constructively discharged after a change in control is entitled to
the following for the remainder of the Employment Term: (1) base pay; (2)
payments under the Performance Incentive Plan; (3) perquisites to which the
executive was entitled on the date of the change in control; and (4)
contributions for benefits expected to be made to the Company's retirement
plans.
Supplemental Compensation will also be provided to mitigate the effects of any
excise taxes applicable to executive employment payments. Each executive is
subject to a confidentiality agreement, and if the executive voluntarily
terminates employment prior to a change in control or if executive's employment
is terminated for cause, the executive will be subject to noncompetition and
nonsolicitation agreements.
Deferred Compensation Agreements
The Company has entered into Deferred Compensation Agreements with certain
directors and executive officers of the Company. Under the provisions of the
agreements the directors and officers may defer a portion of their compensation
each year. Based upon individual performance, if Board established performance
targets are met, a match of up to 50% of the officers' deferrals (with an annual
cap of $6,250 per participant) may be made by the Company. Related to the
agreements, the Company has purchased various life insurance contracts. Interest
on deferrals is computed at an annual rate equal to the taxable equivalent
(determined using the Company's highest marginal tax bracket) of the highest
yielding insurance contracts purchased by the Company related to the agreements.
At December 31, 2000 the rate was 10%. Upon retirement, the director or officer
will receive the deferral balance in 180 equal monthly installments. During the
year ended December 31, 2000, the Company expensed $119,000 related to the
agreements. As of December 31, 2000, the liability related to the agreements
totaled $119,000.
The Company currently has no Incentive Stock Option or Nonstatutory Stock Option
plans.
Comparative Performance By The Company
The omitted graphical presentation compares the cumulative total return of the
Company's common stock with (i) the Russell 2000 Stock Index, (ii) the Media
General Financial Services, Inc. (MGFS) Index for the stocks of banks and bank
holding companies located in the Midwestern United States which are listed on
the New York Stock Exchange or NASDAQ (representing approximately ninety-five
companies, many of which are considerably larger than Iowa First Bancshares
Corp.), and (iii) the MGFS Index for the stocks of small banks and bank holding
companies in the Midwestern United States selected by the Company as a peer
group (representing approximately twenty companies each with total assets under
one billion dollars). In future years the Company will use the MGFS Index for
the stocks of small banks and bank holding companies in the Midwestern United
States selected by the Company as a peer group instead of the Media General
Financial Services, Inc. (MGFS) Index for the stocks of banks and bank holding
companies comprised of mainly larger companies for purposes of comparing
relative stock performance on this graph. In the Company's opinion, this index,
which includes mainly smaller banking companies, affords a more representative
and meaningful comparison than the larger bank Stock Index. The chart assumes an
investment of $100 on January 1, 1996, in each of the Company's common stock,
the Russell 2000 Stock Index, the MGFS Index for the stocks of the larger bank
peer group, and the stocks in the Company selected smaller bank peer group. Each
year's performance is for the twelve months ended December 31. The index level
for all series was set to 100.00 on January 1, 1996. The overall performance
assumes dividend reinvestment throughout the period. The Company's common stock
is not listed on any stock market exchange, thus the price used for the
Company's common stock in the chart was the greater of the year-end bid price
supplied by one of the brokerage firms which acts as a market maker for the
Company or the appraisal price supplied by an independent appraiser. The data
points used in the omitted graph are as follows:
Comparison of 5-Year Cumulative Total Return Among
Iowa First Bancshares Corp.,
NASDAQ Market Index and Peer Group Index
1995 1996 1997 1998 1999 2000
------------------------------------------------------
Iowa First Bancshares 100.00 123.80 182.67 202.30 181.68 153.69
Peer Group Index:
Midwest Banks 100.00 133.59 228.03 252.99 209.94 255.66
Small Banks 100.00 119.36 191.45 170.97 137.56 116.19
Russell 2000 Index 100.00 116.61 142.66 138.66 165.82 158.66
Deadline for Shareholder Proposals for 2002 Annual Meeting
Proposals by shareholders intended to be presented at the 2002 annual meeting
must be received at the Company's executive offices no later than November 18,
2001, to be included in the proxy statement and proxy form.
Deadline for Shareholder Nominations of Directors for 2002 Annual Meeting
Proposals by shareholders for vacant directorships intended to be presented at
the 2002 annual meeting must be received at the Company's executive offices no
later than November 18, 2001, to be included in the proxy statement and proxy
form.
General
The entire cost of soliciting proxies for the annual meeting is paid by the
Company. No solicitation other than by mail is contemplated.
The Board of Directors knows of no other matters which will be brought before
the meeting, but, if other matters properly come before the meeting, the persons
named in the proxy intend to vote the proxy according to their best judgment.
On written request to the undersigned at 300 East Second Street, Muscatine, Iowa
52761, the Company will provide, without charge to the shareholder, a copy of
its Annual Report on Form 10-K, including financial statements and schedules,
filed with the Securities and Exchange Commission for its most recent fiscal
year.
Information set forth in this proxy statement is as of March 9, 2001, unless
otherwise dated.
/s/ George A. Shepley
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March 12, 2001 George A. Shepley
Chairman of the Board