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, 2001 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.
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(Exact name of registrant as specified in its charter)
An Iowa Corporation 42-1211285
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(State or other jurisdiction of (I.R.S. Employer incorporation or
organization) Identification No.)
300 East Second Street, Muscatine, Iowa 52761
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (563) 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
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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, 2002, was $26,077,823. As of February 28, 2002,
1,456,404 shares of the Registrant's common stock were outstanding.
Documents incorporated by reference:
Portions of the registrant's 2001 Annual Report are incorporated in Parts I and
II of this Form 10-K. Portions of the registrant's Proxy Statement dated March
12, 2002 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
Page
No.
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 125 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, savings
and other deposit 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 Company
also owns the outstanding stock of Iowa First Capital Trust I, which was
capitalized in March 2001 for the purpose of issuing Company obligated
mandatorily redeemable preferred securities. See Footnote 9 on page 29 of this
Form 10-K for further discussion of these preferred securities.
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 necessarily
subject to all the same regulatory restrictions or requirements 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
2001 Annual Report to Shareholders which is incorporated by reference (pages 38
- - 49 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 then new 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 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
approximately 1,500 square feet of floor space in a one-story concrete and steel
building. The facility offers a walk-in lobby and night depository. The
two-lane, mobile drive-up facility of this branch is located approximately 100
feet west of the branch at the parking lot of the mall. The building, drive-up
facility and real estate are leased. The terms of the leases provide for monthly
payments of $2,465. These leases are on a month-to-month basis. Management is
negotiating with the new owners of the Muscatine Mall for possible purchase of
land on which may be erected a freestanding bank branch building.
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 Position Business Experience
Name Age Relationship Position Held Since During Past Five Years
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George A. Shepley 79 None Chairman of the Board 1983 Chairman of the Board, 1983 to
Director 1983 Present, Chief Executive Officer,
1983 to 2001, President, 1989 to
1996, Iowa First Bancshares Corp.;
Chairman of the Board, 1987 to present, President,
1963 to 1989, First National Bank of Muscatine;
Chairman of the Board, 1986 to
present, First National Bank in
Fairfield.
Kim K. Bartling 44 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, 1988 to 1996;
Director of the Company
since 1994; Director of 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 51 None Vice Chairman of Vice Chairman of the Board,
the Board 1999 October 1999 to present, Chief
Chief Executive Executive Officer, January 2001 to
Officer 2001 present, Director, 1990 to present,
President 1996 President, 1996 to present, of the
Director 1990 Company; Director, President and CEO,
1990 to present, Vice Chairman of the Board,
1999 to present, First National Bank of
Muscatine.
Patricia R. 54 None Secretary 1986 Corporate Secretary of
Thirtyacre the Company, 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 Sandler O'Neill &
Partners, L.P. make a market for the Company's common stock.
High and low common stock prices and dividends paid for the last two years were:
Dividend
2001 by Quarters High Low Per Share
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First ........................... $ 23.75 $ 19.13 $ 0.22
Second .......................... 22.60 18.88 0.22
Third ........................... 21.75 19.75 0.22
Fourth .......................... 22.50 20.10 0.22
Total Dividend
Paid ............................ $ 0.88
2000 by Quarters
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First ........................... $ 24.00 $ 22.13 $ 0.21
Second .......................... 23.00 22.00 0.21
Third ........................... 23.00 18.00 0.21
Fourth .......................... 23.00 18.50 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 38 - 49 of this Form 10-K; and Note 10 to the Company's
Consolidated Financial Statements in the Company's 2001 Annual Report to
Shareholders which is incorporated by reference, pages 30 - 31 of this Form
10-K), capital requirements, and the Company's financial condition.
As of February 28, 2002, the Company had approximately 350 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 2001
Annual Report to Shareholders which is incorporated by reference (page 15 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 2001
Annual Report to Shareholders which is incorporated by reference (pages 38 - 49
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 2001
Annual Report to Shareholders which is incorporated by reference (pages 17 - 37
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 2001 Proxy
Statement which is incorporated by reference (page 53 of this Form 10-K).
Director Compensation
The annual retainer that each outside Director of the Company received in 2001
was $5,500. The Company paid $125 for attendance at each committee meeting and
special Board of Directors meeting. During 2001, 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 $4,200 to $4,500, plus $75 to $250 for attendance at each committee meeting.
Executive officers who also serve on the Board of Directors do not receive such
retainer or committee fees. Additional information called for by this Item is
contained in the Company's 2001 Proxy Statement which is incorporated by
reference (pages 54 and 57 of this Form 10-K).
ITEM 11. EXECUTIVE COMPENSATION
The information called for by this Item is contained in the Company's 2001 Proxy
Statement which is incorporated by reference (pages 55 - 57 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 2001 Proxy
Statement which is incorporated by reference (pages 52 and 53 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 2001 Annual Report to Shareholders of the
Company:
Page
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Consolidated balance sheets -- dated December 31, 2001 and 2000.
Consolidated statements of income -- years ended December 31,
2001, 2000, and 1999.
Consolidated statements of changes in stockholders' equity --
years ended December 31, 2001, 2000, and 1999.
Consolidated statements of cash flows - years ended
December 31, 2001, 2000, and 1999.
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 2001 Annual Report to Shareholders
(20) Registrant's Proxy Statement dated March 12, 2002
(24) Power of Attorney
(99) Audit Committee Charter
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 18, 2002 /s/ George A. Shepley
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George A. Shepley
Chairman of the Board
Date: March 18, 2002 /s/ Kim K. Bartling
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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 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, the Annual Report on Form 10-K of
Iowa First Bancshares Corp. for the fiscal year ended December 31, 2001, 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
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/s/ Roy J. Carver, Jr. Director February 21, 2002
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Roy J. Carver, Jr.
/s/ Larry L. Emmert Director February 21, 2002
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Larry L. Emmert
/s/ Craig R. Foss Director February 21, 2002
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Craig R. Foss
/s/ Donald R. Heckman Director February 21, 2002
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Donald R. Heckman
/s/ David R. Housley Director February 21, 2002
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David R. Housley
/s/ D. Scott Ingstad Director February 21, 2002
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D. Scott Ingstad
/s/ Victor G. McAvoy Director February 21, 2002
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Victor G. McAvoy
/s/ John "Jay" S. McKee Director February 21, 2002
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John "Jay" S. McKee
/s/ Beverly J. White Director February 21, 2002
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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.
(10c) Executive Deferred Compensation Agreement Incorporated by reference to Exhibit
(10c) to the registrant's
Annual Report on Form 10-K
for the fiscal year ended
December 31, 2000.
(10d) Director Deferred Fee Agreement Incorporated by reference to Exhibit
(10d) to the registrant's Annual
Report on Form 10-K for the
fiscal year ended December 31, 2000.
(13) Registrant's 2001 Annual Report to
Shareholders
(20) Registrant's Proxy Statement Dated
March 12, 2002
(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
(99) Audit Committee Charter