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, 2000
[ ] TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to __________________
Commission File Number: 0-25903
IBT BANCORP, INC.
---------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1532164
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
309 Main Street, Irwin, Pennsylvania 15642
- --------------------------------------- ----------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (724) 863-3100
----------------------------
Securities registered pursuant to Section 12(b) of the Act: None
--------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.25 par value
-----------------------------
(Title of Class)
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.
YES X 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. [ ]
Based on the closing sales price of $21.44 per share of the
registrant's common stock on March 2, 2001, as reported on the OTC Bulletin
Board, the aggregate market value of voting and non-voting stock held by
non-affiliates of the registrant was approximately $56.7 million.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of 2000 Annual Report to Stockholders (Parts II and IV)
2. Portions of Proxy Statement for the 2001 Annual Meeting of Stockholders.
(Part III)
PART I
Forward-Looking Statements
IBT Bancorp, Inc. (the "Company" or "Registrant") may from time to time
make written or oral "forward-looking statements," including statements
contained in the Company's filings with the Securities and Exchange Commission
(including this Annual Report on Form 10-K and the exhibits thereto), in its
reports to stockholders and in other communications by the Company, which are
made in good faith by the Company pursuant to the "safe harbor" provisions of
the private securities litigation reform act of 1995.
These forward-looking statements involve risks and uncertainties, such
as statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economies in which the Company conducts
operations; the effects of, and changes in, trade, monetary and fiscal policies
and laws, including interest rate policies of the Board of Governors of the
Federal Reserve System, inflation, interest rate, market and monetary
fluctuations; the timely development of and acceptance of new products and
services of the Company and the perceived overall value of these products and
services by users, including the features, pricing and quality compared to
competitors' products and services; the willingness of users to substitute
competitors' products and services for the Company's products and services; the
success of the Company in gaining regulatory approval of its products and
services, when required; the impact of changes in financial services' laws and
regulations (including laws concerning taxes, banking, securities and
insurance); technological changes, acquisitions; changes in consumer spending
and saving habits; and the success of the Company at managing the risks involved
in the foregoing.
The Company cautions that the foregoing list of important factors is
not exclusive. The Company does not undertake to update any forward-looking
statement, whether written or oral, that may be made from time to time by or on
behalf of the Company.
Item 1. Business
- -----------------
General
IBT Bancorp, Inc. is a Pennsylvania corporation headquartered in Irwin,
Pennsylvania, which provides a full range of commercial and retail banking
services through its wholly owned banking subsidiary, Irwin Bank & Trust Co.
(collectively, the "Company").
Irwin Bank & Trust Co. (the "Bank") was incorporated in 1922 under the
laws of Pennsylvania as a commercial bank under the name "Irwin Savings and
Trust Company." The Bank engages in a full service mortgage, commercial and
consumer banking business, as well as trust and a variety of deposit services
provided to its customers. At December 31, 2000 the Bank operated through its
main office, five branch offices, a loan center, and a trust office as well as
through five supermarket branches under the name "Irwin Bank Extra." The Bank's
main office, full service branch offices, loan center, trust office and
supermarket branches are located in the Pennsylvania counties of Westmoreland
and Allegheny. The Bank's web site is "www.irwinbank.com."
References to the Company or Registrant used throughout this document
generally refers to the consolidated entity which includes the main operating
company, the Bank, unless the context indicates otherwise.
Competition
The Registrant's primary market area consists of Westmoreland and
Allegheny counties, Pennsylvania, and is one of many financial institutions
serving this market area. The competition for deposit products comes from other
insured financial institutions such as commercial banks, thrift institutions and
credit unions in the Registrant's market area. Deposit competition also includes
a number of insurance products sold by local agents and investment products such
as mutual funds and other securities sold by local and regional brokers. Loan
competition comes from other insured financial institutions such as commercial
banks, thrift institutions and credit unions.
2
Lending Activities
Analysis of Loan Portfolio
The following table sets forth the composition of the Registrant's loan
portfolio in dollar amounts and in percentages of the respective
portfolios at the dates indicated.
At December 31,
----------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------- -------------------- ----------------- ------------------- ------------------
$ % $ % $ % $ % $ %
--------- ------ -------- ------- -------- ------- -------- -------- -------- -------
(Dollars in Thousands)
Type of Loans:
- -------------
Mortgage.................... $152,753 51.95 $130,348 49.56 $123,494 51.31 $107,240 48.97 $ 99,118 50.28
Installment ................ 65,327 22.22 61,983 23.57 52,418 21.78 45,321 20.69 38,595 19.58
Commercial ................. 52,676 17.92 47,294 17.98 45,232 18.79 42,003 19.18 38,517 19.54
Home equity lines of credit. 10,067 3.42 8,886 3.38 8,588 3.57 8,860 4.05 8,723 4.42
PHEAA (1) .................. 6,632 2.26 6,166 2.34 5,043 2.10 4,604 2.10 4,632 2.35
Municipal .................. 5,945 2.02 6,347 2.41 3,616 1.50 7,870 3.59 4,733 2.40
Credit cards ............... -- -- 1,780 .68 1,808 .75 2,022 .93 2,228 1.13
Other ...................... 611 0.21 210 .08 477 .20 1,081 .49 585 .30
------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Total loans .................. 294,011 100.00% 263,014 100.00% 240,676 100.00% 219,001 100.00% 197,131 100.00%
====== ====== ====== ====== ======
Less:
Unearned discount........... -- -- -- -- 1
Deferred loan origination
fees and costs............ 178 146 144 174 213
Allowance for loan losses... 1,919 2,366 2,228 2,340 2,240
------- ------- ------- ------- -------
Total loans, net.............. $291,914 $260,502 $238,304 $216,487 $194,677
======== ======== ======== ======== ========
- --------------------
(1) Pennsylvania Higher Education Assistance Authority.
3
Loan Maturity Table. The following table sets forth maturities and
interest rate sensitivity for all categories of loans as of December 31, 2000.
Scheduled repayments are reported in the maturity category in which payment is
due.
Home
equity
lines of PHEAA
Mortgage credit(2) Installment Commercial (1) Municipal Other Total
--------- --------- ----------- ---------- ------- --------- ----- --------
(In Thousands)
1 year or less................ $ 6,732 $10,067 $10,866 $10,061 $ -- $5,945 $611 $ 44,282
After 1 year:
1 to 5 years................ 32,926 -- 30,599 12,662 6,632 -- -- 82,819
After 5 years............... 113,095 -- 23,862 29,953 -- -- -- 166,910
-------- ------- ------- ------- ------ ------ ---- --------
Total due after one year...... 146,021 -- 54,461 42,615 6,632 -- -- 249,729
-------- ------- ------- ------- ------ ------ ---- --------
Total amount due.............. $152,753 $10,067 $65,327 $52,676 $6,632 $5,945 $611 $294,011
======== ======= ======= ======= ====== ====== ==== ========
- ----------------------
(1) PHEAA loans are sold when repayment begins; assumption is that all PHEAA
loans will mature in 1 to 5 years.
(2) Home equity credit lines have no stated maturities; therefor they are
classified as due in one year or less.
The following table sets forth, as of December 31, 2000, the dollar
amount of all loans due after December 31, 2001, based upon fixed rates of
interest or floating or adjustable interest rates.
Floating or
Fixed Rates Adjustable Rates Total
----------- ---------------- -----
(In Thousands)
Mortgage(1) ....... $129,767 $16,254 $146,021
Installment......... 53,290 1,171 54,461
Commercial.......... 34,696 7,919 42,615
PHEAA............... -- 6,632 6,632
-------- ------- --------
Total.......... $217,753 $31,976 $249,729
======== ======= ========
- --------------------------
(1) Included in the mortgage loans portfolio are commercial real estate
loans. Commercial real estate loans are fixed rate loans that are
primarily callable loans, which reprice every three, five or ten years,
based upon the interest rate on similar loans at the time of repricing.
See "Mortgage Loans."
Mortgage Loans. The Registrant's primary lending activity consists of
the origination of residential and commercial mortgage loans secured by property
in its primary market area. The mortgage loan portfolio consists of one-to four-
family residential mortgage loans, commercial real estate loans, and
construction loans.
The Registrant had approximately $76.1 million of one- to four-family
residential mortgage loans in its mortgage loan portfolio at December 31, 2000.
The Registrant generally originates one- to four-family residential mortgage
loans in amounts of up to 80% of the appraised value of the mortgaged property
without requiring mortgage insurance. The Registrant will originate residential
mortgage loans in an amount up to 95% of the appraised value of a mortgaged
property, however, mortgage insurance for the borrower is required. The
Registrant offers residential fixed rate loans and adjustable rate loans with a
30 year
4
amortization period. Interest rates for adjustable rate loans for residences
adjust every 12 months based upon the weekly average yield on the one year U.S.
Treasury securities, plus a margin of 2.75 percentage points. These adjustable
rate loans have an interest rate cap of 2% per year and 6% over the life of the
loan, and are originated for retention in the portfolio.
Fixed rate loans are underwritten in accordance with Federal National
Mortgage Association ("FNMA") guidelines. Currently, loans underwritten in
accordance with FNMA guidelines are generally sold in the secondary market.
However, the number of saleable loans could vary materially as a result of
market conditions. The Registrant generally charges a higher interest rate if
loans are not saleable under FNMA guidelines. At December 31, 2000, $98.2
million of the Registrant's mortgage portfolio consisted of long- term fixed
rate mortgage loans of which $334,000 were classified as held for sale. The
Registrant does not service any loans that are sold and the Registrant is
generally not liable for these loans (i.e., "nonrecourse loans").
Substantially all of the Registrant's one- to four-family mortgages
include "due on sale" clauses, which are provisions giving the Registrant the
right to declare a loan immediately payable if the borrower sells or otherwise
transfers an interest in the property to a third party.
Property appraisals on real estate securing the Registrant's one- to
four-family residential loans over $250,000 are made by appraisers approved by
the Board of Directors. Appraisals are performed in accordance with applicable
regulations and policies. The Registrant obtains title insurance policies on all
purchase money first mortgage real estate loans originated.
The Registrant's commercial real estate mortgage loans are long-term
loans secured primarily by multi-family dwelling units. Essentially all
originated commercial real estate loans are within the its market area.
Commercial real estate loans are originated at both fixed rate and adjustable
rates of interest. Fixed rate loans are primarily callable loans having terms of
up to 15 years, with principal and interest payments calculated using up to a 20
year amortization period. Callable loans reprice every three, five or ten years
based upon the interest rate on similar loans at the time of repricing. At these
specific time periods, the Registrant has the right but not the obligation to
either accelerate the loan balance or adjust the interest rate of these loans.
Adjustable rate commercial mortgage loans have interest rates set at
the six month U.S. treasury bill rate, plus an upward adjustment of up to 3.75%.
Adjustable rate commercial mortgage loans have terms of up to 20 years and
generally have no maximum interest rate.
As of December 31, 2000, the Registrant's commercial real estate loans
totaled $61.0 million of the mortgage portfolio. Typically, commercial real
estate loans are originated in amounts up to 75% of the appraised value of the
mortgaged property.
The Registrant also originates loans to finance the construction of
one-to four-family dwellings. Generally, the Registrant only makes interim
construction loans to individuals if it also makes the long-term one-to
four-family residential mortgage loan on the property. Interim construction
loans generally have terms of up to nine months with fixed rates of interest. At
December 31, 2000, such loans totaled $12.4 million of the Registrant's total
mortgage loan portfolio.
Construction financing is generally considered to involve a higher
degree of risk of loss than long- term financing on improved, occupied real
estate. Risk of loss on a construction loan is dependent largely upon the
accuracy of the initial estimate of the property's value at completion of
construction and
5
development and the estimated cost (including interest) of construction. During
the construction phase, a number of factors could result in delays and cost
overruns. If the estimate of construction costs proves to be inaccurate, the
Registrant may be required to advance funds beyond the amount originally
committed to permit completion of the development. If the estimate of value
proves to be inaccurate, the Registrant may be confronted, at or prior to the
maturity of the loan, with a project having a value which is insufficient to
assure full repayment.
Installment Loans. Installment loans primarily consist of home equity
term loans and to a lesser extent automobile loans. Home equity loans are
secured primarily by one- to four-family residences. The Registrant originates
these loans with fixed rates with terms of up to 20 years. These loans are
subject to 80% combined loan-to-value limitation, including any outstanding
mortgages or liens, without requiring mortgage insurance. The Registrant will
originate home equity loans in an amount up 100% of the appraised value,
however, mortgage insurance for the borrower is required. The Registrant
originates automobile loans with fixed rates of interest and terms of up to five
years. At December 31, 2000, home equity term loans totaled $60.1 million.
Commercial Loans. Commercial business loans consist of equipment,
accounts receivables, inventory, and other business purpose loans. Such loans
are secured by either the underlying collateral and/or by the personal
guarantees of the borrower.
Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to make repayment from his or her employment and
other income and which are secured by real property whose value tends to be more
easily ascertainable, commercial business loans typically are made on the basis
of the borrower's ability to make repayment from the cash flow of the borrower's
business. As a result, the availability of funds for the repayment of commercial
business loans may be substantially dependent on the success of the business
itself and the general economic environment.
Home Equity Lines of Credit. Revolving home equity lines of credit are
secured primarily by one- to four-family residences. The lines of credit are
subject to an 80% combined loan to value limitation, including all outstanding
mortgages and liens.
Loan Approval Authority and Underwriting. The Registrant establishes
various lending limits for its officers and maintains an officer review
committee. Certain officers generally have authority to approve loans up to
$100,000. Loans between $100,000 and $500,000 are approved by an officers review
committee ("ORC"). The ORC consists of the President and at least four other
officers appointed by the President. All loans over $500,000 are approved by a
majority of the Board of Directors.
Upon receipt of a completed loan application from a prospective
borrower, a credit report is ordered. Income and certain other information is
verified. If necessary, additional financial information may be requested. An
appraisal or other estimate of value of the real estate intended to be used as
security for the proposed loan is obtained. Appraisals are performed by
independent appraisers.
Title insurance is generally required on all purchase money real estate
mortgage loans. Borrowers also must obtain fire and casualty insurance. Flood
insurance is also required on loans secured by property that is located in a
flood zone.
Loan Commitments. Written commitments are given to prospective
borrowers on all approved mortgage loans. Generally, the commitment requires
acceptance within 30 days of the date of issuance. At December 31, 2000,
commitments to cover originations of mortgage loans totaled $13.6 million.
6
Loans to One Borrower. Federal regulations limit loans to one borrower
in an amount equal to 15% of unimpaired capital and unimpaired surplus. If the
loan is secured by readily marketable collateral, the limit is 25% of unimpaired
capital and unimpaired surplus. At December 31, 2000, the Registrant's loan to
one borrower limit was approximately $6.8 million.
Classified Assets. Federal regulations provide for a classification
system for problem assets of insured institutions, including assets previously
treated as "scheduled items." Under this classification system, problem assets
of insured institutions are classified as "substandard," "doubtful" or "loss."
An asset is considered "substandard" if it is inadequately protected by the
current net worth and paying capacity of the obligor or of the collateral
pledged, if any. "Substandard" assets include those characterized by the
"distinct possibility" that the insured institution will sustain "some loss" if
the deficiencies are not corrected. Assets classified as "doubtful" have all the
weaknesses inherent in those classified "substandard," with the added
characteristic that the weaknesses present make "collection of principal in
full," on the basis of currently existing facts, conditions and values, "highly
questionable and improbable." Assets classified as "loss" are those considered
"uncollectible" and of such little value that their continuance as assets
without the establishment of a specific loss reserve is not warranted. Assets
that do not expose the Registrant to risk sufficient to warrant classification
in one of the above categories, but which possess some weakness, are required to
be designated "special mention" by management.
When an insured institution classifies problem assets as either
"substandard" or "doubtful," it may establish allowances for loan losses in an
amount deemed prudent by management. When an insured institution classifies
problem assets as "loss," it is required either to establish an allowance for
losses equal to 100% of that portion of the assets so classified or to charge
off such amount. An institution's determination as to the classification of its
assets and the amount of its allowances is subject to review by the Federal
Deposit Insurance Corporation ("FDIC") which may order the establishment of
additional loss allowances.
The following table sets forth the Registrant's classified assets in
accordance with its classification system.
At December 31, 2000
--------------------
(In Thousands)
Special Mention...................... $6,605
Substandard.......................... 1,908
Doubtful............................. --
Loss................................. --
------
Total........................... $8,513
======
Other Real Estate Owned. Real estate acquired by the Registrant as a
result of foreclosure or by deed in lieu of foreclosure is classified as other
real estate owned until such time as it is sold. When other real estate owned is
acquired, it is recorded at the lower of the unpaid balance of the related loan
or its fair value less disposal costs. Any write-down of other real estate owned
is charged to operations.
7
Allowance for Losses on Loans. It is the policy of management to
provide for losses on unidentified loans in its portfolio in addition to
classified loans. A provision for loan losses is charged to operations based on
management's evaluation of the potential losses that may be incurred in the
Registrant's loan portfolio. Management also periodically performs valuations of
other real estate owned and establishes allowances to reduce book values of the
properties to their net realizable values when necessary.
Management will continue to review the entire loan portfolio to
determine the extent, if any, to which further additional loan loss provisions
may be deemed necessary. There can be no assurance that the allowance for loan
losses will be adequate to cover losses which may be realized in the future. In
addition, there can be no assurance that additional provisions for losses on
loans will not be required.
Analysis of the Allowance for Loan Losses. The following table sets
forth information with respect to the Registrant's allowance for loan losses at
the dates indicated:
December 31,
--------------------------------------------------------------
2000 1999 1998 1997 1996
-------- --------- -------- -------- --------
(Dollars in Thousands)
Total loans outstanding........................... $293,833 $ 262,868 $240,532 $218,827 $196,917
======== ========= ======== ======== ========
Average loans outstanding......................... $279,400 $ 251,574 $226,984 $205,399 $186,845
======== ========= ======== ======== ========
Allowance balances (at beginning of period)...... $2,366 $ 2,228 $ 2,340 $ 2,240 $ 1,969
Provision (credit):
Mortgage....................................... 30 30 30 30 41
Installment.................................... 30 30 30 30 41
Commercial..................................... 240 225 225 225 308
Home equity lines of credit.................... -- -- -- -- --
PHEAA.......................................... -- -- -- -- --
Municipal...................................... -- -- -- -- --
Credit cards................................... -- 15 15 15 20
Other.......................................... -- -- -- -- --
Net (charge-offs) recoveries: -- -- --
Mortgage........................................ (34) (21) (19) (10) --
Installment..................................... (72) (24) (28) (27) (56)
Commercial...................................... (616) (102) (324) (104) (59)
Home equity lines of credit..................... -- -- -- (11) --
PHEAA........................................... -- -- -- -- --
Municipal....................................... -- -- -- -- --
Credit cards.................................... (25) (15) (41) (48) (24)
Other........................................... -- -- -- -- --
-------- --------- -------- -------- --------
Allowance balance (at end of period).............. $ 1,919 $ 2,366 $ 2,228 $ 2,340 $ 2,240
======== ========= ======== ======== ========
Allowance for loan losses as a percent
of total loans outstanding...................... 0.65% 0.90% 0.93% 1.07% 1.14%
======== ========= ======== ======== ========
Net loans charged off as a percent of
average loans outstanding....................... (0.27)% (0.06)% (0.18)% (0.10)% (0.07)%
======== ========= ======== ======== ========
8
Allocation of the Allowance For Loan Losses. The following table sets
forth the allocation of the Registrant's allowance for loan losses by loan
category and the percent of loans in each category to total loans at the date
indicated.
At December 31,
----------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
---------------- ----------------- --------------- ----------------- -------------------
% of % of % of % of % of
Loans Loans Loans Loans Loans
to Total to Total to Total to Total to Total
Amount Loans Amount Loans Amount Loans Amount Loans Amount Loans
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
(Dollars in Thousands)
At end of period allocated to:
Mortgage....................... $ 651 51.95% $ 603 49.56% $ 604 51.31% $ 565 48.97% $ 588 50.28%
Installment.................... 414 22.22 345 23.57 380 21.78 324 20.69 294 19.58
Commercial..................... 786 17.92 1,293 17.98 1,100 18.79 1,301 19.18 1,224 19.54
Home equity lines of credit.... 51 3.42 54 3.38 44 3.57 45 4.05 43 4.42
PHEAA.......................... 10 2.26 9 2.34 8 2.10 7 2.10 7 2.35
Municipal...................... 1 2.02 10 2.41 5 1.50 12 3.59 6 2.40
Credit cards................... -- -- 45 .68 80 .75 71 .93 74 1.13
Other.......................... 6 .21 7 .08 7 .20 15 .49 4 .30
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total allowance.................. $1,919 100.00% $2,366 100.00% $2,228 100.00% $2,340 100.00% $2,240 100.00%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
9
Nonperforming and Problem Assets
Loan Delinquencies. When a loan becomes 16 days past due, a notice of
nonpayment is sent to the borrower. Telephone collection calls, letters and/or
visits to the borrower are initiated within 16 days of the due date missed in an
effort to resolve the delinquency. Generally, if the loan continues in a
delinquent status for 90 days past due and no repayment plan has been reached,
foreclosure, liquidation or other legal proceedings may be initiated.
Loans are reviewed on a monthly basis and are placed on a non-accrual
status when the loan becomes more than 90 days delinquent and when, in our
opinion, the collection of additional interest is doubtful. Interest accrued and
unpaid at the time a loan is placed on nonaccrual status is charged against
interest income. Subsequent interest payments, if any, are either applied to the
outstanding principal balance or recorded as interest income, depending on the
assessment of the ultimate collectibility of the loan.
Nonperforming Assets. The following table sets forth information
regarding nonaccrual loans and real estate owned, as of the dates indicated. No
loans were categorized as troubled debt restructurings within the meaning of
SFAS 15 and there were no impaired loans within the meaning of SFAS 114, as
amended by SFAS 118.
10
At December 31,
---------------------------------------------------------------
2000 1999 1998 1997 1996
------ ------ ------ -------- -------
(Dollars In Thousands)
Loans accounted for on a non-accrual basis:
Mortgage....................................... $ -- $ -- $ -- $ 29 $ --
Home equity lines of credit.................... -- 60 -- -- --
Installment.................................... -- -- -- -- 5
Commercial..................................... -- 91 12 205 114
PHEAA.......................................... -- -- -- -- --
Municipal...................................... -- -- -- -- --
Credit cards................................... -- -- -- -- --
Other.......................................... -- -- -- -- --
------ ------ ------ ------ ----
Total............................................ $ -- 151 12 234 119
------ ------ ------ ------ ----
Accruing loans which are contractually past
due 90 days or more:
Mortgage....................................... 1,067 998 788 362 493
Installment.................................... 10 21 3 21 7
Commercial..................................... 157 568 629 631 250
Home equity lines of credit.................... -- -- -- -- --
PHEAA.......................................... -- -- -- -- --
Municipal...................................... -- -- -- -- --
Credit cards................................... -- 3 8 9 11
Other.......................................... -- -- -- -- --
------ ------ ------ ------ ----
Total............................................ 1,234 1,590 1,428 1023 761
------ ------ ------ ------ ----
Total non-accrual and accrual loans.............. 1,234 1,741 1,440 1257 880
------ ------ ------ ------ ----
Other real estate owned.......................... 132 141 128 37 53
------ ------ ------ ------ ----
Other non-performing assets...................... -- -- -- -- --
------ ------ ------ ------ ----
Total non-performing assets...................... $1,366 $1,882 $1,568 $1,294 $933
====== ====== ====== ====== ====
Total non-accrual and accrual loans
to net loans................................... .42% .67% .60% .58% .45%
====== ====== ====== ====== ====
Total non-accrual and accrual loans to
total assets................................... .25% .39% .35% .34% .27%
====== ====== ====== ====== ====
Total non-performing assets to total assets...... .28% .42% .38% .35% .28%
====== ====== ====== ====== ====
11
Investment Activities
The Registrant maintains a level of liquid assets, including short-term
securities and certain other investments, which varies depending upon several
factors, including: (i) the yields on investment alternatives, (ii) management's
judgment as to the attractiveness of the yields then available in relation to
other opportunities, (iii) expectation of future yield levels, and (iv)
management's projections as to the short-term demand for funds to be used in
loan origination and other activities. Investment securities, including
mortgage-backed securities, are classified at the time of purchase, based upon
management's intentions and abilities, as securities held to maturity or
securities available for sale. Debt securities acquired with the intent and
ability to hold to maturity are classified as held to maturity and are stated at
cost and adjusted for amortization of premium and accretion of discount, which
are computed using the level yield method and recognized as adjustments of
interest income. All other debt securities are classified as available for sale
to serve principally as a source of liquidity.
Current regulatory and accounting guidelines regarding investment
securities (including mortgage backed securities) require the Registrant to
categorize securities as "held to maturity," "available for sale" or "trading."
As of December 31, 2000, the Registrant had securities classified as "available
for sale" in the amount of $167.9 million and had no securities classified as
"held to maturity" or "trading." Securities classified as "available for sale"
are reported for financial reporting purposes at the fair market value with net
changes in the market value from period to period included as a separate
component of stockholders' equity, net of income taxes. At December 31, 2000,
the Registrant's securities available for sale had an amortized cost of $167.6
million and market value of $167.9 million (unrealized gain of $287,000).
Changes in the market value of securities available for sale do not affect the
Company's income. In addition, changes in the market value of securities
available for sale do not affect the Bank's regulatory capital requirements or
its loan-to-one borrower limit.
At December 31, 2000, the Registrant's investment portfolio policy
allowed investments in instruments such as: (i) U.S. Treasury obligations, (ii)
U.S. federal agency or federally sponsored agency obligations, (iii)
mortgage-backed securities, (iv) banker's acceptances, (v) certificates of
deposit, and (vi) investment grade corporate bonds, and commercial paper. The
board of directors may authorize additional investments.
As a source of liquidity and to supplement the Registrant's lending
activities, the Registrant has invested in residential mortgage-backed
securities. Mortgage-backed securities can serve as collateral for borrowings
and, through repayments, as a source of liquidity. Mortgage-backed securities
represent a participation interest in a pool of single-family or other type of
mortgages. Principal and interest payments are passed from the mortgage
originators, through intermediaries (generally quasi-governmental agencies) that
pool and repackage the participation interests in the form of securities. The
quasi-governmental agencies guarantee the payment of principal and interest to
investors and include the Federal Home Loan Mortgage Corporation ("FHLMC"),
Government National Mortgage Association ("GNMA"), and Federal National Mortgage
Association ("FNMA").
Mortgage-backed securities typically are issued with stated principal
amounts. The securities are backed by pools of mortgages that have loans with
interest rates that are within a set range and have varying maturities. The
underlying pool of mortgages can be composed of either fixed rate or adjustable
rate mortgage loans. Mortgage-backed securities are generally referred to as
mortgage participation certificates or pass-through certificates. The interest
rate risk characteristics of the underlying pool of mortgages (i.e.,
12
fixed rate or adjustable rate) and the prepayment risk, are passed on to the
certificate holder. The life of a mortgage-backed pass-through security is equal
to the life of the underlying mortgages. Expected maturities will differ from
contractual maturities due to scheduled repayments and because borrowers may
have the right to call or prepay obligations with or without prepayment
penalties. Mortgage-backed securities issued by FHLMC, GNMA, and FNMA make up a
majority of the pass-through certificates market.
Investment Portfolio. The following table sets forth the carrying value of the
Registrant's investment securities portfolio at the dates indicated:
At December 31
------------------------------
2000 1999 1998
-------- -------- --------
(In Thousands)
Securities available for sale:
U.S. treasury securities ......................... $ -- $ -- $ 5,616
Obligations of U.S. government agencies .......... 97,812 90,744 69,540
Mortgage-backed securities ....................... 44,132 47,005 33,227
Obligations of state and political subdivisions... 18,910 10,536 8,200
Federal home loan bank stock ..................... 1,964 1,964 1,308
Equity securities ................................ 4,236 230 249
Other securities ................................. 820 584 638
-------- -------- --------
Total securities available for sale ........... 167,874 151,063 118,778
-------- -------- --------
Securities held to maturity:
U.S. government agencies ......................... -- -- 2,500
Mortgage-backed securities ....................... -- -- 69
-------- -------- --------
Total securities held to maturity ............. -- -- 2,569
-------- -------- --------
Total investment and mortgage-backed
securities .................................. $167,874 $151,063 $121,347
======== ======== ========
13
Investment Portfolio Maturities. The following table sets forth certain
information regarding carrying values, weighted average yields, and maturities
of the Registrant's investment securities portfolio as of December 31, 2000.
Actual maturities may differ from contractual maturities as certain instruments
have call features which allow prepayment of obligations.
As of December 31, 2000
--------------------------------------------------------------------------------------------------------
After Five More than
One Year or Less One to Five Years to Ten Years Ten Years Total Investment Securities
---------------- ----------------- ------------------ ------------------ ---------------------------
Carrying Average Carrying Average Carrying Average Carrying Average Carrying Average Market
Value Yield Value Yield Value Yield Value Yield Value Yield Value
------- ------- ------- ------- ------- ------- ------- ------- -------- ------- ------
(Dollars in Thousands)
Obligations
of U.S.
government
agencies............. $6,986 5.81% $42,875 6.42% $34,046 6.91% $13,905 7.32% $ 97,812 6.67% $ 97,812
Mortgage-backed
securities........... 9 9.03 -- -- 1,343 7.74 42,780 6.41 44,132 6.45 44,132
Obligations of
state and
political
subdivisions (1)..... 821 5.39 120 5.48 4,596 5.34 13,373 5.18 18,910 5.23 18,910
Federal home loan
bank stock........... -- -- -- -- -- -- 1,964 6.00 1,964 6.00 1,964
Equity securities...... -- -- -- -- -- -- 4,236 6.12 4,236 6.12 4,236
Other securities ..... -- -- 498 7.19 30 7.75 292 6.40 820 6.93 820
------ ------- ------- ------- -------- --------
Total............. $7,816 5.77% $43,493 6.43% $40,015 6.76% $76,550 5.84% $167,874 6.21% $167,874
====== ==== ======= ==== ======= ==== ======= ==== ======== ==== ========
- --------------------
(1) Average yields have not been computed on a tax-equivalent basis.
14
Sources of Funds
General. Deposits are the major source of the Registrant's funds for
lending and other investment purposes. In addition to deposits, the Registrant
derives funds from the amortization, prepayment or sale of loans, maturities of
investment securities and operations. Scheduled loan principal repayments are a
relatively stable source of funds, while deposit inflows and outflows and loan
prepayments are significantly influenced by general interest rates and market
conditions. The Registrant can also borrow from the Federal Home Loan Bank
("FHLB") of Pittsburgh.
Deposits. Consumer and commercial deposits are attracted principally
from within the Registrant's primary market area through the offering of a broad
selection of deposit instruments including checking, regular savings, money
market deposits, term certificate accounts and individual retirement accounts.
Deposit account terms vary according to the minimum balance required, the time
periods the funds must remain on deposit and the interest rate, among other
factors. The Registrant regularly evaluates the internal cost of funds, surveys
rates offered by competing institutions, reviews the Registrant's cash flow
requirements for lending and liquidity and executes rate changes when deemed
appropriate. The Registrant does not obtain funds through brokers, nor does it
solicit funds outside the Commonwealth of Pennsylvania.
The following table indicates the amount of certificates of deposit of
$100,000 or more by time remaining at December 31, 2000 (in thousands).
Maturity Periods Certificates of
---------------- Deposit
---------------
Three months or less $18,598
Over three through six months 6,150
Over six through twelve months 12,583
Over twelve months 9,612
------
$46,943
=======
Borrowings. Deposits are the primary source of funds for the
Registrant's lending and investment activities as well as for general business
purposes. Should the need arise, the Registrant has a maximum borrowing capacity
with the FHLB of $216.7 million. At December 31, 2000 there were outstanding
$28.0 million of long term FHLB borrowings.
Personnel
As of December 31, 2000, the Registrant had 142 full-time and 66
part-time employees. None of the Registrant's employees are represented by a
collective bargaining group.
Regulation
Set forth below is a brief description of certain laws which relate to
the regulation of the Registrant and the Bank. The description does not purport
to be complete and is qualified in its entirety by reference to applicable laws
and regulations.
Regulation of the Company
General. The Company, as a bank holding company under the Bank Holding
Company Act of 1956, as amended ("BHCA"), is subject to regulation and
supervision by the Board of Governors of the Federal
15
Reserve System ("Federal Reserve") and by the Pennsylvania Department of Banking
(the "Department"). The Company is required to file annually a report of its
operations with, and is subject to examination by, the Federal Reserve and the
Department. This regulation and oversight is generally intended to ensure that
the Company limits its activities to those allowed by law and that it operates
in a safe and sound manner without endangering the financial health of its
subsidiary banks.
Under the BHCA, the Company must obtain the prior approval of the
Federal Reserve before it may acquire control of another bank or bank holding
company, merge or consolidate with another bank holding company, acquire all or
substantially all of the assets of another bank or bank holding company, or
acquire direct or indirect ownership or control of any voting shares of any bank
or bank holding company if, after such acquisition, the bank holding company
would directly or indirectly own or control more than 5% of such shares.
Federal statutes impose restrictions on the ability of a bank holding
company and its nonbank subsidiaries to obtain extensions of credit from its
subsidiary bank, on the subsidiary bank's investments in the stock or securities
of the holding company, and on the subsidiary bank's taking of the holding
company's stock or securities as collateral for loans to any borrower. A bank
holding company and its subsidiaries are also prevented from engaging in certain
tie-in arrangements in connection with any extension of credit, lease or sale of
property, or furnishing of services by the subsidiary bank.
A bank holding company is required to serve as a source of financial
and managerial strength to its subsidiary banks and may not conduct its
operations in an unsafe or unsound manner. In addition, it is the policy of the
Federal Reserve that a bank holding company should stand ready to use available
resources to provide adequate capital to its subsidiary banks during periods of
financial stress or adversity and should maintain the financial flexibility and
capital-raising capacity to obtain additional resources for assisting its
subsidiary banks. A bank holding company's failure to meet its obligations to
serve as a source of strength to its subsidiary banks will generally be
considered by the Federal Reserve to be an unsafe and unsound banking practice
or a violation of the Federal Reserve regulations, or both.
Non-Banking Activities. The business activities of the Company, as a
bank holding company, are restricted by the BHCA. Under the BHCA and the Federal
Reserve's bank holding company regulations, the Company may only engage in, or
acquire or control voting securities or assets of a company engaged in, (1)
banking or managing or controlling banks and other subsidiaries authorized under
the BHCA and (2) any BHCA activity the Federal Reserve has determined to be so
closely related to banking or managing or controlling banks to be a proper
incident thereto. These include any incidental activities necessary to carry on
those activities, as well as a lengthy list of activities that the Federal
Reserve has determined to be so closely related to the business of banking as to
be a proper incident thereto.
Financial Modernization. The Gramm-Leach-Bliley Act, which was enacted
in November 1999 and most provisions of which became effective in March 2000
(the "Act"), permits greater affiliation among banks, securities firms,
insurance companies, and other companies under a new type of financial services
company known as a "financial holding company." A financial holding company
essentially is a bank holding company with significantly expanded powers.
Financial holding companies are authorized by statute to engage in a number of
financial activities previously impermissible for bank holding companies,
including securities underwriting, dealing and market making; sponsoring mutual
funds and investment companies; insurance underwriting and agency; and merchant
banking activities. The Act also permits the Federal Reserve and the Treasury
Department to authorize additional activities for financial holding companies if
they are "financial in nature" or "incidental" to financial activities. A bank
holding company may become a financial holding company ("FHC") if each of its
subsidiary banks is well capitalized, well managed, and
16
has at least a "satisfactory" CRA rating. A financial holding company must
provide notice to the Federal Reserve within 30 days after commencing activities
previously determined by statute or by the Federal Reserve and Department of the
Treasury to be permissible. During fiscal 2000, the Company submitted notice to
the Federal Reserve of its intent to be deemed a financial holding company.
Regulation of the Bank
General. As a Pennsylvania chartered, Bank Insurance Fund ("BIF")
insured commercial bank, the Bank is subject to extensive regulation and
examination by the Department and by the FDIC, which insures its deposits to the
maximum extent permitted by law. The federal and state laws and regulations
applicable to banks regulate, among other things, the scope of their business,
their investments, the reserves required to be kept against deposits, the timing
of the availability of deposited funds and the nature and amount of and
collateral for certain loans. The laws and regulations governing the Bank
generally have been promulgated to protect depositors and not for the purpose of
protecting stockholders. This regulatory structure also gives the federal and
state banking agencies extensive discretion in connection with their supervisory
and enforcement activities and examination policies, including policies with
respect to the classification of assets and the establishment of adequate loan
loss reserves for regulatory purposes. Any change in such regulation, whether by
the Department, the FDIC or the United States Congress, could have a material
impact on the Company, the Bank and their operations.
Pennsylvania Savings Bank Law. The Pennsylvania Banking Code ("Banking
Code") contains detailed provisions governing the organization, location of
offices, rights and responsibilities of trustees, officers, and employees, as
well as corporate powers, savings and investment operations and other aspects of
the Bank and its affairs. The Banking Code delegates extensive rule-making power
and administrative discretion to the Department so that the supervision and
regulation of state chartered commercial banks may be flexible and readily
responsive to changes in economic conditions and in savings and lending
practices.
The Banking Code provides state chartered commercial banks with all of
the powers enjoyed by federal savings and loan associations, subject to
regulation by the Department. The Federal Deposit Insurance Corporation Act
("FDIA"), however, prohibits state chartered banks from making new investments,
loans, or becoming involved in activities as principal and equity investments
which are not permitted for national banks unless (1) the FDIC determines the
activity or investment does not pose a significant risk of loss to the BIF and
(2) the bank meets all applicable capital requirements. Accordingly, the
additional operating authority provided to the Bank by the Banking Code is
significantly restricted by the FDIA.
Federal Deposit Insurance. The FDIC is an independent federal agency
that insures the deposits, up to prescribed statutory limits, of federally
insured banks and savings institutions and safeguards the safety and soundness
of the banking and savings industries. The FDIC administers two separate
insurance funds, the BIF, which generally insures commercial bank and state
savings bank deposits, and the Savings Insurance Fund ("SAIF"), which generally
insures savings association deposits. The Bank is a member of the BIF and its
deposit accounts are insured by the FDIC, up to prescribed limits.
The FDIC is authorized to establish separate annual deposit insurance
assessment rates for members of the BIF and the SAIF, and to increase assessment
rates if it determines such increases are appropriate to maintain the reserves
of either insurance fund. In addition, the FDIC is authorized to levy emergency
special assessments on BIF and SAIF members. The FDIC has set the deposit
insurance assessment rates for BIF- member institutions for the first six months
of 2001 at 0% to .027% of insured deposits on an annualized basis, with the
assessment rate for most institutions set at 0%.
17
In addition, all insured institutions of the FDIC are required to pay
assessments at an annual rate of approximately .0202% of insured deposits to
fund interest payments on bonds issued by the Financing Corporation, an agency
of the Federal government established to recapitalize the predecessor to the
SAIF. These assessments will continue until the Financing Corporation bonds
mature in 2017.
Regulatory Capital Requirements. The FDIC has promulgated capital
adequacy requirements for state-chartered banks that, like the Bank, are not
members of the Federal Reserve System. At December 31, 2000, the Bank exceeded
all regulatory capital requirements and was classified as "well capitalized."
The FDIC's capital regulations establish a minimum 3% Tier I leverage
capital requirement for the most highly-rated state-chartered, non-member banks,
with an additional cushion of at least 100 to 200 basis points for all other
state-chartered, non-member banks, which effectively increases the minimum Tier
I leverage ratio for such other banks to 4% to 5%. Under the FDIC's regulation,
the highest-rated banks are those that the FDIC determines are not anticipating
or experiencing significant growth and have well diversified risk, including no
undue interest rate risk exposure, excellent asset quality, high liquidity, good
earnings and, in general, which are considered a strong banking organization,
rated composite 1 under the Uniform Financial Institutions Rating System. Tier I
or core capital is defined as the sum of common stockholders' equity (including
retained earnings), noncumulative perpetual preferred stock and related surplus,
and minority interests in consolidated subsidiaries, minus all intangible assets
other than certain purchased mortgage servicing rights and purchased credit and
relationships.
The FDIC's regulations also require that state-chartered, non-member
banks meet a risk-based capital standard. The risk-based capital standard
requires the maintenance of total capital (which is defined as Tier I capital
and supplementary (Tier 2) capital) to risk weighted assets of 8%. In
determining the amount of risk- weighted assets, all assets, plus certain off
balance sheet assets, are multiplied by a risk-weight of 0% to 100%, based on
the risks the FDIC believes are inherent in the type of asset or item. The
components of Tier I capital for the risk-based standards are the same as those
for the leverage capital requirement. The components of supplementary (Tier 2)
capital include cumulative perpetual preferred stock, mandatory subordinated
debt, perpetual subordinated debt, intermediate-term preferred stock, up to 45%
of unrealized gains on equity securities and a bank's allowance for loan and
lease losses. Allowance for loan and lease losses includable in supplementary
capital is limited to a maximum of 1.25% of risk-weighted assets. Overall, the
amount of supplementary capital that may be included in total capital is limited
to100% of Tier I capital.
A bank that has less than the minimum leverage capital requirement is
subject to various capital plan and activities restriction requirements. The
FDIC's regulations also provide that any insured depository institution with a
ratio of Tier I capital to total assets that is less than 2.0% is deemed to be
operating in an unsafe or unsound condition pursuant to Section 8(a) of the FDIA
and could be subject to potential termination of deposit insurance.
The Bank is also subject to minimum capital requirements imposed by the
Department on Pennsylvania-chartered depository institutions. Under the
Department's capital regulations, a Pennsylvania bank or savings bank must
maintain a minimum leverage ratio of Tier 1 capital (as defined under the FDIC's
capital regulations) to total assets of 4%. In addition, the Department has the
supervisory discretion to require a higher leverage ratio for any institutions
based on the institution's substandard performance in any of a number of areas.
The Bank was in compliance in both the FDIC and Pennsylvania capital
requirements as of December 31, 2000.
18
Affiliate Transaction Restrictions. Federal laws strictly limit the
ability of banks to engage in transactions with their affiliates, including
their bank holding companies. Such transactions between a subsidiary bank and
its parent company or the nonbank subsidiaries of the bank holding company are
limited to 10% of a bank subsidiary's capital and surplus and, with respect to
such parent company and all such nonbank subsidiaries, to an aggregate of 20% of
the bank subsidiary's capital and surplus. Further, loans and extensions of
credit generally are required to be secured by eligible collateral in specified
amounts. Federal law also requires that all transactions between a bank and its
affiliates be on terms as favorable to the bank as transactions with
non-affiliates.
Federal Home Loan Bank System. The Bank is a member of the FHLB of
Pittsburgh, which is one of 12 regional FHLBs. Each FHLB serves as a reserve or
central bank for its members within its assigned region. It is funded primarily
from funds deposited by member institutions and proceeds from the sale of
consolidated obligations of the FHLB System. It makes loans to members (i.e.,
advances) in accordance with policies and procedures established by the Board of
Trustees of the FHLB.
As a member, the Bank is required to purchase and maintain stock in the
FHLB of Pittsburgh in an amount equal to the greater of 1% of its aggregate
unpaid residential mortgage loans, home purchase contracts or similar
obligations at the beginning of each year or 5% of the Bank's outstanding
advances from the FHLB. At December 31, 2000, the Bank was in compliance with
this requirement.
Federal Reserve System. The Federal Reserve requires all depository
institutions to maintain non- interest bearing reserves at specified levels
against their transaction accounts (primarily checking and NOW accounts) and
non-personal time deposits. The balances maintained to meet the reserve
requirements imposed by the Federal Reserve may be used to satisfy the liquidity
requirements that are imposed by the Department. At December 31, 2000, the Bank
met its reserve requirements.
Restrictions on Dividends. The Pennsylvania Banking Code states, in
part, that dividends may be declared and paid only out of accumulated net
earnings and may not be declared or paid unless surplus (retained earnings) is
at least equal to contributed capital. The Bank has not declared or paid any
dividends which cause the Bank's retained earnings to be reduced below the
amount required. Finally, dividends may not be declared or paid if the Bank is
in default in payment of any assessment due the FDIC.
The Federal Reserve has issued a policy statement on the payment of
cash dividends by bank holding companies, which expresses the Federal Reserve's
view that a bank holding company should pay cash dividends only to the extent
that the holding company's net income for the past year is sufficient to cover
both the cash dividends and a rate of earnings retention that is consistent with
the holding company's capital needs, asset quality and overall financial
condition. The Federal Reserve also indicated that it would be inappropriate for
a company experiencing serious financial problems to borrow funds to pay
dividends. Furthermore, under the federal prompt corrective action regulations,
the Federal Reserve may prohibit a bank holding company from paying any
dividends if the holding company's bank subsidiary is classified as
"undercapitalized."
19
Item 2. Properties
- -------------------
At December 31, 2000, the Registrant operated from its main office,
five branch offices and five supermarket branch offices and a loan office and a
trust office, all located in southwestern Pennsylvania. The total net book value
of the Registrant's investment in premises and equipment at December 31, 2000,
was approximately $4.9 million. The main office of the Company and of the Bank
and two branch offices are owned by the Bank and the remaining three branch
offices and five supermarket branch offices are leased by the Bank. These leases
have initial terms of 1 to 20 years, and all leases contain renewal options for
additional years.
Item 3. Legal Proceedings
- --------------------------
The Registrant is periodically involved as a plaintiff or defendant in
various legal actions, such as actions to enforce liens, condemnation
proceedings on properties in which the Registrant holds mortgage interests,
matters involving the making and servicing of mortgage loans and other matters
incident to the Registrant's business. In the opinion of management, none of
these actions individually or in the aggregate is believed to be material to the
financial condition or results of operations of the Registrant.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended December 31, 2000.
Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
- --------------------------------------------------------------------------------
Matters
-------
The information contained under the section captioned "Stock Market
Information" in the 1999 Annual Report to Stockholders (the "Annual Report") is
incorporated herein by reference.
Item 6. Selected Financial Data
- --------------------------------
The information contained in the table captioned "Financial Highlights"
in the Annual Report is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
-------------
The information contained in the section captioned "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Annual Report is incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
- --------------------------------------------------------------------
The information contained in the section captioned "Market Risk" in the
Annual Report is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
The Registrant's financial statements listed in Item 14 herein are
incorporated herein by reference.
20
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 contained under the sections captioned "Section 16(a)
Beneficial Ownership Reporting Compliance" and "Proposal I-- Election of
Directors" and "-- Biographical Information" in the 2001 Proxy Statement are
incorporated herein by reference.
Item 11. Executive Compensation
- --------------------------------
The information contained under the section captioned "Director and
Executive Compensation" in the Proxy Statement is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners
Information required by this item is incorporated herein by
reference to the Section captioned "Voting Securities and
Principal Holders Thereof -- Security Ownership of Certain
Beneficial Owners" of the Proxy Statement.
(b) Security Ownership of Management
Information required by this item is incorporated herein by
reference to the sections captioned "Voting Securities and
Principal Holders Thereof -- Security Ownership of Certain
Beneficial Owners" and "Proposal I -- Election of Directors"
of the Proxy Statement.
(c) Management of the Company knows of no arrangements, including
any pledge by any person of securities of the Company, the
operation of which may at a subsequent date result in a change
in control of the registrant.
Item 13. Certain Relationships and Related Transactions
- --------------------------------------------------------
The information required by this item is incorporated herein by
reference to the section captioned "Proposal I -- Election of Directors" and
"Voting Securities and Principal Holders Thereof" of the Proxy Statement.
21
Part IV
Item 14. Exhibits, Financial Statements, and Reports on Form 8-K
- -----------------------------------------------------------------
(a) Listed below are all financial statements and exhibits filed as
part of this report, and are incorporated by reference.
1. The consolidated statements of financial conditions of IBT
Bancorp, Inc. and subsidiary as of December 31, 2000 and 1999,
and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in the
three year period ended December 31, 2000, together with the
related notes and the independent auditors' report of Edwards
Sauer & Owens, independent accountants.
2. Schedules omitted as they are not applicable.
3. Exhibits
3(i) Articles of Incorporation of IBT Bancorp, Inc.*
3(ii) Bylaws of IBT Bancorp, Inc.*
10 Change In Control Severance Agreement with Charles G. Urtin**
10.1 Deferred Compensation Plan For Bank Directors**
10.2 Retirement Agreement Between Irwin Bank & Trust Co. And
J. Curt Gardner**
10.3 Death Benefit Only Deferred Compensation Plan For Bank Directors
effective as of January 1, 1990**
10.4 Retirement and Death Benefit Deferred Compensation Plan For
Bank Directors effective as of January 1, 1990**
10.5 2000 Stock Option Plan***
13 Portions of the Annual Report to Shareholders
21 Subsidiaries of IBT Bancorp, Inc. (see "Item 1 - Business")
23 Consent of Edwards, Sauer & Owens
-------------------------
* Incorporated by reference to the identically
numbered exhibits of the Registrant's Form
10 (file no. 0-25903)
** Incorporated by reference to the identically
numbered exhibits of the Registrant's Form
10K for December 31, 1999.
*** Incorporated by reference to the definitive
proxy statement of the Registrant filed on
March 17, 2000.
(b) None
22
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 as of March 16, 2001.
IBT BANCORP, INC.
By: /s/Charles G. Urtin
-----------------------------------
Charles G. Urtin, President and
Chief Executive Officer
(Duly Authorized Representative)
Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been signed below on March 16, 2001 by the following persons on
behalf of the registrant and in the capacities indicated.
/s/Richard L. Ryan /s/J. Curt Gardner
- ------------------------------------------------ -------------------------------------------
Richard L. Ryan J. Curt Gardner
Chairman of the Board Director
/s/Charles G. Urtin
- ------------------------------------------------ -------------------------------------------
Charles G. Urtin, President, Chief Executive Thomas Beter
Officer, and Director Director
(Principal Executive, Financial, and Accounting
Officer)
- ------------------------------------------------ -------------------------------------------
William D. Fawcett Edwin A. Paulone
Director Director
/s/Grant J. Shevchik
- ------------------------------------------------ -------------------------------------------
Robert Rebich, Jr. Grant J. Shevchik
Director Director
/s/Robert C. Whisner /s/Robert Bowell
- ------------------------------------------------ -------------------------------------------
Robert C. Whisner Robert Bowell
Director Executive Vice President, Secretary and
Treasurer