NEWS RELEASE                        F O R  I M M E D I A T E  R E L E A S E
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OCTOBER 18, 2006                    FROM:  SHELI L. FYOCK,
                                           ASSISTANT VICE-PRESIDENT/MARKETING
                                           %IRWIN BANK & TRUST CO.
                                           309 MAIN STREET
                                           IRWIN, PA 15642

               IBT BANCORP, INC. FOURTH QUARTER DIVIDEND DECLARED
                                OCTOBER 17, 2006

         IRWIN,  PENNSYLVANIA,  OCTOBER 18, 2006 - The Board of Directors of IBT
Bancorp, Inc. (AMEX: IRW) declared a regular quarterly cash dividend of $.50 per
share on October  17,  2006.  The  dividend  will be paid on November 8, 2006 to
stockholders of record on October 27, 2006. This dividend  represents a yield of
4.81%  annualized based upon a stock price of $41.60 at the close of business on
October 16, 2006.

         The Board also  declared a special  100% stock  dividend on October 17,
2006,  whereby  stockholders will receive one share of stock for each share held
as of the  record  date.  Cash will be paid in lieu of  fractional  shares.  The
dividend will be paid on November 16, 2006 to  stockholders of record on October
27, 2006. It should be noted that the cash  dividend  declared will be paid only
on pre-stock dividend shares.

         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  subsidiary,  Irwin Bank & Trust Company.  The
bank operates through its main office, six branch offices, two loan centers, and
a trust office,  as well as through three  supermarket  branches  under the name
"Irwin Bank Extra"  located in the  Pennsylvania  counties of  Westmoreland  and
Allegheny. The Bank's website is www.myirwinbank.com.

         The  Company's  common stock is traded on the American  Stock  Exchange
under the symbol "IRW."

         Statements  contained in this news  release,  which are not  historical
facts,  are  forward-looking  statements  as the term is defined in the  Private
Securities  Litigation Reform Act of 1995. Such  forward-looking  statements are
subject to risks and  uncertainties  which could cause actual  results to differ
materially  from those currently  anticipated due to a number of factors,  which
include,  but are not limited to,  factors  discussed in documents  filed by the
Company with the Securities and Exchange Commission from time to time.