EXHIBIT 8
Tax Opinion and Consent of Foster, Swift, Collins & Smith, P.C.
Exhibit 8 - 1
[FORM OF OPINION AND CONSENT OF FSCS]
Board of Directors
IBT Bancorp, Inc.
200 East Broadway
Mt. Pleasant, Michigan 48858
Board of Directors
Greenville Community Financial Corporation
1405 West Washington Street
Greenville, Michigan 48838
Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax consequences of
the merger between IBT Bancorp, Inc., a Michigan corporation ("IBT") and
Greenville Community Financial Corporation, a Michigan corporation ("GCFC"), as
described herein.
We have acted as counsel to IBT in connection with the proposed merger of GCFC
with and into IBT (the "Merger") pursuant to the terms of the Agreement and Plan
of Merger dated as of August 21, 2007, and as amended September 24, 2007 (the
"Merger Agreement") by and between each of IBT and GCFC, each as described in
the Registration Statement on Form S-4 filed by IBT with the Securities and
Exchange Commission (the "Registration Statement"). Following the Merger, IBT
will cause the merger of Isabella Bank and Trust, a state-chartered commercial
bank and a wholly-owned subsidiary of IBT ("Isabella") and Greenville Community
Bank ("GCB") such that GCB will merge with and into Isabella with Isabella as
the surviving institution (the "Subsidiary Merger"). This opinion is being
rendered as required by Section 9.1(e) of the Merger Agreement. All capitalized
terms, unless otherwise specified, have the meaning assigned to them in the
Merger Agreement.
In connection with our opinion, we have examined originals or copies, certified
or otherwise and identified to our satisfaction of the Merger Agreement, the
Bank Merger Agreement, the Registration Statement and such other documents as we
have deemed necessary or appropriate to enable us to render the opinion below.
In our examination, we have assumed (i) the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such copies, (ii)
each document reviewed by us has been or will be fully executed and delivered in
substantially the same form, is or will be in full force and effect and has not
been and will not be amended or modified in any respect, (iii) all parties to
the documents at all times had and will have full cooperate power, authority and
capacity to enter into, execute and perform all obligations under those
documents and to observe and perform the terms and conditions thereof and (iv)
the factual matters, statements and recitations contained in the documents are
accurate, true and complete. In rendering our opinion, we have also relied upon
certain assumptions and written representations by each of IBT and GCFC.
In rendering our opinion, we have also considered the applicable provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
issued thereunder, pertinent judicial authorities, interpretive rulings of the
Internal Revenue Service and such other authorities as we have considered
relevant.
Exhibit 8 - 2
In reliance on the assumptions and the representations referenced above, and
subject to the limitations and qualifications stated herein, we are of the
opinion that the Merger will, under current law, constitute a tax-free
reorganization under Section 368(a)(1)(A) of the Code and will have the
following federal income tax consequences to each of IBT, GCFC and the GCFC
shareholders.
1. No gain or loss will be recognized by IBT or GCFC as a result of the
Merger.
2. No gain or loss will be recognized by Isabella or GCB as a result of the
Subsidiary Merger.
3. GCFC shareholders who exchange their GCFC common stock for a combination
of IBT common stock and cash will (if the receipt of cash is not treated
as essentially equivalent to a dividend) recognize gain, but not loss, in
an amount equal to the lesser of (1) the amount of cash received in the
Merger, or (2) the amount of gain realized in the Merger (i.e., the excess
of the sum of the amount of cash and the fair market value of the IBT
common stock received in the Merger over such shareholder's adjusted tax
basis in its shares of GCFC common stock surrendered in the Merger).
4. Gain recognized by GCFC shareholders who exchange their GCFC common stock
for a combination of IBT common stock and cash in the Merger will
generally be long-term capital gain if the holding period of the GCFC
common stock surrendered in the Merger is greater than one year at the
time of the Merger, unless, however, the cash received is treated as a
dividend, in which case the gain will be treated as ordinary dividend
income to the extent of the shareholder's ratable share of accumulated
earnings and profits as calculated for U.S. federal income tax purposes.
5. The aggregate tax basis of IBT common stock received by GCFC shareholders
who exchange their GCFC common stock for a combination of IBT common stock
and cash will be equal to the aggregate adjusted tax basis of the GCFC
common stock surrendered in the Merger, reduced by the amount of cash
received in the Merger and increased by the amount of gain, if any,
recognized by such shareholder in the Merger.
6. The holding period of the IBT common stock received in the Merger by GCFC
shareholders who exchange their GCFC common stock for a combination of IBT
common stock and cash will include the holding period of the GCFC common
stock surrendered in the Merger, provided the GCFC shareholders held the
GCFC common stock surrendered in the Merger as capital assets at the time
of the Merger.
Our opinion may not be applicable to all GCFC shareholders, including, without
limitation, (1) a GCFC shareholder whose GCFC shares are not held as a capital
asset; or (2) a GCFC shareholder who is subject to special treatment under the
Code, including without limitation, an insurance company, a dealer in
securities, a financial institution, a tax-exempt investor, or a non-United
States citizen.
No advance ruling has been obtained from the Internal Revenue Service regarding
the Merger described herein. An opinion of counsel represents counsel's best
legal judgment, but has no binding effect or official status of any kind.
Accordingly, there can be no assurance that the Internal Revenue Service or
courts will not take positions contrary to our opinion; however, we believe that
the positions stated in our opinion will be sustained.
Except as specifically set forth above, no other opinion is expressed as to the
tax consequences to any party to the Merger or any other transactions related to
or occurring in connection with the Merger or otherwise, including, without
limitation, the exchange of any GCFC shares in the Merger that were acquired by
the holder pursuant to an employee stock option or employee stock purchase plan
or otherwise as compensation. No other opinion is expressed
Exhibit 8 - 3
under federal, state, local or foreign law. The opinion expressed herein is
rendered as of the Effective Time of the Merger. We assume no obligation to
update or supplement our opinion to reflect any change or modification of the
facts or circumstances that may hereafter come to our attention or any change in
law that may hereafter become effective.
This opinion is being furnished only to IBT, GCFC and the GCFC shareholders in
connection with the Merger and solely for their benefit in connection therewith
and may not be used or relied upon for any other purpose and may not be
circulated, quoted or otherwise referenced for any other purpose whatsoever
without our express written consent.
We hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement filed by IBT and references to our opinion in the IBT
Registration Statement and Proxy Statement-Prospectus attached thereto. In
giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended.
Sincerely,
FOSTER, SWIFT, COLLINS & SMITH, P.C.
Exhibit 8 - 4