-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T3GNmKmhbLPZTQnzsGQV8QEeemm3rDU1z8O0Ux4JoXRTKrFWwp4G4YAqYfRJNFSI VvF+he9qIW9ldW4t/SOlzA== 0000946275-00-000272.txt : 20000516 0000946275-00-000272.hdr.sgml : 20000516 ACCESSION NUMBER: 0000946275-00-000272 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IBT BANCORP INC CENTRAL INDEX KEY: 0000801122 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 251532164 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25903 FILM NUMBER: 631073 BUSINESS ADDRESS: STREET 1: 309 MAIN ST CITY: IRWIN STATE: PA ZIP: 15642 BUSINESS PHONE: 7248633100 MAIL ADDRESS: STREET 1: IBT BANCORP INC STREET 2: 309 MAIN ST CITY: IRWIN STATE: PA ZIP: 15642 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 -------------- 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 No. 0-25903 IBT Bancorp, Inc. - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Pennsylvania 25-1532164 - ---------------------------------------- ------------------------------------ (State of incorporation or organization) (I.R.S. employer identification no.) 309 Main Street, Irwin, Pennsylvania 15642 - -------------------------------------------- ------------------------------ (Address of principal executive offices) (zip code) (724) 863-3100 - -------------------------------------------------------------------------------- Issuer's telephone number, including area code Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ---------- ---------- Number of shares of Common Stock outstanding as of May 1, 2000: 3,001,923 ---------- IBT BANCORP, INC. Contents --------
Pages ----- PART I - FINANCIAL INFORMATION Item 1. Financial Statements........................................................................ Consolidated statements of financial condition at March 31, 2000 (unaudited) and December 31, 1999........................................................... 1 Consolidated statements of operations (unaudited) for the three months ended March 31, 2000 and 1999 ....................................................... 2 Consolidated statements of cash flows (unaudited) for the three months ended March 31, 2000 and 1999............................................................... 3 Notes to financial statements............................................................... 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................................. 6 Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................. 8 PART II - OTHER INFORMATION Item 1. Legal Proceedings........................................................................... 9 Item 2. Changes in Securities and Use of Records.................................................... 9 Item 3. Defaults upon Senior Securities............................................................. 9 Item 4. Submission of Matters to a Vote of Security-Holders......................................... 9 Item 5. Other Information........................................................................... 9 Item 6. Exhibits and Reports on Form 8-K............................................................ 9 Signatures.................................................................................................. 10
CONSOLIDATED BALANCE SHEETS IBT BANCORP, INC. AND SUBSIDIARY
March 31, 2000 December 31, ----------------- -------------- (unaudited) 1999 ----------------- -------------- ASSETS Cash and due from banks $ 12,772,020 $ 19,171,977 Interest-bearing deposits in banks 84,183 92,590 Federal funds sold 7,120,000 - Certificates of deposit - 3,000,000 Securities available for sale 152,017,924 149,098,906 Federal Home Loan Bank stock, at cost 1,964,300 1,964,300 Loans, net 265,423,539 260,502,270 Premises and equipment, net 4,641,663 4,728,702 Other assets 7,554,506 7,162,670 ------------- ------------- Total Assets $ 451,578,135 $ 445,721,415 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest bearing $ 63,251,109 $ 57,097,999 Interest-bearing 312,444,917 311,582,486 ------------- ------------- Total deposits 375,696,026 368,680,485 Repurchase agreements 6,810,695 6,456,597 Federal funds purchased - 7,000,000 Accrued interest and other liabilities 3,903,793 3,679,053 Long-term debt 27,000,000 22,000,000 ------------- ------------- Total liabilities 413,410,514 407,816,135 Stockholders' Equity Capital stock, par value $1.25, 50,000,000 shares authorized, 3,023,799 shares issued, 3,001,923 and 3,031,174 shares outstanding at March 31, 2000 and December 31, 1999, respectively 3,779,749 3,779,749 Surplus 2,073,102 2,073,102 Retained earnings 36,279,923 35,318,637 Accumulated other comprehensive income (3,275,677) (3,178,596) ------------- ------------- 38,857,097 37,992,892 Less: Treasury stock, at cost (689,476) (87,612) ------------- ------------- Total stockholders' equity 38,167,621 37,905,280 ------------- ------------- Total Liabilities and Stockholders' Equity $ 451,578,135 $ 445,721,415 ============= =============
1 CONSOLIDATED STATEMENTS OF INCOME IBT BANCORP, INC. AND SUBSIDIARY Three Months Ended March 31, ---------------------------- 2000 1999 --------- -------------- (unaudited) --------- -------------- Interest Income Loans $5,244,519 $4,773,554 Investment securities 2,540,463 2,115,162 Federal funds sold 13,138 131,523 ---------- ---------- Total interest income 7,798,120 7,020,239 Interest Expense Deposits 3,233,483 3,045,263 Long-term debt 333,405 183,356 Repurchase agreements 71,626 - ---------- ---------- Total interest expense 3,638,514 3,228,619 ---------- ---------- Net Interest Income 4,159,606 3,791,620 Provision for Loan Losses 75,000 45,000 ---------- ---------- Net Interest Income after Provision 4,084,606 3,746,620 for Loan Losses Other Income Service fees 485,905 372,022 Net investment security gains - 1,170 Other income 294,045 287,827 ---------- ---------- Total other income 779,950 661,019 Other Expenses Salaries 909,579 752,605 Pension and other employee benefits 291,617 241,965 Occupancy expense 258,687 247,007 Data processing expense 143,911 131,351 ATM expense 86,739 71,416 FDIC insurance 19,370 9,873 Other expenses 721,484 645,538 ---------- ---------- Total other expenses 2,431,387 2,099,755 ---------- ---------- Income Before Income Taxes 2,433,169 2,307,884 Provision for Income Taxes 781,192 741,114 ---------- ---------- Net income $1,651,977 $1,566,770 ========== ========== Net Income per Share of Capital Stock $ 0.55 $ 0.52 ========== ========== Dividends per Share of Capital Stock $ 0.23 $ 0.20 ========== ========== 2 CONSOLIDATED STATEMENTS OF CASH FLOWS IBT BANCORP, INC. AND SUBSIDIARY
Three Months ended March 31, ----------------------------- 2000 1999 --------------- ---------- (unaudited) ----------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,651,977 $ 1,566,770 Adjustments to reconcile net cash from operating activities: Depreciation 136,343 133,500 Net amortization/accretion of premiums and discounts 5,163 16,072 Net investment security gains - (1,170) Provision for loan losses 75,000 45,000 Increase (decrease) in cash due to changes in assets and liabilities: Other assets (341,825) (471,297) Accrued interest and other liabilities 224,740 194,259 ------------ ------------ Net Cash From Operating Activities 1,751,398 1,483,134 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from maturity of certificates of deposit 3,000,000 - Proceeds from maturities of securities held to maturity - 69,215 Proceeds from maturities of securities available for sale 2,972,717 10,830,075 Purchase of securities available for sale (6,043,990) (27,072,672) Net loans made to customers (4,996,269) (4,239,472) Purchases of premises and equipment (49,304) (152,348) Purchase of Federal Home Loan Bank stock - (4,400) ------------ ------------ Net Cash Used By Investing Activities (5,116,846) (20,569,602) CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in deposits 7,015,541 (6,043,399) Net increase in securities sold under repurchase agreements 354,098 - Dividends (690,691) (604,760) Federal funds purchased (7,000,000) - Proceeds from long-term debt 5,000,000 - Purchase of treasury stock (601,864) - ------------ ------------ Net Cash From (Used By) Financing Activities 4,077,084 (6,648,159) ------------ ------------ Net Change in Cash and Cash Equivalents 711,636 (25,734,627) Cash and Cash Equivalents at Beginning of Period 19,264,567 43,396,314 ------------ ------------ Cash and Cash Equivalents at End of Period $ 19,976,203 $ 17,661,687 ============ ============
3 IBT BANCORP, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ended December 31, 2000 or any future interim period. The interim financial statements should be read in conjunction with the financial statements and footnotes thereto included in IBT Bancorp, Inc. and subsidiary Annual Report on Form 10-K for the year ended December 31, 1999. NOTE B - EARNINGS PER SHARE Earnings per share are calculated on the basis of the weighted average number of shares outstanding. The weighted average shares outstanding was 3,007,597 and 3,023,799 for the three months ended March 31, 2000 and 1999, respectively. NOTE C - COMPREHENSIVE INCOME Total comprehensive income for the three months ended March 31, 2000 and 1999 was $1,554,896 and $757,488, respectively. 4 IBT BANCORP, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Cont. NOTE D - INVESTMENT SECURITIES Investment securities available for sale consist of the following:
March 31, 2000 ------------------------------------------------------------------------ Gross Gross Amortized Unrealized Unrealized Market Cost Gains Losses Value ------------------------------------------------------------------------ Obligations of U.S. Government Agencies $ 94,089,757 $ 4,631 $ (2,407,363) $ 91,687,025 Obligations of State and political sub-divisions 13,425,214 63,792 (279,811) 13,209,195 Mortgage-backed securities 48,220,926 20,919 (2,442,914) 45,798,931 Other securities 90,765 5,497 - 96,262 Equity securities 1,154,410 72,101 - 1,226,511 ------------------------------------------------------------------------ $ 156,981,072 $ 166,940 $ (5,130,088) $ 152,017,924 ========================================================================
NOTE E - REPURCHASE AGREEMENTS During 1999, the Bank began offering its corporate customers an investment product fashioned in the form of a repurchase agreement. Under the terms of the agreement, deposits in designated demand accounts of the customer are put into an investment vehicle which is used daily to purchase an interest in designated U. S. Government or Agencies' securities owned by the Bank. The Bank in turn agrees to repurchase these investments on a daily basis and pay the customer the daily interest earned on them. At March 31, 2000, the amount of repurchase agreements was $6,810,695. 5 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND RESULTS OF OPERATIONS The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words "believes", "anticipate", "contemplates", "expects", and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in interest rates, risks associated with the effect of opening a new branch, the ability to control costs and expenses, and general economic conditions. IBT Bancorp, Inc. undertakes no obligation to publicly release the results of any revisions to those forward looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. GENERAL IBT Bancorp, Inc. is a bank holding company 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"). As previously disclosed, IBT Bancorp, Inc. and a third party plan to form Irwin Bank Financial Services, LLC, which offers insurance and investment services to customers and the general public. Operations are expected to commence on or about June 1, 2000. FINANCIAL CONDITION At March 31, 2000, total assets increased $5.9 million to $451.6 million from $445.7 million at December 31, 1999. Of this increase, federal funds sold increased $7.1 million, net loans receivable increased $4.9 million, and securities available for sale increased $2.9 million. Such increases were offset by a $6.4 million decrease in cash & due from banks and a $3.0 million decrease in certificates of deposit. Such funds were primarily used to pay down the outstanding federal funds purchased of $7.0 million. Additionally, at March 31, 2000, securities available for sale increased approximately $6.0 million offset by market value declines of approximately $3.1 million. The growth in total deposits of $7.0 million was used primarily to fund the growth in the loan portfolio. The increase in the loan portfolio was primarily due to the growth of the fixed rate one- to four- family mortgage loans of $1.4 million, growth of the adjustable rate real estate secured commercial loans of $1.5 million, and growth of the commercial loans of $1.8 million. The Company's loan portfolio continues to grow due to the Company's offering of competitive market interest rates. Non-interest bearing deposits increased $6.2 million to $63.3 million at March 31, 2000 from $57.1 million at December 31, 1999. This growth is primarily the result of increases in the number of deposit accounts. During the period, long-term debt which consisted of borrowings with the Federal Home Loan Bank ("FHLB") increased $5.0 million. During the period, the Company continued to take advantage of the lower interest rate environment for borrowings and used such advances to purchase higher yielding available for sale securities. 6 At March 31, 2000, total stockholders' equity increased $262,000 to $38.2 million from $37.9 million at December 31, 1999. The increase was due to net income of $1.7 million for the period, offset by the purchase of $602,000 of Company stock, $97,000 loss in accumulated other comprehensive income and dividends paid of $691,000. As previously reported, the Company plans to purchase up to 151,100 shares of the Companies common stock. As of March 31, 2000 the Company had repurchased 21,876 shares. Accumulated other comprehensive income decreased as a result of changes in the net unrealized loss on the available for sale securities due to fluctuations in interest rates. Pursuant to generally accepted accounting principles, securities available for sale are recorded at current market value and net unrealized gains or losses on such securities are excluded from current earnings and reported net of income taxes, as part of comprehensive income, until realized. Because of interest rate volatility, the Company's accumulated other comprehensive income could materially fluctuate for each interim period and year-end. The majority of the accumulated unrealized loss resulted from the Company's investment in U.S. government agencies and mortgage backed securities. The decrease in market value of the investment securities available for sale is considered temporary in nature and will not affect the Company's net income until the securities are sold. See Note D to the condensed consolidated financial statements. RESULTS OF OPERATIONS Net income. Net income for the three months ended March 31, 2000 increased $85,000 to $1.7 million from $1.6 million for the comparable three month period in 1999. Such increase to net income were the result of higher net interest and other income offset by increases to the provision for loan losses and operating expenses. Interest income. Interest income for the three months ended March 31, 2000 increased $778,000 to $7.8 million from $7.0 million for the comparable three month period in 1999. The increases were primarily due to the growth in the loan portfolio and the increase in the available for sale securities. Interest expense. Interest expense for the three months ended March 31, 2000 increased $410,000 to $3.6 million from $3.2 million for the comparable three month period in 1999. The increase was primarily due to the increase in FHLB advances, corporate repurchase agreement deposits, and interest earning deposits. Provision for loan losses. For the three months ended March 31, 2000, provision for loan losses were $75,000 compared to $45,000 for the three months ended March 31, 1999. The evaluation for determining the provision includes evaluations of concentrations of credit, past loss experience, current economic conditions, amount and composition of the loan portfolio (including loans being specifically monitored by management), estimated fair value of underlying collateral, loan commitments outstanding, delinquencies, and other information available at such times. The Company will continue to monitor its allowance for loan losses and make future adjustments to the allowance through the provision for loan losses as economic conditions dictate. 7 Management continues to offer a wider variety of loan products coupled with the continued success of changing the mix of the products offered in the loan portfolio from lower yielding loans (i.e., one- to four-family loans) to higher yielding loans (i.e., equity loans, multi-family (five or more units) buildings, and commercial (nonresidential) mortgages). Although the Company maintains its allowance for loan losses at a level that it considers to be adequate to provide for the inherent risk of loss in its loan portfolio, there can be no assurance that future losses will not exceed estimated amounts or that additional provisions for loan losses will not be required in future periods due to the higher degree of credit risk which might result from the change in the mix of the loan portfolio. Other income. Total other income for the three months ended March 31, 2000 increased $119,000 to $780,000 from $661,000 for the comparable three month period in 1999. The total increases for the three months ended March 31, 2000 were due to the increase in service fees and other income. The increase in service fees resulted primarily from the increase in overdraft fees. Other expense. Total other expense for the three months ended March 31, 2000 increased $332,000 to $2.4 million from $2.1 million for the comparable three month period in 1999. While virtually all other expenses increased during the period, salaries, pension and other employee benefits, ATM expenses, and FDIC insurance were the most significant. The deposits of the bank are insured by the Bank Insurance Fund ("BIF"). Effective January 1, 2000, the BIF increased its assessments on deposits for all banks insured by the BIF. ATM expense increased due to increased operating costs. During the current year three month period salaries increased approximately $157,000 to $910,000 from the same period in 1999. The Company instituted an across the board salary increase to all non-officer employees and eliminated the bonus reward program. Officers of the Company are still eligible for the bonus reward program which is calculated based upon the prior years performance. Pension and other employee benefits increased approximately $50,000 to $259,000 for the current year three month period. Such increase was primarily related to increased health insurance premiums. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There were no significant changes for the three months ended March 31, 2000 from the information presented in the 10K statement, under the caption Market Risk, for the year ended December 31, 1999. 8 PART II. OTHER INFORMATION Item 1. Legal Proceedings The registrant is not engaged in any legal proceedings at the present time. From time to time, the Bank is a party to legal proceedings within the normal course of business wherein it enforces its security interest in loans made by it, and other matters of a like kind. Item 2. Changes in Securities and Use of Proceeds None. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information Not applicable. Item 6. Exhibits and Reports on Form 8-K (a) 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** 27 Financial Data Schedule (electronic filing only) ------------------------- * 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 10KS for December 31, 1999. (b) None. 9 SIGNATURES Pursuant to the requirements 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. IBT BANCORP, INC. Date: May 15, 2000 By: /s/Charles G. Urtin -------------------------------------- Charles G. Urtin President, Chief Executive Officer And Chief Accounting Officer (Duly authorized officer) EX-27 2 FDS
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION. 1000 3-MOS DEC-31-2000 MAR-31-2000 3,916 84 7,120 0 153,982 0 0 267,661 2,237 451,578 375,696 0 10,715 27,000 0 0 3,780 34,388 451,578 5,245 2,540 13 7,798 3,233 405 4,160 75 0 2,431 2,433 2,433 0 0 1,652 .55 .55 0 0 1,656 0 0 2,366 209 5 2,237 2,237 0 0
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