-----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, H8LBS8XHv8kX8hmBO60F5W3aW9obwTmmjuw4p2F+yM11PGYzFqukp/gtQeZDJJ4x sl7TNJG7WQph75ktVSs4Wg== 0000946275-01-500282.txt : 20020410 0000946275-01-500282.hdr.sgml : 20020410 ACCESSION NUMBER: 0000946275-01-500282 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011109 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: 1934 Act SEC FILE NUMBER: 000-25903 FILM NUMBER: 1780396 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 f10q_093001-0262.txt FORM 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 September 30, 2001 ------------------ OR | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . ----------- ----------- Commission File 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 November 01, 2001: 2,985,695 --------- IBT BANCORP, INC. Contents --------
Pages PART I - FINANCIAL INFORMATION Item 1. Financial Statements.............................................................................. Consolidated statements of financial condition at September 30, 2001 (unaudited) and December 31, 2000.............................................................. 1 Consolidated statements of operations (unaudited) for the three months ended September 30, 2001 and 2000 .............................................................. 2 Consolidated statements of cash flows (unaudited) for the three months ended September 30, 2001 and 2000............................................................... 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..................................... 13 PART II - OTHER INFORMATION Item 1. Legal Proceedings.............................................................................. 14 Item 2. Changes in Securities and Use of Records....................................................... 14 Item 3. Defaults upon Senior Securities................................................................ 14 Item 4. Submission of Matters to a Vote of Security-Holders............................................ 14 Item 5. Other Information.............................................................................. 14 Item 6. Exhibits and Reports on Form 8-K............................................................... 14 Signatures..................................................................................................... 15
CONSOLIDATED BALANCE SHEETS IBT BANCORP, INC. AND SUBSIDIARY
September 30, 2001 December 31, 2000 ------------------ ----------------- (unaudited) (unaudited) ------------------ ----------------- ASSETS Cash and due from banks $ 11,862,650 $ 12,877,327 Interest-bearing deposits in banks 12,966,909 4,740,068 Federal funds sold 6,656,000 4,129,000 Certificates of deposit 1,206,400 2,700,000 Securities available for sale 179,263,998 165,909,886 Federal Home Loan Bank stock, at cost 2,101,800 1,964,300 Loans, net 304,951,337 291,914,060 Premises and equipment, net 4,675,254 4,899,777 Other assets 5,951,113 7,245,015 ------------- ------------- Total Assets $ 529,635,461 $ 496,379,433 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest bearing $ 65,253,513 $ 64,316,265 Interest-bearing 363,603,571 345,322,197 ------------- ------------- Total deposits 428,857,084 409,638,462 Repurchase agreements 10,542,555 9,022,190 Accrued interest and other liabilities 5,351,632 5,104,200 Long-term debt 35,000,000 28,000,000 ------------- ------------- Total liabilities 479,751,271 451,764,852 Stockholders' Equity Capital stock, par value $1.25 per share, 50,000,000 shares authorized, 3,023,799 shares issued, 2,985,695 and 3,001,923 shares outstanding at September 30, 2001 and December 31, 2000, respectively 3,779,749 3,779,749 Surplus 2,073,102 2,073,102 Retained earnings 42,557,805 39,261,880 Accumulated other comprehensive income 2,558,287 189,326 ------------- ------------- 50,968,943 45,304,057 Less: Treasury stock, at cost (1,084,753) (689,476) ------------- ------------- Total stockholders' equity 49,884,190 44,614,581 ------------- ------------- Total Liabilities and Stockholders' Equity $ 529,635,461 $ 496,379,433 ============= =============
The accompanying notes are an integral part of these consolidated financial statements. -1- CONSOLIDATED STATEMENTS OF INCOME IBT BANCORP, INC. AND SUBSIDIARY
Three Months Nine Months Ended September 30, Ended September 30, --------------------------- ---------------------------- 2001 2000 2001 2000 ------------ ------------ ------------ ------------ (unaudited) (unaudited) ------------ ------------ ------------ ------------ Interest Income Loans, including fees $ 6,090,559 $ 5,890,379 $ 18,241,857 $ 16,795,571 Investment securities 2,615,809 2,642,988 7,905,044 7,774,220 Federal funds sold 157,796 94,783 474,580 232,617 ------------ ------------ ------------ ------------ Total interest income 8,864,164 8,628,150 26,621,481 24,802,408 Interest Expense Deposits 3,667,390 3,823,228 11,482,032 10,446,969 Long-term debt 470,547 402,284 1,349,431 1,126,498 Repurchase agreements 99,697 92,694 302,914 249,181 ------------ ------------ ------------ ------------ Total interest expense 4,237,634 4,318,206 13,134,377 11,822,648 ------------ ------------ ------------ ------------ Net Interest Income 4,626,530 4,309,944 13,487,104 12,979,760 Provision for Loan Losses 90,000 75,000 265,000 225,000 ------------ ------------ ------------ ------------ Net Interest Income after Provision for Loan Losses 4,536,530 4,234,944 13,222,104 12,754,760 Other Income (Losses) Service fees 428,143 431,788 1,266,989 1,228,787 Investment security gains 155,207 - 391,338 - Investment security losses - - (2,188) (106,974) Other income 458,415 332,779 1,211,402 1,054,100 ------------ ------------ ------------ ------------ Total other income 1,041,765 764,567 2,867,541 2,175,913 Other Expenses Salaries 1,025,592 961,235 3,126,987 2,950,028 Pension and other employee benefits 287,141 274,982 870,955 850,472 Occupancy expense 289,717 266,758 852,736 783,297 Data processing expense 188,001 148,500 543,866 439,263 ATM expense 97,906 100,609 296,816 284,376 Other expenses 897,472 776,967 2,471,989 2,258,447 ------------ ------------ ------------ ------------ Total other expenses 2,785,829 2,529,051 8,163,349 7,565,883 ------------ ------------ ------------ ------------ Income Before Income Taxes 2,792,466 2,470,460 7,926,296 7,364,790 Provision for Income Taxes 808,084 740,248 2,293,375 2,326,352 ------------ ------------ ------------ ------------ Net Income $ 1,984,382 $ 1,730,212 $ 5,632,921 $ 5,038,438 ============ ============ ============ ============ Basic Earnings per Share $ 0.66 $ 0.58 $ 1.88 $ 1.68 ============ ============ ============ ============ Diluted Earnings per Share $ 0.66 $ 0.58 $ 1.88 $ 1.68 ============ ============ ============ ============ Dividends per Share $ 0.26 $ 0.23 $ 0.78 $ 0.69 ============ ============ ============ ============
The accompanying notes are an integral part of these consolidated financial statements. -2- CONSOLIDATED STATEMENTS OF CASH FLOWS IBT BANCORP, INC. AND SUBSIDIARY
Nine Months Ended September 30, ---------------------------- 2001 2000 ------------- ------------ (unaudited) ---------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 5,632,921 $ 5,038,438 Adjustments to reconcile net cash from operating activities: Depreciation 445,365 414,743 Net amortization/accretion of premiums and discounts 45,764 3,974 Net investment security (gains) losses (389,150) 106,974 Provision for loan losses 265,000 225,000 Increase (decrease) in cash due to changes in assets and liabilities: Other assets 1,420,690 (620,258) Accrued interest and other liabilities (972,895) 517,407 ------------ ------------ Net Cash From Operating Activities 6,447,695 5,686,278 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of certificates of deposit (2,606,400) (100,000) Proceeds from maturity of certificates of deposit 4,100,000 3,000,000 Proceeds from sales of securities available for sale 7,117,010 5,285,333 Proceeds from maturities of securities available for sale 69,206,086 6,105,573 Purchase of securities available for sale (85,744,534) (21,905,952) Net loans made to customers (13,429,065) (28,098,163) Purchases of premises and equipment (220,842) (339,454) Purchase of Federal Home Loan Bank stock (137,500) - ------------ ------------ Net Cash Used By Investing Activities (21,715,245) (36,052,663) CASH FLOWS FROM FINANCING ACTIVITIES Net increase in deposits 19,218,623 37,727,022 Net increase in securities sold under repurchase agreement 1,520,365 2,610,130 Dividends paid (2,336,996) (2,071,575) Federal funds purchased - (7,000,000) Proceeds from long-term debt 9,000,000 7,000,000 Repayment of long-term debt (2,000,000) - Purchase of treasury stock (395,278) (601,864) ------------ ------------ Net Cash From Financing Activities 25,006,714 37,663,713 ------------ ------------ Net Change in Cash and Cash Equivalents 9,739,164 7,297,328 Cash and Cash Equivalents at Beginning of Period 21,746,395 19,264,567 ------------ ------------ Cash and Cash Equivalents at End of Period $ 31,485,559 $ 26,561,895 ============ ============
The accompanying notes are an integral part of these consolidated financial statements. -3- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS IBT BANCORP, INC. AND SUBSIDIARY Period Ended September 30, 2001 NOTE A - BASIS OF PRESENTATION The accompanying unaudited 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 and nine months ended September 30, 2001 are not necessarily indicative of the results that may be expected for the year ended December 31, 2001 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, 2000. 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 2,990,469 and 2,996,389 for the three and nine months ended September 30, 2001, respectively and 3,001,923 and 3,003,807 for the three and nine months ended September 30, 2000, respectively. NOTE C - COMPREHENSIVE INCOME Total comprehensive income for the three months ended September 30, 2001 and 2000 was $3,193,880 and $2,760,938, respectively and for the nine months ended September 30, 2001 and 2000 was $8,001,882 and $6,151,911, respectively. NOTE D - INVESTMENT SECURITIES Investment securities available for sale consist of the following:
September 30, 2001 --------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Market Cost Gains Losses Value ------------- ------------- ------------- ------------- Obligations of U.S. Government Agencies $ 70,139,577 $ 1,719,529 $ - $ 71,859,106 Obligations of State and political sub-divisions 31,234,733 1,121,244 (18,292) 32,337,685 Mortgage-backed securities 63,078,086 999,057 (32,545) 64,044,598 Other securities 699,650 44,601 - 744,251 Equity securities 10,235,806 54,466 (11,914) 10,278,358 ------------- ------------- ------------- ------------- $ 175,387,852 $ 3,938,897 $ (62,751) $ 179,263,998 ============= ============= ============= =============
-4- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) IBT BANCORP, INC. AND SUBSIDIARY Period Ended September 30, 2001 NOTE E - STOCK OPTION PLAN In May 2001, 33,000 additional stock options were granted under the 2000 Stock Option Plan at an exercise price of $23.00 per share. As of September 30, 2001, 94,000 stock options have been granted, of which 41,333 are exercisable. 32,333 stock options are exercisable at $24.50 per share and 9,000 are exercisable at $23.00 per share. -5- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 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"). FINANCIAL CONDITION On September 30, 2001, total assets increased $33.2 million, or 6.7%, to $529.6 million from $496.4 million at December 31, 2000. Asset growth resulted from increases in securities available for sale of $13.4 million to $179.3 million from $165.9 million, net loans of $13.1 million to $305.0 million from $291.9 million and cash and cash equivalents of $9.8 million to $31.5 million from $21.7 million at December 31, 2000. The increase in securities available for sale reflected $85.7 million of purchases, $2.9 million of unrealized gains, offset by $76.3 million in proceeds from sales and maturities of such securities. The increase in cash and cash equivalents was predominantly in interest-bearing deposits in banks which rose $8.3 million to $13.0 million from $4.7 million at December 31, 2000. Such increase was primarily the result of certificates of deposit, maturing in less than thirty days, which the Company purchased to offset certain time deposits with similar maturities. The increase in the loan portfolio was primarily due to growth in real estate secured commercial loans of $6.0 million and fixed rate one- to four- family residential mortgage loans of $3.8 million. The Company's offering of competitive market interest rates continues to fuel this growth. At September 30, 2001, total liabilities increased $28.0 million, or 6.2%, to $479.8 million from $451.8 million at December 31, 2000. This increase was primarily the result of interest-bearing deposits, which rose $18.3 million to $363.6 million from $345.3 million at December 31, 2000. The growth was mainly the result of increases in interest bearing checking accounts of $7.6 million, certificate of deposit accounts of $6.5 million, and -6- savings accounts of $3.8 million. Total interest bearing deposit growth was attributed to depositors maintaining higher balances and an increase in the number of deposit accounts. Non-interest bearing deposits increased $1.0 million to $65.3 million at September 30, 2001 from $64.3 million at December 31, 2000. Such increases reflect additions to non-interest bearing deposits of $11.5 million offset by $10.5 million in investments in repurchase products. The Company offers 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. The Company in turn agrees to repurchase these investments on a daily basis and pay the customer the daily interest earned based on the current market rate. At September 30, 2001, repurchase agreements totaled $10.5 million. Long-term debt rose $7.0 million to $35.0 million at September 31, 2001 from $28.0 million at December 31, 2000. Such borrowings consisted of fixed rate loans from the Federal Home Loan Bank that were used to fund loan demand. At September 30, 2001, total stockholders' equity increased $5.3 million to $49.9 million from $44.6 million at December 31, 2000. The increase was due to net income of $5.6 million for the period and an increase of $2.4 million in accumulated other comprehensive income (net of income taxes), offset by the purchase of $396,000 of Company stock, and dividends paid of $2.3 million. Accumulated other comprehensive income increased as a result of changes in the net unrealized gain on the available for sale securities due to fluctuations in interest rates. Because of interest rate volatility, the Company's accumulated other comprehensive income could materially fluctuate for each interim period and year-end. See Note D to the condensed consolidated financial statements. As previously reported, the Company plans to purchase up to 151,100 shares of the Company's common stock. As of September 30, 2001 the Company repurchased 38,104 shares. RESULTS OF OPERATIONS Net income. Net income for the three months ended September 30, 2001 increased $254,000, or 14.7%, to $2.0 million from $1.7 million for the comparable three month period in 2000. Net income for the nine months ended September 30, 2001 increased $595,000 to $5.6 million from $5.0 million for the comparable nine month period in 2000. The increases for the three and nine months ended September 30, 2001 was the result of higher net interest income and other income offset by increases in other expenses. -7- Interest income. Interest income for the three months ended September 30, 2001 increased $236,000 to $8.9 million from $8.6 million for the comparable three month period in 2000. The increase was mainly attributed to an increase in average loans of $20.0 million and average securities available for sale of $24.9 million offset by a 66 basis point decrease in the yield on average interest earning assets to 7.02% for the three months ended September 30, 2001 from 7.68% for the comparable three month period in 2000. Interest income for the nine months ended September 30, 2001 increased $1.8 million to $26.6 million from $24.8 million for the comparable nine month period in 2000. The increase was primarily attributed to an increase in average loans of $26.5 million and average securities available for sale of $19.2 million offset by a 37 basis point decrease in the yield on average interest earning assets to 7.22% for the first nine months of 2001 from 7.59% for the comparable nine month period in 2000. See "Average Balance Sheet and Rate/Volume Analysis" Interest expense. Interest expense for the three months ended September 30, 2001 decreased $80,000 to $4.2 million from $4.3 million for the comparable three month period in 2000. The change was primarily attributed to a 51 basis point decrease in average cost of funds to 4.18% for the three months ended September 30, 2001 from 4.69% for the comparable three month period in 2000 offset by a $21.2 million increase in certificates of deposit and a $17.6 million increase in other interest-bearing liabilities. Interest expense for the nine months ended September 30, 2001 increased $1.3 million to $13.1 million from $11.8 million for the comparable nine month period in 2000. Such increases were primarily the result of an increase in average certificates of deposit of $29.3 million and average other interest-bearing deposits of $12.4 million. Average cost of funds for the nine months ended September 30, 2001 remained relatively constant as compared to the nine month period in 2000. See "Average Balance Sheet and Rate/Volume Analysis" -8- Average Balance Sheet The following table sets forth certain information relating to the company for the periods indicated. The average yields and costs are derived by dividing income or expense on an annualized basis by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are derived from average daily balances.
Three Months Ended September 30, Three Months Ended September 30, ---------------------------------- ---------------------------------- 2001 2000 ---------------------------------- ---------------------------------- Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost ------- -------- ---------- ------- -------- ---------- (In Thousands) (In Thousands) Interest-earning assets: Loans receivable (1) (7) $ 305,154 $ 6,090 7.98% $ 285,204 $ 5,890 8.26% Investment securities available for sale (2) 183,299 2,616 5.71% 158,402 2,643 6.67% Other interest-earning assets (5) 16,960 158 3.72% 5,802 95 6.53% --------- -------- --------- -------- Total interest earning assets $ 505,413 $ 8,864 7.02% $ 449,408 $ 8,628 7.68% ========= ======== ========= ======== Non-interest earning assets 18,504 22,889 --------- --------- Total assets $ 523,917 $ 472,297 ========= ========= Interest-bearing liabilities: Money market accounts 55,045 408 2.96% 56,134 587 4.18% Certificates of Deposit 207,625 2,824 5.44% 186,430 2,732 5.86% Other liabilities 143,047 1,005 2.81% 125,459 999 3.19% --------- -------- --------- -------- Total interest-bearing liabilities $ 405,717 $ 4,237 4.18% $ 368,023 $ 4,318 4.69% Non-interest-bearing liabilities 69,926 64,501 --------- --------- Total liabilities $ 475,643 $ 432,524 ========= ========= Retained Earnings (6) 48,274 39,773 --------- --------- Total liabilities and stockholders' equity $ 523,917 $ 472,297 ========= ========= Net interest income $ 4,627 $ 4,310 ========= ======== Interest rate spread (3) 2.84% 2.99% ====== ====== Net yield on interest-earning assets (4) 3.66% 3.84% ====== ====== Ratio of average interest-earning assets to average interest-bearing liabilities 124.57% 122.11% ====== ======
(1) Average balances include non-accrual loans, and are net of deferred loan fees. (2) Includes interest-bearing deposits in other financial institutions. (3) Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (4) Net yield on interest-earning assets represents net interest income as a percentage of average interest earning assets. (5) Consists of federal funds sold. (6) Includes capital stock, surplus and accumulated other comprehensive income. (7) For both periods presented, interest income includes business manager income, which was previously classified as other non-interest income. -9- Average Balance Sheet The following table sets forth certain information relating to the company for the periods indicated. The average yields and costs are derived by dividing income or expense on an annualized basis by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are derived from average daily balances.
Nine Months Ended September 30, Nine Months Ended September 30, ---------------------------------- ---------------------------------- 2001 2000 ---------------------------------- ---------------------------------- Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost ------- -------- ---------- ------- -------- ---------- (In Thousands) (In Thousands) Interest-earning assets: Loans receivable (1) (7) $ 301,360 $ 18,242 8.07% $ 274,821 $ 16,796 8.15% Investment securities available for sale (2) 174,883 7,905 6.03% 155,638 7,774 6.66% Other interest-earning assets (5) 15,114 474 4.18% 5,164 233 6.01% --------- --------- --------- -------- Total interest earning assets $ 491,357 $ 26,621 7.22% $ 435,623 $ 24,803 7.59% ========= ========= ========= ======== Non-interest earning assets 18,986 21,979 --------- --------- Total assets $ 510,343 $ 457,602 ========= ========= Interest-bearing liabilities: Money market accounts 55,132 1,374 3.32% 56,589 1,698 4.00% Certificates of Deposit 204,288 8,775 5.73% 174,966 7,235 5.51% Other liabilities 135,927 2,985 2.93% 123,450 2,890 3.12% --------- -------- --------- -------- Total interest-bearing liabilities $ 395,347 $ 13,134 4.43% $ 355,005 $ 11,823 4.44% Non-interest-bearing liabilities 68,063 63,627 --------- --------- Total liabilities $ 463,410 $ 418,632 ========= ========= Retained Earnings (6) 46,933 38,970 --------- --------- Total liabilities and stockholders' equity $ 510,343 $ 457,602 ========= ========= Net interest income $ 13,487 $ 12,980 ======== ======== Interest rate spread (3) 2.79% 3.15% ====== ====== Net yield on interest-earning assets (4) 3.66% 3.97% ====== ====== Ratio of average interest-earning assets to average interest-bearing liabilities 124.29% 122.71% ====== ======
(1) Average balances include non-accrual loans, and are net of deferred loan fees. (2) Includes interest-bearing deposits in other financial institutions. (3) Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (4) Net yield on interest-earning assets represents net interest income as a percentage of average interest earning assets. (5) Consists of federal funds sold. (6) Includes capital stock, surplus and accumulated other comprehensive income. (7) For both periods presented, interest income includes business manager income, which was previously classified as other non-interest income. -10- Rate / Volume Analysis The table below sets forth certain information regarding changes in interest income and interest expenses of the Company for the periods iiindicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) cchanges in volume (changes in average volume multiplied by old rate); (ii) changes in rates (changes in rate multiplied by average volume).
Three Month Period Nine Month Period ended September 30, 2001 ended September 30, 2001 --------------------------- --------------------------- 2001 vs. 2000 2001 vs. 2000 --------------------------- --------------------------- Increase (Decrease) Increase (Decrease) Due to Due to --------------------------- --------------------------- Volume Rate Net Volume Rate Net ------ ---- --- ------ ---- --- (In Thousands) (In Thousands) Interest income: Loans receivable 412 (212) 200 1,622 (176) 1,446 Investment securities available for sale 416 (443) (27) 961 (830) 131 Other interest earning assets 182 (119) 63 447 (206) 241 ----- ---- --- ----- ------ ----- Total interest-earning assets 1,010 (774) 236 3,030 (1,212) 1,818 ===== ==== === ===== ====== ===== Interest expense: Money market accounts (11) (168) (179) (44) (280) (324) Certificates of deposit 310 (218) 92 1,212 328 1,540 Other liabilities 140 (134) 6 292 (197) 95 ----- ---- --- ----- ------ ----- Total interest-bearing liabilities 439 (520) (81) 1,460 (149) 1,311 ----- ---- --- ----- ------ ----- Net change in interest income 571 (254) 317 1,570 (1,063) 507 ===== ==== === ===== ====== =====
-11- Provision for loan losses. For the three and nine months ended September 30, 2001 the provision for loan losses was $90,000 and $265,000, respectively, compared to $75,000 and $225,000, respectively, for the three and nine month periods ended September 30, 2000. For the nine months ended September 30, 2001, non-performing loans increased approximately $441,000 from December 31, 2000. Due to the increase in non-performing loans primarily from loans secured by real estate, the loan loss provision for the three and nine months ended September 30, 2001 was increased . 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 time. The Company continues to monitor its allowance for loan losses and make future adjustments to the allowance through the provision for loan losses as economic conditions dictate. 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 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 September 30, 2001 increased $277,000 to $1.0 million from $765,000 for the comparable three month period in 2000. Total other income for the nine months ended September 30, 2001 increased $700,000 to $2.9 million from $2.2 million for the comparable period in 2000. The increase in other income for the three and nine months ended September 30, 2001 is mostly due to $74,000 and $308,000, respectively, of available for sale securities gains recognized as a result of securities originally purchased at a discount, which were called by the issuing agencies prior to their maturity date. Additionally, for the three months ended September 30, 2001, the Company recognized an $81,000 gain from an equity investment it holds as an available for sale security. Such gain reflected the new basis in the shares that the Company received due to the acquisition of the underlying investment in a stock for stock exchange. Other income for the three and nine month period ended September 30, 2001 increased $125,000 and $157,000, respectively mainly due to fees generated from customer usage of the debit card, gains realized from the sale of mortgage loans, and income from the sale title insurance through TA of Irwin offset by a $115,000 gain realized during the three month period ended June 30, 2000 from the sale of the credit card portfolio. -12- Other expense. Total other expense for the three and nine month period ended September 30, 2001 increased $257,000 and $597,000, respectively to $2.8 million and $8.2 million from $2.5 million and $7.6 million, respectively for the comparable three and nine month period in 2000. The increase is primarily due to increased employment, occupancy, data processing, and other expenses. Salary, pension, and other employee benefit costs increased $77,000 and $198,000 for the three and nine months ended September 30, 2001, respectively, to $1.3 million and $4.0 million, respectively, from $1.2 million and $3.8 million, respectively for the comparable three and nine month periods in 2000. Such increases were the result of normal merit increases and increased staff. Occupancy expense for the three and nine months ended September 30, 2001 increased $23,000, and $70,000, respectively, to $290,000 and $853,000 from $267,000 and $783,000, respectively, for the comparable three and nine month periods in 2000 Such an increase for the three month period was due mainly to increased depreciation and insurance costs. In addition, for the nine month period the increase was attributable to the opening of a new supermarket branch office in Penn Township, Westmoreland County in June of 2000, of which the majority of such costs were not included in the prior year period. An increase in data processing fees of $39,000 and $105,000 for the three and nine months ended September 30, 2001, respectively, to $188,000 and $544,000 from $149,000 and $439,000, respectively, for the comparable three and nine month periods in 2000, is primarily the result of increased fees from the Company's third party processor. Other expenses for the three and nine month periods ended September 30, 2001 increased $121,000 and $214,000, respectively, to $898,000 and $2.4 million from $777,000 and $2.2 million for the comparable periods in 2000. Such increases were related to the cost of doing business. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There were no significant changes for the nine months ended September 30, 2001 from the information presented in the 10K statement, under the caption Market Risk, for the year ended December 31, 2000. -13- 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 Not applicable. 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** 10.5 2000 Stock Option Plan***
------------------------- * 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. -14- 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: November 09 , 2001 By: /s/Charles G. Urtin ---------------------------------- Charles G. Urtin President, Chief Executive Officer And Chief Accounting Officer (Duly authorized officer) -15- -----END PRIVACY-ENHANCED MESSAGE-----