-----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, BrgElaylPH2eqnr4C/yXiX417I9v2AN+i9ffuMOY4cVPeQmmWxtKi7LxUEGq05QF /rnXYOgJ7kCRk5SYnUPUag== 0000946275-03-000331.txt : 20030512 0000946275-03-000331.hdr.sgml : 20030512 20030512163048 ACCESSION NUMBER: 0000946275-03-000331 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030512 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: 001-31655 FILM NUMBER: 03693066 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_033103-0262.txt FORM10Q 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, 2003 -------------- 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 ------------ ------------ Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). X Yes No ----- ----- Number of shares of Common Stock outstanding as of May 09, 2003: 2,977,655 IBT BANCORP, INC. Contents Pages ----- PART I - FINANCIAL INFORMATION Item 1. Financial Statements............................................ Consolidated balance sheets at March 31, 2003 (unaudited) and December 31, 2002............................... 1 Consolidated statements of income (unaudited) for the three months ended March 31, 2003 and 2002 ..................... 2 Consolidated statements of cash flows (unaudited) for the three months ended March 31, 2003 and 2002.................. 3 Notes to consolidated financial statements...................... 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................... 5 Item 3. Quantitative and Qualitative Disclosures About Market Risk............................................... 10 Item 4. Controls and Procedures......................................... 10 PART II - OTHER INFORMATION Item 1. Legal Proceedings............................................... 11 Item 2. Changes in Securities and Use of Proceeds....................... 11 Item 3. Defaults upon Senior Securities................................. 11 Item 4. Submission of Matters to a Vote of Security-Holders............. 11 Item 5. Other Information............................................... 12 Item 6. Exhibits and Reports on Form 8-K................................ 12 Signatures................................................................ 14 CONSOLIDATED BALANCE SHEETS IBT BANCORP, INC. AND SUBSIDIARY
March 31, 2003 December 31, 2002 ---------------- ----------------- (unaudited) ---------------------------------------- ASSETS Cash and due from banks $ 14,461,713 $ 12,677,160 Interest-bearing deposits in banks 1,634,413 760,118 Federal funds sold - 1,629,000 Certificates of deposit 100,000 100,000 Securities available for sale 183,600,359 183,564,960 Federal Home Loan Bank stock, at cost 4,453,700 3,152,600 Loans, net 372,466,003 359,871,514 Premises and equipment, net 5,078,237 4,759,015 Other assets 17,769,880 17,520,354 ----------------- ---------------- Total Assets $ 599,564,305 $ 584,034,721 ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest bearing $ 78,465,749 $ 74,339,035 Interest-bearing 389,666,236 393,918,292 ---------------- ---------------- Total deposits 468,131,985 468,257,327 Repurchase agreements 14,525,151 14,525,836 Accrued interest and other liabilities 5,644,074 5,100,380 FHLB advances 53,875,451 40,000,000 ---------------- ---------------- Total liabilities 542,176,661 527,883,543 Stockholders' Equity Capital stock, par value $1.25 per share, 50,000,000 shares authorized, 3,023,799 shares issued, 2,977,655 shares outstanding at March 31, 2003 and December 31, 2002 3,779,749 3,779,749 Surplus 2,073,102 2,073,102 Retained earnings 50,561,363 48,974,137 Accumulated other comprehensive income 2,316,696 2,667,456 ---------------- ---------------- 58,730,910 57,494,444 Less: Treasury stock, at cost (1,343,266) (1,343,266) ---------------- ---------------- Total stockholders' equity 57,387,644 56,151,178 ---------------- ---------------- Total Liabilities and Stockholders' Equity $ 599,564,305 $ 584,034,721 ================ ================
The accompanying notes are an integral part of these consolidated financial statements. 1 CONSOLIDATED STATEMENTS OF INCOME IBT BANCORP, INC. AND SUBSIDIARY
Three Months Ended March 31, 2003 2002 ----------- ---------- (unaudited) --------------------------- Interest Income Loans, including fees $6,437,445 $5,890,544 Investment securities 2,046,119 2,275,029 Federal funds sold 9,992 42,399 ---------- ---------- Total interest income 8,493,556 8,207,972 Interest Expense Deposits 2,363,434 2,648,872 FHLB advances 573,969 516,402 Repurchase agreements 36,388 42,101 ---------- ---------- Total interest expense 2,973,791 3,207,376 ---------- ---------- Net Interest Income 5,519,765 5,000,596 Provision for Loan Losses 150,000 250,000 ---------- ---------- Net Interest Income after Provision for Loan Losses 5,369,765 4,750,596 Other Income (Losses) Service fees 570,236 592,604 Investment security gains 224,798 46,924 Debit card fees 154,046 134,073 Other income 491,460 561,739 ---------- ---------- Total other income 1,440,540 1,335,340 Other Expenses Salaries 1,215,430 1,115,323 Pension and other employee benefits 389,521 303,795 Occupancy expense 377,144 316,102 Data processing expense 194,410 166,884 Pennsylvania shares tax 105,804 95,586 Advertising expense 127,679 111,521 Other expenses 836,506 740,499 ---------- ---------- Total other expenses 3,246,494 2,849,710 ---------- ---------- Income Before Income Taxes 3,563,811 3,236,226 Provision for Income Taxes 934,406 805,240 ---------- ---------- Net Income $2,629,405 $2,430,986 ========== ========== Basic Earnings per Share $ 0.88 $ 0.81 ========== ========== Diluted Earnings per Share $ 0.88 $ 0.81 ========== ========== Dividends per Share $ 0.35 $ 0.30 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 2 CONSOLIDATED STATEMENTS OF CASH FLOWS IBT BANCORP, INC. AND SUBSIDIARY
Three Months Ended March 31, ---------------------------- 2003 2002 ------------ ------------ (unaudited) ---------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,629,405 $ 2,430,986 Adjustments to reconcile net cash from operating activities: Depreciation 199,970 168,855 Increase in cash surrender value of insurance (129,179) (134,355) Net amortization/accretion of premiums and discounts 253,790 79,632 Investment security gains (224,798) (46,924) Provision for loan losses 150,000 250,000 Increase (decrease) in cash due to changes in assets and liabilities: Other assets (968,028) (471,603) Accrued interest and other liabilities 724,389 (439,878) ------------ ------------ Net Cash From Operating Activities 2,635,549 1,836,713 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of securities available for sale 7,338,568 11,423,633 Proceeds from maturities of securities available for sale 17,143,080 21,046,088 Purchase of securities available for sale (25,077,494) (43,158,361) Net loans made to customers (11,896,808) (2,111,163) Purchases of premises and equipment (519,192) (142,887) Purchase of Federal Home Loan Bank stock (1,301,100) -- ------------ ------------ Net Cash Used By Investing Activities (14,312,946) (12,942,690) CASH FLOWS FROM FINANCING ACTIVITIES Net (decrease) increase in deposits (125,342) 8,827,904 Net (decrease) increase in securities sold under repurchase agreements (685) 2,220,431 Dividends paid (1,042,179) (895,708) Proceeds from FHLB advances 14,000,000 5,000,000 Repayment of FHLB advances (124,549) -- Purchase of treasury stock -- (95,760) ------------ ------------ Net Cash From Financing Activities 12,707,245 15,056,867 ------------ ------------ Net Change in Cash and Cash Equivalents 1,029,848 3,950,890 Cash and Cash Equivalents at Beginning of Period 15,066,278 25,218,935 ------------ ------------ Cash and Cash Equivalents at End of Period $ 16,096,126 $ 29,169,825 ============ ============
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 March 31, 2003 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 ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ended December 31, 2003 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, 2002. 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 were 2,977,655 for the three months ended March 31, 2003 and 2,985,087 for the three months ended March 31, 2002. NOTE C - COMPREHENSIVE INCOME Total comprehensive income for the three months ended March 31, 2003 and 2002 was $2,278,645 and $1,296,243, respectively. NOTE D - INVESTMENT SECURITIES Investment securities available for sale consist of the following:
March 2003 --------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Market Cost Gains Losses Value ------------ ------------- ------------- ------------- Obligations of U.S. Government Agencies $ 67,817,275 $ 1,413,649 $ -- $ 69,230,924 Obligations of State and political sub-divisions 36,872,261 1,743,379 (31,662) 38,583,978 Mortgage-backed securities 64,374,190 1,253,216 (75,782) 65,551,624 Other securities 707,152 43,463 -- 750,615 Equity securities 10,319,337 165,682 (1,001,801) 9,483,218 ------------- ------------- ------------- ------------- $ 180,090,215 $ 4,619,389 $ (1,109,245) $ 183,600,359 ============= ============= ============= =============
4 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. Recent Legislation to Curtail Corporate Accounting Irregularities. On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the "Act"). The Securities and Exchange Commission (the "SEC") promulgated certain regulations pursuant to the Act and will continue to propose additional implementing or clarifying regulations as necessary in furtherance of the Act. The passage of the Act and the regulations implemented by the SEC subject publicly-traded companies to additional and more cumbersome reporting regulations and disclosure. Compliance with the Act and corresponding regulations may increase the Company's expense. 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"). On April 1, 2003, the Company's stock began trading on the American Stock Exchange under the symbol IRW. FINANCIAL CONDITION On March 31, 2003, total assets increased $15.5 million, or 2.7%, to $599.5 million from $584.0 million at December 31, 2002. Asset growth was primarily due to an increase of $12.6 million in net loans. Other growth in assets included a $1.3 million increase in Federal Home Loan Bank stock and a $1.0 million increase in cash and cash equivalents. At March 31,2003, net loans reached $372.5 million from $359.9 million at December 31, 2002. The increase in net loans was primarily attributable to the growth of $8.4 million in real estate secured loan portfolio, including a $15.6 million increase in commercial real estate loans, offset by a $7.9 million decrease in one-to-four family residential mortgages. Variable rate lines of credit increased $3.6 million for the period ended March 31, 2003. The increase in net loans is attributable to increased borrowings in the current historically low interest rate environment. At March 31, 2003, total liabilities increased $14.3 million, or 2.7%, to $542.2 million from $527.9 million at December 31, 2002. This increase was primarily the result of fixed-rate long-term and amortizing borrowings from the Federal Home Loan Bank, which had a net increase of $13.9 million reaching $53.9 million at March 31, 2003 from $40.0 million at December 31, 5 2002. These low-rate advances were used to fund the growth in the loan portfolio. Non-interest bearing deposits reached $78.5 million at March 31, 2003, from $74.3 million at December 31, 2002. Higher balances in deposit accounts and an increase in the number of demand deposit accounts attributed to the increase in non-interest bearing deposits. Interest-bearing deposits declined to $389.7 million at March 31, 2003, from $393.9 million at December 31, 2002. The decrease of $4.3 million was primarily attributable to a $13.2 million decrease in certificate of deposit accounts resulting from expected deposit reductions of local municipalities. The reduction in certificate of deposit accounts was offset by increases of $4.4 million and $3.8 million in money market and savings accounts, respectively. At March 31, 2003, total stockholders' equity increased $1.2 million to $57.4 million from $56.2 million at December 31, 2002. The increase was due to net income of $2.6 million offset by a decrease of $400,000 in accumulated other comprehensive income (net of income taxes), and dividends paid of $1.0 million. Accumulated other comprehensive income decreased as a result of changes in the net unrealized gain on securities available for sale. 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 consolidated financial statements. RESULTS OF OPERATIONS Net income. Net income for the three months ended March 31, 2003 increased $200,000, or 8.3%, to $2.6 million from $2.4 million for the comparable three month period in 2002. The increase for the three months ended March 31, 2003 was the result of higher net interest income and other income partially offset by increases in other expenses. Interest income. Interest income for the three months ended March 31, 2003 increased $300,000 to $8.5 million from $8.2 million for the comparable three month period in 2002. While the average balances of interest earning assets increased $63.0 million for the three months ended March 31, 2003, to $593.3 million from $530.3 million for the comparable period in 2002, the yield on these assets decreased 52 basis points to 6.02%, for the three months ended March 31, 2003 from 6.54% for the comparable period in 2002. The reduction in short term interest rates by the Federal Reserve contributed to the decline in average yields in the three month period in 2003. See "Average Balance Sheet and Rate/Volume Analysis." Interest expense. Interest expense for the three months ended March 31, 2003 decreased $200,000 to $3.0 million from $3.2 million for the comparable period in 2002. The decrease in interest expense was primarily attributed to a 56 basis point decrease in the average cost of funds to 2.59% for the three months ended March 31, 2003 from 3.15% for the comparable period in 2002, offset by a $52.7 million increase in the average balance of interest bearing liabilities. The reduction of average cost of funds for the three month period ended March 31, 2003 is reflective of the continued historically low interest rates paid on deposits and borrowings over the past year. See "Average Balance Sheet and Rate/Volume Analysis." 6 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 March 31, Three Months Ended March 31, --------------------------------- -------------------------------- 2003 2002 --------------------------------- -------------------------------- Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost -------- -------- ---------- ------- -------- ---------- (In Thousands) (In Thousands) Interest-earning assets: Loans receivable (1) $369,759 $ 6,437 6.96% $316,796 $ 5,891 7.44% Investment securities available for sale (2) 190,972 2,046 4.29% 175,655 2,275 5.18% Other interest-earning assets (3) 3,545 10 1.13% 9,868 42 1.72% Total interest earning assets $564,276 $ 8,493 6.02% $502,319 $ 8,208 6.54% ======== ======= ======== ======= Non-interest earning assets 29,065 28,030 -------- -------- Total assets $593,341 $530,349 ======== ======== Interest-bearing liabilities: Money market accounts 60,474 216 1.43% 57,895 299 2.07% Certificates of Deposit 224,060 1,893 3.38% 198,258 2,018 4.07% Other liabilities 174,767 864 1.98% 150,470 890 2.37% -------- -------- -------- -------- Total interest-bearing liabilities $459,301 $ 2,973 2.59% $406,623 $ 3,207 3.15% ======== ==== ======== ==== Non-interest-bearing liabilities 77,373 73,276 -------- -------- Total liabilities $536,674 $479,899 ======== ======== Retained Earnings (4) 56,667 50,450 -------- -------- Total liabilities and stockholders' equity $593,341 $530,349 ======== ======== Net interest income $ 5,520 $ 5,001 ======== ======== Interest rate spread (5) 3.43% 3.39% ======= ======= Net yield on interest-earning assets (6) 3.91% 3.98% ======= ======= Ratio of average interest-earning assets to average interest-bearing liabilities 122.86% 123.53% ======= =======
(1) Average balances include non-accrual loans, and are net of deferred loan fees. (2) Includes interest-bearing deposits in other financial institutions. (3) Consists of federal funds sold. (4) Includes capital stock, surplus and accumulated other comprehensive income, less treasury stock. 7 (5) Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (6) Net yield on interest-earning assets represents annualized net interest income as a percentage of average interest earning assets. Rate / Volume Analysis The following table shows the effect of changes in volumes and rates on interest income and interest expense. The changes in interest income and interest expense attributable to changes in both volume and rate have been allocated to the changes due to rate. Tax exempt income was not recalculated on a tax equivalent basis due to the immateriality of the change to the table resulting from a recalculation.
Three Month Period ended March 31, 2003 --------------------------------------- 2003 vs. 2002 --------------------------------------- Increase (Decrease) Due to Volume Rate Net ------ ---- --- (In Thousands) Interest income: Loans receivable 985 (439) 546 Investment securities available for sale 199 (427) (228) Other interest earning assets (27) (5) (32) Total interest-earning assets 1,157 (871) 286 ===== ===== ===== Interest expense: Money market accounts 13 (96) (83) Certificates of deposit 263 (387) (124) Other liabilities 144 (170) (26) Total interest-bearing liabilities 420 (653) (233) ===== ===== ===== Net change in net interest income 737 (218) 519 ===== ===== =====
Provision for loan losses. For the three months ended March 31, 2003 the provision for loan losses was $150,000 compared to $250,000 for the comparable 2002 periods. The addition to the provision for loan losses for the three months ended March 31, 2003 was to cover net losses of $59,000 in the period and the $12.6 million increase in the loan portfolio. The evaluation for determining the provision includes evaluations of concentrations of credit, past loss experience, current economic conditions, amount and composition of fair value of 8 underlying collateral, loan commitments outstanding, delinquencies, and other information available at such time. The Company continues to monitor its allowance 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). Management periodically estimates the likely level of losses on loans to determine whether the allowance for loan losses is adequate to absorb losses in the existing portfolio for unidentified loans as well as classified loans. Based on these estimates, a provision for loan losses is charged to operations in order to adjust the allowance to a level determined to be adequate to absorb anticipated future losses. The allowance is based on management's evaluation of the collectibility of the loan portfolio, including the nature of the portfolio, credit concentrations, trends in historical loss experience, specific impaired loans, and economic conditions. Large groups of smaller balance homogenous loans are valued collectively for impairment. The amount of loss reserve is calculated using historical loss rates, net of recoveries, adjusted for environmental, and other qualitative factors such as industry, geographical, economic and political factors that can affect loss rates or loss measurements. Allowances for losses on specifically identified loans that are determined to be impaired are calculated based upon collateral value, market value, if determinable, or the present value of estimated future cash flows. The allowance is increased by a charge to operations, and reduced by charge-offs, net of recoveries. The allowance for loan losses is maintained at a level that represents management's best estimate of losses in the portfolio at the balance sheet date. However, there can be no assurance that the allowance for loan losses will be adequate to cover losses, which may be realized in the future, and that additional provisions for losses on loans will not be required. Other income. Total other income for the three months ended March 31, 2003 increased $100,000 to $1.4 million from $1.3 million for the comparable three month period in 2002. The increase in other income for the three months ended March 31, 2003 was primarily due to gains recognized from the sale of available for sale securities of $225,000, an increase of $178,000 from the same period in 2002. Such increases were partially offset by a decrease in other income of $70,000 to $491,000 at March 31, 2003 from $562,000 at March 31, 2002. Reflected in other income at March 31, 2002 is $104,000 recorded as a gain on other real estate sold. Other expense. Total other expense for the three month period ended March 31, 2003 increased $400,000 to $3.2 million from $2.8 million for the comparable three month period in 2002. Salaries and benefits increased $200,000 at March 31, 2003 from the comparable period in 2002 due to merit salary increases and increased pension costs. Occupancy expense for the three months ended March 31, 2003 increased $61,000 to $377,000 from $316,000 for the comparable three month period in 2002. Such increases at March 31, 2003 were predominantly due to depreciation expense related to equipment purchases for technological improvements and increased rental expense due to the relocation of the Company's item processing department. Other expense for the period ended March 31, 2003 increased $132,000 to $995,000 from $863,000 for the 9 comparable three month period in 2002. Included in this increase is $46,000 in costs associated with the Company's listing on the American Stock Exchange, $30,000 in donations primarily contributed to Action Housing to support local housing development, $11,000 in legal fees associated with the normal cost of doing business, $10,000 in increased costs associated with customer relations, and $10,000 in additional cost related to the Company's Pennsylvania shares tax. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There were no significant changes for the three months ended March 31, 2003 from the information presented in the 10K statement, under the caption Market Risk, for the year ended December 31, 2002. CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures Based on their evaluation as of a date within 90 days of the filing of this Quarterly Report on Form 10-Q, the Registrant's principal executive officer and principal financial officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rules 13a - 14(c) and 15d - 14(c) under the Securities Exchange Act of 1934 (the "Exchange Act")) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. (b) Changes in internal controls There were no significant changes in the Registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 10 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 The Annual Meeting of Shareholders of the Company was held on April 15, 2003 and the following matter was voted upon: Proposal I - Election of directors with terms to expire in 2004 FOR WITHHELD --- -------- Thomas Beter 2,435,593 20,316 Election of directors with terms to expire in 2006 FOR WITHHELD --- -------- Richard J. Hoffman 2,435,717 20,192 Edwin A. Paulone 2,426,031 29,878 Proposal II - The ratification of Edwards, Sauer, & Owens as auditors for the fiscal year ended December 31, 2003. FOR AGAINST WITHHELD --- ------- -------- 2,436,093 788 19,028 11 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) Amended 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**** 99.0 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ------------------------- * 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 exhibit of the Registrants Form 10-K for December 31, 2002. *** 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) Reports on Form 8-K 1) A Report on Form 8-K was filed on February 11, 2003 pursuant to items 5 and 7 announcing the operating results for the Fourth Quarter and Year ended December 31, 2002. 2) A Report on Form 8-K was filed on March 26, 2003 pursuant to items 5 and 7 announcing the approval of the Registrant's application for listing on the American Stock Exchange. 3) A Report on Form 8-K was filed on April 3, 2003 pursuant to items 5, 7 and 9 announcing the commencement of the Registrant's trading on the American Stock Exchange. 4) A Report on Form 8-K was filed on April 17, 2003 pursuant to items 5 and 7 announcing the results of the Registrant's annual meeting of shareholders and announcing the declaration of a second quarter cash dividend. 12 5) A Report on Form 8-K was filed on April 28, 2003 pursuant to items 7 and 9 (in compliance with Release Number 34-47583) announcing the Registrant's results of Operations for the quarter ended March 31, 2003. 13 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 6, 2003 By: /s/ Charles G. Urtin --------------------------------------- Charles G. Urtin President, Chief Executive Officer (Duly authorized officer) Date: May 6, 2003 By: /s/ Raymond G. Suchta --------------------------------------- Raymond G. Suchta Vice President, Chief Financial Officer (Duly authorized officer) 14 SECTION 302 CERTIFICATION I, Charles G. Urtin, certify that: 1. I have reviewed this quarterly report on Form 10-Q of IBT Bancorp, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 6, 2003 /s/ Charles G. Urtin ------------------------------------- Charles G. Urtin Chief Executive Officer SECTION 302 CERTIFICATION I, Raymond G. Suchta, certify that: 1. I have reviewed this quarterly report on Form 10-Q of IBT Bancorp, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. /s/ Raymond G. Suchta ------------------------------------- Date: May 6, 2003 Raymond G. Suchta Chief Financial Officer EX-99 3 ex99-0262.txt EX-99 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of IBT Bancorp, Inc. (the "Company") on Form 10-Q for the quarter ended March 31, 2003 (the "Report") as filed with the Securities and Exchange Commission on the date hereof, we, Charles G. Urtin, Chief Executive Officer, and Raymond G. Suchta, Chief Financial Officer, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Charles G. Urtin /s/ Raymond G. Suchta - ----------------------------------- ------------------------------------- Charles G. Urtin Raymond G. Suchta Chief Executive Officer Chief Financial Officer May 6, 2003 A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----