10-Q 1 f10q_033106-0262.txt FORM UNITED STATES 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, 2006 -------------- 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. 1-31655 IBT Bancorp, Inc. -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Pennsylvania 25-1532164 ---------------------------- ------------------------------------ (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 309 Main Street, Irwin, Pennsylvania 15642 ------------------------------------ ----- (Address of principal executive offices) (Zip Code) (724) 863-3100 -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NA -------------------------------------------------------------------------------- (Former name, former address and former fiscal year if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. [X] Yes [ ] No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No Number of shares of Common Stock outstanding as of May 09, 2006: 2,954,080 IBT BANCORP, INC. Contents --------
Pages ----- PART I - FINANCIAL INFORMATION Item 1. Financial Statements............................................................................ 2 Consolidated balance sheets at March 31, 2006 (unaudited) and December 31, 2005............................................................... 2 Consolidated statements of income (unaudited) for the three months ended March 31, 2006 and 2005 .................................................................. 3 Consolidated statements of cash flows (unaudited) for the three months ended March 31, 2006 and 2005................................................................... 4 Notes to consolidated financial statements...................................................... 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................................................................... 6 Item 3. Quantitative and Qualitative Disclosures About Market Risk...................................... 11 Item 4. Controls and Procedures......................................................................... 11 PART II - OTHER INFORMATION Item 1. Legal Proceedings............................................................................... 12 Item 1A. Risk Factors.................................................................................... 12 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds..................................... 12 Item 3. Defaults upon Senior Securities................................................................. 13 Item 4. Submission of Matters to a Vote of Security-Holders............................................. 13 Item 5. Other Information............................................................................... 13 Item 6. Exhibits........................................................................................ 13 Signatures...................................................................................................... 15
CONSOLIDATED BALANCE SHEETS IBT BANCORP, INC. AND SUBSIDIARY
March 31, 2006 December 31, 2005 -------------- ------------------ (unaudited) (unaudited) -------------- ------------------ ASSETS Cash and due from banks $ 18,374,973 $ 15,063,970 Interest-bearing deposits in banks 199,369 435,970 Federal funds sold 4,950,000 - Certificates of deposit 100,000 100,000 Securities available for sale 200,231,601 195,993,449 Federal Home Loan Bank stock, at cost 5,482,300 5,469,600 Loans, net 450,965,563 442,225,344 Premises and equipment, net 5,534,321 5,624,572 Other assets 20,518,402 20,237,792 ------------- ------------- Total Assets $ 706,356,529 $ 685,150,697 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest bearing $ 82,584,241 $ 83,846,681 Interest-bearing 444,119,758 436,639,077 ------------- ------------- Total deposits 526,703,999 520,485,758 Repurchase agreements 32,952,404 18,442,703 Accrued interest and other liabilities 6,200,629 4,022,118 Federal funds purchased - 12,468,000 FHLB advances 78,990,242 68,651,125 ------------- ------------- Total liabilities 644,847,274 624,069,704 Stockholders' Equity Capital stock, par value $1.25 per share, 50,000,000 shares authorized, 3,023,799 shares issued, 2,954,080 and 2,955,455 shares outstanding at March 31, 2006 and December 31, 2005, respectively 3,779,749 3,779,749 Surplus 1,227,680 1,231,444 Retained earnings 59,763,942 58,931,230 Accumulated other comprehensive income (859,955) (512,029) ------------- ------------- 63,911,416 63,430,394 Less: Treasury stock, at cost (2,402,161) (2,349,401) ------------- ------------- Total stockholders' equity 61,509,255 61,080,993 ------------- ------------- Total Liabilities and Stockholders' Equity $ 706,356,529 $ 685,150,697 ============= =============
The accompanying notes are an integral part of these consolidated financial statements. 2 CONSOLIDATED STATEMENTS OF INCOME IBT BANCORP, INC. AND SUBSIDIARY
Three Months Ended March 31, ---------------------------- 2006 2005 ---------- ---------- (unaudited) Interest Income Loans, including fees $7,214,485 $6,724,232 Investment securities 2,202,385 2,005,579 Federal funds sold 1,472 8,220 ---------- ---------- Total interest income 9,418,342 8,738,031 Interest Expense Deposits 2,891,101 2,317,160 FHLB advances 757,706 729,507 Repurchase agreements 177,905 64,946 Federal funds purchased 183,934 15,011 ---------- ---------- Total interest expense 4,010,646 3,126,624 ---------- ---------- Net Interest Income 5,407,696 5,611,407 Provision for Loan Losses 300,000 300,000 ---------- ---------- Net Interest Income after Provision for Loan Losses 5,107,696 5,311,407 Other Income Service fees 872,154 848,221 Investment security gains 255,000 81,111 Increase in cash surrender value of life insurance 110,287 107,515 Debit card fees 196,513 175,075 Other income 410,599 412,748 ---------- ---------- Total other income 1,844,553 1,624,670 Other Expenses Salaries 1,543,630 1,407,008 Pension and other employee benefits 577,611 471,504 Occupancy expense 413,466 433,749 Data processing expense 267,321 236,007 Pennsylvania shares tax 150,785 131,643 Advertising expense 62,929 59,575 Other expenses 1,021,921 970,675 ---------- ---------- Total other expenses 4,037,663 3,710,161 ---------- ---------- Income Before Income Taxes 2,914,586 3,225,916 Provision for Income Taxes 604,147 901,770 ---------- ---------- Net Income $2,310,439 $2,324,146 ========== ========== Basic Earnings per Share $ 0.78 $ 0.79 ========== ========== Diluted Earnings per Share $ 0.78 $ 0.78 ========== ========== Dividends per Share $ 0.50 $ 0.46 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 3 CONSOLIDATED STATEMENTS OF CASH FLOWS IBT BANCORP, INC. AND SUBSIDIARY
Three Months Ended March 31, ---------------------------- 2006 2005 ------------ ------------ (unaudited) ---------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,310,439 $ 2,324,146 Adjustments to reconcile net cash from operating activities: Depreciation 204,000 244,548 Increase in cash surrender value of insurance (110,287) (107,515) Net amortization/accretion of premiums and discounts 111,912 227,780 Investment security gains (255,000) (81,111) Provision for loan losses 300,000 300,000 Increase (decrease) in cash due to changes in assets and liabilities: Other assets 13,097 290,624 Accrued interest and other liabilities 2,178,511 1,719,028 ------------ ------------ Net Cash From Operating Activities 4,752,672 4,917,500 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of securities available for sale 2,565,000 - Proceeds from maturities of securities available for sale 7,512,912 12,892,904 Purchase of securities available for sale (14,776,895) (14,645,746) Net (increase) decrease in loans (8,967,646) 6,940,362 Purchases of premises and equipment (113,749) (98,219) Proceeds from sales of Federal Home Loan Bank stock 2,372,000 2,022,300 Purchase of Federal Home Loan Bank stock (2,384,700) (1,629,000) ------------ ------------ Net Cash (Used By) From Investing Activities (13,793,078) 5,482,601 CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in deposits 6,218,241 (2,908,336) Net increase in securities sold under repurchase agreements 14,509,701 4,372,924 Dividends paid (1,477,727) (1,359,509) Proceeds from FHLB advances 12,000,000 - Repayment of FHLB advances (1,660,883) (399,188) Federal funds purchased (12,468,000) - Exercised stock options (3,764) - Purchase Treasury stock (52,760) - ------------ ------------ Net Cash From (Used By) Financing Activities 17,064,808 (294,109) ------------ ------------ Net Change in Cash and Cash Equivalents 8,024,402 10,105,992 Cash and Cash Equivalents at Beginning of Period 15,499,940 16,187,171 ------------ ------------ Cash and Cash Equivalents at End of Period $ 23,524,342 $ 26,293,163 ============ ============
The accompanying notes are an integral part of these consolidated financial statements. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS IBT BANCORP, INC. AND SUBSIDIARY Period Ended March 31, 2006 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 and 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, 2006 are not necessarily indicative of the results that may be expected for the year ended December 31, 2006 or any future interim period. The interim financial statements should be read in conjunction with the financial statements and footnotes thereto included in the IBT Bancorp, Inc. and subsidiary Annual Report on Form 10-K for the year ended December 31, 2005. 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 2,954,922 for the three months ended March 31, 2006 and 2,955,455 for the three months ended March 31, 2005. NOTE C - COMPREHENSIVE INCOME Total comprehensive income for the three months ended March 31, 2006 and 2005 was $1,962,513 and $1,079,787, respectively. NOTE D - INVESTMENT SECURITIES Investment securities available for sale consist of the following:
March 31, 2006 --------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Market Cost Gains Losses Value ------------- ------------- ------------- ------------- Obligations of U.S. Government Agencies $ 75,609,764 $ 25,940 $ (1,575,723) $ 74,059,981 Obligations of States and political sub-divisions 57,089,629 1,272,854 (270,391) 58,092,092 Mortgage-backed securities 63,542,582 74,420 (1,887,370) 61,729,632 Other securities 197,284 - (1) 197,283 Equity securities 5,454,789 719,097 (21,273) 6,152,613 ------------- ------------- ------------- ------------- $ 201,894,048 $ 2,092,311 $ (3,754,758) $ 200,231,601 ============= ============= ============= =============
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", "anticipates", "contemplates", "expects", and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which include changes in interest rates, risks associated with the effect of opening new branches, the ability to control costs and expenses, and general economic conditions. IBT Bancorp, Inc. undertakes no obligation to update those forward-looking statements 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 and trust services through its wholly owned banking subsidiary, Irwin Bank & Trust Co. (collectively, the "Company"). The Company's stock is traded on the American Stock Exchange under the symbol IRW. FINANCIAL CONDITION At March 31, 2006 total assets increased $21.2 million to $706.4 million from $685.2 million at December 31, 2005. Asset growth was primarily due to increases in net loans, securities available for sale, and federal funds sold of $8.7 million, $4.2 million, and $4.9 million, respectively. Net loans increased to $451.0 million at March 31, 2006 from $442.2 million at December 31, 2005. This change was primarily due to an increase in real estate secured mortgage and commercial loans of $6.1 million and consumer term loans of $2.6 million. At March 31, 2006, securities available for sale increased $4.2 million to $200.2 million from $196.0 million at December 31, 2005. This change was primarily due to increases in mortgage-backed securities and obligations of states and political sub-divisions, which posted net increases of $7.9 million and $3.3 million, respectively offset by a net decrease in obligations of U.S. government agencies of $4.8 million and equity securities of $2.1 million. The Company evaluates the available-for-sale investment portfolio on an on-going basis to maximize yield, within established risk thresholds, making purchasing and selling decisions accordingly. At March 31, 2006, total liabilities increased $20.7 million to $644.8 million from $624.1 million at December 31, 2005. This increase was primarily the result of increases in repurchase agreements, FHLB advances, and interest-bearing deposits of $14.6 million, $10.3 million, and $7.4 million, respectively offset by a $12.5 million decrease in federal funds purchased. Repurchase agreements increased to $33.0 million at March 31, 2006, from $18.4 million 6 at December 31, 2005. The Company offers its corporate customers sweep accounts where unused deposit balances are swept into an overnight repurchase agreement yielding market rates. FHLB advances reached $79.0 million at March 31, 2006, from $68.7 million at December 31, 2005. The increase is due to $12.0 million in additional advances with terms ranging from six months to eighteen months and an average cost of 5.26%. These advances will be used to fund loan demand. Offsetting the increase were re-payments of $1.7 million. Interest-bearing deposits increased to $444.1 million at March 31, 2006, from $436.7 million at December 31, 2005. The increase of $7.4 million was primarily in certificates of deposit and interest-bearing checking accounts, which increased $5.3 million and $4.5 million, respectively. The increases were offset by a $3.1 million decrease in money market accounts. The interest rates offered on certificates of deposit and the services and benefits bundled into the interest-bearing checking products have been responsible for the overall growth in interest-bearing deposits. Non-interest bearing deposit accounts decreased to $82.6 million at March 31, 2006, from $83.8 million at December 31, 2005. The decrease of $1.2 million is attributed to normal fluctuations, which arise due to the timing of month-end pension and social security deposits. At March 31, 2006 total stockholders' equity increased $400,000 to $61.5 million from $61.1 million at December 31, 2005. The increase was primarily due to net income of $2.3 million offset by dividends paid of $1.5 million, a decrease in accumulated other comprehensive income (net of deferred income taxes) of $350,000, and treasury stock purchased of $53,000. Accumulated other comprehensive income decreased as a result of changes in the net unrealized gains/losses 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, 2006 decreased $14,000, or .60%, to $2,310,000, or $.78 diluted earnings per share from $2,324,000, or $.78 diluted earnings per share, for the comparable three month period in 2005. The decrease for the three months ended March 31, 2006 was primarily the result of a decrease in net interest income and an increase in other expense offset by an increase in other income. Net interest income. Net interest income declined to $5,408,000 for the three months ended March 31, 2006 compared to $5,611,000 for the three months ended March 31, 2005. While interest income increased 8% over the comparable 2005 quarter, interest expense increased 28%. This was due to rates paid for deposits increasing at a rate faster than rates charged for loans. As a result, the Company's net interest spread tightened to 2.83% from 3.13 % in the prior year period and its net interest margin narrowed to 3.31% from 3.54%. The narrowing of the spread and margin reflect the flattening of the yield curve between periods, which has seen a steady increase in short-term rates while long-term rates have remained stable. Because the loan portfolio is primarily fixed rate, earning asset yields have not adjusted 7 as quickly to the rate environment as funding costs. Interest income. Interest income for the three months ended March 31, 2006 increased $680,000 to $9,418,000 from $8,738,000 for the comparable three month period in 2005. The average balance of interest earning assets increased $18.9 million for the three months ended March 31, 2006, to $653.8 million from $634.9 million for the comparable period in 2005, the yield on these assets increased 26 basis points to 5.76%, for the three months ended March 31, 2006 from 5.50% for the comparable period in 2005. See "Average Balance Sheet and Rate/Volume Analysis" Interest expense. Interest expense for the three months ended March 31, 2006 increased $884,000 to $4,010,000 from $3,127,000 for the comparable period in 2005. The change in interest expense was primarily attributed to an increase of $18.7 million in the average balance of interest-bearing liabilities and a 56 basis point increase in the average cost of funds to 2.93% for the three months ended March 31, 2006 from 2.37% for the comparable period in 2005. See "Average Balance Sheet and Rate/Volume Analysis" 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, 2006 2005 -------------------------------------- ------------------------------------ Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost ------------------------------------------------------------------------------ (Dollars In Thousands) (Dollars In Thousands) Interest-earning assets: Loans receivable (1) $ 449,608 $ 7,215 6.42% $ 436,054 $ 6,724 6.17% Investment securities (2) 204,026 2,202 4.32% 197,348 2,006 4.07% Federal funds sold 171 1 3.44% 1,533 8 2.14% --------- ------- -------- ---------- -------- ------- Total interest earning assets $ 653,805 $ 9,418 5.76% $ 634,935 $ 8,738 5.50% Non-interest earning assets (3) 36,999 38,766 --------- ---------- Total assets $ 690,805 $ 673,701 ========= ========== Interest-bearing liabilities: Money market accounts $ 54,411 $ 279 2.05% $ 62,194 $ 214 1.37% Certificates of Deposit 256,989 2,426 3.78% 249,222 1,932 3.10% Other liabilities (4) 235,153 1,305 2.22% 216,452 981 1.81% --------- ------- -------- ---------- -------- ------- Total interest-bearing liabilities $ 546,552 $ 4,010 2.94% $ 527,868 $ 3,127 2.37% ------- -------- ------- -------
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Non-interest-bearing liabilities (3) 83,746 85,493 --------- ----------- Total liabilities $ 630,298 $ 613,361 Stockholders' equity (5) 60,507 60,340 --------- ----------- Total liabilities and stockholders' equity $ 690,805 $ 673,701 ========= =========== Net interest income $ 5,408 $ 5,611 ======= ========= Interest rate spread (6) 2.82% 3.13% ========== ========== Net interest margin (7) 3.31% 3.54% ========== ========== Ratio of average interest-earning assets to average interest-bearing liabilities 119.62% 120.28% ========== ========== ----------------------------------------------------------------------------------------------------------------------------
(1) Average balances include non-accrual loans, and are net of deferred loan fees. (2) Includes investment securities, interest-bearing deposits in other financial institutions and FHLB stock. (3) Includes net deferred income taxes in excess of deferred tax benefits on AFS securities (SFAS 115), stock options (SFAS 123/148) and deferred fees (SFAS 109). (4) Includes FHLB advances and Federal funds purchased, and repurchase agreements. (5) Includes capital stock, surplus and unrealized holding gains on SFAS 115 AFS securities. (6) Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (7) Net interest margin represents 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, 2006 vs. 2005 ----------------------------------------------- Increase (Decrease) Due to ----------------------------------------------- Volume Rate Net -------------- ----------------- -------------- (Dollars In Thousands) Interest income: Loans receivable $ 210 $ 281 $ 491 Investment securities available for sale 67 129 196 Other interest earning assets (8) 1 (7) ----------- -------------- -------------- Total interest-earning assets 269 411 680 =========== ============== ==============
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Interest expense: Money market accounts (27) 92 65 Certificates of deposit 60 434 494 Other liabilities 84 240 324 ----------- -------------- -------------- Total interest-bearing liabilities 117 766 883 =========== ============== ============== Net change in net interest income $ 152 $ (355) $ (203) =========== ============== ==============
Provision for loan losses. For the three months ended March 31, 2006 and 2005, the provision for loan losses was $300,000. At March 31, 2006, the allowance for loan losses equaled .82% of total loans outstanding compared to .67% at March 31, 2005. Net charge-offs as a percentage of average loans for the respective periods were .02% and .003%. The provision for loan losses is charged to operations to bring the total allowance for loan losses to a level that represents management's best estimate of the losses inherent in the portfolio, based on a monthly review by management of the following factors: o Historical experience o Volume o Type of lending conducted by the Bank o Industry standards o The level and status of past due and non-performing loans o The general economic conditions in the Bank's lending area; and o Other factors affecting the collectability of the loans in the portfolio Large groups of homogeneous loans, such as residential real estate, small commercial real estate loans and home equity and consumer loans are evaluated in the aggregate using historical loss factors and other data. The amount of loss reserve is calculated using historical loss rates, net of recoveries on a five year rolling weighted average, adjusted for environmental, and other qualitative factors such as industry, geographical, economic and political factors that can effect loss rates or loss measurements Watch and classified loans are allocated additional reserves. Large balance and/or more complex loans such as multi-family and commercial real estate loans may be evaluated on an individual basis and are also evaluated in the aggregate to determine adequate reserves. As specific loans are determined to be impaired, specific reserves are assigned based upon collateral value, market value, if determinable, or the present value of the estimated future cash flows of the loan. The allowance is increased by a provision for loan loss which is charged to expense, and 10 reduced by charge-offs, net of recoveries. Loans are placed on non-accrual status when they are 90 days past due, unless they are adequately collateralized and in the process of collection. 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 losses will be adequate to cover losses which may be realized in the future and that additional provisions for losses will not be required. Other income. Total other income for the three months ended March 31, 2006 increased $220,000 to $1,845,000 from $1,625,000 for the comparable three month period in 2005. The increase in other income for the three months ended March 31, 2006 was primarily due to an increase in investment security gains of $174,000. Service fees and debit card fees collected also increased $24,000 and $21,000, respectively, from the comparable period in 2005. A growing deposit base and increased transactions supported the additional fees collected. The change in security gains was due to the sale of equity securities, that were written down in December 2004. Other expense. Total other expense for the three month period ended March 31, 2006 increased $328,000 to $4,038,000 from $3,710,000 for the comparable three month period in 2005. Salaries and pension and employee benefit costs increased $137,000 and $106,000, respectively at March 31, 2006 from the comparable period in 2005 due to annual salary increases, staff additions, and the increased cost of funding the Company's pension plan in the low rate environment. The balances of the increases are due to normal increases in the cost of doing business. Provision for income taxes. Income taxes decreased to $604,000 for the three month period ended March 31, 2006 from $902,000 for the comparable quarter in 2005 as a result of non-taxable security gains recorded from the sale of equity securities and the net increase in tax free obligations of states and political sub-divisions of $3.3 million. Although the securities were written down, for financial reporting purposes, in December 2004, their tax basis did not change. Due to these factors, the effective tax rate decreased to 21% for the first quarter of 2006 from 28% for the comparable quarter in 2005. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There were no significant changes for the three months ended March 31, 2006 from the information presented in the 10K statement, under the caption Market Risk, for the year ended December 31, 2005. Item 4. CONTROLS AND PROCEDURES The Company's management evaluated, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company's disclosure controls and procedures, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required 11 to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. There were no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. PART II. OTHER INFORMATION Item 1. Legal Proceedings The Registrant is not party to any material legal proceedings at the present time. From time to time, the Bank is a party to routine 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 1A. Not applicable Item 2. Unregistered Sales of Equity Securities and Use of Proceeds (a) Unregistered Sales of Equity Securities. Not Applicable (b) Use of Proceeds. Not Applicable (c) Issuer Purchases of Equity Securities.
--------------------------- -------------------- --------------------- ----------------------- ----------------------------- (c) Total Number (d) Maximum Number Of Shares (or Units) (or Approximate Dollar (b) Purchased as Part Value) of Shares (or (a) Total Number Average Price Of Publicly Units) that May Yet Be Of Shares (or Paid per Share Announced Plans Purchased Under the Period Units) Purchased (or Unit) or Programs* Plans or Programs --------------------------- -------------------- --------------------- ----------------------- ----------------------------- 12 January 1 through 31 -- $ -- 68,344 82,756 --------------------------- -------------------- --------------------- ----------------------- ----------------------------- February 1 through 28 700 38.475 69,044 82,056 --------------------------- -------------------- --------------------- ----------------------- ----------------------------- March 1 through 31 675 37.69 69,719 81,381 --------------------------- -------------------- --------------------- ----------------------- ----------------------------- Total 1,375 $ 38.09 69,719 81,381 --------------------------- -------------------- --------------------- ----------------------- -----------------------------
* On November 18, 1999, the Registrant announced a stock repurchase plan for up to 151,000 shares. 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 The following exhibits are either filed with or incorporated by reference in this Quarterly Report on Form 10-Q: 3(i) Articles of Incorporation of IBT Bancorp, Inc.* 3(ii) Amended Bylaws of IBT Bancorp, Inc.** 4 Rights Agreement, dated as of November 18, 2003, by and between IBT Bancorp, Inc. and Registrar and Transfer Company, as Rights Agent.*** 10 Change In Control Severance Agreement with Charles G. Urtin **** 10.1 Deferred Compensation Plan For Bank Directors**** 10.2 Death Benefit Only Deferred Compensation Plan For Bank Directors effective as of January 1, 1990**** 10.3 Retirement and Death Benefit Deferred Compensation Plan For Bank Directors effective as of January 1, 1990**** 10.4 2000 Stock Option Plan***** 10.5 Irwin Bank & Trust Company Supplemental Pension Plan ****** 31.1 Rule 13a-14(a) Certification of Chief Executive Officer 31.2 Rule 13a-14(a) Certification of Chief Financial Officer 32 Section 1350 Certification _________________________ * Incorporated by reference to the identically numbered exhibits of the Registrant's Form 10 (File No. 0-25903) filed April 29, 1999. ** Incorporated by reference to the identically numbered exhibit of the 13 Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2002. *** Incorporated by reference to Exhibit 4 to Amendment No. 1 to Form 8-A (File No. 1-31655) filed November 20, 2003. **** Incorporated by reference to the identically numbered exhibits of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1999. ***** Incorporated by reference to Exhibit 4.1 the Registrant's Registration Statement on Form S-8 (File No. 333-40398) filed June 29, 2000. ****** Incorporated by reference to identically numbered exhibit to Registrant's Annual Report on Form 10-K for fiscal year ended December 31, 2004. 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: May 8, 2006 By: /s/Charles G. Urtin ---------------------------------- Charles G. Urtin President, Chief Executive Officer (Duly authorized officer) Date: May 8, 2006 By: /s/Raymond G. Suchta ---------------------------------- Raymond G. Suchta Chief Financial Officer (Principal Financial Officer) 15