-----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, HmjDu74wkcYLHw3j4GKt4EB6Rxtm44F/LSSO09vhrU6oSgpRGd9epZAUZrd3MKYk nTHvzsA2bGFM4ZTkC/3ohQ== 0000946275-99-000476.txt : 19990813 0000946275-99-000476.hdr.sgml : 19990813 ACCESSION NUMBER: 0000946275-99-000476 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IBT BANCORP INC CENTRAL INDEX KEY: 0000801122 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 251532164 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25903 FILM NUMBER: 99685219 BUSINESS ADDRESS: STREET 1: 309 MAIN ST CITY: IRWIN STATE: PA ZIP: 15642 BUSINESS PHONE: 4128633100 MAIL ADDRESS: STREET 1: IBT BANCORP INC STREET 2: 309 MAIN ST CITY: IRWIN STATE: PA ZIP: 15642 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999 ------------- 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 (I.R.S. employer or organization) 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 NO X --- --- Number of shares of Common Stock issued and outstanding as of August 2, 1999: 3,023,799 - --------- IBT BANCORP, INC. Contents --------
Pages ----- PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated balance sheets at June 30, 1999 (unaudited) and December 31, 1998............................................................................1 Consolidated statements of income (unaudited) for the three and six months ended June 30, 1999 and 1998.................................................................................2 Consolidated statements of cash flows (unaudited) for the six months ended June 30, 1999 and 1998.................................................................................3 Notes to condensed consolidated financial statements (unaudited).............................................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..................................................11 PART II - OTHER INFORMATION Item 1. Legal Proceedings...........................................................................................12 Item 2. Changes in Securities and Use of Records....................................................................12 Item 3. Defaults upon Senior Securities.............................................................................12 Item 4. Submission of Matters to a Vote of Security Holders.........................................................12 Item 5. Other Information...........................................................................................12 Item 6. Exhibits and Reports on Form 8-K............................................................................13 Signatures.................................................................................................................14
PART I CONSOLIDATED BALANCE SHEETS IBT BANCORP, INC. AND SUBSIDIARY
June 30, 1999 December 31, ----------------------- ---------------------- (unaudited) 1998 ----------------------- ---------------------- ASSETS Cash and due from banks $ 11,500,525 $ 10,767,316 Interest-bearing deposits in banks 218,455 7,196,998 Federal funds sold 16,611,000 25,432,000 Securities available for sale 130,884,817 117,469,947 Securities held to maturity (Market value of 1,500,000 2,569,215 $1,498,635 and $2,554,545 respectively) Federal Home Loan Bank stock, at cost 1,544,300 1,308,100 Loans, net 249,329,644 238,304,491 Premises and equipment, net 4,811,813 4,879,133 Other assets 5,882,059 4,438,743 ----------------------- ---------------------- Total Assets $ 422,282,613 $ 412,365,943 ======================= ====================== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest bearing $ 56,041,813 $ 58,208,466 Interest-bearing 307,737,507 298,174,672 ----------------------- ---------------------- Total deposits 363,779,320 356,383,138 Securities sold under repurchase agreements 6,030,670 - Accrued interest and other liabilities 2,853,490 3,781,876 Long-term debt 12,000,000 14,000,000 ----------------------- ---------------------- Total liabilities 384,663,480 374,165,014 Stockholders' Equity Capital stock, par value $1.25, 5,000,000 shares authorized, 3,023,799 shares issued and outstanding 3,779,749 3,779,749 Surplus 2,073,102 2,073,102 Retained earnings 33,350,364 31,401,922 Accumulated other comprehensive income (1,584,082) 946,156 ----------------------- ---------------------- Total stockholders' equity 37,619,133 38,200,929 ----------------------- ---------------------- Total Liabilities and Stockholders' Equity $ 422,282,613 $ 412,365,943 ======================= ======================
1 CONSOLIDATED STATEMENTS OF INCOME IBT BANCORP, INC. AND SUBSIDIARY
Three Months Ended June 30, Six Months Ended June 30, --------------------------------------- --------------------------------------- 1999 1998 1999 1998 ------------------ ------------------ ----------------- ------------------- (unaudited) (unaudited) --------------------------------------- --------------------------------------- Interest Income Loans $ 4,851,764 $ 4,772,086 $ 9,625,318 $ 9,430,595 Investment securities 2,118,109 1,864,136 4,233,272 3,720,553 Federal funds sold 120,303 200,983 251,825 378,246 ------------ ------------ ------------ ------------ Total interest income 7,090,176 6,837,205 14,110,415 13,529,394 Interest Expense Deposits 2,973,836 3,027,614 6,009,989 6,014,562 Long-term debt 181,391 62,000 364,747 124,000 Repurchase agreements 34,327 - 43,437 - ------------ ------------ ------------ ------------ Total interest expense 3,189,554 3,089,614 6,418,173 6,138,562 ------------ ------------ ------------ ------------ Net Interest Income 3,900,622 3,747,591 7,692,242 7,390,832 Provision for Loan Losses 45,000 105,000 90,000 210,000 ------------ ------------ ------------ ------------ Net Interest Income after Provision 3,855,622 3,642,591 7,602,242 7,180,832 for Loan Losses Other Income (Losses) Service fees 420,977 346,759 792,999 644,657 Net investment security gains (losses) 3,619 (3,520) 4,789 24,999 Other income 315,999 223,974 603,826 400,856 ------------ ------------ ------------ ------------ Total other income (losses) 740,595 567,213 1,401,614 1,070,512 Other Expenses Salaries and employee benefits 1,165,937 977,526 2,160,506 2,072,125 Other expense 1,091,596 1,011,530 2,196,782 1,965,515 ------------ ------------ ------------ ------------ Total other expenses 2,257,533 1,989,056 4,357,288 4,037,640 ------------ ------------ ------------ ------------ Income Before Income Taxes 2,338,684 2,220,748 4,646,568 4,213,704 Provision for Income Taxes 747,492 718,261 1,488,606 1,335,777 ------------ ------------ ------------ ------------ Net income $ 1,591,192 $ 1,502,487 $ 3,157,962 $ 2,877,927 ============ ============ ============ ============ Net Income per Share of Capital Stock $ 0.52 $ 0.50 $ 1.04 $ 0.95 ============ ============ ============ ============ Dividends per Share of Capital Stock $ 0.20 $ 0.16 $ 0.40 $ 0.32 ============ ============ ============ ============
2 CONSOLIDATED STATEMENTS OF CASH FLOWS IBT BANCORP, INC. AND SUBSIDIARY
Six Months ended June 30, -------------------------------------- 1999 1998 ---------------- ----------------- (unaudited) -------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 3,157,962 $ 2,877,927 Adjustments to reconcile net cash from operating activities: Depreciation 267,000 236,000 Net amortization/accretion of premiums and discounts 31,275 (4,174) Net investment security gains (4,789) (24,999) Provision for loan losses 90,000 210,000 Decrease in cash due to changes in assets and liabilities: Other assets (139,860) (698,758) Accrued interest and other liabilities (928,386) (654,226) ------------ ------------ Net Cash From Operating Activities 2,473,202 1,941,770 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of securities available for sale 998,750 2,166,459 Proceeds from maturities of securities held to maturity 1,069,215 3,096,589 Proceeds from maturities of securities available for sale 19,776,987 20,221,918 Purchase of securities available for sale (38,050,787) (24,002,005) Net loans made to customers (11,115,153) (2,064,105) Purchases of premises and equipment (199,680) (224,483) Purchase of Federal Home Loan Bank stock (236,200) (137,400) ------------ ------------ Net Cash Used By Investing Activities (27,756,868) (943,027) CASH FLOWS FROM FINANCING ACTIVITIES Net increase in deposits 7,396,182 4,516,304 Net increase in securities sold under repurchase agreements 6,030,670 - Dividends (1,209,520) (970,764) Payments on long-term debt (2,000,000) - ------------ ------------ Net Cash From Financing Activities 10,217,332 3,545,540 ------------ ------------ Net Change in Cash and Cash Equivalents (15,066,334) 4,544,283 Cash and Cash Equivalents at Beginning of Period 43,396,314 27,700,319 ------------ ------------ Cash and Cash Equivalents at End of Period $ 28,329,980 $ 32,244,602 ============ ============
3 IBT BANCORP, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair presentation have been included. Operating results for the three months and six months ended June 30, 1999 are not necessarily indicative of the results that may be expected for the year ended December 31, 1999 or any future interim period. These statements should be read in conjunction with the registration statement on Form 10 (File No. 0-25903). 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, giving retroactive effect, in 1998, to the three-for-one stock split, declared December 28, 1998 and distributed January 19, 1999, was 3,023,799 for the six months ended June 30, 1999 and 1998. NOTE C - COMPREHENSIVE INCOME Total comprehensive income for the six months ended June 30, 1999 and 1998 was $627,724 and $2,830,076, respectively and comprehensive income (loss) for the three months ended June 30, 1999 and 1998 was $(129,764) and $1,409,315 respectively. 4 IBT BANCORP, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Cont. NOTE D - INVESTMENT SECURITIES Investment securities available for sale consist of the following:
June 30, 1999 -------------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Market Cost Gains Losses Value -------------------------------------------------------------------- U.S. Treasury securities $ 4,507,679 $ 29,046 $ - $ 4,536,725 Obligations of U.S. Government Agencies 77,431,335 71,260 (1,187,075) 76,315,520 Obligations of State and political sub-divisions 8,413,176 107,493 (183,642) 8,337,027 Mortgage-backed securities 42,134,713 41,239 (1,363,413) 40,812,539 Other securities 643,631 - - 643,631 Equity securities 154,410 84,965 - 239,375 -------------------------------------------------------------------- $133,284,944 $ 334,003 $ (2,734,130) $ 130,884,817 =========================================================================
NOTE E - REPURCHASE AGREEMENTS During 1999, the Bank began offering its corporate customers an investment product fashioned in the form of a repurchase agreement. Under the terms of the agreement, deposits in designated demand accounts of the customer are put into an investment vehicle which is used daily to purchase an interest in designated U.S. Government or Agencies' securities owned by the Bank. The Bank in turn agrees to repurchase these investments on a daily basis and pay the customer the daily interest earned on them. At June 30, 1999, the amount of repurchase agreements was $6,030,670. 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 The Company's total assets increased by $9.9 million to $422.3 million at June 30, 1999 from $412.4 million at December 31, 1998. The total balance in federal funds sold decreased $8.8 million to $16.6 million at June 30, 1999 from $25.4 million at December 31, 1998. This decrease was used to take advantage of market opportunities by funding investment securities classified as available for sale which reached $130.9 million at June 30, 1999 an increase of $13.4 million from December 31, 1998 of $117.5 million. Net loans receivable increased $11.0 million to $249.3 million at June 30, 1999 from $238.3 million at December 31, 1998. The increase in loans was primarily in the consumer loan portfolio, which rose $6.6 million to $59.0 million at June 30, 1999, from $52.4 million at December 31, 1998. This portfolio's increase was due to our competitive market rates. Interest-bearing deposits rose $9.6 million to reach $307.7 million at June 30, 1999 from $298.1 million at December 31, 1998. Competitive offering rates attributed to this growth. Non-interest bearing deposits decreased by $2.2 million to $56.0 million at June 30, 1999. The decrease in the non-interest bearing accounts is primarily attributed to repurchase agreements. During 1999, the Bank began offering its corporate customers an investment product fashioned in the form of a repurchase agreement. Under the terms of the agreement, deposits in designated demand accounts of the customer are put into an investment vehicle 6 which is used daily to purchase an interest in designated U.S. Government or Agencies' securities owned by the Bank. The Bank in turn agrees to repurchase these investments on a daily basis and pay the customer the daily interest earned on them. At June 30, 1999, the amount of repurchase agreements was $6.0 million. Growth in retained earnings of $1.9 million to $33.4 million at June 30, 1999 is attributed to the Corporation's consolidated earnings during the six months ended June 30, 1999; less dividends paid for the period. Accumulated other comprehensive income decreased $2.5 million to a loss of $1.6 million at June 30, 1999 a result of changes in the unrealized gain (loss) on the available for sale securities due to fluctuations in interest rates. Pusuant to generally accepted accounting principles, securities available for sale are recorded at current market value and net unrealized gains or losses on such securities are excluded from current earnings and reported net of income taxes, as part of comprehensive income, until realized. Because of interest rate volatility, the Company's accumulated comprehensive income (comprised solely of net unrealized holding gains and losses on securities available for sale) could materially fluctuate for each interim period and year-end. The majority of the accumulated unrealized loss resulted from the Company's investment in U.S. government agencies and mortgage backed securities. See Note D to the condensed consolidated financial statements. COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998: General: Net income for the three and six month period ended June 30, 1999 was $1.6 million and $3.2 million, respectively, or $89,000 and $280,000 more than the $1.5 million and $2.9 million earned during the same periods in 1998. The increase in net income for the three and six months ended June 30, 1999 were primarily the result of loan growth and the purchase of available for sale securities. Interest Income. Interest income increased $253,000 to $7.1 million for the three months ended June 30, 1999 from $6.8 million for the three months ended June 30, 1998. Interest income increased $581,000 to $14.1 million for the six months ended June 30, 1999 from $13.5 million for the six months ended June 30, 1998. The increase was primarily the result of an increase in the volume of net loans receivable outstanding during the three-month period as compared to the same period in 1998. Interest Expense. Interest expense increased $100,000 to $3.2 million for the three months ended June 30, 1999 from $3.1 million for the three months ended June 30, 1998. Interest expense increased $280,000 to $6.4 million for the six months ended June 30, 1999 from $6.1 million for the six months ended June 30, 1998. 7 Net Interest Income. Net interest income increased $153,000 to $3.9 million for the three months ended June 30, 1999 from $3.7 million for the same period in 1998. Net interest income increased $301,000 to $7.7 million for the six months ended June 30, 1999 from $7.4 million for the six months ended June 30, 1998. Provision for loan losses. The Company recorded a provision for loan losses of $45,000 for the three months ended June 30, 1998 compared to $105,000 for the same period in 1998. For the six months ended June 30, 1999 the Company recorded a provision for loan losses of $90,000 compared to $210,000 for the same period in 1998. The evaluation for determining the provision includes evaluations of concentrations of credit, past loss experience, current economic conditions, amount and composition of the loan portfolio (including loans being specifically monitored by management), estimated fair value of underlying collateral, loan commitments outstanding, delinquencies, and other information available at such times. The Company will continue to monitor its allowance for loan losses and make future adjustments to the allowance through the provision for loan losses as economic conditions dictate. Management continues to offer a wider variety of loan products coupled with the continued success of changing the mix of the products offered in the loan portfolio from lower yielding loans (i.e., one- to four-family loans) to higher yielding loans (i.e., equity loans, multi-family (five or more units) buildings, and commercial (nonresidential) mortgages). Although the Company maintains its allowance for loan losses at a level that it considers to be adequate to provide for the inherent risk of loss in its loan portfolio, there can be no assurance that future losses will not exceed estimated amounts or that additional provisions for loan losses will not be required in future periods due to the higher degree of credit risk which might result from the change in the mix of the loan portfolio. Non interest income. Non interest income amounted to $741,000 and $1.4 million for the three and six months ended June 30, 1999, and $567,000 and $1.1 million for the three and six months ended June 30, 1998, respectively. The total increases in the three and six month amounts ended June 30, 1999 over the same period in 1998 were a result of income generated from ATM surcharging and increased overdraft fee resulting from an increase in the number of demand deposit accounts. Non interest expense. Non interest expense increased by $268,000 to $2.3 million for the three-month period ended June 30, 1999 from $2.0 million for the comparable quarter in 1998. For the six month period ended June 30, 1999, non-interest expense amounted to $4.3 million, an increase of $319,000 from the $4.0 million reported for the six months ended June 30, 1998. Increased expenses were the result of the opening of supermarket branches in September, 1998 and February 1999. 8 Year 2000 Issues Senior management views the year 2000 initiative as one of the highest priorities of the Company. With oversight from the Board of Directors, the Company is aggressively pursuing appropriate solutions and assurances with regard to compliance of all applications affected by the year 2000. In 1997, the Bank put together a year 2000 team consisting of senior management, officers, and members of various departments in the Bank, to assess the impact year 2000 issues could have on the Bank's daily business operations. A five-phase plan was developed. The five phases included awareness, assessment, renovation, validation, and implementation. The awareness phase included gathering information on year 2000 issues and sharing it with all levels of employees and the Board of Directors. This process of gathering and sharing information continues and has been expanded to include the Bank's customer base. Workshops have been provided for commercial customers. Newsletters, local newspaper announcements and brochures are available at each branch location to keep customers, shareholders and employees abreast of the year 2000 issue. The Board of Directors is updated on a monthly basis. The assessment phase includes the inventorying of all hardware and software and identification of all systems, which could be affected by the date change. The hardware, software and systems were prioritized based upon their importance in providing uninterrupted services to customers. Those items determined to be of the highest priority were ranked "mission critical." The Bank's core processing system was determined to be "mission critical." The core processing system is outsourced to two outside vendors. The first vendor provides the software for in-house processing of all documents including checks, deposit tickets, loan payments, and miscellaneous items from the Federal Reserve, correspondent banks, and over the counter transactions. The second vendor, at an off-site location, performs the process of editing, posting, and report generation of all activity on customer accounts. All non-information technology systems were also identified during the assessment phase and testing was performed. This included testing of loan calculators, fax machines, VCR's, surveillance cameras, etc. Vendors were contacted and provided with makes, models, and serial numbers on systems that could not be tested in-house, such as, elevators, vault security systems, phone systems, and heat/air conditioning systems. The vendors provided written assurance that their systems are year 2000 compliant. 9 During the assessment phase it was determined that the cost associated with addressing the year 2000 issue should not exceed $400,000, which includes capital expenditures. At June 30, 1999, approximately $190,000 had been expended. These costs or any additional costs associated with the year 2000 issue are not expected to have a major impact on the Company's financial statements. The renovation phase included hardware replacement, software upgrades and vendor assurance. At June 30, 1999, the renovation phase for all "mission critical" systems are complete and other systems are in their final stages. The validation phase includes extensive testing of all hardware, software and systems provided by third party vendors. As of June 30, 1999, the final states of testing of our "mission critical" core applications are complete. The testing process was monitored by an independent consulting group. The anticipated completion for testing of all remaining products is September 30, 1999. The risks exist that some of the Bank's commercial borrowers may not be prepared for year 2000 issues and may suffer financial harm as a result. This, in turn, represents risk to the Bank regarding the repayment of loans from those commercial customers. Because of this, year 2000 compliance is considered part of our loan underwriting procedures. A risk analysis was performed in September of 1998 on all existing commercial loans with an aggregate balance exceeding $100,000 and commercial mortgage loans with an aggregate balance exceeding $250,000. The risk analysis was performed using FDIC guidelines. Commercial loan customers were evaluated based upon their year 2000 vulnerability, their ability to obtain the resources to identify and correct any deficiencies, and their year 2000 plan. Their overall year 2000 credit risk was then classified as low, medium, or high. Those classified as high risk are re-evaluated on a quarterly basis. However, repayment sources for the majority of loans in the Bank's commercial loan portfolio are in multi-family real estate projects that tend to be less computer-dependent than, for example, a manufacturing business. Nevertheless, a year 2000 disclosure is included in new commercial and commercial mortgage loans requiring the borrower to maintain year 2000 compliant systems. A Contingency and Business Resumption Plan was approve by the Board in May 1999. This plan addresses perceived risks associated with the year 2000 problem. These activities include remediation contingency planning intended to mitigate any risks associated with unforeseen system glitches, system failure, increased demands for cash, or processes outside the Bank's control. The remainder of 1999 will be used to further validate the plan. While this plan was designed to significantly address the Year 2000 problems of the Bank, the occurrence of the following could negatively impact the Bank: 10 (a) utility service companies may be unable to provide the necessary service to drive the Bank's data systems or provide sufficient sanitary conditions for the Bank's offices; (b) the Bank's primary software provider could have a major malfunction in its system or their service could be disrupted due to its utility providers, or some combination of the two; or (c) the Bank may have to transact its business manually The Bank will attempt to monitor these uncertainties by continuing to request an update on all critical and important vendors through the remainder of 1999. If the Bank identifies any concern related to any critical or important vendor, the contingency plan will be implemented immediately to assure continued service to the Bank's customers. The implementation phase includes incorporating all necessary changes and becoming completely year 2000 compliant. It is expected that this phase will be completed by September 30, 1999. The Bank continues to focus on the awareness phase with its efforts on providing customers, the Company's shareholders and employees with up-to-date information on the Bank's state of preparedness for the year 2000. This will include employee awareness at monthly manager and operation meetings and informational seminars at various local civic groups. The Bank will also be readily available to answer any questions. Successful and timely completion of the year 20000 project is based on management's best estimates derived from various assumptions of future events, which are inherently uncertain, including the progress and results of the Bank's testing plans, and all vendors, suppliers and customer readiness. Despite the best efforts of management to address this issue, the vast number of external entities that have direct and indirect business relationships with the Bank, such as customers, vendors, payment systems providers, and other financial institutions, makes it impossible to assure that a failure to achieve compliance by one or more of these entities would not have a material impact on the financial statements of the Company. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There were no significant changes for the six months ended June 30, 1999 from the information presented in the Form 10 registration statement, under the caption Market Risk, for the year ended December 31, 1998. 11 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 Registrant was held on April 19, 1999 and the following matters were voted upon: Proposal I - Election of directors with terms to expire in 2002. FOR WITHHELD --- -------- J. Cart Gardner 2,586,901 44,950 Richard L. Ryan 2,630,569 1,390 Robert C. Whisner 2,630,569 1,390 Proposal II - The approval of amendments to the articles of incorporation and bylaws of the Registrant. FOR: 2,583,691 AGAINST: 48,870 ABSTAIN: 2,268 Item 5. Other Information Not applicable. 12 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.* 27 Financial Data Schedule (electronic filing only) --------------- *Incorporated by reference to the registration statement on Form 10, filed on April 29, 1999 and subsequently amended on June 28, 1999. (b) Reports on Form 8-K -- None. 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: August 12, 1999 By: /s/Charles G. Urtin ---------------------------------- Charles G. Urtin Executive Vice President and Chief Financial Officer (duly authorized officer) 14 EX-27 2 FDS
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION. 1000 6-MOS DEC-31-1999 JUN-30-1999 11,501 218 16,611 0 130,885 1,500 1,499 247,061 2,269 422,283 363,779 0 2,853 12,000 0 0 3,780 33,839 422,283 9,625 4,233 252 14,110 6,010 408 7,692 90 5 4,357 4,647 4,647 0 0 3,158 1.04 1.04 0 12 1,675 0 0 2,228 53 4 2,269 2,269 0 0
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