SEC Company Response from IBT BANCORP INC (CIK 0000801122) — Jul 15, 2005
IBT BANCORP INC (CIK 0000801122)
Date: July 15, 2005 · CIK: 0000801122 · Accession: 0000946275-05-000708
AI Filing Summary & Sentiment
Referenced dates: July 1, 2005
Letter
IBT BANCORP, INC. ---------------------------------------------------------------------- [LOGO] BY FACSIMILE AND EDGAR ---------------------- July 15, 2005 Mr. Don Walker Senior Assistant Chief Accountant Securities and Exchange Commission 100 F Street, N.E. Mail Stop 4561 Washington D.C. 20549
Dear Mr. Walker,
I am writing on behalf of IBT Bancorp, Inc. (the "Registrant") in response to the staff's letter of comment dated July 1, 2005. Our responses are numbered so as to correspond with the numbering in the comment letter.
Form 10-K ---------
Our methodology for calculating our reserve for loan losses is as follows:
o Our portfolio is segmented according to collateral.
o Loans are classified as acceptable, watch, substandard, doubtful, loss or special review.
o Homogeneous groups of loans classified as acceptable or watch are provided reserves according to a five year rolling average of net charge offs, adjusted for nonqualitative factors.
o Homogeneous groups of loans classified as substandard or doubtful are provided reserves according to percentages required by the FDIC.
o Loans classified as loss are written off.
o Impaired loans (all of which are collateral dependent) are provided reserves equal to the difference between the loan balance and the value of the collateral (fair value less estimated selling costs), except non-accrual loans which are provided reserves at 50% of the loan balance.
As loans change in classification the portion of the loans loss reserve assigned to those classified loans changes. A summary of our work papers for the calculation of the adequacy of the reserves for December 31, 2004 and 2003 is attached.
-------------------------------------------------------------------------------- 309 Main Street - Irwin, PA 15642 o (724) 863-3100
<PAGE> Mr. Don WQalker July 15, 2005 Page 2.
Note 3-2004 Financial Statements -------------------------------- <TABLE> <CAPTION>
Total recorded for impaired loans:
2003-Non accrual loans $567,564, specific reserves $283,781 (see w/p's attached)
<S> <C> 2004-Borrower A $903,530, specific reserves $204,430 (see w/p's attached) Borrower B 511,775, specific reserves $147,775 (see w/p's attached) Non accrual loans 120,529, specific reserves $ 60,265 (see w/p's attached) ---------- -------- Totals 2004 $1,535,834 $417,470 ========== ======== </TABLE>
The loans that were charged off in 2004 were not included in the above calculations.
We are pleased to be able to provide the information you requested. If you require anything further regarding this matter, please do not hesitate to call.
Sincerely,
/s/ Charles G. Urtin
Show Raw Text
<DOCUMENT>
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IBT BANCORP, INC.
---------------------------------------------------------------------- [LOGO]
BY FACSIMILE AND EDGAR
----------------------
July 15, 2005
Mr. Don Walker
Senior Assistant Chief Accountant
Securities and Exchange Commission
100 F Street, N.E.
Mail Stop 4561
Washington D.C. 20549
Dear Mr. Walker,
I am writing on behalf of IBT Bancorp, Inc. (the "Registrant") in response
to the staff's letter of comment dated July 1, 2005. Our responses are numbered
so as to correspond with the numbering in the comment letter.
Form 10-K
---------
Our methodology for calculating our reserve for loan losses is as follows:
o Our portfolio is segmented according to collateral.
o Loans are classified as acceptable, watch, substandard, doubtful, loss
or special review.
o Homogeneous groups of loans classified as acceptable or watch are
provided reserves according to a five year rolling average of net
charge offs, adjusted for nonqualitative factors.
o Homogeneous groups of loans classified as substandard or doubtful are
provided reserves according to percentages required by the FDIC.
o Loans classified as loss are written off.
o Impaired loans (all of which are collateral dependent) are provided
reserves equal to the difference between the loan balance and the
value of the collateral (fair value less estimated selling costs),
except non-accrual loans which are provided reserves at 50% of the
loan balance.
As loans change in classification the portion of the loans loss reserve assigned
to those classified loans changes. A summary of our work papers for the
calculation of the adequacy of the reserves for December 31, 2004 and 2003 is
attached.
--------------------------------------------------------------------------------
309 Main Street - Irwin, PA 15642 o (724) 863-3100
<PAGE>
Mr. Don WQalker
July 15, 2005
Page 2.
Note 3-2004 Financial Statements
--------------------------------
<TABLE>
<CAPTION>
Total recorded for impaired loans:
2003-Non accrual loans $567,564, specific reserves $283,781 (see w/p's attached)
<S> <C>
2004-Borrower A $903,530, specific reserves $204,430 (see w/p's attached)
Borrower B 511,775, specific reserves $147,775 (see w/p's attached)
Non accrual loans 120,529, specific reserves $ 60,265 (see w/p's attached)
---------- --------
Totals 2004 $1,535,834 $417,470
========== ========
</TABLE>
The loans that were charged off in 2004 were not included in the above
calculations.
We are pleased to be able to provide the information you requested. If you
require anything further regarding this matter, please do not hesitate to call.
Sincerely,
/s/ Charles G. Urtin
Charles G. Urtin
President and CEO
cc: James C. Stewart, Malizia Spidi & Fisch (Fax)
David Cabala, Federal Reserve Bank of Cleveland
Page 2
<PAGE>
Loan Loss Reserve Analysis
Summary of determination of Adequacy
<TABLE>
<CAPTION>
LOAN TYPE: Loan Loan
Loan Balance Loss Loss
12/31/2004 Percentage Reserve
------------- ---------- -------
<S> <C> <C> <C>
COMMERCIAL:
Classified as Acceptable
Commercial real estate $ 178,817,877 0.17194% (1) $ 307,459
Multifamily real estate 5,544,372 0.14788% 8,199
Secured by assets other than real estate 21,614,411 0.90013% 194,558
Unsecured commercial loans -
Business Manager 1,578,007 7.15994% 112,984
------------- ----------
207,554,667 $ 623,201
Classified as Watch:
Commercial real estate 18,675,663 1.17194% (2) 218,868
Multifamily real estate 3,323,162 1.14788% 38,146
Secured by assets other than real estate 1,810,399 1.90013% 34,400
Unsecured commercial loans - -
Business Manager 14,445 8.15994% 1,179
------------- ----------
23,823,669 292,592
Classified as Substandard
Commercial real estate 865,374 15% (3) 129,806
Multifamily real estate 540,461 15% 81,069
Secured by assets other than real estate 2,324,744 15% 348,712
Unsecured commercial loans - 15% -
Business Manager - 15% -
------------- ----------
3,730,579 559,587
Classified as Doubtful
Commercial real estate - 50% (3) -
Multifamily real estate - 50% -
Secured by assets other than real estate - 50% -
Unsecured commercial loans - 50% -
Business Manager - 50% -
- -
------------- ----------
Commercial loans selected for further review 6,753,642 0.00000% -
Commercial loans selected for review for which an
impairment has been determined 511,775 See W/P's 147,775
------------- ----------
TOTAL COMMERCIAL LOANS $ 242,374,332 $1,623,155
============= ==========
1 to 4 FAMILY MORTGAGE LOANS:
Classified as Acceptable $ 68,562,887 0.14788% (1) 101,391
Classifed as Watch 631,261 1.14788% (2) 7,246
Classified as Substandard - 15% -
Classified as Doubtful 71,293 50% 35,647
1 to 4 family mortgage loans selected for review
for which an impairment has been determined
(detailed list attached) - n/a -
------------- ----------
TOTAL SINGLE FAMILY MORTGAGE LOANS $ 69,265,441 $ 144,284
============= ==========
MUNICIPAL LOANS:
Classified as Acceptable $ 10,050,266 0% -
Classified as Watch - -
Classified as Substandard - -
Classified as Doubtful - -
Municipal loans selected for review for which an
impairment has been determined
(detailed list attached) 903,530 see w/p's 204,430
------------- ----------
TOTAL MUNICIPAL LOANS $ 10,953,796 $ 204,430
============= ==========
CONSUMER LOANS:
Classified as Acceptable:
Secured by real estate $ 102,291,398 0.13142% (1) 134,428
Secured by other than real estate 5,356,348 1.03149% (1) 55,250
Unsecured - -
------------- ----------
107,647,746 189,678
Classified as Watch:
Secured by real estate - 1.13142% (2) -
Secured by other than real estate 314,845 2.03149% 6,396
Unsecured - -
------------- ----------
314,845 6,396
Classified as Substandard:
Secured by real estate 193,175 15% 28,976
Secured by other than real estate 16,254 15% 2,438
Unsecured - 15% -
------------- ----------
209,429 31,414
Classified as Doubtful:
Secured by real estate - 50% -
Secured by other than real estate 188,494 50% 94,247
Unsecured - 50% -
------------- ----------
188,494 94,247
PHEAA Loans: 7,354,534 -
Consumer loans selected for review for which an
impairment has been determined
(detailed list attached) - n/a -
------------- ----------
TOTAL CONSUMER LOANS $ 115,715,048 $ 321,735
============= ==========
NON ACCRUAL LOANS (Classified as doubtful) $ 120,529 50% 60,265
=============
TOTAL PORTFOLIO $ 438,429,146 $2,353,868
============= ==========
REQUIRED RESERVE Required reserve at 12/31/04 $ 2,353,868
=============
G/L Balance at 12/31/04 $ 2,593,642
=============
Overage $ 239,774
=============
Max overage per policy $ 235,387
=============
Loss Reserve to total loans 0.59%
<CAPTION>
LOAN TYPE: Loan Loan
Loan Balance Loss Loss
12/31/2003 Percentage Reserve
------------ ---------- -------
<S> <C> <C> <C>
COMMERCIAL:
Classified as Acceptable
Commercial real estate $ 169,022,110 0.17194% $ 290,616
Multifamily real estate 15,337,259 0.14788% 22,681
Secured by assets other than real estate 22,968,902 0.90013% 206,750
Unsecured commercial loans
Business Manager 1,325,693 7.15994% 94,919
------------- ----------
208,653,964 $ 614,966
Classified as Watch:
Commercial real estate 13,182,200 1.17194% 154,487
Multifamily real estate 986,400 1.14788% 11,323
Secured by assets other than real estate 4,406,198 1.90013% 83,724
Unsecured commercial loans - -
Business Manager