ITEM 1. BUSINESS.
Iowa First Bancshares Corp. (the "Company"), is a bank holding company headquartered in Muscatine, Iowa. The Company owns all the outstanding stock of two national banks in Iowa, First National Bank of Muscatine and First National Bank in Fairfield.
On a full-time equivalent basis, year-end employment for the Company and its subsidiary banks totaled 123 employees.
First National Bank of Muscatine has a total of five locations in Muscatine, Iowa. The First National Bank in Fairfield has two locations in Fairfield, Iowa. Each bank is engaged in the general commercial banking business and provides full service banking to individuals and businesses, including checking and savings accounts, commercial loans, consumer loans, real estate loans, safe deposit facilities, transmitting of funds, trust services, and such other banking services as are usual and customary for commercial banks.
The commercial banking business is highly competitive. Subsidiary banks compete with other commercial banks and with other financial institutions, including savings banks, mortgage banking companies, credit unions and mutual funds. In recent years, competition also has increased from institutions not necessarily subject to all the same regulatory restrictions or requirements as banks and bank holding companies.
The operations of the Company and its subsidiary banks are affected by state and federal legislative changes and by policies of various regulatory authorities. The Company is a registered bank holding company under the Bank Holding Company Act of 1956 (the "Act") and is subject to the supervision of, and regulation by, the Board of Governors of the Federal Reserve System (the "Board"). Under the Act, a bank holding company may engage in banking, managing or controlling banks, furnishing or performing services for banks it controls, and conducting activities that the Board has determined to be closely related to banking.
National banks are subject to the supervision of, and are examined by, the Office of the Comptroller of the Currency. Both subsidiary banks of the Company are members of the Federal Deposit Insurance Corporation, and as such, are subject to examination thereby. In practice, the primary federal regulator makes regular examinations of each subsidiary bank subject to its regulatory review or participates in joint examinations with other federal regulators. Areas subject to regulation by these authorities include capital levels, the allowance for possible loan losses, investments, loans, mergers, issuance of securities, payment of dividends, establishment of branches, and many other aspects of operations.
Statistical information called for by this Item is contained in the Company's 2000 Annual Report to Shareholders which is incorporated by reference (pages 40 - - 51 of this Form 10-K).
ITEM 2.
ITEM 2. PROPERTIES.
Since the Company commenced business, its principal executive office has been located at 300 East Second Street, Muscatine, Iowa, which is the principal office of First National Bank of Muscatine, a national banking association and a wholly owned subsidiary of the Company.
First National Bank of Muscatine conducts its operations from five facilities located in Muscatine. The main bank is located at 300 East Second Street and is a modern brick and steel building completed in 1979 containing 36,000 square feet of floor space on three floors. The bank owns both the building and the underlying real estate. All administrative functions of the bank are conducted at its main offices. Portions of the building are leased to commercial tenants. During 1997, a branch was opened inside the then new Wal-Mart Supercenter located on highway 61 at Muscatine. This branch and the Wal-Mart Supercenter were the first of their kind in Iowa. The bank operates this branch under a five year lease agreement with Wal-Mart, with two five year renewal options. Additionally, another new branch facility, which includes drive-through banking services and is located across the alley from the main Muscatine banking headquarters, was completed in the fall of 1997. This branch replaced a previous downtown branch. The bank owns this facility and the underlying real estate.
Two locations, in addition to the new Wal-Mart branch, provide banking services outside the Muscatine downtown area. The office at the Muscatine Mall is approximately two miles northeast of the main bank. The facility contains 2,304 square feet of floor space in a one-story concrete and steel building. The facility offers a walk-in lobby and night depository. The three-lane drive-up facility of this branch is located approximately 500 feet west of the branch at the parking lot of the mall. The building, drive-up facilities and real estate are leased. The terms of the lease provide for monthly payments of $2,304. This lease has expired. Management is negotiating with the new owners of the Muscatine Mall for construction of a freestanding building on Mall property with a long-term lease arrangement with First National Bank of Muscatine.
The bank's southside office at 608 Grandview Avenue is located two miles southwest of the main bank. The office contains 3,600 square feet of floor space and is located in a one-story steel frame, concrete block building. The facility offers a walk-in lobby and three drive-up lanes. The building and underlying real estate are owned by the bank. Portions of the building are leased to commercial tenants.
First National Bank in Fairfield conducts its operations from a modern brick and steel building completed in 1968 containing 8,200 square feet of floor space on two floors. The bank owns both the building and the underlying real estate. Portions of the building are leased to commercial tenants. A three-lane drive-up facility is located at the main bank. In the spring of 1997, a new branch facility was opened at Fairfield, Iowa. The building, which is located in a high traffic area in front of the local Wal-Mart store on highway 34, contains several private offices for lending staff and management as well as teller and deposit services, including several drive-through lanes.
The Company's facilities are well maintained and are suitable for the Company's business operations.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS. - ----------------------------
The Company has no pending legal proceedings which are material.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART I, TABLE I
EXECUTIVE OFFICERS OF THE REGISTRANT
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The brokerage firms of Howe Barnes Investments, Inc. and Sandler O'Neill & Partners, L.P. make a market for the Company's common stock.
High and low common stock prices and dividends for the last two years were:
2000 by Dividend Quarters High Low Per Share - --------------------------------------------------------------------------------
First ..................... $ 24.00 $ 22.13 $ 0.21 Second .................... 23.00 22.00 0.21 Third ..................... 23.00 18.00 0.21 Fourth .................... 23.00 18.50 0.21
Total Dividend Paid $0.84
1999 by Dividend Quarters High Low Per Share - -------------------------------------------------------------------------------- First ..................... $ 32.50 $ 31.00 $ 0.21 Second .................... 32.50 29.50 0.21 Third ..................... 29.50 25.50 0.21 Fourth .................... 27.50 23.88 0.21
Total Dividend Paid ...................... $ 0.84
The above quotations were furnished by the brokerage firms that serve as market makers for the Company's stock. The quotations represent prices between dealers and do not include retail markup, markdown, or commissions.
Future dividends are dependent on future earnings, regulatory restrictions (see Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 40 - 51 of this Form 10-K; and Note 9 to the Company's Consolidated Financial Statements in the Company's 2000 Annual Report to Shareholders which is incorporated by reference, pages 30 - 32 of this Form 10-K), capital requirements, and the Company's financial condition.
As of February 28, 2001, the Company had approximately 400 shareholders of its outstanding class of common stock. The Iowa First Bancshares Corp. Employee Stock Ownership Plan with 401(k) Provisions is considered one shareholder as all shares owned by this plan are voted by the trustees of said plan unless the vote in question encompasses approval or disapproval of any corporate merger, consolidation, dissolution, or similar transaction.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
The information called for by this Item is contained in the Company's 2000 Annual Report to Shareholders which is incorporated by reference (page 39 of this Form 10-K).
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information called for by this Item is contained in the Company's 2000 Annual Report to Shareholders which is incorporated by reference (pages 40 - 51 of this Form 10-K).
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information called for by this Item is contained in the Company's 2000 Annual Report to Shareholders which is incorporated by reference (pages 18 - 39 of this Form 10-K).
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information called for by this Item is contained in the Company's 2000 Proxy Statement which is incorporated by reference (page 55 of this Form 10-K).
Director Compensation
The annual retainer that each outside Director of the Company received in 2000 was $5,500. The Company paid $125 for attendance at each committee meeting and special Board of Directors meeting. During 2000, each Director of the Company served as Director and member of committees for subsidiary boards and committees, with the exception of Mr. Carver who served only as a Director of the Company. The annual retainer fee paid to each outside subsidiary Director was $4,200, plus $125 to $250 for attendance at each committee meeting. Executive officers who also serve on the Board of Directors do not receive such retainer or committee fees. Additional information called for by this Item is contained in the Company's 2000 Proxy Statement which is incorporated by reference (page 59 of this Form 10-K).
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information called for by this Item is contained in the Company's 2000 Proxy Statement which is incorporated by reference (pages 57 - 59 of this Form 10-K).
ITEM 12.
ITEM 12. SECURITY OWNERHSIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information called for by this Item is contained in the Company's 2000 Proxy Statement which is incorporated by reference (pages 54 and 55 of this Form 10-K).
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Officers and Directors of the Company and its subsidiaries have had, and may have in the future, banking transactions in the ordinary course of business of the Company's subsidiaries. All such transactions are on substantially the same terms, including interest rates on loans and collateral, as those prevailing at the time for comparable transactions with others, and involve no more than the normal risk of collectibility.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) Documents Filed with This Report:
(1) Financial Statements. The following consolidated financial statements of the Company and its subsidiaries are incorporated by reference from the 2000 Annual Report to Shareholders of the Company:
Page
Consolidated balance sheets -- dated December 31, 2000 and 1999.
Consolidated statements of income -- years ended December 31, 2000, 1999, and 1998.
Consolidated statements of changes in stockholders' equity -- years ended December 31, 2000, 1999, and 1998.
Consolidated statements of cash flows - years ended December 31, 2000, 1999, and 1998.
Notes to consolidated financial statements.
Opinion of independent accountants.
(2) Financial Statement Schedules. All schedules are omitted because they are not applicable, are not required, or because the required information is included in the financial statements or the notes thereto.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the last quarter of the period covered by this report.
(c) Exhibits. The following exhibits are attached pursuant to Item 601 of Regulation S-K:
(10c) Executive Deferred Comp Agreements 1) Kim Bartling 2) Timothy Nelson 3) Dean Holst 4) Scott Ingstad (10d) Director Deferred Fee Agreement (13) Registrant's 2000 Annual Report to Shareholders (20) Registrant's Proxy Statement dated March 12, 2001 (24) Power of Attorney
See Exhibit Index on page 11 hereof for a complete list of management contracts and arrangements required by this item and all other Exhibits filed or incorporated by reference as a part of this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
IOWA FIRST BANCSHARES CORP.
Date: March 9, 2001 /s/ George A. Shepley ------------- ------------------------------- George A. Shepley Chairman of the Board
Date: March 9, 2001 /s/ Kim K. Bartling ------------- ------------------------------- Kim K. Bartling, Executive Vice President, Chief Operating Officer, Treasurer and Director (Principal Financial and Accounting Officer)
We, the undersigned directors of Iowa First Bancshares Corp. hereby severally constitute George A. Shepley and Kim Bartling, and each of them, our true and lawful attorneys with full power to them, and each of them, to sign for us and in our name, the capacities indicated below, the Annual Report on Form 10-K of Iowa First Bancshares Corp. for the fiscal year ended December 31, 2000, to be filed herewith and any amendments to said Annual Report, and generally do all such things in our name and behalf in our capacities as directors to enable Iowa First Bancshares Corp. to comply with the provisions of the Securities Exchange Act of 1934 as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or either of them, to said Annual Report on Form 10-K and any and all amendments thereto.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Roy J. Carver, Jr. Director February 15, 2001 - ---------------------- ----------------- Roy J. Carver, Jr.
/s/ Larry L. Emmert Director February 15, 2001 - ------------------- ----------------- Larry L. Emmert
/s/ Craig R. Foss Director February 15, 2001 - ----------------- ----------------- Craig R. Foss
/s/ Donald R. Heckman Director February 15, 2001 - --------------------- ----------------- Donald R. Heckman
/s/ Dean H. Holst Director February 15, 2001 - ----------------- ----------------- Dean H. Holst
/s/ David R. Housley Director February 15, 2001 - -------------------- ----------------- David R. Housley
/s/ D. Scott Ingstad Director February 15, 2001 - -------------------- ----------------- D. Scott Ingstad
/s/ Victor G. McAvoy Director February 15, 2001 - -------------------- ----------------- Victor G. McAvoy
/s/ John "Jay" S. McKee Director February 15, 2001 - ----------------------- ----------------- John "Jay" S. McKee
/s/ Beverly J. White Director February 15, 2001 - -------------------- ----------------- Beverly J. White
ITEM 14 (a) (3) - INDEX OF EXHIBITS