SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES  EXCHANGE
     ACT OF 1934

     For the Fiscal Year Ended December 31, 2003
                                     - OR -
[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from _________________  to __________________

Commission File Number: 0-25903

                                IBT BANCORP, INC.
             ------------------------------------------------------
           (Exact name of registrant as specified in its charter)

         Pennsylvania                                  25-1532164
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

309 Main Street, Irwin, Pennsylvania                        15642
----------------------------------------                  ----------
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code:       (724) 863-3100
                                                          --------------

Securities registered pursuant to Section 12(b) of the Act:

   Title of each class                Name of each exchange on which registered
   -------------------                -----------------------------------------
Common Stock, $1.25 par value                   American Stock Exchange
-----------------------------                   -----------------------
Stock Purchase Rights                           American Stock Exchange
---------------------                           -----------------------

Securities registered pursuant to Section 12(g) of the Act:    None
                                                          --------------

         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.
YES   X           NO     .
     ---             ---
         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ X ]

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Exchange Act Rule 12b-2).  YES   X          NO    .
                                               ---            ---
         Based  on  the  closing   sales  price  of  $49.99  per  share  of  the
registrant's  common  stock on June 30,  2003,  as  reported  on the  AMEX,  the
aggregate market value of voting and non-voting stock held by  non-affiliates of
the registrant was approximately $129.7 million.

         As of March 2, 2004,  there were 2,977,655  shares of the  Registrant's
common stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

1.   Portions  of  2003  Annual  Report  to  Stockholders  (Parts  II and IV)
2.   Portions of Proxy  Statement for the 2004 Annual  Meeting of  Stockholders.
     (Part III)
<PAGE>

                                     PART I

Forward-Looking Statements

         IBT Bancorp, Inc. (the "Company" or "Registrant") may from time to time
make  written  or  oral  "forward-looking   statements,"   including  statements
contained in the Company's  filings with the Securities and Exchange  Commission
(including  this Annual  Report on Form 10-K and the exhibits  thereto),  in its
reports to stockholders and in other  communications  by the Company,  which are
made in good faith by the Company  pursuant to the "safe  harbor"  provisions of
the Private Securities Litigation Reform Act of 1995.

         These forward-looking statements involve risks and uncertainties,  such
as statements of the Company's plans,  objectives,  expectations,  estimates and
intentions,  that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's  financial  performance to differ  materially from the
plans,  objectives,  expectations,  estimates and  intentions  expressed in such
forward-looking statements: the strength of the United States economy in general
and  the  strength  of  the  local  economies  in  which  the  Company  conducts
operations;  the effects of, and changes in, trade, monetary and fiscal policies
and laws,  including  interest  rate  policies of the Board of  Governors of the
Federal  Reserve  System,   inflation,   interest  rate,   market  and  monetary
fluctuations;  the timely  development  of and  acceptance  of new  products and
services of the Company and the perceived  overall  value of these  products and
services by users,  including  the  features,  pricing  and quality  compared to
competitors'  products and  services;  the  willingness  of users to  substitute
competitors' products and services for the Company's products and services;  the
success of the  Company in  gaining  regulatory  approval  of its  products  and
services,  when required;  the impact of changes in financial services' laws and
regulations   (including  laws  concerning   taxes,   banking,   securities  and
insurance);  technological changes,  acquisitions;  changes in consumer spending
and saving habits; and the success of the Company at managing the risks involved
in the foregoing.

         The Company  cautions that the foregoing  list of important  factors is
not  exclusive.  The Company does not  undertake  to update any  forward-looking
statement,  whether written or oral, that may be made from time to time by or on
behalf of the Company.

Item 1.  Business
-------  --------

General

         IBT Bancorp, Inc. is a Pennsylvania corporation 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").

         Irwin Bank & Trust Co. (the "Bank") was  incorporated in 1922 under the
laws of  Pennsylvania  as a  commercial  bank under the name "Irwin  Savings and
Trust  Company." The Bank engages in a  full-service  mortgage,  commercial  and
consumer  banking  business,  as well as trust and a variety of deposit services
provided to its customers.  At December 31, 2003, the Bank operated  through its
main office,  six branch offices,  a loan center,  and a trust office as well as
through five supermarket  branches under the name "Irwin Bank Extra." The Bank's
main  office,  full  service  branch  offices,  loan  center,  trust  office and
supermarket  branches are located in the  Pennsylvania  counties of Westmoreland
and Allegheny. The Bank's web site is "www.myirwinbank.com."

<PAGE>

         References to the Company or Registrant  used  throughout this document
generally  refers to the  consolidated  entity which includes the main operating
company, the Bank, unless the context indicates otherwise.

Competition

         The  Registrant's  primary  market area  consists of  Westmoreland  and
Allegheny  counties,  Pennsylvania,  and is one of many  financial  institutions
serving this market area. The competition for deposit  products comes from other
insured financial institutions such as commercial banks, thrift institutions and
credit unions in the Registrant's market area. Deposit competition also includes
a number of insurance products sold by local agents and investment products such
as mutual funds and other  securities sold by local and regional  brokers.  Loan
competition comes from other insured  financial  institutions such as commercial
banks, thrift institutions and credit unions.

                                       2

<PAGE>

Lending Activities

         Analysis  of  Loan  Portfolio.  The  following  table  sets  forth  the
composition  of  the  Registrant's  loan  portfolio  in  dollar  amounts  and in
percentages of the respective portfolios at the dates indicated.

<TABLE>
<CAPTION>
                                                                          At December 31,
                           -------------------------------------------------------------------------------------------------------
                                   2003                  2002                   2001                2000               1999
                           ------------------    ------------------    ------------------   -----------------   ------------------
                               $          %          $          %          $          %         $        %          $          %
                           --------    ------    --------     -----    --------     -----   --------    -----   --------     -----
                                                                             (Dollars in Thousands)
<S>                       <C>          <C>      <C>          <C>      <C>          <C>     <C>         <C>     <C>          <C>
  Mortgage..............   $244,923     58.33%   $210,244     57.87%   $173,214     54.55%  $152,753    51.95   $130,348     49.56
  Installment...........     78,327     18.65      59,321     16.33      64,053     20.17     65,327    22.22     61,983     23.57
  Commercial............     59,591     14.19      58,634     16.14      55,185     17.38     52,676    17.92     47,294     17.98
  Home equity
    lines of credit.....     21,963      5.23      15,832      4.36      11,001      3.47     10,067     3.42      8,886      3.38
  PHEAA (1).............      7,834      1.87       6,900      1.90       6,950      2.19      6,632     2.26      6,166      2.34
  Municipal.............      6,268      1.49      11,190      3.08       5,369      1.69      5,945     2.02      6,347      2.41
  Credit cards..........         38       .01          32       .01          32       .01         --       --      1,780       .68
  Other.................        965       .23       1,148       .31       1,715       .54        611      .21        210       .08
                            -------    ------    --------    ------    --------    ------   --------   ------   --------    ------
Total loans.............    419,909    100.00%    363,301    100.00%    317,519    100.00%   294,011   100.00%   263,014    100.00%
                                       ======                ======                ======              ======               ======
Less:
  Unearned discount.....         --                    --                    --                   --                  --
  Deferred loan
    origination
    fees and costs......        338                   557                   273                  178                 146
  Allowance for loan
    losses..............      3,285                 2,873                 2,114                1,919               2,366
                           --------              --------              --------             --------            --------
Total loans, net........   $416,286              $359,871              $315,132             $291,914            $260,502
                           ========              ========              ========             ========            ========
</TABLE>

--------
(1)  Pennsylvania Higher Education Assistance Authority.

                                        3

<PAGE>

         Loan Maturity  Table.  The following  table sets forth  maturities  and
interest rate  sensitivity  for all categories of loans as of December 31, 2003.
Scheduled  repayments are reported in the maturity  category in which payment is
due.

<TABLE>
<CAPTION>
                                         Home
                                        equity                                                          Credit
                                       lines of                                     PHEAA                Cards
                           Mortgage    credit(2)      Installment Commercial         (1)    Municipal     (2)     Other    Total
                           --------    ---------      ----------  ----------       -------  ---------   -------   ------  --------
                                                                          (In Thousands)
<S>                       <C>          <C>             <C>          <C>            <C>        <C>      <C>       <C>     <C>
1 year or less............ $ 10,380     $21,963         $10,442      $12,538       $     -     $6,268   $    38   $ 965   $ 62,594

After 1 year:
  1 to 5 years............   53,226           -          33,438       14,754         7,834          -         -       -    109,252
  After 5 years...........  181,317           -          34,447       32,299             -          -         -       -    248,063
                           --------     -------         -------      -------        ------     ------   -------   -----   --------
Total due after one year..  234,543           -          67,885       47,053         7,834          -         -       -    357,315
                           --------     -------         -------      -------        ------     ------   -------   -----   --------
Total amount due.......... $244,923     $21,963         $78,327      $59,591        $7,834     $6,268   $    38   $ 965   $419,909
                           ========     =======         =======      =======        ======     ======   =======   =====   ========
</TABLE>

-------------
(1)  PHEAA loans are sold when  repayment  begins;  assumption is that all PHEAA
     loans will mature in 1 to 5 years.
(2)  Home equity  credit lines and credit card loans have no stated  maturities;
     therefore they are classified as due in one year or less.

         The  following  table sets forth,  as of December 31, 2003,  the dollar
amount of all loans due after  December  31,  2004,  based upon  fixed  rates of
interest or floating or adjustable interest rates.


                                               Floating or
                           Fixed Rates         Adjustable Rates       Total
                           -----------         ----------------       -----
                                                (In Thousands)

Mortgage(1)  .........        $216,575             $17,968          $234,543
Installment...........          66,377               1,508            67,885
Commercial............          20,074              26,979            47,053
PHEAA.................               -               7,834             7,834
                              --------             -------          --------
     Total............        $303,026             $54,289          $357,315
                              ========             =======          ========

-----------
(1)  Included in the mortgage loans  portfolio are commercial real estate loans.
     Commercial  real  estate  loans are fixed  rate  loans  that are  primarily
     callable loans,  which reprice every three,  five or ten years,  based upon
     the interest rate on similar loans at the time of repricing.  See "Mortgage
     Loans."

         Mortgage Loans. The Registrant's  primary lending activity  consists of
the origination of residential and commercial mortgage loans secured by property
in its primary  market area.  The  mortgage  loan  portfolio  consists of one-to
four-family  residential  mortgage  loans,  commercial  real estate  loans,  and
construction loans.

         The Registrant had  approximately  $80.0 million of one- to four-family
residential  mortgage loans in its mortgage loan portfolio at December 31, 2003.
The Registrant  generally  originates one- to four-family  residential  mortgage
loans in amounts of up to 80% of the appraised  value of the mortgaged  property
without requiring mortgage insurance.  The Registrant will originate residential
mortgage  loans in an amount  up to 95% of the  appraised  value of a  mortgaged
property,  however,  mortgage  insurance  for  the  borrower  is  required.  The
Registrant  offers  residential  fixed rate loans and adjustable rate loans with
amortization periods ranging from 15 to 30 years.  Interest rates for adjustable
rate loans for  residences  adjust every 12 months based upon the weekly average
yield on the one year U.S. Treasury securities, plus a margin of 2.75 percentage
points.  These adjustable rate loans have an interest rate cap of two percentage
points per year and six  percentage  points  over the life of the loan,  and are
originated for retention in the portfolio.

                                        4

<PAGE>

         Fixed  rate  loans  are   underwritten  in  accordance  with  FannieMae
guidelines.   Currently,   loans   underwritten  in  accordance  with  FannieMae
guidelines are generally sold in the secondary  market.  However,  the number of
saleable  loans  could vary  materially  as a result of market  conditions.  The
Registrant  generally  charges a higher  interest rate if loans are not saleable
under  FannieMae  guidelines.  At  December  31,  2003,  $207.5  million  of the
Registrant's mortgage portfolio consisted of long-term fixed rate mortgage loans
of which  $491,000 were  classified as held for sale.  The  Registrant  does not
service any loans that are sold and the  Registrant  is generally not liable for
these loans (i.e., "nonrecourse loans").

         Substantially  all of the  Registrant's  one- to four-family  mortgages
include "due on sale" clauses,  which are  provisions  giving the Registrant the
right to declare a loan  immediately  payable if the borrower sells or otherwise
transfers an interest in the property to a third party.

         Property  appraisals on real estate securing the  Registrant's  one- to
four-family  residential loans over $250,000 are made by appraisers  approved by
the Board of Directors.  Appraisals are performed in accordance  with applicable
regulations and policies. The Registrant obtains title insurance policies on all
purchase money first mortgage real estate loans originated.

         The  Registrant's  commercial  real estate mortgage loans are long-term
loans secured  primarily by  multi-family  dwelling  units and  commercial  real
estate.  Essentially all originated  commercial real estate loans are within its
market area.  Commercial real estate loans are originated at both fixed rate and
adjustable  rates of interest.  Fixed rate loans are  primarily  callable  loans
having terms of up to 20 years.  Callable loans reprice every three, five or ten
years based upon the interest rate on similar loans at the time of repricing. At
these specific time periods, the Registrant has the right but not the obligation
to either  accelerate  the loan  balance  or adjust the  interest  rate of these
loans.

         Adjustable  rate  commercial  mortgage loans have interest rates set at
the six month U.S. treasury bill rate, plus a margin of up to 3.75%.  Adjustable
rate  commercial  mortgage loans have terms of up to 20 years and generally have
no maximum interest rate.

         As of December 31, 2003, the Registrant's  commercial real estate loans
totaled $118.4 million of the mortgage  portfolio.  Typically,  commercial  real
estate loans are  originated in amounts up to 75% of the appraised  value of the
mortgaged property.

         The Registrant  also  originates  loans to finance the  construction of
one- to  four-family  dwellings  and  commercial  real  estate.  Generally,  the
Registrant only makes interim construction loans to individuals if it also makes
the long-term  one- to  four-family  residential  mortgage loan on the property.
Interim  construction loans generally have terms of up to nine months with fixed
rates of interest.  At December 31,  2003,  such loans  totaled $5.6 million and
$7.3 million, respectively, of the Registrant's total mortgage loan portfolio.

         Construction  financing  is  generally  considered  to involve a higher
degree of risk of loss than long- term  financing  on  improved,  occupied  real
estate.  Risk of loss on a  construction  loan is  dependent  largely  upon  the
accuracy  of the initial  estimate  of the  property's  value at  completion  of
construction  and  development  and the estimated cost  (including  interest) of
construction. During the construction phase, a number of factors could result in
delays and cost  overruns.  If the estimate of  construction  costs proves to be
inaccurate,  the  Registrant  may be required to advance funds beyond the amount
originally committed to permit completion of the development. If the estimate of
value proves to be inaccurate,  the Registrant may be confronted, at or prior to
the maturity of the loan, with a project having a value which is insufficient to
assure full repayment.

                                        5

<PAGE>

         Installment  Loans.  Installment loans primarily consist of home equity
term  loans and to a lesser  extent  automobile  loans.  Home  equity  loans are
secured primarily by one- to four-family  residences.  The Registrant originates
these  loans with fixed  rates  with  terms of up to 20 years.  These  loans are
subject to 80% combined  loan-to-value  limitation,  including  any  outstanding
mortgages or liens,  without requiring mortgage  insurance.  The Registrant will
originate  home  equity  loans  in an  amount  up 100% of the  appraised  value,
however,  mortgage  insurance for the borrower may be required.  The  Registrant
originates automobile loans with fixed rates of interest and terms of up to five
years. At December 31, 2003, home equity term loans totaled $78.3 million.

         Commercial  Loans.  Commercial  business  loans  consist of  equipment,
accounts  receivables,  inventory,  and other business purpose loans. Such loans
are generally secured by either the underlying collateral and/or by the personal
guarantees of the borrower.

         Unlike  residential  mortgage  loans,  which  generally are made on the
basis of the borrower's ability to make repayment from his or her employment and
other income and which are secured by real property whose value tends to be more
easily ascertainable,  commercial business loans typically are made on the basis
of the borrower's ability to make repayment from the cash flow of the borrower's
business. As a result, the availability of funds for the repayment of commercial
business  loans may be  substantially  dependent  on the success of the business
itself and the general economic environment.

         Home Equity Lines of Credit.  Revolving home equity lines of credit are
secured  primarily by one- to  four-family  residences.  The lines of credit are
generally  subject to an 80% combined  loan to value  limitation,  including all
outstanding mortgages and liens.

         Loan Approval  Authority and Underwriting.  The Registrant  establishes
various  lending  limits  for its  officers  and  maintains  an  officer  review
committee.  Certain  officers  generally  have  authority to approve loans up to
$500,000.  Loans up to $1,000,000  are approved by an officer  review  committee
("ORC").  The ORC  consists of the  President  and at least four other  officers
appointed by the President.  All loans over $1,000,000 are approved by the Board
of Directors.

         Upon  receipt  of a  completed  loan  application  from  a  prospective
borrower,  a credit report is ordered.  Income and certain other  information is
verified. If necessary,  additional financial  information may be requested.  An
appraisal or other  estimate of value of the real estate  intended to be used as
security  for the  proposed  loan  is  obtained.  Appraisals  are  performed  by
independent appraisers.

         Title insurance is generally required on all purchase money real estate
mortgage loans.  Borrowers also must obtain fire and casualty  insurance.  Flood
insurance  is also  required on loans  secured by property  that is located in a
flood zone.

         Loan  Commitments.   Written   commitments  are  given  to  prospective
borrowers on all approved loans.  Generally,  the commitment requires acceptance
within 30 days of the date of issuance.  At December 31,  2003,  commitments  to
cover originations of loans totaled $77.0 million.

         Classified  Assets.  Federal  regulations  provide for a classification
system for problem assets of insured  institutions,  including assets previously
treated as "scheduled items." Under this classification  system,  problem assets
of insured  institutions are classified as "substandard,"  "doubtful" or "loss."
An asset is  considered  "substandard"  if it is  inadequately  protected by the
current  net worth and  paying  capacity  of the  obligor  or of the  collateral
pledged,  if  any.  "Substandard"  assets  include  those  characterized  by the
"distinct  possibility" that the insured institution will sustain "some loss" if
the deficiencies are not corrected. Assets classified as "doubtful" have all the
weaknesses inherent in those classified "substandard," with the

                                        6

<PAGE>

added  characteristic  that the weaknesses present make "collection of principal
in full," on the basis of  currently  existing  facts,  conditions  and  values,
"highly  questionable  and  improbable."  Assets  classified as "loss" are those
considered  "uncollectible"  and of such little value that their  continuance as
assets  without the  establishment  of a specific loss reserve is not warranted.
Assets  that  do not  expose  the  Registrant  to  risk  sufficient  to  warrant
classification in one of the above categories,  but which possess some weakness,
are required to be designated "special mention" by management.

         When  an  insured  institution  classifies  problem  assets  as  either
"substandard"  or "doubtful," it may establish  allowances for loan losses in an
amount deemed  prudent by  management.  When an insured  institution  classifies
problem  assets as "loss," it is required  either to establish an allowance  for
losses  equal to 100% of that portion of the assets so  classified  or to charge
off such amount. An institution's  determination as to the classification of its
assets and the  amount of its  allowances  is  subject to review by the  Federal
Deposit  Insurance  Corporation  ("FDIC") which may order the  establishment  of
additional loss allowances.

         The following table sets forth the  Registrant's  classified  assets in
accordance with its classification system.

                                               At December 31, 2003
                                               --------------------
                                                  (In Thousands)
Special Mention...........................           $19,022
Substandard...............................             8,756
Doubtful..................................               668
Loss......................................                 -
                                                     -------
      Total...............................           $28,446
                                                     =======

         Other Real Estate Owned.  Real estate  acquired by the  Registrant as a
result of  foreclosure  or by deed in lieu of foreclosure is classified as other
real estate owned until such time as it is sold. When other real estate owned is
acquired,  it is recorded at the lower of the unpaid balance of the related loan
or its fair value less disposal costs. Any write-down of other real estate owned
is charged to operations.

Nonperforming and Problem Assets

         Loan  Delinquencies.  When a loan becomes 16 days past due, a notice of
nonpayment is sent to the borrower.  Telephone  collection calls, letters and/or
visits to the borrower are  initiated at or after 16 days of the due date missed
in an effort to resolve the delinquency.  Generally,  if the loan continues in a
delinquent  status for 90 days past due and no repayment  plan has been reached,
foreclosure, liquidation or other legal proceedings may be initiated.

         Loans are reviewed on a monthly  basis and are placed on a  non-accrual
status  when the loan  becomes  more than 90 days  delinquent  and when,  in our
opinion, the collection of additional interest is doubtful.  Normally,  interest
accrued and unpaid at the time a loan is placed on nonaccrual  status is charged
against  interest  income.  Subsequent  interest  payments,  if any,  are either
applied to the  outstanding  principal  balance or recorded as interest  income,
depending on the assessment of the ultimate collectibility of the loan.

         Nonperforming  Assets.  The  following  table  sets  forth  information
regarding nonaccrual loans and real estate owned, as of the dates indicated.  As
of  the  dates   indicated,   no  loans  were   categorized   as  troubled  debt
restructurings  within the meaning of SFAS 15 and there were no  impaired  loans
within the meaning of SFAS 114, as amended by SFAS 118.

                                        7

<PAGE>

<TABLE>
<CAPTION>
                                                                                      At December 31,
                                                            -----------------------------------------------------------------
                                                                2003           2002         2001          2000        1999
                                                                ----           ----         ----          ----        ----
                                                                             (Dollars In Thousands)
Loans accounted for on a non-accrual basis:
<S>                                                         <C>            <C>          <C>           <C>         <C>
  Mortgage...........................................         $  567         $  446       $  940        $   --      $   --
  Home equity lines of credit........................             --             --           --            --          60
  Installment........................................             --             77           27            --          --
  Commercial.........................................             --             96           60            --          91
  PHEAA..............................................             --             --           --            --          --
  Municipal..........................................             --             --           --            --          --
  Credit cards.......................................             --             --           --            --          --
  Other..............................................             --             --           --            --          --
                                                              ------         ------       ------        ------      ------
Total................................................         $  567         $  619       $1,027        $   --      $  151
                                                              ------         ------       ------        ------      ------
Accruing loans which are contractually past
  due 90 days or more:
  Mortgage...........................................            704            728          559         1,067         998
  Installment........................................             10             --            3            10          21
  Commercial.........................................             14             41            7           157         568
  Home equity lines of credit........................             --             --           --            --          --
  PHEAA..............................................             --             --           --            --          --
  Municipal..........................................             --             --           --            --           -
  Credit cards.......................................             --             --           --            --           3
  Other..............................................             --             --           --            --          --
                                                              ------         ------       ------        ------      ------
Total................................................            728            769          569         1,234       1,590
                                                              ------         ------       ------        ------      ------
Total non-accrual and accrual loans..................          1,295          1,388        1,596         1,234       1,741
                                                              ------         ------       ------        ------      ------
Other real estate owned..............................            254            637          239           132         141
                                                              ------         ------       ------        ------      ------
Other non-performing assets..........................             --             --           --            --          --
                                                              ------         ------       ------        ------      ------
Total non-performing assets..........................         $1,549         $2,025       $1,835        $1,366      $1,882
                                                              ======         ======       ======        ======      ======
Total non-accrual and accrual loans to net loans.....            .31%           .39%         .51%          .42%        .67%
                                                              ======         ======       ======        ======      ======
Total non-accrual and accrual loans to total assets..            .21%           .24%         .30%          .25%        .39%
                                                              ======         ======       ======        ======      ======
Total non-performing assets to total assets..........            .25%           .35%         .35%          .28%        .42%
                                                              ======         ======       ======        ======      ======
</TABLE>


         As of December 31, 2003, there were no loans not reflected in the above
as to which  management  had serious  doubts as to the ability of  borrowers  to
comply with present loan repayment loans.

         Provision for Loan Losses.  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

                                        8

<PAGE>

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.

         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 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.

         Analysis of the  Allowance for Loan Losses.  The  following  table sets
forth information with respect to the Registrant's  allowance for loan losses at
the dates indicated:

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                       -------------------------------------------------------------------
                                                       2003           2002            2001           2000           1999
                                                      --------       --------       --------       --------      ---------
                                                                              (Dollars in Thousands)
<S>                                                 <C>            <C>            <C>            <C>           <C>
Total loans outstanding........................       $419,571       $362,744       $317,246       $293,833      $ 262,868
                                                      ========       ========       ========       ========      =========
Average loans outstanding......................       $393,743       $337,600       $304,080       $279,400      $ 251,574
                                                      ========       ========       ========       ========      =========
Allowance balances (at beginning of  period)...       $  2,873       $  2,114       $  1,919       $  2,366      $   2,228
Provision (credit):
   Mortgage....................................            430            930            200             30             30
   Installment.................................             38             25            100             30             30
   Commercial..................................            132            145            200            240            225
   Home equity lines of credit.................             --             --             --             --             --
   PHEAA.......................................             --             --             --             --             --
   Municipal...................................             --             --             --             --             --
   Credit cards................................             --             --             --             --             15
   Other.......................................             --             --             --             --             --
Net (charge-offs) recoveries:
  Mortgage.....................................            (11)          (219)          (203)          (34)            (21)
  Installment..................................            (64)           (59)           (90)          (72)            (24)
  Commercial...................................           (113)           (63)           (14)         (616)           (102)
  Home equity lines of credit..................             --             --             --             --             --
  PHEAA........................................             --             --             --             --             --
  Municipal....................................             --             --             --             --             --
  Credit cards.................................             --             --              2           (25)            (15)
  Other........................................             --             --             --             --             --
                                                      --------       --------       --------       --------      ---------
Allowance balance (at end of period)...........       $  3,285       $  2,873       $  2,114       $  1,919       $  2,366
                                                      ========       ========       ========       ========      =========
Allowance for loan losses as a percent
  of total loans outstanding...................         0.78%          0.79%          0.67%           0.65%          0.90%
                                                        =====          =====          =====           =====          ====
Net loans charged off as a percent of
  average loans outstanding....................         0.05%          0.10%          0.10%           0.27%          0.06%
                                                        =====          =====          =====           =====          ====
</TABLE>

                                        9

<PAGE>

         Allocation of the Allowance For Loan Losses.  The following  table sets
forth the  allocation  of the  Registrant's  allowance  for loan  losses by loan
category  and the  percent of loans in each  category to total loans at the date
indicated.

<TABLE>
<CAPTION>

                                                                         At December 31,
                                     ---------------------------------------------------------------------------------------------
                                            2003              2002             2001               2000                 1999
                                     ------------------ ----------------  ----------------  -----------------    -----------------
                                                % of             % of              % of               % of                 % of
                                                Loans            Loans            Loans               Loans               Loans
                                               to Total         to Total          to Total           to Total             to Total
                                     Amount     Loans    Amount  Loans    Amount  Loans      Amount   Loans       Amount   Loans
                                     ------     -----    ------  -----    ------  -----      ------   -----       ------  ------
                                                                                   (Dollars in Thousands)
<S>                                 <C>        <C>      <C>     <C>     <C>       <C>      <C>       <C>        <C>       <C>
At end of period allocated to:
  Mortgage.......................    $  806     58.33%  $2,183   57.87%  $1,120    54.55%   $  651    51.95%     $  603    49.56%
  Installment....................       109     18.65      194   16.33      409    20.17       414    22.22         345    23.57
  Commercial.....................     2,217     14.19      432   16.14      501    17.38       786    17.92       1,293    17.98
  Home equity lines of credit....       138      5.23       64    4.36       60     3.47        51     3.42          54     3.38
  PHEAA..........................         5      1.87       --    1.90       11     2.19        10     2.26           9     2.34
  Municipal......................         9      1.49       --    3.08        8     1.69         1     2.02          10     2.41
  Credit cards...................        --       .01       --     .01       --      .01        --       --          45      .68
  Other..........................         1       .23       --     .31        5      .54         6      .21           7      .08
                                     ------    ------   ------  ------   ------   ------    ------   ------      ------   ------
Total allowance..................    $3,285    100.00%  $2,873  100.00%  $2,114   100.00%   $1,919   100.00%     $2,366   100.00%
                                     ======    ======   ======  ======   ======   ======    ======   ======      ======   ======
</TABLE>

                                       10

<PAGE>

Investment Activities

         The Registrant maintains a level of liquid assets, including short-term
securities  and certain other  investments,  which vary  depending  upon several
factors, including: (i) the yields on investment alternatives, (ii) management's
judgment as to the  attractiveness  of the yields then  available in relation to
other  opportunities,  (iii)  expectation  of  future  yield  levels,  and  (iv)
management's  projections  as to the  short-term  demand for funds to be used in
loan  origination  and  other  activities.   Investment  securities,   including
mortgage-backed  securities,  are classified at the time of purchase, based upon
management's  intentions  and  abilities,  as  securities  held to  maturity  or
securities  available  for sale.  Debt  securities  acquired with the intent and
ability to hold to maturity are classified as held to maturity and are stated at
cost and adjusted for  amortization of premium and accretion of discount,  which
are  computed  using the level yield method and  recognized  as  adjustments  of
interest income.  All other debt securities are classified as available for sale
to serve principally as a source of liquidity.

         Current  regulatory  and  accounting  guidelines  regarding  investment
securities  (including  mortgage  backed  securities)  require the Registrant to
categorize  securities as "held to maturity," "available for sale" or "trading."
As of December 31, 2003, the Registrant had securities  classified as "available
for sale" in the amount of $167.9  million and had no  securities  classified as
"held to maturity" or "trading."  Securities  classified as "available for sale"
are reported for financial  reporting purposes at the fair market value with net
changes  in the  market  value  from  period to period  included  as a  separate
component of  stockholders'  equity,  net of income taxes. At December 31, 2003,
the Registrant's  securities  available for sale had an amortized cost of $166.3
million  and market  value of $167.9  million.  Changes  in the market  value of
securities  available for sale do not affect the Company's  income. In addition,
changes in the market value of  securities  available for sale do not affect the
Bank's regulatory capital requirements or its loan-to-one borrower limit.

         At December 31, 2003,  the  Registrant's  investment  portfolio  policy
allowed investments in instruments such as: (i) U.S. Treasury obligations,  (ii)
U.S.   federal  agency  or  federally   sponsored  agency   obligations,   (iii)
mortgage-backed   securities,   (iv)   municipal   obligations,   (v)   banker's
acceptances,  (vi) certificates of deposit, and (vii) investment grade corporate
bonds,  and commercial  paper.  The board of directors may authorize  additional
investments.

         As a source of liquidity and to  supplement  the  Registrant's  lending
activities,   the  Registrant   has  invested  in  residential   mortgage-backed
securities.  Mortgage-backed  securities  can serve as collateral for borrowings
and, through repayments,  as a source of liquidity.  Mortgage-backed  securities
represent a participation  interest in a pool of  single-family or other type of
mortgages.  Principal  and  interest  payments  are  passed  from  the  mortgage
originators, through intermediaries (generally quasi-governmental agencies) that
pool and repackage the  participation  interests in the form of securities.  The
quasi-governmental  agencies  guarantee the payment of principal and interest to
investors  and include  FreddieMac,  Government  National  Mortgage  Association
("GinnieMae"), and FannieMae.

         Mortgage-backed  securities  typically are issued with stated principal
amounts.  The  securities  are backed by pools of mortgages that have loans with
interest  rates that are  within a set range and have  varying  maturities.  The
underlying  pool of mortgages can be composed of either fixed rate or adjustable
rate mortgage  loans.  Mortgage-backed  securities are generally  referred to as
mortgage participation certificates or pass-through  certificates.  The interest
rate risk  characteristics of the underlying pool of mortgages (i.e., fixed rate
or adjustable  rate) and the prepayment  risk, are passed on to the  certificate
holder. The life of a mortgage-backed pass-through security is equal to the life
of the underlying  mortgages.  Expected  maturities will differ from contractual
maturities due to scheduled repayments and because borrowers may have the

                                       11

<PAGE>

right  to call or  prepay  obligations  with or  without  prepayment  penalties.
Mortgage-backed  securities issued by FreddieMac,  GinnieMae, and FannieMae make
up a majority of the pass-through certificates market.

         Investment Portfolio. The following table sets forth the carrying value
of the Registrant's investment securities portfolio at the dates indicated:

<TABLE>
<CAPTION>
                                                                  At December 31
                                                        --------------------------------
                                                          2003        2002        2001
                                                        --------    --------    --------
                                                                 (In Thousands)
<S>                                                    <C>         <C>         <C>
Securities available for sale:
  Obligations of U.S. government agencies.............  $ 82,969    $ 80,503    $ 62,544
  Mortgage-backed securities..........................    37,656      54,104      55,526
  Obligations of state and political subdivisions.....    37,921      38,889      31,843
  Federal home loan bank stock........................     4,541       3,153       2,102
  Equity securities...................................     8,621       9,318      10,214
  Other securities....................................       740         750         739
                                                        --------    --------    --------
     Total securities available for sale..............  $172,448    $186,717    $162,968
                                                        ========    ========    ========
</TABLE>

                                       12

<PAGE>

         Investment Portfolio Maturities. The following table sets forth certain
information  regarding carrying values,  weighted average yields, and maturities
of the  Registrant's  investment  securities  portfolio as of December 31, 2003.
Actual maturities may differ from contractual  maturities as certain instruments
have call features which allow prepayment of obligations.

<TABLE>
<CAPTION>
                                                                 As of December 31, 2003
                                --------------------------------------------------------------------------------------------------
                                                                         After Five         More than             Total
                                One Year or Less   One to Five Years    to Ten Years        Ten Years      Investment Securities
                                ----------------   -----------------  ---------------- ------------------ ------------------------
                                Carrying  Average  Carrying Average   Carrying Average Carrying   Average Carrying Average  Market
                                  Value    Yield    Value    Yield     Value    Yield   Value      Yield   Value    Yield    Value
                                --------  -------  -------- -------   -------- ------- --------   ------- -------- -------  ------
                                                    (Dollars in Thousands)
<S>                             <C>       <C>     <C>        <C>    <C>         <C>    <C>        <C>    <C>        <C>   <C>
Obligations of U.S.
    government agencies......... $2,050    5.67%   $ 9,196    3.64%  $71,723     3.52%  $    --      --%  $ 82,969   3.59% $ 82,969
Mortgage-backed securities......     --      --         --      --     7,406     4.27    30,250    4.83     37,656   4.72    37,656
Obligations of state and
    political subdivisions (1)..    600    4.59      1,234    4.99     7,204     4.96    28,883    4.98     37,921   4.97    37,921
Federal home loan bank stock....     --      --         --      --        --       --     4,541    2.36      4,541   2.36     4,541
Equity securities...............     --      --         --      --        --       --     8,621    2.06      8,621   2.06     8,621
Other securities  ..............    188    0.83%       527    7.08        25     2.50        --      --        740   5.34       740
                                 ------            -------           -------            -------           --------         --------
     Total...................... $2,838    5.12%   $10,957    3.96%  $86,358     3.70%  $72,295    4.40%  $172,448   4.04% $172,448
                                 ======            =======           =======            =======           ========         ========
</TABLE>

------------
(1)  Average yields have not been computed on a tax-equivalent basis.

                                       13

<PAGE>

Sources of Funds

         General.  Deposits are the major source of the  Registrant's  funds for
lending and other investment purposes.  In addition to deposits,  the Registrant
derives funds from the amortization,  prepayment or sale of loans, maturities of
investment securities and operations.  Scheduled loan principal repayments are a
relatively  stable source of funds,  while deposit inflows and outflows and loan
prepayments are  significantly  influenced by general  interest rates and market
conditions.  The  Registrant  can also borrow  from the  Federal  Home Loan Bank
("FHLB") of Pittsburgh.

         Deposits.  Consumer and commercial  deposits are attracted  principally
from within the Registrant's primary market area through the offering of a broad
selection of deposit  instruments  including  checking,  regular savings,  money
market deposits,  term certificate accounts and individual  retirement accounts.
Deposit account terms vary according to the minimum balance  required,  the time
periods  the funds must  remain on deposit and the  interest  rate,  among other
factors.  The Registrant regularly evaluates the internal cost of funds, surveys
rates  offered by competing  institutions,  reviews the  Registrant's  cash flow
requirements  for lending and  liquidity  and executes  rate changes when deemed
appropriate.  The Registrant does not obtain funds through brokers,  nor does it
solicit funds outside the Commonwealth of Pennsylvania.

     The  following  table  shows  the   distribution   of,  and  certain  other
information relating to the Bank's deposits by type as of the dates indicated.
<TABLE>
<CAPTION>
                                                        At December 31,
                               -------------------------------------------------------------------
                                       2003                    2002                   2001
                               -------------------     -------------------      ------------------
                                Average    Average       Average  Average       Average   Average
                                Balance     Rate         Balance    Rate        Balance    Rate
                                -------     ----         -------    ----        -------    ----
                                                    (Dollars in Thousands)
<S>                           <C>           <C>        <C>         <C>        <C>          <C>
Checking accounts:
   Non-interest-bearing.....   $ 77,862        --%      $ 71,568      --%      $ 63,770       --%
   Interest-bearing.........     54,788      0.58         48,375    1.05         44,716     1.84
Passbook and club accounts..     76,641      0.70         69,776    1.48         60,351     2.10
Money market accounts.......     61,138      1.05         60,735    2.03         55,020     3.18
Certificate accounts........    221,186      3.30        208,789    3.80        205,242     5.50
                               --------      ----       --------    ----       --------     ----
         Total..............   $491,615      1.79%      $459,243    2.33%      $429,099     3.52%
                               ========      ====       ========    ====       ========     ====
</TABLE>


         The following  table indicates the amount of certificates of deposit of
$100,000 or more by time remaining at December 31, 2003 (in thousands).


                                                   Certificates of
  Maturity Periods                                     Deposit
  ----------------                                     -------
  Three months or less......................           $25,071
  Over three through six months.............             3,161
  Over six through twelve months............             5,091
  Over twelve months........................            20,927
                                                       -------
        Total...............................           $54,250
                                                       =======

                                       14

<PAGE>

         Borrowings.   Deposits  are  the  primary   source  of  funds  for  the
Registrant's  lending and investment  activities as well as for general business
purposes. Should the need arise, the Registrant has a maximum borrowing capacity
with the FHLB of $282.4 million.  At December 31, 2003,  there were  outstanding
$53.3 million of long term FHLB borrowings.

Personnel

         As of December  31,  2003,  the  Registrant  had 178  full-time  and 60
part-time  employees.  None of the  Registrant's  employees are represented by a
collective bargaining group.

Regulation of the Company

         Set forth below is a brief description of certain laws which related to
the regulation of the Company and the Bank. The description  does not purport to
be complete and is qualified in its entirety by reference to applicable laws and
regulations.

         Sarbanes-Oxley  Act of 2002.  On July 30, 2002,  President  Bush signed
into law the  Sarbanes-  Oxley  Act of 2002  (the  "Act").  The  Securities  and
Exchange Commission (the "SEC") has promulgated certain regulations  pursuant to
the Act and will  continue  to propose  additional  implementing  or  clarifying
regulations  as necessary in  furtherance of the Act. The passage of the Act and
the  regulations  implemented  by the SEC subject  publicly-traded  companies to
additional and more cumbersome reporting regulations and disclosure.  Compliance
with the Act and corresponding regulations may increase the Company's expenses.

         General.  The Company, as a bank holding company under the Bank Holding
Company  Act of 1956,  as amended,  is subject to  regulation,  supervision  and
examination  by the Board of Governors of the Federal  Reserve System and by the
Pennsylvania  Department  of  Banking.  The  Company  is also  required  to file
annually  a  report  of  its  operations   with  the  Federal  Reserve  and  the
Pennsylvania  Department of Banking.  This regulation and oversight is generally
intended to ensure that the Company  limits its  activities  to those allowed by
law and that it  operates in a safe and sound  manner  without  endangering  the
financial health of the Bank.

         Under the Bank  Holding  Company Act, the Company must obtain the prior
approval of the Federal Reserve before it may acquire control of another bank or
bank holding  company,  merge or consolidate  with another bank holding company,
acquire all or  substantially  all of the assets of another bank or bank holding
company, or acquire direct or indirect ownership or control of any voting shares
of any bank or bank  holding  company if,  after such  acquisition,  the Company
would directly or indirectly own or control more than 5% of such shares.

         Federal  statutes impose  restrictions on the ability of a bank holding
company and its nonbank  subsidiaries  to obtain  extensions  of credit from its
subsidiary bank, on the subsidiary bank's investments in the stock or securities
of the  holding  company,  and on the  subsidiary  bank's  taking of the holding
company's  stock or securities as collateral  for loans to any borrower.  A bank
holding company and its subsidiaries are also prevented from engaging in certain
tie-in arrangements in connection with any extension of credit, lease or sale of
property, or furnishing of services by the subsidiary bank.

                                       15

<PAGE>

     A bank holding  company is required to serve as a source of  financial  and
managerial  strength to its subsidiary  banks and may not conduct its operations
in an unsafe or unsound  manner.  In addition,  it is the Federal Reserve policy
that a bank holding  company  should stand ready to use  available  resources to
provide  adequate  capital to its  subsidiary  banks during periods of financial
stress  or  adversity  and  should   maintain  the  financial   flexibility  and
capital-raising  capacity  to obtain  additional  resources  for  assisting  its
subsidiary  banks. A bank holding  company's  failure to meet its obligations to
serve  as a source  of  strength  to its  subsidiary  banks  will  generally  be
considered by the Federal Reserve to be an unsafe and unsound  banking  practice
or a violation of the Federal Reserve regulations, or both.

     Non-Banking  Activities.  The business activities of the Company, as a bank
holding company,  are restricted by the Bank Holding Company Act. Under the Bank
Holding Company Act and the Federal Reserve's bank holding company  regulations,
the  Company  may only  engage in, or acquire or control  voting  securities  or
assets of a company engaged in, (1) banking or managing or controlling banks and
other  subsidiaries  authorized  under the Bank Holding  Company Act and (2) any
non-banking activity the Federal Reserve has determined to be so closely related
to banking or managing or  controlling  banks to be a proper  incident  thereto.
These include any incidental  activities necessary to carry on those activities,
as well as a lengthy list of activities  that the Federal Reserve has determined
to be so closely  related to the business of banking as to be a proper  incident
thereto.

     Financial Modernization. The Gramm-Leach-Bliley Act, which became effective
in March 2000,  permits  greater  affiliation  among  banks,  securities  firms,
insurance companies,  and other companies under a new type of financial services
company  known as a "financial  holding  company." A financial  holding  company
essentially  is a bank  holding  company  with  significantly  expanded  powers.
Financial  holding  companies are authorized by statute to engage in a number of
financial  activities  previously  impermissible  for  bank  holding  companies,
including securities underwriting,  dealing and market making; sponsoring mutual
funds and investment companies;  insurance underwriting and agency; and merchant
banking  activities.  The act also permits the Federal  Reserve and the Treasury
Department to authorize additional activities for financial holding companies if
they are "financial in nature" or "incidental" to financial  activities.  A bank
holding company may become a financial holding company if each of its subsidiary
banks is well capitalized,  well managed,  and has at least a "satisfactory" CRA
rating.  A financial  holding company must provide notice to the Federal Reserve
within 30 days after commencing  activities  previously determined by statute or
by the Federal  Reserve and  Department  of the Treasury to be  permissible.  In
fiscal 2000, the Company  submitted  notice to the Federal  Reserve and became a
financial holding company.

     Regulatory  Capital  Requirements.  The Federal Reserve has adopted capital
adequacy guidelines under which it assesses the adequacy of capital in examining
and supervising a bank holding company and in analyzing applications to it under
the Bank Holding Company Act. The Federal Reserve's capital adequacy  guidelines
are  similar  to those  imposed  on the Bank by the  Federal  Deposit  Insurance
Corporation. See "Regulation of the Bank - Regulatory Capital Requirements."

     Restrictions on Dividends.  The Pennsylvania  Banking Code states, in part,
that dividends may be declared and paid only out of accumulated net earnings and
may not be declared or paid unless surplus (retained earnings) is at least equal
to  contributed  capital.  The Bank has not declared or paid any dividends  that
have  caused its  retained  earnings  to be reduced  below the amount  required.
Finally,  dividends  may not be  declared  or paid if the Bank is in  default in
payment of any assessment due the Federal Deposit Insurance Corporation.

                                       16

<PAGE>

         The  Federal  Reserve has issued a policy  statement  on the payment of
cash dividends by bank holding companies,  which expresses the Federal Reserve's
view that a bank holding  company  should pay cash  dividends only to the extent
that the holding  company's  net income for the past year is sufficient to cover
both the cash dividends and a rate of earnings retention that is consistent with
the holding  company's  capital  needs,  asset  quality  and  overall  financial
condition. The Federal Reserve also indicated that it would be inappropriate for
a  company  experiencing  serious  financial  problems  to  borrow  funds to pay
dividends.  Furthermore, under the federal prompt corrective action regulations,
the  Federal  Reserve  may  prohibit  a bank  holding  company  from  paying any
dividends  if  the  holding   company's   bank   subsidiary   is  classified  as
"undercapitalized."

Regulation of the Bank

         General.  As a  Pennsylvania  chartered  insured  commercial  bank with
deposits  insured by the Bank  Insurance Fund of the Federal  Deposit  Insurance
Corporation,  the Bank is subject to extensive regulation and examination by the
Pennsylvania  Department  of  Banking  and  by  the  Federal  Deposit  Insurance
Corporation,  which insures its deposits to the maximum extent permitted by law.
The federal and state laws and regulations  applicable to banks regulate,  among
other  things,  the scope of their  business,  their  investments,  the reserves
required  to be  kept  against  deposits,  the  timing  of the  availability  of
deposited  funds and the nature and amount of and  collateral for certain loans.
The laws and regulations  governing the Bank generally have been  promulgated to
protect  depositors  and not for the purpose of  protecting  stockholders.  This
regulatory structure also gives the federal and state banking agencies extensive
discretion in connection with their  supervisory and enforcement  activities and
examination  policies,  including policies with respect to the classification of
assets and the  establishment  of adequate  loan loss  reserves  for  regulatory
purposes. Any change in such regulation,  whether by the Pennsylvania Department
of Banking,  the Federal  Deposit  Insurance  Corporation  or the United  States
Congress, could have a material impact on the Company and its operations.

         Federal law  provides the federal  banking  regulators,  including  the
Federal Deposit Insurance  Corporation and the Federal Reserve, with substantial
enforcement powers. This enforcement authority includes, among other things, the
ability to assess civil money penalties,  to issue  cease-and-desist  or removal
orders,  and to initiate  injunctive  actions against banking  organizations and
institution-affiliated  parties,  as  defined.  In  general,  these  enforcement
actions may be initiated for  violations of laws and  regulations  and unsafe or
unsound  practices.  Other  actions  or  inactions  may  provide  the  basis for
enforcement  action,   including  misleading  or  untimely  reports  filed  with
regulatory authorities.

         Pennsylvania  Banking  Law.  The  Pennsylvania  Banking  Code  contains
detailed provisions governing the organization,  location of offices, rights and
responsibilities  of trustees,  officers,  and  employees,  as well as corporate
powers,  savings and investment operations and other aspects of the Bank and its
affairs.  The code  delegates  extensive  rule-making  power and  administrative
discretion to the Pennsylvania Department of Banking so that the supervision and
regulation  of state  chartered  commercial  banks may be  flexible  and readily
responsive  to  changes  in  economic  conditions  and in  savings  and  lending
practices.

         The code also provides state-chartered commercial banks with the powers
to make certain leway  investments,  subject to  regulation by the  Pennsylvania
Department of Banking.  The Federal Deposit Insurance  Corporation Act, however,
prohibits a state-chartered bank from making new investments, loans, or becoming
involved  in  activities  as  principal  and  equity  investments  which are not
permitted  for  national  banks  unless  (1)  the  Federal   Deposit   Insurance
Corporation  determines  the activity or investment  does not pose a significant
risk of loss to the  appropriate  deposit  insurance fund and (2) the bank meets
all applicable

                                       17

<PAGE>

federal capital  requirements.  Accordingly,  the additional operating authority
provided  to the Bank by the code is  significantly  restricted  by the  Federal
Deposit Insurance Act.

         Federal Deposit Insurance. The Federal Deposit Insurance Corporation is
an  independent  federal  agency that  insures the  deposits,  up to  prescribed
statutory  limits,  of  federally  insured  banks and savings  institutions  and
safeguards the safety and soundness of the banking and savings  industries.  The
Federal Deposit Insurance Corporation  administers two separate insurance funds,
the Bank Insurance  Fund,  which  generally  insures  commercial  bank and state
savings  bank  deposits,  and the  Savings  Association  Insurance  Fund,  which
generally insures savings association deposits. The Bank is a member of the Bank
Insurance  Fund and its deposit  accounts  are  insured by the  Federal  Deposit
Insurance Corporation, up to prescribed limits.

         The Federal  Deposit  Insurance  Corporation is authorized to establish
separate  annual  deposit  insurance  assessment  rates for  members of the Bank
Insurance  Fund and the  Savings  Association  Insurance  Fund,  and to increase
assessment rates if it determines such increases are appropriate to maintain the
reserves of either  insurance fund. In addition,  the Federal Deposit  Insurance
Corporation  is  authorized  to  levy  emergency  special  assessments  on  Bank
Insurance  Fund and Savings  Association  Insurance  Fund  members.  The Federal
Deposit Insurance  Corporation's deposit insurance premiums are assessed through
a risk-based system under which all insured  depository  institutions are placed
into one of nine  categories  and assessed  insurance  premiums based upon their
level of capital and supervisory  evaluation,  with the assessment rate for most
institutions set at 0%.

         In addition,  all  institutions  with  deposits  insured by the Federal
Deposit  Insurance  Corporation are required to pay assessments to fund interest
payments on bonds issued by the Financing Corporation,  an agency of the Federal
government   established  to   recapitalize   the  predecessor  to  the  Savings
Association   Insurance   Fund.  The  current   quarterly   assessment  rate  is
approximately .0154% of insured deposits.  These assessments will continue until
the Financing Corporation bonds mature in 2017.

         Regulatory   Capital   Requirements.   The  Federal  Deposit  Insurance
Corporation has promulgated  capital adequacy  requirements for  state-chartered
banks  that,  like the Bank are not members of the Federal  Reserve  System.  At
December 31, 2003, the Bank exceeded all regulatory capital requirements and was
classified as "well capitalized."

         The  Federal  Deposit  Insurance   Corporation's   capital  regulations
establish a minimum 3% Tier 1 leverage  capital  requirement for the most highly
rated state-chartered,  non-member banks, with an additional cushion of at least
100 to 200 basis points for all other  state-chartered,  non-member banks, which
effectively  increases the minimum Tier 1 leverage ratio for such other banks to
4% to 5% or more. Under the Federal Deposit Insurance Corporation's  regulation,
the highest-rated banks are those that the Federal Deposit Insurance Corporation
determines are not anticipating or experiencing significant growth and have well
diversified  risk,  including no undue  interest rate risk  exposure,  excellent
asset  quality,  high  liquidity,  good  earnings  and,  in  general,  which are
considered a strong banking  organization,  rated  composite 1 under the Uniform
Financial  Institutions  Rating System. Tier 1 or core capital is defined as the
sum of common stockholders' equity (including retained earnings),  noncumulative
perpetual  preferred  stock and  related  surplus,  and  minority  interests  in
consolidated  subsidiaries,  minus all  intangible  assets  other  than  certain
mortgage  and   non-mortgage   servicing   assets  and  purchased   credit  card
relationships.

         The Federal Deposit  Insurance  Corporation's  regulations also require
that state-chartered,  non- member banks meet a risk-based capital standard. The
risk-based  capital standard requires the maintenance of total capital (which is
defined as Tier 1 capital and  supplementary  (Tier 2) capital) to risk weighted
assets

                                       18

<PAGE>

of 8%. In  determining  the amount of  risk-weighted  assets,  all assets,  plus
certain off balance sheet assets, are multiplied by a risk-weight of 0% to 100%,
based on the  risks the  Federal  Deposit  Insurance  Corporation  believes  are
inherent in the type of asset or item.  The components of Tier 1 capital for the
risk-based standards are the same as those for the leverage capital requirement.
The components of supplementary  (Tier 2) capital include  cumulative  perpetual
preferred stock,  mandatory  subordinated  debt,  perpetual  subordinated  debt,
intermediate-term  preferred  stock,  up to 45% of  unrealized  gains on  equity
securities and a bank's allowance for loan and lease losses.  Allowance for loan
and lease losses includable in supplementary  capital is limited to a maximum of
1.25% of risk-weighted assets. Overall, the amount of supplementary capital that
may be included in total capital is limited to 100% of Tier 1 capital.

         A bank that has less than the minimum leverage  capital  requirement is
subject to various  capital plan and activities  restriction  requirements.  The
Federal  Deposit  Insurance  Corporation's  regulations  also  provide  that any
insured  depository  institution  with a ratio of Tier 1 capital to total assets
that is less  than  2.0% is deemed  to be  operating  in an  unsafe  or  unsound
condition  pursuant to Section  8(a) of the Federal  Deposit  Insurance  Act and
could be subject to termination of deposit insurance.

         The Bank is also subject to minimum capital requirements imposed by the
Pennsylvania   Department  of  Banking  on   Pennsylvania-chartered   depository
institutions.   Under  the   Pennsylvania   Department   of  Banking's   capital
regulations,  a  Pennsylvania  bank or  savings  bank  must  maintain  a minimum
leverage ratio of Tier 1 capital (as defined under the Federal Deposit Insurance
Corporation's  capital  regulations)  to total  assets of 4%. In  addition,  the
Pennsylvania  Department of Banking has the supervisory  discretion to require a
higher  leverage  ratio  for  any  institutions   based  on  the   institution's
substandard  performance in any of a number of areas. The Bank was in compliance
with  both  the  Federal  Deposit  Insurance  Corporation  and the  Pennsylvania
Department of Banking capital requirements as of December 31, 2003.

         Affiliate  Transaction  Restrictions.  Federal laws strictly  limit the
ability  of banks to engage in  transactions  with their  affiliates,  including
their bank holding companies.  In particular,  loans by a subsidiary bank to its
parent  company or the  nonbank  subsidiaries  of the bank  holding  company are
limited to 10% of a bank  subsidiary's  capital and surplus and, with respect to
such parent company and all such nonbank subsidiaries, to an aggregate of 20% of
the bank subsidiary's capital and surplus.  Further,  loans and other extensions
of credit  generally  are  required  to be secured  by  eligible  collateral  in
specified  amounts.  Federal law also requires that all  transactions  between a
bank and its  affiliates  be on terms as favorable  to the bank as  transactions
with non-affiliates.

         Federal Home Loan Bank System. The Bank is a member of the Federal Home
Loan Bank of  Pittsburgh,  which is one of 12 regional  Federal Home Loan Banks.
Each  Federal Home Loan Bank serves as a reserve or central bank for its members
within its  assigned  region.  It is funded  primarily  from funds  deposited by
member  institutions  and proceeds from the sale of consolidated  obligations of
the Federal Home Loan Bank system. It makes loans to members (i.e., advances) in
accordance with policies and procedures  established by the board of trustees of
the Federal Home Loan Bank.

         As a member,  it is  required  to purchase  and  maintain  stock in the
Federal Home Loan Bank of Pittsburgh in an amount equal to 5% of its outstanding
residential mortgage loans plus .7% of its unused maximum borrowing capacity. At
December 31, 2003, the Bank was in compliance with this requirement.

         Federal  Reserve System.  The Federal  Reserve  requires all depository
institutions  to maintain non-  interest  bearing  reserves at specified  levels
against their  transaction  accounts  (primarily  checking and NOW accounts) and
non-personal  time  deposits.  The  balances  maintained  to  meet  the  reserve
requirements

                                       19

<PAGE>

imposed by the Federal Reserve may be used to satisfy the liquidity requirements
that are imposed by the  Department.  At  December  31,  2003,  the Bank met its
reserve requirements.

Item 2.  Properties
-------  ----------

         At December 31, 2003, the Registrant operated from its main office, six
branch offices and five supermarket branch offices and a loan office and a trust
office,  all located in southwestern  Pennsylvania.  The total net book value of
the Registrant's  investment in premises and equipment at December 31, 2003, was
approximately  $6.5 million.  The main office of the Company and of the Bank and
three  branch  offices  are  owned by the Bank and the  remaining  three  branch
offices,  five supermarket  branch offices,  and the Bank's trust division,  are
leased by the Bank.  These leases have initial terms of one to twenty years, and
all leases contain renewal options for additional years.

Item 3.  Legal Proceedings
-------  -----------------

         The Registrant is periodically  involved as a plaintiff or defendant in
various  legal  actions,   such  as  actions  to  enforce  liens,   condemnation
proceedings  on properties in which the  Registrant  holds  mortgage  interests,
matters  involving the making and servicing of mortgage  loans and other matters
incident to the  Registrant's  business.  In the opinion of management,  none of
these actions individually or in the aggregate is believed to be material to the
financial condition or results of operations of the Registrant.

Item 4.  Submission of Matters to a Vote of Security Holders
-------  ---------------------------------------------------

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of the fiscal year ended December 31, 2003.

                                     Part II

Item 5.  Market for the Registrant's Common Equity and Related Stockholder
-------  -----------------------------------------------------------------
         Matters
         -------

         The  information  contained under the section  captioned  "Stock Market
Information" in the 2003 Annual Report to Stockholders  (the "Annual Report") is
incorporated herein by reference.

Item 6.  Selected Financial Data
-------  -----------------------

         The information  contained in the table captioned  "Selected  Financial
Information" in the Annual Report is incorporated herein by reference.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
-------  -----------------------------------------------------------------------
         of Operations
         -------------

         The  information  contained  in  the  section  captioned  "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Annual Report is incorporated herein by reference.

                                       20

<PAGE>

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
--------  ----------------------------------------------------------

         The information contained in the section captioned "Market Risk" in the
Annual Report is incorporated herein by reference.

Item 8.  Financial Statements and Supplementary Data
-------  -------------------------------------------

         The  Registrant's  financial  statements  listed in Item 15 herein  are
incorporated herein by reference from the Annual Report.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
-------  ---------------------------------------------------------------
         Financial Disclosure
         --------------------

         None.

Item 9A.  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 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.

                                       21

<PAGE>

                                    Part III

Item 10.  Directors and Executive Officers of the Registrant
--------  --------------------------------------------------

         The information  contained under the sections  captioned "Section 16(a)
Beneficial  Ownership  Reporting  Compliance"  and  "Proposal  I--  Election  of
Directors" and "--  Biographical  Information"  in the 2003 Proxy  Statement are
incorporated herein by reference.

         The Company has adopted a Code of Ethics that applies to its  principal
executive officer,  principal financial officer, principal accounting officer or
controller or persons performing similar functions. A copy of the Company's Code
of Ethics will be  furnished,  without  charge,  to any person who requests such
copy by writing to the Secretary,  IBT Bancorp,  Inc.,  309 Main Street,  Irwin,
Pennsylvania 15642.

Item 11.  Executive Compensation
--------  ----------------------

         The  information  contained under the section  captioned  "Director and
Executive  Compensation"  in the  Proxy  Statement  is  incorporated  herein  by
reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
--------  --------------------------------------------------------------

         (a)      Security Ownership of Certain Beneficial Owners

                  Information  required by this item is  incorporated  herein by
                  reference  to the Section  captioned  "Voting  Securities  and
                  Principal  Holders  Thereof -- Security  Ownership  of Certain
                  Beneficial Owners" of the Proxy Statement.

         (b)      Security Ownership of Management

                  Information  required by this item is  incorporated  herein by
                  reference to the sections  captioned  "Voting  Securities  and
                  Principal  Holders  Thereof -- Security  Ownership  of Certain
                  Beneficial  Owners" and  "Proposal I -- Election of Directors"
                  of the Proxy Statement.

         (c)      Changes in Control

                  Management of the Company knows of no arrangements,  including
                  any pledge by any person of  securities  of the  Company,  the
                  operation of which may at a subsequent date result in a change
                  in control of the registrant.

         (d)      Securities Authorized for Issuance Under  Equity  Compensation
                  Plans

         Set forth below is  information as of December 31, 2003 with respect to
compensation   plans  under  which  equity  securities  of  the  Registrant  are
authorized for issuance.

                                       22

<PAGE>

<TABLE>
<CAPTION>
                                           EQUITY COMPENSATION PLAN INFORMATION

                                                 (a)                      (b)                        (c)

                                                                                               Number of securities
                                        Number of securities        Weighted-average          remaining available for
                                          to be issued upon         exercise price of          future issuance under
                                             exercise of               outstanding           equity compensation plans
                                        outstanding options,        options, warrants          (excluding securities
                                        warrants and rights            and rights            reflected in column (a))
                                        -------------------            ----------            ------------------------
<S>                                         <C>                        <C>                         <C>
Equity compensation plans
approved by shareholders:

2000 Stock Option Plan...............          150,000                   $29.83                       150,000

Equity compensation plans                        n/a                       n/a                          n/a
not approved by shareholders.........

     TOTAL..........................          $150,000                   $29.83                      $150,000
                                              ========                                               ========
</TABLE>


Item 13.  Certain Relationships and Related Transactions
--------  ----------------------------------------------

         The  information  required  by this  item  is  incorporated  herein  by
reference  to the section  captioned  "Proposal  I -- Election of  Directors - -
Certain Relationships and Related Transactions" of the Proxy Statement.

Item 14.  Principal Accounting Fees and Services
--------  --------------------------------------

         The  information  called  for by this  item is  incorporated  herein by
reference to the section  entitled  "Ratification of Appointment of Accountants"
in the Proxy Statement.

                                     Part IV

Item 15.  Exhibits, Financial Statements, and Reports on Form 8-K
--------  -------------------------------------------------------

         (a)      Listed below are all financial  statements  and exhibits filed
                  as part of this report, and are incorporated by reference.

                  1.       The consolidated  statements of financial  conditions
                           of IBT Bancorp,  Inc. and  subsidiary  as of December
                           31,  2003  and  2002,  and the  related  consolidated
                           statements of income, changes in stockholders' equity
                           and cash  flows  for each of the  years in the  three
                           year period ended  December 31, 2003,  together  with
                           the  related  notes  and  the  independent  auditors'
                           report  of   Edwards   Sauer  &  Owens,   independent
                           accountants.

                  2.       Schedules omitted as they are not applicable.

                                       23

<PAGE>

                  3.       Exhibits
<TABLE>
<CAPTION>
                       <S>       <C>
                            3(i)   Articles of Incorporation of IBT Bancorp, Inc.*
                            3(ii)  Amended  Bylaws of IBT  Bancorp,  Inc.**
                            4.1    Rights  Agreement,  dated as of November 18, 2003 by
                                   and between IBT Bancorp, Inc. and Registrar and Transfer Company*****
                           10      Change In Control Severance Agreement with Charles G. Urtin***
                           10.1    Deferred Compensation Plan For Bank Directors***
                           10.2    Retirement Agreement Between Irwin Bank & Trust Co. And
                                   J. Curt Gardner***
                           10.3    Death Benefit Only Deferred Compensation Plan For Bank Directors
                                   effective as of January 1, 1990***
                           10.4    Retirement and Death Benefit Deferred Compensation Plan For
                                   Bank Directors effective as of January 1, 1990***
                           10.5    2000 Stock Option Plan****
                           13      2003 Annual Report to Shareholders
                           21      Subsidiaries of IBT Bancorp, Inc. (see "Item 1 - Business")
                           23      Consent of Edwards, Sauer & Owens
                           31      Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
                           32      Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>

         _________________________
         *        Incorporated by reference to the identically numbered exhibits
                  of the Registrant's Form 10 (file no. 0-25903)
         **       Incorporated by reference t the identically  numbered exhibits
                  of the Registrant's Form 10-K for December 31, 2002.
         ***      Incorporated by reference to the identically numbered exhibits
                  of the Registrant's Form 10-K for December 31, 1999.
         ****     Incorporated  by  reference  to  the  Form  S-8   Registration
                  Statement (333-40398) filed with the SEC on June 29, 2000.
         *****    Incorporated  by reference  to the Form 8-A  Registration
                  Statement  (001-31655) filed with the SEC on November 20,
                  2003.

         (b) Reports on Form 8-K.

                  o        A Report on Form 8-K,  dated  October 23,  2003,  was
                           filed  with the SEC on  October  23,  2003 to  report
                           results of operations for the quarter ended September
                           30, 2003.

                  o        A Report on Form 8-K,  dated  November 18, 2003,  was
                           filed with the SEC on  November  20, 2003 to announce
                           the adoption of a shareholder rights plan.

                                       24

<PAGE>

                                   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 as of March 15, 2004.

                                       IBT BANCORP, INC.


                                       By:      /s/Charles G. Urtin
                                                --------------------------------
                                                Charles G. Urtin, President and
                                                Chief Executive Officer
                                                (Duly Authorized Representative)

         Pursuant to the  requirement  of the  Securities  Exchange Act of 1934,
this report has been signed below on March 15, 2004 by the following  persons on
behalf of the registrant and in the capacities indicated.

<TABLE>
<CAPTION>
<S>                                                        <C>

/s/Charles G. Urtin                                           /s/J. Curt Gardner
--------------------------------------------                  -------------------------------------------
Charles G. Urtin, President, Chief Executive                  J. Curt Gardner
Officer, and Director                                         Chairman of the Board
(Principal Executive Officer)

/s/Richard L. Ryan                                            /s/Thomas Beter
--------------------------------------------                  -------------------------------------------
Richard L. Ryan                                               Thomas Beter
Director                                                      Director


--------------------------------------------                  -------------------------------------------
Edwin A. Paulone                                              Robert C. Whisner
Director                                                      Director

/s/Grant J. Shevchik                                          /s/Robert Rebich, Jr.
--------------------------------------------                  -------------------------------------------
Grant J. Shevchik                                             Robert Rebich, Jr.
Director                                                      Director

/s/Raymond G. Suchta                                          /s/Richard J. Hoffman
--------------------------------------------                  -------------------------------------------
Raymond G. Suchta                                             Richard J. Hoffman
Vice President and Chief Financial Officer                    Director
(Principal Financial and Accounting Officer)

</TABLE>