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, 1999

[ ]  TRANSITIONAL  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 incorporation    (I.R.S.   Employer
     or organization)                                 Identification No.

        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:      None
                                                            --------------

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

                          Common Stock, $1.25 par value
                          -----------------------------
                                (Title of Class)

         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. [ ]

         Based on the closing  sales price of $27 per share of the  registrant's
common stock on February 25, 2000,  as reported on the OTC Bulletin  Board,  the
aggregate market value of voting and non-voting stock held by  non-affiliates of
the registrant was approximately $71.7 million.

         DOCUMENTS INCORPORATED BY REFERENCE


     1.   Portions of 1999 Annual Report to Stockholders (Parts II and IV)
     2.   Portions  of  Proxy   Statement   for  the  2000  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., a Pennsylvania Corporation,  headquartered in Irwin,
Pennsylvania,  is the bank  holding  company  for Irwin Bank & Trust  Company of
Pennsylvania  (the  "Bank").  The Company  conducts no  significant  business or
operations  of its own other than  holding all of the  outstanding  stock of the
Bank.  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.

         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, 1999 the Bank operated through its main office, five branch offices
and a loan center as well as through four  supermarket  branches  under the name
"Irwin Bank Extra." The Bank's main office,  full service branch  offices,  loan
center,  and supermarket  branches are located in the  Pennsylvania  counties of
Westmoreland and Allegheny. The Bank's web site is "www.irwinbank.com."

<PAGE>

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,
                           --------------------------------------------------------------------------------------------------------
                                     1999                 1998                   1997                1996                  1995
                           --------------------  --------------------  --------------------  -------------------  -----------------
                                 $         %         $          %          $            %        $          %          $        %
                           -----------  -------  ----------  --------  ----------    ------  ---------  --------  ----------  -----
                                                                         (Dollars in Thousands)
<S>                         <C>        <C>       <C>        <C>       <C>            <C>    <C>          <C>      <C>        <C>
Type of Loans:
-------------
  Mortgage.................. $130,348   49.56     $123,494   51.31     $107,240       48.97  $  99,118    50.28    $ 87,772   49.00
  Installment...............   61,983   23.57       52,418   21.78       45,321       20.69     38,595    19.58      34,389   19.20
  Commercial................   47,294   17.98       45,232   18.79       42,003       19.18     38,517    19.54      35,399   19.76
  Home equity credit........    8,886    3.38        8,588    3.57        8,860        4.05      8,723     4.42       9,457    5.28
  PHEAA (1).................    6,166    2.34        5,043    2.10        4,604        2.10      4,632     2.35       4,589    2.56
  Municipal.................    6,347    2.41        3,616    1.50        7,870        3.59      4,733     2.40       4,828    2.70
  Credit cards..............    1,780     .68        1,808     .75        2,022         .93      2,228     1.13       2,119    1.18
  Other.....................      210     .08          477     .20        1,081         .49        585      .30         584     .32
                             --------  -------    --------  ------      -------      ------    -------   ------    --------  ------
Total loans.................  263,014  100.00%     240,676  100.00%     219,001      100.00%   197,131   100.00%    179,137  100.00%
                                       ======               ======                   ======              ======              ======
Less:
  Loans in process..........       --                   --                   --                     --                   --
  Unearned discount.........       --                   --                   --                      1                   10
  Deferred loan origination.
    fees and costs..........      146                  144                  174                    213                  160
  Allowance for loan losses.    2,366                2,228                2,340                  2,240                1,969
                             --------             --------             --------               --------             --------
Total loans, net............ $260,502             $238,304             $216,487               $194,677             $176,998
                             ========             ========             ========               ========             ========
</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, 1999.
Scheduled  repayments are reported in the maturity  category in which payment is
due.
<TABLE>
<CAPTION>
                                          Home
                                         Equity                                     PHEAA
                             Mortgage    Credit(2)    Installment     Commercial     (1)      Municipal   Cards(2)   Other   Total
                            ---------   ----------   -------------  ------------  ---------   ----------  --------   ------ --------
                                                                           (In Thousands)

<S>                         <C>            <C>          <C>            <C>       <C>           <C>        <C>       <C>   <C>
1 year or less.............  $  12,121      $ 8,886      $ 11,312       $  3,298  $      --     $ 6,347    $ 1,780   $ 210 $  43,954
                              --------       ------       -------        -------   --------      ------     ------    ----  --------

After 1 year:
  1 to 5 years.............     25,947           --        30,507         11,752      6,166          --         --      --    74,372
  After 5 years............     92,280           --        20,164         32,244         --          --         --      --   144,688
                               -------       ------        ------         ------      -----      ------     ------    ----   -------
Total due after one year...    118,227           --        50,671         43,996      6,166          --         --      --   219,060
                               -------       ------       -------         ------      -----      ------     ------    ----   -------
Total amount due...........   $130,348      $ 8,886      $ 61,983       $ 47,294    $ 6,166     $ 6,347    $ 1,780   $ 210 $ 263,014
                               =======       ======       =======        =======     ======      ======     ======    ====  ========
</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 are lines of credit. Home equity credit lines and credit
     cards have no stated maturities; therefor they are classified as due in one
     year or less.


         The  following  table sets forth,  as of December 31, 1999,  the dollar
amount of all loans due after  December  31,  2000,  based upon  fixed  rates of
interest or floating or adjustable interest rates.

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

Mortgage(1)                        $ 110,844        $ 7,383           $ 118,227
Installment                           49,573          1,098              50,671
Commercial                            31,828         12,168              43,996
Home equity credit                        --             --                  --
PHEAA                                     --          6,166               6,166
Municipal                                 --             --                  --
Credit Cards                              --             --                  --
Other                                     --             --                  --
                                    --------        -------            --------
     Total                         $ 192,245       $ 26,815           $ 219,060
                                    ========        =======            ========

--------------------------
(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.

                                       4
<PAGE>

         The Registrant had  approximately  $67.9 million of one- to four-family
residential  mortgage loans in its mortgage loan portfolio at December 31, 1999.
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 a
30 year  amortization  period.  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 2% per year and 6% over the
life of the loan, and are originated for retention in the portfolio.

         Fixed rate loans are  underwritten in accordance with Federal  National
Mortgage  Association  ("FNMA")  guidelines.  Currently,  loans  underwritten in
accordance  with FNMA  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 FNMA  guidelines.  At December  31,  1999,  $79.4
million of the Registrant's mortgage portfolio consisted of long-term fixed rate
mortgage  loans  of  which  $114,000  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 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.   Essentially  all
originated  commercial  real  estate  loans  are  within  the 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 15 years, with principal and interest payments calculated using up to a 20
year amortization period.  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 an upward adjustment of up to 3.75%.
Adjustable rate commercial  mortgage loans have terms of up to 20 years and have
no maximum interest rate.

         As of December 31, 1999, the Registrant's  commercial real estate loans
totaled  $51.6 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.


                                       5
<PAGE>

         The Registrant  also  originates  loans to finance the  construction of
one-to  four-family  dwellings.  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, 1999,  such loans  totaled $8.8 million 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.

         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. The Registrant  originates automobile loans with fixed rates
of interest and terms of up to five years.  At December  31,  1999,  home equity
loans totaled $62.4 million.

         Commercial  Loans.  Commercial  business  loans  consist of  equipment,
accounts  receivables,  inventory,  and other business purpose loans. Such loans
are  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.  These  revolving  home  equity  lines of
credit are secured  primarily by one- to  four-family  residences.  The lines of
credit are 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
$100,000. Loans between $100,000 and $500,000 are approved by an officers review
committee  ("ORC").  The ORC consists of the  President  and at least four other
officers  appointed by the President.  All loans over $500,000 are approved by a
majority of 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.

                                       6
<PAGE>

         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  mortgage loans.  Generally,  the commitment  requires
acceptance  within  30 days of the  date of  issuance.  At  December  31,  1999,
commitments to cover originations of mortgage loans totaled $14.1 million.

         Loans to One Borrower.  Federal regulations limit loans to one borrower
in an amount equal to 15% of unimpaired capital and unimpaired  surplus.  If the
loan is secured by readily marketable collateral, the limit is 25% of unimpaired
capital and unimpaired  surplus.  At December 31, 1999, the Registrant's loan to
one borrower  limit was  approximately  $6.4 million.  At December 31, 1999, the
Registrant's  largest  loan to one  borrower  was $5.6  million  and was secured
primarily by real estate in  Westmoreland  county.  The borrower is a commercial
and residential developer.

         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  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.

         At December 31, 1999,  the  Registrant had a total of $6.8 million and,
$3.0  million,  respectively,  of the  loan  portfolio  classified  as  "special
mention" and  "substandard".  There were no loans  classified  as  "doubtful" or
"loss".

         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.


                                       7
<PAGE>

         Allowance  for  Losses on Loans.  It is the  policy  of  management  to
provide  for  losses on  unidentified  loans in its  portfolio  in  addition  to
classified  loans. A provision for loan losses is charged to operations based on
management's  evaluation  of the  potential  losses  that may be incurred in the
Registrant's loan portfolio. Management also periodically performs valuations of
other real estate owned and establishes  allowances to reduce book values of the
properties to their net realizable values when necessary.

         Management  will  continue  to review  the  entire  loan  portfolio  to
determine the extent,  if any, to which further  additional loan loss provisions
may be deemed  necessary.  There can be no assurance that the allowance for loan
losses will be adequate to cover losses which may be realized in the future.  In
addition,  there can be no assurance  that  additional  provisions for losses on
loans and other real estate owned 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,
                                               -----------------------------------------------------------------
                                                  1999          1998          1997          1996          1995
                                               ---------     ---------     ---------     ---------     ---------
                                                                        (Dollars in Thousands)
<S>                                           <C>           <C>           <C>           <C>           <C>
Total loans outstanding ....................   $ 262,868     $ 240,532     $ 218,827     $ 196,917     $ 178,967
                                               =========     =========     =========     =========     =========
Average loans outstanding ..................   $ 251,574     $ 226,984     $ 205,399     $ 186,845     $ 163,471
                                               =========     =========     =========     =========     =========
Allowance balances (at beginning of  period)   $   2,228     $   2,340     $   2,240     $   1,969     $   1,685
Provision (credit):
   Mortgage ................................          30            30            30            41            38
   Installment .............................          30            30            30            41            38
   Commercial ..............................         225           225           225           308           285
   Home equity credit ......................          --            --            --            --            --
   PHEAA ...................................          --            --            --            --            --
   Municipal ...............................          --            --            --            --            --
   Credit cards ............................          15            15            15            20            19
   Other ...................................          --            --            --            --            --
Net (charge-offs) recoveries: ..............          --            --            --            --
  Mortgage .................................         (21)          (19)          (10)           --            --
  Installment ..............................         (24)          (28)          (27)          (56)          (32)
  Commercial ...............................        (102)         (324)         (104)          (59)          (20)
  Home equity credit .......................          --            --           (11)           --           (25)
  PHEAA ....................................          --            --            --            --            --
  Municipal ................................          --            --            --            --            --
  Credit cards .............................         (15)          (41)          (48)          (24)          (19)
  Other ....................................          --            --            --            --            --
                                               ---------     ---------     ---------     ---------     ---------
Allowance balance (at end of period) .......   $   2,366     $   2,228     $   2,340     $   2,240     $   1,969
                                               =========     =========     =========     =========     =========
Allowance for loan losses as a percent
  of total loans outstanding ...............         .90%         0.93%         1.07%         1.14%         1.10%
                                               =========     =========     =========     =========     =========
Net loans charged off as a percent of
  average loans outstanding ................         .06%         0.18%         0.10%         0.07%         0.06%
                                               =========     =========     =========     =========     =========
</TABLE>

                                       8
<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,
                                 ---------------------------------------------------------------------------------------------------
                                         1999                1998                1997                1996               1995
                                 -------------------   -----------------   -----------------   -----------------  ------------------
                                             % 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                       $  603      49.56%   $  604     51.31%    $  565     48.97%   $  588     50.28% $  508      49.00%
  Installment                       345      23.57       380     21.78        324     20.69       294     19.58     270      19.20
  Commercial                      1,293      17.98     1,100     18.79      1,301     19.18     1,224     19.54   1,050      19.76
  Home equity credit                 54       3.38        44      3.57         45      4.05        43      4.42      47       5.28
  PHEAA                               9       2.34         8      2.10          7      2.10         7      2.35       7       2.56
  Municipal                          10       2.41         5      1.50         12      3.59         6      2.40       7       2.70
  Credit cards                       45        .68        80       .75         71       .93        74      1.13      74       1.18
  Other                               7        .08         7       .20         15       .49         4       .30       6        .32
                                -------     ------     -----   -------      -----    ------     -----    ------   -----     ------
Total allowance                 $ 2,366     100.00%  $ 2,228    100.00%   $ 2,340    100.00%  $ 2,240    100.00% $1,969     100.00%
                                 ======     ======    ======    ======     ======    =======   ======    ======   =====     ======

</TABLE>


                                       9

<PAGE>



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 within 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. 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.  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.

                                       10
<PAGE>
<TABLE>
<CAPTION>
                                                               At December 31,
                                              -----------------------------------------------
                                                1999      1998      1997      1996      1995
                                              ------    ------    ------    ------    ------
                                                            (Dollars In Thousands)
<S>                                          <C>       <C>       <C>          <C>    <C>
Loans accounted for on a non-accrual basis:
  Mortgage ................................   $   --    $   --    $  29      $  --    $   --
  Installment .............................       --        --        --         5         1
  Commercial ..............................       91        12       205       114        18
  Home equity credit ......................       60        --        --        --        --
  PHEAA ...................................       --        --        --        --        --
  Municipal ...............................       --        --        --        --        --
  Credit cards ............................       --        --        --        --        --
  Other ...................................       --        --        --        --        --
                                              ------    ------    ------    ------    ------
Total .....................................      151        12       234       119        19
                                              ------    ------    ------    ------    ------
Accruing loans which are contractually past
  due 90 days or more:
  Mortgage ................................      998       788       362       493       703
  Installment .............................       21         3        21         7        53
  Commercial ..............................      568       629       631       250       111
  Home equity credit ......................       --        --        --        --        --
  PHEAA ...................................       --        --        --        --        --
  Municipal ...............................       --        --        --        --        --
  Credit cards ............................        3         8         9        11        11
  Other ...................................       --        --        --        --        --
                                              ------    ------    ------    ------    ------
Total .....................................    1,590     1,428     1,023       761       878
                                              ------    ------    ------    ------    ------
Total non-accrual and accrual loans .......    1,741     1,440     1,257       880       897
                                              ------    ------    ------    ------    ------
Other real estate owned ...................      141       128        37        53        30
                                              ------    ------    ------    ------    ------
Other non-performing assets ...............       --        --        --        --        --
                                              ------    ------    ------    ------    ------
Total non-performing assets ...............   $1,882    $1,568    $1,294    $  933    $  927
                                              ======    ======    ======    ======    ======
Total non-accrual and accrual loans
  to net loans ............................      .67%      .60%      .58%      .45%      .51%
                                              ======    ======    ======    ======    ======
Total non-accrual and accrual loans to
  total assets ............................      .39%      .35%      .34%      .27%      .30%
                                              ======    ======    ======    ======    ======
Total non-performing assets to total assets      .42%      .38%      .35%      .28%      .31%
                                              ======    ======    ======    ======    ======

</TABLE>

                                       11

<PAGE>

Investment Activities

         The Registrant maintains a level of liquid assets, including short-term
securities and certain other  investments,  which varies  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, 1999, the Registrant had securities  classified as "available
for sale" in the amount of $149.1  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, 1999,
the Registrant's  securities  available for sale had an amortized cost of $153.9
million and market value of $149.1  million  (unrealized  loss of $4.8 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, 1999,  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) banker's  acceptances,  (v)  certificates  of
deposit,  and (vi) 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,  to
investors,  like us. The  quasi-governmental  agencies  guarantee the payment of
principal  and interest to investors  and include the Federal Home Loan Mortgage
Corporation  ("FHLMC"),  Government National Mortgage Association ("GNMA"),  and
Federal National Mortgage Association ("FNMA").

         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

                                       12
<PAGE>

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  right to call or  prepay  obligations  with or  without
prepayment penalties. Mortgage-backed securities issued by FHLMC, GNMA, and FNMA
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
                                                    -------------------------------
                                                      1999       1998       1997
                                                    ---------  --------   ---------
                                                           (In Thousands)
<S>                                               <C>        <C>        <C>
Securities available for sale:
  Obligations of U.S. government agencies .......   $ 90,744   $ 69,540   $ 70,725
  Mortgage-backed securities ....................     47,005     33,227     21,611
  Obligations of state and political subdivisions     10,536      8,200      6,929
  U.S. treasury securities ......................       --        5,616      6,627
  Federal home loan bank stock ..................      1,964      1,308      1,171
  Equity securities .............................        230        249        239
  Other securities ..............................        584        638        499
                                                    --------   --------   --------
     Total securities available for sale ........    151,063    118,778    107,801
                                                    --------   --------   --------

Securities held to maturity:
  U.S. government agencies ......................         --      2,500      5,500
  Mortgage-backed securities ....................         --         69        355
                                                    --------   --------   --------
     Total securities held to maturity ..........         --      2,569      5,855
                                                    --------   --------   --------
     Total investment and mortgage-backed
       securities ...............................   $151,063   $121,347   $113,656
                                                    ========   ========   ========
</TABLE>


                                       13
<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, 1999.
Actual maturities may differ from contractual  maturities as certain instruments
have call features which allow prepayment of obligations.

<TABLE>
<CAPTION>
                                                                     As of December 31, 1999
                                ----------------------------------------------------------------------------------------------------
                                                                         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..........  $1,238   5.84%   $42,212    6.08%   $35,896  6.87%  $11,398     7.20% $ 90,744   6.53%  $ 90,744
Mortgage-backed securities.......      --     --         23    9.03      1,367  6.72    45,615     6.63    47,005   6.64     47,005
Obligations of state and
    political subdivisions (1)...     155   6.10      1,405    5.62      1,497  5.82     7,479     5.08    10,536   5.15     10,536
Federal home loan bank stock.....      --     --         --      --         --    --     1,964     6.00     1,964   6.00      1,964
Equity securities................      --     --         --      --         --    --       230     6.00       230   6.00        230
Other securities.................      --     --         --      --         31  9.00       553     5.71       584   5.88        584
                                   ------           -------            -------         -------           --------          --------
     Total.......................  $1,393   5.87%   $43,640    6.07%   $38,791  6.83%  $67,239    6.53%  $151,063   6.46%  $151,063
                                   ======   ====    =======    ====    =======  ====   =======    ====   ========   ====   ========

</TABLE>

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

                                       14
<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 indicates the amount of certificates of deposit of
$100,000 or more by time remaining at December 31, 1999 (in thousands).


  Three months or less..............................     $ 427
  Over three through six months.....................       915
  Over six through twelve months....................       711
  Over twelve months................................    38,780
                                                        ------
                                                       $40,833
                                                       =======

         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 $136.5 million. At December 31, 1999 there were outstanding $22
million of long term FHLB borrowings.

Personnel

         As of December  31,  1999,  the  Registrant  had 140  full-time  and 52
part-time  employees.  None of the  Registrant's  employees are represented by a
collective bargaining group.

Regulation

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

         Financial  Modernization  Legislation.  On November 12, 1999, President
Clinton  signed  into law the  Gramm-Leach-Bliley  Act (the  "GLB  Act")  which,
effective March 11, 2000,  permits  qualifying bank holding  companies to become
financial  holding  companies and thereby  affiliate with  securities  firms and
insurance  companies and engage in other activities that are financial in nature
or  incidental  to a  financial  activity.  The GLB  Act  and  the  implementing
regulation of the Board of Governors of the Federal Reserve

                                       15
<PAGE>

System  (the  "Federal   Reserve")  define  "financial  in  nature"  to  include
securities  underwriting,  dealing and market  making;  sponsoring  and managing
mutual  funds and  investment  companies;  insurance  underwriting  and  agency;
merchant banking  activities;  management  consulting  services;  operation of a
travel  agency;  and  activities  that the Federal  Reserve has determined to be
closely related to banking.  A bank holding company may elect to be treated as a
financial holding company only if all depository institution subsidiaries of the
holding company are and continue to be  well-capitalized  and  well-managed  and
have at least a satisfactory rating under the Community Reinvestment Act.

         The  GLB  Act  also  authorizes  national  banks  to  engage,   through
"financial  subsidiaries,"  in any activity that is permissible  for a financial
holding company and any activity that is determined to be financial in nature or
incidental to a financial activity,  except insurance underwriting,  real estate
development,  real estate  investment  (except as  otherwise  permitted by law),
insurance company  portfolio  investments and merchant banking  activities.  The
authority of a national bank to invest in a financial subsidiary is subject to a
number of conditions,  including, among other things, requirements that the bank
must be  well-managed  and  well-capitalized  (after  deducting from capital the
bank's outstanding investments in financial  subsidiaries).  The GLB Act further
provides  that a state bank may invest in financial  subsidiaries,  assuming the
requisite  investment  authority under state law, subject to the same conditions
that apply to national bank investments in financial subsidiaries.

         In  addition,  the GLB Act  enacts a number  of  consumer  protections,
including  provisions  intended to protect privacy of bank customers'  financial
information and provisions  requiring disclosure of ATM fees imposed by banks on
customers of other banks.

         Bank Holding  Company  Regulation.  The  Registrant is regulated by the
Pennsylvania Department of Banking and the Federal Reserve. The Registrant files
with the Federal Reserve an annual report and such additional information as the
Federal  Reserve  may  require.  The  Registrant  is  also  subject  to  regular
examination by the Federal Reserve.

         The Registrant  must obtain the prior  approval of the Federal  Reserve
before it may acquire all or substantially  all of the assets of another bank or
bank holding company, merge or consolidate with another 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 bank holding  company
would directly or indirectly own or control more than 5% of such shares.

         As a bank holding company,  the Registrant is prohibited,  with certain
exceptions,  from acquiring direct or indirect ownership or control of more than
5% of the  voting  shares  of a  company  that is not a bank  or a bank  holding
company,  or from engaging directly or indirectly in activities other than those
of  banking,  managing or  controlling  banks,  or  providing  services  for its
subsidiaries.  The principal  exceptions to these  prohibitions  involve certain
non-bank  activities that, by statute or by Federal Reserve regulation or order,
have been identified as activities closely related to the business of banking or
managing or controlling banks.

         The  GLB  Act  greatly   expands  the  scope  of  business   activities
permissible  for bank holding  companies by enacting  authority  for  "financial
holding  companies."  Effective  March  11,  2000,  the GLBA Act  permits a bank
holding company, upon classification as a financial holding company and assuming
such holding company's subsidiary banks meet certain requirements,  to engage in
activities  that are defined by statute as "financial in nature" or are approved
by the  Federal  Reserve as  financial  in nature or  incidental  to a financial
activity. See "-- Financial Modernization Legislation."


                                       16
<PAGE>



         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.

         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 policy of the
Federal  Reserve 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.

         The Federal Reserve has adopted capital adequacy guidelines pursuant to
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  holding company capital adequacy  guidelines
are similar to those imposed on the Bank by the FDIC.  See  "Regulatory  Capital
Requirements."

         Regulation  of the  Bank.  The Bank is  regulated  by the  Pennsylvania
Department of Banking and the FDIC.  The deposits of the Bank are insured by the
FDIC,  and the Bank is subject to  regulation  and  regular  examination  by the
Pennsylvania  Department of Banking and the FDIC. 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
are  intended  primarily  for  the  protection  of  depositors  rather  than  of
stockholders.

         The  Bank's  deposit  accounts  are  insured by the BIF to a maximum of
$100,000 for each insured  account (as defined by statute and  regulation).  The
Bank is required to pay insurance  premiums based on a percentage of its insured
deposits to the FDIC for  insurance  of its  deposits by the BIF.  The FDIC also
maintains  another  insurance  fund,  the  Savings  Institution  Insurance  Fund
("SAIF"),  which  insures  savings  association  deposits.  The FDIC has set the
deposit insurance assessment rates for BIF-member institutions for the first six
months of 2000 at 0% to .027% of insured deposits on an annualized  basis,  with
the  assessment  rate for most banks set at 0%. In  addition,  all  FDIC-insured
institutions  are  required  through 2017 to pay  assessments  to the FDIC at an
annual  rate of  approximately  .0212%  of  insured  deposits  to fund  interest
payments on bonds issued by the Financing Corporation,  an agency of the Federal
government established to recapitalize the predecessor to the SAIF.

         Federal  laws  strictly  limit  the  ability  of  banks  to  engage  in
transactions with their affiliates, including their bank holding companies. Such
transactions  by a  subsidiary  bank to its  parent  company  or to any  nonbank
subsidiary  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 such bank subsidiary's capital and surplus.  Further,  loans
and  extensions  of credit  generally  are  required  to be secured by  eligible
collateral  in  specified  amounts.   Federal  law  also  prohibits  banks  from
purchasing low-quality assets from affiliates.

                                       17
<PAGE>

         Regulatory  Capital  Requirements.  The  FDIC has  promulgated  capital
adequacy  requirements  for state banks that,  like the Bank, are not members of
the Federal Reserve System,  and the FRB has established  substantially  similar
capital adequacy guidelines applicable to bank holding companies.  These capital
regulations impose two sets of capital  requirements:  risk-based capital rules,
which  require  the  maintenance  of  specified  minimum  ratios of  capital  to
"risk-weighted" assets, and minimum leverage rules, which require banks and bank
holding  companies  to  maintain a specified  minimum  ratio of capital to total
assets.

         The required  minimum  ratio of total capital to  risk-weighted  assets
(including  off-balance sheet activities,  such as standby letters of credit) is
8%.  At least  half of the  total  capital  is  required  to be Tier 1  capital,
consisting principally of common shareholders' equity,  noncumulative  perpetual
preferred  stock, a limited amount of cumulative  perpetual  preferred stock and
minority  interests in the equity  accounts of consolidated  subsidiaries,  less
goodwill.  The  remainder  (Tier 2 capital)  may consist of a limited  amount of
subordinated debt and intermediate-term  preferred stock, certain hybrid capital
instruments and other debt securities,  perpetual  preferred stock and a limited
amount of the general loan loss allowance.

         The   leverage   capital   rules  of  the  FDIC  and  the  FRB  require
state-chartered  banks and bank holding companies,  respectively,  to maintain a
minimum  leverage  ratio of Tier 1 capital to total assets of 3% for those banks
and bank holding companies that have the highest regulatory  examination ratings
and are not contemplating or experiencing  significant growth or expansion.  All
other banks and bank holding companies are required to maintain a leverage ratio
of at least 1% to 2% above the 3% stated minimum. At December 31, 1999, the Bank
and the Registrant exceeded all applicable capital requirements.

         The Bank is also subject to minimum capital requirements imposed by the
Department  on   Pennsylvania-chartered   depository   institution.   Under  the
Department's  regulations,  a Pennsylvania  bank or savings bank must maintain a
minimum  leverage  ratio of Tier 1 capital (as defined under the FDIC's  capital
adequacy regulation) to total assets of 4%. In addition,  the Department has the
supervisory  discretion to require a higher  leverage ratio for any  institution
based  on the  institution's  substandard  performance  in any  of a  number  of
specified areas. The Bank was in compliance with applicable Pennsylvania capital
requirements at December 31, 1999.

         In addition to the federal  regulatory capital  requirements,  the FDIC
has issued a regulation  that  classifies  insured  banks by capital  levels and
provides that the FDIC will take various prompt  corrective  actions,  including
the imposition of significant operational restrictions, against any bank subject
to its regulation that fails to meet the regulation's  capital standards.  Under
this prompt corrective action regulation,  a "well capitalized" bank is one that
has a total  risk-based  capital  ratio of at  least  10%,  a Tier 1  risk-based
capital ratio of at least 6%, a leverage capital ratio of 5%, and is not subject
to any order or  directive  requiring  the  institution  to improve  its capital
level.  A bank falls within the  "adequately  capitalized"  category if it has a
total risk-based capital ratio of at least 8%, a Tier 1 risk-based capital ratio
of at least 4%, and a leverage capital ratio of at least 4%.  Institutions  with
lower  capital  levels  are  deemed  to  be  "undercapitalized,"  "significantly
undercapitalized"  or "critically  undercapitalized,"  depending on their actual
capital  levels.  A bank that  falls  within  any of the three  undercapitalized
categories  is subjected to severe  regulatory  sanctions  under the FDIC prompt
corrective action  regulation.  At December 31, 1999, the Bank was classified as
"well capitalized."

                                       18
<PAGE>

         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  which  cause the Bank's  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 FDIC.

         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."

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

         At December 31, 1999,  the  Registrant  operated  from its main office,
five  branch  offices  and four  supermarket  branch  offices,  all  located  in
southwestern  Pennsylvania.  The  total  net  book  value  of  the  Registrant's
investment  in premises and  equipment at December 31, 1999,  was  approximately
$4.7  million.  The main  office of the  Company  and of the Bank and two branch
offices are owned by the Bank and the  remaining  three branch  offices and four
supermarket  branch  offices are leased by the Bank.  These  leases have initial
terms of 1 to 20 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, 1999.

                                       19
<PAGE>

                                     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 1999 Annual Report to Stockholders  (the "Annual Report") is
incorporated herein by reference.

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

     The information contained in the table captioned "Financial  Highlights" 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.

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  14  herein  are
incorporated herein by reference.

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

     None.

                                    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 2000 Proxy  Statement are
incorporated herein by reference.

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

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


                                       20
<PAGE>

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)      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.

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"  and
"Voting Securities and Principal Holders Thereof" of the Proxy Statement.

                                     Part IV

Item 14.  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, 1999 and 1998,
                  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, 1999,  together with
                  the  related  notes and the  independent  auditors'  report of
                  Edwards Leap & Sauer, independent accountants.

         2.       Schedules omitted as they are not applicable.
<TABLE>
<CAPTION>
         3.       Exhibits
               <S>       <C>
                   3(i)    Articles of Incorporation of IBT Bancorp, Inc.*
                   3(ii)   Bylaws of IBT Bancorp, Inc.*
                  10       Change In Control Severance Agreement with Charles G. Urtin
                  10.1     Deferred Compensation Plan For Bank Directors
</TABLE>

                                       21
<PAGE>
<TABLE>
<CAPTION>
               <S>       <C>
                  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
                  13       Portions of the Annual Report to Shareholders
                  21       Subsidiaries of IBT Bancorp, Inc.*
                  27       Financial Data Schedule (electronic filing only)
</TABLE>

                  -------------------------
               *  Incorporated by reference to the identically numbered exhibits
                  of the Registrant's Form 10 (file no. 0-25903)

          (b)  On November  18, 1999,  the Company  filed a Form 8-K (Item 5) to
               announce a stock repurchase plan.


                                       22
<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 22, 2000.

                              IBT BANCORP, INC.


                              By:   /s/Charles G. Urtin
                                    --------------------------------------------
                                    Charles G. Urtin, Executive Vice 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 22, 2000 by the following  persons on
behalf of the registrant and in the capacities indicated.

/s/Richard L. Ryan                                   /s/J. Curt Gardner
-----------------------------------------------      ---------------------------
Richard L. Ryan                                      J. Curt Gardner
Chairman of the Board                                President and Director



/s/Charles G. Urtin                                  /s/Thomas Beter
-----------------------------------------------      ---------------------------
Charles G. Urtin, Executive Vice President           Thomas Beter
Secretary, Treasurer and Director                    Director
(Principal Executive, Financial, and Accounting
Officer)



/s/William D. Fawcett                                /s/Edwin A. Paulone
-----------------------------------------------      ---------------------------
William D. Fawcett                                   Edwin A. Paulone
Director                                             Director



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


/s/Robert C. Whisner
-----------------------------------------------
Robert C. Whisner
Director