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Pursuant to Rule 425
File No. 0-18415
April 7, 2000
Dear Shareholder:
I am pleased to inform you that the directors of IBT Bancorp have
unanimously approved entering into an agreement with FSB Bancorp, Inc. of
Breckenridge to combine companies. Today a Definitive Agreement was signed
forming a financial service company with over $500 million in total assets and
18 banking offices. IBT is the holding company for Isabella Bank and Trust and
FSB is the holding company for Farmers State Bank. Both banks will continue to
operate as stand alone banks. The transaction will involve Farmers State Bank
becoming a subsidiary of IBT, with FSB shareholders receiving 2.1362 shares of
IBT common stock for each share of FSB stock.
The Board of Directors of the holding company will consist of eight
existing directors of IBT and two representatives designated by FSB. L. A. Johns
will continue as Chairman of the Board of the holding company, and David W. Hole
will continue as President and Chief Executive Officer. Herbert C. Wybenga will
be named as Vice President of IBT, and will continue as President and Chief
Executive Officer of Farmers State Bank. The management team for Isabella Bank
and Trust will remain unchanged.
The transaction is expected to be completed in the third quarter of
2000, following the receipt of regulatory and FSB shareholder approvals. No vote
of our shareholders is required under state law. No per share dilution is
anticipated after the first year of operation, nor will there be any change in
the corporate cash or stock dividend policy as a result of the transaction.
Your directors believe that FSB Bancorp, Inc. shares our commitment to
our customers and the communities we serve. Isabella Bank and Trust and Farmers
State Bank will continue to operate as community banks, delivering the same high
quality personal service that has made us both so successful in the past.
Together we each will benefit from the efficiencies of a larger organization.
We look forward to seeing you at the Annual Shareholders Meeting on
April 18, 2000.
Sincerely,
/s/ L.A. Johns
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L.A. Johns
Chairman
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Dear FSB Bancorp, Inc. Shareholder:
I am pleased to inform you that the directors of FSB Bancorp, Inc. have entered
into an agreement for the holding company to be merged with IBT Bancorp of
Mount Pleasant. Under the terms of the agreement, Farmers State Bank will become
an affiliate of IBT Bancorp, and will continue to operate under its current name
and with its existing management team and board of directors. The proposed
transaction is subject to your approval and that of bank regulators.
During this interim period, a special shareholders meeting will be scheduled to
obtain your approval of the transaction. Regulatory approval is expected in the
third quarter of 2000. The directors of FSB Bancorp, inc. believe that the
merger would be beneficial to all shareholders and are in their support of this
proposed merger. If the transaction is approved, the agreement provides for a
tax-free exchange of IBT Bancorp common shares for shares of FSB Bancorp, Inc.
The exchange ratio is 2.1362 shares of IBT Bancorp common stock for each share
of FSB Bancorp, Inc. This results in a value of $64.09 for each share of FSB
Bancorp, Inc. common stock, based upon a market price of $30.00 per share for
IBT Bancorp as of April 7, 2000. Prior to the special shareholders meeting, you
will receive a proxy statement providing full information about the proposed
merger, including more complete information on the selling price of IBT Bancorp
shares.
FSB Bancorp, Inc. is proud of its long history of service to the Breckenridge,
Ithaca and Hemlock communities. However, for the bank to reach its growth
potential and enhance shareholder value, we would need to enter new lines of
business beyond the credit and deposit services that have been our specialty.
Developing expertise independently would be time consuming and costly, making a
combination with a larger financial institution attractive. The merger with IBT
Bancorp will provide access to capital and technology that will allow us to
serve a wide range of customer's financial needs in the future. IBT Bancorp
shares our passion for excellence and commitment to the customers and the
communities we serve. We believe that our affiliation will benefit both
companies along with our shareholders, customers and employees.
The attached press release provides additional information. The date of the
shareholders meeting will be sent to you when it is set. In the meantime, if you
have any questions, please feel free to call me at (517) 842-3191, ext. 122, or
see me at the Breckenridge office.
Sincerely,
/s/ Herbert C. Wybenga
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Herbert C. Wybenga
President and Chief Executive Officer
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PRESS RELEASE
IBT BANCORP OF MT. PLEASANT, MICHIGAN AND FSB BANCORP, INC. OF BRECKENRIDGE,
MICHIGAN ANNOUNCE MERGER
IBT Bancorp ("IBT") and FSB Bancorp, Inc. ("FSB") announced today the
signing of a Definitive Agreement to combine companies, forming a financial
services company with over $500 million in total assets and 18 banking offices.
IBT is the holding company for Isabella Bank and Trust and FSB is the holding
company for Farmers State Bank. Both banks will continue to operate as stand
alone banks. The transaction will involve FSB merging with and into IBT and
Farmers State Bank becoming a wholly owned subsidiary of IBT. In the transaction
FSB shareholders will receive 2.1362 shares of IBT common stock for each share
of FSB stock.
The Board of Directors of IBT, the surviving holding company, will
consist of eight existing directors of IBT and two additional directors
designated by FSB. L. A. Johns will continue as Chairman of the Board of the
holding company, and David W. Hole will continue as President and Chief
Executive Officer. Herbert C. Wybenga will be named as Vice President of IBT,
and will continue as President and Chief Executive Officer of Farmers State
Bank.
Mr. Hole said, "We are delighted to join forces with this outstanding
community-oriented bank. The shareholders, customers and employees of Farmers
State Bank will become an extremely important part of our company, and together
we will reap the benefits of a larger, more efficient organization while
maintaining our strong commitment to our other communities which have been so
important to our growth and success."
Mr. Wybenga stated, "The combination provides Farmers State Bank the
diversity needed and a larger base to develop the technology necessary to serve
our customers
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with the most up-to-date products. We are pleased to be an important part of
IBT, a community-oriented financial corporation."
At December 31, 1999, IBT had consolidated assets of $402,018,000 and
total stockholders' equity of $36,678,000. Isabella Bank and Trust operates 15
banking offices in Mecosta, Montcalm, Isabella and Clare Counties of Michigan.
At December 31, 1999, FSB had consolidated assets of $101,579,000 and
total stockholders' equity of $10,429,000. Farmers State Bank operates three
banking offices in Gratiot and Saginaw Counties of Michigan.
The transaction is expected to be completed in the third quarter of
2000, following the receipt of regulatory and FSB shareholder approvals. It is
intended that the transaction constitute a tax-free reorganization under the
Internal Revenue Code, so that shareholders of FSB will not recognize gain or
loss in connection with the exchange. In addition, it is intended that the
merger be accounted for as a "pooling of interest." A Form S-4 registration
statement detailing the terms and conditions of the proposed exchange offer will
be filed shortly with the Securities and Exchange Commission. No offering of IBT
common stock will be made except by means of a prospectus to be included in the
Form S-4 registration statement.
FSB shareholders are urged to read the Registration Statement on Form
S-4, including the prospectus, regarding the transactions referred to above,
when it becomes available, as well as the other documents which IBT has filed or
will file with the Securities and Exchange Commission, because they contain or
will contain important information. FSB shareholders may obtain a free copy of
the prospectus, when it becomes available, and other documents filed by IBT at
the Securities and Exchange Commission's web site at http://www.sec.gov or from
IBT by directing such request in writing or by telephone to: IBT Bancorp, Inc.,
200 East Broadway, Mt. Pleasant, Michigan 48848, Attention: Secretary,
Telephone: (517) 772-9471. This communication shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any sale of
securities in any state in which offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
state. No offering of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as
amended.
