10-Q 1 c72956e10vq.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2002 ------------------------- 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 0-25983 --------------------------------- First Manitowoc Bancorp, Inc. (Exact name of registrant as specified in its charter) Wisconsin 39-1435359 -------------------------------------------------------------------------------------------------------- (State or other jurisdiction of incorporation or organization) (IRS employer identification no.) 402 North Eighth Street, Manitowoc, Wisconsin 54220 -------------------------------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code)

(920) 684-6611 --------------- (Registrant's telephone number, including area code) -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.) Yes X No --- --- The number of shares outstanding of registrant's common stock, par value $1.00 per share, at October 31, 2002, was 6,937,268 shares. FIRST MANITOWOC BANCORP, INC. TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS: FIRST MANITOWOC BANCORP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

(See accompanying notes to Unaudited Consolidated Financial Statements.) 1 ITEM 1. FINANCIAL STATEMENTS CONTINUED: FIRST MANITOWOC BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(See accompanying notes to Unaudited Consolidated Financial Statements.) 2 ITEM 1. FINANCIAL STATEMENTS CONTINUED: FIRST MANITOWOC BANCORP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) Nine Months Ended September 30, 2001 (In Thousands, Except Share Data)

Nine Months Ended September 30, 2002 (In Thousands, Except Share Data)

(See accompanying notes to Unaudited Consolidated Financial Statements.) 3 ITEM 1. FINANCIAL STATEMENTS CONTINUED: FIRST MANITOWOC BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Supplemental schedule of noncash investing and financing activities not described in the notes to the financial statements: 4 Acquisition: Cash paid for purchase of stock --- $ (733) Cash acquired --- 666 ------------------------------------------------------------------------------------------------------------------- Net cash paid for acquisition --- (67) Fair value of assets acquired --- 563 Acquisition intangibles --- 2,582 Liabilities assumed --- 1,611 Notes payable to former shareholders --- 1,467

(See accompanying notes to Unaudited Consolidated Financial Statements.) 5 ITEM 1. FINANCIAL STATEMENTS CONTINUED: FIRST MANITOWOC BANCORP, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with instructions for Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, these accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly First Manitowoc Bancorp, Inc.'s ("Corporation") financial position, results of its operations, changes in stockholders' equity and cash flows for the periods presented. All adjustments necessary for the fair presentation of the consolidated financial statements are of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. This report should be read in conjunction with the Corporation's 2001 annual report on Form 10-K. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. NOTE 2: The consolidated financial statements include the accounts of all subsidiaries. The Corporation is a bank holding company that engages in its business through its sole subsidiary, First National Bank in Manitowoc ("Bank"), a nationally chartered commercial bank. The Bank has two wholly owned subsidiaries, FNBM Investment Corp. and Insurance Center of Manitowoc, Inc. ("Insurance Center"). All material intercompany transactions and balances are eliminated. Certain items in the prior period consolidated financial statements have been reclassified to conform with the September 30, 2002 presentation. In January 2001, the Bank acquired 100% ownership in the Insurance Center of Manitowoc, Inc. Insurance Center also operates an office known as Gary Vincent and Associates in Green Bay, Wisconsin. Insurance Center is an independent agency offering commercial, personal, life, and health insurance. It is being operated as a wholly owned subsidiary of the Bank. Insurance Center had approximately $563,000 in assets at date of acquisition. The transaction was accounted for under the purchase method of accounting and goodwill of approximately $2.6 million was recorded. The Corporation's financial statements reflect the accounts and operations of Insurance Center beginning January 1, 2001. The Corporation recorded all Insurance Center assets and liabilities at fair value at date of acquisition. 6 NOTE 3: Investment Securities The amortized cost and fair values of investment securities available for sale for the periods indicated are as follows: Investment Securities (In Thousands)

NOTE 4: Loan Portfolio Loans are summarized as follows: Summary of Loan Portfolio (Dollars In Thousands)

7 NOTE 5: Allowance for Loan Losses Activity in the allowance for loan losses for the periods indicated is as follows:

NOTE 6: Business Segments The Corporation through the bank and bank branch network provides a broad range of financial services to individuals and companies in northeastern Wisconsin. These services include demand, time, and savings deposits; commercial and retail lending; ATM processing; trust services; and insurance services. While the Corporation's president monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Corporate-wide basis. Accordingly, all of the Corporation's operations are considered by management to be aggregated in one reportable operating segment. NOTE 7: Per Share Computations Weighted average shares outstanding were 3,468,634 for the three months ended September 30, 2002 and 2001 and for the nine months ended September 30, 2002 and 2001. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING INFORMATION Forward-looking statements have been made by First Manitowoc Bancorp, Inc. (the "Corporation") in this document and in documents incorporated by reference that are subject to risks and uncertainties. These forward-looking statements, which are included in Management's Discussion and Analysis, describe future plans or strategies and include the Corporation's expectations of future results of operations. Statements containing certain terms including, but not limited to, the words "believes," "expects," "anticipates" or similar expressions constitute forward-looking statements. Shareholders should note that many factors, some of which are discussed elsewhere in this document could affect the future financial results of the Corporation and could cause those results to differ materially from those expressed in forward-looking statements contained in this document. These factors include the following: - operating, legal and regulatory risks; - economic, political and competitive forces affecting the Corporation's banking, securities, asset management and credit services businesses; - the risk that the Corporation's analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful; - general market rates; - general economic conditions; 8 - changes by the federal government in monetary and fiscal policies; and - changes in composition of our loan portfolio. These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. The Corporation does not undertake and specifically disclaims any obligation to update any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. EARNINGS Net Income (Dollars In Thousands, Except Share Data)

Weighted average shares outstanding were 3,468,634 for the three months ended September 30, 2002 and 2001. Net income for the three months ended September 30, 2002 was $1,853,000 compared to $1,648,000 for the three months ended September 30, 2001, an increase of $205,000, or 12.44%. Interest income decreased $919,000 to $8,032,000 primarily as a result of a decrease in loan interest due to lower interest rates. Interest expense decreased $1,382,000 to $2,981,000 mainly as a result of a decrease in interest rates paid on deposits. Total other expense increased $270,000 to $3,631,000. This is a result of increased salaries, commissions and related benefits due to annual merit increases in wages for employees. Earnings per share for the three months ended September 30, 2002 was $0.53 compared to $0.48 for the three months ended September 30, 2001. Net income for the nine months ended September 30, 2002 was $5,518,000 compared to $4,232,000 for the nine months ended September 30, 2001, an increase of $1,286,000 or 30.39%. Interest income decreased $3,319,000 to $23,958,000 primarily due to a decrease in interest rates. Interest expense decreased $5,173,000 to $9,110,000 primarily due to lower interest rates paid on deposits. Other income increased $179,000 to $3,701,000 primarily as a result of an insurance commission income increase of $112,000. Other expense increased $424,000 as a result of increased salaries, commissions, and annual merit increases. Earnings per share for the nine months ended September 30, 2002 was $1.59 compared to $1.22 for the nine months ended September 30, 2001. Return on average assets (ROA) on an annualized basis for the first nine months of 2002 was 1.39% compared to 1.13% for the first nine months in 2001. Return on average equity (ROE) on an annualized basis for the first nine months of 2002 was 14.79% compared to 13.22% for the first nine months of 2001. 9 AVERAGE BALANCES, YIELD AND RATES

10 AVERAGE BALANCES, YIELD AND RATES

11 NET INTEREST INCOME AND NET INTEREST MARGIN Net interest income is the principal source of earnings for a banking company. It represents the differences between interest and fees earned on the loan and investment portfolios offset by the interest paid on deposits and borrowings. The nine months ended September 30, 2002 has been characterized by generally falling interest rates. Net interest margin is calculated as tax equivalent net interest income divided by average earning assets and represents the Bank's net yield on its earning assets. The tax equivalent adjustment was calculated using the statutory federal income tax rate of 34%. THIRD QUARTER 2002 COMPARED TO THIRD QUARTER 2001: Net interest income (on a tax equivalent basis) for the three months ended September 30, 2002 increased by $250,000 or 4.81% compared to the three months ended September 30, 2001. Interest income for the three months ended September 30, 2002 decreased by $1,133,000 primarily as a result of lower interest rates. Total average loans increased to $339,697,000 for the third quarter of 2002 from $334,835,000 for the third quarter of 2001. Average investment securities increased to $141,802,000 for the third quarter of 2002 from $124,936,000 for the third quarter of 2001. Interest yields on loans and securities declined to 7.29% and 6.04% for the third quarter of 2002 from 8.50% and 7.26% for the third quarter of 2001. Interest expense decreased $1,383,000 primarily as a result of lower interest rates paid on deposits and repurchase agreements. Total average interest-bearing deposits increased to $330,624,000 for the third quarter of 2002 from $330,010,000 for the third quarter of 2001. Average repurchase agreements increased to $51,376,000 for the third quarter of 2002 from $32,996,000 for the third quarter of 2001. Interest rates fell on both interest bearing deposits and repurchase agreements from the third quarter of 2001 to the third quarter of 2002. The interest rate spread, which is the difference between the average yield on interest earning assets and the average rate paid on interest bearing liabilities, was 3.88% for the three months ended September 30, 2002, an increase of 13 basis points from the interest rate spread of 3.75% for the three months ended September 30, 2001. Net interest margin for the three months ended September 30, 2002 was 4.28% compared with 4.38% for the three months ended September 30, 2001. YTD 2002 COMPARED TO YTD 2001: Net interest income (on a tax equivalent basis) for the nine months ended September 30, 2002 increased by $1,518,000 or 10.50% compared to the nine months ended September 30, 2001. Interest income decreased $3,661,000 primarily as a result of lower interest rates. Total average loans increased to $333,379,000 for the first nine months of 2002 from $332,449,000 for the first nine months of 2001. Total average investment securities increased to $136,765,000 for the first nine months of 2002 from $122,406,000 for the first nine months of 2001. Interest yields fell on both loans and investment securities for the nine months ended September 30, 2002. The yield on total interest earning assets declined to 6.84% for the nine months ended September 30, 2002 from 8.30% for the nine months ended September 30, 2001. Interest expense decreased $5,179,000 primarily due to lower interest rates on interest bearing deposits. Total average interest bearing deposits decreased to $326,801,000 for the first nine months of 2002 from $321,305,000 for the first nine months of 2001, while repurchase agreements increased to $46,384,000 from $30,217,000 in the first nine months of 2001. The rate on total interest bearing liabilities fell to 2.92% for the nine months ended September 30, 2002, from 4.80% for the nine months ended September 30, 2001. The interest rate spread was 3.92% for the nine months ended September 30, 2002, an increase of 42 basis points from the interest rate spread of 3.50% for the nine months ended September 30, 2001. Net interest margin for the nine months ended September 30, 2002 was 4.37% compared with 4.18% for the nine months ended September 30, 2001. 12 PROVISION AND ALLOWANCE FOR LOAN LOSSES For the three months ended September 30, 2002, the Bank charged $325,000 to expense for the provision for loan loss compared to $470,000 for the three months ended September 30, 2001. Allowance for Loan Losses (In Thousands)

The decrease in the ratio of allowance for loan losses to total loans is primarily a result of higher charge-offs in December 2001. There are several factors that are included in the analysis of the adequacy of the allowance for loan losses. Management considers loan volume trends, levels and trends in delinquencies and nonaccruals, current problem credits, national and local economic trends and conditions, concentrations of credit by industry, current and historical levels of charge-offs, the experience and ability of the lending staff, and other miscellaneous factors. Management has determined the allowance for loan losses is adequate to absorb probable loan losses in its loan portfolio as of September 30, 2002 based on its most recent evaluation of these factors. The factor of loan volume trends is based on actual lending activity. The loan volume trends factor is for estimated losses that are believed to be inherently part of the loan portfolio but that have not yet been identified as specific problem credits. The current problem credits factor includes the exposure believed to exist for specifically identified problem loans determined on a loan-by-loan basis. A table showing the allocation of allowance for loan losses is shown below. Allocation of Allowance for Loan Losses (In Thousands)

13 Specific problem loans includes the allocation of the allowance for specific problem credits. Loan type allocation includes the factor of loan volume trends, with management's goal for this factor to maintain an adequate loan loss reserve for outstanding loans less the specifically identified current problem credits. The allocation of the allowance among the various loan types is based on the average proportion of the loan types that make up the specific problem loans. The unallocated portion of the allowance consists of the other factors included in the analysis because those factors cannot be tied to specific loans or loan categories. The allocation and total for the allowance for loan losses is not to be interpreted as a single year's exposure for loss nor the loss for any specified time period. NONPERFORMING LOANS It is the policy of the Bank to place a loan in nonaccrual status whenever there is substantial doubt about the ability of a borrower to pay principal or interest on any outstanding credit. Management considers and discusses with the borrower such factors as payment history, the nature and value of collateral securing the loan and the overall economic situation of the borrower when making a nonaccrual decision. Nonaccrual loans are closely monitored by management. A nonaccruing loan is restored to current status when the prospects of future contractual payments are no longer in substantial doubt. Total nonperforming loans at September 30, 2002 were $2,074,000, a decrease of $767,000 from December 31, 2001. The following table presents nonperforming and nonaccrual loan information as of the dates indicated. Nonperforming Loans (In Thousands)

OTHER INCOME Other Income (In Thousands)

THIRD QUARTER 2002 COMPARED TO THIRD QUARTER 2001: Other income for the third quarter of 2002 was $1,265,000 compared to $1,268,000 for the third quarter of 2001, a decrease of $3,000 or 0.24%. 14 YTD 2002 COMPARED TO YTD 2001: Other income for the nine months ended September 30, 2002 was $3,701,000 compared to $3,522,000 for the nine months ended September 30, 2001, an increase of $179,000 or 5.1%. The increase resulted primarily from an increase of $112,000 in insurance commission income. OTHER EXPENSE Other Expense (In Thousands)

THIRD QUARTER 2002 COMPARED TO THIRD QUARTER 2001: Other expense for the third quarter of 2002 was $3,631,000 compared to $3,361,000 for the third quarter of 2001, an increase of $270,000, or 8.0%. The increase is a result of increased salaries, commissions and related benefits due to annual merit increases in wages for employees. YTD 2002 COMPARED TO YTD 2001: Other expense for the first nine months of 2002 was $10,436,000 compared to $10,012,000 for the first nine months of 2001, an increase of $424,000 or 4.2%. This increase is the result of increased salaries and employee benefits due to additional salaries, commissions, and annual merit increases for employees. Legal expense increased due to collection and repossession-related expenses. INCOME TAXES The effective tax rate for the three months ended September 30, 2002 was 21.5% compared to 18.6% for the three months ended September 30, 2001. 15 BALANCE SHEET SEPTEMBER 30, 2002 COMPARED TO DECEMBER 31, 2001 The Corporation's total assets increased from $527.3 million at December 31, 2001 to $547.4 million at September 30, 2002. Loans increased $18.0 million, a result of an increase in commercial loans and offset by a decrease in consumer loans. Securities increased $11.9 million primarily as a result of an increase in U.S. Treasury securities and obligations of U.S. Government Corporation agencies. Deposits decreased $1.5 million to $392.6 million at September 30, 2002 from $394.1 million at December 31, 2001, due to decreases in interest-bearing deposits. Repurchase agreements increased $17.6 million primarily due to municipality funds. Long-term borrowings decreased $4.0 million from $47.2 million at December 31, 2001 to $43.1 million at September 30, 2002. The decrease in long-term borrowings was a result of paying off a long-term borrowing with FHLB. LIQUIDITY MANAGEMENT Liquidity describes the ability of the Bank to meet financial obligations that arise out of the ordinary course of business. Liquidity is primarily needed to meet borrowing and deposit withdrawal requirements of the customers of the Bank and to fund current and planned expenditures. The Bank maintains its asset liquidity position internally through cash and cash equivalents, short term investments, the maturity distribution of the investment portfolio, loan repayments and income from earning assets. A substantial portion of the investment portfolio contains readily marketable securities that could be converted to cash immediately. On the liability side of the balance sheet, liquidity is affected by the timing of maturing liabilities and the ability to generate new deposits or borrowings as needed. Other sources are available through borrowings from the Federal Reserve Bank, the Federal Home Loan Bank and from lines of credit approved at correspondent banks. Management knows of no trend or event which will have a material impact on the Bank's ability to maintain liquidity at adequate levels. CAPITAL RESOURCES AND ADEQUACY Capital (Dollars In Thousands, Except Share Data)

Total stockholders' equity increased $7.5 million from $46.5 million at December 31, 2001 to $54.0 million at September 30, 2002. Net income for the nine month period ending September 30, 2002 was $5.5 million. 16 Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. Management believes, as of September 30, 2002 and December 31, 2001, that the Bank meets all capital adequacy requirements to which it is subject. As of September 30, 2002, the Bank's and the Corporation's ratio of Tier 1 capital to risk-weighted assets was 11.2% and 11.5%, respectively. As of September 30, 2002, the Bank's and the Corporation's ratio of total capital to risk-weighted assets was 12.1% and 12.4%, respectively. In addition to risk-based capital, banks and bank holding companies are required to maintain a minimum amount of Tier 1 capital to total assets, referred to as the leverage capital ratio, of at least 4.0%. As of September 30, 2002, the Bank's and the Corporation's leverage capital ratio was 7.3% and 7.6%, respectively. As of September 30, 2002 and December 31, 2001, the most recent notification from the Office of the Comptroller of Currency and the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios. There are no conditions or events since that notification that management believes have changed the institution's category. RECENT ACCOUNTING PRONOUNCEMENTS In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 supersedes Accounting Principles Board (APB) Opinion No. 16, "Business Combinations", and SFAS No. 38, "Accounting for Preacquisition Contingencies of Purchased Enterprises." SFAS No. 141 requires the use of the purchase method of accounting for business combinations initiated after June 30, 2001. SFAS No. 142 supersedes APB Opinion No. 17, "Intangible Assets." SFAS No. 142 addresses how intangible assets acquired outside of a business combination should be accounted for upon acquisition and how goodwill and other intangible assets should be accounted for after they have been initially recognized. SFAS No. 142 eliminates the amortization for goodwill and other intangible assets with indefinite lives. Other intangible assets with a finite life will be amortized over their useful life. Goodwill and other intangible assets with indefinite useful lives shall be tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. The Corporation adopted SFAS No. 142 and passed step one of the goodwill impairment test on January 1, 2002. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There has been no material change to the market risk position from that disclosed as of December 31, 2001 in the Corporation's 2001 Form 10-K Annual Report. ITEM 4. CONTROLS AND PROCEDURES An evaluation of the Corporation's disclosure controls and procedures (as defined in Section 13(a)-14(c) of the Securities Exchange Act of 1934 (the "Act") was carried out under the supervision and with the participation of the Corporation's Chief Executive Officer, Chief Financial Officer and several other members of the Corporation's senior management within the 90-day period preceding the filing date of this quarterly report. The Corporation's Chief Executive Officer and Chief Financial Officer concluded that the Corporation's disclosure controls and procedures as currently in effect are effective in ensuring that the information required to be disclosed by the Corporation in the reports it files or submits under the Act is (i) accumulated and communicated to the Corporation's management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. In the quarter ended September 30, 2002, the Corporation did not make any significant changes in, nor take any corrective actions regarding, its internal controls or other factors that could significantly affect these controls. 17 FIRST MANITOWOC BANCORP, INC. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Neither the Corporation nor its subsidiary is involved in any pending legal proceedings involving amounts in which management believes are material to the financial condition and results of operations of the Corporation. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: None Exhibit Number Sequential Page Number or Incorporate by Reference to (3)(1) Articles of Incorporation Filed as Exhibit (3)(1) to Report on Form 10 filed May 5, 1999. Amendment filed as Exhibit (3)(2) to Form 10-Q filed August 14, 2000. (3)(2) Bylaws Filed as Exhibit (3)(2) to Report on Form 10 filed May 5, 1999. (11) Statement Re: Computation of Per Share Earnings See Note 7 in Part I Item 1 (99)(1) CEO and CFO Certification Filed as Exhibit (99)(1) b) Reports on Form 8-K: On August 19, 2002, the Corporation filed Form 8-K regarding declaration of a stock dividend. There were no other reports on Form 8-K filed for the quarter ended September 30, 2002. 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FIRST MANITOWOC BANCORP, INC. (Registrant) Date: November 13, 2002 /s/ Thomas J. Bare ------------------- Thomas J. Bare President Date: November 13, 2002 /s/ Thomas J. Bare ------------------- Thomas J. Bare Principal Financial Officer 19 CERTIFICATION I, Thomas J. Bare, certify that: 1. I have reviewed this quarterly report on Form 10Q of First Manitowoc Bancorp, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 13, 2002 /s/ Thomas J. Bare ------------------------------------ Thomas J. Bare Chief Executive Officer /s/ Thomas J. Bare ------------------------------------ Thomas J. Bare Chief Financial Officer 20

FIRST MANITOWOC BANCORP INC 10-Q