8-K 1 form8k_072303.txt 2ND QUARTER EARNINGS UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 23, 2003 FIRST MID-ILLINOIS BANCSHARES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OR OTHER JURISDICTION OF INCORPORATION) 0-13368 37-1103704 (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.) 1515 CHARLESTON AVENUE, MATTOON, IL 61938 (ADDRESS INCLUDING ZIP CODE OF PRINCIPAL EXECUTIVE OFFICES) (217) 234-7454 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Item 5. Other Events Incorporated by reference is the quarterly shareholder report issued by the Registrant on July 23, 2003, attached as Exhibit 99, providing information concerning the Registrant's financial statements as of June 30, 2003. Item 7. Financial Statements and Exhibits (c) Exhibits Exhibit 99 - Quarterly shareholder report issued July 23, 2003 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has dully caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. FIRST MID-ILLINOIS BANCSHARES, INC. Dated: July 23, 2003 By: /s/ William S. Rowland William S. Rowland President and Chief Executive Officer EXHIBIT INDEX Exhibit Number Description 99 Quarterly shareholder report issued July 23, 2003 Exhibit 99 July 23, 2003 Quarterly Report to the Owners, First Mid-Illinois Bancshares, Inc. First Mid-Illinois Bancshares, Inc. has done well in 2003 with diluted earnings per share amounting to $1.40 per share for the first six months of the year. This represents a 19% increase from $1.18 per share earned in the first six months of 2002. As a result, the Board of Directors elected to increase the dividend for the first half of 2003 to $.25 per share from $.23 per share paid in the first half of 2002. Our solid financial progress resulted in the total market capitalization (the market price per share multiplied by the number of shares outstanding) of First Mid-Illinois Bancshares, Inc. exceeding $100 million for the first time in our long history. We achieved this milestone in the second quarter of the year and are pleased that the market place has recognized our solid financial performance. Our stock buy-back activities continued during the first half of 2003, with 70,051 shares being acquired at a total investment of $2,075,000. We continue to believe this is one of the best ways of enhancing shareholder value, and any shareholder who wishes to utilize this service should contact Ms. Christie Burich at (217) 258-0493. Net income for the first half of 2003 amounted to $4,484,000, a 12% increase from the $4,015,000 we earned in the first six months of 2002. Net interest income was essentially flat for the first six months, amounting to $13,105,000 in 2003 as compared to $13,122,000 in 2002. Loan pricing constraints together with an extremely low interest rate environment resulted in a decline in our net interest margin from 4.18% in the first half of 2002 to 3.77% for the first half of 2003. While margin compression is a concern, we have been able to offset it by increasing our loan volumes. In addition, residential real estate activity continues to be strong throughout our franchise area with mortgage banking revenue increasing to $1,082,000 in 2003 from $703,000 in the first half of 2002. Most of the residential real estate loans we originate are sold into the secondary market for interest rate risk management purposes. The fees that we received from these loan sales have compensated for the lower net interest margin. Our provision for loan losses amounted to $500,000 for the first six months of 2003 as compared to $275,000 during the same period last year. This is in response to an increase of approximately $2,500,000 in non-performing loans during the first half of 2003. The majority of the increase is in the agricultural sector of our lending operations. While we do not anticipate any material losses from these credits, an increased provision was nevertheless appropriate in these circumstances. As a result of a recovery on one commercial loan during the first six months of 2003, year-to-date net charge-offs declined to $101,000 as compared with $264,000 for the first half of 2002. The Checkley Agency, Inc., which we acquired in early 2002, continues to perform well and our two new banking centers in Champaign and Maryville are both exceeding our growth and operational forecasts. We expect both of these branches to add to our profitability in the second half of 2003. Though we face many challenges, we remain optimistic about our future. You can be assured that the Board, management, and staff will continue to work hard to retain the confidence you have demonstrated with your investment. Sincerely, /s/ William S. Rowland William S. Rowland Chairman and Chief Executive Officer
Condensed Consolidated Balance Sheets (In thousands, except share data) (unaudited) June 30, December 31, 2003 2002 ------------------ ----------------- Assets Cash and due from banks $ 19,746 $ 22,437 Federal funds sold and other interest-bearing deposits 7,637 47,220 Investment securities: Available-for-sale, at fair value 173,743 166,415 Held-to-maturity, at amortized cost (estimated fair value of $1,821 and $1,927 at June 30, 2003 Loans 523,258 499,864 Less allowance for loan losses (4,122) (3,723) ------------------ ----------------- Net loans 519,136 496,141 Premises and equipment, net 16,663 16,916 Goodwill, net 9,034 9,034 Intangible assets, net 4,378 4,743 Other assets 9,876 11,432 ------------------ ----------------- Total assets $762,010 $776,240 ================== ================= Liabilities and Stockholders' Equity Deposits: Non-interest bearing $ 87,739 $ 84,025 Interest bearing 520,425 529,427 ------------------ ----------------- Total deposits 608,164 613,452 Repurchase agreements with customers 38,303 44,184 Other borrowings 39,925 44,625 Other liabilities 5,625 7,172 ------------------ ----------------- Total liabilities $692,017 $709,433 ------------------ ----------------- Stockholders' Equity: Common stock ($4 par value; authorized 6,000,000 shares; Issued 3,653,857 shares in 2003 and 3,603,737 shares in 2002) $14,615 $14,415 Additional paid-in capital 15,625 14,450 Retained earnings 49,589 45,896 Deferred compensation 1,791 1,589 Accumulated other comprehensive income 2,566 2,373 Treasury stock at cost, 484,613 shares in 2003 and 414,562 shares in 2002 (14,193) (11,916) ------------------ ----------------- Total stockholders' equity 69,993 66,807 ------------------ ----------------- Total liabilities and stockholders' equity $762,010 $776,240 ================== =================
Condensed Consolidated Statements of Income (In thousands) (unaudited) For the six months ended June 30, 2003 2002 ------------------ ----------------- Interest income: Interest and fees on loans $ 16,083 $ 16,821 Interest on investment securities 3,175 3,778 Interest on federal funds sold and other 191 86 ------------------ ----------------- Total interest income 19,449 20,685 Interest expense: Interest on deposits 5,269 6,374 Interest on repurchase agreements with customers 132 172 Interest on other borrowings 943 1,017 ------------------ ----------------- Total interest expense 6,344 7,563 ------------------ ----------------- Net interest income 13,105 13,122 Provision for loan losses 500 275 ------------------ ----------------- Net interest income after provision for loan losses 12,605 12,847 Non-interest income: Trust revenues 945 928 Brokerage commissions 124 134 Insurance commissions 778 554 Service charges 2,138 1,517 Securities gains, net 370 116 Mortgage banking revenues 1,082 703 Other 1,108 847 ------------------ ----------------- Total non-interest income 6,545 4,799 Non-interest expense: Salaries and employee benefits 6,729 6,102 Net occupancy and equipment expense 2,123 1,980 Amortization of intangible assets 365 370 Other 3,129 3,193 ------------------ ----------------- Total non-interest expense 12,346 11,645 ------------------ ----------------- Income before income taxes 6,804 6,001 Income taxes 2,320 1,986 ------------------ ----------------- Net income $ 4,484 $ 4,015 ================== =================
Condensed Consolidated Statements of Changes in Stockholders' Equity (in thousands) (unaudited) For the six month period ended June 30, 2003 2002 ------------------ ----------------- Balance at beginning of period $ 66,807 $ 63,925 Net income 4,484 4,015 Dividends on stock (791) (780) Issuance of stock 1,375 1,292 Purchase of treasury stock (2,075) (614) Change in accumulated other comprehensive income (loss) 193 1,246 ------------------ ----------------- Balance at end of period $ 69,993 $ 69,084 ================== =================
Per Share Information (unaudited) June 30, June 30, 2003 2002 ------------------ ----------------- Basic earnings per share $ 1.41 $ 1.19 Diluted earnings per share $ 1.40 $ 1.18 Book value per share $ 22.09 $ 20.31
First Mid-Illinois Bancshares, Inc. 1515 Charleston Avenue Mattoon, Illinois 61938 (217) 234-7454 www.firstmid.com