8-K 1 form8k_012605.txt 2004 4TH Q 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): JANUARY 26, 2005 FIRST MID-ILLINOIS BANCSHARES, INC. (Exact Name of Registrant as Specified in its Charter) DELAWARE (State of 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR 240.13e-4(c)) Item 8.01. Other Events Incorporated by reference is the quarterly shareholder report issued by the Registrant on January 26, 2005, attached as Exhibit 99, providing information concerning the Registrant's financial statements as of December 31, 2004. Item 9.01. Financial Statements and Exhibits (a) None required (b) None required (c) Exhibits Exhibit 99 - Quarterly shareholder report as of and for the period ending December 31, 2004 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: January 26, 2005 By: /s/ William S. Rowland William S. Rowland President and Chief Executive Officer INDEX TO EXHIBITS Exhibit Number Description -------------------------------------------------------------------------------- 99 Quarterly shareholder report issued January 26, 2005 Exhibit 99 [GRAPHIC OMITTED][GRAPHIC OMITTED] First Mid-Illinois Bancshares, Inc. experienced another successful year in 2004, with diluted earnings per share increasing to $2.09 as compared with $1.88 per share in 2003, an 11% increase. In 2004, net income increased to $9,604,000 as compared with $9,093,000 in 2003. As a result, the Company increased its regular annual dividend to $.45 per share in 2004 from $.38 per share in 2003. All share and per share information for current and prior periods presented in this report have been adjusted to reflect the three-for-two stock split in the form of a 50% stock dividend completed in July 2004. Net interest income, trust revenue, brokerage commissions and service charge revenue all had meaningful increases in 2004, whereas revenue from our mortgage banking activities declined significantly from $1.7 million in 2003 to $.5 million in 2004. We anticipated the 2004 decline because 2003 was an uncharacteristically active year for home refinancings. We continued to grow in 2004 with loan totals ending the year at $598 million, an increase of $45 million from December 31, 2003. Deposits also grew, although not as rapidly as loans. Year-end 2004 deposits amounted to $650 million compared with $615 million last year. Competition for quality loans and economically priced deposits is intense throughout our market area, so we are pleased with our 2004 growth. Credit quality is of high importance to banks and is an area where we invest significant energies. Our 2004 experience was good with net loan losses of only $393,000. While we would, of course, prefer to have no losses, this amount compares well with peer banks and is reasonable given the size of our loan portfolio. At First Mid, we consider any loan which is past due 90 days or more to be non-performing and immediately stop accruing interest on the loan. We follow this policy regardless of our collateral position or whether we anticipate a loss. Our non-performing loans totaled $3.1 million on December 31, 2004, a slight decline from the 2003 year-end total of $3.3 million. Because loan losses were not significant and non-performing loan totals were not excessive, we were able to reduce our annual provision for loan losses to $588,000 in 2004 from $1,000,000 in 2003. Earlier, I mentioned that our trust revenues increased in 2004 as compared with 2003. The amount of the increase was $262,000, or 13%, and resulted from growth in trust assets due to market value increases and from new customers. In total, trust assets ended the year at $388 million as compared with $350 million at the end of 2003. We consider our trust activities to be critical for our long-term success. As the baby boom generation ages, the United States approaches an enormous intergenerational transfer of wealth. Just as our banking operations provide us with the opportunity to serve customers during their working years, our trust department positions us to serve customers during their retirement years, when personal wealth management becomes a key concern. Beginning in 2003 and continuing through 2004, we increased our expense management efforts to ensure that our overhead costs were directed towards those activities which served the interests of our shareholders. In total, non-interest expense increased $470,000, or 1.9%, in 2004 as compared with 2003. Sarbanes-Oxley compliance costs accounted for most of this increase so we are pleased with our expense management efforts. During 2004, we repurchased 320,000 shares of our own stock in the open market and through various privately-negotiated transactions. This program has proven to be an effective way of increasing value for shareholders. Any shareholder who wishes to use this service should contact Christie L. Wright at (217) 258-0493. In April, our Company will celebrate 140 years of providing financial services to the people of Illinois. Businesses do not survive 140 years without the trust and confidence of those it does business with. At First Mid, we work hard to obtain and retain the trust and confidence of our shareholders, our customers, our communities, and our employees. Together, we have built an outstanding organization--one in which we can all take a great deal of pride. Thank you for your continued support and confidence in First Mid-Illinois Bancshares, Inc. Sincerely, /s/ William S. Rowland William S. Rowland Chairman and Chief Executive Officer January 26, 2005 First Mid-Illinois Bancshares, Inc. 1515 Charleston Avenue Mattoon, Illinois 61938 217-234-7454 www.firstmid.com CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (unaudited) December 31, December 31, -------------------------------------------------------------------------------- 2004 2003 Assets Cash and due from banks $19,119 $20,659 Federal funds sold and other interest-bearing deposits 4,435 4,290 Investment securities: Available-for-sale, at fair value 168,821 176,481 Held-to-maturity, at amortized cost (estimated fair value of $1,598 and $1,687 at December 31, 2004 and December 31, 2003, respectively) 1,552 1,677 Loans 597,508 552,824 Less allowance for loan losses (4,621) (4,426) -------------------------------------------------------------------------------- Net loans 592,887 548,398 Premises and equipment, net 15,227 16,059 Goodwill, net 9,034 9,034 Intangible assets, net 3,346 3,969 Other assets 12,117 13,078 -------------------------------------------------------------------------------- Total assets $826,538 $793,645 ================================================================================ Liabilities and Stockholders' Equity Deposits: Non-interest bearing $85,524 $94,723 Interest bearing 564,716 520,269 -------------------------------------------------------------------------------- Total deposits 650,240 614,992 Repurchase agreements with customers 59,835 59,875 Junior subordinated debentures 10,310 - Other borrowings 29,900 39,925 Other liabilities 7,189 8,258 -------------------------------------------------------------------------------- Total liabilities 757,474 723,050 -------------------------------------------------------------------------------- Stockholders' Equity: Common stock ($4 par value; authorized 18,000,000 shares; issued 5,578,897 shares in 2004 and 5,501,831 shares in 2003) 22,316 14,672 Additional paid-in capital 17,845 15,960 Retained earnings 53,113 52,942 Deferred compensation 2,260 1,881 Accumulated other comprehensive income 623 1,581 Treasury stock at cost, 1,121,546 shares in 2004 and 801,928 shares in 2003 (27,093) (16,441) -------------------------------------------------------------------------------- Total stockholders' equity 69,064 70,595 -------------------------------------------------------------------------------- Total liabilities and stockholders' equity $826,538 $793,645 ================================================================================ CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands) (unaudited) -------------------------------------------------------------------------------- For the year ended December 31, 2004 2003 Interest income: Interest and fees on loans $33,841 $32,435 Interest on investment securities 6,053 6,227 Interest on federal funds sold and other 178 276 -------------------------------------------------------------------------------- Total interest income 40,072 38,938 Interest expense: Interest on deposits 9,122 9,751 Interest on repurchase agreements with customers 455 272 Interest on subordinated debt 382 - Interest on other borrowings 1,685 1,873 -------------------------------------------------------------------------------- Total interest expense 11,644 11,896 -------------------------------------------------------------------------------- Net interest income 28,428 27,042 Provision for loan losses 588 1,000 -------------------------------------------------------------------------------- Net interest income after provision for loan losses 27,840 26,042 Non-interest income: Trust revenues 2,254 1,992 Brokerage commissions 428 283 Insurance commissions 1,447 1,476 Service charges 4,746 4,484 Securities gains, net 92 370 Mortgage banking revenues 522 1,672 Other 2,150 1,978 -------------------------------------------------------------------------------- Total non-interest income 11,639 12,255 Non-interest expense: Salaries and employee benefits 13,487 13,232 Net occupancy and equipment expense 4,259 4,290 Amortization of intangible assets 623 774 Other 6,631 6,234 -------------------------------------------------------------------------------- Total non-interest expense 25,000 24,530 -------------------------------------------------------------------------------- Income before income taxes 14,479 13,767 Income taxes 4,875 4,674 -------------------------------------------------------------------------------- Net income $9,604 $9,093 ================================================================================ Per Share Information (unaudited) -------------------------------------------------------------------------------- For the year ended December 31, 2004 2003 Basic earnings per share $2.13 $1.92 Diluted earnings per share $2.09 $1.88 Book value per share at December 31 $15.49 $15.02 Market price of stock at December 31 $38.00 $31.03 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In thousands) (unaudited) -------------------------------------------------------------------------------- For the year ended December 31, 2004 2003 Balance at beginning of period $70,595 $66,807 Net income 9,604 9,093 Dividends on stock (2,022) (2,047) Issuance of stock 2,050 1,767 Purchase of treasury stock (10,365) (4,233) Deferred compensation adjustment 160 - Changes in accumulated other comprehensive income (loss) (958) (792) -------------------------------------------------------------------------------- Balance at end of period $69,064 $70,595 ================================================================================