8-K 1 form8k_080505.txt 2005 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): AUGUST 5, 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 August 5, 2005, attached as Exhibit 99, providing information concerning the Registrant's financial statements as of June 30, 2005. 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 June 30, 2005 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. MID-ILLINOIS BANCSHARES, INC. Dated: August 5, 2005 /s/ William S. Rowland William S. Rowland President and Chief Executive Officer INDEX TO EXHIBITS Exhibit Number Description -------------------------------------------------------------------------------- 99 Quarterly shareholder report issued August 5, 2005 Exhibit 99 [GRAPHIC OMITTED][GRAPHIC OMITTED] The financial performance of First Mid-Illinois Bancshares, Inc. was good during the first six months of 2005 with diluted earnings per share increasing to $1.06 compared to $1.03 per share during the same period in 2004. Net income increased to $4,797,000 for the first half of 2005 compared to $4,752,000 for the first half of 2004. As a result of this performance, the Board of Directors elected to increase the dividend to $.24 per share for the first half of 2005 from $.21 per share for the first half of 2004. All share and per share information for 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. One factor in the earnings growth was greater non-interest income. Non-interest income increased to $6,244,000 for the first half of 2005 compared to $5,841,000 for the first half of 2004. As a result of new business underwritten through The Checkley Agency, Inc., insurance commissions were $136,000 greater for the first half of 2005 than for the first six months of 2004. Also, we sold securities that resulted in a gain of $162,000 greater than last year as market opportunities and liquidity factored in the decisions to sell. In addition, increased residential mortgage originations and greater refinance activity as a result of lower long-term interest rates in the first six months of 2005 led to mortgage banking revenues increasing by $75,000 from the first six months of 2004. Net interest income also increased to $14,297,000 compared to $14,074,000 for the first six months of 2004 despite the current interest rate environment. Currently, the difference between short-term rates and long-term rates is at a historically low level. This has resulted in the Company's year-to-date net interest margin declining to 3.78% on a tax-equivalent basis compared with 3.89% for the first six months of last year as short-term interest rates have increased, leading to greater funding costs. However, we have more than compensated and been able to increase net interest income as a result of growth in loans and deposits. Loan balances on June 30, 2005 were $617 million compared to $576 million on June 30, 2004. Deposit balances increased to $637 million on June 30, 2005 from $631 million on June 30, 2004. Since December 31, 2004, loan balances have increased due to growth in commercial real estate loans, while deposits have declined primarily as a result of the maturity of brokered CDs that were not replaced. Our provision for loan losses amounted to $337,000 for the first six months of 2005 compared to $375,000 for the same period in 2004. Net charge-offs declined to $271,000 in the first half of 2005 compared to $296,000 for the same period last year. Non-performing loans were $3.7 million on June 30, 2005 compared with $3.1 million on December 31, 2004. Non-interest expenses increased to $12.8 million for the first six months of 2005 compared to $12.4 million for the same period in 2004 as a result of increased costs incurred with the addition to staff in opening the new Highland banking facility and greater professional fees. During the quarter, we announced that The Checkley Agency, Inc. would be moving its office location to the corner of Route 16 and Lerna Road in September. Since acquiring the agency in 2002, the business has continued to grow, creating the need for additional office space. We are pleased with the insurance line of business results and continue to explore ways to better serve the financial needs of our customers. In addition, we announced the engagement of BKD, LLP as our independent registered public accounting firm, replacing KPMG LLP. The audit committee completed an extensive review process and selected BKD as the company's audit firm. We had no accounting disagreements with KPMG LLP. Also, we celebrated our 140-year anniversary during the quarter and held an open house at the main bank. We had outstanding attendance and I sincerely appreciated your support. We continue to work diligently to retain your confidence. Thank you for your continued support in First Mid-Illinois Bancshares, Inc. Sincerely, /s/ William S. Rowland William S. Rowland Chairman and Chief Executive Officer August 5, 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) JUN 30, Dec 31, -------------------------------------------------------------------------------- 2005 2004 Assets Cash and due from banks $15,778 $19,119 Federal funds sold and other interest-bearing deposits 922 4,435 Investment securities: Available-for-sale, at fair value 148,124 168,821 Held-to-maturity, at amortized cost (estimated fair value of $1,476 and $1,598 at June 30, 2005 and December 31, 2004, respectively) 1,432 1,552 Loans 617,390 597,508 Less allowance for loan losses (4,687) (4,621) -------------------------------------------------------------------------------- Net loans 612,703 592,887 Premises and equipment, net 15,020 15,227 Goodwill, net 9,034 9,034 Intangible assets, net 3,059 3,346 Other assets 11,612 12,117 -------------------------------------------------------------------------------- Total assets $817,684 $826,538 ================================================================================ Liabilities and Stockholders' Equity Deposits: Non-interest bearing $93,679 $85,524 Interest bearing 543,713 564,716 -------------------------------------------------------------------------------- Total deposits 637,392 650,240 Repurchase agreements with customers 50,205 59,835 Junior subordinated debentures 10,310 10,310 Other borrowings 43,000 29,900 Other liabilities 6,258 7,189 -------------------------------------------------------------------------------- Total liabilities 747,165 757,474 -------------------------------------------------------------------------------- Stockholders' Equity: Common stock ($4 par value; authorized 18,000,000 shares; issued 5,622,898 shares in 2005 and 5,578,897 shares in 2004) 22,492 22,316 Additional paid-in capital 19,122 17,845 Retained earnings 57,000 53,113 Deferred compensation 2,413 2,260 Accumulated other comprehensive income 80 623 Treasury stock at cost, 1,203,495 shares in 2005 and 1,121,546 shares in 2004 (30,588) (27,093) -------------------------------------------------------------------------------- Total stockholders' equity 70,519 69,064 -------------------------------------------------------------------------------- Total liabilities and stockholders' equity $817,684 $826,538 ================================================================================ CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands) (unaudited) -------------------------------------------------------------------------------- For the year ended June 30, 2005 2004 Interest income: Interest and fees on loans $18,072 $16,371 Interest on investment securities 3,123 3,060 Interest on federal funds sold and other 102 57 -------------------------------------------------------------------------------- Total interest income 21,297 19,488 Interest expense: Interest on deposits 5,151 4,294 Interest on repurchase agreements with customers 619 134 Interest on subordinated debt 293 140 Interest on other borrowings 937 846 -------------------------------------------------------------------------------- Total interest expense 7,000 5,414 -------------------------------------------------------------------------------- Net interest income 14,297 14,074 Provision for loan losses 337 375 -------------------------------------------------------------------------------- Net interest income after provision for loan losses 13,960 13,699 Non-interest income: Trust revenues 1,208 1,162 Brokerage commissions 212 227 Insurance commissions 912 776 Service charges 2,187 2,317 Securities gains, net 254 92 Mortgage banking revenues 321 246 Other 1,150 1,021 -------------------------------------------------------------------------------- Total non-interest income 6,244 5,841 Non-interest expense: Salaries and employee benefits 6,880 6,709 Net occupancy and equipment expense 2,080 2,159 Amortization of intangible assets 287 323 Other 3,553 3,213 -------------------------------------------------------------------------------- Total non-interest expense 12,800 12,404 -------------------------------------------------------------------------------- Income before income taxes 7,404 7,136 Income taxes 2,607 2,384 -------------------------------------------------------------------------------- Net income $4,797 $4,752 ================================================================================ Per Share Information (unaudited) -------------------------------------------------------------------------------- For the year ended June 30, 2005 2004 Basic earnings per share $1.08 $1.05 Diluted earnings per share $1.06 $1.03 Book value per share at June 30 $15.96 $14.63 Market price of stock at June 30 $40.50 $33.33 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In thousands) (unaudited) -------------------------------------------------------------------------------- For the year ended June 30, 2005 2004 Balance at beginning of period $69,154 $70,595 Net income 4,797 9,751 Dividends on stock (1,056) (2,023) Issuance of stock 1,352 2,050 Purchase of treasury stock (3,303) (10,365) Deferred compensation adjustment 118 104 Changes in accumulated other comprehensive income (loss) (543) (958) -------------------------------------------------------------------------------- Balance at end of period $70,519 $69,154 ================================================================================