8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
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 14, 2015
FIRST MID-ILLINOIS BANCSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware	0-13368		37-1103704
(State of Other Jurisdiction	(Commission File Number)		(IRS Employer
of Incorporation)			Identification No.)
1421 CHARLESTON AVENUE
MATTOON, IL		61938
(Address of Principal Executive Offices)		(Zip Code)
(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 2.01. Completion of Acquisition or Disposition of Assets.

On August 14, 2015, First Mid-Illinois Bancshares, Inc. (the “Company”) ”) filed a Current Report on Form 8-K to report that First Mid-Illinois Bank & Trust, N.A. (“First Mid Bank”), a wholly-owned subsidiary of the Company, completed on August 14, 2015 its previously-announced acquisition of 12 branch offices (the “ONB Branches”) of Old National Bank, a national banking association having its principal office in Evansville, Indiana. Pursuant to the terms of the Branch Purchase and Assumption Agreement, dated January 30, 2015, as amended, by and between First Mid Bank and Old National Bank, First Mid Bank, among other matters, assumed certain deposit liabilities and acquired certain loans, as well as cash, real property, furniture, and other fixed operating assets associated with the Branches. The deposit and loan balances assumed were approximately $453 million and $156 million, respectively, as of August 14, 2015. First Mid Bank also assumed certain leases, and entered into certain subleases, relating to the Branches.

First Mid Bank agreed to pay Old National Bank the sum of: (i) a depoist premium of 3.6% on the amount of deposit accounts of the ONB Branches, other than brokered deposits and municipal deposits, which equated to approximately $15.9 million, (ii) $500,000, representing the fixed deposit premium related to the municipal deposits of the Branches, (iii) the principal amount of the loans being purchased, plus the accrued but unpaid interest, (iv) the aggregate net book value of the other assets purchased including facilities of approximately $4.5 million, and (v) the aggregate amount of cash on hand of $2.7 million as of the closing. The acquisition was settled by Old National Bank paying cash of approximately $276.8 million to First Mid Bank for the difference between these amounts and the total deposits assumed.

The Current Report on Form 8-K/A is being filed in order to file certain financial statements with respect to the ONB Branches and other information. The Company recognized approximately $1.1 million of costs related to completion of the acquisition during the first nine months of 2015. These acquisition costs are included in other expense in the statement of income of the Company and are not reflected in the financial statements filed herewith.

The purchase was accounted for under the acquisition method in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations,” and accordingly the assets and liabilities were recorded at their fair values on the date of acquisition. The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands).

August 14, 2015	Acquired Book Value		Fair Value Adjustments			As Recorded by First Mid Bank
Assets
Cash	$	279,468	—			$	279,468
Loans	155,774		(3,377		)	152,397
Premises and equipment	4,547		(125		)	4,422
Goodwill	—		14,015			14,015
Core deposit intangible	—		6,216			6,216
Other assets	1,433		—			1,433
Total assets acquired	$	441,222	$	16,729		$	457,951
Liabilities
Deposits	$	452,810	$	837		$	453,647
Securities sold under agreements to repurchase	3,797		—			3,797
Other liabilities	507		—			507
Total liabilities assumed	$	457,114	$	837		$	457,951

The difference between the fair value and acquired value of the purchased loans of $3,377,000 is being accreted to interest income over the remaining term of the loans. The difference between the fair value and acquired value of the assumed time deposits of $837,000 is being amortized to interest expense over the remaining term of the time deposits. The core deposit intangible asset, with a fair value of $6,216,000, will be amortized on an accelerated basis over its estimated life of ten years.

Item 9.01 Financial Statements and Exhibits.

In accordance with the Company’s request for relief submitted to the Securities and Exchange Commission to which the staff of the Securities and Exchange Commission informed the Company that it would not object, the Company has provided the information described below in Item 9.01 (a) and Exhibit 99.1 and Exhibit 99.2 in lieu of certain historical financial information of the ONB Branches required by Rule 3-05 and Article 11 of Regulation S-X because separate, audited financial statements of the ONB Branches were never prepared and the ONB Branches were not operated as a distinct, stand-alone entity.

Certain financial information of the ONB Branches required by Rule 3-05 of Regulation S-X and certain related pro forma financial information under Article 11 of Regulation S-X have been omitted as the historical financial information for these branches does not exist or is impracticable to provide. The financial statements presented are not indicative of the financial condition or results of operations of the acquired branches going forward due to omission of various expenses and changes in business practices. See notes to financial statements for further explanation of these financial statements.

(a)Financial Statements of Businesses Acquired.

The following are included in the attached Exhibit 99.1 and incorporated herein by reference:

1. Report of Independent Registered Public Accounting Firm

2. Statements of Assets Acquired and Liabilities Assumed as of December 31, 2014 and June 30, 2015 (unaudited)

3. Statements of Revenues and Direct Expenses for the year ended December 31, 2014 and the six month periods ended June 30, 2014 (unaudited) and June 30, 2015 (unaudited)

4. Notes to Financial Statements

(b)Pro Forma Financial Information (unaudited).

The following are included in the attached as Exhibit 99.2 and incorporated herein by reference:

1. Pro Forma Balance Sheet as of December 31, 2014 and June 30, 2015

2. Pro Forma Results of Operations for the year ended December 31, 2014 and the six months ended June 30, 2015

(d)Exhibits.

2.1	Branch Purchase and Assumption Agreement between First Mid-Illinois Bank & Trust, N.A. and Old National Bank, dated January 30, 2015 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed January 30, 2015).
2.2	First Amendment to Branch Purchase and Assumption Agreement between First Mid-Illinois Bank & Trust, N.A. and Old National Bank, dated August 14, 2015 (filed herewith). *
23.1	Consent of BKD, LLP (filed herewith).
99.1	Financial Statements of the Businesses Acquired (filed herewith).
99.2	Pro Forma Financial Information (filed herewith).
99.3	Press Release dated August 14, 2015 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed August 14, 2015).
	* Certain schedules and exhibits have been omitted pursuant to Section 6.01(b)(2) of Regulation S-K.

SIGNATURE

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 MID-ILLINOIS BANCSHARES, INC.

Dated: October 23, 2015    

By:

Joseph R. Dively

Chairman and Chief Executive Officer

EX-2.2

Exhibit 2.2

FIRST AMENDMENT

TO

BRANCH PURCHASE AND ASSUMPTION AGREEMENT

This FIRST AMENDMENT TO BRANCH PURCHASE AND ASSUMPTION AGREEMENT(this “First Amendment”), dated as of August 14, 2015, is made and entered into by and between OLD NATIONAL BANK, a national banking association having its principal office in Evansville, Indiana (the “Seller”), and FIRST MID-ILLINOIS BANK & TRUST, N.A., a national banking association having its principal office in Mattoon, Illinois (the “Purchaser”, and together with the Seller, the “Parties”, and each, a “Party”).

WHEREAS, the Seller and the Purchaser are parties to that certain Branch Purchase and Assumption Agreement dated as of January 30, 2015 (the “Agreement”), pursuant to the terms of which the Purchaser shall acquire certain assets and assume certain liabilities of the Seller;

WHEREAS, Section 9.3 of the Agreement prohibits any amendments, modifications or supplements to the Agreement, except by an instrument in writing executed by the Seller and the Purchaser;

WHEREAS, the Seller and Purchaser desire to amend the Agreement as herein provided.

NOW, THEREFORE,in consideration of the premises, the mutual covenants hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, subject to the terms and conditions set forth herein, the Seller and the Purchaser hereby agree as follows:

1.General

The Agreement is amended, as of the date on which the Seller and the Purchaser execute this First Amendment, by adding, deleting or otherwise modifying the provisions of the Agreement as noted herein. This First Amendment is part of the Agreement. All other provisions of the Agreement remain intact and by signing below, each of the Seller and the Purchaser reaffirms its agreement to be bound by the terms and conditions of the Agreement (as hereby amended by this First Amendment).

Capitalized terms used but not defined in this First Amendment shall have the same meanings ascribed to such terms in the Agreement.

2.Schedules

(a)    The attached Schedule 3.3 supersedes and replaces the existing Schedule 3.3.

(b)    The attached Schedule 3.14 is added to the Agreement.

For purposes of determining the satisfaction of the condition set forth in Section 6.1 of the Agreement, the Disclosure Schedules delivered by the Seller shall be deemed to include only that information contained therein on the date of the Agreement and shall be deemed to exclude any information contained in any disclosure schedule updated pursuant to this Section 2 of the Amendment (the “Schedule Updates”). If the Purchaser closes the transactions contemplated by the Agreement, the Purchaser will be entitled to indemnification pursuant to ARTICLE VIII for any breaches of the representations or warranties of ARTICLE III determined without giving effect to the Schedule Updates, subject, in each case, to the limitations on indemnification set forth in ARTICLE VIII.

3.Exhibits

(a)    The attached Exhibit 1.3(a) supersedes and replaces the existing Exhibit 1.3(a).

(b)    The attached Exhibit 1.3(e) supersedes and replaces the existing Exhibit 1.3(e).

(c)    The attached Exhibit 1.3(f) supersedes and replaces the existing Exhibit 1.3(f).

(d)    The attached Exhibit 1.5(a) supersedes and replaces the existing Exhibit 1.5(a).

(e)    The attached Exhibit 1.6 supersedes and replaces the existing Exhibit 1.6.

(f)    The attached Exhibit 2.19 supersedes and replaces the existing Exhibit 2.19.

(g)    The attached Exhibit 2.31(b) supersedes and replaces the existing Exhibit 2.31(b).

(h)     The attached Exhibit 5.6(g) is added to the Agreement.

4.Commitment for Title Insurance and Survey

Section 2.24 of the Agreement is amended to delete from the first sentence thereof the phrase “forty-five (45) days” and to substitute “ninety (90) days” therefor.

5.    Loans

At the Closing, the Seller will assign the letters of credit listed on Exhibit A attached hereto (the “Letters of Credit”) to the Purchaser. The Letters of Credit will constitute Assets under the Agreement. Following the Closing, the Purchaser shall not amend, modify, or extend the Letters of Credit without the Seller’s prompt written consent, which shall not be unreasonably withheld, conditioned or delayed. Additionally, the Purchaser agrees to provide timely notice to terminate the Letters of Credit prior to any automatic extensions.  Further, the Purchaser agrees to provide the Seller prompt notice prior to the termination of any Letter of Credit. On the Closing Date and subject to the Purchaser’s receipt of complete copies of the Letters of Credit, the Purchaser shall issue one or more standby letter(s) of credit to secure obligations under the Letters of Credit, in a form and substance reasonably satisfactory to the Seller.

6.    ATMs and Dealer Reserves

Section 1.9 of the Agreement is amended to include the following sentence immediately before the last sentence of Section 1.9:

“Notwithstanding the foregoing and anything to the contrary contained in this Agreement or any in exhibit or schedule hereto, for the purposes of calculating the Purchase Price, (x) the ATM machines reflected in Schedule 1.3(e) shall have an aggregate adjusted book value of $29,200 and (y) the dealer reserves with respect to certain prepaid assets shall be discounted by 6%.”

7.Brokerage Accounts

(a)    Section 1.3 of the Agreement is amended to move the text of Subsection (k) to a new Subsection (l), and to add a new Subsection (k), the text of which to read as follows:

“(k) all rights and interests of the Seller with respect to the accounts listed on Exhibit 1.3(k) and contracts associated therewith (the “Brokerage Accounts”), in connection with annuities, securities and investment products, including, without limitation, all rights of the Seller to receive income, premiums, fees or commissions relating to annuities, securities or investment products following the Closing Date; and”

(b)    Section 1.5 of the Agreement is amended to move the text of Subsection (h) to a new Subsection (i), and to add a new Subsection (h), the text of which to read as follows:

“(h) the performance of contractual obligations arising, and relating to the period, after the Closing Date under the Brokerage Accounts; and”

8.HSA Accounts

Section 1.4 of the Agreement is amended to move the text of Subsection (i) to a new Subsection (j), and add a new Subsection (i), the text of which to read as follows:

“(i) all Health Savings Accounts (HSAs) maintained by the Seller or any of its affiliates for a customer attributed to the Branches; and”

9.Swap Agreements

The Seller is retaining the swap agreements listed on Exhibit B attached hereto (the “Swap Agreements”) related to certain of the Loans. The Purchaser agrees to indemnify the Seller against, and hold the Seller harmless from, any Losses with respect to the Swap Agreements relating to the post-Closing period, provided that the Seller provides to the Purchaser a written calcuation and notice, reasonably satisfactory to the Purchaser, of any such Loss. On a monthly basis for so long as the Swap Agreements remain outstanding, the Seller will provide to the Purchaser a written notification of the potential Losses under the Swap Agreements.

10.    Indirect Auto Lending

Notwithstanding Section 2.20 of the Agreement, Seller can continue its existing indirect auto lending business and existing relationships with such dealers in the Restricted Area.

11. Owned Real Property

Section 1.9, Section (b)(ii) of the Agreement is amended to add “and the Owned Real Property” immediately after “the net book value of the Fixed Assets.”

12. Trailing Payments

The last sentence of Section 2.8(a) is amended and restated in its entirety to read as follows:

“The Purchaser’s obligations hereunder to honor checks, drafts and withdrawal orders on forms provided by the Seller and carrying the Seller’s imprint (including name and transit routing number) shall not apply to any such check, draft or withdrawal order (i) presented to the Purchaser more than ninety (90) days (or, one hundered and eighty (180) days if presented by Southern Illinois University) following the Closing Date or (ii) on which a stop payment has been requested by the depositor.”

The first two sentences of Section 2.8(c) are amended and restated in their entirety to read as follows:

“The Seller and the Purchaser shall make arrangements to provide for the daily settlement with immediately available funds by the Purchaser of checks, ACH charges or debits, drafts, withdrawal orders, debit card trailing activity and returns presented and paid by Seller for the period between the Closing Date and ninety (90) days after the Closing Date and which are drawn on or chargeable to Deposit Liabilities transferred to the Purchaser; provided, however, that such period shall be one hundered and eighty (180) days in the case of any checks, ACH charges or debits, drafts, withdrawal orders, debit card trailing activity and returns presented and paid by Seller with respect to Southern Illinois University. After the expiration of such applicable period following the Closing Date, the Seller shall dishonor all checks, drafts, withdrawal orders and other instruments and items drawn on the Deposit Liabilities which are presented in any manner to the Seller, unless the Seller and the Purchaser agree to extend such applicable period and

extend the provision for a settlement account as necessary.”

The last sentence of Section 2.8(d) is amended and restaed in its entirety to read as follows:

“In connection with the obligations under Section 2.4(b) hereof, the Purchaser and the Seller shall cooperate in good faith (i) to determine the method and timing for remitting to the Purchaser and settling, for up to a ninety (90) day period (or, for a one hundered and eighty (180) day period if related to Southern Illinois University) following the Closing Date , ACH direct deposits and FedWire direct deposits relating to accounts constituting Deposit Liabilities, as well as such other matters relating thereto as may be necessary or advisable for purposes of assuring an orderly transition of ownership of the Deposit Liabilities to the Purchaser hereunder, and (ii) to determine the method and timing for remitting to the Seller and settling, for up to a ninety (90) day period (or, for a one hundered and eighty (180) day period if related to Southern Illinois University) following the Closing Date, ACH direct deposits and FedWire direct deposits relating to deposit accounts of the Seller that are not Deposit Liabilities, but which transactions are nonetheless routed to the Purchaser, as well as such other matters relating thereto as may be necessary or advisable for purposes of assuring the orderly processing of transactions routed to the Purchaser that relate to deposit accounts of the Seller that are not Deposit Liabilities.”

The last sentence of Section 2.8(e) is amended and restaed in its entirety to read as follows:

“In connection with the obligations under Section 2.4(b) hereof, the Purchaser and the Seller shall cooperate in good faith, (i) to determine the method and timing for forwarding to the Purchaser and settling, for up to a ninety (90) day period (or, for a one hundered and eighty (180) day period if related to Southern Illinois University) following the Closing Date all direct debits relating to accounts constituting Deposit Liabilities, as well as such other matters relating thereto as may be necessary or advisable for purposes of assuring an orderly transition of ownership of the Deposit Liabilities to the Purchaser hereunder, and (ii) to determine the method and timing for forwarding to the Seller and settling, for up to a ninety (90) day period (or, for a one hundered and eighty (180) day period if related to Southern Illinois University) following the Closing Date all direct debits relating to deposit accounts of the Seller that are not Deposit Liabilities, but which transactions are nonetheless routed to the Purchaser, as well as such other matters relating thereto as may be necessary or advisable for purposes of assuring the orderly processing of transactions routed to the Purchaser that relate to deposit accounts of the Seller that are not Deposit Liabilities.”

13. Closing Documents

(a) Section 5.6 of the Agreement is amended to move the text of Subsection (g) to a new Subsection (h), and to add a new Subsection (g), the text of which to read as follows:

“(g) a lease with respect to the Real Property located in Lawrenceville, Illinois signed by a duly authorized officer of the Purchaser in substantially the form set forth in Exhibit 5.6(g); and”

(b) Section 6.6 of the Agreement is amended to move the text of Subsection (s) to a new Subsection (t), and to add new Subsection (s), the text of which to read as follows:

“(s) a lease with respect to the Real Property located in Lawrenceville, Illinois signed by a duly authorized officer of the Sellerin substantially the form set forth in Exhibit 5.6(g); and”

14. Sublease

Notwithstanding anything in the Agreement to the contrary, the Parties hereby agree that the Branch Lease listed on Exhibit 1.3(d) to the Agreement with respect to the Branch located in Carmi, Illinois (the “Carmi Branch”) will not be assigned to the Purchaser by the Seller at the Closing, and that such Branch Lease shall be an Excluded Asset and the obligations and responsibilities of the lessee thereunder shall be Excluded Liabilities; provided, however, that the Parties agree that at Closing the Seller shall sublease the Carmi Branch to the Purchaser pursuant to the terms of such Branch Lease and in accordance with the terms of a sublease agreement reasonably agreed to by the Seller and the Purchaser.

15.Ratification

As amended by this First Amendment, the Agreement is in all respects ratified and confirmed, and as so amended by this First Amendment, the Agreement shall be read, taken and construed as one and the same instrument. Upon the execution of this First Amendment, each reference in the First Agreement to “this Agreement,” “hereby,” “hereunder,” “herein,” “hereof” or words of like import referring to the Agreement shall mean and refer to the Agreement as amended by this First Amendment. Any and all notices, requests, certificates and other instruments executed and delivered prior to, on or after the date of this First Amendment may refer to the Agreement without making specific reference to this First Amendment, but nevertheless all references to the Agreement shall be a reference to such document as amended hereby

16.Counterparts

This First Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument and shall become effective when counterparts have been signed by each of the Seller and the Purchaser and delivered to the other parties, it being understood that the Seller and the Purchaser need not sign the same counterpart.

IN WITNESS WHEREOF, the Seller and the Purchaser have made and entered into this First Amendment to be executed in its name and on its behalf by its duly authorized representative, effective as of the date first written above.

OLD NATIONAL BANK

By: /s/ Jeffrey L. Knight    

Name: Jeffrey L. Knight

Title: Executive Vice President, Corporate Secretary and

Chief Legal Counsel

FIRST MID-ILLINOIS BANK & TRUST, N.A.

By: /s/ Joseph R. Dively    

Name: Joseph R. Dively

Title: President & CEO

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Audit Committee, Board of Directors and Stockholders

First Mid-Illinois Bancshares, Inc.

Mattoon, Illinois

Re: Registration Statements

Registration No. 333-81850 on Form S-3

Registration No. 333-207199 on Form S-3

Registration No. 033-64061 on Form S-8

Registration No. 033-64139 on Form S-8

Registration No. 333-69673 on Form S-8

Registration No. 333-81852 on Form S-8

Registration No. 333-148080 on Form S-8

Registration No. 333-186919 on Form S-8

We consent to incorporation by reference in the Registration Statements on Form S-3 and Form S-8 of First Mid-Illinois Bancshares, Inc. of our report dated October 23, 2015, relating to the statement of assets acquired and liabilities assumed by First Mid-Illinois Bank Trust, N.A. (a wholly owned subsidiary of First Mid-Illinois Bancshares, Inc.) as of December 31, 2014 and the related statement of revenues and direct expenses for the year then ended pursuant to the purchase and assumption agreement dated Janaury 30, 2015.

Decatur, Illinois

October 23, 2015

EX-99.1

Exhibit 99.1

ONB BRANCHES

Financial Statements

For the Year Ended December 31, 2014

and Six Months Ended June 30, 2015 (unaudited) and 2014 (unaudited)

	Page
Table of Contents	Number
Report of Independent Registered Public Accounting Firm	2
Statements of Assets Acquired and Liabilities Assumed	3
Statements of Revenues and Direct Expenses	4
Notes to Financial Statements	5

Report of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Stockholders

First Mid-Illinois Bancshares, Inc.

Mattoon, Illinois

We have audited the accompanying statement of assets acquired and liabilities assumed by First Mid-Illinois Bank & Trust, N.A. (a wholly owned subsidiary of First Mid-Illinois Bancshares, Inc. (Company)) as of December 31, 2014 and the related statement of revenues and direct expenses for the year then ended pursuant to the purchase and assumption agreement dated January 30, 2015. The Company's management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audit included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement of assets acquired and liabilities assumed and statement of revenues and direct expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K/A of First Mid-Illinois Bancshares, Inc. as described in Note 1 and are not intended to be a presentation of financial position or results of operations.

In our opinion, the financial statements referred to above present fairly, in all material respects, the assets acquired and liabilities assumed as of December 31, 2014, and the results of its revenues and direct expenses for the year ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

Decatur, Illinois

October 23, 2015

ONB Branches
Statements of Assets Acquired and Liabilities Assumed
(in thousands)
	(unaudited)
	June 30, 2015			December 31, 2014
Assets Acquired
Cash and cash equivalents	$	4,919		$	4,385
Loans	160,363			158,930
Allowance for loan losses	(1,712		)	(1,630		)
Net loans	158,651			157,300
Interdivisional investment funds	320,402			341,333
Interest receivable	462			512
Premises and equipment	4,292			4,117
Other assets	954			1,063
Total assets acquired	$	489,680		$	508,710
Liabilities Assumed
Deposits:
Non-interest bearing	$	106,163		$	106,210
Interest bearing	378,070			394,480
Total deposits	484,233			500,690
Securities sold under agreements to repurchase	4,892			7,590
Interest payable	122			120
Other liabilities	433			310
Total liabilities assumed	$	489,680		$	508,710
See accompanying notes to financial statements.

ONB Branches
Statements of Revenues and Direct Expenses
For the year ended December 31, 2014 and
Six Months Ended June 30, 2015 (unaudited) and 2014 (unaudited)
(in thousands)
			(Unaudited)
	Year Ended		Six Months Ended
	December 31, 2014		June 30, 2015		June 30, 2014
Interest income:
Interest and fees on loans	$	5,314	$	2,889	$	2,657
Interest on investment of interdivisional funds	3,447		1,618		1,715
Total interest income	8,761		4,507		4,372
Interest expense:
Interest on deposits	1,138		567		569
Interest on securities sold under agreements to repurchase	3		2		2
Total interest expense	1,141		569		571
Net interest income	7,620		3,938		3,801
Provision for loan losses	208		82		104
Net interest income after provision for loan losses	7,412		3,856		3,697
Other income:
Service charges	3,292		1,400		1,646
Other	4,230		2,203		2,115
Total other income	7,522		3,603		3,761
Other expense:
Salaries and employee benefits	4,880		2,472		2,440
Net occupancy and equipment expense	2,805		1,352		1,403
FDIC insurance expense	111		59		56
Stationery and supplies	88		30		44
Legal and professional	101		1		51
Marketing and promotion	138		71		69
Other	688		286		344
Total other expense	8,811		4,271		4,407
Total revenue in excess of direct expenses	$	6,123	$	3,188	$	3,051
See accompanying notes to financial statements.

ONB Branches

Notes to Financial Statements

(Table dollar amounts in thousands, except share data)

Note 1 - Summary of Significant Accounting Policies

Basis of Accounting

The accompanying financial statements include the accounts of the ONB Branches that were acquired and assumed by First Mid-Illinois Bank & Trust, N.A. (“First Mid Bank”), a national bank and a wholly-owned subsidiary of First Mid-Illinois Bancshares, Inc. (“the Company”). The accounting and reporting policies of the ONB Branches conform to accounting principles generally accepted in the United States of America. Following is a description of the more significant of these policies.

Prior to August 14, 2015, the ONB Branches operated as 12 bank branches located in Carbondale, Carmi, Carterville, De Soto, Harrisburg, Lawrenceville, Marion, Mt. Carmel, Mt. Vernon and Murphysboro, Illinois as part of Old National Bank, a national banking association having its principal offices in Evansville, Indiana. Accordingly, these financial statements are presented based on information as previously maintained and provided by Old National Bank for these branch operations. The financial statements presented are not a full set of financial statements, but rather they present assets acquired and liabilities assumed and revenues and direct expenses attributable to the branch bank operations. Further, in accordance with a request for relief submitted to the Securities and Exchange Commission to which the staff of the Securities and Exchange Commission informed the Company that it would not object, the information provided is in lieu of certain historical financial information of the acquired branches required by Rule 3-05 and Article 11 of Regulation S-X because separate, audited financial statements of the acquired branches were never prepared and the acquired branches were not operated as a distinct, stand-alone entity. The statements of revenues and direct expenses exclude costs that are not directly related to the acquired branches such as corporate overhead, interest on corporate debt and income taxes. As such, the financial statements presented are not indicative of the financial condition or results of operations of the acquired branches going forward due to omission of various expenses and changes in business practices.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the amount of assets and liabilities as of the date of the statements of assets acquired and liabilities assumed and revenues and direct expenses for the reported periods. Actual results could differ from these estimates.

Fair Value Measurements

The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Where financial instruments are actively traded and have quoted market prices, quoted market prices are used for fair value. When the financial instruments are not actively traded, other observable market inputs, such as quoted prices of securities with similar characteristics, may be used, if available, to determine fair value. When observable market prices do not exist, fair value is estimated.

SFAS No. 157, Fair Value Measurements, which was codified into ASC 820, establishes a framework for measuring the fair value of financial instruments that considers the attributes specific to particular assets or liabilities and establishes a three-level hierarchy for determining fair value based on the transparency of inputs to each valuation as of the fair value measurement date. The three levels are defined as follows:

• Level 1 - quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 - inputs include quoted prices for similar assets and liabilities in active markets, quoted prices of identical or similar assets or liabilities in markets that are not active, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 - inputs that are unobservable and significant to the fair value measurement.

From time to time, assets or liabilities may be transferred within hierarchy levels due to changes in availability of observable market inputs to measure fair value at the measurement date. Transfers into or out of hierarchy levels are based upon the fair value at the beginning of the reporting period. Additional information regarding the fair value of the financial instruments presented in these financial statements can be found in Note 7 - “Disclosures of Fair Values of Financial Instruments” of these financial statements.

Cash and Cash Equivalents

Cash and cash equivalents are defined as cash on hand or in banks and cash items.

Loans

Loans are stated at the principal amount outstanding net of unearned discounts, unearned income and the allowance for loan losses. Interest and fees on loans are recognized as income using the interest method. Loan origination fees and costs are deferred and accreted to interest income over the estimated life of the loans using the interest method.

The accrual of interest on loans is discontinued when it appears that interest or principal may not be paid in a timely manner in the normal course of business or once principal or interest payments become 90 days past due under the contractual terms of the loan agreement. Generally, payments received on nonaccrual and impaired loans are recorded as principal reductions. Interest income is recognized after all delinquent principal has been repaid or an improvement in the condition of the loan has occurred that warrants resumption of interest accruals.

A loan is considered impaired when it is probable that all amounts due, both principal and interest, according to the contractual terms of the loan agreement will not be collected. Loans on nonaccrual status and restructured loans are considered to be impaired loans.

All loans included in the financial statement presentation are considered performing as of the financial statement dates given that the Company acquired only performing loans and, as such, no accounting for impairment or unaccrued interest was included in these financial statements.

Allowance for Loan Losses

The financial information previously maintained and provided by Old National Bank for these branch operations did not include an allowance for loan losses for the loans acquired; therefore the Company has estimated this amount using its own analysis and methodology. See Note 3 - “Allowance For Loan Losses” for additional information regarding this estimate. Following is First Mid Bank’s accounting policy for the allowance for loan losses.

The allowance for loan losses is maintained at a level deemed appropriate by management to provide for probable losses inherent in the loan portfolio. The allowance is based on a continuing review of the loan portfolio, the underlying value of the collateral securing the loans, current economic conditions and past loan loss experience. Loans that are deemed to be uncollectible are charged off to the allowance. The provision for loan losses and recoveries are credited to the allowance.

Management, considering current information and events regarding the borrowers’ ability to repay their obligations, considers a loan to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the note agreement, including principal and interest. The amount of the impairment is measured based on the fair value of the collateral, if the loan is collateral dependent, or alternatively, at the present value of expected future cash flows discounted at the loan’s effective interest rate. Certain homogeneous loans such as residential real estate mortgage and installment loans are excluded from the impaired loan provisions. Interest income on impaired loans is recorded when cash is received and only if principal is considered to be fully collectible.

Interdivisional Investment Funds

The amount of interdivisional investment funds represents the amount of excess deposits and other liabilities assumed over the loans and other assets acquired. An estimated yield of 1% was assumed on these funds based on a blended rate of potential investments for these funds such as federal funds and U.S. Treasury securities.

Premises and Equipment

Land is carried at cost. Buildings and improvements, leasehold improvements and furniture and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is charged to expense and determined principally by the straight‑line method over the estimated useful lives of the assets.

The estimated useful lives for each major depreciable classification of premises and equipment are as follows:

Buildings and improvements	15 - 40 years
Leasehold improvements	6-18 years
Furniture and equipment	5-7 years

Adoption of New Accounting Guidance

Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606): Revenue from Contracts with Customers ("ASU 2014-09"). In May 2014, FASB issued ASU 2014-09 which creates a new topic in the FASB Accounting Standards Codification(R) ("ASC"), Topic 606. In addition to superseding and replacing nearly all existing U.S. GAAP revenue recognition guidance, including industry-specific guidance, ASU 2014-09 establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, ASU 2014-09 adds a new Subtopic to the ASC, Other Assets and Deferred Costs: Contracts with Customers ("ASC 340-40"), to provide guidance on costs related to obtaining a contract with a customer and costs incurred in fulfilling a contract with a customer that are not in the scope of another ASC Topic. The new guidance does not apply to certain contracts within the scope of other ASC Topics, such as lease contracts, insurance contracts, financing arrangements, financial instruments, guarantee other than product or service warranties, and non-monetary exchanges between entities in the same line of business to facilitate sales to customers. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

Note 2 - Loans

A summary of loans at June 30, 2015 (unaudited) and December 31, 2014 follows (in thousands):

	June 30, 2015		December 31, 2014
Construction and land development	$	2,167	$	1,705
Farm loans	5,251		6,553
1-4 Family residential properties	63,012		67,110
Multifamily residential properties	771		1,754
Commercial real estate	9,830		10,728
Loans secured by real estate	81,031		87,850
Agricultural loans	4,761		6,126
Commercial and industrial loans	38,086		37,236
Consumer loans	33,719		24,655
All other loans	2,766		3,063
Total loans	$	160,363	$	158,930

Impaired loans are defined as those loans where it is probable that amounts due according to contractual terms, including principal and interest, will not be collected. Both nonaccrual and restructured loans meet this definition. The Company only acquired performing loans and, as such, there were no impaired loans (including nonaccrual, past due ninety days or more or renegotiated loans) as of the financial statement periods.

There were no concentrations as defined by the regulatory agencies for the periods shown above.

Note 3 - Allowance for Loan Losses

The allowance for loan losses represents an estimate of the reserve necessary to adequately account for probable losses that could ultimately be realized from current loan exposures. The financial information previously maintained and provided by Old National Bank for the ONB Branches acquired did not include an allocation for an allowance for loan losses for the loans acquired. Therefore, the Company has estimated this amount using its own analysis and methodology.

In determining the adequacy of the allowance, the Company relies predominantly on a disciplined credit review and approval process. The review process is directed by overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing difficulty. Before acquisition of the ONB Branch loans, the Company performed a similar process to determine that only performing loans, considered pass rated, were purchased. Because all loans were deemed performing, no specific borrower analysis was prepared in determining an allowance for loan losses for the loans purchased. Rather the Company’s risk factors, allocated by loan category, for non-classified borrowers were applied to the loan categories. These factors are based on the Company’s own historical net losses, as well as, current economic conditions and industry trends. The Company believes applying these factors is a reasonable estimate of an allowance for loan losses for the ONB Branch loans presented in these financial statements.

The following table presents the balance in the allowance for loan losses by portfolio segment as of June 30, 2015 (unaudited) and December 31, 2014 (in thousands):

	June 30, 2015		December 31, 2014
Commercial / Commercial Real Estate	$	841	$	856
Agriculture / Agriculture Real Estate	75		95
Residential Real Estate	237		251
Consumer	527		396
Unallocated	32		32
Total	$	1,712	$	1,630

Note 4 - Premises and Equipment

Premises and equipment at June 30, 2015 (unaudited) and December 31, 2014 consisted of:

	June 30, 2015		December 31, 2014
Land	$	353	$	353
Buildings and improvements	3,069		3,069
Furniture and equipment	1,998		1,856
Leasehold improvements	2,014		1,705
Subtotal	7,434		6,983
Accumulated depreciation and amortization	3,142		2,866
Total	$	4,292	$	4,117

Depreciation and amortization expense was $275,000 and $224,000 for the six months ended June 30, 2015 and 2014 (unaudited), respectively, and $447,000 for the year ended December 31, 2014.

Note 5 - Deposits

As of June 30, 2015 (unaudited) and December 31, 2014 deposits consisted of the following:

	June 30, 2015		December 31, 2014
Demand deposits:
Non-interest bearing	$	106,163	$	106,210
Interest-bearing	172,632		181,487
Savings	128,770		131,158
Money market	24,366		26,789
Time deposits	52,302		55,046
Total deposits	$	484,233	$	500,690

Total interest expense on deposits for the six months ended June 20, 2015 (unaudited) and the year ended December 31, 2014 was as follows:

	June 30, 2015		December 31, 2014
Interest-bearing demand	$	9	$	20
Savings	157		332
Money market	6		14
Time deposits	395		772
Total	$	567	$	1,138

As of June 30, 2015 (unaudited) and December 31, 2014, the aggregate amount of time deposits in denominations of more than $100,000 and the total interest expense on such deposits was as follows:

	June 30, 2015		December 31, 2014
Outstanding	$	11,071	$	10,789
Interest expense for the year	$	175	$	160

The following table shows the amount of maturities for all time deposits as of June 30, 2015 (unaudited) and December 31, 2014:

	June 30, 2015		December 31, 2014
Less than 1 year	$	25,568	$	27,048
1 year to 2 years	14,724		16,959
2 years to 3 years	4,908		4,251
3 years to 4 years	4,262		3,779
4 years to 5 years	2,035		2,056
Over 5 years	805		953
Total	$	52,302	$	55,046

Note 6 - Disclosure of Fair Values of Financial Instruments

The following methods were used to estimate fair value of all financial instruments recognized in the accompanying statements of assets acquired and liabilities assumed at amounts other than fair value.

Cash and cash equivalents, interest receivable, interest payable and securities sold under agreements to repurchase

The carrying amount approximates fair value.

Loans

Loans have been valued using a discounted present value of projected cash flow. The discount rate used in these calculations is the current rate at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying amount of accrued interest approximates it fair value.

Deposits

Deposits include demand deposits, savings accounts, and certain money market deposits. The carrying amount of these deposits approximates fair value. The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

The following table presents estimated fair values of the ONB Branches financial instruments in accordance with FAS 107-1 and APB 28-1, codified with ASC 805 as of June 30, 2015 (unaudited) and December 31, 2014.

	Carrying		Fair
June 30, 2015	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	4,919	$	4,919	$	4,919	$	—	$	—
Loans net of allowance for loan losses	158,651		155,262		—		—		155,262
Interest receivable	462		462		—		462		—
Financial Liabilities
Deposits	$	484,233	$	484,450	$	—	$	431,931	$	52,519
Securities sold under agreements to repurchase	4,892		4,892		—		4,892		—
Interest payable	122		122		—		122		—

December 31, 2014
Financial Assets
Cash and cash equivalents	$	4,385	$	4,385	$	4,385	$	—	$	—
Loans net of allowance for loan losses	157,300		153,555		—		—		153,555
Interest receivable	512		512		—		512		—
Financial Liabilities
Deposits	$	500,690	$	500,909	$	—	$	445,644	$	55,265
Securities sold under agreements to repurchase	7,590		7,590		—		7,590		—
Interest payable	120		120		—		120		—

Note 7 - Cash Flows

For the six months ended June 30, 2015 (unaudited) and 2014 (unaudited) and for the year ended December 31, 2014, the following cash items occurred:

	Year ended			Six months ended
	December 31, 2014			June 30, 2015			June 30, 2014
Non-cash operating items:
Depreciation	$	447		$	275		$	224
Provision for possible loan losses	208			82			104
(Increase) decrease in accrued interest receivable	(35		)	50			(24		)
Increase (decrease) in accrued interest payable	(28		)	2			(16		)
	592			409			288
Investing activities:
(Increase) decrease in loans	3,626			(1,433		)	(4,830		)
Additions to premises and equipment	(104		)	(451		)	—
	3,522			(1,884		)	(4,830		)
Financing activities:
Increase (decrease) in deposits	(3,495		)	(16,457		)	4,848
Increase (decrease) in repurchase agreements	1,090			(2,698		)	(109		)
	(2,405		)	(19,155		)	4,739

Note 9 - Leases

The ONB Branches had several noncancellable operating leases, primarily for property rental of banking buildings that expire over the next fifteen years. These leases generally contained renewal options for periods ranging from two to five years. Rental expense for these leases was $682,000 and $671,000 for the six months ended June 30, 2015 (unaudited) and 2014 (unaudited), respectively and $1,342,000 for the year ended December 31, 2014.

Future minimum lease payments under operating leases are:

	Operating Leases
2015	$	693
2016	1,401
2017	1,414
2018	1,427
2019	1,441
Thereafter	38,796
Total minimum lease payments	$	45,172

Note 10 - Subsequent Events

On August 14, 2015, the ONB Branches were acquired by First Mid Bank. See Item 2.01 of this Current Report on Form 8-K for the details of this transaction.

EX-99.2

Exhibit 99.2

(b) Pro Forma Financial Information.

The following pro forma financial information is the result of combining the Company's reported historical financial information with the ONB Branches historical financial information and making adjustments to the combined information to reflect events that have occurred or that are assumed to have occurred because of the acquisition. The pro forma information should be read in conjunction with the Company’s previously reported historical financial statements and the ONB Branches financial statements included in this filing.

The pro forma condensed consolidating statements do not assume or include any possible cost savings or revenue opportunities that may be realized as a result of the combination. This condensed consolidating pro forma information is provided for illustrative purposes only and is not necessarily indicative of the results of operations or financial position which would have resulted if the combination had been effected at the beginning of the periods presented or as of the date indicated or the financial position or results of operation which we might obtain in the future.

The following pro forma condensed combined financial information presents the financial position of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the acquisition taken place at the dates identified (in thousands):

(Unaudited)			ONB		Pro Forma
As of June 30, 2015	First Mid		Branches		Transactions			Note	Pro Forma
Assets
Cash and cash equivalents	$	46,334	$	4,919	(1,047		)	G	$	50,206
Investment securities	465,896		—		—				465,896
Loans, net	1,045,172		158,651		(3,377		)	A	1,200,446
Interdivisional investment funds	—		320,402		(15,892		)	B	304,510
Interest receivable	6,044		462		—				6,506
Premises and equipment	27,208		4,292		(125		)	C	31,375
Goodwill	25,753		—		14,015			D	39,768
Intangible assets	1,533		—		6,216			E	7,749
Other assets	16,180		954		—				17,134
Total assets	$	1,634,120	$	489,680	$	(210	)		$	2,123,590
Liabilities
Deposits	$	1,266,199	$	484,233	$	837		F	$	1,751,269
Repurchase agreements with customers	117,468		4,892		—				122,360
Interest payable	302		122		—				424
Borrowings and other debt	45,620		—		—				45,620
Other liabilities	6,636		433		(366		)	G	6,703
Total liabilities	1,436,225		489,680		471				1,926,376
Stockholders’ equity	197,895		—		(681		)	G	197,214
Total liabilities and stockholders’ equity	$	1,634,120	$	489,680	$	(210	)		$	2,123,590

(Unaudited)			ONB		Pro Forma
As of December 31, 2014	First Mid		Branches		Transactions			Note	Pro Forma
Assets
Cash and cash equivalents	$	51,730	$	4,385	(1,325		)		$	54,790
Investment securities	431,506		—		—			G	431,506
Loans, net	1,048,724		157,300		(3,377		)		1,202,647
Interdivisional investment funds	—		341,333		(15,892		)	A	325,441
Interest receivable	6,828		512		—			B	7,340
Premises and equipment	27,352		4,117		(125		)		31,344
Goodwill	25,753		—		14,015			C	39,768
Intangible assets	1,844		—		6,216			D	8,060
Other assets	13,366		1,063		—			E	14,429
Total assets	$	1,607,103	$	508,710	$	(488	)		$	2,115,325
Liabilities
Deposits	$	1,272,077	$	500,690	$	837			$	1,773,604
Repurchase agreements with customers	121,869		7,590		—			F	129,459
Interest payable	285		120		—				405
Borrowings and other debt	40,620		—		—				40,620
Other liabilities	7,336		310		(464		)		7,182
Total liabilities	1,442,187		508,710		373			G	1,951,270
Stockholders’ equity	164,916		—		(861		)		164,055
Total liabilities and stockholders’ equity	$	1,607,103	$	508,710	$	(488	)	G	$	2,115,325

Notes:

A The difference between the fair value and acquired value of the acquired loans on the date of the acquisition. This amount is being accreted to interest income over the remaining term of the loans.

B Core deposit premium paid (3.6% of core deposits).

C The difference between the fair value and acquired value of the premises and equipment acquired on the date of the acquisition.

D Goodwill resulting from acquisition.

E Core deposit intangible asset. This amount is being amortized to other expense on a accelerated basis over the estimated life of ten years.

F The difference between the fair value and acquired value of the acquired time deposits on the date of the acquisition. This amount is being amortized to interest expense over the remaining term of the time deposits.

G Non-recurring, incremental costs directly related to the transaction not yet reflected in the historical financial statements.

The following pro forma condensed combined financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments, had the acquisition taken place at the beginning of each period (in thousands):

(Unaudited)			ONB		Pro Forma
For the year ended December 31, 2014	First Mid		Branches		Transactions			Note	Pro Forma
Net interest income	$	51,482	$	7,620	$	2,841		A, B, C	$	61,943
Provision for loan losses	629		—		116			D	745
Non-interest income	18,369		7,522		—				25,891
Non-interest expense	44,507		8,811		3,057			E, F, G	56,375
Income before taxes	24,715		6,331		(332		)		30,714
Income tax expense (benefit)	9,254		2,216		(116		)	H	11,354
Net income (loss)	$	15,461	$	4,115	$	(216	)		$	19,360
Dividends on preferred shares	4,152		—		—				4,152
Net income available to common stockholders	$	11,309	$	4,115	$	(216	)		$	15,208
Earnings per share:
Basic	$	1.88							$	2.53
Diluted	$	1.85							$	2.31
Basic weighted average shares	6,002,766								6,002,766
Diluted weighted average shares	8,371,687								8,371,687

(Unaudited)			ONB		Pro Forma
For the six months ended June 30, 2015	First Mid		Branches		Transactions			Note	Pro Forma
Net interest income	$	25,956	$	3,938	$	780		A, B, C	$	30,674
Provision for loan losses	408		—		58			D	466
Non-interest income	9,336		3,603		—				12,939
Non-interest expense	22,034		4,271		1,013			E, F, G	27,318
Income before taxes	12,850		3,270		(291		)		15,829
Income tax expense (benefit)	4,655		1,145		(102		)	H	5,698
Net income (loss)	$	8,195	$	2,125	$	(189	)		$	10,131
Dividends on preferred shares	1,100		—		—				1,100
Net income available to common stockholders	$	7,095	$	2,125	$	(189	)		$	9,031
Earnings per share:
Basic	$	1.00							$	1.27
Diluted	$	0.97							$	1.20
Basic weighted average shares	7,112,309								7,112,309
Diluted weighted average shares	8,477,102								8,477,102

(Unaudited)			ONB		Pro Forma
For the six months ended June 30, 2014	First Mid		Branches		Transactions			Note	Pro Forma
Net interest income	$	25,359	$	3,801	$	683		A, B, C	$	29,843
Provision for loan losses	451		—		58			D	509
Non-interest income	9,471		3,761		—				13,232
Non-interest expense	22,174		4,407		1,291			E, F, G	27,872
Income before taxes	12,205		3,155		(666		)		14,694
Income tax expense (benefit)	4,569		1,104		(233		)	H	5,440
Net income (loss)	$	7,636	$	2,051	$	(433	)		$	9,254
Dividends on preferred shares	2,208		—		—				2,208
Net income available to common stockholders	$	5,428	$	2,051	$	(433	)		$	7,046
Earnings per share:
Basic	$	0.92							$	1.20
Diluted	$	0.91							$	1.10
Basic weighted average shares	5,882,122								5,882,122
Diluted weighted average shares	8,386,302								8,386,302

Notes:

A To reflect the accretion of the discount on loans acquired.

B To reflect the amortization of the premium on time deposits acquired.

C To reflect the decrease in interest income on interdivisional investments funds as a result of deposit premium paid.

D To reflect additional provision for loan losses for the loans acquired.

E To reflect amortization of the core deposit intangible asset.

F To reflect additional depreciation from adjustment to market value of premises and equipment acquired.

G To reflect additional operational expenses.

H Tax effect of pro forma adjustments at an estimated tax rate of 35%.