-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NvTOWf2BzcEKtM4VDvlkpBys3di+KSM0wEE4Lzxq7BiKZNOnvuE5AZ3lX7SdoZ7+ tbaNOYfhrVqzhZhgyKwc/w== 0000700565-96-000002.txt : 19960328 0000700565-96-000002.hdr.sgml : 19960328 ACCESSION NUMBER: 0000700565-96-000002 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960327 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST MID ILLINOIS BANCSHARES INC CENTRAL INDEX KEY: 0000700565 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 371103704 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13368 FILM NUMBER: 96539076 BUSINESS ADDRESS: STREET 1: 1515 CHARLESTON AVE STREET 2: PO BOX 499 CITY: MATTOON STATE: IL ZIP: 61938 BUSINESS PHONE: 2172347454 MAIL ADDRESS: STREET 1: 1515 CHARLESTON AVENUE STREET 2: PO BOX 499 CITY: MATTOON STATE: IL ZIP: 61938 10-K 1 [PERIOD-TYPE] 12-MOS FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from_________________to_________________ Commission file number: 0-13368 First Mid-Illinois Bancshares, Inc. (Exact name of Registrant as specified in its charter) Delaware 37-1103704 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1515 Charleston Avenue, Mattoon, Illinois 61938 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 217-234-7454 Securities registered pursuant to Section 12(g) of the Act: Title of each class Name of each exchange on which registered NONE Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $4.00 per share 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] State the aggregate market value of the voting stock held by non-affiliates of the Registrant. The aggregate market value shall be computed by reference to the price at which the stock sold, or the average bid and asked prices of such stock, as of a specified date within 60 days prior to the date of filing: $30,568,060 as of March 20, 1996. Based on the last reported price of an actual transaction in Registrant's common stock on March 20, 1996, and reports of beneficial ownership filed by the directors and executive officers of Registrant and by beneficial owners of more than 5% of the outstanding shares of the common stock of Registrant; however, such determination of shares owned by affiliates does not constitute an admission of affiliate status or beneficial interest in shares of common stock of Registrant. Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date: 898,268 shares of common stock at March 20, 1996.
DOCUMENTS INCORPORATED BY REFERENCE Document Certain items of the Annual Report to Stockholders of Part of Form 10-K the Registrant for fiscal year ended December 31, 1995 Proxy Statement for the Annual Meeting of Parts II and III Stockholders to be held May 15, 1996, excluding the sections marked "Board Compensation Committee Report" and "Comparative Stock Performance" Index to Exhibits is in Item 14(a)(3) on page 34 Part III This report consists of 89 pages.
FIRST MID-ILLINOIS BANCSHARES, INC. FORM 10-K DOCUMENTS INCORPORATED BY REFERENCE CROSS REFERENCE SHEET As indicated above, certain items are incorporated by reference to the particular statements, schedules, footnotes and discussions contained in the Registrant's Annual Report to Stockholders for the fiscal year ended December 31, 1995 (the "1995 Annual Report") and in the Proxy Statement for the Annual Meeting of Stockholders to be held on May 15, 1996 (the "1996 Proxy Statement"), copies of which are included as exhibits hereto.
1995 1996 Annual Report Proxy Statement Form 10-K Page Number Page Number Page Number Part I Item 1. Business 4 - 15 Item 2. Properties 27 - 29 Item 3. Legal Proceedings 29 Item 4. Submission of Matters to a Vote of Security Holders 29 Part II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters 29 29 Item 6. Selected Financial Data 1 30 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 25 - 29 30 Item 8. Financial Statements and Supplementary Data 10 - 22 30 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 30 Part III Item 10. Directors and Executive Officers of the Registrant 30 - 31 Item 11. Executive Compensation 5 31 Item 12. Security Ownership of Certain Beneficial Owners and Management 8 31 Item 13. Certain Relationships and Related Transactions 16 - 17 4 32 Part IV Item 14. Exhibits, Financial Statement Schedules Reports on Form 8-K 32
PART I Item 1. Business First MId-Illinois Bancshares, Inc. (the "Registrant") is a bank holding company engaged in the business of banking through its wholly owned subsidiaries, First Mid-Illinois Bank & Trust, N.A. ("First Mid Bank") and Heartland Savings Bank ("Heartland"). First Mid Bank and Heartland are referred to as the "Bank Subsidiaries". In addition to engaging in banking activities, the Registrant also engages in certain other additional activities through Mid-Illinois Data Services, Inc., a wholly owned corporation organized on March 25, 1987, as a non-banking subsidiary ("MIDS"). The primary business of MIDS is to provide financial data processing services to the Registrant and the Bank Subsidiaries. The Registrant, a Delaware corporation, was incorporated on September 8, 1981, pursuant to the approval of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") and became the holding company owning all of the outstanding stock of First National Bank, Mattoon ("First National") on June 1, 1982. The Registrant acquired all of the outstanding stock of a number of community banks on the following dates: Mattoon Bank, Mattoon ("Mattoon Bank") on April 2, 1984; State Bank of Sullivan ("Sullivan Bank") on April 1, 1985; Cumberland County National Bank in Neoga ("Cumberland County") on December 31, 1985; First National Bank and Trust Company of Douglas County ("Douglas County") on December 31, 1986; and Charleston Community Bank ("Charleston Bank") on December 30, 1987. In April 1989, a purchase and assumption agreement was executed between First National and Mattoon Bank whereby First National purchased substantially all of the assets and assumed all of the liabilities of Mattoon Bank. On May 31, 1992, the Company merged Sullivan Bank, Cumberland County, Douglas County and Charleston Bank into First National. First National changed its name at that time to First Mid-Illinois Bank & Trust, N.A.. On October 4, 1994, First Mid Bank acquired all of the outstanding stock of Downstate Bancshares, Inc. ("DBI") which owned 100% of the stock of Downstate National Bank ("DNB"). DNB operated branch locations in Altamont and Effingham, Illinois. Immediately following the acquisition, DBI was dissolved and DNB was merged with and into First Mid Bank with First Mid Bank being the surviving entity. DBI was purchased for cash in the amount of $8.6 million with $5.6 million of that amount being internally generated funds and $3 million from additional long-term borrowings of the Registrant. The acquisition of DBI by First Mid Bank was accounted for using the purchase method of accounting. Accordingly, the assets and liabilities of DBI were recorded at their fair values as of the acquisition date. On July 1, 1992, the Registrant acquired and recapitalized Heartland, a $125 million thrift headquartered in Mattoon with offices in Charleston, Sullivan and Urbana, Illinois. Under the terms of the acquisition, Heartland converted from the mutual form of organization into a federally chartered, stock savings association and became a 100% owned subsidiary of the Registrant. Following that reorganization and immediately before the Heartland acquisition, the reorganized banking subsidiary acquired certain assets and deposit liabilities of Heartland. The acquisition was accounted for as a purchase and, accordingly, the operating results of Heartland have been consolidated with those of the Registrant since July 1, 1992. In accordance with purchase accounting requirements, the assets and liabilities of Heartland were accounted for at their fair market values as of the acquisition date. In connection with the Heartland acquisition, $3.1 million of Series A perpetual, cumulative, non-voting, convertible, preferred stock was issued to directors and certain senior officers of the Registrant pursuant to a private placement. 620 shares of the preferred stock were sold at a stated value of $5,000 per share with such shares bearing a dividend rate of 9.25%. The preferred stock may be converted at any time, at the option of the preferred stockholder, into common shares at the conversion ratio of 202.1 shares of common stock for each share of preferred. The Registrant has the right at any time after July 1, 1998, and upon giving at least thirty days prior notice, to redeem all (but not less than all) of the preferred stock at a cash value of $5,000 per share plus any accrued but unpaid dividends. The Registrant also has the right at any time after July 1, 1998, and upon giving at least thirty days prior notice to require the conversion of all (but not less than all) of the preferred stock into common stock at the conversion ratio. In December 1994, Heartland (formerly known as Heartland Federal Savings and Loan Association) converted from a federally chartered stock savings association to a state chartered savings bank and changed its name to Heartland Savings Bank. The Bank Subsidiaries The Bank Subsidiaries conduct a general banking business embracing most of the services, both consumer and commercial, which banks may lawfully provide, including the following principal services: the acceptance of deposits to demand, savings and time accounts and the servicing of such accounts; commercial, industrial, agricultural, consumer and real estate lending, including installment, credit card, personal lines of credit and overdraft protection; safe deposit box operations; and an extensive variety of additional services tailored to the needs of customers, such as traveler's checks and cashiers' checks, foreign currency, and other special services. First Mid Bank also provides services to its customers through its trust department and investment center. Loans, both commercial and consumer, are serviced on either a secured or unsecured basis to corporations, partnerships and individuals. Commercial lending covers such categories as business, industry, capital, construction, agriculture, inventory and real estate, with the latter including residential properties. The Bank Subsidiaries' installment loan departments make direct loans to consumers and some commercial customers, and purchase retail obligations from retailers, primarily without recourse. The Bank Subsidiaries conduct their businesses in the middle of some of the richest farmland in the world. Accordingly, the Bank Subsidiaries provide a wide range of financial services to farmers and agribusiness within their respective markets. The farm management department, headquartered in Mattoon, Illinois, has approximately 32,000 acres under management and is the largest management operation in the area, ranking in the top 100 firms nationwide. As a group, the Bank Subsidiaries are the largest supplier of farm credit in the Registrant's market area with $39.7 million in agriculture related loans at December 31, 1995. The farm credit products offered by the Bank Subsidiaries include not only real estate loans, but machinery and equipment loans, production loans, inventory financing and lines of credit. The following chart sets forth (in thousands) the assets, deposits and stockholder's equity of the Bank Subsidiaries (before intercompany eliminations) as of December 31, 1995, and the average deposits for the year ended December 31, 1995:
Stockholder's Average Assets Deposits Equity Deposits First Mid Bank $377,805 $318,119 $33,740 $314,193 Heartland 98,520 80,750 7,871 83,174 Total $476,325 $398,869 $41,611 $397,367
The Registrant, MIDS and the Bank Subsidiaries employed 254 people on a full-time equivalent basis as of December 31, 1995. Pages 16 through 26 in this Report contain supplemental statistical data which is included to comply with the requirements of the Securities and Exchange Commission applicable to bank holding companies. This data should be read in conjunction with the financial statements and related footnotes and the discussion included in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the 1995 Annual Report. COMPETITION The Registrant, through its Bank Subsidiaries, actively competes in all areas in which the Bank Subsidiaries presently do business. Each competes for commercial and individual deposits, loans, and trust business with many east central Illinois banks, savings and loan associations, and credit unions. The principal methods of competition in the banking and financial services industry are quality of services to customers, ease of access to facilities, and pricing of services, including interest rates paid on deposits, interest rates charges on loans, and fees charged for fiduciary and other banking services. The Bank Subsidiaries operate facilities in the Illinois counties of Champaign, Coles, Cumberland, Douglas, Effingham and Moultrie. Each facility primarily serves the community in which it is located. First Mid Bank serves eight different communities with 13 separate locations in the towns of Mattoon, Charleston, Neoga, Tuscola, Sullivan, Arcola, Effingham and Altamont, Illinois and Heartland serves the two communities of Mattoon and Urbana, Illinois. Within the area of service there are numerous competing financial institutions and financial services companies. Two of the major bank competitors had assets and deposits of $174 million and $23.4 billion and $154 million and $19.6 billion respectively as of December 31, 1995. SUPERVISION AND REGULATION General The growth and earnings performance of the Registrant can be affected not only by management decisions and general economic conditions, but also by the policies of various governmental regulatory authorities including, but not limited to, the Office of the Comptroller of the Currency ("OCC"), the Illinois Commissioner of Savings and Residential Finance (the "Commissioner"), the Federal Reserve Board ("FRB"), the Federal Deposit Insurance Corporation ("FDIC"), the Internal Revenue Service and state taxing authorities and the Securities and Exchange Commission ("SEC"). Financial institutions and their holding companies are extensively regulated under federal and state law. The effect of such statutes, regulations and policies can be significant, and cannot be predicted with a high degree of certainty. Federal and state laws and regulations generally applicable to financial institutions, such as the Registrant and its subsidiaries, regulate, among other things, the scope of business, investments, reserves against deposits, capital levels relative to operations, the nature and amount of collateral for loans, the establishment of branches, mergers, consolidations and dividends. The system of supervision and regulation applicable to the Registrant and its subsidiaries establishes a comprehensive framework for their respective operations and is intended primarily for the protection of the FDIC's deposit insurance funds and the depositors, rather than the shareholders, of financial institutions. The following references to material statutes and regulations affecting the Registrant and its subsidiaries are brief summaries thereof and do not purport to be complete, and are qualified in their entirety by reference to such statutes and regulations. Any change in applicable law or regulations may have a material effect on the business of the Registrant and its subsidiaries. Recent Regulatory Developments On August 8, 1995, the FDIC amended its regulations to change the range of deposit insurance assessments charged to members of the Bank Insurance Fund (the "BIF"), such as First Mid Bank, from the then-prevailing range of .23% to .31% of deposits, to a range of .04% to .31% of deposits. Additionally, because the change in BIF-assessments was applied retroactively to June 1, 1995, BIF-member institutions, including First Mid Bank, received a refund of the difference between the amount of assessments previously paid at the higher assessment rates for the period from June 30, 1995 through September 30, 1995, and the amount that would have been paid for that period at the new rates. In the case of First Mid Bank, this refund totalled $170,000. The FDIC did not, however, change the assessment rates charged to members of the Savings Association Insurance Fund (the "SAIF"), such as Heartland, and SAIF-insured institutions continue to pay assessments ranging from .23% to .31% of deposits. As a result of the change in the assessment rates charged to BIF- member institutions, Heartland currently pays significantly higher deposit insurance assessments as a member of the SAIF than it would pay if it were able to become a member of the BIF. The difference between the deposit insurance assessments paid by BIF- member institutions and those payable by SAIF-member institutions will increase further in calendar year 1996. On November 14, 1995, the FDIC reduced the deposit insurance assessments for BIF-member institutions by four basis points. As a result, the range of BIF assessments for the semi-annual assessment period commencing January 1, 1996 will be between 0% and .27% of deposits. BIF-member institutions, such as First Mid Bank, which qualify for the 0% assessment category will, however, still have to pay the $1000 minimum semi-annual assessment required by federal statute. The FDIC was able to change the range for BIF-member deposit insurance assessments to their current levels because the ratio of the insurance reserves of the BIF to total BIF-insured deposits exceeds the statutorily designated reserve ratio of 1.25%. Because the SAIF does not meet this designated reserve ratio, the FDIC is prohibited by federal law from reducing the deposit insurance assessments charged to SAIF-member institutions to the same levels currently charged BIF-member institutions. Legislative proposals pending before the Congress would recapitalize the SAIF to the designated reserve ratio by imposing a special assessment against SAIF-insured institutions, payable in a single installment, sufficient in the aggregate to increase the ratio of the insurance reserves of the SAIF to total SAIF-insured deposits to 1.25%. Based upon the information currently available to the Registrant with respect to the manner in which any such special assessment would be calculated under the pending legislation, the Registrant estimates that the imposition of a special assessment under the pending legislation would result in a one-time charge to Heartland of approximately $900,000. At such time as the SAIF meets the designated reserve ratio of 1.25%, the assessment rates charged SAIF-member institutions could be reduced to levels consistent with those charged to BIF-member institutions. Legislation has also been introduced in the Congress that would, among other things, require federal thrift institutions to convert to state or national banks and merge the BIF and the SAIF into a single deposit insurance fund administered by the FDIC. At this time, it is not possible to predict whether, or in what form, any such legislation will be adopted or the impact, if any, such legislation would have on the Registrant, First Mid Bank or Heartland. The Registrant General The Registrant, as the sole shareholder of First Mid Bank and Heartland, is a bank holding company. As a bank holding company, the Registrant is registered with, and is subject to regulation by, the FRB under the Bank Holding Company Act, as amended (the "BHCA"). In accordance with FRB policy, the Registrant is expected to act as a source of financial strength to First Mid Bank and Heartland and to commit resources to support First Mid Bank and Heartland in circumstances where the Registrant might not do so absent such policy. Under the BHCA, the Registrant is subject to periodic examination by the FRB and is required to file periodic reports of its operations and such additional information as the FRB may require. Because Heartland is chartered under the Illinois Savings Bank Act (the "ISBA"), the Registrant is also subject to regulation by the Commissioner under the ISBA. Investments and Activities Under the BHCA, a bank holding company must obtain FRB approval before: (i) acquiring, directly or indirectly, ownership or control of any voting shares of another bank or bank holding company if, after such acquisition, it would own or control more than 5% of such shares (unless it already owns or controls the majority of such shares); (ii) acquiring all or substantially all of the assets of another bank or bank holding company; or (iii) merging or consolidating with another bank holding company. Prior to September 29, 1995, the BHCA prohibited the FRB from approving any direct or indirect acquisition by a bank holding company of more than 5% of the voting shares, or of all or substantially all of the assets, of a bank located outside of the state in which the operations of the bank holding company's banking subsidiaries are principally located unless the laws of the state in which the bank to be acquired is located specifically authorize such an acquisition. Pursuant to amendments to the BHCA which took effect September 29, 1995, the FRB may now allow a bank holding company to acquire banks located in any state of the United States without regard to geographic restrictions or reciprocity requirements imposed by state law, but subject to certain conditions, including limitations on the aggregate amount of deposits that may be held by the acquiring holding company and all of its insured depository institution affiliates. The BHCA also prohibits, with certain exceptions noted below, the Registrant from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company which is not a bank and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to banks and their subsidiaries, except that bank holding companies may engage in, and may own shares of companies engaged in, certain businesses found by the FRB to be "so closely related to banking... as to be a proper incident thereto." Under current regulations of the FRB, the Registrant and its non-bank subsidiaries are permitted to engage in, among other activities, such banking-related businesses as the operation of a thrift, sales and consumer finance, equipment leasing, the operation of a computer service bureau, including software development, and mortgage banking and brokerage. The BHCA does not place territorial restrictions on the activities of non-bank subsidiaries of bank holding companies. Federal legislation also prohibits the acquisition of "control" of a bank or bank holding company, such as the Registrant, without prior notice to certain federal bank regulators. "Control" is defined in certain cases as acquisition of 10% of the outstanding shares of a bank or bank holding company. Capital Requirements The FRB uses capital adequacy guidelines in its examination and regulation of bank holding companies. If capital falls below minimum guideline levels, a bank holding company, among other things, may be denied approval to acquire or establish additional banks or non-bank businesses. The FRB's capital guidelines establish the following minimum regulatory capital requirements for bank holding companies: a risk-based requirement expressed as a percentage of total risk-weighted assets, and a leverage requirement expressed as a percentage of total assets. The risk-based requirement consists of a minimum ratio of total capital to total risk- weighted assets of 8%, of which at least one-half must be Tier 1 capital (which consists principally of stockholders' equity). The leverage requirement consists of a minimum ratio of Tier 1 capital to total assets of 3% for the most highly rated companies, with minimum requirements of 4% to 5% for all others. The risk-based and leverage standards presently used by the FRB are minimum requirements, and higher capital levels will be required if warranted by the particular circumstances or risk profiles of individual banking organizations. Further, any banking organization experiencing or anticipating significant growth would be expected to maintain capital ratios, including tangible capital positions (I.E. Tier 1 capital less all intangible assets), well above the minimum levels. As of December 31, 1995, the Registrant had regulatory capital in excess of the FRB's minimum requirements, with a risk-based capital ratio of 11.51% and a leverage ratio of 6.24%. Dividends The FRB has issued a policy statement on the payment of cash dividends by bank holding companies. In the policy statement, the FRB expressed its view that a bank holding company experiencing earnings weaknesses should not pay cash dividends exceeding its net income or which could only be funded in ways that weakened the bank holding company's financial health, such as by borrowing. Additionally, the FRB possesses enforcement powers over bank holding companies and their non-bank subsidiaries to prevent or remedy actions that represent unsafe or unsound practices or violations of applicable statutes and regulations. Among these powers is the ability to proscribe the payment of dividends by banks and bank holding companies. In addition to the restrictions on dividends imposed by the FRB, the Delaware General Corporation Law would allow the Registrant to pay dividends only out of its surplus, or if the Registrant has no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Federal Securities Regulation The Registrant's common stock is registered with the SEC under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended ( the "Exchange Act"). Consequently, the Registrant is subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Exchange Act. The Subsidiaries General First Mid Bank is a national bank, chartered by the OCC under the National Bank Act. The deposit accounts of First Mid Bank are insured by the BIF of the FDIC, and it is a member of the Federal Reserve System. As a BIF- insured national bank, First Mid Bank is subject to the examination, supervision, reporting and enforcement requirements of the OCC, as the chartering authority for national banks, and the FDIC, as administrator of the BIF. Heartland is an Illinois-chartered savings bank, the deposits of which are insured by the SAIF of the FDIC. As a SAIF-insured, Illinois-chartered savings bank, Heartland is subject to the examination, supervision, reporting and enforcement requirements of the Commissioner, as the chartering authority for Illinois savings banks, and the FDIC, as administrator of the SAIF. Deposit Insurance As FDIC-insured institutions, First Mid Bank and Heartland are required to pay deposit insurance premium assessments to the FDIC. The amount each institution pays for FDIC deposit insurance coverage is determined in accordance with a risk-based assessment system under which all insured depository institutions are placed into one of nine categories and assessed insurance premiums based upon their level of capital and supervisory evaluation. Institutions classified as well-capitalized (as defined by the FDIC) and considered healthy pay the lowest premium while institutions that are less than adequately capitalized (as defined by the FDIC) and considered of substantial supervisory concern pay the highest premium. For the semi- annual assessment period ended December 31, 1995, BIF assessments ranged from 0.04% to 0.31% of deposits, while SAIF assessments ranged from 0.23% to 0.31% of deposits. The premiums currently paid by Heartland for membership in the SAIF are substantially higher than the premiums currently paid by First Mid Bank for membership in the BIF. See "Recent Regulatory Developments." Risk classification of all insured institutions is made by the FDIC for each semi- annual assessment period. The FDIC may terminate the deposit insurance of any insured depository institution if the FDIC determines, after a hearing, that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order, or any condition imposed in writing by, or written agreement with, the FDIC. The FDIC may also suspend deposit insurance temporarily during the hearing process for a permanent termination of insurance if the institution has no tangible capital. Management of the Registrant is not aware of any activity or condition that could result in termination of the deposit insurance of either First Mid Bank or Heartland. Capital Requirements Under the ISBA and the regulations of the Commissioner, an Illinois savings bank must maintain a minimum level of total capital equal to the higher of 3% of total assets or the amount required to maintain insurance of deposits by the FDIC. The Commissioner has the authority to require an Illinois savings bank to maintain a higher level of capital if the Commissioner deems necessary based on the savings bank's financial condition, history, management or earnings prospects. The FDIC has established the following minimum capital standards for state chartered savings banks, such as Heartland: a leverage requirement consisting of a minimum ratio of Tier 1 capital to total assets of 3% for the most highly-rated savings banks with minimum requirements of 4% to 5% for all others, and a risk-based capital requirement consisting of a minimum ratio of total capital to total risk- weighted assets of 8%, at least one half of which must be Tier 1 capital. The OCC has established the following minimum capital standards for national banks, such as First Mid Bank: a leverage requirement consisting of a minimum ratio of Tier 1 capital to total assets of 3% for the most-highly rated banks with minimum requirements of 4% to 5% for all others, and a risk- based capital requirement consisting of a minimum ratio of total capital to total risk-weighted assets of 8%, at least one-half of which must be Tier 1 capital. The capital requirements described above are minimum requirements. Higher capital levels will be required if warranted by the particular circumstances or risk profiles of individual institutions. For example, the regulations of both the FDIC and OCC provide that additional capital may be required to take adequate account of the risks posed by concentrations of credit, nontraditional activities and the institution's ability to manage such risks. On August 2, 1995, the federal banking regulators, including the FDIC and the OCC, published amendments to their respective risk-based capital standards designed to take into account interest rate risk ("IRR") exposure. The amendments provide that a bank's exposure to declines in the economic value of its capital due to changes in interest rates will be among the factors considered by the agencies in evaluating a bank's capital adequacy. Management does not anticipate that this amendment will adversely affect the ability of either First Mid Bank or Heartland to maintain compliance with applicable capital requirements. The IRR amendments do not establish a system for measuring IRR exposure. However, concurrently with the adoption of the amendments, the agencies issued a proposed joint policy statement setting out a framework that would be used to measure the IRR exposure of individual banks. The proposed policy statement would generally require banks to quantify their level of IRR exposure using a measurement system developed by the regulators that weights a bank's assets, liabilities and off-balance sheet positions by risk factors designed to reflect the approximate change in each instrument's value that would result from 200 basis point changes in interest rates. The level of IRR exposure reflected by this measurement process, as well as the level of IRR exposure reflected by a bank's own internal measurement system, would then be considered by the agencies in assessing a bank's capital adequacy. Although it is not presently possible to predict whether, or in what form, the proposed policy statement will be adopted, management does not anticipate that the adoption of a policy statement substantially in the form proposed would have a material adverse effect on the ability of First Mid Bank or Heartland to maintain compliance with applicable capital requirements. During the year ended December 31, 1995, neither First Mid Bank nor Heartland was required by its respective regulators to increase its capital to an amount in excess of the minimum regulatory requirement. As of December 31, 1995, First Mid Bank and Heartland each exceeded its minimum regulatory capital requirements. Federal law provides the federal banking regulators with broad power to take prompt corrective action to resolve the problems of undercapitalized institutions. The extent of the regulators' powers depends upon whether the institution in question is "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," or "critically under- capitalized", as defined by regulation. Depending upon the capital category to which an institution is assigned, the regulators' corrective powers include: requiring the submission of a capital restoration plan; placing limits on asset growth and restrictions on activities; requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired; restricting transactions with affiliates; restricting the interest rate the institution may pay on deposits; ordering a new election of directors of the institution; requiring that senior executive officers or directors be dismissed; prohibiting the institution from accepting deposits from correspondent banks; requiring the institution to divest certain subsidiaries; prohibiting the payment of principal or interest in subordinate debt; and ultimately, appointing a receiver for the institution. Additionally, institutions insured by the FDIC may be liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with the default of commonly controlled FDIC insured depository institutions or any assistance provided by the FDIC to commonly controlled FDIC insured depository institutions in danger of default. Dividends The National Bank Act imposes limitations on the amount of dividends that a national bank, such as First Mid Bank, may pay without prior regulatory approval. Generally, the amount is limited to the national bank's current year's net earnings plus the adjusted retained earnings for the two preceding years. Under the ISBA and the regulations of the Commissioner, dividends may be paid by Heartland out of its net profits (I.E. earnings from current operations, investments and other assets plus actual recoveries on loans, net of current expenses including dividends or interest on deposits, additions to reserves as required by the Commissioner, actual losses, accrued dividends on preferred stock, if any, and all state and federal taxes). In general, so long as Heartland's capital ratio exceeds 6% of total assets, Heartland may declare dividends without prior regulatory approval provided that the aggregate amount of dividends declared during any 12-month period do not exceed Heartland's net profits for that period. Any dividend which, when aggregated with all other dividends declared during the preceding 12-month period, would exceed Heartland's net profits for that 12-month period would require prior approval by the Commissioner. If, however, Heartland's capital falls below 6% of its total assets, Heartland may not declare dividends in any twelve-month period which, in the aggregate, exceed 50% of its net profits for that period, without the prior written approval of the Commissioner. Additionally, Heartland will be unable to pay dividends in an amount which would reduce its capital below the amount required by the FDIC. The Commissioner and the FDIC also have the authority to prohibit the payment of any dividends by the Bank if the Commissioner or the FDIC determine that the distribution would constitute an unsafe or unsound practice. The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations. As described above, the Registrant, First Mid Bank and Heartland each exceeded their minimum capital requirements under applicable guidelines as of December 31, 1995. As of December 31, 1995, approximately $5.7 million was available to be paid as dividends to the Registrant by First Mid Bank and Heartland. Insider Transactions First Mid Bank and Heartland are subject to certain restrictions imposed by the Federal Reserve Act on any extensions of credit to the Registrant and its subsidiaries, on investments in the stock or other securities of the Registrant and its subsidiaries and the acceptance of the stock or other securities of the Registrant or its subsidiaries as collateral for loans. Certain limitations and reporting requirements are also placed on extensions of credit by First Mid Bank and Heartland to their respective directors and officers, to directors and officers of the Registrant and its subsidiaries, to principal stockholders of the Registrant, and to "related interests" of such directors, officers and principal stockholders. In addition, such legislation and regulations may affect the terms upon which any person becoming a director or officer of the Registrant or one of its subsidiaries or a principal stockholder of the Registrant may obtain credit from banks with which First Mid Bank or Heartland maintain a correspondent relationship. Safety and Soundness Standards On July 10, 1995, the federal banking regulators, including the FDIC and the OCC, published final guidelines establishing operational and managerial standards to promote the safety and soundness of federally insured depository institutions. The guidelines, which took effect on August 9, 1995, establish standards for internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, and compensation, fees and benefits. In general, the guidelines prescribe the goals to be achieved in each area, and each institution will be responsible for establishing its own procedures to achieve those goals. If an institution fails to comply with any of the standards set forth in the guidelines, the institution's primary federal regulator may require the institution to submit a plan for achieving and maintaining compliance. The preamble to the guidelines states that the agencies expect to require a compliance plan from an institution whose failure to meet one or more of the standards is of such severity that it could threaten the safe and sound operation of the institution. Failure to submit an acceptable compliance plan, or failure to adhere to a compliance plan that has been accepted by the appropriate regulator, would constitute grounds for further enforcement action. The federal banking agencies have also published for comment proposed asset quality and earnings standards which, if adopted, would be added to the safety and soundness guidelines. This proposal, like the final guidelines, would establish the goals to be achieved with respect to asset quality and earnings, and each institution would be responsible for establishing its own procedures to meet such goals. State Bank Activities Under federal law and FDIC regulations, FDIC insured state banks, such as Heartland, are prohibited, subject to certain exceptions, from making or retaining equity investments of a type, or in an amount, that are not permissible for a national bank. Federal law and FDIC regulations also prohibit FDIC insured state banks and their subsidiaries, subject to certain exceptions, from engaging as principal in any activity that is not permitted for a national bank or its subsidiary, respectively, unless the bank meets, and continues to meet, its minimum regulatory capital requirements and the FDIC determines the activity would not pose a significant risk to the deposit insurance fund of which the bank is a member. Branching Authority Illinois savings banks, such as the Bank, have the authority under Illinois law to establish branches any where in the State of Illinois, subject to receipt of all required regulatory approvals. Federal law grants the same branching authority to national banks, such as First Mid Bank, which are headquartered in Illinois. Effective June 1, 1997 (or earlier if expressly authorized by applicable state law), the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the "Riegle-Neal Act") allows banks to establish interstate branch networks through acquisitions of other banks, subject to certain conditions, including certain limitations on the aggregate amount of deposits that may be held by the surviving bank and all of its insured depository institution affiliates. The establishment of de novo interstate branches or the acquisition of individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) is allowed by the Riegle-Neal Act only if specifically authorized by state law. The legislation allows individual states to "opt-out" of certain provisions of the Riegle-Neal Act by enacting appropriate legislation prior to June 1, 1997. Illinois has enacted legislation permitting interstate bank mergers beginning on June 1, 1997. Selected Statistical Information I. Distribution of Consolidated Assets, Liabilities and Stockholders' Equity A. Interest Rates and Interest Differential (dollars in thousands)
Year Ended Year Ended December 31, 1995 December 31, 1994 Avg Bal Int Avg Rate Avg Bal Int Avg Rate INTEREST EARNING ASSETS Investment certificates of $ 99 $ 10 10.10% $ 1,211 $ 51 4.21% deposits Due from banks-interest 1,511 84 5.56% 924 22 2.38% bearing Excess funds sold 6,199 356 5.74% 3,643 156 4.28% Investment securities: Taxable 115,725 7,068 6.11% 117,285 5,772 4.92% Tax-exempt 12,831 733 8.66% 14,546 851 8.86% Loans (net of unearned 294,220 25,214 8.57% 243,166 19,576 8.05% income) Total earning assets 430,585 33,465 7.86% 380,775 26,428 7.06% NONEARNING ASSETS Cash and due from banks 15,382 13,720 Premises and equipment 9,333 8,393 Other nonearning assets 12,699 9,150 Allowance for loan losses (2,711) (2,354) Total assets $465,288 $409,684 INTEREST BEARING LIABILITIES Demand deposits $106,118 $2,823 2.66% $110,069 $ 2,764 2.51% Savings deposits 40,920 1,107 2.71% 38,985 1,009 2.59% Time deposits 202,305 10,958 5.42% 170,252 7,298 4.29% Other borrowings 24,140 1,266 5.24% 13,103 471 3.59% Long-term debt 7,636 571 7.48% 5,579 376 6.74% Total interest-bearing 381,119 16,725 4.39% 337,988 11,918 3.53% liabilities NONINTEREST BEARING LIABILITIES Demand deposits 46,237 37,527 Other liabilities 4,561 3,901 Stockholders' equity 33,371 30,268 Total liabilities & equity $465,288 $409,684 Net interest earnings $16,740 3.47% $14,510 3.53% Net interest earnings as a % of interest earning assets on a full tax equivalent basis 3.98% 3.93% (1) Full tax equivalent yields on tax exempt securities have been calculated using a 34% tax rate. (2) Income on Investment securities on a full tax equivalent basis for the period ended December 31, 1995 and 1994 amounted to $1,111 and $1,289. (3) Nonaccrual loans have been included in the average balances. (4) Interest includes net loan fees.
Selected Statistical Information, Continued I. Distribution of Consolidated Assets, Liabilities, and Stockholders' Equity Interest Rates and Interest Differential, Continued (Dollars in thousands) (above table continued)
Year Ended December 31, 1993 Avg Bal Int Avg Rate INTEREST EARNING ASSETS Investment certificates of deposits $ 3,352 $ 123 3.67% Due from banks-interest bearing 1,923 57 2.96% Excess funds sold 6,129 182 2.97% Investment securities: Taxable 122,383 6,290 5.14% Tax-exempt 15,996 888 8.41% Loans (net of unearned income) 214,408 17,970 8.38% Total earning assets 364,191 25,510 7.13% NONEARNING ASSETS Cash and due from banks 11,256 Premises and equipment 8,432 Other nonearning assets 8,440 Allowance for loan losses (2,067) Total assets $390,252 INTEREST BEARING LIABILITIES Demand deposits $107,896 $ 2,893 2.68% Savings deposits 35,860 1,033 2.88% Time deposits 168,724 7,410 4.39% Other borrowings 5,398 337 6.24% Long-term debt 8,843 262 2.96% Total interest-bearing liabilities 326,721 11,935 3.65% NONINTEREST BEARING LIABILITIES Demand deposits 31,746 Other liabilities 3,798 Stockholders' equity 27,987 Total liabilities & equity $390,252 Net interest earnings $13,575 3.48% Net interest earnings as a % of interest earning assets on a full tax equivalent basis 3.85% (1) Full tax equivalent yields on tax exempt securities have been calculated using a 34% tax rate. (2) Income on Investment securities on a full tax equivalent basis for the period ended December 31, 1993 amounted to $1,345. (3) Nonaccrual loans have been included in the average balances. (4) Interest includes net loan fees.
Selected Statistical Information, Continued I. Distribution of Consolidated Assets, Liabilities and Stockholders' Equity B. Interest Rates and Interest Differential, Continued (dollars in thousands)
1995 Compared to 1994 Increase - (Decrease) Total Rate/ Change Volume Rate Volume INTEREST INCOME: Investment certificates of $(41) $(47) $71 $(65) deposit Due from banks-interest bearing 62 14 29 19 Excess funds sold 200 110 53 37 Investment securities: Taxable 1,296 (78) 1,391 (17) Tax-exempt (118) (100) (20) 2 Loans 5,638 4,110 1,263 265 Total interest income 7,037 4,009 2,787 241 INTEREST EXPENSE: Demand deposits 59 (99) 164 (6) Savings deposits 98 50 46 2 Time deposits 3,660 1,374 1,924 362 Other borrowings 795 398 216 181 Long-term debt 195 139 41 15 Total interest expense 4,807 1,862 2,391 554 NET INTEREST EARNINGS $2,230 $2,147 $ 396 $ (313)
1994 Compared to 1993 Increase - (Decrease) Total Rate/ Change Volume Rate Volume INTEREST INCOME: Investment certificates of $ (72) $(79) $ 18 $(11) deposit Due from banks-interest bearing (35) (30) (11) 6 Excess funds sold (26) (73) 86 (39) Investment securities: Taxable (519) (262) (267) 10 Tax-exempt (36) (80) 48 (4) Loans 1,606 2,410 (709) (95) Total interest income 918 1,886 (835) (133) INTEREST EXPENSE: Demand deposits (129) 59 (184) (4) Savings deposits (24) 90 (105) (9) Time deposits (112) 67 (177) (2) Other borrowings 209 126 56 27 Long-term debt 39 11 27 1 Total interest expense (17) 353 (383) 13 NET INTEREST EARNINGS $ 935 $1,533 $(452) $(146)
Nonaccruing loans are not material and have been included in the average loan balances for purposes of this computation. No out-of-period adjustments have been included in the above analysis. The changes in rate/volume are computed on a consistent basis by multiplying the change in rates with the change in volume. Loan fees included in interest income are not material. Interest on nontaxable securities is shown on a tax-equivalent basis using a 34% tax rate. There were no foreign activities by the Registrant during the three-year report period ending December 31, 1995. II. Investment Portfolio A. The amortized costs, gross unrealized gains and losses and approximate fair value for available-for-sale and held-to-maturity securities by major security type at December 31, 1995 and 1994 were as follows (dollars in thousands):
Gross Gross Estimated Amortized Unrealized Unrealized Fair 1995 Cost Gains Losses Value AVAILABLE-FOR-SALE: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 72,599 $ 481 $ (683) $ 72,397 Obligations of state and political subdivisions 8,628 440 (7) 9,061 Mortgage backed securities 35,766 222 (163) 35,825 Other securities 2,105 - - 2,105 Total available-for-sale $119,098 $ 1,143 $ (853) $119,388 HELD-TO-MATURITY: Obligations of state and political subdivisions 3,381 43 (15) 3,409 Total held-to-maturity 3,381 43 (15) 3,409 Total $122,479 $ 1,186 $ (868) $122,797
Gross Gross Estimated Amortized Unrealized Unrealized Fair 1994 Cost Gains Losses Value AVAILABLE-FOR-SALE: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 34,358 $ - $ (970) $ 33,388 Obligations of state and political subdivisions 9,641 240 (160) 9,721 Mortgage backed securities 24,751 29 (804) 23,976 Other securities 1,888 - - 1,888 Total available-for-sale $ 70,638 $ 269 $(1,934) $ 68,973 HELD-TO-MATURITY: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 42,312 $ 6 $(1,760) $ 40,558 Obligations of state and political subdivisions 4,023 5 (101) 3,927 Mortgage backed securities 15,969 1 (619) 15,351 Total held-to-maturity $ 62,304 $ 12 $(2,480) $ 59,836 Total $132,942 $ 281 $(4,414) $128,809
Gross Gross Estimated Amortized Unrealized Unrealized Fair 1993 Cost Gains Losses Value AVAILABLE-FOR-SALE: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 25,826 $ 122 $ (31) $ 25,917 Obligations of state and political subdivisions 14,874 1,239 (42) 16,071 Mortgage backed securities 30,516 267 (78) 30,705 Other securities 1,431 - - 1,431 Total available-for-sale $ 72,647 $ 1,628 $ (151) $ 74,124 HELD-TO-MATURITY: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 40,726 $ 125 $ (137) $ 40,714 Obligations of state and political subdivisions 1,761 21 (7) 1,775 Mortgage backed securities 18,657 135 (38) 18,754 Total held-to-maturity $ 61,144 $ 281 $ (182) $ 61,243 Total $133,791 $ 1,909 $ (333) $135,367
Other securities include stock in the Federal Home Loan Bank totaling $1,699,000 in 1995, $1,572,000 in 1994 and $1,115,000 in 1993. B. The following table indicates the expected maturities of investment securities classified as available-for-sale and held-to-maturity at December 31, 1995 (dollars in thousands) and the weighted average yield for each range of maturities. Mortgage backed securities are aged according to their weighted average life. All other securities are shown at their contractual maturity.
Book Value Maturing for Available-for-Sale Investment Securities One After 1 After 5 After year through through ten or less 5 years 10 years years Total U.S. Treasury securities and obligations of U.S. government corporations and agencies $17,961 $45,155 $ 9,483 $ - $ 72,599 Obligations of state and political subdivisions 425 6,934 1,269 - 8,628 Mortgage-backed securities 3,776 27,473 1,239 3,278 35,766 Other securities - - - 2,105 2,105 Total Investments $22,162 $79,562 $11,991 $ 5,383 $119,098 Weighted average yield 5.72% 5.47% 6.06% 8.37% Full tax equivalent yield 5.73% 5.73% 6.41% 8.37%
Book Value Maturing for Held-to-Maturity Investment Securities One After 1 After 5 After year through through ten or less 5 years 10 years years Total Obligations of state and political subdivisions 582 1,884 915 - 3,381 Total held-to-maturity securities $ 582 $ 1,884 $ 915 $ - $3,381 Weighted average yield 4.70% 4.99% 5.14% Full tax equivalent yield 7.18% 7.65% 7.79%
The weighted average yields are calculated on the basis of the cost and effective yields weighted for the scheduled maturity of each security. Full tax equivalent yields have been calculated using a 34% tax rate. The maturities of, and yields on, mortgage backed securities have been calculated using actual repayment history. However, where securities have call features, and have a market value in excess of par value, the call date has been used to determine the expected maturity. With the exception of obligations of the U.S. Treasury and other U.S. Government agencies and corporations, there were no investment securities of any single issuer the book value of which exceeded 10% of stockholders' equity at December 31, 1995. In December 1995, the Registrant reclassified certain investment securities between held-to-maturity and available-for-sale in accordance with guidelines issued by the Financial Accounting Standards Board (FASB) permitting a one-time change in classification. Based on discussion and analysis, the Registrant decided that only local, non-rated municipal securities would be classified as held-to-maturity and the remaining portfolio would be designated as available-for-sale. The book value and gross unrealized loss of securities transferred from held-to-maturity to available- for-sale amounted to $52,536,000 and $445,000, respectively. III. Loan Portfolio A. Types of Loans The following table indicates loans, net of unearned income, by type at December 31, (dollars in thousands):
1995 1994 1993 Commercial, financial and agricultural $ 65,916 $ 61,520 $ 50,353 Real estate - mortgage 211,147 195,524 151,916 Installment 27,996 22,294 16,360 Other 1,945 2,815 4,590 Total loans $307,004 $282,153 $223,219
1992 1991 Commercial, financial and agricultural $ 46,464 $ 43,406 Real estate - mortgage 146,333 69,272 Installment 16,316 15,592 Other 5,080 5,024 Total loans $214,193 $133,294
B. Maturities and Rate Sensitivity of Loans The following table presents the balance of loans outstanding as of December 31, 1995, by maturities, based on remaining repayments of principal (dollars in thousands):
Over 1 One year through Over or less 5 years 5 years Total Commercial, financial and agricultural $ 46,581 $ 16,549 $ 2,786 $ 65,916 Real estate - mortgage 45,006 109,254 56,887 211,147 Installment 7,252 20,619 125 27,996 Other 439 1,025 481 1,945 Total loans $ 99,278 $147,447 $ 60,279 $307,004
As of December 31, 1995, loans with maturities over one year consisted of $163,802,000 in fixed rate loans and $43,924,000 in variable rate loans. The loan maturities noted above are based on the contractual provisions of the individual loans. The Registrant has no general policy regarding rollovers and borrower requests for such are handled on a case by case basis. C. Risk Elements 1. The following table presents information concerning the aggregate amount of nonperforming loans. Nonperforming loans include: (a) loans accounted for on a nonaccrual basis; (b) accruing loans contractually past due 90 days or more as to interest or principal payments; and (c) loans not included in (a) and (b) above which are "troubled debt restructuring" as defined in Statement of Financial Accounting Standards No. 15, "Accounting by Debtors and Creditors for Troubled Debt Restructuring." (dollars in thousands)
December 31, 1995 1994 1993 1992 1991 Nonaccrual loans $ 636 $ 393 $ 497 $ 685 $ 348 Loans past due ninety days or more and still accruing 554 509 248 585 418 Restructured loans which are performing in accordance with revised terms 604 772 307 383 678
Interest income that would have been reported if nonaccrual and restructured loans had been performing totaled $143,000, $100,000 and $85,000 for the years ended December 31, 1995, 1994 and 1993, respectively. Interest income that was included in income totaled $56,000, $37,000 and $15,000 for the same periods. The Registrant's policy is to discontinue the accrual of interest income on any loan for which principal or interest is 90 days past due or when, in the opinion of management, there is reasonable doubt as to the timely collectibility of interest or principal. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collectibility of interest or principal. 2. Potential Loan Problems. Management is not aware of any additional credits which should be disclosed above under "Risk Elements." 3. Foreign Outstandings. There was no foreign activity as of December 31, 1995, required to be disclosed. 4. Loan Concentrations. At December 31, 1995, the Registrant had loan concentrations in agricultural industries of 12.9% of outstanding loans. The Registrant had no further industry loan concentrations in excess of 10% of outstanding loans. There were no other interest-bearing assets which would be required to be disclosed as having "risk elements" if such other assets were loans. Selected Statistical Information, Continued IV. Summary of Loan Loss Experience A. Loan loss experience for the years ending December 31, are summarized as follows (dollars in thousands):
1995 1994 1993 1992 1991 Average loans outstanding, net of unearned income $294,220 $243,166 $214,408 $178,919 $127,918 Allowance- beginning of year 2,608 2,110 1,906 1,566 1,505 Balance of acquired subsidiary - 343 - 350 - Charge-offs: Commercial, financial and agricultural 18 29 140 298 273 Real estate-mortgage 111 28 241 350 11 Installment 57 120 86 139 132 Total charge-offs 186 177 467 787 416 Recoveries: Commercial, financial and agricultural 73 98 150 167 57 Real estate-mortgage - 21 3 18 - Installment 39 45 26 49 33 Total recoveries 112 164 179 234 90 Net charge-offs 74 13 288 553 326 Provision for loan losses 280 168 492 543 387 Allowance-end of period $ 2,814 $2,608 $ 2,110 $ 1,906 $ 1,566 Ratio of net charge-offs to average loans .03% .01% .13% .31% .25% Ratio of allowance for loan losses to loans outstanding (less unearned interest) at end of period .90% .93% .95% .89% 1.17%
The allowance for loan losses is maintained at a level deemed appropriate by management to provide for known and inherent risks 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 which are deemed to be uncollectible are charged to the allowance. The provision for loan losses and recoveries are credited to the allowance. B. The allowance for loan losses, in management's judgment, would be allocated as follows to cover potential loan losses (in thousands):
December 31, 1995 December 31, 1994 Allowance % of Allowance % of for loans for loans loan to total loan to total losses loans losses loans Commercial, financial and agricultural $ 1,554 21.5% $ 1,481 21.8% Real estate-mortgage 314 68.8% 427 69.3% Installment 131 9.1% 100 7.9% Other - .6% - 1.0% Total allocated 1,999 2,008 Unallocated 815 N/A 600 N/A Allowance at end of reported period $ 2,814 100.0% $ 2,608 100.0%
December 31, 1993 December 31, 1992 Allowance % of Allowance % of for loans for loans loan to total loan to total losses loans losses loans Commercial, financial and agricultural $ 1,351 22.5% $ 1,045 21.7% Real estate-mortgage 330 68.1% 325 68.3% Installment 78 7.3% 183 7.6% Other - 2.1% - 2.4% Total allocated 1,759 1,553 Unallocated 351 N/A 353 N/A Allowance at end of reported period $ 2,110 100.0% $ 1,906 100.0%
December 31, 1991 Allowance % of for loans loan to total losses loans Commercial, financial and agricultural $ 999 32.6% Real estate-mortgage 248 51.9% Installment 185 11.7% Other - 3.8% Total allocated 1,432 Unallocated 134 N/A Allowance at end of reported period $ 1,566 100.0%
The allowance is allocated to the individual loan categories by a specific reserve for all classified loans plus a percentage of loans not classified based on historical losses. V. Average Deposits by Classification A. The following table sets forth the average deposits and weighted average rates at December 31, 1995, 1994, and 1993 (dollars in thousands):
1995 1994 1993 Weighted Weighted Weighted Average Average Average Amount Rate Amount Rate Amount Rate Demand deposits: Non-interest bearing $ 46,237 - $ 37,527 - $ 31,746 - Interest bearing 106,118 2.66% 110,069 2.51% 107,896 2.68% Savings 40,920 2.71% 38,985 2.59% 35,860 2.88% Time deposits 202,305 5.42% 170,252 4.29% 168,724 4.39% Total average deposits $395,580 3.76% $356,833 3.10% $344,226 3.29%
D. Maturities of Time Deposits of $100,000 or More The following table sets forth the maturity of time deposits of $100,000 or more, at December 31, 1995 (dollars in thousands):
Balance 3 months or less $ 17,167 Over 3 through 6 months 6,451 Over 6 through 12 months 7,495 Over 12 months 6,217 Total $ 37,330
There were no time deposits of $100,000 or more that were issued by foreign offices at December 31, 1995. VI. Selected Ratios The following table presents selected financial ratios for the years ended December 31, 1995, 1994, and 1993:
1995 1994 1993 Return on average total assets .84% .83% .85% Return on average total stockholders' equity 11.76% 11.35% 11.80% Dividend payout ratio 19.76% 20.89% 21.40% Average total equity to average assets ratio 7.17% 7.38% 7.17%
VII. Other Borrowings Information pertaining to other borrowings as of December 31, 1995 is shown in Note 10 on page 18 of the 1995 Annual Report and is incorporated by reference. Item 2. Properties All of the following properties are owned by the Registrant or its Bank Subsidiaries except those specifically identified as being leased. First Mid Bank Mattoon First Mid Bank's main office is located at 1515 Charleston Avenue, Mattoon, Illinois. The office building consists of a one-story structure which was opened in 1965 with approximately 36,000 square feet of office space, eight walk-in teller stations and a walk-up automated teller machine ("ATM"). Adjacent to this building is a parking lot with parking for approximately seventy cars. A drive-up facility with ten drive-up lanes is located across the street from First Mid Bank's main office. First Mid Bank has a facility at 333 Broadway Avenue East, Mattoon, Illinois. The one-story office building contains approximately 7,600 square feet of office space. The main floor provides space for five teller windows, two private offices, a safe-deposit vault and four drive-up lanes. There is adequate parking located adjacent to the building. A drive-up ATM is located adjacent to the building. First Mid Bank leases a facility at 1504-A Lakeland Boulevard, Mattoon, Illinois which provides space for 3 tellers, two drive-up lanes and a walk-up ATM. First Mid Bank owns an office building located at 1701 Charleston Avenue, Mattoon, Illinois and an adjacent parking lot. The building is used by MIDS for its data processing center and backroom operations for the Registrant and its Bank Subsidiaries. Sullivan First Mid Bank operates two locations in Sullivan, Illinois. The main office is located at 200 South Hamilton Street, Sullivan, Illinois. Its office building is a one-story structure containing approximately 11,400 square feet of office space with five tellers, six private offices and four drive-up lanes. Adjacent to its main office is a parking lot used primarily by the employees. Adequate customer parking is available on two sides of the main office building. The second office is a leased facility at 435 South Hamilton, Sullivan, Illinois in the IGA. The facility has two teller stations, a vault, an ATM and a night depository. Neoga First Mid Bank's office in Neoga, Illinois, is located at 102 East 6th Street, Neoga, Illinois. The building consists of a one-story structure containing approximately 4,000 square feet of office space. The main office building provides space for four tellers in the lobby of the building, two drive-up tellers, four private offices, two night depositories, and an ATM. Adequate customer parking is available on three sides of the main office building. Tuscola First Mid Bank operates two offices in Tuscola, Illinois. The main office is located at 100 North Main Street, Tuscola, Illinois. The building consists of a two-story structure with approximately 18,000 square feet of office space with space for six tellers, five private offices and a night depository. Adequate customer parking is available at the main office building. The second facility is located at 410 South Main Street, Tuscola, Illinois. The facility has a walk-in teller stations and two drive-up bay windows and contains approximately 320 square feet of office space. A drive- up ATM is located adjacent to this facility. Charleston First Mid Bank has two offices in Charleston, Illinois. The main office is located at 701 Sixth Street, Charleston, Illinois. This building is a one-story facility with an attached two-bay drive-up structure and consists of approximately 5,500 square feet of office space. This facility has adequate parking to serve its customers. The office space is comprised of three teller stations, seven private offices and a night depository. The second office is located at 580 West Lincoln Avenue, Charleston, Illinois. This office has three lobby tellers, three drive-up lanes, a commercial night drop and one private office. A drive-thru ATM is located in the parking lot of this facility. Altamont First Mid Bank has a banking facility located at 101 West Washington Street, Altamont, Illinois. This building is a one-story structure which has approximately 4,300 square feet of office space. The office space consists of nine teller windows, three drive-up teller lanes (one of these faciliates an ATM), seven private offices, one conference room and a night depository. Adequate parking is available on three sides of the building. Effingham First Mid Bank operates a facility at 902 N Keller Drive, Effingham, Illinois. The building is a two story structure with approximately 4,000 square feet of office space. This office space consists of four teller stations, three drive-up teller lanes, five private offices and a night depository. Adequate parking is available to customers in front of the facility. First Mid Bank also owns a building and land at 900 N Keller Drive, Effingham, Illinois which is currently vacant. Arcola First Mid Bank leases a facility at 324 South Chestnut Street, Arcola, Illinois. This building is a one-story structure with approximately 1,140 square feet of office space. This office space consists of two lobby teller stations, one loan station, two drive-up teller lanes, one private office and a night depository. A drive-up ATM lane is available adjacent to the teller lanes. Adequate parking is available to customers in front of the facility. Heartland Mattoon The main office is located at 1520 Charleston Avenue, Mattoon, Illinois. The office building consists of a two-story structure which has approximately 20,000 square feet of office space including six teller stations on the main floor. A drive-up facility with eight drive-up lanes is located adjacent to the main office. Adequate customer parking is available on two sides of the building and in an adjacent parking lot. Urbana Heartland's Urbana facility is located at 601 South Vine Street, Urbana, Illinois. Its office building consists of a one-story structure and contains approximately 3,600 square feet. The office building provides space for three tellers, one private office and two drive-up lanes. An adequate customer parking lot is located on the south side of the building. Heartland sold two single family residences located at 206 East Oregon Street, Urbana, Illinois and 205 East California Avenue, Urbana, Illinois, during 1995. These properties are adjacent to the Urbana facility and were previously held for expansion purposes. Registrant The Registrant owns a single family residence at 1515 Wabash Avenue, Mattoon, Illinois which is being held for future expansion. Item 3. Legal Proceedings. Since the Bank Subsidiaries act as depositories of funds, each is named from time to time as a defendent in law suits (such as garnishment proceedings) involving claims to the ownership of funds in particulare accounts. Management believes that all such litigation as well as other pending legal preceedings constitute ordinary routine litigation incidential to the business of the Bank Subsidiaries and that such litigation will not materially adversely affect the Registrant's consolidated financial condition. Item 4. Submission of Matters to a Vote of Security Holders None. PART II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters The following portions of the 1995 Annual Report are being incorporated by reference: "Common Stock Information and Dividends" on page 29, and restrictions on the Registrant's ability to pay dividends in Note 15 of Notes to Consolidated Financial Statements on page 20. Item 6. Selected Financial Data The "Five-Year Financial Data" on page 1 of the 1995 Annual Report is incorporated by reference. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 25 through 29 of the 1995 Annual Report are incorporated by reference. Item 8. Financial Statements and Supplementary Data The consolidated financial statements and related notes on pages 10 through 20 in the 1995 Annual Report are incorporated by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III Item 10. Directors and Executive Officers of the Registrant. "Election of Directors" on pages 2 through 3 of the 1996 Proxy Statement is incorporated by reference. Section 16(a) of the Securities Exchange Act of 1934 requires that the Registrant's executive officers and directors and persons who own more than 10% of the Registrant's Common Stock file reports of ownership and changes in ownership with the Securities and Exchange Commission and with the exchange on which the Registrant's shares of Common Stock are traded. Such persons are also required to furnish the Registrant with copies of all Section 16(a) forms they file. Based solely on the Registrant's review of the copies of such forms, the Registrant is not aware that any of its directors and executive officers or 10% stockholders failed to comply with the filing requirements of Section 16(a) during the period commencing January 1, 1995 and ending December 31, 1995. Executive Officers of the Registrant The executive officers of the Registrant are identified below. The executive officers of the Registrant are elected annually by the Registrant's Board of Directors.
Name (Age) Position With Registrant Daniel E. Marvin, Jr. (57) Chairman of the Board of Directors, President and Chief Executive Officer William S. Rowland (49) Director, Chief Financial Officer, Secretary and Treasurer Dan R. Cunningham (46) Vice President, Trust and Farm Stanley E. Gilliland (51) Vice President, Lending Alfred M. Wooleyhan, Jr. (48) Vice President, Development
Daniel E. Marvin, Jr., age 57, has been Chairman of the Board of Directors, President and Chief Executive Officer of the Registrant and the First Mid Bank since 1983, and has been Vice Chairman of the Board of Directors of Heartland since 1992. He was appointed president of Heartland in 1994. William S. Rowland, age 49, has served as a director of the Registrant since 1991, has been Chief Financial Officer since 1989 and has served as Secretary/Treasurer since 1991. Mr. Rowland is also Executive Vice President, Finance of First Mid Bank since 1989. Since 1989 he has also been a director of MIDS, and became a director of Heartland in 1992. Mr. Rowland was in the Davenport, Iowa, office of KPMG Peat Marwick from 1975-1989. Daniel R. Cunningham, age 46, has been Vice President of the Trust and Farm Department of the Registrant since 1987. Mr. Cunningham has also served since 1987 as a director, Secretary and Executive Vice President of First Mid Bank. Stanley E. Gilliland, age 51, has been Vice President of Lending of the Registrant since 1985, and has been Executive Vice President of Lending for First Mid Bank since 1990. Mr. Gilliland is also a director and member of the Loan Committee of Heartland. Alfred M. Wooleyhan, Jr., age 48, has been Vice President of Development of the Registrant since the beginning of 1995. Mr. Wooleyhan was the President of the Charleston Business Unit of First Mid Bank from 1989-1995. Item 11. Executive Compensation. "Remuneration of Executive Officers," "Retirement Benefits" and "Transactions with Management" on pages 4 through 6 of the 1996 Proxy Statement is incorporated by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management. "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Management" on pages 8 through 9 of the 1996 Proxy Statement is incorporated by reference. Item 13. Certain Relationships and Related Transactions. "Transactions with Management" on page 4 of the 1996 Proxy Statement and Note 5 of Notes to the Consolidated Financial Statements on pages 16 through 17 of the 1995 Annual Report are incorporated by reference. PART IV Item 14. Exhibits, Financial Statements Schedules, and Reports on Form 8-K.
1995 Annual Form 10-K Report Page Number Page Number (a)(1) Index to Financial Statements Incorporated by reference is Part II, Item 8 of this report: First Mid-Illinois Bancshares, Inc. and Subsidiaries: Consolidated Balance Sheets as of December 31, 1995 and 1994 49 10 Consolidated Statements of Income for the years ended December 31, 1995, 1994 and 1993 50 11 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1995, 1994 and 1993 51 12 Consolidated Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993 52 13 Notes to Consolidated Financial Statements 53 - 61 14 - 22 Independent Auditors' Report 63 24 (a)(2) Financial Statement and Schedules All schedules are omitted as they are not applicable or required or else equivalent information has been included in the financial statements or notes thereto. (a)(3) Exhibits The exhibits required by Item 601 of Regulation S-K are included along with this Form 10-K and are listed on the "Index to Exhibits" immediately following the signature page.
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 thereunto duly authorized. FIRST MID-ILLINOIS BANCSHARES, INC. (Registrant) /s/ Daniel E. Marvin, Jr. *-------------------------------------* Daniel E. Marvin, Jr. President and Chief Executive Officer /s/ William S. Rowland *-------------------------------------* William S. Rowland Dated: March 26, 1996 Chief Financial Officer *---------------------* Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signatures Title Dated /s/ Daniel E. Marvin, Jr. 03/26/96 Daniel E. Marvin, Jr. Principal Executive Officer and Director /s/ William S. Rowland 03/26/96 William S. Rowland Principal Financial Officer and Director /s/ Charles A. Adams 03/26/96 Charles A. Adams Director Kenneth R. Diepholz Director /s/ Richard A. Lumpkin 03/26/96 Richard A. Lumpkin Director Gary W. Melvin Director William G. Roley Director /s/ Ray A. Sparks 03/26/96 Ray A. Sparks Director
Exhibit Index to Form 10-K Registration Statement Incorporated Exhibit Description Herein by Filed Page No. Reference To Herewith No. 3.1 Restated Certificate of Exhibit 3(a) to Incorporation and First Mid-Illinois Bancshares, Amendment to Restated Certificate Inc.'s Annual Report on Form 10-K of Incorporation of First Mid- for the year ended December 31, 1987 Illinois Bancshares, Inc. (File No 0-13688) 4.2 Restated Bylaws of First Mid- Exhibit 3(b) to First Mid-Illinois Illinois Bancshares, Inc. Bancshares, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1987 (File No 0-13368) 11.1 Statement re: Computation of Note 1 in the Earnings Per Share Annual Report to Stockholders (see Exhibit 13.1) 13.1 Annual Report to Security Holders 1-37 38-72 (furnished for the information for the Commission and not to be deemed "filed" as part of the Form 10-K except for portions incorporated by reference) 21.1 Subsidiaries of the Registrant 35 22.1 Form S-8 Registration Statement for Form S-8 filed the Registrant's Deferred November 8, 1995 Compensation Plan (File No. 033-64061) Form S-8 Registration Statement for Form S-8 filed the Registrant's First Retirement November 13, 1995 and Savings Plan (File No. 033-64139) Form S-3 Registration Statement for Form S-3 filed the Registrant's Dividend September 23, 1994 Reinvestment Plan (File No. 033-84404) 23.1 Consent of KPMG Peat Marwick LLP 36 99.1 Proxy Statement for the 1996 Annual 73-89 Meeting of Stockholders
First Mid-Illinois Bancshares, Inc. Exhibit #21.1 S.E.C. Form 10-K December 31, 1995 Subsidiaries of Registrant: First Mid-Illinois Bank & Trust, N.A., Mattoon, IL Heartland Savings Bank, Mattoon, IL Mid-Illinois Data Services, Inc., Mattoon, IL CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors First Mid-Illinois Bancshares, Inc.: RE: REGISTRATION STATEMENTS * Registration No. 33-84404 on Form S-3 * Registration No. 33-64061 on Form S-8 * Registration No. 33-64139 on Form S-8 We consent to incorporation by reference in the subject Registration Statements on Form S-3 and S-8 of First Mid-Illinois Bancshares, Inc. of our report dated January 26, 1996, relating to the consolidated balance sheets of First Mid-Illinois Bancshares, Inc. and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of income, changes in stockholders' equity, and cash flows for each of the years in the three year period ended December 31, 1995, which report is incorporated by reference in the December 31, 1995 annual report on Form 10-K of First Mid-Illinois Bancshares, Inc. KPMG Peat Marwick LLP Chicago, Illinois March 15, 1996 EX-13 Exhibit 13 First Mid-Illinois Bancshares, Inc. Financial Report and Management's Discussion and Analysis from the Registrant's 1995 Annual Report to Shareholders. Financial Highlights For the Year (in thousands)
1995 1994 Net Income $ 3,924 $ 3,434 Dividends Declared on Common Stock 722 658 Per Common Share Primary Earnings Per Share $ 4.10 $ 3.59 Fully Diluted Earnings Per Share 3.88 3.43 Dividends Declared .81 .75 Book Value-End of Period 36.07 31.37 Averages (in thousands) Total Assets $465,287 $409,684 Total Earnings Assets 430,585 380,775 Investment Securities 128,556 131,831 Loans 294,220 243,166 Deposits 395,580 356,833 Stockholders' Equity 33,371 30,268 Common Stockholders' Equity 30,271 27,168 At Year-End (in thousands) Total Assets 472,494 451,158 Investment Securities 122,769 131,277 Loans 307,004 282,153 Deposits 396,879 389,568 Common Stockholders' Equity 32,209 27,500 Ratios Return on Average Assets .84% .84% Return on Average Common Equity 12.02 11.59 Tier 1 Capital to Risk-Based Assets 10.50 9.68 Total Capital to Risk-Based Assets 11.51 10.69 Leverage 6.24 5.63
Five-Year Financial Data (Dollars in thousands, except per share data) Income, Dividends and Capital:
1995 1994 1993 1992 1991 Interest income $ 33,465 $ 26,428 $ 25,510 $ 24,589 $ 22,125 Interest expense 16,725 11,918 11,935 12,839 12,877 Net interest income 16,740 14,510 13,575 11,750 9,248 Provision for loan losses 280 168 492 543 387 Net interest income after provision for loan losses 16,460 14,342 13,083 11,207 8,861 Other income 4,009 3,805 3,928 3,580 2,866 Other expenses 14,715 13,263 12,713 10,823 9,152 Income before income taxes and cumulative effect of change in accounting principle 5,754 4,884 4,298 3,964 2,575 Income taxes 1,830 1,450 1,150 1,100 563 Net income before cumulative effect of change in accounting principle 3,924 3,434 3,148 2,864 2,012 Cumulative effect of change in accounting principle - - 155 - - Net income $ 3,924 $ 3,434 $ 3,303 $ 2,864 $ 2,012 Dividends to common $ 722 $ 658 $ 658 $ 658 $ 526 stockholders Dividends to preferred 286 286 286 143 - stockholders Stockholders' equity 35,309 30,600 30,184 26,850 21,687 Per Common Share Statistics: Weighted average number of common shares outstanding 887,370 876,769 876,769 876,769 876,769 Primary earnings per common share before cumulative effect of change in accounting principle $ 4.10 $ 3.59 $ 3.26 $ 3.10 $ 2.29 Primary earnings per common 4.10 3.59 3.44 3.10 2.29 share Fully diluted earnings per common share before cumulative effect of change in accounting principle 3.88 3.43 3.14 3.05 2.29 Fully diluted earnings per 3.88 3.43 3.30 3.05 2.29 common share Dividends per common share .81 .75 .75 .75 .60 Book value per common share 36.07 31.37 30.89 27.09 24.74 Selected Balance Sheet Data: Assets Cash and cash equivalents $ 23,295 $ 17,713 $ 21,417 $ 15,983 $ 11,304 Interest bearing deposits 99 99 2,875 3,860 3,959 Investment securities 122,769 131,277 135,268 145,476 109,088 Net loans 304,190 279,545 221,109 212,287 131,728 Other assets 22,141 22,524 16,940 17,521 10,474 Total assets $472,494 $451,158 $397,609 $395,127 $266,553 Liabilities and Stockholders' Equity Deposits $396,879 $389,568 $349,058 $349,605 $229,009 Other borrowings 28,515 19,590 9,630 10,560 10,080 Long-term debt 7,200 7,700 5,000 5,500 3,400 Other liabilities 4,591 3,700 3,737 2,612 2,377 Total liabilities 437,185 420,558 367,425 368,277 244,866 Stockholders' equity 35,309 30,600 30,184 26,850 21,687 Total liabilities and stockholders' equity $472,494 $451,158 $397,609 $395,127 $266,553
Consolidated Balance Sheets December 31, 1995 and 1994
(In thousands, except share data) 1995 1994 Assets Cash and due from banks (note 3): Noninterest bearing $ 17,536 $ 17,631 Interest bearing 784 82 Excess funds sold 4,975 - Cash and cash equivalents 23,295 17,713 Interest bearing deposits with financial institutions 99 99 Investment securities available-for-sale, at fair value (note 4) 119,388 68,973 Investment securities held-to-maturity, at amortized cost (estimated fair value of $ 3,409 and $59,836 at December 31, 1995 and 1994) (note 4) 3,381 62,304 Loans (note 5) 307,004 282,153 Less allowance for loan losses (note 6) 2,814 2,608 Net loans 304,190 279,545 Premises and equipment, net (note 7) 9,487 9,336 Accrued interest receivable 4,397 3,929 Intangible assets (notes 2 and 8) 6,019 6,627 Other assets (note 14) 2,238 2,632 Total assets $472,494 $451,158 Liabilities and Stockholders' Equity Deposits: Noninterest bearing $ 51,017 $ 45,159 Interest bearing (note 9) 345,862 344,409 Total deposits 396,879 389,568 Accrued interest payable 1,580 1,014 Other borrowings (notes 4 and 10) 28,515 19,590 Long-term debt (note 11) 7,200 7,700 Other liabilities (note 14) 3,011 2,686 Total liabilities 437,185 420,558 Stockholders' Equity Series A convertible preferred stock; no par value; authorized 1,000,000 shares; issued 620 shares with stated value of $5,000 per share 3,100 3,100 Common stock, $4 par value; authorized 2,000,000 shares; issued 894,991 shares in 1995 and 876,769 shares in 1994 3,580 3,515 Additional paid-in-capital 3,969 3,531 Retained earnings 24,493 21,577 Net unrealized gain(loss) on available-for- sale investment securities, net of tax (note 4) 191 (1,099) 35,333 30,624 Less treasury stock at cost, 2,000 shares 24 24 Total stockholders' equity 35,309 30,600 Total liabilities and stockholders' equity $472,494 $451,158 See accompanying notes to consolidated financial statements.
Consolidated Statement of Income For the years ended December 31, 1995, 1994 and 1993
(In thousands, except per share data) 1995 1994 1993 Interest income: Interest and fees on loans (note 5) $25,214 $19,576 $17,970 Interest on investment securities: Taxable 7,068 5,772 6,290 Exempt from federal income tax 733 851 888 Interest on excess funds sold 356 178 239 Interest on deposits with financial institutions 94 51 123 Total interest income 33,465 26,428 25,510 Interest expense: Interest on deposits (note 9) 14,888 11,071 11,336 Interest on other borrowings (note 10) 1,266 471 262 Interest on long-term debt (note 11) 571 376 337 Total interest expense 16,725 11,918 11,935 Net interest income 16,740 14,510 13,575 Provision for loan losses (note 6) 280 168 492 Net interest income after provision for loan 16,460 14,342 13,083 losses Other income: Trust revenues 1,118 1,118 1,119 Brokerage revenues 183 349 92 Service charges 1,574 1,456 1,345 Securities gains(losses), net (note 4) - (4) 19 Mortgage banking income 273 158 517 Other 861 728 836 Total other income 4,009 3,805 3,928 Other expense: Salaries and employee benefits (note 13) 7,484 6,964 6,517 Net occupancy expense 1,021 937 900 Equipment rentals, depreciation and maintenance 1,277 1,032 1,017 Federal deposit insurance premiums 590 802 729 Amortization of intangible assets (note 8) 608 358 348 Other 3,735 3,170 3,202 Total other expense 14,715 13,263 12,713 Income before income taxes and cumulative effect of change in accounting principle 5,754 4,884 4,298 Income taxes (note 14) 1,830 1,450 1,150 Net income before cumulative effect of change in accounting principle 3,924 3,434 3,148 Cumulative effect of change in accounting for income taxes (note 14) - - 155 Net income $ 3,924 $ 3,434 $ 3,303 Per common share data: Primary earnings per share before cumulative effect of change in accounting principle $ 4.10 $ 3.59 $ 3.26 Primary earnings per share 4.10 3.59 3.44 Fully diluted earnings per share before cumulative effect of change in accounting principle 3.88 3.43 3.14 Fully diluted earnings per share 3.88 3.43 3.30 See accompanying notes to consolidated financial statements
Consolidated Statements of Changes in Stockholders' Equity (In thousands, except for per share data)
Net Unrealized Gain(Loss) on Available- Additional for-sale Preferred Common Paid-In- Retained Investment Treasury Stock Stock Capital Earnings Securities Stock Total December 31, 1992 $ 3,100 $3,515 $3,531 $16,728 $ - $ (24) $26,850 Net income - - - 3,303 - - 3,303 Cash dividends on preferred stock ($462.50 per share) - - - (286) - - (286) Cash dividends on common stock ($.75 per share) - - - (658) - - (658) Implementation of change in accounting for marketable debt and equity securities, net of tax - - - - 975 - 975 December 31, 1993 3,100 3,515 3,531 19,087 975 (24) 30,184 Net income - - - 3,434 - - 3,434 Cash dividends on preferred stock ($462.50 per share) - - - (286) - - (286) Cash dividends on common stock ($.75 per share) - - - (658) - - (658) Change in net unrealized (loss) on available-for- sale investment securities, net of tax - - - - (2,074) - (2,074) December 31, 1994 3,100 3,515 3,531 21,577 (1,099) (24) 30,600 Net income - - - 3,924 - - 3,924 Cash dividends on preferred stock ($462.50 per share) - - - (286) - - (286) Cash dividends on common stock ($.81 per share) - - - (722) - - (722) Issuance of 16,222 common shares pursuant to the Dividend Re- investment Plan - 65 438 - - - 503 Change in net unrealized gain on available- for-sale investment securities, net of tax - - - - 1,290 - 1,290 December 31, 1995 $ 3,100 $3,580 $ 3,969 $24,493 $ 191 $ (24) $35,309 See accompanying note to consolidated financial statements.
Consolidated Statements of Cash Flows
(In thousands) 1995 1994 1993 Cash flows from operating activities: Net income $ 3,924 $ 3,434 $ 3,303 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 280 168 492 Depreciation, amortization and accretion, 1,231 1,503 2,440 net Loss (gain) on sales of securities, net - 4 (19) Gain on sale of loans held for sale, net (126) (22) (418) Deferred income taxes (110) 158 (325) (Increase) decrease in accrued interest (468) 158 1,055 receivable Increase (decrease) in accrued interest 566 170 (223) payable Origination of mortgage loans held for sale (10,592) (4,307) (19,226) Proceeds from sale of mortgage loans held 11,055 5,021 19,732 for sale (Increase) decrease in other assets 394 365 (1,256) Increase (decrease) in other liabilities (290) (946) 1,213 Net cash provided by operating activities 5,864 5,706 6,768 Cash flows from investing activities: Purchases of premises and equipment (891) (455) (338) Net increase in loans (25,262) (29,438) (9,402) Proceeds from sales of: Investment securities - - 6,018 Securities available-for-sale 487 21,232 - Proceeds from maturities of: Investment securities - - 79,633 Securities available-for-sale 19,905 4,274 - Securities held-to-maturity 12,549 31,631 - Purchases of: Investment securities - - (75,266) Securities available-for-sale (16,200) (22,636) - Securities held-to-maturity (6,161) (14,975) - Net decrease in interest bearing deposits - 2,776 985 Purchase of financial organization, net of - (6,706) - cash received Net cash provided by (used in) investing (15,573) (14,297) 1,630 activities Cash flows from financing activities: Net increase (decrease) in deposits 7,311 (6,829) (547) Increase (decrease) in other borrowings 8,925 9,960 (930) Repayment of long-term debt (500) (300) (500) Proceeds from long-term debt - 3,000 - Dividends paid on preferred stock (58) (286) (286) Dividend paid on common stock (387) (658) (701) Net cash provided by (used in) financing 15,291 4,887 (2,964) activities Increase (decrease) in cash and cash 5,582 (3,704) 5,434 equivalents Cash and cash equivalents at beginning of 17,713 21,417 15,983 year Cash and cash equivalents at end of year $23,295 $17,713 $21,417 Additional disclosures of cash flow information Cash paid during the year for: Interest paid $17,291 $12,306 $12,158 Income taxes 1,900 1,400 1,410 Loans transfered to real estate owned 182 264 610 See accompanying notes to consolidated financial statements
Notes To Consolidated Financial Statements December 31, 1995, 1994 and 1993 Note 1 - Summary of Significant Accounting Policies Basis of Accounting and Consolidation The accompanying consolidated financial statements include the accounts of First Mid-Illinois Bancshares, Inc. (Company) and its wholly owned subsidiaries: First Mid-Illinois Bank & Trust, N.A. (Bank); Heartland Savings Bank (Heartland); and Mid-Illinois Data Services, Inc. (MIDS). All significant intercompany balances and transactions have been eliminated. Certain amounts in the 1994 and 1993 consolidated financial statements have been reclassified to conform with the 1995 presentation. The accounting and reporting policies of the Company conform to generally accepted accounting principles and to general practices within the banking industry. The following is a description of the more significant of these policies. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Cash Equivalents For purposes of reporting cash flows, cash equivalents include amounts due from banks and excess funds sold. Generally, excess funds are sold for one-day periods. Investment Securities At December 31, 1993, the Company adopted the Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (FAS 115). The Company classifies its debt securities into one or more of three categories: held-to-maturity, available-for-sale, or trading. Held-to-maturity securities are those which management has the positive intent and ability to hold to maturity. Available-for-sale securities are those securities which management may sell prior to maturity as a result of changes in interest rates, prepayment factors, or as part of the Company's overall asset and liability strategy. Trading securities are those securities bought and held principally for the purpose of selling them in the near term. The Company has no securities designated as trading. Held-to-maturity securities are recorded at cost adjusted for amortization of premium and accretion of discount to the earlier of the call date or maturity date using the interest method. Available-for-sale securities are recorded at fair value. Unrealized holding gains and losses, net of the related income tax effect, are excluded from income and reported as a separate component of stockholders' equity. If a decrease in the market value of a security is expected to be other than temporary, then the security is written down to its fair value through a charge to income. Realized gains and losses on the sale of investment securities are recorded by using the specific identification method. Loans Loans are stated at the principal amount outstanding, net of the allowance for loan losses. Interest on substantially all loans is credited to income based on the principal amount outstanding. The Company's policy is to discontinue the accrual of interest income on any loan for which principal or interest is 90 days past due or when, in the opinion of management, there is reasonable doubt as to the timely collectibility of interest or principal. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collectibility of interest or principal. Allowance for Loan Losses The allowance for loan losses is maintained at a level deemed appropriate by management to provide for known and inherent risks 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 which are deemed to be uncollectible are charged to the allowance. The provision for loan losses and recoveries are credited to the allowance. The Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors for Impairment of a Loan", as amended by SFAS No. 118, "Accounting by Creditors for Impairment of a Loan - Income Recognition and Disclosure", on January 1, 1995. Management, considering current information and events regarding the borrower's 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. Interest income on impaired loans is recorded when cash is received and only if principal is considered to be fully collectible. Premises and Equipment Premises and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization is determined principally by the straight-line method over the estimated useful lives of the assets. Intangible Assets Intangible assets generally arise from business combinations which the Company accounted for as purchases. Such assets consist of the excess of the purchase price over the fair market value of net assets acquired, specific amounts assigned to core deposit relationships of acquired businesses and purchased mortgage servicing rights. Intangible assets are amortized by the straight-line and accelerated methods over various periods of up to 15 years. The Company assesses the recoverability of its intangible assets through reviews of various economic factors on a periodic basis in determining whether impairment, if any, exists. Preferred Stock In connection with the Company's acquisition of Heartland in 1992, $3.1 million of Series A perpetual, cumulative, non-voting, convertible, preferred stock was issued to directors and certain senior officers of the Company pursuant to a private placement. 620 shares of the preferred stock were sold at a stated value of $5,000 per share with such shares bearing a dividend rate of 9.25%. The preferred stock may be converted at any time, at the option of the preferred stockholder, into common shares at the conversion ratio of 202.1 shares of common stock for each share of preferred. The Company also has the right, any time after July 1, 1998, and upon giving at least thirty days prior notice, to redeem all (but not less than all) of the preferred stock at a cash value of $5,000 per share plus any accrued but unpaid dividends. The Company also has the right at any time after July 1, 1998, and upon giving at least thirty days prior notice, to require the conversion of all (but not less than all) of the preferred stock into common stock at the conversion ratio. Mortgage Banking Activities Heartland originates residential mortgage loans both for its portfolio and for sale into the secondary market, generally with servicing rights retained. Included in mortgage banking income are gains or losses on the sale of loans and servicing fee income. Origination costs for loans sold are expensed as incurred. Loans that are originated and held for sale are carried at the lower of aggregate amortized cost or estimated market value. Income Taxes The Company and its subsidiaries file a consolidated Federal income tax return with each organization computing its taxes on a separate company basis. Amounts provided for income tax expense are based on income reported for financial statement purposes rather than amounts currently payable under tax laws. Effective January 1, 1993 the Company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (FAS 109) and, accordingly, has reported the cumulative effect of that accounting change in the 1993 consolidated statement of income. Deferred tax assets and liabilities are recognized for future tax consequences attributable to the temporary differences existing between the financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as operating loss and tax credit carryforwards. To the extent that current available evidence about the future raises doubt about the realization of a deferred tax asset, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as an increase or decrease in income tax expense in the period such change is enacted. Trust Department Assets Property held for customers in fiduciary or agency capacities is not included in the accompanying consolidated balance sheets since such items are not assets of the Company or its subsidiaries. Earnings Per Share Income for primary and fully diluted earnings per common share is adjusted for dividends attributable to preferred stock. Primary earnings per common share is based on the weighted average number of common shares outstanding. Fully diluted earnings per share data is computed by using the weighted average number of common shares outstanding, increased by the assumed conversion of the convertible preferred stock. The weighted average number of common equivalent shares used in calculating earnings per share were as follows:
1995 1994 1993 Primary 887,370 876,769 876,769 Fully diluted 1,012,672 1,002,071 1,002,071
Note 2 - Acquisitions On October 4, 1994, the Bank acquired all of the outstanding stock of Downstate Bancshares, Inc. (DBI) which owned 100% of the stock of Downstate National Bank (DNB). DNB had locations in Altamont and Effingham, Illinois. Immediately following the acquisition, DBI was dissolved and DNB was merged with and into the Bank with the Bank being the surviving entity. DBI was purchased for cash of $8,570,0000, with $5,570,000 of that amount being internally generated funds and $3,000,000 resulting from additional long-term borrowings of the Company. The acquisition of DBI by the Bank was accounted for using the purchase method of accounting whereby the assets and liabilities of DBI were recorded at their fair values as of the acquisition date and the operating results of DBI operations have been combined with those of the Company since October 4, 1994. A summary of the fair values of those assets and liabilities at October 4, 1994, follows (in thousands):
Fair values of assets acquired: 10/04/94 Cash and cash equivalents $ 1,864 Investment securities 18,019 Loans, net of allowance 29,859 Premises and equipment 1,368 Other assets 892 Total 52,002 Fair values of liabilities assumed: Deposits 47,338 Other liabilities 583 Total 47,921 Fair value of net assets acquired 4,081 Purchase price of DBI stock 8,570 Goodwill (excess of purchase price over fair value of net assets acquired $ 4,489
Note 3 - Cash and Due from Banks Aggregate cash and due from bank balances of $5,881,000 and $5,280,000 at December 31, 1995 and 1994, respectively, were maintained in satisfaction of statutory reserve requirements of the Federal Reserve Bank. Note 4 - Investment Securities The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at December 31, 1995 and 1994 were as follows (in thousands):
Gross Gross Estimated Amortized Unrealized Unrealized Fair 1995 Cost Gains Losses Value Available-for-sale: U.S. Treasury securities and obligations of U.S. Government corporations and agencies $ 72,599 $ 481 $ (683) $ 72,397 Obligations of states and political subdivisions 8,628 440 (7) 9,061 Mortgage-backed securities 35,766 222 (163) 35,825 Other securities 2,105 - - 2,105 Total available-for-sale $119,098 $1,143 $ (853) $119,388 Held-to-maturity: Obligations of states and political subdivisions $ 3,381 $ 43 $ (15) $ 3,409
Gross Gross Estimated Amortized Unrealized Unrealized Fair 1994 Cost Gains Losses Value Available-for-sale: U.S. Treasury securities and obligations of U.S. Government corporations and agencies $ 34,358 $ - $ (970) $ 33,388 Obligations of states and political subdivisions 9,641 240 (160) 9,721 Mortgage-backed securities 24,751 29 (804) 23,976 Other securities 1,888 - - 1,888 Total available-for-sale $ 70,638 $ 269 $(1,934) $ 68,973 Held-to-maturity: U.S. Treasury securities and obligations of U.S. Government corporations and agencies $ 42,312 $ 6 $(1,760) $ 40,558 Obligations of states and political subdivisions 4,023 5 (101) 3,927 Mortgage-backed securities 15,969 1 (619) 15,351 Total held-to-maturity $ 62,304 $ 12 $(2,480) $ 59,836
Other securities include stock in the Federal Home Loan Bank totaling $1,699,000 and $1,572,000 at December 31, 1995 and 1994, respectively. Proceeds from sales of investment securities and realized gains and losses were as follows during the three years ended December 31, 1995, 1994 and 1993 (in thousands):
1995 1994 1993 Proceeds from sales $ 487 $21,232 $ 6,018 Gains - 157 61 Losses - 161 42
Maturities of investment securities were as follows at December 31, 1995 (in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Amortized Estimated Cost Fair Value Available-for-sale: Due in one year or less $ 18,386 $ 18,401 Due after one-five years 52,089 52,373 Due after five-ten years 10,752 10,684 Due after ten years 2,105 2,105 83,332 83,563 Mortgage-backed securities 35,766 35,825 Total available-for-sale $119,098 $119,388 Held-to-maturity: Due in one year or less $ 582 $ 584 Due after one-five years 1,884 1,908 Due after five-ten years 915 917 Total held-to-maturity $ 3,381 $ 3,409 Total $122,479 $122,797
Investment securities carried at approximately $88,030,000 and $88,474,000 at December 31, 1995 and 1994 respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law. In December 1995, the Company reclassified certain investment securities between held-to-maturity and available-for-sale in accordance with guidelines issued by the Financial Accounting Standards Board (FASB) permitting a one- time change in classification. Based on discussion and analysis, the Company decided that only local, non-rated municipal securities would be classified as held-to-maturity and the remaining portfolio would be designated as available- for-sale. The book value and gross unrealized loss of securities transferred from held-to-maturity to available-for-sale amounted to $52,536,000 and $445,000, respectively. Note 5 - Loans A summary of loans at December 31, 1995 and 1994 follows (in thousands):
1995 1994 Commercial, financial and agricultural $ 65,916 $ 61,520 Real estate-mortgage 211,147 195,524 Installment 27,996 22,294 Other 1,945 2,815 Total $307,004 $282,153
Certain officers, directors and principal stockholders of the Company and its subsidiaries, their immediate families or their affiliated companies have loans with one or more of the subsidiaries. These loans are made in the ordinary course of business on substantially the same terms, including interest and collateral, as those prevailing for comparable transactions with others and do not involve more than the normal risk of collectibility. Loans to related parties which exceeded $60,000 in the aggregate totaled $10,060,000 at December 31, 1995 and $9,651,000 at December 31, 1994. Activity during 1995 was as follows (in thousands):
Balance at December 31, 1994 $ 9,651 New loans 4,915 Loan repayments (4,506) Balance at December 31, 1995 $10,060
The aggregate principal balances of nonaccrual, past due and renegotiated loans were as follows at December 31, 1995 and 1994 (in thousands):
1995 1994 Nonaccrual loans $636 $393 Loans past due ninety days or more and still accruing 554 509 Renegotiated loans which are performing in accordance with revised terms 604 772
The interest income which would have been recorded under the original terms of such nonaccrual or renegotiated loans was $143,000, $100,000 and $85,000 in 1995, 1994 and 1993, respectively. The amount of interest income which was recorded amounted to $56,000 in 1995, $37,000 in 1994 and $15,000 in 1993. 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. Impaired loans are measured by the Company at the present value of expected future cash flows or, alternatively if the loan is collateral dependant, at the fair value of the collateral. Known losses of principal on these loans have been charged off. Interest income on nonaccrual loans is recognized only at the time cash is received. Interest income on restructured loans is accrued according to the most recently agreed upon contractual terms. At December 31, 1995, the recorded investment of impaired loans totaled $1,240,000. There was no related allowance for these impaired loans at December 31, 1995. The average recorded investment in impaired loans during the year was $1,076,000. Total interest income which would have been recorded under the original terms of the impaired loans was $143,000. Total interest income recorded on a cash basis was $56,000. The Bank and Heartland enter into financial instruments with off-balance sheet risk to meet the financing needs of their customers. These financial instruments include commitments to extend credit in accordance with line of credit agreements and/or mortgage commitments and standby letters of credit. Standby letters of credit are conditional commitments issued by a bank to guarantee the performance of a customer to a third-party. The subsidiaries evaluate each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the subsidiaries upon an extension of credit, is based on management's evaluation of the credit worthiness of the borrower. Collateral varies but generally includes assets such as property, equipment and receivables. At December 31, 1995 and 1994, respectively, the Company had $29,070,000 and $24,333,000 of outstanding commitments to extend credit and $1,242,000 and $1,025,000 of standby letters of credit. Management does not believe that any significant losses will be incurred in connection with such instruments. Most of the Company's business activities are with customers located within east central Illinois. At December 31, 1995 and 1994, the Company's loan portfolio included $39,720,000 and $38,730,000, respectively, of loans to borrowers directly related to the agricultural industry. Mortgage loans serviced for others by Heartland are not included in the accompanying consolidated balance sheets. The unpaid principal balances of these loans at December 31, 1995 and 1994 was approximately $43,622,000 and $39,193,000, respectively. Note 6 - Allowance for Loan Losses Changes in the allowance for loan losses were as follows during the three year period ended December 31, 1995 (in thousands):
1995 1994 1993 Balance, beginning of year $2,608 $2,110 $1,906 Allowance of purchased subsidiary at date of acquisition - 343 - Provision for loan losses 280 168 492 Recoveries 112 164 179 Charge offs (186) (177) (467) Balance, end of year $2,814 $2,608 $2,110
Note 7 - Premises and Equipment, Net Premises and equipment at December 31, 1995 and 1994 consisted of (in thousands):
1995 1994 Land $ 2,489 $ 2,399 Buildings and improvements 7,679 7,741 Furniture and equipment 4,881 4,450 Leasehold improvements 340 190 Construction in progress 78 59 15,467 14,839 Accumulated depreciation and amortization 5,980 5,503 Total $ 9,487 $ 9,336
Depreciation expense was $740,000, $672,000 and $720,000 for the years ended December 31, 1995, 1994 and 1993, respectively. Note 8 - Intangible Assets Intangible assets, net of accumulated amortization, at December 31, 1995 and 1994 consisted of (in thousands):
1995 1994 Excess of cost over fair market value of acquired subsidiaries $ 4,742 $ 5,095 Core deposit premium of acquired subsidiaries 1,277 1,472 Purchased mortgage servicing rights - 60 Total $ 6,019 $ 6,627
Amortization expense was $608,000, $358,000 and $348,000 for the years ended December 31, 1995, 1994 and 1993, respectively. Note 9 - Deposits Total interest expense on deposits for the years ended December 31, 1995, 1994 and 1993 was as follows (in thousands):
1995 1994 1993 Interest-bearing demand $ 2,823 $ 2,764 $ 2,893 Savings 1,107 1,009 1,033 Time 10,958 7,298 7,410 Total $14,888 $11,071 $11,336
As of December 31, 1995, 1994 and 1993, the aggregate amount of time deposits in denominations of more than $100,000 and the total interest expense on such deposits was as follows (in thousands):
1995 1994 1993 Outstanding $35,002 $26,451 $19,473 Interest expense for the year 1,963 963 743
Note 10 - Other Borrowings As of December 31, 1995, 1994 and 1993, other borrowings consisted of (in thousands):
1995 1994 1993 Securities sold under agreements to repurchase $16,815 $15,590 $ 9,630 Federal Home Loan Bank advances: Overnight advances 2,200 3,500 - Fixed term advances due in one year or less 6,000 - - Fixed term advances due after one year 3,500 - - Federal funds purchased - 500 - $28,515 $19,590 $ 9,630
Information concerning such borrowings for the years ended December 31, 1995, 1994 and 1993 was as follows (dollars in thousands):
1995 1994 1993 Maximum amount of borrowings outstanding at any month end $36,770 $23,460 $11,390 Average amount outstanding 24,114 13,103 8,843 Weighted average interest rate at year end 5.11% 3.55% 2.91% Weighted average interest rate during the year 5.24% 3.59% 2.96%
The Bank and Heartland have collateral pledge agreements whereby they have agreed to keep on hand at all time, free of all other pledges, liens, and encumbrances, whole first mortgages on improved residential property with unpaid principal balances aggregating no less than 167% of the outstanding advances from the Federal Home Loan Bank. Note 11 - Long-term Debt A summary of long-term debt at December 31, 1995 and 1994 was as follows (in thousands):
1995 1994 Floating rate loan at 1.5% over the Federal funds rate. Interest due quarterly. Principal payments due quarterly in various amounts beginning September 30, 1995. The debt matures September 30, 1999. Effective interest rate of 7.03% at December 31, 1995. $7,200 $7,700
The loan is secured by all of the common stock of the Bank and of Heartland. The borrowing agreement contains requirements for the Company and the subsidiaries to maintain various operating and capital ratios and also contains requirements for prior lender approval for certain sales of assets, merger activity, the acquisition or issuance of debt and the acquisition of treasury stock. The company and the subsidiaries were in compliance with the existing covenants at December 31, 1995. The scheduled principal payments on the outstanding long-term debt are as follows (in thousands):
1996 $ 1,000 1997 1,125 1998 1,500 1999 3,575
Note 12 - Disclosure of Fair Values of Financial Instruments Statement of Financial Accounting Standards No. 107 (FAS 107), "Disclosures about Fair Value of Financial Instruments", requires the disclosure of the estimated fair value of financial instrument assets and liabilities. For the Company, as for most financial institutions, most of the assets and liabilities are considered financial instruments as defined in FAS 107. However, many of the Company's financial instruments lack an available trading market as characterized by a willing buyer and seller engaging in an exchange transaction. Additionally, the Company's general practice and intent is to hold its financial instruments until maturity and not to engage in trading or sales activity. Accordingly, significant assumptions and estimations as well as present value calculations were used by the Company for purposes of the FAS 107 disclosure. Future changes in these assumptions or methodologies may have a material effect on estimated fair values. Estimated fair values have been determined by the Company using the best available information and an estimation methodology suitable for each category of financial instrument. The estimation methodology used, the estimated fair values and the carrying amount at December 31, 1995 and 1994 were as follows (in thousands): Financial instruments for which an active secondary market exists have been valued using quoted available market prices.
1995 1994 Fair Carrying Fair Carrying Value Amount Value Amount Cash and cash equivalents $ 23,295 $ 23,295 $ 17,713 $ 17,713 Interest bearing deposits with financial institutions 99 99 99 99 Investments available-for-sale 119,388 119,388 68,973 68,973 Investments held-to-maturity 3,409 3,381 59,836 62,304
Financial instrument liabilities with stated maturities and other borrowings have been valued at present value, using a discount rate approximating current market rates for similar assets and liabilities.
1995 1994 Fair Carrying Fair Carrying Value Amount Value Amount Deposits with stated maturities $206,062 $204,844 $190,490 $190,453 Other borrowings 28,556 28,515 19,590 19,590
Financial instrument liabilities without stated maturities and floating rate long-term debt have estimated fair values equal to both the amount payable on demand and the carrying amount.
1995 1994 Fair Carrying Fair Carrying Value Amount Value Amount Deposits with no stated maturity $192,035 $192,035 $199,115 $199,115 Floating rate long-term debt 7,200 7,200 7,700 7,700
For loans with floating interest rates, it is assumed that the estimated fair values generally approximate the carrying amount balances. Fixed rate 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.
1995 1994 Fair Carrying Fair Carrying Value Amount Value Amount Net loan portfolio $304,038 $304,190 $274,231 $279,545
The notational amount of off-balance sheet items such as unfunded loan commitments and stand-by letters of credit generally approximate their estimated fair values. Note 13 - Retirement Plan The Company has a defined contribution retirement plan which provides for base contributions of 4% of compensation and a matching contribution by the Company of up to 50% of the first 4% of voluntary employee contributions. Employee contributions are limited to 15% of compensation. Prior to December 31, 1993, Heartland had a separate defined contribution retirement plan which provided for matching contributions of up to 6% of compensation. The total expense for the two plans was $255,000 in 1993. Effective January 1, 1994, Heartland's plan was merged with the Company's plan and substantially all employees of the Company, including the employees of Heartland, are now covered by the Company's plan and the total expense for the plan amounted to $285,000 in 1995 and $270,000 in 1994. Note 14 - Income Taxes The Company adopted the Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" (FAS 109) as of January 1, 1993. The cumulative effect of this change in accounting method of $155,000 was reported in the consolidated statements of income for the year ended December 31, 1993. The components of Federal income taxes (benefit) for the three years ended December 31, 1995, 1994 and 1993 were as follows (in thousands):
1995 1994 1993 Current $1,940 $1,292 $1,475 Deferred (110) 158 (325) Total $1,830 $1,450 $1,150
There were no state income taxes for 1995, 1994 or 1993. Recorded income tax expense differs from the expected tax expense (computed by applying the applicable statutory U.S. Federal tax rate to income before income taxes). The principle reasons for this difference are as follows (in thousands):
1995 1994 1993 Expected income taxes $1,956 $1,661 $1,461 Effects of: Tax-exempt income (276) (317) (338) Nondeductible interest expense 29 28 27 Goodwill amortization 120 35 - Other items, net 1 43 - Total $1,830 $1,450 $1,150
The tax effects of the temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 1995 and 1994 are presented below (in thousands):
1995 1994 Deferred tax assets: Allowance for loan losses $ 479 $ 435 Employee benefits 166 112 Available-for-sale investment securities - 566 Other, net 193 136 Total gross deferred tax assets 838 1,249 Less valuation allowance (149) (172) Net deferred tax assets $ 689 $1,077 Deferred tax liabilities: Depreciation $ 415 $ 337 Available-for-sale investment securities 99 - Purchase accounting 160 203 Other, net 70 38 Total gross deferred tax liabilities $ 744 $ 578 Net deferred tax assets (liabilities) $ (55) $ 499
Deferred tax assets and deferred tax liabilities are recorded in other assets and other liabilities, respectively, on the consolidated balance sheets. Note 15 - Dividend Restrictions Banking regulations impose restrictions on the ability of the Banking Subsidiaries to pay dividends to the Company. At December 31, 1995, regulatory approval would have been required for aggregate dividends from the Bank Subsidiaries to the Company in excess of approximately $5.7 million. The amount of such dividends that could be paid is further restricted by the limitations of sound and prudent banking principles. Note 16 - Commitments and Contingent Liabilities In the normal course of business, there are various outstanding commitments and contingent liabilities such as guarantees, commitments to extend credit, claims and legal actions which are not reflected in the accompanying consolidated financial statements. In the opinion of management, no significant losses are anticipated as a result of these matters. Note 17 - First Mid-Illinois Bancshares, Inc. (Parent Company) Presented below are condensed balance sheets, statements of income and cash flows for the Parent Company (in thousands):
Balance Sheets: December 31, 1995 1994 Assets Cash $ 724 $ 914 Premises and equipment, net 68 55 Investment in subsidiaries 42,045 37,361 Other assets 927 834 Total assets $43,764 $39,164 Liabilities and stockholders' equity Liabilities: Dividends payable 420 359 Long-term debt 7,200 7,700 Other liabilities 835 505 Total liabilities 8,455 8,564 Stockholders' equity 35,309 30,600 Total liabilities and stockholders' equity $43,764 $39,164
Statements of Income:
Years ended December 31, 1995 1994 1993 Income: Dividends from subsidiaries $ 1,369 $1,825 $ 2,509 Other income 25 62 264 1,394 1,887 2,773 Operating expenses 1,266 1,127 1,275 Income before income taxes and equity in distributed earnings of subsidiaries and cumulative effect of change in accounting 128 760 1,498 principle Income tax benefit 402 342 290 Income before equity in undistributed earnings of subsidiaries and cumulative effect of change in accounting principle 530 1,102 1,788 Equity in undistributed earnings of subsidiaires 3,394 2,332 1,483 Net income before cumulative effect of change in accounting 3,924 3,434 3,271 principle Cumulative effect of change in accounting for income taxes - - 32 Net income $ 3,924 $ 3,434 $ 3,303
Statement of Cash flows:
Years ended December 31, 1995 1994 1993 Cash flows from operating activities: Net income $ 3,924 $ 3,434 $ 3,303 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and accretion, net 5 33 33 Equity in undistributed earnings of subsidiaries (3,394) (2,332) (1,483) (Increase) decrease in other assets (93) 305 (519) Increase (decrease) in other liabilities 331 2 253 Net cash provided by operating activities 773 1,442 1,587 Cash flows from investing activities: Investment in subsidiaires - (3,000) - (Purchases) sales of equipment (18) 27 (33) Net cash used in investment activities (18) (2,973) (33) Cash flows from financing activities: Repayment of long-term debt (500) (300) (500) Proceeds from long-term borrowings - 3,000 - Dividends paid on preferred stock (58) (286) (286) Dividends paid on common stock (387) (658) (701) Net cash provided by (used in) financing activities (945) 1,756 (1,487) Increase (decrease) in cash (190) 225 67 Cash at beginning of year 914 689 622 Cash at end of year $ 724 $ 914 $ 689
Statement of Responsibility for Financial Data Management is responsible for the integrity of all the financial data included in this Annual Report. The financial statements and related notes are prepared in accordance with generally accepted accounting principles, which in the judgement of management are appropriate in the circumstances. Financial information elsewhere in this Report is consistent with that in the financial statements. Management maintains a system of internal accounting control, including an internal audit program, which provides reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition, transactions are properly authorized and accounting records are reliable for the preparation of financial statements. The foundation of the system of internal accounting control rests upon careful selection and training of personnel, segregation of responsibilities and application of formal policies and procedures that are consistent with the highest standards of business conduct. The system of internal accounting control is being continuously modified and improved in response to changes in business conditions and operations. The Board of Directors has an Audit Committee comprised of six outside directors. The Committee meets periodically with the independent auditors, the internal auditors and management to ensure that the system of internal accounting control is being properly administered and that financial data is being properly reported. The Committee reviews the scope and timing of both the internal and external audits, including recommendations made with respect to the system of internal accounting control by the independent auditors. The consolidated financial statements, as identified in the accompanying Independent Auditors' Report, have been audited by KPMG Peat Marwick LLP, independent certified public accountants. The audits were conducted in accordance with generally accepted auditing standards, which included tests of the accounting records and other auditing procedures considered necessary to formulate an opinion as to the fairness, in all material respects, of the consolidated financial statements. Daniel E. Marvin, Jr. William S. Rowland Chairman and Chief Chief Financial Executive Officer Officer Independent Auditors' Report The Board of Directors First Mid-Illinois Bancshares, Inc. Mattoon, Illinois: We have audited the accompanying consolidated balance sheets of First Mid- Illinois Bancshares, Inc. and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of income, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1995. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of First Mid- Illinois Bancshares, Inc. and subsidiaries as of December 31, 1995 and 1994, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1995 in conformity with generally accepted accounting principles. As discussed in notes 1 and 14 to the consolidated financial statements, the Company changed its method of accounting for income taxes on January 1, 1993, to adopt the provisions of the Financial Accounting Standards Board's (SFAS) No. 109, "Accounting for Income Taxes." KPMG Peat Marwick LLP Chicago, Illinois January 26, 1996 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following discussion provides additional insight into the financial condition and the operating results of the Company. The discussion should be read in conjunction with the consolidated financial statements and other selected data included elsewhere in the Annual Report. Overview of Operations In 1995, the Company reported net income in the amount of $3,924,000, a 14.3% increase over the $3,434,000 reported in 1994. Fully diluted earnings per share increased 13.1% to $3.88, compared to $3.43 in 1994. A summary of the significant factors which contributed to the earnings increase follows (in thousands):
Effect on Earnings, 1995 vs. 1994 Change in: Net interest income $ 2,230 Provision for loan losses (112) Other income including securities transactions 204 Other expenses (1,452) Income taxes (380) Increase in net income $ 490
When comparing 1995's results with those of 1994, it should be noted that the October 4, 1994 acquisition of Downstate Bancshares Inc. (Downstate) was accounted for as a purchase and accordingly, Downstate's operating results were consolidated with those of the Company for only three months in 1994. Since the Downstate acquisition increased the overall size of the Company by approximately $52 million (12%), the effects of this acquisition have an impact on all year-to-year financial comparisons. Net Interest Income Net interest income is the difference between interest and fees earned on earning assets and the interest paid on deposits and other interest-bearing liabilities. As illustrated in the following two tables, the Company's net interest income increased significantly during 1995 and its net interest margin (computed by dividing tax equivalent net interest income by average earning assets) increased slightly. Net interest income increased to $16,740,000 in 1995 from $14,510,000 in 1994 and $13,575,000 in 1993. The increase from 1994 to 1995 is primarily due to the growth in the Company's loan portfolio, including those loans resulting from the Downstate acquisition and improved yields on loans and investments. A summary of the factors which contributed to the $2,230,000 (15.4%) increase between 1995 and 1994 follows (in thousands):
Increase (Decrease) in Net Interest Income due to: Total Volume Rate Rate/Volume Interest earning assets: Interest bearing time deposits with financial institutions $ (41) $ (47) $ 71 $ (65) Due from banks-interest bearin 62 14 29 19 Excess funds sold 200 110 53 37 Investment securities 1,178 (178) 1,371 (15) Loans 5,638 4,110 1,263 265 7,037 4,009 2,787 241 Interest bearing liabilities: Deposits 3,817 1,325 2,134 358 Other borrowings 795 398 216 181 Long-term debt 195 139 41 15 4,807 1,862 2,391 554 $2,230 $2,147 $ 396 $ (313)
As seen below, net interest margin increased slightly to 3.98% from 3.93% in 1994 and 3.85% in 1993.
1995 1994 1993 Yield on interest earning assets 7.86% 7.06% 7.13% Rate on interest bearing liabilities 4.39% 3.53% 3.65% Net interest margin 3.98% 3.93% 3.85%
Interest Rate Sensitivity During much of 1995 interest rates continued the increase which began in 1994 following the decline in rates during 1993. The Company monitors its interest rate sensitivity position to maintain a balance between rate sensitive assets and rate sensitive liabilities. This balance serves to limit the adverse effects of changes in interest rates. The Company's asset/liability management committee oversees the interest rate sensitivity position and directs the overall allocation of funds. The following table presents the Company's interest rate sensitivity position at various intervals at December 31, 1995:
Number of Months Until Next Repricing Opportunity 0-1 1-3 3-6 6-12 12+ Interest earning assets: Deposits with other financial $ 784 $ - $ - $ - $ 99 institutions Excess funds sold 4,975 - - - - Taxable investment securities 46,928 15,007 7,785 10,792 30,354 Nontaxable investment securities 190 - 217 563 10,933 Loans 31,805 23,033 20,928 34,499 196,739 Total $ 84,682 $ 38,040 $ 28,930 $ 45,854 $ 238,125 Interest bearing liabilities: Savings and N.O.W. accounts 105,153 - - - - Money market accounts 35,865 - - - - Other time deposits 27,518 30,119 40,927 55,046 51,234 Other borrowings 18,515 3,000 500 3,000 3,500 Long-term debt 7,200 - - - - Total $ 194,251 $ 33,119 $ 41,427 $ 58,046 $ 54,734 Periodic GAP $(109,569) $ 4,921 $ (12,497) $ (12,192) $ 183,391 Cumulative GAP $(109,569) $(104,648) $(117,145) $(129,337) $ 54,054 GAP as a % of interest earning assets: Periodic (25.2%) 1.1% (2.9%) 2.8% 42.1% Cumulative (25.2%) (24.0%) (26.9%) (29.7%) 12.4%
Of the $24.9 million growth in the Company's loan portfolio during 1995, $15.6 million (63%) resulted from real estate loans. Because real estate loans generally have longer maturities than other loans, the overall maturity of the portfolio extended during 1995, as can be seen by the following tabulation:
1995 1994 % of loan portfolio which will not reprice during the next 12 months 64% 58%
During 1995, the maturity of the Company's deposit base shortened somewhat as illustrated below:
% of interest bearing deposits which will not reprice during the next 12 months 15% 17%
As a result of the changing characteristics of the Company's loan portfolio and deposit base and to maintain an overall level of interest rate risk commensurate with the Company's long term risk management strategy, management shortened the maturity/repricing characteristics of its investment portfolio. The effect of the strategy can be seen below:
1995 1994 % of investment portfolio repricing within the next 30 days 38% 32%
At December 31, 1995, the Company was liability sensitive on a cumulative basis through the twelve-month time horizon. Accordingly, future increases in interest rates, if any, could have an unfavorable effect on the Company's net interest margin. However, the Company's historical repricing of N.O.W. and savings accounts has not, and is not expected to change on a frequent basis and this would mitigate to some extent the negative effect of an upturn in rates. Interest rate sensitivity using a static GAP analysis basis is only one of several measurements of the impact of interest rate changes on net interest income used by the Company. Its actual usefulness in assessing the effect of changes in interest rates varies with the constant changes which occur in the composition of the Company's earning assets and interest bearing liabilities. For this reason, the Company uses financial models to project interest income under various rate scenarios and various assumptions relative to the prepayments, reinvestment and roll overs of assets and liabilities. Loan Quality and Allowance for Loan Losses The provision for loan losses amounted to $280,000 in 1995 as compared to $168,000 in 1994 and $492,000 in 1993. Net charge-offs amounted to $74,000 in 1995 as compared to $13,000 in 1994 and $288,000 in 1993. On December 31, 1995, the allowance for loan losses amounted to $2,814,000, or .92% of total loans, and 156.8% of nonperforming loans. At December 31, 1994, the allowance was $2,608,000, or .92% of total loans, and 155.8% of nonperforming loans. The allowance for loan losses represents management's best estimate of the reserve necessary to adequately cover losses that could ultimately be realized from current loan exposures. The provision for loan losses is the charge against current earnings that is determined by management as the amount needed to maintain an adequate allowance for loan losses. In determining the adequacy of the allowance for loan losses, and therefore the provision to be charged to current earnings, management relies predominantly on a disciplined credit review and approval process which extends to the full range of the Company's credit exposure. The review process is directed by overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Once identified, the magnitude of exposure to individual borrowers is quantified in the form of specific allocations of the allowance for loan losses. Collateral values are considered by management in the determination of such specific allocations. Additional factors considered by management in evaluating the overall adequacy of the allowance include historical net loan losses, the level and composition of nonaccrual, past due and renegotiated loans and the current and anticipated economic conditions in the region where the Company operates. In addition to the aforementioned considerations, management also considers the loan loss experience of other banks, thrifts and financial services holding companies. Management recognizes that there are risk factors which are inherent in the Company's loan portfolio. All financial institutions face risk factors in their loan portfolios because risk exposure is a function of the business. The Company's operations (and therefore its loans) are concentrated in east central Illinois, an area where agriculture is the dominant industry. Accordingly, lending and other business relationships with agriculture-based businesses are critical to the Company's success. At December 31, 1995, the Company's loan portfolio included $39.7 million of loans to borrowers whose businesses are directly related to agriculture. This increased $1 million from $38.7 million at December 31, 1994. In addition to agricultural lending, the Company has historically had substantial residential mortgage lending activity in and around east central Illinois. At December 31, 1995, these loans amounted to $153.6 million or 50.0% of total loans. Residential mortgage loans amounted to $135.5 million or 48.0% of total loans at December 31, 1994. Other Income The Company's other income increased slightly to $4,009,000 as compared to $3,805,000 in 1994 and $3,928,000 in 1993. This increase was primarily due to the Downstate acquisition in October 1994. Trust revenues were stable, amounting to $1,118,000 in both 1995 and 1994 and $1,119,000 in 1993. Trust assets increased to $215,903,000 in 1995 from $182,729,000 in 1994 and $179,745,000 in 1993. Although assets and the number of trust accounts grew during each of these years, the number of estates and therefore executor fees on those accounts were less in 1995 than in 1994 and 1993. Accordingly, the growth in assets did not translate directly into higher revenues. Revenues from the Company's brokerage and annuity sales decreased in 1995 as consumer preference shifted away from annuity products when interest rates on traditional deposit products rose. In 1996 the Company is planning to expand its product line by offering full-service brokerage services and increasing its marketing efforts in this area. Service charges amounted to $1,574,000 in 1995 as compared to $1,456,000 in 1994 and $1,345,000 in 1993. This 8.1% increase in service charges of $118,000 in 1995 as compared to 1994 is primarily due to the addition of the Effingham and Altamont business units associated with the Downstate acquisition. These two business units added $104,000 to service charge income in 1995 as compared to $21,000 in 1994. The remainder of the increase is associated with an increased volume in transaction and savings accounts. The $111,000 increase in service charges between 1994 and 1993 was primarily due to a new service fee schedule which went into effect September 1, 1994. Heartland Savings Bank (Heartland) originates loans for its own portfolio and for sale to others. Mortgage banking income from loans originated and subsequently sold into the secondary market amounted to $273,000 in 1995 as compared to $158,000 in 1994 and $517,000 in 1993. In 1995 the volume of loans sold by Heartland was $11 million representing 189 loans as compared to $5 million in 1994 representing 92 loans. Other Expense The Company's non-interest expense amounted to $14,715,000 in 1995 as compared to $13,263,000 in 1994, an increase of $1,452,000 (10.9%). Non- interest expense increased $550,000 (4.33%) in 1994 from $12,713,000 in 1993. Of the $1,452,000 increase between 1995 and 1994, $520,000 related to increased costs for salaries and benefits. In addition to merit and incentive increases for continuing employees, the Downstate acquisition increased the Company's full-time equivalent number of employees by approximately 10%. The cost of insurance premiums assessed by the Federal Deposit Insurance Corporation (FDIC) was $590,000 in 1995, compared to $802,000 in 1994 and $729,000 in 1993. The 1995 decrease was the result of a refund the FDIC premium paid in the third quarter of 1995 in the amount of $170,000 and a reduced assessment rate for the second half of 1995. On August 8, 1995, the FDIC amended its regulations to change the range of deposit insurance assessments charged to members of the Bank Insurance Fund (BIF) from the then- prevailing range of .23 % to .31% of deposits, to a range of .04% to .31% of deposits. This significantly reduced the Company's insurance premiums to the FDIC. The 1994 increase was directly related to deposit growth, since the assessment rate paid by the Company's banking subsidiaries had been unchanged during those years. Premium rates for 1995 range from .04% to .31% of average deposits, with higher risk institutions paying a higher premium. The Company's bank subsidiaries, First Mid-Illinois Bank & Trust, N.A. (Bank) and Heartland, have been assessed at the lowest possible rates. The Bank (a BIF insured institution) has an assessment rate of .04% of average deposits, while Heartland (a Savings Association Insurance fund (SAIF) insured institution) has an assessment rate of .23% of average deposits. Under terms of proposed legislation being considered in Congress to recapitalize SAIF, the Company may be subject to a one-time assessment for deposits which were acquired in 1992 when Heartland became a subsidiary of the Company. If this legislation is enacted in its present form in 1996, this special assessment would reduce the Company's 1996 net income by approximately $600,000. Income Taxes Income tax expense amounted to $1,830,000 in 1995 as compared to $1,450,000 in 1994 and $1,150,000 in 1993. Effective tax rates were 31.8%, 29.7% and 26.8% respectively, for those years. The Company's effective tax rate has continued to increase slightly each year as the relative percentage of tax- exempt income decreases. The Company adopted the provisions of FAS 109 effective January 1, 1993. The cumulative effect of this accounting principle change amounted to $155,000, which was recognized during the first quarter of 1993. Capital Resources At December 31, 1995, the Company's stockholders' equity amounted to $35,309,000, a $4,709,000 or 15.4% increase from the $30,600,000 balance as of December 31, 1994. During the year, net income contributed $3,924,000 to equity before the payment of dividends to common and preferred stockholders amounting to $1,008,000. The change in net unrealized gain on available- for-sale investment securities increased stockholders' equity by $1,290,000, net of tax. In late 1994, the Company implemented a Dividend Reinvestment Plan whereby common and preferred shareholders could elect to have their cash dividends automatically reinvested into newly-issued common shares of the Company. This plan became effective with the January, 1995 common dividend. Of the $1,008,000 in common and preferred dividends paid during 1995, $503,000 or 49.9% was reinvested into shares of common stock of the Company through the Dividend Reinvestment Plan. This resulted in an additional 16,222 shares of common stock being issued during 1995. The Company and its subsidiaries have capital ratios which are above the regulatory capital requirements. These requirements call for a minimum total risk-based capital ratio of 8% and a minimum leverage ratio of 3% for the most highly rated banks that do not expect significant growth. All other institutions are required to maintain a ratio of Tier 1 capital to total assets of 4% to 5% depending on their particular circumstances and risk profiles. At December 31, 1995, the Company's leverage ratio was 6.24%. A tabulation of the Company's and its subsidiaries' risk-based capital ratios as of December 31, 1995 follows:
Tier One Risk-Based Total Risk-Based Capital Ratio Capital Ratio First Mid-Illinois Bancshares, Inc. (Consolidated) 10.5% 11.5% First Mid-Illinois Bank & Trust, N.A. 12.1% 13.2% Heartland Savings Bank 16.0% 16.8%
Banks and bank holding companies are generally expected to operate at or above the minimum capital requirements. These ratios are in excess of regulatory minimums and will allow the Company to operate without capital adequacy concerns. Upon ratification by the shareholders in May 1996, the Company will begin issuing First Mid-Illinois Bancshares' stock as part of a deferred compensation plan for its directors and certain senior officers. The Company registered 100,000 shares of stock with the Securities and Exchange Commission for the Deferred Compensation Plan. Liquidity Liquidity represents the ability of the Company and its subsidiaries to meet the requirements of customers for loans and deposit withdrawals. Liquidity management focuses on the ability to obtain funds economically for these purposes and to maintain assets which may be converted into cash at minimal costs. Management monitors its expected liquidity requirements carefully, focusing primarily on cash flows from operating, investing and financing activities. A summary of the Company's cash flows from these sources for 1995, 1994 and 1993 follows (in thousands):
Cash and cash equivalents provided by (used in): 1995 1994 1993 Operating Activities $ 5,864 $ 5,706 $ 6,768 Investing Activities (15,573) (14,297) 1,630 Financing Activities 15,291 4,887 (2,964) Net Cash Flows $ 5,582 $ (3,704) $ 5,434
In addition to liquidity provided by operating, financing and investing activities, the Company has other sources of liquidity, including unpledged available-for-sale investment securities and formalized line of credit arrangements with correspondent banks. From these sources, management has the ability to generate approximately $70 million in an economical manner for liquidity purposes. Effects of Inflation Unlike industrial companies, virtually all of the assets and liabilities of the Company are monetary in nature. As a result, interest rates have a more significant impact on the Company's performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or experience the same magnitude of changes as goods and services, since such prices are effected by inflation. In the current economic environment, liquidity and interest rate adjustments are features of the Company's assets and liabilities which are important to the maintenance of acceptable performance levels. The Company attempts to maintain a balance between monetary assets and monetary liabilities, over time, to offset these potential effects. Future Accounting Changes In May 1995, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage Servicing Rights" (FAS 122). FAS 122 amends FASB Statement No. 65 by establishing a new standard for capitalizing mortgage servicing rights. Under FAS 122, the accounting principles for mortgage servicing rights are the same for mortgages originated by the servicer as for those acquired through purchase transactions. Accordingly, under the new standard, the Company will record an asset for mortgage servicing rights when it sells mortgages and retains the servicing. Mortgage servicing rights are to be amortized in proportion to the net servicing income over the period during which servicing income is expected to be received. Servicing rights are to be evaluated for impairment based on fair value. FAS 122 is required to be applied prospectively to transactions in fiscal years beginning after December 15, 1995. The Company will adopt FAS 122 effective January 1, 1996. Management believes that the impact of the adoption of FAS 122 will not have a material effect on the consolidated financial statements of the Company. FAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to Be Disposed Of" will be effective for financial statements for the fiscal years beginning after December 15, 1995. FAS 121 requires entities to perform separate calculations for long-lived assets to determine whether recognition of an impairment loss is required and, if so, to measure that impairment. All long-lived assets for which management has committed to a plan to dispose of, shall be reported at the lower of cost or fair value less costs to sell. Management believes that the impact of the adoption of FAS 121 will not have any impact on the financial position of the Company. Common Stock Information and Dividends The Company's common stock was held by approximately 740 shareholders of record, as of December 31, 1995, and is traded in the over-the-counter market. The following table shows, for the indicated periods, the range of prices per share of the Company's common stock in the over-the-counter market. These quotations represent interdealer prices without retail mark-ups, mark-downs or commissions and do not necessarily represent actual transactions.
Quarter High Bid Low Ask 1995 1st $ 27 $ 28 2nd 29 30 3rd 33 32 4th 33 34
Quarter High Bid Low Ask 1994 1st $ 25 $ 26 2nd 25 26 3rd 25 27 4th 25 27
Cash dividends have been declared by the Board of Directors of the Company semi-annually during the two years ended December 31, 1995. The following table sets forth the cash dividends per share paid on the Company's common stock for the past two years.
Date Paid Amount per Share June 20, 1994 $.34 January 3, 1995 $.41 June 20, 1995 $.34 January 3, 1996 $.47
Stockholders' Information Transfer and Dividend Paying Agent Stockholders should direct inquiries concerningdividend checks or their stockholder records to: Harris Trust and Savings Bank P.O. Box A3309 Chicago, Illinois 60690 (312) 461-7447 Dividend Reinvestment Plan For information concerning the Company's Dividend Reinvestment Plan, contact: Harris Trust and Savings Bank P.O. Box A3309 Chicago, Illinois 60690 (312) 461-7447 Annual Meeting of Stockholders The annual meeting of stockholders will be May 15, 1996 at 11:00 a.m. at the Mattoon Ramada Inn, 300 Broadway Avenue East, Mattoon, Illinois. Form 10-K Upon written request of any stockholder, the Company will provide, without charge, a copy of its 1995 Annual Report on Form 10-K, including financial statements and schedules, as required to be filed with the Securities and Exchange Commission. To obtain a copy of the Form 10-K, please send a written request to Mr. William S. Rowland, Chief Financial Officer, First Mid-Illinois Bancshares, Inc., 1515 Charleston Avenue, P.O. Box 499, Mattoon, Illinois, 61938. Directors Directors of First Mid-Illinois Bancshares, Inc. Charles A. Adams President, Howell Paving, Inc. and Vice President, Howell Asphalt Co. Kenneth R. Diepholz Owner, D-Co Oil and President, Diepholz Chevrolet, Oldsmobile, Cadillac and GEO Richard A. Lumpkin Chairman, Consolidated Communications Inc. Daniel E. Marvin, Jr. Chairman of the Board, President and Chief Executive Officer, First Mid- Illinois Bancshares, Inc. Gary W. Melvin Co-Owner Rural King Stores William G. Roley Retired William S. Rowland Chief Financial Officer, Secretary/Treasurer, First Mid-Illinois Bancshares, Inc. Ray A. Sparks President, Electric Lab and Sales Corp. Directors of First Mid-Illinois Bank & Trust, N.A. Charles A. Adams President, Howell Paving, Inc. and Vice President, Howell Asphalt Co. Dan R. Cunningham Executive Vice President, First Mid-Illinois Bank & Trust, N.A. and Mattoon Community President Kenneth R. Diepholz Owner, D-Co Oil and President, Diepholz Chevrolet, Oldsmobile, Cadillac and GEO John A. Dively Retired Richard A. Lumpkin Chairman, Consolidated Communications Inc. Daniel E. Marvin, Jr. Chairman of the Board, President and Chief Executive Officer, First Mid- Illinois Bancshares, Inc. Gary W. Melvin Co-Owner Rural King Stores William G. Roley Retired Fred F. Uphoff Farmer Directors, Heartland Savings Bank Ronald E. Batterham Retired Roger W. Dettro Dentist and former Mayor of Mattoon, Illinois Stanley E. Gilliland Vice President-Lending, First Mid-Illinois Bancshares, Inc. and Executive Vice President, First Mid-Illinois Bank & Trust, N.A. Robert F. Jones President, The Checkley Agency Daniel E. Marvin, Jr. President and CEO, First Mid-Illinois Bancshares, Inc. and First Mid-Illinois Bank & Trust, N.A. Robert M. Ronchetti President, Ronchetti Distributing Company William S. Rowland Chief Financial Officer, First Mid-Illinois Bancshares, Inc. and Executive Vice President, First Mid-Illinois Bank & Trust, N.A. Ray A. Sparks President, Electric Labs and Sales Corp. Andrew P. Zavarella Executive Vice President and Managing Officer, Heartland Savings Bank Senior Officers Daniel E. Marvin, Jr. President and CEO, First Mid-Illinois Bancshares, Inc. and First Mid-Illinois Bank & Trust, N.A. William S. Rowland Chief Financial Officer, First Mid-Illinois Bancshares, Inc. and Executive Vice President, First Mid-Illinois Bank & Trust, N.A. Stanley E. Gilliland Vice President-Lending, First Mid-Illinois Bancshares, Inc. and Executive Vice President, First Mid-Illinois Bank & Trust, N.A. Dan R. Cunningham Executive Vice President and Mattoon Community President, First Mid-Illinois Bank & Trust, N.A. Alfred M. Wooleyhan, Jr. Executive Vice President, First Mid-Illinois Bank & Trust, N.A. Randall H. Ross Senior Vice President, First Mid-Illinois Bank &Trust, N.A. Laurel G. Allenbaugh Vice President and Controller, First Mid-Illinois Bancshares, Inc. Gary J. Boske Vice President, First Mid-Illinois Bank & Trust, N.A. Christie L. Burich Vice President and Investment Manager, First Mid-Illinois Bancshares, Inc. Janet L. Grove Vice President and Senior Trust Officer, First Mid-Illinois Bank & Trust, N.A. Sherry L. Hingten Senior Loan Officer, Heartland Savings Bank Christopher L. Slabach Auditor, First Mid-Illinois Bancshares, Inc. Robert E. Weber, Jr. Senior Vice President, First Mid-Illinois Bank & Trust, N.A. Andrew P. Zavarella Executive Vice President and Managing Officer, Heartland Savings Bank James O. Baker Effingham Community President, First Mid-Illinois Bank & Trust, N.A. Mark A. Bluhm Charleston Community President, First Mid-Illinois Bank & Trust, N.A. Daniel D. Downs Arcola Manager, First Mid-Illinois Bank & Trust, N.A. Janet E. Hamilton Altamont Manager, First Mid-Illinois Bank & Trust, N.A. Gary L. Kuhns Neoga Community President, First Mid-Illinois Bank & Trust, N.A. Douglas R. McCumber Tuscola Community President, First Mid-Illinois Bank & Trust, N.A. Larry D. Stenger Sullivan Community President, First Mid-Illinois Bank & Trust, N.A. Community Banking Directors Charleston Mark A. Bluhm Charleston Community President John A. Dively Retired Dr. Charles R. Maris Physician J. W. Oglesby Retired L. Stephen Whitley Retired Neoga Clyde E. Drennan Retired Gary L. Kuhns Neoga Community President Melvin C. Lockard Retired Richard L. Peters Farmer James W. Short President, Short Furniture, Inc. James E. Zimmer District Representative, Monsanto Corp. Effingham Dr. Peter M. Bonutti Physician Donald G. Cunningham Retired C. Ron Greene CFO, Effingham Truck Sales, Inc. Paul O. Wendling Owner/President of Direct Lines Michael D. Yager Owner/President, Mid-America Designs, Inc. James O. Baker Effingham Community President Sullivan Richard C. Atchison Owner, Atchison Electric, Inc. William G. Roley Retired Larry D. Stenger Sullivan Community President Kurt W. VanDeursen Owner, Coast-to-Coast Hardware of Sullivan Terry P. Warren Farmer Ronald D. White Pharmacist Tuscola Laverl Byers Farmer Dr. Stanley L. Cross Dentist Paul R. Flock Owner, Flock Electronics Douglas R. McCumber Tuscola Community President Charles M. Rogers Owner, Kelsey Furniture, Inc. Altamont Dale A. Laue Farmer Ruth Ann Hoffmeister Altamont City Commissioner Darrell J. Kuhns Farmer Gerald L. Quade Farmer Donald L. Wendling Don's Floor Covering & Refrigeration Janet E. Hamilton Altamont Manager SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. __) Filed by the Registrant [x] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a- 6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to (section) 240.14a-11(c) or (section) 240.14a-12 FIRST MID-ILLINOIS BANCSHARES, INC. (Name of Registrant as Specified In Its Charter) Mr. William S. Rowland, Chief Financial Officer of the Registrant (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined: 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: April 12, 1996 Dear Fellow Stockholder: On behalf of the Board of Directors and management of First Mid-Illinois Bancshares, Inc., I cordially invite you to attend the Annual Meeting of Stockholders of First Mid-Illinois Bancshares, Inc. to be held at 11:00 a.m. on May 15, 1996, at the Ramada Inn located at 300 Broadway Avenue, Mattoon, Illinois. The accompanying Notice of Annual Meeting of Stockholders and Proxy Statement discuss the business to be conducted at the meeting. We have also enclosed a copy of the Company's 1995 Annual Report to Stockholders. At the meeting we shall report on Company operations and the outlook for the year ahead. Your Board of Directors has nominated two persons to serve as Class I directors. Both of the nominees are incumbent directors. The Board also recommends that you approve the adoption of a deferred compensation plan, as set forth in the accompanying Proxy Statement. In addition, the Company's management has selected and recommends that you ratify the selection of KPMG Peat Marwick LLP to continue as the Company's independent public accountants for the year ending December 31, 1996. We recommend that you vote your shares for the director nominees and in favor of the proposals. I encourage you to attend the meeting in person. Whether or not you plan to attend, however, please complete, sign and date the enclosed proxy and return it in the accompanying postpaid return envelope as promptly as possible. This will ensure that your shares are represented at the meeting. If you have any questions concerning these matters, please do not hesitate to contact me at (217) 234-7454. We look forward with pleasure to seeing and visiting with you at the meeting. Very truly yours, FIRST MID-ILLINOIS BANCSHARES, INC. Daniel E. Marvin, Jr. Chairman NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 15, 1996 FIRST MID-ILLINOIS BANCSHARES, INC. 1515 Charleston Avenue P.O. Box 499 Mattoon, Illinois 61938 (217) 234-7454 To the stockholders of FIRST MID-ILLINOIS BANCSHARES, INC. The Annual Meeting of the Stockholders of First Mid-Illinois Bancshares, Inc., a Delaware corporation (the "Company"), will be held at the RAMADA INN, 300 Broadway Avenue, East in Rooms A, B and C, Mattoon, Illinois, on Wednesday, May 15, 1996, at 11:00 a.m., local time, for the following purposes: 1. to elect two Class I directors for a term of three years. 2. to approve the adoption of the First Mid-Illinois Bancshares, Inc. Deferred Compensation Plan. 3. to approve the appointment of KPMG Peat Marwick LLP as independent public accountants for the Company for the fiscal year ending December 31, 1996. 4. to transact such other business as may properly be brought before the meeting and any adjournments or postponements thereof. The Board of Directors has fixed the close of business on April 1, 1996, as the record date for the determination of stockholders entitled to notice of, and to vote at, the meeting. By order of the Board of Directors Daniel E. Marvin, Jr. Chairman Mattoon, Illinois April 12, 1996 PROXY STATEMENT This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of First Mid-Illinois Bancshares, Inc. (the "Company") of proxies to be voted at the Annual Meeting of Stockholders to be held at the Ramada Inn, 300 Broadway Avenue, East in Rooms A, B and C, Mattoon, Illinois, on Wednesday, May 15, 1996, at 11:00 a.m., local time, and at any adjournments or postponements thereof. The Board of Directors would like to have all stockholders represented at the meeting. If you do not expect to be present, please sign and mail your proxy card in the enclosed self-addressed, stamped envelope. You have the power to revoke your proxy at any time before it is voted, and the giving of a proxy will not affect your right to vote in person if you attend the meeting. The mailing address of the Company*s principal executive offices is 1515 Charleston Avenue, P.O. Box 499, Mattoon, Illinois 61938. This Proxy Statement and the accompanying proxy card are being mailed to stockholders on or about April 12, 1996. The 1995 Annual Report of the Company, which includes consolidated financial statements of the Company, is enclosed. The Company is a diversified financial services company which serves the financial needs of east central Illinois. It is the parent company of First Mid-Illinois Bank & Trust, N.A. (the "Bank"), a regional banking entity which has locations in Mattoon, Altamont, Effingham, Charleston, Sullivan, Tuscola, Arcola and Neoga, Illinois. The Company is also the holding company for Heartland Savings Bank, an Illinois savings bank located in Mattoon and Urbana, Illinois ("Heartland"). Mid-Illinois Data Services, Inc., a data processing company ("MIDS"), is a wholly owned nonbanking subsidiary of the Company. The Bank, Heartland and MIDS are sometimes referred to as the "Subsidiaries." Only holders of record of the Company*s Common Stock, par value $4.00 per share (the "Common Stock"), at the close of business on April 1, 1996 will be entitled to vote at the annual meeting or any adjournments or postponements of such meeting. On April 1, 1996, the Company had 898,268 shares of Common Stock, and 620 shares of Preferred Stock, no par value (the "Preferred Stock"), issued and outstanding. In the election of directors, and for all other matters to be voted upon at the annual meeting, each issued and outstanding share of Common Stock is entitled to one vote. Holders of the Preferred Stock are not entitled to vote their Preferred Stock at the annual meeting. All shares of Common Stock represented at the annual meeting by properly executed proxies received prior to or at the annual meeting, and not revoked, will be voted at the meeting in accordance with the instructions thereon. If no instructions are indicated, properly executed proxies will be voted for the nominees and for adoption of the proposals set forth in this Proxy Statement. A majority of the shares of the Common Stock, present in person or represented by proxy, shall constitute a quorum for purposes of the annual meeting. Abstentions and broker non-votes will be counted for purposes of determining a quorum. Directors shall be elected by a plurality of the votes present in person or represented by proxy. In all matters other than the election of directors, the affirmative vote of the majority of shares present in person or represented by proxy at the annual meeting and entitled to vote on the subject matter shall be required to constitute stockholder approval. Abstentions will be treated as votes against a proposal and broker non-votes will have no effect on the vote. ELECTION OF DIRECTORS At the Annual Meeting of the Stockholders to be held on May 15, 1996, the stockholders will be entitled to elect two (2) Class I directors for a term expiring in 1999. The directors of the Company are divided into three classes having staggered terms of three years. Both of the nominees for election as Class I directors are incumbent directors. The Company has no knowledge that any of the nominees will refuse or be unable to serve, but if any of the nominees becomes unavailable for election, the holders of the proxies reserve the right to substitute another person of their choice as a nominee when voting at the meeting. Set forth below is information, as of April 1, 1996, concerning the nominees for election and for the other persons whose terms of office will continue after the meeting, including age, year first elected a director of the Company and business experience during the previous five years of each. The two nominees, if elected at the annual meeting, will serve as Class I directors for three year terms expiring in 1999.
Nominees Director Position with the Company and the Subsidiaries Name (Age) Since and Occupation for the Last Five Years CLASS I (Term Expires 1999) Kenneth R. Diepholz 1990 Director of the Bank (since 1984) and of the Company; President, (Age 57) Diepholz Chevrolet, Oldsmobile, Cadillac and Geo and Owner, D-Co Coin Laundry and Diepholz Rentals. Gary W. Melvin 1990 Director of the Bank (since 1984) and of the Company; Director of (Age 46) MIDS (since 1987); Co-Owner, Rural King Stores.
Continuing Directors Director Position with the Company and the Subsidiaries Name (Age) Since and Occupation for the Last Five Years CLASS II (Term Expires 1997) Richard Anthony Lumpkin 1982 Director of the Bank (since 1966) and of the Company; Chairman of (Age 61) the Board of Consolidated Communications Inc., Director CIPSCO Incorporated (since 1995). William G. Roley 1985 Director of the Bank (since 1992) and of the Company; retired, (Age 66) former owner of Roley Real Estate. William S. Rowland 1991 Chief Financial Officer, Secretary (since 1991), Treasurer (Age 49) (since 1989) and Director of the Company; Director of MIDS (since 1989); and of Heartland (since 1992); Executive Vice President of the Bank (since 1989). CLASS III (Term Expires 1998) Charles A. Adams 1984 Director of the Bank (since 1989), of MIDS (since 1987) and of the (Age 54) Company; Vice President, Howell Asphalt Company and President, Howell Paving Inc. Daniel E. Marvin, Jr. 1982 Chairman, President, Chief Executive Officer and Director of the (Age 57) Company; Director (since 1980), Chairman, President and Chief Executive Officer (since 1983) of the Bank; Director of MIDS (1987-1992); Director, Chairman (since 1992) and President (since 1994) of Heartland. Ray Anthony Sparks 1994 Director of the Company; Director of Heartland (since 1992); (Age 39) President of Elasco Agency Sales, Inc. and Electrical Laboratories and Sales Corporation.
All of the Company*s directors will hold office for the terms indicated, or until their respective successors are duly elected and qualified, and all executive officers hold office for a term of one year. There are no arrangements or understandings between any of the directors, executive officers or any other person pursuant to which any of the Company*s directors or executive officers have been selected for their respective positions. Directors of the Company received a $1,500 quarterly retainer for serving on the Board of Directors in 1995, except Mr. Rowland, who is not separately compensated for his service on the board. Additionally, the Bank provides a pension to certain Bank directors who have served for a minimum of ten years and have attained the age of 65 or older and who were not serving as an officer of the Bank upon retirement. The pension is equal to 75% of the regular directors' meeting fees paid to current directors, based upon fourteen regular meetings in each fiscal year. Board Committees and Meetings The Board of Directors of the Company has established an audit committee and a compensation committee. These committees are composed entirely of outside directors. The Board has also created other company-wide committees composed of officers of the Company and the Subsidiaries. Members of the audit committee are Messrs. Adams, Diepholz, Lumpkin, Melvin, Roley and Sparks. The audit committee reports to the Board of Directors and has the responsibility to review and approve internal control procedures, accounting practices and reporting activities of the Subsidiaries. The committee also has the responsibility for establishing and maintaining communications between the Board and the independent auditors and regulatory agencies. The audit committee reviews with the independent auditors the scope of their examinations, with particular emphasis on the areas to which either the audit committee or the auditors believe special attention should be directed. It also reviews the examination reports of regulatory agencies and reports to the full Board regarding matters discussed therein. Finally, it oversees the establishment and maintenance of effective controls over the business operations of the Subsidiaries. The Audit Committee met four times in 1995. The members of the compensation committee are Messrs. Adams, Diepholz, Lumpkin, Melvin, Roley and Sparks. The compensation committee reports to the Board of Directors and has responsibility for all matters related to compensation of executive officers of the Company, including review and approval of base salaries, conducting a review of salaries of executive officers compared to other financial services holding companies in the region, fringe benefits, including modification of the retirement plan, and incentive compensation. The compensation committee met four times in 1995. A total of ten regularly scheduled and special meetings were held by the Board of Directors of the Company during 1995. During 1995, all directors attended at least 75 percent of the meetings of the Board and the committees on which they served. Transactions With Management Directors and officers of the Company and the Subsidiaries and their associates, were customers of and had transactions with the Company and the Subsidiaries during 1995. Additional transactions may be expected to take place in the future. All outstanding loans, commitments to loan, transactions in repurchase agreements and certificates of deposit and depository relationships, in the opinion of management, were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time or comparable transactions with other persons and did not involve more than the normal risk of collectibility or present other unfavorable features. EXECUTIVE COMPENSATION The following table shows the compensation earned for the last three fiscal years by the Chief Executive Officer and those executive officers of the Company and the Subsidiaries whose 1995 salary and bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE Annual Compensation (a) (b) (c) (d) (e) Name and Principal Position Fiscal Year Ended All Other December 31st Salary($)(1) Bonus($) Compensation($) Daniel E. Marvin, Jr., President and 1995 $ 164,000 $ 48,163 $ 26,001 (2) Chief Executive Officer 1994 160,255 35,040 23,048 (2) 1993 150,255 33,862 24,328 (2) William S. Rowland, Chief Financial 1995 $ 101,000 $ 21,651 $ 11,940 (3) Officer 1994 96,000 13,590 11,971 (3) 1993 85,000 12,844 10,947 (3) Dan R. Cunningham, Vice President 1995 $ 93,000 $ 13,857 $ 6,411 (4) 1994 90,000 11,970 6,582 (4) 1993 80,000 11,000 5,429 (4) Stanley E. Gilliland, Vice President 1995 $ 86,000 $ 15,738 $ 6,103 (4) 1994 82,260 12,636 5,477 (4) 1993 75,000 11,231 4,819 (4) (1) Includes deferred amounts. (2) Represents the Company's contributions to its retirement plan and the premium payments for an insurance policy purchased to fund a supplemental retirement and death benefit for Mr. Marvin. These amounts were $12,720 and $13,281 for 1995, $10,874 and $12,174 for 1994 and $11,047 and $13,281 for 1993, respectively. (3) Represents the Company's contributions to its retirement plan and the premium payments for an insurance policy purchased to fund a supplemental retirement and death benefit for Mr. Rowland. These amounts were $6,060 and $5,880 for 1995, $6,091 and $5,800 for 1994 and $5,067 and $5,800 for 1993, respectively. (4) Represents the Company's contributions to its retirement plan.
The Compensation Committee has furnished the following report on executive compensation. The incorporation by reference of this Proxy Statement into any document filed with the Securities and Exchange Commission by the Company shall not be deemed to include such report unless the report is specifically stated to be incorporated by reference into such document. Compensation Committee Report As members of the Compensation Committee, it is our duty to evaluate the performance of management, review total management compensation levels and consider management succession and other related matters. The Committee reviews and approves in detail all aspects of compensation for the nine highest paid officers within the Company and uses state, regional and national salary studies to ascertain existing market conditions for personnel. No member of the Committee is a former or current officer or employee of the Company or any of the Subsidiaries. The compensation philosophy of the Company is that a portion of the annual compensation of each officer relates to and must be contingent upon the performance of the Company, as well as the individual contribution of each officer. As a result, a portion of each executive officer's annual compensation is based upon the officer's performance, the performance of the operating unit for which the officer has primary responsibility and the performance of the Company as a whole. In 1993, the formulas for measuring performance and awarding bonuses were refined and improved so as to more objectively link financial and individual performance with bonus amounts. During 1995, the Company's earnings improved and its market share increased significantly. Additionally, various other improvements were made in the Company's operating and administrative functions. Accordingly, Messrs. Marvin, Rowland, Cunningham and Gilliland were awarded incentive bonuses of $48,163, $21,651, $13,857 and $15,738, respectively. The relationships between the base salaries and incentive compensation of Messrs. Marvin, Rowland and Cunningham for 1995, 1994 and 1993 were as follows:
Incentive compensation as a % of Base Salary 1995 1994 1993 Mr. Marvin 29% 22% 23% Mr. Rowland 21% 15% 15% Mr. Cunningham 15% 13% 14% Mr. Gilliland 18% 15% 15%
Submitted by the Compensation Committee Members Charles A. Adams Kenneth R. Diepholz Richard A. Lumpkin Gary W. Melvin William G. Roley Ray Anthony Sparks The incorporation by reference of this Proxy Statement into any document filed with the Securities and Exchange Commission by the Company shall not be deemed to include the following performance graph and related information unless the graph and related information are specifically stated to be incorporated by reference into such document. Performance Graph The line graph below compares the cumulative total stockholder return on a $100 investment in the Company's Common Stock to the cumulative total return of the S & P 500 Index and the Nasdaq Bank Stock Index for the period December 31, 1990 through December 31, 1995. The S&P 500 Index and the Nasdaq Bank Stock Index were calculated at the Company's request by Research Data Group, San Francisco, California. CUMULATIVE TOTAL RETURN *
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 First Mid-Illinois $100 $100 $153 $200 $206 $272 Bancshares, Inc. Nasdaq Bank Stocks $100 $164 $239 $272 $271 $404 S&P 500 $100 $130 $140 $155 $157 $215 * Total return assumes reinvestment of dividends
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The following table sets forth certain information regarding the Company*s Common Stock beneficially owned on April 1, 1996 with respect to all persons known to the Company to be the beneficial owner of more than five percent of the Company Common Stock, each director and nominee, each executive officer named in the Summary Compensation Table and all directors and executive officers of the Company as a group.
Name of Individual and Amount and Nature of Percent Number of Persons in Group Beneficial Ownership (1) of Class 5% Stockholders Margaret Lumpkin Keon 65,418 (2) 7.2% 16 Miller Avenue, Suite 203 Mill Valley, California 94941 Mary Lumpkin Sparks 91,687 (3) 10.1% 2438 Campbell Road, N.W. Alburquerque, New Mexico 87104 Directors Charles A. Adams 55,758 (4) 5.9% Kenneth R. Diepholz 15,481 (5) 1.7% Richard Anthony Lumpkin 187,365 (6) 20.2% Daniel E. Marvin, Jr. 11,357 (7) 1.3% Gary W. Melvin 38,912 (8) 4.2% William G. Roley 16,773 (9) 1.8% William S. Rowland 3,246 (10) * Ray Anthony Sparks 5,483 (11) * Other Named Executive Officers Dan R. Cunningham 1,879 (12) * Stanley E. Gilliland 2,177 (13) * All directors and executive officers as a group (11 persons) 338,535 (14) 33.8% * Less than one percent. (1) The information contained in this column is based upon information furnished to the Company by the persons named above and the members of the designated group. The nature of beneficial ownership for shares shown in this column is sole voting and investment power, except as set forth in the footnotes below. Inclusion of shares shall not constitute an admission of beneficial ownership. (2) The above amount includes 10,105 shares obtainable through the conversion of Preferred Stock held by Ms. Keon, 550 shares held directly by Ms. Keon and 54,763 shares held under the Margaret L. Keon Trust, established under Article 5 of the Mary G. Lumpkin Trust dated January 31, 1984, of which trust Ms. Keon is trustee and beneficiary. (3) The above amount includes 10,105 shares obtainable through the conversion of Preferred Stock and 54,763 shares held under the Mary L. Sparks Trust, established under Article 5 of the Mary G. Lumpkin Trust dated January 31, 1984, with respect to which shares Mrs. Sparks has no voting or investment power. The shares held by this trust are also included in the number of shares reported as beneficially owned by Mr. Richard A. Lumpkin in this table. The above amount also includes 571 shares held directly by Mrs. Sparks and 26,248 shares held in trust for the benefit of Richard Anthony Lumpkin's adult children for which Mrs. Sparks serves as trustee and of which shares Mrs. Sparks disclaims beneficial ownership. (4) The above amount includes 40,420 shares obtainable through the conversion of Preferred Stock held by Mr. Adams. Also includes 3,022 shares held by a corporation and over which Mr. Adams has shared voting and investment power and 987 shares held by Mr. Adams' spouse, over which shares Mr. Adams has no voting or investment power. (5) The above amount includes 7,074 shares obtainable through the conversion of Preferred Stock held by Mr. Diepholz. (6) The above amount includes 20,210 shares obtainable through the conversion of Preferred Stock held by Mr. Lumpkin and by the Richard A. Lumpkin Trust, of which Mr. Lumpkin is trustee, 20,899 shares held directly by Mr. Lumpkin and 4,706 shares held by The Lumpkin Foundation, of which Mr. Lumpkin serves as a director. The above amount also includes 54,763 shares held under the Richard A. Lumpkin Trust, and further includes 10,105 shares obtainable through the conversion of Preferred Stock and 54,763 shares held under the Mary Lee Sparks Trust, of which Mr. Lumpkin is trustee. Each such trust has been established under Article 5 of the Mary G. Lumpkin Trust dated January 31, 1984. The above amount also includes 21,919 shares held by Consolidated Communications Inc., of which Mr. Lumpkin is Chairman of the Board, director and Chief Executive Officer and of which shares beneficial ownership is disclaimed. The above amount does not include 30,951 shares held by the adult children of Mr. Lumpkin and 26,248 shares held in trust for the benefit of Mr. Lumpkin*s adult children of which trust Mr. Lumpkin is not a trustee and of which shares beneficial ownership is also disclaimed. (7) The above amount includes 2,425 shares obtainable through the conversion of Preferred Stock held by Mr. Marvin. The above amount also includes 1,495 shares held by Mr. Marvin's spouse, over which shares Mr. Marvin has no voting or investment power and of which Mr. Marvin disclaims beneficial ownership. (8) The above amount includes 20,210 shares obtainable through the conversion of Preferred Stock held by Mr. Melvin. (9) The above amount includes 2,021 shares obtainable through the conversion of Preferred Stock held by Mr. Roley. The above amount also includes 2,021 shares obtainable through the conversion of Preferred Stock and 5,559 shares held in a trust for which Mr. Roley's spouse serves as trustee and over which shares Mr. Roley has no voting or investment power. (10) The above amount includes 2,425 shares obtainable through the conversion of Preferred Stock held by Mr. Rowland. (11) The above amount includes 1,496 shares held by Mr. Sparks' children and over which Mr. Sparks' shares voting and investment power. (12) The above amount includes 1,213 shares obtainable through the conversion of Preferred Stock held by Mr. Cunningham. (13) The above amount includes 1,011 shares obtainable through the conversion of Preferred Stock held by Mr. Gilliland. (14) Includes an aggregate of 104,509 shares obtainable through the conversion of Preferred Stock.
As of March 11, 1996, the Bank acted as sole or co-fiduciary with respect to trusts and other fiduciary accounts which own or hold 48,418 shares or 5.39% of the outstanding Common Stock of the Company over which the Bank has sole or shared voting power and/or sole or shared investment power. Of such shares, the Bank has sole voting and investment power with respect to 42,368 shares, or 4.72%, of the outstanding Common Stock, and has shared voting and investment power with respect to 6,050 shares, or 0.67%, of the outstanding Common Stock. Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") requires that the Company*s directors, executive officers and persons who own more than 10% of the Company*s Common Stock file reports of ownership and changes in ownership with the Securities and Exchange Commission. Such persons are also required to furnish the Company with copies of all Section 16(a) forms they file. Based solely on the Company*s review of the copies of such forms, the Company is not aware that any of its directors and executive officers or 10% stockholders failed to comply with the filing requirements of Section 16(a) during the period commencing January 1, 1995 through December 31, 1995. PROPOSAL TO ADOPT THE DEFERRED COMPENSATION PLAN The Board of Directors has adopted, subject to stockholder approval, the First Mid-Illinois Bancshares, Inc. Deferred Compensation Plan (the "Plan"), to permit directors, advisory directors and key officers of the Company and its Subsidiaries to elect to defer a portion of the fees and cash compensation payable by the Company and its Subsidiaries on account of service as a director or employee. The Plan is intended as a means of maximizing the effectiveness and flexibility of the compensation arrangements to directors and a select group of management and highly compensated employees of the Company and its Subsidiaries, and as an aid in attracting and retaining individuals of outstanding abilities and specialized skills, thereby advancing the interests of the Company and its stockholders. The Company has maintained a deferred compensation plan for its directors since June 1984. Under the former deferred compensation plan, as amended from time to time, amounts deferred by directors were invested into a master certificate of deposit account at the Bank. In November 1995, the Board of Directors approved the Plan, which is an amended version of the former deferred compensation plan. The Plan, as adopted in November 1995, expands the categories of individuals eligible to defer compensation to include advisory directors and key officers, and provides that amounts deferred under the Plan will generally be invested into shares of the Company's Common Stock, as more fully described below. The Plan is intended to replace the former deferred compensation plan, and is subject to the approval of the Company's stockholders. The Plan is administered by the Deferred Compensation Plan Committee (the "Deferred Compensation Committee"). The Plan provides that all directors and advisory directors of the Company and its Subsidiaries are eligible to participate in the Plan, and provides that the Deferred Compensation Committee, in its sole discretion, may select additional eligible employees of the Company and its Subsidiaries to participate in the Plan. The Plan authorizes directors and advisory directors to defer the receipt of all of their director fees and provides that such amounts may be invested into either shares of Common Stock or into a master certificate of deposit account held at the Bank. Key employees selected to participate in the Plan may defer the receipt of up to 15% of their base salary and up to 100% of their incentive compensation, subject to certain restrictions. Base salary and incentive compensation deferred by key employees will be invested into Common Stock. The Plan authorizes participants to purchase, in the aggregate, up to 100,000 shares of Common Stock, which shares may be purchased for use under the Plan in the open market or may be issued directly by the Company. In the event that the number of outstanding shares of Common Stock are changed into or exchanged for a different number or kind of shares of capital stock or other securities by reason of a reorganization, merger, consolidation, recapitalization, stock dividend, split-up or stock right distribution or other similar modification, the Plan provides that the Board of Directors shall make an equitable adjustment in the number and kind of shares covered by the Plan. The price at which shares will be deemed purchased under the Plan shall be the actual purchase price for shares purchased in the open market and shall be determined by the Board of Directors in accordance with the Company's Dividend Reinvestment Plan with respect to shares issued directly by the Company. The Company will not receive any of the amounts used to purchase shares on the open market, but will receive the full purchase price of shares issued directly by the Company under the Plan. In lieu of actual purchases, the Plan also permits amounts deferred under the Plan and not directed into the certificate of deposit account to be deemed to be invested in shares of Common Stock without actual purchases of such shares being effectuated. In the case of deemed investments in Common Stock, amounts deferred will accrue appreciation in amounts equivalent to the appreciation which would have accrued had actual purchases been made under the Plan, and will be credited to each participant's account on a quarterly basis. Subject to certain hardship provisions, no shares of Common Stock or other amounts in a participant's account may be distributed until the March 15th following the date such participant terminates service with the Company and its Subsidiaries. At the discretion of the Board of Directors, amounts to be distributed under the Plan will be paid in one lump sum or in five annual payments. Shares of Common Stock purchased under the Plan will only be distributed to a participant upon delivery to the Company of such representations and warranties as the Company deems necessary or advisable with respect to the investment intent of the participant as required by the Securities Act of 1933, as amended, and any other federal or state securities laws or regulations. The Company is not required to deliver shares purchased under the Plan prior to: (a) such shares becoming listed for trading on any stock exchange on which the Common Stock may then be listed, if any; and (b) the completion of such registration or other qualification of such shares under any state or federal law, rule or regulation, as the Deferred Compensation Committee shall determine to be necessary or advisable. The Company presently intends to maintain an effective registration statement with respect to the sale of shares to Plan participants, but is not required to maintain such registration under the provisions of the Plan. The Plan is intended to comply with Rule 16b-3 ("Rule 16b-3") under the Exchange Act so that purchases of shares under the Plan will be exempt from the short-swing profit prohibitions set forth in Section 16(b) of the Exchange Act. Subject to certain limitations, including those currently applicable pursuant to Rule 16b-3, the Company's Board of Directors may amend the Plan from time to time. Under Rule 16b-3, as presently in effect, stockholder approval is required for any amendment to the Plan which would increase materially the number of shares issuable under the Plan, increase materially the benefits which may be provided under the Plan or modify materially the eligibility requirements for participation in the Plan. In addition, no amendment may impair the existing rights of any individual under the Plan, unless the individual consents to such amendment. The Plan is also intended to be administered as a nonqualified deferred compensation plan for a select group of management or highly compensated employees. Assuming that the Plan is administered in such manner, amounts deferred and earnings accrued under the Plan are not recognized in the respective participant's federal taxable income until such contributions or earnings are actually distributed or withdrawn from the Plan. The Company will not be entitled to a compensation expense deduction for amounts deferred under the Plan and will be required to pay income tax on all earnings on amounts held in the Plan which accrue under the Plan while such amounts remain in the Plan. Upon distribution or withdrawal of any such amounts, the respective participant will be subject to income tax on such amounts and the Company will receive a compensation expense deduction in the amount of the withdrawal or distribution. The information regarding federal tax laws contained in the foregoing is only a brief summary of the applicable federal income tax laws and should not be relied upon as being a complete statement. Further, income tax laws may change after the date of this proxy statement. The Board of Directors unanimously recommends that the stockholders vote FOR the proposal to amend the Deferred Compensation Plan. RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS Stockholders will be asked to approve the appointment of KPMG Peat Marwick LLP as the Company*s independent public accountants for the year ending December 31, 1996. A proposal will be presented at the annual meeting to ratify the appointment of KPMG Peat Marwick. If the appointment of KPMG Peat Marwick is not ratified, the matter of the appointment of independent public accountants will be considered by the Board of Directors. Representatives of KPMG Peat Marwick LLP are expected to be present at the meeting and will be given the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. The Board of Directors unanimously recommends a vote FOR ratification of this appointment. STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING For inclusion in the Company's Proxy Statement and form of proxy relating to the 1996 Annual Meeting of Stockholders, stockholder proposals must be received by the Company on or before December 12, 1996 and must otherwise comply with the Company's bylaws. GENERAL Your proxy is solicited by the Board of Directors and the cost of solicitation will be paid by the Company. In addition to the solicitation of proxies by use of the mails, officers, directors and regular employees of the Company or the Subsidiaries, acting on the Company*s behalf, may solicit proxies by telephone, telegraph or personal interview. The Company will, at its expense, upon the receipt of a request from brokers and other custodians, nominees and fiduciaries, forward proxy soliciting material to the beneficial owners of shares held of record by such persons. OTHER BUSINESS It is not anticipated that any action will be asked of the stockholders other than that set forth above, but if other matters properly are brought before the meeting, the persons named in the proxy will vote in accordance with their best judgment. FAILURE TO INDICATE CHOICE If any stockholder fails to indicate a choice in items (1) (2) or (3) on the proxy card, the shares of such stockholder shall be voted (FOR) in each instance. REPORT ON FORM 10-K THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON REPRESENTING THAT HE OR SHE WAS A BENEFICIAL OWNER OF THE COMPANY*S COMMON STOCK AS OF THE RECORD DATE FOR THE MEETING, UPON WRITTEN REQUEST, A COPY OF THE COMPANY*S ANNUAL REPORT ON FORM 10-K. SUCH WRITTEN REQUEST SHOULD BE SENT TO MR. WILLIAM S. ROWLAND, FIRST MID-ILLINOIS BANCSHARES, INC., 1515 CHARLESTON AVENUE, P.O. BOX 499, MATTOON, ILLINOIS 61938. By order of the Board of Directors Daniel E. Marvin, Jr. Chairman Mattoon, Illinois April 12, 1996 ALL STOCKHOLDERS ARE URGED TO SIGN AND MAIL THEIR PROXIES PROMPTLY [side 1 of proxy card] PROXY FIRST MID-ILLINOIS BANCSHARES, INC. PROXY Proxy is Solicited By the Board of Directors For the Annual Meeting of Stockholders -- May 15, 1996 The undersigned hereby appoints Ronald Batterham, Dan R. Cunningham and Stanley E. Gilliland, or any of them acting in the absence of the others, with power of substitution, attorneys and proxies, for and in the name and place of the undersigned, to vote the number of shares of Common Stock that the undersigned would be entitled to vote if then personally present at the Annual Meeting of the Stockholders of First Mid-Illinois Bancshares, Inc., to be held at the Ramada Inn, 300 Broadway Avenue, East in Rooms A B and C, Mattoon, Illinois 61938, on Wednesday, May 15, 1996, at 11:00 a.m., local time, or any adjournments or postponements thereof, upon the matters set forth in the Notice of Annual Meeting and Proxy Statement (receipt of which is hereby acknowledged) as designated on the reverse side, and in their discretion, the proxies are authorized to vote upon such other business as may come before the meeting: (square) Check here for address change. New Address: (square) Check here if you plan to attend the meeting. (Continued and to be signed on reverse side.) [side 2 of proxy card] FIRST MID-ILLINOIS BANCSHARES, INC. PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY 1. Election of Directors Kenneth R. Diepholz and Gary W. Melvin 2. To approve the adoption of the First Mid-Illinois Bancshares, Inc. Deferred Compensation Plan 3. To ratify the selection of KPMG Peat Marwick LLP as auditors for the Company for 1996. The Board of Directors recommends a vote FOR all proposals. THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SPECIFICATION MADE. IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS. Dated: , 1996 Signature(s) NOTE: Please sign exactly as your name(s) appears. For joint accounts, each owner should sign. When signing as executor, administrator, attorney, trustee or guardian, etc., please give your full title. EX-27 2 EXHIBIT 27
9 12-MOS
DEC-31-1995 DEC-31-1995 17,536,000 784,000 4,975,000 0 119,388,000 3,381,000 3,409,000 307,004,000 2,814,000 472,494,000 396,879,000 28,515,000 3,011,000 7,200,000 3,580,000 0 3,100,000 28,653,000 472,494,000 25,214,000 7,801,000 450,000 33,465,000 14,888,000 16,725,000 16,740,000 280,000 0 14,715,000 5,754,000 5,754,000 0 0 3,924,000 4.10 3.88 3.98 636,000 554,000 604,000 0 2,608,000 186,000 112,000 2,814,000 2,814,000 0 815,000
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