SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
APRIL 28, 2004
FIRST MID-ILLINOIS BANCSHARES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-13368 37-1103704
(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
1515 CHARLESTON AVENUE, MATTOON, IL 61938
(ADDRESS INCLUDING ZIP CODE OF PRINCIPAL EXECUTIVE OFFICES)
(217) 234-7454
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Item 5. Other Events
Incorporated by reference is the quarterly shareholder report issued by the
Registrant on April 28, 2004, attached as Exhibit 99, providing information
concerning the Registrant's financial statements as of March 31, 2004.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99 - Quarterly shareholder report issued March 31, 2004
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has dully caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST MID-ILLINOIS BANCSHARES, INC.
Dated: April 28, 2004 By: /s/ William S. Rowland
William S. Rowland
President and Chief
Executive Officer
EXHIBIT INDEX
Exhibit
Number Description
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99 Quarterly shareholder report issued April 28, 2004
Exhibit 99
[GRAPHIC OMITTED][GRAPHIC OMITTED]
First Mid-Illinois Bancshares, Inc. had an excellent first quarter with diluted
earnings per share increasing to $.77 per share as compared to $.73 per share
for the first quarter of 2003. Net income increased to $2,389,000 compared to
$2,362,000 for the first quarter of 2003. Earnings per share increased more than
net income because of our stock buy-back program. In the first quarter of 2004,
we acquired 175,818 shares at a total investment of $8,376,000. This program has
proven to be an effective way of increasing value for our shareholders.
Higher net interest income was the primary factor in earnings growth. Loan
balances have increased $44 million since March 31, 2003, which resulted in an
improvement in our net interest margin, as well as net interest income. Net
interest income increased from $6,480,000 for the first quarter of 2003 to
$7,040,000 for the same period in 2004 for an increase of $560,000 or 8.6%. The
Company's net interest margin increased to 3.90% on a tax equivalent basis from
3.74% a year earlier. This increase offset the decline in mortgage banking
revenue of $396,000 as mortgage refinancings slowed from their early 2003
levels.
During the first quarter of 2004, we experienced slight declines in loan
balances, an increase in overnight funds and a modest increase in our deposit
balances, all generally as a result of the cyclical business activities of many
of our core customers.
Our provision for loan losses amounted to $187,000 for the first three months of
2004 as compared to $250,000 during the same period last year, with net
charge-offs declining to $113,000 for the first three months of 2004 compared to
$132,000 for the same period last year. Non-performing loans on March 31, 2004
were $3,269,000 as compared with $3,331,000 on December 31, 2003.
We are pleased with the increases we recorded in both trust and brokerage
revenue. Revenue from these activities is dependant not only on volume but also
on the general levels of the equity markets in the United States and abroad.
Since early 2003, our volumes have increased nicely as have the equity markets.
Together, these factors resulted in a $213,000 or 42% increase in revenue from
our trust and retail brokerage activities. In late 2002, we formed a strategic
alliance with WCM Investment Management, Inc. in Carmel, California to improve
our overall trust investment and wealth management capabilities. This alliance
is working out well and the return on our common trust fund has exceeded the S &
P 500 since this alliance was consummated.
Non-interest expenses increased by $153,000 compared to the first quarter of
2003 as a result of increased costs for salaries and benefits, and professional
fees incurred in implementing the requirements of the Sarbanes-Oxley Act of
2002. Since the passage of Sarbanes-Oxley in 2002, First Mid has undertaken a
comprehensive review of all aspects of our corporate governance policies and
procedures.
During the first quarter of 2004, we issued $10 million of Trust Preferred
Securities. Trust Preferred Securities are long-term debt, callable securities
which, because of certain equity-like features, qualify as regulatory capital.
While we have no specific plans at this point for this additional capital, these
funds could be used for stock repurchases, acquisitions or other corporate
purposes.
Our 2004 annual meeting of stockholders will be held at 4:00 PM on May 26, 2004
in the main lobby of First Mid-Illinois Bank & Trust, N.A., 1515 Charleston
Avenue, Mattoon, Illinois. All shareholders are invited to attend. On behalf of
the Board, management and entire staff of the Company, I thank you for your
continued support and look forward to visiting with as many of you as possible
at the annual meeting.
Sincerely,
/s/ William S. Rowland
William S. Rowland
Chairman and Chief Executive Officer
April 28, 2004
First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
Mattoon, Illinois 61938
217-234-7454
www.firstmid.com
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (unaudited) March 31, December 31,
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2004 2003
Assets
Cash and due from banks $18,340 $20,659
Federal funds sold and other interest-bearing deposits 21,167 4,290
Investment securities:
Available-for-sale, at fair value 157,829 176,481
Held-to-maturity, at amortized cost (estimated fair
value of $1,651 and $1,687 at March 31, 2004
and December 31, 2003, respectively) 1,567 1,677
Loans 550,832 552,824
Less allowance for loan losses (4,500) (4,426)
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Net loans 546,332 548,398
Premises and equipment, net 15,851 16,059
Goodwill, net 9,034 9,034
Intangible assets, net 3,794 3,969
Other assets 10,916 13,078
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Total assets $784,830 $793,645
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Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $86,170 $94,723
Interest bearing 537,413 520,269
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Total deposits 623,583 614,992
Repurchase agreements with customers 48,004 59,875
Junior subordinated debentures 10,310 -
Other borrowings 30,400 39,925
Other liabilities 6,404 8,258
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Total liabilities 718,701 723,050
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Stockholders' Equity:
Common stock ($4 par value; authorized
6,000,000 shares; issued 3,694,040 shares in
2004 and 3,667,887 shares in 2003) 14,776 14,672
Additional paid-in capital 16,898 15,960
Retained earnings 55,333 52,942
Deferred compensation 2,065 1,881
Accumulated other comprehensive income 2,058 1,581
Treasury stock at cost, 710,437 shares in 2004
and 534,619 shares in 2003 (25,001) (16,441)
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Total stockholders' equity 66,129 70,595
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Total liabilities and stockholders' equity $784,830 $793,645
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands) (unaudited)
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For the three month period ended March 31, 2004 2003
Interest income:
Interest and fees on loans $8,167 $8,008
Interest on investment securities 1,515 1,602
Interest on federal funds sold and other 45 110
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Total interest income 9,727 9,720
Interest expense:
Interest on deposits 2,138 2,698
Interest on repurchase agreements with customers 72 64
Interest on subordinated debt 37 -
Interest on other borrowings 440 478
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Total interest expense 2,687 3,240
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Net interest income 7,040 6,480
Provision for loan losses 187 250
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Net interest income after provision for loan losses 6,853 6,230
Non-interest income:
Trust revenues 616 456
Brokerage commissions 110 57
Insurance commissions 430 424
Service charges 1,124 1,038
Securities gains, net 0 370
Mortgage banking revenues 94 490
Other 524 465
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Total non-interest income 2,898 3,300
Non-interest expense:
Salaries and employee benefits 3,338 3,231
Net occupancy and equipment expense 1,073 1,063
Amortization of intangible assets 175 184
Other 1,582 1,458
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Total non-interest expense 6,168 5,936
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Income before income taxes 3,583 3,594
Income taxes 1,194 1,232
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Net income $2,389 $2,362
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Per Share Information
(unaudited)
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For the three month period ended March 31, 2004 2003
Basic earnings per share $0.78 $0.74
Diluted earnings per share $0.77 $0.73
Book value per share $22.16 $21.48
Market price of stock $48.00 $28.90
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands) (unaudited)
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For the three month period ended March 31, 2004 2003
Balance at beginning of year $70,595 $66,807
Net income 2,389 2,362
Dividends on stock
Issuance of stock 1,044 825
Purchase of treasury stock (8,376) (1,689)
Changes in accumulated other comprehensive
income (loss) 477 (388)
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Balance at end of year $66,129 $67,917
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