UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
OCTOBER 27, 2004
FIRST MID-ILLINOIS BANCSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State of Other Jurisdiction of Incorporation)
0-13368 37-1103704
(Commission File Number) (IRS Employer Identification No.)
1515 CHARLESTON AVENUE, MATTOON, IL 61938
(Address Including Zip Code of Principal Executive Offices)
(217) 234-7454
(Registrant's Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17CFR 240.13e-4(c))
Item 8.01. Other Events
Incorporated by reference is the quarterly shareholder report issued by the
Registrant on October 27, 2004, attached as Exhibit 99, providing information
concerning the Registrant's financial statements as of September 30, 2004.
Item 9.01. Financial Statements and Exhibits
(a) None required
(b) None required
(c) Exhibits
Exhibit 99 - Quarterly shareholder report as of and for the
period ending September 30, 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: October 27, 2004 By: /s/ William S. Rowland
William S. Rowland
President and Chief
Executive Officer
INDEX TO EXHIBITS
Exhibit
Number Description
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99 Quarterly shareholder report issued October 27, 2004
Exhibit 99
[GRAPHIC OMITTED][GRAPHIC OMITTED]
Our financial results for the first nine months of 2004 were good, with diluted
earnings per share amounting to $1.56 as compared to $1.42 during the same
period in 2003. Net income increased to $7,181,000 for the first nine months of
2004 as compared to $6,877,000 for the first nine months of 2003. All share and
per share information for current and prior periods presented in this report
have been adjusted to reflect the three-for-two stock split in the form of a 50%
stock dividend completed in July 2004.
An increase in net interest income was the primary factor in 2004 earnings
growth. Net interest income before provision for loan losses was $21,187,000 for
the first nine months of 2004 as compared to $19,965,000 for the same period in
2003, an increase of $1,222,000. Growth in net average earning assets and an
increase in margin contributed to the increase in net interest income. Loan
balances increased $44 million in 2004 and deposit balances increased by $33
million. The net interest margin for the first nine months of 2004 increased to
3.87% on a tax equivalent basis from 3.81% for the first nine months of 2003 as
a result of the loan growth and lower funding costs.
Our provision for loan losses amounted to $437,000 for the first nine months of
2004 as compared to $750,000 during the same period last year. The reduced
provision is primarily due to a decline in the level of non-performing loans.
Non-performing loans on September 30, 2004 were $3,606,000 as compared to
$4,766,000 on September 30, 2003. Net charge-offs were $303,000 for the first
nine months of 2004 as compared with $204,000 for the same period last year.
Non-interest income for the first nine months of 2004 was $8,717,000 compared to
$9,487,000 for the same period last year. As we anticipated, mortgage refinance
activity slowed considerably in 2004 and mortgage banking revenue declined to
$384,000 for the first nine months of 2004 compared to $1,581,000 for the same
period last year. Increases in trust and brokerage fees have partially offset
these declines. Trust revenues have increased from $1,444,000 for the first nine
months of 2003 to $1,676,000 for the first nine months of 2004. The increase in
revenues is the result of improvement in equity prices and growth in new
business. Trust assets increased from $339 million on September 30, 2003 to $354
million on September 30, 2004.
Non-interest expenses increased by $408,000 compared to the first nine months of
2003 as a result of increased costs for salaries and benefits, marketing costs
for deposit promotions, and professional fees incurred in implementing the
requirements of the Sarbanes-Oxley Act of 2002.
During the third quarter of 2004, we completed the initial phase of our retail
deposit realignment. Customers have had a favorable response to the new products
and we have added 977 new deposit accounts since the new products were first
introduced. In addition to the deposit products, we have made it much more
convenient for customers to obtain a home mortgage loan with the completion of
our online mortgage center. A customer can apply and receive pre-approval for
their home mortgage loan online. This provides the customer peace-of-mind as
they search for their new home. Initial customer usage has been very good with
over 5,000 hits to this page of our website in the last few months.
Thank you for your continued support and confidence in First Mid-Illinois
Bancshares, Inc.
Sincerely,
/s/ William S. Rowland
William S. Rowland
Chairman and Chief Executive Officer
October 27, 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) September 30, December 31,
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2004 2003
Assets
Cash and due from banks $16,918 $20,659
Federal funds sold and other interest-bearing deposits 732 4,290
Investment securities:
Available-for-sale, at fair value 168,341 176,481
Held-to-maturity, at amortized cost (estimated fair
value of $1,628 and $1,687 at September 30, 2004
and December 31, 2003, respectively) 1,567 1,677
Loans 597,406 552,824
Less allowance for loan losses (4,560) (4,426)
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Net loans 592,846 548,398
Premises and equipment, net 15,471 16,059
Goodwill, net 9,034 9,034
Intangible assets, net 3,497 3,969
Other assets 13,656 13,078
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Total assets $822,062 $793,645
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Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $85,151 $94,723
Interest bearing 563,199 520,269
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Total deposits 648,350 614,992
Repurchase agreements with customers 53,153 59,875
Junior subordinated debentures 10,310 -
Other borrowings 34,900 39,925
Other liabilities 6,623 8,258
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Total liabilities 753,336 723,050
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Stockholders' Equity:
Common stock ($4 par value; authorized
18,000,000 shares; issued 5,564,207 shares
in 2004 and 5,501,831 shares in 2003) 22,257 14,672
Additional paid-in capital 17,561 15,960
Retained earnings 51,763 52,942
Deferred compensation 2,198 1,881
Accumulated other comprehensive income 1,092 1,581
Treasury stock at cost, 1,098,676 shares in
2004 and 801,928 shares in 2003 (26,145) (16,441)
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Total stockholders' equity 68,726 70,595
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Total liabilities and stockholders' equity $822,062 $793,645
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands) (unaudited)
--------------------------------------------------------------------------------
For the nine month period ended September 30, 2004 2003
Interest income:
Interest and fees on loans $24,941 $24,245
Interest on investment securities 4,574 4,649
Interest on federal funds sold and other 72 222
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Total interest income 29,587 29,116
Interest expense:
Interest on deposits 6,634 7,549
Interest on repurchase agreements with customers 245 193
Interest on subordinated debt 255 -
Interest on other borrowings 1,266 1,409
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Total interest expense 8,400 9,151
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Net interest income 21,187 19,965
Provision for loan losses 437 750
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Net interest income after provision for loan losses 20,750 19,215
Non-interest income:
Trust revenues 1,676 1,444
Brokerage commissions 298 209
Insurance commissions 1,112 1,141
Service charges 3,572 3,303
Securities gains, net 92 370
Mortgage banking revenues 384 1,581
Other 1,583 1,439
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Total non-interest income 8,717 9,487
Non-interest expense:
Salaries and employee benefits 10,087 9,928
Net occupancy and equipment expense 3,237 3,202
Amortization of intangible assets 472 577
Other 4,860 4,541
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Total non-interest expense 18,656 18,248
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Income before income taxes 10,811 10,454
Income taxes 3,630 3,577
--------------------------------------------------------------------------------
Net income $7,181 $6,877
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Per Share Information
(unaudited)
--------------------------------------------------------------------------------
For the nine month period ended September 30, 2004 2003
Basic earnings per share $1.59 $1.45
Diluted earnings per share $1.56 $1.42
Book value per share $15.39 $14.90
Market price of stock $36.50 $31.50
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands) (unaudited)
--------------------------------------------------------------------------------
For the nine month period ended September 30, 2004 2003
Balance at beginning of year $70,595 $66,807
Net income 7,181 6,877
Dividends on stock (949) (791)
Issuance of stock 1,775 1,580
Purchase of treasury stock (9,479) (3,466)
Deferred compensation adjustment 92 -
Changes in accumulated other comprehensive
income (loss) (489) (706)
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Balance at end of year $68,726 $70,301
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