UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
AUGUST 5, 2005
FIRST MID-ILLINOIS BANCSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State of Other Jurisdiction of Incorporation)
0-13368 37-1103704
(Commission File Number) (IRS Employer Identification No.)
1515 CHARLESTON AVENUE, MATTOON, IL 61938
(Address Including Zip Code of Principal Executive Offices)
(217) 234-7454
(Registrant's Telephone Number,
including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17CFR 240.13e-4(c))
Item 8.01. Other Events
Incorporated by reference is the quarterly shareholder report issued by the
Registrant on August 5, 2005, attached as Exhibit 99, providing information
concerning the Registrant's financial statements as of June 30, 2005.
Item 9.01. Financial Statements and Exhibits
(a) None required
(b) None required
(c) Exhibits
Exhibit 99 - Quarterly shareholder report as of and for the period ending
June 30, 2005
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has dully caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
MID-ILLINOIS BANCSHARES, INC.
Dated: August 5, 2005 /s/ William S. Rowland
William S. Rowland
President and Chief Executive Officer
INDEX TO EXHIBITS
Exhibit
Number Description
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99 Quarterly shareholder report issued August 5, 2005
Exhibit 99
[GRAPHIC OMITTED][GRAPHIC OMITTED]
The financial performance of First Mid-Illinois Bancshares, Inc. was good during
the first six months of 2005 with diluted earnings per share increasing to $1.06
compared to $1.03 per share during the same period in 2004. Net income increased
to $4,797,000 for the first half of 2005 compared to $4,752,000 for the first
half of 2004. As a result of this performance, the Board of Directors elected to
increase the dividend to $.24 per share for the first half of 2005 from $.21 per
share for the first half of 2004. All share and per share information for prior
periods presented in this report have been adjusted to reflect the three-for-two
stock split in the form of a 50% stock dividend completed in July 2004.
One factor in the earnings growth was greater non-interest income. Non-interest
income increased to $6,244,000 for the first half of 2005 compared to $5,841,000
for the first half of 2004. As a result of new business underwritten through The
Checkley Agency, Inc., insurance commissions were $136,000 greater for the first
half of 2005 than for the first six months of 2004. Also, we sold securities
that resulted in a gain of $162,000 greater than last year as market
opportunities and liquidity factored in the decisions to sell. In addition,
increased residential mortgage originations and greater refinance activity as a
result of lower long-term interest rates in the first six months of 2005 led to
mortgage banking revenues increasing by $75,000 from the first six months of
2004.
Net interest income also increased to $14,297,000 compared to $14,074,000 for
the first six months of 2004 despite the current interest rate environment.
Currently, the difference between short-term rates and long-term rates is at a
historically low level. This has resulted in the Company's year-to-date net
interest margin declining to 3.78% on a tax-equivalent basis compared with 3.89%
for the first six months of last year as short-term interest rates have
increased, leading to greater funding costs. However, we have more than
compensated and been able to increase net interest income as a result of growth
in loans and deposits. Loan balances on June 30, 2005 were $617 million compared
to $576 million on June 30, 2004. Deposit balances increased to $637 million on
June 30, 2005 from $631 million on June 30, 2004. Since December 31, 2004, loan
balances have increased due to growth in commercial real estate loans, while
deposits have declined primarily as a result of the maturity of brokered CDs
that were not replaced.
Our provision for loan losses amounted to $337,000 for the first six months of
2005 compared to $375,000 for the same period in 2004. Net charge-offs declined
to $271,000 in the first half of 2005 compared to $296,000 for the same period
last year. Non-performing loans were $3.7 million on June 30, 2005 compared with
$3.1 million on December 31, 2004.
Non-interest expenses increased to $12.8 million for the first six months of
2005 compared to $12.4 million for the same period in 2004 as a result of
increased costs incurred with the addition to staff in opening the new Highland
banking facility and greater professional fees.
During the quarter, we announced that The Checkley Agency, Inc. would be moving
its office location to the corner of Route 16 and Lerna Road in September. Since
acquiring the agency in 2002, the business has continued to grow, creating the
need for additional office space. We are pleased with the insurance line of
business results and continue to explore ways to better serve the financial
needs of our customers.
In addition, we announced the engagement of BKD, LLP as our independent
registered public accounting firm, replacing KPMG LLP. The audit committee
completed an extensive review process and selected BKD as the company's audit
firm. We had no accounting disagreements with KPMG LLP.
Also, we celebrated our 140-year anniversary during the quarter and held an open
house at the main bank. We had outstanding attendance and I sincerely
appreciated your support. We continue to work diligently to retain your
confidence.
Thank you for your continued support in First Mid-Illinois Bancshares, Inc.
Sincerely,
/s/ William S. Rowland
William S. Rowland
Chairman and Chief Executive Officer
August 5, 2005
First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
Mattoon, Illinois 61938
217-234-7454
www.firstmid.com
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (unaudited) JUN 30, Dec 31,
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2005 2004
Assets
Cash and due from banks $15,778 $19,119
Federal funds sold and other interest-bearing deposits 922 4,435
Investment securities:
Available-for-sale, at fair value 148,124 168,821
Held-to-maturity, at amortized cost (estimated fair
value of $1,476 and $1,598 at June 30, 2005
and December 31, 2004, respectively) 1,432 1,552
Loans 617,390 597,508
Less allowance for loan losses (4,687) (4,621)
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Net loans 612,703 592,887
Premises and equipment, net 15,020 15,227
Goodwill, net 9,034 9,034
Intangible assets, net 3,059 3,346
Other assets 11,612 12,117
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Total assets $817,684 $826,538
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Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $93,679 $85,524
Interest bearing 543,713 564,716
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Total deposits 637,392 650,240
Repurchase agreements with customers 50,205 59,835
Junior subordinated debentures 10,310 10,310
Other borrowings 43,000 29,900
Other liabilities 6,258 7,189
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Total liabilities 747,165 757,474
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Stockholders' Equity:
Common stock ($4 par value; authorized
18,000,000 shares; issued 5,622,898 shares
in 2005 and 5,578,897 shares in 2004) 22,492 22,316
Additional paid-in capital 19,122 17,845
Retained earnings 57,000 53,113
Deferred compensation 2,413 2,260
Accumulated other comprehensive income 80 623
Treasury stock at cost, 1,203,495 shares in
2005 and 1,121,546 shares in 2004 (30,588) (27,093)
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Total stockholders' equity 70,519 69,064
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Total liabilities and stockholders' equity $817,684 $826,538
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands) (unaudited)
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For the year ended June 30, 2005 2004
Interest income:
Interest and fees on loans $18,072 $16,371
Interest on investment securities 3,123 3,060
Interest on federal funds sold and other 102 57
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Total interest income 21,297 19,488
Interest expense:
Interest on deposits 5,151 4,294
Interest on repurchase agreements with customers 619 134
Interest on subordinated debt 293 140
Interest on other borrowings 937 846
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Total interest expense 7,000 5,414
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Net interest income 14,297 14,074
Provision for loan losses 337 375
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Net interest income after provision for loan losses 13,960 13,699
Non-interest income:
Trust revenues 1,208 1,162
Brokerage commissions 212 227
Insurance commissions 912 776
Service charges 2,187 2,317
Securities gains, net 254 92
Mortgage banking revenues 321 246
Other 1,150 1,021
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Total non-interest income 6,244 5,841
Non-interest expense:
Salaries and employee benefits 6,880 6,709
Net occupancy and equipment expense 2,080 2,159
Amortization of intangible assets 287 323
Other 3,553 3,213
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Total non-interest expense 12,800 12,404
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Income before income taxes 7,404 7,136
Income taxes 2,607 2,384
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Net income $4,797 $4,752
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Per Share Information
(unaudited)
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For the year ended June 30, 2005 2004
Basic earnings per share $1.08 $1.05
Diluted earnings per share $1.06 $1.03
Book value per share at June 30 $15.96 $14.63
Market price of stock at June 30 $40.50 $33.33
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands) (unaudited)
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For the year ended June 30, 2005 2004
Balance at beginning of period $69,154 $70,595
Net income 4,797 9,751
Dividends on stock (1,056) (2,023)
Issuance of stock 1,352 2,050
Purchase of treasury stock (3,303) (10,365)
Deferred compensation adjustment 118 104
Changes in accumulated other comprehensive
income (loss) (543) (958)
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Balance at end of period $70,519 $69,154
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