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):
JULY 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 July 28, 2004, attached as Exhibit 99, providing information
concerning the Registrant's financial statements as of June 30, 2004.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99 - Quarterly shareholder report issued June 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: July 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 July 28, 2004
Exhibit 99
[GRAPHIC OMITTED][GRAPHIC OMITTED]
The financial performance of First Mid-Illinois Bancshares, Inc. was solid
during the first six months of 2004 with diluted earnings per share increasing
to $1.03 as compared to $.93 during the same period in 2003. Net income
increased to $4,752,000 for the first half of 2004 as compared to $4,484,000 for
the first half of 2003. As a result of the improved performance, the Board of
Directors elected to increase the dividend to $.21 per share for the first half
of 2004 from $.17 for the first half of 2003. The Board also declared a
three-for-two stock split in the form of a 50 percent stock dividend. This stock
dividend was declared on June 22, 2004 and was paid on July 16, 2004 to all
shareholders of record as of July 6, 2004. As a result of this stock dividend,
all share and per share information for current and prior periods presented in
this report have been adjusted to reflect the stock split. This is our third
stock split since 1997 and is reflective of our long-term commitment to
shareholder value.
Higher net interest income was the primary factor in 2004 earnings growth. Net
interest income before provision for loan losses was $14,074,000 for the first
six months of 2004 as compared to $13,105,000 for the same period in 2003, an
increase of $969,000. Growth in net average earning assets and an increase in
margin contributed to the increase in net interest income. Loan balances
increased $23 million in 2004 with growth in commercial real estate and
operating loans. Deposit balances also increased by $15.5 million. Net interest
margin for the first six months of 2004 increased to 3.89% on a tax equivalent
basis from 3.77% for the first six months of 2003 as a result of the loan growth
and lower funding costs.
Our provision for loan losses amounted to $375,000 for the first six months of
2004 as compared to $500,000 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 June 30, 2004 were $2,205,000 as compared to $5,678,000
on June 30, 2003. Net charge-offs were $296,000 for the first six months of 2004
as compared with $101,000 for the same period last year
Non-interest income for the first half of 2004 was $5,841,000 compared to
$6,270,000 for the same period last year. Mortgage refinance activity has slowed
considerably in 2004 and mortgage banking revenue declined to $246,000 for the
first half of 2004 compared to $939,000 for the same period last year. Increases
in trust and brokerage fees have partially offset these declines. Trust revenues
have increased from $945,000 for the first six months of 2003 to $1,162,000 for
the first six months of 2004. The increase in revenues is the result of
improvement in equity prices and growth in new business. Trust assets increased
from $330 million on June 30, 2003 to $351 million on June 30, 2004.
Non-interest expenses increased by $333,000 compared to the first half 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. First Mid has undertaken a
comprehensive review of all aspects of our corporate governance policies and
procedures.
Our improved financial performance and the shareholder value we have created is
a result of an on-going commitment by management and the Board of Directors to
improve the underlying fundamentals of our business. During the second quarter
of 2004, we made a number of changes to our retail deposit products to ensure
that this phase of our operations meets customer expectations and that our
products are competitive in the marketplace. We began advertising our new retail
products late in the second quarter and results to date have been encouraging.
We also employed a full-time business development officer, Mr. Chris Kirk, to
serve our market in the metro-east area of St. Louis. This area has a great deal
of growth potential and in the three years since we have entered the market, we
have done quite well.
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
July 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) June 30, December 31,
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2004 2003
Assets
Cash and due from banks $18,726 $20,659
Federal funds sold and other interest-bearing deposits 902 4,290
Investment securities:
Available-for-sale, at fair value 167,357 176,481
Held-to-maturity, at amortized cost (estimated fair
value of $1,604 and $1,687 at June 30, 2004
and December 31, 2003, respectively) 1,567 1,677
Loans 576,041 552,824
Less allowance for loan losses (4,505) (4,426)
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Net loans 571,536 548,398
Premises and equipment, net 15,797 16,059
Goodwill, net 9,034 9,034
Intangible assets, net 3,646 3,969
Other assets 13,310 13,078
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Total assets $801,875 $793,645
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Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $78,901 $94,723
Interest bearing 551,617 520,269
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Total deposits 630,518 614,992
Repurchase agreements with customers 52,582 59,875
Junior subordinated debentures 10,310 -
Other borrowings 36,200 39,925
Other liabilities 6,825 8,258
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Total liabilities 736,435 723,050
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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) 14,821 14,672
Additional paid-in capital 17,400 15,960
Retained earnings 56,745 52,942
Deferred compensation 2,064 1,881
Accumulated other comprehensive income 60 1,581
Treasury stock at cost, 710,437 shares in 2004
and 534,619 shares in 2003 (25,650) (16,441)
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Total stockholders' equity 65,440 70,595
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Total liabilities and stockholders' equity $801,875 $793,645
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands) (unaudited)
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For the six month period ended June 30, 2004 2003
Interest income:
Interest and fees on loans $16,371 $16,083
Interest on investment securities 3,060 3,175
Interest on federal funds sold and other 57 191
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Total interest income 19,488 19,449
Interest expense:
Interest on deposits 4,294 5,269
Interest on repurchase agreements with customers 134 132
Interest on subordinated debt 140 -
Interest on other borrowings 846 943
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Total interest expense 5,414 6,344
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Net interest income 14,074 13,105
Provision for loan losses 375 500
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Net interest income after provision for loan losses 13,699 12,605
Non-interest income:
Trust revenues 1,162 945
Brokerage commissions 227 124
Insurance commissions 776 778
Service charges 2,317 2,138
Securities gains, net 92 370
Mortgage banking revenues 246 939
Other 1,021 976
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Total non-interest income 5,841 6,270
Non-interest expense:
Salaries and employee benefits 6,709 6,560
Net occupancy and equipment expense 2,159 2,123
Amortization of intangible assets 323 365
Other 3,213 3,023
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Total non-interest expense 12,404 12,071
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Income before income taxes 7,136 6,804
Income taxes 2,384 2,320
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Net income $4,752 $4,484
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Per Share Information
(unaudited)
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For the six month period ended June 30, 2004 2003
Basic earnings per share $1.05 $0.94
Diluted earnings per share $1.03 $0.93
Book value per share $14.63 $14.72
Market price of stock $33.33 $22.00
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands) (unaudited)
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For the six month period ended June 30, 2004 2003
Balance at beginning of year $70,595 $66,807
Net income 4,752 4,484
Dividends on stock (949) (791)
Issuance of stock 1,589 1,375
Purchase of treasury stock (9,026) (2,075)
Changes in accumulated other comprehensive
income (loss) (1,521) 193
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Balance at end of year $65,440 $69,993
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