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):
JANUARY 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 January 28, 2004, attached as Exhibit 99, providing information
concerning the Registrant's financial statements as of December 31, 2003.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99 - Quarterly shareholder report issued December 31, 2003
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: January 28, 2004 By: /s/ William S. Rowland
William S. Rowland
President and Chief
Executive Officer
EXHIBIT INDEX
Exhibit
Number Description
99 Quarterly shareholder report issued January 28, 2004
January 28, 2004
Quarterly Report to the Owners,
First Mid-Illinois Bancshares, Inc.
We are pleased to report that First Mid-Illinois Bancshares, Inc. had a
successful 2003, with diluted earnings per share increasing to $2.82 per share
as compared to $2.38 per share in 2002, an 18.5 percent increase. Net income
increased to $9,093,000 in 2003 as compared to $8,034,000 in 2002. As a result
of this performance, the Company increased its annual dividend to $.575 per
share in 2003 from $.50 per share in 2002. In addition, the Company declared a
special, one-time dividend of $.075 per share to shareholders of record on
December 30, 2003.
Higher non-interest income was one factor in the earnings growth. Non-interest
income was $12,754,000 for 2003 as compared to $10,898,000 in 2002. Residential
real estate activity was strong throughout most of 2003 with activity declining
during the fourth quarter. For the year, mortgage banking revenue increased to
$2,171,000 from $1,777,000 for 2002. Most of the residential real estate loans
we originate are sold into the secondary market for interest rate risk
management purposes. Also, deposit service charges increased during 2003, as did
insurance commissions and trust revenues.
Net interest income was $27,042,000 in 2003 as compared to $26,726,000 in 2002.
Average earning assets for the year increased by $52 million with commercial
real estate loans increasing by $48 million. The growth in the loan portfolio
offset the decline in our net interest margin caused by the low interest rate
environment and loan pricing constraints. The Company's net interest margin was
3.75% in 2003 as compared with 3.99% in 2002. On a tax-equivalent basis, the net
interest margin was 3.84% in 2003 and 4.09% in 2002.
The provision for loan losses amounted to $1,000,000 in 2003 as compared to
$1,075,000 in 2002, with net charge-offs declining to $297,000 in 2003 from
$1,054,000 in 2002. The decline in net charge-offs was primarily the result of a
$382,000 recovery on a commercial loan. Non-performing loans on December 31,
2003 were $3,331,000 as compared with $3,149,000 on December 31, 2002.
Non-interest expenses increased by $519,000 or 2% when compared to 2002. This
was primarily as a result of the costs associated with operating the locations
in Champaign and Maryville. Both were opened in November, 2002 and have had
solid loan and deposit growth.
Earnings per share growth was also impacted by our share repurchase program.
During 2003, we repurchased 120,000 shares of our own stock in the open market
and through privately negotiated transactions. This program has proven to be an
effective way of increasing value for shareholders. Any shareholder who wishes
to use this service should contact Mrs. Christie Wright at (217) 258-0493.
Thank you for your support and for your confidence in First Mid-Illinois
Bancshares, Inc.
Sincerely,
/s/ William S. Rowland
William S. Rowland
Chairman and Chief Executive Officer
Condensed Consolidated Balance Sheets
(In thousands, except share data) (unaudited) December 31, December 31,
2003 2002
------------------ -----------------
Assets
Cash and due from banks $ 20,659 $ 22,437
Federal funds sold and other interest-bearing deposits 4,290 47,220
Investment securities:
Available-for-sale, at fair value 176,481 166,415
Held-to-maturity, at amortized cost (estimated fair
value of $1,687 and $1,927 at December 31, 2003
and 2002, respectively) 1,677 1,902
Loans 552,824 499,864
Less allowance for loan losses (4,426) (3,723)
------------------ -----------------
Net loans 548,398 496,141
Premises and equipment, net 16,059 16,916
Goodwill, net 9,034 9,034
Intangible assets, net 3,969 4,743
Other assets 13,078 11,432
------------------ -----------------
Total assets $793,645 $776,240
================== =================
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $ 94,723 $ 84,025
Interest bearing 520,269 529,427
------------------ -----------------
Total deposits 614,992 613,452
Repurchase agreements with customers 59,875 44,184
Other borrowings 39,925 44,625
Other liabilities 8,258 7,172
------------------ -----------------
Total liabilities $723,050 $709,433
------------------ -----------------
Stockholders' Equity:
Common stock ($4 par value; authorized 6,000,000 shares;
Issued 3,667,887 shares in 2003 and 3,603,737 shares in 2002) $14,672 $14,415
Additional paid-in capital 15,960 14,450
Retained earnings 52,942 45,896
Deferred compensation 1,881 1,589
Accumulated other comprehensive income 1,581 2,373
Treasury stock at cost, 534,619 shares in 2003 and 414,562 shares in 2002 (16,441) (11,916)
------------------ -----------------
Total stockholders' equity 70,595 66,807
------------------ -----------------
Total liabilities and stockholders' equity $793,645 $776,240
================== =================
Condensed Consolidated Statements of Income
(In thousands) (unaudited)
For the year ended December 31, 2003 2002
------------------ -----------------
Interest income:
Interest and fees on loans $ 32,435 $ 33,726
Interest on investment securities 6,227 7,325
Interest on federal funds sold and other 276 336
------------------ -----------------
Total interest income 38,938 41,387
Interest expense:
Interest on deposits 9,751 12,253
Interest on repurchase agreements with customers 272 345
Interest on other borrowings 1,873 2,063
------------------ -----------------
Total interest expense 11,896 14,661
------------------ -----------------
Net interest income 27,042 26,726
Provision for loan losses 1,000 1,075
------------------ -----------------
Net interest income after provision for loan losses 26,042 25,651
Non-interest income:
Trust revenues 1,992 1,855
Brokerage commissions 283 265
Insurance commissions 1,476 1,258
Service charges 4,484 3,799
Securities gains, net 370 223
Mortgage banking revenues 2,171 1,777
Other 1,978 1,721
------------------ -----------------
Total non-interest income 12,754 10,898
Non-interest expense:
Salaries and employee benefits 13,522 12,732
Net occupancy and equipment expense 4,290 4,055
Amortization of intangible assets 774 742
Other 6,443 6,981
------------------ -----------------
Total non-interest expense 25,029 24,510
------------------ -----------------
Income before income taxes 13,767 12,039
Income taxes 4,674 4,005
------------------ -----------------
Net income $ 9,093 $ 8,034
================== =================
Condensed Consolidated Statements of Changes in Stockholders' Equity
(in thousands) (unaudited)
For the year ended December 31, 2003 2002
------------------ -----------------
Balance at beginning of year $ 66,807 $ 63,925
Net income 9,093 8,034
Dividends on stock (2,047) (1,640)
Issuance of stock 1,767 1,394
Purchase of treasury stock (4,233) (6,540)
Change in accumulated other comprehensive income (loss) (792) 1,634
------------------ -----------------
Balance at end of year $ 70,595 $ 66,807
================== =================
Per Share Information
(unaudited)
For the year ended December 31, 2003 2002
------------------ -----------------
Basic earnings per share $ 2.88 $ 2.39
Diluted earnings per share $ 2.82 $ 2.38
Book value per share $22.53 $20.95
First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
Mattoon, Illinois 61938
(217) 234-7454
www.firstmid.com