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):
MARCH 31, 2006
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 May 5, 2006, attached as Exhibit 99, providing information
concerning the Registrant's financial statements as of March 31, 2006.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit 99 - Quarterly shareholder report as of and for the period
ending March 31, 2006
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: May 5, 2006 /s/ Michael L. Taylor
Michael L. Taylor
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit
Number Description
--------------------------------------------------------------------------------
99 Quarterly shareholder report issued May 5, 2006
Exhibit 99
[GRAPHIC OMITTED][GRAPHIC OMITTED]
First Mid-Illinois Bancshares, Inc. has started 2006 well with diluted earnings
per share of $.54 and net income of $2,404,000 - results that are comparable to
last year's first quarter results of $.54 per share and net income of
$2,435,000. Loan and deposit balances increased during the first quarter of
2006, non-performing assets declined to $3.3 million from $4.3 million a year
ago and our previously announced acquisition of Mansfield Bancorp, Inc. has
closed as scheduled during the second quarter.
In previous reports, I have communicated with you about the challenging interest
rate environment which banks are experiencing. This rate environment has
continued in 2006, resulting in a decline in our net interest margin to 3.66% at
March 31, 2006 from 3.71% at March 31, 2005. However, growth in loans and
deposits has more than compensated for the decline in margin. Loan balances on
March 31, 2006 were $642 million as compared to $638 million on December 31,
2005 with the majority of the growth in commercial real estate loans. Deposit
balances on March 31, 2006 were $654 million compared to $649 million on
December 31, 2005 with growth in money market account balances. As a result, net
interest income increased by $65,000 to $7,140,000 compared to $7,075,000 for
the first quarter of 2005.
Non-interest income amounted to $3,133,000 for the first quarter of 2006 as
compared with $3,176,000 for the first quarter of 2005. Increases in long-term
interest rates led to a decline in mortgage banking revenues, while service
charge income from deposit accounts and insurance commissions increased. During
the first quarter of 2005, we recognized $173,000 of securities gains. We
recognized no security gains in the first quarter of 2006.
Non-interest expense increased slightly in 2006 to $6,529,000 compared to
$6,306,000 in 2005. This increase is attributed to the opening of our newest
branch in Highland, Illinois which opened in March 2005, the new location for
The Checkley Agency, Inc. which opened in June 2005 and an accounting change
associated with stock options. Beginning in 2006, businesses that have
outstanding stock options are required to make an estimate of compensation
expense associated with these options and record that amount as a charge to
earnings. This accounting change resulted in additional compensation expense of
$49,000 being recorded in the first quarter of 2006. In previous years, this
amount has been shown only in the footnotes to the financial statements.
We continue to stress the importance of credit quality. Total non-performing
assets have declined from $4.3 million on March 31, 2005 to $3.3 million on
March 31, 2006 and remain below peer bank averages. Our provision for loan
losses amounted to $193,000 for the first quarter of 2006 as compared with
$187,000 for the first quarter of 2005. Net charge-offs were $112,000 for the
first quarter of 2006 as compared to $71,000 last year.
We also continue to provide our shareholders with liquidity for their First Mid
investments through our ongoing share repurchase program. During the first
quarter of 2006, we repurchased approximately 80,000 shares at a total cost of
$3.3 million. This program has proven to be a solid way of increasing
shareholder value, as well as providing a supplement to open-market liquidity
for our shareholders. Any shareholder who wishes to utilize this service should
contact Ms. Christie Wright at (217) 258-0493.
As mentioned earlier, I am pleased to report that we have recently completed the
acquisition of Mansfield, Bancorp, Inc., the parent company for Peoples State
Bank of Mansfield. From a strategic standpoint, the acquisition expands our
ability to deliver banking, trust, and insurance solutions to clients in
Champaign, Piatt and Dewitt Counties. Our existing branch network compliments
these locations nicely, and we will now have 28 banking locations in 20
communities across central Illinois. We look forward to carrying on the
tradition of quality customer service that Peoples State Bank of Mansfield has
displayed since 1910. We have recently begun preparations for installation of an
ATM at the Mahomet facility to enhance convenience for customers. In addition,
we continue to work diligently to combine the operations of Peoples and First
Mid-Illinois Bank & Trust, N.A. and anticipate this to be completed by the end
of the third quarter, 2006. At that time, services such as electronic banking
and remote deposit will be available for customers. We look forward to the
opportunities that lie ahead.
Our 2006 annual meeting of stockholders will be held at 4:00 p.m. on May 24,
2006 in the 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
Chairman and Chief Executive Officer
May 5, 2006
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) Mar 31, Dec 31,
--------------------------------------------------------------------------------
2006 2005
Assets
Cash and due from banks $14,945 $19,131
Federal funds sold and other interest-bearing deposits 2,345 426
Investment securities:
Available-for-sale, at fair value 147,000 155,841
Held-to-maturity, at amortized cost (estimated fair
value of $1,316 and $1,442 at March 31, 2006
and December 31, 2005, respectively) 1,292 1,412
Loans 641,861 638,133
Less allowance for loan losses (4,729) (4,648)
--------------------------------------------------------------------------------
Net loans 637,132 633,485
Premises and equipment, net 15,325 15,168
Goodwill, net 9,034 9,034
Intangible assets, net 2,640 2,778
Other assets 12,303 13,298
--------------------------------------------------------------------------------
Total assets $842,016 $850,573
================================================================================
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing $96,827 $95,305
Interest bearing 556,919 553,764
--------------------------------------------------------------------------------
Total deposits 653,746 649,069
Repurchase agreements with customers 46,606 67,380
Other borrowings 53,000 44,500
Junior subordinated debentures 10,310 10,310
Other liabilities 6,101 6,988
--------------------------------------------------------------------------------
Total liabilities 769,763 778,247
--------------------------------------------------------------------------------
Stockholders' Equity:
Common stock ($4 par value; authorized
18,000,000 shares; issued 5,662,115 shares
in 2006 and 5,633,621 shares in 2005) 22,648 22,534
Additional paid-in capital 20,302 19,439
Retained earnings 63,272 60,867
Deferred compensation 2,514 2,440
Accumulated other comprehensive income (887) (739)
Treasury stock at cost, 1,321,390 shares in
2006 and 1,241,359 shares in 2005 (35,596) (32,215)
--------------------------------------------------------------------------------
Total stockholders' equity 72,253 72,326
--------------------------------------------------------------------------------
Total liabilities and stockholders' equity $842,016 $850,573
================================================================================
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands) (unaudited)
--------------------------------------------------------------------------------
For the three months ended March 31, 2006 2005
Interest income:
Interest and fees on loans $10,286 $ 8,782
Interest on investment securities 1,553 1,563
Interest on federal funds sold and other 20 79
--------------------------------------------------------------------------------
Total interest income 11,859 10,424
Interest expense:
Interest on deposits 3,449 2,515
Interest on repurchase agreements with customers 481 283
Interest on subordinated debt 599 411
Interest on other borrowings 190 140
--------------------------------------------------------------------------------
Total interest expense 4,719 3,349
--------------------------------------------------------------------------------
Net interest income 7,140 7,075
Provision for loan losses 193 187
--------------------------------------------------------------------------------
Net interest income after provision for loan losses 6,947 6,888
Non-interest income:
Trust revenues 609 636
Brokerage commissions 92 97
Insurance commissions 576 511
Service charges 1,150 1,034
Securities gains, net (1) 173
Mortgage banking revenues 67 153
Other 640 572
--------------------------------------------------------------------------------
Total non-interest income 3,133 3,176
Non-interest expense:
Salaries and employee benefits 3,563 3,474
Net occupancy and equipment expense 1,136 1,036
Amortization of intangible assets 138 142
Other 1,692 1,654
--------------------------------------------------------------------------------
Total non-interest expense 6,529 6,306
--------------------------------------------------------------------------------
Income before income taxes 3,551 3 758
Income taxes 1,147 1,323
--------------------------------------------------------------------------------
Net income $2,404 $2,435
================================================================================
Per Share Information
(unaudited)
--------------------------------------------------------------------------------
For the three months ended March 31, 2005 2004
Basic earnings per share $0.55 $0.55
Diluted earnings per share $0.54 $0.54
Book value per share at March 31 $16.65 $15.72
Market price of stock at March 31 $40.00 $40.15
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands) (unaudited)
--------------------------------------------------------------------------------
For the three months ended March 31, 2005 2004
Balance at beginning of period $72,326 $69,154
Net income 2,404 2,435
Issuance of stock 783 711
Purchase of treasury stock (3,307) (1,566)
Deferred compensation adjustment 195 87
Changes in accumulated other comprehensive
income (loss) (148) (985)
--------------------------------------------------------------------------------
Balance at end of period $74,259 $71,841
================================================================================