Exhibit 99
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First Mid-Illinois Bancshares, Inc. had a successful first quarter with diluted earnings per share increasing to $.46 per share as compared to $.40 per share for the first quarter of 2007, a 15% increase. Net income increased to $2,922,000 as compared to $2,594,000 in the first quarter of 2007. All share and per share information for the 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 June 2007.
Growth in net interest income was the primary contributor to the increase in earnings. Net interest income increased to $8,502,000 as compared to $7,677,000 for the first quarter of 2007. This was the result of an improved net interest margin and modest growth of loans and deposits. The Company’s 2008 year-to-date net interest margin was 3.55% as compared to 3.41% for the first three months of 2007. This was the result of funding costs decreasing more quickly than asset yields. In addition, growth in loan balances to $738 million on March 31, 2008 from $709 million on March 31, 2007 led to increased interest income. The growth was primarily in commercial operating and commercial real estate loans. Since December 31, 2007, loan balances have declined as a result of seasonal paydowns on agricultural loans. In addition, deposit balances increased to $796 million from $778 million last March due to growth in money market account balances.
Non-interest income increased to $3,970,000 for the first quarter of 2008 as compared to $3,832,000 for the same period in 2007. Fees received on ATM and debit cards increased by $90,000 from the first quarter of 2007 due to an overall increase in the number of electronic transactions. The Company now has 32 ATMs dispersed throughout its market area and customer usage of debit cards continues to increase. In addition, service charge income increased because of fees received on overdrafts. Trust revenues increased by $27,000 from the first quarter of 2007 due to greater revenue from farm agency accounts and increased employee benefit fees.
Non-interest expense increased to $7,785,000 compared with $7,531,000 for the first quarter of 2007. This increase is attributed to increases in compensation expense and expenses related to loan collections, including legal fees and other real estate expenses.
Credit quality remains of high importance to the Company and we continue to invest significant energies in this area. Our provision for loan losses amounted to $191,000 for the first three months of 2008 as compared to $186,000 last year. Net charge-offs were low at $58,000 in the first quarter of 2008 compared to $31,000 for the same period last year. However, as general economic trends have declined, we have seen an increase in the level of non-performing loans. Non-performing loans were $8.3 million on March 31, 2008 as compared to $4 million on March 31, 2007. Much of this increase is due to the insufficient cash flows on commercial real estate loans of one borrower which totaled $2.9 million as of March 31, 2008.
We continue to make progress on our retail customer service and sales efforts. During the first quarter, each of our frontline staff completed customer service training. In addition, we introduced our new checking account lineup and are pleased with how our customers have received these products thus far.
As most shareholders already know, our organization lost a true friend on April 21, 2008 when Dr. Daniel E. Marvin, Jr. passed away. Dan first joined the board of our bank in 1980 and was one of the original organizers of First Mid-Illinois Bancshares, Inc. in 1981. He was always committed to First Mid--our customers, shareholders, employees and most importantly our values. He will be missed by all.
Thank you for your continued support of First Mid-Illinois Bancshares, Inc.
Sincerely,
/s/ William S. Rowland
Sincerely,
William S. Rowland
Chairman and Chief Executive Officer
April 30, 2008
First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
Mattoon, Illinois 61938
217-234-7454
www.firstmid.com
| CONDENSED CONSOLIDATED BALANCE SHEETS | | | | | | |
| | | (unaudited) | | | | |
| (in thousands, except share data) | | Mar 31 | | | Dec 31 | |
| | | 2008 | | | 2007 | |
| | | | | | | |
| Assets | | | | | | |
| Cash and due from banks | | $ | 22,808 | | | $ | 28,737 | |
| Federal funds sold and other interest-bearing deposits | | | 41,905 | | | | 2,386 | |
| Investment securities: | | | | | | | | |
| Available-for-sale, at fair value | | | 169,783 | | | | 184,033 | |
| Held-to-maturity, at amortized cost (estimated fair value of $1,062 and | | | | | | | | |
| $1,194 at March 31, 2008 and December 31, 2007, respectively) | | | 1,043 | | | | 1,178 | |
| Loans | | | 737,841 | | | | 748,161 | |
| Less allowance for loan losses | | | (6,251 | ) | | | (6,118 | ) |
| Net loans | | | 731,590 | | | | 742,043 | |
| Premises and equipment, net | | | 15,210 | | | | 15,520 | |
| Goodwill, net | | | 17,363 | | | | 17,363 | |
| Intangible assets, net | | | 4,136 | | | | 4,327 | |
| Other assets | | | 17,322 | | | | 20,751 | |
| Total assets | | $ | 1,021,160 | | | $ | 1,016,338 | |
| | | | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | | |
| Deposits: | | | | | | | | |
| Non-interest bearing | | $ | 120,775 | | | $ | 124,486 | |
| Interest bearing | | | 674,932 | | | | 646,097 | |
| Total deposits | | | 795,707 | | | | 770,583 | |
| Repurchase agreements with customers | | | 54,251 | | | | 68,300 | |
| Other borrowings | | | 59,250 | | | | 67,250 | |
| Junior subordinated debentures | | | 20,620 | | | | 20,620 | |
| Other liabilities | | | 8,136 | | | | 9,133 | |
| Total liabilities | | | 937,964 | | | | 935,886 | |
| Stockholders’ Equity: | | | | | | | | |
| Common stock ($4 par value; authorized 18,000,000 shares; issued | | | | | | | | |
| 7,163,687 shares in 2008 and 7,135,113 shares in 2007) | | | 28,655 | | | | 28,450 | |
| Additional paid-in capital | | | 23,941 | | | | 23,308 | |
| Retained earnings | | | 52,817 | | | | 49,895 | |
| Deferred compensation | | | 2,629 | | | | 2,568 | |
| Accumulated other comprehensive income (loss) | | | 1,815 | | | | 1,096 | |
| Treasury stock at cost, 923,385 shares in 2008 and 858,396 | | | | | | | | |
| in 2007 | | | (26,661 | ) | | | (24,955 | ) |
| Total stockholders’ equity | | | 83,196 | | | | 80,452 | |
| Total liabilities and stockholders’ equity | | $ | 1,021,160 | | | $ | 1,016,338 | |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |
| (In thousands) (unaudited) | | | | | | |
| For the period ended March 31, | | 2008 | | | 2007 | |
| | | | | | | |
| Interest income: | | | | | | |
| Interest and fees on loans | | $ | 12,354 | | | $ | 12,172 | |
| Interest on investment securities | | | 2,122 | | | | 2,269 | |
| Interest on federal funds sold & other deposits | | | 311 | | | | 85 | |
| Total interest income | | | 14,787 | | | | 14,526 | |
| Interest expense: | | | | | | | | |
| Interest on deposits | | | 4,850 | | | | 5,290 | |
| Interest on repurchase agreements with customers | | | 368 | | | | 577 | |
| Interest on other borrowings | | | 701 | | | | 587 | |
| Interest on subordinated debt | | | 366 | | | | 395 | |
| Total interest expense | | | 6,285 | | | | 6,849 | |
| Net interest income | | | 8,502 | | | | 7,677 | |
| Provision for loan losses | | | 191 | | | | 186 | |
| Net interest income after provision for loan losses | | | 8,311 | | | | 7,491 | |
| Non-interest income: | | | | | | | | |
| Trust revenues | | | 744 | | | | 717 | |
| Brokerage commissions | | | 99 | | | | 112 | |
| Insurance commissions | | | 709 | | | | 699 | |
| Services charges | | | 1,321 | | | | 1,270 | |
| Securities gains (losses), net | | | 151 | | | | 139 | |
| Mortgage banking revenues | | | 108 | | | | 121 | |
| Other | | | 838 | | | | 774 | |
| Total non-interest income | | | 3,970 | | | | 3,832 | |
| Non-interest expense: | | | | | | | | |
| Salaries and employee benefits | | | 4,124 | | | | 4,076 | |
| Net occupancy and equipment expense | | | 1,235 | | | | 1,217 | |
| Amortization of intangible assets | | | 191 | | | | 217 | |
| Other | | | 2,235 | | | | 2,021 | |
| Total non-interest expense | | | 7,785 | | | | 7,531 | |
| Income before income taxes | | | 4,496 | | | | 3,792 | |
| Income taxes | | | 1,574 | | | | 1,198 | |
| Net income | | $ | 2,922 | | | $ | 2,594 | |
| | | | | | | | | |
Per Share Information (unaudited) | | | | | | | | |
| For the year ended March 31, | | 2008 | | | 2007 | |
| Basic earnings per share | | $ | 0.47 | | | $ | 0.40 | |
| Diluted earnings per share | | $ | 0.46 | | | $ | 0.40 | |
| Book value per share at March 31 | | $ | 13.33 | | | $ | 12.01 | |
| Market price of stock at March 31 | | $ | 25.50 | | | $ | 27.63 | |
| | | | | | | | | |
| CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY | |
| (In thousands) (unaudited) | | | | | | |
| For the period ended March 31, | | 2008 | | | 2007 | |
| | | | | | | |
| Balance at beginning of period | | $ | 80,452 | | | $ | 75,786 | |
| Net income | | | 2,922 | | | | 205949 | |
| Dividends on stock | | | - | | | | 7 | |
| Issuance of stock | | | 677 | | | | 827 | |
| Purchase of treasury stock | | | (1,645 | ) | | | (3,008 | ) |
| Deferred compensation and other adjustments | | | 71 | | | | 174 | |
| Changes in accumulated other comprehensive income (loss) | | | 719 | | | | 99 | |
| Balance at end of period | | $ | 83,196 | | | $ | 76,479 | |
