Exhibit 99.3
Unaudited Pro Forma Financial Information.
The following pro forma financial information is the result of combining the Company's reported historical financial information with First Clover Leaf historical financial information and making adjustments to the combined information to reflect events that have occurred or that are assumed to have occurred because of the acquisition. The pro forma information should be read in conjunction with the Company’s previously reported historical financial statements and the First Clover Leaf financial statements included in this filing.
The pro forma condensed consolidating statements do not assume or include any possible cost savings or revenue opportunities that may be realized as a result of the combination. This condensed consolidating pro forma information is provided for illustrative purposes only and is not necessarily indicative of the results of operations or financial position which would have resulted if the combination had been effected at the beginning of the periods presented or as of the date indicated or the financial position or results of operation which we might obtain in the future.
The following pro forma condensed combined financial information presents the financial position of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the acquisition taken place at the dates identified (in thousands):
|
| | | | | | | | | | | | | |
| (Unaudited) | | First Clover | Pro Forma | | |
| As of June 30, 2016 | First Mid | Leaf | Transactions | Note | Pro Forma |
| Assets | | | | | |
| Cash and cash equivalents | $ | 53,072 |
| $ | 66,628 |
| (7,545 | ) | (1)(13) | $ | 112,155 |
|
| Investment securities | 643,045 |
| 110,258 |
| (737 | ) | (2) | 752,566 |
|
| Loans held for sale | 1,346 |
| 592 |
| — |
|
| 1,938 |
|
| Loans | 1,313,841 |
| 446,625 |
| (10,403 | ) | (3) | 1,750,063 |
|
| Allowance for loan losses | | (6,225 | ) | 6,225 |
| (4) | (15,164 | ) |
| Other real estate owned | 436 |
| 2,851 |
| (754 | ) | (5) | 2,533 |
|
| Premises and equipment | 29,569 |
| 9,670 |
| 1,963 |
| (6) | 41,202 |
|
| Goodwill | 41,007 |
| 11,385 |
| 5,400 |
| (7)(8) | 57,792 |
|
| Intangible assets | 8,140 |
| 1,191 |
| 4,561 |
| (9) | 13,892 |
|
| Bank owned life insurance | 25,183 |
| 15,563 |
| — |
|
| 40,746 |
|
| Other assets | 19,308 |
| 6,781 |
| 1,395 |
| (10) | 27,484 |
|
| Total assets | $ | 2,119,783 |
| $ | 665,319 |
| $ | 105 |
| | $ | 2,785,207 |
|
| | | | | | |
| Liabilities | | | | | |
| Deposits | $ | 1,704,199 |
| $ | 539,590 |
| $ | 1,994 |
| (11) | $ | 2,245,783 |
|
| Securities sold under agreements to repurchase | 131,099 |
| 21,817 |
| — |
|
| 152,916 |
|
| FHLB advances | 40,000 |
| 15,999 |
| 113 |
| (12) | 56,112 |
|
| Other borrowings | — |
| — |
| 15,000 |
| (13) | 15,000 |
|
| Subordinated debentures | 20,620 |
| 4,000 |
| (731 | ) | (14) | 23,889 |
|
| Other liabilities | 7,245 |
| 1,716 |
| 353 |
| (16) | 9,314 |
|
| Total liabilities | 1,903,163 |
| 583,122 |
| 16,729 |
| | 2,503,014 |
|
| Stockholders’ equity | 216,620 |
| 82,197 |
| (16,624 | ) | (15)(16) | 282,193 |
|
| Total liabilities and stockholders’ equity | $ | 2,119,783 |
| $ | 665,319 |
| $ | 105 |
| | $ | 2,785,207 |
|
The following pro forma condensed combined financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments, had the acquisition taken place at the beginning of each period (dollars in thousands):
|
| | | | | | | | | | | | | |
| (Unaudited) | | First Clover | Pro Forma | | |
| For the Six Months Ended June 30, 2016 | First Mid | Leaf | Transactions | Note | Pro Forma |
| Net interest income | $ | 32,057 |
| $ | 8,965 |
| $ | 1,550 |
| (17)(18) | $ | 42,572 |
|
| Provision for loan losses | 846 |
| 320 |
| — |
|
| 1,166 |
|
| Non-interest income | 13,103 |
| 1,319 |
| — |
| | 14,422 |
|
| Non-interest expense | 29,314 |
| 7,946 |
| 148 |
| (19)(20) | 37,408 |
|
| Income before taxes | 15,000 |
| 2,018 |
| 1,402 |
| | 18,420 |
|
| Income tax expense (benefit) | 5,265 |
| 353 |
| 491 |
| (21) | 6,109 |
|
| Net income (loss) | $ | 9,735 |
| $ | 1,665 |
| $ | 911 |
| | $ | 12,311 |
|
| Dividends on preferred shares | 825 |
| — |
| — |
| | 825 |
|
| Net income available to common stockholders | $ | 8,910 |
| $ | 1,665 |
| $ | 911 |
| | $ | 11,486 |
|
| | | | | | |
| Earnings per share: | | | | | |
| Basic | $ | 1.01 |
| $ | 0.24 |
| | | $ | 1.01 |
|
| Diluted | $ | 0.99 |
| $ | 0.24 |
| | | $ | 0.99 |
|
| | | | | | |
| Basic weighted average shares | 8,804,107 |
| | 2,600,616 | (22) | 11,404,723 |
|
| Diluted weighted average shares | 9,831,591 |
| | 2,600,616 | (22) | 12,432,207 |
|
|
| | | | | | | | | | | | | |
| (Unaudited) | | First Clover | Pro Forma | | |
| For the Year Ended December 31, 2015 | First Mid | Leaf | Transactions | Note | Pro Forma |
| Net interest income | $ | 55,752 |
| $ | 17,282 |
| $ | 2,912 |
| (17)(18) | $ | 75,946 |
|
| Provision for loan losses | 1,318 |
| (500 | ) | — |
|
| 818 |
|
| Non-interest income | 20,544 |
| 2,672 |
| — |
| | 23,216 |
|
| Non-interest expense | 49,248 |
| 14,141 |
| 780 |
| (19)(20) | 64,169 |
|
| Income before taxes | 25,730 |
| 6,313 |
| 2,132 |
| | 34,175 |
|
| Income tax expense (benefit) | 9,218 |
| 1,675 |
| 746 |
| (21) | 11,639 |
|
| Net income (loss) | $ | 16,512 |
| $ | 4,638 |
| $ | 1,386 |
| | $ | 22,536 |
|
| Dividends on preferred shares | 2,200 |
| — |
| — |
| | 2,200 |
|
| Net income available to common stockholders | $ | 14,312 |
| $ | 4,638 |
| $ | 1,386 |
| | $ | 20,336 |
|
| | | | | | |
| Earnings per share: | | | | | |
| Basic | $ | 1.84 |
| $ | 0.66 |
| | | $ | 1.96 |
|
| Diluted | $ | 1.81 |
| $ | 0.66 |
| | | $ | 1.92 |
|
| | | | | | |
| Basic weighted average shares | 7,775,490 |
| | 2,600,616 | (22) | 10,376,106 |
|
| Diluted weighted average shares | 9,137,689 |
| | 2,600,616 | (22) | 11,738,305 |
|
Note 1 - Basis of Presentation
The Company acquired First Clover Leaf on September 8, 2016. The acquisition is accounted for under the acquisition method of accounting and, accordingly the assets and liabilities of First Clover Leaf, presented in these pro forma condensed combined financial statements have been adjusted to their fair values based upon conditions as of the merger date and as if the transaction had been effective on January 1, 2015 for statement of income data. Since these are pro forma statements, the Company cannot assure that the amounts reflected in these financial statements would have been represented of the actual amounts earned had the companies combined at that time. The fair values are estimates as of the date hereof and are subject to refinement for up to one year after the closing date as additional information regarding the closing date fair values becomes available.
Note 2 - Pro Forma Adjustments Footnotes
|
| | | |
| (1 | ) | | Cash portion paid for purchase of $22,545,000 net of proceeds of $15,000,000 from debt used to fund the payment |
| (2 | ) | | Adjustment to reflect investments securities acquired at fair value |
| (3 | ) | | Adjustment to record loans acquired at fair value. Adjustment includes discounts for potential credit adjustments and market rate differential. Of this amount approximately $8.4 million is being accreted to interest income over the remaining term of the loans |
| (4 | ) | | To eliminate First Clover Leaf's existing allowance for loan losses. Purchased loans in a business combination are recorded at fair value on the purchase date and the carryover of the related allowance for loan losses is prohibited |
| (5 | ) | | Adjustment to reflect other real estate owned acquired at fair value |
| (6 | ) | | Adjustment of $2,652,000 to reflect buildings and equipment acquired at fair value less elimination of previous fair value adjustment recorded by First Clover Leaf of $689,000 |
| (7 | ) | | Adjustment to record goodwill of $16.8 million resulting from the difference between the purchase price and the identifiable net assets as follows (in thousands): |
|
| | | | | |
| Total purchase price | | $ | 88,471 |
|
| Allocated to book value of assets and liabilities | | 79,730 |
|
| | | 8,741 |
|
| Adjustments to record assets and liabilities to fair value: | | |
| Investments | 737 |
| |
| Loans | 10,403 |
| |
| Allowance for loan losses | (6,928 | ) | |
| OREO | 754 |
| |
| Premises and equipment | (1,963 | ) | |
| Core deposit intangible | (4,660 | ) | |
| Other assets | 8,325 |
| |
| Time deposits | 1,994 |
| |
| FHLB advances | 113 |
| |
| Subordinated debentures | (731 | ) | |
| | | 8,044 |
|
| | | $ | 16,785 |
|
|
| | | |
| (8 | ) | | To eliminate First Clover Leaf's existing goodwill of $11,385,000 |
| (9 | ) | | To record core deposit intangible asset of $4,660,000 and eliminate First Clover Leaf's existing core deposit intangible asset of $99,000 |
| (10 | ) | | To record deferred tax asset for the effects of the acquisition accounting and other miscellaneous adjustments |
|
| | | |
| (11 | ) | | Adjustment to reflect time deposits assumed at fair value. Amount is being accreted over the remaining term of the deposits |
| (12 | ) | | Adjustment to reflect FHLB advances assumed at fair value. Amount is being accreted over the remaining term of the advances. |
| (13 | ) | | To reflect debt of the Company used to finance the cash portion of the consideration paid which consists of $15,000,000 of long-term debt with a current annual interest rate of 2.25% |
| (14 | ) | | Adjustment to reflect subordinated debentures at fair value. Amount is being amortized over the remaining life of the liability. |
| (15 | ) | | To eliminate First Clover Leaf's stockholders' equity and reflect fair value of 2,600,616 shares of the Company's common stock issued as consideration for the acquisition |
| (16 | ) | | To record acquisition costs of $353,000, net of tax, not recorded as of the balance sheet date. |
|
| | | | | | | | | | |
| | | | Six months ended June 30, 2016 | | Year Ended December 31, 2015 |
| (17 | ) | To reflect accretion and amortization of fair value adjustments on the following: | | | | |
| | Loans | | $ | 1,175 |
| | $ | 2,263 |
|
| | Time deposits | | 548 |
| | 976 |
|
| | FHLB advances | | 28 |
| | 56 |
|
| | Subordinated debentures | | (42 | ) | | (84 | ) |
| (18 | ) | To reflect interest expense of the Company's debt at annual rate of 2.25% | | (160 | ) | | (299 | ) |
| (19 | ) | To reflect estimated amortization of core deposit intangible and depreciation expense | | |
| (20 | ) | To exclude direct, incremental costs of acquisition recorded during period | | 242 |
| | — |
|
| (21 | ) | To reflect tax effects on pro forma adjustments at an effective rate of 35% | | | | |
| (22 | ) | To reflect increase in common shares issued as consideration of the acquisition | | | | |
