EXHIBIT 99.1
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October 26, 2001
Quarterly Report to the Owners,
First Mid-Illinois Bancshares, Inc.
Our financial results for the first nine months of 2001 were good with
net income amounting to $4,772,000 -- a 13 percent increase over the
$4,209,000 we earned during the same period in 2000. Improved net
interest income as well as increases in mortgage banking and service
charge revenues were the primary drivers of our improved performance.
We also continue to grow our banking franchise, as evidenced by the
increase in loans -- $467.2 million at September 30, 2001 as compared
to $429.3 million at December 31, 2000 -- and deposits -- $555.8
million at September 30, 2001, as compared to $504.0 million at
December 31, 2000.
Because of our financial results, the Board of Directors declared a
three-for-two stock split in the form of a 50 percent stock dividend
to be paid to shareholders of record as of October 26, 2001, payable
on November 16, 2001. All share and per share information for current
and prior periods presented have been adjusted to reflect the stock
split. The stock dividend will increase the number of shares
outstanding by approximately 1.1 million shares. Shareholders of
record on October 26, 2001 can expect to receive specific information
concerning their stock dividend shortly after November 16, 2001.
The Board has also authorized the repurchase, in the open market or in
privately negotiated transactions, of up to an aggregate of $3 million
of additional shares of common stock. Shareholders who wish to learn
more about the aforementioned stock dividend or the repurchase,
should contact Ms. Christie L. Burich, Manager of Shareholder
Services, at 217/258-0493 or me at 217/258-0415.
As we are all aware, the tragic events of September 11, 2001 have
changed our lives and the way we view our surroundings forever. The
total impact of these events on the American economy and our way of
life in general will not be completely known for many months or years.
We do anticipate some slowing of economic activity as well as
additional banking regulations as Congress determines how the banking
system can best function as a resource in America s war on terrorism.
As Chairman and CEO, I want to assure you that your Company is
prepared for the challenges ahead. We will do whatever is required to
support our Government, as well as to be a trusted provider of
financial services to the citizens of this great country.
Sincerely,
William S. Rowland
Chairman and Chief Executive Officer
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (unaudited) September 30, December 31,
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2001 2000
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ASSETS
Cash and due from banks $ 30,155 $ 22,115
Federal funds sold 12,300 2,725
Investment securities:
Available-for-sale, at fair value 142,812 150,034
Held-to-maturity, at amortized cost (estimated fair
value of $2,777 and $2,800 at September 30, 2001
and December 31, 2000, respectively) 2,692 2,757
Loans 467,229 429,288
Less allowance for loan losses (3,786) (3,262)
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Net loans 463,443 426,026
Premises and equipment, net 16,922 15,375
Intangible assets, net 12,704 12,150
Other assets 11,344 11,817
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TOTAL ASSETS $692,372 $642,999
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 71,426 $ 66,646
Interest bearing 484,336 437,339
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Total deposits 555,762 503,985
Repurchase agreements with customers 34,364 31,096
Other borrowings 28,300 40,300
Long-term debt 4,325 4,325
Other liabilities 5,553 5,566
TOTAL LIABILITIES $628,304 $585,272
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Stockholders' Equity
Common stock ($4 par value; authorized 6,000,000 shares;
issued 3,542,634 shares in 2001 and 3,488,204 shares in 2000) $14,171 $9,302
Additional paid-in-capital 13,219 12,293
Retained earnings 38,566 39,169
Deferred compensation 1,351 1,218
Accumulated other comprehensive income (loss) 1,710 (288)
Treasury stock at cost, 166,563 shares in 2001 and 128,106 shares in 2000 (4,949) (3,967)
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TOTAL STOCKHOLDERS' EQUITY 64,068 57,727
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $692,372 $642,999
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The share information has been adjusted to reflect the three-for-two stock split payable on November 16, 2001.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands) (unaudited)
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For the nine-month period ended September 30, 2001 2000
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INTEREST INCOME:
Interest and fees on loans $ 27,765 $ 25,641
Interest on investment securities 6,309 6,856
Interest on federal funds sold 285 97
Total interest income 34,359 32,594
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INTEREST EXPENSE:
Interest on deposits 14,714 13,386
Interest on repurchase agreements with customers 779 943
Interest on other borrowings 1,244 1,778
Interest on long-term debt 189 244
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Total interest expense 16,926 16,351
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NET INTEREST INCOME 17,433 16,243
Provision for loan losses 450 400
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Net interest income after provision for loan losses 16,983 15,843
Other income:
Trust revenues 1,426 1,362
Brokerage revenues 271 370
Service charges 2,309 1,836
Securities gains (losses), net 154 (3)
Mortgage banking income 764 261
Other 1,368 915
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Total other income 6,292 4,741
OTHER EXPENSE:
Salaries and employee benefits 8,152 7,545
Net occupancy and equipment expense 2,899 2,702
Federal deposit insurance premiums 73 76
Amortization of intangible assets 916 896
Other 4,291 3,682
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Total other expense 16,331 14,901
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Income before income taxes 6,944 5,683
Income taxes 2,172 1,474
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NET INCOME $ 4,772 $ 4,209
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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands) (unaudited)
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For the nine-month period ended September 30, 2001 2000
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Balance at beginning of period $ 57,727 $ 51,518
Net income 4,772 4,209
Issuance of stock 1,072 736
Purchase of treasury stock (850) (1,637)
Change in accumulated other comprehensive income (loss) 1,998 945
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Balance at end of period $ 64,068 $ 55,163
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PER SHARE INFORMATION
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2001 2000
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For the nine-month period ended September 30, $ 1.41 $ 1.41
Basic earnings per share $ 1.41 $ 1.23
Diluted earnings per share $18.98 $16.37
The per share information has been adjusted to reflect the three-for-two stock split payable on November 16, 2001.
First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
Mattoon, Illinois 61938
(217) 234-7454
www.firstmid.com