Attached files
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| 8-K - 1ST QUARTER 2012 EARNINGS RELEASE - FIRST MID BANCSHARES, INC. | form8k_042512.htm |
Exhibit 99
[GRAPHIC OMITTED][GRAPHIC OMITTED]
2012 has started well for First Mid with growth in earnings and earnings per share, balance sheet growth, reduced levels of non-performing assets, and a continued strong capital position. Net income for the first quarter of 2012 was $3,390,000 compared to $2,845,000 for the first quarter of 2011. Diluted earnings per share also increased to $.41 per share for the first quarter of 2012 compared to $.35 per share for the same period last year.
Net interest income for the first quarter of 2012 amounted to $12.1 million compared to $11.7 million last year. This was due to growth in the balance sheet with more loans, investments, and deposits than a year ago and an increase in the net interest margin. Since March 31, 2011, loan balances increased $46 million, investment balances increased $95 million, and deposit balances increased $17 million. The balance sheet shows a decline in total loan balances since year-end as we have experienced seasonal paydowns in agricultural operating loans. In addition to the balance sheet growth since last March, our net interest margin was higher for the first quarter of 2012 than the first quarter last year. The margin, on a tax equivalent basis, was 3.50% for the first quarter of 2012 compared to 3.48% last year as we have reduced our level of excess liquidity over the past year. The improvement in the net interest margin was achieved despite the continued flattening of the yield curve and historically low levels of interest rates during the first quarter of 2012.
Non-interest income also had a positive impact on earnings. Total non-interest income of $4.6 million for the first quarter of 2012 was higher than the $4 million recognized during the same period last year. Revenue from our trust, insurance, and mortgage banking areas all increased during the first quarter this year. Fees received on debit and ATM transactions also increased as we continue to attract new customers. and we recognized more in gains on the sale of securities in the first quarter of 2012 than in the first quarter of 2011. In addition, we did not incur any impairment charges on the trust preferred securities we own during this quarter as the level of community bank defaults has slowed.
Operating expenses for the first quarter of 2012 were $10.6 million compared to $10.3 million for the same period last year. The increase in costs is primarily due to compensation expense and costs incurred to acquire customers for our brokerage operations.
Over the past few quarters, we have made significant improvement in our level of non-performing assets and continue to compare quite well to other peer banks. Our total non-performing assets (non-performing loans and other real estate owned) were $11 million at March 31, 2012 compared to $17.7 million on March 31, 2011. Provision expense for the first quarter of 2012 was $615,000 compared with $940,000 for the first quarter of 2011. Our net charge-offs for the first quarter were $442,000 compared to $682,000 last year. Our coverage ratio, or total loan loss reserve to non-accrual loans, of 161.7% remains strong when compared to our peer banks. We will continue to monitor and manage these assets closely.
Our capital ratios have also increased and remain quite strong. At March 31, 2012, our Tier 1 Capital ratio was 13.85% which is well in excess of the regulatory minimums to be considered well-capitalized. This capital position provides First Mid the ability to respond to opportunities that may lie ahead.
I have mentioned in past communications that our operating environment has been, and is likely to remain, challenging for the foreseeable future. We have focused on strengthening our balance sheet, improving asset quality, and enhancing our infrastructure during this time. We have made significant progress and our results compare well to other peer banks. That said, our management team is committed to ensuring that First Mid is an even better organization in the future. Over the past several months, we have developed a strategic initiative we have named “Excellence 2015”. This is a three-year operating plan designed to ensure that we perform at a level with the highest-performing community banks in the Midwest and that we increase value for our shareholders and customers in the future. This three-year initiative coincides with our 150th anniversary as an organization that we will celebrate in April, 2015. I will share our progress on these plans in upcoming quarterly stockholder reports. We have demonstrated a long and consistent record of performance in the past with the efforts of our dedicated professionals. We have a great team and are committed to ensuring that First Mid continues to be one of the best financial services organizations in the future.
Thank you for your continued support of First Mid-Illinois Bancshares, Inc.
Very Truly Yours,
/s/ William S. Rowland
William S. Rowland
Chairman and Chief Executive Officer
April 25, 2012
First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
Mattoon, Illinois 61938
217-234-7454
www.firstmid.com
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(unaudited)
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(in thousands, except share data)
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Mar 31
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Dec 31
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2012
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2011
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Assets
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Cash and due from banks
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$ | 28,111 | $ | 43,356 | ||||
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Federal funds sold and other interest-bearing deposits
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95,507 | 29,746 | ||||||
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Certificates of deposit investments
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12,044 | 13,231 | ||||||
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Investment securities:
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Available-for-sale, at fair value
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482,663 | 478,916 | ||||||
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Held-to-maturity, at amortized cost (estimated FV of $51 at
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Mar 31, 2012 and $51 at Dec 31, 2011, respectively)
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51 | 51 | ||||||
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Loans
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840,835 | 860,074 | ||||||
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Less allowance for loan losses
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(11,293 | ) | (11,120 | ) | ||||
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Net loans
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829,542 | 848,954 | ||||||
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Premises and equipment, net
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30,471 | 30,717 | ||||||
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Goodwill, net
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25,753 | 25,753 | ||||||
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Intangible assets, net
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3,689 | 3,934 | ||||||
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Other assets
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26,592 | 26,298 | ||||||
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Total assets
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$ | 1,534,423 | $ | 1,500,956 | ||||
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Liabilities and Stockholders’ Equity
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Deposits:
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Non-interest bearing
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$ | 219,688 | $ | 198,962 | ||||
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Interest bearing
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1,013,939 | 971,772 | ||||||
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Total deposits
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1,233,627 | 1,170,734 | ||||||
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Repurchase agreements with customers
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109,043 | 132,380 | ||||||
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Other borrowings
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18,000 | 28,000 | ||||||
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Junior subordinated debentures
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20,620 | 20,620 | ||||||
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Other liabilities
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9,567 | 8,255 | ||||||
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Total liabilities
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1,390,857 | 1,359,989 | ||||||
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Stockholders’ Equity:
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Preferred stock (no par value, authorized 1,000,000 shares; issued
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8,777 shares in 2012 and 2011)
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43,785 | 43,785 | ||||||
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Common stock ($4 par value; authorized 18,000,000 shares; issued
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7,593,052 shares in 2012 and 7,553,094 shares in 2011)
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30,372 | 30,212 | ||||||
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Additional paid-in capital
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29,935 | 29,368 | ||||||
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Retained earnings
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74,190 | 71,739 | ||||||
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Deferred compensation
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2,880 | 2,904 | ||||||
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Accumulated other comprehensive income (loss)
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3,176 | 3,148 | ||||||
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Treasury stock at cost, 1,575,463 shares in 2012
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and 1,546,529 in 2011
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(40,772 | ) | (40,189 | ) | ||||
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Total stockholders’ equity
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143,566 | 140,967 | ||||||
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Total liabilities and stockholders’ equity
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$ | 1,534,423 | $ | 1,500,956 | ||||
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
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(In thousands) (unaudited)
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For the year ended March 31,
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2012
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2011
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Interest income:
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Interest and fees on loans
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$ | 10,960 | $ | 11,463 | ||||
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Interest on investment securities
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2,952 | 2,444 | ||||||
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Interest on certificates of deposit
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18 | 21 | ||||||
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Interest on federal funds sold & other deposits
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18 | 101 | ||||||
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Total interest income
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13,948 | 14,029 | ||||||
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Interest expense:
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Interest on deposits
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1,427 | 1,819 | ||||||
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Interest on repurchase agreements with customers
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45 | 33 | ||||||
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Interest on other borrowings
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277 | 211 | ||||||
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Interest on subordinated debt
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146 | 261 | ||||||
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Total interest expense
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1,895 | 2,324 | ||||||
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Net interest income
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12,053 | 11,705 | ||||||
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Provision for loan losses
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615 | 940 | ||||||
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Net interest income after provision for loan losses
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11,438 | 10,765 | ||||||
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Non-interest income:
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Trust revenues
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860 | 781 | ||||||
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Brokerage commissions
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142 | 155 | ||||||
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Insurance commissions
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647 | 608 | ||||||
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Services charges
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1,101 | 1,096 | ||||||
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Securities gains (losses), net
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384 | 181 | ||||||
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Impairment losses on securities
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0 | (185 | ) | |||||
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Mortgage banking revenues
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236 | 116 | ||||||
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ATM / debit card revenue
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879 | 832 | ||||||
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Other
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331 | 421 | ||||||
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Total non-interest income
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4,580 | 4,005 | ||||||
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Non-interest expense:
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Salaries and employee benefits
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5,673 | 5,434 | ||||||
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Net occupancy and equipment expense
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2,010 | 1,967 | ||||||
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FDIC insurance
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234 | 434 | ||||||
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Amortization of intangible assets
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245 | 286 | ||||||
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Legal and professional expense
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611 | 567 | ||||||
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Other
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1,844 | 1,604 | ||||||
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Total non-interest expense
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10,617 | 10,292 | ||||||
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Income before income taxes
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5,401 | 4,478 | ||||||
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Income taxes
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2,011 | 1,633 | ||||||
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Net income
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$ | 3,390 | $ | 2,845 | ||||
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Per Share Information (unaudited)
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For the year ended March 31,
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2012 | 2011 | ||||||
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Basic earnings per common share
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$ | 0.41 | $ | 0.35 | ||||
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Diluted earnings per common share
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$ | 0.41 | $ | 0.35 | ||||
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Book value per share at Mar 31
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$ | 16.58 | $ | 14.94 | ||||
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OTCBB market price of stock at Mar 31
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$ | 23.00 | $ | 18.65 | ||||
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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
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(In thousands) (unaudited)
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For the year ended March 31,
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2012
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2011
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Balance at beginning of period
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$ | 140,967 | $ | 112,265 | ||||
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Net income
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3,390 | 2,845 | ||||||
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Dividends on preferred stock and common stock
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(939 | ) | (707 | ) | ||||
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Issuance of preferred and common stock
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665 | 14,111 | ||||||
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Purchase of treasury stock
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(617 | ) | (382 | ) | ||||
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Deferred compensation and other adjustments
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72 | 32 | ||||||
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Changes in accumulated other comprehensive income
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28 | 745 | ||||||
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Balance at end of period
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$ | 143,566 | $ | 128,909 | ||||
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CONSOLIDATED CAPITAL RATIOS
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Primary Capital Measurements (unaudited):
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2012
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2011
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For the year ended March 31,
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Leverage ratio
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9.18 | % | 8.53 | % | ||||
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Tier 1 capital to risk-weighted assets
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13.85 | % | 13.54 | % | ||||
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Total capital to risk-weighted assets
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14.99 | % | 14.70 | % | ||||