MATTOON, Ill., April 24, 2019 (GLOBE NEWSWIRE) -- First Mid-Illinois Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended March 31, 2019.

Highlights

  • Record quarterly net income of $13.3 million, or $0.80 diluted earnings per share
  • Completed SCB Bancorp, Inc. (“Soy Capital”) Bank conversion and remain on target to achieve projected savings
  • Named top 50 highest performing community bank by S&P Global Market Intelligence based on asset size
  • Awarded Central/Southern Illinois Community Bank of the Year by U.S. Small Business Administration for 6th consecutive year
  • Finalizing our rebranding initiative by receiving shareholder approval to change the name of our charter to First Mid Bancshares, Inc.

“We kicked off 2019 with very strong earnings,” said Joe Dively, Chairman and Chief Executive Officer.  “Our cross-selling efforts between our banking, insurance and wealth management groups are off to a great start with the former Soy Capital business lines.  In addition, our continued emphasis on improving asset quality is driving positive momentum with minimal net charge-offs and lower provision expense.  However, this initiative combined with typical first quarter seasonality contributed to a slight decline in loan balances.” 

“Subsequent to quarter end, on the first weekend of April, we completed the systems integration and merger with the former Soy Capital Bank.  Also, that weekend, we completed the system conversions to combine the insurance divisions of each company.  The integrations went very well and I could not be more proud of the team on the efforts to ensure such successful projects.  We are really excited about the future of the combined companies and are pleased to have the Soy Capital employees and customers as part of First Mid,” said Dively.

“I am also excited to announce that today our shareholders voted to approve shortening the name of our company to First Mid Bancshares, Inc. This refreshed name and logo aligns our Company with its three lines of business and completes the rebranding initiative that kicked off last year with the name change of our bank. We believe the shortened name positions us for future growth opportunities.  The change will be official upon the filing of an amendment to our charter, which we anticipate will happen on April 25, 2019,” Dively concluded.

Net Interest Income

Net interest income for the first quarter of 2019 increased by $1.3 million, or 4.0% compared to the fourth quarter of 2018.  The increase was primarily driven by the full quarter impact of the acquisition of Soy Capital, which closed on November 15, 2018.  In addition, accretion income in the current quarter was $2.9 million compared to $2.1 million in the prior quarter.

In comparison to the first quarter of 2018, net interest income increased by $9.1 million, or 39.1%.  The increase was primarily attributable to the addition of Soy Capital and the acquisition of First BancTrust Corporation (“First Bank”), which closed on May 1, 2018.

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.74% for the first quarter of 2019 compared to 3.75% in the prior quarter.  The decrease was primarily driven by the inclusion of Soy Capital’s lower margin for the full period, partially offset by higher accretion income.  Excluding accretion income, net interest margin declined by 9 basis points in the current quarter.  In addition to the decline from the inclusion of Soy Capital, net interest margin was lower due to the impact of greater Fed Funds sold and interest-bearing deposits. 

In comparison to the first quarter of 2018, net interest margin increased by 9 basis points.  The year-over-year increase in the ratio was primarily due to higher yields on loans and investments, as well as the additional accretion income from the acquisitions outpacing the increase in cost of funds.

Loan Portfolio

Total loans ended the quarter at $2.60 billion, representing a decrease of $47.5 million compared to the prior quarter.  The first quarter has historically been a seasonally slower growth quarter due in part to pay downs in agriculture operating loans, although the first quarter of 2018 was an anomaly.  In addition, the company has been working through some acquired loans with lower asset quality measures, resulting in higher payoffs than normal.  Loans increased by $619.2 million compared to the first quarter of last year through a combination of both organic and acquisition related growth.

Asset Quality

At March 31, 2019, nonperforming loans were 1.0% of total loans, allowance for loan losses was 1.03% of total loans, and the allowance for loan losses to nonperforming loans was 102.8%.  Nonperforming loans declined $3.7 million to $26.0 million at quarter end.  The Consolidated Financial Highlights and Ratios table at the end of the release reflects certain changes to the fourth quarter 2018 asset quality measures to properly reflect the exclusion of TDR’s from Soy Capital, which were marked to fair value at the close of the transaction.  Excluding outstanding acquired loans, the allowance for loan losses to total loans was 1.42%.

Net charge-offs were $0.4 million during the first quarter compared to $0.8 million in the prior quarter.  The Company recorded a provision for loan losses of $0.9 million during the first quarter compared to $3.2 million in the fourth quarter of 2018 and $1.1 million in the first quarter of last year.

Deposits

Total deposits ended the quarter at $3.05 billion, which represented an increase of $57.5 million from the prior quarter.   The Company’s average rate on cost of funds was 0.70% for the quarter compared to 0.60% in the fourth quarter and 0.32% in the first quarter of 2018.  With nearly 50% of deposits in noninterest bearing and interest bearing checking, and approximately 80% as core deposits, the Company continues to maintain a strong deposit base.

Noninterest Income

Noninterest income for the first quarter of 2019 was $14.6 million compared to $11.6 million in the fourth quarter and $7.5 million in the first quarter of last year.  The increase was primarily driven by the insurance and wealth management (including Ag services) business lines from Soy Capital included in the results for the full period.  Noninterest income is traditionally higher in the first quarter due to the timing of insurance commission revenues. Overall, noninterest income represented over 31% of total revenues in the quarter and our wealth management division increased to $4.2 billion in assets under management from $3.9 billion at the end of 2018.

Noninterest Expenses

Noninterest expense for the first quarter totaled $28.3 million compared to $26.3 million in the fourth quarter 2018.  The current quarter included $0.2 million in acquisition related costs compared to $1.1 million in the prior quarter.  The higher expenses are primarily tied to the additional period Soy Capital was in the results in the first quarter 2019.  In addition, the increase in expenses was partially driven by the company's continued investment in technology with its recent upgrade to its commercial online banking platform.  Cost savings initiatives tied to the Soy Capital acquisition are on target overall with some of the savings in the first quarter run-rate and an additional amount to be included in the second quarter tied to the completion of the bank merger and systems conversion.

Noninterest expense was $9.9 million higher than the first quarter of 2018.  The increase is primarily due to the addition of both Soy Capital and First Bank in the numbers for the current quarter.  The Company’s efficiency ratio, on a tax equivalent basis, for the first quarter 2019 was 56.8% compared to 57.2% for the same period last year.

Regulatory Capital Levels and Dividend

The Company’s capital levels remained comfortably above the “well capitalized” levels and ended the period as follows: 

Total capital to risk-weighted assets14.45%
Tier 1 capital to risk-weighted assets13.55%
Common equity tier 1 capital to risk-weighted assets12.57%
Leverage ratio10.77%

On April 24, 2019, the Board of Directors declared the Company’s next semi-annual dividend of $0.36 for shareholders of record on June 3rd and payable on June 10th.  The dividend represents an increase of 5.6% over the dividend paid in the first half of 2018.

Capital Raise

Under the previously announced ‘at-the-market’ equity offering, during the quarter ended March 31, 2019, the Company did not sell any shares.  

About Us: First Mid-Illinois Bancshares, Inc. (“First Mid”) is the parent company of First Mid Bank & Trust, N.A., First Mid Insurance Group, Inc. and First Mid Wealth Management Co.  Our mission is to fulfill the financial needs of our communities with exceptional personal service, professionalism and integrity, and deliver meaningful value and results for our customers and shareholders.

First Mid is a $3.9 billion community-focused organization that provides a full-suite of financial services including banking, wealth management, brokerage, Ag services, and insurance through a sizeable network of locations throughout Illinois and eastern Missouri and a loan production office in the greater Indianapolis area.  Together, our First Mid team takes great pride in their work and their ability to serve our customers well over the last 154 years. 

More information about the Company is available on our website at www.firstmid.com.  Our stock is traded in The NASDAQ Stock Market LLC under the ticker symbol “FMBH”.

Non-GAAP Measures:  In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this release contains certain non-GAAP financial measures.  The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance.  Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.  These non-GAAP financial measures are detailed as supplemental tables and include “Net Interest Margin, tax equivalent,” “Tangible Book Value per Common Share,” and “Common Equity Tier 1 Capital to Risk Weighted Assets”.  While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP.  These non-GAAP financial measures may also differ from the similar measures presented by other companies.

Forward Looking Statements:  This document may contain certain forward-looking statements about First Mid, such as discussions of First Mid’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1955. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid, are identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative/regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mid’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; and accounting principles, policies and guidelines. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mid’s financial results, are included in First Mid’s filings with the Securities and Exchange Commission (the “SEC”), including its Annual Reports on Form 10-K. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

Investor Contact: 
Aaron Holt
VP, Shareholder Relations
217-258-0463
aholt@firstmid.com

– Tables Follow –

      
FIRST MID-ILLINOIS BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
 As of
 
 March 31, December 31, March 31,
 2019
 2018
 2018
      
Assets     
Cash and cash equivalents$232,548  $141,400  $54,835 
Investment securities 772,400   769,279   640,905 
Loans (including loans held for sale) 2,596,994   2,644,519   1,977,697 
Less allowance for loan losses (26,704)  (26,189)  (20,771)
Net loans 2,570,290   2,618,330   1,956,926 
Premises and equipment, net 59,237   59,117   37,833 
Goodwill and intangibles, net 137,461   139,097   70,324 
Bank owned life insurance 65,914   65,484   42,159 
Other assets 57,769   47,027   34,364 
Total assets$3,895,619  $3,839,734  $2,837,346 
      
Liabilities and Stockholders' Equity     
Deposits:     
Noninterest bearing$628,944  $575,784  $478,303 
Interest bearing 2,417,269   2,412,902   1,813,588 
Total deposits 3,046,213   2,988,686   2,291,891 
Repurchase agreement with customers 157,760   192,330   132,435 
Other borrowings 126,048   127,469   69,399 
Junior subordinated debentures 29,042   29,000   24,021 
Other liabilities 39,404   26,385   9,013 
Total liabilities 3,398,467   3,363,870   2,526,759 
      
Total stockholders' equity 497,152   475,864   310,587 
Total liabilities and stockholders' equity$3,895,619  $3,839,734  $2,837,346 
      

 

    
FIRST MID-ILLINOIS BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
    
 Three Months Ended
 March 31,
 2019 2018
Interest income:   
Interest and fees on loans$32,104 $21,007
Interest on investment securities 5,209  4,081
Interest on federal funds sold & other deposits 738  70
Total interest income 38,051  25,158
Interest expense:   
Interest on deposits 4,378  1,262
Interest on securities sold under agreements to repurchase 260  59
Interest on other borrowings 723  383
Interest on subordinated debt 438  259
Total interest expense 5,799  1,963
Net interest income 32,252   23,195
Provision for loan losses 947  1,055
Net interest income after provision for loan 31,305  22,140
Noninterest income:   
Wealth management revenues 3,645  1,742
Insurance commissions 5,555  1,487
Service charges 1,802  1,635
Securities gains, net 54  20
Mortgage banking revenues 239  161
ATM/debit card revenue 2,016  1,604
Other 1,328  838
Total noninterest income 14,639  7,487
Noninterest expense:   
Salaries and employee benefits 16,574  10,194
Net occupancy and equipment expense 4,455  3,273
Net other real estate owned (income) expense 53  76
FDIC insurance 279  281
Amortization of intangible assets 1,356  505
Stationary and supplies 287  211
Legal and professional expense 1,194  1,137
Marketing and donations 454  354
Other 3,658  2,343
Total noninterest expense 28,310  18,374
Income before income taxes 17,634  11,253
Income taxes 4,318  2,863
Net income$13,316  $8,390
    
Per Share Information   
Basic earnings per common share$0.80 $0.66
Diluted earnings per common share 0.80  0.66
    
Weighted average shares outstanding 16,665,999  12,671,017
Diluted weighted average shares outstanding 16,704,779  12,688,247
      

 

          
FIRST MID-ILLINOIS BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
          
 For the Quarter Ended
 March 31, December 31, September 30, June 30, March 31, 
 2019 2018 2018 2018 2018
Interest income:         
Interest and fees on loans$32,104 $30,553 $28,850  $25,362 $21,007
Interest on investment securities 5,209  4,966  4,511   4,679  4,081
Interest on federal funds sold & other deposits 738  269  127   90  70
Total interest income 38,051  35,788  33,488   30,131  25,158
Interest expense:         
Interest on deposits 4,378  3,422  2,217   1,670  1,262
Interest on securities sold under agreements to repurchase 260  134  72   65  59
Interest on other borrowings 723  834  707   593  383
Interest on subordinated debt 438  396  405   349  259
Total interest expense 5,799  4,786  3,401   2,677  1,963
Net interest income 32,252   31,002   30,087    27,454   23,195
Provision for loan losses 947  3,184  2,551   1,877  1,055
Net interest income after provision for loan 31,305  27,818  27,536   25,577  22,140
Noninterest income:         
Wealth management revenues 3,645  3,540  1,579   1,599  1,742
Insurance commissions 5,555  2,390  877   838  1,487
Service charges 1,802  1,988  2,009   1,803  1,635
Securities gains, net 54  0  0   881  20
Mortgage banking revenues 239  266  368   410  161
ATM/debit card revenue 2,016  2,044  1,979   1,860  1,604
Other 1,328  1,419  1,107   970  838
Total noninterest income 14,639  11,647  7,919   8,361  7,487
Noninterest expense:         
Salaries and employee benefits 16,574  13,952  11,600   11,057  10,194
Net occupancy and equipment expense 4,455  4,225  3,530   3,505  3,273
Net other real estate owned (income) expense 53  260  (61)  7  76
FDIC insurance 279  319  174   285  281
Amortization of intangible assets 1,356  1,156  838   716  505
Stationary and supplies 287  238  328   186  211
Legal and professional expense 1,194  1,318  1,071   1,717  1,137
Marketing and donations 454  541  468   431  354
Other 3,658  4,311  6,542   2,892  2,343
Total noninterest expense 28,310  26,320  24,490   20,796  18,374
Income before income taxes 17,634  13,145  10,965   13,142  11,253
Income taxes 4,318  3,206  2,731   3,105  2,863
Net income$13,316  $9,939  $8,234   $10,037  $8,390
          

 

           
FIRST MID-ILLINOIS BANCSHARES, INC.
Consolidated Financial Highlights and Ratios
(Dollars in thousands, except per share data)
(Unaudited)
  As of and for the Quarter Ended
  March 31, December 31, September 30, June 30, March 31,
  2019
 2018
 2018
 2018
 2018
           
Loan Portfolio           
Construction and land development$49,179  $50,618  $91,355  $88,481  $109,076 
Farm loans  236,864   231,700   191,724   184,887   122,564 
1-4 Family residential properties 362,617   373,518   367,343   378,573   289,899 
Multifamily residential properties 175,903   184,051   100,368   105,948   60,881 
Commercial real estate 905,679   906,850   814,574   803,362   699,142 
Loans secured by real estate 1,730,242   1,746,737   1,565,364   1,561,251   1,281,562 
Agricultural loans 118,026   135,877   120,770   113,533   74,336 
Commercial and industrial loans 550,853   557,011   540,387   502,211   458,697 
Consumer loans  86,540   91,517   57,248   59,090   28,784 
All other loans  111,333   113,377   116,391   140,598   134,318 
Total loans  2,596,994   2,644,519   2,400,160   2,376,683   1,977,697 
           
Deposit Portfolio          
Noninterest bearing demand deposits$628,944  $575,784  $493,935  $526,117  $478,303 
Interest bearing demand deposits 828,144   903,426   749,396   781,360   707,759 
Savings deposits  444,619   432,319   397,910   405,287   374,594 
Money Market  483,867   485,388   481,799   434,559   389,020 
Time deposits  660,639   591,769   528,357   523,541   342,215 
Total deposits  3,046,213   2,988,686   2,651,397   2,670,864   2,291,891 
           
Asset Quality          
Nonperforming loans$25,988  $29,749  $27,924  $24,729  $17,869 
Nonperforming assets 29,857   32,344   30,065   27,237   19,849 
Net charge-offs  432   834   757   603   261 
Allowance for loan losses to nonperforming loans 102.76%  88.03%  85.37%  89.15%  116.24%
Allowance for loan losses to total loans outstanding 1.03%  0.99%  0.99%  0.93%  1.05%
Nonperforming loans to total loans 1.00%  1.13%  1.16%  1.04%  0.90%
Nonperforming assets to total assets 0.77%  0.84%  0.90%  0.81%  0.70%
           
Common Share Data         
Common shares outstanding 16,677,128   16,644,635   15,294,925   15,285,146   12,677,846 
Book value per common share$29.81  $28.57  $27.25  $26.91  $24.50 
Tangible book value per common share$21.57  $20.22  $20.58  $20.20  $18.95 
Market price of stock$33.32  $31.92  $40.33  $39.30  $36.45 
           
Key Performance Ratios and Metrics         
End of period earning assets$3,539,175  $3,491,606  $3,081,929  $3,103,956  $2,634,223 
Average earning assets 3,516,032   3,307,437   3,090,835   2,949,144   2,625,684 
Average rate on average earning assets (tax equivalent) 4.44%  4.35%  4.35%  4.16%  3.95%
Average rate on cost of funds 0.70%  0.60%  0.46%  0.38%  0.32%
Net interest margin (tax equivalent) 3.74%  3.75%  3.89%  3.79%  3.65%
Return on average assets 1.38%  1.10%  0.98%  1.27%  1.18%
Return on average common equity 11.02%  8.99%  7.92%  11.23%  10.86%
Efficiency ratio (tax equivalent) 1 56.77%  57.66%  61.56%  56.65%  57.16%
Full-time equivalent employees 832   818   686   711   591 
           
1 Represents noninterest expense divided by the sum of fully tax equivalent net interest income and noninterest income.  Noninterest expense adjustments exclude foreclosed property expense and amortization of intangibles.  Noninterest income includes tax equivalent adjustments and noninterest income excludes gains and losses on the sale of investment securities.
Note:  Asset Quality metrics as of December 31, 2018 were adjusted to match the disclosures in the 10K, which exclude TDR's from the Soy Capital acquisition.
    

 

 
FIRST MID-ILLINOIS BANCSHARES, INC.
Net Interest Margin
      
 For the Quarter Ended March 2019
 QTD Average   Average
 Balance Interest Rate
INTEREST EARNING ASSETS     
Interest bearing deposits 112,220   697 2.52%
Federal funds sold 663   3 1.84%
Certificates of deposits investments 7,348   38 2.10%
Investment Securities:     
Taxable (total less municipals) 582,290   3,811 2.62%
Tax-exempt (Municipals) 190,695   1,770 3.71%
Loans (net of unearned income) 2,622,816   32,280 4.99%
      
Total interest earning assets 3,516,032   38,599 4.44%
      
NONEARNING ASSETS     
Cash and due from banks 64,329     
Premises and equipment 59,192     
Other nonearning assets 250,265     
Allowance for loan losses (26,815)    
      
Total assets$3,863,003     
      
INTEREST BEARING LIABILITIES     
Demand deposits 1,335,626   1,622 0.49%
Savings deposits 436,581   152 0.14%
Time deposits 620,377   2,604 1.70%
Total interest bearing deposits 2,392,584   4,378 0.74%
Repurchase agreements 182,466   260 0.58%
FHLB advances 119,760   723 2.45%
Federal funds purchased 0   0 0.00%
Subordinated debt 29,014   438 6.12%
Other borrowings 6,845   0 0.00%
Total borrowings 338,085   1,421 1.70%
Total interest bearing liabilities 2,730,669   5,799 0.86%
      
NONINTEREST BEARING LIABILITIES     
Demand deposits 605,296  Average cost of funds0.70%
Other liabilities 43,723     
Stockholders' equity 483,315     
      
Total liabilities & stockholders' equity$3,863,003     
      
Net Interest Earnings / Spread  $32,800 3.58%
      
Impact of NonInterest Bearing Funds    0.16%
      
Tax effected yield on interest earning assets   3.74%
      

 

          
FIRST MID-ILLINOIS BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, unaudited)
          
 As of and for the Quarter Ended
 March 31, December 31, September 30, June 30, March 31, 
 2019 2018 2018 2018 2018
          
Net interest income as reported$32,252  $31,002  $30,087  $27,454  $23,195 
Net interest income, (tax equivalent) 32,800   31,546   30,604   27,951   23,660 
Average earning assets 3,516,032   3,307,437   3,090,835   2,949,144   2,625,685 
Net interest margin (tax equivalent) 1 3.74%  3.75%  3.89%  3.79%  3.65%
          
          
Common stockholders' equity$497,152  $475,864  $416,833  $411,326  $310,587 
Goodwill and intangibles, net 137,461   139,097   102,014   102,618   70,324 
Common shares outstanding 16,677   16,645   15,295   15,285   12,678 
Tangible Book Value per common share$21.57  $20.22  $20.58  $20.20  $18.95 
          
          
Common equity tier 1 capital$372,731  $357,690  $335,552  $325,572  $254,487 
Risk weighted assets 2,964,638   3,030,259   2,662,706   2,678,691   2,289,235 
Common equity tier 1 capital to risk weighted assets 2 12.57%  11.80%  12.60%  12.15%  11.12%
          
          
1 Annualized and calculated on a tax equivalent basis where interest earned on tax-exempt securities and loans is adjusted to an amount comparable to interest subject to normal income taxes assuming a federal tax rate of 21% during 2018 and 35% during 2017 and includes the impact of noninterest bearing funds.
          
2 Defined as total common equity adjusted for gains/(losses) less goodwill and intangibles divided by risk weighted assets as of period end.
          


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