MATTOON, Ill., Oct. 26, 2017 (GLOBE NEWSWIRE) -- First Mid-Illinois Bancshares, Inc. (NASDAQ:FMBH) (the “Company”) today announced its financial results for the quarter and year-to-date period ended September 30, 2017.
Highlights
- Delivered Year-Over-Year Growth in Net Income and Earnings Per Share of 43.1% and 19.6%, respectively
- Total Loans increased $41.9 million, or 2.3% in the Quarter
- Board of Directors Increases Semi-Annual Dividend by $0.02, or 6.3%
Third Quarter Financial Summary
- Net income of $7.6 million, or $0.61 diluted earnings per share
- Net interest income of $22.9 million
- Non-interest income of $7.7 million
- Return on average assets of 1.08%
“We are pleased with our third quarter results and the ongoing success of our strategic initiatives,” said Joe Dively, Chairman and Chief Executive Officer. “Our third quarter results reflect solid growth in earnings and a strong quarter of loan growth, continuing the positive momentum we have built throughout the year and positioning us well for the future. We continued to improve our overall capital position and the Board of Directors increased the semi-annual dividend. The results in the quarter and our ongoing success reflect our commitment to customers, shareholders and the communities we serve.”
Net Interest Income
Net interest income for the third quarter of 2017 decreased by $1.1 million, or 4.5% compared to the second quarter of 2017. The decrease was primarily driven by $1.2 million in accelerated accretion income recognized in the second quarter versus $0.1 million in the current quarter. Excluding the accelerated accretion, net interest income was consistent with the prior quarter on growth in loan income offset by a decline in investment income. The balance in the investment portfolio was lower as securities were sold to fund loan growth.
In comparison to the third quarter of 2016, net interest income increased by $5.3 million, or 29.8%. The increase was primarily attributable to the growth in earning assets, increased interest rates and the First Clover Leaf acquisition, which closed on September 8, 2016.
Net Interest Margin
Net interest margin, on a tax equivalent basis, was 3.68% for the third quarter compared to 3.84% in the prior quarter and 3.40% in the third quarter last year. The second quarter included $1.2 million in accelerated accretion income. The year-over-year increase in the ratio was due to higher yields on loans and investments, which outpaced the increase in our cost of funds. In addition, accretion income associated with the First Clover Leaf acquisition helped drive the margin higher. On a year-to-date basis, the net interest margin was 3.68% compared to 3.38% for the same period last year.
Loan Portfolio
Total loans increased by $41.9 million in the quarter and ended at $1.87 billion compared to $1.83 billion at the end of the prior quarter. The Company continued to maintain a well-diversified loan portfolio. The increase was mostly in the categories of commercial and industrial and commercial real estate. Loans increased by $60.8 million compared to the third quarter of 2016 driven by organic growth.
Asset Quality
At September 30, 2017, nonperforming loans were 1.06% of total loans compared to 0.94% at June 30, 2017. The Company’s allowance for loan losses was 1.00% of total loans at the end of the third quarter, which was the same as the prior quarter. The allowance for loan losses to non-performing loans was 93.9% at September 30, 2017 versus 106.3% at June 30, 2017. Non-performing loans were $19.8 million, which was an increase of $2.7 million versus the prior quarter.
Net charge-offs improved to $1.1 million during the third quarter compared to $1.5 million for the second quarter 2017. The Company recorded a provision for loan losses of $1.5 million during the third quarter compared to $1.8 million during the second quarter of 2017. The decrease was primarily related to lower net charge-offs, partially offset by loan growth. The provision increased by $0.4 million from $1.1 million when compared to the third quarter of last year.
Deposits
Total deposits ended the quarter at $2.22 billion, which represented a decrease of approximately $72.0 million from the prior quarter and a decrease of $47.8 million from the same quarter last year. The decrease in the current quarter was primarily due to cash flow requirements for a few of our largest depositors. Consistent with general trends in the industry, the Company has experienced some upward pressure on cost of deposits and has responded with targeted promotions, while maintaining a low overall cost of funds.
Noninterest Income
Noninterest income for the third quarter of 2017 was $7.7 million compared to $8.0 million in the second quarter. Increases in the third quarter were primarily in trust revenues and service charges, which were more than offset by seasonal declines in insurance and ATM card revenue. In addition, the second quarter included a $0.9 million tax refund that was partially offset by a bank owned life insurance claim of $0.5 million in the third quarter. Noninterest income increased $0.8 million when compared to the third quarter of last year.
Noninterest Expenses
Noninterest expense for the third quarter totaled $17.9 million, which was consistent with the prior quarter. During the quarter, the Company recorded a write-down on other real estate owned of $0.3 million on a vacant lot that was an asset of First Clover Leaf’s prior to the acquisition. In addition, the Company recorded a non-recurring $0.4 million loss on a negotiated settlement for a former First Clover Leaf credit.
Noninterest expense increased by $2.6 million when compared to the third quarter of 2016 primarily due to the First Clover Leaf acquisition. The Company’s efficiency ratio, on a tax equivalent basis, for the third quarter 2017 was 54.5% compared to 60.2% for the same period last year.
Regulatory Capital Levels and Dividend
The Company’s capital levels remained strong above the “well capitalized” levels and ended the period as follows:
| Total capital to risk-weighted assets | 13.26% | |
| Tier 1 capital to risk-weighted assets | 12.41% | |
| Common equity tier 1 capital to risk-weighted assets | 11.31% | |
| Leverage ratio | 9.84% |
On October 24, 2017, the Board of Directors declared the Company’s next semi-annual dividend of $0.34, which represents a 6.3% increase over the prior dividend. The dividend is payable on December 8th for shareholders of record on December 1st.
Capital Raise
Under the previously announced ‘at-the-market’ equity offering, during the quarter ended September 30, 2017, the Company sold 95,310 common shares at a weighted average price of approximately $35.06, representing gross proceeds of $3.34 million and net proceeds of $3.28 million.
About First Mid-Illinois Bancshares, Inc.: First Mid-Illinois Bancshares, Inc. is the parent company of First Mid-Illinois Bank & Trust, N.A. (“First Mid Bank”), Mid-Illinois Data Services, Inc., and First Mid Insurance Group. 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 customers and shareholders.
First Mid Bank was first chartered in 1865 and has since grown into a $2.8 billion community-focused organization that provides financial services through a network of 52 banking centers in 37 Illinois and Missouri communities. 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”.
Forward Looking Statements: This news release contains forward-looking statements about First Mid-Illinois Bancshares, Inc. for which the Company claims protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, 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 those described in Item 1A – “Risk Factors” and other sections of the Company’s Annual Report on Form 10-K and the Company’s other filings with the SEC. Furthermore, 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 obligations to update or review any forward-looking information, whether as a result of new information, future events or otherwise.
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.
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) | ||||||||||||||
| As of | ||||||||||||||
| September 30, | December 31, | September 30, | ||||||||||||
| 2017 | 2016 | 2016 | ||||||||||||
| (unaudited) | (audited) | (unaudited) | ||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 69,643 | $ | 175,902 | $ | 123,037 | ||||||||
| Investment securities | 692,195 | 708,722 | 684,571 | |||||||||||
| Loans (including loans held for sale) | 1,867,562 | 1,825,992 | 1,806,745 | |||||||||||
| Less allowance for loan losses | (18,589 | ) | (16,753 | ) | (16,161 | ) | ||||||||
| Net loans | 1,848,973 | 1,809,239 | 1,790,584 | |||||||||||
| Premises and equipment, net | 38,638 | 40,292 | 40,695 | |||||||||||
| Goodwill and intangibles, net | 71,331 | 70,623 | 71,209 | |||||||||||
| Bank owned life insurance | 41,601 | 41,318 | 41,031 | |||||||||||
| Other assets | 32,075 | 38,439 | 32,821 | |||||||||||
| Total assets | $ | 2,794,456 | $ | 2,884,535 | $ | 2,783,948 | ||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||
| Deposits: | ||||||||||||||
| Non-interest bearing | $ | 430,036 | $ | 471,206 | $ | 431,480 | ||||||||
| Interest bearing | 1,787,441 | 1,858,681 | 1,833,779 | |||||||||||
| Total deposits | 2,217,477 | 2,329,887 | 2,265,259 | |||||||||||
| Repurchase agreement with customers | 116,360 | 185,763 | 127,432 | |||||||||||
| Other borrowings | 118,302 | 58,157 | 72,109 | |||||||||||
| Junior subordinated debentures | 23,980 | 23,917 | 23,892 | |||||||||||
| Other liabilities | 6,906 | 6,138 | 7,991 | |||||||||||
| Total liabilities | 2,483,025 | 2,603,862 | 2,496,683 | |||||||||||
| Total stockholders' equity | 311,431 | 280,673 | 287,265 | |||||||||||
| Total liabilities and stockholders' equity | $ | 2,794,456 | $ | 2,884,535 | $ | 2,783,948 | ||||||||
| FIRST MID-ILLINOIS BANCSHARES, INC. | ||||||||||||||||
| Condensed Consolidated Statements of Income | ||||||||||||||||
| (In thousands, except per share data, unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Interest income: | ||||||||||||||||
| Interest and fees on loans | $ | 20,385 | $ | 15,294 | $ | 61,337 | $ | 42,496 | ||||||||
| Interest on investment securities | 4,179 | 3,229 | 12,585 | 9,622 | ||||||||||||
| Interest on federal funds sold & other deposits | 50 | 100 | 320 | 367 | ||||||||||||
| Total interest income | 24,614 | 18,623 | 74,242 | 52,485 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Interest on deposits | 1,028 | 623 | 2,840 | 1,777 | ||||||||||||
| Interest on securities sold under agreements to repurchase | 51 | 23 | 137 | 62 | ||||||||||||
| Interest on other borrowings | 426 | 192 | 987 | 510 | ||||||||||||
| Interest on subordinated debt | 236 | 162 | 680 | 456 | ||||||||||||
| Total interest expense | 1,741 | 1,000 | 4,644 | 2,805 | ||||||||||||
| Net interest income | 22,873 | 17,623 | 69,598 | 49,680 | ||||||||||||
| Provision for loan losses | 1,489 | 1,081 | 5,051 | 1,927 | ||||||||||||
| Net interest income after provision for loan | 21,384 | 16,542 | 64,547 | 47,753 | ||||||||||||
| Non-interest income: | ||||||||||||||||
| Trust revenues | 925 | 774 | 2,696 | 2,549 | ||||||||||||
| Brokerage commissions | 536 | 526 | 1,550 | 1,440 | ||||||||||||
| Insurance commissions | 670 | 738 | 3,148 | 2,806 | ||||||||||||
| Service charges | 1,758 | 1,824 | 5,160 | 4,977 | ||||||||||||
| Securities gains, net | 254 | 466 | 589 | 1,130 | ||||||||||||
| Mortgage banking revenues | 347 | 382 | 875 | 715 | ||||||||||||
| ATM/debit card revenue | 1,595 | 1,457 | 4,828 | 4,418 | ||||||||||||
| Other | 1,576 | 731 | 4,280 | 1,966 | ||||||||||||
| Total non-interest income | 7,661 | 6,898 | 23,126 | 20,001 | ||||||||||||
| Non-interest expense: | ||||||||||||||||
| Salaries and employee benefits | 9,648 | 7,844 | 29,685 | 23,293 | ||||||||||||
| Net occupancy and equipment expense | 3,129 | 2,864 | 9,378 | 8,389 | ||||||||||||
| Net other real estate owned (income) expense | 385 | 32 | 530 | 23 | ||||||||||||
| FDIC insurance | 210 | 294 | 679 | 841 | ||||||||||||
| Amortization of intangible assets | 545 | 455 | 1,651 | 1,312 | ||||||||||||
| Stationary and supplies | 168 | 221 | 539 | 612 | ||||||||||||
| Legal and professional expense | 871 | 713 | 2,596 | 2,414 | ||||||||||||
| Marketing and donations | 338 | 285 | 909 | 1,486 | ||||||||||||
| Other | 2,618 | 2,612 | 9,102 | 6,264 | ||||||||||||
| Total non-interest expense | 17,912 | 15,320 | 55,069 | 44,634 | ||||||||||||
| Income before income taxes | 11,133 | 8,120 | 32,604 | 23,120 | ||||||||||||
| Income taxes | 3,538 | 2,812 | 10,545 | 8,077 | ||||||||||||
| Net income | $ | 7,595 | $ | 5,308 | $ | 22,059 | $ | 15,043 | ||||||||
| Per Share Information | ||||||||||||||||
| Basic earnings per common share | $ | 0.61 | $ | 0.51 | $ | 1.76 | $ | 1.52 | ||||||||
| Diluted earnings per common share | 0.61 | 0.51 | 1.76 | 1.50 | ||||||||||||
| Weighted average shares outstanding | 12,528,674 | 10,497,072 | 12,498,913 | 9,372,547 | ||||||||||||
| Diluted weighted average shares outstanding | 12,535,809 | 10,504,046 | 12,506,576 | 10,057,398 | ||||||||||||
| 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 | |||||||||||||||||||||
| September 30, | June 30 | March 31 | December 31, | September 30, | |||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||||
| Loan Portfolio | |||||||||||||||||||||
| Construction and land development | $ | 77,179 | $ | 68,681 | $ | 58,304 | $ | 49,104 | $ | 49,019 | |||||||||||
| Farm loans | 126,096 | 123,420 | 123,061 | 126,108 | 128,829 | ||||||||||||||||
| 1-4 Family residential properties | 301,897 | 310,522 | 319,713 | 326,415 | 341,900 | ||||||||||||||||
| Multifamily residential properties | 72,323 | 72,492 | 74,714 | 83,200 | 83,697 | ||||||||||||||||
| Commercial real estate | 647,184 | 632,492 | 624,372 | 630,135 | 636,686 | ||||||||||||||||
| Loans secured by real estate | 1,224,679 | 1,207,607 | 1,200,164 | 1,214,962 | 1,240,131 | ||||||||||||||||
| Agricultural loans | 81,383 | 79,759 | 76,757 | 86,685 | 81,414 | ||||||||||||||||
| Commercial and industrial loans | 443,473 | 421,280 | 400,810 | 409,033 | 371,800 | ||||||||||||||||
| Consumer loans | 30,074 | 32,814 | 34,962 | 38,028 | 40,881 | ||||||||||||||||
| All other loans | 87,953 | 84,174 | 82,969 | 77,284 | 72,519 | ||||||||||||||||
| Total loans | 1,867,562 | 1,825,634 | 1,795,662 | 1,825,992 | 1,806,745 | ||||||||||||||||
| Deposit Portfolio | |||||||||||||||||||||
| Non-interest bearing demand deposits | $ | 430,036 | $ | 425,344 | $ | 456,037 | $ | 471,206 | $ | 431,480 | |||||||||||
| Interest bearing demand deposits | 678,302 | 714,918 | 718,699 | 716,204 | 641,327 | ||||||||||||||||
| Savings deposits | 364,277 | 368,220 | 372,815 | 356,740 | 352,489 | ||||||||||||||||
| Money Market | 423,486 | 450,685 | 440,551 | 432,656 | 458,019 | ||||||||||||||||
| Time deposits | 321,376 | 330,239 | 341,427 | 353,081 | 381,944 | ||||||||||||||||
| Total deposits | 2,217,477 | 2,289,406 | 2,329,529 | 2,329,887 | 2,265,259 | ||||||||||||||||
| Asset Quality | |||||||||||||||||||||
| Non-performing loans | $ | 19,788 | $ | 17,125 | $ | 27,652 | $ | 18,241 | $ | 15,787 | |||||||||||
| Non-performing assets | 22,051 | 21,559 | 30,085 | 20,226 | 17,888 | ||||||||||||||||
| Net charge-offs | 1,109 | 1,477 | 629 | 307 | 85 | ||||||||||||||||
| Allowance for loan losses to non-performing loans | 93.94 | % | 106.33 | % | 64.54 | % | 91.84 | % | 102.37 | % | |||||||||||
| Allowance for loan losses to total loans outstanding | 1.00 | % | 1.00 | % | 0.99 | % | 0.92 | % | 0.89 | % | |||||||||||
| Nonperforming loans to total loans | 1.06 | % | 0.94 | % | 1.54 | % | 1.00 | % | 0.87 | % | |||||||||||
| Nonperforming assets to total assets | 0.79 | % | 0.76 | % | 1.06 | % | 0.70 | % | 0.64 | % | |||||||||||
| Common Share Data | |||||||||||||||||||||
| Common shares outstanding | 12,618,026 | 12,505,873 | 12,483,787 | 12,470,999 | 12,457,462 | ||||||||||||||||
| Book value per common share | $ | 24.68 | $ | 24.06 | $ | 23.29 | $ | 22.51 | $ | 23.06 | |||||||||||
| Tangible book value per common share | $ | 19.03 | $ | 18.50 | $ | 17.68 | $ | 16.84 | $ | 17.34 | |||||||||||
| Market price of stock | $ | 38.40 | $ | 34.10 | $ | 33.84 | $ | 34.00 | $ | 27.26 | |||||||||||
| Key Performance Ratios and Metrics | |||||||||||||||||||||
| End of period earning assets | $ | 2,566,809 | $ | 2,604,505 | $ | 2,624,399 | $ | 2,652,628 | $ | 2,557,109 | |||||||||||
| Average earning assets | 2,605,652 | 2,615,792 | 2,633,227 | 2,590,488 | 2,134,471 | ||||||||||||||||
| Average rate on average earning assets (tax equivalent) | 3.96 | % | 4.08 | % | 3.85 | % | 3.66 | % | 3.58 | % | |||||||||||
| Average rate on cost of funds | 0.28 | % | 0.24 | % | 0.22 | % | 0.23 | % | 0.18 | % | |||||||||||
| Net interest margin (tax equivalent) | 3.68 | % | 3.84 | % | 3.63 | % | 3.43 | % | 3.40 | % | |||||||||||
| Return on average assets | 1.08 | % | 1.16 | % | 0.88 | % | 0.97 | % | 0.92 | % | |||||||||||
| Return on average common equity | 9.95 | % | 11.11 | % | 8.77 | % | 9.22 | % | 9.02 | % | |||||||||||
| Efficiency ratio (tax equivalent) 1 | 54.54 | % | 53.17 | % | 59.90 | % | 55.67 | % | 60.17 | % | |||||||||||
| Full-time equivalent employees | 584 | 590 | 590 | 598 | 596 | ||||||||||||||||
| 1 Represents non-interest expense divided by the sum of fully tax equivalent net interest income and non-interest income. Non-interest expense adjustments exclude foreclosed property expense | |||||||||||||||||||||
| and amortization of intangibles. Non-interest income includes tax equivalent adjustments and non-interest income excludes gains and losses on the sale of investment securities. | |||||||||||||||||||||
| FIRST MID-ILLINOIS BANCSHARES, INC. | |||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||
| (In thousands, unaudited) | |||||||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||||||
| September 30, | June 30 | March 31 | December 31, | September 30, | |||||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||||||
| Net interest income as reported | $ | 22,873 | $ | 23,953 | $ | 22,772 | $ | 21,524 | $ | 17,623 | |||||||||||||
| Net interest income, (tax equivalent) | 23,729 | 24,844 | 23,620 | 22,324 | 18,221 | ||||||||||||||||||
| Average earning assets | 2,605,652 | 2,615,792 | 2,633,227 | 2,590,488 | 2,134,471 | ||||||||||||||||||
| Net interest margin (tax equivalent) 1 | 3.68 | % | 3.84 | % | 3.63 | % | 3.43 | % | 3.40 | % | |||||||||||||
| Common stockholder's equity | $ | 311,431 | $ | 300,891 | $ | 290,738 | $ | 280,673 | $ | 287,265 | |||||||||||||
| Goodwill and intangibles, net | 71,331 | 69,517 | 70,076 | 70,623 | 71,209 | ||||||||||||||||||
| Common shares outstanding | 12,618 | 12,506 | 12,484 | 12,471 | 12,457 | ||||||||||||||||||
| Tangible Book Value per common share | $ | 19.03 | $ | 18.50 | $ | 17.68 | $ | 16.84 | $ | 17.34 | |||||||||||||
| Common equity tier 1 capital | $ | 247,104 | $ | 237,764 | $ | 238,102 | $ | 229,341 | $ | 222,884 | |||||||||||||
| Risk weighted assets | 2,184,812 | 2,185,041 | 2,171,056 | 2,111,787 | 2,053,118 | ||||||||||||||||||
| Common equity tier 1 capital to risk weighted assets 2 | 11.31 | % | 10.88 | % | 10.97 | % | 10.86 | % | 10.86 | % | |||||||||||||
| 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 35% and includes the impact of non-interest 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. | |||||||||||||||||||||||