UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
FIRST MID-ILLINOIS BANCSHARES, INC.
401(k) PROFIT SHARING PLAN
(Full Title of Plan)
FIRST MID-ILLINOIS BANCSHARES, INC.
1515 Charleston Avenue
P.O. Box 499
Mattoon, Illinois 61938
(Name of Issuer of the Securities Held Pursuant to the Plan
and the Address of the Principal Executive Office)
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
EIN 37-0404035 PN 002
Accountants' Report and Financial Statements
December 31, 2005 and 2004
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
December 31, 2005 and 2004
Contents
Report of Independent Registered Public Accounting Firm....................1
Financial Statements
Statements of Net Assets Available for Benefits........................3
Statements of Changes in Net Assets Available for Benefits ............4
Notes to Financial Statements..........................................5
Supplemental Schedule
Schedule H, Line 4i -- Schedule of Assets (Held at End of Year).......11
Report of Independent Registered Public Accounting Firm
Plan Administrator
First Mid-Illinois Bancshares, Inc. 401(k) Profit Sharing Plan
Mattoon, Illinois
We have audited the accompanying statement of net assets available for benefits
of First Mid-Illinois Bancshares, Inc. 401(k) Profit Sharing Plan as of December
31, 2005, and the related statement of changes in net assets available for
benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of First Mid-Illinois Bancshares, Inc. 401(k) Profit Sharing Plan as
of and for the year ended December 31, 2004, were audited by other accountants
whose report dated June 24, 2005 expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the 2005 financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of First
Mid-Illinois Bancshares, Inc. 401(k) Profit Sharing Plan as of December 31,
2005, and the changes in its net assets available for benefits for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.
The accompanying supplemental schedule of assets (held at end of year) is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements, but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedule
is the responsibility of the Plan's management. The supplemental schedule has
been subjected to the auditing procedures applied in the audit of the 2005 basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the 2005 basic financial statements taken as a whole.
/s/ BKD, LLP
Decatur, Illinois
May 16, 2006
Federal Employer Identification Number: 44-0160260
Report of Independent Registered Public Accounting Firm
The Participants and Plan Administrator of the
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan:
We have audited the accompanying statement of net assets available for plan
benefits of the First Mid Illinois Bancshares, Inc. 401(k) Profit Sharing Plan
as of December 31, 2004 and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 2004. These
financial statements are the responsibility of the Plan Administrator. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the plan administrator, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above presents fairly, in
all material respects, the net assets available for plan benefits of the First
Mid-Illinois Bancshares, Inc. 401(k) Profit Sharing Plan as of December 31,
2004, and the changes in net assets available for plan benefits for the year
ended December 31, 2004 in conformity with U.S. generally accepted accounting
principles.
/s/ KPMG LLP
Chicago, Illinois
June 24, 2005
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
Statements of Net Assets Available for Benefits
December 31, 2005 and 2004
Assets
2005 2004
-----------------------------------
Investments, At Fair Value $ 24,813,871 $ 22,879,997
--------------- ---------------
Receivables
Employer's contribution -- 1,761
Interest and dividends 72,777 63,921
--------------- ---------------
72,777 65,682
--------------- ---------------
Total assets 24,886,648 22,945,679
--------------- ---------------
Liability
Refunds due to excess contributions 17,533 4,629
--------------- ---------------
Net Assets Available for Benefits $ 24,869,115 $ 22,941,050
=============== ===============
See Notes to Financial Statements
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2005 and 2004
2005 2004
--------------------------
Investment Income
Net appreciation in fair value of investments $ 969,790 $ 2,571,172
Interest and dividends 695,018 498,841
----------- -----------
1,664,808 3,070,013
----------- -----------
Contributions
Employer 628,456 613,843
Participants 764,561 719,296
Rollovers 29,282 142,044
----------- -----------
1,422,299 1,475,183
----------- -----------
Total additions 3,087,107 4,545,196
----------- -----------
Deductions
Benefits paid directly to participants 1,159,042 441,745
----------- -----------
Net Increase 1,928,065 4,103,451
Net Assets Available for Benefits, Beginning of Year 22,941,050 18,837,599
----------- -----------
Net Assets Available for Benefits, End of Year $ 24,869,115 $ 22,941,050
=========== ===========
See Notes to Financial Statements
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2005 and 2004
Note 1: Description of the Plan
The following description of First Mid-Illinois Bancshares, Inc. 401(k)
Profit Sharing Plan (Plan) provides only general information.
Participants should refer to the Plan Document and Summary Plan
Description for a more complete description of the Plan's provisions,
which are available from the plan administrator.
General
The Plan is a defined contribution plan sponsored by First Mid-Illinois
Bancshares, Inc. (Company) covering all full-time employees who have at
least one-half year of service. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
The Plan permits eligible employees through a salary deferral election
to have the Company make annual contributions of up to 100% of eligible
compensation. Employee rollover contributions are also permitted. The
Company makes a matching contribution calculated as a percentage of the
before tax contribution made on behalf of each contributing participant.
The Company determines this percentage each year. Matching
contributions, however, will not exceed 2% of the eligible compensation
of each participant in any year and cannot exceed 50% of the employee's
elected deferral. The Company may also, at its sole discretion,
contribute to the Plan an amount to be determined from year to year as a
profit sharing contribution. For the years ended December 31, 2005 and
2004, the profit sharing contribution was 4% of eligible compensation.
Contributions are subject to certain limitations.
Participant Investment Account Options
Investment account options available include various funds. Each
participant has the option of directing his contributions into any of
the separate investment accounts and may change the allocation daily.
The profit sharing contribution is maintained in a nonparticipant
directed investment until this contribution is allocated by the Plan to
the eligible participant accounts.
Participant Accounts
Each participant's account is credited with the participant's
contribution, the Company's contribution and plan earnings. The benefits
to which a participant is entitled is the benefit that can be provided
from the participant's vested account.
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2005 and 2004
Vesting
Participants are immediately vested in their voluntary contributions and
the Company's matching contributions plus earnings thereon. Vesting in
the Company's profit sharing contribution portion of their accounts plus
earnings thereon is based on years of continuous service. A participant
is fully vested after 6 years of continuous service. The nonvested
balance is forfeited upon payment of benefits. Forfeitures are allocated
among active participants based upon eligible compensation.
Payment of Benefits
Upon termination of service, an employee may elect to receive either a
lump-sum amount or installments equal to the value of his account.
Participant Loans
The Plan document includes provisions authorizing loans from the Plan to
active eligible participants. Loans are made to any eligible participant
demonstrating a qualifying need. The minimum amount of a loan shall be
$1,000. The maximum amount of a participant's loans is determined by the
available loan balance restricted to the lesser of $50,000 or 40% of the
participant's vested account balance. All loans are covered by demand
notes and are repayable over a period not to exceed five years except
for loans for the purchase of a principal residence through payroll
withholdings unless the participant is paying the loan in full. Interest
on the loans is charged at prime rate at loan inception.
Plan Termination
Although it has not expressed an intention to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan, subject to the provisions of ERISA. In the event of
plan termination, participants will become 100% vested in their
accounts.
Note 2: Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis
of accounting.
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2005 and 2004
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and changes therein and disclosure of
contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
Valuation of Investments and Income Recognition
Quoted market prices are used to value mutual funds and common stock.
Participant loans, certificates of deposit, and money market funds are
valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a settlement-date
basis. Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
Plan Tax Status
The Plan adopted a prototype plan which obtained its latest
determination letter on August 7, 2001, in which the Internal Revenue
Service stated that the Plan and related trust, as then designed, were
in compliance with the applicable requirements of the Internal Revenue
Code and therefore not subject to tax. The Plan has been amended since
receiving the determination letter. However, the plan administrator
believes that the Plan and related trust are currently designed and
being operated in compliance with the applicable requirements of the
Internal Revenue Code.
Payment of Benefits
Benefit payments to participants are recorded upon distribution.
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2005 and 2004
Note 3: Investments
The Plan's investments are held by a bank-administered trust fund. The
following table presents the Plan's investments. Investments that
represent 5% or more of total plan assets are separately identified.
2005
---------------------------------
Net Appreciation
in Fair Value Fair Value at
During Year End of Year
---------------------------------
Investments at Fair Value as Determined by
Quoted Prices in an Active Market
Mutual funds $ 353,402 $ 12,364,336
Common stock 616,388 10,259,387
------------- ------------
969,790 22,623,723
Investments at Cost Which Approximates Fair
Value
Money market funds -- 228,486
Certificates of deposit -- 1,501,969
Participant loans -- 459,693
------------- ------------
-- 2,190,148
------------- ------------
$ 969,790 $ 24,813,871
============= ============
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2005 and 2004
2004
---------------------------------
Net Appreciation
in Fair Value Fair Value at
During Year End of Year
---------------------------------
Investments at Fair Value as Determined by
Quoted Prices in an Active Market
Mutual funds $ 879,328 $ 11,540,838
Common stock 1,691,844 9,192,884
------------- ------------
2,571,172 20,733,722
Investments at Cost Which Approximates Fair
Value
Money market funds -- 205,631
Certificates of deposits -- 1,457,730
Participant loans -- 482,914
------------- ------------
-- 2,146,275
------------- ------------
$ 2,571,172 $ 22,879,997
============= ============
The fair value of individual investments that represented 5% or more of
the Plan's net assets available for benefits were as follows:
2005 2004
-----------------------------
Federated Max Capital Fund $ 2,245,624 $ 2,228,390
Vanguard Growth Index Fund 2,331,586 2,419,618
Dodge & Cox Balanced Fund 1,772,610 1,630,340
Oakmark Global I Fund 2,177,692 1,615,027
T. Rowe Price Mid-Cap Value Fund 1,462,070 1,161,257
First Mid-Illinois Bancshares, Inc. common stock 10,259,387 9,192,884
------------ ------------
$ 20,248,969 $ 18,247,516
============ ============
Interest and dividends realized on the Plan's investments for the years
ended 2005 and 2004 were $695,018 and $498,841, respectively.
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2005 and 2004
Note 4: Nonparticipant-Directed Investments
Information about the net assets and the components of the changes in
net assets relating to the nonparticipant-directed investments is as
follows:
2005 2004
-----------------------
Net assets:
Certificate of deposit $ 444,262 $ 430,988
Interest receivable 1,076 788
Employer contribution receivable -- 587
--------- ---------
Net assets $ 445,338 $ 432,363
========= =========
Changes in net assets:
Contributions $ 437,210 $ 426,341
Interest income 8,128 6,022
Transfers to participant-directed investments (432,363) (426,475)
--------- ---------
Total additions $ 12,975 $ 5,888
========= =========
Note 5: Party-in-Interest Transaction
Party-in-interest transactions include those with fiduciaries or
employees of the Plan, any person who provides services to the Plan, an
employer whose employees are covered by the Plan, a person who owns 50
percent or more of such an employer, or relatives of such persons.
The Plan's investments are held in a trust account administered by First
Mid-Illinois Bank & Trust, a wholly owned subsidiary of the Company.
Active participants can purchase the common stock of the Company. At
December 31, 2005 and 2004, participants held 253,006 and 241,918
shares, respectively.
The Plan also holds certificates of deposit with First Mid-Illinois Bank
& Trust, totaling $1,501,969 and $1,457,730 at December 31, 2005 and
2004, respectively.
The Plan incurs expenses related to general administration and record
keeping. The plan sponsor pays these expenses and certain accounting and
auditing fees relating to the Plan.
Supplemental Schedule
First Mid-Illinois Bancshares, Inc.
401(k) Profit Sharing Plan
EIN 37-0404035 PN 002
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2005
Identity of Issuer Description of Investment Current Value
-----------------------------------------------------------------------------------------------------
Certificates of Deposit
First Mid-Illinois Bank & Trust* 3.75%, due 12/31/2006 $ 444,262
First Mid-Illinois Bank & Trust* 3.75%, due 12/31/2006 1,057,707
-----------
1,501,969
Common Stock
First Mid-Illinois Bancshares, Inc.* 253,006 Shares 10,259,387
-----------
Mutual Funds
Federated Mid Capital Index Fund 45,502 Shares 1,008,324
Federated Max Capital Fund 90,879 Shares 2,245,624
Federated Total Return Bond Fund 51,291 Shares 541,113
Fidelity Low Priced Stock Fund 17,913 Shares 731,581
Dodge & Cox Balanced Fund 21,793 Shares 1,772,610
Oakmark Global I Fund 92,786 Shares 2,177,692
Royce Low-Priced Stock Fund 6,036 Shares 93,736
T. Rowe Price Mid-Cap Value Fund 62,535 Shares 1,462,070
Vanguard Growth Index Fund 84,662 Shares 2,331,586
-----------
12,364,336
Money Market
Federated Prime Obligation Funds #10 11,433 Units 11,433
Federated Prime Obligation Fund #396 216,967 Units 216,967
NTHN Institutional Funds Government
Select 86 Units 86
-----------
228,486
Participant Loans 4.00% to 8.50% 459,693
-----------
$ 24,813,871
===========
Represents a party-in-interest to the Plan
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan Administrator has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
First Mid-Illinois Bancshares, Inc.
401 (k) Profit Sharing Plan
Date: June 29, 2006
/s/ William S. Rowland
William S. Rowland
President and Chief Executive Officer
Exhibit Index to Annual Report on Form 11-K
Exhibit
Number Description and Filing or Incorporation Reference
------------------ -------------------------------------------------------------
23.1 Consent of BKD, LLP
23.2 Consent of KPMG LLP