form11k_2007.htm

 
FORM 11-K
 
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2007
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
 
Commission file number: 0-13368
 
 
FIRST MID-ILLINOIS BANCSHARES, INC.
PROFIT SHARING PLAN AND TRUST
(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.
Profit Sharing Plan & Trust
EIN 37-0404035 PN 002
Accountants’ Report and Financial Statements
December 31, 2007 and 2006


 
 
 

First Mid-Illinois Bancshares, Inc.
Profit Sharing Plan & Trust
December 31, 2007 and 2006


            
Contents
   
Report of Independent Registered Public Accounting Firm
1
   
Financial Statements
  
   Statements of Net Assets Available for Benefits
2
   Statements of Changes in Net Assets Available for Benefits
3
   Notes to Financial Statements
4
   
Supplemental Schedules
  
   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 & Trust
Mattoon, Illinois

 
We have audited the accompanying statements of net assets available for benefits of  First Mid-Illinois Bancshares, Inc. 401(k) Profit Sharing Plan & Trust as of December 31, 2007 and 2006, and the related statements of changes in net assets available for benefits for the years 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 audits.
 
We conducted our audits in accordance with 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 audits provide a reasonable basis for our opinion.
 
In our opinion, the 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 & Trust as of December 31, 2007 and 2006, and the changes in its net assets available for benefits for the years 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 basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
 
/s/ BKD, LLP
 
Decatur, Illinois
June 26, 2008
 

 
Federal Employer Identification Number:  44-0160260
 

 
 
 

First Mid-Illinois Bancshares, Inc.
Profit Sharing Plan & Trust
Statements of Net Assets Available for Benefits
December 31, 2007 and 2006
 
 
 

   
2007
    
2006
  
Assets
            
             
      Investments, At Fair Value
   $ 30,557,259     $ 29,304,769  
                 
      Receivables
                
               Employer’s contribution
     588       1,766  
               Interest and dividends
     224,289       161,772  
               Due from broker for securities transferred
     -       394,360  
                 
      224,877       557,898  
                 
                       Total assets
     30,782,136       29,862,667  
                 
Liability
                
                 
               Refunds due to excess contributions
     5,060       7,384  
                 
     Net Assets Available for Benefits
   $ 30,777,076     $ 29,855,283  
                 


See Notes to Financial Statements
 
 
 


First Mid-Illinois Bancshares, Inc.
Profit Sharing Plan & Trust
Statements of Changes in Net Assets Available for Benefits
December 31, 2007 and 2006
 
 

 
   
2007
    
2006
  
     Investment Income
            
               Net appreciation in fair value of investments
   $ (1,182,025 )   $ 901,733  
               Interest and dividends
     2,016,650       1,383,240  
      834,625       2,284,973  
                 
     Contributions
                
               Employer
     718,552       675,027  
               Participants
     922,462       895,069  
               Rollovers
     14,652       2,249,764  
                 
      1,655,666       3,819,860  
                 
                    Total additions
     2,490,291       6,104,833  
                 
     Deductions
                
               Benefits paid directly to participants
     1,568,498       1,118,665  
                 
                 
     Net Increase
     921,793       4,986,168  
                 
     Net Assets Available for Benefits, Beginning of Year
     29,855,283       24,869,115  
                 
     Net Assets Available for Benefits, End of Year
   $ 30,777,076     $ 29,855,283  
                 


See Notes to Financial Statements
 
 
 

 
First Mid-Illinois Bancshares, Inc.
Profit Sharing Plan & Trust
Notes to Financial Statements
December 31, 2007 and 2006
 
 
 
Note 1:  Description of Plan
 
The following description of the 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 matching contributions calculated as a percentage of the before tax contribution made on behalf of each contributing participant.  The Company determines this percentage each year.  For December 31, 2007 and 2006, the matching contributions were 50% of employees’ salary deferral amounts up to 4% of employees’ eligible compensation.  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, 2007 and 2006, 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 annual profit sharing contribution is maintained in a non-participant 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.
Profit Sharing Plan & Trust
Notes to Financial Statements
December 31, 2007 and 2006

 
 
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 vesting service, defined as a minimum of 500 hours of service.  A participant is fully vested after 6 years of vesting 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 equal to the value of his account or installments.
 
 
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.
Profit Sharing Plan & Trust
Notes to Financial Statements
December 31, 2007 and 2006
 
 
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 net assets and changes in net assets 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 and dividend income is recorded on the accrual basis.
 
 
Plan Tax Status
 
The Plan operates under a nonstandardized adoption agreement in connection with a prototype retirement plan sponsored by First Mid-Illinois Bank & Trust.  This prototype plan document has been filed with the appropriate agency and a determination letter was obtained on August 7, 2001.  The Plan has not obtained or requested a 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 and that the Plan was qualified and the related trust tax exempt as of the financial statement date.
 
 
Payment of Benefits
 
Benefit payments to participants are recorded upon distribution.
 
 
Administrative Expenses
 
Administrative expenses may be paid by the Company or the Plan, at the Company’s discretion.
 

 
 
 

            
First Mid-Illinois Bancshares, Inc.
Profit Sharing Plan & Trust
Notes to Financial Statements
December 31, 2007 and 2006
 
 
Note 3:  Investments
 
The Plan’s investments are held by a bank-administered trust fund.  The Plan’s investments (including investments bought, sold and held during the year) appreciated (depreciated) in fair value as follows:
 

 
   
2007
  
   
Net (Depreciation) in Fair Value During Year
    
Fair Value at End of Year
  
             
             
             
     Investments at Fair Value as Determined by
            
       Quoted Prices in an Active Market
            
               Mutual funds
   $ (789,657 )   $ 18,005,971  
               Common stock
     (392,369 )     9,021,768  
                 
      (1,182,026 )     27,027,739  
                 
                 
     Investments at Cost Which Approximates Market
                
               Money market fund
     -       552,920  
               Certificates of deposit
     -       2,527,763  
               Participant loans
     -       448,837  
                 
      -       3,529,520  
                 
    $ (1,182,026 )   $ 30,557,259  
                 

 
 
 

First Mid-Illinois Bancshares, Inc.
Profit Sharing Plan & Trust
Notes to Financial Statements
December 31, 2007 and 2006
 
   
2006
  
   
Net Appreciation in Fair Value During Year
    
Fair Value at End of Year
  
             
             
             
     Investments at Fair Value as Determined by
            
       Quoted Prices in an Active Market
            
               Mutual funds
   $ 833,141     $ 15,222,121  
               Common stock
     68,592       10,163,444  
                 
      901,733       25,385,565  
                 
                 
     Investments at Cost Which Approximates Market
                
               Money market fund
     -       1,711,691  
               Certificates of deposit
     -       1,778,692  
               Participant loans
     -       428,821  
                 
      -       3,919,204  
                 
    $ 901,733     $ 29,304,769  
                 
 

 
 
 

First Mid-Illinois Bancshares, Inc.
Profit Sharing Plan & Trust
Notes to Financial Statements
December 31, 2007 and 2006


 The fair value of individual investments that represented 5% or more of the Plan’s net assets available for benefits were as follows:
 
   
2007
    
2006
  
             
          Federated Max Capital Index Fund
   $ 2,706,731     $ 2,624,262  
          Vanguard Growth Index Fund
     3,025,136       2,404,040  
          Dodge & Cox Balanced Fund
     2,180,766       2,051,854  
          Oakmark Global I Fund
     4,079,675       3,244,005  
          T. Rowe Price Mid-Cap Value Fund
     1,887,959       1,694,318  
          First Mid-Illinois Bancshares, Inc. common stock
     9,021,768       10,163,444  
         First Mid-Illinois Bank & Trust certificate of deposit
     1,852,172       975,842  
                 
                 


Interest and dividends realized on the Plan’s investments for the years ended 2007 and 2006 were $2,016,650 and $1,383,240, respectively.

 
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:
 

   
2007
    
2006
  
          Net Assets:
            
               Certificate of deposit
   $ 512,160     $ 476,326  
               Interest receivable
     1,798       1,467  
                 
                    Net assets
   $ 513,958     $ 477,793  
                 
          Changes in net assets:
                
               Contributions
   $ 500,719     $ 467,384  
               Interest income
     13,239       10,410  
               Transfers to participant-directed investments
     (477,793 )     (445,339 )
                 
                     Total additions
   $ 36,165     $ 32,455  
                 
 

 
 
 

 First Mid-Illinois Bancshares, Inc.
Profit Sharing Plan & Trust
Notes to Financial Statements
December 31, 2007 and 2006


Note 5:  Party-in-Interest Transactions
 
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 employee association, 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, 2007 and 2006, participants held 346,325 and 249,104 shares, respectively.
 
The Plan also holds certificates of deposit with First Mid-Illinois Bank & Trust, totaling $2,364,332 and $1,452,168 at December 31, 2007 and 2006, 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.
Profit Sharing Plan & Trust
EIN 37-1149138 PN 002
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2007
 
 
Identity of Issuer
Description of Investment
  
Current Value
  
         
Certificates of Deposit
        
First Mid-Illinois Bank & Trust*
4.25% due 12/31/08
   $ 512,160  
First Mid-Illinois Bank & Trust*
4.25% due 12/31/08
     1,852,172  
Central Illinois Bank
4.72% due 12/18/08
     163,431  
        2,527,763  
           
Common Stock
          
     First Mid-Illinois Bancshares, Inc.*
346,325 Shares
     9,021,768  
           
Mutual Funds
          
     Federated Mid Capital Index Fund
58,370 Shares
     1,271,297  
     Federated Max Capital Index Fund
114,838 Shares
     2,706,731  
     Federated Total Return Bond Fund
54,309 Shares
     581,110  
     Fidelity Low Priced Stock Fund
18,156 Shares
     746,749  
     Dodge & Cox Balanced Fund
26,923 Shares
     2,180,766  
     Oakmark Global I Fund
169,281 Shares
     4,079,675  
     Royce Low-Priced Stock Fund
29,642 Shares
     438,111  
     T. Rowe Price Mid-Cap Value Fund
84,059 Shares
     1,887,959  
     T. Rowe Price Retirement 2010 Fund
62 Shares
     1,005  
     T. Rowe Price Retirement 2020 Fund
7,928 Shares
     140,084  
     T. Rowe Price Retirement 2030 Fund
1,716 Shares
     32,559  
     T. Rowe Price Retirement 2040 Fund
1,221 Shares
     23,346  
     T. Rowe Price Retirement 2050 Fund
2,355 Shares
     24,662  
     Vanguard Growth Index Fund
91,036 Shares
     3,025,136  
     Vanguard Windsor II
27,728 Shares
     866,781  
        18,005,971  
           
Money Market
          
     Federated Prime Obligation Funds #10
24,915 Units
     24,915  
     Federated Prime Obligation Funds #396
513,266 Units
     513,266  
     NTHN Institutional Funds Government Select
14,739 Units
     14,739  
        552,920  
           
Participant Loans
4.00% to 8.50%
     448,837  
           
      $ 30,557,259  
           
 
 
* 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 26, 2008


/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
Consent of BKD, LLP