UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1996
Commission File Number: 33-90342
CENTRAL ILLINOIS FINANCIAL CO., INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 37-1338484
(State or other jurisdiction (I.R.S. Employer
Identification
of incorporation or organization) Number)
100 WEST UNIVERSITY, CHAMPAIGN, ILLINOIS 61820
(Address of principal executive offices) (Zip Code)
(217) 351-6500
(Registrant's telephone number, including area code)
Indicate by "X" whether the registrant (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of the registrant's common stock,
as of May 1, 1996:
Central Illinois Financial Co., Inc. Common Stock 4,722,983
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TABLE OF CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security
Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
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<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTRAL ILLINOIS FINANCIAL CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 1996 and December 31, 1995
(Unaudited, dollars in thousands, except per share data)
Mar. 31, Dec. 31,
1996 1995
<S> <C> <C>
ASSETS
Cash and due from banks $21,112 $26,900
Federal funds sold 55,000 53,800
Investments in debt and equity securities:
Available-for-sale, at estimated market
value 89,990 75,874
Held-to-maturity (approximate market
value of $14,739 and $21,528 at March 31,
1996 and December 31, 1995, respectively) 14,707 21,430
Mortgage loans held for sale 9,617 9,421
Loans, net of allowance for loan losses of
$6,025 and $5,882 at March 31, 1996 and
December 31, 1995, respectively 290,066 311,519
Premises and equipment, net 11,060 10,992
Accrued interest receivable 4,270 4,443
Other assets 6,291 6,207
Total assets $502,113 $520,586
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest bearing demand deposits 55,624 66,693
Interest bearing demand deposits 114,961 107,363
Savings deposits 21,734 23,997
Time deposits $100 and over 35,496 42,839
Other time deposits 170,040 178,265
Total deposits 397,855 419,157
Federal funds purchased and securities
sold under repurchase agreements 39,643 36,273
Federal Home Loan Bank advances 9,000 9,000
Accrued interest payable 1,682 1,964
Other liabilities 5,132 5,784
Total liabilities 453,312 472,178
Stockholders' equity:
Common stock, $0.01 par value; 6,500,000
shares authorized:
4,959,132 shares issued and outstanding 50 50
Paid in capital 19,066 19,066
Retained earnings 30,183 29,180
Unrealized holding gain (loss) on debt and
equity securities available-for-sale (498) 112
Total stockholders' equity 48,801 48,408
Total liabilities and stockholders'
equity $502,113 $520,586
See accompanying notes to Condensed Consolidated Financial Statements.
</TABLE>
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<TABLE>
CENTRAL ILLINOIS FINANCIAL CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 1996 and 1995
(Unaudited, dollars in thousands, except per share data)
<S> <C> <C>
Interest income: 1996 1995
Loans
Taxable $6,810 $7,126
Exempt from federal income tax 6 6
Debt and equity securities available-for-sale 1,207 821
Debt securities held-to-maturity
Taxable 97 510
Exempt from federal income tax 97 125
Federal funds sold 774 104
Total interest income 8,991 8,692
Interest expense:
Deposits 3,927 3,379
Federal funds purchased and securities sold
under repurchase agreements 544 441
Federal Home Loan Bank advances 149 147
Total interest expense4,6203,967
Net interest income 4,371 4,725
Provision for loan losses 150 75
Net interest income after provision for
loan losses 4,221 4,650
Other income:
Trust fees 545 402
Service charges on deposit accounts 187 171
Gains on sale of debt securities 0 2
Gain (loss) on sales of mortgage loans held
for sale, net (7) 2
Other 368 371
Total other income 1,093 948
Other expenses:
Salaries and employee benefits 2,036 2,176
Occupancy 374 297
Equipment 259 300
Data processing fees 154 117
Federal deposit insurance premiums 1 220
Other 1,010 916
Total other expenses 3,834 4,026
Income from continuing operations before
income tax expense 1,480 1,572
Income tax expense 477 506
Income from continuing operations 1,003 1,066
Income from discontinued operations (net of tax
effect of $293 in 1995) 0 570
Net income $1,003 $1,636
Per share data:
Income from continuing operations $0.20 $0.21
Income from discontinued operations 0.00 0.12
Net income $0.20 $0.33
Weighted average shares outstanding 5,019,526 4,980,919
See accompanying notes to Condensed Consolidated Financial Statements.
</TABLE>
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<TABLE>
CENTRAL ILLINOIS FINANCIAL CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ending March 31, 1996 and 1995
(Unaudited, in thousands)
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $1,003 $1,636
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 284 305
Debt and equity securities amortization
(accretion), net 61 (2)
Provision for loan losses 150 75
Debt and equity securities gains 0 (2)
Gain (loss) on sales of mortgage loans
held for sale, net 7 (2)
Gain on disposal of subsidiary 0 (570)
Increase in accrued interest receivable 173 180
(Increase) decrease in other assets (93) 198
(Decrease) increase in accrued interest
payable (282) 97
(Decrease) increase in other liabilities 80 (207)
(Increase) in mortgage loans held for sale (196) (742)
Other, net (7) 49
Net cash provided by operating
activities 1,180 1,015
Cash flows from investing activities:
Net decrease in loans 21,303 1,686
Proceeds from maturity of investments in debt
securities:
Available-for-sale 14,321 8,007
Held-to-maturity 6,588 7,162
Proceeds from sales of investments in debt
and equity securities available-for-sale 0 589
Purchases of investments in debt and equity
securities:
Available-for-sale (30,016) (11,840)
Held-to-maturity 0 (2,908)
Principal paydowns from mortgage-backed and
mortgage-related securities:
Available-for-sale 620 233
Held-to-maturity 109 198
Purchases of premises and equipment (383) (676)
Net cash provided by investing
activities 12,542 2,451
Cash flows from financing activities:
Net decrease in demand and savings deposits (5,734) (8,404)
Net (decrease) increase in time deposits $100
and over (7,343) 5,788
Net (decrease) increase in other time
deposits (8,225) 6,693
Net (decrease) increase in federal funds
purchased and securities sold under
repurchase agreements 3,370 (9,092)
Dividends paid (378) (161)
Net treasury stock transactions 0 4
Net cash used in financing activities (18,310) (5,172)
Net decrease in cash and cash equivalents (4,588) (1,706)
Cash and cash equivalents at beginning of
period 80,700 36,486
Cash and cash equivalents at end of period $76,112 $34,780
Additional cash flows information:
Interest paid on deposits $4,902 $3,282
Income tax paid 0 160
See accompanying notes to Condensed Consolidated Financial Statements.
</TABLE>
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CENTRAL ILLINOIS FINANCIAL CO., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited Condensed Consolidated Financial Statements
have been prepared in accordance with the instructions to Form 10-Q and
therefore do not include all information and footnotes necessary for fair
presentation of financial position, results of operations, and cash flows in
conformity with generally accepted accounting principles.
In the opinion of management, the Condensed Consolidated Financial
Statements of Central Illinois Financial Co., Inc. (the "Company") and
subsidiaries as of March 31, 1996 and for the three month periods ended March
31, 1996 and 1995 include all adjustments necessary for fair presentation of
the results of those periods. All such adjustments are of a normal recurring
nature.
Results of operations for the three-month period ended March 31, 1996
are not necessarily indicative of the results which may be expected for the
year ended December 31, 1996.
NOTE 2. BUSINESS COMBINATION
On December 31, 1994, BankIllinois Financial Co. and Central Illinois
Financial Corporation entered into an Agreement and Plan of Merger which
provided for a "merger of equals" between the two companies, structured as a
merger of the two companies into the Company. The merger, which was
accounted for as a pooling of interests, was completed on June 30, 1995.
Accordingly, prior period Condensed Consolidated Financial Statements have
been restated as though the prior entities had been consolidated for all
periods presented.
NOTE 3. STOCK DIVIDEND
At its regular board meeting on March 12, 1996, the Board of Directors
of the Company declared a one-for-twenty, or five percent, common stock
dividend. The record date of the stock dividend is May 1, 1996 and will be
distributed on May 15, 1996. The accompanying unaudited Condensed
Consolidated Financial Statements have been restated to take the stock
dividend into account.
NOTE 4. NEW ACCOUNTING RULES AND REGULATIONS
During March 1995, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" ("SFAS 121"). SFAS 121 provides guidance for the recognition and
measurement of impairment of long-lived assets, certain identifiable
intangibles and goodwill related both to
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assets to be held and used and assets to be disposed of. SFAS 121 requires
entities to perform separate calculations for assets to be held and used to
determine whether recognition of an impairment loss is required and, if so,
to measure the impairment. SFAS 121 requires long-lived assets and certain
identifiable intangibles to be disposed of to be reported at the lower of
carrying amount or fair value less costs to sell, except for assets covered
by the provisions of APB Opinion No. 30. SFAS 121 is effective for financial
statements issued for fiscal years beginning after December 15, 1995,
although earlier application is encouraged. The Company does not anticipate
that the adoption of SFAS 121 will have a significant impact on its financial
statements.
During October 1995, the FASB issued Statement of Financial Accounting
Standards No. 123, "Accounting for Stock--Based Compensation" ("SFAS 123").
SFAS 123 establishes financial accounting and reporting standards for stock-
based employee compensation plans and also applies to transactions in which
an entity issues its equity instruments to acquire goods or services from
non-employees. SFAS 123 defines a fair value-based method of accounting for
an employee stock option or similar equity instruments and encourages all
entities to adopt that method of accounting. However, it also allows an
entity to continue to measure compensation cost for those plans using the
intrinsic value-based method of accounting prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
(APB 25). SFAS 123 is effective for transactions entered into in fiscal
years beginning after December 15, 1995. Pro forma disclosures required for
entities that elect to continue to measure compensation cost using APB 25
must include the effect of all awards granted in fiscal years which begin
after December 15, 1994. The Company plans to continue to measure
compensation cost using APB 25; therefore, the adoption of SFAS No. 123 will
not have any impact on the Company's financial condition or results of
operations.
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ITEM 2. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FINANCIAL CONDITION
ASSETS AND LIABILITIES
Total assets decreased $18,473,000, or 3.5%, from $520,586,000 at
December 31, 1995 to $502,113,000 at March 31, 1996. Decreases in cash and
due from banks, investments in debt securities held-to-maturity, and loans,
offset somewhat by increases in federal funds sold and debt and equity
securities available-for-sale, resulted in the decrease in assets.
The decrease in cash and due from banks of $5,788,000, or 21.5%, at
March 31, 1996 compared to December 31, 1995 is attributable to a smaller
dollar amount of deposit items in process of collection at March 31, 1996
compared to December 31, 1995.
Investments in debt securities held-to-maturity decreased $6,723,000, or
31.4%, at March 31, 1996 compared to December 31, 1995. This decrease was a
result of investments maturing and the proceeds being reinvested in debt and
equity securities available-for-sale, which increased $14,116,000, or 18.6%,
from December 31, 1995 to March 31, 1996.
Net loans decreased $21,453,000, or 6.9%, from December 31, 1995 to
March 31, 1996. Included in the decrease was an $8,422,000, or 6.9%,
decrease in commercial, financial, and agricultural loans, a $6,166,000, or
4.8%, decrease in real estate loans, and a $6,722,000, or 9.8%, decrease in
installment and consumer loans. Management has expended substantial time on
a review of the Company's lending process in the months following the merger.
Much of the decrease in loans can be attributed to management's emphasis on
appropriate loan structure and pricing as well as a very competitive local
lending environment. There was also some seasonal reduction in credit lines
outstanding during the first quarter of 1996.
Total deposits decreased $21,302,000, or 5.1%, from $419,157,000 at
December 31, 1995 to $397,855,000 at March 31, 1996. The decrease includes
an $11,069,000, or 16.6%, decrease in noninterest bearing demand deposits, a
$2,263,000, or 9.4%, decrease in savings deposits, a $7,343,000, or 17.1%,
decrease in time deposits $100,000 and over, and a decrease of $8,225,000, or
4.6%, in other time deposits. These decreases were somewhat offset by an
increase of $7,598,000, or 7.1%, in noninterest bearing demand deposits. The
decrease in deposits is attributable to management's emphasis on appropriate
pricing in a very competitive market as well as some seasonal run-off.
Deposits showed little change from March 31, 1995 to March 31, 1996. Total
deposits were $397,933,000 at March 31, 1995 compared to $397,855,000 at
March 31, 1996.
Federal funds purchased and securities sold under repurchase agreements
increased $3,370,000, or 9.3%, from $36,273,000 at December 31, 1995 to
$39,643,000 at March 31, 1996.
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CAPITAL
Total stockholders' equity increased $393,000 from December 31, 1995 to
March 31, 1996. The change is summarized as follows:
<TABLE>
(IN THOUSANDS)
<S> <C>
Stockholders' equity, December 31, 1995 $48,408
Net income 1,003
Change in unrealized holding gain (loss) on
investments in debt and equity securities
available-for-sale (610)
Stockholders' equity, March 31, 1996 $48,801
</TABLE>
Financial institutions are required by regulatory agencies to maintain
minimum levels of capital based on asset size and risk characteristics.
Currently, the Company and its subsidiary, BankIllinois, are required by
their primary regulators to maintain adequate capital based on two
measurements: the total assets leverage ratio and the risk-weighted assets
ratio.
The total assets leverage ratio is the ratio of "Tier 1 capital" to
total assets. Tier 1 capital equals total stockholders' equity (before
unrealized holding gain (loss) on investments in available-for-sale debt
securities and unrealized holding gain on investments in available-for-sale
equity securities with readily determinable fair values) less most intangible
assets and certain amounts of deferred tax assets. Average total assets
consist of total assets less most intangible assets and certain amounts of
deferred tax assets. Based on Federal Reserve guidelines, a bank holding
company generally is required to maintain a leverage ratio of 3.0% plus an
additional cushion of at least 100 to 200 basis points. The Company's total
assets leverage ratio at both March 31, 1996 and December 31, 1995 was 9.7%.
The leverage ratio for BankIllinois for the same periods were 9.3% and 9.2%,
respectively--well above the regulatory minimum for both the Company and
BankIllinois.
For the Company, the risk-weighted assets ratio equals the sum of Tier 1
capital plus the allowance for loan losses up to 1.25% of weighted-risk
assets less most intangible assets and certain amounts of deferred tax
assets, divided by total risk-adjusted assets. Total risk-adjusted assets
are derived by assigning each asset and specific off-balance-sheet items,
such as letters of credit and loan commitments, to one of four risk
categories, and multiplying the items in each category by the risk factor
assigned to such category. The resulting totals are then added, and that sum
is the risk-adjusted assets ratio used in the calculation. The minimum risk-
weighted assets ratio for bank holding companies is 8.0%. The Company's
total risk-weighted assets ratios at March 31, 1996 and December 31, 1995
were 15.9% and 15.0%, respectively--significantly higher than the regulatory
minimum. BankIllinois' total risk-weighted assets ratios were also
significantly higher than the regulatory minimum--15.4% and 14.5% at March
31, 1996 and December 31, 1995, respectively.
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RATE SENSITIVITY OF EARNING ASSETS AND INTEREST BEARING LIABILITIES
As of March 31, 1996
(In thousands)
1-30 31-90 91-180 181-365 Over
Days Days Days Days 1-year Total
<S> <C> <C> <C> <C> <C> <C>
Federal funds sold $55,000 $0 $0 $0 $0 $55,000
Debt and equity securities <F1> 1,566 4,191 10,503 17,646 70,791 104,697
Loans <F2> 83,021 24,351 18,787 42,855 136,694 305,708
Total interest earning assets $139,587 $28,542 $29,290 $60,501 $207,485 $465,405
Savings and interest bearing demand
deposits $136,695 $0 $0 $0 $0 $136,695
Time deposits 17,046 31,116 35,703 51,196 70,475 205,536
Federal funds purchased and securities
sold under repurchase agreements 32,785 310 5,327 642 579 39,643
Federal Home Loan Bank advances 0 0 0 0 9,000 9,000
Total interest bearing liabilities $186,526 $31,426 $41,030 $51,838 $80,054 $390,874
Net asset (liability) funding gap ($46,939) ($2,884) ($11,740) $8,663 $127,431 $74,531
Repricing gap 0.75 0.91 0.71 1.17 2.59 1.19
Cumulative repricing gap 0.75 0.77 0.76 0.83 1.19 1.19
<FN>
<F1> Debt and equity securities include securities available-for-sale.
<F2> Loans include mortgage loans held for sale.
</FN>
</TABLE>
At March 31, 1996, the Company was liability-sensitive due to the levels
of savings and interest bearing demand deposits, short-term time deposits,
federal funds purchased and securities sold under repurchase agreements. As
such, the effect of a decrease in the interest rate for all interest earning
assets and interest bearing liabilities of 100 basis points would increase
annualized net interest income by approximately $469,000 in the 1-30 days
category and $498,000 in the 1-90 days category assuming no management
intervention. An increase in interest rates would have the opposite effect
for the same time periods.
LIQUIDITY
The Company was able to meet liquidity needs during the first three
months of 1996. A review of the Condensed Consolidated Statement of Cash
Flows included in the accompanying financial statements shows that the
Company's cash and cash equivalents decreased $4,588,000 from December 31,
1995 to March 31, 1996. This decrease came from net cash used in financing
activities offset by cash provided by operating and investing activities.
Net cash provided by operating activities reflects net earnings plus or
minus certain noncash and other adjustments to arrive at net cash provided by
operating activities. In the three month period ended March 31, 1996, net
cash provided by operating activities was $165,000 more than the net cash
provided by operating activities for the same period in 1995. The biggest
reason for the increase in 1996 over 1995 was that mortgage loans held for
sale increased by
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$196,000 during the first three months of 1996 compared to $742,000 during
the same period during 1995, a $546,000 decrease. In addition, other
liabilities increased $80,000 during the first three months of 1996 compared
to a decrease of $207,000 during 1995, a $287,000 change. Negatively
affecting cash provided was a decrease in net income of $633,000. This was
somewhat offset by the noncash gain on disposal of subsidiary of $570,000
included in 1995 net income. Cash provided by operating activities was
offset by a decrease in accrued interest payable of $282,000, a change of
$379,000 from 1995.
Net cash provided by investing activities was $12,542,000 in the three
month period ended March 31, 1996 compared to $2,451,000 for the same period
in 1995. This resulted from a decrease in loans for the first three months
of 1996 of $21,303,000, $19,617,000 more than the decrease for the same
period in 1995. This increase was somewhat offset by purchases of
investments in debt and equity securities of $30,016,000 in the three months
ended March 31, 1996. During the same time period, the Company received
proceeds from maturities of investments in debt securities totaling
$20,909,000. During the first three months of 1995, the Company had
purchases of investments in debt and equity securities of $14,748,000 and
proceeds from maturity of investments in debt securities totaling
$15,169,000.
Net cash used in financing activities for the first three months of 1996
was $18,310,000 compared to $5,172,000 during the same period in 1995.
Included in the increase in cash used is a decrease in total deposits of
$21,302,000 during the first three months of 1996 compared to an increase of
$4,077,000 during the same period in 1995. The decrease in deposits was
somewhat offset by an increase in federal funds purchased and securities sold
under repurchase agreements of $3,370,000 in 1996 compared to a decrease of
$9,092,000 in 1995.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses is based on management's evaluation of the
loan portfolio in light of national and local economic conditions, changes in
the composition and volume of the loan portfolio, changes in the volume of
past due and nonaccrual loans, and other relevant factors. The allowance for
loan losses, which is reported as a deduction from loans, is available for
loan charge-offs. The allowance is increased by the provision charged to
expense and is reduced by loan charge-offs net of loan recoveries. The
balance of the allowance for loan losses was $6,025,000 at March 31, 1996
compared to $5,882,000 at December 31, 1995. The allowance for loan losses
as a percent of outstanding loans was 2.0% at March 31, 1996 compared to 1.9%
at December 31, 1995. Additionally, the allowance for loan losses as a
percent of nonperforming assets was 113.0% at March 31, 1996 compared to
163.7% at December 31, 1995. Management has expended substantial time on a
review of the Company's lending process in the months following the merger.
Management believes that the increase in nonperforming assets is a result of
the emphasis placed on early detection of problem assets and not necessarily
an indication of deterioration in the Company's credit quality. Management
believes that the allowance for loan losses is adequate to absorb possible
losses in the portfolio.
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RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996
Net income for the first three months of 1996 was $1,003,000, a
$633,000, or 38.7%, decrease from the first three months of 1995. This
decrease was primarily the result of a $570,000 gain, net of tax, on the sale
of discontinued operations during the first three months of 1995. As a
result, net income per share dropped 39.4%, from $0.33 in 1995 to $0.20 in
1996.
Income from continuing operations for the three months ended March 31,
1996, was $1,003,000, or $0.20 per share, compared to $1,066,000, or $0.21
per share, for the same period in 1995, a 5.9% decrease.
Net interest income was $354,000, or 7.5% less for the first three
months of 1996 compared to 1995. Total interest income was $299,000, or 3.4%
higher in 1996 compared to 1995. This increase was more than offset by an
increase in interest expense of $653,000, or 16.4%.
Included in the increase in total interest income is an increase of
$670,000, or 644.2%, in interest income on federal funds sold. This increase
reflects average additional federal funds sold during the first quarter of
1996 of $48,820,000, a 654.9% increase over 1995. This increase was somewhat
offset by a decrease of $316,000, or 4.4%, in interest income on loans. This
decrease reflects a $18,327,000, or 5.5%, decrease in average loans
outstanding during the first quarter of 1996 compared to the same period in
1995.
The increase in interest expenses of $653,000 was primarily due to
higher balances and interest rates on interest bearing funds.
The provision for loan losses recorded was $150,000 during the first
three months of 1996. This was $75,000, or 100.0%, more than the amount
recorded during the first three months of 1995. The provision during the
first quarter of 1996 was based on management's analysis of the Bank's loan
portfolio and adequacy of allowance for loan losses.
Other income increased $145,000, or 15.3%, during the first three months
of 1996 compared to the first three months of 1995. Included in this
increase was an increase of $143,000, or 35.6%, in trust fees.
Total other expenses decreased $192,000, or 4.8%, during the first three
months of 1996 compared to the first three months of 1995. Included in the
decrease were decreases in salaries and employee benefits of $140,000,
equipment of $41,000 and federal deposit insurance premiums of $219,000. The
reduction in salary and employee benefits reflects the restructuring the
Company completed during 1995. Included in the reduction of equipment
expense is a reduction in computer-related equipment expenses related to a
portion of the Company's computer operation which is now being out-sourced.
The reduction in federal deposit insurance premiums is a direct result of a
reduction in premium assessments.
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Somewhat offsetting these decreases were increases in occupancy of
$77,000, data processing fees of $37,000 and other of $94,000. Included in
the increase in net occupancy were expenses related to a branch opened in
mid-1995 as well as costs incurred as a result of operations being
consolidated due to the merger. The data processing increase is a result of
more data processing being out-sourced in 1996 than in 1995. The increase in
other operating expenses reflects the expenses of the aggressive marketing
campaign initiated in mid-1995.
Income from discontinued operations decreased to zero due to the
conclusion of a sales agreement relating to the operations that were
discontinued. In 1992, the Company divested its interest in a wholly owned
subsidiary, and the total sales price was based upon the annual operating
revenues of the former subsidiary for the period July 1, 1992 through June
30, 1995 up to a maximum certain dollar amount. All remaining gains on this
sale were recognized during the first quarter of 1995. Thus, no income from
discontinued operations was recognized for the three months ended March 31,
1996.
Page 13
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<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The are no material pending legal proceedings to which the Company or its
subsidiaries is a party other than ordinary routine litigation incidental to
their respective businesses.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
At their regularly scheduled meeting on March 12, 1996, the Board of
Directors adopted a resolution declaring a one-for-twenty, or five percent,
common stock dividend. The record date of the stock dividend was May 1,
1996, and the distribution date, May 15, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
None
b. Reports
None
Page 14
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
CENTRAL ILLINOIS FINANCIAL CO., INC.
Date:May 1, 1996
By: /s/ David B. White
Executive Vice President
and Chief Financial Officer
Page 15
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 21,112
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 55,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 89,990
<INVESTMENTS-CARRYING> 14,707
<INVESTMENTS-MARKET> 14,739
<LOANS> 299,683<F1>
<ALLOWANCE> 6,025
<TOTAL-ASSETS> 502,113
<DEPOSITS> 397,855
<SHORT-TERM> 39,643
<LIABILITIES-OTHER> 6,814
<LONG-TERM> 9,000
0
0
<COMMON> 50
<OTHER-SE> 48,751
<TOTAL-LIABILITIES-AND-EQUITY> 502,113
<INTEREST-LOAN> 6,816
<INTEREST-INVEST> 1,401
<INTEREST-OTHER> 774
<INTEREST-TOTAL> 8,991
<INTEREST-DEPOSIT> 3,927
<INTEREST-EXPENSE> 4,620
<INTEREST-INCOME-NET> 4,371
<LOAN-LOSSES> 150
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,834
<INCOME-PRETAX> 1,480
<INCOME-PRE-EXTRAORDINARY> 1,003
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,003
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
<YIELD-ACTUAL> 7.73
<LOANS-NON> 2,942
<LOANS-PAST> 1,663
<LOANS-TROUBLED> 176
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<FN>
<F1>Includes mortgages available-for-sale and net of allowance for loan losses
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