First Bankers Trustshares, Inc.
2014 Summary Annual Report
Corporate Information ............................................................................. 1
Letter to Shareholders ............................................................................. 2
Select Financial Data ........................................................................ 3 – 4
Management’s Reports .................................................................... 5 – 6
Management’s Discussion and Analysis of
Financial Condition and Results of Operations ............................. 7 – 11
Board of Directors ................................................................................. 12
Officers .................................................................................................. 13
Corporate Information
Corporate Description
First Bankers Trustshares, Inc. (FBTI) is a bank holding company for First
Bankers Trust Company, N.A., First Bankers Trust Services, Inc., FBIL
Statutory Trust II and FBIL Statutory Trust III. The Company was
incorporated on August 25, 1988 and is headquartered in Quincy,
Illinois.
First Bankers Trustshares’ mission, through its subsidiaries, is to provide
comprehensive financial products and services to its retail, institutional,
and corporate customers.
First Bankers Trust Company, N.A. is a community-oriented financial
institution, which traces its beginnings to 1946, operates 10 banking
facilities in Adams, Hancock, McDonough, Sangamon and Schuyler
counties in West Central Illinois.
First Bankers Trust Services, Inc. is a national provider of fiduciary
services to individual retirement accounts, personal trusts, and
employee benefit trusts. The Trust Company is headquartered in Quincy,
Illinois and operates facilities in Chicago, IL, St. Peters, MO, Phoenix, AZ,
Philadelphia, PA and Springfield, IL.
FBIL Statutory Trust II and FBIL Statutory Trust III were capitalized in
September 2003 and August 2004, respectively, for the purpose of
issuing Company Obligated Mandatorily Redeemable Preferred
Securities.
For additional financial information contact:
Brian A. Ippensen, Treasurer
First Bankers Trustshares, Inc.
(217) 228-8000
Stockholder Information
Common shares authorized:
Common shares outstanding as of
December 31, 2014:
Certificate holders of record:
*As of December 31, 2014
6,000,000
3,079,521
228*
Inquiries regarding transfer requirements, lost certificates, changes of
address and account status should be directed to the corporation’s
transfer agent:
AST Shareholder Services
6201 15th Avenue
Brooklyn, NY 11219
Corporate Address
First Bankers Trustshares, Inc.
1201 Broadway
P.O. Box 3566
Quincy, IL 62305
Independent Auditors
McGladrey LLP
201 N. Harrison, Suite 300
Davenport, IA 52801
General Counsel
Hunton & Williams, LLP
1445 Ross Ave., Suite 3700
Dallas, TX 75202
First Bankers Trustshares, Inc. Board of Directors
David E. Connor
Chairman Emeritus, First Bankers Trustshares, Inc.
Carl Adams, Jr.
President, Illinois Ayers Oil Company
Scott A. Cisel
Executive Adviser to Accenture’s North America Energy Practice
William D. Daniels
Member, Harborstone Group, LLC
Mark E. Freiburg
Owner, Freiburg Insurance Agency & Freiburg Development
President, Freiburg, Inc.
Donald K. Gnuse
Chairman of the Board, First Bankers Trustshares, Inc.
Chairman of the Board, First Bankers Trust Company, N.A.
Chairman of the Board, First Bankers Trust Services, Inc.
Arthur E. Greenbank
President/CEO, First Bankers Trust Company, N.A.
President/CEO, First Bankers Trustshares, Inc.
Phyllis J. Hofmeister
Secretary, Robert Hofmeister Farm
John E. Laverdiere
Laverdiere Construction, Inc., President
LCI Concrete, Inc., Vice President/Manager
Steven E. Siebers
Secretary of the Board, First Bankers Trustshares, Inc.
Secretary of the Board, First Bankers Trust Company, N.A.
Secretary of the Board, First Bankers Trust Services, Inc.
Attorney at Law, Scholz, Loos, Palmer, Siebers & Duesterhaus
Merle L. Tieken
T-C Building Corporation, President
M&M Developments Corporation, Owner
Dennis R. Williams
Chairman of the Board, Quincy Newspapers, Inc.
Executive Officers
Arthur E. Greenbank, President and CEO
Brian A. Ippensen, Treasurer
Steven E. Siebers, Secretary
First Bankers Trustshares, Inc. Stock Prices
(For the three months period ended)
Market Value
High
Low
Period End Close
12/31/14
$24.00
$21.00
$22.76
09/30/14
$22.25
$20.07
$21.50
06/30/14
$20.30
$19.50
$20.10
03/31/14
$19.50
$18.90
$19.50
12/31/13
$19.50
$18.60
$19.00
The following companies make a market in FBTI common stock:
Raymond James
225 S. Riverside Plaza, 7th Floor
Chicago, IL 60606
(800) 800-4693
Wells Fargo Advisors
510 Maine, 9th Floor
Quincy, IL 62301
(800) 223-1037
Stifel Nicolas & Co., Inc.
227 W. Monroe, Suite 1850
Chicago, IL 60606
(800) 745-7110
Monroe Securities, Inc.
100 N. Riverside Plaza, Suite 1620
Chicago, IL 60606
(312) 327-2530
Corporate Information | Summary Annual Report 2014 1
Letter to Shareholders
Dear Shareholders of First Bankers Trustshares, Inc.,
The past year, 2014, was a very good year as measured by most standard banking ratios. From the
standpoint of net income, it was a record year with our Company earning over $7.2 million for the full year
ending December 31, 2014. Assets and deposits were at or near record levels while assets under
management at our Trust subsidiary (First Bankers Trust Services, Inc.) exceeded $6 billion in what was a
very good year for them. They added resources to both our St. Louis and Quincy offices as they continued
to profitably grow this national company.
The Bank, (First Bankers Trust Company, N. A.) also had a record year contributing record earnings.
During the last couple of years, the Bank purchased two brokerage businesses and added them to our
existing brokerage operation. These businesses have performed very well and are currently contributing
significant fee income to our bottom line.
We enter 2015 with bright prospects. Asset quality remains very good. Earnings are strong and we have
ideas and plans for future growth both at the Bank and Trust Company. We look forward to talking with
you at our annual meeting on Tuesday, May 12, 2015 at the Corporate Headquarters located at 12th &
Broadway in Quincy, Illinois. The meeting will begin at 9:00 a.m.
Donald K. Gnuse
Chairman of the Board
Arthur E. Greenbank
President/CEO
Sincerely,
Donald K. Gnuse
Chairman of the Board
First Bankers Trustshares, Inc.
Arthur E. Greenbank
President/CEO
First Bankers Trustshares, Inc.
2 Summary Annual Report 2014 | Letter to Shareholders
Select Financial Data
(Amount in thousands of dollars, except per share data statistics)
Year Ended December 31,
2014
2013
2012
2011
2010
2009
PERFORMANCE
Net income
Common stock cash dividends paid
Common stock cash dividend payout ratio 1
Return on average assets 1
Return on average common stockholders’ equity 2
PER COMMON SHARE
Earnings, basic and diluted
Dividends (paid) on common stock
Book value 3
Stock price
High
Low
Close
Price/Earnings per share (at period end)
Market price/Book value (at period end)
Weighted average number of shares outstanding
AT DECEMBER 31,
Assets
Investment securities
Loans held for sale
Loans
Deposits
Short-term borrowings and Federal Home
Loan Bank advances
Junior subordinated debentures
Preferred stock
Stockholders’ equity 4
Total equity to total assets 4
Tier 1 capital ratio (risk based)
Total capital ratio (risk based)
Leverage ratio
$
7,245
$
5,695
$
6,840
$
6,057
$
6,440
$
5,885
$
1,355
$
1,325
$
1,232
$
944
$
943
$
942
18.96%
0.87%
11.48%
23.27%
0.70%
9.79%
18.26%
0.87%
12.84%
17.67%
0.75%
11.26%
16.28%
0.88%
13.54%
17.90%
0.89%
13.79%
$
2.32
$
1.82
$
2.19
$
1.73
$
1.89
$
1.71
$
0.44
$
0.43
$
0.41
$
0.31
$
0.31
$
0.31
$
21.09
$
19.22
$
17.84
$
16.05
$
14.65
$
13.08
$
24.00
$
23.33
$
17.67
$
14.73
$
14.67
$
12.17
$
18.90
$
17.43
$
14.03
$
12.00
$
10.73
$
8.00
$
22.76
$
19.00
$
17.43
$
14.03
$
13.40
$
10.73
9.8
1.08
10.4
0.99
8.0
0.98
8.1
0.87
7.1
0.91
6.3
0.82
3,079,521
3,079,521
3,079,521
3,079,037
3,076,278
3,072,843
$
842,305
$
775,640
$
804,568
$
721,854
$
690,644
$
623,896
298,042
274,227
327,325
281,635
278,729
282,135
87
475,534
667,668
77,048
10,310
10,000
88
442,498
627,789
60,934
10,310
10,000
499
406,803
658,498
51,985
15,465
10,000
454
375,390
584,499
48,769
15,465
10,000
-
337,558
570,436
43,104
15,465
10,200
183
292,344
511,769
38,717
15,465
10,100
$
74,952
$
69,193
$
64,933
$
59,446
$
55,286
$
50,287
8.90%
13.90%
14.97%
9.67%
8.92%
13.59%
14.66%
9.39%
8.07%
14.60%
15.60%
9.44%
8.24%
14.68%
15.54%
9.99%
8.00%
14.70%
15.43%
9.83%
8.06%
15.44%
16.60%
9.88%
Note: A 3-for-2 common stock split occurred on August 26, 2013. All common shares reported, including per share data, in this annual report
have been retroactively adjusted for this split as if it occurred at the beginning of the earliest period presented.
1 Excludes preferred stock dividends/accretion.
2 Return on average common stockholders’ equity is calculated by dividing net income, excluding preferred stock dividends/accretion, by average common stockholders’
equity. Common stockholders’ equity is defined as equity less preferred stock and accumulated other comprehensive income or loss.
3 Book value per share is calculated by dividing stockholders’ equity, excluding preferred stock and accumulated other comprehensive income or loss, by outstanding
common shares.
4 Stockholders’ equity includes preferred stock and excludes accumulated other comprehensive income or loss.
Select Financial Data | Summary Annual Report 2014 3
Return on Average Assets
Return on Average Common Equity
1.00%
0.80%
0.89% 0.88%
0.87%
0.87%
0.75%
0.70%
13.79% 13.54%
12.84%
11.26%
11.48%
9.79%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2009
2010
2011
2012
2013
2014
2009
2010
2011
2012
2013
2014
Earnings Per Share
Price/Earnings Multiples
$1.71
$1.89
$1.73
$2.19
$1.82
$2.32
7.1X
6.3X
8.1X
8.0X
10.4X
9.8X
12
10
8
6
4
2
0
2009
2010
2011
2012
2013
2014
2009
2010
2011
2012
2013
2014
Market Price to Book Value
Loan/Deposit Growth
0.91X
0.87X
0.98X
0.99X
0.99X
1.08X
700
600
500
400
300
200
100
-
$584
$658
$628
$570
$375
$407
$442
$476
$512
$401
$292
$338
2010
2011
2012
2013
2013
2014
2009
2010
2011
2012
2013
2014
0.60%
0.40%
0.20%
0.00%
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
1.45
1.25
1.05
0.85
0.65
0.45
0.25
4 Summary Annual Report 2014 | Select Financial Data
Management’s Report on First Bankers Trust Company
First Bankers Trust Company, National Association Corporate Statement
First Bankers Trust Company, N. A. (the Bank) is a community-oriented financial institution that provides
banking services in six communities, including five county seats through ten branches in West Central
Illinois, to meet the needs of the communities served. We have diversified our business through many
thousands of customers including many individuals and numerous small businesses within these
communities. The Bank attracts deposits from the general public and uses these deposits, along with other
borrowings and funds to originate residential mortgage loans, consumer loans, small business loans and
agricultural loans for these markets.
We provide value to these relationships through our cutting edge banking products and high level services.
We simultaneously manage our costs in order to stay competitive with our pricing. The Bank has been
providing these services for nearly seven decades and prides itself on the success achieved.
Arthur E. Greenbank
President/CEO
Arthur E. Greenbank
President/CEO
First Bankers Trust Company, N. A.
Management’s Report | Summary Annual Report 2014 5
Management’s Report on First Bankers Trust Services, Inc.
First Bankers Trust Services, Inc. Corporate Statement
First Bankers Trust Services, Inc. provides fiduciary services to individuals and corporate clients across the
United States, a multitude of custodial and trust support to individual retirement accounts, personal trusts,
farm service relationships and employee benefit trusts.
In 2014, our assets under management surpassed $6.2 billion through our continual marketing efforts of
new relationships and excellence in client administration. We continue to see a changing competitor
environment with established organizations leaving and new faces arriving. Our steady presence and
highly experienced staff have made First Bankers Trust Services one the premier, fiduciary service
providers.
2014 marks the tenth year of First Bankers Trust Services as a separate entity, wholly owned by First
Bankers Trustshares, Inc. During 2014, we introduced our new corporate logo and enhanced our website
and marketing materials. From humble beginnings in 1956 as a trust department of a bank, and through
today, we continue to serve each of our clients with the respect and dedication so deserving of the task they
have entrusted to us to accomplish.
We look forward to the opportunity and challenges of 2015 and beyond.
Brian A. Ippensen
President/CEO
Brian A. Ippensen
President/CEO
First Bankers Trust Services, Inc.
6 Summary Annual Report 2014 | Management’s Report
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Introduction
The following discussion of the financial condition and results of
operations of First Bankers Trustshares, Inc. provides an analysis of
the consolidated financial statements and focuses upon those
factors which had a significant influence on the overall 2014
performance.
The discussion should be read in conjunction with the Company’s
consolidated financial statements and notes thereto appearing in
the Combined Proxy and Consolidated Financial Statements.
The Company was incorporated on August 25, 1988, and acquired
First Midwest Bank/M.C.N.A. (the Bank) on June 30, 1989. The
Bank acquisition was accounted for using purchase accounting.
Prior to the acquisition of the Bank, the Company did not engage in
any significant business activities.
Financial Management
The business of the Company is that of a community-oriented
financial institution offering a variety of financial services to meet
the needs of the communities it serves.
Consolidated Assets (Amounts in Thousands of Dollars)
The Company attracts deposits from the general public and uses
such deposits, together with borrowings and other funds, to
originate one-to-four family residential mortgage loans, consumer
loans, business loans and agricultural loans in its primary market
area. The Company also invests in investment securities consisting
primarily of U.S. government or agency obligations, mortgage-
backed securities, financial institution certificates of deposit, and
other liquid assets. In addition, the Company conducts Trust
Operations nationwide through its sales representatives.
The Company’s goal is to achieve consistently high levels of earning
assets and loan/deposit ratios while maintaining effective expense
control and high customer service levels. The term “high level”
means the ability to profitably increase earning assets. As deposits
have become fully deregulated, sustained earnings enhancement
has focused on “earning asset” generation. The Company will focus
on lending money profitably, controlling credit quality, net interest
margin, operating expenses and on generating fee income from
trust and banking operations.
2014
Change
2013
Change
2012
2011
2010
2009
5 Year
Change
Assets
Cash and due from banks:
Non-interest bearing
Interest bearing
Securities
Federal funds sold
Loans held for sale
Net loans
Other assets
TOTAL
Liabilities & Stockholders' Equity
Deposits
Short-term borrowings
Federal Home Loan Bank
advances
Junior Subordinated Debentures
Other liabilities
Stockholders’ equity
TOTAL
$
11,307
5.90%
$
10,677
(25.13%)
$
14,261
$
12,104
$
9,363
$
9,119
23.99%
14,548
122.34
6,543
298,042
8.68
274,227
5,006
175.51
87
467,357
45,958
(1.14)
7.38
(2.30)
1,817
88
435,247
47,041
(53.60)
(16.22)
(11.84)
(82.36)
8.67
2.72
14,102
9,073
25,681
8,497
327,325
281,635
278,729
282,135
71.21
5.64
2,061
499
3,238
454
2,167
293
1608.53
-
183
(52.46)
400,525
370,203
332,538
287,700
45,795
45,147
42,166
35,969
62.45
27.77
$
842,305
8.59%
$
775,640
(3.60%)
$
804,568
$
721,854
$
690,644
$
623,896
35.01%
$
667,668
6.35%
$
627,789
(4.66%)
$
658,498
$
584,499
$
570,436
$
511,769
30.46%
77,048
26.45
60,934
17.21
51,985
48,769
37,604
30,217
154.98
-
10,310
8,229
79,050
-
-
23.91
12.98
-
-
-
-
5,500
8,500
(100.00)
10,310
6,641
69,966
(33.33)
(29.80)
1.17
15,465
15,465
15,465
15,465
(33.33)
9,460
8,954
5,057
5,269
69,160
64,167
56,582
52,676
56.18
50.07
$
842,305
8.59%
$
775,640
(3.60%)
$
804,568
$
721,854
$
690,644
$
623,896
35.01%
Management’s Discussion and Analysis | Summary Annual Report 2014 7
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
At December 31, 2014, the company had assets of $842,305,000
compared to $775,640,000 at December 31, 2013. The increase
in assets is primarily made up of a $32,110,000 (7.38%) increase
in net loans and a $23,815,000 (8.68%) increase in securities. The
growth was funded by a $39,879,000 (6.35%) increase in deposits
and a $16,114,000 (26.45%) increase in repurchase agreements.
The growth in the gross loan portfolio was primarily made up of
growth in residential real estate loans of $15,018,000 and
agricultural loans of $10,989,000. Approximately $22,705,000 of
fixed rate long-term residential real estate loans were sold in the
secondary market during 2014 while $49,907,000 were sold in
2013. Agricultural real estate loans totaling $838,000 were sold in
the secondary market during 2014, while $1,336,000 were sold in
2013. Management continues to place emphasis on the quality
versus the quantity of the credits placed in the portfolio.
In addition to lending, the Company has focused on maintaining and
enhancing high levels of fee income for its existing services and new
services. Generation of fee income will be a goal of the Company
and should be a source of continued revenues in the future.
Results of Operations Summary
The Company’s earnings are primarily dependent on net interest
income, the difference between interest income and interest
expense. Interest income is a function of the balances of loans,
securities and other interest earning assets outstanding during the
period and the yield earned on such assets. Interest expense is a
function of the balances of deposits and borrowings outstanding
during the same period and the rates paid on such deposits and
borrowings. The Company’s earnings are also affected by provisions
for loan losses, service charges, trust income, other non-interest
income and expense and income taxes. Non-interest expense
consists primarily of employee compensation and benefits,
occupancy and equipment expenses and general and administrative
expenses.
Prevailing economic conditions as well as federal regulations
concerning monetary and fiscal policies as they pertain to financial
institutions significantly affect the Company. Deposit balances are
influenced by a number of factors including interest rates paid on
competing personal investments and the level of personal income
and savings within the institution’s market. In addition, growth of
deposit balances is influenced by the perceptions of customers
regarding the stability of the financial services industry. Lending
activities are influenced by the demand for housing, competition
from other lending institutions, as well as lower interest rate levels,
which may stimulate loan refinancing. The primary sources of funds
for lending activities include deposits, loan payments, borrowings
and funds provided from operations.
For the year ended December 31, 2014, the Company reported
consolidated net income of $7,245,000, a $1,550,000 (27.22%)
increase from 2013. Net interest income after provision for loan
losses for the periods being compared increased $3,378,000 or
18.51%. Other operating income increased $618,000 (4.47%) and
other operating expenses increased $1,241,000 (5.07%) from
2013.
Analysis of Net Income
The Company’s assets are primarily comprised of interest earning
assets including commercial, agricultural, consumer and real estate
loans, as well as federal funds sold, interest bearing deposits in
banks and securities. Average earning assets equaled
$773,051,000 for the year ended December 31, 2014. A
combination of interest bearing and non-interest bearing deposits,
securities sold under agreement to repurchase, other borrowings
and capital funds are employed to finance these assets.
Consolidated Income Summary (Amounts in Thousands of Dollars)
2014
Change
2013
Change
2012
2011
2010
2009
5 Year
Growth Rate
Interest income
Interest expense
$
26,947
6.85%
$
25,219
(3.79)%
$
26,212
$
27,155
$
25,930
$
26,153
3.04%
(4,145)
(24.98)
(5,525)
(16.99)
(6,656)
(7,888)
(8,932)
(9,663)
(57.10%)
Net interest income
$
22,802
15.78%
$
19,694
0.71%
$
19,556
$
19,267
$
16,998
$
16,490
Provision for loan losses
Net interest income after
provision for loan losses
Other income
Other expenses
Income before taxes
Income tax expense
NET INCOME
(1,170)
(18.75)
(1,440)
-
(1,440)
(1,640)
(1,080)
(1,080)
$
21,632
18.51%
$
18,254
0.76%
$
18,116
$
17,627
$
15,918
$
15,410
14,432
(25,707)
4.47
5.07
13,814
(24,466)
0.04
13,808
10,643
11,164
9,093
10.89
(22,064)
(19,889)
(17,899)
(16,116)
$
10,357
36.24%
$
7,602
(22.90)%
$
9,860
$
8,381
$
9,183
$
8,387
(3,112)
7,245
$
63.19
27.22%
(1,907)
5,695
$
(36.85)
(16.74)%
(3,020)
6,840
$
(2,324)
6,057
$
(2,743)
6,440
$
(2,502)
5,885
$
38.28%
8.33%
40.38%
58.72%
59.51%
23.49%
24.38%
23.11%
8 Summary Annual Report 2014 | Management’s Discussion and Analysis
Years Ended December 31,
(Amounts in Thousands of Dollars)
2014
2013
2012
Interest income
Loan fees
Interest expense
$
26,443
$
24,601
$
25,485
504
(4,145)
618
(5,525)
727
(6,656)
NET INTEREST INCOME
$
22,802
$
19,694
$
19,556
Average earning assets
$
773,051
$
745,363
$
721,709
Net interest margin
2.95%
2.64%
2.71%
The yield on average earning assets for the year ended 2014 was
3.49% while the average cost of funds for the same period was
0.64% on average interest bearing liabilities of $645,704,000. The
yield on average earning assets for the year ended 2013 was
3.38%, while the average cost of funds for the same period was
0.87% on average interest bearing liabilities of $635,614,000. The
increase in the net interest income of $3,108,000 can be attributed
to the 3.71% increase in average earning assets, the 0.23%
decrease in average cost of funds, and the 0.11% increase in yield
on earning assets.
Provision for Loan Losses
The allowance for loan losses as a percentage of gross loans
outstanding is 1.72% as of December 31, 2014, compared to
1.64% as of December 31, 2013. Net loan charge-offs totaled
$244,000 for the year ended December 31, 2014 compared to
$467,000 in 2013.
The amounts recorded in the provision for loan losses are
determined from management’s quarterly evaluation of the quality
of the loan portfolio. In this review, such factors as the volume and
character of the loan portfolio, general economic conditions and
past loan loss experience are considered. Management believes
that the allowance for loan losses is adequate to provide for
possible losses in the portfolio as of December 31, 2014.
Other Income
Other income may be divided into two broad categories – recurring
and non-recurring. Trust fees and service charges on deposit
accounts are the major sources of recurring other income.
Investment securities gains and other income vary annually. Other
income for the period ended December 31, 2014 was
$14,432,000, an increase of $618,000 (4.47%) from 2013. This is
attributed to an increase in trust services income of $1,206,000,
which was partially offset by a decrease in security gains of
$627,000.
Other Expense
Other expense for the period ended December 31, 2014 totaled
$25,707,000, an increase of $1,241,000 (5.07%) from 2013 year-
end totals. Salaries and employee benefits expense aggregated
60.66% and 58.71% of total other expense for the years ended
December 31, 2014 and 2013, respectively.
Non-Accrual and Past Due Loans, Leases and Other Real Estate Owned
(Amounts in Thousands of Dollars)
As of December 31,
Non-accrual loans and leases
Other real estate owned (OREO)
2014
2013
2012
2011
2010
2009
$
2,679
$
8,279
$
4,511
$
5,218
$
5,856
$
3,449
-
203
105
210
1,757
230
Total non-accrual loans and OREO
$
2,679
$
8,482
$
4,616
$
5,428
$
7,613
$
3,679
Loans and leases past due 90 days
or more and still accruing interest
TOTAL
157
332
147
186
591
199
$
2,836
$
8,814
$
4,763
$
5,614
$
8,204
$
3,878
Management’s Discussion and Analysis | Summary Annual Report 2014 9
Income Taxes
The Company files its federal income tax return on a consolidated
basis with the Bank. See Note 13 in the Combined Proxy and
Consolidated Financial Statements for detail of income taxes.
Liquidity
The concept of liquidity comprises the ability of an enterprise to
maintain sufficient cash flow to meet its needs and obligations on a
timely basis. Bank liquidity must thus be considered in terms of the
nature and mix of the institution’s sources and uses of funds.
Bank liquidity is provided from both assets and liabilities. The asset
side provides liquidity through regular maturities of investment
securities and loans. Investment securities with maturities of one year
or less, deposits with banks and federal funds sold are a primary
source of asset liquidity. On December 31, 2014, these categories
totaled $39,595,000 or 4.70% of assets, compared to $27,848,000
or 3.59% the previous year.
As of December 31, 2014, securities held to maturity included
$209,000 of gross unrealized gains and no gross unrealized losses on
securities which management intends to hold until maturity. Such
amounts are not expected to have a material effect on future earnings
beyond the usual amortization of premium and accretion of discount.
Closely related to the management of liquidity is the management of
rate sensitivity (management of variable rate assets and liabilities),
which focuses on maintaining stable net interest margin, an important
factor in earnings growth and stability. Emphasis is placed on
maintaining an evenly balanced rate sensitivity position to avoid wide
swings in margins and minimize risk due to changes in interest rates.
The Company’s Asset/Liability Committee is charged with the
responsibility of prudently managing the volumes and mixes of assets
and liabilities of the subsidiary bank.
Management believes that it has structured its pricing mechanisms
such that the net interest margin should maintain acceptable levels in
2015, regardless of the changes in interest rates that may occur. The
following table shows the repricing period for interest-earning assets
and interest-bearing liabilities and the related repricing gap:
Repricing Period as of December 31, 2014
Through
One Year
After
One Year
through
Five Years
After
Five Years
(Amounts in Thousands of Dollars)
Interest-earning assets
$
190,890
$
280,482
$
321,845
Interest-bearing liabilities
535,985
106,230
10,310
Repricing gap (repricing assets
minus repricing liabilities)
$
(345,095)
$
174,252
$
311,535
Repricing Period as of December 31, 2013
Through
One Year
After
One Year
through
Five Years
After
Five Years
(Amounts in Thousands of Dollars)
Interest-earning assets
Interest-bearing liabilities
Repricing gap (repricing assets minus
repricing liabilities)
$
209,246
$
220,993
$
294,934
489,051
116,955
10,310
$
(279,805)
$
104,038
$
284,624
Effects of Inflation
Until recent years, the economic environment in which the Company
operates has been one of significant increases in the prices of most
goods and services and a corresponding decline in the purchasing
power of the dollar.
Banks are affected differently than other commercial enterprises by
the effects of inflation. Some reasons for these disparate effects are:
a) premises and equipment for banks represent a relatively small
proportion of total assets; b) a bank’s assets and liability structure is
substantially monetary in nature, which can be converted into a fixed
number of dollars regardless of changes in prices, such as loans and
deposits; and c) the majority of a bank’s income is generated through
net interest income and not from goods or services rendered.
Although inflation may impact both interest rates and volume of loans
and deposits, the major factor that affects net interest income is how
well a bank is positioned to cope with changing interest rates.
10 Summary Annual Report 2014 | Management’s Discussion and Analysis
Capital
The ability to generate and maintain capital at adequate levels is
critical to the Company’s long-term success. A common measure of
capitalization for financial institutions is primary capital as a percent of
total assets.
Regulations also require the Company to maintain certain minimum
capital levels in relation to consolidated Company assets. Regulations
require a ratio of capital to risk-weighted assets of 8%.
Asset Liability Management
Since changes in interest rates may have a significant impact on
operations, the Company has implemented, and currently maintains,
an asset liability management committee at the Bank to monitor and
react to the changes in interest rates and other economic conditions.
Research concerning interest rate risk is supplied by the Company
from information received from a third-party source. The committee
acts upon this information by adjusting pricing, fee income parameters
and/or marketing emphasis.
The Company’s capital, as defined by the regulations, was 14.97% of
risk-weighted assets as of December 31, 2014. In addition, a leverage
ratio of at least 4.00% is to be maintained. As of December 31, 2014,
the Company’s leverage ratio was 9.67%.
Common Stock Information and Dividends
The Company’s common stock is held by 228 certificate holders as of
December 31, 2014, and is traded in a limited over-the-counter
market.
On December 31, 2014 the market price of the Company’s common
stock was $22.76. Market price is based on stock transactions in the
market. Dividends on common stock of approximately $1,386,000
were declared by the Board of Directors of the Company for the year
ended December 31, 2014.
Risk Based Capital Ratios
Closing Share Price Data
15.43% 15.54% 15.60%
14.66% 14.97%
20.00%
15.00%
16.38%
10.00%
5.00%
0.00%
$30.00
$25.00
$20.00
$15.00
$10.00
$5.00
$0.00
$22.76
$17.43
$19.00
$13.40
$14.03
$10.73
2009
2010
2011
2012
2013
2014
2009
2010
2011
2012
2013
2014
Financial Report
Upon written request of any shareholder of record on December 31,
2014, the Company will provide, without charge, a copy of its 2014
Combined Proxy and Consolidated Financial Statements.
Notice of Annual Meeting of Stockholders
The annual meeting of stockholders will be May 12, 2015 at 9:00 a.m.
at the corporate headquarters, 1201 Broadway, Quincy, Illinois.
Management’s Discussion and Analysis | Summary Annual Report 2014 11
Board of Directors
First Bankers Trustshares, Inc.
First Bankers Trust Company, N. A.
First Bankers Trust Services, Inc.
Donald K. Gnuse
Chairman of the Board
Arthur E. Greenbank
President/CEO
Donald K. Gnuse
Chairman of the Board
Arthur E. Greenbank
President/CEO
Donald K. Gnuse
Chairman of the Board
Brian A. Ippensen
President
Steven E. Siebers
Secretary
Scholz, Loos, Palmer, Siebers, & Duesterhaus,
Attorney at Law
Steven E. Siebers
Secretary
Scholz, Loos, Palmer, Siebers, & Duesterhaus,
Attorney at Law
Steven E. Siebers
Secretary
Scholz, Loos, Palmer, Siebers, &
Duesterhaus, Attorney at Law
Carl W. Adams, Jr.
Illinois Ayers Oil Company, President
Carl W. Adams, Jr.
Illinois Ayers Oil Company, President
Scott A. Cisel
Executive Adviser to Accenture’s North
America Energy Practice
Scott A. Cisel
Executive Adviser to Accenture’s North
American Energy Practice
Carl W. Adams, Jr.
Illinois Ayers Oil Company, President
Phyllis J. Hofmeister
Robert Hofmeister Farm, Secretary
William D. Daniels
Harborstone Group, LLC, Member
William D. Daniels
Harborstone Group, LLC, Member
Mark E. Freiburg
Freiburg Insurance Agency & Freiburg
Development, Owner
Freiburg, Inc., President
Mark E. Freiburg
Freiburg Insurance Agency & Freiburg
Development, Owner
Freiburg, Inc., President
Phyllis J. Hofmeister
Robert Hofmeister Farm, Secretary
Phyllis J. Hofmeister
Robert Hofmeister Farm, Secretary
John E. Laverdiere
Laverdiere Construction, Inc., President
LCI Concrete Inc., Vice President/Manager
John E. Laverdiere
Laverdiere Construction, Inc., President
LCI Concrete Inc., Vice President/Manager
Merle L. Tieken
T-C Building Corporation, President
M&M Developments Corporation, Owner
Kemia M. Sarraf, MD, M.P.H.
President & Founder of genHKids, Inc.
Dennis R. Williams
Quincy Newspapers, Inc., Chairman
Merle L. Tieken
T-C Building Corporation, President
M&M Developments Corporation, Owner
Dennis R. Williams
Quincy Newspapers, Inc., Chairman
12 Summary Annual Report 2014 | Board of Directors
Officers
First Bankers Trust Company, N. A.
First Bankers Trust Services, Inc.
INFORMATION TECHNOLOGY
OFFICERS
Nicole R. Allen-Cain
Ronald W. Fairley
Terry J. Hanks
Andrew W. Marner
John K. Predmore
RETAIL OFFICERS
Jason T. Cale
W. Kay Divan
Susan L. Farlow
Janna L. Lockman
Cynthia MacKenzie
Debora A. McClelland
Jeremy W. Melvin
Kimberly M. Neal
Eric L. Roon
Dennis L. Royalty
Rachel Y. St. Clair
Kelly R. Seifert
Sally E. Vigezzi
ACCOUNTING OFFICER
Brooke C. Venvertloh
COMPLIANCE OFFICER
Christine A. Baker
Kristen E. Krietmeyer
CREDIT OFFICER
Dan J. Brink
HUMAN RESOURCES OFFICER
Laura J. Maas
PRESIDENT/CEO
Arthur E. Greenbank
REGIONAL PRESIDENTS
Gregory A. Curl East Region
Jason L. Duncan North Region
David J. Rakers West Region
SENIOR VICE PRESIDENTS
Thomas J. Frese (CFO/COO)
Dennis R. Iversen
Gretchen A. McGee
VICE PRESIDENTS
Timothy W. Corrigan (Auditor)
Mark A. DiMarzio
Pamela L. Eftink
Steven K. Fryman
Jennifer M. Gilker
Charles D. Grace
Ryan G. Goestenkors
Kathleen D. McNay
James R. Obert
Marvin E. Rabe
Douglas R. Reed
Nancy S. Richards
Hugh K. Roderick
Sherry R. Schaffnit
Jeanette L. Schinderling
Linda K. Tossick (Controller)
Brent R. Voth
Patricia J. Westerman
Randal S. Westerman
James D. Whitaker
David A. Young
ASSISTANT VICE PRESIDENTS
John T. Armstrong
Sherry A. Bryson
Maria D. Eckert
James M. Farmer
David J. Garner
Lisa K. Hoffman
Ryne R. Lubben
Karen J. Koehn
Jayson E. Martin
Afton R. Mast
Michelle M. Shortridge
Michele Walgren
Leslie A. Westen
Joan M. Whitlow
PRESIDENT/CEO
Brian A. Ippensen
VICE PRESIDENTS
Merri E. Ash
Steven P. Eckert
Michele R. Foster
Patricia D. Goestenkors
Julie E. Kenning
Danielle C. Montesano
Larry E. Shepherd
TRUST OFFICERS
Teresa L. Daggett
Paul R. Edwards, III
Donald J. Fitzgerald
Robin L. Fitzgibbons
Joseph E. Harris
Susan D. Knoche
Teresa F. Kuchling
Marilyn H. Marchetti
W. Diane McHatton
Ashley Melton
Blake R. Mock
Mary A. Schmidt
Kimberly A. Serbin
Linda J. Shultz
Deborah J. Staff
Karen C. Sutor
Martha E. Wert
ASSISTANT VICE PRESIDENT
John P. Shelton
ASSISTANT TRUST OFFICERS
John T. Cifaldi
Zachary W. Clark
Emily J. Coniglio
Marilyn J. Crim
Marissa J. Ermeling
Jennifer L. Gordley
Kelle M. Ponce`
Brenda K. Martin
Jacob E. Newton
Sherri A. Zuspann
Officers | Summary Annual Report 2014 13