Main Street Trust Announces Record 2005 Earnings and Other Activities

CHAMPAIGN, Ill., Jan. 27  /PRNewswire-FirstCall/ -- Main Street Trust, Inc. (OTC:MSTI) (BULLETIN BOARD: MSTI)  is pleased to report record year-end earnings of $1.80 net income per diluted share, compared to $1.54 earnings per share for 2004, an increase of 16.9%.  Consolidated net income for the year ended December 31, 2005 totaled $18.308 million compared to $14.778 million for 2004, an increase of 23.9%.  Earnings of $0.44 per diluted share were reported for fourth quarter 2005, compared to $0.37 earnings per share for the same period in 2004, an increase of 18.9%.  Consolidated net income for the fourth quarter totaled $4.497 million compared to $3.562 million for the same period in 2004, an increase of 26.2%.

Van A. Dukeman, President and CEO, stated that, "These record earnings reflect favorably on the efforts of our Main Street Associates in executing our mission of building relationships through Trust, Knowledge and Service. That execution strategy in the fourth quarter included the successful integration and conversion of the former Citizen's Savings Bank into the Main Street family.  Another milestone achieved this quarter was our core bank surpassing $1.6 billion in total assets while assets under management in our Wealth Management division topped $1.9 billion.

We will continue to build our brand in 2006 with the launch of several initiatives highlighted by a new website and the construction of two new banking centers by Main Street Bank & Trust in Normal and Peoria over the coming months."

Cash Dividend Paid

The Company distributed a $0.23 per share cash dividend on January 27, 2006, payable to shareholders of record on January 13, 2006.  This is the fourth quarterly cash dividend declared in 2005, and represents a 5% increase in the quarterly dividend declared for the same period in 2004.

Franchise

Main Street Trust, Inc. is a diversified financial services company with $1.63 billion in assets as of December 31, 2005, providing financial services at 23 locations in Downstate Illinois.  Main Street Bank & Trust offers online banking ( http://www.mainstreettrust.com/ ) and surcharge free ATM access at over 80 locations throughout Illinois.  In addition, Main Street Wealth Management has $1.96 billion of financial assets under management for individuals and institutions.  Main Street Trust, Inc. also owns a retail payment processing subsidiary -- FirsTech, Inc., which processes over 25 million items per year.

                        SELECTED FINANCIAL HIGHLIGHTS
                  (dollars in thousands, except share data)

                                                  Three Months Ended
                                            Dec. 30,    Dec. 30,   Sept. 30,
                                               2005        2004        2005
  EARNINGS & PER SHARE DATA
    Basic earnings per share                  $0.44       $0.38       $0.50
    Weighted average shares of common
     stock outstanding                   10,197,424   9,448,657  10,248,453
    Diluted earnings per share                $0.44       $0.37       $0.50
    Weighted average shares of common
     stock and dilutive
     potential common shares
     outstanding                         10,294,786   9,554,364  10,341,647
    Market price per share at period
     end(1)                                  $29.85      $29.00      $29.35
    Price to book ratio(1)                   210.66%     240.46%     208.16%
    Price to earnings ratio(1,2)              16.40       18.59       16.68
    Cash dividends paid per share              0.22        0.21        0.22
    Cash dividends declared per share          0.23        0.22        0.22
    Book value per share                     $14.17      $12.06      $14.10
    Tangible book value per share(3)         $11.68      $12.06      $11.60
    Ending number of common shares
     outstanding                         10,146,675   9,448,990  10,228,542

  AVERAGE BALANCES
    Assets                               $1,593,509  $1,239,921  $1,537,563
    Investment securities                   389,215     364,416     360,031
    Gross loans(4)                        1,025,537     751,631   1,020,809
    Earning assets                        1,470,756   1,156,435   1,407,522
    Deposits                              1,243,489     992,181   1,187,693
    Interest bearing liabilities          1,222,910     943,950   1,162,494
    Common shareholders' equity             144,286     113,616     143,826

  END OF PERIOD FINANCIAL DATA
    Tax equivalized net interest income     $13,057     $10,160     $13,770
    Gross loans(4)                        1,018,060     771,882   1,016,486
    Allowance for loan losses                13,472       9,650      13,688
    Total assets under management         1,959,495   1,764,562   1,870,721

  PERFORMANCE RATIOS
    Return on average assets(5)                1.12%       1.14%       1.33%
    Return on average equity(5)               12.37%      12.47%      14.21%
    Net yield on average earning
     assets(5,6)                               3.52%       3.50%       3.88%
    Interest spread(5,6)                       3.05%       3.14%       3.43%
    Net overhead efficiency ratio(6,7)        57.19%      60.55%      52.73%
    Non-interest revenues as a % of
     total revenues(7,8)                      28.96%      31.55%      29.89%
    Allowance for loan losses to loans         1.32%       1.25%       1.35%
    Allowance as a percentage of non-
     performing loans                        449.07%     431.57%     298.28%
    Average loan to deposit ratio             82.47%      75.76%      85.95%
    Dividend payout ratio(2)                  48.90%      54.49%      50.00%

  ASSET QUALITY
    Net charge-offs                            $666        $423        $390
    Non-performing loans                      3,000       2,236       4,589
    Other non-performing assets                 224          33          90


                                                    Twelve Months Ended
                                                 Dec. 30,          Dec. 30,
                                                   2005              2004
  EARNINGS & PER SHARE DATA
    Basic earnings per share                       $1.82             $1.56
    Weighted average shares of common
     stock outstanding                        10,060,032         9,481,034
    Diluted earnings per share                     $1.80             $1.54
    Weighted average shares of common
     stock and dilutive
     potential common shares
     outstanding                              10,157,409         9,594,148
    Market price per share at period
     end(1)                                       $29.85            $29.00
    Price to book ratio(1)                        210.66%           240.46%
    Price to earnings ratio(1,2)                   16.40             18.59
    Cash dividends paid per share                   0.88              0.84
    Cash dividends declared per share              $0.89              0.85
    Book value per share                          $14.17            $12.06
    Tangible book value per share(3)              $11.68            $12.06
    Ending number of common shares
     outstanding                              10,146,675         9,448,990

  AVERAGE BALANCES
    Assets                                    $1,474,691        $1,209,267
    Investment securities                        366,127           373,278
    Gross loans(4)                               957,824           722,030
    Earning assets                             1,360,236         1,123,174
    Deposits                                   1,147,426           958,611
    Interest bearing liabilities               1,118,939           918,963
    Common shareholders' equity                  136,621           112,968

  END OF PERIOD FINANCIAL DATA
    Tax equivalized net interest income          $50,344           $38,958
    Gross loans(4)                             1,018,060           771,882
    Allowance for loan losses                     13,472             9,650
    Total assets under management              1,959,495         1,764,562

  PERFORMANCE RATIOS
    Return on average assets(5)                     1.24%             1.22%
    Return on average equity(5)                    13.40%            13.08%
    Net yield on average earning
     assets(5,6)                                    3.70%             3.47%
    Interest spread(5,6)                            3.26%             3.14%
    Net overhead efficiency ratio(6,7)             55.71%            57.74%
    Non-interest revenues as a % of
     total revenues(7,8)                           29.84%            34.19%
    Allowance for loan losses to loans              1.32%             1.25%
    Allowance as a percentage of non-
     performing loans                             449.07%           431.57%
    Average loan to deposit ratio                  83.48%            75.32%
    Dividend payout ratio(2)                       48.90%            54.49%

  ASSET QUALITY
    Net charge-offs                               $1,142            $1,236
    Non-performing loans                           3,000             2,236
    Other non-performing assets                      224                33


  (1) Closing price at end of period        (5) Annualized
  (2) Last 12-months earnings               (6) On a fully tax-
                                                equivalized basis
  (3) Net of goodwill and core-deposit      (7) Does not include
      intangibles                               securities gains/losses
  (4) Loans include mortgage loans held     (8) Net of interest expense
      for sale and nonaccrual loans


  Special Note Concerning Forward-Looking Statements


This document (including information incorporated by reference) may contain future oral and written statements of the Company and its management within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company.  Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company's management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions.  Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements.  These factors include, among others, the following: (i) the strength of the local and national economy; (ii) the economic impact of any future terrorist threats or attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company's general business; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi)  changes  in  accounting  policies  and  practices.    These  risks  and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.

    Condensed Consolidated Balance Sheets
     (Unaudited, in thousands)            December    September    December
                                              31,         30,         31,
                                             2005        2005        2004
  ASSETS
  Cash and cash equivalents                 $94,066    $112,845     $64,928
  Investments in debt and equity
   securities                               444,623     334,576     358,726
  Mortgage loans held for sale                1,661       1,973       1,005
  Loans, net of allowance for loan
   losses                                 1,002,927   1,000,825     761,227
  Premises and equipment                     23,047      22,364      17,087
  Goodwill                                   20,736      20,832           -
  Core deposit intangibles                    4,569       4,786           -
  Accrued interest receivable                 8,461       9,157       6,570
  Other assets                               25,047      26,061      18,575

      Total assets                       $1,625,137  $1,533,419  $1,228,118

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Liabilities:
  Deposits                               $1,275,972  $1,181,826    $974,577
  Federal funds purchased, repurchase
   agreements and notes payable             118,452     117,130      96,900
  Federal Home Loan Bank advances and
   other borrowings                          67,386      71,482      29,882
  Accrued interest payable                    4,657       3,727       2,601
  Other liabilities                          14,901      15,025      10,183

      Total liabilities                  $1,481,368  $1,389,190  $1,114,143

  Total shareholders' equity                143,769     144,229     113,975

      Total liabilities and
       shareholders' equity              $1,625,137  $1,533,419  $1,228,118



    Consolidated Statements of Income
     (Unaudited, in thousands)         Quarter Ended:   Twelve Months Ended:
                                      December  December  December  December
                                         31,       31,       31,      31,
                                        2005      2004      2005     2004
  Interest Income:
    Loans and fees on loans           $17,027   $10,997   $60,988   $41,568
    Investments in debt and equity
     securities
      Taxable                           3,196     2,820    12,465    10,793
      Tax-exempt                          360       420     1,516     1,844
    Federal funds sold and interest
     bearing deposits                     771       261     2,023       600
                 Total interest
                  income                21,354    14,498    76,992    54,805

  Interest expense:
    Deposits                            6,718     3,783    21,589    13,972
    Federal funds purchased, repurchase
     agreements and notes payable         969       378     3,097     1,271
    Federal Home Loan Bank advances and
     other borrowings                     808       407     2,793     1,609
                 Total interest
                  expense               8,495     4,568    27,479    16,852

                 Net interest income   12,859     9,930    49,513    37,953

  Provision for loan losses               450       110     1,530     1,100

                 Net interest income
                  after provision
                  for loan losses         12,409    9,820   47,983   36,853

  Non-interest income:
    Remittance processing                  1,604    1,566    6,748    7,201
    Trust and brokerage fees               1,794    1,661    7,599    6,492
    Service charges on deposit accounts      794      599    2,923    2,419
    Securities transactions, net            (136)      (6)    (586)     133
    Gain on sales of mortgage loans, net     160      220      886      997
    Other                                    890      530    2,907    2,605
                 Total non-interest
                  income                   5,106    4,570   20,477   19,847

  Non-interest expense:
    Salaries and employee benefits         5,774    4,911   23,099   18,889
    Occupancy                                781      701    3,074    2,669
    Equipment                                637      626    2,592    2,512
    Data processing                          747      650    2,416    2,283
    Office supplies                          339      360    1,245    1,247
    Amortization expense- core deposit
     intangibles                             218        -      653        -
    Service charges from correspondent
     banks                                   124      129      513      781
    Other                                  1,845    1,545    6,187    5,498
                 Total non-interest
                  expense                 10,465    8,922   39,779   33,879

                 Income before
                  income taxes             7,050    5,468   28,681   22,821

  Income taxes                             2,553    1,906   10,373    8,043
                 Net income               $4,497   $3,562  $18,308  $14,778


First Call Analyst: 

FCMN Contact: 

DATASOURCE: Main Street Trust, Inc.



CONTACT:  Van A. Dukeman, CFA, President and CEO of Main Street Trust,

Inc., [phone], or  



Web site:  http://www.bankillinois.com/

http://www.mainstreettrust.com/ 

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