##### 



Exhibit 13.0




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##### 



First BancTrust Corporation
Selected Financial Data (in thousands, except share data)
 2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Summary of OperationsInterest income
    
    $
    18,489
    
    
    $
    16,292
    
    
    $
    12,999
    
    
    $
    11,774
    
    
    $
    11,899Interest expense
    
    
    10,274
    
    
    
    8,385
    
    
    
    5,333
    
    
    
    4,397
    
    
    
    4,621Net interest income
    
    
    8,215
    
    
    
    7,907
    
    
    
    7,666
    
    
    
    7,377
    
    
    
    7,278Provision for loan losses
    
    
    775
    
    
    
    230
    
    
    
    510
    
    
    
    515
    
    
    
    728Noninterest income
    
    
    3,783
    
    
    
    3,462
    
    
    
    3,338
    
    
    
    3,469
    
    
    
    3,819Noninterest expense
    
    
    9,872
    
    
    
    9,784
    
    
    
    8,933
    
    
    
    8,564
    
    
    
    7,488Income before income tax
    
    
    1,351
    
    
    
    1,355
    
    
    
    1,561
    
    
    
    1,767
    
    
    
    2,881Income tax expense
    
    
    295
    
    
    
    239
    
    
    
    313
    
    
    
    539
    
    
    
    932Net Income
    
    
    1,056
    
    
    
    1,116
    
    
    
    1,248
    
    
    
    1,228
    
    
    
    1,949Per Share (1)Basic earnings per share
    
    $
    0.49
    
    
    $
    0.51
    
    
    $
    0.56
    
    
    $
    0.54
    
    
    $
    0.85Diluted earnings per share
    
    $
    0.47
    
    
    $
    0.48
    
    
    $
    0.52
    
    
    $
    0.51
    
    
    $
    0.81Cash dividends paid
    
    $
    0.24
    
    
    $
    0.24
    
    
    $
    0.24
    
    
    $
    0.23
    
    
    $
    0.175Book value at December 31
    
    $
    12.07
    
    
    $
    11.50
    
    
    $
    11.00
    
    
    $
    11.04
    
    
    $
    10.55Market value at December 31
    
    $
    10.64
    
    
    $
    11.80
    
    
    $
    12.19
    
    
    $
    11.58
    
    
    $
    11.62Ratios Based on Net IncomeReturn on average stockholders equity

    
    4.00
    %
    
    
    4.26
    %
    
    
    4.66
    %
    
    
    4.58
    %
    
    
    7.38
    %Return on average assets
    
    
    0.35
    %
    
    
    0.40
    %
    
    
    0.52
    %
    
    
    0.54
    %
    
    
    0.90
    %Net interest margin on average
earning assets
    
    
    2.99
    %
    
    
    3.06
    %
    
    
    3.46
    %
    
    
    3.56
    %
    
    
    3.68
    %Dividend payout ratio
    
    
    48.98
    %
    
    
    48.62
    %
    
    
    46.64
    %
    
    
    46.82
    %
    
    
    23.05
    %Year-End Balance Sheet DataTotal assets
    
    
    326,875
    
    
    
    311,058
    
    
    
    273,865
    
    
    
    230,924
    
    
    
    226,194Net loans (2)
    
    
    235,249
    
    
    
    186,279
    
    
    
    157,527
    
    
    
    117,586
    
    
    
    106,864Securities
    
    
    53,959
    
    
    
    69,295
    
    
    
    79,862
    
    
    
    88,723
    
    
    
    93,742Deposits
    
    
    232,139
    
    
    
    242,603
    
    
    
    193,975
    
    
    
    159,471
    
    
    
    163,028Other borrowings
    
    
    65,701
    
    
    
    38,986
    
    
    
    51,886
    
    
    
    42,500
    
    
    
    35,500Total stockholders equity
    
    
    26,501
    
    
    
    26,656
    
    
    
    26,046
    
    
    
    27,547
    
    
    
    26,392Average equity to average assets
    
    
    8.77
    %
    
    
    9.27
    %
    
    
    11.08
    %
    
    
    11.84
    %
    
    
    12.19
    %
 (1)
    
    Per share data reflects two for one stock split on May 21, 2004(2)
    
    Includes loans held for sale  1




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##### 



First BancTrust Corporation
Managements Discussion and Analysis
(Table dollar amounts in thousands, except share data)
    Safe Harbor Statement
   2




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##### 



Financial Overview
     3




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4




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##### 



Comparison of Operating Results for the Years Ended  December 31, 2007, December 31, 2006, and December 31, 2005
       5




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##### 



6




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##### 



7




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##### 



Average Balance
    
    
    
    
    
    
    %2007
    
    
    2006
    
    
    Change
    
    
    Change(Dollars in thousands)Real Estate LoansOne-to-four family
    
    $
    68,849
    
    
    $
    56,275
    
    
    $
    12,574
    
    
    
    22.34
    %Multi-family
    
    
    5,960
    
    
    
    1,988
    
    
    
    3,972
    
    
    
    199.80
    %Commercial
    
    
    36,538
    
    
    
    32,206
    
    
    
    4,332
    
    
    
    13.45
    %Construction
    
    
    3,202
    
    
    
    2,554
    
    
    
    648
    
    
    
    25.37
    %Agricultural
    
    
    27,574
    
    
    
    22,908
    
    
    
    4,666
    
    
    
    20.37
    %Total real estate loans
    
    
    142,123
    
    
    
    115,931
    
    
    
    26,192
    
    
    
    22.59
    %Agricultural production
finance
    
    
    19,380
    
    
    
    18,584
    
    
    
    796
    
    
    
    4.28
    %Commercial and
industrial loans
    
    
    10,624
    
    
    
    9,894
    
    
    
    730
    
    
    
    7.38
    %Consumer loans
    
    
    34,494
    
    
    
    32,556
    
    
    
    1,938
    
    
    
    5.95
    %Total loans
    
    
    206,621
    
    
    
    176,965
    
    
    
    29,656
    
    
    
    16.76
    %Allowance for loan losses
    
    
    (2,106
    )
    
    
    (2,590
    )
    
    
    484
    
    
    
    -18.69
    %Net Loans
    
    $
    204,515
    
    
    $
    174,375
    
    
    $
    30,140
    
    
    
    17.28
    %
    8




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9




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10




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11




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##### 



As of
    
    
    Year EndedDecember 31, 2007
    
    
    December 31, 2007Ending
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Yield/Rate
    
    
    Balance
    
    
    Interest
    
    
    Yield/Rate(Dollars in thousands)Interest-earning assetsDeposits with financial institutions(1)
    
    $
    2,709
    
    
    
    3.54
    %
    
    $
    4,875
    
    
    $
    221
    
    
    
    4.53
    %Securities
    
    
    53,959
    
    
    
    4.47
    %
    
    
    61,517
    
    
    
    2,756
    
    
    
    4.48
    %Loans receivable, net (2)
    
    
    235,249
    
    
    
    7.42
    %
    
    
    204,515
    
    
    
    15,425
    
    
    
    7.54
    %Federal Home Loan Bank stock
    
    
    3,749
    
    
    
    0.00
    %
    
    
    3,749
    
    
    
    87
    
    
    
    2.32
    %Total interest-earning assets
    
    
    295,666
    
    
    
    6.75
    %
    
    
    274,656
    
    
    
    18,489
    
    
    
    6.73
    %Non-interest-earning assets
    
    
    31,209
    
    
    
    
    
    
    
    25,925Total assets
    
    $
    326,875
    
    
    
    
    
    
    $
    300,581Interest-bearing liabilitiesDeposits:Demand
    
    $
    49,827
    
    
    
    2.66
    %
    
    $
    49,062
    
    
    $
    1,210
    
    
    
    2.47
    %Savings
    
    
    16,744
    
    
    
    2.48
    %
    
    
    14,738
    
    
    
    303
    
    
    
    2.06
    %Certificates of deposits of $100,000 or more
    
    
    46,868
    
    
    
    4.78
    %
    
    
    40,425
    
    
    
    1,908
    
    
    
    4.72
    %Other certificates
    
    
    99,426
    
    
    
    4.57
    %
    
    
    98,716
    
    
    
    4,567
    
    
    
    4.63
    %Borrowings
    
    
    65,701
    
    
    
    4.42
    %
    
    
    50,386
    
    
    
    2,286
    
    
    
    4.54
    %Total interest-bearing liabilities
    
    
    278,566
    
    
    
    4.10
    %
    
    
    253,327
    
    
    
    10,274
    
    
    
    4.06
    %Non-interest-bearing demand accounts
    
    
    19,274
    
    
    
    
    
    
    
    20,390Non-interest-bearing liabilities
    
    
    2,534
    
    
    
    
    
    
    
    491Total liabilities
    
    
    300,374
    
    
    
    
    
    
    
    274,208Total equity capital(3)
    
    
    26,501
    
    
    
    
    
    
    
    26,373Total liabilities and equity capital
    
    $
    326,875
    
    
    
    
    
    
    $
    300,581Net average interest-earning assets
    
    $
    17,100
    
    
    
    
    
    
    $
    21,329Net interest income; interest rate spread(4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8,215
    
    
    
    2.67
    %Net interest margin(5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.99
    %Average interest-earning assets to average
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    108.42
    %
 
 (1)
    
    Includes interest-bearing demand deposits and other interest bearing deposits.(2)
    
    Includes loans held for sale and nonaccruing loans.(3)
    
    Includes retained earnings and accumulated other comprehensive income (loss).(4)
    
    Interest rate spread represents the difference between the weighted average yield on interest-earning
assets and the weighted average rate on interest-bearing liabilities.(5)
    
    Net interest margin is net interest income divided by net average interest-earning assets.  12




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##### 



Year ended December 31,2006
    
    
    2005Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yield/Rate
    
    
    Balance
    
    
    Interest
    
    
    Yield/Rate(Dollars in thousands)Interest-earning assetsDeposits with financial institutions(1)
    
    $
    3,942
    
    
    $
    204
    
    
    
    5.18
    %
    
    $
    3,421
    
    
    $
    113
    
    
    
    3.30
    %Securities
    
    
    74,731
    
    
    
    3,198
    
    
    
    4.28
    %
    
    
    82,130
    
    
    
    3,242
    
    
    
    3.95
    %Loans receivable, net (2)
    
    
    174,375
    
    
    
    12,704
    
    
    
    7.29
    %
    
    
    131,405
    
    
    
    9,432
    
    
    
    7.18
    %Federal Home Loan Bank stock
    
    
    5,557
    
    
    
    186
    
    
    
    3.35
    %
    
    
    4,904
    
    
    
    212
    
    
    
    4.32
    %Total interest-earning assets
    
    
    258,605
    
    
    
    16,292
    
    
    
    6.30
    %
    
    
    221,860
    
    
    
    12,999
    
    
    
    5.86
    %Non-interest-earning assets
    
    
    23,818
    
    
    
    
    
    
    
    
    
    
    
    19,757Total assets
    
    $
    282,423
    
    
    
    
    
    
    
    
    
    
    $
    241,617Interest-bearing liabilitiesDeposits:Demand
    
    $
    48,383
    
    
    $
    833
    
    
    
    1.72
    %
    
    $
    52,831
    
    
    $
    702
    
    
    
    1.33
    %Savings
    
    
    12,449
    
    
    
    103
    
    
    
    0.83
    %
    
    
    12,225
    
    
    
    104
    
    
    
    0.85
    %Certificates of deposits of $100,000 or more
    
    
    41,725
    
    
    
    2,112
    
    
    
    5.06
    %
    
    
    22,090
    
    
    
    794
    
    
    
    3.59
    %Other certificates
    
    
    86,556
    
    
    
    3,315
    
    
    
    3.83
    %
    
    
    63,849
    
    
    
    1,906
    
    
    
    2.99
    %Borrowings
    
    
    45,006
    
    
    
    2,022
    
    
    
    4.49
    %
    
    
    45,234
    
    
    
    1,826
    
    
    
    4.04
    %Total interest-bearing liabilities
    
    
    234,119
    
    
    
    8,385
    
    
    
    3.58
    %
    
    
    196,229
    
    
    
    5,332
    
    
    
    2.72
    %Non-interest-bearing demand accounts

    
    21,423
    
    
    
    
    
    
    
    
    
    
    
    17,357Non-interest-bearing liabilities
    
    
    708
    
    
    
    
    
    
    
    
    
    
    
    1,271Total liabilities
    
    
    256,250
    
    
    
    
    
    
    
    
    
    
    
    214,857Total equity capital(3)
    
    
    26,173
    
    
    
    
    
    
    
    
    
    
    
    26,760Total liabilities and equity capital
    
    $
    282,423
    
    
    
    
    
    
    
    
    
    
    $
    241,617Net average interest-earning assets
    
    $
    24,486
    
    
    
    
    
    
    
    
    
    
    $
    25,631Net interest income; interest rate spread(4)
    
    
    
    
    
    $
    7,907
    
    
    
    2.72
    %
    
    
    
    
    
    $
    7,667
    
    
    
    3.14
    %Net interest margin(5)
    
    
    
    
    
    
    
    
    
    
    3.06
    %
    
    
    
    
    
    
    
    
    
    
    3.46
    %Average interest-earning assets to average
interest-bearing liabilities
    
    
    110.46
    %
    
    
    
    
    
    
    
    
    
    
    113.06
    %
 
 (1)
    
    Includes interest-bearing demand deposits and other interest bearing deposits.(2)
    
    Includes loans held for sale and nonaccruing loans.(3)
    
    Includes retained earnings and accumulated other comprehensive income (loss).(4)
    
    Interest rate spread represents the difference between the weighted average yield on interest-earning assets
and the weighted average rate on interest-bearing liabilities.(5)
    
    Net interest margin is net interest income divided by net average interest-earning assets.  13




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##### 



Year Ended 12/31/2007
    
    
    Year Ended 12/31/2006Compared to
    
    
    Compared toYear Ended 12/31/2006
    
    
    Year Ended 12/31/2005Increase
    
    
    
    
    
    
    Increase(Decrease)
    
    
    
    
    
    
    (Decrease)Due to
    
    
    
    
    
    
    Due toVolume
    
    
    Rate
    
    
    Net
    
    
    Volume
    
    
    Rate
    
    
    NetInterest-earning assets:Interest-bearing demand
deposits
    
    $
    44
    
    
    $
    (27
    )
    
    $
    17
    
    
    $
    19
    
    
    $
    72
    
    
    $
    91Securities
    
    
    (586
    )
    
    
    144
    
    
    
    (442
    )
    
    
    (305
    )
    
    
    261
    
    
    
    (44
    )Loans receivable, net
    
    
    2,260
    
    
    
    461
    
    
    
    2,721
    
    
    
    3,129
    
    
    
    143
    
    
    
    3,272Federal Home Loan Bank stock
    
    
    (51
    )
    
    
    (48
    )
    
    
    (99
    )
    
    
    26
    
    
    
    (52
    )
    
    
    (26
    )Total interest-earning assets
    
    
    1,667
    
    
    
    530
    
    
    
    2,197
    
    
    
    2,869
    
    
    
    424
    
    
    
    3,293Interest-bearing liabilities:Demand accounts
    
    
    12
    
    
    
    365
    
    
    
    377
    
    
    
    (63
    )
    
    
    194
    
    
    
    131Savings accounts
    
    
    22
    
    
    
    178
    
    
    
    200
    
    
    
    2
    
    
    
    (3
    )
    
    
    (1
    )Certificates of deposit
    
    
    441
    
    
    
    607
    
    
    
    1,048
    
    
    
    1,688
    
    
    
    1,039
    
    
    
    2,727Borrowings
    
    
    229
    
    
    
    35
    
    
    
    264
    
    
    
    (9
    )
    
    
    205
    
    
    
    196Total interest-bearing
liabilities
    
    
    704
    
    
    
    1,185
    
    
    
    1,889
    
    
    
    1,618
    
    
    
    1,435
    
    
    
    3,053Net change in net interest
income
    
    $
    963
    
    
    $
    (655
    )
    
    $
    308
    
    
    $
    1,251
    
    
    $
    (1,011
    )
    
    $
    240
    14




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15




---



##### 



16




---



##### 



17




---



##### 



18




---



##### 



19




---



##### 



20




---



##### 



Financial Condition
    21




---



##### 



22




---



##### 



23




---



##### 



24




---



##### 



25




---



##### 



26




---



##### 



27




---



##### 



28




---



##### 



Critical Accounting Policies
     29




---



##### 



Liquidity and Capital Resources
  Contractual and Off-Balance Sheet Obligations
   30




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##### 



Next 12
    
    
    13-36
    
    
    37-60
    
    
    More thanMonths
    
    
    Months
    
    
    Months
    
    
    60 Months
    
    
    TotalsContractual obligations:Certificates of deposit
    
    $
    113,567
    
    
    $
    26,476
    
    
    $
    5,164
    
    
    $
    1,087
    
    
    $
    146,294Federal Home Loan Bank advances
    
    
    11,800
    
    
    
    
    
    
    
    20,000
    
    
    
    24,000
    
    
    
    55,800Junior subordinated debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,186
    
    
    
    6,186Purchase of building in
Champaign IL
    
    
    1,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,700Minimum operating lease
commitments
    
    
    308
    
    
    
    161
    
    
    
    4
    
    
    
    
    
    
    
    473Totals
    
    $
    127,375
    
    
    $
    26,637
    
    
    $
    25,168
    
    
    $
    31,273
    
    
    $
    210,453
    Next 12
    
    
    13-36
    
    
    37-60
    
    
    More thanMonths
    
    
    Months
    
    
    Months
    
    
    60 Months
    
    
    TotalsUnfunded commitments:Lines of credit
    
    $
    11,452
    
    
    $
    7,282
    
    
    $
    597
    
    
    $
    3,804
    
    
    $
    23,135
   31




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32




---



##### 



Management of Interest Rate Risk
    33




---



##### 



34




---



##### 



Daily
    
    
    1 to 3
    
    
    3 to 12
    
    
    1 to 3
    
    
    3 to 5
    
    
    Over 5(dollars in thousands)
    
    Repricing
    
    
    Months
    
    
    Months
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    TotalInterest-earning assets:Loans receivable, net (1)
    
    $
    0
    
    
    $
    44,864
    
    
    $
    40,267
    
    
    $
    80,985
    
    
    $
    39,216
    
    
    $
    29,917
    
    
    $
    235,249Investments
    
    $
    0
    
    
    $
    9,988
    
    
    $
    13,076
    
    
    $
    17,566
    
    
    $
    7,260
    
    
    $
    6,069
    
    
    $
    53,959Int bearing due from bank
    
    $
    2,709
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    2,709Total
    
    $
    2,709
    
    
    $
    54,852
    
    
    $
    53,343
    
    
    $
    98,551
    
    
    $
    46,476
    
    
    $
    35,986
    
    
    $
    291,917Interest-bearing liabilities:Deposits
    
    $
    0
    
    
    $
    102,984
    
    
    $
    76,896
    
    
    $
    26,734
    
    
    $
    6,251
    
    
    $
    0
    
    
    $
    212,865Borrowings
    
    $
    10,700
    
    
    $
    4,515
    
    
    $
    300
    
    
    $
    6,186
    
    
    $
    20,000
    
    
    $
    24,000
    
    
    $
    65,701Total
    
    $
    10,700
    
    
    $
    107,499
    
    
    $
    77,196
    
    
    $
    32,920
    
    
    $
    26,251
    
    
    $
    24,000
    
    
    $
    278,566GAP
    
    $
    (7,991
    )
    
    $
    (52,647
    )
    
    $
    (23,853
    )
    
    $
    65,631
    
    
    $
    20,225
    
    
    $
    11,986
    
    
    $
    13,351Cumulative GAP
    
    $
    (7,991
    )
    
    $
    (60,638
    )
    
    $
    (84,491
    )
    
    $
    (18,860
    )
    
    $
    1,365
    
    
    $
    13,351
    
    
    $
    13,351Cumulative
GAP as a %
of Total Assets
    
    
    -2.4
    %
    
    
    -18.6
    %
    
    
    -25.8
    %
    
    
    -5.8
    %
    
    
    0.4
    %
    
    
    4.1
    %
    
    
    4.1
    %
 (1)
    
    Fixed rate loans are slotted according to their final maturity date. Adjustable rate loans
are slotted according to their
next reprice date. The cash flows for Residential R/E, Commercial R/E and Consumer Installment
Loans all receive an
amortizing treatment. The cash flows for Residential R/E are accelerated to reflect assumptions
for prepayments.(2)
    
    Reflects re-pricing, contractual maturity, or anticipated call date.(3)
    
    Securities are classified as available-for-sale and held-to-maturity.(4)
    
    Adjusted to reflect next likely reset period.(5)
    
    The cash flows for mortgage-backed securities receive an amortizing treatment.(6)
    
    The cash flows for mortgage-backed securities are accelerated to reflect assumptions for
prepayments. Earnings-at-Risk Earnings Simulation
 relative
  35




---



##### 



$ Change
    
    
    4Q-2007
    
    
    $ ChangeRates Falling
    
    
    Earnings
    
    
    Rates Rising100 BP
    
    
    Forecast
    
    
    100 BP(in thousands)INTEREST INCOMEFF Sold & Due From Banks
    
    
    -16
    
    
    
    32
    
    
    
    16Securities
    
    
    -147
    
    
    
    2,522
    
    
    
    133Total Loans
    
    
    -411
    
    
    
    18,420
    
    
    
    401Other Interest Income
    
    
    -29
    
    
    
    122
    
    
    
    29Total Interest Income
    
    
    -603
    
    
    
    21,096
    
    
    
    579INTEREST EXPENSENOW, MMDA & Savings
    
    
    -164
    
    
    
    1,568
    
    
    
    65Small CDs
    
    
    -341
    
    
    
    4,579
    
    
    
    341Large CDs
    
    
    -136
    
    
    
    2,330
    
    
    
    136Structured Debt
    
    
    -80
    
    
    
    2,523
    
    
    
    80Total Interest Expense
    
    
    -721
    
    
    
    11,000
    
    
    
    622NET INTEREST INCOME
    
    
    118
    
    
    
    10,096
    
    
    
    -43Provision Expense
    
    
    0
    
    
    
    775
    
    
    
    0Non-Interest Income
    
    
    0
    
    
    
    2,570
    
    
    
    0Non-Interest Expense
    
    
    0
    
    
    
    9,086
    
    
    
    0Realized Security G/L
    
    
    0
    
    
    
    0
    
    
    
    0Income Before Taxes
    
    
    118
    
    
    
    2,805
    
    
    
    -43Taxes
    
    
    31
    
    
    
    740
    
    
    
    -11NET INCOME
    
    
    87
    
    
    
    2,065
    
    
    
    -32% Change in Net Interest Income
    
    
    1.17
    %
    
    
    
    
    
    
    -0.43
    %
   36




---



##### 



Impact of Inflation and Changing Prices
  Impact of Accounting Changes
 Postretirement Benefits Associated with Split-Dollar Life Insurance
 Fair Value Measurements
 The Fair Value Option for Financial
Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115
  37




---



##### 



Business Combinations
 Non-controlling Interest in Consolidated
Financial Statements  an Amendment of ARB No. 151
 Risk Factors (FBTC)
   38




---



##### 



We are geographically concentrated in East Central Illinois, and changes in local economic
conditions could impact our profitability.
   Our continued growth may require the need for additional capital and further regulatory approvals
which, if not obtained, could adversely impact our profitability and implementation of our current
business plan.
  We have a concentration of credit exposure to borrowers in certain industries and we also target
small to medium-sized businesses.
   39




---



##### 



If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings will
decrease.
   Fluctuations in interest rates could reduce our profitability.
    40




---



##### 



Loss of our senior executive officers or other key employees could impair our relationship with our
customers and adversely affect our business.
  Competition with other banking institutions could adversely affect our profitability.
  We may issue additional common stock or other equity securities in the future which could dilute
the ownership interest of existing shareholders.
  Even though our common stock is currently traded on the Nasdaq Stock Market, it has less liquidity
than the average stock quoted on that or similar securities exchanges.
     41




---



##### 



If a change in control or change in management is delayed or prevented, the market price of our
common stock could be negatively affected.
  The amount of common stock owned by, and other compensation arrangements with, our officers and
directors may make it more difficult to obtain shareholder approval of potential takeovers that
they oppose.
  Our business is dependent on technology, and an inability to invest in technological improvements
may adversely affect our results of operations and financial condition.
   42




---



##### 



Our internal control over financial reporting may have weaknesses or inadequacies that may be
material.
  We are subject to various statutes and regulations that may limit our ability to take certain
actions.
    43




---



##### 



This page left intentionally blank.
  44




---



##### 



Report of Independent
Registered Public Accounting Firm
 
    BKD, LLP
 BKD, LLP
 
  45




---



##### 



First BancTrust Corporation
Consolidated Balance Sheets
December 31, 2007 and 2006
 2007
    
    
    2006AssetsCash and due from banks
    
    $
    7,630,464
    
    
    $
    13,216,243Interest-bearing demand deposits
    
    
    2,708,902
    
    
    
    15,575,106Cash and cash equivalents
    
    
    10,339,366
    
    
    
    28,791,349Available-for-sale securities
    
    
    48,628,669
    
    
    
    64,515,293Held-to-maturity securities (fair
value of $5,284,368 and $4,661,650)
    
    
    5,330,817
    
    
    
    4,779,948Loans held for sale, net of
unrealized losses of $0 and $2,617 at
December 31, 2007 and 2006
    
    
    393,900
    
    
    
    835,904Loans, net of allowance for loan
losses of $2,091,278 and $2,222,355
at December 31, 2007 and 2006
    
    
    234,855,325
    
    
    
    185,443,561Premises and equipment, net
    
    
    10,509,674
    
    
    
    11,016,532Federal Home Loan Bank stock
    
    
    3,748,855
    
    
    
    3,748,855Foreclosed assets held for sale, net
    
    
    553,589
    
    
    
    366,201Interest receivable
    
    
    3,511,478
    
    
    
    2,919,235Deferred income taxes
    
    
    1,201,502
    
    
    
    1,489,866Loan servicing rights
    
    
    292,632
    
    
    
    351,114Cash surrender value of life insurance
    
    
    5,476,148
    
    
    
    5,007,722Goodwill
    
    
    541,474
    
    
    
    541,474Core deposit intangibles
    
    
    666,965
    
    
    
    763,954Other assets
    
    
    824,961
    
    
    
    486,791Total assets
    
    $
    326,875,355
    
    
    $
    311,057,799
 See Notes
to Consolidated Financial Statements
  46




---



##### 



2007
    
    
    2006Liabilities and Stockholders EquityLiabilitiesDepositsDemand
    
    $
    19,273,786
    
    
    $
    25,032,511Savings, NOW, and money market
    
    
    66,570,610
    
    
    
    57,844,273Time
    
    
    129,759,805
    
    
    
    159,726,297Brokered time
    
    
    16,534,532
    
    
    
    Total deposits
    
    
    232,138,733
    
    
    
    242,603,081Short-term borrowings
    
    
    3,714,766
    
    
    
    Federal Home Loan Bank advances
    
    
    55,800,000
    
    
    
    32,800,000Junior subordinated debentures
    
    
    6,186,000
    
    
    
    6,186,000Pass through payments received on loans sold
    
    
    84,946
    
    
    
    122,282Advances from borrowers for taxes and insurance
    
    
    131,933
    
    
    
    148,051Interest payable
    
    
    915,955
    
    
    
    929,094Other liabilities
    
    
    1,402,213
    
    
    
    1,613,425Total liabilities
    
    
    300,374,546
    
    
    
    284,401,933Commitments and Contingent LiabilitiesStockholders EquityPreferred stock, $.01 par value; authorized and unissued 
1,000,000 sharesCommon stock, $.01 par value; authorized 5,000,000 shares;
Issued 3,041,750 sharesOutstanding  2007  2,195,839 shares; 2006  2,318,700 shares
    
    
    30,418
    
    
    
    30,418Additional paid-in capital
    
    
    15,134,403
    
    
    
    14,833,574Retained earnings
    
    
    20,219,243
    
    
    
    19,693,271Unearned ESOP compensation; 2007  38,086 shares,
2006  68,494 shares
    
    
    (220,105
    )
    
    
    (395,837
    )Accumulated other comprehensive loss
    
    
    (425,563
    )
    
    
    (679,414
    )Treasury stock, at costCommon: 2007  845,911 shares; 2006  723,050 shares
    
    
    (8,237,587
    )
    
    
    (6,826,146
    )Total stockholders equity
    
    
    26,500,809
    
    
    
    26,655,866Total liabilities and stockholders equity
    
    $
    326,875,355
    
    
    $
    311,057,799
  47




---



##### 



First BancTrust Corporation
Consolidated Statements of Income
Years Ended December 31, 2007, 2006, and 2005
 2007
    
    
    2006
    
    
    2005Interest and Dividend IncomeLoansTaxable
    
    $
    15,368,130
    
    
    $
    12,644,476
    
    
    $
    9,370,277Tax-exempt
    
    
    57,008
    
    
    
    59,513
    
    
    
    61,896SecuritiesTaxable
    
    
    2,467,510
    
    
    
    2,676,412
    
    
    
    2,775,099Tax-exempt
    
    
    287,810
    
    
    
    521,787
    
    
    
    466,712Dividends on Federal Home Loan Bank stock
    
    
    87,471
    
    
    
    186,479
    
    
    
    212,394Deposits with financial institutions and other
    
    
    220,720
    
    
    
    203,693
    
    
    
    112,507Total interest and dividend income
    
    
    18,488,649
    
    
    
    16,292,360
    
    
    
    12,998,885Interest ExpenseDeposits
    
    
    7,988,640
    
    
    
    6,363,391
    
    
    
    3,506,395Federal Home Loan Bank advances and other debt
    
    
    2,285,732
    
    
    
    2,021,927
    
    
    
    1,826,035Total interest expense
    
    
    10,274,372
    
    
    
    8,385,318
    
    
    
    5,332,430Net Interest Income
    
    
    8,214,277
    
    
    
    7,907,042
    
    
    
    7,666,455Provision for Loan Losses
    
    
    774,748
    
    
    
    230,000
    
    
    
    510,145Net Interest Income After Provision for Loan Losses
    
    
    7,439,529
    
    
    
    7,677,042
    
    
    
    7,156,310Noninterest IncomeCustomer service fees
    
    
    1,200,063
    
    
    
    1,074,097
    
    
    
    965,684Other service charges and fees
    
    
    988,717
    
    
    
    905,621
    
    
    
    755,606Net gains on loan sales
    
    
    248,676
    
    
    
    259,479
    
    
    
    291,259Net realized gains on sales of available-for-sale
securities
    
    
    69,621
    
    
    
    12,106
    
    
    
    117,959Loan servicing fees
    
    
    411,736
    
    
    
    437,335
    
    
    
    489,196Brokerage fees
    
    
    79,662
    
    
    
    85,825
    
    
    
    85,425Abstract and title fees
    
    
    343,385
    
    
    
    312,761
    
    
    
    349,733Increase in cash surrender value of life insurance
    
    
    227,914
    
    
    
    215,014
    
    
    
    176,560Other
    
    
    213,377
    
    
    
    159,345
    
    
    
    106,172Total noninterest income
    
    
    3,783,151
    
    
    
    3,461,583
    
    
    
    3,337,594
 See
Notes to Consolidated Financial Statements
  48




---



##### 



2007
    
    
    2006
    
    
    2005Noninterest ExpenseSalaries and employee benefits
    
    $
    4,936,015
    
    
    $
    5,068,424
    
    
    $
    4,642,557Net occupancy expense
    
    
    860,348
    
    
    
    685,911
    
    
    
    437,944Equipment expense
    
    
    1,068,174
    
    
    
    1,055,258
    
    
    
    831,912Data processing fees
    
    
    678,664
    
    
    
    615,035
    
    
    
    485,944Professional fees
    
    
    409,528
    
    
    
    455,870
    
    
    
    460,101Foreclosed assets expense, net
    
    
    172,718
    
    
    
    87,139
    
    
    
    63,510Marketing expense
    
    
    253,312
    
    
    
    242,413
    
    
    
    334,164Printing and office supplies
    
    
    164,054
    
    
    
    164,675
    
    
    
    154,171Amortization of loan servicing rights
    
    
    175,192
    
    
    
    242,327
    
    
    
    486,792Recovery of impairment of loan servicing rights
    
    
    
    
    
    
    
    
    
    
    (24,191
    )Other
    
    
    1,154,231
    
    
    
    1,166,882
    
    
    
    1,060,033Total noninterest expense
    
    
    9,872,236
    
    
    
    9,783,934
    
    
    
    8,932,937Income Before Income Taxes
    
    
    1,350,444
    
    
    
    1,354,691
    
    
    
    1,560,967Provision for Income Taxes
    
    
    294,806
    
    
    
    238,862
    
    
    
    313,272Net Income
    
    $
    1,055,638
    
    
    $
    1,115,829
    
    
    $
    1,247,695Basic Earnings Per Share
    
    $
    0.49
    
    
    $
    0.51
    
    
    $
    0.56Diluted Earnings Per Share
    
    $
    0.47
    
    
    $
    0.48
    
    
    $
    0.52
  49




---



##### 



First BancTrust Corporation
Consolidated Statements of Stockholders Equity
Years Ended December 31, 2007, 2006 and 2005
 Common Stock
    
    
    Additional PaidShares
    
    
    Amount
    
    
    -In CapitalBalance, January 1, 2005
    
    
    2,494,850
    
    
    $
    30,418
    
    
    $
    14,787,446Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    Change in unrealized appreciation on available-for-sale
securities, net of taxes
    
    
    
    
    
    
    
    
    
    
    Total comprehensive incomeDividends on common stock, $.24 per share
    
    
    
    
    
    
    
    
    
    
    Purchase of treasury stock (131,600 shares)
    
    
    (131,600
    )
    
    
    
    
    
    
    Stock options exercised (4,200 shares)
    
    
    4,200
    
    
    
    
    
    
    
    4,400Incentive plan shares allocated (13,704 shares)
    
    
    
    
    
    
    
    
    
    
    (3,426
    )Tax benefit related to stock options exercised and incentive
plan
    
    
    
    
    
    
    
    
    
    
    24,401ESOP shares earned (30,408 shares)
    
    
    
    
    
    
    
    
    
    
    202,318Balance, December 31, 2005
    
    
    2,367,450
    
    
    
    30,418
    
    
    
    15,015,139Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    Change in unrealized depreciation on available-for-sale
securities, net of taxes
    
    
    
    
    
    
    
    
    
    
    Total comprehensive incomeTransfer of unearned incentive plan shares to paid-in capital
    
    
    
    
    
    
    
    
    
    
    (589,364
    )Cumulative effect of the initial application of SAB 108
    
    
    
    
    
    
    
    
    
    
    Dividends on common stock, $.24 per share
    
    
    
    
    
    
    
    
    
    
    Purchase of treasury stock (58,750 shares)
    
    
    (58,750
    )
    
    
    
    
    
    
    Stock options exercised (10,000 shares)
    
    
    10,000
    
    
    
    
    
    
    
    5,500Incentive plan shares allocated (20,099 shares)
    
    
    
    
    
    
    
    
    
    
    190,174Tax benefit related to stock options exercised and incentive
plan
    
    
    
    
    
    
    
    
    
    
    26,881ESOP shares earned (30,408 shares)
    
    
    
    
    
    
    
    
    
    
    185,244Balance, December 31, 2006
    
    
    2,318,700
    
    
    
    30,418
    
    
    
    14,833,574Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    Change in unrealized depreciation on available-for-sale
securities, net of taxes
    
    
    
    
    
    
    
    
    
    
    Defined benefit pension plan  net loss
    
    
    
    
    
    
    
    
    
    
    Total comprehensive incomeDividends on common stock, $.24 per share
    
    
    
    
    
    
    
    
    
    
    Purchase of treasury stock (123,361 shares)
    
    
    (123,361
    )
    
    
    
    
    
    
    Stock options exercised (500 shares)
    
    
    500
    
    
    
    
    
    
    
    80Incentive plan shares allocated (10,785 shares)
    
    
    
    
    
    
    
    
    
    
    114,186Tax benefit related to stock options exercised and incentive
plan
    
    
    
    
    
    
    
    
    
    
    19,026ESOP shares earned (30,408 shares)
    
    
    
    
    
    
    
    
    
    
    167,537Balance, December 31, 2007
    
    
    2,195,839
    
    
    $
    30,418
    
    
    $
    15,134,403
 See Notes to Consolidated Financial Statements
  50




---



##### 



Unearned
    
    
    Unearned
    
    
    Accumulated OtherRetained
    
    
    
    
    Incentive Plan
    
    
    ESOP
    
    
    Comprehensive
    
    
    TreasuryEarnings
    
    
    
    
    Shares
    
    
    Compensation
    
    
    Loss
    
    
    Stock
    
    
    Total$
    18,396,265
    
    
    
    
    $
    (702,422
    )
    
    $
    (747,302
    )
    
    $
    415,227
    
    
    $
    (4,632,769
    )
    
    $
    27,546,8631,247,695
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,247,695
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,080,650
    )
    
    
    
    
    
    
    (1,080,650
    )167,045(581,970
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (581,970
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,639,297
    )
    
    
    (1,639,297
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,054
    
    
    
    41,454
    
    
    
    
    
    113,058
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109,632
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,401
    
    
    
    
    
    
    
    
    
    175,732
    
    
    
    
    
    
    
    
    
    
    
    378,05019,061,990
    
    
    
    
    
    (589,364
    )
    
    
    (571,570
    )
    
    
    (665,423
    )
    
    
    (6,235,012
    )
    
    
    26,046,1781,115,829
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,115,829
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,991
    )
    
    
    
    
    
    
    (13,991
    )1,101,838
    
    
    
    
    
    589,364
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,000(542,548
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (542,548
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (684,334
    )
    
    
    (684,334
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,200
    
    
    
    98,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190,174
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,881
    
    
    
    
    
    
    
    
    
    175,733
    
    
    
    
    
    
    
    
    
    
    
    360,97719,693,271
    
    
    
    
    
    
    
    
    
    (395,837
    )
    
    
    (679,414
    )
    
    
    (6,826,146
    )
    
    
    26,655,8661,055,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,055,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    301,739
    
    
    
    
    
    
    
    301,739
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47,888
    )
    
    
    
    
    
    
    (47,888
    )1,309,489(529,666
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (529,666
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,416,296
    )
    
    
    (1,416,296
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,855
    
    
    
    4,935
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    114,186
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,026
    
    
    
    
    
    
    
    
    
    175,732
    
    
    
    
    
    
    
    
    
    
    
    343,269$
    20,219,243
    
    
    
    
    $
    
    
    
    $
    (220,105
    )
    
    
    (425,563
    )
    
    $
    (8,237,587
    )
    
    $
    26,500,809
  51




---



##### 



First BancTrust Corporation
Consolidated Statements of Cash Flows
Years Ended December 31, 2007, 2006, and 2005
 2007
    
    
    2006
    
    
    2005Operating ActivitiesNet income
    
    $
    1,055,638
    
    
    $
    1,115,829
    
    
    $
    1,247,695Items not requiring (providing) cashDepreciation and amortization
    
    
    833,093
    
    
    
    651,548
    
    
    
    413,487Provision for loan losses
    
    
    774,748
    
    
    
    230,000
    
    
    
    510,145Loss on foreclosed assets, net
    
    
    89,438
    
    
    
    27,908
    
    
    
    20,868Loss (gain) on premises and equipment
    
    
    (5,170
    )
    
    
    93,260
    
    
    
    89,188Amortization of premiums and discounts on
securities, net
    
    
    71,157
    
    
    
    49,390
    
    
    
    67,397Amortization of loan servicing rights
    
    
    175,192
    
    
    
    242,327
    
    
    
    486,792Recovery for impairment of loan servicing rights
    
    
    
    
    
    
    
    
    
    
    (24,191
    )Deferred income taxes
    
    
    127,425
    
    
    
    (99,486
    )
    
    
    (189,433
    )Amortization of intangible assets
    
    
    96,989
    
    
    
    68,723
    
    
    
    42,120Net realized gains on available-for-sale securities
    
    
    (69,621
    )
    
    
    (12,106
    )
    
    
    (117,959
    )Net gain on loan sales
    
    
    (248,676
    )
    
    
    (259,479
    )
    
    
    (291,259
    )Federal Home Loan Bank stock dividends
    
    
    
    
    
    
    
    
    
    
    (212,186
    )Compensation expense related to ESOP and incentive
plan
    
    
    457,455
    
    
    
    551,151
    
    
    
    487,682Loans originated for sale
    
    
    (16,532,742
    )
    
    
    (15,410,475
    )
    
    
    (15,494,804
    )Proceeds from sales of loans originated for sale
    
    
    17,106,712
    
    
    
    15,345,148
    
    
    
    15,113,485Changes inInterest receivable
    
    
    (592,243
    )
    
    
    (503,546
    )
    
    
    (73,789
    )Cash surrender value of life insurance
    
    
    (193,426
    )
    
    
    (182,836
    )
    
    
    (176,560
    )Other assets
    
    
    (338,170
    )
    
    
    171,182
    
    
    
    (53,981
    )Interest payable
    
    
    (13,139
    )
    
    
    683,976
    
    
    
    104,617Other liabilities
    
    
    (270,433
    )
    
    
    249,785
    
    
    
    244,436Net cash provided by operating activities
    
    
    2,524,227
    
    
    
    3,012,299
    
    
    
    2,193,750Investing ActivitiesPurchases of available-for-sale securities
    
    
    (9,332,982
    )
    
    
    (7,338,757
    )
    
    
    (9,325,372
    )Proceeds from maturities of available-for-sale securities
    
    
    18,535,599
    
    
    
    18,185,350
    
    
    
    23,616,275Proceeds from sales of available-for-sale securities
    
    
    7,171,793
    
    
    
    996,446
    
    
    
    985,299Purchases of held-to-maturity securities
    
    
    (986,535
    )
    
    
    (1,880,773
    )
    
    
    Proceeds from maturities of held-to-maturity securities
    
    
    439,381
    
    
    
    543,941
    
    
    
    1,356,578Net change in loans
    
    
    (50,985,490
    )
    
    
    (29,247,099
    )
    
    
    (25,700,454
    )Proceeds from sales of foreclosed assets
    
    
    522,152
    
    
    
    331,539
    
    
    
    799,345Purchase of premises and equipment
    
    
    (329,145
    )
    
    
    (5,306,086
    )
    
    
    (2,699,845
    )Capitalized interest
    
    
    
    
    
    
    (101,080
    )
    
    
    (20,216
    )Proceeds from disposal of premises and equipment
    
    
    8,080
    
    
    
    31,900
    
    
    
    Proceeds received from exchange of premises and equipment
    
    
    
    
    
    
    
    
    
    
    269,096Redemption of Federal Home Loan Bank stock
    
    
    
    
    
    
    2,859,557
    
    
    
    Purchase of life insurance
    
    
    (275,000
    )
    
    
    
    
    
    
    (125,000
    )Net cash paid for the purchase of Rantoul First Bank
(net of cash received)
    
    
    
    
    
    
    
    
    
    
    (2,333,440
    )Net cash used in investing activities
    
    
    (35,232,147
    )
    
    
    (20,925,062
    )
    
    
    (13,177,734
    )
 See Notes to Consolidated Financial Statements
  52




---



##### 



2007
    
    
    2006
    
    
    2005Financing ActivitiesNet increase (decrease) in demand deposits, money market,
NOW and savings accounts
    
    $
    2,967,612
    
    
    $
    (4,994,112
    )
    
    $
    (1,184,822
    )Net increase (decrease) in certificates of deposit
    
    
    (13,431,960
    )
    
    
    53,621,926
    
    
    
    8,952,043Premium paid for acquired deposits
    
    
    
    
    
    
    (348,925
    )
    
    
    Net increase (decrease) in short-term borrowings
    
    
    3,714,766
    
    
    
    (2,500,000
    )
    
    
    500,000Proceeds from Federal Home Bank advances
    
    
    29,500,000
    
    
    
    29,500,000
    
    
    
    2,000,000Repayment of Federal Home Loan Bank advances
    
    
    (6,500,000
    )
    
    
    (39,900,000
    )
    
    
    Proceeds from the issuance of junior subordinated debentures
    
    
    
    
    
    
    
    
    
    
    6,186,000Net change in pass through payments received on loans sold
    
    
    (37,336
    )
    
    
    47,587
    
    
    
    14,501Net change in advances from borrowers for taxes and insurance
    
    
    (16,118
    )
    
    
    (41,315
    )
    
    
    29,778Proceeds from stock options exercised
    
    
    4,935
    
    
    
    98,700
    
    
    
    41,454Purchase of treasury stock
    
    
    (1,416,296
    )
    
    
    (684,334
    )
    
    
    (1,639,297
    )Dividends paid
    
    
    (529,666
    )
    
    
    (542,548
    )
    
    
    (581,970
    )Net cash provided by financing activities
    
    
    14,255,937
    
    
    
    34,256,979
    
    
    
    14,317,687Increase (Decrease) in Cash and Cash Equivalents
    
    
    (18,451,983
    )
    
    
    16,344,216
    
    
    
    3,333,703Cash and Cash Equivalents, Beginning of Year
    
    
    28,791,349
    
    
    
    12,447,133
    
    
    
    9,113,430Cash and Cash Equivalents, End of Year
    
    $
    10,339,366
    
    
    $
    28,791,349
    
    
    $
    12,447,133Supplemental Cash Flows InformationInterest paid (net of capitalized interest)
    
    $
    10,287,511
    
    
    $
    7,701,342
    
    
    $
    5,227,813Income taxes paid (net of refunds)
    
    $
    302,952
    
    
    $
    460,000
    
    
    $
    340,000Real estate and other property acquired in settlement of
loans
    
    $
    798,978
    
    
    $
    458,448
    
    
    $
    257,374Tax benefit related to incentive plan and exercise of options
    
    $
    19,026
    
    
    $
    26,881
    
    
    $
    24,401
  53




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Note 1: Nature of Operations and Summary of Significant Accounting Policies
 Nature of Operations
  Principles of Consolidation
  Use of Estimates
    54




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Cash Equivalents
  Securities
     Loans Held for Sale
    55




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Loans
   Allowance for Loan Losses
     56




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
  Premises and Equipment
    Federal Home Loan Bank Stock
   Foreclosed Assets Held for Sale
  Goodwill
   57




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Core Deposit Intangibles
  Loan Servicing Rights
  Incentive Plan
 Accounting for Stock Issued
to Employees Share-Based Payment
   58




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Employee Stock Ownership Plan
   Treasury Stock
  Stock Options
 Accounting for Stock Issued to Employees Share-Based Payment
  59




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Year Ended2005Net income, as reported
    
    $
    1,247,695Less: Total stock-based employee
compensation cost determined under the
fair value based method, net of income
taxes
    
    
    282,723Pro forma net income
    
    $
    964,972Earnings per share:Basic  as reported
    
    $
    .56Basic  pro forma
    
    $
    .43Diluted  as reported
    
    $
    .52Diluted  pro forma
    
    $
    .41
  Income Taxes
  Earnings Per Share
    60




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Reclassifications
  Note 2: Adoption of Staff Accounting Bulletin No. 108
  Note 3: Securities
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    ApproximateCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueAvailable-for-sale
securities:December 31, 2007:U.S. Treasuries
    
    $
    3,873,398
    
    
    $
    
    
    
    $
    (412,798
    )
    
    $
    3,460,600U.S. government
agencies
    
    
    5,480,738
    
    
    
    140,318
    
    
    
    (2,390
    )
    
    
    5,618,666Mortgage-backed
securities
    
    
    34,020,418
    
    
    
    90,014
    
    
    
    (437,899
    )
    
    
    33,672,533State and
political
subdivisions
    
    
    4,858,762
    
    
    
    21,565
    
    
    
    (29,187
    )
    
    
    4,851,140Equity securities
    
    
    1,026,424
    
    
    
    7,506
    
    
    
    (8,200
    )
    
    
    1,025,730$
    49,259,740
    
    
    $
    259,403
    
    
    $
    (890,474
    )
    
    $
    48,628,669
  61




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    ApproximateCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueDecember 31, 2006:U.S. Treasuries
    
    $
    3,869,313
    
    
    $
    
    
    
    $
    (413,049
    )
    
    $
    3,456,264U.S. government
agencies
    
    
    6,966,473
    
    
    
    77,022
    
    
    
    (29,748
    )
    
    
    7,013,747Mortgage-backed
securities
    
    
    40,767,304
    
    
    
    99,665
    
    
    
    (909,794
    )
    
    
    39,957,175State and
political
subdivisions
    
    
    12,351,297
    
    
    
    150,189
    
    
    
    (96,426
    )
    
    
    12,405,060Equity securities
    
    
    1,685,013
    
    
    
    5,304
    
    
    
    (7,270
    )
    
    
    1,683,047$
    65,639,400
    
    
    $
    332,180
    
    
    $
    (1,456,287
    )
    
    $
    64,515,293
 Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    ApproximateCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueHeld-to-maturity securities:December 31, 2007:Mortgage-backed
securities
    
    $
    5,330,817
    
    
    $
    22,379
    
    
    $
    (68,828
    )
    
    $
    5,284,368December 31, 2006:Mortgage-backed
securities
    
    $
    4,779,948
    
    
    $
    
    
    
    $
    (118,298
    )
    
    $
    4,661,650
  62




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
  Available-for-Sale
    
    
    Held-to-MaturityAmortized
    
    
    Approximate
    
    
    Amortized
    
    
    ApproximateCost
    
    
    Fair Value
    
    
    Cost
    
    
    Fair ValueWithin one year
    
    $
    2,365,197
    
    
    $
    2,219,835
    
    
    $
    
    
    
    $
    One to five years
    
    
    8,560,892
    
    
    
    8,421,808
    
    
    
    
    
    
    
    Five to ten years
    
    
    3,286,809
    
    
    
    3,288,763
    
    
    
    
    
    
    
    14,212,898
    
    
    
    13,930,406
    
    
    
    
    
    
    
    Mortgage-backed securities
    
    
    34,020,418
    
    
    
    33,672,533
    
    
    
    5,330,817
    
    
    
    5,284,368Equity securities
    
    
    1,026,424
    
    
    
    1,025,730
    
    
    
    
    
    
    
    Totals
    
    $
    49,259,740
    
    
    $
    48,628,669
    
    
    $
    5,330,817
    
    
    $
    5,284,368
        63




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
  Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedDescription of Securities
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesDecember 31, 2007:U.S. treasury
    
    $
    
    
    
    $
    
    
    
    $
    3,460,600
    
    
    $
    (412,798
    )
    
    $
    3,460,600
    
    
    $
    (412,798
    )U.S. government
agencies
    
    
    
    
    
    
    
    
    
    
    997,610
    
    
    
    (2,390
    )
    
    
    997,610
    
    
    
    (2,390
    )Mortgage-backed
securities
    
    
    5,369,800
    
    
    
    (19,187
    )
    
    
    22,129,729
    
    
    
    (487,540
    )
    
    
    27,499,529
    
    
    
    (506,727
    )State and
political
subdivisions
    
    
    29,980
    
    
    
    (20
    )
    
    
    2,518,329
    
    
    
    (29,167
    )
    
    
    2,548,309
    
    
    
    (29,187
    )Equity securities
    
    
    
    
    
    
    
    
    
    
    8,500
    
    
    
    (8,200
    )
    
    
    8,500
    
    
    
    (8,200
    )Total
temporarily
impaired
securities
    
    $
    5,399,780
    
    
    $
    (19,207
    )
    
    $
    29,114,768
    
    
    $
    (940,095
    )
    
    $
    34,514,548
    
    
    $
    (959,302
    )
 Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedDescription of Securities
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesDecember 31, 2006:U.S. treasury
    
    $
    
    
    
    $
    
    
    
    $
    3,456,264
    
    
    $
    (413,049
    )
    
    $
    3,456,264
    
    
    $
    (413,049
    )U.S. government
agencies
    
    
    
    
    
    
    
    
    
    
    2,467,511
    
    
    
    (29,748
    )
    
    
    2,467,511
    
    
    
    (29,748
    )Mortgage-backed
securities
    
    
    2,848,852
    
    
    
    (31,943
    )
    
    
    31,441,688
    
    
    
    (996,149
    )
    
    
    34,290,540
    
    
    
    (1,028,092
    )State and
political
subdivisions
    
    
    1,555,034
    
    
    
    (18,653
    )
    
    
    3,836,070
    
    
    
    (77,773
    )
    
    
    5,391,104
    
    
    
    (96,426
    )Equity securities
    
    
    
    
    
    
    
    
    
    
    9,430
    
    
    
    (7,270
    )
    
    
    9,430
    
    
    
    (7,270
    )Total
temporarily
impaired
securities
    
    $
    4,403,886
    
    
    $
    (50,596
    )
    
    $
    41,210,963
    
    
    $
    (1,523,989
    )
    
    $
    45,614,849
    
    
    $
    (1,574,585
    )
  64




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Note 4: Loans and Allowance for Loan Losses
  2007
    
    
    2006Commercial and industrial
    
    $
    14,394,967
    
    
    $
    7,359,758Agricultural production financing
    
    
    19,875,471
    
    
    
    18,897,117Real estate construction
    
    
    4,166,338
    
    
    
    2,422,756Commercial and agricultural real estate
    
    
    78,710,673
    
    
    
    60,733,680Residential real estate
    
    
    91,544,319
    
    
    
    70,082,306Consumer
    
    
    27,723,211
    
    
    
    27,539,835Other
    
    
    1,526,258
    
    
    
    1,599,529Total loans
    
    
    237,941,237
    
    
    
    188,634,981LessUnearned discount and fees
    
    
    (994,205
    )
    
    
    (882,007
    )Undisbursed loans in process
    
    
    (429
    )
    
    
    (87,058
    )Allowance for loan losses
    
    
    (2,091,278
    )
    
    
    (2,222,355
    )Net loans
    
    $
    234,855,325
    
    
    $
    185,443,561
  2007
    
    
    2006
    
    
    2005Balance, beginning of year
    
    $
    2,222,355
    
    
    $
    2,662,450
    
    
    $
    2,300,452Provision charged to expense
    
    
    774,748
    
    
    
    230,000
    
    
    
    510,145Losses charged off, net of
recoveries of $89,267 for
2007, $102,794 for 2006 and
$90,198 for 2005
    
    
    (905,825
    )
    
    
    (670,095
    )
    
    
    (348,348
    )Allowance acquired through
business combination
    
    
    
    
    
    
    
    
    
    
    200,201Balance, end of year
    
    $
    2,091,278
    
    
    $
    2,222,355
    
    
    $
    2,662,450
   65




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
   Note 5: Premises and Equipment
  2007
    
    
    2006Land
    
    $
    1,112,339
    
    
    $
    1,098,339Buildings and improvements
    
    
    9,170,487
    
    
    
    9,028,432Leasehold improvements
    
    
    445,016
    
    
    
    445,016Equipment
    
    
    3,810,688
    
    
    
    3,646,23814,538,530
    
    
    
    14,218,025Less accumulated depreciation
    
    
    4,028,856
    
    
    
    3,201,493Net premises and equipment
    
    $
    10,509,674
    
    
    $
    11,016,532
 Note 6: Goodwill
    66




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Note 7: Core Deposit Intangibles
  2007
    
    
    2006Gross
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationCore
deposit intangibles
    
    $
    889,617
    
    
    $
    222,652
    
    
    $
    889,617
    
    
    $
    125,663
   2008
    
    $
    93,3482009
    
    
    89,7842010
    
    
    86,7412011
    
    
    85,1112012
    
    
    83,552
  67




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Note 8: Loan Servicing
  2007
    
    
    2006One-to-four family residential loansFHLMC
    
    $
    68,401,799
    
    
    $
    69,799,034IHDA
    
    
    11,976,977
    
    
    
    11,286,79080,378,776
    
    
    
    81,085,824Agricultural loansFarmer Mac
    
    
    249,610
    
    
    
    265,758Other investors
    
    
    5,883,794
    
    
    
    7,141,476Commercial loansOther financial institutions
    
    
    383,054
    
    
    
    $
    86,895,234
    
    
    $
    88,493,058
   2007
    
    
    2006
    
    
    2005Loan Servicing RightsBalance, beginning of year
    
    $
    351,114
    
    
    $
    462,341
    
    
    $
    780,828Servicing rights capitalized
    
    
    116,710
    
    
    
    131,100
    
    
    
    168,305Amortization of servicing rights
    
    
    (175,192
    )
    
    
    (242,327
    )
    
    
    (486,792
    )292,632
    
    
    
    351,114
    
    
    
    462,341Valuation allowance
    
    
    
    
    
    
    
    
    
    
    Balance, end of year
    
    $
    292,632
    
    
    $
    351,114
    
    
    $
    462,341
  68




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
  2007
    
    
    2006
    
    
    2005Balance, beginning of year
    
    $
    
    
    
    $
    
    
    
    $
    24,191Additions
    
    
    
    
    
    
    
    
    
    
    1,739Reductions
    
    
    
    
    
    
    
    
    
    
    (25,930
    )Direct write-downs
    
    
    
    
    
    
    
    
    
    
    Balance, end of year
    
    $
    
    
    
    $
    
    
    
    $
    
 Note 9: Interest-Bearing Deposits
   2008
    
    $
    113,566,9292009
    
    
    17,548,0422010
    
    
    8,928,3052011
    
    
    2,872,7892012
    
    
    2,291,572Thereafter
    
    
    1,086,700$
    146,294,337
 Note 10: Short-term Borrowings
  2007
    
    
    2006Federal funds purchased
    
    $
    2,700,000
    
    
    $
    Short term line of credit
    
    
    1,014,766
    
    
    
    Total short-term borrowings
    
    $
    3,714,766
    
    
    $
    
  69




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
  Note 11: Federal Home Loan Bank Advances and Other Debt
 2007
    
    
    2006Federal Home Loan Bank open
line of credit, variable
rate, 3.96% at December 31,
2007
    
    $
    8,000,000
    
    
    $
    Federal Home Loan Bank
advances, fixed rates
ranging from 3.12% to 5.32%
at December 31, 2007, due at
various dates through April
2017
    
    
    47,800,000
    
    
    
    32,800,000$
    55,800,000
    
    
    $
    32,800,000
   2008
    
    $
    3,800,0002011
    
    
    15,000,0002012
    
    
    5,000,000After 2012
    
    
    24,000,000$
    47,800,000
  70




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
 Note 12: Junior Subordinated Debentures
   Note 13: Income Taxes
  2007
    
    
    2006
    
    
    2005Taxes currently payableFederal
    
    $
    130,643
    
    
    $
    338,348
    
    
    $
    502,705State
    
    
    36,738
    
    
    
    
    
    
    
    Deferred income taxesFederal
    
    
    111,661
    
    
    
    (153,151
    )
    
    
    (291,959
    )State
    
    
    15,764
    
    
    
    53,665
    
    
    
    102,526Income tax expense
    
    $
    294,806
    
    
    $
    238,862
    
    
    $
    313,272
  71




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements
December 31, 2007 and 2006
  2007
    
    
    2006
    
    
    2005Computed at the statutory rate (34%)
    
    $
    459,151
    
    
    $
    460,595
    
    
    $
    530,729Increase (decrease) resulting fromTax exempt interest
    
    
    (95,097
    )
    
    
    (165,132
    )
    
    
    (198,900
    )State income taxes
    
    
    34,651
    
    
    
    35,419
    
    
    
    67,667Increase in cash surrender
value of life insurance
    
    
    (65,273
    )
    
    
    (61,761
    )
    
    
    (58,513
    )Other
    
    
    (38,626
    )
    
    
    (30,259
    )
    
    
    (27,711
    )Actual tax expense
    
    $
    294,806
    
    
    $
    238,862
    
    
    $
    313,272
  2007
    
    
    2006Deferred tax assetsAllowance for loan losses
    
    $
    812,021
    
    
    $
    862,879Reserve for uncollected interest
    
    
    3,875
    
    
    
    23,668Deferred compensation
    
    
    199,662
    
    
    
    167,422Unrealized losses on available-for-sale securities
    
    
    244,855
    
    
    
    436,152Net operating losses
    
    
    772,799
    
    
    
    858,166Other
    
    
    274,691
    
    
    
    175,1322,307,903
    
    
    
    2,523,419Deferred tax liabilitiesDepreciation
    
    
    (309,203
    )
    
    
    (301,836
    )Federal Home Loan Bank stock dividends
    
    
    (349,503
    )
    
    
    (349,503
    )Capitalized loan servicing rights
    
    
    (113,068
    )
    
    
    (134,354
    )Purchase accounting difference
    
    
    (163,526
    )
    
    
    (199,604
    )Other
    
    
    (171,101
    )
    
    
    (48,256
    )(1,106,401
    )
    
    
    (1,033,553
    )Net deferred tax asset
    
    $
    1,201,502
    
    
    $
    1,489,866
   72




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
  Note 14: Other Comprehensive Income (Loss)
  2007
    
    
    2006
    
    
    2005Unrealized gains (loss) on
available-for-sale securities
    
    $
    562,658
    
    
    $
    (10,754
    )
    
    $
    (1,664,047
    )Less reclassification adjustment for
realized gains included in income
    
    
    69,621
    
    
    
    12,106
    
    
    
    117,959493,037
    
    
    
    (22,860
    )
    
    
    (1,782,006
    )Defined benefit pension plan  net loss
    
    
    (78,247
    )
    
    
    
    
    
    
    Other comprehensive income
(loss), before tax effect
    
    
    414,790
    
    
    
    (22,860
    )
    
    
    (1,782,006
    )Tax expense (benefit)
    
    
    160,939
    
    
    
    (8,869
    )
    
    
    (701,356
    )Other comprehensive income (loss)
    
    $
    253,851
    
    
    $
    (13,991
    )
    
    $
    (1,080,650
    )
  2007
    
    
    2006Net unrealized loss on securities available-for-sale
    
    $
    (622,531
    )
    
    $
    (1,115,568
    )Defined benefit pension plan
    
    
    (78,247
    )
    
    
    (700,778
    )
    
    
    (1,115,568
    )Tax effect
    
    
    275,215
    
    
    
    436,154Net other comprehensive loss, net of taxes
    
    $
    (425,563
    )
    
    $
    (679,414
    )
  73




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Note 15: Stockholders Equity
     To Be Well CapitalizedFor Capital Adequacy
    
    
    Under Prompt CorrectiveActual
    
    
    Purposes
    
    
    Action ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(dollars in thousands)As of December 31, 2007Total capital

(to risk-weighted assets)
    
    $
    33,325
    
    
    
    14.5
    %
    
    $
    18,366
    
    
    
    8.0
    %
    
    $
    22,958
    
    
    
    10.0
    %Tier I capital

(to risk-weighted assets)
    
    
    31,234
    
    
    
    13.6
    
    
    
    9,183
    
    
    
    4.0
    
    
    
    13,775
    
    
    
    6.0Tier I capital
(to average assets)
    
    
    31,234
    
    
    
    10.1
    
    
    
    12,414
    
    
    
    4.0
    
    
    
    15,517
    
    
    
    5.0As of December 31, 2006Total capital

(to risk-weighted assets)
    
    $
    32,492
    
    
    
    17.1
    %
    
    $
    15,213
    
    
    
    8.0
    %
    
    $
    19,016
    
    
    
    10.0
    %Tier I capital

(to risk-weighted assets)
    
    
    30,270
    
    
    
    15.9
    
    
    
    7,606
    
    
    
    4.0
    
    
    
    11,410
    
    
    
    6.0Tier I capital

(to average assets)
    
    
    30,270
    
    
    
    10.4
    
    
    
    11,679
    
    
    
    4.0
    
    
    
    14,598
    
    
    
    5.0
  74




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
  Note 16: Related Party Transactions
   Balance, January 1, 2007
    
    $
    658,603Change in composition of related parties
    
    
    627,562New loans, including renewals
    
    
    251,642Payments, etc., including renewals
    
    
    (219,806
    )Balance, December 31, 2007
    
    $
    1,318,001
  Note 17: Employee Benefit Plans
   75




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
      Note 18: Employee Stock Ownership Plan
    76




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
  2007
    
    
    2006
    
    
    2005Allocated shares
    
    
    205,254
    
    
    
    174,846
    
    
    
    144,438Shares released for allocation
    
    
    
    
    
    
    
    
    
    
    Unreleased shares
    
    
    38,086
    
    
    
    68,494
    
    
    
    98,902Total ESOP shares
    
    
    243,340
    
    
    
    243,340
    
    
    
    243,340Fair value of unreleased
shares at December 31
    
    $
    405,235
    
    
    $
    808,229
    
    
    $
    1,211,550
  Note 19: Incentive Plan
    77




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
  2007Weighted-AverageGrant-DateShares
    
    
    Fair ValueNonvested, beginning of year
    
    
    61,676
    
    
    $
    11.51Granted
    
    
    Vested
    
    
    13,498
    
    
    
    8.00Forfeited
    
    
    Nonvested, end of year
    
    
    48,178
    
    
    $
    12.49
   Note 20: Stock Option Plan
   78




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
   2007Weighted-AverageWeighted-
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateShares
    
    
    Exercise Price
    
    
    Term
    
    
    Intrinsic ValueOutstanding, beginning
of year
    
    
    289,974
    
    
    $
    9.87Granted
    
    
    
    
    
    
    Exercised
    
    
    500
    
    
    
    9.87Forfeited or expired
    
    
    
    
    
    
    Outstanding, end of year
    
    
    289,474
    
    
    $
    9.87
    
    
    5.3 years
    
    
    $
    222,895Exercisable, end of year
    
    
    289,474
    
    
    $
    9.87
    
    
    5.3 years
    
    
    $
    222,895
   79




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Note 21: Leases
   2008
    
    $
    308,3142009
    
    
    142,7902010
    
    
    18,2762011
    
    
    3,2632012
    
    
    804Total minimum lease payments
    
    $
    473,447
 Note 22: Earnings Per Share
  Year Ended December 31, 2007Weighted-
    
    
    Per ShareIncome
    
    
    Average Shares
    
    
    AmountNet income
    
    $
    1,055,638
    
    
    
    2,146,063Basic earnings per shareIncome available to common
stockholders
    
    
    
    
    
    
    
    
    
    $
    .49Effect of dilutive securitiesStock options
    
    
    
    
    
    
    28,793Unearned incentive plan shares
    
    
    
    
    
    
    59,285Diluted earnings per shareIncome available to common
stockholders and assumed
conversions
    
    $
    1,055,638
    
    
    
    2,234,141
    
    
    $
    .47
  80




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Year Ended December 31, 2006Weighted-
    
    
    Per ShareIncome
    
    
    Average Shares
    
    
    AmountNet income
    
    $
    1,115,829
    
    
    
    2,207,980Basic earnings per shareIncome available to common
stockholders
    
    
    
    
    
    
    
    
    
    $
    .51Effect of dilutive securitiesStock options
    
    
    
    
    
    
    39,003Unearned incentive plan shares
    
    
    
    
    
    
    66,999Diluted earnings per shareIncome available to common
stockholders and assumed
conversions
    
    $
    1,115,829
    
    
    
    2,313,982
    
    
    $
    .48
 Year Ended December 31, 2005Weighted-
    
    
    Per ShareIncome
    
    
    Average Shares
    
    
    AmountNet income
    
    $
    1,247,695
    
    
    
    2,237,853Basic earnings per shareIncome available to common
stockholders
    
    
    
    
    
    
    
    
    
    $
    0.56Effect of dilutive securitiesStock options
    
    
    
    
    
    
    52,146Unearned incentive plan shares
    
    
    
    
    
    
    87,132Diluted earnings per shareIncome available to common
stockholders and assumed
conversions
    
    $
    1,247,695
    
    
    
    2,377,131
    
    
    $
    0.52
  81




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Note 23: Acquisition
  Cash and cash equivalents
    
    $
    1,972,552Securities
    
    
    9,503,128Loans, net of allowance for loan losses of $200,201
    
    
    14,504,337Premises and equipment
    
    
    1,387,844Federal Home Loan Bank stock
    
    
    2,120,800Foreclosed assets held for sale, net
    
    
    640,136Interest receivable
    
    
    162,955Deferred income taxes
    
    
    600,337Goodwill
    
    
    541,474Core deposit intangibles
    
    
    422,128Other assets
    
    
    179,801Total assets acquired
    
    
    32,035,492Deposits
    
    
    26,736,981Federal Home Loan Bank advances
    
    
    700,000Other liabilities
    
    
    292,519Total liabilities assumed
    
    
    27,729,500Net assets acquired
    
    $
    4,305,992
   82




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Note 24: Disclosures about Fair Value of Financial Instruments
  December 31, 2007
    
    
    December 31, 2006Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    ValueFinancial assetsCash and cash equivalents
    
    $
    10,339,366
    
    
    $
    10,339,366
    
    
    $
    28,791,349
    
    
    $
    28,791,349Available-for-sale securities
    
    
    48,628,669
    
    
    
    48,628,669
    
    
    
    64,515,293
    
    
    
    64,515,293Held-to-maturity securities
    
    
    5,330,817
    
    
    
    5,284,368
    
    
    
    4,779,948
    
    
    
    4,661,650Loans held for sale
    
    
    393,900
    
    
    
    393,900
    
    
    
    835,904
    
    
    
    835,904Loans, net allowance of loan
losses
    
    
    234,855,325
    
    
    
    237,057,800
    
    
    
    185,443,561
    
    
    
    185,796,000Federal Home Loan Bank stock
    
    
    3,748,855
    
    
    
    3,748,855
    
    
    
    3,748,855
    
    
    
    3,748,855Interest receivable
    
    
    3,511,478
    
    
    
    3,511,478
    
    
    
    2,919,235
    
    
    
    2,919,235Financial liabilitiesDeposits
    
    
    232,138,733
    
    
    
    231,820,000
    
    
    
    242,603,081
    
    
    
    242,728,000Short-term borrowings
    
    
    3,714,766
    
    
    
    3,714,766
    
    
    
    
    
    
    
    Federal Home Loan Bank
advances
    
    
    55,800,000
    
    
    
    56,416,000
    
    
    
    32,800,000
    
    
    
    32,881,00Junior subordinated
debentures
    
    
    6,186,000
    
    
    
    6,291,224
    
    
    
    6,186,000
    
    
    
    6,084,000Pass through payments
received on loans sold
    
    
    84,946
    
    
    
    84,946
    
    
    
    122,282
    
    
    
    122,282Advances by borrowers for
taxes and insurance
    
    
    131,933
    
    
    
    131,933
    
    
    
    148,051
    
    
    
    148,051Interest payable
    
    
    915,955
    
    
    
    915,955
    
    
    
    929,094
    
    
    
    929,094Unrealized financial instruments
(net of contract amount)Commitments to originate
loans
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Lines of credit
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
  83




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
  Cash and Cash Equivalents, Interest Receivable and Federal Home Loan Bank Stock
  Securities
  Loans Held for Sale
  Loans
  Deposits
 i.e.
 Federal Home Loan Bank Advances and Junior Subordinated Debentures
  Short-term Borrowings, Pass Through Payments Received on Loan Sold and Advances by Borrowers for
Taxes and Insurance, and Interest Payable
   84




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Commitments to Originate Loans and Lines of Credit
  Note 25: Significant Estimates and Concentrations
  Note 26: Commitments, Credit Risk, and Contingent Liabilities
  Commitments to Originate Loans
   85




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
  Lines of Credit
   Other Credit Risks and Contingent Liabilities
  Note 27: Future Changes in Accounting Principles
 Fair Value Measurements
  86




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 The Fair Value Option for Financial
Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115
 Business Combinations
 Non-controlling Interest in
Consolidated Financial Statements  an amendment of ARB No. 51
  87




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Note 28: Condensed Financial Information (Parent Company Only)
  Condensed Balance Sheets
 December 31,2007
    
    
    2006AssetsCash and due from banks
    
    $
    525
    
    
    $
    350Interest bearing demand deposits
    
    
    35,716
    
    
    
    139,268Total cash and cash equivalents
    
    
    36,241
    
    
    
    139,618Available-for-sale securities
    
    
    104,391
    
    
    
    101,762ESOP loan to subsidiaries
    
    
    220,105
    
    
    
    395,837Premises and equipment
    
    
    152,240
    
    
    
    152,240Investment in consolidated subsidiaries:First Bank & Trust, S.B.
    
    
    32,163,817
    
    
    
    31,099,161ECS Service Corporation
    
    
    279,368
    
    
    
    331,999First Charter Service Corporation
    
    
    74,749
    
    
    
    74,340Investment in FBTC Statutory Trust
    
    
    186,000
    
    
    
    186,000Cash surrender value of life insurance
    
    
    71,665
    
    
    
    68,478Other assets
    
    
    435,243
    
    
    
    317,777Total assets
    
    $
    33,723,819
    
    
    $
    32,867,212LiabilitiesJunior subordinated debentures
    
    $
    6,186,000
    
    
    $
    6,186,000Short-term borrowings
    
    
    1,014,766
    
    
    
    Other liabilities
    
    
    22,244
    
    
    
    25,346Total liabilities
    
    
    7,223,010
    
    
    
    6,211,346Stockholders Equity
    
    
    26,500,809
    
    
    
    26,655,866Total liabilities and stockholders equity
    
    $
    33,723,819
    
    
    $
    32,867,212
  88




---



##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Condensed Statements of Income
 Year Ending December 31,2007
    
    
    2006
    
    
    2005IncomeDividends from First Bank & Trust, S.B.
    
    $
    1,100,000
    
    
    $
    1,400,000
    
    
    $
    150,000Dividends from ECS Service Corporation
    
    
    125,000
    
    
    
    50,000
    
    
    
    Interest and dividend income
    
    
    44,753
    
    
    
    51,398
    
    
    
    71,830Net realized gains on sales of
available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    117,959Other income
    
    
    3,188
    
    
    
    3,399
    
    
    
    113Total income
    
    
    1,272,941
    
    
    
    1,504,797
    
    
    
    339,902Expenses-Other
    
    
    774,812
    
    
    
    797,272
    
    
    
    564,200Income (Loss) Before Income Tax and Equity
in Undistributed Income of Subsidiaries
    
    
    498,129
    
    
    
    707,525
    
    
    
    (224,298
    )Income Tax Benefit
    
    
    (274,504
    )
    
    
    (305,340
    )
    
    
    (147,331
    )Income (Loss) Before Equity in
Undistributed Income of Subsidiaries
    
    
    772,633
    
    
    
    1,012,865
    
    
    
    (76,967
    )Equity in Undistributed Income of
Subsidiaries
    
    
    283,005
    
    
    
    102,964
    
    
    
    1,324,662Net Income
    
    $
    1,055,638
    
    
    $
    1,115,829
    
    
    $
    1,247,695
  89




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##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Condensed Statements of Cash Flows
 Year Ending December 31,2007
    
    
    2006
    
    
    2005Operating ActivitiesNet income
    
    $
    1,055,638
    
    
    $
    1,115,829
    
    
    $
    1,247,695Items not requiring (providing) cashNet realized gains on
available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    (117,959
    )Equity in undistributed income of
subsidiaries
    
    
    (283,005
    )
    
    
    (102,964
    )
    
    
    (1,324,662
    )Changes inOther assets
    
    
    (121,146
    )
    
    
    (160,947
    )
    
    
    (68,171
    )Other liabilities
    
    
    (3,103
    )
    
    
    473
    
    
    
    13,735Net cash provided by (used in)
operating activities
    
    
    648,384
    
    
    
    852,391
    
    
    
    (249,362
    )Investing ActivitiesNet change in ESOP loan
    
    
    175,732
    
    
    
    175,733
    
    
    
    175,733Purchases of available-for-sale securities
    
    
    (1,358
    )
    
    
    (35,834
    )
    
    
    (185,945
    )Proceeds from the sales of
available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    985,299Purchase of premises and equipment
    
    
    
    
    
    
    
    
    
    
    (152,240
    )Investment in FBTC Statutory Trust
    
    
    
    
    
    
    
    
    
    
    (186,000
    )Purchase of Rantoul First Bank, SB
    
    
    
    
    
    
    
    
    
    
    (4,305,992
    )Net cash provided by (used in)
investing activities
    
    
    174,374
    
    
    
    139,899
    
    
    
    (3,669,145
    )Financing ActivitiesPurchase of treasury stock
    
    
    (1,416,296
    )
    
    
    (684,334
    )
    
    
    (1,639,297
    )Dividends paid
    
    
    (529,666
    )
    
    
    (542,548
    )
    
    
    (581,970
    )Net change in short-term borrowings
    
    
    1,014,766
    
    
    
    
    
    
    
    Issuance of long-term debt
    
    
    
    
    
    
    
    
    
    
    6,186,000Exercise of stock options
    
    
    4,935
    
    
    
    98,700
    
    
    
    41,454Tax benefit related to stock options
exercised
    
    
    126
    
    
    
    8,320
    
    
    
    4,941Net cash provided by (used in)
financing activities
    
    
    (926,135
    )
    
    
    (1,119,862
    )
    
    
    4,011,128Net Change in Cash and Cash Equivalents
    
    
    (103,377
    )
    
    
    (127,572
    )
    
    
    92,621Cash and Cash Equivalents at Beginning of Year
    
    
    139,618
    
    
    
    267,190
    
    
    
    174,569Cash and Cash Equivalents at End of Year
    
    $
    36,241
    
    
    $
    139,618
    
    
    $
    267,190
  90




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##### 



First BancTrust Corporation
Notes to Consolidated Financial Statements  December 31, 2007 and 2006
 Note 29: Quarterly Financial Information
  Quarter EndedDecember 31
    
    
    September 30
    
    
    June 30
    
    
    March 31(In thousands, except share data)2007Net interest income
    
    $
    2,105
    
    
    $
    2,210
    
    
    $
    1,975
    
    
    $
    1,924Provision for loan losses
    
    
    329
    
    
    
    182
    
    
    
    132
    
    
    
    132Noninterest income
    
    
    966
    
    
    
    956
    
    
    
    1,011
    
    
    
    850Noninterest expense
    
    
    2,545
    
    
    
    2,355
    
    
    
    2,508
    
    
    
    2,464Income before income tax
    
    
    197
    
    
    
    629
    
    
    
    346
    
    
    
    178Net income
    
    
    179
    
    
    
    442
    
    
    
    268
    
    
    
    167Basic earnings per share
    
    
    0.08
    
    
    
    0.21
    
    
    
    0.12
    
    
    
    0.08Diluted earnings per share
    
    
    0.08
    
    
    
    0.20
    
    
    
    0.12
    
    
    
    0.072006Net interest income
    
    $
    1,950
    
    
    $
    1,992
    
    
    $
    1,948
    
    
    $
    2,017Provision for loan losses
    
    
    67
    
    
    
    68
    
    
    
    50
    
    
    
    45Noninterest income
    
    
    848
    
    
    
    897
    
    
    
    931
    
    
    
    785Noninterest expense
    
    
    2,351
    
    
    
    2,491
    
    
    
    2,452
    
    
    
    2,489Income before income tax
    
    
    380
    
    
    
    330
    
    
    
    377
    
    
    
    268Net income
    
    
    336
    
    
    
    272
    
    
    
    281
    
    
    
    227Basic earnings per share
    
    
    0.16
    
    
    
    0.12
    
    
    
    0.13
    
    
    
    0.10Diluted earnings per share
    
    
    0.14
    
    
    
    0.12
    
    
    
    0.12
    
    
    
    0.10
  91




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##### 



FIRST BANCTRUST CORPORATION
SHAREHOLDER INFORMATION
 Stock Listing and Price Information
   Quarter Ended:
    
    High
    
    
    LowMarch 31, 2005
    
    
    12.89
    
    
    
    11.71June, 30 2005
    
    
    12.65
    
    
    
    10.85September 30, 2005
    
    
    12.90
    
    
    
    12.59December 31, 2005
    
    
    12.90
    
    
    
    11.95March 31, 2006
    
    
    13.49
    
    
    
    11.63June, 30 2006
    
    
    12.23
    
    
    
    10.95September 30, 2006
    
    
    12.20
    
    
    
    11.35December 31, 2006
    
    
    12.00
    
    
    
    11.02March 31, 2007
    
    
    12.15
    
    
    
    11.54June, 30 2007
    
    
    12.13
    
    
    
    11.59September 30, 2007
    
    
    11.79
    
    
    
    10.50December 31, 2007
    
    
    11.28
    
    
    
    9.51
  Date Declared
    
    Record Date
    
    Payment Date
    
    AmountFebruary 10, 2005
    
    February 25, 2005
    
    March 8, 2005
    
    $
    0.06May 12, 2005
    
    June 3, 2005
    
    June 14, 2005
    
    $
    0.06August 11, 2005
    
    August 26, 2005
    
    September 9, 2005
    
    $
    0.06November 10, 2005
    
    December 2, 2005
    
    December 16, 2005
    
    $
    0.06February 9, 2006
    
    February 21, 2006
    
    March 6, 2006
    
    $
    0.06May 11, 2006
    
    June 5, 2006
    
    June 14, 2006
    
    $
    0.06August 10, 2006
    
    September 1, 2006
    
    September 15, 2006
    
    $
    0.06November 9, 2006
    
    December 4, 2006
    
    December 15, 2006
    
    $
    0.06February 15, 2007
    
    February 21, 2007
    
    March 7, 2007
    
    $
    0.06May 10, 2007
    
    June 1, 2007
    
    June 14, 2007
    
    $
    0.06August 9, 2007
    
    September 7, 2007
    
    September 14, 2007
    
    $
    0.06November 8, 2007
    
    December 7, 2007
    
    December 14, 2007
    
    $
    0.06
  92




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##### 



First Banc Trust Corporation
 
 Period EndingIndex
    
    
    12/31/02
    
    
    
    12/31/03
    
    
    
    12/31/04
    
    
    
    12/31/05
    
    
    
    12/31/06
    
    
    
    12/31/07First BancTrust Corporation
    
    
    
    100.00
    
    
    
    
    145.43
    
    
    
    
    142.25
    
    
    
    
    146.93
    
    
    
    
    141.53
    
    
    
    
    127.62NASDAQ Composite
    
    
    
    100.00
    
    
    
    
    150.01
    
    
    
    
    162.89
    
    
    
    
    165.13
    
    
    
    
    180.85
    
    
    
    
    198.60S&P Small Cap Bank Index
    
    
    
    100.00
    
    
    
    
    134.07
    
    
    
    
    161.38
    
    
    
    
    145.95
    
    
    
    
    152.11
    
    
    
    
    104.06
 Source : SNL Financial LC, Charlottesville, VA
    
    (434) 977-1600© 2008
    
    www.snl.com
  93




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##### 



Annual Report on Form 10-K
  Special Regulatory Counsel
 
 Independent Accountants
 
 Annual Meeting of Stockholders
  
 Transfer Agent
  
  94




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##### 



DIRECTORS
 JOHN W. WELBORN
    
    TERRY T. HUTCHISONChairman of the
Board; Retired
Facilities Manager,
TRW, Inc., Marshall,
Illinois
    
    Self-employed Business Consultant, Paris, IllinoisJOSEPH R. SCHROEDER
    
    DAVID W. DICKAttorney in private
practice with the
law firm of Bennett,
Schroeder & Wieck,
Marshall, Illinois
    
    Senior Partner Gladding & Dick Insurance; agents
for Country Insurance and Financial Services,
Bloomington, Illinois; Illinois licensed embalmer
and funeral directorVICK N. BOWYER
    
    JOHN P. GRAHAMCo-owner and
registered principal
of Linsco/Private
Ledger Branch, a
registered
broker-dealer,
Marshall, Illinois
    
    Director of Accounting, Regency Associates,
Champaign, IllinoisJAMES D. MOTLEY
    
    TERRY J. HOWARDSelf employed owner
of accounting firm
James D. Motley,
C.P.A., Paris,
Illinois
    
    President and Chief Executive Officer of the
Company and First Bank
 EXECUTIVE OFFICERS
 TERRY J. HOWARD
    
    DAVID F. SULLIVANDirector, President and Chief Executive Officer of
the Company and First Bank & Trust, s.b.
    
    Vice President of the Company and President of
First Bank of Paris, a branch of First Bank &
Trust, s.b.ELLEN M. LITTERAL
    
    LARRY W. STROHMChief Financial Officer and Treasurer of the Company
and Senior Vice President of First Bank & Trust,
s.b.
    
    Vice President of the Company and President of
First Bank of Marshall, a branch of First Bank &
Trust, s.b.JACK R. FRANKLIN
    
    ADAM YEAZELSr. Vice President of the Company and Chief Operating
Officer of First Bank & Trust, s.b.
    
    President of First Bank of Savoy, a branch of First
Bank & Trust, s.b.THOMAS H. TRACYChief Credit Officer, First Bank & Trust, s.b.
 BANKING LOCATIONS
 MAIN OFFICE
 
 BRANCH OFFICES
 610 North Michigan Avenue
    
    1251 Woodfield DriveMarshall, Illinois 62441
    
    Savoy, Illinois 61874(217) 826-6308
    
    (217) 351-35261500 East Grove Avenue
    
    10 East CumberlandRantoul, Illinois 61866
    
    Martinsville, Illinois 62442(217) 893-8100
    
    (217) 382-3430826 West Champaign
    
    Community FinanceRantoul, Illinois 61866
    
    208 West Washington St(217) 892-9111
    
    Paris, Illinois 61944(217) 465-5626
  95