FIRST MID BANCSHARES, INC.
For the period ended Mar 31, 2025. Filed May 9, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
FMBH$50.61-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000950170-24-123741
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000950170-25-067613
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSForward-Looking StatementsOverviewCritical Accounting Policies and Use of Significant EstimatesResults of Consolidated OperationsAnalysis of Consolidated Balance SheetsInterest Rate SensitivityCapital ResourcesStock PlansLiquidityOff-Balance Sheet ArrangementsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 189 previous paragraphs and 133 current paragraphs.
53 unchanged; 73 reworded; 7 added; 60 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 25 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
During the first quarter 2025, the Company changed the methodology utilized for the calculation of net interest margin to be more consistent with what is typically used by peer banks and research analysts. The calculation now is the annualized net interest income on a tax equivalent basis divided by average interest earning assets.
Current report
Average securities sold under agreements to repurchase decreased by $62.9 million or 23.8%.
Current report
$28.5 million (representing 140 loans) for the three months ended March 31, 2025.
Current report
$10.6 million (representing 77 loans) for the three months ended March 31, 2024.
Current report
Other income decreased due to a loss recognized on the repayment of the Company's subordinated debentures shown as offsetting the company's other income and numerous other miscellaneous decreases.
Current report
The increase in occupancy and equipment and legal and professional fees expenses are primarily due to nonrecurring technology project expenses in the first quarter of 2025.
Current report
ATM/Debit card expense increased primarily due to a negotiated settlement from a related vendor resulting in a credit during the first quarter of 2024.
Removed paragraphs (60)
Previous report
Forward-Looking Statements
Previous report
Overview
Previous report
On March 27, 2020, the federal banking regulatory agencies, issued an interim final rule which provided an option to delay the estimated impact on regulatory capital of ASU 2016-13, which was effective January 1, 2020. The initial impact of adoption of ASU 2016-13, as well as 25% of the quarterly increases in the allowance for credit losses subsequent to adoption of ASU 2016-13 ("CECL adjustments"), was be delayed for two years. The cumulative amount of these adjustments is being phased out of the regulatory capital calculation over a three-year period, with 75% of the adjustments included in 2022, 50% of the adjustments included in 2023 and 25% of the adjustments included in 2024. After five years, the temporary delay of ASU 2016-13 adoption will be fully reversed. The Company has elected this option.
Previous report
Investment in Debt and Equity Securities. The Company classifies its investments in debt and equity securities as either held-to-maturity or available-for-sale in accordance with Statement of Financial Accounting Standards (SFAS) No. 115,“Accounting for Certain Investments in Debt and Equity Securities,”which was codified into ASC 320. Securities classified as held-to-maturity are recorded at amortized cost. Available-for-sale securities are carried at fair value. Fair value calculations are based on quoted market prices when such prices are available. If quoted market prices are not available, estimates of fair value are computed using a variety of techniques, including extrapolation from the quoted prices of similar instruments or recent trades for thinly traded securities, fundamental analysis, or through obtaining purchase quotes. Due to the subjective nature of the valuation process, it is possible that the actual fair values of these investments could differ from the estimated amounts, thereby affecting the financial position, results of operations and cash flows of the Company.
Previous report
If the estimated value of investments is less than the cost or amortized cost, the Company evaluates whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment. If such an event or change has occurred and the Company determines that the impairment is other-than-temporary, a further determination is made as to the portion of impairment that is related to credit loss. The impairment of the investment that is related to the credit loss is expensed in the period in which the event or change occurred. The remainder of the impairment is recorded in other comprehensive income (loss).
Previous report
Loans. Loans are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase discounts and premiums, fair value hedge accounting adjustments and deferred loan fees and costs. Accrued interest is reported separately and is included in interest receivable in the consolidated balance sheets.
Previous report
Allowance for Credit Losses - Loans. The Company believes the allowance for credit losses for loans is the critical accounting policy that requires the most significant judgments and assumptions used in the preparation of its consolidated financial statements. The allowance for credit losses for loans represents the best estimate of losses inherent in the existing loan portfolio. An estimate of potential losses inherent in the loan portfolio are determined and an allowance for those losses is established by considering factors including historical loss rates, expected cash flows and estimated collateral values. In assessing these factors, the Company uses relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts.
Previous report
To determine the allowance, the loan portfolio is segmented based on similar risk characteristics. The allowance for credit losses is estimated using a discounted cash flow (DCF) methodology. The DCF projects future cash flows over the life of the loan portfolio. Probability of default (PD) and loss given default (LGD) are key components in calculating expected losses in this model. The PD is forecasted using a regression model that determines the likelihood of default with a forward-looking forecast of unemployment rates. The LGD is the percentage of defaulted loans that is ultimately charged off. The allowance is calculated as the net present value of the expected cash flows less the amortized cost basis of the loans. Prior to 2022, the allowance for credit losses was measured on a collective (pool) basis for non-individually evaluated loans with similar risk characteristics. Historical credit loss experience provided the basis for the estimate of expected credit losses. Adjustments to expected losses are made using qualitative factors for relevant to each loan segment including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. In addition, a forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period.
Previous report
The Company estimates the appropriate level of allowance for credit losses for individually evaluated loans by evaluating them separately. A specific allowance is assigned to an impaired loan when expected cash flows or collateral are less than the carrying amount of the loan.
Previous report
Allowance for Credit Losses - Off-Balance Sheet Credit Exposures. The Company estimates expected credit losses over the contractual period that the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is included in other liabilities in the consolidated balance sheets.
Previous report
Other Real Estate Owned. Other real estate owned acquired through loan foreclosure is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for loan losses. Due to the subjective nature of establishing the fair value when the asset is acquired, the actual fair value of the other real estate owned or foreclosed asset could differ from the original estimate. If it is determined that fair value temporarily declines subsequent to foreclosure, a valuation allowance is recorded through noninterest expense.
Previous report
Operating costs associated with the assets after acquisition are also recorded as noninterest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other noninterest expense.
Previous report
Mortgage Servicing Rights. The Company has elected to record mortgage servicing rights under the amortization method. Using this method, servicing rights are amortized in proportion to and over the period of estimated net servicing income. The amortized assets are assessed for impairment based on fair value at each reporting date. Impairment is determined by stratifying rights into tranches based on predominant characteristics, such as interest rate, loan type and investor type.
Previous report
Impairment is recognized through a valuation reserve, to the extent that fair value is less than the carrying amount of the servicing assets. Fair value in excess of the carrying amount of servicing assets is not recognized.
Previous report
Deferred Income Tax Assets/Liabilities. The Company’s net deferred income tax asset arises from differences in the dates that items of income and expense enter our reported income and taxable income. Deferred tax assets and liabilities are established for these items as they arise. From an accounting standpoint, deferred tax assets are reviewed to determine if they are realizable based on the historical level of taxable income, estimates of future taxable income and the reversals of deferred tax liabilities. In most cases, the realization of the deferred tax asset is based on future profitability. If the Company were to experience net operating losses for tax purposes in a future period, the realization of deferred tax assets would be evaluated for a potential valuation reserve.
Previous report
Additionally, the Company reviews its uncertain tax positions annually under FASB Interpretation No. 48 (FIN No. 48), “Accounting for Uncertainty in Income Taxes,” codified within ASC 740. An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be recognized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. A significant amount of judgment is applied to determine both whether the tax position meets the "more likely than not" test as well as to determine the largest amount of tax benefit that is greater than 50% likely to be recognized. Differences between the position taken by management and that of taxing authorities could result in a reduction of a tax benefit or increase to tax liability, which could adversely affect future income tax expense.
Previous report
Impairment of Goodwill and Intangible Assets. Core deposit and customer relationships, which are intangible assets with a finite life, are recorded on the Company’s consolidated balance sheets. These intangible assets were capitalized as a result of past acquisitions and are being amortized over their estimated useful lives of up to 15 years. Core deposit intangible assets, with finite lives will be tested for impairment when changes in events or circumstances indicate that its carrying amount may not be recoverable. Core deposit intangible assets were tested for impairment as of September 30, 2024 as part of the goodwill impairment test and no impairment was identified.
Previous report
As a result of the Company’s acquisition activity, goodwill, an intangible asset with an indefinite life, is reflected on the consolidated balance sheets. Goodwill is evaluated for impairment annually, unless there are factors present that indicate a potential impairment, in which case, the goodwill impairment test is performed more frequently than annually.
Previous report
Fair Value Measurements. The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company estimates the fair value of a financial instrument using a variety of valuation methods. Where financial instruments are actively traded and have quoted market prices, quoted market prices are used for fair value. When the financial instruments are not actively traded, other observable market inputs, such as quoted prices of securities with similar characteristics, may be used, if available, to determine fair value. When observable market prices do not exist, the Company estimates fair value. The Company’s valuation methods consider factors such as liquidity and concentration concerns. Other factors such as model assumptions, market dislocations, and unexpected correlations can affect estimates of fair value. Imprecision in estimating these factors can impact the amount of revenue or loss recorded.
Previous report
SFAS No. 157, “Fair Value Measurements”, which was codified into ASC 820, establishes a framework for measuring the fair value of financial instruments that considers the attributes specific to particular assets or liabilities and establishes a three-level hierarchy for determining fair value based on the transparency of inputs to each valuation as of the fair value measurement date.
Previous report
The three levels are defined as follows:
Previous report
Level 1 — quoted prices (unadjusted) for identical assets or liabilities in active markets.
Previous report
Level 2 — inputs include quoted prices for similar assets and liabilities in active markets, quoted prices of identical or similar assets or liabilities in markets that are not active, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Previous report
Level 3 — inputs that are unobservable and significant to the fair value measurement.
Previous report
At the end of each quarter, the Company assesses the valuation hierarchy for each asset or liability measured. From time to time, assets or liabilities may be transferred within hierarchy levels due to changes in availability of observable market inputs to measure fair value at the measurement date. Transfers into or out of hierarchy levels are based upon the fair value at the beginning of the reporting period. A more detailed description of the fair values measured at each level of the fair value hierarchy can be found in Note 7 – Fair Value of Assets and Liabilities.
Previous report
Results of Consolidated Operations
Previous report
Net Interest Income
Previous report
Average securities sold under agreements to repurchase increased by $0.9 million or 0.4%.
Previous report
Provision for Loan Losses
Previous report
Other Income
Previous report
Fees from service charges increased during the first nine months of 2024 primarily due to the acquisition of Blackhawk Bank in the third quarter of 2023.
Previous report
Net losses from the sale of securities during 2024 were $0.4 million compared to net gains in 2023 of $3.3 million. The Company sold 37 securities during the nine months ended September 30, 2024 with the intent to replace them with higher yielding assets and restructured the balance sheet of Blackhawk Bank after the acquisition in 2023.
Previous report
$100.5 million (representing 579 loans) for the nine months ended September 30, 2024.
Previous report
$45.5 million (representing 318 loans) for the nine months ended September 30, 2023.
Previous report
Other income increased primarily due to gains recognized on the repayment of the Company's subordinated debentures being partially offset by late charges on loans being presented as interest income starting in 2024.
Previous report
Other Expense
Previous report
The increase in occupancy and equipment expense was primarily due to the acquisition of Blackhawk Bank during the third quarter of 2023.
Previous report
The decrease in net other real estate owned expense for the nine month period was primarily due to significantly less write downs of other real estate owned compared to the same period in 2023.
Previous report
Expense for amortization of intangible assets increased for the nine months ended September 30, 2024 compared to 2023. Core deposit intangibles and mortgage servicing rights increased due to the acquisition of Blackhawk Bank during the third quarter of 2023. In addition, PGIB was acquired in the second quarter of 2023 and MRIG was acquired in the third quarter of 2024.
Showing the first 40 of 60 passages. Open the source sections for the rest.
Reworded paragraphs (73)
Previous wording
The following discussion and analysis is intended to provide a better understanding of the consolidated financial condition and results of operations of the Company and its subsidiaries as of, and for the three and nine months ended September 30, 2024 and 2023. This discussion and analysis should be read in conjunction with the consolidated financial statements, related notes and selected financial data appearing elsewhere in this report.
Current wording
The following discussion and analysis is intended to provide a better understanding of the consolidated financial condition and results of operations of the Company and its subsidiaries as of, and for the three months ended March 31, 2025 and 2024. This discussion and analysis should be read in conjunction with the consolidated financial statements, related notes and selected financial data appearing elsewhere in this report.
Previous wording
This document may contain certain forward-looking statements about First Mid, such as discussions of First Mid’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid, are identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, the possibility that any of the anticipated benefits of the merger between First Mid and Blackhawk will not be realized or will not be realized within the expected time period; changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative and/or regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mid’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; accounting principles, policies and guidelines. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mid’s financial results, are included in First Mid’s filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.
Current wording
This document may contain certain forward-looking statements about First Mid, such as discussions of First Mid’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid, are identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, the possibility that any of the anticipated benefits of the acquisition of Mid Rivers Insurance Group, Inc. or of the merger between First Mid and Blackhawk will not be realized or will not be realized within the expected time period; changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative and/or regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mid’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; accounting principles, policies and guidelines. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mid’s financial results, are included in First Mid’s filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.
Previous wording
Net income was $59.7 million and $50.9 million for the nine months ended September 30, 2024 and 2023, respectively. Diluted net income per common share was $2.49 and $2.40 for the nine months ended September 30, 2024 and 2023, respectively.
Current wording
Net income was $22.2 million and $20.5 million for the three months ended March 31, 2025 and 2024, respectively. Diluted net income per common share was $0.93 and $0.86 for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
The following table shows the Company’s annualized performance ratios for nine months ended September 30, 2024 and 2023, compared to the performance ratios for the year ended December 31, 2023:
Current wording
The following table shows the Company’s annualized performance ratios for three months ended March 31, 2025 and 2024, compared to the performance ratios for the year ended December 31, 2024:
Previous wording
Total assets were $7.6 billion at September 30, 2024, compared to $7.6 billion as of December 31, 2023. From December 31, 2023 to September 30, 2024, cash and cash equivalents increased $21.1 million, net loan balances increased $30.8 million and investment securities decreased $55.7 million. Net loan balances were $5.5 billion at September 30, 2024 compared to $5.5 billion at December 31, 2023.
Current wording
Total assets were $7.6 billion at March 31, 2025, compared to $7.5 billion as of December 31, 2024. From December 31, 2024 to March 31, 2025, cash and cash equivalents increased $80.3 million, net loan balances increased $29.5 million and investment securities decreased $23.5 million. Net loan balances were $5.6 billion at March 31, 2025 compared to $5.6 billion at December 31, 2024.
Previous wording
Net interest margin, on a tax equivalent basis, defined as net interest income divided by average interest-earning assets, was 3.32% for the nine months ended September 30, 2024, up from 2.95% for the same period in 2023. This increase was primarily due to an increase in earning asset yields partially offset by increased rates on interest-bearing deposits and borrowings. Net interest income before the provision for loan losses was $169.8 million compared to net interest income of $136.0 million for the same period in 2023. The increase in net interest income was primarily due to the acquisition of Blackhawk Bank during the third quarter of 2023 and increased net interest margin as mentioned above.
Current wording
Net interest margin, on a tax equivalent basis, defined as net interest income divided by average interest-earning assets, was 3.60% for the three months ended March 31, 2025, up from 3.25% for the same period in 2024. This increase was primarily due to an increase in earning asset yields and by decreased rates on interest-bearing deposits and borrowings. Net interest income before the provision for loan losses was $59.4 million compared to net interest income of $55.5 million for the same period in 2024. The increase in net interest income was due to the increased net interest margin as mentioned above.
Previous wording
Total non-interest income of $69.9 million increased $4.9 million or 7.5% from $65.0 million for the same period last year. The increase in non-interest income resulted primarily from an increase in insurance commissions, wealth management revenues, and income generated from former Blackhawk Bank customers partially offset by a decrease in bank owned life insurance income and a decrease in the gain or loss on securities.
Current wording
Total non-interest income of $24.9 million increased $386,000 or 1.6% from $24.5 million for the same period last year. The increase in non-interest income resulted primarily from an increase in insurance commissions, wealth management revenues, and a gain recognized on a death benefit received from bank owned life insurance partially offset by a decrease in miscellaneous income.
Previous wording
Total non-interest expense of $158.7 million increased $30.0 million or 23.3% from $128.7 million for the same period last year. The increase was primarily due to the acquisition of Blackhawk Bank during the third quarter of 2023 and the related amortization of intangibles and increased size of the bank causing increased expenses.
Current wording
Total non-interest expense of $54.5 million increased $1.1 million or 2.1% from $53.4 million for the same period last year. The increase was primarily due to the routine annual increases in salaries and employee benefits and nonrecurring technology project expenses which were partially offset by the decrease in integration expenses compared to the first quarter of 2024 related to Blackhawk Bank.
Previous wording
Credit quality is an area of importance to the Company. Total nonperforming loans were $18.2 million at September 30, 2024, compared to $21.3 million at September 30, 2023 and $20.1 million at December 31, 2023. See the discussion under the heading “Loan Quality and Allowance for Loan Losses” for a detailed explanation of these balances. Repossessed asset balances totaled $1.8 million at September 30, 2024 compared to $2.3 million at September 30, 2023 and $1.2 million at December 31, 2023.
Current wording
Credit quality is an area of importance to the Company. Total nonperforming loans were $26.6 million at March 31, 2025, compared to $20.1 million at March 31, 2024 and $29.8 million at December 31, 2024. See the discussion under the heading “Loan Quality and Allowance for Loan Losses” for a detailed explanation of these balances. Repossessed asset balances totaled $2.1 million at March 31, 2025 compared to $1.4 million at March 31, 2024 and $2.2 million at December 31, 2024.
Previous wording
The Company’s provision for credit losses for the nine months ended September 30, 2024 and 2023 was $2.0 million and $5.6 million, respectively. Total loans past due 30 days or more were 0.39% of loans at September 30, 2024 compared to 0.23% at September 30, 2023, and 0.26% of loans at December 31, 2023. Loans secured by both commercial and residential real estate comprised approximately 68.8% of the loan portfolio as of September 30, 2024 and 68.9% as of December 31, 2023.
Current wording
The Company’s provision for credit losses for the three months ended March 31, 2025 and 2024 was $1.7 million and ($357,000), respectively. Total loans past due 30 days or more were 0.32% of loans at March 31, 2025 compared to 0.32% at March 31, 2024, and 0.19% of loans at December 31, 2024. Loans secured by both commercial and residential real estate comprised approximately 68.3% of the loan portfolio as of March 31, 2025 and 68.4% as of December 31, 2024.
Previous wording
The Company’s capital position remains strong, and the Company has consistently maintained regulatory capital ratios above the “well-capitalized” standards. The Company’s Tier 1 capital to risk weighted assets ratio calculated under the regulatory risk-based capital requirements at September 30, 2024 and 2023 and December 31, 2023 was 12.70%, 10.19% and 12.02%, respectively. The Company’s total capital to risk weighted assets ratio calculated under the regulatory risk-based capital requirements at September 30, 2024 and 2023, and December 31, 2023 was 15.24%, 12.60% and 14.84%, respectively. The increase in Tier 1 capital and total to risk weighted assets ratio from December 31, 2023 was primarily due to net income less dividends declared for the period increasing equity and a decrease in risk weighted assets related to a reallocation of the Company's balance sheet resulting in lower risk weighted assets such as cash on hand increasing and investment securities decreasing.
Current wording
The Company’s capital position remains strong, and the Company has consistently maintained regulatory capital ratios above the “well-capitalized” standards. The Company’s Tier 1 capital to risk weighted assets ratio calculated under the regulatory risk-based capital requirements at March 31, 2025 and 2024 and December 31, 2024 was 13.13%, 12.46% and 12.82%, respectively. The Company’s total capital to risk weighted assets ratio calculated under the regulatory risk-based capital requirements at March 31, 2025 and 2024, and December 31, 2024 was 15.59%, 15.35% and 15.37%, respectively. The increase in Tier 1 capital and total to risk weighted assets ratio from December 31, 2024 was primarily due to net income less dividends declared for the period increasing equity and a decrease in risk weighted assets related to a reallocation of the Company's balance sheet resulting in lower risk weighted assets such as cash on hand increasing and investment securities decreasing partially offset by an increase in loans.
Previous wording
The Company enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. The total outstanding commitments at September 30, 2024 and 2023, were $1.4 billion and $1.1 billion, respectively.
Current wording
The Company enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. The total outstanding commitments at March 31, 2025 and 2024, were $1.5 billion and $1.3 billion, respectively.
Previous wording
The Company expensed $2.6 million and $2.3 million for the assessment during the first nine months of 2024 and 2023, respectively.
Current wording
The Company expensed $849,000 and $869,000 for the assessment during the first three months of 2025 and 2024, respectively.
Previous wording
The Company has established various accounting policies that govern the application of U.S. generally accepted accounting principles in the preparation of the Company’s consolidated financial statements. The significant accounting policies of the Company are described in the footnotes to the consolidated financial statements included in the Company’s 2023 Annual Report on Form 10-K. Certain accounting policies involve significant judgments and assumptions by management that have a material impact on the carrying value of certain assets and liabilities; management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and assumptions, which could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company.
Current wording
The Company has established various accounting policies that govern the application of U.S. generally accepted accounting principles in the preparation of the Company’s consolidated financial statements. The significant accounting policies and use of significant estimates of the Company are described in the footnotes to the consolidated financial statements included in the Company’s 2024 Annual Report on Form 10-K.
Previous wording
Net interest income is the excess of interest received from earning assets over interest paid on interest-bearing liabilities. For analytical purposes, net interest income is presented on a full tax equivalent ("TE") basis in the table that follows. The federal statutory rate in effect of 21% for 2024 and 2023 was used. The TE analysis portrays the income tax benefits associated with the tax-exempt assets. The year-to-date net yield on interest-earning assets excluding the TE adjustments of $2.3 million and $2.3 million for 2024 and 2023, respectively were 3.26% and 2.90% at September 30, 2024 and 2023, respectively.
Current wording
Net interest income is the excess of interest received from earning assets over interest paid on interest-bearing liabilities. For analytical purposes, net interest income is presented on a full tax equivalent ("TE") basis in the table that follows. The federal statutory rate in effect of 21% for 2025 and 2024 was used. The TE analysis portrays the income tax benefits associated with the tax-exempt assets. The year-to-date net yield on interest-earning assets excluding the TE adjustments of $753,000 and $616,000 for 2025 and 2024, respectively were 3.56% and 3.20% at March 31, 2025 and 2024, respectively.
Previous wording
The Company’s average balances, fully tax equivalent interest income and interest expense, and rates earned or paid for major balance sheet categories are set forth for the three and nine months ended September 30, 2024 and 2023 in the following table (dollars in thousands):
Current wording
The Company’s average balances, fully tax equivalent interest income and interest expense, and rates earned or paid for major balance sheet categories are set forth for the three months ended March 31, 2025 and 2024 in the following table (dollars in thousands):
Previous wording
Changes in net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense. The following table summarizes the approximate relative contribution of changes in average volume and interest rates to changes in net interest income for the three and nine months ended September 30, 2024, compared to the same period in 2023 (in thousands):
Current wording
Changes in net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense. The following table summarizes the approximate relative contribution of changes in average volume and interest rates to changes in net interest income for the three months ended March 31, 2025, compared to the same period in 2024 (in thousands):
Previous wording
Tax equivalent net interest income increased $33.8 million, or 24.4%, to $172.1 million for the nine months ended September 30, 2024, from $138.3 million for the same period in 2023. Net interest income and net interest margin increased primarily due to an increase in earning asset yields partially offset by the increase in deposit and borrowing rates.
Current wording
Tax equivalent net interest income increased $4.1 million, or 7.3%, to $60.2 million for the three months ended March 31, 2025, from $56.1 million for the same period in 2024. Net interest income and net interest margin increased primarily due to an increase in earning asset yields and a decrease in deposit and borrowing rates.
Previous wording
For the nine months ended September 30, 2024, average earning assets increased $618.8 million, or 9.9%, and average interest-bearing liabilities increased $427.8 million or 8.7% compared with average balances for the same period in 2023.
Current wording
For the three months ended March 31, 2025, average earning assets decreased $115.0 million, or 1.7%, and average interest-bearing liabilities decreased $219.9 million or 4.1% compared with average balances for the same period in 2024.
Previous wording
Average interest-bearing deposits with other financial institutions increased $106.3 million or 223.7%.
Current wording
Average interest-bearing deposits with other financial institutions decreased $102.7 million or 59.2%.
Previous wording
Average federal funds sold decreased $7.7 million or 95.3%.
Current wording
Average federal funds sold decreased $1.0 million or 93.1%.
Previous wording
Average certificates of deposits investments increased $1.0 million or 53.9%.
Current wording
Average certificates of deposits investments increased $1.6 million or 104.7%.
Previous wording
Average loans increased by $609.8 million or 12.4%.
Current wording
Average loans increased by $81.6 million or 1.5%.
Previous wording
Average securities decreased by $90.6 million or 7.2%.
Current wording
Average securities decreased by $94.6 million or 8.0%.
Previous wording
Average interest-bearing customer deposits increased by $672.9 million or 16.6%.
Current wording
Average interest-bearing customer deposits decreased by $70.2 million or 1.5%.
Previous wording
Average borrowings and other debt decreased by $246.0 million or 39.5%.
Current wording
Average borrowings and other debt decreased by $86.7 million or 22.3%.
Previous wording
Net interest margin increased to 3.32% for the first nine months of 2024 from 2.95% for the first nine months of 2023.
Current wording
Net interest margin increased to 3.60% for the first three months of 2025 from 3.25% for the first three months of 2024.
Previous wording
The provision for credit losses for the nine months ended September 30, 2024 and 2023 was $2.0 million and $5.6 million, respectively. Net charge offs were $1.9 million for the nine months ended September 30, 2024, compared to net charge offs of $0.2 million for September 30, 2023. Nonperforming loans were $18.2 million and $21.3 million as of September 30, 2024 and 2023, respectively. For information on loan loss experience and nonperforming loans, see discussion under the “Nonperforming Loans” and “Loan Quality and Allowance for Loan Losses” sections below.
Current wording
The provision for credit losses for the three months ended March 31, 2025 and 2024 was $1.7 million and ($357,000), respectively. Net charge offs were $1.8 million for the three months ended March 31, 2025, compared to net charge offs of $382,000 for March 31, 2024. Nonperforming loans were $26.6 million and $20.1 million as of March 31, 2025 and 2024, respectively. For information on loan loss experience and nonperforming loans, see discussion under the “Nonperforming Loans” and “Loan Quality and Allowance for Loan Losses” sections below.
Previous wording
An important source of the Company’s revenue is other income. The following table sets forth the major components of other income for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Current wording
An important source of the Company’s revenue is other income. The following table sets forth the major components of other income for the three months ended March 31, 2025 and 2024 (in thousands):
Previous wording
Following are explanations of the changes in these other income categories for the three and nine months ended September 30, 2024 compared to the same period in 2023:
Current wording
Following are explanations of the significant changes in these other income categories for the three months ended March 31, 2025 compared to the same period in 2024:
Previous wording
Wealth management revenues increased for the nine month period due to increased brokerage and trust fees, partially offset by less agricultural services fee incomes.
Current wording
Wealth management revenues increased for the three month period due to increased brokerage fees and trust fees, and agricultural services fee incomes.
Previous wording
Insurance commissions increased primarily due to organic growth and the acquisitions of PGIB and MRIG during the second quarter of 2023 and third quarter of 2024, respectively.
Current wording
Insurance commissions increased primarily due to the acquisition of MRIG during the third quarter of 2024.
Previous wording
The increase in mortgage banking income was due to an increase from loans sold in the secondary market and the acquisition of Blackhawk Bank in the third quarter of 2023. First Mid Bank generally releases the servicing rights on loans sold into the secondary market.
Current wording
The increase in mortgage banking income was due to an increase from loans sold in the secondary market. First Mid Bank generally releases the servicing rights on loans sold into the secondary market.
Previous wording
Revenue from ATMs and debit cards increased due to an increase in activity during the period and the acquisition of Blackhawk Bank in the third quarter of 2023.
Current wording
Revenue from ATMs and debit cards decreased due to an decrease in activity during the period resulting in less service charges.
Previous wording
Bank owned life insurance income decreased approximately $0.3 million during the first nine months of 2024 compared to the same period in 2023 primarily due to a claim payout in 2023.
Current wording
Bank owned life insurance income increased approximately $566,000 during the first three months of 2025 compared to the same period in 2024 primarily due the gain recognized on a death claim filed in 2025.
Previous wording
The following table sets forth the major components of other expense for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):
Current wording
The following table sets forth the major components of other expense for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Previous wording
Following are explanations for the changes in these other expense categories for the three and nine months ended September 30, 2024 compared to the same period in 2023:
Current wording
Following are explanations for the significant changes in these other expense categories for the three months ended March 31, 2025 compared to the same period in 2024:
Previous wording
The increase in salaries and employee benefits, the largest component of other expense, is primarily due to the acquisition of Blackhawk Bank and regularly scheduled annual raises occurring during the quarter ended March 31, 2024. This was partially offset by the Company's efficiency improvement efforts. There were 1,207 and 1,224 full-time equivalent employees at September 30, 2024 and 2023, respectively.
Current wording
The increase in salaries and employee benefits, the largest component of other expense, is primarily due to regularly scheduled annual raises. There were 1,194 and 1,188 full-time equivalent employees at March 31, 2025 and 2024, respectively.
Previous wording
The increase in all other operating expenses during the first nine months of 2024 was primarily due to the acquisition of Blackhawk Bank during the third quarter of 2023.
Current wording
The decrease in all other operating expenses during the first three months of 2025 was primarily due to integration related expenses for Blackhawk Bank occurring during the first quarter of 2024.
Previous wording
Total income tax expense amounted to $19.3 million (24.4% effective tax rate) for the nine months ended September 30, 2024, compared to $15.9 million (23.7% effective tax rate) for the same period in 2023. The increase in effective rate is primarily related to a one time increase in income tax expense required because of the State of Illinois income apportionment law change that occurred during the quarter ended June 30, 2024.
Current wording
Total income tax expense amounted to $6.0 million (21.2% effective tax rate) for the three months ended March 31, 2025, compared to $6.4 million (23.9% effective tax rate) for the same period in 2024. The decrease in effective rate is primarily related the interest expense disallowance decreasing due to the Company beginning to utilize an investment subsidiary during the second quarter of 2024 and a decrease in nondeductible expenses.
Showing the first 40 of 73 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Critical Accounting Policies and Use of Significant Estimates
Previous report — wording carried elsewhere
Loan Quality and Allowance for Credit Losses
Previous report — wording carried elsewhere
Management recognizes there are risk factors that are inherent in the Company’s loan portfolio. All financial institutions face risk factors in their loan portfolios because risk exposure is a function of the business. The Company’s operations (and therefore its loans) are concentrated in Illinois, Missouri, Texas, and Wisconsin areas, where agriculture is the dominant industry. Accordingly, lending and other business relationships with agriculture-based businesses are critical to the Company’s success. At September 30, 2024, the