FIRST MID BANCSHARES, INC.
For the period ended Mar 31, 2026. Filed May 8, 2026.
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, 2026 · Filed May 8, 2026
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 2025-09-30; filed 2025-11-07.
0001193125-25-272249
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 ArrangementsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001193125-26-213797
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSWebsiteForward-Looking StatementsOverviewCritical Accounting Policies and Use of Significant EstimatesResults of OperationsAnalysis of Consolidated Balance SheetsInterest Rate SensitivityCapital ResourcesStock PlansLiquidityThe 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 128 previous paragraphs and 123 current paragraphs.
18 unchanged; 79 reworded; 19 added; 30 removed; 1 previous and 7 current paragraphs rearranged.
Tables are not compared: 23 previous and 21 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 (19)
Current report
The Company maintains a website at www.firstmid.com. All periodic and current reports of the Company and amendments to these reports filed with the Securities and Exchange Commission (“SEC”) can be accessed, free of charge, through this website and at www.sec.gov as soon as reasonably practicable after these materials are filed with the SEC.
Current report
Total deposit balances increased to $7.5 billion at March 31, 2026 from $6.4 billion at December 31, 2025. The increase was primarily due to the acquisition of Two Rivers Bank.
Current report
The Company’s provision for credit losses for the three months ended March 31, 2026 and 2025 was $2.6 million and $1.7 million, respectively. The increase in provision expense was expected as the industry returns to a normal credit cycle from historically low credit losses.
Current report
The primary reasons for the more significant changes in other income components for the three months ended March 31, 2026 compared to the same period in 2025 are as follows:
Current report
Wealth management revenues increased due to the acquisition of Two Rivers on February 28, 2026, including their trust and brokerage portfolio.
Current report
ATM / debit card revenue increased primarily due to the acquisition of Two Rivers Bank in the quarter ended March 31, 2026.
Current report
The primary reasons for the more significant changes in other expense components for the three months ended March 31, 2026 compared to the same period in 2025 are as follows:
Current report
The increase in occupancy and equipment expense is primarily due to the acquisition of Two Rivers and the related expanded real estate footprint.
Current report
The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at March 31, 2026, and the weighted average yield for each range of maturities (dollars in thousands):
Current report
The weighted average yields are calculated on the basis of the amortized cost and effective yields weighted for the scheduled maturity of each security. Tax equivalent yields have been calculated using a 21% tax rate. With the exception of obligations of the U.S. Treasury and other U.S. government agencies and corporations, there were no investment securities of any single issuer, which the book value exceeded 10% of stockholders' equity at March 31, 2026. Investment securities carried at approximately $481.4 million and $473.8 million at March 31, 2026, and December 31, 2025, respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law.
Current report
Commercial and commercial real estate loans generally involve higher credit risks than residential real estate and consumer loans. Because payments on loans secured by commercial real estate or equipment are often dependent upon the successful operation and management of the underlying assets, repayment of such loans may be influenced to a great extent by conditions in the market or the economy. The Company does not have any sub-prime mortgages or credit card loans outstanding which are also generally considered to be higher credit risk.
Current report
The allowance for credit losses to nonperforming loans ratio has decreased due to the acquired nonperforming loans from Two Rivers Bank. Management believes that the overall estimate of the allowance for credit losses appropriately accounts for probable losses attributable to current exposures.
Current report
On February 28, 2026, the Company assumed, as part of the Two Rivers acquisition, $20.0 million principal amount of 3.75% Fixed-to-Floating Rate Note Payable due 2029 (“Two Rivers Note Payable”). Two Rivers Note Payable was issued pursuant to Indenture between the Company and Bankers Bank, as trustee. This Indenture governs the terms of the Two Rivers Note Payable and provides that such note is unsecured and will mature on September 30, 2029. From and including the date of issuance to, but excluding the date of merger of Two Rivers Bank and First Mid Bank, the notes will bear interest at an initial rate of 3.75% per annum. From and including the date of merger of Two Rivers Bank and First Mid Bank to, but excluding the maturity date, the notes will bear interest at a floating rate equal to thirty-day Term SOFR plus a spread of 275 basis points. As of March 31, 2026, $19.9 million in aggregate principal amount of the Two Rivers Note Payable remains issued and outstanding.
Current report
June 15, 2011 and then converted to floating rate (SOFR plus 160 basis points) after June 15, 2011 (5.54% and 5.59% at March 31, 2026 and December 31, 2025, respectively). The net proceeds to the Company were used for general corporate purposes, including the Company’s acquisition of Mansfield Bancorp, Inc. in 2006.
Current report
On February 28, 2026, the Company assumed the trust preferred securities of Great River Capital Trust I (“GRCT I”), a statutory business trust that was a wholly owned unconsolidated subsidiary of Two Rivers. The $10.0 million of trust preferred securities and an additional $310,000 investment in common equity of GRCT I is invested in junior subordinated debentures issued to GRCT I. The subordinated debentures mature in 2035, bear interest at three-month SOFR plus 175 basis points (5.69% at March 31, 2026) and reset quarterly.
Current report
Deferred Compensation Plan. The Company follows the provisions of the Emerging Issues Task Force Issue No. 97-14, “Accounting for Deferred Compensation Arrangements Where Amounts Earned Are Held in a Rabbi Trust and Invested” (“EITF 97-14”), which was codified into ASC 710-10, for purposes of the First Mid Bancshares, Inc. Amended and Restated Deferred Compensation Plan (“DCP”). At March 31, 2026, the Company classified the cost basis of its common stock issued and held in trust in connection with the DCP of approximately $7.0 million as treasury stock. The Company also classified the cost basis of its related deferred compensation obligation of approximately $7.0 million as an equity instrument (deferred compensation).
Current report
The DCP was effective as of June 1984. The purpose of the DCP is to enable directors, advisory directors, and key employees the opportunity to defer a portion of the fees and cash compensation paid by the Company as a means of maximizing the effectiveness and flexibility of compensation arrangements. The Company invests all participants’ deferrals in shares of common stock. Dividends paid on the shares are credited to participants’ DCP accounts and invested in additional shares.
Current report
First Retirement and Savings Plan. The First Retirement Savings Plan (“401(k) plan”) was effective beginning in 1985. Employees are eligible to participate in the 401(k) plan after three months of service with the Company.
Removed paragraphs (30)
Previous report
The following table shows the Company’s annualized performance ratios for nine months ended September 30, 2025 and 2024, compared to the performance ratios for the year ended December 31, 2024:
Previous report
The Company’s provision for credit losses for the nine months ended September 30, 2025 and 2024 was $7.6 million and $2.0 million, respectively. Total loans past due 30 days or more were 0.50% of loans at September 30, 2025 compared to 0.39% at September 30, 2024, and 0.19% of loans at December 31, 2024. Loans secured by both commercial and residential real estate comprised approximately 68.2% of the loan portfolio as of September 30, 2025 and 68.4% as of December 31, 2024.
Previous report
Federal Deposit Insurance Corporation Insurance Coverage. As FDIC-insured institutions, First Mid Bank is required to pay deposit insurance premium assessments to the FDIC. Several requirements with respect to the FDIC insurance system have affected results, including insurance assessment rates.
Previous report
The Company expensed $2.6 million and $2.6 million for the assessment during the first nine months of 2025 and 2024, respectively.
Previous 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.
Previous report
The changes in average balances for these periods are shown below:
Previous report
Average interest-bearing deposits with other financial institutions decreased $40.0 million or 26.0%.
Previous report
Average federal funds sold decreased $305,000 or 80.3%.
Previous report
Average certificates of deposits investments decreased $345,000 or 11.9%.
Previous report
Average loans increased by $170.0 million or 3.1%.
Previous report
Average securities decreased by $61.0 million or 5.2%.
Previous report
Average interest-bearing customer deposits increased by $86.6 million or 1.8%.
Previous report
Average securities sold under agreements to repurchase decreased by $26.6 million or 11.9%.
Previous report
Average borrowings and other debt decreased by $55.3 million or 14.7%.
Previous report
Net interest margin increased to 3.71% for the first nine months of 2025 from 3.32% for the first nine months of 2024.
Previous report
Following are explanations of the significant changes in these other income categories for the three and nine months ended September 30, 2025 compared to the same period in 2024:
Previous report
Wealth management revenues decreased due to agricultural services fee income decreasing as a result of lower commodity prices.
Previous report
Security losses, net increased due to strategic sales of securities during the period that allowed the Company to invest the resulting cash at a higher yield.
Previous report
Other income increased for the three month period due to gains recognized on the sale of real estate assets as part of the Company's branch optimization project.
Previous report
Following are explanations for the significant changes in these other expense categories for the three and nine months ended September 30, 2025 compared to the same period in 2024:
Previous report
The increase in occupancy and equipment and legal and professional fees expenses are primarily due to nonrecurring technology project expenses in the first three quarters of 2025.
Previous report
Total income tax expense amounted to $19.0 million (21.8% effective tax rate) for the nine months ended September 30, 2025, compared to $19.3 million (24.4% effective tax rate) for the same period in 2024. The decrease in effective rate is primarily related to a true-up of the Company's tax accrual and the state of Illinois law change that became effective during the second quarter of 2024 that required a one-time revalue of deferred taxes and resulted in a decrease Illinois apportionment percentage for all of 2025.
Previous report
On July 4, 2025, The One Big Beautiful Bill Act, was signed into law. The Company has completed its evaluation of the provisions of the bill and does not expect it to have a material impact on its financial statements.
Previous report
Loans are geographically dispersed primarily throughout Illinois, the St. Louis Metro area, central Missouri, Texas, and southern Wisconsin. While these regions have experienced some economic stress during 2024 and 2025, the Company does not consider these locations high risk areas for quick and material economic shifts.
Previous report
The allowance for credit losses to nonperforming loans ratio has remained consistent due to the amount of nonperforming loans changing at a similar rate as the loan portfolio.
Previous report
The following table sets forth the high and low month-end balances for the nine months ended September 30, 2025 and 2024 and for the year ended December 31, 2024 (in thousands):
Previous report
Similarly, the final rule implementing the Basel III reforms allows holding companies with less than $15.0 billion in consolidated assets as of December 31, 2009 to continue to count toward Tier 1 capital any trust preferred securities issued before May 19, 2010. New issuances of trust preferred securities, however, would not count as Tier 1 regulatory capital.
Previous report
The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Bank holding companies follow minimum regulatory requirements established by the Board of Governors of the Federal Reserve System (“Federal Reserve System”), First Mid Bank follows similar minimum regulatory requirements established for banks by the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation, as applicable. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary action by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Company and its subsidiary bank to maintain minimum capital amounts and ratios. Management believes that, as of September 30, 2025 and December 31, 2024, the Company and First Mid Bank, as applicable, met all capital adequacy requirements, as further detailed in Note 10 of our consolidated financial statements.
Previous report
First Mid Bank 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. Each of these instruments involves, to varying degrees, elements of credit, interest rate and liquidity risk in excess of the amounts recognized in the consolidated balance sheets. The Company uses the same credit policies and requires similar collateral in approving lines of credit and commitments and issuing letters of credit as it does in making loans. The exposure to credit losses on financial instruments is represented by the contractual amount of these instruments. However, the Company does not anticipate any losses from these instruments. Off-balance sheet arrangements are further detailed in Note 11 of our consolidated financial statements.
Reworded paragraphs (79)
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, 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.
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 for the three months ended March 31, 2026 and 2025. 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; 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
“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 proposed transactions between First Mid and Two Rivers will not be realized within the expected time period; the risk that integration of the operations of Two Rivers with First Mid will be materially delayed or will be more costly or difficult than expected; the effect of the announcement of the proposed transactions on customer relationships and operating results; the possibility that the proposed transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events; changes in interest rates; general economic conditions and those in the market areas of the Company; 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 the Company’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 the Company; accounting principles, policies and guidelines; or any of the other foregoing risks. Additional information concerning the Company, including additional factors and risks that could materially affect the Company’s financial results, are included in the Company’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, the Company does 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
This overview of management’s discussion and analysis highlights selected information in this document and may not contain all the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting estimates which have an impact on the Company’s financial condition and results of operations you should carefully read this entire document.
Current wording
This overview of management’s discussion and analysis highlights selected information in this document and may not contain all the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting estimates you should carefully read this entire document. These have an impact on the Company’s consolidated financial condition and results of consolidated operations.
Previous wording
Net income was $68.1 million and $59.7 million for the nine months ended September 30, 2025 and 2024, respectively. Diluted net income per common share was $2.84 and $2.49 for the nine months ended September 30, 2025 and 2024, respectively.
Current wording
Net income was $26.3 million and $22.2 million for the three months ended March 31, 2026 and 2025, respectively and diluted net income per common share was $1.06 and $0.93 for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
Total assets were $7.8 billion at September 30, 2025, compared to $7.5 billion as of December 31, 2024. From December 31, 2024 to September 30, 2025, cash and cash equivalents increased $155.9 million, net loan balances increased $149.9 million and investment securities increased $27.0 million. Net loan balances were $5.7 billion at September 30, 2025 compared to $5.6 billion at December 31, 2024.
Current wording
Total assets were $9.3 billion at March 31, 2026, compared to $8.0 billion as of December 31, 2025. Net loan balances were $6.9 billion at March 31, 2026 compared to $5.9 billion at December 31, 2025.
Previous wording
Net interest margin, on a tax equivalent basis, defined as net interest income divided by average interest-earning assets, was 3.71% for the nine months ended September 30, 2025, up from 3.32% 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 credit losses was $189.6 million compared to net interest income of $169.8 million for the same period in 2024. The increase in net interest income was primarily due to the increased net interest margin as mentioned above.
Current wording
Net interest margin (tax equivalent), defined as net interest income divided by average interest-earning assets, was 3.78% for the three months ended March 31, 2026, up from 3.60% for the same period in 2025. This increase was primarily due to an increase in earning asset yields and decreased funding costs.
Previous wording
Total non-interest income of $71.4 million increased $1.4 million or 2.1% from $69.9 million for the same period last year. The increase in non-interest income resulted primarily from an increase in insurance commissions, partially offset by an increase in losses on the sale of securities.
Current wording
Total non-interest income of $26.4 million increased $1.6 million or 6.3% from $24.9 million for the same period last year. The increase in non-interest income resulted primarily from the addition of Two Rivers Bank, an increase in insurance commissions, and an increase in wealth management revenues.
Previous wording
Total non-interest expense of $166.4 million increased $7.7 million or 4.8% from $158.7 million for the same period last year. The increase was primarily due to the routine annual increases in salaries and employee benefits and an increase in expense accrued for incentive compensation based on overperformance compared to the 2025 budget, partially offset by the decrease in integration expenses compared to the first three quarters of 2024 related to Blackhawk Bank.
Current wording
Total non-interest expense of $60.7 million increased $6.3 million or 11.5% from $54.5 million for the same period last year. The increase was primarily due to increases in salaries, employee benefits, net occupancy, equipment expenses, and integration expenses due to the acquisition of Two Rivers in the first quarter of 2026.
Previous wording
Credit quality is an area of importance to the Company. Total nonperforming loans were $22.2 million at September 30, 2025, compared to $18.2 million at September 30, 2024 and $29.8 million at December 31, 2024. See the discussion under the heading “Loan Quality and Allowance for Credit Losses” for a detailed explanation of these balances. Repossessed asset balances totaled $1.5 million at September 30, 2025 compared to $1.8 million at September 30, 2024 and $2.2 million at December 31, 2024.
Current wording
Credit quality is an area of importance to the Company. Total nonperforming loans were $44.1 million at March 31, 2026, compared to $26.6 million at March 31, 2025 and $31.9 million at December 31, 2025. See the discussion under the heading “Loan Quality and Allowance for Credit Losses” for a detailed explanation of these balances. Repossessed asset balances totaled $5.5 million at March 31, 2026 compared to $2.1 million at March 31, 2025 and $2.9 million at December 31, 2025.
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, 2025 and 2024 and December 31, 2024 was 13.53%, 12.70% and 12.82%, respectively. The Company’s total capital to risk weighted assets ratio calculated under the regulatory risk-based capital requirements at September 30, 2025 and 2024, and December 31, 2024 was 15.99%, 15.24% and 15.37%, respectively.
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 at March 31, 2026 and 2025 and December 31, 2025 was 13.57%, 13.13% and 13.55%, respectively. The Company’s total capital to risk weighted assets ratio at March 31, 2026 and 2025, and December 31, 2025 was 15.48%, 15.59% and 15.67%, respectively.
Previous wording
The Company’s liquidity position remains sufficient to fund operations and meet the requirements of borrowers, depositors, and creditors. The Company maintains various sources of liquidity to fund its cash needs. See the discussion under the heading “Liquidity” for a full listing of sources and anticipated significant contractual obligations.
Current wording
The Company’s liquidity position remains sufficient to fund operations and meet the requirements of borrowers, depositors, and creditors. The Company maintains various sources of liquidity to fund its cash needs. See “Liquidity” herein for a full listing of its sources and anticipated significant contractual obligations.
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, 2025 and 2024, were $1.5 billion and $1.4 billion, respectively.
Current wording
The Company and Two Rivers Bank enter 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, 2026 and 2025, were $1.5 billion and $1.5 billion, respectively. See Note 12 - “Commitments and Contingent Liabilities” herein for further information.
Previous wording
The largest source of revenue for the Company is net interest income. Net interest income represents the difference between total interest income earned on earning assets and total interest expense paid on interest-bearing liabilities. The amount of interest income is dependent upon many factors, including the volume and mix of earning assets, the general level of interest rates and the dynamics of changes in interest rates. The cost of funds necessary to support earning assets varies with the volume and mix of interest-bearing liabilities and the rates paid to attract and retain such funds.
Current wording
The largest source of operating revenue for the Company is net interest income. Net interest income represents the difference between total interest income earned on earning assets and total interest expense paid on interest-bearing liabilities. The amount of interest income is dependent upon many factors, including the volume and mix of earning assets, the general level of interest rates and the dynamics of changes in interest rates. The cost of funds necessary to support earning assets varies with the volume and mix of interest-bearing liabilities and the rates paid to attract and retain such funds.
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 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 $2.3 million and $2.3 million for 2025 and 2024, respectively were 3.66% and 3.26% at September 30, 2025 and 2024, respectively.
Current wording
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 2026 and 2025 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 $796,000 and $753,000 for 2026 and 2025, respectively, were 3.74% and 3.56% at March 31, 2026 and 2025, 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, 2025 and 2024 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, 2026 and 2025 in the following table (dollars in thousands):
Previous wording
The tax-exempt income is shown on a tax equivalent basis.
Current wording
Tax-exempt income is shown on a fully tax equivalent basis.
Previous wording
Nonaccrual loans and loans held for sale are included in the average balances. Balances are net of unaccreted discount related to loans acquired.
Current wording
Nonaccrual loans have been included in the average balances. Balances are net of unaccreted discounts related to loans acquired.
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, 2025, compared to the same period in 2024 (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, 2026 and 2025 (in thousands):
Previous wording
Nonaccrual loans have been included in the average balances.
Current wording
Nonaccrual loans have been included in the average balances. Balances are net of unaccreted discounts related to loans acquired.
Previous wording
Tax equivalent net interest income increased $19.9 million, or 11.5%, to $191.9 million for the nine months ended September 30, 2025, from $172.1 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.
Current wording
Net interest income on a tax equivalent basis increased $11.4 million, or 18.98%, to $71.6 million for the three months ended March 31, 2026, from $60.2 million for the same period in 2025. Net interest income on a tax equivalent basis and tax equivalent net interest margin increased primarily due to an increase in earning asset yields and a decrease in deposit rates.
Previous wording
For the nine months ended September 30, 2025, average earning assets increased $68.4 million, or 1.0%, and average interest-bearing liabilities increased $4.7 million or 0.1% compared with average balances for the same period in 2024.
Current wording
For the three months ended March 31, 2026, average earning assets increased $900.9 million, or 13.31%, and average interest-bearing liabilities increased $661.0 million or 12.69% compared with average balances for the same period in 2025.
Previous wording
The provision for credit losses for the nine months ended September 30, 2025 and 2024 was $7.6 million and $2.0 million, respectively. Net charge offs were $4.8 million for the nine months ended September 30, 2025, compared to net charge offs of $1.9 million for September 30, 2024. Nonperforming loans were $22.2 million and $18.2 million as of September 30, 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 Credit Losses” sections below.
Current wording
The provision for credit losses for the three months ended March 31, 2026 and 2025 was $2.6 million and $1.7 million, respectively. Nonperforming loans were $44.1 million and $26.6 million as of March 31, 2026 and 2025, respectively. Net charge offs were $1.5 million for the three months ended March 31, 2026, compared to net charge offs of $1.8 million for March 31, 2025. For information on credit loss experience and nonperforming loans, see “Nonperforming Loans and Nonperforming Other Assets” and “Loan Quality and Allowance for Credit Losses” herein.
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, 2025 and 2024 (in thousands):
Current wording
An important source of the Company’s revenue is derived from other income. The following table sets forth the major components of other income for the three months ended March 31, 2026 and 2025 (in thousands):
Previous wording
Insurance commissions increased primarily due to the acquisition of MRIG during the third quarter of 2024 and the acquisition of a portion of AAIG's customer list in July 2025.
Current wording
Insurance commissions increased primarily due to the acquisition of a portion of AAIG's customer list in July 2025 and the customer list of Downs Insurance Agency, Inc. in January 2026 as well as organic growth.
Previous wording
The following table sets forth the major components of other expense for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):
Current wording
The major categories of other expense include salaries and employee benefits, occupancy and equipment expenses and other operating expenses associated with day-to-day operations. The following table sets forth the major components of other expense for the three months ended March 31, 2026 and 2025 (dollars in thousands):
Previous wording
The increase in salaries and employee benefits, the largest component of other expense, is primarily due to regularly scheduled annual raises and increase in expense accrued for incentive compensation to be paid in 2026 based on overperformance compared to the 2025 budgeted net income. There were 1,178 and 1,207 full-time equivalent employees at September 30, 2025 and 2024, respectively.
Current wording
The increase in salaries and employee benefits, the largest component of other expense, is primarily due to the increase in full-time equivalent employees from 1,194 to 1,335 at March 31, 2025 and 2026, respectively, due to the acquisition of Two Rivers.
Previous wording
The decrease in all other operating expenses during the first nine months of 2025 was primarily due to integration related expenses for Blackhawk Bank occurring during the first quarter of 2024.
Current wording
The increase in all other operating expenses during the quarter ended March 31, 2026, were due to integration and acquisition related expenses for Two Rivers Bank on February 28, 2026.
Previous wording
The Company files U.S. federal and state of Florida, Illinois, Indiana, Missouri, Texas, and Wisconsin income tax returns. As of September 30, 2025, the Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2021.
Current wording
Total income tax expense amounted to $7.6 million for the three months ended March 31, 2026, compared to $6.0 million for the same period in 2025. Effective tax rates were 22.3% for the three months ended March 31, 2026, compared to 21.2% for the same period in 2025. The Company files U.S. federal and state of Florida, Illinois, Indiana, Iowa, Missouri, Texas, and Wisconsin income tax returns.
Previous wording
The Company’s overall investment objectives are to insulate the investment portfolio from undue credit risk, maintain adequate liquidity, insulate capital against changes in market value and control excessive changes in earnings while optimizing investment performance. The types and maturities of securities purchased are primarily based on the Company’s current and projected liquidity and interest rate sensitivity positions. The following table sets forth the amortized cost of the available-for-sale and held-to-maturity securities as of September 30, 2025 and December 31, 2024 (dollars in thousands):
Current wording
The Company’s overall investment objectives are to insulate the investment portfolio from undue credit risk, maintain adequate liquidity, insulate capital against changes in market value and control excessive changes in earnings while optimizing investment performance. The types and maturities of securities purchased are primarily based on the Company’s current and projected liquidity and interest rate sensitivity positions.
Previous wording
At September 30, 2025, the Company’s investment portfolio decreased by $16.5 million from December 31, 2024 primarily due to the sale of fifteen securities, paydowns, calls and maturities of various securities mostly offset by the purchase of twenty-three securities. When purchasing investment securities, the Company considers its overall liquidity and interest rate risk profile, as well as the adequacy of expected returns relative to the risks assumed. The table below presents the credit ratings as of September 30, 2025 for investment securities (in thousands):
Current wording
At March 31, 2026, the amortized cost of the Company’s investment portfolio increased by $109.2 million from December 31, 2025 primarily due to the acquisition of Two Rivers Bank, subsequent sale of their entire portfolio, reinvestment of a portion of the proceeds, and the redeployment of some of the proceeds to other areas of the balance sheet. When purchasing investment securities, the Company considers its overall liquidity and interest rate risk profile, as well as the adequacy of expected returns relative to the risks assumed.
Previous wording
The loan portfolio is the largest category of the Company’s earning assets. The following table summarizes the composition of the loan portfolio at amortized cost, including loans held for sale, as of September 30, 2025 and December 31, 2024 (in thousands):
Current wording
The loan portfolio (net of unearned interest) is the largest category of the Company’s earning assets. The following table summarizes the composition of the loan portfolio, including loans held for sale, as of March 31, 2026, and December 31, 2025 (dollars in thousands):
Previous wording
Loan balances increased $151.6 million, or 2.7%. The increase was primarily due to construction and land development loans increasing and increased seasonal demand for agricultural operating loans. The balance of real estate loans held for sale, included in the balances shown above, amounted to $5.5 million and $6.6 million as of September 30, 2025 and December 31, 2024, respectively.
Current wording
Loan balances increased $932.9 million, or 15.5%. The increase was primarily due to the acquisition of Two Rivers. The balance of real estate loans held for sale, included in the balances shown above, amounted to $4.9 million and $5.2 million as of March 31, 2026 and December 31, 2025, respectively.
Previous wording
First Mid Bank does not have a concentration, as defined by the regulatory agencies and in Note 4, in construction and land development loans or commercial real estate loans as a percentage of the Company's total capital. At September 30, 2025 and December 31, 2024, First Mid Bank did have industry loan concentrations that exceeded 25% of the sum of Tier 1 Capital and allowance for loan loss in the following industries (dollars in thousands):
Current wording
First Mid Bank and Two Rivers Bank do not have a concentration, as defined by the regulatory agencies and land development loans or commercial real estate loans as a percentage of the total amount of the Company's total capital for the periods shown above. At March 31, 2026 and December 31, 2025, First Mid Bank and Two Rivers Bank did have industry loan concentrations in excess of 25% of the sum of Tier 1 Capital and allowance for loan loss in the following industries (dollars in thousands):
Previous wording
First Mid Bank had no further industry loan concentrations in excess of 25% of the sum of Tier 1 Capital and allowance for loan loss.
Current wording
First Mid Bank and Two Rivers Bank had no further industry loan concentrations in excess of 25% of the sum of Tier 1 Capital and allowance for loan loss.
Previous wording
As of September 30, 2025, loans with maturities over one year consisted of approximately $2.5 billion in fixed rate loans and approximately $2.1 billion in variable rate loans. The loan maturities noted above are based on the contractual provisions of the individual loans. The Company has no general policy regarding renewals and borrower requests, which are handled on a case-by-case basis.
Current wording
As of March 31, 2026, loans with maturities over one year consisted of approximately $3.2 billion in fixed rate loans and approximately $2.1 billion in variable rate loans. The loan maturities noted above are based on the contractual provisions of the individual loans. The Company has no general policy regarding renewals and borrower requests, which are handled on a case-by-case basis.
Previous wording
Nonperforming loans include: (a) loans accounted for on a nonaccrual basis; (b) accruing loans contractually past due 90 days or more as to interest or principal payments; and (c) loans not included in (a) and (b) above which are defined as “modified”. Repossessed assets include primarily repossessed real estate and automobiles.
Current wording
Nonperforming loans include: (a) loans accounted for on a nonaccrual basis; (b) accruing loans contractually past due ninety days or more as to interest or principal payments; and (c) loans not included in (a) and (b) above which are defined as “modified.” Repossessed assets include primarily repossessed real estate and automobiles.
Previous wording
The Company’s policy is to discontinue the accrual of interest income on any loan for which principal or interest is 90 days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal.
Current wording
The Company’s policy is to discontinue the accrual of interest income on any loan for which principal or interest is 90 days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on nonaccrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal.
Previous wording
The $8.0 million decrease in nonaccrual loans during 2025 resulted from the net of $8.6 million of loans put on nonaccrual status offset by $12.2 million of loans becoming current or paid-off and $4.4 million of loans charged off. The following table summarizes the composition of nonaccrual loans (dollars in thousands):
Current wording
The $12.1 million increase in nonaccrual loans during 2026 resulted from the net of $10.9 million of loans acquired from Two Rivers Bank, $5.8 million of loans put on nonaccrual status, offset by $1.1 million of loans becoming current or paid-off, $2.0 million of loans transferred to other real estate owned, and $1.5 million loans charged off.
Previous wording
Interest income that would have been reported if nonaccrual and restructured loans had been performing totaled $981,000 and $516,000 for the nine months ended September 30, 2025 and 2024, respectively.
Current wording
Interest income that would have been reported if nonaccrual and restructured loans had been performing totaled $501,000 and $471,000 for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
The $1.3 million decrease in repossessed assets during the 2025 resulted from $184,000 of additional assets repossessed and $1.2 million repossessed assets sold, $257,000 write-downs, and no change in fair value premiums and discounts. The following table summarizes the composition of repossessed assets (dollars in thousands):
Current wording
The $2.7 million increase in repossessed assets during 2026 resulted from $3.0 million of additional assets repossessed and $280,000 of repossessed assets sold, $50,000 of write-downs on existing assets, and no deferred fair value marks were recognized. The following table summarizes the composition of repossessed assets (dollars in thousands):
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Current report — wording carried from elsewhere
This document may contain certain forward-looking statements about the Company, such as discussions of the Company’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. The Company 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 the Company are identified by use of the words “believe,”
Current report — wording carried from elsewhere
Net interest income before the provision for credit losses was $70.8 million compared to net interest income of $59.4 million for the same period in 2025. The increase in net interest income was primarily due to the addition of the Two Rivers Bank loan portfolio, as well as the increased net interest margin as mentioned above.
Current report — wording carried from elsewhere
The following table sets forth the amortized cost of the available-for-sale and held-to-maturity securities as of March 31, 2026 and December 31, 2025 (dollars in thousands):
Current report — wording carried from elsewhere
The table below presents the credit ratings as of March 31, 2026 for investment securities (in thousands):
Current report — wording carried from elsewhere
The following table summarizes the composition of nonaccrual loans (dollars in thousands):
Current report — wording carried from elsewhere
Information relating to securities sold under agreements to repurchase and other borrowings as of March 31, 2026 and December 31, 2025 is presented below (dollars in thousands):
Current report — wording carried from elsewhere
The following table sets forth the Company’s interest rate repricing GAP for selected maturity periods at March 31, 2026 (dollars in thousands):
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The tax-exempt income is shown on a tax-equivalent basis.