First Mid Bancshares, Inc. Announces Third Quarter 2023 Results

First Mid Bancshares, Inc.

MATTOON, Ill., Oct. 26, 2023 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended September 30, 2023.

Highlights

• Net income of $15.1 million, or $0.68 diluted EPS

• Adjusted net income (non-GAAP) of $17.1 million, or $0.77 diluted EPS

• Closed on the acquisition of Blackhawk Bancorp, Inc. (“Blackhawk”) on August 15^th

• Completed balance sheet restructuring by selling a portion of Blackhawk bonds

• Increased liquidity position and lowered loan to deposit ratio to 87%

• Net interest margin, on a tax equivalent basis (non-GAAP), improved to 3.06% for the third quarter

“We are pleased to deliver solid core results that provide a baseline to the earnings momentum we expect to achieve with the Blackhawk acquisition,” said Joe Dively, Chairman and Chief Executive Officer. “We executed well in a challenging operating environment and maintained our disciplined approach to growth and prudent credit management. We are extremely excited to welcome the addition of new customers and talented employees following our acquisition of Blackhawk. The integration and operational planning are progressing as expected, and we are confident that this strategic combination will enhance value for our stockholders by driving improved profitability trends and expanding our platform for growth opportunities.”

Blackhawk Update
The Company has received approval from the OCC to complete the merger of Blackhawk Bank with and into First Mid Bank & Trust, N.A. The planned bank merger and system conversion are scheduled for the first weekend of December.

With the closing of the acquisition of Blackhawk on August 15^th, the Company added approximately $1.2 billion in deposits and $730.2 million in loans, net of interest rate marks and the non-PCD credit mark. The final purchase accounting fair value marks included a discount to loans for credit and interest rates totaling $50.7 million. An amount of $4.1 million was recorded directly to the allowance for credit losses related to purchase credit deteriorated loans. The marks also included a discount to time deposits and debt of $2.3 million and $3.7 million, respectively. The core deposit intangible fair value mark was $34.6 million. In addition to $2.1 in acquisition related costs, the third quarter included $6.0 million of provision expense of which $5.5 million was recorded to Blackhawk Bank, including $3.8 million for the “Day Two” current expected credit loss (“CECL”) requirement.

After closing the acquisition, the Company sold a portion of Blackhawk’s bonds from its investment portfolio for net proceeds totaling $251.9 million. The transactions resulted in a net gain on sales of securities of $3.4 million for the quarter. These funds were used to pay down a portion of the Company’s borrowings and brokered CD’s, and the remaining balance was retained in cash.

Net Interest Income
Net interest income for the third quarter of 2023 increased by $8.1 million, or 19.1% compared to the second quarter of 2023. Interest income and interest expense increased in the quarter by $14.3 million and $6.3 million, respectively. The increase in interest income was primarily driven by the addition of Blackhawk and the repricing of loans with higher interest rates. Accretion income for the quarter was $2.6 million, an increase compared to $0.5 million in the prior quarter. Interest expense increased primarily from the addition of Blackhawk and higher interest rates. The third quarter interest expense included $0.4 million in amortization of premiums on time deposits.

In comparison to the third quarter of 2022, net interest income increased $2.2 million, or 4.3%. The increase was primarily driven by the addition of Blackhawk. Interest income increased by $23.7 million, while interest expense increased $21.5 million.

Net Interest Margin
Net interest margin, on a tax equivalent basis (non-GAAP), was 3.06% for the third quarter of 2023, which was 22 basis points higher compared to the prior quarter. Earning asset yields increased by 46 basis points and the average cost of funds increased 24 basis points. The quarter included a net $2.2 million of purchase accounting benefit.

In comparison to the third quarter of last year, the net interest margin decreased 15 basis points, with an average earnings asset increase of 112 basis points versus the average cost of funds increase of 127 basis points.

Loan Portfolio
Total loans ended the quarter at $5.54 billion, representing an increase of $726.6 million. Excluding the Blackhawk acquired net loans in the period, loans decreased by $3.5 million compared to the prior quarter. The largest category of growth came in CRE, while C&I loans declined the most. Overall, loan demand was slower in the quarter, but new opportunities were well diversified both geographically and by sector. The weighted average yield on new loans was 8.88% in the quarter.

Asset Quality
The Company’s strong credit culture continues to be reflected in its asset quality metrics for September 30, 2023. The allowance for credit losses (“ACL”) increased by $9.6 million to $68.2 million with an ending ACL to total loans ratio of 1.23%. In addition to the ACL, an unearned discount of $54.5 remains at quarter end providing another 99 basis points of coverage. Provision expense was recorded in the amount of $5.9 million, inclusive of the Blackhawk acquisition CECL requirement. The Company had a total of $0.2 million in net charge offs in the quarter. Also, at the end of the third quarter, the ratio of non-performing loans to total loans was 0.38%, and the ACL to non-performing loans was 320.85%. The ratio of nonperforming assets to total assets was 0.30% and nonperforming loans were $21.3 million at quarter end. For the quarter, special mention loans were $73.7 million of which $24.5 million were added for Blackhawk. Substandard loans at the end of the quarter were $30.6 million of which $4.1 million were added for Blackhawk.

Deposits
Total deposits ended the quarter at $6.35 billion, which represented an increase of $1.13 billion. Excluding the net deposits acquired from Blackhawk, deposits declined by $68.2 million from the prior quarter. Most of the changes in the period were driven by seasonal real estate tax and overall customer operating needs. Although the deposit cost pressures continue, outflows directly tied to pricing trended lower in the quarter. The Company’s average rate on cost of funds increased to 1.83% compared to 1.59% in the prior quarter and 0.56% in the third quarter of 2022.

Noninterest Income
Noninterest income represented 31% of our total net revenues in the quarter and 32% year-to-date.

Noninterest income for the third quarter of 2023 was $23.1 million compared to $19.5 million in the second quarter of 2023. The increase compared to the prior quarter was primarily due to the addition of Blackhawk and a $3.4 million gain on securities sales tied to the balance sheet restructuring after closing the acquisition.

In comparison to the third quarter of 2022, noninterest income increased $6.3 million, or 37.3%, due to a combination of organic growth, the addition of Blackhawk and the securities gains.

Noninterest Expenses
Noninterest expense for the third quarter of 2023 totaled $47.1 million compared to $40.0 million in the prior quarter. The increase was primarily driven by the addition of Blackhawk and approximately $2.1 million in nonrecurring acquisition related costs.

In comparison to the third quarter of 2022, noninterest expenses increased $5.5 million, inclusive of $2.1 million in nonrecurring acquisition related costs. The increase was primarily driven by the addition of Blackhawk. Excluding Blackhawk and acquisition related costs, the primary changes were lower salaries and benefits costs tied to the cost savings initiatives at the end of the first quarter.

The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the third quarter 2023 was 58.6% compared to 60.4% in the prior quarter and 59.6% for the same period last year.

Capital Levels
The Company’s capital levels remained strong and above the “well capitalized” levels. During the third quarter, the closing of the Blackhawk acquisition resulted in decreases to the ratios. Capital levels ended the period as follows:

Total capital to risk-weighted assets	12.60%
Tier 1 capital to risk-weighted assets	10.19%
Common equity tier 1 capital to risk-weighted assets	9.85%
Leverage ratio	9.74%

Tangible book value per share declined in the period to $19.73. The decrease was primarily the result of the acquisition of Blackhawk and an increase to the unrealized loss position in the bond portfolio impacting accumulated other comprehensive income (“AOCI”). The reduction to tangible book value per share from AOCI was $1.15.

About First Mid: First Mid Bancshares, Inc. (“First Mid”) is the parent company of First Mid Bank & Trust, N.A., Blackhawk Bank, First Mid Insurance Group, Inc., and First Mid Wealth Management Co. First Mid is a $7.9 billion community-focused organization that provides a full-suite of financial services including banking, wealth management, brokerage, Ag services, and insurance through a sizeable network of locations throughout Illinois, Missouri, Texas, and Wisconsin and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in providing solutions and services to the customers and communities and has done so over the last 157 years. More information about the Company is available on our website at www.firstmid.com.

Non-GAAP Measures: In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance. Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported. These non-GAAP financial measures are detailed as supplemental tables and include “Adjusted Net Income,” “Adjusted Diluted EPS,” “Efficiency Ratio,” “Net Interest Margin, tax equivalent,” and “Tangible Book Value per Common Share”. While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP. These non-GAAP financial measures may also differ from the similar measures presented by other companies.

Forward Looking Statements
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 integration of the operations of Blackhawk with First Mid will be materially delayed or will be more costly or difficult than expected; the inability to complete the proposed transactions due to the failure to satisfy conditions to completion of the proposed transactions, including failure to obtain the required regulatory, shareholder and other approvals; the failure of the proposed transactions to close for any other reason; 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 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; and the impact of the global COVID-19 pandemic on First Mid’s businesses, the ability to complete the proposed transactions or any of the other foregoing risks. 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.

Investor Contact:
Aaron Holt
VP, Shareholder Relations
217-258-0463
aholt@firstmid.com

Matt Smith
Chief Financial Officer
217-258-1528
msmith@firstmid.com

– Tables Follow –

			FIRST MID BANCSHARES, INC.
			Condensed Consolidated Balance Sheets
			(In thousands, unaudited)
			As of
			September 30,				December 31,				September 30,
				2023				2022				2022
Assets
Cash and cash equivalents			$	383,237			$	152,433			$	160,954
Investment securities				1,226,746				1,223,720				1,235,505
Loans (including loans held for sale)				5,540,065				4,826,212				4,720,290
Less allowance for credit losses				(68,241	)			(59,093	)			(58,777	)
Net loans				5,471,824				4,767,119				4,661,513
Premises and equipment, net				102,004				90,473				90,659
Goodwill and intangibles, net				267,793				169,897				170,897
Bank owned life insurance				165,022				151,756				150,831
Other assets				238,668				188,817				181,024
Total assets			$	7,855,294			$	6,744,215			$	6,651,383
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing			$	1,389,022			$	1,256,514			$	1,334,686
Interest bearing				4,957,302				4,000,487				4,148,512
Total deposits				6,346,324				5,257,001				5,483,198
Repurchase agreement with customers				214,978				221,414				220,707
Other borrowings				364,953				465,071				181,232
Junior subordinated debentures				24,003				19,364				19,322
Subordinated debt				106,648				94,553				94,515
Other liabilities				60,440				53,657				51,694
Total liabilities				7,117,346				6,111,060				6,050,668
Total stockholders’ equity				737,948				633,155				600,715
Total liabilities and stockholders’ equity			$	7,855,294			$	6,744,215			$	6,651,383

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
			Three Months Ended						Nine Months Ended
			September 30,						September 30,
			2023			2022			2023			2022
Interest income:
Interest and fees on loans			$	69,143		$	49,278		$	183,747		$	132,741
Interest on investment securities				9,284			7,302			23,604			22,095
Interest on federal funds sold & other deposits				2,011			174			2,888			346
Total interest income				80,438			56,754			210,239			155,182
Interest expense:
Interest on deposits				22,047			4,915			51,394			9,586
Interest on securities sold under agreements to repurchase				1,625			428			4,811			632
Interest on other borrowings				4,749			1,927			13,716			2,848
Interest on jr. subordinated debentures				545			241			1,314			553
Interest on subordinated debt				1,029			986			3,003			2,958
Total interest expense				29,995			8,497			74,238			16,577
Net interest income				50,443			48,257			136,001			138,605
Provision for credit losses				5,911			142			5,552			4,001
Net interest income after provision for loan				44,532			48,115			130,449			134,604
Non-interest income:
Wealth management revenues				4,940			4,843			15,795			16,291
Insurance commissions				5,199			4,158			19,416			16,903
Service charges				2,994			2,445			7,583			6,737
Net securities gains/(losses)				3,389			79			3,337			81
Mortgage banking revenues				846			355			1,328			1,125
ATM/debit card revenue				3,766			3,101			10,114			9,213
Other				1,919			1,810			7,445			6,125
Total non-interest income				23,053			16,791			65,018			56,475
Non-interest expense:
Salaries and employee benefits				25,422			24,877			75,037			74,984
Net occupancy and equipment expense				6,929			5,903			18,969			18,131
Net other real estate owned (income) expense				902			58			1,062			243
FDIC insurance				785			479			2,324			1,341
Amortization of intangible assets				2,568			1,598			5,567			4,753
Stationary and supplies				335			361			942			997
Legal and professional expense				1,844			1,770			5,314			5,389
ATM/debit card expense				1,751			1,243			3,990			2,991
Marketing and donations				764			739			2,326			2,318
Other				5,796			4,521			13,184			12,342
Total non-interest expense				47,096			41,549			128,715			123,489
Income before income taxes				20,489			23,357			66,752			67,590
Income taxes				5,372			5,418			15,888			15,277
Net income			$	15,117		$	17,939		$	50,864		$	52,313
Per Share Information
Basic earnings per common share			$	0.68		$	0.88		$	2.41		$	2.61
Diluted earnings per common share				0.68			0.88			2.40			2.60
Weighted average shares outstanding				22,220,438			20,454,669			21,086,802			20,070,687
Diluted weighted average shares outstanding				22,319,334			20,535,215			21,176,946			20,145,435

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
							For the Quarter Ended
							September 30,			June 30,				March 31,				December 31,				September 30,
							2023				2023				2023				2022			2022
Interest income:
Interest and fees on loans							$	69,143		$	58,368			$	56,236			$	53,128			$	49,278
Interest on investment securities								9,284			7,193				7,127				7,285				7,302
Interest on federal funds sold & other deposits								2,011			569				308				296				174
Total interest income								80,438			66,130				63,671				60,709				56,754
Interest expense:
Interest on deposits								22,047			16,580				12,767				9,227				4,915
Interest on securities sold under agreements to repurchase								1,625			1,723				1,463				1,163				428
Interest on other borrowings								4,749			4,084				4,883				3,345				1,927
Interest on jr. subordinated debentures								545			390				379				315				241
Interest on subordinated debt								1,029			986				988				987				986
Total interest expense								29,995			23,763				20,480				15,037				8,497
Net interest income								50,443			42,367				43,191				45,672				48,257
Provision for credit losses								5,911			458				(817	)			805				142
Net interest income after provision for loan								44,532			41,909				44,008				44,867				48,115
Non-interest income:
Wealth management revenues								4,940			5,341				5,514				6,201				4,843
Insurance commissions								5,199			5,737				8,480				4,719				4,158
Service charges								2,994			2,386				2,203				2,375				2,445
Securities gains, net								3,389			(6	)			(46	)			(48	)			79
Mortgage banking revenues								846			332				150				65				355
ATM/debit card revenue								3,766			3,265				3,083				3,209				3,101
Other								1,919			2,431				3,095				1,686				1,810
Total non-interest income								23,053			19,486				22,479				18,207				16,791
Non-interest expense:
Salaries and employee benefits								25,422			23,544				26,071				23,610				24,877
Net occupancy and equipment expense								6,929			6,035				6,005				6,126				5,903
Net other real estate owned (income) expense								902			27				133				87				58
FDIC insurance								785			1,076				463				464				479
Amortization of intangible assets								2,568			1,477				1,522				1,537				1,598
Stationary and supplies								335			315				292				298				361
Legal and professional expense								1,844			1,780				1,690				1,607				1,770
ATM/debit card expense								1,751			1,016				1,223				1,309				1,243
Marketing and donations								764			908				654				681				739
Other								5,796			3,864				3,524				3,653				4,521
Total non-interest expense								47,096			40,042				41,577				39,372				41,549
Income before income taxes								20,489			21,353				24,910				23,702				23,357
Income taxes								5,372			4,786				5,730				3,063				5,418
Net income							$	15,117		$	16,567			$	19,180			$	20,639			$	17,939
Per Share Information
Basic earnings per common share							$	0.68		$	0.81			$	0.94			$	1.01			$	0.88
Diluted earnings per common share								0.68			0.80				0.93				1.01				0.88
Weighted average shares outstanding								22,220,438			20,528,717				20,492,254				20,461,046				20,454,669
Diluted weighted average shares outstanding								22,319,334			20,628,239				20,563,972				20,535,220				20,535,215

		FIRST MID BANCSHARES, INC.
		Consolidated Financial Highlights and Ratios
		(Dollars in thousands, except per share data)
		(Unaudited)
		As of and for the Quarter Ended
		September 30,				June 30,				March 31,				December 31,				September 30,
			2023				2023				2023				2022				2022
Loan Portfolio
Construction and land development		$	189,206			$	151,574			$	159,157			$	144,264			$	142,801
Farm real estate loans			399,834				392,220				401,957				410,327				360,424
1-4 Family residential properties			531,699				418,932				424,545				440,180				436,625
Multifamily residential properties			327,067				303,482				301,808				294,346				298,321
Commercial real estate			2,392,834				2,056,529				2,003,647				2,030,011				1,996,338
Loans secured by real estate			3,840,640				3,322,737				3,291,114				3,319,128				3,234,509
Agricultural operating loans			179,447				148,318				146,847				166,838				160,511
Commercial and industrial loans			1,242,653				1,094,522				1,078,021				1,082,960				1,064,033
Consumer loans			99,542				80,241				88,430				97,775				100,783
All other loans			177,783				167,598				156,219				159,511				160,454
Total loans			5,540,065				4,813,416				4,760,631				4,826,212				4,720,290
Deposit Portfolio
Non-interest bearing demand deposits		$	1,389,022			$	1,171,047			$	1,262,181			$	1,256,514			$	1,334,686
Interest bearing demand deposits			1,940,162				1,477,765				1,419,791				1,389,283				1,364,306
Savings deposits			734,377				602,523				639,691				636,699				657,592
Money Market			1,161,957				923,259				878,452				1,267,726				1,443,060
Time deposits			1,120,806				1,044,991				830,663				706,779				683,554
Total deposits			6,346,324				5,219,585				5,030,778				5,257,001				5,483,198
Asset Quality
Non-performing loans		$	21,269			$	18,637			$	15,163			$	19,170			$	20,812
Non-performing assets			23,565				22,615				19,225				23,539				25,143
Net charge-offs (recoveries)			181				(38	)			53				489				440
Allowance for credit losses to non-performing loans			320.85	%			315.07	%			383.98	%			308.26	%			282.42	%
Allowance for credit losses to total loans outstanding			1.23	%			1.22	%			1.22	%			1.22	%			1.25	%
Nonperforming loans to total loans			0.38	%			0.39	%			0.32	%			0.40	%			0.44	%
Nonperforming assets to total assets			0.30	%			0.34	%			0.29	%			0.35	%			0.38	%
Special Mention loans			73,732				40,687				47,022				39,853				25,298
Substandard and Doubtful loans			30,575				28,255				29,931				34,352				37,378
Common Share Data
Common shares outstanding			23,830,038				20,528,192				20,519,717				20,452,376				20,454,636
Book value per common share		$	30.97			$	32.18			$	32.26			$	30.96			$	29.37
Tangible book value per common share (1)			19.73				23.48				24.05				22.65				21.01
Tangible book value per common share excluding other comprehensive income at period end (1)			27.24				30.87				30.77				30.06				29.21
Market price of stock			26.56				24.14				27.22				32.08				31.97
Key Performance Ratios and Metrics
End of period earning assets		$	7,007,282			$	6,023,553			$	5,995,674			$	6,063,953			$	5,975,619
Average earning assets			6,593,781				6,049,626				6,052,264				6,000,106				6,063,061
Average rate on average earning assets (tax equivalent)			4.89	%			4.43	%			4.32	%			4.07	%			3.77	%
Average rate on cost of funds			1.83	%			1.59	%			1.38	%			1.00	%			0.56	%
Net interest margin (tax equivalent) (1)			3.06	%			2.84	%			2.94	%			3.07	%			3.21	%
Return on average assets			0.90	%			0.99	%			1.15	%			1.24	%			1.07	%
Adjusted return on average assets (1)			0.94	%			1.03	%			1.18	%			1.25	%			1.11	%
Return on average common equity			8.70	%			10.07	%			12.11	%			13.51	%			11.18	%
Adjusted return on average common equity (1)			9.82	%			10.42	%			11.92	%			13.60	%			11.51	%
Efficiency ratio (tax equivalent) (1)			58.60	%			60.37	%			59.01	%			58.07	%			59.64	%
Full-time equivalent employees			1,224				995				988				1,043				1,051
1 Non-GAAP financial measure. Refer to reconciliation to the comparable GAAP measure.

FIRST MID BANCSHARES, INC.
Net Interest Margin
(In thousands, unaudited)
		For the Quarter Ended September 30, 2023
		QTD Average								Average
		Balance				Interest				Rate
INTEREST EARNING ASSETS
Interest bearing deposits		$	90,957			$	1,882			8.21	%
Federal funds sold			8,561				114			5.28	%
Certificates of deposits investments			2,152				16			2.95	%
Investment Securities:
Taxable (total less municipals)			1,004,994				7,352			2.93	%
Tax-exempt (Municipals)			287,232				2,445			3.40	%
Loans (net of unearned income)			5,199,885				69,397			5.29	%
Total interest earning assets			6,593,781				81,206			4.89	%
NONEARNING ASSETS
Cash and due from banks			125,014
Premises and equipment			97,474
Other nonearning assets			524,478
Allowance for loan losses			(64,636	)
Total assets		$	7,276,111
INTEREST BEARING LIABILITIES
Demand deposits		$	2,646,134			$	12,740			1.91	%
Savings deposits			669,930				190			0.11	%
Time deposits			1,081,978				9,117			3.34	%
Total interest bearing deposits			4,398,042				22,047			1.99	%
Repurchase agreements			212,644				1,625			3.03	%
FHLB advances			486,738				4,761			3.88	%
Federal funds purchased			-				-			0.00	%
Subordinated debt			105,332				1,028			3.87	%
Jr. subordinated debentures			19,258				545			11.23	%
Other debt			-				(12	)		0.00	%
Total borrowings			823,972				7,947			3.83	%
Total interest bearing liabilities			5,222,014				29,994			2.28	%
NONINTEREST BEARING LIABILITIES
Demand deposits			1,293,422			Average cost of funds				1.83	%
Other liabilities			65,265
Stockholders’ equity			695,410
Total liabilities & stockholders’ equity		$	7,276,111
Net Interest Earnings / Spread						$	51,212			2.61	%
Impact of Non-Interest Bearing Funds										0.45	%
Tax effected yield on interest earning assets										3.06	%

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, unaudited)
					As of and for the Quarter Ended
					September 30,				June 30,				March 31,				December 31,				September 30,
						2023				2023				2023				2022				2022
Net interest income as reported					$	50,443			$	42,367			$	43,191			$	45,672			$	48,257
Net interest income, (tax equivalent)						51,212				43,109				43,947				46,464				49,060
Average earning assets						6,593,781				6,049,626				6,052,264				6,000,106				6,063,061
Net interest margin (tax equivalent)						3.06	%			2.84	%			2.94	%			3.07	%			3.21	%
Common stockholder’s equity					$	737,948			$	660,687			$	661,865			$	633,155			$	600,715
Goodwill and intangibles, net						267,793				178,615				168,373				169,897				170,897
Common shares outstanding						23,830				20,528				20,520				20,452				20,455
Tangible Book Value per common share					$	19.73			$	23.48			$	24.05			$	22.65			$	21.01
Accumulated other comprehensive loss (AOCI)						(178,903	)			(151,566	)			(137,901	)			(151,507	)			(167,663	)
Adjusted tangible book value per commone share					$	27.24			$	30.87			$	30.77			$	30.06			$	29.21

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except per share data, unaudited)
					As of and for the Quarter Ended
					September 30,				June 30,				March 31,				December 31,				September 30,
						2023				2023				2023				2022				2022
Adjusted earnings Reconciliation
Net Income - GAAP					$	15,117			$	16,567			$	19,180			$	20,639			$	17,939
Adjustments (post-tax): (1)
Acquisition ACL on non-PCD assets in provision expense						2,985				-				-				-				-
Nonrecurring severance expense						-				-				416				-				-
Net (gain)/loss on securities sales						(2,677	)			-				-				-				-
Integration and acquisition expenses						1,653				589				135				131				524
Total non-recurring adjustments (non-GAAP)					$	1,962			$	589			$	551			$	131			$	524
Adjusted earnings - non-GAAP					$	17,079			$	17,156			$	19,731			$	20,770			$	18,463
Adjusted diluted earnings per share (non-GAAP)					$	0.77			$	0.83			$	0.96			$	1.01			$	0.90
Adjusted return on average assets - non-GAAP						0.94	%			1.03	%			1.18	%			1.25	%			1.11	%
Adjusted return on average common equity - non-GAAP						9.82	%			10.42	%			11.92	%			13.60	%			11.51	%
Efficiency Ratio Reconciliation
Noninterest expense - GAAP					$	47,096			$	40,042			$	41,577			$	39,372			$	41,549
Other real estate owned property income (expense)						(902	)			(27	)			(133	)			(87	)			(58	)
Amortization of intangibles						(2,568	)			(1,477	)			(1,522	)			(1,537	)			(1,598	)
Nonrecurring severance expense						-				-				(527	)			-				-
integration and acquisition expenses						(2,093	)			(745	)			(171	)			(166	)			(663	)
Adjusted noninterest expense (non-GAAP)					$	41,533			$	37,793			$	39,224			$	37,582			$	39,230
Net interest income -GAAP					$	50,443			$	42,367			$	43,192			$	45,672			$	48,257
Effect of tax-exempt income (1)						769				742				755				792				803
Adjusted net interest income (non-GAAP)					$	51,212			$	43,109			$	43,947			$	46,464			$	49,060
Noninterest income - GAAP					$	23,053			$	19,486			$	22,479			$	18,207			$	16,791
Net (gain)/loss on securities sales						(3,389	)			6				46				48				(79	)
Adjusted noninterest income (non-GAAP)					$	19,664			$	19,492			$	22,525			$	18,255			$	16,712
Adjusted total revenue (non-GAAP)					$	70,876			$	62,601			$	66,472			$	64,719			$	65,772
Efficiency ratio (non-GAAP)						58.60	%			60.37	%			59.01	%			58.07	%			59.64	%
(1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%.