First Mid Bancshares, Inc. Announces Second Quarter 2023 Results

First Mid Bancshares, Inc.

MATTOON, Ill., July 27, 2023 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended June 30, 2023.

Highlights

• Net income of $16.6 million, or $0.80 diluted EPS

• Adjusted net income (non-GAAP) of $17.2 million, or $0.83 diluted EPS

• Loan growth of 1.1% and deposit growth of 3.8% for the quarter

• Board of Directors declares regular quarterly dividend of $0.23 per share

• Completed the acquisition of PGIB Insurance (“PGIB”) on June 16^th adding approximately $2.5 million in annual revenues to noninterest income

• Received regulatory approvals for the acquisition of Blackhawk Bancorp, Inc. (“Blackhawk”) with closing targeted for mid-August

“Our second quarter results reflect the strength of our diversification and the success of our strategic initiatives,” said Joe Dively, Chairman and Chief Executive Officer. “We delivered on our relationship-driven model with growth in both loans and deposits, while maintaining strong asset quality metrics.”

“On the M&A front, we were pleased to receive regulatory approval to proceed with closing the Blackhawk acquisition, which we have targeted for mid-August. The work that has been done to this point and the reception by Blackhawk customers and employees has us increasingly excited about what the combined company can achieve. In addition, we completed the acquisition of PGIB Insurance on June 16^th, which strengthens our expertise in the insurance business and positions us to advance these services through our northern and western Illinois footprint,” Dively concluded.

Net Interest Income

Net interest income for the second quarter of 2023 decreased by $0.8 million, or 1.9% compared to the first quarter of 2023. Interest income and interest expense increased in the quarter by $2.5 million and $3.3 million, respectively. The increase in interest income was primarily driven by higher interest rates and loan growth. Accretion income increased by $0.1 million in the quarter to $0.5 million. Interest expense increased primarily from higher rates and balances on deposits, partially offset by less borrowings.   

In comparison to the second quarter of 2022, net interest income decreased $4.5 million, or 9.5%.   Interest income increased by $14.8 million and was more than offset by an increase in interest expense of $19.3 million.             

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 2.84% for the second quarter of 2023, which was 10 basis points lower compared to the prior quarter. Earning asset yields increased by 11 basis points and the average cost of funds increased 21 basis points with more aggressive pricing on deposits early in the quarter.

In comparison to the second quarter of last year, the net interest margin decreased 36 basis points, with an average earnings asset increase of 93 basis points versus the average cost of funds increased 129 basis points.

Loan Portfolio

Total loans ended the quarter at $4.81 billion, representing an increase of $52.8 million, or 1.1% compared to the prior quarter. Growth was well diversified both geographically and by sector and came primarily within commercial real estate and commercial and industrial loans. The average yield on new loans and operating line usage was 7.8% in the quarter. The loan pipeline outlook remains muted due to the macro headwinds in the economy.     

Asset Quality

The Company’s strong credit culture continues to be reflected in its asset quality metrics for June 30, 2023. The allowance for credit losses (‘ACL’) increased by $0.5 million to $58.7 million with an ending ACL to total loans ratio of 1.22%. Provision expense was recorded in the amount of $0.5 million and the Company had net recoveries in the period. Also, at the end of the second quarter, the ratio of non-performing loans to total loans was 0.39%, and the ACL to non-performing loans was 315%.   The ratio of nonperforming assets to total assets was 0.34% at quarter end. Nonperforming loans increased by $3.5 million in the period to $18.6 million. Special mention loans declined $6.3 million in the quarter to $40.7 million. Substandard loans declined $1.7 million in the period to $28.3 million.   

Deposits

Total deposits ended the quarter at $5.22 billion, which represented an increase of $188.8 million, or 3.8% from the prior quarter. The increase was primarily in interest bearing demand and time deposits. The Company was aggressive with pricing throughout the first half of the quarter to increase deposits. The success of that effort allowed the Company to use the funds primarily to pay down a net $145.0 million in Federal Home Loan Bank borrowings and to fund loan growth.   The Company’s average rate on cost of funds increased to 1.59% compared to 1.38% in the prior quarter, which reflected the lowest increase since the second quarter of 2022.               

Noninterest Income/PGIB Acquisition

On June 16, 2023, our subsidiary First Mid Insurance Group closed on the acquisition of PGIB Insurance based in Macomb, Illinois. PGIB has nearly a 100-year history serving northern and western Illinois with a diversified product offering including commercial property & casualty, personal property & casualty, and group medical plans and individual health insurance. Annual revenues are approximately $2.5 million, which is expected to grow with the opportunities from bank referrals and access to expanded markets.

Noninterest income represented 31.5% of our total net revenues in the quarter and 32.9% year-to-date.

Noninterest income for the second quarter of 2023 was $19.5 million compared to $22.5 million in the first quarter of 2023.   The decrease compared to the prior quarter was primarily due to the seasonality of the insurance business, which was down by $2.7 million, and the previously disclosed bank owned life insurance claim of $0.7 million that occurred in the first quarter of 2023.

In comparison to the second quarter of 2022, noninterest income increased $0.9 million, or 5.0%. All categories increased, except for wealth management and net securities gains.              

Noninterest Expenses  

Noninterest expense for the second quarter of 2023 totaled $40.0 million compared to $41.6 million in the prior quarter. The decrease was primarily driven by the cost savings initiatives the Company implemented at the end of the first quarter and the variable cost tied to the seasonality of wealth management and insurance revenues. This was partially offset by an increase to the FDIC insurance expense accrual. The current quarter included $0.7 million in nonrecurring acquisition related expenses.

In comparison to the second quarter of 2022, noninterest expenses decreased $1.5 million. The decrease was primarily driven by 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 second quarter 2023 was 60.4% compared to 59.0% in the prior quarter and 58.5% for the same period last year.

Capital Levels and Dividend

The Company’s capital levels remained strong and comfortably above the “well capitalized” levels. During the second quarter, significant loan growth increased risk-weighted assets resulting in a modest decrease in certain of the ratios. Capital levels ended the period as follows:

Total capital to risk-weighted assets	15.67%
Tier 1 capital to risk-weighted assets	12.82%
Common equity tier 1 capital to risk-weighted assets	12.45%
Leverage ratio	10.00%

The Company’s Board of Directors approved its next quarterly dividend of $0.23 payable on September 1, 2023 for shareholders of record on August 14, 2023.

About First Mid: First Mid Bancshares, Inc. (“First Mid”) is the parent company of First Mid Bank & Trust, N.A., First Mid Insurance Group, Inc., and First Mid Wealth Management Co. First Mid is a $6.7 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, and Texas, 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 and Blackhawk, such as discussions of First Mid’s and Blackhawk’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 and Blackhawk, 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 proposed transactions between First Mid and Blackhawk will not be realized or will not be realized within the expected time period; the risk that 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 and Blackhawk; 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 and Blackhawk’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 and Blackhawk; accounting principles, policies and guidelines; and the impact of the global COVID-19 pandemic on First Mid’s or Blackhawk’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.

Important Information about the Merger and Additional Information
First Mid filed a registration statement on Form S-4 with the SEC on May 30, 2023, which, as amended, was declared effective on June 23, 2023, in connection with the proposed transaction. The registration statement includes a proxy statement of Blackhawk that also constitutes a prospectus of First Mid. The definitive proxy statement/prospectus was first mailed to the shareholders of Blackhawk on or about July 5, 2023, seeking their approval of the proposed transaction. Investors in Blackhawk are urged to read the proxy statement/prospectus, which will contain important information, including detailed risk factors. The proxy statement/prospectus and other documents which were filed by First Mid with the SEC will be available free of charge at the SEC’s website, www.sec.gov, or by directing a request when such a filing is made to First Mid Bancshares, P.O. Box 499, Mattoon, IL 61938, Attention: Investor Relations; or to Blackhawk upon written request to Blackhawk Bancorp, Inc., 400 Broad St., Beloit, WI 53511-6223, Attention: Todd J. James, President & CEO.

Participants in the Solicitation
First Mid and Blackhawk, and certain of their respective directors, executive officers and other members of management and employees, are participants in the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of First Mid is set forth in the proxy statement for its 2023 annual meeting of stockholders, which was filed with the SEC on March 15, 2023. These documents can be obtained free of charge from the sources provided above. Investors may obtain additional information regarding the interests of such participants in the proposed transactions by reading the proxy statement/prospectus for such proposed transactions when it becomes available.

No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

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
			June 30,				December 31,				June 30,
				2023				2022				2022
Assets
Cash and cash equivalents			$	174,253			$	152,433			$	137,544
Investment securities				1,169,428				1,223,720				1,354,943
Loans (including loans held for sale)				4,813,416				4,826,212				4,648,663
Less allowance for credit losses				(58,719	)			(59,093	)			(59,075	)
Net loans				4,754,697				4,767,119				4,589,588
Premises and equipment, net				89,924				90,473				90,766
Goodwill and intangibles, net				178,615				169,897				172,871
Bank owned life insurance				152,538				151,756				149,917
Other assets				184,414				188,817				165,293
Total assets			$	6,703,869			$	6,744,215			$	6,660,922
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing			$	1,171,047			$	1,256,514			$	1,369,756
Interest bearing				4,048,538				4,000,487				3,949,222
Total deposits				5,219,585				5,257,001				5,318,978
Repurchase agreement with customers				209,170				221,414				174,934
Other borrowings				449,979				465,071				386,286
Junior subordinated debentures				19,448				19,364				19,279
Subordinated debt				94,632				94,553				94,476
Other liabilities				50,368				53,657				40,701
Total liabilities				6,043,182				6,111,060				6,034,654
Total stockholders' equity				660,687				633,155				626,268
Total liabilities and stockholders' equity			$	6,703,869			$	6,744,215			$	6,660,922

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
			Three Months Ended							Six Months Ended
			June 30,							June 30,
				2023				2022			2023				2022
Interest income:
Interest and fees on loans			$	58,368			$	43,555		$	114,604			$	83,463
Interest on investment securities				7,193				7,623			14,320				14,793
Interest on federal funds sold & other deposits				569				105			877				172
Total interest income				66,130				51,283			129,801				98,428
Interest expense:
Interest on deposits				16,580				2,523			29,347				4,671
Interest on securities sold under agreements to repurchase				1,723				137			3,186				204
Interest on other borrowings				4,084				645			8,967				921
Interest on jr. subordinated debentures				390				166			769				312
Interest on subordinated debt				986				986			1,974				1,972
Total interest expense				23,763				4,457			44,243				8,080
Net interest income				42,367				46,826			85,558				90,348
Provision for credit losses				458				907			(359	)			3,859
Net interest income after provision for loan				41,909				45,919			85,917				86,489
Non-interest income:
Wealth management revenues				5,341				5,473			10,855				11,448
Insurance commissions				5,737				5,641			14,217				12,745
Service charges				2,386				2,236			4,589				4,292
Net securities gains/(losses)				(6	)			2			(52	)			2
Mortgage banking revenues				332				289			482				770
ATM/debit card revenue				3,265				3,214			6,348				6,112
Other				2,431				1,704			5,526				4,315
Total non-interest income				19,486				18,559			41,965				39,684
Non-interest expense:
Salaries and employee benefits				23,544				25,768			49,615				50,107
Net occupancy and equipment expense				6,035				6,073			12,040				12,228
Net other real estate owned (income) expense				27				218			160				185
FDIC insurance				1,076				436			1,539				862
Amortization of intangible assets				1,477				1,633			2,999				3,155
Stationary and supplies				315				325			607				636
Legal and professional expense				1,780				1,885			3,470				3,619
ATM/debit card expense				1,016				670			2,239				1,748
Marketing and donations				908				706			1,562				1,579
Other				3,864				3,801			7,388				7,821
Total non-interest expense				40,042				41,515			81,619				81,940
Income before income taxes				21,353				22,963			46,263				44,233
Income taxes				4,786				5,205			10,516				9,859
Net income			$	16,567			$	17,758		$	35,747			$	34,374
Per Share Information
Basic earnings per common share			$	0.81			$	0.87		$	1.74			$	1.73
Diluted earnings per common share				0.80				0.86			1.74				1.72
Weighted average shares outstanding				20,528,717				20,448,799			20,510,585				19,875,516
Diluted weighted average shares outstanding				20,628,239				20,529,523			20,596,283				19,947,227

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
					For the Quarter Ended
					June 30,				March 31,				December 31,				September 30,			June 30,
						2023				2023				2022				2022			2022
Interest income:
Interest and fees on loans					$	58,368			$	56,236			$	53,128			$	49,278		$	43,555
Interest on investment securities						7,193				7,127				7,285				7,302			7,623
Interest on federal funds sold & other deposits						569				308				296				174			105
Total interest income						66,130				63,671				60,709				56,754			51,283
Interest expense:
Interest on deposits						16,580				12,767				9,227				4,915			2,523
Interest on securities sold under agreements to repurchase						1,723				1,463				1,163				428			137
Interest on other borrowings						4,084				4,883				3,345				1,927			645
Interest on jr. subordinated debentures						390				379				315				241			166
Interest on subordinated debt						986				988				987				986			986
Total interest expense						23,763				20,480				15,037				8,497			4,457
Net interest income						42,367				43,191				45,672				48,257			46,826
Provision for credit losses						458				(817	)			805				142			907
Net interest income after provision for loan						41,909				44,008				44,867				48,115			45,919
Non-interest income:
Wealth management revenues						5,341				5,514				6,201				4,843			5,473
Insurance commissions						5,737				8,480				4,719				4,158			5,641
Service charges						2,386				2,203				2,375				2,445			2,236
Securities gains, net						(6	)			(46	)			(48	)			79			2
Mortgage banking revenues						332				150				65				355			289
ATM/debit card revenue						3,265				3,083				3,209				3,101			3,214
Other						2,431				3,095				1,686				1,810			1,704
Total non-interest income						19,486				22,479				18,207				16,791			18,559
Non-interest expense:
Salaries and employee benefits						23,544				26,071				23,610				24,877			25,768
Net occupancy and equipment expense						6,035				6,005				6,126				5,903			6,073
Net other real estate owned (income) expense						27				133				87				58			218
FDIC insurance						1,076				463				464				479			436
Amortization of intangible assets						1,477				1,522				1,537				1,598			1,633
Stationary and supplies						315				292				298				361			325
Legal and professional expense						1,780				1,690				1,607				1,770			1,885
ATM/debit card expense						1,016				1,223				1,309				1,243			670
Marketing and donations						908				654				681				739			706
Other						3,864				3,524				3,653				4,521			3,801
Total non-interest expense						40,042				41,577				39,372				41,549			41,515
Income before income taxes						21,353				24,910				23,702				23,357			22,963
Income taxes						4,786				5,730				3,063				5,418			5,205
Net income					$	16,567			$	19,180			$	20,639			$	17,939		$	17,758
Per Share Information
Basic earnings per common share					$	0.81			$	0.94			$	1.01			$	0.88		$	0.87
Diluted earnings per common share						0.80				0.93				1.01				0.88			0.86
Weighted average shares outstanding						20,528,717				20,492,254				20,461,046				20,454,669			20,448,799
Diluted weighted average shares outstanding						20,628,239				20,563,972				20,535,220				20,535,215			20,529,523

			FIRST MID BANCSHARES, INC.
			Consolidated Financial Highlights and Ratios
			(Dollars in thousands, except per share data)
			(Unaudited)
			As of and for the Quarter Ended
			June 30,				March 31,				December 31,				September 30,				June 30,
				2023				2023				2022				2022				2022
Loan Portfolio
Construction and land development			$	151,574			$	159,157			$	144,264			$	142,801			$	141,072
Farm real estate loans				392,220				401,957				410,327				360,424				350,159
1-4 Family residential properties				418,932				424,545				440,180				436,625				424,230
Multifamily residential properties				303,482				301,808				294,346				298,321				330,600
Commercial real estate				2,056,529				2,003,647				2,030,011				1,996,338				1,976,654
Loans secured by real estate				3,322,737				3,291,114				3,319,128				3,234,509				3,222,715
Agricultural operating loans				148,318				146,847				166,838				160,511				142,406
Commercial and industrial loans				1,094,522				1,078,021				1,082,960				1,064,033				1,036,987
Consumer loans				80,241				88,430				97,775				100,783				94,828
All other loans				167,598				156,219				159,511				160,454				151,727
Total loans				4,813,416				4,760,631				4,826,212				4,720,290				4,648,663
Deposit Portfolio
Non-interest bearing demand deposits			$	1,171,047			$	1,262,181			$	1,256,514			$	1,334,686			$	1,369,756
Interest bearing demand deposits				1,477,765				1,419,791				1,389,283				1,364,306				1,453,932
Savings deposits				602,523				639,691				636,699				657,592				683,944
Money Market				923,259				878,452				1,267,726				1,443,060				1,158,724
Time deposits				1,044,991				830,663				706,779				683,554				652,622
Total deposits				5,219,585				5,030,778				5,257,001				5,483,198				5,318,978
Asset Quality
Non-performing loans			$	18,637			$	15,163			$	19,170			$	20,812			$	19,981
Non-performing assets				22,615				19,225				23,539				25,143				24,190
Net charge-offs (recoveries)				(38	)			53				489				440				307
Allowance for credit losses to non-performing loans				315.07	%			383.98	%			308.26	%			282.42	%			295.66	%
Allowance for credit losses to total loans outstanding				1.22	%			1.22	%			1.22	%			1.25	%			1.27	%
Nonperforming loans to total loans				0.39	%			0.32	%			0.40	%			0.44	%			0.43	%
Nonperforming assets to total assets				0.34	%			0.29	%			0.35	%			0.38	%			0.36	%
Special Mention loans				40,687				47,022				39,853				25,298				35,849
Substandard and Doubtful loans				28,255				29,931				34,352				37,378				38,155
Common Share Data
Common shares outstanding				20,528,192				20,519,717				20,452,376				20,454,636				20,448,799
Book value per common share			$	32.18			$	32.26			$	30.96			$	29.37			$	30.63
Tangible book value per common share (1)				23.48				24.05				22.65				21.01				22.17
Market price of stock				24.14				27.22				32.08				31.97				35.67
Key Performance Ratios and Metrics
End of period earning assets			$	6,023,553			$	5,995,674			$	6,063,953			$	5,975,619			$	6,024,815
Average earning assets				6,049,626				6,052,264				6,000,106				6,063,061				5,975,821
Average rate on average earning assets (tax equivalent)				4.43	%			4.32	%			4.07	%			3.77	%			3.50	%
Average rate on cost of funds				1.59	%			1.38	%			1.00	%			0.56	%			0.30	%
Net interest margin (tax equivalent) (1)				2.84	%			2.94	%			3.07	%			3.21	%			3.20	%
Return on average assets				0.99	%			1.15	%			1.24	%			1.07	%			1.08	%
Return on average common equity				10.07	%			12.11	%			13.51	%			11.18	%			11.02	%
Efficiency ratio (tax equivalent) (1)				60.37	%			59.01	%			58.07	%			59.64	%			58.45	%
Full-time equivalent employees				995				988				1,043				1,051				1,025
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 June 30, 2023
		QTD Average							Average
		Balance				Interest			Rate
INTEREST EARNING ASSETS
Interest bearing deposits		$	35,093			$	456		5.21	%
Federal funds sold			8,025				98		4.90	%
Certificates of deposits investments			1,715				14		3.27	%
Investment Securities:
Taxable (total less municipals)			950,755				5,270		2.22	%
Tax-exempt (Municipals)			276,719				2,434		3.52	%
Loans (net of unearned income)			4,777,319				58,602		4.92	%
Total interest earning assets			6,049,626				66,874		4.43	%
NONEARNING ASSETS
Cash and due from banks			135,574
Premises and equipment			89,974
Other nonearning assets			464,899
Allowance for loan losses			(58,617	)
Total assets		$	6,681,456
INTEREST BEARING LIABILITIES
Demand deposits		$	2,318,119			$	9,467		1.64	%
Savings deposits			619,426				168		0.11	%
Time deposits			983,323				6,945		2.83	%
Total interest bearing deposits			3,920,868				16,580		1.70	%
Repurchase agreements			226,734				1,723		3.05	%
FHLB advances			486,920				4,084		3.36	%
Federal funds purchased			-				-		0.00	%
Subordinated debt			94,606				988		4.19	%
Jr. subordinated debentures			19,427				390		8.05	%
Other debt			-				-		0.00	%
Total borrowings			827,687				7,185		3.48	%
Total interest bearing liabilities			4,748,555				23,765		2.01	%
NONINTEREST BEARING LIABILITIES
Demand deposits			1,228,395			Average cost of funds			1.59	%
Other liabilities			46,163
Stockholders' equity			658,343
Total liabilities & stockholders' equity		$	6,681,456
Net Interest Earnings / Spread						$	43,109		2.42	%
Impact of Non-Interest Bearing Funds									0.42	%
Tax effected yield on interest earning assets									2.84	%

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, unaudited)
					As of and for the Quarter Ended
					June 30,				March 31,				December 31,				September 30,				June 30,
						2023				2023				2022				2022				2022
Net interest income as reported					$	42,367			$	43,191			$	45,672			$	48,257			$	46,826
Net interest income, (tax equivalent)						43,109				43,947				46,464				49,060				47,625
Average earning assets						6,049,626				6,052,264				6,000,106				6,063,061				5,975,821
Net interest margin (tax equivalent)						2.84	%			2.94	%			3.07	%			3.21	%			3.20	%
Common stockholder's equity					$	660,687			$	661,865			$	633,155			$	600,715			$	626,268
Goodwill and intangibles, net						178,615				168,373				169,897				170,897				172,871
Common shares outstanding						20,528				20,520				20,452				20,455				20,449
Tangible Book Value per common share					$	23.48			$	24.05			$	22.65			$	21.01			$	22.17

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except per share data, unaudited)
					As of and for the Quarter Ended
					June 30,				March 31,				December 31,				September 30,				June 30,
						2023				2023				2022				2022				2022
Adjusted earnings Reconciliation
Net Income - GAAP					$	16,567			$	19,180			$	20,639			$	17,939			$	17,758
Adjustments (post-tax):(1)
Acquisition ACL on non-PCD assets in provision expense						-				-				-				-				-
Nonrecurring severance expense						-				416				-				-				-
Integration and acquisition expenses						589				135				131				524				777
Total non-recurring adjustments (non-GAAP)					$	589			$	551			$	131			$	524			$	777
Adjusted earnings - non-GAAP					$	17,156			$	19,731			$	20,770			$	18,463			$	18,535
Adjusted diluted earnings per share (non-GAAP)					$0.83				$0.96				$1.01				$0.90				$0.90
Efficiency Ratio Reconciliation
Noninterest expense - GAAP					$	40,042			$	41,577			$	39,372			$	41,549			$	41,515
Other real estate owned property income (expense)						(27	)			(133	)			(87	)			(58	)			(218	)
Amortization of intangibles						(1,477	)			(1,522	)			(1,537	)			(1,598	)			(1,633	)
Nonrecurring severance expense						-				(527	)			-				-				-
integration and acquisition expenses						(745	)			(171	)			(166	)			(663	)			(983	)
Adjusted noninterest expense (non-GAAP)					$	37,793			$	39,224			$	37,582			$	39,230			$	38,681
Net interest income -GAAP					$	42,367			$	43,192			$	45,672			$	48,257			$	46,826
Effect of tax-exempt income(1)						742				755				792				803				799
Adjusted net interest income (non-GAAP)					$	43,109			$	43,947			$	46,464			$	49,060			$	47,625
Noninterest income - GAAP					$	19,486			$	22,479			$	18,207			$	16,791			$	18,559
Net (gain)/loss on securities sales						6				46				48				(79	)			(2	)
Adjusted noninterest income (non-GAAP)					$	19,492			$	22,525			$	18,255			$	16,712			$	18,557
Adjusted total revenue (non-GAAP)					$	62,601			$	66,472			$	64,719			$	65,772			$	66,182
Efficiency ratio (non-GAAP)						60.37	%			59.01	%			58.07	%			59.64	%			58.45	%
(1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%.