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First Mid Bancshares, Inc. Announces Third Quarter 2020 Results

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First Mid Bancshares, Inc.
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MATTOON, Ill., Oct. 29, 2020 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter and year-to-date period ended September 30, 2020.

Highlights

  • Net income of $11.6 million, or $0.69 diluted EPS

  • Loan growth of 1% with strong asset quality metrics

  • Announced the pending acquisition of LINCO Bancshares, Inc.

  • Completed a public offering of $96.0 million of fixed-to-floating rate subordinated notes in early October

  • Board approves next semi-annual dividend at $0.41, an increase of 2.5%

  • Awarded Central/Southern Illinois SBA Lender of the Year for 7th consecutive year

  • Named America’s Best Bank in Illinois by Newsweek

“The third quarter was an eventful one for First Mid as we delivered strong financial results and announced the pending acquisition of LINCO Bancshares, Inc. (“LINCO”) and its subsidiary Providence Bank,” said Joe Dively, Chairman and Chief Executive Officer. “In addition, in early October, we completed a $96.0 million subordinated notes offering with pricing at 3.95% fixed-to-floating due 2030. We were extremely pleased with the demand and execution of the offering.”

“We were excited to receive the recognition from both the SBA and Newsweek. Our team has done an excellent job in adding value to our customers whether it has been navigating through the multiple stimulus options or expanding the relationships through the many services we have to offer. Despite operating in a more challenging environment, our net interest income was higher by 4.5% and noninterest income increased by 5.1% compared to the same quarter last year. Our asset quality metrics have continued to improve with another decline in non-performing loans and the lowest quarterly net charge-offs in two and a half years. Outstanding loan deferrals have continued to trend lower and are now at 2.2% of outstanding loans. Our strong capital levels increased in the quarter and we are well positioned to continue to execute on our strategic plan,” Dively added.

“Finally, the acquisition of LINCO will deepen our presence in the St. Louis metro market and expand our geographic diversity into mid-Missouri and Texas. The culture and vision of the two companies align very closely with both organizations having a long history of delivering excellent service to customers and communities. I have been to all of the Providence Bank markets participating in small group meetings with employees and there is excitement about the larger and more diverse set of products to offer the Providence Bank customers,” Dively concluded.

Net Interest Income

Net interest income for the third quarter of 2020 increased by $0.9 million, or 3.0% compared to the second quarter of 2020. Interest income increased by $0.8 million and interest expense decreased $0.2 million. The increase in interest income was driven by loan growth and the first full quarter of financial benefits from Paycheck Protection Program (“PPP”) loans. Total accretion income was $0.4 million, which was a decline of $0.1 million from the previous quarter. Interest expense declined primarily due to lower balances and rates on Federal Home Loan Bank advances and CD’s.

In comparison to the third quarter of 2019, net interest income increased $1.4 million, or 4.5%. The increase was primarily the result of higher interest income and lower interest expense outpacing the decline in investment income. Interest expense decreased by $2.7 million compared to the third quarter of last year.

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.17% for the third quarter of 2020 compared to 3.25% in the prior quarter primarily due to the full quarter impact of PPP loans on the balance sheet and the increase in excess liquidity. Earning asset yields declined by 12 basis points on a combination of lower loan and investment yields. Average cost of funds declined by 4 basis points to 0.39%.

In comparison to the third quarter of 2019, net interest margin decreased 43 basis points. Earning asset yields were down 79 basis points on a combination of lower rates, the impact of PPP loans and a decline in accretion income of $2.2 million. Average cost of funds declined by 40 basis points on lower rates in all categories.

Loan Portfolio

Total loans ended the quarter at $3.24 billion, representing an increase of $31.0 million compared to the prior quarter. The third quarter ending balance included approximately $261.7 million in PPP loans. On a year-over-year basis, loans increased $612.7 million, or 23.4%. Excluding PPP and $183.0 million in loans acquired from Stifel Bank in the second quarter of 2020, balances increased $168.0 million, or 6.4%.

The Company has a diversified loan portfolio that lessens the risks from economic challenges in any particular sector. At quarter end, the more vulnerable sectors due to COVID-19, excluding PPP loans, were: 1) Hotels, which represented 4.1% of outstanding loans, 2) Retail Shopping/Strip centers at 4.0% of outstanding loans, and 3) Restaurants, which represented 2.9% of outstanding loans. Most of the largest borrowers in the hotel and restaurant sector own and operate multiple businesses across various industries providing a diverse cash flow stream to support their loans and have provided personal guarantees. First Mid’s retail loans included borrowers who sell home goods and other products that have performed well throughout the pandemic.

The Company began offering a 90-day principal and interest deferral program primarily for the hotel and restaurant sector in late March. Subsequently, the Company offered a principal only deferral program to select borrowers upon request primarily in the commercial real estate market. For those deferrals that included principal and interest, nearly half continued to pay interest during the deferral period. For any second deferrals, the agreement included only a deferral of principal. The Company also offered a residential mortgage and consumer principal and interest deferral program. As of October 19th, 2020, the Company had total outstanding deferrals of $72.1 million, or 2.2% of total outstanding loans.

Asset Quality

The Company’s asset quality measures continue to reflect a strong credit culture. The allowance for credit losses, excluding $261.7 million of PPP loans, was 1.41% of total loans. The ratio of non-performing loans to total loans was 0.69%, and the allowance for credit losses to non-performing loans was 186.8%. Non-performing loans declined $0.7 million to $22.4 million at quarter end. Non-performing assets to total assets declined to 0.55%. Net charge-offs were $0.3 million during the third quarter compared to $0.6 million in the prior quarter.

Provision expense was recorded in the amount of $3.9 million in the third quarter reflecting $3.6 million of a reserve build above the $0.3 million in net charge-offs. This reserve build was recorded under Accounting Standards Update 2016-13 known as the current expected credit loss model. The Company’s required allowance for credit loss was calculated using a combination of, among other things, historical loss experience and the uncertainty of future macro-economic conditions and forecasts.

Deposits

Total deposits ended the quarter at $3.62 billion, which represented an increase of $234.0 million from the prior quarter. The increase includes approximately $60.0 million of customer deposits that converted in July to First Mid for the loan relationships acquired from Stifel Bank in the second quarter. In addition, the increase in deposits includes the movement of funds from repurchase agreements, which declined $179.9 million. The Company’s average rate on cost of funds was 0.39% for the quarter compared to 0.43% in the prior quarter and 0.79% in the third quarter of 2019.

Noninterest Income

Noninterest income for the third quarter of 2020 was $13.6 million compared to $13.9 million in the second quarter. The decrease compared to prior quarter is tied to the seasonality of the business lines, as the third quarter has historically been the lowest in insurance revenues and there are typically less farm real estate sales in wealth management.

In comparison to the third quarter of 2019, noninterest income increased $0.7 million, or 5.1%. The year-over-year increase was primarily driven by wealth management and mortgage banking income, partially offset by lower service charge revenue.

Noninterest Expenses

Noninterest expense for the third quarter totaled $26.9 million compared to $26.1 million in the second quarter. The increase was primarily due to higher FDIC insurance expense on a change in rates and higher average assets, as well as deferred costs related to PPP that occurred in the second quarter. The third quarter included $0.1 million of acquisition related costs.

In comparison to the third quarter of 2019, noninterest expenses increased $1.0 million. The increase was primarily from higher salaries and benefits costs and an increase in FDIC insurance from higher average assets and 2019 credits.

The Company’s efficiency ratio, on a tax equivalent basis, for the third quarter 2020 was 54.9% compared to 54.3% in the prior quarter and 54.7% for the same period last year.

Regulatory Capital Levels and Dividend

The Company’s capital levels remained strong and comfortably above the “well capitalized” levels. Capital levels ended the period as follows:

Total capital to risk-weighted assets

15.73%

Tier 1 capital to risk-weighted assets

14.52%

Common equity tier 1 capital to risk-weighted assets

13.91%

Leverage ratio

10.33%

The Company’s Board of Directors approved its next semi-annual dividend in the amount of $0.41, representing a 2.5% increase. The dividend is payable on December 15, 2020 for shareholders of record on December 1, 2020.

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 $4.5 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 and eastern Missouri and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in their work and their ability to serve our customers well over the last 155 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 “Net Interest Margin, tax equivalent,” “Tangible Book Value per Common Share,” and “Common Equity Tier 1 Capital to Risk Weighted Assets”. 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 Bancshares, Inc. (“First Mid”) and LINCO Bancshares, Inc., a Missouri corporation (“LINCO”), such as discussions of First Mid’s and LINCO’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. First Mid and LINCO intend 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 1955. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid and LINCO, 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 LINCO will not be realized or will not be realized within the expected time period; the risk that integration of the operations of LINCO 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 obtain the required stockholder approval; the failure to satisfy other conditions to completion of the proposed transactions, including receipt of required regulatory and other approvals; the failure of the proposed transactions to close for any other reason; the effect of the announcement of the transaction on customer relationships and operating results; the possibility that the transaction 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 LINCO; legislative/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 LINCO’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 LINCO; accounting principles, policies and guidelines; the severity, magnitude and duration of COVID-19 pandemic, the direct and indirect impact of such pandemic, including responses to the pandemic by the government, commercial customers' businesses, the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mid’s and LINCO’s liquidity and capital positions, impair the ability of First Mid’s and LINCO’s borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses, and the impact of the COVID-19 pandemic on First Mid’s and LINCO’s financial results, including possible lost revenue and increased expenses (including cost of capital), as well as possible goodwill impairment charges. 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,

2020

2019

2019

Assets

Cash and cash equivalents

$

232,385

$

85,080

$

108,229

Investment securities

750,122

760,215

811,573

Loans (including loans held for sale)

3,236,247

2,695,347

2,623,558

Less allowance for credit losses

(41,915

)

(26,911

)

(26,741

)

Net loans

3,194,332

2,668,436

2,596,817

Premises and equipment, net

59,356

59,491

59,724

Goodwill and intangibles, net

129,287

133,257

134,461

Bank owned life insurance

68,519

67,225

66,786

Other assets

75,127

65,722

60,139

Total assets

$

4,509,128

$

3,839,426

$

3,837,729

Liabilities and Stockholders' Equity

Deposits:

Non-interest bearing

$

837,602

$

633,331

$

596,518

Interest bearing

2,782,234

2,284,035

2,392,407

Total deposits

3,619,836

2,917,366

2,988,925

Repurchase agreement with customers

170,345

208,109

174,530

Other borrowings

93,954

118,895

80,862

Junior subordinated debentures

18,985

18,858

29,126

Other liabilities

44,999

49,589

42,327

Total liabilities

3,948,119

3,312,817

3,315,770

Total stockholders' equity

561,009

526,609

521,959

Total liabilities and stockholders' equity

$

4,509,128

$

3,839,426

$

3,837,729


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,

2020

2019

2020

2019

Interest income:

Interest and fees on loans

$

32,151

$

31,976

$

93,560

$

95,619

Interest on investment securities

4,074

5,297

12,740

15,942

Interest on federal funds sold & other deposits

70

305

271

1,639

Total interest income

36,295

37,578

106,571

113,200

Interest expense:

Interest on deposits

3,168

5,174

10,134

14,492

Interest on securities sold under agreements to repurchase

68

196

420

671

Interest on other borrowings

395

691

1,506

2,111

Interest on subordinated debt

147

392

539

1,236

Total interest expense

3,778

6,453

12,599

18,510

Net interest income

32,517

31,125

93,972

94,690

Provision for loan losses

3,883

2,658

15,500

3,696

Net interest income after provision for loan

28,634

28,467

78,472

90,994

Non-interest income:

Wealth management revenues

3,468

3,311

10,921

10,543

Insurance commissions

3,291

3,242

14,000

12,557

Service charges

1,446

2,091

4,335

5,852

Securities gains, net

95

51

913

323

Mortgage banking revenues

1,661

582

3,205

1,167

ATM/debit card revenue

2,367

2,173

6,593

6,391

Other

1,250

1,467

4,006

4,311

Total non-interest income

13,578

12,917

43,973

41,144

Non-interest expense:

Salaries and employee benefits

15,346

14,497

47,301

46,636

Net occupancy and equipment expense

4,363

4,377

12,746

13,375

Net other real estate owned (income) expense

110

172

62

413

FDIC insurance

469

(87

)

851

389

Amortization of intangible assets

1,277

1,373

3,862

4,552

Stationary and supplies

262

284

805

835

Legal and professional expense

1,320

1,215

4,207

3,713

Marketing and donations

387

1,038

1,182

2,670

Other

3,393

3,025

9,740

11,808

Total non-interest expense

26,927

25,894

80,756

84,391

Income before income taxes

15,285

15,490

41,689

47,747

Income taxes

3,720

3,820

9,988

11,780

Net income

$

11,565

$

11,670

$

31,701

$

35,967

Per Share Information

Basic earnings per common share

$

0.69

$

0.70

$

1.90

$

2.16

Diluted earnings per common share

0.69

0.70

1.89

2.15

Weighted average shares outstanding

16,728,191

16,684,395

16,710,485

16,677,932

Diluted weighted average shares outstanding

16,775,099

16,719,175

16,757,393

16,712,712


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,

2020

2020

2020

2019

2019

Interest income:

Interest and fees on loans

$

32,151

$

31,382

$

30,027

$

31,206

$

31,976

Interest on investment securities

4,074

4,077

4,589

5,101

5,297

Interest on federal funds sold & other deposits

70

76

125

214

305

Total interest income

36,295

35,535

34,741

36,521

37,578

Interest expense:

Interest on deposits

3,168

3,105

3,861

4,447

5,174

Interest on securities sold under agreements to repurchase

68

158

194

240

196

Interest on other borrowings

395

516

595

610

691

Interest on subordinated debt

147

174

218

240

392

Total interest expense

3,778

3,953

4,868

5,537

6,453

Net interest income

32,517

31,582

29,873

30,984

31,125

Provision for loan losses

3,883

6,136

5,481

2,737

2,658

Net interest income after provision for loan

28,634

25,446

24,392

28,247

28,467

Non-interest income:

Wealth management revenues

3,468

3,827

3,626

5,027

3,311

Insurance commissions

3,291

4,088

6,621

3,361

3,353

Service charges

1,446

1,111

1,778

1,985

2,091

Securities gains, net

95

287

531

479

51

Mortgage banking revenues

1,661

1,236

308

579

582

ATM/debit card revenue

2,367

2,239

1,987

2,100

2,173

Other

1,250

1,097

1,659

1,342

1,356

Total non-interest income

13,578

13,885

16,510

14,873

12,917

Non-interest expense:

Salaries and employee benefits

15,346

15,455

16,500

15,942

14,497

Net occupancy and equipment expense

4,363

4,141

4,242

4,305

4,377

Net other real estate owned (income) expense

110

(2

)

(46

)

30

172

FDIC insurance

469

289

93

(170

)

(87

)

Amortization of intangible assets

1,277

1,290

1,295

1,296

1,373

Stationary and supplies

262

275

268

269

284

Legal and professional expense

1,320

1,489

1,398

1,451

1,215

Marketing and donations

387

314

481

573

523

Other

3,393

2,847

3,500

3,905

3,540

Total non-interest expense

26,927

26,098

27,731

27,601

25,894

Income before income taxes

15,285

13,233

13,171

15,519

15,490

Income taxes

3,720

3,096

3,172

3,543

3,820

Net income

$

11,565

$

10,137

$

9,999

$

11,976

$

11,670


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,

2020

2020

2020

2019

2019

Loan Portfolio

Construction and land development

$

167,515

$

180,934

$

123,326

$

94,142

$

68,821

Farm real estate loans

256,230

251,382

242,891

240,241

229,715

1-4 Family residential properties

339,172

342,036

325,128

336,427

347,370

Multifamily residential properties

139,255

141,015

139,734

153,948

154,859

Commercial real estate

1,177,571

1,123,540

1,002,868

995,702

954,992

Loans secured by real estate

2,079,743

2,038,907

1,833,947

1,820,460

1,755,757

Agricultural operating loans

141,074

149,043

139,136

136,124

121,650

Commercial and industrial loans

807,668

811,169

565,789

528,973

543,937

Consumer loans

80,348

82,084

82,104

83,183

83,171

All other loans

127,414

124,059

123,322

126,607

119,043

Total loans

3,236,247

3,205,262

2,744,298

2,695,347

2,623,558

Deposit Portfolio

Non-interest bearing demand deposits

$

837,602

$

817,623

$

642,384

$

633,331

$

596,518

Interest bearing demand deposits

1,053,691

938,710

827,387

850,956

899,763

Savings deposits

485,241

474,545

441,998

428,778

431,497

Money Market

736,262

625,361

441,381

419,801

435,517

Time deposits

507,040

529,588

555,477

584,500

625,630

Total deposits

3,619,836

3,385,827

2,908,627

2,917,366

2,988,925

Asset Quality

Non-performing loans

$

22,439

$

23,096

$

24,463

$

27,818

$

24,203

Non-performing assets

24,712

25,397

27,306

31,538

28,645

Net charge-offs

349

631

1,188

2,567

2,276

Allowance for credit losses to non-performing loans

186.80

%

166.18

%

134.39

%

96.74

%

110.49

%

Allowance for credit losses to total loans outstanding

1.41%1

1.30%1

1.20

%

1.00

%

1.02

%

Nonperforming loans to total loans

0.69

%

0.72

%

0.89

%

1.03

%

0.92

%

Nonperforming assets to total assets

0.55

%

0.57

%

0.71

%

0.82

%

0.75

%

Common Share Data

Common shares outstanding

16,731,684

16,728,190

16,702,484

16,673,480

16,663,095

Book value per common share

$

33.53

$

32.84

$

31.91

$

31.58

$

31.32

Tangible book value per common share

25.80

25.02

24.00

23.59

23.25

Market price of stock

24.95

26.23

23.74

35.25

34.62

Key Performance Ratios and Metrics

End of period earning assets

$

4,130,186

$

4,093,511

$

3,492,271

$

3,464,144

$

3,444,775

Average earning assets

4,113,846

3,942,832

3,451,123

3,464,200

3,444,088

Average rate on average earning assets (tax equivalent)

3.56

%

3.68

%

4.11

%

4.24

%

4.39

%

Average rate on cost of funds

0.39

%

0.43

%

0.60

%

0.67

%

0.79

%

Net interest margin (tax equivalent)

3.17

%

3.25

%

3.51

%

3.57

%

3.60

%

Return on average assets

1.03

%

0.94

%

1.05

%

1.25

%

1.22

%

Return on average common equity

8.31

%

7.47

%

7.48

%

9.17

%

9.04

%

Efficiency ratio (tax equivalent) 2

54.85

%

54.27

%

57.14

%

57.23

%

54.69

%

Full-time equivalent employees

816

828

835

827

830

1 Excludes Payment Protection Program loans.

2 Represents non-interest expense divided by the sum of fully tax equivalent net interest income and non-interest income. Non-interest expense adjustments exclude foreclosed property expense and amortization of intangibles. Net-interest income includes tax equivalent adjustments and non-interest income excludes gains and losses on the sale of investment securities.


FIRST MID BANCSHARES, INC.

Net Interest Margin

(In thousands, unaudited)

For the Quarter Ended September 2020

QTD Average

Average

Balance

Interest

Rate

INTEREST EARNING ASSETS

Interest bearing deposits

147,930

$

51

0.14

%

Federal funds sold

1,291

1

0.31

%

Certificates of deposits investments

3,188

18

2.25

%

Investment Securities:

Taxable (total less municipals)

542,821

2,639

1.94

%

Tax-exempt (Municipals)

208,937

1,818

3.48

%

Loans (net of unearned income)

3,209,679

32,335

4.01

%

Total interest earning assets

4,113,846

36,862

3.56

%

NONEARNING ASSETS

Cash and due from banks

89,108

Premises and equipment

58,905

Other nonearning assets

256,464

Allowance for credit losses

(40,051

)

Total assets

$

4,478,272

INTEREST BEARING LIABILITIES

Demand deposits

$

1,753,148

$

1,043

0.24

%

Savings deposits

481,128

102

0.08

%

Time deposits

525,266

2,023

1.53

%

Total interest bearing deposits

2,759,542

3,168

0.46

%

Repurchase agreements

183,720

68

0.15

%

FHLB advances

98,510

395

1.60

%

Federal funds purchased

0

0

0.00

%

Subordinated debt

18,957

147

3.08

%

Other borrowings

0

0

0.00

%

Total borrowings

301,187

610

0.81

%

Total interest bearing liabilities

3,060,729

3,778

0.49

%

NONINTEREST BEARING LIABILITIES

Demand deposits

813,404

Average cost of funds

0.39

%

Other liabilities

47,350

Stockholders' equity

556,789

Total liabilities & stockholders' equity

$

4,478,272

Net Interest Earnings / Spread

$

33,084

3.07

%

Impact of Non-Interest Bearing Funds

0.10

%

Tax effected yield on interest earning assets

3.17

%


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,

2020

2020

2020

2019

2019

Net interest income as reported

$

32,517

$

31,582

$

29,873

$

30,984

$

31,125

Net interest income, (tax equivalent)

33,084

32,118

30,393

31,517

31,659

Average earning assets

4,113,846

3,942,832

3,451,123

3,464,200

3,444,088

Net interest margin (tax equivalent) 1

3.17

%

3.25

%

3.51

%

3.57

%

3.60

%

Common stockholder's equity

$

561,009

$

549,273

$

533,051

$

526,609

$

521,959

Goodwill and intangibles, net

129,287

130,656

132,199

133,257

134,461

Common shares outstanding

16,732

16,728

16,702

16,673

16,663

Tangible Book Value per common share

$

25.80

$

25.02

$

24.00

$

23.59

$

23.25

Common equity tier 1 capital

$

431,342

$

417,326

$

410,565

$

398,536

$

391,429

Risk weighted assets

3,101,591

3,101,449

2,854,102

2,822,648

2,923,245

Common equity tier 1 capital to risk weighted assets 2

13.91

%

13.46

%

14.39

%

14.12

%

13.39

%

1 Annualized and calculated on a tax equivalent basis where interest earned on tax-exempt securities and loans is adjusted to an amount comparable to interest subject to normal income taxes assuming a federal tax rate of 21% and includes the impact of non-interest bearing funds.

2 Defined as total common equity adjusted for gains/(losses) less goodwill and intangibles divided by risk weighted assets as of period end.