First Mid Bancshares, Inc. Announces Second Quarter 2020 Results

MATTOON, Ill., July 30, 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 June 30, 2020.

Highlights

• Net income of $10.1 million, or $0.60 diluted EPS
• Organic loan growth up 8.5% year-over-year, excluding Paycheck Protection Program (“PPP”) and loans acquired April 21^st (the Acquired Loans”)
• Strong start with the Acquired Loans and lenders in the St. Louis metro market
• Continued supporting our communities with $260 million in total loans under the PPP

“I am proud of the strength and perseverance of the First Mid team as we have played and continue to play a key role in the support and success of the customers and communities we serve,” said Joe Dively, Chairman and Chief Executive Officer.  “Our SBA expertise, along with our commitment to our communities, has allowed us to gain a significant number of new customers through the Paycheck Protection Program that will provide long-term value.”

“We delivered another solid quarter of financial results despite a reserve build for the uncertain macro-economic conditions.  The team of commercial lenders and loan relationships we acquired in the second quarter have integrated successfully and are off to a great start. As our markets have either partially or fully reopened, our commercial customers who were most impacted by the shelter-in-place orders are seeing positive trends in their businesses.  While it is early in the process, approximately 80% of borrowers who have ended their initial 90-day deferral program have not needed extensions,” Dively added.

“Finally, as you can see from our historical and consistent performance through various cycles, we have a very experienced underwriting team with a laser focus on asset quality.  While this may be a headwind to growth during booming economic times, this culture and philosophy outperforms in periods such as the current cycle.  When you combine our credit quality with our strong balance sheet and capital, we are uniquely positioned to not only manage the uncertainties that lie ahead, but also to take advantage of all opportunities to enhance shareholder value,” Dively concluded.

Net Interest Income

Net interest income for the second quarter of 2020 increased by $1.7 million, or 5.7% compared to the first quarter of 2020.  Interest income increased by $0.8 million and interest expense decreased $0.9 million.  The increase in interest income was primarily driven by the growth in balances from the Acquired Loans and PPP loans, partially offset by less securities income, lower loan yields and less accretion income.  Total accretion income was $0.5 million, which was a decline of $0.3 million from the previous quarter.  Interest expense declined due to the changes made to rates following the Federal Reserve cutting rates in March, including maturing CD’s and Federal Home Loan Bank advances.

In comparison to the second quarter of 2019, net interest income increased $0.3 million, or 0.9%.  The increase was primarily attributable to a $2.3 million decline in interest expense, partially offset by lower interest income with accretion income down $2.1 million from the same quarter last year.       

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.25% for the second quarter of 2020 compared to 3.51% in the prior quarter.  The PPP loans carry a 1% interest rate and were dilutive to the margin by approximately 16 basis points in the quarter.  In addition, total accretion of $0.5 million for the second quarter was down from $0.8 million in the prior quarter.  Excluding the PPP and accretion income, net interest margin declined by 5 basis points in the quarter with lower yields on earning assets partially offset by lower funding costs. 

In comparison to the second quarter of 2019, net interest margin decreased 39 basis points.  The year-over-year decrease was primarily due to the impact of the PPP loans and a $2.1 million decline in accretion income.  Excluding PPP loans and accretion income, net interest margin increased one basis point in the current period compared to the second quarter of 2019.

Loan Portfolio

Total loans ended the quarter at $3.21 billion, representing an increase of $461.0 million compared to the prior quarter.  The second quarter ending balance included approximately $259.6 million in PPP loans.  Excluding the PPP loans and the $183.0 million in Acquired Loans, balances increased organically by approximately $18.4 million.  On a year-over-year basis, loans increased $658.7 million, or 25.9%.  Excluding PPP and Acquired Loans, balances increased $216.1 million, or 8.5%.     

The Company has a diversified loan portfolio.  The Company decided to continue to provide additional disclosures on industry segments with escalated monitoring and stress testing from the COVID-19 shelter in place.  At quarter end, the more vulnerable sectors due to COVID-19, excluding PPP loans, were:  1) Retail Shopping/Strip centers, which represented 4.2% of outstanding loans, 2) Hotels, which represented 4.1% of outstanding loans, and 3) Restaurants, which represented 3.0% 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.  

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 deferral program to select borrowers upon request primarily in the commercial real estate market.  In addition, the Company offered a residential mortgage and consumer principal and interest deferral program.  As of July 17^th, 2020, approximately 80%, or $141.3 million, of the $177.5 million in deferred loans that reached the end of the original deferral period were not extended to a new deferral period.  After reaching a peak of approximately $424.0 million in deferrals, the Company had total outstanding deferrals of $282.6 million, or 8.8% of total outstanding loans on July 17^th, 2020.

The Company will continue to monitor and grant additional deferrals based upon the facts and circumstances of each borrower’s financial position.  These loan deferrals and modifications have been executed consistent with the CARES Act and are not included in our non-performing loans.     

Asset Quality

The Company’s asset quality measures continue to reflect a strong credit culture.  The allowance for loan losses, excluding $259.6 million of PPP loans, was 1.30% of total loans.  Also, the remaining fair value mark on certain acquired loans represents seven basis points in addition to the current allowance.  The ratio of non-performing loans to total loans was 0.72%, and the allowance for loan losses to non-performing loans was 166.2%.  Non-performing loans declined $1.4 million to $23.1 million at quarter end.  Non-performing assets to total assets declined to 0.57%.  Net charge-offs were $0.6 million during the second quarter compared to $1.2 million in the prior quarter. 

Provision expense was recorded in the amount of $6.1 million in the second quarter reflecting $5.5 million of a reserve build above the $0.6 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.

Deposits

Total deposits ended the quarter at $3.39 billion, which represented an increase of $477.2 million from the prior quarter.  The increase includes approximately $160.0 million of funding under the depository agreement setup for the acquired loans. The Company’s average rate on cost of funds was 0.43% for the quarter compared to 0.60% in the first quarter and 0.76% in the second quarter of 2019.  Total interest-bearing deposit costs declined by 17 basis points in the first quarter 2020 and declined by 32 basis points year-over-year.        

Noninterest Income

Noninterest income for the second quarter of 2020 was $13.9 million compared to $16.5 million in the first quarter and $13.6 million in the second quarter of last year.  The decrease compared to first quarter was primarily driven by the timing of insurance revenues, which are seasonally higher in the first quarter.  Excluding insurance revenues, noninterest income was essentially flat in the second quarter 2020.  In addition, the current period included a negative $0.2 million mortgage servicing rights valuation adjustment.

In comparison to the second quarter of 2019, noninterest income increased $0.3 million, or 2.2% with increases in insurance, wealth management, and mortgage banking more than offsetting declines in services charges and late fees recorded in other income.  The Company’s fee businesses continue to provide significant diversification and are a valuable and consistent income generator.  Our First Mid Wealth Management division ended the quarter with $4.1 billion in assets under management.        

Noninterest Expenses    

Noninterest expense for the second quarter totaled $26.1 million compared to $27.7 million in the first quarter and $30.2 million in the second quarter last year.  The current quarter was lower than the first quarter primarily due to the seasonality of our business lines as well as the deferral of loan origination costs related to the PPP loans. 

The second quarter of 2019 included $2.4 million of costs related to the Soy Capital acquisition and integration versus $0.1 million of acquisition costs in the current period.  The remaining year-over-year decline was primarily driven by lower occupancy and equipment costs, less OREO expense, and lower amortization of intangibles.

The Company will be closing two branches in the third quarter of 2020 as part of its ongoing initiative to optimize its branch network and manage its cost structure.  The continued increase in the use of the Company’s advanced digital platform and the location of other nearby First Mid locations is expected to minimize any disruption to the customer.

The Company’s efficiency ratio, on a tax equivalent basis, for the second quarter 2020 improved to 54.3% compared to 57.1% in the prior quarter and 62.3% for the same period last year.

Regulatory Capital Levels

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	15.19%
Tier 1 capital to risk-weighted assets	14.07%
Common equity tier 1 capital to risk-weighted assets	13.46%
Leverage ratio	10.43%

Capital levels declined in the period compared to the prior quarter as the Company paid its semi-annual dividend of $0.40 per share in June and the balance sheet increased from both organic growth and Acquired Loans.

About Us: 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.  Our mission is to fulfill the financial needs of our communities with exceptional personal service, professionalism and integrity, and deliver meaningful value and results for our customers and shareholders.

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.  Our stock is traded in The NASDAQ Stock Market LLC under the ticker symbol “FMBH”.

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, such as discussions of First Mid’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses, planned schedules and impacts from COVID-19. 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 1955. 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/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; the severity, magnitude and duration of the COVID-19 pandemic; the direct and indirect impact of such pandemic, including responses to the pandemic by the government, businesses and consumers, on First Mid’s operations and personnel, commercial activity and demand across First Mid’s business and customers’ businesses; the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mid’s liquidity and capital positions, impair the ability of First Mid’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 financial results, including possible lost revenue and increased expenses (including the 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 Securities and Exchange Commission (the “SEC”), including its Annual Reports on Form 10-K. 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
[e-mail]

– Tables Follow –

FIRST MID BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
					As of
	June 30,				December 31,				June 30,
		2020				2019				2019
Assets
Cash and cash equivalents	$	238,487			$	85,080			$	168,416
Investment securities		727,154				760,215				833,763
Loans (including loans held for sale)		3,205,262				2,695,347				2,546,543
Less allowance for loan losses		(38,381	)			(26,911	)			(26,359	)
Net loans		3,166,881				2,668,436				2,520,184
Premises and equipment, net		58,905				59,491				59,898
Goodwill and intangibles, net		130,656				133,257				135,762
Bank owned life insurance		68,084				67,225				66,347
Other assets		68,144				65,722				58,471
Total assets	$	4,458,311			$	3,839,426			$	3,842,841
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing	$	817,623			$	633,331			$	603,823
Interest bearing		2,568,204				2,284,035				2,408,667
Total deposits		3,385,827				2,917,366				3,012,490
Repurchase agreement with customers		350,288				208,109				152,264
Other borrowings		103,939				118,895				95,826
Junior subordinated debentures		18,942				18,858				29,084
Other liabilities		50,042				49,589				44,219
Total liabilities		3,909,038				3,312,817				3,333,883
Total stockholders' equity		549,273				526,609				508,958
Total liabilities and stockholders' equity	$	4,458,311			$	3,839,426			$	3,842,841

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,
		2020				2019				2020				2019
Interest income:
Interest and fees on loans	$	31,382			$	31,539			$	61,409			$	63,643
Interest on investment securities		4,077				5,436				8,666				10,645
Interest on federal funds sold & other deposits		76				596				201				1,334
Total interest income		35,535				37,571				70,276				75,622
Interest expense:
Interest on deposits		3,105				4,940				6,966				9,318
Interest on securities sold under agreements to repurchase		158				215				352				475
Interest on other borrowings		516				697				1,111				1,420
Interest on subordinated debt		174				406				392				844
Total interest expense		3,953				6,258				8,821				12,057
Net interest income		31,582				31,313				61,455				63,565
Provision for loan losses		6,136				91				11,617				1,038
Net interest income after provision for loan		25,446				31,222				49,838				62,527
Non-interest income:
Wealth management revenues		3,827				3,587				7,453				7,232
Insurance commissions		4,088				3,760				10,709				9,315
Service charges		1,111				1,959				2,889				3,761
Securities gains, net		287				218				818				272
Mortgage banking revenues		1,236				346				1,544				585
ATM/debit card revenue		2,239				2,202				4,226				4,218
Other		1,097				1,516				2,756				2,844
Total non-interest income		13,885				13,588				30,395				28,227
Non-interest expense:
Salaries and employee benefits		15,455				15,565				31,955				32,139
Net occupancy and equipment expense		4,141				4,543				8,383				8,998
Net other real estate owned (income) expense		(2	)			188				(48	)			241
FDIC insurance		289				197				382				476
Amortization of intangible assets		1,290				1,823				2,585				3,179
Stationary and supplies		275				264				543				551
Legal and professional expense		1,489				1,304				2,887				2,498
Marketing and donations		314				481				795				935
Other		2,847				5,822				6,347				9,480
Total non-interest expense		26,098				30,187				53,829				58,497
Income before income taxes		13,233				14,623				26,404				32,257
Income taxes		3,096				3,642				6,268				7,960
Net income	$	10,137			$	10,981			$	20,136			$	24,297
Per Share Information
Basic earnings per common share	$	0.61			$	0.66			$	1.21			$	1.46
Diluted earnings per common share		0.60				0.66				1.20				1.45
Weighted average shares outstanding		16,709,886				16,683,194				16,701,536				16,674,646
Diluted weighted average shares outstanding		16,756,794				16,717,974				16,748,444				16,709,426

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,
	2020				2020				2019				2019			2019
Interest income:
Interest and fees on loans	$	31,382		$	30,027			$	31,206			$	31,976			$	31,539
Interest on investment securities		4,077			4,589				5,101				5,297				5,436
Interest on federal funds sold & other deposits					125				214				305				596
Total interest income		35,535			34,741				36,521				37,578				37,571
Interest expense:
Interest on deposits		3,105			3,861				4,447				5,174				4,940
Interest on securities sold under agreements to repurchase					194				240				196				215
Interest on other borrowings		516			595				610				691				697
Interest on subordinated debt		174			218				240				392				406
Total interest expense		3,953			4,868				5,537				6,453				6,258
Net interest income		31,582			29,873				30,984				31,125				31,313
Provision for loan losses		6,136			5,481				2,737				2,658				91
Net interest income after provision for loan					24,392				28,247				28,467				31,222
Non-interest income:
Wealth management revenues		3,827			3,626				5,027				3,311				3,587
Insurance commissions		4,088			6,621				3,361				3,353				3,760
Service charges		1,111			1,778				1,985				2,091				1,959
Securities gains, net		287			531				479				51				218
Mortgage banking revenues		1,236			308				579				582				346
ATM/debit card revenue		2,239			1,987				2,100				2,173				2,202
Other		1,097			1,659				1,342				1,356				1,516
Total non-interest income		13,885			16,510				14,873				12,917				13,588
Non-interest expense:
Salaries and employee benefits		15,455			16,500				15,942				14,497				15,565
Net occupancy and equipment expense		4,141			4,242				4,305				4,377				4,543
Net other real estate owned (income) expense					(46	)			30				172				188
FDIC insurance		289			93				(170	)			(87	)			197
Amortization of intangible assets		1,290			1,295				1,296				1,373				1,823
Stationary and supplies		275			268				269				284				264
Legal and professional expense		1,489			1,398				1,451				1,215				1,304
Marketing and donations		314			481				573				523				481
Other		2,847			3,500				3,905				3,540				5,822
Total non-interest expense		26,098			27,731				27,601				25,894				30,187
Income before income taxes		13,233			13,171				15,519				15,490				14,623
Income taxes		3,096			3,172				3,543				3,820				3,642
Net income	$	10,137		$	9,999			$	11,976			$	11,670			$	10,981

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,
			2020				2020				2019				2019				2019
Loan Portfolio
Construction and land development		$	180,934			$	123,326			$	94,142			$	68,821			$	57,069
Farm real estate loans			251,382				242,891				240,241				229,715				229,924
1-4 Family residential properties			342,036				325,128				336,427				347,370				355,143
Multifamily residential properties			141,015				139,734				153,948				154,859				167,709
Commercial real estate			1,123,540				1,002,868				995,702				954,992				888,711
Loans secured by real estate			2,038,907				1,833,947				1,820,460				1,755,757				1,698,556
Agricultural operating loans			149,043				139,136				136,124				121,650				118,216
Commercial and industrial loans			811,169				565,789				528,973				543,937				530,405
Consumer loans			82,084				82,104				83,183				83,171				84,907
All other loans			124,059				123,322				126,607				119,043				114,459
Total loans			3,205,262				2,744,298				2,695,347				2,623,558				2,546,543
Deposit Portfolio
Non-interest bearing demand deposits		$	817,623			$	642,384			$	633,331			$	596,518			$	603,823
Interest bearing demand deposits			938,710				827,387				850,956				899,763				844,931
Savings deposits			474,545				441,998				428,778				431,497				438,769
Money Market			625,361				441,381				419,801				435,517				473,160
Time deposits			529,588				555,477				584,500				625,630				651,807
Total deposits			3,385,827				2,908,627				2,917,366				2,988,925				3,012,490
Asset Quality
Non-performing loans		$	23,096			$	24,463			$	27,818			$	24,203			$	25,773
Non-performing assets			25,397				27,306				31,538				28,645				29,380
Net charge-offs			631				1,188				2,567				2,276				436
Allowance for loan losses to non-performing loans			166.18	%			134.39	%			96.74	%			110.49	%			102.27	%
Allowance for loan losses to total loans outstanding		1.30%1					1.20	%			1.00	%			1.02	%			1.04	%
Nonperforming loans to total loans			0.72	%			0.89	%			1.03	%			0.92	%			1.01	%
Nonperforming assets to total assets			0.57	%			0.71	%			0.82	%			0.75	%			0.77	%
Common Share Data
Common shares outstanding			16,728,190				16,702,484				16,673,480				16,663,095				16,694,316
Book value per common share		$	32.84			$	31.91			$	31.58			$	31.32			$	30.49
Tangible book value per common share			25.02				24.00				23.59				23.25				22.35
Market price of stock			26.23				23.74				35.25				34.62				34.92
Key Performance Ratios and Metrics
End of period earning assets		$	4,093,511			$	3,492,271			$	3,464,144			$	3,444,775			$	3,447,695
Average earning assets			3,942,832				3,451,123				3,464,200				3,444,088				3,470,776
Average rate on average earning assets (tax equivalent)			3.68	%			4.11	%			4.24	%			4.39	%			4.40	%
Average rate on cost of funds			0.43	%			0.60	%			0.67	%			0.79	%			0.76	%
Net interest margin (tax equivalent)			3.25	%			3.51	%			3.57	%			3.60	%			3.64	%
Return on average assets			0.94	%			1.05	%			1.25	%			1.22	%			1.15	%
Return on average common equity			7.47	%			7.48	%			9.17	%			9.04	%			8.80	%
Efficiency ratio (tax equivalent) 2			54.27	%			57.14	%			57.23	%			54.69	%			62.31	%
Full-time equivalent employees			828				835				827				830				826
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 June 2020
	QTD Average							Average
	Balance				Interest			Rate
INTEREST EARNING ASSETS
Interest bearing deposits	$	152,090			$	55		0.15	%
Federal funds sold		1,069				-		0.00	%
Certificates of deposits investments		4,154				21		2.03	%
Investment Securities:
Taxable (total less municipals)		507,466				2,751		2.17	%
Tax-exempt (Municipals)		182,585				1,678		3.68	%
Loans (net of unearned income)		3,095,468				31,566		4.10	%
Total interest earning assets		3,942,832				36,071		3.68	%
NONEARNING ASSETS
Cash and due from banks		80,492
Premises and equipment		59,155
Other nonearning assets		254,386
Allowance for loan losses		(36,215	)
Total assets	$	4,300,650
INTEREST BEARING LIABILITIES
Demand deposits	$	1,464,173			$	697		0.19	%
Savings deposits		465,281				98		0.08	%
Time deposits		541,413				2,310		1.72	%
Total interest bearing deposits		2,470,867				3,105		0.51	%
Repurchase agreements		301,810				158		0.21	%
FHLB advances		114,368				505		1.78	%
Federal funds purchased		0				0		0.00	%
Subordinated debt		18,915				174		3.70	%
Other borrowings		1,868				11		2.37	%
Total borrowings		436,961				848		0.78	%
Total interest bearing liabilities		2,907,828				3,953		0.55	%
NONINTEREST BEARING LIABILITIES
Demand deposits		799,332			Average cost of funds			0.43	%
Other liabilities		50,804
Stockholders' equity		542,686
Total liabilities & stockholders' equity	$	4,300,650
Net Interest Earnings / Spread					$	32,118		3.13	%
Impact of Non-Interest Bearing Funds								0.12	%
Tax effected yield on interest earning assets								3.25	%

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,
		2020				2020				2019				2019				2019
Net interest income as reported	$	31,582			$	29,873			$	30,984			$	31,125			$	31,313
Net interest income, (tax equivalent)		32,118				30,393				31,517				31,659				31,850
Average earning assets		3,942,832				3,451,123				3,464,200				3,444,088				3,470,776
Net interest margin (tax equivalent) 1		3.25	%			3.51	%			3.57	%			3.60	%			3.64	%
Common stockholder's equity	$	549,273			$	533,051			$	526,609			$	521,959			$	508,958
Goodwill and intangibles, net		130,656				132,199				133,257				134,461				135,762
Common shares outstanding		16,728				16,702				16,673				16,663				16,695
Tangible Book Value per common share	$	25.02			$	24.00			$	23.59			$	23.25			$	22.35
Common equity tier 1 capital	$	417,326			$	410,565			$	398,536			$	391,429			$	379,581
Risk weighted assets		3,101,449				2,854,102				2,822,648				2,923,245				2,935,236
Common equity tier 1 capital to risk weighted assets  2		13.46	%			14.39	%			14.12	%			13.39	%			12.93	%
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.