First Mid Bancshares, Inc. Announces Third Quarter 2020 Results

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 7^th 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 19^th, 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
[e-mail]

Matt Smith
Chief Financial Officer
217-258-1528
[e-mail]

– 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.