First Mid Bancshares, Inc. Announces Fourth Quarter and Full Year 2020 Results

MATTOON, Ill., Jan. 28, 2021 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter and full year period ended December 31, 2020.

Highlights

• Record quarterly net income of $13.6 million, or $0.81 diluted EPS
• Received regulatory approval on pending acquisition of LINCO Bancshares, Inc. (“LINCO”)
• Assisted customers on the forgiveness of $93.4 million in Paycheck Protection Program (“PPP”) loans
• Announced branch optimization plan with completion now anticipated by mid-year 2021
• Wealth Management assets under management increased 7% for the year to $4.5 billion
• Announcing change to quarterly dividend from semi-annual dividend beginning in 2021

“2020 was an incredible year with a combination of significant challenges and tremendous opportunities,” said Joe Dively, Chairman and Chief Executive Officer. “The First Mid team stepped up for our customers and shareholders, and I am proud of all that we accomplished. We ended the year with a record quarter of financial results, including working with our customers in the PPP forgiveness process, while completing a very successful subordinated debt offering and receiving regulatory approval for the pending acquisition of LINCO Bancshares, Inc.”

“We are excited about the new year with the second round of PPP underway, the branch optimization plan to be completed by mid-year, and the expected close of the LINCO acquisition in February. The deepened presence in the St. Louis metro market and geographic diversity into mid-Missouri and Texas increases our growth prospects, strengthens our balance sheet, and is estimated to provide over 20% earnings accretion. The customers and employees are excited about the expanded product set and are ready to move forward with a combined company that we believe will be better and stronger,” Dively concluded.

Net Interest Income

Net interest income for the fourth quarter of 2020 increased by $0.9 million, or 2.8% compared to the third quarter of 2020. Interest income increased by $1.3 million and interest expense increased $0.4 million from the previous quarter. The increase in interest income was partially driven by fee income from the PPP loans. The PPP fee income was $3.2 million in the fourth quarter compared to $1.0 million in the third quarter of 2020.   At year end, the Company had $3.5 million of unrealized fee income on the first round of PPP loans remaining.   Total accretion income was $0.3 million, which was a decline of $0.1 million from the previous quarter. Interest expense was impacted by an additional $0.9 million of interest on the $96 million of subordinated debt that was raised in connection with the pending LINCO acquisition and for general corporate purposes. Excluding this, interest expense declined by $0.5 million in the quarter.

In comparison to the fourth quarter of 2019, net interest income increased $2.5 million, or 7.9%. The increase was primarily the result of higher interest income on loans and lower interest expense outpacing the decline in investment income. Interest expense decreased by $1.4 million compared to the fourth quarter of last year, despite the additional $0.9 million of interest expense on the new subordinated debt.           

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.17% for the fourth quarter of 2020, which was flat compared to the prior quarter. Both earning asset yields and cost of funds increased by two basis points.   Earning asset yields were impacted by PPP fee income and cost of funds were impacted by the new subordinated debt interest expense. Excluding the subordinated debt interest, the net interest margin would have been 8 basis points higher.

In comparison to the fourth quarter of 2019, the net interest margin decreased 40 basis points with accretion income representing $1.5 million, or 17 basis points of the decline. Earning asset yields were down 66 basis points and average cost of funds declined by 26 basis points compared to the same period.  

Loan Portfolio

Total loans ended the quarter at $3.14 billion, representing a decrease of $97.8 million compared to the prior quarter. The decline included $93.4 million of forgiven PPP loans. At year end, the Company had $168.3 million of PPP loans remaining on the balance sheet. For the year, and excluding PPP and acquired loans, loan balances increased $91.8 million, or 3.4%.  

The Company continues to see its loan deferrals trending lower. As of January 19, 2021, outstanding deferrals totaled $49.4 million, or 1.6% of the loan portfolio. Hotels represent the largest deferral category at 84% of the total outstanding deferrals. Most remaining deferrals are paying interest with only principal deferred.

Asset Quality

The Company’s asset quality measures continue to reflect a strong credit culture.   As of December 31, 2020, the allowance for credit losses, excluding $168.3 million of PPP loans, was 1.41% of total loans, the ratio of non-performing loans to total loans was 0.90%, and the allowance for credit losses to non-performing loans was 149.0%.   Non-performing loans increased $5.7 million to $28.1 million at quarter end.   Non-performing assets to total assets was 0.65% at quarter end. Net charge-offs were $0.6 million during the fourth quarter compared to $0.3 million in the prior quarter. During the quarter, the Company completed a review of all its internally identified COVID watch list loans, including those remaining on or coming off deferrals. The review, along with other changes to classifications unrelated to COVID, resulted in an increase to special mention loans by $31.9 million to $137.8 million and an increase to substandard loans by $4.4 million to $59.5 million. The increases were primarily in the hotel and restaurant sectors. The Company does not currently expect material losses from those specific downgrades that occurred in the quarter. The Company’s total past dues improved to 0.44% at year-end 2020 versus 0.55% at the end of the third quarter.

Provision expense was recorded in the amount of $0.6 million in the fourth quarter, in line with net charge-offs. The reserve was flat compared to the prior quarter on a slightly lower loan balance, excluding PPP. The economic outlook has significantly improved for the Agriculture sector, while the COVID driven restrictions continue to provide macro-economic uncertainty in certain sectors.

Deposits

Total deposits ended the quarter at $3.69 billion, which represented an increase of $72.9 million from the prior quarter.   Noninterest bearing deposits increased $99.3 million, while interest bearing deposits declined by $26.4 million. The Company’s average rate on cost of funds was 0.41% for the quarter compared to 0.39% in the prior quarter and 0.67% in the fourth quarter of 2019. Excluding the interest on the subordinated debt raised during the quarter in connection with the pending LINCO acquisition, the average cost of funds would have been 0.33%.            

Noninterest Income

Noninterest income for the fourth quarter of 2020 was $15.5 million compared to $13.6 million in the third quarter.   The increase compared to the prior quarter was due to the strong performance in the farm management and real estate areas of the wealth management division and higher insurance and mortgage banking revenues. The strength of First Mid’s noninterest income continues to be a strategic differentiator providing significant diversification for the Company.     

In comparison to the fourth quarter of 2019, noninterest income increased $0.7 million, or 4.5%. The year-over-year increase was driven by wealth management, insurance, debit card fees and mortgage banking income, partially offset by lower service charges, less securities gains and a decline in the other non-interest income category.        

Noninterest Expenses     

Noninterest expense for the fourth quarter totaled $30.3 million compared to $26.9 million in the third quarter. The current quarter included $0.4 million, or approximately $0.02 EPS, of acquisition related costs. Consistent with the prior year, incentive compensation increased with the seasonal growth for the farm real estate sales within the wealth management business as well as the strong overall financial performance for the quarter.

In comparison to the fourth quarter of 2019, noninterest expenses increased $2.7 million. The increase was primarily due to acquisition costs and higher incentive costs from increased revenues and net income.

The Company’s efficiency ratio, on a tax equivalent basis and inclusive of acquisition costs, for the fourth quarter 2020 was 59.0% compared to 54.9% in the prior quarter and 57.2% 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	18.82%
Tier 1 capital to risk-weighted assets	14.63%
Common equity tier 1 capital to risk-weighted assets	14.03%
Leverage ratio	10.22%

The Company’s Board of Directors has determined it is in the best interest of shareholders to change from its historical semi-annual dividend to a quarterly dividend beginning in 2021. Therefore, the Board of Directors approved a quarterly dividend in the amount of $0.205 payable on March 1, 2021 for shareholders of record on February 19, 2021. The dividend amount is exactly half of the most recent semi-annual dividend that was paid in December.

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 $4.7 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 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; 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
		December 31,				September 30,				December 31,
			2020				2020				2019
Assets
Cash and cash equivalents		$	417,281			$	232,385			$	85,080
Investment securities			887,169				750,122				760,215
Loans (including loans held for sale)			3,138,419				3,236,247				2,695,347
Less allowance for loan losses			(41,910	)			(41,915	)			(26,911	)
Net loans			3,096,509				3,194,332				2,668,436
Premises and equipment, net			58,206				59,356				59,491
Goodwill and intangibles, net			128,120				129,287				133,257
Bank owned life insurance			68,955				68,519				67,225
Other assets			70,108				75,127				65,722
Total assets		$	4,726,348			$	4,509,128			$	3,839,426
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing		$	936,926			$	837,602			$	633,331
Interest bearing			2,755,858				2,782,234				2,284,035
Total deposits			3,692,784				3,619,836				2,917,366
Repurchase agreement with customers			206,937				170,345				208,109
Other borrowings			93,969				93,954				118,895
Junior subordinated debentures			19,027				18,985				18,858
Subordinated debt			94,253				-				-
Other liabilities			51,150				44,999				49,589
Total liabilities			4,158,120				3,948,119				3,312,817
Total stockholders' equity			568,228				561,009				526,609
Total liabilities and stockholders' equity		$	4,726,348			$	4,509,128			$	3,839,426

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
	Three Months Ended									Twelve Months Ended
	December 31,									December 31,
		2020				2019					2020			2019
Interest income:
Interest and fees on loans	$	33,254			$	31,206				$	126,814		$	126,825
Interest on investment securities		4,226				5,101					16,966			21,043
Interest on federal funds sold & other deposits		90				214					361			1,853
Total interest income		37,570				36,521					144,141			149,721
Interest expense:
Interest on deposits		2,617				4,447					12,751			18,939
Interest on securities sold under agreements to repurchase		68				240					488			911
Interest on other borrowings		371				610					1,877			2,721
Interest on jr. subordinated debentures		143				240					682			1,476
Interest on subordinated debt		931				0					931			0
Total interest expense		4,130				5,537					16,729			24,047
Net interest income		33,440				30,984					127,412			125,674
Provision for loan losses		603				2,737					16,103			6,433
Net interest income after provision for loan		32,837				28,247					111,309			119,241
Non-interest income:
Wealth management revenues		5,232				5,027					16,153			15,570
Insurance commissions		3,477				3,361					17,477			16,029
Service charges		1,527				1,985					5,862			7,837
Securities gains, net		193				479					1,106			802
Mortgage banking revenues		1,870				579					5,075			1,746
ATM/debit card revenue		2,369				2,100					8,962			8,491
Other		879				1,342					4,885			5,542
Total non-interest income		15,547				14,873					59,520			56,017
Non-interest expense:
Salaries and employee benefits		19,151				15,942					66,452			62,578
Net occupancy and equipment expense		3,962				4,305					16,708			17,680
Net other real estate owned (income) expense		(20	)			30					42			443
FDIC insurance		458				(170	)				1,309			219
Amortization of intangible assets		1,200				1,296					5,062			5,848
Stationary and supplies		275				269					1,080			1,104
Legal and professional expense		1,220				1,451					5,427			5,164
Marketing and donations		434				573					1,616			2,031
Other		3,651				3,905					13,391			16,925
Total non-interest expense		30,331				27,601					111,087			111,992
Income before income taxes		18,053				15,519					59,742			63,266
Income taxes		4,484				3,543					14,472			15,323
Net income	$	13,569			$	11,976				$	45,270		$	47,943
Per Share Information
Basic earnings per common share	$	0.81			$	0.72				$	2.71		$	2.88
Diluted earnings per common share		0.81				0.72					2.70			2.87
Dividends per common share		0.41				0.40					0.81			0.76
Weighted average shares outstanding		16,735,926				16,667,370					16,716,880			16,675,269
Diluted weighted average shares outstanding		16,779,129				16,699,876					16,762,856			16,709,476

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
	For the Quarter Ended
	December 31,				September 30,			June 30,				March 31,				December 31,
		2020				2020			2020				2020				2019
Interest income:
Interest and fees on loans	$	33,254			$	32,151		$	31,382			$	30,027			$	31,206
Interest on investment securities		4,226				4,074			4,077				4,589				5,101
Interest on federal funds sold & other deposits		90				70			76				125				214
Total interest income		37,570				36,295			35,535				34,741				36,521
Interest expense:
Interest on deposits		2,617				3,168			3,105				3,861				4,447
Interest on securities sold under agreements to repurchase		68				68			158				194				240
Interest on other borrowings		371				395			516				595				610
Interest on jr. subordinated debentures		143				147			174				218				240
Interest on subordinated debt		931				-			-				-				-
Total interest expense		4,130				3,778			3,953				4,868				5,537
Net interest income		33,440				32,517			31,582				29,873				30,984
Provision for loan losses		603				3,883			6,136				5,481				2,737
Net interest income after provision for loan		32,837				28,634			25,446				24,392				28,247
Non-interest income:
Wealth management revenues		5,232				3,468			3,827				3,626				5,027
Insurance commissions		3,477				3,291			4,088				6,621				3,361
Service charges		1,527				1,446			1,111				1,778				1,985
Securities gains, net		193				95			287				531				479
Mortgage banking revenues		1,870				1,661			1,236				308				579
ATM/debit card revenue		2,369				2,367			2,239				1,987				2,100
Other		879				1,250			1,097				1,659				1,342
Total non-interest income		15,547				13,578			13,885				16,510				14,873
Non-interest expense:
Salaries and employee benefits		19,151				15,346			15,455				16,500				15,942
Net occupancy and equipment expense		3,962				4,363			4,141				4,242				4,305
Net other real estate owned (income) expense		(20	)			110			(2	)			(46	)			30
FDIC insurance		458				469			289				93				(170	)
Amortization of intangible assets		1,200				1,277			1,290				1,295				1,296
Stationary and supplies		275				262			275				268				269
Legal and professional expense		1,220				1,320			1,489				1,398				1,451
Marketing and donations		434				387			314				481				573
Other		3,651				3,393			2,847				3,500				3,905
Total non-interest expense		30,331				26,927			26,098				27,731				27,601
Income before income taxes		18,053				15,285			13,233				13,171				15,519
Income taxes		4,484				3,720			3,096				3,172				3,543
Net income	$	13,569			$	11,565		$	10,137			$	9,999			$	11,976

FIRST MID BANCSHARES, INC.
Consolidated Financial Highlights and Ratios
(Dollars in thousands, except per share data)
(Unaudited)
		As of and for the Quarter Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
			2020				2020				2020				2020				2019
Loan Portfolio
Construction and land development		$	122,479			$	167,515			$	180,934			$	123,326			$	94,142
Farm real estate loans			254,341				256,230				251,382				242,891				240,241
1-4 Family residential properties			325,762				339,172				342,036				325,128				336,427
Multifamily residential properties			189,632				139,255				141,015				139,734				153,948
Commercial real estate			1,174,300				1,177,571				1,123,540				1,002,868				995,702
Loans secured by real estate			2,066,514				2,079,743				2,038,907				1,833,947				1,820,460
Agricultural operating loans			137,352				141,074				149,043				139,136				136,124
Commercial and industrial loans			738,313				807,668				811,169				565,789				528,973
Consumer loans			78,002				80,348				82,084				82,104				83,183
All other loans			118,238				127,414				124,059				123,322				126,607
Total loans			3,138,419				3,236,247				3,205,262				2,744,298				2,695,347
Deposit Portfolio
Non-interest bearing demand deposits		$	936,926			$	837,602			$	817,623			$	642,384			$	633,331
Interest bearing demand deposits			1,031,183				1,053,691				938,710				827,387				850,956
Savings deposits			499,427				485,241				474,545				441,998				428,778
Money Market			748,179				736,262				625,361				441,381				419,801
Time deposits			477,069				507,040				529,588				555,477				584,500
Total deposits			3,692,784				3,619,836				3,385,827				2,908,627				2,917,366
Asset Quality
Non-performing loans		$	28,123			$	22,439			$	23,096			$	24,463			$	27,818
Non-performing assets			30,616				24,712				25,397				27,306				31,538
Net charge-offs			608				349				631				1,188				2,567
Allowance for loan losses to non-performing loans			149.02	%			186.80	%			166.18	%			134.39	%			96.74	%
Allowance for loan losses to total loans outstanding		1.41%1				1.41%1				1.30%1					1.20	%			1.00	%
Nonperforming loans to total loans			0.90	%			0.69	%			0.72	%			0.89	%			1.03	%
Nonperforming assets to total assets			0.65	%			0.55	%			0.57	%			0.71	%			0.82	%
Common Share Data
Common shares outstanding			16,741,208				16,731,684				16,728,190				16,702,484				16,673,480
Book value per common share		$	33.94			$	33.53			$	32.84			$	31.91			$	31.58
Tangible book value per common share			26.29				25.80				25.02				24.00				23.59
Market price of stock			33.66				24.95				26.23				23.74				35.25
Key Performance Ratios and Metrics
End of period earning assets		$	4,367,717			$	4,130,186			$	4,093,511			$	3,492,271			$	3,464,144
Average earning assets			4,238,388				4,113,846				3,942,832				3,451,123				3,464,200
Average rate on average earning assets (tax equivalent)			3.58	%			3.56	%			3.68	%			4.11	%			4.24	%
Average rate on cost of funds			0.41	%			0.39	%			0.43	%			0.60	%			0.67	%
Net interest margin (tax equivalent)			3.17	%			3.17	%			3.25	%			3.51	%			3.57	%
Return on average assets			1.18	%			1.03	%			0.94	%			1.05	%			1.25	%
Return on average common equity			9.66	%			8.31	%			7.47	%			7.48	%			9.17	%
Efficiency ratio (tax equivalent) 2			59.02	%			54.85	%			54.27	%			57.14	%			57.23	%
Full-time equivalent employees			824				816				828				835				827
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 December 2020
	QTD Average							Average
	Balance				Interest			Rate
INTEREST EARNING ASSETS
Interest bearing deposits	$	236,894			$	75		0.13	%
Federal funds sold		1,304				-		0.00	%
Certificates of deposits investments		2,695				15		2.21	%
Investment Securities:
Taxable (total less municipals)		581,245				2,647		1.82	%
Tax-exempt (Municipals)		240,398				1,997		3.32	%
Loans (net of unearned income)		3,175,852				33,436		4.19	%
Total interest earning assets		4,238,388				38,170		3.58	%
NONEARNING ASSETS
Cash and due from banks		86,239
Premises and equipment		58,740
Other nonearning assets		258,129
Allowance for loan losses		(43,026	)
Total assets	$	4,598,470
INTEREST BEARING LIABILITIES
Demand deposits	$	1,743,053			$	900		0.21	%
Savings deposits		494,802				107		0.09	%
Time deposits		491,046				1,610		1.30	%
Total interest bearing deposits		2,728,901				2,617		0.38	%
Repurchase agreements		189,686				68		0.14	%
FHLB advances		93,959				371		1.57	%
Federal funds purchased		0				0		0.00	%
Subordinated debt		89,128				931		4.16	%
Jr. subordinated debentures		18,999				143		2.99	%
Other borrowings		0				0		0.00	%
Total borrowings		391,772				1,513		1.54	%
Total interest bearing liabilities		3,120,673				4,130		0.53	%
NONINTEREST BEARING LIABILITIES
Demand deposits		867,035			Average cost of funds			0.41	%
Other liabilities		48,684
Stockholders' equity		562,078
Total liabilities & stockholders' equity	$	4,598,470
Net Interest Earnings / Spread					$	34,040		3.05	%
Impact of Non-Interest Bearing Funds								0.12	%
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
		December 31,				September 30,				June 30,				March 31,				December 31,
			2020				2020				2020				2020				2019
Net interest income as reported		$	33,440			$	32,517			$	31,582			$	29,873			$	30,984
Net interest income, (tax equivalent)			34,040				33,084				32,118				30,393				31,517
Average earning assets			4,238,388				4,113,846				3,942,832				3,451,123				3,464,200
Net interest margin (tax equivalent) 1			3.17	%			3.17	%			3.25	%			3.51	%			3.57	%
Common stockholder's equity		$	568,228			$	561,009			$	549,273			$	533,051			$	526,609
Goodwill and intangibles, net			128,120				129,287				130,656				132,199				133,257
Common shares outstanding			16,741				16,732				16,728				16,702				16,673
Tangible Book Value per common share		$	26.29			$	25.80			$	25.02			$	24.00			$	23.59
Common equity tier 1 capital		$	439,299			$	431,342			$	417,326			$	410,565			$	398,536
Risk weighted assets			3,132,049				3,101,591				3,101,449				2,854,102				2,822,648
Common equity tier 1 capital to risk weighted assets 2			14.03	%			13.91	%			13.46	%			14.39	%			14.12	%
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.