First Mid Bancshares, Inc. Announces First Quarter 2021 Results

MATTOON, Ill., April 28, 2021 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended March 31, 2021.

Highlights

• Net income of $4.1 million, or $0.24 diluted EPS
• Adjusted net income (non-GAAP) of $15.2 million, or $0.88 diluted EPS, reflecting a record high
• Completed the acquisition of LINCO Bancshares, Inc. (“LINCO”) and its subsidiary Providence Bank (“Providence”) on February 22, 2021
• Solid quarter of wealth management and insurance revenues drives noninterest income to 33% of total
• Board of Directors declares regular quarterly dividend of $0.205 per share
  

“We kicked off 2021 on a positive note with a strong financial performance, including record high adjusted earnings driven by successes across our business lines,” said Joe Dively, Chairman and Chief Executive Officer. “The quarter was highlighted by the closing of the LINCO acquisition where we met both our timing and financial targets. The reception from customers has been very good and the teams have been working extremely well together as we prepare for a mid-May bank system conversion.”

“We also had a strong start to the year in our farm management business and continued to play an important role in assisting our clients with the Paycheck Protection Program (PPP). Our commitment to our customers and communities is evident with the success we have had in the PPP program for both existing and new customers. We have had employees working long hours to help customers and added $107.4 million in loans under the new round of PPP, while working with borrowers from the previous rounds to process forgiveness applications. The First Mid team demonstrated how much it can accomplish within an unprecedented operating environment and I am proud of all the work they have done to support our customers and communities,” Dively concluded.

Net Interest Income

Net interest income for the first quarter of 2021 increased by $3.3 million, or 9.9% compared to the fourth quarter of 2020. Interest income increased by $3.2 million and interest expense declined by $0.1 million from the previous quarter. The increase in interest income was primarily driven by the addition of Providence for the period subsequent to closing on February 22, 2021. Accretion income increased by $0.9 million in the quarter to $1.2 million. This was offset by a decline in PPP fee income of $0.9 million to $2.3 million in total. At quarter end, the Company had $7.5 million of deferred fee income on PPP loans remaining. Interest expense declined, despite the addition of Providence, driven by additional reductions in money market and savings products and continuing to allow wholesale time deposit and FHLB advances to mature without replacement.

In comparison to the first quarter of 2020, net interest income increased $6.9 million, or 23.1%. The increase was primarily the result of the addition of Providence, the additional income from the PPP, and the active management to lower funding costs.            

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.16% for the first quarter of 2021, which was one basis point lower compared to the prior quarter. Earning asset yields declined by six basis points on higher cash liquidity invested at lower yields. The higher liquidity was primarily driven by additional government stimulus in the quarter. Average cost of funds declined by five basis points as the company continues to allow wholesale time deposits and FHLB advances to mature and lowered certain product rates during the period.

In comparison to the first quarter of last year, the net interest margin decreased 35 basis points with earning asset yields down 59 basis points and average cost of funds lower by 24 basis points. The current quarter included $2.3 million of PPP fee income that did not exist in the first quarter of 2020 and accretion income was higher by $0.3 million compared to the same period last year.

Loan Portfolio

Total loans ended the quarter at $3.94 billion, representing an increase of $804.7 million compared to the prior quarter. The increase was primarily driven by the addition of Providence, which had $817.2 million, net of the discount, at quarter end. Excluding Providence, loans declined $12.5 million in the quarter and PPP loans increased $35.3 million. The Company had $72.1 million of the initial PPP loans forgiven and/or pay down in the period, while it added $107.4 million in the new PPP program. Total PPP loans ended the period at $259.7 million, which included $56.1 million for Providence. Overall, the loan growth pipeline has improved, but payoffs have increased as well. A combination of stimulus and PPP income has helped borrowers reduce debt and the stronger Ag economy has driven farmers to pay down borrowings to improve their overall balance sheets.   

The Company continues to see its loan deferrals trending lower. As of April 23, 2021, outstanding deferrals totaled $45.8 million, or 1.2% of the loan portfolio. Hotels represent the largest deferral category at 90% of the total outstanding deferrals. A majority of the remaining deferrals are expected to return to full principal and interest over the next three months. All but one of the 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 March 31, 2021, the allowance for credit losses, excluding $259.7 million of PPP loans, was 1.50% of total loans, excluding 25 basis points of credit discount. Also at quarter end, the ratio of non-performing loans to total loans was 0.81%, and the allowance for credit losses to non-performing loans was 173.3%. Nonperforming loans and nonperforming assets increased with the addition of Providence. Excluding Providence, nonperforming loans and nonperforming assets were essentially flat compared to the fourth quarter. The ratio of nonperforming assets to total assets was 0.78% at quarter end. Net charge-offs were $0.7 million during the first quarter compared to $0.6 million in the prior quarter. During the quarter, the Company recognized significant improvement in its classified loans. Excluding Providence, special mention loans decreased $14.0 million to $123.8 million and substandard loans decreased $9.3 million to $50.2 million.

Provision expense was recorded in the amount of $12.1 million in the first quarter. The Company recorded $11.5 million for the non-PCD CECL requirement tied to the Providence acquisition. The allowance for credit losses increased $13.5 million to $55.4 million in the quarter. In addition to the non-PCD requirement related to the Providence acquisition, the Company added $2.1 million in PCD reserve through purchase accounting.   

Deposits

Total deposits ended the quarter at $4.74 billion, which represented an increase of $1.04 billion from the prior quarter primarily from the addition of Providence, which had $870.4 million in deposits at quarter end. Excluding Providence, total deposits increased $174.5 million driven primarily from increases related to the government stimulus efforts. The Company’s average rate on cost of funds was 0.36% for the quarter compared to 0.41% in the prior quarter and 0.60% in the first quarter of 2020. The Company continues to see opportunities to reprice CD’s lower as well as allow wholesale CD’s to mature.               

Noninterest Income

Noninterest income for the first quarter of 2021 was $17.7 million compared to $15.5 million in the fourth quarter of 2020. The increase compared to the prior quarter was partially due to the addition of Providence and the seasonally higher insurance revenue. Wealth management had a solid quarter of farm management fee income on higher commodity prices. Both the wealth management and insurance business are well diversified in their revenue sources and deliver consistent cash flows. These two businesses represent approximately 60% of the Company’s noninterest income providing significant diversification for the Company. The quarter also included an increase in debit card fee income as more businesses came off of pandemic restrictions allowing for more consumer spending. Service charges declined with additional stimulus in the quarter and mortgage banking was lower on higher interest rates.     

In comparison to the first quarter of 2020, noninterest income increased $1.2 million, or 7.5%. The year-over-year increase was driven by the addition of Providence, higher farm management fee income within the wealth management division, an increase in mortgage banking and debit card usage. These were offset by lower insurance revenues, service charges and securities gains.         

Noninterest Expenses     

Noninterest expense for the first quarter totaled $37.6 million compared to $30.3 million in the fourth quarter. The increase was primarily driven by the addition of Providence, non-recurring acquisition costs of $2.6 million, and higher incentive compensation.   

In comparison to the first quarter of 2020, noninterest expenses increased $9.9 million. The increase was primarily due to the addition of Providence, non-recurring acquisition costs and higher incentive compensation.

The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the first quarter 2021 was 61.2% compared to 58.3% in the prior quarter and 56.8% 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	13.75%
Tier 1 capital to risk-weighted assets	10.74%
Common equity tier 1 capital to risk-weighted assets	10.33%
Leverage ratio	9.84%

The Company’s Board of Directors approved a regular quarterly dividend in the amount of $0.205 payable on June 1, 2021 for shareholders of record on May 18, 2021.  

About First Mid: First Mid Bancshares, Inc. (“First Mid”) is the parent company of First Mid Bank & Trust, N.A., Providence Bank, First Mid Insurance Group, Inc. and First Mid Wealth Management Co. First Mid is a $5.8 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 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 “Adjusted Net Income,” “Adjusted Diluted EPS,” “Efficiency Ratio,” “Net Interest Margin, tax equivalent,” and “Tangible Book Value per Common Share”. While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP. These non-GAAP financial measures may also differ from the similar measures presented by other companies.

Forward Looking Statements:
This document may contain certain forward-looking statements about First Mid Bancshares, Inc. (“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 and planned schedules. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 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, the possibility that any of the anticipated benefits of the closed transaction 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; 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 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 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 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
	March 31,				December 31,				March 31,
		2021				2020				2020
Assets
Cash and cash equivalents	$	410,017			$	417,281			$	182,027
Investment securities		1,099,532				887,169				646,744
Loans (including loans held for sale)		3,943,099				3,138,419				2,744,298
Less allowance for loan losses		(55,418	)			(41,910	)			(32,876	)
Net loans		3,887,681				3,096,509				2,711,422
Premises and equipment, net		86,654				58,206				59,359
Goodwill and intangibles, net		138,606				128,120				132,199
Bank owned life insurance		124,925				68,955				67,656
Other assets		89,855				70,108				65,424
Total assets	$	5,837,270			$	4,726,348			$	3,864,831
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing	$	1,185,181			$	936,926			$	642,384
Interest bearing		3,552,512				2,755,858				2,266,243
Total deposits		4,737,693				3,692,784				2,908,627
Repurchase agreement with customers		212,503				206,937				231,649
Other borrowings		116,861				93,969				124,921
Junior subordinated debentures		19,069				19,027				18,900
Subordinated debt		94,289				94,253				-
Other liabilities		54,971				51,150				47,683
Total liabilities		5,235,386				4,158,120				3,331,780
Total stockholders' equity		601,884				568,228				533,051
Total liabilities and stockholders' equity	$	5,837,270			$	4,726,348			$	3,864,831

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
	Three Months Ended
	March 31,
	2021			2020
Interest income:
Interest and fees on loans	$	35,886		$	30,027
Interest on investment securities		4,842			4,589
Interest on federal funds sold & other deposits		88			125
Total interest income		40,816			34,741
Interest expense:
Interest on deposits		2,484			3,861
Interest on securities sold under agreements to repurchase		70			194
Interest on other borrowings		374			595
Interest on jr. subordinated debentures		140			218
Interest on subordinated debt		984			0
Total interest expense		4,052			4,868
Net interest income		36,764			29,873
Provision for loan losses		12,136			5,481
Net interest income after provision for loan		24,628			24,392
Non-interest income:
Wealth management revenues		4,926			3,626
Insurance commissions		5,857			6,621
Service charges		1,364			1,778
Securities gains, net		4			531
Mortgage banking revenues		1,409			308
ATM/debit card revenue		2,699			1,987
Other		1,490			1,659
Total non-interest income		17,749			16,510
Non-interest expense:
Salaries and employee benefits		23,487			16,500
Net occupancy and equipment expense		4,970			4,242
Net other real estate owned (income) expense		78			(46	)
FDIC insurance		452			93
Amortization of intangible assets		1,220			1,295
Stationary and supplies		316			268
Legal and professional expense		1,402			1,398
Marketing and donations		502			481
Other		5,173			3,500
Total non-interest expense		37,600			27,731
Income before income taxes		4,777			13,171
Income taxes		668			3,172
Net income	$	4,109		$	9,999
Per Share Information
Basic earnings per common share	$	0.24		$	0.60
Diluted earnings per common share		0.24			0.60
Weighted average shares outstanding		17,299,927			16,693,183
Diluted weighted average shares outstanding		17,352,947			16,740,091

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
		For the Quarter Ended
		March 31,			December 31,				September 30,			June 30,				March 31,
		2021			2020				2020			2020				2020
Interest income:
Interest and fees on loans		$	35,886		$	33,254			$	32,151		$	31,382			$	30,027
Interest on investment securities			4,842			4,226				4,074			4,077				4,589
Interest on federal funds sold & other deposits			88			90				70			76				125
Total interest income			40,816			37,570				36,295			35,535				34,741
Interest expense:
Interest on deposits			2,484			2,617				3,168			3,105				3,861
Interest on securities sold under agreements to repurchase			70			68				68			158				194
Interest on other borrowings			374			371				395			516				595
Interest on jr. subordinated debentures			140			143				147			174				218
Interest on subordinated debt			984			931				-			-				-
Total interest expense			4,052			4,130				3,778			3,953				4,868
Net interest income			36,764			33,440				32,517			31,582				29,873
Provision for loan losses			12,136			603				3,883			6,136				5,481
Net interest income after provision for loan			24,628			32,837				28,634			25,446				24,392
Non-interest income:
Wealth management revenues			4,926			5,232				3,468			3,827				3,626
Insurance commissions			5,857			3,477				3,291			4,088				6,621
Service charges			1,364			1,527				1,446			1,111				1,778
Securities gains, net			4			193				95			287				531
Mortgage banking revenues			1,409			1,870				1,661			1,236				308
ATM/debit card revenue			2,699			2,369				2,367			2,239				1,987
Other			1,490			879				1,250			1,097				1,659
Total non-interest income			17,749			15,547				13,578			13,885				16,510
Non-interest expense:
Salaries and employee benefits			23,487			19,151				15,346			15,455				16,500
Net occupancy and equipment expense			4,970			3,962				4,363			4,141				4,242
Net other real estate owned (income) expense			78			(20	)			110			(2	)			(46	)
FDIC insurance			452			458				469			289				93
Amortization of intangible assets			1,220			1,200				1,277			1,290				1,295
Stationary and supplies			316			275				262			275				268
Legal and professional expense			1,402			1,220				1,320			1,489				1,398
Marketing and donations			502			434				387			314				481
Other			5,173			3,651				3,393			2,847				3,500
Total non-interest expense			37,600			30,331				26,927			26,098				27,731
Income before income taxes			4,777			18,053				15,285			13,233				13,171
Income taxes			668			4,484				3,720			3,096				3,172
Net income		$	4,109		$	13,569			$	11,565		$	10,137			$	9,999
Per Share Information
Basic earnings per common share		$	0.24		$	0.81			$	0.69		$	0.61			$	0.60
Diluted earnings per common share			0.24			0.81				0.69			0.60				0.60
Weighted average shares outstanding			17,299,927			16,735,926				16,728,191			16,709,886				16,693,183
Diluted weighted average shares outstanding			17,352,947			16,779,129				16,775,099			16,756,794				16,740,091

FIRST MID BANCSHARES, INC.
Consolidated Financial Highlights and Ratios
(Dollars in thousands, except per share data)
(Unaudited)
		As of and for the Quarter Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
			2021				2020				2020				2020				2020
Loan Portfolio
Construction and land development		$	165,376			$	122,479			$	167,515			$	180,934			$	123,326
Farm real estate loans			269,652				254,341				256,230				251,382				242,891
1-4 Family residential properties			412,470				325,762				339,172				342,036				325,128
Multifamily residential properties			297,984				189,632				139,255				141,015				139,734
Commercial real estate			1,402,885				1,174,300				1,177,571				1,123,540				1,002,868
Loans secured by real estate			2,548,367				2,066,514				2,079,743				2,038,907				1,833,947
Agricultural operating loans			121,070				137,352				141,074				149,043				139,136
Commercial and industrial loans			1,017,400				738,313				807,668				811,169				565,789
Consumer loans			91,705				78,002				80,348				82,084				82,104
All other loans			164,557				118,238				127,414				124,059				123,322
Total loans			3,943,099				3,138,419				3,236,247				3,205,262				2,744,298
Deposit Portfolio
Non-interest bearing demand deposits		$	1,185,181			$	936,926			$	837,602			$	817,623			$	642,384
Interest bearing demand deposits			1,268,882				1,031,183				1,053,691				938,710				827,387
Savings deposits			668,098				499,427				485,241				474,545				441,998
Money Market			803,946				748,179				736,262				625,361				441,381
Time deposits			811,586				477,069				507,040				529,588				555,477
Total deposits			4,737,693				3,692,784				3,619,836				3,385,827				2,908,627
Asset Quality
Non-performing loans		$	31,984			$	28,123			$	22,439			$	23,096			$	24,463
Non-performing assets			45,323				30,616				24,712				25,397				27,306
Net charge-offs			702				608				349				631				1,188
Allowance for loan losses to non-performing loans			173.27	%			149.02	%			186.80	%			166.18	%			134.39	%
Allowance for loan losses to total loans outstanding		1.50%1				1.41%1				1.41%1				1.30%1					1.20	%
Nonperforming loans to total loans			0.81	%			0.90	%			0.69	%			0.72	%			0.89	%
Nonperforming assets to total assets			0.78	%			0.65	%			0.55	%			0.57	%			0.71	%
Common Share Data
Common shares outstanding			18,042,256				16,741,208				16,731,684				16,728,190				16,702,484
Book value per common share		$	33.36			$	33.94			$	33.53			$	32.84			$	31.91
Tangible book value per common share (2)			25.68				26.29				25.80				25.02				24.00
Market price of stock			43.93				33.66				24.95				26.23				23.74
Key Performance Ratios and Metrics
End of period earning assets		$	5,837,270			$	4,367,717			$	4,130,186			$	4,093,511			$	3,492,271
Average earning assets			4,769,975				4,238,388				4,113,846				3,942,832				3,451,123
Average rate on average earning assets (tax equivalent)			3.52	%			3.58	%			3.56	%			3.68	%			4.11	%
Average rate on cost of funds			0.36	%			0.41	%			0.39	%			0.43	%			0.60	%
Net interest margin (tax equivalent) (2)			3.16	%			3.17	%			3.17	%			3.25	%			3.51	%
Return on average assets			0.32	%			1.18	%			1.03	%			0.94	%			1.05	%
Return on average common equity			2.78	%			9.66	%			8.31	%			7.47	%			7.48	%
Efficiency ratio (tax equivalent) (2)			61.20	%			58.27	%			54.66	%			53.70	%			56.81	%
Full-time equivalent employees			983				824				816				828				835
1 Excludes Paycheck Protection Program loans.
2 Non-GAAP financial measure. Refer to reconciliation to the comparable GAAP measure.

FIRST MID BANCSHARES, INC.
Net Interest Margin
(In thousands, unaudited)
	For the Quarter Ended March 2021
	QTD Average							Average
	Balance				Interest			Rate
INTEREST EARNING ASSETS
Interest bearing deposits	$	278,295			$	74		0.11	%
Federal funds sold		1,316				-		0.03	%
Certificates of deposits investments		2,695				14		2.14	%
Investment Securities:
Taxable (total less municipals)		761,727				3,249		1.71	%
Tax-exempt (Municipals)		248,188				2,016		3.25	%
Loans (net of unearned income)		3,477,754				36,058		4.20	%
Total interest earning assets		4,769,975				41,411		3.52	%
NONEARNING ASSETS
Cash and due from banks		84,392
Premises and equipment		68,282
Other nonearning assets		296,284
Allowance for loan losses		(46,735	)
Total assets	$	5,172,198
INTEREST BEARING LIABILITIES
Demand deposits	$	1,876,378			$	886		0.19	%
Savings deposits		579,632				136		0.10	%
Time deposits		623,852				1,462		0.95	%
Total interest bearing deposits		3,079,862				2,484		0.33	%
Repurchase agreements		198,670				70		0.14	%
FHLB advances		102,081				374		1.49	%
Federal funds purchased		-				-		0.00	%
Subordinated debt		94,266				984		4.23	%
Jr. subordinated debentures		19,041				140		2.98	%
Other borrowings		-				-		0.00	%
Total borrowings		414,058				1,568		1.54	%
Total interest bearing liabilities		3,493,920				4,052		0.47	%
NONINTEREST BEARING LIABILITIES
Demand deposits		1,033,741			Average cost of funds			0.36	%
Other liabilities		54,346
Stockholders' equity		590,191
Total liabilities & stockholders' equity	$	5,172,198
Net Interest Earnings / Spread					$	37,359		3.05	%
Impact of Non-Interest Bearing Funds								0.11	%
Tax effected yield on interest earning assets								3.16	%

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, unaudited)
		As of and for the Quarter Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
			2021				2020				2020				2020				2020
Net interest income as reported		$	36,764			$	33,440			$	32,517			$	31,582			$	29,873
Net interest income, (tax equivalent)			37,359				34,040				33,084				32,118				30,393
Average earning assets			4,769,975				4,238,388				4,113,846				3,942,832				3,451,123
Net interest margin (tax equivalent)			3.16	%			3.17	%			3.17	%			3.25	%			3.51	%
Common stockholder's equity		$	601,884			$	568,228			$	561,009			$	549,273			$	533,051
Goodwill and intangibles, net			138,606				128,120				129,287				130,656				132,199
Common shares outstanding			18,042				16,741				16,732				16,728				16,702
Tangible Book Value per common share		$	25.68			$	26.29			$	25.80			$	25.02			$	24.00

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except per share data, unaudited)
		As of and for the Quarter Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
		2021				2020				2020				2020				2020
Adjusted earnings Reconciliation
Net Income - GAAP		$	4,109			$	13,569			$	11,565			$	10,137			$	9,999
Adjustments (post-tax): (1)
Acquisition ACL on non-PCD assets in provision expense			9,072				-				-				-				-
Integration and acquisition expenses			2,036				292				69				204				110
Total non-recurring adjustments (non-GAAP)		$	11,108			$	292			$	69			$	204			$	110
Adjusted earnings - non-GAAP		$	15,217			$	13,861			$	11,634			$	10,341			$	10,109
Adjusted diluted earnings per share (non-GAAP)		$	0.88			$	0.83			$	0.69			$	0.62			$	0.60
Efficiency Ratio Reconciliation
Noninterest expense - GAAP		$	37,600			$	30,331			$	26,927			$	26,098			$	27,731
Foreclosed property income (expense)			(78	)			20				(110	)			2				46
Amortization of intangibles			(1,220	)			(1,200	)			(1,277	)			(1,290	)			(1,295	)
integration and acquisition expenses			(2,578	)			(369	)			(87	)			(259	)			(139	)
Adjusted noninterest expense (non-GAAP)		$	33,724			$	28,782			$	25,453			$	24,551			$	26,343
Net interest income -GAAP		$	36,764			$	33,440			$	32,517			$	31,582			$	29,873
Effect of tax-exempt income (1)			595				601				566				537				520
Adjusted net interest income (non-GAAP)		$	37,359			$	34,041			$	33,083			$	32,119			$	30,393
Noninterest income - GAAP		$	17,749			$	15,547			$	13,578			$	13,885			$	16,510
Gain on sales of investment securities, net			(4	)			(193	)			(95	)			(287	)			(531	)
Adjusted noninterest income (non-GAAP)		$	17,745			$	15,354			$	13,483			$	13,598			$	15,979
Adjusted total revenue (non-GAAP)		$	55,104			$	49,395			$	46,566			$	45,717			$	46,372
Efficiency ratio (non-GAAP)			61.20	%			58.27	%			54.66	%			53.70	%			56.81	%
(1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%.