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First Mid Bancshares, Inc. Announces Third Quarter 2023 Results
来源: Nasdaq GlobeNewswire / 26 10月 2023 07:00:01 America/New_York
MATTOON, Ill., Oct. 26, 2023 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended September 30, 2023.
Highlights
- Net income of $15.1 million, or $0.68 diluted EPS
- Adjusted net income (non-GAAP) of $17.1 million, or $0.77 diluted EPS
- Closed on the acquisition of Blackhawk Bancorp, Inc. (“Blackhawk”) on August 15th
- Completed balance sheet restructuring by selling a portion of Blackhawk bonds
- Increased liquidity position and lowered loan to deposit ratio to 87%
- Net interest margin, on a tax equivalent basis (non-GAAP), improved to 3.06% for the third quarter
“We are pleased to deliver solid core results that provide a baseline to the earnings momentum we expect to achieve with the Blackhawk acquisition,” said Joe Dively, Chairman and Chief Executive Officer. “We executed well in a challenging operating environment and maintained our disciplined approach to growth and prudent credit management. We are extremely excited to welcome the addition of new customers and talented employees following our acquisition of Blackhawk. The integration and operational planning are progressing as expected, and we are confident that this strategic combination will enhance value for our stockholders by driving improved profitability trends and expanding our platform for growth opportunities.”
Blackhawk Update
The Company has received approval from the OCC to complete the merger of Blackhawk Bank with and into First Mid Bank & Trust, N.A. The planned bank merger and system conversion are scheduled for the first weekend of December.With the closing of the acquisition of Blackhawk on August 15th, the Company added approximately $1.2 billion in deposits and $730.2 million in loans, net of interest rate marks and the non-PCD credit mark. The final purchase accounting fair value marks included a discount to loans for credit and interest rates totaling $50.7 million. An amount of $4.1 million was recorded directly to the allowance for credit losses related to purchase credit deteriorated loans. The marks also included a discount to time deposits and debt of $2.3 million and $3.7 million, respectively. The core deposit intangible fair value mark was $34.6 million. In addition to $2.1 in acquisition related costs, the third quarter included $6.0 million of provision expense of which $5.5 million was recorded to Blackhawk Bank, including $3.8 million for the “Day Two” current expected credit loss (“CECL”) requirement.
After closing the acquisition, the Company sold a portion of Blackhawk’s bonds from its investment portfolio for net proceeds totaling $251.9 million. The transactions resulted in a net gain on sales of securities of $3.4 million for the quarter. These funds were used to pay down a portion of the Company’s borrowings and brokered CD’s, and the remaining balance was retained in cash.
Net Interest Income
Net interest income for the third quarter of 2023 increased by $8.1 million, or 19.1% compared to the second quarter of 2023. Interest income and interest expense increased in the quarter by $14.3 million and $6.3 million, respectively. The increase in interest income was primarily driven by the addition of Blackhawk and the repricing of loans with higher interest rates. Accretion income for the quarter was $2.6 million, an increase compared to $0.5 million in the prior quarter. Interest expense increased primarily from the addition of Blackhawk and higher interest rates. The third quarter interest expense included $0.4 million in amortization of premiums on time deposits.In comparison to the third quarter of 2022, net interest income increased $2.2 million, or 4.3%. The increase was primarily driven by the addition of Blackhawk. Interest income increased by $23.7 million, while interest expense increased $21.5 million.
Net Interest Margin
Net interest margin, on a tax equivalent basis (non-GAAP), was 3.06% for the third quarter of 2023, which was 22 basis points higher compared to the prior quarter. Earning asset yields increased by 46 basis points and the average cost of funds increased 24 basis points. The quarter included a net $2.2 million of purchase accounting benefit.In comparison to the third quarter of last year, the net interest margin decreased 15 basis points, with an average earnings asset increase of 112 basis points versus the average cost of funds increase of 127 basis points.
Loan Portfolio
Total loans ended the quarter at $5.54 billion, representing an increase of $726.6 million. Excluding the Blackhawk acquired net loans in the period, loans decreased by $3.5 million compared to the prior quarter. The largest category of growth came in CRE, while C&I loans declined the most. Overall, loan demand was slower in the quarter, but new opportunities were well diversified both geographically and by sector. The weighted average yield on new loans was 8.88% in the quarter.Asset Quality
The Company’s strong credit culture continues to be reflected in its asset quality metrics for September 30, 2023. The allowance for credit losses (“ACL”) increased by $9.6 million to $68.2 million with an ending ACL to total loans ratio of 1.23%. In addition to the ACL, an unearned discount of $54.5 remains at quarter end providing another 99 basis points of coverage. Provision expense was recorded in the amount of $5.9 million, inclusive of the Blackhawk acquisition CECL requirement. The Company had a total of $0.2 million in net charge offs in the quarter. Also, at the end of the third quarter, the ratio of non-performing loans to total loans was 0.38%, and the ACL to non-performing loans was 320.85%. The ratio of nonperforming assets to total assets was 0.30% and nonperforming loans were $21.3 million at quarter end. For the quarter, special mention loans were $73.7 million of which $24.5 million were added for Blackhawk. Substandard loans at the end of the quarter were $30.6 million of which $4.1 million were added for Blackhawk.Deposits
Total deposits ended the quarter at $6.35 billion, which represented an increase of $1.13 billion. Excluding the net deposits acquired from Blackhawk, deposits declined by $68.2 million from the prior quarter. Most of the changes in the period were driven by seasonal real estate tax and overall customer operating needs. Although the deposit cost pressures continue, outflows directly tied to pricing trended lower in the quarter. The Company’s average rate on cost of funds increased to 1.83% compared to 1.59% in the prior quarter and 0.56% in the third quarter of 2022.Noninterest Income
Noninterest income represented 31% of our total net revenues in the quarter and 32% year-to-date.Noninterest income for the third quarter of 2023 was $23.1 million compared to $19.5 million in the second quarter of 2023. The increase compared to the prior quarter was primarily due to the addition of Blackhawk and a $3.4 million gain on securities sales tied to the balance sheet restructuring after closing the acquisition.
In comparison to the third quarter of 2022, noninterest income increased $6.3 million, or 37.3%, due to a combination of organic growth, the addition of Blackhawk and the securities gains.
Noninterest Expenses
Noninterest expense for the third quarter of 2023 totaled $47.1 million compared to $40.0 million in the prior quarter. The increase was primarily driven by the addition of Blackhawk and approximately $2.1 million in nonrecurring acquisition related costs.In comparison to the third quarter of 2022, noninterest expenses increased $5.5 million, inclusive of $2.1 million in nonrecurring acquisition related costs. The increase was primarily driven by the addition of Blackhawk. Excluding Blackhawk and acquisition related costs, the primary changes were lower salaries and benefits costs tied to the cost savings initiatives at the end of the first quarter.
The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the third quarter 2023 was 58.6% compared to 60.4% in the prior quarter and 59.6% for the same period last year.
Capital Levels
The Company’s capital levels remained strong and above the “well capitalized” levels. During the third quarter, the closing of the Blackhawk acquisition resulted in decreases to the ratios. Capital levels ended the period as follows:Total capital to risk-weighted assets 12.60% Tier 1 capital to risk-weighted assets 10.19% Common equity tier 1 capital to risk-weighted assets 9.85% Leverage ratio 9.74% Tangible book value per share declined in the period to $19.73. The decrease was primarily the result of the acquisition of Blackhawk and an increase to the unrealized loss position in the bond portfolio impacting accumulated other comprehensive income (“AOCI”). The reduction to tangible book value per share from AOCI was $1.15.
About First Mid: First Mid Bancshares, Inc. (“First Mid”) is the parent company of First Mid Bank & Trust, N.A., Blackhawk Bank, First Mid Insurance Group, Inc., and First Mid Wealth Management Co. First Mid is a $7.9 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, Missouri, Texas, and Wisconsin and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in providing solutions and services to the customers and communities and has done so over the last 157 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, 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 1995. 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 integration of the operations of Blackhawk 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 satisfy conditions to completion of the proposed transactions, including failure to obtain the required regulatory, shareholder and other approvals; the failure of the proposed transactions to close for any other reason; the effect of the announcement of the proposed transactions on customer relationships and operating results; the possibility that the proposed transactions 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; legislative and/or 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; and the impact of the global COVID-19 pandemic on First Mid’s businesses, the ability to complete the proposed transactions or any of the other foregoing risks. 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.comMatt Smith
Chief Financial Officer
217-258-1528
msmith@firstmid.com– Tables Follow –
FIRST MID BANCSHARES, INC. Condensed Consolidated Balance Sheets (In thousands, unaudited) As of September 30, December 31, September 30, 2023 2022 2022 Assets Cash and cash equivalents $ 383,237 $ 152,433 $ 160,954 Investment securities 1,226,746 1,223,720 1,235,505 Loans (including loans held for sale) 5,540,065 4,826,212 4,720,290 Less allowance for credit losses (68,241 ) (59,093 ) (58,777 ) Net loans 5,471,824 4,767,119 4,661,513 Premises and equipment, net 102,004 90,473 90,659 Goodwill and intangibles, net 267,793 169,897 170,897 Bank owned life insurance 165,022 151,756 150,831 Other assets 238,668 188,817 181,024 Total assets $ 7,855,294 $ 6,744,215 $ 6,651,383 Liabilities and Stockholders’ Equity Deposits: Non-interest bearing $ 1,389,022 $ 1,256,514 $ 1,334,686 Interest bearing 4,957,302 4,000,487 4,148,512 Total deposits 6,346,324 5,257,001 5,483,198 Repurchase agreement with customers 214,978 221,414 220,707 Other borrowings 364,953 465,071 181,232 Junior subordinated debentures 24,003 19,364 19,322 Subordinated debt 106,648 94,553 94,515 Other liabilities 60,440 53,657 51,694 Total liabilities 7,117,346 6,111,060 6,050,668 Total stockholders’ equity 737,948 633,155 600,715 Total liabilities and stockholders’ equity $ 7,855,294 $ 6,744,215 $ 6,651,383 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, 2023 2022 2023 2022 Interest income: Interest and fees on loans $ 69,143 $ 49,278 $ 183,747 $ 132,741 Interest on investment securities 9,284 7,302 23,604 22,095 Interest on federal funds sold & other deposits 2,011 174 2,888 346 Total interest income 80,438 56,754 210,239 155,182 Interest expense: Interest on deposits 22,047 4,915 51,394 9,586 Interest on securities sold under agreements to repurchase 1,625 428 4,811 632 Interest on other borrowings 4,749 1,927 13,716 2,848 Interest on jr. subordinated debentures 545 241 1,314 553 Interest on subordinated debt 1,029 986 3,003 2,958 Total interest expense 29,995 8,497 74,238 16,577 Net interest income 50,443 48,257 136,001 138,605 Provision for credit losses 5,911 142 5,552 4,001 Net interest income after provision for loan 44,532 48,115 130,449 134,604 Non-interest income: Wealth management revenues 4,940 4,843 15,795 16,291 Insurance commissions 5,199 4,158 19,416 16,903 Service charges 2,994 2,445 7,583 6,737 Net securities gains/(losses) 3,389 79 3,337 81 Mortgage banking revenues 846 355 1,328 1,125 ATM/debit card revenue 3,766 3,101 10,114 9,213 Other 1,919 1,810 7,445 6,125 Total non-interest income 23,053 16,791 65,018 56,475 Non-interest expense: Salaries and employee benefits 25,422 24,877 75,037 74,984 Net occupancy and equipment expense 6,929 5,903 18,969 18,131 Net other real estate owned (income) expense 902 58 1,062 243 FDIC insurance 785 479 2,324 1,341 Amortization of intangible assets 2,568 1,598 5,567 4,753 Stationary and supplies 335 361 942 997 Legal and professional expense 1,844 1,770 5,314 5,389 ATM/debit card expense 1,751 1,243 3,990 2,991 Marketing and donations 764 739 2,326 2,318 Other 5,796 4,521 13,184 12,342 Total non-interest expense 47,096 41,549 128,715 123,489 Income before income taxes 20,489 23,357 66,752 67,590 Income taxes 5,372 5,418 15,888 15,277 Net income $ 15,117 $ 17,939 $ 50,864 $ 52,313 Per Share Information Basic earnings per common share $ 0.68 $ 0.88 $ 2.41 $ 2.61 Diluted earnings per common share 0.68 0.88 2.40 2.60 Weighted average shares outstanding 22,220,438 20,454,669 21,086,802 20,070,687 Diluted weighted average shares outstanding 22,319,334 20,535,215 21,176,946 20,145,435 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, 2023 2023 2023 2022 2022 Interest income: Interest and fees on loans $ 69,143 $ 58,368 $ 56,236 $ 53,128 $ 49,278 Interest on investment securities 9,284 7,193 7,127 7,285 7,302 Interest on federal funds sold & other deposits 2,011 569 308 296 174 Total interest income 80,438 66,130 63,671 60,709 56,754 Interest expense: Interest on deposits 22,047 16,580 12,767 9,227 4,915 Interest on securities sold under agreements to repurchase 1,625 1,723 1,463 1,163 428 Interest on other borrowings 4,749 4,084 4,883 3,345 1,927 Interest on jr. subordinated debentures 545 390 379 315 241 Interest on subordinated debt 1,029 986 988 987 986 Total interest expense 29,995 23,763 20,480 15,037 8,497 Net interest income 50,443 42,367 43,191 45,672 48,257 Provision for credit losses 5,911 458 (817 ) 805 142 Net interest income after provision for loan 44,532 41,909 44,008 44,867 48,115 Non-interest income: Wealth management revenues 4,940 5,341 5,514 6,201 4,843 Insurance commissions 5,199 5,737 8,480 4,719 4,158 Service charges 2,994 2,386 2,203 2,375 2,445 Securities gains, net 3,389 (6 ) (46 ) (48 ) 79 Mortgage banking revenues 846 332 150 65 355 ATM/debit card revenue 3,766 3,265 3,083 3,209 3,101 Other 1,919 2,431 3,095 1,686 1,810 Total non-interest income 23,053 19,486 22,479 18,207 16,791 Non-interest expense: Salaries and employee benefits 25,422 23,544 26,071 23,610 24,877 Net occupancy and equipment expense 6,929 6,035 6,005 6,126 5,903 Net other real estate owned (income) expense 902 27 133 87 58 FDIC insurance 785 1,076 463 464 479 Amortization of intangible assets 2,568 1,477 1,522 1,537 1,598 Stationary and supplies 335 315 292 298 361 Legal and professional expense 1,844 1,780 1,690 1,607 1,770 ATM/debit card expense 1,751 1,016 1,223 1,309 1,243 Marketing and donations 764 908 654 681 739 Other 5,796 3,864 3,524 3,653 4,521 Total non-interest expense 47,096 40,042 41,577 39,372 41,549 Income before income taxes 20,489 21,353 24,910 23,702 23,357 Income taxes 5,372 4,786 5,730 3,063 5,418 Net income $ 15,117 $ 16,567 $ 19,180 $ 20,639 $ 17,939 Per Share Information Basic earnings per common share $ 0.68 $ 0.81 $ 0.94 $ 1.01 $ 0.88 Diluted earnings per common share 0.68 0.80 0.93 1.01 0.88 Weighted average shares outstanding 22,220,438 20,528,717 20,492,254 20,461,046 20,454,669 Diluted weighted average shares outstanding 22,319,334 20,628,239 20,563,972 20,535,220 20,535,215 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, 2023 2023 2023 2022 2022 Loan Portfolio Construction and land development $ 189,206 $ 151,574 $ 159,157 $ 144,264 $ 142,801 Farm real estate loans 399,834 392,220 401,957 410,327 360,424 1-4 Family residential properties 531,699 418,932 424,545 440,180 436,625 Multifamily residential properties 327,067 303,482 301,808 294,346 298,321 Commercial real estate 2,392,834 2,056,529 2,003,647 2,030,011 1,996,338 Loans secured by real estate 3,840,640 3,322,737 3,291,114 3,319,128 3,234,509 Agricultural operating loans 179,447 148,318 146,847 166,838 160,511 Commercial and industrial loans 1,242,653 1,094,522 1,078,021 1,082,960 1,064,033 Consumer loans 99,542 80,241 88,430 97,775 100,783 All other loans 177,783 167,598 156,219 159,511 160,454 Total loans 5,540,065 4,813,416 4,760,631 4,826,212 4,720,290 Deposit Portfolio Non-interest bearing demand deposits $ 1,389,022 $ 1,171,047 $ 1,262,181 $ 1,256,514 $ 1,334,686 Interest bearing demand deposits 1,940,162 1,477,765 1,419,791 1,389,283 1,364,306 Savings deposits 734,377 602,523 639,691 636,699 657,592 Money Market 1,161,957 923,259 878,452 1,267,726 1,443,060 Time deposits 1,120,806 1,044,991 830,663 706,779 683,554 Total deposits 6,346,324 5,219,585 5,030,778 5,257,001 5,483,198 Asset Quality Non-performing loans $ 21,269 $ 18,637 $ 15,163 $ 19,170 $ 20,812 Non-performing assets 23,565 22,615 19,225 23,539 25,143 Net charge-offs (recoveries) 181 (38 ) 53 489 440 Allowance for credit losses to non-performing loans 320.85 % 315.07 % 383.98 % 308.26 % 282.42 % Allowance for credit losses to total loans outstanding 1.23 % 1.22 % 1.22 % 1.22 % 1.25 % Nonperforming loans to total loans 0.38 % 0.39 % 0.32 % 0.40 % 0.44 % Nonperforming assets to total assets 0.30 % 0.34 % 0.29 % 0.35 % 0.38 % Special Mention loans 73,732 40,687 47,022 39,853 25,298 Substandard and Doubtful loans 30,575 28,255 29,931 34,352 37,378 Common Share Data Common shares outstanding 23,830,038 20,528,192 20,519,717 20,452,376 20,454,636 Book value per common share $ 30.97 $ 32.18 $ 32.26 $ 30.96 $ 29.37 Tangible book value per common share (1) 19.73 23.48 24.05 22.65 21.01 Tangible book value per common share excluding other comprehensive income at period end (1) 27.24 30.87 30.77 30.06 29.21 Market price of stock 26.56 24.14 27.22 32.08 31.97 Key Performance Ratios and Metrics End of period earning assets $ 7,007,282 $ 6,023,553 $ 5,995,674 $ 6,063,953 $ 5,975,619 Average earning assets 6,593,781 6,049,626 6,052,264 6,000,106 6,063,061 Average rate on average earning assets (tax equivalent) 4.89 % 4.43 % 4.32 % 4.07 % 3.77 % Average rate on cost of funds 1.83 % 1.59 % 1.38 % 1.00 % 0.56 % Net interest margin (tax equivalent) (1) 3.06 % 2.84 % 2.94 % 3.07 % 3.21 % Return on average assets 0.90 % 0.99 % 1.15 % 1.24 % 1.07 % Adjusted return on average assets (1) 0.94 % 1.03 % 1.18 % 1.25 % 1.11 % Return on average common equity 8.70 % 10.07 % 12.11 % 13.51 % 11.18 % Adjusted return on average common equity (1) 9.82 % 10.42 % 11.92 % 13.60 % 11.51 % Efficiency ratio (tax equivalent) (1) 58.60 % 60.37 % 59.01 % 58.07 % 59.64 % Full-time equivalent employees 1,224 995 988 1,043 1,051 1 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 September 30, 2023 QTD Average Average Balance Interest Rate INTEREST EARNING ASSETS Interest bearing deposits $ 90,957 $ 1,882 8.21 % Federal funds sold 8,561 114 5.28 % Certificates of deposits investments 2,152 16 2.95 % Investment Securities: Taxable (total less municipals) 1,004,994 7,352 2.93 % Tax-exempt (Municipals) 287,232 2,445 3.40 % Loans (net of unearned income) 5,199,885 69,397 5.29 % Total interest earning assets 6,593,781 81,206 4.89 % NONEARNING ASSETS Cash and due from banks 125,014 Premises and equipment 97,474 Other nonearning assets 524,478 Allowance for loan losses (64,636 ) Total assets $ 7,276,111 INTEREST BEARING LIABILITIES Demand deposits $ 2,646,134 $ 12,740 1.91 % Savings deposits 669,930 190 0.11 % Time deposits 1,081,978 9,117 3.34 % Total interest bearing deposits 4,398,042 22,047 1.99 % Repurchase agreements 212,644 1,625 3.03 % FHLB advances 486,738 4,761 3.88 % Federal funds purchased - - 0.00 % Subordinated debt 105,332 1,028 3.87 % Jr. subordinated debentures 19,258 545 11.23 % Other debt - (12 ) 0.00 % Total borrowings 823,972 7,947 3.83 % Total interest bearing liabilities 5,222,014 29,994 2.28 % NONINTEREST BEARING LIABILITIES Demand deposits 1,293,422 Average cost of funds 1.83 % Other liabilities 65,265 Stockholders’ equity 695,410 Total liabilities & stockholders’ equity $ 7,276,111 Net Interest Earnings / Spread $ 51,212 2.61 % Impact of Non-Interest Bearing Funds 0.45 % Tax effected yield on interest earning assets 3.06 % 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, 2023 2023 2023 2022 2022 Net interest income as reported $ 50,443 $ 42,367 $ 43,191 $ 45,672 $ 48,257 Net interest income, (tax equivalent) 51,212 43,109 43,947 46,464 49,060 Average earning assets 6,593,781 6,049,626 6,052,264 6,000,106 6,063,061 Net interest margin (tax equivalent) 3.06 % 2.84 % 2.94 % 3.07 % 3.21 % Common stockholder’s equity $ 737,948 $ 660,687 $ 661,865 $ 633,155 $ 600,715 Goodwill and intangibles, net 267,793 178,615 168,373 169,897 170,897 Common shares outstanding 23,830 20,528 20,520 20,452 20,455 Tangible Book Value per common share $ 19.73 $ 23.48 $ 24.05 $ 22.65 $ 21.01 Accumulated other comprehensive loss (AOCI) (178,903 ) (151,566 ) (137,901 ) (151,507 ) (167,663 ) Adjusted tangible book value per commone share $ 27.24 $ 30.87 $ 30.77 $ 30.06 $ 29.21 FIRST MID BANCSHARES, INC. Reconciliation of Non-GAAP Financial Measures (In thousands, except per share data, unaudited) As of and for the Quarter Ended September 30, June 30, March 31, December 31, September 30, 2023 2023 2023 2022 2022 Adjusted earnings Reconciliation Net Income - GAAP $ 15,117 $ 16,567 $ 19,180 $ 20,639 $ 17,939 Adjustments (post-tax): (1) Acquisition ACL on non-PCD assets in provision expense 2,985 - - - - Nonrecurring severance expense - - 416 - - Net (gain)/loss on securities sales (2,677 ) - - - - Integration and acquisition expenses 1,653 589 135 131 524 Total non-recurring adjustments (non-GAAP) $ 1,962 $ 589 $ 551 $ 131 $ 524 Adjusted earnings - non-GAAP $ 17,079 $ 17,156 $ 19,731 $ 20,770 $ 18,463 Adjusted diluted earnings per share (non-GAAP) $ 0.77 $ 0.83 $ 0.96 $ 1.01 $ 0.90 Adjusted return on average assets - non-GAAP 0.94 % 1.03 % 1.18 % 1.25 % 1.11 % Adjusted return on average common equity - non-GAAP 9.82 % 10.42 % 11.92 % 13.60 % 11.51 % Efficiency Ratio Reconciliation Noninterest expense - GAAP $ 47,096 $ 40,042 $ 41,577 $ 39,372 $ 41,549 Other real estate owned property income (expense) (902 ) (27 ) (133 ) (87 ) (58 ) Amortization of intangibles (2,568 ) (1,477 ) (1,522 ) (1,537 ) (1,598 ) Nonrecurring severance expense - - (527 ) - - integration and acquisition expenses (2,093 ) (745 ) (171 ) (166 ) (663 ) Adjusted noninterest expense (non-GAAP) $ 41,533 $ 37,793 $ 39,224 $ 37,582 $ 39,230 Net interest income -GAAP $ 50,443 $ 42,367 $ 43,192 $ 45,672 $ 48,257 Effect of tax-exempt income (1) 769 742 755 792 803 Adjusted net interest income (non-GAAP) $ 51,212 $ 43,109 $ 43,947 $ 46,464 $ 49,060 Noninterest income - GAAP $ 23,053 $ 19,486 $ 22,479 $ 18,207 $ 16,791 Net (gain)/loss on securities sales (3,389 ) 6 46 48 (79 ) Adjusted noninterest income (non-GAAP) $ 19,664 $ 19,492 $ 22,525 $ 18,255 $ 16,712 Adjusted total revenue (non-GAAP) $ 70,876 $ 62,601 $ 66,472 $ 64,719 $ 65,772 Efficiency ratio (non-GAAP) 58.60 % 60.37 % 59.01 % 58.07 % 59.64 % (1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%. 
