EX-99.1 3 exh_991.htm EXHIBIT 99.1

EXHIBIT 99.1

First Mid Bancshares, Inc. Announces Second Quarter 2021 Results

MATTOON, Ill., July 29, 2021 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter and year-to-date period ended June 30, 2021.

Highlights

- Net income of $12.2 million, or $0.68 diluted EPS
- Adjusted net income (non-GAAP) of $17.8 million, or $0.98 diluted EPS
- Board of Directors increased the quarterly dividend by 7.3% to $0.22 per share
- Completed the bank merger and system conversion with Providence Bank in May
- Acquired and integrated an insurance agency and a separate wealth management financial services firm with a combined annualized non-interest income of over $2.0 million
- Announced pending acquisition of Delta Bancshares Company (“Delta”), parent to Jefferson Bank & Trust
- Announced pending acquisition of a St. Louis based commercial lending team including a portfolio of loans of approximately $225 million and deposits of approximately $280 million

“The second quarter reflected very good financial and operating performance with strong earnings and the successful completion of the integration with Providence,” said Joe Dively, Chairman and Chief Executive Officer. “Our earnings, adjusted for the acquisition and branch consolidation costs, are a record high. In addition, we continued our strategic focus on growing noninterest income and expanding our services for our customers by completing an acquisition in each of our insurance and wealth management business lines.”

“Lastly, we completed extensive due diligence on the pending acquisitions of both Delta Bancshares Company and a separate St. Louis based team and portfolio. We are extremely excited to deepen our presence in the St. Louis market area with these two announced acquisitions. Delta has a long history providing financial services in the market and the lenders in the loan and deposit deal all worked with our current market President in the past. The former Providence employees did a great job in working with our customers through the integration and we are now in a great position to layer on these pending acquisitions to create an even larger Missouri presence.” Dively concluded.

Net Interest Income

Net interest income for the second quarter of 2021 increased by $6.0 million, or 16.3% compared to the first quarter of 2021. Interest income increased by $5.8 million and interest expense decreased $0.2 million from the previous quarter. The increases are primarily driven by the first full quarter with Providence included. Accretion income increased by $1.6 million in the quarter for a total of $2.8 million. This was partially offset by a decline in PPP fee income of $0.3 million to $2.0 million in total. At quarter end, the Company had $7.1 million of deferred fee income on PPP loans remaining.

In comparison to the second quarter of 2020, net interest income increased $11.2 million, or 35.4%. 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 3.22% for the second quarter of 2021, which was an increase of six basis points compared to the prior quarter. Earning asset yields were flat, while the average cost of funds declined by six basis points as the Company continues to allow wholesale time deposits and FHLB advances to mature.

In comparison to the second quarter of last year, the net interest margin decreased three basis points with earning asset yields down 16 basis points and average cost of funds lower by 13 basis points. The current quarter included $2.0 million of PPP fee income compared to $1.0 million in the second quarter of 2020. The current quarter also included $2.8 million in accretion income compared to $0.5 million in the same period last year.

Loan Portfolio

Total loans ended the quarter at $3.80 billion, representing a decrease of $146.8 million compared to the prior quarter. PPP loans decreased by $94.6 million and ended the period with $165.1 million outstanding. Excluding PPP, loans declined by $52.2 million in the quarter. The Company had a solid quarter of growth in loans from both new and existing customers, but experienced higher payoffs than normal more than offsetting the growth.

The Company continues to see its loan deferrals trending lower. As of July 15, 2021, outstanding deferrals totaled $9.9 million, or 0.3% of the loan portfolio. It is not anticipated that any of the customers with outstanding deferrals will receive an additional deferral when they mature.

Asset Quality

The Company’s asset quality measures continue to reflect a strong credit culture. At quarter end, the ratio of non-performing loans to total loans was 0.80%, and the allowance for credit losses (“ACL”) to non-performing loans was 180%. Nonperforming loans and nonperforming assets decreased in the quarter. The ratio of nonperforming assets to total assets was 0.65% at quarter end. Net charge-offs were $0.3 million during the second quarter compared to $0.7 million in the prior quarter. The Company recognized significant improvement in its classified loans during the quarter. Special mention loans decreased to $86.9 million and substandard loans decreased to $55.5 million.

Provision expense was recorded as a credit in the amount of $0.6 million in the second quarter compared to $6.1 million in the same quarter last year. The improving economic conditions combined with low levels of charge-offs and muted loan growth from higher payoffs resulted in a reduction to the ACL of $0.8 million. As of June 30, 2021, the ACL, excluding $165.1 million of PPP loans, was 1.50% of total loans.

Deposits

Total deposits ended the quarter at $4.74 billion, which represented an increase of $1.6 million from the prior quarter. The Company’s average rate on cost of funds was 0.30% for the quarter compared to 0.36% in the prior quarter and 0.43% in the second quarter of 2020. The Company continues to reprice CD’s lower and let wholesale funding sources mature without replacement.

Noninterest Income

Noninterest income for the second quarter of 2021 was $18.3 million compared to $17.7 million in the first quarter of 2021. The increase compared to the prior quarter was partially due to the full quarter inclusion of Providence. Both the insurance and wealth management divisions had strong quarters compared to what has typically been a more seasonally soft period. The Ag group within wealth management benefited from higher commodity prices driving larger management fees and more farm sales than historically occurs in the second quarter. Insurance and wealth management businesses represented approximately 54.7% of the Company’s noninterest income providing significant diversification and more stable revenue than other fee income.

In comparison to the second quarter of 2020, noninterest income increased $4.4 million, or 31.7%. Combined, insurance and wealth management business lines increased 26.4% over the same period last year. The other fee income services increased partially by the addition of Providence.

Noninterest Expenses

Noninterest expense for the second quarter totaled $46.0 million compared to $37.6 million in the first quarter. The increase was primarily driven by the first full quarter inclusive of Providence, non-recurring acquisition costs of $5.8 million, and non-recurring branch consolidation costs of $1.2 million.

In comparison to the second quarter of 2020, noninterest expenses increased $19.9 million. The increase was primarily due to the addition of Providence and non-recurring costs.

The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the second quarter 2021 was 57.9% compared to 61.2% in the prior quarter and 53.7% 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 | 13.91%
Tier 1 capital to risk-weighted assets | 10.92%
Common equity tier 1 capital to risk-weighted assets | 10.51%
Leverage ratio | 8.87%

The Company’s Board of Directors approved an increase of $0.015, or 7.3% per share, to its quarterly dividend. The increase results in the amount of $0.22 payable on September 1, 2021 for shareholders of record on August 18, 2021.

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 $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, Missouri, and Texas, 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 156 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 and Delta, such as discussions of First Mid’s and Delta’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 and Delta, 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 Delta will not be realized or will not be realized within the expected time period; the risk that integration of the operations of Delta 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 and Delta; 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 and Delta’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 Delta; accounting principles, policies and guidelines; the severity, magnitude and duration of the COVID-19 pandemic, the direct and indirect impact of such pandemic, including responses to the pandemic by the U.S., state and local governments, customers' businesses, the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mid’s and Delta’s liquidity and capital positions, impair the ability of First Mid’s and Delta’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 Delta’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.

Important Information about the Merger and Additional Information
First Mid will file a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The registration statement will include a proxy statement of Delta that also constitutes a prospectus of First Mid, which will be sent to the shareholders of Delta. Investors in Delta are urged to read the proxy statement/prospectus, which will contain important information, including detailed risk factors, when it becomes available. The proxy statement/prospectus and other documents which will be filed by First Mid with the SEC will be available free of charge at the SEC’s website, www.sec.gov, or by directing a request when such a filing is made to First Mid Bancshares, P.O. Box 499, Mattoon, IL 61938, Attention: Investor Relations; or to Delta Bancshares Company, 2301 Market Street, Saint Louis, MO 63103, Attention: John Dulle, Executive Vice President. A final proxy statement/prospectus will be mailed to the shareholders of Delta.

Participants in the Solicitation
First Mid and Delta, and certain of their respective directors, executive officers and other members of management and employees, are participants in the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of First Mid is set forth in the proxy statement for its 2021 annual meeting of stockholders, which was filed with the SEC on March 19, 2021. These documents can be obtained free of charge from the sources provided above. Investors may obtain additional information regarding the interests of such participants in the proposed transactions by reading the proxy statement/prospectus for such proposed transactions when it becomes available.

No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

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 |
|  |  | June 30, |  | December 31, |  | June 30, |
|  |  |  | 2021 |  |  |  | 2020 |  |  |  | 2020 |  |
Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 340,741 |  |  | $ | 417,281 |  |  | $ | 238,487 |  |
Investment securities |  |  | 1,231,998 |  |  |  | 887,169 |  |  |  | 727,154 |  |
Loans (including loans held for sale) |  | 3,796,304 |  |  |  | 3,138,419 |  |  |  | 3,205,262 |  |
Less allowance for credit losses |  |  | (54,597 | ) |  |  | (41,910 | ) |  |  | (38,381 | ) |
Net loans |  |  |  | 3,741,707 |  |  |  | 3,096,509 |  |  |  | 3,166,881 |  |
Premises and equipment, net |  |  | 82,099 |  |  |  | 58,206 |  |  |  | 58,905 |  |
Goodwill and intangibles, net |  |  | 139,995 |  |  |  | 128,120 |  |  |  | 130,656 |  |
Bank owned life insurance |  |  | 130,734 |  |  |  | 68,955 |  |  |  | 68,084 |  |
Other assets |  |  |  | 123,308 |  |  |  | 70,108 |  |  |  | 68,144 |  |
Total assets |  |  | $ | 5,790,582 |  |  | $ | 4,726,348 |  |  | $ | 4,458,311 |  |
Liabilities and Stockholders' Equity |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |
Non-interest bearing |  | $ | 1,157,009 |  |  | $ | 936,926 |  |  | $ | 817,623 |  |
Interest bearing |  |  |  | 3,582,313 |  |  |  | 2,755,858 |  |  |  | 2,568,204 |  |
Total deposits |  |  |  | 4,739,322 |  |  |  | 3,692,784 |  |  |  | 3,385,827 |  |
Repurchase agreement with customers |  | 151,394 |  |  |  | 206,937 |  |  |  | 350,288 |  |
Other borrowings |  |  | 112,753 |  |  |  | 93,969 |  |  |  | 103,939 |  |
Junior subordinated debentures |  | 19,111 |  |  |  | 19,027 |  |  |  | 18,942 |  |
Subordinated debt |  |  | 94,326 |  |  |  | 94,253 |  |  |  | - |  |
Other liabilities |  |  |  | 57,610 |  |  |  | 51,150 |  |  |  | 50,042 |  |
Total liabilities |  |  |  | 5,174,516 |  |  |  | 4,158,120 |  |  |  | 3,909,038 |  |
Total stockholders' equity |  |  | 616,066 |  |  |  | 568,228 |  |  |  | 549,273 |  |
Total liabilities and stockholders' equity | $ | 5,790,582 |  |  | $ | 4,726,348 |  |  | $ | 4,458,311 |  |

FIRST MID BANCSHARES, INC. |
Condensed Consolidated Statements of Income |
(In thousands, except per share data, unaudited) |
|  |  | Three Months Ended |  |  | Six Months Ended |
|  |  | June 30, |  |  | June 30, |
|  |  |  | 2021 |  |  |  | 2020 |  |  |  |  | 2021 |  |  | 2020 |  |
Interest income: |  |  |  |  |  |  |  |  |  |  |
Interest and fees on loans |  | $ | 40,795 |  |  | $ | 31,382 |  |  |  | $ | 76,681 |  | $ | 61,409 |  |
Interest on investment securities |  |  | 5,739 |  |  |  | 4,077 |  |  |  |  | 10,581 |  |  | 8,666 |  |
Interest on federal funds sold & other deposits |  | 101 |  |  |  | 76 |  |  |  |  | 189 |  |  | 201 |  |
Total interest income |  |  |  | 46,635 |  |  |  | 35,535 |  |  |  |  | 87,451 |  |  | 70,276 |  |
Interest expense: |  |  |  |  |  |  |  |  |  |  |
Interest on deposits |  |  |  | 2,262 |  |  |  | 3,105 |  |  |  |  | 4,746 |  |  | 6,966 |  |
Interest on securities sold under agreements to repurchase |  |  |  | 57 |  |  |  | 158 |  |  |  |  | 127 |  |  | 352 |  |
Interest on other borrowings |  |  | 445 |  |  |  | 516 |  |  |  |  | 819 |  |  | 1,111 |  |
Interest on jr. subordinated debentures |  |  | 139 |  |  |  | 0 |  |  |  |  | 279 |  |  | 0 |  |
Interest on subordinated debt |  |  | 985 |  |  |  | 174 |  |  |  |  | 1,969 |  |  | 392 |  |
Total interest expense |  |  |  | 3,888 |  |  |  | 3,953 |  |  |  |  | 7,940 |  |  | 8,821 |  |
Net interest income |  |  |  | 42,747 |  |  |  | 31,582 |  |  |  |  | 79,511 |  |  | 61,455 |  |
Provision for loan losses |  |  | (560 | ) |  |  | 6,136 |  |  |  |  | 11,576 |  |  | 11,617 |  |
Net interest income after provision for loan |  | 43,307 |  |  |  | 25,446 |  |  |  |  | 67,935 |  |  | 49,838 |  |
Non-interest income: |  |  |  |  |  |  |  |  |  |  |
Wealth management revenues |  |  | 5,016 |  |  |  | 3,827 |  |  |  |  | 9,942 |  |  | 7,453 |  |
Insurance commissions |  |  |  | 4,988 |  |  |  | 4,088 |  |  |  |  | 10,845 |  |  | 10,709 |  |
Service charges |  |  |  | 1,539 |  |  |  | 1,111 |  |  |  |  | 2,903 |  |  | 2,889 |  |
Securities gains, net |  |  |  | 73 |  |  |  | 287 |  |  |  |  | 77 |  |  | 818 |  |
Mortgage banking revenues |  |  | 1,691 |  |  |  | 1,236 |  |  |  |  | 3,100 |  |  | 1,544 |  |
ATM/debit card revenue |  |  | 3,141 |  |  |  | 2,239 |  |  |  |  | 5,840 |  |  | 4,226 |  |
Other |  |  |  | 1,836 |  |  |  | 1,097 |  |  |  |  | 3,326 |  |  | 2,756 |  |
Total non-interest income |  |  | 18,284 |  |  |  | 13,885 |  |  |  |  | 36,033 |  |  | 30,395 |  |
Non-interest expense: |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 24,908 |  |  |  | 15,455 |  |  |  |  | 48,395 |  |  | 31,955 |  |
Net occupancy and equipment expense |  |  | 5,482 |  |  |  | 4,141 |  |  |  |  | 10,452 |  |  | 8,383 |  |
Net other real estate owned (income) expense |  | 1,966 |  |  |  | (2 | ) |  |  |  | 2,044 |  |  | (48 | ) |
FDIC insurance |  |  |  | 478 |  |  |  | 289 |  |  |  |  | 930 |  |  | 382 |  |
Amortization of intangible assets |  |  | 1,295 |  |  |  | 1,290 |  |  |  |  | 2,515 |  |  | 2,585 |  |
Stationary and supplies |  |  |  | 235 |  |  |  | 275 |  |  |  |  | 551 |  |  | 543 |  |
Legal and professional expense |  |  | 1,639 |  |  |  | 1,489 |  |  |  |  | 3,041 |  |  | 2,887 |  |
Marketing and donations |  |  | 507 |  |  |  | 314 |  |  |  |  | 1,009 |  |  | 795 |  |
Other |  |  |  | 9,503 |  |  |  | 2,847 |  |  |  |  | 14,676 |  |  | 6,347 |  |
Total non-interest expense |  |  | 46,013 |  |  |  | 26,098 |  |  |  |  | 83,613 |  |  | 53,829 |  |
Income before income taxes |  |  | 15,578 |  |  |  | 13,233 |  |  |  |  | 20,355 |  |  | 26,404 |  |
Income taxes |  |  |  | 3,357 |  |  |  | 3,096 |  |  |  |  | 4,025 |  |  | 6,268 |  |
Net income |  |  | $ | 12,221 |  |  | $ | 10,137 |  |  |  | $ | 16,330 |  | $ | 20,136 |  |
Per Share Information |  |  |  |  |  |  |  |  |  |  |
Basic earnings per common share |  | $ | 0.68 |  |  | $ | 0.61 |  |  |  | $ | 0.92 |  | $ | 1.21 |  |
Diluted earnings per common share |  |  | 0.68 |  |  |  | 0.60 |  |  |  |  | 0.92 |  |  | 1.20 |  |
Weighted average shares outstanding |  |  | 18,067,190 |  |  |  | 16,709,886 |  |  |  |  | 17,685,679 |  |  | 16,701,536 |  |
Diluted weighted average shares outstanding |  | 18,120,210 |  |  |  | 16,756,794 |  |  |  |  | 17,738,699 |  |  | 16,748,444 |  |

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
|  |  |  |  | For the Quarter Ended
|  |  |  |  | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30,
|  |  |  |  |  |  | 2021 |  |  |  | 2021 |  |  | 2020 |  |  |  | 2020 |  |  | 2020 |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and fees on loans |  |  |  |  | $ | 40,795 |  |  | $ | 35,886 |  | $ | 33,254 |  |  | $ | 32,151 |  | $ | 31,382 |
Interest on investment securities |  |  |  |  |  | 5,739 |  |  |  | 4,842 |  |  | 4,226 |  |  |  | 4,074 |  |  | 4,077 |
Interest on federal funds sold & other deposits |  |  |  |  | 101 |  |  |  | 88 |  |  | 90 |  |  |  | 70 |  |  | 76 |
Total interest income |  |  |  |  |  |  | 46,635 |  |  |  | 40,816 |  |  | 37,570 |  |  |  | 36,295 |  |  | 35,535 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on deposits |  |  |  |  |  |  | 2,262 |  |  |  | 2,484 |  |  | 2,617 |  |  |  | 3,168 |  |  | 3,105 |
Interest on securities sold under agreements to repurchase |  |  |  | 57 |  |  |  | 70 |  |  | 68 |  |  |  | 68 |  |  | 158 |
Interest on other borrowings |  |  |  |  |  | 445 |  |  |  | 374 |  |  | 371 |  |  |  | 395 |  |  | 516 |
Interest on jr. subordinated debentures |  |  |  |  |  | 139 |  |  |  | 140 |  |  | 143 |  |  |  | 147 |  |  | 174 |
Interest on subordinated debt |  |  |  |  |  | 985 |  |  |  | 984 |  |  | 931 |  |  |  | - |  |  | - |
Total interest expense |  |  |  |  |  |  | 3,888 |  |  |  | 4,052 |  |  | 4,130 |  |  |  | 3,778 |  |  | 3,953 |
Net interest income |  |  |  |  |  |  | 42,747 |  |  |  | 36,764 |  |  | 33,440 |  |  |  | 32,517 |  |  | 31,582 |
Provision for loan losses |  |  |  |  |  | (560 | ) |  |  | 12,136 |  |  | 603 |  |  |  | 3,883 |  |  | 6,136 |
Net interest income after provision for loan |  |  |  |  | 43,307 |  |  |  | 24,628 |  |  | 32,837 |  |  |  | 28,634 |  |  | 25,446 |
Non-interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Wealth management revenues |  |  |  |  |  | 5,016 |  |  |  | 4,926 |  |  | 5,232 |  |  |  | 3,468 |  |  | 3,827 |
Insurance commissions |  |  |  |  |  |  | 4,988 |  |  |  | 5,857 |  |  | 3,477 |  |  |  | 3,291 |  |  | 4,088 |
Service charges |  |  |  |  |  |  | 1,539 |  |  |  | 1,364 |  |  | 1,527 |  |  |  | 1,446 |  |  | 1,111 |
Securities gains, net |  |  |  |  |  |  | 73 |  |  |  | 4 |  |  | 193 |  |  |  | 95 |  |  | 287 |
Mortgage banking revenues |  |  |  |  |  | 1,691 |  |  |  | 1,409 |  |  | 1,870 |  |  |  | 1,661 |  |  | 1,236 |
ATM/debit card revenue |  |  |  |  |  | 3,141 |  |  |  | 2,699 |  |  | 2,369 |  |  |  | 2,367 |  |  | 2,239 |
Other |  |  |  |  |  |  | 1,836 |  |  |  | 1,490 |  |  | 879 |  |  |  | 1,250 |  |  | 1,097 |
Total non-interest income |  |  |  |  |  | 18,284 |  |  |  | 17,749 |  |  | 15,547 |  |  |  | 13,578 |  |  | 13,885 |
Non-interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  |  |  |  | 24,908 |  |  |  | 23,487 |  |  | 19,151 |  |  |  | 15,346 |  |  | 15,455 |
Net occupancy and equipment expense |  |  |  |  |  | 5,482 |  |  |  | 4,970 |  |  | 3,962 |  |  |  | 4,363 |  |  | 4,141 |
Net other real estate owned (income) expense |  |  |  |  | 1,966 |  |  |  | 78 |  |  | (20 | ) |  |  | 110 |  |  | (2 | )
FDIC insurance |  |  |  |  |  |  | 478 |  |  |  | 452 |  |  | 458 |  |  |  | 469 |  |  | 289 |
Amortization of intangible assets |  |  |  |  |  | 1,295 |  |  |  | 1,220 |  |  | 1,200 |  |  |  | 1,277 |  |  | 1,290 |
Stationary and supplies |  |  |  |  |  |  | 235 |  |  |  | 316 |  |  | 275 |  |  |  | 262 |  |  | 275 |
Legal and professional expense |  |  |  |  |  | 1,639 |  |  |  | 1,402 |  |  | 1,220 |  |  |  | 1,320 |  |  | 1,489 |
Marketing and donations |  |  |  |  |  | 507 |  |  |  | 502 |  |  | 434 |  |  |  | 387 |  |  | 314 |
Other |  |  |  |  |  |  | 9,503 |  |  |  | 5,173 |  |  | 3,651 |  |  |  | 3,393 |  |  | 2,847 |
Total non-interest expense |  |  |  |  |  | 46,013 |  |  |  | 37,600 |  |  | 30,331 |  |  |  | 26,927 |  |  | 26,098 |
Income before income taxes |  |  |  |  |  | 15,578 |  |  |  | 4,777 |  |  | 18,053 |  |  |  | 15,285 |  |  | 13,233 |
Income taxes |  |  |  |  |  |  | 3,357 |  |  |  | 668 |  |  | 4,484 |  |  |  | 3,720 |  |  | 3,096 |
Net income |  |  |  |  |  | $ | 12,221 |  |  | $ | 4,109 |  | $ | 13,569 |  |  | $ | 11,565 |  | $ | 10,137 |
Per Share Information |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per common share |  |  |  |  | $ | 0.68 |  |  | $ | 0.24 |  | $ | 0.81 |  |  | $ | 0.69 |  | $ | 0.61 |
Diluted earnings per common share |  |  |  |  |  | 0.68 |  |  |  | 0.24 |  |  | 0.81 |  |  |  | 0.69 |  |  | 0.60 |
Weighted average shares outstanding |  |  |  |  |  | 18,067,190 |  |  |  | 17,299,927 |  |  | 16,735,926 |  |  |  | 16,728,191 |  |  | 16,709,886 |
Diluted weighted average shares outstanding |  |  |  |  | 18,120,210 |  |  |  | 17,352,947 |  |  | 16,779,129 |  |  |  | 16,775,099 |  |  | 16,756,794 |

FIRST MID BANCSHARES, INC. |
Consolidated Financial Highlights and Ratios |
(Dollars in thousands, except per share data) |
(Unaudited) |
|  |  | As of and for the Quarter Ended |
|  |  | June 30, |  | March 31, |  | December 31, |  | September 30, |  | June 30, |
|  |  |  | 2021 |  |  |  | 2021 |  |  |  | 2020 |  |  |  | 2020 |  |  |  | 2020 |  |
Loan Portfolio |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 141,568 |  |  | $ | 165,376 |  |  | $ | 122,479 |  |  | $ | 167,515 |  |  | $ | 180,934 |  |
Farm real estate loans |  |  | 277,362 |  |  |  | 269,652 |  |  |  | 254,341 |  |  |  | 256,230 |  |  |  | 251,382 |  |
1-4 Family residential properties |  |  | 394,902 |  |  |  | 412,470 |  |  |  | 325,762 |  |  |  | 339,172 |  |  |  | 342,036 |  |
Multifamily residential properties |  |  | 274,910 |  |  |  | 297,984 |  |  |  | 189,632 |  |  |  | 139,255 |  |  |  | 141,015 |  |
Commercial real estate |  |  | 1,480,198 |  |  |  | 1,402,885 |  |  |  | 1,174,300 |  |  |  | 1,177,571 |  |  |  | 1,123,540 |  |
Loans secured by real estate |  |  | 2,568,940 |  |  |  | 2,548,367 |  |  |  | 2,066,514 |  |  |  | 2,079,743 |  |  |  | 2,038,907 |  |
Agricultural operating loans |  |  | 123,101 |  |  |  | 121,070 |  |  |  | 137,352 |  |  |  | 141,074 |  |  |  | 149,043 |  |
Commercial and industrial loans |  |  | 864,554 |  |  |  | 1,017,400 |  |  |  | 738,313 |  |  |  | 807,668 |  |  |  | 811,169 |  |
Consumer loans |  |  |  | 84,541 |  |  |  | 91,705 |  |  |  | 78,002 |  |  |  | 80,348 |  |  |  | 82,084 |  |
All other loans |  |  |  | 155,168 |  |  |  | 164,557 |  |  |  | 118,238 |  |  |  | 127,414 |  |  |  | 124,059 |  |
Total loans |  |  |  | 3,796,304 |  |  |  | 3,943,099 |  |  |  | 3,138,419 |  |  |  | 3,236,247 |  |  |  | 3,205,262 |  |
Deposit Portfolio |  |  |  |  |  |  |  |  |  |  |
Non-interest bearing demand deposits |  | $ | 1,157,009 |  |  | $ | 1,185,181 |  |  | $ | 936,926 |  |  | $ | 837,602 |  |  | $ | 817,623 |  |
Interest bearing demand deposits |  |  | 1,418,717 |  |  |  | 1,268,882 |  |  |  | 1,031,183 |  |  |  | 1,053,691 |  |  |  | 938,710 |  |
Savings deposits |  |  |  | 598,232 |  |  |  | 668,098 |  |  |  | 499,427 |  |  |  | 485,241 |  |  |  | 474,545 |  |
Money Market |  |  |  | 842,771 |  |  |  | 803,946 |  |  |  | 748,179 |  |  |  | 736,262 |  |  |  | 625,361 |  |
Time deposits |  |  |  | 722,593 |  |  |  | 811,586 |  |  |  | 477,069 |  |  |  | 507,040 |  |  |  | 529,588 |  |
Total deposits |  |  |  | 4,739,322 |  |  |  | 4,737,693 |  |  |  | 3,692,784 |  |  |  | 3,619,836 |  |  |  | 3,385,827 |  |
Asset Quality |  |  |  |  |  |  |  |  |  |  |  |
Non-performing loans |  | $ | 30,410 |  |  | $ | 31,984 |  |  | $ | 28,123 |  |  | $ | 22,439 |  |  | $ | 23,096 |  |
Non-performing assets |  |  | 37,648 |  |  |  | 45,323 |  |  |  | 30,616 |  |  |  | 24,712 |  |  |  | 25,397 |  |
Net charge-offs |  |  |  | 261 |  |  |  | 702 |  |  |  | 608 |  |  |  | 349 |  |  |  | 631 |  |
Allowance for credit losses to non-performing loans |  | 179.54 | % |  |  | 173.27 | % |  |  | 149.02 | % |  |  | 186.80 | % |  |  | 166.18 | % |
Allowance for credit losses to total loans outstanding | 1.50 | %1 |  | 1.50 | %1 |  | 1.41 | %1 |  | 1.41 | %1 |  | 1.30 | %1 |
Nonperforming loans to total loans |  |  | 0.80 | % |  |  | 0.81 | % |  |  | 0.90 | % |  |  | 0.69 | % |  |  | 0.72 | % |
Nonperforming assets to total assets |  |  | 0.65 | % |  |  | 0.78 | % |  |  | 0.65 | % |  |  | 0.55 | % |  |  | 0.57 | % |
Common Share Data |  |  |  |  |  |  |  |  |  |  |
Common shares outstanding |  |  | 18,078,474 |  |  |  | 18,042,256 |  |  |  | 16,741,208 |  |  |  | 16,731,684 |  |  |  | 16,728,190 |  |
Book value per common share |  | $ | 34.08 |  |  | $ | 33.36 |  |  | $ | 33.94 |  |  | $ | 33.53 |  |  | $ | 32.84 |  |
Tangible book value per common share (2) |  | 26.33 |  |  |  | 25.68 |  |  |  | 26.29 |  |  |  | 25.80 |  |  |  | 25.02 |  |
Market price of stock |  |  | 40.51 |  |  |  | 43.93 |  |  |  | 33.66 |  |  |  | 24.95 |  |  |  | 26.23 |  |
Key Performance Ratios and Metrics |  |  |  |  |  |  |  |  |  |  |
End of period earning assets |  | $ | 5,269,882 |  |  | $ | 5,374,848 |  |  | $ | 4,367,717 |  |  | $ | 4,130,186 |  |  | $ | 4,093,511 |  |
Average earning assets |  |  | 5,380,411 |  |  |  | 4,769,975 |  |  |  | 4,238,388 |  |  |  | 4,113,846 |  |  |  | 3,942,832 |  |
Average rate on average earning assets (tax equivalent) |  | 3.52 | % |  |  | 3.52 | % |  |  | 3.58 | % |  |  | 3.56 | % |  |  | 3.68 | % |
Average rate on cost of funds |  |  | 0.30 | % |  |  | 0.36 | % |  |  | 0.41 | % |  |  | 0.39 | % |  |  | 0.43 | % |
Net interest margin (tax equivalent) (2) |  |  | 3.22 | % |  |  | 3.16 | % |  |  | 3.17 | % |  |  | 3.17 | % |  |  | 3.25 | % |
Return on average assets |  |  | 0.84 | % |  |  | 0.32 | % |  |  | 1.18 | % |  |  | 1.03 | % |  |  | 0.94 | % |
Return on average common equity |  |  | 8.00 | % |  |  | 2.78 | % |  |  | 9.66 | % |  |  | 8.31 | % |  |  | 7.47 | % |
Efficiency ratio (tax equivalent) (2) |  |  | 57.94 | % |  |  | 61.20 | % |  |  | 58.27 | % |  |  | 54.66 | % |  |  | 53.70 | % |
Full-time equivalent employees |  |  | 960 |  |  |  | 983 |  |  |  | 824 |  |  |  | 816 |  |  |  | 828 |  |
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 | $ | 341,907 |  |  | $ | 87 |  | 0.10 | % |  |
Federal funds sold |  | 1,328 |  |  |  | - |  | 0.00 | % |  |
Certificates of deposits investments |  | 2,690 |  |  |  | 15 |  | 2.24 | % |  |
Investment Securities: |  |  |  |  |  |  |
Taxable (total less municipals) |  | 890,660 |  |  |  | 4,046 |  | 1.82 | % |  |
Tax-exempt (Municipals) |  | 270,791 |  |  |  | 2,143 |  | 3.17 | % |  |
Loans (net of unearned income) |  | 3,873,035 |  |  |  | 40,956 |  | 4.24 | % |  |
Total interest earning assets |  | 5,380,411 |  |  |  | 47,247 |  | 3.52 | % |  |
NONEARNING ASSETS |  |  |  |  |  |  |
Cash and due from banks |  | 91,497 |  |  |  |  |  |  |
Premises and equipment |  | 87,494 |  |  |  |  |  |  |
Other nonearning assets |  | 341,570 |  |  |  |  |  |  |
Allowance for loan losses |  | (55,656 | ) |  |  |  |  |  |
Total assets | $ | 5,845,316 |  |  |  |  |  |  |
INTEREST BEARING LIABILITIES |  |  |  |  |  |  |
Demand deposits | $ | 2,173,498 |  |  | $ | 1,027 |  | 0.19 | % |  |
Savings deposits |  | 640,479 |  |  |  | 123 |  | 0.08 | % |  |
Time deposits |  | 788,375 |  |  |  | 1,112 |  | 0.57 | % |  |
Total interest bearing deposits |  | 3,602,352 |  |  |  | 2,262 |  | 0.25 | % |  |
Repurchase agreements |  | 177,002 |  |  |  | 57 |  | 0.13 | % |  |
FHLB advances |  | 112,622 |  |  |  | 445 |  | 1.58 | % |  |
Federal funds purchased |  | - |  |  |  | - |  | 0.00 | % |  |
Subordinated debt |  | 94,302 |  |  |  | 985 |  | 4.19 | % |  |
Jr. subordinated debentures |  | 19,083 |  |  |  | 139 |  | 2.92 | % |  |
Other borrowings |  | - |  |  |  | - |  | 0.00 | % |  |
Total borrowings |  | 403,009 |  |  |  | 1,626 |  | 1.62 | % |  |
Total interest bearing liabilities |  | 4,005,361 |  |  |  | 3,888 |  | 0.39 | % |  |
NONINTEREST BEARING LIABILITIES |  |  |  |  |  |  |
Demand deposits |  | 1,164,128 |  |  | Average cost of funds | 0.30 | % |  |
Other liabilities |  | 64,808 |  |  |  |  |  |  |
Stockholders' equity |  | 611,019 |  |  |  |  |  |  |
Total liabilities & stockholders' equity | $ | 5,845,316 |  |  |  |  |  |  |
Net Interest Earnings / Spread |  |  | $ | 43,359 |  | 3.13 | % |  |
Impact of Non-Interest Bearing Funds |  |  |  |  | 0.09 | % |  |
Tax effected yield on interest earning assets |  |  |  | 3.22 | % |  |

FIRST MID BANCSHARES, INC. |
Reconciliation of Non-GAAP Financial Measures |
(In thousands, unaudited) |
|  |  |  |  | As of and for the Quarter Ended |
|  |  |  |  | June 30, |  | March 31, |  | December 31, |  | September 30, | June 30, |
|  |  |  |  |  | 2021 |  |  |  | 2021 |  |  |  | 2020 |  |  |  | 2020 |  |  |  | 2020 |  |
Net interest income as reported |  |  | $ | 42,747 |  |  | $ | 36,764 |  |  | $ | 33,440 |  |  | $ | 32,517 |  |  | $ | 31,582 |  |
Net interest income, (tax equivalent) |  |  | 43,359 |  |  |  | 37,359 |  |  |  | 34,040 |  |  |  | 33,084 |  |  |  | 32,118 |  |
Average earning assets |  |  |  | 5,380,411 |  |  |  | 4,769,975 |  |  |  | 4,238,388 |  |  |  | 4,113,846 |  |  |  | 3,942,832 |  |
Net interest margin (tax equivalent) |  |  | 3.22 | % |  |  | 3.16 | % |  |  | 3.17 | % |  |  | 3.17 | % |  |  | 3.25 | % |
Common stockholder's equity |  |  | $ | 616,066 |  |  | $ | 601,884 |  |  | $ | 568,228 |  |  | $ | 561,009 |  |  | $ | 549,273 |  |
Goodwill and intangibles, net |  |  |  | 139,995 |  |  |  | 138,606 |  |  |  | 128,120 |  |  |  | 129,287 |  |  |  | 130,656 |  |
Common shares outstanding |  |  |  | 18,078 |  |  |  | 18,042 |  |  |  | 16,741 |  |  |  | 16,732 |  |  |  | 16,728 |  |
Tangible Book Value per common share |  | $ | 26.33 |  |  | $ | 25.68 |  |  | $ | 26.29 |  |  | $ | 25.80 |  |  | $ | 25.02 |  |

FIRST MID BANCSHARES, INC. |
Reconciliation of Non-GAAP Financial Measures |
(In thousands, except per share data, unaudited) |
|  |  |  |  | As of and for the Quarter Ended |
|  |  |  |  | June 30, |  | March 31, |  | December 31, |  | September 30, | June 30, |
|  |  |  |  |  | 2021 |  |  |  | 2021 |  |  |  | 2020 |  |  |  | 2020 |  |  |  | 2020 |  |
Adjusted earnings Reconciliation |  |  |  |  |  |  |  |  |  |  |
Net Income - GAAP |  |  |  | $ | 12,221 |  |  | $ | 4,109 |  |  | $ | 13,569 |  |  | $ | 11,565 |  |  | $ | 10,137 |  |
Adjustments (post-tax): (1) |  |  |  |  |  |  |  |  |  |  |  |
Acquisition ACL on non-PCD assets in provision expense |  | - |  |  |  | 9,072 |  |  |  | - |  |  |  | - |  |  |  | - |  |
Branch optimization costs |  |  |  | 960 |  |  |  |  |  |  |  |  |  |
Integration and acquisition expenses |  |  | 4,634 |  |  |  | 2,036 |  |  |  | 292 |  |  |  | 69 |  |  |  | 204 |  |
Total non-recurring adjustments (non-GAAP) | $ | 5,595 |  |  | $ | 11,108 |  |  | $ | 292 |  |  | $ | 69 |  |  | $ | 204 |  |
Adjusted earnings - non-GAAP |  |  | $ | 17,816 |  |  | $ | 15,217 |  |  | $ | 13,861 |  |  | $ | 11,634 |  |  | $ | 10,341 |  |
Adjusted diluted earnings per share (non-GAAP) | $ | 0.98 |  |  | $ | 0.88 |  |  | $ | 0.83 |  |  | $ | 0.69 |  |  | $ | 0.62 |  |
Efficiency Ratio Reconciliation |  |  |  |  |  |  |  |  |  |  |  |
Noninterest expense - GAAP |  |  | $ | 46,013 |  |  | $ | 37,600 |  |  | $ | 30,331 |  |  | $ | 26,927 |  |  | $ | 26,098 |  |
Foreclosed property income (expense) |  |  | (1,966 | ) |  |  | (78 | ) |  |  | 20 |  |  |  | (110 | ) |  |  | 2 |  |
Amortization of intangibles |  |  |  | (1,295 | ) |  |  | (1,220 | ) |  |  | (1,200 | ) |  |  | (1,277 | ) |  |  | (1,290 | ) |
Branch optimization costs |  |  |  | (1,215 | ) |  |  |  |  |  |  |  |  |
integration and acquisition expenses |  |  | (5,866 | ) |  |  | (2,578 | ) |  |  | (369 | ) |  |  | (87 | ) |  |  | (259 | ) |
Adjusted noninterest expense (non-GAAP) |  | $ | 35,671 |  |  | $ | 33,724 |  |  | $ | 28,782 |  |  | $ | 25,453 |  |  | $ | 24,551 |  |
Net interest income -GAAP |  |  | $ | 42,747 |  |  | $ | 36,764 |  |  | $ | 33,440 |  |  | $ | 32,517 |  |  | $ | 31,582 |  |
Effect of tax-exempt income (1) |  |  |  | 612 |  |  |  | 595 |  |  |  | 601 |  |  |  | 566 |  |  |  | 537 |  |
Adjusted net interest income (non-GAAP) |  | $ | 43,359 |  |  | $ | 37,359 |  |  | $ | 34,041 |  |  | $ | 33,083 |  |  | $ | 32,119 |  |
Noninterest income - GAAP |  |  | $ | 18,284 |  |  | $ | 17,749 |  |  | $ | 15,547 |  |  | $ | 13,578 |  |  | $ | 13,885 |  |
Gain on sales of investment securities, net |  |  | (73 | ) |  |  | (4 | ) |  |  | (193 | ) |  |  | (95 | ) |  |  | (287 | ) |
Adjusted noninterest income (non-GAAP) |  | $ | 18,211 |  |  | $ | 17,745 |  |  | $ | 15,354 |  |  | $ | 13,483 |  |  | $ | 13,598 |  |
Adjusted total revenue (non-GAAP) |  | $ | 61,570 |  |  | $ | 55,104 |  |  | $ | 49,395 |  |  | $ | 46,566 |  |  | $ | 45,717 |  |
Efficiency ratio (non-GAAP) |  |  |  | 57.94 | % |  |  | 61.20 | % |  |  | 58.27 | % |  |  | 54.66 | % |  |  | 53.70 | % |
(1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%. |  |  |  |  |  |