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First Mid Bancshares, Inc. Announces Second Quarter 2023 Results
Source: Nasdaq GlobeNewswire / 27 Jul 2023 06:00:01 America/Chicago
MATTOON, Ill., July 27, 2023 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended June 30, 2023.
Highlights
- Net income of $16.6 million, or $0.80 diluted EPS
- Adjusted net income (non-GAAP) of $17.2 million, or $0.83 diluted EPS
- Loan growth of 1.1% and deposit growth of 3.8% for the quarter
- Board of Directors declares regular quarterly dividend of $0.23 per share
- Completed the acquisition of PGIB Insurance (“PGIB”) on June 16th adding approximately $2.5 million in annual revenues to noninterest income
- Received regulatory approvals for the acquisition of Blackhawk Bancorp, Inc. (“Blackhawk”) with closing targeted for mid-August
“Our second quarter results reflect the strength of our diversification and the success of our strategic initiatives,” said Joe Dively, Chairman and Chief Executive Officer. “We delivered on our relationship-driven model with growth in both loans and deposits, while maintaining strong asset quality metrics.”
“On the M&A front, we were pleased to receive regulatory approval to proceed with closing the Blackhawk acquisition, which we have targeted for mid-August. The work that has been done to this point and the reception by Blackhawk customers and employees has us increasingly excited about what the combined company can achieve. In addition, we completed the acquisition of PGIB Insurance on June 16th, which strengthens our expertise in the insurance business and positions us to advance these services through our northern and western Illinois footprint,” Dively concluded.
Net Interest Income
Net interest income for the second quarter of 2023 decreased by $0.8 million, or 1.9% compared to the first quarter of 2023. Interest income and interest expense increased in the quarter by $2.5 million and $3.3 million, respectively. The increase in interest income was primarily driven by higher interest rates and loan growth. Accretion income increased by $0.1 million in the quarter to $0.5 million. Interest expense increased primarily from higher rates and balances on deposits, partially offset by less borrowings.
In comparison to the second quarter of 2022, net interest income decreased $4.5 million, or 9.5%. Interest income increased by $14.8 million and was more than offset by an increase in interest expense of $19.3 million.
Net Interest Margin
Net interest margin, on a tax equivalent basis, was 2.84% for the second quarter of 2023, which was 10 basis points lower compared to the prior quarter. Earning asset yields increased by 11 basis points and the average cost of funds increased 21 basis points with more aggressive pricing on deposits early in the quarter.
In comparison to the second quarter of last year, the net interest margin decreased 36 basis points, with an average earnings asset increase of 93 basis points versus the average cost of funds increased 129 basis points.
Loan Portfolio
Total loans ended the quarter at $4.81 billion, representing an increase of $52.8 million, or 1.1% compared to the prior quarter. Growth was well diversified both geographically and by sector and came primarily within commercial real estate and commercial and industrial loans. The average yield on new loans and operating line usage was 7.8% in the quarter. The loan pipeline outlook remains muted due to the macro headwinds in the economy.
Asset Quality
The Company’s strong credit culture continues to be reflected in its asset quality metrics for June 30, 2023. The allowance for credit losses (‘ACL’) increased by $0.5 million to $58.7 million with an ending ACL to total loans ratio of 1.22%. Provision expense was recorded in the amount of $0.5 million and the Company had net recoveries in the period. Also, at the end of the second quarter, the ratio of non-performing loans to total loans was 0.39%, and the ACL to non-performing loans was 315%. The ratio of nonperforming assets to total assets was 0.34% at quarter end. Nonperforming loans increased by $3.5 million in the period to $18.6 million. Special mention loans declined $6.3 million in the quarter to $40.7 million. Substandard loans declined $1.7 million in the period to $28.3 million.
Deposits
Total deposits ended the quarter at $5.22 billion, which represented an increase of $188.8 million, or 3.8% from the prior quarter. The increase was primarily in interest bearing demand and time deposits. The Company was aggressive with pricing throughout the first half of the quarter to increase deposits. The success of that effort allowed the Company to use the funds primarily to pay down a net $145.0 million in Federal Home Loan Bank borrowings and to fund loan growth. The Company’s average rate on cost of funds increased to 1.59% compared to 1.38% in the prior quarter, which reflected the lowest increase since the second quarter of 2022.
Noninterest Income/PGIB Acquisition
On June 16, 2023, our subsidiary First Mid Insurance Group closed on the acquisition of PGIB Insurance based in Macomb, Illinois. PGIB has nearly a 100-year history serving northern and western Illinois with a diversified product offering including commercial property & casualty, personal property & casualty, and group medical plans and individual health insurance. Annual revenues are approximately $2.5 million, which is expected to grow with the opportunities from bank referrals and access to expanded markets.
Noninterest income represented 31.5% of our total net revenues in the quarter and 32.9% year-to-date.
Noninterest income for the second quarter of 2023 was $19.5 million compared to $22.5 million in the first quarter of 2023. The decrease compared to the prior quarter was primarily due to the seasonality of the insurance business, which was down by $2.7 million, and the previously disclosed bank owned life insurance claim of $0.7 million that occurred in the first quarter of 2023.
In comparison to the second quarter of 2022, noninterest income increased $0.9 million, or 5.0%. All categories increased, except for wealth management and net securities gains.
Noninterest Expenses
Noninterest expense for the second quarter of 2023 totaled $40.0 million compared to $41.6 million in the prior quarter. The decrease was primarily driven by the cost savings initiatives the Company implemented at the end of the first quarter and the variable cost tied to the seasonality of wealth management and insurance revenues. This was partially offset by an increase to the FDIC insurance expense accrual. The current quarter included $0.7 million in nonrecurring acquisition related expenses.
In comparison to the second quarter of 2022, noninterest expenses decreased $1.5 million. The decrease was primarily driven by 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 second quarter 2023 was 60.4% compared to 59.0% in the prior quarter and 58.5% for the same period last year.
Capital Levels and Dividend
The Company’s capital levels remained strong and comfortably above the “well capitalized” levels. During the second quarter, significant loan growth increased risk-weighted assets resulting in a modest decrease in certain of the ratios. Capital levels ended the period as follows:
Total capital to risk-weighted assets 15.67% Tier 1 capital to risk-weighted assets 12.82% Common equity tier 1 capital to risk-weighted assets 12.45% Leverage ratio 10.00% The Company’s Board of Directors approved its next quarterly dividend of $0.23 payable on September 1, 2023 for shareholders of record on August 14, 2023.
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 $6.7 billion community-focused organization that provides a full-suite of financial services including banking, wealth management, brokerage, Ag services, and insurance through a sizeable network of locations throughout Illinois, Missouri, and Texas, 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 and Blackhawk, such as discussions of First Mid’s and Blackhawk’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 Blackhawk, 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 Blackhawk will not be realized or will not be realized within the expected time period; the risk that 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 and Blackhawk; 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 Blackhawk’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 Blackhawk; accounting principles, policies and guidelines; and the impact of the global COVID-19 pandemic on First Mid’s or Blackhawk’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.Important Information about the Merger and Additional Information
First Mid filed a registration statement on Form S-4 with the SEC on May 30, 2023, which, as amended, was declared effective on June 23, 2023, in connection with the proposed transaction. The registration statement includes a proxy statement of Blackhawk that also constitutes a prospectus of First Mid. The definitive proxy statement/prospectus was first mailed to the shareholders of Blackhawk on or about July 5, 2023, seeking their approval of the proposed transaction. Investors in Blackhawk are urged to read the proxy statement/prospectus, which will contain important information, including detailed risk factors. The proxy statement/prospectus and other documents which were 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 Blackhawk upon written request to Blackhawk Bancorp, Inc., 400 Broad St., Beloit, WI 53511-6223, Attention: Todd J. James, President & CEO.Participants in the Solicitation
First Mid and Blackhawk, 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 2023 annual meeting of stockholders, which was filed with the SEC on March 15, 2023. 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.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 June 30, December 31, June 30, 2023 2022 2022 Assets Cash and cash equivalents $ 174,253 $ 152,433 $ 137,544 Investment securities 1,169,428 1,223,720 1,354,943 Loans (including loans held for sale) 4,813,416 4,826,212 4,648,663 Less allowance for credit losses (58,719 ) (59,093 ) (59,075 ) Net loans 4,754,697 4,767,119 4,589,588 Premises and equipment, net 89,924 90,473 90,766 Goodwill and intangibles, net 178,615 169,897 172,871 Bank owned life insurance 152,538 151,756 149,917 Other assets 184,414 188,817 165,293 Total assets $ 6,703,869 $ 6,744,215 $ 6,660,922 Liabilities and Stockholders' Equity Deposits: Non-interest bearing $ 1,171,047 $ 1,256,514 $ 1,369,756 Interest bearing 4,048,538 4,000,487 3,949,222 Total deposits 5,219,585 5,257,001 5,318,978 Repurchase agreement with customers 209,170 221,414 174,934 Other borrowings 449,979 465,071 386,286 Junior subordinated debentures 19,448 19,364 19,279 Subordinated debt 94,632 94,553 94,476 Other liabilities 50,368 53,657 40,701 Total liabilities 6,043,182 6,111,060 6,034,654 Total stockholders' equity 660,687 633,155 626,268 Total liabilities and stockholders' equity $ 6,703,869 $ 6,744,215 $ 6,660,922 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, 2023 2022 2023 2022 Interest income: Interest and fees on loans $ 58,368 $ 43,555 $ 114,604 $ 83,463 Interest on investment securities 7,193 7,623 14,320 14,793 Interest on federal funds sold & other deposits 569 105 877 172 Total interest income 66,130 51,283 129,801 98,428 Interest expense: Interest on deposits 16,580 2,523 29,347 4,671 Interest on securities sold under agreements to repurchase 1,723 137 3,186 204 Interest on other borrowings 4,084 645 8,967 921 Interest on jr. subordinated debentures 390 166 769 312 Interest on subordinated debt 986 986 1,974 1,972 Total interest expense 23,763 4,457 44,243 8,080 Net interest income 42,367 46,826 85,558 90,348 Provision for credit losses 458 907 (359 ) 3,859 Net interest income after provision for loan 41,909 45,919 85,917 86,489 Non-interest income: Wealth management revenues 5,341 5,473 10,855 11,448 Insurance commissions 5,737 5,641 14,217 12,745 Service charges 2,386 2,236 4,589 4,292 Net securities gains/(losses) (6 ) 2 (52 ) 2 Mortgage banking revenues 332 289 482 770 ATM/debit card revenue 3,265 3,214 6,348 6,112 Other 2,431 1,704 5,526 4,315 Total non-interest income 19,486 18,559 41,965 39,684 Non-interest expense: Salaries and employee benefits 23,544 25,768 49,615 50,107 Net occupancy and equipment expense 6,035 6,073 12,040 12,228 Net other real estate owned (income) expense 27 218 160 185 FDIC insurance 1,076 436 1,539 862 Amortization of intangible assets 1,477 1,633 2,999 3,155 Stationary and supplies 315 325 607 636 Legal and professional expense 1,780 1,885 3,470 3,619 ATM/debit card expense 1,016 670 2,239 1,748 Marketing and donations 908 706 1,562 1,579 Other 3,864 3,801 7,388 7,821 Total non-interest expense 40,042 41,515 81,619 81,940 Income before income taxes 21,353 22,963 46,263 44,233 Income taxes 4,786 5,205 10,516 9,859 Net income $ 16,567 $ 17,758 $ 35,747 $ 34,374 Per Share Information Basic earnings per common share $ 0.81 $ 0.87 $ 1.74 $ 1.73 Diluted earnings per common share 0.80 0.86 1.74 1.72 Weighted average shares outstanding 20,528,717 20,448,799 20,510,585 19,875,516 Diluted weighted average shares outstanding 20,628,239 20,529,523 20,596,283 19,947,227 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, 2023 2023 2022 2022 2022 Interest income: Interest and fees on loans $ 58,368 $ 56,236 $ 53,128 $ 49,278 $ 43,555 Interest on investment securities 7,193 7,127 7,285 7,302 7,623 Interest on federal funds sold & other deposits 569 308 296 174 105 Total interest income 66,130 63,671 60,709 56,754 51,283 Interest expense: Interest on deposits 16,580 12,767 9,227 4,915 2,523 Interest on securities sold under agreements to repurchase 1,723 1,463 1,163 428 137 Interest on other borrowings 4,084 4,883 3,345 1,927 645 Interest on jr. subordinated debentures 390 379 315 241 166 Interest on subordinated debt 986 988 987 986 986 Total interest expense 23,763 20,480 15,037 8,497 4,457 Net interest income 42,367 43,191 45,672 48,257 46,826 Provision for credit losses 458 (817 ) 805 142 907 Net interest income after provision for loan 41,909 44,008 44,867 48,115 45,919 Non-interest income: Wealth management revenues 5,341 5,514 6,201 4,843 5,473 Insurance commissions 5,737 8,480 4,719 4,158 5,641 Service charges 2,386 2,203 2,375 2,445 2,236 Securities gains, net (6 ) (46 ) (48 ) 79 2 Mortgage banking revenues 332 150 65 355 289 ATM/debit card revenue 3,265 3,083 3,209 3,101 3,214 Other 2,431 3,095 1,686 1,810 1,704 Total non-interest income 19,486 22,479 18,207 16,791 18,559 Non-interest expense: Salaries and employee benefits 23,544 26,071 23,610 24,877 25,768 Net occupancy and equipment expense 6,035 6,005 6,126 5,903 6,073 Net other real estate owned (income) expense 27 133 87 58 218 FDIC insurance 1,076 463 464 479 436 Amortization of intangible assets 1,477 1,522 1,537 1,598 1,633 Stationary and supplies 315 292 298 361 325 Legal and professional expense 1,780 1,690 1,607 1,770 1,885 ATM/debit card expense 1,016 1,223 1,309 1,243 670 Marketing and donations 908 654 681 739 706 Other 3,864 3,524 3,653 4,521 3,801 Total non-interest expense 40,042 41,577 39,372 41,549 41,515 Income before income taxes 21,353 24,910 23,702 23,357 22,963 Income taxes 4,786 5,730 3,063 5,418 5,205 Net income $ 16,567 $ 19,180 $ 20,639 $ 17,939 $ 17,758 Per Share Information Basic earnings per common share $ 0.81 $ 0.94 $ 1.01 $ 0.88 $ 0.87 Diluted earnings per common share 0.80 0.93 1.01 0.88 0.86 Weighted average shares outstanding 20,528,717 20,492,254 20,461,046 20,454,669 20,448,799 Diluted weighted average shares outstanding 20,628,239 20,563,972 20,535,220 20,535,215 20,529,523 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, 2023 2023 2022 2022 2022 Loan Portfolio Construction and land development $ 151,574 $ 159,157 $ 144,264 $ 142,801 $ 141,072 Farm real estate loans 392,220 401,957 410,327 360,424 350,159 1-4 Family residential properties 418,932 424,545 440,180 436,625 424,230 Multifamily residential properties 303,482 301,808 294,346 298,321 330,600 Commercial real estate 2,056,529 2,003,647 2,030,011 1,996,338 1,976,654 Loans secured by real estate 3,322,737 3,291,114 3,319,128 3,234,509 3,222,715 Agricultural operating loans 148,318 146,847 166,838 160,511 142,406 Commercial and industrial loans 1,094,522 1,078,021 1,082,960 1,064,033 1,036,987 Consumer loans 80,241 88,430 97,775 100,783 94,828 All other loans 167,598 156,219 159,511 160,454 151,727 Total loans 4,813,416 4,760,631 4,826,212 4,720,290 4,648,663 Deposit Portfolio Non-interest bearing demand deposits $ 1,171,047 $ 1,262,181 $ 1,256,514 $ 1,334,686 $ 1,369,756 Interest bearing demand deposits 1,477,765 1,419,791 1,389,283 1,364,306 1,453,932 Savings deposits 602,523 639,691 636,699 657,592 683,944 Money Market 923,259 878,452 1,267,726 1,443,060 1,158,724 Time deposits 1,044,991 830,663 706,779 683,554 652,622 Total deposits 5,219,585 5,030,778 5,257,001 5,483,198 5,318,978 Asset Quality Non-performing loans $ 18,637 $ 15,163 $ 19,170 $ 20,812 $ 19,981 Non-performing assets 22,615 19,225 23,539 25,143 24,190 Net charge-offs (recoveries) (38 ) 53 489 440 307 Allowance for credit losses to non-performing loans 315.07 % 383.98 % 308.26 % 282.42 % 295.66 % Allowance for credit losses to total loans outstanding 1.22 % 1.22 % 1.22 % 1.25 % 1.27 % Nonperforming loans to total loans 0.39 % 0.32 % 0.40 % 0.44 % 0.43 % Nonperforming assets to total assets 0.34 % 0.29 % 0.35 % 0.38 % 0.36 % Special Mention loans 40,687 47,022 39,853 25,298 35,849 Substandard and Doubtful loans 28,255 29,931 34,352 37,378 38,155 Common Share Data Common shares outstanding 20,528,192 20,519,717 20,452,376 20,454,636 20,448,799 Book value per common share $ 32.18 $ 32.26 $ 30.96 $ 29.37 $ 30.63 Tangible book value per common share (1) 23.48 24.05 22.65 21.01 22.17 Market price of stock 24.14 27.22 32.08 31.97 35.67 Key Performance Ratios and Metrics End of period earning assets $ 6,023,553 $ 5,995,674 $ 6,063,953 $ 5,975,619 $ 6,024,815 Average earning assets 6,049,626 6,052,264 6,000,106 6,063,061 5,975,821 Average rate on average earning assets (tax equivalent) 4.43 % 4.32 % 4.07 % 3.77 % 3.50 % Average rate on cost of funds 1.59 % 1.38 % 1.00 % 0.56 % 0.30 % Net interest margin (tax equivalent) (1) 2.84 % 2.94 % 3.07 % 3.21 % 3.20 % Return on average assets 0.99 % 1.15 % 1.24 % 1.07 % 1.08 % Return on average common equity 10.07 % 12.11 % 13.51 % 11.18 % 11.02 % Efficiency ratio (tax equivalent) (1) 60.37 % 59.01 % 58.07 % 59.64 % 58.45 % Full-time equivalent employees 995 988 1,043 1,051 1,025 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 June 30, 2023 QTD Average Average Balance Interest Rate INTEREST EARNING ASSETS Interest bearing deposits $ 35,093 $ 456 5.21 % Federal funds sold 8,025 98 4.90 % Certificates of deposits investments 1,715 14 3.27 % Investment Securities: Taxable (total less municipals) 950,755 5,270 2.22 % Tax-exempt (Municipals) 276,719 2,434 3.52 % Loans (net of unearned income) 4,777,319 58,602 4.92 % Total interest earning assets 6,049,626 66,874 4.43 % NONEARNING ASSETS Cash and due from banks 135,574 Premises and equipment 89,974 Other nonearning assets 464,899 Allowance for loan losses (58,617 ) Total assets $ 6,681,456 INTEREST BEARING LIABILITIES Demand deposits $ 2,318,119 $ 9,467 1.64 % Savings deposits 619,426 168 0.11 % Time deposits 983,323 6,945 2.83 % Total interest bearing deposits 3,920,868 16,580 1.70 % Repurchase agreements 226,734 1,723 3.05 % FHLB advances 486,920 4,084 3.36 % Federal funds purchased - - 0.00 % Subordinated debt 94,606 988 4.19 % Jr. subordinated debentures 19,427 390 8.05 % Other debt - - 0.00 % Total borrowings 827,687 7,185 3.48 % Total interest bearing liabilities 4,748,555 23,765 2.01 % NONINTEREST BEARING LIABILITIES Demand deposits 1,228,395 Average cost of funds 1.59 % Other liabilities 46,163 Stockholders' equity 658,343 Total liabilities & stockholders' equity $ 6,681,456 Net Interest Earnings / Spread $ 43,109 2.42 % Impact of Non-Interest Bearing Funds 0.42 % Tax effected yield on interest earning assets 2.84 % 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, 2023 2023 2022 2022 2022 Net interest income as reported $ 42,367 $ 43,191 $ 45,672 $ 48,257 $ 46,826 Net interest income, (tax equivalent) 43,109 43,947 46,464 49,060 47,625 Average earning assets 6,049,626 6,052,264 6,000,106 6,063,061 5,975,821 Net interest margin (tax equivalent) 2.84 % 2.94 % 3.07 % 3.21 % 3.20 % Common stockholder's equity $ 660,687 $ 661,865 $ 633,155 $ 600,715 $ 626,268 Goodwill and intangibles, net 178,615 168,373 169,897 170,897 172,871 Common shares outstanding 20,528 20,520 20,452 20,455 20,449 Tangible Book Value per common share $ 23.48 $ 24.05 $ 22.65 $ 21.01 $ 22.17 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, 2023 2023 2022 2022 2022 Adjusted earnings Reconciliation Net Income - GAAP $ 16,567 $ 19,180 $ 20,639 $ 17,939 $ 17,758 Adjustments (post-tax):(1) Acquisition ACL on non-PCD assets in provision expense - - - - - Nonrecurring severance expense - 416 - - - Integration and acquisition expenses 589 135 131 524 777 Total non-recurring adjustments (non-GAAP) $ 589 $ 551 $ 131 $ 524 $ 777 Adjusted earnings - non-GAAP $ 17,156 $ 19,731 $ 20,770 $ 18,463 $ 18,535 Adjusted diluted earnings per share (non-GAAP) $0.83 $0.96 $1.01 $0.90 $0.90 Efficiency Ratio Reconciliation Noninterest expense - GAAP $ 40,042 $ 41,577 $ 39,372 $ 41,549 $ 41,515 Other real estate owned property income (expense) (27 ) (133 ) (87 ) (58 ) (218 ) Amortization of intangibles (1,477 ) (1,522 ) (1,537 ) (1,598 ) (1,633 ) Nonrecurring severance expense - (527 ) - - - integration and acquisition expenses (745 ) (171 ) (166 ) (663 ) (983 ) Adjusted noninterest expense (non-GAAP) $ 37,793 $ 39,224 $ 37,582 $ 39,230 $ 38,681 Net interest income -GAAP $ 42,367 $ 43,192 $ 45,672 $ 48,257 $ 46,826 Effect of tax-exempt income(1) 742 755 792 803 799 Adjusted net interest income (non-GAAP) $ 43,109 $ 43,947 $ 46,464 $ 49,060 $ 47,625 Noninterest income - GAAP $ 19,486 $ 22,479 $ 18,207 $ 16,791 $ 18,559 Net (gain)/loss on securities sales 6 46 48 (79 ) (2 ) Adjusted noninterest income (non-GAAP) $ 19,492 $ 22,525 $ 18,255 $ 16,712 $ 18,557 Adjusted total revenue (non-GAAP) $ 62,601 $ 66,472 $ 64,719 $ 65,772 $ 66,182 Efficiency ratio (non-GAAP) 60.37 % 59.01 % 58.07 % 59.64 % 58.45 % (1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%. 
