UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): April 30, 2020
FIRST MID BANCSHARES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware | 0-13368 | 37-1103704 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1421 CHARLESTON AVENUE, MATTOON, IL 61938 |
(Address of Principal Executive Offices) (Zip Code) |
(217) 234-7454
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock | FMBH | Nasdaq Global Market |
Item 2.02. Results of Operations and Financial Condition.
On April 30, 2020, First Mid Bancshares, Inc. (the "Company") issued a press release to report its results of operations and financial condition as of and for the quarter ended March 31, 2020. A copy of this press release is included in Exhibit 99.1 to this Form 8-K and incorporated into this item 2.02 by reference.
Item 7.01. Regulation FD Disclosure.
On April 30, 2020, the Company posted an investor presentation on its website. A copy of the presentation is attached as Exhibit 99.2. The information in this Form 8-K, and attached exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) ExhibitsExhibit Number Description 99.1 Press Release of the Company, dated April 30, 2020 99.2 Investor Presentation of First Mid Bancshares, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FIRST MID BANCSHARES, INC. | ||
Date: April 30, 2020 | By: | /s/ Joseph R. Dively |
Joseph R. Dively | ||
Chairman and Chief Executive Officer | ||
EXHIBIT 99.1
First Mid Bancshares, Inc. Announces First Quarter 2020 Results
MATTOON, Ill., April 30, 2020 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended March 31, 2020.
Highlights
“While the challenges created from the COVID-19 pandemic are unprecedented, I am confident in First Mid’s position given our strong capital levels and significant liquidity,” said Joe Dively, Chairman and Chief Executive Officer. “Our balance sheet, combined with the extraordinary efforts of our employees, has allowed us to provide tremendous support to our customers and communities.”
“Due to the pandemic, we activated our business continuity plan and continue to operate at all of our branch locations as drive-thru facilities. Our call center remains accessible and we have increased the utilization of our digital platform. In addition, we have enabled a significant number of employees with work from home capabilities,” Dively continued.
“We have taken a multitude of steps for our customers including a 90-day deferral program, primarily for hotel and restaurant borrowers, a 180-day residential mortgage deferral program, and, as a long-standing SBA lender, we were very active in the Paycheck Protection Program (‘PPP’) for both existing and new customers. In fact, in the first round of the program, we helped nearly 1,400 customers receive approximately $235 million in loans. Awareness of our expertise in this process quickly spread in the communities we serve and allowed us to gain over 250 new relationships that we hope will be long-term customers,” Dively added.
“Our credit department has spent a lot of time stress testing the portfolio, especially those categories most impacted by COVID-19, and we believe the strength of our balance sheet has us well prepared for any losses that may arise. To highlight our position from a macro perspective, our current allowance for credit losses is more than our cumulative net charge-offs over the last 20 years. This, combined with our significant capital strength, provides me with the belief that we are very well positioned for the economic uncertainty ahead of us,” Dively continued.
“We delivered first quarter financial results that reflect the soundness and diversification of our business model and the hard work and dedication of our employees. For the quarter, we generated 1.8% loan growth, improved our asset quality measures, and delivered solid earnings despite a material reserve build. All of our capital ratios increased, and our total capital ratio ended the period at a very strong 16.13%,” Dively added.
“Finally, on April 21st, 2020, we completed an acquisition of a team of commercial lenders and their loan relationships in the St. Louis metro market. I have personally spent time with all of the lending team and could not be more excited about the talent and capabilities of this group. St. Louis has been a strategic market that we have wanted to increase our presence in for quite some time, and this negotiated opportunity, and group of community bankers, are a great fit to our long-term strategic plans,” Dively concluded.
Chief Financial Officer Matt Smith said, “The loan portfolio purchased totals approximately $183.0 million and was funded primarily through a depository agreement entered into with Promontory and Stifel, Nicolaus & Company, Inc. In addition, we will assume approximately $50.0 million of deposits from the acquired loan relationships, once regulatory approval is received. We completed significant due diligence on the portfolio, which is well diversified and primarily composed of commercial real estate and commercial operating loans, with no hotel borrowers. Our strong balance sheet, combined with the structure of the deal, allowed us to complete the loan acquisition with minimal impact on our overall capital and liquidity positions. The deal is expected to be accretive to 2020 earnings.”
1 Reserve build represents the amount by which the provision for credit losses exceeds net charge-offs. See non-GAAP reconciliation.
Net Interest Income
Net interest income for the first quarter of 2020 declined by $1.1 million, or 3.6% compared to the fourth quarter of 2019. The decrease was primarily driven by lower accretion income of $1.0 million. In addition, interest on securities income declined due to lower balances in the investment portfolio as a result of an increase in bonds getting called from the change in interest rates. The Company elected to hold on to a majority of the cash proceeds to maintain additional excess liquidity during these uncertain times. Cash and cash equivalents on the balance sheet increased by $96.9 million, while the investment portfolio decreased $113.5 million.
In comparison to the first quarter of 2019, net interest income decreased $2.4 million, or 7.4%. The decrease was primarily attributable to a $2.1 million decline in accretion income and changes in the interest rate environment.
Net Interest Margin
Net interest margin, on a tax equivalent basis, was 3.51% for the first quarter of 2020 compared to 3.57% in the prior quarter. The decrease was primarily driven by a $1.0 million decline in accretion income. Excluding accretion income, net interest margin increased 4 basis points in the current quarter as the decline in overall funding costs more than offset the decline in yield on average earning assets.
In comparison to the first quarter of 2019, net interest margin decreased 23 basis points. The year-over-year decrease was primarily due to a $2.1 million decline in accretion income. Excluding accretion income, net interest margin increased by 1 basis point compared to the same quarter last year with average earning asset yields down 9 basis points and funding costs down 10 basis points.
Loan Portfolio
Total loans ended the quarter at $2.74 billion, representing an increase of $49.0 million compared to the prior quarter. On a year-over-year basis, loans increased $147.3 million, or 5.7%. The Company saw less payoffs compared to the first quarter of last year as the Company has worked through a majority of the loans from our two acquisitions in 2018, underwriting them under First Mid’s loan policy guidelines. During the current quarter, line draws were consistent with prior periods and represented approximately $3.0 million of the loan growth.
The Company has a diversified loan portfolio. Due to these unprecedented times, the Company decided to provide additional disclosures on certain loan categories with escalated monitoring and stress testing from the COVID-19 shelter in place. Most of the largest borrowers in the hotel and restaurant sector own and operate multiple businesses across various industries providing a diverse cash flow stream to support their loans and have provided personal guarantees. The majority of retail-merchandise borrowers sell home supplies and other necessities and have remained open.
The Company began offering a 90-day deferral program primarily for the hotel and restaurant sector in late March. As of the end of the first quarter, the Company had provided 90-day deferrals on $30.3 million in loans, or 1.1% of total outstanding loans. As of April 17, the Company had provided an additional $98.0 million in commercial loan modifications or deferrals. The total as of the April 17 date represented approximately 4.7% of loans.
Sector Detail as of March 31, 2020 ($ in thousands) | Balance | % of Loan Portfolio | Average LTV | Average DSCR | |
Retail | $162,071 | 5.9% | 52% | 1.75x | |
(Merchandise $79.4 million) | |||||
Hotel | 119,676 | 4.4% | 61% | 1.41x | |
(67% major chains) | |||||
Restaurant | 70,141 | 2.6% | 89% | 2.02x | |
(79% franchise/drive-thru/limited service) | |||||
Oil Related | 5,110 | 0.2% | 54% | 3.74x | |
($2.2 million production) | |||||
Through March 31, 2020, the Company had provided deferrals of $1.0 million on combined consumer and residential real estate loans. An additional $4.8 million of deferrals on consumer and residential real estate loans were provided through April 17, 2020.
Asset Quality
All the Company’s asset quality measures improved in the first quarter 2020. The ratio of non-performing loans to total loans was 0.89%, allowance for loan losses was 1.20% of total loans, and the allowance for loan losses to non-performing loans was 134.3%. Non-performing loans declined $3.4 million to $24.5 million at quarter end. Non-performing assets to total assets declined to 0.71%, the lowest level in two years. Net charge-offs were $1.2 million during the first quarter compared to $2.6 million in the prior quarter.
CECL
Effective January 1, 2020, the Company adopted Accounting Standards Update 2016-13. The provisions of ASU 2016-13 require an entity to use the new impairment model known as the current expected credit loss (“CECL”). Allowance for loan and lease losses increased from 1.00% to 1.20% of total loans from December 31, 2019 to March 31, 2020. The information below details, by loan pool, the impact from implementing CECL and the reserve build for the quarter, which was impacted by the deterioration in the economic outlook due to COVID-19.
Incurred Loss Model | CECL Adoption | CECL | ||||
31-Dec-19 | 1-Jan-20 | 31-Mar-20 | ||||
Allowance for Loan Losses ($ in thousands) | Amount | % of loans and leases outstanding | Amount | % of loans and leases outstanding | Amount | % of loans and leases outstanding |
Construction & Land Development | $1,146 | 1.22% | $1,033 | 1.09% | $1,620 | 1.31% |
Farm Loans | 1,093 | 0.45% | 1,323 | 0.55% | 1,335 | 0.55% |
1-4 Family Residential Properties | 1,386 | 0.41% | 2,142 | 0.64% | 1,931 | 0.59% |
Multifamily & Commercial Real Estate | 11,198 | 0.97% | 11,739 | 1.02% | 13,621 | 1.19% |
Agricultural Loans | 1,386 | 1.02% | 1,023 | 0.75% | 1,064 | 0.76% |
Commercial & Industrial Loans | 9,273 | 1.41% | 9,428 | 1.44% | 11,294 | 1.64% |
Consumer Loans | 1,429 | 1.72% | 1,895 | 2.28% | 2,011 | 2.45% |
$26,911 | 1.00% | $28,583 | 1.06% | $32,876 | 1.20% | |
The reserve for unfunded commitments was immaterial at the adoption of CECL and at quarter end.
Deposits
Total deposits ended the quarter at $2.91 billion, which represented a slight decrease of $8.8 million from the prior quarter. The Company’s average rate on cost of funds was 0.60% for the quarter compared to 0.67% in the fourth quarter and 0.70% in the first quarter of 2019. Total interest-bearing deposit costs declined by 8 basis points in the first quarter 2020 and declined by 6 basis points year-over-year.
Noninterest Income
Noninterest income for the first quarter of 2020 was $16.5 million compared to $14.9 million in the fourth quarter and $14.6 million in the first quarter of last year. The increase was primarily driven by higher insurance commission revenues, securities gains from bonds called, and interest rate swap fees. The Company’s fee business continues to provide significant diversification from the direct impacts of interest rate changes. Our First Mid Wealth Management division ended the quarter with $4.1 billion in assets under management. Overall, noninterest income represented nearly 36% of revenues for the period versus 31% of revenues in the first quarter last year.
Noninterest Expenses
Noninterest expense for the first quarter totaled $27.7 million compared to $27.6 million in the fourth quarter 2019. The current quarter included $0.1 million in acquisition related costs. The higher expenses were primarily in salaries and benefits tied to the increased revenues from our insurance business and annual employee compensation changes. FDIC insurance expense was also higher due to the final utilization of the available credit.
Noninterest expense was $0.6 million lower than the first quarter of 2019 across multiple categories including occupancy and equipment, amortization of intangibles, and FDIC insurance. The Company’s efficiency ratio, on a tax equivalent basis, for the first quarter 2020 was 57.1% compared to 56.8% for the same period last year.
Regulatory Capital Levels and Liquidity Sources
The Company elected the 5-year regulatory capital transition for the implementation of CECL. The Company’s capital levels remained strong and comfortably above the “well capitalized” levels. Capital levels ended the period as follows:
Total capital to risk-weighted assets | 16.13% |
Tier 1 capital to risk-weighted assets | 15.05% |
Common equity tier 1 capital to risk-weighted assets | 14.39% |
Leverage ratio | 11.59% |
The Company maintains significant liquidity capacity through a variety of sources as outlined below:
Liquidity Sources | ||
31-Mar-20 | ||
Source | Amount ($ in thousands) | |
Fed Reserves and Cash at Banks | $103,400 | |
Unpledged Investment Securities | 60,251 | |
FHLB Borrowing Capacity | 525,149 | |
Fed Funds Lines Correspondent Banks | 100,000 | |
Fed Discount Window Availability | 10,000 | |
Total | 798,800 | |
About Us: 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. Our mission is to fulfill the financial needs of our communities with exceptional personal service, professionalism and integrity, and deliver meaningful value and results for our customers and shareholders.
First Mid is a $3.9 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 and eastern Missouri and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in their work and their ability to serve our customers well over the last 155 years.
More information about the Company is available on our website at www.firstmid.com. Our stock is traded in The NASDAQ Stock Market LLC under the ticker symbol “FMBH”.
Non-GAAP Measures: In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance. Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported. These non-GAAP financial measures are detailed as supplemental tables and include “Net Interest Margin, tax equivalent,” Tangible Book Value per Common Share,” “Common Equity Tier 1 Capital to Risk Weighted Assets,” and “Reserve Build”. 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, planned schedules and impacts from COVID-19. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1955. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid, are identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative/regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mid’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; accounting principles, policies and guidelines; the severity, magnitude and duration of the COVID-19 pandemic; the direct and indirect impact of such pandemic, including responses to the pandemic by the government, businesses and consumers, on First Mid’s operations and personnel, commercial activity and demand across First Mid’s business and customers’ businesses; the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mid’s liquidity and capital positions, impair the ability of First Mid’s borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses; and the impact of the COVID-19 pandemic on First Mid’s financial results, including possible lost revenue and increased expenses (including the 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 Securities and Exchange Commission (the “SEC”), including its Annual Reports on Form 10-K. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.
Investor Contact:
Aaron Holt
VP, Shareholder Relations
217-258-0463
aholt@firstmid.com
- Tables Follow -
FIRST MID BANCSHARES, INC. | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(In thousands, unaudited) | |||||||||||
As of | |||||||||||
March 31, | December 31, | March 31, | |||||||||
2020 | 2019 | 2019 | |||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 182,027 | $ | 85,080 | $ | 232,548 | |||||
Investment securities | 646,744 | 760,215 | 772,400 | ||||||||
Loans (including loans held for sale) | 2,744,298 | 2,695,347 | 2,596,994 | ||||||||
Less allowance for loan losses | (32,876 | ) | (26,911 | ) | (26,704 | ) | |||||
Net loans | 2,711,422 | 2,668,436 | 2,570,290 | ||||||||
Premises and equipment, net | 59,359 | 59,491 | 59,237 | ||||||||
Goodwill and intangibles, net | 132,199 | 133,257 | 137,461 | ||||||||
Bank owned life insurance | 67,656 | 67,225 | 65,914 | ||||||||
Other assets | 65,424 | 65,722 | 57,769 | ||||||||
Total assets | $ | 3,864,831 | $ | 3,839,426 | $ | 3,895,619 | |||||
Liabilities and Stockholders' Equity | |||||||||||
Deposits: | |||||||||||
Non-interest bearing | $ | 642,384 | $ | 633,331 | $ | 628,944 | |||||
Interest bearing | 2,266,243 | 2,284,035 | 2,417,269 | ||||||||
Total deposits | 2,908,627 | 2,917,366 | 3,046,213 | ||||||||
Repurchase agreement with customers | 231,649 | 208,109 | 157,760 | ||||||||
Other borrowings | 124,921 | 118,895 | 126,048 | ||||||||
Junior subordinated debentures | 18,900 | 18,858 | 29,042 | ||||||||
Other liabilities | 47,683 | 49,589 | 39,404 | ||||||||
Total liabilities | 3,331,780 | 3,312,817 | 3,398,467 | ||||||||
Total stockholders' equity | 533,051 | 526,609 | 497,152 | ||||||||
Total liabilities and stockholders' equity | $ | 3,864,831 | $ | 3,839,426 | $ | 3,895,619 | |||||
FIRST MID BANCSHARES, INC. | ||||||
Condensed Consolidated Statements of Income | ||||||
(In thousands, except per share data, unaudited) | ||||||
Three Months Ended | ||||||
March 31 | ||||||
2020 | 2019 | |||||
Interest income: | ||||||
Interest and fees on loans | $ | 30,027 | $ | 32,104 | ||
Interest on investment securities | 4,589 | 5,209 | ||||
Interest on federal funds sold & other deposits | 125 | 738 | ||||
Total interest income | 34,741 | 38,051 | ||||
Interest expense: | ||||||
Interest on deposits | 3,861 | 4,378 | ||||
Interest on securities sold under agreements to repurchase | 194 | 260 | ||||
Interest on other borrowings | 595 | 723 | ||||
Interest on subordinated debt | 218 | 438 | ||||
Total interest expense | 4,868 | 5,799 | ||||
Net interest income | 29,873 | 32,252 | ||||
Provision for loan losses | 5,481 | 947 | ||||
Net interest income after provision for loan | 24,392 | 31,305 | ||||
Non-interest income: | ||||||
Wealth management revenues | 3,626 | 3,645 | ||||
Insurance commissions | 6,621 | 5,555 | ||||
Service charges | 1,778 | 1,802 | ||||
Securities gains, net | 531 | 54 | ||||
Mortgage banking revenues | 308 | 239 | ||||
ATM/debit card revenue | 1,987 | 2,016 | ||||
Other | 1,659 | 1,328 | ||||
Total non-interest income | 16,510 | 14,639 | ||||
Non-interest expense: | ||||||
Salaries and employee benefits | 16,500 | 16,574 | ||||
Net occupancy and equipment expense | 4,242 | 4,455 | ||||
Net other real estate owned (income) expense | (46 | ) | 53 | |||
FDIC insurance | 93 | 279 | ||||
Amortization of intangible assets | 1,295 | 1,356 | ||||
Stationary and supplies | 268 | 287 | ||||
Legal and professional expense | 1,398 | 1,194 | ||||
Marketing and donations | 481 | 454 | ||||
Other | 3,500 | 3,658 | ||||
Total non-interest expense | 27,731 | 28,310 | ||||
Income before income taxes | 13,171 | 17,634 | ||||
Income taxes | 3,172 | 4,318 | ||||
Net income | $ | 9,999 | $ | 13,316 | ||
Per Share Information | ||||||
Basic earnings per common share | $ | 0.60 | $ | 0.80 | ||
Diluted earnings per common share | 0.60 | 0.80 | ||||
Weighted average shares outstanding | 16,693,183 | 16,665,999 | ||||
Diluted weighted average shares outstanding | 16,740,091 | 16,704,779 | ||||
FIRST MID BANCSHARES, INC. | |||||||||||||||||
Condensed Consolidated Statements of Income | |||||||||||||||||
(In thousands, except per share data, unaudited) | |||||||||||||||||
For the Quarter Ended | |||||||||||||||||
March 31, | December 31, | September 30 | June 30, | March 31, | |||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | |||||||||||||
Interest income: | |||||||||||||||||
Interest and fees on loans | $ | 30,027 | $ | 31,206 | $ | 31,976 | $ | 31,539 | $ | 32,104 | |||||||
Interest on investment securities | 4,589 | 5,101 | 5,297 | 5,436 | 5,209 | ||||||||||||
Interest on federal funds sold & other deposits | 125 | 214 | 305 | 596 | 738 | ||||||||||||
Total interest income | 34,741 | 36,521 | 37,578 | 37,571 | 38,051 | ||||||||||||
Interest expense: | |||||||||||||||||
Interest on deposits | 3,861 | 4,447 | 5,174 | 4,940 | 4,378 | ||||||||||||
Interest on securities sold under agreements to repurchase | 194 | 240 | 196 | 215 | 260 | ||||||||||||
Interest on other borrowings | 595 | 610 | 691 | 697 | 723 | ||||||||||||
Interest on subordinated debt | 218 | 240 | 392 | 406 | 438 | ||||||||||||
Total interest expense | 4,868 | 5,537 | 6,453 | 6,258 | 5,799 | ||||||||||||
Net interest income | 29,873 | 30,984 | 31,125 | 31,313 | 32,252 | ||||||||||||
Provision for loan losses | 5,481 | 2,737 | 2,658 | 91 | 947 | ||||||||||||
Net interest income after provision for loan | 24,392 | 28,247 | 28,467 | 31,222 | 31,305 | ||||||||||||
Non-interest income: | |||||||||||||||||
Wealth management revenues | 3,626 | 5,027 | 3,311 | 3,587 | 3,645 | ||||||||||||
Insurance commissions | 6,621 | 3,361 | 3,353 | 3,760 | 5,555 | ||||||||||||
Service charges | 1,778 | 1,985 | 2,091 | 1,959 | 1,802 | ||||||||||||
Securities gains, net | 531 | 479 | 51 | 218 | 54 | ||||||||||||
Mortgage banking revenues | 308 | 579 | 582 | 346 | 239 | ||||||||||||
ATM/debit card revenue | 1,987 | 2,100 | 2,173 | 2,202 | 2,016 | ||||||||||||
Other | 1,659 | 1,342 | 1,356 | 1,516 | 1,328 | ||||||||||||
Total non-interest income | 16,510 | 14,873 | 12,917 | 13,588 | 14,639 | ||||||||||||
Non-interest expense: | |||||||||||||||||
Salaries and employee benefits | 16,500 | 15,942 | 14,497 | 15,565 | 16,574 | ||||||||||||
Net occupancy and equipment expense | 4,242 | 4,305 | 4,377 | 4,543 | 4,455 | ||||||||||||
Net other real estate owned (income) expense | (46 | ) | 30 | 172 | 188 | 53 | |||||||||||
FDIC insurance | 93 | (170 | ) | (87 | ) | 197 | 279 | ||||||||||
Amortization of intangible assets | 1,295 | 1,296 | 1,373 | 1,823 | 1,356 | ||||||||||||
Stationary and supplies | 268 | 269 | 284 | 264 | 287 | ||||||||||||
Legal and professional expense | 1,398 | 1,451 | 1,215 | 1,304 | 1,194 | ||||||||||||
Marketing and donations | 481 | 573 | 523 | 481 | 454 | ||||||||||||
Other | 3,500 | 3,905 | 3,540 | 5,822 | 3,658 | ||||||||||||
Total non-interest expense | 27,731 | 27,601 | 25,894 | 30,187 | 28,310 | ||||||||||||
Income before income taxes | 13,171 | 15,519 | 15,490 | 14,623 | 17,634 | ||||||||||||
Income taxes | 3,172 | 3,543 | 3,820 | 3,642 | 4,318 | ||||||||||||
Net income | $ | 9,999 | $ | 11,976 | $ | 11,670 | $ | 10,981 | $ | 13,316 | |||||||
FIRST MID BANCSHARES, INC. | |||||||||||||||||||
Consolidated Financial Highlights and Ratios | |||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
As of and for the Quarter Ended | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | |||||||||||||||
Loan Portfolio | |||||||||||||||||||
Construction and land development | $ | 123,326 | $ | 94,142 | $ | 68,821 | $ | 57,069 | $ | 49,179 | |||||||||
Farm loans | 242,891 | 240,241 | 229,715 | 229,924 | 236,864 | ||||||||||||||
1-4 Family residential properties | 325,128 | 336,427 | 347,370 | 355,143 | 362,617 | ||||||||||||||
Multifamily residential properties | 139,734 | 153,948 | 154,859 | 167,709 | 175,903 | ||||||||||||||
Commercial real estate | 1,002,868 | 995,702 | 954,992 | 888,711 | 905,679 | ||||||||||||||
Loans secured by real estate | 1,833,947 | 1,820,460 | 1,755,757 | 1,698,556 | 1,730,242 | ||||||||||||||
Agricultural loans | 139,136 | 136,124 | 121,650 | 118,216 | 118,026 | ||||||||||||||
Commercial and industrial loans | 565,789 | 528,973 | 543,937 | 530,405 | 550,853 | ||||||||||||||
Consumer loans | 82,104 | 83,183 | 83,171 | 84,907 | 86,540 | ||||||||||||||
All other loans | 123,322 | 126,607 | 119,043 | 114,459 | 111,333 | ||||||||||||||
Total loans | 2,744,298 | 2,695,347 | 2,623,558 | 2,546,543 | 2,596,994 | ||||||||||||||
Deposit Portfolio | |||||||||||||||||||
Non-interest bearing demand deposits | $ | 642,384 | $ | 633,331 | $ | 596,518 | $ | 603,823 | $ | 628,944 | |||||||||
Interest bearing demand deposits | 827,387 | 850,956 | 899,763 | 844,931 | 828,144 | ||||||||||||||
Savings deposits | 441,998 | 428,778 | 431,497 | 438,769 | 444,619 | ||||||||||||||
Money Market | 441,381 | 419,801 | 435,517 | 473,160 | 483,867 | ||||||||||||||
Time deposits | 555,477 | 584,500 | 625,630 | 651,807 | 660,639 | ||||||||||||||
Total deposits | 2,908,627 | 2,917,366 | 2,988,925 | 3,012,490 | 3,046,213 | ||||||||||||||
Asset Quality | |||||||||||||||||||
Non-performing loans | $ | 24,463 | $ | 27,818 | $ | 24,203 | $ | 25,773 | $ | 25,988 | |||||||||
Non-performing assets | 27,306 | 31,538 | 28,645 | 29,380 | 29,857 | ||||||||||||||
Net charge-offs | 1,188 | 2,567 | 2,276 | 436 | 432 | ||||||||||||||
Allowance for loan losses to non-performing loans | 134.39 | % | 96.74 | % | 110.49 | % | 102.27 | % | 102.76 | % | |||||||||
Allowance for loan losses to total loans outstanding | 1.20 | % | 1.00 | % | 1.02 | % | 1.04 | % | 1.03 | % | |||||||||
Nonperforming loans to total loans | 0.89 | % | 1.03 | % | 0.92 | % | 1.01 | % | 1.00 | % | |||||||||
Nonperforming assets to total assets | 0.71 | % | 0.82 | % | 0.75 | % | 0.77 | % | 0.77 | % | |||||||||
Common Share Data | |||||||||||||||||||
Common shares outstanding | 16,702,484 | 16,673,480 | 16,663,095 | 16,694,316 | 16,677,128 | ||||||||||||||
Book value per common share | $ | 31.91 | $ | 31.58 | $ | 31.32 | $ | 30.49 | $ | 29.81 | |||||||||
Tangible book value per common share | 24.00 | 23.59 | 23.25 | 22.35 | 21.57 | ||||||||||||||
Market price of stock | 23.74 | 35.25 | 34.62 | 34.92 | 33.32 | ||||||||||||||
Key Performance Ratios and Metrics | |||||||||||||||||||
End of period earning assets | $ | 3,492,271 | $ | 3,464,144 | $ | 3,444,775 | $ | 3,447,695 | $ | 3,539,175 | |||||||||
Average earning assets | 3,451,123 | 3,464,200 | 3,444,088 | 3,470,776 | 3,516,032 | ||||||||||||||
Average rate on average earning assets (tax equivalent) | 4.11 | % | 4.24 | % | 4.39 | % | 4.40 | % | 4.44 | % | |||||||||
Average rate on cost of funds | 0.60 | % | 0.67 | % | 0.79 | % | 0.76 | % | 0.70 | % | |||||||||
Net interest margin (tax equivalent) | 3.51 | % | 3.57 | % | 3.60 | % | 3.64 | % | 3.74 | % | |||||||||
Return on average assets | 1.05 | % | 1.25 | % | 1.22 | % | 1.15 | % | 1.38 | % | |||||||||
Return on average common equity | 7.48 | % | 9.17 | % | 9.04 | % | 8.80 | % | 11.02 | % | |||||||||
Efficiency ratio (tax equivalent) 1 | 57.14 | % | 57.23 | % | 54.69 | % | 62.31 | % | 56.77 | % | |||||||||
Full-time equivalent employees | 835 | 827 | 830 | 826 | 832 | ||||||||||||||
1 Represents non-interest expense divided by the sum of fully tax equivalent net interest income and non-interest income. Non-interest expense adjustments exclude foreclosed property expense and amortization of intangibles. Net-interest income includes tax equivalent adjustments and non-interest income excludes gains and losses on the sale of investment securities. |
FIRST MID BANCSHARES, INC. | |||||||||
Net Interest Margin | |||||||||
(In thousands, unaudited) | |||||||||
For the Quarter Ended March 2020 | |||||||||
QTD Average | Average | ||||||||
Balance | Interest | Rate | |||||||
INTEREST EARNING ASSETS | |||||||||
Interest bearing deposits | $ | 23,824 | $ | 91 | 1.54% | ||||
Federal funds sold | 926 | 2 | 0.87% | ||||||
Certificates of deposits investments | 5,064 | 31 | 2.46% | ||||||
Investment Securities: | |||||||||
Taxable (total less municipals) | 543,799 | 3,339 | 2.46% | ||||||
Tax-exempt (Municipals) | 174,459 | 1,582 | 3.63% | ||||||
Loans (net of unearned income) | 2,703,051 | 30,215 | 4.50% | ||||||
Total interest earning assets | 3,451,123 | 35,260 | 4.11% | ||||||
NONEARNING ASSETS | |||||||||
Cash and due from banks | 93,283 | ||||||||
Premises and equipment | 59,476 | ||||||||
Other nonearning assets | 251,359 | ||||||||
Allowance for loan losses | (29,990 | ) | |||||||
Total assets | $ | 3,825,251 | |||||||
INTEREST BEARING LIABILITIES | |||||||||
Demand deposits | $ | 1,264,489 | $ | 1,092 | 0.35% | ||||
Savings deposits | 435,480 | 119 | 0.11% | ||||||
Time deposits | 570,132 | 2,650 | 1.87% | ||||||
Total interest bearing deposits | 2,270,101 | 3,861 | 0.68% | ||||||
Repurchase agreements | 202,693 | 194 | 0.38% | ||||||
FHLB advances | 120,146 | 580 | 1.94% | ||||||
Federal funds purchased | 2,110 | 10 | 1.91% | ||||||
Subordinated debt | 18,873 | 218 | 4.65% | ||||||
Other borrowings | 769 | 4 | 2.09% | ||||||
Total borrowings | 344,591 | 1,006 | 1.17% | ||||||
Total interest bearing liabilities | 2,614,692 | 4,867 | 0.75% | ||||||
NONINTEREST BEARING LIABILITIES | |||||||||
Demand deposits | 628,588 | Average cost of funds | 0.60% | ||||||
Other liabilities | 47,539 | ||||||||
Stockholders' equity | 534,432 | ||||||||
Total liabilities & stockholders' equity | $ | 3,825,251 | |||||||
Net Interest Earnings / Spread | $ | 30,393 | 3.36% | ||||||
Impact of Non-Interest Bearing Funds | 0.15% | ||||||||
Tax effected yield on interest earning assets | 3.51% | ||||||||
FIRST MID BANCSHARES, INC. | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
(In thousands, unaudited) | ||||||||||||||||||||
As of and for the Quarter Ended | ||||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||
Net interest income as reported | $ | 29,873 | $ | 30,984 | $ | 31,125 | $ | 31,313 | $ | 32,252 | ||||||||||
Net interest income, (tax equivalent) | 30,393 | 31,517 | 31,659 | 31,850 | 32,800 | |||||||||||||||
Average earning assets | 3,451,123 | 3,464,200 | 3,444,088 | 3,470,776 | 3,516,032 | |||||||||||||||
Net interest margin (tax equivalent) 1 | 3.51 | % | 3.57 | % | 3.60 | % | 3.64 | % | 3.74 | % | ||||||||||
Common stockholder's equity | $ | 533,051 | $ | 526,609 | $ | 521,959 | $ | 508,958 | $ | 497,152 | ||||||||||
Goodwill and intangibles, net | 132,199 | 133,257 | 134,461 | 135,762 | 137,461 | |||||||||||||||
Common shares outstanding | 16,702 | 16,673 | 16,663 | 16,695 | 16,677 | |||||||||||||||
Tangible Book Value per common share | $ | 24.00 | $ | 23.59 | $ | 23.25 | $ | 22.35 | $ | 21.57 | ||||||||||
Common equity tier 1 capital | $ | 410,565 | $ | 398,536 | $ | 391,429 | $ | 379,581 | $ | 372,731 | ||||||||||
Risk weighted assets | 2,854,102 | 2,822,648 | 2,923,245 | 2,935,236 | 2,964,638 | |||||||||||||||
Common equity tier 1 capital to risk weighted assets 2 | 14.39 | % | 14.12 | % | 13.39 | % | 12.93 | % | 12.57 | % | ||||||||||
Provision Expense, net of net charge offs | $ | 4,293 | ||||||||||||||||||
Effective tax rate for period | 24.08 | % | ||||||||||||||||||
Average diluted shares outstanding | 16,740 | |||||||||||||||||||
Diluted EPS impact from reserve build | $ | 0.19 | ||||||||||||||||||
1 Annualized and calculated on a tax equivalent basis where interest earned on tax-exempt securities and loans is adjusted to an amount comparable to interest subject to normal income taxes assuming a federal tax rate of 21% and includes the impact of non-interest bearing funds. | ||||||||||||||||||||
2 Defined as total common equity adjusted for gains/(losses) less goodwill and intangibles divided by risk weighted assets as of period end. |
EXHIBIT 99.2
Investor Presentation April 30, 2020 FIRST MID for every step of life.
Disclos u re Non - GAAP Financial Measures In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this release contains certain non - GAAP financial measures. The Company believes that such non - GAAP financial measures provide investors with information useful in understanding the Company’s financial performance. Readers of this release, however, are urged to review these non - GAAP financial measures in conjunction with the GAAP results as reported. These non - GAAP financial measures are detailed as supplemental tables and include “Net Interest Margin, tax equivalent,” Tangible Book Value per Common Share,” “Common Equity Tier 1 Capital to Risk Weighted Assets,” and “Reserve Build”. 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, planned schedules and impacts from COVID - 19. First Mid intends such forward - looking statements to be covered by the safe harbor provisions for forward - looking statements contained in the Private Securities Litigation Reform Act of 1955. Forward - looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid, are identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative/regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mid’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; accounting principles, policies and guidelines; the severity, magnitude and duration of the COVID - 19 pandemic; the direct and indirect impact of such pandemic, including responses to the pandemic by the government, businesses and consumers, on First Mid’s operations and personnel, commercial activity and demand across First Mid’s business and customers’ businesses; the disruption of global, national, state and local economies associated with the COVID - 19 pandemic, which could affect First Mid’s liquidity and capital positions, impair the ability of First Mid’s borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses; and the impact of the COVID - 19 pandemic on First Mid’s financial results, including possible lost revenue and increased expenses (including the 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 Securities and Exchange Commission (the “SEC”), including its Annual Reports on Form 10 - K. 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. 2
COVID - 19 Relief to Our Employees and Customers • Executed pandemic plan already tested and in place. • Implemented preventative and personal hygiene measures per CDC guidelines. • Protected the safety of employees with transition to drive - thru use only at branches. • Increased eligible sick days to every employee. • Provided financial assistance for employees in need. • Enabled approximately half of workforce to work remotely with secure connections. Employee Relief Customer Relief • Provided support to nearly 1,400 small business owners (both existing and new customers) through the first round of the Paycheck Protection Program (PPP) resulting in $235 million approved with the SBA. • Offered 90 - day payment relief primarily to hotel and restaurant borrowers with a total of $30 million deferred as of March 31, 2020. An additional $98 million was deferred from April 1 st through April 17 th . • Implemented a residential mortgage payment deferral program in early April for our retail customers, providing 180 - day relief to 37 customers through April 17 th . • Provided additional assistance where appropriate to affected retail and commercial customers across our footprint. 3
Most of the largest borrowers in the hotel and restaurant sectors own and operate multiple businesses across various industries providing a diverse cash flow stream to support their loans, and have provided personal guarantees COVID - 19 Loan Monitoring Industry Detail % of Loan P o r t f o l io Av g L TV Avg DSCR Retail (Merchandise 49%) 5.9% 52% 1.75x Hotel (67% major chains) 4.4% 61% 1.41x Restaurant (79% franchise/drive - thru/limited service) 2.6% 89% 2.02x Oil Related (Production is 43% of Oil) 0.2% 54% 3.74x Total 13.1% Due to the unprecedented global pandemic and shelter in place mandate, First Mid implemented escalated monitoring and stress testing of the vulnerable sectors within our loan portfolio. Identified “At - Risk” Industries All Other Loans 86.9% V uln e rable Industries 13.1% 4
Corporate Profile 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 $3.9 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 and eastern Missouri and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in their work and their ability to serve our customers well over the last 155 years. Current Company Snapshot • Assets: $3.86 billion • Deposits: $2.91 billion • Loans: $2.74 billion • Wealth Management AUM: $4.08 billion Strong Capital Ratios • Leverage ratio: 11.59% • Total RBC ratio: 16.13% Strong Asset Quality • NPAs/Assets: 0.71% • NCOs/Avg. Loans (LTM) : 0.18% Profitability (Q1’2020) • Net Income of $9.99 million • Net interest margin, TE: 3.51% • ROAA: 1.05% (annualized for period) • ROACE: 7.48% (annualized for period) Financial data as of March 31, 2020 5
Company Overview First Mid is headquartered in Mattoon with multiple locations and a dedicated team of nearly 900 employees serving central and southern Illinois, metro St . Louis, and the greater Indianapolis area . 6 Our vision is to be a nimble, community - focused organization committed to quality, growth and earned independence for the benefit of all our stakeholders.
Providing Shareholder Value $1.42 $1.44 $1.51 $1.57 $1.67 $1.04 $1.07 $1.29 $1.62 $1.73 $1.85 $1 .81 $2.05 $2.13 $2.52 $2.87 $0.30 $0.33 $0.35 $0.38 $0.38 $0.38 $0.38 $0.40 $0.42 $0.46 $0.55 $0.59 $0.62 $0.66 $0.70 $0.76 $8.49 $9.18 $8.28 $9.36 $10.09 $10.91 $9.38 $ 1 1.24 $12.68 $11.75 $15.63 $ 1 5.09 $16.84 $18.73 $20.22 $ 2 3.59 $ 0 .00 $ 5 .00 $10.00 $15.00 $20.00 $25.00 $ 0 .00 $ 0 .50 $ 1 .00 $ 1 .50 $ 2 .00 $ 2 .50 $ 3 .00 $ 3 .50 $ 4 .00 20 0 4 20 0 5 20 0 7 20 0 8 20 0 9 20 1 4 20 1 5 20 1 9 TBV/Share Earnings & Dividends/Share Performance Timeline thru 12/31/19 2006 Diluted EPS 20 1 0 20 1 1 20 1 2 20 1 3 Dividends Per Share (Declared) 2016 2017 2018 Tangible Book Value Per Share First Mid Bancshares consistently provides value to shareholders by delivering solid diluted earnings per share and returning competitive dividends. *Tangible Book Value Per Share is a non - GAAP measure and is defined as total common equity less goodwill and intangibles divided by shares outstanding as of period end. TBV Q1’2020 - $24.00 7
- 4 0 .0 0 % 1 2 0 . 00 % 1 0 0 . 00 % 8 0 .0 0 % 6 0 .0 0 % 4 0 .0 0 % 2 0 .0 0 % 0 . 0 0% - 2 0 .0 0 % 4/17/2015 4/17/2016 4/17/2017 4/17/2018 4/17/2019 4/17/2020 F M BH Historical Price Performance (5 Year) Russell 2000 (1.8 2 %) NASDAQ Bank (7.8 8 %) Peer Group + 9.7 2 % FMBH + 17 . 9 0 % Russell 2000 NASDAQ Bank Peer Group (1) The chart above reflects relative price performance of First Mid stock over the last 5 years ending 4/17/2020. The performance of the Russell 2000, Nasdaq Bank Index and selected peers during the same period have been added for comparison (2) Source: S&P Global, Inc. Relative price performance between April 17, 2015 and April 17, 2020 8
History and Recognition First Mid has a proud 155 year history of service to agricultural, small business and retail customers. • First National Bank of Mattoon established in 1865 • The oldest nationally chartered bank in Illinois • First Mid Bancshares, Inc. incorporated in 1981 • Committed to our community banking heritage and mission • Publicly traded on the NASDAQ stock market since 2014 • Membership extended into the all - cap Russell 3000 and small - cap Russell 2000 indexes in 2016 Achievements through Performance: 9
Strategic Advantage First Mid Bancshares is able to provide strong strategic advantages in key areas: • Diversified Sources of Revenue – Full service banking – Insurance Services – Trust and Wealth Management – Ag Services including Farm Management and Brokerage • Quality Core Deposit Franchise • Diverse Geographic Footprint • Demonstrated Ability to Raise Capital and Successfully Complete Acquisitions • Track Record of Growing Shareholder Value (Dividends since 1879) • Experienced Management 10
Our Branch Footprint *Source: S&P Global Market Intelligence First Mid Bank & Trust currently operates 65 banking centers throughout Illinois and eastern Missouri and a loan production office in the greater Indianapolis area . Clusters of branches are located in and around cities such as St . Louis, Peoria, Champaign, Decatur, and Carbondale . First Mid Wealth Management Company operates multiple office locations in Bloomington, Bourbonnais, Decatur, Mattoon, Peoria, and Springfield First Mid Insurance Group, Inc. has offices in Decatur, Mattoon, Peoria as well as the Champaign & Metro East MSAs. 11
Market Share Diverse market segments with economies based on agriculture, manufacturing, education and services Operating Market Rank Institution Parent City State As of June 30, 2019 # of Active B r a n c h e s Total Deposits ($000s) Market Share (%) 1 U.S. Bancorp 2 First Busey Corp. 3 Commerce Bancshares Inc. 4 Bank of America Corp. 5 PNC Financial Services Group Inc. 6 Regions Financial Corp. Minneapolis Champaign Kansas City Charlotte Pittsburgh Birmingham MN IL MO NC PA AL 80 58 37 30 47 62 $ 6,205,855 $ 6,064,002 $ 5,932,787 $ 5,716,733 $ 3,869,591 $ 3,133,506 8.62% 8.42% 8.24% 7.94% 5.37% 4.35% 7 First Mid Bancshares Inc. Mattoon IL 65 $ 3,036,911 4.22% 8 Enterprise Financial Services Corp 9 FB Corp. 10 Midland State Bancorp Inc. 11 JPMorgan Chase & Co. 12 Central Banco. Inc. 13 Simons First National Corp. 14 First Co. Bancorp Inc. 15 Stupp Bros. Inc. 16 Heartland Bancorp Inc. 17 Bank of Montreal 18 Associated Banc - Corp 19 CBX Corp. 20 United Community Bancorp Inc. Clayton Creve Coeur Effingham New York Jefferson City Pine Bluff Collinsville Saint Louis Bloomington Montreal Green Bay Carrollton Chatham MO MO IL NY MO AR IL MO IL WI IL IL 9 26 25 8 10 20 16 9 17 10 17 7 13 $ 2,384,890 $ 1,574,832 $ 1,538,723 $ 1,447,611 $ 1,180,835 $ 1,099,356 $ 1,043,645 $ 867,261 $ 815,678 $ 773,987 $ 695,685 $ 670,694 $ 655,809 3.31% 2.19% 2.14% 2.01% 1.64% 1.53% 1.45% 1.20% 1.13% 1.08% 0.97% 0.93% 0.91% M a r k e t T o t a l 1 , 08 8 $ 71 , 996 , 08 0 100 . 00 % • Top employers in the region include a diverse range of operations such as Ameren, ADM, Caterpillar, State Universities, Multiple Hospitals & Medical Care Facilities, Rural King, and Continental Tire North America • First Mid ranks in the Top 10 for market share in 20 of the 26 counties served and ranks in the Top 5 in nearly 70% of those markets • First Mid Ranks 2 nd in its operating market among community banks (excluding money center, super regional and other banks with assets greater than $10 billion) – all while maintaining “best in class” deposit costs *Operating Market includes all counties in which First Mid has deposit market share; Includes pro - forma deposits of pending acquisitions in the market; Excludes State Farm Insurance Group. Source: S&P Global Market Intelligence 12
Quality Core Deposit Franchise March 31, 2020 Balance % Non - Interest bearing demand deposits $ 642,384 22.1% Interest bearing demand deposits $ 827,387 28.4% Savings deposits $ 462,346 15.9% Money Market $ 421,033 14.5% Time Deposits $ 555,477 19.1% Total Deposits $ 2,908,627 100% Deposit Composition ($000s) Rounded to Nearest Percentage 0.19% 0.18% 0.22% 0.42% 0.80% 0.68% $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 0 . 0 0% 0 . 1 0% 0 . 2 0% 0 . 3 0% 0 . 4 0% 0 . 5 0% 0 . 6 0% 0 . 7 0% 0 . 8 0% 0 . 9 0% Cost of Interest Bearing Deposits COD Total Deposits 13
Diversified Loan Portfolio March 31, 2020 Balance % Commercial Real Estate (Nonfarm/Nonresidential) $ 1,002,868 36.5% Commercial & Industrial Loans $ 565,789 20.6% 1 - 4 Family Residential Properties $ 325,128 11.8% Agricultural Real Estate $ 242,891 8.9% Agricultural Loans $ 139,136 5.1% Multifamily Residential Properties $ 139,734 5.1% Construction & Land Development $ 123,326 4.5% Consumer Loans $ 82,102 3.0% All Other Loans $ 123,322 4.5% Total Loans $ 2,744,298 100% Loan Composition ($000s) Rounded to Nearest Percentage $1, 2 81, 8 8 9 $1, 8 25, 9 9 2 $1, 9 39, 5 0 1 $2, 6 44, 5 1 9 $2, 6 95, 3 4 7 $2, 7 44, 2 9 8 $ 2, 7 5 0 ,0 0 0 $ 2, 5 0 0 ,0 0 0 $ 2, 2 5 0 ,0 0 0 $ 2, 0 0 0 ,0 0 0 $ 1, 7 5 0 ,0 0 0 $ 1, 5 0 0 ,0 0 0 $ 1, 2 5 0 ,0 0 0 $ 1, 0 0 0 ,0 0 0 $ 7 5 0, 0 00 Total Loans ($000s) 14
Diversified Loan Portfolio Mix 34% 16% 26% 9% 7% 3% 3% 3% 1% March 31, 2010 CRE (nonfarm/nonresidential) C&I 1 - 4 Family Ag Real Estate Ag Loans Multi - Family C&LD Consumer All Other Loans 37% 21% 12% 9% 5% 5% 4% 3% 4% March 31, 2020 CRE (nonfarm/nonresidential) C&I 1 - 4 Family Ag Real Estate Ag Loans M ul t i - Fa mi l y C&LD Consumer All Other Loans A historical comparison of First Mid’s loan portfolio mix 10 years apart. 15
Diverse Geographic Lending Central Region 16 D ecat ur Region Metro Region Pe o ria Region S o u t h ern Regio n S u l l ivan Region As of March 31, 2020 Balance % Central Region Includes Indianapolis LPO balances $ 6 1 4, 6 25 22% Champaign/Decatur Region $ 6 1 7, 3 90 22% Metro/St. Louis Region $ 5 5 6, 8 55 20% Peoria Region $ 4 7 1, 4 28 17% Southern Region $ 1 1 5, 7 48 4% Sullivan Region $ 3 6 8, 2 52 13% Total Loans $ 2,744,298 100% First Mid’s loan portfolio is geographically disbursed across our footprint
Strong Credit Culture 0.06% 0.10% 0.22% 0.06% 0.07% 0.17% 0.13% 0.09% 0.28% 0.25% 0.39% 0.29% 0.23% 0.08% 0.02% 0.04% 0.04% 0.24% 0.11% 0.22% 0.15% 0.15% 0. 2 0% 0. 4 0% 0. 8 0% Earnings & Dividends/Share 1.00% Net Charge - Offs (Recoveries) as a % of Average Loans 0.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 NCOs/Avg Loans 20 Year Avg NCOs/Avg Loans 17 First Mid’s exceptional credit underwriting standards have led to historically low net charge - offs over the last 20 years • Historical net - charge offs have averaged only 15 bps per year over the last 20 years • The current ACL balance ($32.9 million) at 3/31/2020 is greater than the total net charge offs ($31.6 million) over the last 20 years through the same date. 0.60%
Effective January 1, 2020, First Mid adopted the new impairment model known as the current expected credit loss (“CECL”). Adoption of CECL CECL calls for a number of quantitative inputs and qualitative considerations including economic inputs, exposure to high risk industries, portfolio credit characteristics and financial health of the consumer and commercial borrowers. 18
Strength in Capital & Liquidity Management First Mid Regulatory Capital Ratios 12/31/2007 3/31/2020 Leverage Ratio 7.89% 11.59% Common Equity Tier 1 Ratio (CET1) 1 N/A 14.39% Tier 1 Capital Ratio 10.32% 15.05% Total Risk - Based Capital Ratio (Total RBC) 11.13% 16.13% First Mid is well positioned with strong capital and liquidity sources to support challenges presented by the economic impacts of COVID - 19 • First Mid’s capital levels are higher today than during the great recession 2 • Multiple banking analysts have identified First Mid as a top pick with respect to capital to weather the COVID - 19 economic crisis. 1 A non - GAAP metric defined as total common equity adjusted for gains/(losses) less goodwill and intangibles divided by risk weighted assets as of period end. Liquidity Sources Source Amount ($ in thousands) Fed Reserves and Cash at Banks $ 1 0 3 ,4 0 0 Unpledged Investment Securities 6 0 ,2 5 1 FHLB Borrowing Capacity 5 2 5, 1 49 Fed Funds Lines Correspondent Banks 1 0 0, 0 00 Fed Discount Window Availability 10,000 Total $798 , 80 0 2 ”The Great Recession” defined as the period beginning December 2007. 19
Capital Management and Acquisitions Recent Capital Events 2019 Strategically repurchased $1.1 million of common stock through Q3’19. June 2018 Raised $36 million through an overnight public offering of common stock. August 2017 Launched a $20 million at - the - market equity offering. June 2015 Raised $29.3 million through a private placement of common stock. Approximately 90% raised via new institutional relationships. $(0 . 1) 1 9 98 2019 20 $0 . 5 $0 . 2 $0 . 8 $1 . 1 $1 . 4 $1 . 7 $ 2 . 0 $2 . 3 $2 . 6 $2 . 9 $3 . 2 $3 . 5 $3 . 8 ($ B il) Acquisitions and Asset Growth Timeline – (1998 - 2019) May 1999 Acquired 4 branches from Bank One Corp. April 2001 Acquired American Bank of Illinois January 2002 Acquired The Checkley Agency, Inc., an Insurance Broker May 2006 Acquired Mansfield Bancorp, Inc. September 2010 Acquired 10 branches from FirstBank August 2015 Acquired 12 branches from Old National Bank September 2016 Acquired First Clover Leaf Financial Corp. December 2015 Acquired Illiana Insurance Agency May 2018 Acquired First BancTrust Corp. November 2018 Acquired SCB Bancorp, Inc.
Recent Transactions First Mid has announced or successfully completed five major acquisitions since 2010 which has added nearly $2.3 billion of assets. Transaction Date Closed 9 / 1 0 /10 Closed 8 / 1 4 /15 Closed 9 / 0 8 /16 Closed 5/01/1 8 Closed 1 1 /1 5 /18 T r ansa c ti o n Value $16 Million $16 Million $89 Million $72 Million $70 Million Deal Type Branch Branch Whole Bank Whole Bank Whole Bank Assets ($000s) $321 Million $441 Million $659 Million $475 Million $458 Million Loans ($000s) $135 Million $156 Million $449 Million $371 Million $254 Million Deposits ($000s) $336 Million $453 Million $535 Million $384 Million $341 Million # of Branches 10 12 7 7 10 • Figures noted above exclude fair value adjustments made at closing. 21
Strategic Announcement • Completed a strategic acquisition of a talented team of lenders and their loan relationships in the St. Louis metro market. • The acquisition was funded primarily through a depository agreement entered into with Promontory and Stifel, Nicholas & Company, Inc. • The loan portfolio is well diversified and primarily comprised of CRE and commercial operating loans, with no hotel borrowers. • First Mid will assume deposits from the acquired loan relationships, following regulatory approval. • Negotiated opportunity. • Great fit and strategic enhancement to our St Louis metro market presence. • Accretive to 2020 earnings. • Picked up a talented group of community bankers. • All lenders have signed employment agreements. • The loan portfolio totals approximately $183 million of performing loans. • Approximately $50 million of deposits. First Mid continues to seek strategic opportunities to create shareholder value even during challenging times On April 21 st , 2020 Overview Highlights of the Deal 22
Diversified Solutions and Sources of Revenue $ 5 ,0 6 1, 0 00 $ 5 ,4 2 5, 0 00 $ 5 ,9 0 5, 0 00 $ 8 ,4 6 0, 0 00 $ 1 5 , 5 7 0 , 0 0 0 $3,500,0 0 0 $5,500 , 0 0 0 $7,500,0 0 0 $9,500 , 0 0 0 $11,500, 0 00 $13,500,000 $15,500, 0 00 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 • Complementary Wealth Management, Trust Operations, and Ag Services • Source of Revenue: • 50% coming from Trust and Wealth Management Services • 50% related to Ag Services division including Farm Management & Brokerage • Assets Under Management totaling $4.1 billion 1 • Investment/Brokerage through an agreement with Raymond James Financial Services, Inc. • Largest farm manager in Illinois with approximately 281,000 acres under management 1 • Multiple office locations (Bloomington, Decatur, Bourbonnais, Mattoon, Peoria, and Springfield 1 Data as of March 31, 2020 23 Total Revenue
Diversified Solutions and Sources of Revenue $2,113, 0 00 $ 3 ,4 5 4, 0 00 $ 3 ,8 8 0, 0 00 $ 5 ,5 9 2, 0 00 $ 1 6 , 0 2 9 , 0 0 0 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 • Largest community bank - owned insurance agent in Illinois 24 • Offers the following product lines to meet our communities’ needs: • Property/Casualty and Health Insurance Products for businesses • Homeowner and Personal Insurance Products • Senior Care Insurance • Surety Bonding Products • Expanding geographic customer base with offices in Decatur, Mattoon, Peoria as well as the Champaign & Metro East MSAs Total Revenue
Value Proposition Ability to Raise Capital and Grow Strategically Strong Risk Management Coupled with Efficient Operations Increasing Sha r eho l der Value 25 Experienced Management Team and Board Diversified Revenue Streams and Proven Earnings Engine Well Positioned Balance Sheet & Strong Asset Quality 150+ year Operating Track Record Focused on all Stakeholders
Key Financial Metrics
Selected Income Statement Data 27 Selected Income Statement Data ($000s) Q1’2020 2019 2018 2017 2016 2015 Interest income $ 3 4, 7 41 $ 1 4 9 ,7 2 1 $ 1 2 4 ,5 6 5 $ 9 9, 5 55 $ 7 5, 4 96 $ 5 9, 2 51 Interest expense 4, 8 68 2 4 ,0 4 7 1 2 ,8 2 7 6, 4 82 4, 2 92 3 , 49 9 Net interest income 29,873 125,674 111,738 93,073 71,204 55,752 Provision for loan losses 5, 4 81 6, 4 33 8, 6 67 7, 4 62 2, 8 26 1 , 31 8 Net interest income after provision 2 4 , 3 92 1 1 9 , 2 4 1 1 0 3 , 0 7 1 8 5 , 6 11 6 8 , 3 78 5 4 , 4 34 Other income 1 6 ,5 1 0 5 6 ,0 1 7 3 5 ,4 1 4 3 0 ,3 3 6 2 6 ,9 1 2 2 0 ,5 4 4 Other expenses 27,731 111,992 89,980 74,221 61,510 49,248 Income before income taxes 1 3 ,1 7 1 6 3 ,2 2 6 4 8 ,5 0 5 4 1 ,7 2 6 3 3 ,7 8 0 2 5 ,7 3 0 Income taxes 3, 1 72 1 5 ,3 2 3 1 1 ,9 0 5 1 5 ,0 4 2 1 1 ,9 4 0 9 , 21 8 Net income $ 9 , 9 99 $ 4 7 , 9 4 3 $ 3 6 , 6 0 0 $ 2 6 , 6 8 4 $ 2 1 , 8 4 0 $ 1 6 , 5 1 2 Per Share Information Basic earnings per common share $0 .60 $2 .88 $2 .53 $2 .13 $2 .07 $1 . 84 Diluted earnings per common share $0 .60 $2 .87 $2 .52 $2 .13 $2 .05 $1 . 81 Dividends per common share $0 .76 $0 .70 $0 .66 $0 .62 $0 . 59 Weighted average shares outstanding 16,693,183 16,675,269 14,487,126 12,531,659 10 , 149 , 09 9 7,775,490 Diluted weighted avg shares outstanding 16,740,091 16,709,476 14,500,585 12,536,534 10 , 663 , 71 0 9,137,689
Selected Balance Sheet Data 28 Selected Balance Sheet Data ($000s) ASSETS Q1’2020 2019 2018 2017 2016 2015 Cash and cash equivalents $ 1 8 2 ,0 2 7 $ 8 5, 0 80 $ 1 4 1 ,4 0 0 $ 8 8, 8 79 $175 , 90 2 $ 1 1 5 ,7 8 4 Investment securities 6 4 6, 7 44 7 6 0, 2 15 7 6 9, 2 79 6 4 9, 5 96 7 0 8, 7 22 6 2 9, 0 56 Net loans 2, 7 1 1 ,4 2 2 2, 6 6 8 ,4 3 6 2, 6 1 8 ,3 3 0 1, 9 1 9 ,5 2 4 1 , 809 , 23 9 1, 2 6 7 ,3 1 3 Other assets 324,638 325,695 310,725 183,540 190,672 102,346 Total assets $ 3 , 8 6 4 , 8 31 $ 3 , 8 3 9 , 4 26 $ 3 , 8 3 9 , 7 34 $ 2 , 8 4 1 , 5 39 $ 2 , 8 8 4 , 5 35 $ 2 , 1 1 4 , 4 99 LIABILITIES & STOCKHOLDERS’ EQUITY Deposits $ 2 ,9 0 8, 6 27 $ 2 ,9 1 7, 3 66 $ 2 ,9 8 8, 6 86 $ 2 ,2 7 4, 6 39 $ 2 ,3 2 9, 8 87 $ 1 ,7 3 2, 5 68 Borrowings 3 7 5, 4 70 3 4 5, 8 62 3 4 8, 7 99 2 4 9, 7 39 2 6 7, 8 37 1 6 9, 4 62 Other liabilities 4 7 ,6 8 3 4 9 ,5 8 9 2 6 ,3 8 5 9, 1 97 6, 1 38 7, 4 60 Total liabilities 3 , 3 3 1 , 7 8 0 3 , 3 1 2 , 8 1 7 3 , 3 6 3 , 8 7 0 2 , 5 3 3 , 5 7 5 2 , 603 , 86 2 1 , 9 0 9 , 4 9 0 Stockholders’ equity 533,051 526,609 475,864 307,964 280,673 205,009 Total liabilities and stockholders’ equity $ 3 , 8 6 4 , 8 31 $ 3 , 8 3 9 , 4 26 $ 3 , 8 3 9 , 7 34 $ 2 , 8 4 1 , 5 39 $ 2 , 8 8 4 , 5 35 $ 2 , 1 1 4 , 4 99
Non - GAAP Measures
Non - GAAP Measures 30 As of and for the Quarter Ended March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 Mar 31, 2019 Net interest income as reported $29,873 $30,984 $31,125 $31,313 $32,252 Net interest income, (tax equivalent) 3 0 ,3 9 3 3 1 ,5 1 7 3 1 ,6 5 9 3 1 ,8 5 0 3 2 ,8 0 0 Average earning assets 3, 4 5 1 ,1 2 3 3, 4 6 4 ,2 0 0 3, 4 4 4 ,0 8 8 3, 4 7 0 ,7 7 6 3, 5 1 6 ,0 3 2 Net interest margin (tax equivalent) 1 3.51% 3.57% 3.60% 3.64% 3.74% Reconciliation of Non - GAAP Financial Measures (In thousands, unaudited)
Board of Directors Holly A. Bailey President, Howell Asphalt Company President, Howell Paving, Inc. Robert S. Cook Managing Partner, TAR CO Investments, LLC Joseph R. Dively Chairman and Chief Executive Officer, First Mid Bancshares, Inc. Steven L. Grissom Chief Executive Officer, SKL Investment Group, LLC Zachary I. Horn President & Founder, MCC Network Services, LLC Ray A. Sparks Private Investor, Sparks Investment Group, LP Mary J. Westerhold Chief Financial Officer, Madison Communications Company James E. Zimmer Owner, Zimmer Real Estate Properties, LLC Co - Founder, Bio - Enzyme 31
Experienced Management Team Joseph R. Dively Chairman, Chief Executive Officer and President Joe joined First Mid as a Board of Director in 2004. Michael L. Taylor SEVP, Chief Operating Officer Mike joined First Mid in 2000. Matthew K. Smith EVP, Chief Financial Officer Matt joined First Mid in 2016. Laurel G. Allenbaugh EVP, Chief Operations Officer Laurel joined First Mid in 1990. Bradley L. Beesley EVP, Chief Executive Officer First Mid Wealth Management Company Brad joined First Mid in 2007 . Clay M. Dean EVP, Chief Executive Officer First Mid Insurance Group, Inc. Clay joined First Mid in 2010. Amanda D. Lewis EVP, Chief Deposit Services Officer Mandy joined First Mid in 2001. Eric S. McRae EVP, Chief Credit Officer Eric joined First Mid in 1999. Jason M. Crowder SVP, Legal Counsel Jason joined First Mid in 2019. Rhonda R. Gatons SVP, Chief Human Resources Officer Rhonda joined First Mid in 2016. David R. Hiden SVP, Chief Information Officer David joined First Mid in 2018. Christopher L. Slabach SVP, Chief Risk Officer Chris joined First Mid in 1993. 32
Achievements through Performance:
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