10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                               to                               

Commission file number 001-36434

FIRST MID BANCSHARES, INC.

(Exact name of Registrant as specified in its charter)

Delaware	37-1103704
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

1421 Charleston Avenue
Mattoon, Illinois	61938
(Address of principal executive offices)	(Zip code)

(217) 234-7454

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	FMBH	NASDAQ Global Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☐
	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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of May 9, 2022 20,448,799 common shares, $4.00 par value, were outstanding.

PART I

ITEM 1. FINANCIAL STATEMENTS

First Mid Bancshares, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)	March 31, 2022			December 31, 2021
Assets
Cash and due from banks:
Non-interest bearing	$	112,276		$	90,907
Interest bearing		105,796			76,335
Federal funds sold		5,908			1,360
Cash and cash equivalents		223,980			168,602
Certificates of deposit		1,960			2,450
Investment securities:
Available-for-sale, at fair value		1,466,950			1,421,422
Held-to-maturity, at amortized cost (estimated fair value of $2,998 and $7,035 at March 31, 2022 and December 31, 2021, respectively)		2,998			7,030
Equity securities, at fair value		369			397
Loans held for sale		2,037			2,748
Loans		4,452,524			3,992,775
Less allowance for credit losses		(58,474	)		(54,655	)
Net loans		4,394,050			3,938,120
Interest receivable		22,365			19,868
Other real estate owned		4,794			4,984
Premises and equipment, net		89,319			81,484
Goodwill		140,465			111,853
Intangible assets, net		34,034			29,523
Bank owned life insurance		149,041			132,375
Right of use lease assets		15,242			15,116
Other assets		84,402			50,610
Total assets	$	6,632,006		$	5,986,582
Liabilities and stockholders’ equity
Deposits:
Non-interest bearing	$	1,373,881		$	1,246,673
Interest bearing		4,113,424			3,709,813
Total deposits		5,487,305			4,956,486
Securities sold under agreements to repurchase		187,326			146,268
Interest payable		2,466			1,346
FHLB borrowings		126,396			86,446
Junior subordinated debentures, net		19,237			19,195
Subordinated debt, net		94,438			94,400
Lease liabilities		15,458			15,322
Other liabilities		32,995			33,225
Total liabilities		5,965,621			5,352,688
Stockholders’ equity:
Common stock, $4 par value; authorized 30,000,000 shares; issued 21,065,888 and 18,708,746 shares in 2022 and 2021, respectively; outstanding 20,437,183 and 18,080,303 shares in 2022 and 2021 respectively		86,264			76,835
Additional paid-in capital		426,148			340,419
Retained earnings		246,805			234,162
Deferred compensation		468			2,517
Accumulated other comprehensive loss		(74,028	)		(831	)
Less treasury stock at cost, 628,705 shares in 2022 and 628,443 shares in 2021		(19,272	)		(19,208	)
Total stockholders’ equity		666,385			633,894
Total liabilities and stockholders’ equity	$	6,632,006		$	5,986,582

See accompanying notes to unaudited condensed consolidated financial statements.

2

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Income (unaudited)

(In thousands, except per share data)

	Three months ended March 31,
(In thousands, except per share data)	2022			2021
Interest income:
Interest and fees on loans	$	39,908		$	35,886
Interest on investment securities		7,170			4,842
Interest on certificates of deposit investments		12			14
Interest on deposits with other financial institutions		55			74
Total interest income		47,145			40,816
Interest expense:
Interest on deposits		2,148			2,484
Interest on securities sold under agreements to repurchase		67			70
Interest on FHLB borrowings		276			374
Interest on junior subordinated debentures		146			140
Interest on subordinated debentures		986			984
Total interest expense		3,623			4,052
Net interest income		43,522			36,764
Provision for loan losses		2,952			12,136
Net interest income after provision for loan losses		40,570			24,628
Other income:
Wealth management revenues		5,975			4,926
Insurance commissions		7,104			5,857
Service charges		2,056			1,364
Securities gains, net		—			4
Mortgage banking revenue, net		444			1,409
ATM / debit card revenue		2,898			2,699
Bank owned life insurance		844			637
Other		1,767			853
Total other income		21,088			17,749
Other expense:
Salaries and employee benefits		24,302			23,487
Net occupancy and equipment expense		6,155			4,970
Net other real estate owned expense		(33	)		78
FDIC insurance		426			452
Amortization of intangible assets		1,522			1,220
Stationery and supplies		311			316
Legal and professional		1,734			1,402
ATM / debit card		1,078			838
Marketing and donations		873			502
Other		4,020			4,335
Total other expense		40,388			37,600
Income before income taxes		21,270			4,777
Income taxes		4,654			668
Net income	$	16,616		$	4,109
Per share data:
Basic net income per common share	$	0.86		$	0.24
Diluted net income per common share		0.86			0.24
Cash dividends declared per common share		0.220			0.205

See accompanying notes to unaudited condensed consolidated financial statements.

3

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Comprehensive Loss (unaudited)

	Three months ended March 31,
(In thousands)	2022			2021
Net income	$	16,616		$	4,109
Other comprehensive loss
Unrealized losses on available-for-sale securities, net of taxes of $29,898 and $4,903 for three months ended March 31, 2022 and 2021, respectively		(73,197	)		(12,005	)
Less: reclassification adjustment for realized gains included in net income, net of taxes of $0 and $1 for three months ended March 31, 2022 and 2021, respectively		—			(3	)
Other comprehensive loss, net of taxes		(73,197	)		(12,008	)
Comprehensive loss	$	(56,581	)	$	(7,899	)

See accompanying notes to unaudited condensed consolidated financial statements.

4

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

For the three months ended March 31, 2022 and 2021

(In thousands)	Common Stock		Additional Paid-In- Capital			Retained Earnings			Deferred Compensation			Accumulated Other Comprehensive Loss			Treasury Stock			Total
December 31, 2021	$	76,835	$	340,419		$	234,162		$	2,517		$	(831	)	$	(19,208	)	$	633,894
Net income		—		—			16,616			—			—			—			16,616
Other comprehensive loss, net tax		—		—			—			—			(73,197	)		—			(73,197	)
Cash dividends on common stock (.220/share)		—		—			(3,973	)		—			—			—			(3,973	)
Issuance of 1,939 common shares pursuant to the deferred compensation plan		8		75			—			—			—			—			83
Issuance of 54,834 restricted shares pursuant to 2017 stock incentive plan		219		2,040			—			—			—			—			2,259
Issuance of 4,950 common shares pursuant to 2017 stock incentive plan		20		179			—			—			—			—			199
Issuance of 3,149 common shares pursuant to the employee stock purchase plan		13		111			—			—			—			—			124
Issuance of 2,292,270 common shares pursuant to the acquisition of Delta Bancshares, Co., net proceeds		9,169		83,003			—			—			—			—			92,172
Issuance costs pursuant to acquisition of Delta Bancshares Company				(31	)														(31	)
Purchase of 262 shares of treasury stock																(11	)		(11	)
Deferred compensation		—		—			—			(2,518	)		—			(53	)		(2,571	)
Grant of restricted units pursuant to 2017 stock incentive plan				1,529															1,529
Release of restricted units pursuant to 2017 stock incentive plan				(1,216	)														(1,216	)
Vested restricted shares/units compensation expense		—		39			—			469			—			—			508
March 31, 2022	$	86,264	$	426,148		$	246,805		$	468		$	(74,028	)	$	(19,272	)	$	666,385

5

(In thousands)	Common Stock		Additional Paid-In- Capital			Retained Earnings			Deferred Compensation			Accumulated Other Comprehensive Income			Treasury Stock			Total
December 31, 2020	$	71,449	$	297,806		$	197,726		$	2,980		$	17,095		$	(18,828	)	$	568,228
Net income		—		—			4,109			—			—			—			4,109
Other comprehensive income, net tax		—		—			—			—			(12,008	)		—			(12,008	)
Cash dividends on common stock (.205/share)		—		—			(3,427	)		—			—			—			(3,427	)
Issuance of 4896 common shares pursuant to the dividend reinvestment plan		17		154			—			—			—			—			171
Issuance of 18,397 common shares pursuant to the deferred compensation plan		3		15			—			—			—			—			18
Issuance of 27,750 restricted shares pursuant to the 2017 stock incentive plan		111		832			—			—			—			—			943
Issuance of 2,375 common shares pursuant to the 2017 stock incentive plan		10		75			—			—			—			—			85
Issuance of 1,262,246 common shares pursuant to the acquisition of LINCO Bancshares, Inc., net proceeds		5,049		39,142			—			—			—			—			44,191
Issuance of 3,142 common shares pursuant to the employee stock purchase plan		13		62			—			—			—			—			75
Deferred compensation		—		—			—			(71	)		—			71			—
Tax benefit related to deferred compensation distributions		—		179			—			—			—			—			179
Grant of restricted units pursuant to 2017 stock incentive plan		—		1,216			—			—			—			—			1,216
Release of restricted units pursuant to 2017 stock incentive plan		—		(584	)		—			—			—			—			(584	)
Vested restricted shares/units compensation expense		—		—			—			(1,312	)		—			—			(1,312	)
March 31, 2021	$	76,652	$	338,897		$	198,408		$	1,597		$	5,087		$	(18,757	)	$	601,884

See accompanying notes to unaudited condensed consolidated financial statements.

6

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

	Three months ended March 31,
(In thousands)	2022			2021
Cash flows from operating activities:
Net income	$	16,616		$	4,109
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		2,952			12,136
Depreciation, amortization and accretion, net		3,777			2,692
Change in cash surrender value of bank owned life insurance		(844	)		(637	)
Stock-based compensation expense		508			262
Operating lease payments		(722	)		(711	)
Gain on investment securities, net		—			(4	)
Gain on sales and write downs of other real estate owned, net		(210	)		(35	)
Loss on sale of loans		38			—
Loss on sale of other assets		4			—
Gain on sale of loans held for sale, net		(415	)		(1,229	)
(Increase) decrease in accrued interest receivable		(725	)		2,034
Increase in accrued interest payable		745			262
Origination of loans held for sale		(18,931	)		(42,379	)
Proceeds from sale of loans held for sale		20,057			40,839
Increase in other investment		(487	)		(84	)
Decrease in other assets		2,616			454
Increase (decrease) in other liabilities		(846	)		3,844
Net cash provided by operating activities		24,133			21,553
Cash flows from investing activities:
Proceeds from maturities of certificates of deposit investments		490			—
Proceeds from maturities of securities available-for-sale		39,854			68,541
Proceeds from maturities of securities held-to-maturity		5,000			—
Purchases of securities available-for-sale		(7,806	)		(177,116	)
Net (increase) decrease in loans		(41,434	)		26,319
Purchases of premises and equipment		(27	)		(1,195	)
Proceeds from sales of other real property owned		475			116
Investment in banked owned life insurance		—			(25,000	)
Net cash provided by acquisition		67,323			27,061
Net cash provided by (used in) investing activities		63,875			(81,274	)
Cash flows from financing activities:
Net (decrease) increase in deposits		(29,558	)		54,499
Increase in repurchase agreements		5,535			5,566
Proceeds from FHLB advances		20,000			—
Repayment of FHLB advances		(25,000	)		(5,000	)
Proceeds from issuance of common stock		406			179
Direct expenses related to capital transactions		(29	)		—
Purchase of treasury stock		(11	)		—
Dividends paid on common stock		(3,973	)		(3,257	)
Net cash (used in) provided by financing activities		(32,630	)		51,987
Increase (decrease) in cash and cash equivalents		55,378			(7,734	)
Cash and cash equivalents at beginning of period		168,602			417,281
Cash and cash equivalents at end of period	$	223,980		$	409,547

See accompanying notes to unaudited condensed consolidated financial statements.

7

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

	Three months ended March 31,
(In thousands)	2022		2021
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	2,503	$	3,183
Income taxes		—		—
Supplemental disclosures of noncash investing and financing activities
Loans transferred to other real estate		198		45
Initial recognition of right-of-use assets		715		—
Initial recognition of lease liabilities		715		—
Dividends reinvested in common stock		—		171
Net tax benefit related to option and deferred compensation plans		—		179
Supplemental disclosures of purchases of capital stock
Fair value of assets acquired	$	750,063	$	1,173,443
Consideration paid:
Cash paid		15,150		103,500
Common stock issued		92,172		44,191
Total consideration paid		107,322		147,691
Fair value of liabilities assumed	$	642,741	$	1,025,752

8

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1 -- Basis of Accounting and Consolidation

The unaudited condensed consolidated financial statements include the accounts of First Mid Bancshares, Inc. (“Company”) and its wholly owned subsidiaries: First Mid Bank & Trust, N.A. (“First Mid Bank”), Jefferson Bank and Trust Company (“Jefferson Bank”), First Mid Wealth Management Company, First Mid Insurance Group, Inc. (“First Mid Insurance”), and First Mid Captive, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. The financial information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods ended March 31, 2022 and 2021, and all such adjustments are of a normal recurring nature. Certain amounts in the prior year’s consolidated financial statements may have been reclassified to conform to the March 31, 2022 presentation and there was no impact on net income or stockholders’ equity. The results of the interim period ended March 31, 2022 are not necessarily indicative of the results expected for the year ending December 31, 2022. The Company operates as a one-segment entity for financial reporting purposes. The 2021 year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and related footnote disclosures although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report on Form 10-K.

COVID-19

The COVID-19 outbreak is an unprecedented event that provides significant economic uncertainty for a broad spectrum of industries. The Company is focused on supporting its customers, communities and employees during this unique operating environment. Throughout this document, the Company describes the impact COVID-19 is having, actions taken as a result of COVID-19, and certain risks to the Company that COVID-19 creates or exacerbates, as well as management's outlook on the current COVID-19 situation.

Delta Bancshares Company

On July 28, 2021, the Company and Brock Sub LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company (“Delta Merger Sub”), entered into an Agreement and Plan of Merger (the “Delta Merger Agreement”) with Delta Bancshares Company, a Missouri corporation (“Delta”), pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of Delta pursuant to a business combination whereby Delta merged with and into Merger Sub, whereupon the separate corporate existence of Delta ceased and Merger Sub continued as the surviving company and a wholly-owned subsidiary of First Mid (the “Delta Merger”). The Delta Merger was completed on February 14, 2022.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Delta Merger, each share of common stock, par value $10.00 per share, of Delta issued and outstanding immediately prior to the effective time of the Delta Merger (other than shares held in treasury by Delta) converted into and became the right to receive cash and shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration paid by the Company at the closing of the Delta Merger to Delta’s shareholders and option holders was approximately $15.15 million in cash and 2,292,270 shares of Company common stock. Delta’s outstanding stock options vested upon consummation of the Delta Merger, and all outstanding Delta options that were unexercised prior to the effective time of the Delta Merger were cashed out.

It is anticipated that Delta’s wholly owned bank subsidiary, Jefferson Bank, will be merged with and into First Mid Bank during the second quarter of 2022. At the time of the bank merger, Jefferson Bank’s banking offices will become branches of First Mid Bank. As of March 31, 2022, Jefferson Bank had total consolidated assets of approximately $748 million, loans of approximately $434 million and total deposits of approximately $561 million.

LINCO Bancshares, Inc.  

On September 25, 2020, the Company and Eval Sub Inc., a wholly owned subsidiary of the Company ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with LINCO Bancshares, Inc., the former parent of Providence Bank ("LINCO"), and the sellers as defined therein, pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of LINCO pursuant to a business combination whereby Merger Sub merged with and into LINCO, whereupon the separate corporate existence of Merger Sub ceased and LINCO continued as the surviving company and a wholly owned subsidiary of the Company (the "LINCO Merger").

9

Subject to the terms and conditions of the Merger Agreement, at the effective time of the LINCO Merger, each share of common stock, par value $1.00 per share, of LINCO issued and outstanding immediately prior to the effective time of the LINCO Merger (other than shares held in treasury by LINCO) was converted into and become the right to receive, cash or shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration payable by the Company at the closing of the Merger was $103.5 million in cash and 1,262,246 shares of the Company’s common stock, provided that the shareholders of LINCO collectively elected pursuant to the Merger Agreement to receive varying amounts of cash or shares of common stock of the Company as consideration in the Merger. In addition, immediately prior to the closing of the proposed merger, LINCO paid a special dividend to its shareholders in the aggregate amount of $13 million.

The LINCO Merger closed on February 22, 2021, and Providence Bank merged into First Mid Bank on May 15, 2021.

Website

The Company maintains a website at www.firstmid.com. All periodic and current reports of the Company and amendments to these reports filed with the Securities and Exchange Commission (“SEC”) can be accessed, free of charge, through this website as soon as reasonably practicable after these materials are filed with the SEC.

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

2021 Loan Purchase

On September 10, 2021, First Mid Bank completed an acquisition of loans in the St. Louis Metro market totaling $208 million.  There were no loans purchased with deteriorated credit.  First Mid Bank also assumed $215 million of related customer deposits and recorded a core deposit intangible asset of approximately $4.9 million that is being amortized on an accelerated basis over ten years.  

Stock Plans

At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the First Mid-Illinois Bancshares, Inc. 2017 Stock Incentive Plan (“SI Plan”). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term. The SI Plan is intended to provide a means whereby directors, employees, consultants and advisors of the Company and its subsidiaries may sustain a sense of proprietorship and personal involvement in the continued development and financial success of the Company and its subsidiaries, thereby advancing the interests of the Company and its stockholders. Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of common stock of the Company on the terms and conditions established in the SI Plan.

Following the stockholders’ approval at the 2021 annual meeting of the Company, a maximum of 399,983 shares of common stock may be issued under the SI Plan. There have been no stock options awarded under any Company plan since 2008. The Company has awarded 26,000 and 13,175 shares of restricted stock during 2022 and 2021, respectively, and 37,150 and 35,400 restricted stock units during 2022 and 2021, respectively.

Employee Stock Purchase Plan

At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP is intended to promote the interests of the Company by providing eligible employees with the opportunity to purchase shares of common stock of the Company at a 15% discount through payroll deductions. The ESPP is also intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code.

A maximum of 600,000 shares of common stock may be issued under the ESPP. As of March 31, 2022, 34,833 shares have been issued pursuant to the ESPP. During the three months ended March 31, 2022 and 2021, 3,149 shares and 3,142 shares, respectively, were issued pursuant to the ESPP.

10

Captive Insurance Company

First Mid Captive, Inc. (the “Captive"), a wholly owned subsidiary of the Company which was formed and began operations in December 2019, is a Nevada-based captive insurance company. The Captive insures against certain risks unique to operations of the Company and its subsidiaries for which insurance may not be currently available or economically feasible in today's insurance marketplace. The Captive pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. The Captive is subject to regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance. It has elected to be taxed under Section 831(b) of the Internal Revenue Code. Pursuant to Section 831(b), if gross premiums do not exceed $2,450,000, then the Captive is taxable solely on its investment income. The Captive is included in the Company's consolidated financial statements and its federal income return.

Bank Owned Life Insurance

First Mid Bank has purchased life insurance policies on certain senior management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts that are probable at settlement.

Revenue Recognition

Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), establishes a revenue recognition model for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Most of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans and investment securities, and revenue related to mortgage servicing activities, which are subject to other accounting standards. A description of the revenue-generating activities that are within the scope of ASC 606, and included in other income in the Company’s condensed consolidated statements of income are as follows:

Trust revenues. The Company generates fee income from providing fiduciary services through its subsidiary, First Mid Wealth Management Company. Fees are billed in arrears based upon the preceding period account balance. Revenue from farm management services is recorded when the service is complete, for example when crops are sold.

Brokerage commissions. Revenue is recorded at the beginning of each quarter through billing to customers based on the account asset size on the last day of the previous quarter. If a withdrawal of funds takes place, a prorated refund may occur; this is reflected within the same quarter as the original billing occurred. All performance obligations are met within the same quarter that the revenue is recorded.

Insurance commissions. The Company’s insurance agency subsidiary, First Mid Insurance, receives commissions on premiums of new and renewed business policies. First Mid Insurance records commission revenue on direct bill policies as the cash is received. For agency bill policies, First Mid Insurance retains its commission portion of the customer premium payment and remits the balance to the carrier. In both cases, the entire performance obligation is held by the carriers.

Service charges on deposits. The Company generates revenue from fees charged for deposit account maintenance, overdrafts, wire transfers, and check fees. The revenue related to deposit fees is recognized at the time the performance obligation is satisfied.

ATM/debit card revenue. The Company generates revenue through service charges on the use of its ATM machines and interchange income from the use of Company issued credit and debit cards. The revenue is recognized at the time the service is used and the performance obligation is satisfied.

Other income. Treasury management fees and lock box fees are received and recorded after the service performance obligation is completed. Merchant bank card fees are received from various vendors; however, the performance obligation is with the vendors. The Company records gains on the sale of loans and the sale of OREO properties after the transactions are complete and transfer of ownership has occurred.

As each of the Company’s facilities is in markets with similar economies, no disaggregation of revenue is necessary.

11

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive loss included in stockholders’ equity as of March 31, 2022 and December 31, 2021 are as follows (in thousands):

	Unrealized Gain (Loss) on Securities
March 31, 2022
Net unrealized loss on securities available-for-sale	$	(104,265	)
Tax benefit		30,237
Balance at March 31, 2022	$	(74,028	)
December 31, 2021
Net unrealized loss on securities available-for-sale	$	(1,170	)
Tax benefit		339
Balance at December 31, 2021	$	(831	)

Amounts reclassified from accumulated other comprehensive income and the affected line items in the statements of income during the three months ended March 31, 2022 and 2021, were as follows (in thousands):

	Amounts Reclassified from Other Comprehensive Income
	Three months ended March 31,
	2022		2021			Affected Line Item in the Statements of Income
Realized gains on available-for-sale securities	$	—	$	4		Securities gains, net
Tax effect		—		(1	)	Income taxes
Total reclassifications out of accumulated other comprehensive income	$	—	$	3		Net reclassified amount

See “Note 3 – Investment Securities” for more detailed information regarding unrealized losses on available-for-sale securities.

Adoption of New Accounting Guidance

Accounting Standards Update 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). In March 2022, FASB issued ASU 2022-02. The amendments in this update eliminate the accounting guidance and related disclosures for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty and requiring an entity to disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and are applied prospectively, except with respect to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method. Early adoption of the amendments in this update is permitted. An entity may elect to early adopt the amendments regarding TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The adoption of this accounting guidance is not expected to have a material impact on the Company's consolidated financial statements.

12

Note 2 -- Earnings Per Share

Basic net income per common share available to common stockholders is calculated as net income less preferred stock dividends divided by the weighted average number of common shares outstanding. Diluted net income per common share available to common stockholders is computed using the weighted average number of common shares outstanding, increased by the Company’s stock options, unless anti-dilutive.

The components of basic and diluted net income per common share available to common stockholders for the three months ended March 31, 2022 and 2021 were as follows:

	Three months ended March 31,
	2022		2021
Basic net income per common share
Available to common stockholders:
Net income	$	16,616,000	$	4,109,000
Weighted average common shares outstanding		19,295,860		17,299,927
Basic earnings per common share	$	0.86	$	0.24
Diluted net income per common share
Available to common stockholders:
Net income applicable to diluted earnings per share	$	16,616,000	$	4,109,000
Weighted average common shares outstanding		19,295,860		17,299,927
Dilutive potential common shares: restricted stock awarded		62,597		53,020
Diluted weighted average common shares outstanding		19,358,457		17,352,947
Diluted earnings per common share	$	0.86	$	0.24

There were no shares excluded when computing diluted earnings per share for the three months ended March 31, 2022 and 2021 because they were anti-dilutive.

13

Note 3 -- Investment Securities

The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at March 31, 2022 and December 31, 2021 were as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2022
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	264,466	$	37	$	(16,527	)	$	247,976
Obligations of states and political subdivisions		386,489		2,713		(30,523	)		358,679
Mortgage-backed securities: GSE residential		820,448		245		(59,166	)		761,527
Other securities		99,812		274		(1,318	)		98,768
Total available-for-sale	$	1,571,215	$	3,269	$	(107,534	)	$	1,466,950
Held-to-maturity:
Other investments	$	2,998	$	—	$	—		$	2,998
Total held-to-maturity	$	2,998	$	—	$	—		$	2,998
December 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	208,598	$	80	$	(4,863	)	$	203,815
Obligations of states and political subdivisions		383,991		12,123		(657	)		395,457
Mortgage-backed securities: GSE residential		799,456		4,292		(12,710	)		791,038
Other securities		30,546		671		(105	)		31,112
Total available-for-sale	$	1,422,591	$	17,166	$	(18,335	)	$	1,421,422
Held-to-maturity:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	5,001	$	5	$	—		$	5,006
Other investments		2,029		—		—			2,029
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	7,030	$	5	$	—		$	7,035

The Company also had $369,000 and $397,000 of equity securities, at fair value, as of March 31, 2022 and December 31, 2021, respectively. The Company's held-to-maturity securities are government agency-backed securities for which the risk of loss is minimal. As such, as of March 31, 2022, the Company did not record an allowance for credit losses on its held-to-maturity securities.

Realized gains and losses resulting from sales of securities were as follows during the three months ended March 31, 2022 and 2021 (in thousands):

	Three months March 31,
	2022		2021
Gross gains	$	—	$	4
Gross losses		—		—

14

The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at March 31, 2022 and the weighted average yield for each range of maturities (dollars in thousands):

	One year or less			After 1 through 5 years			After 5 through 10 years			After ten years			Total
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	155,050		$	82,575		$	10,351		$	—		$	247,976
Obligations of state and political subdivisions		20,894			94,654			241,873			1,258			358,679
Mortgage-backed securities: GSE residential		9,460			139,057			611,067			1,943			761,527
Other securities		22,747			74,575			1,446			—			98,768
Total available-for-sale investments	$	208,151		$	390,861		$	864,737		$	3,201		$	1,466,950
Weighted average yield		1.47	%		2.34	%		1.76	%		2.93	%		1.87	%
Full tax-equivalent yield		1.59	%		2.58	%		1.94	%		3.43	%		2.06	%
Held to maturity:
Other investments	$	—		$	—		$	—		$	2,998		$	2,998
Total held-to-maturity	$	—		$	—		$	—		$	2,998		$	2,998
Weighted average yield		—	%		—	%		—	%		—	%		—	%
Full tax-equivalent yield		—	%		—	%		—	%		—	%		—	%

The weighted average yields are calculated based on the amortized cost and effective yields weighted for the scheduled maturity of each security. Tax-equivalent yields have been calculated using a 21% tax rate. With the exception of obligations of the U.S. Treasury and other U.S. government agencies and corporations, there were no investment securities of any single issuer, the book value of which exceeded 10% of stockholders' equity at March 31, 2022.

Investment securities carried at approximately $665 million and $590 million at March 31, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law.

The following table presents the aging of gross unrealized losses and fair value by investment category as of March 31, 2022 and December 31, 2021 (in thousands):

	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2022
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	124,219	$	(5,410	)	$	116,577	$	(11,117	)	$	240,796	$	(16,527	)
Obligations of states and political subdivisions		231,248		(29,282	)		6,399		(1,241	)		237,647		(30,523	)
Mortgage-backed securities: GSE residential		546,117		(37,044	)		193,648		(22,122	)		739,765		(59,166	)
Other securities		80,465		(1,260	)		2,515		(58	)		82,980		(1,318	)
Total	$	982,049	$	(72,996	)	$	319,139	$	(34,538	)	$	1,301,188	$	(107,534	)
December 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	48,316	$	(1,927	)	$	139,846	$	(2,936	)	$	188,162	$	(4,863	)
Obligations of states and political subdivisions		61,535		(657	)		—		—			61,535		(657	)
Mortgage-backed securities: GSE residential		562,699		(11,019	)		46,504		(1,691	)		609,203		(12,710	)
Other securities		7,976		(105	)		—		—			7,976		(105	)
Total	$	680,526	$	(13,708	)	$	186,350	$	(4,627	)	$	866,876	$	(18,335	)

15

U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies. At March 31, 2022 there were fourteen available-for-sale securities with a fair value of $116,577,000 and unrealized losses of $11,117,000 in a continuous unrealized loss position for twelve months or more.  At December 31, 2021, there were six available-for-sale securities with a fair value of $139,846,000 and unrealized losses of $2,936,000 in a continuous unrealized loss position for twelve months or more. There were no held-to-maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies in a continuous unrealized loss position for twelve months or more.

Obligations of states and political subdivisions. At March 31, 2022, there were five obligations of states and political subdivisions with a fair value of $6,399,000 and unrealized losses of $1,241,000 in a continuous unrealized loss position for twelve months or more. At December 31, 2021there were no obligations of states and political subdivisions in a continuous unrealized loss position for twelve months or more.  

Mortgage-backed Securities: GSE Residential. At March 31, 2022, there were forty two mortgage-backed securities with a fair value of $193,648,000 and unrealized losses of $22,122,000 in a continuous unrealized loss position for twelve months or more. At December 31, 2021 there were fifteen mortgage-backed securities with a fair value of $46,504,000 and unrealized losses of $1,691,000 in a continuous unrealized loss position for twelve months or more.

Other securities.  At March 31, 2022, there were three other securities with a fair value of $2,515,000 and unrealized losses of $58,000 in a continuous unrealized loss position for twelve months or more. At December 31, 2021, there were no other securities in a continuous unrealized loss position for twelve months or more.

The Company does not believe any unrealized losses as of March 31, 2022 represents other than temporary impairment ("OTTI"). However, given the uncertainty of the financial markets, the Company may be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced, and the resulting loss recognized in the period the other-than-temporary impairment is identified.

Note 4 – Loans and Allowance for Credit Losses

Loans are stated at amortized cost net of an allowance for credit losses. Amortized cost is the unpaid principal net of unearned premiums and discounts, and net deferred origination fees and costs. Deferred loan origination fees are reduced by loan origination costs and are amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method. Interest on substantially all loans is credited to income based on the principal amount outstanding.

A summary of loans at March 31, 2022 and December 31, 2021 follows (in thousands):

	March 31, 2022		December 31, 2021
Construction and land development	$	131,784	$	145,156
Agricultural real estate		280,946		279,001
1-4 family residential properties		417,231		399,932
Multifamily residential properties		370,654		298,974
Commercial real estate		1,971,833		1,666,764
Loans secured by real estate		3,172,448		2,789,827
Agricultural loans		121,532		151,344
Commercial and industrial loans		938,041		834,061
Consumer loans		89,651		78,538
All other loans		142,720		143,738
Total gross loans		4,464,392		3,997,508
Less: loans held for sale		2,037		2,748
		4,462,355		3,994,760
Less:
Net deferred loan fees, premiums and discounts		9,831		1,985
Allowance for credit losses		58,474		54,655
Net loans	$	4,394,050	$	3,938,120

Loans expected to be sold are classified as held for sale in the consolidated financial statements and are recorded at the lower of aggregate cost or fair value, taking into consideration future commitments to sell the loans. These loans are primarily for 1-4 family residential properties.

Accrued interest on loans, which is excluded from the amortized cost of the balances above, totaled $15.2 million and $14.7 million

16

at March 31, 2022 and December 31, 2021, respectively.

Most of the Company’s business activities are with customers located near the Company's branch locations in Illinois, Missouri, and Texas. At March 31, 2022, the Company’s loan portfolio included $402.7 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $283.6 million was concentrated in corn and other grain farming. Total loans to borrowers whose businesses are directly related to agriculture decreased $28.1 million from $430.8 million at December 31, 2021 due to seasonal timing of cash flow requirements. Loans concentrated in corn and other grain farming decreased $13.8 million from $297.4 million at December 31, 2021. The Company's underwriting practices include collateralization of loans. Any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in loan losses within the agricultural portfolio.

In addition, the Company has $208.8 million of loans to motels and hotels. The performance of these loans is dependent on borrower specific issues as well as the general level of business and personal travel within the region. While the Company adheres to sound underwriting standards, a prolonged period of reduced business or personal travel could result in an increase in nonperforming loans to this business segment and potentially in loan losses. The Company also has $874.1 million of loans to lessors of non-residential buildings, and $537.7 million of loans to lessors of residential buildings and dwellings. 

The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the board of directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation and most borrowers are below regulatory thresholds. The Company can occasionally have outstanding balances to one borrower up to but not exceeding the regulatory threshold should underwriting guidelines warrant. Most of the Company’s loans are to businesses located in the geographic market areas served by the Company’s branch bank system. Additionally, a significant portion of the collateral securing the loans in the portfolio is located within the Company’s primary geographic footprint. In general, the Company adheres to loan underwriting standards consistent with industry guidelines for all loan segments.

The Company’s lending can be summarized into the following primary areas:

Commercial Real Estate Loans. Commercial real estate loans are generally comprised of loans to small business entities to purchase or expand structures in which the business operations are housed, loans to owners of real estate who lease space to non-related commercial entities, loans for construction and land development, loans to hotel operators, and loans to owners of multi-family residential structures, such as apartment buildings. Commercial real estate loans are underwritten based on historical and projected cash flows of the borrower and secondarily on the underlying real estate pledged as collateral on the debt. For the various types of commercial real estate loans, minimum criteria have been established within the Company’s loan policy regarding debt service coverage while maximum limits on loan-to-value and amortization periods have been defined. Maximum loan-to-value ratios range from 65% to 80% depending upon the type of real estate collateral, while the desired minimum debt coverage ratio is 1.20x. Amortization periods for commercial real estate loans are generally limited to twenty or twenty five years, depending on the loan-to-value. The Company’s commercial real estate portfolio is below the thresholds that would designate a concentration in commercial real estate lending, as established by the federal banking regulators.

Commercial and Industrial Loans. Commercial and industrial loans are primarily comprised of working capital loans used to purchase inventory and fund accounts receivable that are secured by business assets other than real estate. These loans are generally written for one year or less. Also, equipment financing is provided to businesses with these loans generally limited to 80% of the value of the collateral and amortization periods limited to seven years. Commercial loans are often accompanied by a personal guaranty of the principal owners of a business. Like commercial real estate loans, the underlying cash flow of the business is the primary consideration in the underwriting process. The financial condition of commercial borrowers is monitored at least annually with the type of financial information required determined by the size of the relationship. Measures employed by the Company for businesses with higher risk profiles include the use of government- assisted lending programs through the Small Business Administration and U.S. Department of Agriculture.

Agricultural and Agricultural Real Estate Loans. Agricultural loans are generally comprised of seasonal operating lines to cash grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop. Loan-to-value ratios on loans secured by farmland generally do not exceed 65% and have amortization periods limited to twenty-five years. Federal government-assistance lending programs through the Farm Service Agency are used to mitigate the level of credit risk when deemed appropriate.

17

Residential Real Estate Loans. Residential real estate loans generally include loans for the purchase or refinance of residential real estate properties consisting of one-to-four units and home equity loans and lines of credit. The Company sells most of its long-term fixed rate residential real estate loans to secondary market investors. The Company also releases the servicing of these loans upon sale. Residential real estate loans are typically underwritten to conform to industry standards including criteria for maximum debt-to-income and loan-to-value ratios as well as minimum credit scores. Loans secured by first liens on residential real estate held in the portfolio typically do not exceed 80% of the value of the collateral and have amortization periods of twenty-five years or less. The Company does not originate subprime mortgage loans.

Consumer Loans. Consumer loans are primarily comprised of loans to individuals for personal and household purposes such as the purchase of an automobile or other living expenses. Minimum underwriting criteria have been established that consider credit score, debt-to-income ratio, employment history, and collateral coverage. Typically, consumer loans are set up on monthly payments with amortization periods based on the type and age of the collateral.

Other Loans. Other loans consist primarily of loans to municipalities to support community projects such as infrastructure improvements or equipment purchases. Underwriting guidelines for these loans are consistent with those established for commercial loans with the additional repayment source of the taxing authority of the municipality.

Allowance for Credit Losses

The allowance for credit losses represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining contractual life of the assets. The provision for credit losses is the charge against current earnings that is determined by the Company as the amount needed to maintain an adequate allowance for credit losses. In determining the adequacy of the allowance for credit losses, and therefore the provision to be charged to current earnings, the Company relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by the overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net loan losses, the level and composition of nonaccrual, past due and troubled debt restructurings, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates. The Company estimates the appropriate level of allowance for credit losses by evaluating large individually evaluated loans separately from non-individually evaluated loans.

Individually Evaluated Loans

The Company individually evaluates certain loans for impairment. In general, these loans have been internally identified via the Company’s loan grading system as credits requiring management’s attention due to underlying problems in the borrower’s business or collateral concerns. This evaluation considers expected future cash flows, the value of collateral and other factors that may impact the borrower’s ability to make payments when due. For loans greater than $250,000, impairment is individually measured each quarter using one of three alternatives: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price, if available; or (3) the fair value of the collateral less costs to sell for collateral dependent loans and loans for which foreclosure is deemed to be probable. A specific allowance is assigned when expected cash flows or collateral are less than the carrying amount of the loan. The carrying value of the loan reflects reductions from prior charge-offs.

Non-Individually Evaluated Loans

Non-individually evaluated loans comprise the vast majority of the Company’s total loan portfolio and include loans in accrual status and those credits not identified as troubled debt restructurings. A small portion of these loans are considered “criticized” due to the risk rating assigned reflecting elevated credit risk due to characteristics, such as a strained cash flow position, associated with the individual borrowers. Criticized loans are those assigned risk ratings of Special Mention, Substandard, or Doubtful.

To determine the allowance, the loan portfolio is segmented based on similar risk characteristics. The allowance for credit losses is estimated using a discounted cash flow (DCF) methodology. The DCF projects future cash flows over the life of the loan portfolio. Probability of default (PD) and loss given default (LGD) are key components in calculating expected losses in this model. The PD is forecasted using a regression model that determines the likelihood of default with a forward-looking forecast of unemployment rates. The LGD is the percentage of defaulted loans that is ultimately charged off. The allowance is calculated as the net present value of the expected cash flows less the amortized cost basis of the loans. Prior to 2022, the allowance for credit losses was measured on a collective (pool) basis for non-individually evaluated loans with similar risk characteristics. Historical credit loss experience provided the basis for the estimate of expected credit losses. Adjustments to expected losses are made using qualitative factors for relevant to each loan segment including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. In addition, a forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period.

18

The Company also considers specific current economic events occurring globally, in the U.S. and in its local markets. In March 2020, in response to the COVID-19 outbreak, its significant disruptions in the U.S. economy and impacts on local markets, First Mid Bank offered a 90-day commercial deferral program, primarily to hotel and restaurant borrowers. In accordance with interagency guidance issued in March 2020, these short-term deferrals are not considered troubled debt restructurings. These deferrals were, however, considered in the factors used to estimate the required allowance for credit losses for non-individually evaluated loans. Other COVID-19 related impacts considered included revenue losses of businesses required to restrict or cease services, income loss to workers laid off as a result of COVID-19 restrictions, various federal and state government stimulus programs and additional deferral programs offered by First Mid Bank beginning in April 2020. Other events considered include the status of trade agreements with China, scheduled increases in minimum wage and changes to the minimum salary threshold for overtime provisions, current and projected unemployment rates, current and projected grain and oil prices and economies of local markets where customers work and operate.

Within each pool, risk elements are evaluated that have specific impacts to the borrowers within the pool. These, along with the general risks and events, and the specific lending policies and procedures by loan type described above, are analyzed to estimate the qualitative factors used to adjust the historical loss rates.

During the current period, the following assumptions and factors were considered when determining the historical loss rate and any potential adjustments by loan pool.

Construction and Land Development Loans. Historical losses in this segment remained very low. Current activity in this industry was deemed essential and has continued during COVID-19. While staffing shortages and supply chain disruptions cause risk in this segment, most projects are associated with financially strong borrowers. The qualitative factor for this segment was not changed.

Agricultural Real Estate Loans. Historical losses in the segment remain very low. Farmland values have increased over an extended period of time and there are no indications that this will change in the next year. There was a slight decrease to the qualitative factor for this segment.

1- 4 Family Residential Properties Loans. COVID-19 has impacted the finances of consumers from layoffs and furloughs resulting from employers that must reduce or suspend operations. Increased risk in this segment includes consumer ability to make mortgage and rent payments. Some of this impact was offset by governmental actions such as stimulus payments and extended unemployment benefits. First Mid Bank also offered short-term loan payment deferral to borrowers in this segment.  There was no change to the qualitative factors for this segment.

Commercial Real Estate Loans. This segment includes the Company's majority of exposure to the hotel industry which has been significantly impacted by COVID-19 events. Other impacted industries in this segment include restaurants and retail establishments. The qualitative factors on both non-owner occupied and owner-occupied loans for this segment were not changed.

Agricultural Loans. Losses in this segment are very low. Commodity prices have been elevated and yields have been strong.  The qualitative factor of this segment was decreased slightly.

Commercial and Industrial Loans. The COVID-19 impacts include forced closures and scaled-back services for many industries within this segment including retailers, restaurants, and video gaming establishments. Some of this risk was offset by government relief programs as well as, First Mid Bank's payment deferral program. The qualitative factor for this segment was not changed.

Consumer Loans. The financial status of many borrowers was impacted by COVID-19 events including layoffs and reduced hours. Some of this impact was offset by government stimulus programs, increased paid leave and increased and extended unemployment benefits. Additionally, First Mid Bank has offered a short-term payment deferral program. The qualitative factor for this segment was not changed.

Acquired Loans. Prior to January 1, 2020 loans acquired with evidence of credit deterioration since origination and for which it was probable that all contractually required payments would not be collected were considered purchased credit impaired at the time of acquisition. Purchase credit-impaired ("PCI") loans were accounted for under ASC 310-30, Receivables--Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"), and were initially measured at fair value, which included the estimated future credit losses expected to be incurred over the life of the loan.

Accordingly, an allowance for credit losses related to these loans was not carried over and recorded at the acquisition date. The cash flows expected to be collected were estimated using current key assumptions, such as default rates, value of underlying collateral, severity and prepayment speeds.

Subsequent to January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is

19

added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date. Accordingly, on January 1, 2020, the amortized cost basis of the PCD loans were adjusted to reflect the addition of $833,000 to the allowance for credit losses.

For acquired loans not deemed purchased credit deteriorated at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. At the acquisition date, an initial allowance for expected credit losses is estimated and recorded as credit loss expense. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

The following table presents the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2022 (in thousands):

	Construction and Land Development			Agricultural Real Estate		1-4 Family Residential Properties		Commercial Real Estate		Agricultural Loans		Commercial and Industrial			Consumer Loans			Total
Three months ended March 31, 2022
Beginning balance	$	1,743		$	1,257	$	2,330	$	26,246	$	983	$	19,241		$	2,855		$	54,655
Initial allowance on loans purchased with credit deterioration		272			—		3		478		—		94			16			863
Provision for credit loss expense		(25	)		714		1,264		3,613		68		(2,045	)		(637	)		2,952
Loans charged off		2			—		72		339		—		3			358			774
Recoveries collected		—			—		203		347		—		61			167			778
Ending balance	$	1,988		$	1,971	$	3,728	$	30,345	$	1,051	$	17,348		$	2,043		$	58,474

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2021 and for the year ended December 31, 2021 (in thousands):

	Construction and Land Development		Agricultural Real Estate		1-4 Family Residential Properties			Commercial Real Estate		Agricultural Loans			Commercial and Industrial		Consumer Loans		Total
Three months ended March 31, 2021
Beginning balance (prior to adoption of ASC 326)	$	1,666	$	1,084	$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Initial allowance on loans purchased with credit deterioration		261		44		328			646		—			795		—		2,074
Provision for credit loss expense		359		500		617			5,902		(645	)		4,674		729		12,136
Loans charged off		—		—		182			480		—			18		288		968
Recoveries collected		—		—		8			9		—			18		231		266
Ending balance	$	2,286	$	1,628	$	3,093		$	25,737	$	881		$	18,954	$	2,839	$	55,418
Twelve months ended December 31, 2021
Beginning balance (prior to adoption of ASC 326)	$	1,666	$	1,084	$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Impact of adopting ASC 326		261		44		328			646		—			795		—		2,074
Provision for credit loss expense		21		129		(160	)		6,415		(544	)		7,940		1,350		15,151
Loans charged off		205		—		371			535		—			3,118		1,405		5,634
Recoveries collected		—		—		211			60		1			139		743		1,154
Ending balance	$	1,743	$	1,257	$	2,330		$	26,246	$	983		$	19,241	$	2,855	$	54,655

20

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For individually evaluated loans that are considered solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 180 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

21

The following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of March 31, 2022 (in thousands):

	Collateral								Allowance
	Real Estate		Business Assets		Other		Total		for Credit Losses
Construction and land development	$	475	$	—	$	—	$	475	$	215
1-4 family residential properties		1,375		—		—		1,375		133
Multifamily residential properties		1,658		—		—		1,658		—
Commercial real estate		9,657		—		—		9,657		605
Loans secured by real estate		13,165		—		—		13,165		953
Commercial and industrial loans		—		1,132		—		1,132		192
Consumer loans		—		—		4	4			—
Total loans	$	13,165	$	1,132	$	4	$	14,301	$	1,145

Credit Quality

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, collateral support, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Company uses the following definitions for risk ratings which are commensurate with a loan considered “criticized”:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current sound-worthiness and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing factors, conditions and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans.

22

The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of March 31, 2022 (in thousands):

	Term Loans by Origination Year												Revolving
Risk rating	2022		2021		2020		2019		2018		Prior		Loans		Total
March 31, 2022
Construction and land development loans
Pass	$	7,333	$	47,220	$	33,352	$	26,873	$	2,599	$	13,533	$	—	$	130,910
Special mention		—		107		—		—		—		—		—		107
Substandard		—		—		—		—		—		487		—		487
Total	$	7,333	$	47,327	$	33,352	$	26,873	$	2,599	$	14,020	$	—	$	131,504
Agricultural real estate loans
Pass	$	27,996	$	91,907	$	64,989	$	26,672	$	39,318	$	18,288	$	427	$	269,597
Special mention		825		46		259		3,499		390		5,504		—		10,523
Substandard		—		—		—		—		244		629		—		873
Total	$	28,821	$	91,953	$	65,248	$	30,171	$	39,952	$	24,421	$	427	$	280,993
1-4 family residential property loans
Pass	$	17,076	$	95,294	$	101,585	$	38,664	$	49,229	$	92,832	$	2,898	$	397,578
Special mention		—		158		—		1,915		1,796		3,098		40		7,007
Substandard		46		367		499		492		1,366		9,245		632		12,647
Total	$	17,122	$	95,819	$	102,084	$	41,071	$	52,391	$	105,175	$	3,570	$	417,232
Commercial real estate loans
Pass	$	157,560	$	563,350	$	409,771	$	317,733	$	224,746	$	614,381	$	218	$	2,287,759
Special mention		1,733		1,431		1,101		1,887		1,268		17,831		—		25,251
Substandard		3,889		499		851		704		5,824		10,470		—		22,237
Total	$	163,182	$	565,280	$	411,723	$	320,324	$	231,838	$	642,682	$	218	$	2,335,247
Agricultural loans
Pass	$	35,055	$	48,882	$	11,860	$	4,502	$	2,330	$	2,067	$	—	$	104,696
Special mention		3,859		9,913		346		2,648		129		64		—		16,959
Substandard		30		6		—		17		—		—		—		53
Total	$	38,944	$	58,801	$	12,206	$	7,167	$	2,459	$	2,131	$	—	$	121,708
Commercial and industrial loans
Pass	$	116,681	$	326,191	$	149,215	$	88,980	$	58,513	$	292,322	$	39,894	$	1,071,796
Special mention		370		694		274		1,639		174		1,023		—		4,174
Substandard		—		587		360		32		128		1,115		—		2,222
Total	$	117,051	$	327,472	$	149,849	$	90,651	$	58,815	$	294,460	$	39,894	$	1,078,192
Consumer loans
Pass	$	11,315	$	29,356	$	19,264	$	16,484	$	5,049	$	5,321	$	2,475	$	89,264
Special mention		—		64		32		35		8		—		—		139
Substandard		12		96		23		22		59		70		—		282
Total	$	11,327	$	29,516	$	19,319	$	16,541	$	5,116	$	5,391	$	2,475	$	89,685
Total loans
Pass	$	373,016	$	1,202,200	$	790,036	$	519,908	$	381,784	$	1,038,744	$	45,912	$	4,351,600
Special mention		6,787		12,413		2,012		11,623		3,765		27,520		40		64,160
Substandard		3,977		1,555		1,733		1,267		7,621		22,016		632		38,801
Total	$	383,780	$	1,216,168	$	793,781	$	532,798	$	393,170	$	1,088,280	$	46,584	$	4,454,561

23

The following tables present the credit risk profile of the Company’s loan portfolio based on risk rating category as of December 31, 2021 (in thousands):

	Term Loans by Origination Year												Revolving
Risk rating	2021		2020		2019		2018		2017		Prior		Loans		Total
December 31, 2021
Construction and land development loans
Pass	$	38,656	$	34,774	$	23,505	$	34,358	$	3,760	$	9,433	$	—	$	144,486
Special mention		110		—		—		—		—		—		—		110
Substandard		—		—		—		483		—		39		—		522
Total	$	38,766	$	34,774	$	23,505	$	34,841	$	3,760	$	9,472	$	—	$	145,118
Agricultural real estate loans
Pass	$	78,793	$	64,159	$	25,713	$	30,203	$	12,142	$	54,808	$	—	$	265,818
Special mention		872		259		4,028		384		69		6,087		—		11,699
Substandard		—		—		392		187		57		1,119		—		1,755
Total	$	79,665	$	64,418	$	30,133	$	30,774	$	12,268	$	62,014	$	—	$	279,272
1-4 family residential property loans
Pass	$	78,889	$	94,404	$	35,554	$	44,248	$	30,735	$	52,131	$	42,800	$	378,761
Special mention		234		—		1,934		499		2,601		1,196		41		6,505
Substandard		355		496		1,534		1,302		3,458		7,250		652		15,047
Total	$	79,478	$	94,900	$	39,022	$	46,049	$	36,794	$	60,577	$	43,493	$	400,313
Commercial real estate loans
Pass	$	568,200	$	417,334	$	299,973	$	174,448	$	150,811	$	304,585	$	—	$	1,915,351
Special mention		3,185		1,206		1,836		1,295		10,609		8,632		—		26,763
Substandard		2,007		714		6,242		1,179		4,646		8,238		—		23,026
Total	$	573,392	$	419,254	$	308,051	$	176,922	$	166,066	$	321,455	$	—	$	1,965,140
Agricultural loans
Pass	$	105,378	$	17,903	$	5,612	$	2,822	$	924	$	1,316	$	—	$	133,955
Special mention		13,725		436		2,648		150		13		64		—		17,036
Substandard		350		18		—		—		—		125		—		493
Total	$	119,453	$	18,357	$	8,260	$	2,972	$	937	$	1,505	$	—	$	151,484
Commercial and industrial loans
Pass	$	279,814	$	167,662	$	119,702	$	76,022	$	22,888	$	302,962	$	—	$	969,050
Special mention		613		399		1,463		182		477		819		—		3,953
Substandard		506		34		133		621		24		1,433		—		2,751
Total	$	280,933	$	168,095	$	121,298	$	76,825	$	23,389	$	305,214	$	—	$	975,754
Consumer loans
Pass	$	27,948	$	19,033	$	16,978	$	5,505	$	4,297	$	1,244	$	—	$	75,005
Special mention		68		54		38		9		—		—		—		169
Substandard		585		58		308		678		43		1,596		—		3,268
Total	$	28,601	$	19,145	$	17,324	$	6,192	$	4,340	$	2,840	$	—	$	78,442
Total loans
Pass	$	1,177,678	$	815,269	$	527,037	$	367,606	$	225,557	$	726,479	$	42,800	$	3,882,426
Special mention		18,807		2,354		11,947		2,519		13,769		16,798		41		66,235
Substandard		3,803		1,320		8,609		4,450		8,228		19,800		652		46,862
Total	$	1,200,288	$	818,943	$	547,593	$	374,575	$	247,554	$	763,077	$	43,493	$	3,995,523

24

The following table presents the Company’s loan portfolio aging analysis at March 31, 2022 and December 31, 2021 (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
March 31, 2022
Construction and land development	$	93	$	12	$	203	$	308	$	131,196	$	131,504	$	—
Agricultural real estate		243		139		1,813		2,195		278,798		280,993		—
1-4 family residential properties		2,080		253		1,644		3,977		413,255		417,232		—
Multifamily residential properties		—		—		580		580		369,346		369,926		—
Commercial real estate		2,317		—		11,305		13,622		1,951,699		1,965,321		—
Loans secured by real estate		4,733		404		15,545		20,682		3,144,294		3,164,976		—
Agricultural loans		—		—		321		321		121,387		121,708		—
Commercial and industrial loans		572		54		1,486		2,112		933,342		935,454		—
Consumer loans		271		213		119		603		89,082		89,685		—
All other loans		—		—		—		—		142,738		142,738		—
Total loans	$	5,576	$	671	$	17,471	$	23,718	$	4,430,843	$	4,454,561	$	—
December 31, 2021
Construction and land development	$	159	$	199	$	203	$	561	$	144,557	$	145,118	$	—
Agricultural real estate		—		222		1		223		279,049		279,272		—
1-4 family residential properties		2,532		914		2,012		5,458		394,855		400,313		—
Multifamily residential properties		—		—		1,676		1,676		297,266		298,942		—
Commercial real estate		8,930		640		2,484		12,054		1,654,144		1,666,198		—
Loans secured by real estate		11,621		1,975		6,376		19,972		2,769,871		2,789,843		—
Agricultural loans		—		10		588		598		150,886		151,484		—
Commercial and industrial loans		381		302		1,156		1,839		830,169		832,008		—
Consumer loans		388		47		118		553		77,889		78,442		—
All other loans		1,854		—		—		1,854		141,892		143,746		—
Total loans	$	14,244	$	2,334	$	8,238	$	24,816	$	3,970,707	$	3,995,523	$	—

Individually Evaluated Loans

Within all loan portfolio segments, loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Impaired loans, excluding certain troubled debt restructured loans, are placed on nonaccrual status. Impaired loans include nonaccrual loans and loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. It is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being modified remain on nonaccrual status until, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. If the restructured loan is on accrual status prior to being modified, the loan is reviewed to determine if the modified loan should remain on accrual status.

The Company’s policy is to discontinue the accrual of interest income on all loans for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Interest on loans determined to be troubled debt restructurings is recognized on an accrual basis in accordance with the restructured terms if the loan is in compliance with the modified terms. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.

The amount of interest income recognized by the Company within the periods stated above was due to loans modified in troubled debt restructurings that remain on accrual status.  

25

Non-Accrual Loans

The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated for which no allowance was recorded as of March 31, 2022 and December 31, 2021 (in thousands). There were no loans past due over eighty-nine days that were still accruing.

	March 31, 2022				December 31, 2021
	Nonaccrual with no Allowance for		Total		Nonaccrual with no Allowance for		Total
	Credit Loss		Nonaccrual		Credit Loss		Nonaccrual
Construction and land development	$	—	$	—	$	25	$	25
Agricultural real estate		273		1,296		237		336
1-4 family residential properties		4,344		5,144		5,252		5,252
Multifamily residential properties		1,886		1,886		1,982		1,982
Commercial real estate		7,938		8,341		7,554		7,920
Loans secured by real estate		14,441		16,667		15,050		15,515
Agricultural loans		15		230		560		560
Commercial and industrial loans		1,905		2,293		936		1,851
Consumer loans		140		140		179		179
All other loans		—		—		—		—
Total loans	$	16,501	$	19,330	$	16,725	$	18,105

Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $95,000 and $154,000 for the three months ended March 31, 2022 and 2021, respectively.

Troubled Debt Restructuring

The balance of troubled debt restructurings ("TDRs") at March 31, 2022 and December 31, 2021 was $5.5 million and $5.8 million, respectively. There was $581,000 and $765,000 in specific reserves established with respect to these loans as of March 31, 2022 and December 31, 2021, respectively. As troubled debt restructurings, these loans are included in nonperforming loans. The modification of the terms of these loans included one or a combination of the following: a reduction of stated interest rate of the loan; an extension of the maturity date and change in payment terms; or a permanent reduction of the recorded investment in the loan.

The following table presents the Company’s recorded balance of troubled debt restructurings at March 31, 2022 and December 31, 2021 (in thousands).

Troubled debt restructurings:	March 31, 2022		December 31, 2021
Agricultural real estate	$	245	$	245
1-4 family residential properties		1,228		1,353
Commercial real estate		3,231		3,355
Loans secured by real estate		4,704		4,953
Agricultural loans		193		228
Commercial and industrial loans		459		479
Consumer loans		94		109
All other loans		—		23
Total	$	5,450	$	5,792
Performing troubled debt restructurings:
Agricultural real estate	$	245	$	245
1-4 family residential properties		668		882
Commercial real estate		2,010		2,552
Loans secured by real estate		2,923		3,679
Agricultural loans		—		—
Commercial and industrial loans		171		179
Consumer loans		41		50
All other loans		—		23
Total	$	3,135	$	3,931

26

The following table presents loans modified as TDRs during the three months ended March 31, 2022, as a result of various modified loan factors (in thousands). The change in the recorded investment from pre-modification to post- modification was not material.

	March 31, 2022					March 31, 2021
	Number of		Recorded		Type of	Number of		Recorded		Type of
	Modifications		Investment		Modifications	Modifications		Investment		Modifications
1-4 family residential properties		4	$	143	(b)(c)		—	$	—
Commercial real estate		2		197	(b)		—		—
Loans secured by real estate		6		340			—		—
Consumer loans		—		—			2		16	(b)
Total		6	$	340			2	$	16

Type of modifications:

(a) Reduction of stated interest rate of loan

(b) Change in payment terms

(c) Extension of maturity date

(d) Permanent reduction of the recorded investment

A loan is considered to be in payment default once it is 90 days past due under the modified terms. There were three loans modified as troubled debt restructurings during the prior twelve months that experienced defaults for three months ended March 31, 2022. There was one loan modified as troubled debt restructuring during the prior twelve months that experienced defaults as of December 31, 2021.

The balance of real estate owned includes $4,794,000 and $4,984,000 of foreclosed real estate properties recorded as a result of obtaining physical possession of the property at March 31, 2022 and December 31, 2021, respectively. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure procedures are in process was $410,000 and $411,000 at March 31, 2022 and December 31, 2021, respectively.

Purchased Credit Deteriorated (PCD) Loans

The Company has acquired loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans at acquisition date is as follows (in thousands):

	Delta Acquisition			LINCO Acquisition
Purchase price of purchase credit deteriorated loans at acquisition	$	18,796		$	64,647
Allowance for credit losses at acquisition		(863	)		(2,074	)
Non-credit discount/(premium) at acquisition		(523	)		(187	)
Fair value of purchased credit deteriorated loans at acquisition	$	17,410		$	62,386

27

Note 5 -- Goodwill and Intangible Assets

The Company has goodwill from business combinations, intangible assets from branch acquisitions, identifiable intangible assets assigned to core deposit relationships and customer lists of First Mid Wealth Management Company and First Mid Insurance. The following table presents gross carrying value and accumulated amortization by major intangible asset class as of March 31, 2022 and December 31, 2021 (in thousands):

	March 31, 2022				December 31, 2021
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Goodwill not subject to amortization (effective 1/1/02)	$	144,225	$	3,760	$	115,613	$	3,760
Intangibles from branch acquisition		3,015		3,015		3,015		3,015
Core deposit intangibles		45,355		25,074		39,435		24,085
Other intangibles		20,561		7,240		20,561		6,808
	$	213,156	$	39,089	$	178,624	$	37,668

During the first quarter of 2022, goodwill of $28.6 million was provisionally recorded for the acquisition and merger of Delta Bancshares Company.  All this goodwill was assigned to the banking unit of the Company.   

During the second quarter of 2021, goodwill of $1.4 million was recorded for the acquisition of certain assets used by BBM & Associates Inc., in connection with its trucking insurance business.  All this goodwill was assigned to First Mid Insurance.  

Goodwill of $8.9 million was provisionally recorded for the acquisition and merger of LINCO Bancshares, Inc. (“LINCO”) during the first quarter of 2021. All this goodwill was assigned to the banking unitt of the Company. This goodwill was subsequently adjusted to $5.4 million to reflect adjustments made to finalize the purchase accounting.

The following table provides a reconciliation of the purchase price paid for the acquisition of Delta and the amount of goodwill recorded (in thousands):

Unallocated purchase price				$	29,791
Less purchase accounting adjustments:
Fair value of securities	$	(2,836	)
Fair value of loans, net		(3,399	)
Fair value of premises and equipment		3,508
Fair value of time deposits		(1,759	)
Fair value of FHLB advances		(75	)
Core deposit intangible		5,920
Other assets		(623	)
Other liabilities		444
					1,180
				$	28,611

28

The following table provides a reconciliation of the purchase price paid for the acquisition of LINCO and the amount of goodwill recorded (in thousands):

Unallocated purchase price				$	12,248
Less purchase accounting adjustments:
Fair value of securities	$	264
Fair value of loans, net		(2,818	)
Fair value of other real estate owned		915
Fair value of premises and equipment		6,360
Fair value of time deposits		(2,081	)
Fair value of FHLB advances		(975	)
Core deposit intangible		2,025
Other assets		3,293
Other liabilities		(184	)
					6,799
				$	5,449

The Company has mortgage servicing rights acquired in previous acquisitions. The following table summarizes the activity pertaining to mortgage servicing rights included in intangible assets as of March 31, 2022, March 31, 2021 and December 31, 2021 (in thousands):

	March 31, 2022			March 31, 2021			December 31, 2021
Beginning balance	$	420		$	516		$	516
Fair market value adjustment		106			210			544
Mortgage servicing rights amortized		(101	)		(177	)		(629	)
Interest only strip		7			2			(11	)
Ending balance	$	432		$	551		$	420

Total amortization expense for three months ended March 31, 2022 and 2021 was as follows (in thousands):

	Three months ended March 31,
	2022		2021
Core deposit intangibles	$	989	$	710
Customer list intangibles		432		333
Mortgage servicing rights		101		177
	$	1,522	$	1,220

Aggregate amortization expense for the current year and estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands):

Aggregate amortization expense:
For period 01/01/22-03/31/22	$	1,522
Estimated amortization expense:
For period 04/01/22-12/31/22		4,681
For year ended 12/31/23		5,799
For year ended 12/31/24		5,291
For year ended 12/31/25		4,741
For year ended 12/31/26		3,852

In accordance with the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” codified within ASC 350, the Company performed testing of goodwill for impairment as of September 30, 2021 and determined that, as of that date, goodwill was not impaired. Management also concluded that the remaining amounts and amortization periods were appropriate for all intangible assets. 

29

Note 6 -- Repurchase Agreements and Other Borrowings

Securities sold under agreements to repurchase were $187.3 million at March 31, 2022, increase of $41.1 million from $146.3 million at December 31, 2021. The increase during the first three months of 2022 was primarily due to changes in business cash flow needs. All the transactions have overnight maturities with a weighted average rate of 0.21%.

The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., declare bankruptcy), the Company could cancel the repurchase agreement (i.e., cease payment of principal and interest), and attempt collection on the amount of collateral value in excess of the repurchase agreement fair value. The collateral is held by a third-party financial institution in the counterparty's custodial account. The counterparty has the right to sell or repledge the investment securities. For government entity repurchase agreements, the collateral is held by the Company in a segregated custodial account under a tri-party agreement. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional securities. The Company closely monitors collateral levels to ensure adequate levels are maintained, while mitigating the potential of over-collateralization in the event of counterparty default.

Collateral pledged by class for repurchase agreements are as follows (in thousands):

	March 31, 2022		December 31, 2021
US Treasury securities and obligations of U.S. government corporations and agencies	$	61,370	$	53,782
Mortgage-backed securities: GSE: residential		125,956		92,486
Miscellaneous		—		—
Total	$	187,326	$	146,268

FHLB borrowings, before net premiums of $538,074, were $125.9 million and $86 million at March 31, 2022 and December 31, 2021, respectively. At March 31, 2022 the advances were as follows:

Advance		Term (in years)		Interest Rate	Maturity Date
$	15,000,000	3 months		0.35%	April 4, 2022
	5,000,000		1.0	0.00%	May 31, 2022
	5,000,000		3.0	2.41%	May 31, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	20,000,000	3 months		0.80%	June 23, 2022
	5,000,000		3.0	1.73%	July 12, 2022
	5,000,000		8.0	2.40%	January 9, 2023
	5,000,000		4.0	2.44%	May 30, 2023
	5,000,000		3.5	1.51%	July 31, 2023
	5,000,000		3.5	0.77%	September 11, 2023
	5,000,000		5.0	1.54%	July 12, 2024
	10,000,000		5.0	1.45%	December 31, 2024
	5,000,000		5.0	0.91%	March 10, 2025
	5,857,785		10.0	2.64%	December 23, 2025
	5,000,000		10.0	1.15%	October 3, 2029
	5,000,000		10.0	1.12%	October 3, 2029
	10,000,000		10.0	1.39%	December 31, 2029

30

Note 7 -- Fair Value of Assets and Liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Following is a description of the inputs and valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Available-for-Sale Securities. The fair value of available-for-sale securities is determined by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independent sources of market parameters, including but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Fair value determinations for Level 3 measurements of securities are the responsibility of the Treasury function of the Company. The Company contracts with a pricing specialist to generate fair value estimates on a monthly basis. The Treasury function of the Company challenges the reasonableness of the assumptions used and reviews the methodology to ensure the estimated fair value complies with accounting standards generally accepted in the United States, analyzes the changes in fair value and compares these changes to internally developed expectations and monitors these changes for appropriateness.

Derivatives. The fair value of derivatives is based on models using observable market data as of the measurement date and are therefore classified in Level 2 of the valuation hierarchy.

31

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of March 31, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2022
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	247,976	$	—	$	247,976	$	—
Obligations of states and political subdivisions		358,679		—		358,679		—
Mortgage-backed securities		761,527		—		761,527		—
Other securities		98,768		—		98,768		—
Total available-for-sale securities		1,466,950		—		1,466,950		—
Equity securities		369		369		—		—
Derivative assets: interest rate swaps		2,286		—		2,286		—
Total assets	$	1,469,605	$	369	$	1,469,236	$	—
Derivative liabilities: interest rate swaps	$	2,167	$	—	$	2,167	$	—
December 31, 2021
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	203,815	$	—	$	203,815	$	—
Obligations of states and political subdivisions		395,457		—		395,358		99
Mortgage-backed securities		791,038		—		791,038		—
Other securities		31,112		—		31,112		—
Total available-for-sale securities		1,421,422		—		1,421,323		99
Equity securities		397		397		—		—
Derivative assets: interest rate swaps		809		—		809		—
Total assets	$	1,422,628	$	397	$	1,422,132	$	99
Derivative liabilities: interest rate swaps	$	1,476	$	—	$	1,476	$	—

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2022 and 2021 is summarized as follows (in thousands):

	Obligation of State and Political Subdivisions
	Three months ended
	March 31, 2022			March 31, 2021
Beginning balance	$	99		$	794
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Total gains or losses:
Included in net income		—			1
Included in other comprehensive income (loss)		—			—
Purchases, issuances, sales and settlements:
Purchases		—			—
Issuances		—			—
Sales		—			(181	)
Settlements		(99	)		—
Ending balance	$	—		$	614
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$	—		$	—

32

Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Collateral Dependent Loans. Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment and estimating fair value include using the fair value of the collateral for collateral dependent loans.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Individually evaluated loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method.

Management establishes a specific allowance for individually evaluated loans that have an estimated fair value that is below the carrying value. The total carrying amount of loans for which a change in specific allowance has occurred as of March 31, 2022 was $5,741,000 and a fair value of $4,596,000 resulting in specific loss exposures of $1,145,000.

When there is little prospect of collecting principal or interest, loans, or portions of loans, may be charged-off to the allowance for credit losses. Losses are recognized in the period an obligation becomes uncollectible. The recognition of a loss does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan even though partial recovery may be affected in the future.

Foreclosed Assets Held For Sale. Other real estate owned acquired through loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for credit losses. Due to the subjective nature of establishing the fair value when the asset is acquired, the actual fair value of the other real estate owned, or foreclosed asset could differ from the original estimate. If it is determined that fair value declines subsequent to foreclosure, a valuation allowance is recorded through noninterest expense. Operating costs associated with the assets after acquisition are also recorded as noninterest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other noninterest expense. The total carrying amount of other real estate owned as of March 31, 2022 was $4,794,000. Other real estate owned included in the total carrying amount and measured at fair value on a nonrecurring basis during the period amounted to $28,000.

Mortgage Servicing Rights. As of March 31, 2022, mortgage servicing rights had a carrying value of $367,000 and a fair value of $432,000 resulting in a valuation reserve of $65,000. The fair value used to determine the valuation reserve for mortgage servicing rights was estimated using the discounted cash flow models. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the fair value hierarchy.

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2022
Collateral dependent loans	$	4,596	$	—	$	—	$	4,596
Foreclosed assets held for sale		28		—		—		28
Mortgage servicing rights		432		—		—		432
December 31, 2021
Collateral dependent loans	$	6,750	$	—	$	—	$	6,750
Foreclosed assets held for sale		2,068		—		—		2,068
Mortgage servicing rights		420		—		—		420

33

Sensitivity of Significant Unobservable Inputs

The following table presents quantitative information about unobservable inputs used in Level 3 fair value measurements other than goodwill at March 31, 2022.

March 31, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Collateral dependent loans	$	4,596	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		28	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		432	Third party valuations	PSA standard prepayment model rate	177 - 438		189

December 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Collateral dependent loans	$	6,750	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		2,068	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		420	Third party valuations	PSA standard prepayment model rate	205 - 513		273

34

The following tables present estimated fair values of the Company’s financial instruments at March 31, 2022 and December 31, 2021 in accordance with ASC 825 (in thousands):

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2022
Financial assets
Cash and due from banks	$	218,072	$	218,072	$	218,072	$	—	$	—
Federal funds sold		5,908		5,908		5,908		—		—
Certificates of deposit investments		1,960		1,960		—		1,960		—
Available-for-sale securities		1,466,950		1,466,950		—		1,466,950		—
Held-to-maturity securities		2,998		2,998		2,998		—		—
Equity securities		369		369		369		—		—
Loans held for sale		2,037		2,037		—		2,037		—
Loans net of allowance for credit losses		4,394,050		4,280,190		—		—		4,280,190
Interest receivable		22,365		22,365		—		22,365		—
Federal Reserve Bank stock		13,845		13,845		—		13,845		—
Federal Home Loan Bank stock		6,484		6,484		—		6,484		—
Financial liabilities
Deposits	$	5,487,305	$	5,482,217	$	—	$	4,821,794	$	660,423
Securities sold under agreements to repurchase		187,326		152,086		—		152,086		—
Interest payable		2,466		2,466		—		2,466		—
Federal Home Loan Bank borrowings		126,396		123,295		—		123,295		—
Subordinated debt, net		94,438		94,438				94,438
Junior subordinated debentures, net		19,237		15,458		—		15,458		—
December 31, 2021
Financial assets
Cash and due from banks	$	167,242	$	167,242	$	167,242	$	—	$	—
Federal funds sold		1,360		1,360		1,360		—		—
Certificates of deposit investments		2,450		2,450		—		2,450		—
Available-for-sale securities		1,421,422		1,421,422		—		1,421,323		99
Held-to-maturity securities		7,030		7,034		2,029		5,005		—
Equity securities		397		397		397		—		—
Loans held for sale		2,748		2,748		—		2,748		—
Loans net of allowance for credit losses		3,938,120		3,889,870		—		—		3,889,870
Interest receivable		19,868		19,868		—		19,868		—
Federal Reserve Bank stock		13,845		13,845		—		13,845		—
Federal Home Loan Bank stock		6,484		6,484		—		6,484		—
Financial liabilities
Deposits	$	4,956,486	$	4,956,738	$	—	$	4,394,434	$	562,304
Securities sold under agreements to repurchase		146,268		146,274		—		146,274		—
Interest payable		1,346		1,346		—		1,346		—
Federal Home Loan Bank borrowings		86,446		86,248		—		86,248		—
Subordinated debt, net		94,400		94,400		—		94,400		—
Junior subordinated debentures, net		19,195		15,012		—		15,012		—

Note 8 – Business Combinations

On July 28, 2021, the Company and Brock Sub LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company (“Delta Merger Sub”), entered into an Agreement and Plan of Merger (the “Delta Merger Agreement”) with Delta Bancshares Company, a Missouri corporation (“Delta”), pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of Delta pursuant to a business combination whereby Delta merged with and into Delta Merger Sub, whereupon the separate corporate existence of Delta ceased and Delta Merger Sub continued as the surviving company and a wholly-owned subsidiary of First Mid (the “Delta Merger”). The Delta Merger was completed on February 14, 2022.

35

Subject to the terms and conditions of the Delta Merger Agreement, at the effective time of the Delta Merger, each share of common stock, par value $10.00 per share, of Delta issued and outstanding immediately prior to the effective time of the Delta Merger (other than shares held in treasury by Delta) converted into and became the right to receive cash and shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration paid by the Company at the closing of the Delta Merger to Delta’s shareholders and option holders was approximately $15.15 million in cash and 2,292,270 shares of Company common stock. Delta’s outstanding stock options vested upon consummation of the Delta Merger, and all outstanding Delta options that were unexercised prior to the effective time of the Delta Merger were cashed out.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business Combinations ("ASC 805"),” and accordingly the assets and liabilities were recorded at their estimated fair values as of the date of acquisition. Fair values are subject to refinement for up to one year after the closing date of February 14, 2022 as additional information regarding the closing date fair values become available. The total consideration paid was used to determine the amount of goodwill resulting from the transaction. As the total consideration paid exceeded the net assets acquired, goodwill of $28.6 million was recorded for the acquisition. Goodwill recorded in the transaction, which reflects the synergies and economies of scale expected from combining operations and the enhanced revenue opportunities from the Company’s service capabilities, is not tax deductible, and was all assigned to the banking segment of the Company.

	Acquired			Fair Value			As Recorded by
(In thousands)	Book Value			Adjustments			Jefferson Bank
Assets
Cash and due from banks	$	82,473		$	—		$	82,473
Investment securities		184,959			(2,836	)		182,123
Loans		426,433			(7,924	)		418,509
Allowance for credit losses		(5,388	)		4,525			(863	)
Premises and equipment		5,522			3,508			9,030
Goodwill		14			28,597			28,611
Core deposit intangible		—			5,920			5,920
Bank owned life insurance		15,822						15,822
Right of use asset		—			717			717
Other assets		9,061			(1,340	)		7,721
Total assets acquired	$	718,896		$	31,167		$	750,063
Liabilities
Deposits	$	558,619		$	1,759		$	560,378
Securities sold under agreements to repurchase		35,523			—			35,523
FHLB advances		45,000			75			45,075
Lease liability		—			717			717
Other liabilities		2,209			(1,161	)		1,048
Total liabilities assumed		641,351			1,390			642,741
Net assets acquired	$	77,545		$	29,777		$	107,322
Consideration paid
Cash							$	15,150
Common stock								92,172
							$	107,322

The Company has recognized approximately $785,000, pre-tax, of acquisition costs for the Delta Merger. Of this amount, $535,000 was recognized during 2022. These costs are included in salaries and benefits, legal and professional and other expense. Of the $7.9 million adjustment to loans, $8.2 million is being accreted to interest income over the remaining term of the loans. The remaining $300,000 was the elimination of deferred fees and unearned discounts previously recorded by Jefferson Bank. The Company also recorded approximately $863,000 directly to the allowance for credit losses for loans identified as PCD. Of the $426 million of loans acquired, approximately $18.8 million was identified as PCD.

The differences between fair value and acquired value of the assumed time deposits of $1.8 million and the assumed FHLB advances of $75,000, are being amortized to interest expense over the remaining life of the liabilities. The core deposit intangible asset, with a fair value of $5.9 million, is being amortized on an accelerated basis over its estimated life of 10 years.

36

The following unaudited pro forma condensed combined financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the Delta Merger taken place at the beginning of the period (dollars in thousands, except per share data):

	Three months ended March 31,
	2022		2021
Net interest income	$	44,200	$	40,966
Provision for loan losses		2,952		14,136
Non-interest income		21,088		18,528
Non-interest expense		40,575		39,653
Income before taxes		21,761		5,705
Income tax expense (benefit)		4,797		887
Net income (loss)	$	16,964	$	4,818
Earnings per share
Basic	$	0.88	$	0.28
Diluted		0.88		0.28
Basic weighted average shares o/s		19,295,860		17,299,927
Diluted weighted average shares o/s		19,358,457		17,352,947

On September 25, 2020, the Company and Eval Sub Inc., a newly formed Illinois corporation and wholly-owned subsidiary of the Company ("Eval Merger Sub"), entered into an Agreement and Plan of Merger (the "LINCO Merger Agreement") with LINCO Bancshares, Inc., a Missouri corporation ("LINCO"), and the sellers as defined therein, pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of LINCO pursuant to a business combination whereby Eval Merger Sub merged with and into LINCO, whereupon the separate corporate existence of Merger Sub ceased and LINCO continued as the surviving company and a wholly-owned subsidiary of the Company (the "LINCO Merger"). The LINCO Merger closed on February 22, 2021.

Subject to the terms and conditions of the LINCO Merger Agreement, at the effective time of the LINCO Merger, each share of common stock, par value $1.00 per share, of LINCO issued and outstanding immediately prior to the effective time of the LINCO Merger (other than shares held in treasury by LINCO) was converted into and become the right to receive, cash or shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration paid by the Company at the closing of the LINCO Merger was $103.5 million in cash and 1,262,246 shares of the Company’s common stock. In addition, immediately prior to the closing of the proposed merger, LINCO paid a special dividend to its shareholders in the aggregate amount of $13 million.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business Combinations ("ASC 805"),” and accordingly the assets and liabilities were recorded at their estimated fair values as of the date of acquisition. Fair values are subject to refinement for up to one year after the closing date of February 22, 2021 as additional information regarding the closing date fair values become available. The total consideration paid was used to determine the amount of goodwill resulting from the transaction. As the total consideration paid exceeded the net assets acquired, goodwill of $5.4 million was recorded for the acquisition. Goodwill recorded in the transaction, which reflects the synergies and economies of scale expected from combining operations and the enhanced revenue opportunities from the Company’s service capabilities, is not tax deductible, and was all assigned to the banking segment of the Company.

37

	Acquired			Fair Value			As Recorded by
(In thousands)	Book Value			Adjustments			Providence Bank
Assets
Cash and due from banks	$	130,561		$	—		$	130,561
Investment securities		119,234			264			119,498
Loans		838,377			(9,401	)		828,976
Allowance for credit losses		(8,656	)		6,583			(2,073	)
Other real estate owned		8,435			915			9,350
Premises and equipment		23,440			6,360			29,800
Goodwill		20,503			(15,054	)		5,449
Core deposit intangible		123			2,025			2,148
Right of use asset		—			794			794
Other assets		43,697			2,499			46,196
Total assets acquired	$	1,175,714		$	(5,015	)	$	1,170,699
Liabilities
Deposits	$	988,329		$	2,081		$	990,410
Securities sold under agreements to repurchase		—			—			—
FHLB advances		26,941			975			27,916
Other borrowings		—			—			—
Lease liability		—			794			794
Other liabilities		4,498			(610	)		3,888
Total liabilities assumed		1,019,768			3,240			1,023,008
Net assets acquired	$	155,946		$	(8,255	)	$	147,691
Consideration paid
Cash							$	103,500
Common stock								44,191
							$	147,691

38

The Company has recognized approximately $9 million, pre-tax, of acquisition costs for the LINCO acquisition. Of this amount, $8.5 million was recognized during the first three months of 2021. These costs are included in salaries and benefits, legal and professional and other expense. Of the $9.4 million adjustment to loans, $11.1 million is being accreted to interest income over the remaining term of the loans. The remaining $1.7 million was the elimination of deferred fees and unearned discounts previously recorded by Providence Bank. The Company also recorded approximately $2 million directly to the allowance for credit losses for loans identified as PCD. Of the $838 million of loans acquired, approximately $64.6 million was identified as PCD.

The differences between fair value and acquired value of the assumed time deposits of $2.1 million and the assumed FHLB advances of $975,000, are being amortized to interest expense over the remaining life of the liabilities. The core deposit intangible asset, with a fair value of $2.1 million, is being amortized on an accelerated basis over its estimated life of 10 years.

The following unaudited pro forma condensed combined financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the LINCO acquisition taken place at the beginning of the period (dollars in thousands, except per share data):

	Three months ended
	March 31, 2021
Net interest income	$	38,237
Provision for loan losses		12,136
Non-interest income		17,749
Non-interest expense		37,659
Income before taxes		6,191
Income tax expense (benefit)		1,078
Net income (loss)	$	5,113
Earnings per share
Basic	$	0.30
Diluted		0.29
Basic weighted average shares o/s		17,299,927
Diluted weighted average shares o/s		17,352,947

Note 9 -- Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). As of March 31, 2022, substantially all the Company's leases are operating leases for real estate property for bank branches, ATM locations, and office space.

These leases are generally for periods of 1 to 25 years with various renewal options. The Company elected the optional transition method permitted by Topic 842. Under this method, the Company recognizes and measures leases that exist at the application date and prior comparative periods are not adjusted. In addition, the Company elected the package of practical expedients:

1. An entity need not reassess whether any expired or existing contracts contain leases.

2. An entity need not reassess the lease classification for any expired or existing leases.

3. An entity need not reassess initial direct costs for any existing leases.

The Company has also elected the practical expedient, which may be elected separately or in conjunction with the package noted above, to use hindsight in determining the lease term and in assessing the right-of-use assets. This expedient must be applied consistently to all leases. Lastly, the Company has elected to use the practical expedient to include both lease and non-lease components as a single component and account for it as a lease. In addition, the Company has elected to not include short-term leases (i.e. leases with terms of twelve months or less) or equipment leases (primarily copiers) deemed immaterial, on the consolidated balance sheets.

39

For leases in effect at January 1, 2019 and for leases commencing thereafter, the Company recognizes a lease liability and a right-of-use asset, based on the present value of lease payments over the lease term. The discount rate used in determining present value was the Company's incremental borrowing rate which is the FHLB fixed advance rate based on the remaining lease term as of January 1, 2019, or the commencement date for leases subsequently entered into. The following table contains supplemental balance sheet information related to leases (dollars in thousands):

	March 31, 2022			March 31, 2021			December 31, 2021
Operating lease right-of-use assets	$	15,242		$	17,424		$	15,116
Operating lease liabilities		15,458			17,578			15,322
Weighted-average remaining lease term (in years)		6.9			6.8			6.6
Weighted-average discount rate		2.67	%		2.63	%		2.70	%

Certain of the Company's leases contain options to renew the lease; however, not all renewal options are included in the calculation of lease liabilities as they are not reasonably certain to be exercised. The Company's leases do not contain residual value guarantees or material variable lease payments. The Company does not have any other material restrictions or covenants imposed by leases that would impact the Company's ability to pay dividends or cause the Company to incur additional financial obligations.

Maturities of lease liabilities were as follows (in thousands):

Year ending December 31,
	2022	$	2,221
	2021		2,416
	2022		2,044
	2023		1,713
	2024		1,714
Thereafter			7,645
Total lease payments			17,753
Less imputed interest			(2,295	)
Total lease liability		$	15,458

The components of lease expense for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

	Three months ended March 31,
	2022			2021
Operating lease cost	$	629		$	708
Short-term lease cost		27			35
Variable lease cost		266			137
Total lease cost		922			880
Income from subleases		(100	)		(153	)
Net lease cost	$	822		$	727

As the Company elected not to separate lease and non-lease components, the variable lease cost primarily represents variable payment such as common area maintenance and copier expense. The Company does not have any material sub-lease agreements. Cash paid for amounts included in the measurement of lease liabilities was (in thousands):

	March 31, 2022		March 31, 2021
Operating cash flows from operating leases	$	722	$	711

40

Note 10 – Derivatives

The Company utilizes an interest rate swap, designated as a fair value hedge, to mitigate the risk of changing interest rates on the fair value of a fixed rate commercial real estate loan. For derivative instruments that are designed and qualify as a fair value hedge, the gain or loss on the derivative instrument, as well as the offsetting loss or gain in the hedged asset attributable to the hedged risk, is recognized in current earnings.

Derivatives Designated as Hedging Instruments

The following table provides the outstanding notional balances and fair values of outstanding derivatives designated as hedging instruments as of March 31, 2022 and December 31, 2021 (in thousands):

	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
March 31, 2022
Fair value hedges:
Interest rate swap agreements	Other liabilities	7.1	$	13,839	$	(2,167	)
December 31, 2021
Fair value hedges:
Interest rate swap agreements	Other liabilities	7.3	$	13,900	$	(1,476	)

The effects of the fair value hedges on the Company's income statement during the three months ended March 31, 2022 and 2021 were as follows (in thousands):

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Derivatives	2022			2021
Interest rate swap agreements	Interest income on loans	$	(785	)	$	(743	)

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Hedged Items	2022		2021
Interest rate swap agreements	Interest income on loans	$	785	$	743

As of March 31, 2022, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustment for fair value hedges (in thousands):

Line Item in the Balance Sheet in Which the Hedge Item is Included	Carrying Amount of the Hedged Asset		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
Loans	$	13,958	$	(118	)

Derivatives Not Designated as Hedging Instruments

The following amounts represent the notional amounts and gross fair value of derivative contracts not designated as hedging instruments outstanding during the three months ended March 31, 2022 (dollars in thousands):

March 31, 2022	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
Interest rate swap agreements	Other assets	5.8	$	40,435	$	2,286
Interest rate swap agreements	Other liabilities	5.8		40,435		(2,286	)

41

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to provide a better understanding of the consolidated financial condition and results of operations of the Company and its subsidiaries as of, and for the three months ended March 31, 2022 and 2021. This discussion and analysis should be read in conjunction with the consolidated financial statements, related notes and selected financial data appearing elsewhere in this report.

Forward-Looking Statements

This document may contain certain forward-looking statements, such as discussions of the Company’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. The Company 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 the company, 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 transactions between First Mid and Delta will not be realized within the expected time period; the risk that integration of the operations of Delta with First Mid will be materially delayed or will be more costly or difficult than expected; the inability to complete the proposed transactions due to the failure to satisfy conditions to completion of the proposed transactions, including failure to obtain the required regulatory, shareholder and other approvals; the failure of the proposed transactions to close for any other reason; the effect of the announcement of the proposed transactions on customer relationships and operating results; the possibility that the proposed transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events; changes in interest rates; general economic conditions and those in the market areas of the Company; 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 the 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 the Company’s; accounting principles, policies and guidelines; the severity, magnitude and duration of the COVID-19 pandemic, the direct and indirect impact of such pandemic, including responses to the pandemic by the U.S., state and local governments, customers' businesses, the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect the company’s liquidity and capital positions, impair the ability of the company’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 the Company’s financial results, including possible lost revenue and increased expenses (including cost of capital), as well as possible goodwill impairment charges. Additional information concerning the Company, including additional factors and risks that could materially affect the Company financial results, are included in the Company 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.

COVID-19 Impact

The COVID-19 outbreak is an unprecedented event that provides significant economic uncertainty for a broad spectrum of industries. The spread of this outbreak has caused significant disruptions in the U.S. economy and some of these impacts will be long lasting. As it continues to evolve it is not clear when or how the pandemic-driven contraction will recover. Congress, the President, and the Federal Reserve have taken several actions designed to cushion the economic fallout. Most notably, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law at the end of March 2020 as a $2 trillion legislative package. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. Many of the CARES Act provisions, as well as other recent legislative and regulatory efforts, are expected to have a material impact on financial institutions. The Company's strong track record and revenue diversification provide a solid foundation for earnings and capital. The Company is focused on supporting its customers, communities, and employees during this unique operating environment. Following is a description of the impact COVID-19 is having, actions taken because of COVID-19, and certain risks to the Company that COVID-19 creates or exacerbates, as well as management's outlook on the current COVID-19 situation.

Lending operations and accommodations to customers. Beginning in March 2020, First Mid Bank offered a 90-day commercial deferral program, primarily to hotel and restaurant borrowers. Subsequently, additional deferrals were offered on an individual case basis and a broader program was offered to residential and consumer customers. As of March 31, 2022, a total of $467,000 was still deferred through these programs. In accordance with interagency guidance issued in March 2020, these short-term deferrals are not considered troubled debt restructurings.

42

Beginning April 3, 2020, with the passage of the initial Paycheck Protection Program (“PPP”), administered by the Small Business Administration (“SBA”), the Company actively participated in assisting existing and new customers with applications for resources through the program. PPP loans have a two to five-year term and earn interest at 1%. The Company believes that most of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program. As of March 31, 2022, the Company has outstanding 33 PPP loans totaling $5.3 million with the SBA. It is the Company’s understanding that loans funded through the PPP program are fully guaranteed by the U.S. government and as such do not represent a credit risk.

Employees. The Company has a business continuity plan in place that was executed in March 2020. Approximately half of the Company's workforce has the ability to work remotely with secure connections. In addition, various preventative and personal hygiene measures, in accordance with CDC guidelines have been implemented. To protect and ensure the safety of employees, as well as customers, the Company continues to monitor all Company locations.

Asset impairment. The Company does not believe that any impairment exists due to COVID-19 to goodwill and other intangible assets, long-lived assets, mortgage servicing rights ("MSRs"), right of use assets, or available-for-sale investment securities at this time. While certain valuation assumptions and judgements will change to account for COVID-19 related circumstances, the Company does not expect significant changes in methodology used to determine the fair value of assets in accordance with GAAP. It is uncertain whether prolonged effects of COVID-19 will result in future impairment charges related to any of these assets.

Capital and liquidity. The Company’s current allowance for credit losses could absorb net charge offs greater than the total of all net charge offs over the last 20 years. The Company’s aggregate net charge offs over the last 20 years through March 31, 2022, were $35.9 million. Current capital levels also support the Company's recent loan stress testing of the most vulnerable industry sectors impacted by COVID-19.

The Company maintains access to multiple sources of liquidity. Currently, the Company's total liquidity sources could provide $2.4 billion of total available capacity as of March 31, 2022.

Management's outlook. The Company's current financial position is strong and the fundamental earning capabilities of its currently existing operations is solid. Due to the uncertain economic outlook related to the COVID-19 crisis and the potential for loan losses and other asset impairments, it is anticipated that reserve levels will remain elevated compared to recent historical trends. All processes, procedures and internal controls are expected to continue as outlined in existing applicable policies despite remote working status of many employees. While the Company does not currently anticipate any material changes or deficiencies to its capital or liquidity sources, uncertainties about duration and overall effects on the economy could result in more adverse effects than expected.

Overview

This overview of management’s discussion and analysis highlights selected information in this document and may not contain all the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting estimates which have an impact on the Company’s financial condition and results of operations you should carefully read this entire document.

Net income was $16.6 million and $4.1 million for the three months ended March 31, 2022 and 2021, respectively. Diluted net income per common share was $0.86 and $0.24 for the three months ended March 31, 2022 and 2021.

The following table shows the Company’s annualized performance ratios for three months ended March 31, 2022 and 2021, compared to the performance ratios for the year ended December 31, 2021:

	Three months ended						Year ended
	March 31, 2022			March 31, 2021			December 31, 2021
Return on average assets		1.05	%		0.32	%		0.90	%
Return on average common equity		9.95	%		2.78	%		8.38	%
Average equity to average assets		10.56	%		11.41	%		10.72	%

Total assets were $6.6 billion at March 31, 2022, compared to $6.0 billion as of December 31, 2021. From December 31, 2021 to March 31, 2022, cash and interest-bearing deposits increased $55.4 million, net loan balances increased $455.9 million and investment securities increased $41.5 million. Net loan balances were $4.39 billion at March 31, 2022 compared to $3.94 billion at December 31, 2021. The increases were primarily due to the acquisition of Jefferson Bank during the first quarter of 2022.

Net interest margin, on a tax equivalent basis, defined as net interest income divided by average interest-earning assets, was 3.07% for the three months ended March 31, 2022, down from 3.16% for the same period in 2021. This decrease was primarily due to lower yields on loans and investments. Net interest income before the provision for loan losses was $43.5 million compared to net interest income of $36.8 million for the same period in 2021. The increase in net interest income was primarily due to the acquisition of Jefferson Bank during the first quarter of 2022.

43

Total non-interest income of $21.1 million increased $3.3 million or 18.8% from $17.7 million for the same period last year. The increase in non-interest income resulted primarily from an increase in wealth management revenues, insurance commissions, and income from Jefferson Bank.

Total non-interest expense of $40.4 million increased $2.8 million or 7.4% from $37.6 million for the same period last year. The increase was primarily due to to variable costs tied to the increased revenues, inflationary impacts, and expenses from the acquisition of Delta during the first quarter of 2022.

Following is a summary of the factors that contributed to the changes in net income (in thousands):

	Change in Net Income
	2022 versus 2021
		Three months ended March 31, 2022
Net interest income		$	6,758
Provision for loan losses			9,184
Other income, including securities transactions			3,339
Other expenses			(2,788	)
Income taxes			(3,986	)
Increase in net income		$	12,507

Credit quality is an area of importance to the Company. Total nonperforming loans were $22.5 million at March 31, 2022, compared to $32.0 million at March 31, 2021 and $22.0 million at December 31, 2021. See the discussion under the heading “Loan Quality and Allowance for Loan Losses” for a detailed explanation of these balances. Repossessed asset balances totaled $4.8 million at March 31, 2022 compared to $13.3 million at March 31, 2021 and $5.0 million at December 31, 2021.

The Company’s provision for loan losses for the three months ended March 31, 2022 and 2021 was $2,952,000 and $12,136,000, respectively. The provision expense during the first three months of 2022 included recording an initial provision for credit losses for Jefferson Bank of $2 million.  Provision expense during the first three months of 2021 included recording an initial provision for credit losses for Providence Bank loans of $11.5 million, offset by lower provision expense for First Mid Bank compared to the same period in 2020 which included adoption of ASC 2016-13. Total loans past due 30 days or more were 0.53% of loans at March 31, 2022 compared to 0.39% at March 31, 2021, and 0.62% of loans at December 31, 2021. Loans secured by both commercial and residential real estate comprised approximately 71.1% of the loan portfolio as of March 31, 2022 and 69.8% as of December 31, 2021.

The Company’s capital position remains strong and the Company has consistently maintained regulatory capital ratios above the “well-capitalized” standards. The Company’s Tier 1 capital to risk weighted assets ratio calculated under the regulatory risk-based capital requirements at March 31, 2022 and 2021 and December 31, 2021 was 12.42%, 10.74% and 12.51%, respectively. The Company’s total capital to risk weighted assets ratio calculated under the regulatory risk-based capital requirements at March 31, 2022 and 2021, and December 31, 2021 was 15.41%, 13.75% and 15.79%, respectively. The decrease in Tier 1 capital to risk weighted assets ratio from December 31, 2021 was primarily due to the acquisition of LINCO and dividends paid to shareholders, offset by net income added to retained earnings.

On March 27, 2020, the federal banking regulatory agencies, issued an interim final rule which provided an option to delay the estimated impact on regulatory capital of ASU 2016-13, which was effective January 1, 2020. The initial impact of adoption of ASU 2016-13 as well as 25% of the quarterly increases in the allowance for credit losses subsequent to adoption of ASU 2016-13 ("CECL adjustments") was be delayed for two years. The cumulative amount of these adjustments will be phased out of the regulatory capital calculation over a three-year period, with 75% of the adjustments included in 2022, 50% of the adjustments included in 2023 and 25% of the adjustments included in 2024. After five years, the temporary delay of ASU 2016-13 adoption will be fully reversed. The Company has elected this option.

The Company’s liquidity position remains sufficient to fund operations and meet the requirements of borrowers, depositors, and creditors. The Company maintains various sources of liquidity to fund its cash needs. See the discussion under the heading “Liquidity” for a full listing of sources and anticipated significant contractual obligations.

The Company’s liquidity position remains sufficient to fund operations and meet the requirements of borrowers, depositors, and creditors. The Company maintains various sources of liquidity to fund its cash needs. See the discussion under the heading “Liquidity” for a full listing of sources and anticipated significant contractual obligations.

44

The Company enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. The total outstanding commitments at March 31, 2022 and 2021, were $1.2 billion and $850 million, respectively.  The increase in outstanding commitments was primarily due to the acquisition of Jefferson Bank.

Federal Deposit Insurance Corporation Insurance Coverage. As FDIC-insured institutions, First Mid Bank and Jefferson Bank are required to pay deposit insurance premium assessments to the FDIC. Several requirements with respect to the FDIC insurance system have affected results, including insurance assessment rates.

The Company expensed $426,000 and $452,000 for the assessment during the first three months of 2022 and 2021, respectively.

Critical Accounting Policies and Use of Significant Estimates

The Company has established various accounting policies that govern the application of U.S. generally accepted accounting principles in the preparation of the Company’s consolidated financial statements. The significant accounting policies of the Company are described in the footnotes to the consolidated financial statements included in the Company’s 2020 Annual Report on Form 10-K. Certain accounting policies involve significant judgments and assumptions by management that have a material impact on the carrying value of certain assets and liabilities; management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and assumptions, which could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company.

Investment in Debt and Equity Securities. The Company classifies its investments in debt and equity securities as either held-to-maturity or available-for-sale in accordance with Statement of Financial Accounting Standards (SFAS) No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” which was codified into ASC 320. Securities classified as held-to-maturity are recorded at amortized cost. Available-for-sale securities are carried at fair value. Fair value calculations are based on quoted market prices when such prices are available. If quoted market prices are not available, estimates of fair value are computed using a variety of techniques, including extrapolation from the quoted prices of similar instruments or recent trades for thinly traded securities, fundamental analysis, or through obtaining purchase quotes. Due to the subjective nature of the valuation process, it is possible that the actual fair values of these investments could differ from the estimated amounts, thereby affecting the financial position, results of operations and cash flows of the Company.

If the estimated value of investments is less than the cost or amortized cost, the Company evaluates whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment. If such an event or change has occurred and the Company determines that the impairment is other-than-temporary, a further determination is made as to the portion of impairment that is related to credit loss. The impairment of the investment that is related to the credit loss is expensed in the period in which the event or change occurred. The remainder of the impairment is recorded in other comprehensive income (loss).

Loans. Loans are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase discounts and premiums, fair value hedge accounting adjustments and deferred loan fees and costs. Accrued interest is reported separately and is included in interest receivable in the consolidated balance sheets.

Allowance for Credit Losses - Loans. The Company believes the allowance for credit losses for loans is the critical accounting policy that requires the most significant judgments and assumptions used in the preparation of its consolidated financial statements. The allowance for credit losses for loans represents the best estimate of losses inherent in the existing loan portfolio. An estimate of potential losses inherent in the loan portfolio are determined and an allowance for those losses is established by considering factors including historical loss rates, expected cash flows and estimated collateral values. In assessing these factors, the Company uses relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts.

To determine the allowance, the loan portfolio is segmented based on similar risk characteristics. The allowance for credit losses is estimated using a discounted cash flow (DCF) methodology. The DCF projects future cash flows over the life of the loan portfolio. Probability of default (PD) and loss given default (LGD) are key components in calculating expected losses in this model. The PD is forecasted using a regression model that determines the likelihood of default with a forward-looking forecast of unemployment rates.  The LGD is the percentage of defaulted loans that is ultimately charged off.  The allowance is calculated as the net present value of the expected cash flows less the amortized cost basis of the loans. Prior to 2022, the allowance for credit losses was measured on a collective (pool) basis for non-individually evaluated loans with similar risk characteristics. Historical credit loss experience provided the basis for the estimate of expected credit losses. Adjustments to expected losses are made using qualitative factors for relevant to each loan segment including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. In addition, a forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period.

45

The Company estimates the appropriate level of allowance for credit losses for individually evaluated loans by evaluating them separately. A specific allowance is assigned to an impaired loan when expected cash flows or collateral are less than the carrying amount of the loan.

Allowance for Credit Losses - Off-Balance Sheet Credit Exposures. The Company estimates expected credit losses over the contractual period that the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is included in other liabilities in the consolidated balance sheets.

Other Real Estate Owned. Other real estate owned acquired through loan foreclosure is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for loan losses. Due to the subjective nature of establishing the fair value when the asset is acquired, the actual fair value of the other real estate owned or foreclosed asset could differ from the original estimate. If it is determined that fair value temporarily declines subsequent to foreclosure, a valuation allowance is recorded through noninterest expense.

Operating costs associated with the assets after acquisition are also recorded as noninterest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other noninterest expense.

Mortgage Servicing Rights. The Company has elected to measure mortgage servicing rights under the amortization method. Using this method, servicing rights are amortized in proportion to and over the period of estimated net servicing income. The amortized assets are assessed for impairment based on fair value at each reporting date. Impairment is determined by stratifying rights into tranches based on predominant characteristics, such as interest rate, loan type and investor type.

Impairment is recognized through a valuation reserve, to the extent that fair value is less than the carrying amount of the servicing assets. Fair value in excess of the carrying amount of servicing assets is not recognized.

Deferred Income Tax Assets/Liabilities. The Company’s net deferred income tax asset arises from differences in the dates that items of income and expense enter our reported income and taxable income. Deferred tax assets and liabilities are established for these items as they arise. From an accounting standpoint, deferred tax assets are reviewed to determine if they are realizable based on the historical level of taxable income, estimates of future taxable income and the reversals of deferred tax liabilities. In most cases, the realization of the deferred tax asset is based on future profitability. If the Company were to experience net operating losses for tax purposes in a future period, the realization of deferred tax assets would be evaluated for a potential valuation reserve.

Additionally, the Company reviews its uncertain tax positions annually under FASB Interpretation No. 48 (FIN No. 48), “Accounting for Uncertainty in Income Taxes,” codified within ASC 740. An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be recognized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. A significant amount of judgment is applied to determine both whether the tax position meets the "more likely than not" test as well as to determine the largest amount of tax benefit that is greater than 50% likely to be recognized. Differences between the position taken by management and that of taxing authorities could result in a reduction of a tax benefit or increase to tax liability, which could adversely affect future income tax expense.

Impairment of Goodwill and Intangible Assets. Core deposit and customer relationships, which are intangible assets with a finite life, are recorded on the Company’s consolidated balance sheets. These intangible assets were capitalized as a result of past acquisitions and are being amortized over their estimated useful lives of up to 15 years. Core deposit intangible assets, with finite lives will be tested for impairment when changes in events or circumstances indicate that its carrying amount may not be recoverable. Core deposit intangible assets were tested for impairment as of September 30, 2021 as part of the goodwill impairment test and no impairment was identified.

As a result of the Company’s acquisition activity, goodwill, an intangible asset with an indefinite life, is reflected on the consolidated balance sheets. Goodwill is evaluated for impairment annually, unless there are factors present that indicate a potential impairment, in which case, the goodwill impairment test is performed more frequently than annually.

Fair Value Measurements. The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company estimates the fair value of a financial instrument using a variety of valuation methods. Where financial instruments are actively traded and have quoted market prices, quoted market prices are used for fair value. When the financial instruments are not actively traded, other observable market inputs, such as quoted prices of securities with similar characteristics, may be used, if available, to determine fair value. When observable market prices do not exist, the Company estimates fair value. The Company’s valuation methods consider factors such as liquidity and concentration concerns. Other factors such as model assumptions, market dislocations, and unexpected correlations can affect estimates of fair value. Imprecision in estimating these factors can impact the amount of revenue or loss recorded.

46

SFAS No. 157, “Fair Value Measurements”, which was codified into ASC 820, establishes a framework for measuring the fair value of financial instruments that considers the attributes specific to particular assets or liabilities and establishes a three-level hierarchy for determining fair value based on the transparency of inputs to each valuation as of the fair value measurement date.

The three levels are defined as follows:

• Level 1 — quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 — inputs include quoted prices for similar assets and liabilities in active markets, quoted prices of identical or similar assets or liabilities in markets that are not active, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 — inputs that are unobservable and significant to the fair value measurement.

At the end of each quarter, the Company assesses the valuation hierarchy for each asset or liability measured. From time to time, assets or liabilities may be transferred within hierarchy levels due to changes in availability of observable market inputs to measure fair value at the measurement date. Transfers into or out of hierarchy levels are based upon the fair value at the beginning of the reporting period. A more detailed description of the fair values measured at each level of the fair value hierarchy can be found in Note 7 – Fair Value of Assets and Liabilities.

Results of Consolidated Operations

Net Interest Income

The largest source of revenue for the Company is net interest income. Net interest income represents the difference between total interest income earned on earning assets and total interest expense paid on interest-bearing liabilities. The amount of interest income is dependent upon many factors, including the volume and mix of earning assets, the general level of interest rates and the dynamics of changes in interest rates. The cost of funds necessary to support earning assets varies with the volume and mix of interest-bearing liabilities and the rates paid to attract and retain such funds.

Net interest income is the excess of interest received from earning assets over interest paid on interest-bearing liabilities. For analytical purposes, net interest income is presented on a full tax equivalent ("TE") basis in the table that follows. The federal statutory rate in effect of 21% for 2022 and 2021 was used. The TE analysis portrays the income tax benefits associated with the tax-exempt assets. The year-to-date net yield on interest-earning assets excluding the TE adjustments of $770,000 and $595,000 for 2022 and 2021, respectively were 3.03% and 3.11% at March 31, 2022 and 2021, respectively.

47

The Company’s average balances, fully tax equivalent interest income and interest expense, and rates earned or paid for major balance sheet categories are set forth for the three months ended March 31, 2022 and 2021 in the following table (dollars in thousands):

	Three months ended March 31, 2022								Three months ended March 31, 2021
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
Assets
Interest-bearing deposits with other financial institutions	$	135,176		$	55		0.16	%	$	278,295		$	74		0.11	%
Federal funds sold		3,714			1		0.13	%		1,316			—		0.03	%
Certificates of deposit		2,238			11		2.04	%		2,695			14		2.14	%
Investment securities:
Taxable		1,111,109			4,905		1.77	%		761,727			3,249		1.71	%
Tax-exempt (1)		382,909			2,867		2.99	%		248,188			2,016		3.25	%
Loans net of unearned income (TE) (2)		4,182,606			40,076		3.88	%		3,477,754			36,058		4.20	%
Total earning assets		5,817,752			47,915		3.33	%		4,769,975			41,411		3.52	%
Cash and due from banks		114,257								84,392
Premises and equipment		83,883								68,282
Other assets		367,966								296,284
Allowance for loan losses		(58,462	)							(46,735	)
Total assets	$	6,325,396							$	5,172,198
Liabilities and stockholders' equity
Interest-bearing deposits
Demand deposits	$	2,610,573		$	1,321		0.21	%	$	1,876,378		$	886		0.19	%
Savings deposits		658,038			119		0.07	%		579,632			136		0.10	%
Time deposits		615,142			708		0.47	%		623,852			1,462		0.95	%
Total interest-bearing deposits		3,883,753			2,148		0.22	%		3,079,862			2,484		0.33	%
Securities sold under agreements to repurchase		173,491			67		0.16	%		198,670			70		0.14	%
FHLB advances		115,852			276		0.97	%		102,081			374		1.49	%
Federal funds purchased		44			—		—	%		—			—		—	%
Subordinated debt		94,413			986		4.24	%		94,266			984		4.23	%
Junior subordinated debentures		19,210			146		3.08	%		19,041			140		2.98	%
Total borrowings		403,010			1,475		1.48	%		414,058			1,568		1.54	%
Total interest-bearing liabilities		4,286,763			3,623		0.34	%		3,493,920			4,052		0.47	%
Non interest-bearing demand deposits		1,329,554					0.26	%		1,033,741					0.36	%
Other liabilities		41,345								54,346
Stockholders' equity		667,734								590,191
Total liabilities and equity	$	6,325,396							$	5,172,198
Net interest income				$	44,292							$	37,359
Net interest spread							2.99	%							3.05	%
Impact of non interest-bearing funds							0.08	%							0.11	%
TE net yield on interest-earning assets							3.07	%							3.16	%

1. The tax-exempt income is shown on a tax equivalent basis.

2. Nonaccrual loans and loans held for sale are included in the average balances. Balances are net of unaccreted discount related to loans acquired.

48

Changes in net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense. The following table summarizes the approximate relative contribution of changes in average volume and interest rates to changes in net interest income for the three months ended March 31, 2022, compared to the same period in 2021 (in thousands):

	Three months ended March 31, 2022 compared to 2021 Increase / (Decrease)
	Total
	Change			Volume (1)			Rate (1)
Earning assets:
Interest-bearing deposits	$	(19	)	$	(158	)	$	139
Federal funds sold		1			1			—
Certificates of deposit investments		(3	)		(2	)		(1	)
Investment securities:
Taxable		1,656			1,538			118
Tax-exempt (2)		851			1,020			(169	)
Loans (2) (3)		4,018			19,097			(15,079	)
Total interest income	$	6,504		$	21,496		$	(14,992	)
Interest-bearing liabilities:
Interest-bearing deposits
Demand deposits	$	435		$	343		$	92
Savings deposits		(17	)		102			(119	)
Time deposits		(754	)		(20	)		(734	)
Securities sold under agreements to repurchase		(3	)		(39	)		36
FHLB advances		(98	)		269			(367	)
Federal funds purchased		—			—			—
Subordinated debt		2			1			1
Junior subordinated debentures		6			1			5
Other debt		—			—			—
Total interest expense		(429	)		657			(1,086	)
Net interest income	$	6,933		$	20,839		$	(13,906	)

1. Changes attributable to the combined impact of volume and rate have been allocated proportionately to the change due to volume and the change due to rate.

2. The tax-exempt income is shown on a tax-equivalent basis.

3. Nonaccrual loans have been included in the average balances.

Tax equivalent net interest income increased $6.9 million, or 18.6%, to $44.3 million for the three months ended March 31, 2022, from $37.4 million for the same period in 2021. Net interest income increased primarily due to the acquisition of Jefferson Bank during the first quarter of 2022. The net interest margin decreased primarily due to lower interest rates on loans and investments.

For the three months ended March 31, 2022, average earning assets increased $1.0 billion, or 22.0%, and average interest-bearing liabilities increased $792.8 million or 22.7% compared with average balances for the same period in 2021.

The changes in average balances for these periods are shown below:

• Average interest-bearing deposits with other financial institutions decreased $143.1 million or 51.4%.

• Average federal funds sold increased $2.4 million or 182.2%.

• Average certificates of deposits investments decreased $0.5 million or 17.0%.

• Average loans increased by $704.9 million or 20.3%.

• Average securities increased by $484.1 million or 47.9%.

• Average interest-bearing customer deposits increased by $803.9 million or 26.1%.

• Average securities sold under agreements to repurchase decreased by $25.2 million or 12.7%.

• Average borrowings and other debt increased by $14.1 million or 6.6%.

•Net interest margin decreased to 3.07% for the first three months of 2022 from 3.16% for the first three months of 2021.

49

Provision for Loan Losses

The provision for loan losses for the three months ended March 31, 2022 and 2021 was $3.0 million and $12.1 million, respectively. The provision expense during the first three months of 2022 included recording an initial provision for credit losses for Jefferson Bank of $2 million. The provision expense during the first three months of 2021 included recording an initial provision for credit losses for Providence Bank loans of $11.5 million, offset by lower provision expense for First Mid Bank. Net charge-offs were $0 for the three months ended March 31, 2022, compared to net charge offs of $0.7 million for March 31, 2021. Nonperforming loans were $22.5 million and $32.0 million as of March 31, 2022 and 2021, respectively. For information on loan loss experience and nonperforming loans, see discussion under the “Nonperforming Loans” and “Loan Quality and Allowance for Loan Losses” sections below.

Other Income

An important source of the Company’s revenue is other income. The following table sets forth the major components of other income for the three months ended March 31, 2022 and 2021 (in thousands):

	Three months March 31, 2022
	2022		2021		$ Change			% Change
Wealth management revenues	$	5,975	$	4,926	$	1,049			21.3	%
Insurance commissions		7,104		5,857		1,247			21.3	%
Service charges		2,056		1,364		692			50.7	%
Security gains, net		—		4		(4	)		-100.0	%
Mortgage banking revenue, net		444		1,409		(965	)		-68.5	%
ATM / debit card revenue		2,898		2,699		199			7.4	%
Bank owned life insurance		844		637		207			32.5	%
Other		1,767		853		914			107.2	%
Total other income	$	21,088	$	17,749	$	3,339			18.8	%

Following are explanations of the changes in these other income categories for the three months ended March 31, 2022 compared to the same period in 2021:

• Wealth management revenues increased due to growth in customer accounts and assets under management as well as rising commodity prices, which drove higher farm management fee income.

• Insurance commissions increased primarily due to an increase in commission and fee income and contingency income during the first quarter of 2022 compared to the same period last year.

• Fees from service charges increased during the first three months of 2022 primarily due to an increase in overdraft fees and transaction account service charges during the period and the acquisition of Jefferson Bank.

• Gains from the sale of securities during the first quarter of 2022 and 2021 were $0 and $4,000, respectively.

• The decrease in mortgage banking income was due to a decrease in mortgage refinancing activity and fees from loans sold in the secondary market.

• $19.6 million (representing 139 loans) for the three months ended March 31, 2022.

• $108.3 million (representing 263 loans) for the three months ended March 31, 2021.

First Mid Bank generally releases the servicing rights on loans sold into the secondary market.

• Revenue from ATMs and debit cards increased due to an increase in activity during the period and the acquisition of Jefferson Bank.

• Bank owned life insurance income increased approximately $207,000 during the first quarter of 2022 compared to the same period in 2021 primarily due to $15.8 million of insurance added through the acquisition of Jefferson Bank.

• Other income increased primarily due to gain realized on the termination of derivatives, a partnership distribution in other investments, and the acquisition of Jefferson Bank.

50

Other Expense

The following table sets forth the major components of other expense for the three months ended March 31, 2022 and 2021 (dollars in thousands):

	Three months March 31,
	2022			2021		$ Change			% Change
Salaries and employee benefits	$	24,302		$	23,487	$	815			3.5	%
Net occupancy and equipment expense		6,155			4,970		1,185			23.8	%
Net other real estate owned expense		(33	)		78		(111	)		-142.3	%
FDIC insurance		426			452		(26	)		-5.8	%
Amortization of intangible assets		1,522			1,220		302			24.8	%
Stationery and supplies		311			316		(5	)		-1.6	%
Legal and professional		1,734			1,402		332			23.7	%
Marketing and donations		873			502		371			73.9	%
ATM/debit card expense		1,078			838		240			28.6	%
Other operating expenses		4,020			4,335		(315	)		-7.3	%
Total other expense	$	40,388		$	37,600	$	2,788			7.4	%

Following are explanations for the changes in these other expense categories for the three months ended March 31, 2022 compared to the same period in 2021:

• The increase in salaries and employee benefits, the largest component of other expense, is primarily due to an increase in incentive compensation and commissions, share-based compensation expense, increases for merit raises and applicable payroll taxes, and the addition of Jefferson Bank, offset by declines in bonus accrual expense and group insurance expense, during the first quarter of 2022. There were 1050 and 983 full-time equivalent employees at March 31, 2022 and 2021, respectively.

• The increase in occupancy and equipment expense was due to increases in depreciation, equipment, and other property related expenses from the acquisition of Jefferson Bank and increases in data processing expense.

• The decrease in net other real estate owned expense was primarily due to properties sold at a net gain during 2022 compared to properties sold or written down at a net loss during 2021.

• Expense for amortization of intangible assets increased due to increases in amortization expense for core deposit intangibles for the three months ended March 31, 2022 compared to 2021, resulting from the acquisition of Jefferson Bank.

• The decrease in other operating expenses was primarily due to a decrease in costs to acquire Delta compared to cost to acquire LINCO offset by additional expenses from the operation of Jefferson Bank.

• On a net basis, all other categories of operating expenses increased during the period compared to last year primarily due to the operation of Jefferson Bank.

Income Taxes

Total income tax expense amounted to $4.6 million (21.9% effective tax rate) for the three months ended March 31, 2022, compared to $0.7 million (14.0% effective tax rate) for the same period in 2021. The increase in effective rate is primarily resulting from a decrease in significant non-recurring costs.

The Company files U.S. federal and state of Illinois, Indiana, Missouri and Texas income tax returns. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2019.

51

Analysis of Consolidated Balance Sheets

Securities

The Company’s overall investment objectives are to insulate the investment portfolio from undue credit risk, maintain adequate liquidity, insulate capital against changes in market value and control excessive changes in earnings while optimizing investment performance. The types and maturities of securities purchased are primarily based on the Company’s current and projected liquidity and interest rate sensitivity positions. The following table sets forth the amortized cost of the available-for-sale and held-to-maturity securities as of March 31, 2022 and December 31, 2021 (dollars in thousands)

	March 31, 2022					December 31, 2021
	Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	264,466		1.27	%	$	213,599		1.22	%
Obligations of states and political subdivisions		386,489		2.39	%		383,991		2.40	%
Mortgage-backed securities: GSE residential		820,448		1.69	%		799,456		1.58	%
Other securities		102,810		2.92	%		32,575		4.30	%
Total securities	$	1,574,213		1.87	%	$	1,429,621		1.80	%

At March 31, 2022, the Company’s investment portfolio increased by $144.6 million from December 31, 2021 primarily due to securities added with the acquisition of Jefferson Bank. When purchasing investment securities, the Company considers its overall liquidity and interest rate risk profile, as well as the adequacy of expected returns relative to the risks assumed.  The table below presents the credit ratings as of March 31, 2022 for certain investment securities (in thousands):

					Average Credit Rating of Fair Value at March 31, 2022 (1)
	Amortized Cost		Estimated Fair Value		AAA		AA +/-		A +/-		BBB +/-		< BBB -		Not rated
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	264,466	$	247,976	$	27,615	$	219,614	$	—	$	—	$	—	$	747
Obligations of state and political subdivisions		386,489		358,679		43,689		257,409		57,041		—		—		540
Mortgage-backed securities (2)		820,448		761,527		1,014		—		—		—		—		760,513
Other securities		99,812		98,768		—		11,854		42,498		5,123		—		39,293
Total available-for-sale	$	1,571,215	$	1,466,950	$	72,318	$	488,877	$	99,539	$	5,123	$	—	$	801,093
Held-to-maturity:
Other securities		2,998		2,998												2,998
Total held-to-maturity	$	2,998	$	2,998	$	—	$	—	$	—	$	—	$	—	$	2,998
Equity securities:
Federal Agricultural Mtg Corp	$	84	$	369	$	—	$	—	$	—	$	—	$	—	$	369

1. Credit ratings reflect the lowest current rating assigned by a nationally recognized credit rating agency.

2. Mortgage-backed securities include mortgage-backed securities (MBS) and collateralized mortgage obligation (CMO) issues from the following government sponsored enterprises: FHLMC, FNMA, GNMA and FHLB. While MBS and CMOs are no longer explicitly rated by credit rating agencies, the industry recognizes that they are backed by agencies which have an implied government guarantee.

52

Loans

The loan portfolio is the largest category of the Company’s earning assets. The following table summarizes the composition of the loan portfolio at amortized cost, including loans held for sale, as of March 31, 2022 and December 31, 2021 (in thousands):

	March 31, 2022					December 31, 2021
	Amortized Cost		% Outstanding Loans			Amortized Cost		% Outstanding Loans
Construction and land development	$	131,504		3.0	%	$	145,118		3.6	%
Agricultural real estate		280,993		6.3	%		279,272		7.0	%
1-4 family residential properties		417,232		9.4	%		400,313		10.0	%
Multifamily residential properties		369,926		8.3	%		298,942		7.5	%
Commercial real estate		1,965,321		44.1	%		1,666,198		41.7	%
Loans secured by real estate		3,164,976		71.1	%		2,789,843		69.8	%
Agricultural loans		121,708		2.7	%		151,484		3.8	%
Commercial and industrial loans		935,454		21.0	%		832,008		20.8	%
Consumer loans		89,685		2.0	%		78,442		2.0	%
All other loans		142,738		3.2	%		143,746		3.6	%
Total loans	$	4,454,561		100.0	%	$	3,995,523		100.0	%

Loan balances increased $459.0 million, or 11.5%. The increase included approximately $426.4 million of loans acquired, before purchase accounting adjustments, from Jefferson Bank. The increase was offset by payoffs and PPP forgiveness. The balance of real estate loans held for sale, included in the balances shown above, amounted to $2.0 million and $2.7 million as of March 31, 2022 and December 31, 2021, respectively.

Commercial and commercial real estate loans generally involve higher credit risks than residential real estate and consumer loans. Because payments on loans secured by commercial real estate or equipment are often dependent upon the successful operation and management of the underlying assets, repayment of such loans may be influenced to a great extent by conditions in the market or the economy. The Company does not have any sub-prime mortgages or credit card loans outstanding which are also generally considered to be higher credit risk.

Loans are geographically dispersed in central and southern Illinois, the St. Louis Metro area, central Missouri, and Texas. While these regions have experienced some economic stress during 2022 and 2021, the Company does not consider these locations high risk areas since these regions have not experienced the significant changes in real estate values seen in some other areas in the United States.

The Company does not have a concentration, as defined by the regulatory agencies, in construction and land development loans or commercial real estate loans as a percentage of total risk-based capital for the periods shown above. At March 31, 2022 and December 31, 2021, the Company did have industry loan concentrations that exceeded 25% of total risk-based capital in the following industries (dollars in thousands):

	March 31, 2022					December 31, 2021
	Principal balance		% Outstanding Loans			Principal balance		% Outstanding Loans
Other grain farming	$	283,613		6.37	%	$	297,394		7.44	%
Lessors of non-residential buildings		874,114		19.62	%		696,730		17.44	%
Lessors of residential buildings and dwellings		537,665		12.07	%		468,362		11.72	%
Hotels and motels		208,780		4.69	%		57,549		1.44	%

The Company had no further industry loan concentrations in excess of 25% of total risk-based capital.

53

The following table presents the balance of loans outstanding as of March 31, 2022, by contractual maturities (in thousands):

	Maturity (1)
	One year or less(2)		Over 1 through 5 years		Over 5 years		Total
Construction and land development	$	38,233	$	62,033	$	31,238	$	131,504
Agricultural real estate		12,291		121,735		146,967		280,993
1-4 family residential properties		16,755		116,344		284,133		417,232
Multifamily residential properties		22,870		251,783		95,273		369,926
Commercial real estate		121,846		929,841		913,634		1,965,321
Loans secured by real estate		211,995		1,481,736		1,471,245		3,164,976
Agricultural loans		88,262		30,311		3,135		121,708
Commercial and industrial loans		307,187		371,453		256,814		935,454
Consumer loans		10,545		58,747		20,393		89,685
All other loans		43,449		24,233		75,056		142,738
Total loans	$	661,438	$	1,966,480	$	1,826,643	$	4,454,561

1. Based upon remaining contractual maturity.

2. Includes demand loans, past due loans and overdrafts.

As of March 31, 2022, loans with maturities over one year consisted of approximately $2.6 billion in fixed rate loans and approximately $1.2 billion in variable rate loans. The loan maturities noted above are based on the contractual provisions of the individual loans. The Company has no general policy regarding renewals and borrower requests, which are handled on a case-by-case basis.

Nonperforming Loans and Nonperforming Other Assets

Nonperforming loans include: (a) loans accounted for on a nonaccrual basis; (b) accruing loans contractually past due ninety days or more as to interest or principal payments; and (c) loans not included in (a) and (b) above which are defined as “troubled debt restructurings”. Repossessed assets include primarily repossessed real estate and automobiles.

The Company’s policy is to discontinue the accrual of interest income on any loan for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal.

Restructured loans are loans on which, due to deterioration in the borrower’s financial condition, the original terms have been modified in favor of the borrower or either principal or interest has been forgiven. Repossessed assets represent property acquired as the result of borrower defaults on loans. These assets are recorded at estimated fair value, less estimated selling costs, at the time of foreclosure or repossession. Write-downs occurring at foreclosure are charged against the allowance for loan losses. On an ongoing basis, properties are appraised as required by market indications and applicable regulations. Write-downs for subsequent declines in value are recorded in non-interest expense in other real estate owned along with other expenses related to maintaining the properties.

The following table presents information concerning the aggregate amount of nonperforming loans and repossessed assets at March 31, 2022 and December 31, 2021 (dollars in thousands):

	March 31, 2022			December 31, 2021
Nonaccrual loans	$	19,330		$	18,105
Restructured loans which are performing in accordance with revised terms		3,135			3,931
Total nonperforming loans		22,465			22,036
Repossessed assets		4,804			5,019
Total nonperforming loans and repossessed assets	$	27,269		$	27,055
Nonperforming loans to loans, before allowance for loan losses		0.50	%		0.55	%
Nonperforming loans and repossessed assets to loans, before allowance for    loan losses		0.61	%		0.68	%

54

The $1,225,000 increase in nonaccrual loans during 2022 resulted from the net of $2,986,000 of loans put on nonaccrual status offset by $1,488,000 of loans becoming current or paid-off, $145,000 of loans transferred to other real estate and $129,000 of loans charged off. The following table summarizes the composition of nonaccrual loans (dollars in thousands):

	March 31, 2022					December 31, 2021
	Balance		% of Total			Balance		% of Total
Construction and land development	$	—		0.0	%	$	25		0.1	%
Agricultural real estate		1,296		6.7	%		336		1.9	%
1-4 family residential properties		5,144		26.6	%		5,252		29.0	%
Multifamily residential properties		1,886		9.8	%		1,982		11.0	%
Commercial real estate		8,341		43.1	%		7,920		43.7	%
Loans secured by real estate		16,667		86.2	%		15,515		85.7	%
Agricultural loans		230		1.2	%		560		3.1	%
Commercial and industrial loans		2,293		11.9	%		1,851		10.2	%
Consumer loans		140		0.7	%		179		1.0	%
Total loans	$	19,330		100.0	%	$	18,105		100.0	%

Interest income that would have been reported if nonaccrual and restructured loans had been performing totaled $95,000 and $154,000 for the three months ended March 31, 2022 and 2021, respectively.

The $215,000 decrease in repossessed assets during the first three months of 2022 resulted from $198,000 of additional assets repossessed and $454,000 of repossessed assets sold, and approximately $66,000 of change in fair value premiums and discounts. The following table summarizes the composition of repossessed assets (dollars in thousands):

	March 31, 2022					December 31, 2021
	Balance		% of Total			Balance		% of Total
Construction and land development	$	2,973		61.9	%	$	3,004		59.9	%
1-4 family residential properties		28		0.6	%		12		0.2	%
Commercial real estate		1,793		37.3	%		1,968		39.2	%
Total real estate		4,794		99.8	%		4,984		99.3	%
Consumer loans		10		0.2	%		35		0.7	%
Total repossessed collateral	$	4,804		100.0	%	$	5,019		100.0	%

Repossessed assets sold during the first three months of 2022 resulted in net gains of $21,000 related to real estate asset sales. Tzedhe Company also recognized $66,000 of deferred gains. Repossessed assets sold during the same period in 2021 resulted in net gains of $72,000, of which $71,000 of net losses was related to real estate asset sales and $1,000 of net gains was related to other repossessed assets.

Loan Quality and Allowance for Credit Losses

The allowance for credit losses represents management’s estimate of the reserve necessary to adequately account for probable losses existing in the current portfolio. The provision for loan losses is the charge against current earnings that is determined by management as the amount needed to maintain an adequate allowance for loan losses. In determining the adequacy of the allowance for loan losses, and therefore the provision to be charged to current earnings, management relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Factors considered by management in evaluating the overall adequacy of the allowance include a migration analysis of the historical net loan losses by loan segment, the level and composition of nonaccrual, past due and renegotiated loans, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates.

Management reviews economic factors including the potential for reduced cash flow for commercial operating loans from reduction in sales or increased operating costs, decreased occupancy rates for commercial buildings, reduced levels of home sales for commercial land developments, the uncertainty regarding grain prices, increased operating costs for farmers, and increased levels of unemployment and bankruptcy impacting consumer’s ability to pay. Each of these economic uncertainties was taken into consideration in developing the level of the reserve. Management considers the allowance for loan losses a critical accounting policy.

55

Management recognizes there are risk factors that are inherent in the Company’s loan portfolio. All financial institutions face risk factors in their loan portfolios because risk exposure is a function of the business. The Company’s operations (and therefore its loans) are concentrated in east central Illinois, an area where agriculture is the dominant industry. Accordingly, lending and other business relationships with agriculture-based businesses are critical to the Company’s success. At March 31, 2022, the Company’s loan portfolio included $402.7 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $283.6 million was concentrated in other grain farming. Total loans to borrowers whose businesses are directly related to agriculture decreased $28.1 million from $430.8 million at December 31, 2021 while loans concentrated in other grain farming decreased $13.8 million from $297.4 million at December 31, 2021. While the Company adheres to sound underwriting practices, including collateralization of loans, any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in loan losses within the agricultural portfolio. In addition, the Company has $208.8 million of loans to motels and hotels. The performance of these loans is dependent on borrower specific issues as well as the general level of business and personal travel within the region. While the Company adheres to sound underwriting standards, a prolonged period of reduced business or personal travel could result in an increase in nonperforming loans to this business segment and potentially in loan losses. The Company also has $874.1 million of loans to lessors of non-residential buildings, and $537.7 million of loans to lessors of residential buildings and dwellings.

The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the Board of Directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation; however, limits well below the regulatory thresholds are generally observed. Most of the Company’s loans are to businesses located in the geographic market areas served by the Company’s branch bank system. Additionally, a significant portion of the collateral securing the loans in the portfolio is located within the Company’s primary geographic footprint. In general, the Company adheres to loan underwriting standards consistent with industry guidelines for all loan segments.

The Company minimizes credit risk by adhering to sound underwriting and credit review policies. Management and the board of directors of the Company review these policies at least annually. Senior management is actively involved in business development efforts and the maintenance and monitoring of credit underwriting and approval. The loan review system and controls are designed to identify, monitor and address asset quality problems in an accurate and timely manner. The board of directors and management review the status of problem loans each month and formally determine a best estimate of the allowance for loan losses on a quarterly basis. In addition to internal policies and controls, regulatory authorities periodically review asset quality and the overall adequacy of the allowance for loan losses.

Analysis of the allowance for credit losses as of March 31, 2022 and 2021, and of changes in the allowance for the three months ended March 31, 2022 and 2021, is as follows (dollars in thousands):

	Three months ended March 31,
	2022			2021
Average loans outstanding, net of unearned income	$	4,182,606		$	3,477,754
Allowance - beginning of period		54,655			41,910
Initial allowance on loans purchased with credit deterioration		863			2,074
Charge-offs:
Construction and land development		2			—
1-4 family residential		72			182
Commercial real estate		339			480
Commercial and industrial		3			18
Consumer		358			288
Total charge-offs		774			968
Recoveries:
1-4 family residential		203			8
Commercial real estate		347			9
Commercial and industrial		61			18
Consumer		167			231
Total recoveries		778			266
Net charge-offs (recoveries)		(4	)		702
Provision for loan losses		2,952			12,136
Allowance-end of period	$	58,474		$	55,418
Ratio of annualized net charge-offs to average loans		0.00	%		0.08	%
Ratio of allowance for credit losses to loans outstanding (at amortized cost)		1.31	%		1.41	%
Ratio of allowance for credit losses to nonperforming loans		260	%		173	%

56

The increase in the allowance for credit losses to nonperforming loans ratio is primarily due to a decline in nonperforming loans at March 31, 2022 compared to March 31, 2021. The increase in allowance for credit losses is primarily due to the day one provision required to be recorded in the acquisition of loans with Jefferson Bank.

During the first three months of 2022, the Company had net recoveries of $4,000 compared to net charge-offs of $702,000 in 2021. During the first three months of 2022, there was a charge-off of two commercial real estate loans of one borrower totaling $271,000. During the first three months of 2021, there were significant charge-offs of one commercial real estate loan to one borrowers totaling $480,000 and one commercial loan to a single borrower totaling $1,572,000.

Deposits

Funding of the Company’s earning assets is substantially provided by a combination of consumer, commercial and public fund deposits. The Company continues to focus its strategies and emphasis on retail core deposits, the major component of funding sources. The following table sets forth the average deposits and weighted average rates for the three months ended March 31, 2022 and 2021 and for the year ended December 31, 2021 (dollars in thousands):

	Three months ended March 31, 2022					Three months ended March 31, 2021					Year ended December 31, 2021
	Average Balance		Weighted Average Rate			Average Balance		Weighted Average Rate			Average Balance		Weighted Average Rate
Demand deposits:
Non-interest-bearing	$	1,329,554	—%			$	1,033,741	—%			$	1,164,877	—%
Interest-bearing		2,610,573		0.21	%		1,876,378		0.19	%		2,217,281		0.19	%
Savings		658,038		0.07	%		579,632		0.10	%		611,379		0.08	%
Time deposits		615,142		0.47	%		623,852		0.95	%		671,056		0.64	%
Total average deposits	$	5,213,307		0.17	%	$	4,113,603		0.25	%	$	4,664,593		0.19	%

During the first three months of 2022, the average balance of deposits increased by $0.5 billion from the average balance for the year ended December 31, 2021. Average non-interest-bearing deposits increased by $164.7 million, average interest-bearing balances increased by $393.3 million, savings account balances increased $46.7 million and balances of time deposits decreased $55.9 million. These increases were primarily due to deposits added in the acquisition of Jefferson Bank.

The following table sets forth the high and low month-end balances for the three months ended March 31, 2022 and 2021 and for the year ended December 31, 2021 (in thousands):

	Three months ended March 31, 2022		Three months ended March 31, 2021		Year ended December 31, 2021
High month-end balances of total deposits	$	5,487,305	$	4,737,693	$	5,000,084
Low month-end balances of total deposits		4,904,973		3,725,741		3,725,741

Balances of time deposits of $100,000 or more include time deposits maintained for public fund entities and consumer time deposits. The following table sets forth the maturity of time deposits of $100,000 or more at March 31, 2022 and December 31, 2021 (in thousands):

	March 31, 2022		December 31, 2021
3 months or less	$	76,415	$	86,790
Over 3 through 6 months		74,335		57,777
Over 6 through 12 months		98,852		82,644
Over 12 months		80,472		75,568
Total	$	330,074	$	302,779

57

Repurchase Agreements and Other Borrowings

Securities sold under agreements to repurchase are short-term obligations of First Mid Bank. These obligations are collateralized with certain government securities that are direct obligations of the United States or one of its agencies. These retail repurchase agreements are offered as a cash management service to its corporate customers. Other borrowings consist of Federal Home Loan Bank (“FHLB”) advances, federal funds purchased, loans (short-term or long-term debt) that the Company has outstanding and junior subordinated debentures. Information relating to securities sold under agreements to repurchase and other borrowings as of March 31, 2022 and December 31, 2021 is presented below (dollars in thousands):

	March 31, 2022			December 31, 2021
Securities sold under agreements to repurchase	$	187,326		$	146,268
Federal Home Loan Bank advances:
Fixed term – due in one year or less		65,065			25,113
Fixed term – due after one year		61,331			61,333
Other borrowings:
Subordinated debt		94,438			94,400
Junior subordinated debentures		19,237			19,195
Total	$	427,397		$	346,309
Average interest rate at end of period		1.42	%		1.78	%
Maximum outstanding at any month-end:
Securities sold under agreements to repurchase	$	190,314		$	212,503
Federal Home Loan Bank advances:
FHLB – overnight		45,000			—
Fixed term – due in one year or less		70,068			30,180
Fixed term – due after one year		61,331			97,877
Other borrowings:
Subordinated debt		94,438			94,400
Junior subordinated debentures		19,237			19,195
Averages for the period (YTD):
Securities sold under agreements to repurchase	$	173,491		$	173,762
Federal Home Loan Bank advances:
FHLB – overnight		7,055			—
Fixed term – due in one year or less		50,055			22,751
Fixed term – due after one year		58,742			84,766
Other borrowings:
Federal funds purchased		44			0
Subordinated debt		94,413			94,321
Junior subordinated debentures		19,210			19,105
Total	$	403,010		$	394,705
Average interest rate during the period		1.46	%		1.58	%

58

Securities sold under agreements to repurchase decreased $41.1 million during the first three months of 2021 primarily due to the cash flow needs of various customers. FHLB advances represent borrowings by First Mid Bank to economically fund loan demand. At March 31, 2022 the fixed term advances, before net premiums of $538,000, consisted of $125.9 million as follows:

Advance		Term (in years)		Interest Rate	Maturity Date
$	15,000,000	3 months		0.35%	April 4, 2022
	5,000,000		1.0	0.00%	May 31, 2022
	5,000,000		3.0	2.41%	May 31, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	20,000,000	3 months		0.80%	June 23, 2022
	5,000,000		3.0	1.73%	July 12, 2022
	5,000,000		8.0	2.40%	January 9, 2023
	5,000,000		4.0	2.44%	May 30, 2023
	5,000,000		3.5	1.51%	July 31, 2023
	5,000,000		3.5	0.77%	September 11, 2023
	5,000,000		5.0	1.54%	July 12, 2024
	10,000,000		5.0	1.45%	December 31, 2024
	5,000,000		5.0	0.91%	March 10, 2025
	5,857,785		10.0	2.64%	December 23, 2025
	5,000,000		10.0	1.15%	October 3, 2029
	5,000,000		10.0	1.12%	October 3, 2029
	10,000,000		10.0	1.39%	December 31, 2029

The Company is party to a revolving credit agreement with The Northern Trust Company in the amount of $15 million. There was no balance on this line of credit as of March 31, 2022. This loan was renewed on April 8, 2022 for one year as a revolving credit agreement. The interest rate is floating at 2.25% over the federal funds rate. The loan is secured by the stock of First Mid Bank. The Company and First Mid Bank were in compliance with the existing covenants at March 31, 2022 and 2021, and December 31, 2021.

On October 6, 2020, the Company issued and sold $96.0 million in aggregate principal amount of its 3.95% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”).  The Notes were issued pursuant to the Indenture, dated as of October 6, 2020 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of October 6, 2020 (the “Supplemental Indenture”), between the Company and the Trustee. The Base Indenture, as amended and supplemented by the Supplemental Indenture, governs the terms of the Notes and provides that the Notes are unsecured, subordinated debt obligations of the Company and will mature on October 15, 2030. From and including the date of issuance to, but excluding October 15, 2025, the Notes will bear interest at an initial rate of 3.95% per annum. From and including October 15, 2025 to, but excluding the maturity date or earlier redemption, the Notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 383 basis points, or such other rate as determined pursuant to the Supplemental Indenture, provided that in no event shall the applicable floating interest rate be less than zero per annum.

The Company may, beginning with the interest payment date of October 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the Notes at any time, including prior to October 15, 2025, at the Company’s option, in whole but not in part, if: (i) a change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to but excluding the redemption date.

On April 26, 2006, the Company completed the issuance and sale of $10 million of fixed/floating rate trust preferred securities through First Mid-Illinois Statutory Trust II (“Trust II”), a statutory business trust and wholly owned unconsolidated subsidiary of the Company, as part of a pooled offering. The Company established Trust II for the purpose of issuing the trust preferred securities. The $10 million in proceeds from the trust preferred issuance and an additional $310,000 for the Company’s investment in common equity of Trust II, a total of $10,310 000, was invested in junior subordinated debentures of the Company. The underlying junior subordinated debentures issued by the Company to Trust II mature in 2036, bore interest at a fixed rate of 6.98% paid quarterly until June 15, 2011 and then converted to floating rate (LIBOR plus 160 basis points, 2.43% and 1.80% at March 31, 2022 and December 31, 2021, respectively).

59

On September 8, 2016, the Company assumed the trust preferred securities of Clover Leaf Statutory Trust I (“CLST I”), a statutory business trust that was a wholly owned unconsolidated subsidiary of First Clover Financial. The $4,000,000 of trust preferred securities and an additional $124,000 additional investment in common equity of CLST I, is invested in junior subordinated debentures issued to CLST I. The subordinated debentures mature in 2025, bear interest at three-month LIBOR plus 185 basis points (2.68% and 2.05% at March 31, 2022 and December 31, 2021, respectively) and resets quarterly.

On May 1, 2018, the Company assumed the trust preferred securities of FBTC Statutory Trust I (“FBTCST I”), a statutory business trust that was a wholly owned unconsolidated subsidiary of First BancTrust Corporation. The $6,000,000 of trust preferred securities and an additional $186,000 additional investment in common equity of FBTCST I is invested in junior subordinated debentures issued to FBTCST I. The subordinated debentures mature in 2035, bear interest at three-month LIBOR plus 170 basis points (2.53% and 1.90% at March 31, 2022 and December 31, 2021, respectively) and resets quarterly.

The trust preferred securities issued by Trust II, CLST I and FBTCST I are included as Tier 1 capital of the Company for regulatory capital purposes. On March 1, 2005, the Federal Reserve Board adopted a final rule that allows the continued limited inclusion of trust preferred securities in the calculation of Tier 1 capital for regulatory purposes. The final rule provided a five-year transition period, ending September 30, 2010, for application of the revised quantitative limits. On March 17, 2009, the Federal Reserve Board adopted an additional final rule that delayed the effective date of the new limits on inclusion of trust preferred securities in the calculation of Tier 1 capital until March 31, 2012. The application of the revised quantitative limits did not and is not expected to have a significant impact on its calculation of Tier 1 capital for regulatory purposes or its classification as well-capitalized. The Dodd-Frank Act, signed into law July 21, 2010, removes trust preferred securities as a permitted component of a holding company’s Tier 1 capital after a three-year phase-in period beginning January 1, 2013 for larger holding companies. For holding companies with less than $15 billion in consolidated assets, existing issues of trust preferred securities are grandfathered and not subject to this new restriction.

Similarly, the final rule implementing the Basel III reforms allows holding companies with less than $15 billion in consolidated assets as of December 31, 2009 to continue to count toward Tier 1 capital any trust preferred securities issued before May 19, 2010. New issuances of trust preferred securities, however, would not count as Tier 1 regulatory capital.

In addition to requirements of the Dodd-Frank Act discussed above, the act also required the federal banking agencies to adopt certain rules that prohibit banks and their affiliates from engaging in proprietary trading and investing in and sponsoring certain unregistered investment companies (defined as hedge funds and private equity funds). This rule is generally referred to as the “Volcker Rule.” The rules permit the retention of an interest in or sponsorship of covered funds by banking entities under $15 billion in assets (such as the Company) if (1) the collateralized debt obligation was established and issued prior to May 19, 2010, (2) the banking entity reasonably believes that the offering proceeds received by the collateralized debt obligation were invested primarily in qualifying trust preferred collateral, and (3) the banking entity’s interests in the collateralized debt obligation was acquired on or prior to December 10, 2013. The Company does not currently anticipate that the Volcker Rule will have a material effect on the operations of the Company, First Mid Bank or Jefferson Bank. On June 25, 2020, the agencies announced that certain restrictions under the Volcker Rule applicable to large banking entities will be eased commencing October 1, 2020.

Interest Rate Sensitivity

The Company seeks to maximize its net interest margin while maintaining an acceptable level of interest rate risk. Interest rate risk can be defined as the amount of forecasted net interest income that may be gained or lost due to changes in the interest rate environment, a variable over which management has no control. Interest rate risk, or sensitivity, arises when the maturity or repricing characteristics of interest-bearing assets differ significantly from the maturity or repricing characteristics of interest- bearing liabilities. The Company monitors its interest rate sensitivity position to maintain a balance between rate sensitive assets and rate sensitive liabilities. This balance serves to limit the adverse effects of changes in interest rates. The Company’s asset liability management committee (ALCO) oversees the interest rate sensitivity position and directs the overall allocation of funds.

60

In the banking industry, a traditional way to measure potential net interest income exposure to changes in interest rates is through a technique known as “static GAP” analysis which measures the cumulative differences between the amounts of assets and liabilities maturing or repricing at various intervals. By comparing the volumes of interest-bearing assets and liabilities that have contractual maturities and repricing points at various times in the future, management can gain insight into the amount of interest rate risk embedded in the balance sheet. The following table sets forth the Company’s interest rate repricing GAP for selected maturity periods at March 31, 2022 (dollars in thousands):

	Rate Sensitive Within
	1 years			1-2 years			2-3 years			3-4 years			4-5 years			Thereafter			Total		Fair Value
Interest-earning assets:
Federal funds sold and other interest-bearing deposits	$	111,704		$	—		$	—		$	—		$	—		$	—		$	111,704	$	111,704
Certificates of deposit investments		1,715			245			—		—				—		—				1,960		1,960
Taxable investment securities		56,477			112,071			101,901			101,949			91,834			651,833			1,116,065		1,116,065
Nontaxable investment securities		13,157			12,347			14,756			10,630			20,994			282,368			354,252		354,252
Loans		1,587,437			595,797			618,161			512,391			757,593			383,182			4,454,561		4,340,701
Total	$	1,770,490		$	720,460		$	734,818		$	624,970		$	870,421		$	1,317,383		$	6,038,542	$	5,924,682
Interest-bearing liabilities:
Savings and NOW accounts	$	557,452		$	191,487		$	191,487		$	191,487		$	191,487		$	844,384		$	2,167,784	$	2,167,784
Money market accounts		959,110			45,544			45,544			45,544			45,544			138,843			1,280,129		1,280,129
Other time deposits		475,774			109,545			43,817			16,319			19,994			62			665,511		660,423
Short-term borrowings/debt		187,326			—			—			—			—			—			187,326		152,086
Long-term borrowings/debt		84,302			15,111			20,043			6,177			94,438			20,000			240,071		233,191
Total	$	2,263,964		$	361,687		$	300,891		$	259,527		$	351,463		$	1,003,289		$	4,540,821	$	4,493,613
Rate sensitive assets – rate sensitive liabilities	$	(493,474	)	$	358,773		$	433,927		$	365,443		$	518,958		$	314,094		$	1,497,721
Cumulative GAP		(493,474	)		(134,701	)		299,226			664,669			1,183,627			1,497,721
Cumulative amounts as % of total Rate sensitive assets		-8.2	%		5.9	%		7.2	%		6.1	%		8.6	%		5.2	%
Cumulative Ratio		-8.2	%		-2.2	%		5.0	%		11.0	%		19.6	%		24.8	%

The static GAP analysis shows that at March 31, 2022, the Company was liability sensitive, on a cumulative basis, through the twelve-month time horizon. This indicates that future increases in interest rates could have an adverse effect on net interest income. There are several ways the Company measures and manages the exposure to interest rate sensitivity, including static GAP analysis. The Company’s ALCO also uses other financial models to project interest income under various rate scenarios and prepayment/extension assumptions consistent with First Mid Bank’s historical experience and with known industry trends. ALCO meets at least monthly to review the Company’s exposure to interest rate changes as indicated by the various techniques and to make necessary changes in the composition terms and/or rates of the assets and liabilities.

Capital Resources

At March 31, 2022, the Company’s stockholders' equity increased $32 million or 5.1%, to $666.4 million from $633.9 million as of December 31, 2021. During the first three months of 2022, net income contributed $16.6 million to equity before the payment of dividends to stockholders. The change in market value of available-for-sale investment securities decreased stockholders' equity by $73.2 million, net of tax. Dividends of $4.0 million were paid during the first three months of 2022. The acquisition of Delta also increased stockholders’ equity $92.1 million.

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Bank holding companies follow minimum regulatory requirements established by the Board of Governors of the Federal Reserve System (“Federal Reserve System”), First Mid Bank and Jefferson Bank follow similar minimum regulatory requirements established for banks by the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation, as applicable. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary action by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Company and its subsidiary banks to maintain a minimum capital amounts and ratios (set forth in the table below). Management believes that, as of March 31, 2022 and December 31, 2021, the Company, First Mid Bank and Jefferson Bank met all capital adequacy requirements.

As permitted by the interim final rule issued on March 27, 2020 by the federal banking regulatory agencies, the Company elected the option to delay the estimated impact on regulatory capital of adopting ASU 2016-13, which was effective January 1, 2020. The initial impact of adoption of ASU 2016-13, as well as 25% of the quarterly increases in allowance for credit losses subsequent to adoption of ASU 2016-13 was delayed for two years. After two years, the cumulative amount of these adjustments is being phased out of the regulatory capital calculation over a three-year period, with 75% of the adjustments included in 2022, 50% of the adjustments included in 2023 and 25% of the adjustments included in 2024. After five years, the temporary delay of ASU 2016-13 adoption will be fully reversed.

61

To be categorized as well-capitalized, total risk-based capital, Tier 1 risk-based capital, common equity Tier 1 risk-based capital and Tier 1 leverage ratios must be maintained as set forth in the following table (dollars in thousands):

	Actual					Required Minimum For Capital Adequacy Purposes			To Be Well-Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio	Amount		Ratio
March 31, 2022
Total capital (to risk-weighted assets)
Company	$	752,452		15.41	%	$	512,640	> 10.50%	N/A		N/A
First Mid Bank		633,240		14.70	%		452,448	> 10.50%	$	430,903	> 10.00%
Jefferson Bank		76,656		13.20	%		60,982	> 10.50%		58,078	> 10.00%
Tier 1 capital (to risk-weighted assets)
Company		606,435		12.42	%		414,994	> 8.50%	N/A		N/A
First Mid Bank		583,701		13.55	%		366,267	> 8.50%		344,722	> 8.00%
Jefferson Bank		74,616		12.85	%		49,367	> 8.50%		46,463	> 8.00%
Common equity tier 1 capital (to risk-weighted assets)
Company		587,198		12.03	%		341,760	> 7.00%	N/A		N/A
First Mid Bank		583,701		13.55	%		301,632	> 7.00%		280,087	> 6.50%
Jefferson Bank		74,616		12.85	%		40,655	> 7.00%		37,751	> 6.50%
Tier 1 capital (to average assets)
Company		606,435		9.28	%		261,311	> 4.00%	N/A		N/A
First Mid Bank		583,701		10.05	%		232,305	> 4.00%		290,382	> 5.00%
Jefferson Bank		74,616		10.71	%		27,871	> 4.00%		34,839	> 5.00%
December 31, 2021
Total capital (to risk-weighted assets)
Company	$	674,310		15.79	%	$	448,344	> 10.50%	N/A		N/A
First Mid Bank		624,150		14.67	%		446,711	> 10.50%	$	425,439	> 10.00%
Tier 1 capital (to risk-weighted assets)
Company		534,277		12.51	%		362,945	> 8.50%	N/A		N/A
First Mid Bank		578,517		13.60	%		361,623	> 8.50%		340,351	> 8.00%
Common equity tier 1 capital (to risk-weighted assets)
Company		515,082		12.06	%		298,896	> 7.00%	N/A		N/A
First Mid Bank		578,517		13.60	%		297,807	> 7.00%		376,535	> 6.50%
Tier 1 capital (to average assets)
Company		534,277		9.05	%		236,151	> 4.00%	N/A		N/A
First Mid Bank		578,517		9.83	%		135,337	> 4.00%		294,171	> 5.00%

The Company's risk-weighted assets, capital, and capital ratios for March 31, 2022 are computed in accordance with Basel III capital rules which were effective January 1, 2015. See heading "Basel III" in the Overview section of this report for a more detailed description of the Basel III rules. As of March 31, 2022, the Company, First Mid Bank and Jefferson Bank had capital ratios above the required minimums for regulatory capital adequacy, and First Mid Bank had capital ratios that qualified it for treatment as well-capitalized under the regulatory framework for prompt corrective action with respect to banks.

62

Stock Plans

Participants may purchase Company stock under the following four plans of the Company: The Deferred Compensation Plan, the First Retirement and Savings Plan, the Dividend Reinvestment Plan, and the Stock Incentive Plan. For more detailed information on these plans, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the 2017 Stock Incentive Plan ("SI Plan"). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term. The SI Plan is intended to provide a means whereby directors, employees, consultants and advisors of the Company and its Subsidiaries may sustain a sense of proprietorship and personal involvement in the continued development and financial success of the Company and its Subsidiaries, thereby advancing the interests of the Company and its stockholders. Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of Common Stock of the Company on the terms and conditions established in the SI Plan.

Following the stockholders’ approval at the 2021 annual meeting of the Company, a maximum of 399,983 shares of common stock may be issued under the SI Plan. The Company awarded 26,000 and 13,175 restricted stock awards during 2022 and 2021, respectively and 37,150 and 35,400 as stock unit awards during 2022 and 2021, respectively.

Employee Stock Purchase Plan

At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP is intended to promote the interests of the Company by providing eligible employees with the opportunity to purchase shares of common stock of the Company at a 15% discount through payroll deductions. The ESPP is also intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. A maximum of 600,000 shares of common stock may be issued under the ESPP. As of March 31, 2022, 34,833 shares have been issued pursuant to the ESPP. During the three months ended March 31, 2022 and 2021, 3,149 shares and 3,142 shares, respectively, were issued pursuant to the ESPP.

Stock Repurchase Program

Since August 5, 1998, the Board of Directors has approved repurchase programs pursuant to which the Company may repurchase a total of approximately $76.7 million of the Company’s common stock. During the quarter, the Company repurchased 262 shares. All of these shares were a result of shares withheld for taxes on vested employee stock incentives.  The Company has approximately $4.4 million in remaining capacity under its existing repurchase program.

Although the Company adopted the repurchase plan, the Company may make discretionary repurchases in the open market or in privately negotiated transactions from time to time. The timing, manner, price and amount of any such repurchases will be determined by the Company at its discretion and will depend upon a variety of factors including economic and market conditions, price, applicable legal requirements and other factors.

Liquidity

Liquidity represents the ability of the Company and its subsidiaries to meet all present and future financial obligations arising in the daily operations of the business. Financial obligations consist of the need for funds to meet extensions of credit, deposit withdrawals and debt servicing. The Company’s liquidity management focuses on the ability to obtain funds economically through assets that may be converted into cash at minimal costs or through other sources. The Company’s other sources of cash include overnight federal fund lines, Federal Home Loan Bank advances, deposits of the State of Illinois, the ability to borrow at the Federal Reserve Bank of Chicago, and the Company’s operating line of credit with The Northern Trust Company.

Details of the Company's liquidity sources include:

• First Mid Bank has $100 million available in overnight federal fund lines, including $30 million from First Horizon Bank, N.A., $20 million from U.S. Bank, N.A., $10 million from Wells Fargo Bank, N.A., $15 million from The Northern Trust Company and $25 million from Zions Bank. Availability of the funds is subject to First Mid Bank meeting minimum regulatory capital requirements for total capital to risk-weighted assets and Tier 1 capital to total average assets. As of March 31, 2022, First Mid Bank met these regulatory requirements.

• First Mid Bank can borrow from the Federal Home Loan Bank as a source of liquidity. Availability of the funds is subject to the pledging of collateral to the Federal Home Loan Bank. Collateral that can be pledged includes one-to-four family residential real estate loans and securities. At March 31, 2022, the excess collateral at the FHLB would support approximately $721 million of additional advances for First Mid Bank.

• First Mid Bank is a member of the Federal Reserve System and can borrow funds provided that sufficient collateral is pledged.

63

• In addition, as of March 31, 2022, the Company had a revolving credit agreement in the amount of $15 million with The Northern Trust Company with an outstanding balance of $0 million and $15 million in available funds. This loan was renewed on April 8, 2022 for one year as a revolving credit agreement. The interest rate is floating at 2.25% over the federal funds rate. The loan is secured by the stock of First Mid Bank, including requirements for operating and capital ratios. The Company and its subsidiary bank were in compliance with the existing covenants at March 31, 2022 and 2021 and December 31, 2021.

Management continues to monitor its expected liquidity requirements carefully, focusing primarily on cash flows from:

• lending activities, including loan commitments, letters of credit and mortgage prepayment assumptions;

• deposit activities, including seasonal demand of private and public funds;

• investing activities, including prepayments of mortgage-backed securities and call provisions on U.S. Treasury and government agency securities; and

• operating activities, including scheduled debt repayments and dividends to stockholders.

The following table summarizes significant contractual obligations and other commitments at March 31, 2022 (in thousands):

			Less than						More than
	Total		1 year		1-3 years		3-5 years		5 years
Time deposits	$	665,511	$	475,774	$	153,362	$	36,313	$	62
Debt		113,675		—		—		3,859		109,816
Other borrowing		313,721		252,391		35,153		6,177		20,000
Operating leases		17,753		2,633		4,309		3,382		7,429
Supplemental retirement		1,718		50		100		150		1,418
	$	1,112,378	$	730,848	$	192,924	$	49,881	$	138,725

For the three months ended March 31, 2022, net cash of $24.1 million was provided by operating activities, $63.9 million was provided by investing activities, and $32.6 million was used in financing activities. In total, cash and cash equivalents increased by $55.4 million since year-end 2021.

Off-Balance Sheet Arrangements

First Mid Bank and Jefferson Bank enter into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. Each of these instruments involves, to varying degrees, elements of credit, interest rate and liquidity risk in excess of the amounts recognized in the consolidated balance sheets. The Company uses the same credit policies and requires similar collateral in approving lines of credit and commitments and issuing letters of credit as it does in making loans. The exposure to credit losses on financial instruments is represented by the contractual amount of these instruments. However, the Company does not anticipate any losses from these instruments. The off-balance sheet financial instruments whose contract amounts represent credit risk at March 31, 2022 and December 31, 2021 were as follows (in thousands):

	March 31, 2022		December 31, 2021
Unused commitments and lines of credit:
Commercial real estate	$	166,724	$	118,190
Commercial operating		658,214		529,035
Home equity		63,993		59,422
Other		318,885		293,339
Total	$	1,207,816	$	999,986
Standby letters of credit	$	19,127	$	14,403

Commitments to originate credit represent approved commercial, residential real estate and home equity loans that generally are expected to be funded within ninety days. Lines of credit are agreements by which the Company agrees to provide a borrowing accommodation up to a stated amount as long as there is no violation of any condition established in the loan agreement. Both commitments to originate credit and lines of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the lines and some commitments are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements.

64

Standby letters of credit are conditional commitments issued by the Company to guarantee the financial performance of customers to third parties. Standby letters of credit are primarily issued to facilitate trade or support borrowing arrangements and generally expire in one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending credit facilities to customers. The maximum amount of credit that would be extended under letters of credit is equal to the total off-balance sheet contract amount of such instrument. The Company's deferred revenue under standby letters of credit was nominal.

The Company is also subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition of ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

65

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in the market risk faced by the Company since December 31, 2021. For information regarding the Company’s market risk, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective. Further, there have been no changes in the Company’s internal control over financial reporting during the last fiscal quarter that have materially affected or that are reasonably likely to affect materially the Company’s internal control over financial reporting.

66

PART II

ITEM 1. LEGAL PROCEEDINGS

From time to time the Company and its subsidiaries may be involved in litigation that the Company believes is a type common to our industry. None of any such existing claims are believed to be individually material at this time to the Company, although the outcome of any such existing claims cannot be predicted with certainty.

ITEM 1A. RISK FACTORS

Various risks and uncertainties, some of which are difficult to predict and beyond the Company’s control, could negatively impact the Company. As a financial institution, the Company is exposed to interest rate risk, liquidity risk, credit risk, operational risk, risks from economic or market conditions, and general business risks among others. Adverse experience with these or other risks could have a material impact on the Company’s financial condition and results of operations, as well as the value of its common stock. See the risk factors and “Supervision and Regulation” described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES
Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2022 - January 31, 2022		262	$	41.15		262	$	4,395,000
February 1, 2022 - February 28, 2022		—		—		—		4,395,000
March 1, 2022 - March 31, 2022		—		—		—		4,395,000
Total		262	$	41.15		262	$	4,395,000

See heading “Stock Repurchase Program” for more information regarding stock purchases.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

67

ITEM 6. EXHIBITS

The exhibits required by Item 601 of Regulation S-K and filed herewith are listed in the Exhibit Index that precedes the Signature Page and the exhibits filed.

Exhibit Number	Exhibit Index to Quarterly Report on Form 10-Q Description and Filing or Incorporation Reference
10.1	Fourth Amendment to the Sixth Amended and Restated Credit Agreement by and between First Mid Bancshares, Inc. and The Northern Trust Company, dated as of February 7, 2022 (incorporated by reference to Exhibit 10.1 to First Mid Bancshares, Inc.’s Current Report on Form 8-K filed with the SEC on February 8, 2022).
31.1	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (formatted as Inline XBRL and contained in Exhibits 101)
	*Exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K. Copies of any omitted exhibit will be furnished to the SEC upon request.

68

SIGNATURES

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 thereunto duly authorized.

FIRST MID BANCSHARES, INC.

(Registrant)

Date: May 9, 2022

/s/ Joseph R. Dively

Joseph R. Dively

President and Chief Executive Officer

/s/ Matthew K. Smith

Matthew K. Smith

Chief Financial Officer

69

EX-31.1

Exhibit 31.1

Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002

I, Joseph R. Dively, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First Mid Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2022

By:	/s/ Joseph R. Dively
Joseph R. Dively
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002

I, Matthew K. Smith, certify that:

1. I have reviewed this report on Form 10-Q of First Mid Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2022

By:	/s/ Matthew K. Smith
Matthew K. Smith
Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification pursuantto 18 U.S.C. section 1350, as adopted pursuantto

section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of First Mid Bancshares, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph R. Dively, PresidentandChiefExecutiveOfficeroftheCompany,certify,pursuantto18U.S.C.§1350,asadoptedpursuantto§906ofthe Sarbanes-Oxley Act of 2002,that:

(1) TheReportfullycomplieswiththerequirementsofsection13(a)or15(d)oftheSecuritiesExchangeActof1934; and

(2) TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresults of operations of theCompany.

Date: May 9, 2022

/s/ Joseph R. Dively

Joseph R. Dively

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification pursuantto 18 U.S.C. section 1350, as adopted pursuantto

In connection with the Quarterly Report of First Mid Bancshares, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew K. Smith, ChiefFinancialOfficeroftheCompany,certify,pursuantto18U.S.C.§1350,asadoptedpursuantto§906oftheSarbanes-Oxley Act of 2002,that:

(1) TheReportfullycomplieswiththerequirementsofsection13(a)or15(d)oftheSecuritiesExchangeActof1934; and

(2) TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresults of operations of theCompany.

Date: May 9, 2022

/s/ Matthew K. Smith

Matthew K. Smith

Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 09, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Entity Registrant Name	FIRST MID BANCSHARES, INC.
Entity Central Index Key	0000700565
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		20,448,799
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock
Trading Symbol	FMBH
Security Exchange Name	NASDAQ
Entity File Number	001-36434
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	37-1103704
Entity Address, Address Line One	1421 Charleston Avenue
Entity Address, City or Town	Mattoon
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	61938
City Area Code	217
Local Phone Number	234-7454
Document Quarterly Report	true
Document Transition Report	false

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Cash and due from banks:
Non-interest bearing	$ 112,276,000	$ 90,907,000
Interest bearing	105,796,000	76,335,000
Federal funds sold	5,908,000	1,360,000
Cash and cash equivalents	223,980,000	168,602,000
Certificates of deposit	1,960,000	2,450,000
Investment securities:
Available-for-sale, at fair value	1,466,950,000	1,421,422,000
Held-to-maturity, at amortized cost (estimated fair value of $2,998 and $7,035 at March 31, 2022 and December 31, 2021, respectively)	2,998,000	7,030,000
Equity securities, at fair value	369,000	397,000
Loans held for sale	2,037,000	2,748,000
Loans	4,452,524,000	3,992,775,000
Less allowance for credit losses	(58,474,000)	(54,655,000)
Net loans	4,394,050,000	3,938,120,000
Interest receivable	22,365,000	19,868,000
Other real estate owned	4,794,000	4,984,000
Premises and equipment, net	89,319,000	81,484,000
Goodwill	140,465,000	111,853,000
Intangible assets, net	34,034,000	29,523,000
Bank owned life insurance	149,041,000	132,375,000
Right of use lease assets	15,242,000	15,116,000
Other assets	84,402,000	50,610,000
Total assets	6,632,006,000	5,986,582,000
Deposits:
Non-interest bearing	1,373,881,000	1,246,673,000
Interest bearing	4,113,424,000	3,709,813,000
Total deposits	5,487,305,000	4,956,486,000
Securities sold under agreements to repurchase	187,326,000	146,268,000
Interest payable	2,466,000	1,346,000
FHLB borrowings	126,396,000	86,446,000
Junior subordinated debentures, net	19,237,000	19,195,000
Subordinated debt, net	94,438,000	94,400,000
Lease liabilities	15,458,000	15,322,000
Other liabilities	32,995,000	33,225,000
Total liabilities	5,965,621,000	5,352,688,000
Stockholders’ equity:
Common stock, $4 par value; authorized 30,000,000 shares; issued 21,065,888 and 18,708,746 shares in 2022 and 2021, respectively; outstanding 20,437,183 and 18,080,303 shares in 2022 and 2021 respectively	86,264,000	76,835,000
Additional paid-in capital	426,148,000	340,419,000
Retained earnings	246,805,000	234,162,000
Deferred compensation	468,000	2,517,000
Accumulated other comprehensive loss	(74,028,000)	(831,000)
Less treasury stock at cost, 628,705 shares in 2022 and 628,443 shares in 2021	(19,272,000)	(19,208,000)
Total stockholders’ equity	666,385,000	633,894,000
Total liabilities and stockholders’ equity	$ 6,632,006,000	$ 5,986,582,000

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Investment securities:
Held-to-maturity, at fair value	$ 2,998	$ 7,035
Stockholders’ equity:
Common stock, par value (in dollars per share)	$ 4	$ 4
Common stock, authorized (in shares)	30,000,000	30,000,000
Common stock, issued (in shares)	21,065,888	18,708,746
Common stock, outstanding (in shares)	20,437,183	18,080,303
Treasury stock (in shares)	628,705	628,443

XML

Condensed Consolidated Statements of Income (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Interest income:
Interest and fees on loans	$ 39,908	$ 35,886
Interest on investment securities	7,170	4,842
Interest on certificates of deposit investments	12	14
Interest on deposits with other financial institutions	55	74
Total interest income	47,145	40,816
Interest expense:
Interest on deposits	2,148	2,484
Interest on securities sold under agreements to repurchase	67	70
Interest on FHLB borrowings	276	374
Interest on junior subordinated debentures	146	140
Interest on subordinated debentures	986	984
Total interest expense	3,623	4,052
Net interest income	43,522	36,764
Provision for loan losses	2,952	12,136
Net interest income after provision for loan losses	40,570	24,628
Other income:
Wealth management revenues	5,975	4,926
Insurance commissions	7,104	5,857
Service charges	2,056	1,364
Securities gains, net		4
Mortgage banking revenue, net	444	1,409
ATM / debit card revenue	2,898	2,699
Bank owned life insurance	844	637
Other	1,767	853
Total other income	21,088	17,749
Other expense:
Salaries and employee benefits	24,302	23,487
Net occupancy and equipment expense	6,155	4,970
Net other real estate owned expense	(33)	78
FDIC insurance	426	452
Amortization of intangible assets	1,522	1,220
Stationery and supplies	311	316
Legal and professional	1,734	1,402
ATM / debit card	1,078	838
Marketing and donations	873	502
Other	4,020	4,335
Total other expense	40,388	37,600
Income before income taxes	21,270	4,777
Income taxes	4,654	668
Net income	$ 16,616	$ 4,109
Per share data:
Basic net income per common share	$ 0.86	$ 0.24
Diluted net income per common share	0.86	0.24
Cash dividends declared per common share	$ 0.220	$ 0.205

XML

Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 16,616	$ 4,109
Unrealized losses on available-for-sale securities, net of taxes of $29,898 and $4,903 for three months ended March 31, 2022 and 2021, respectively	(73,197)	(12,005)
Less: reclassification adjustment for realized gains included in net income, net of taxes of $0 and $1 for three months ended March 31, 2022 and 2021, respectively		(3)
Other comprehensive loss, net of taxes	(73,197)	(12,008)
Comprehensive loss	$ (56,581)	$ (7,899)

XML

Condensed Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Other Comprehensive Income
Unrealized losses on available-for-sale securities,taxes	$ 29,898	$ 4,903
Reclassification adjustment for realized gains included in net income, taxes	$ 0	$ 1

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Delta Bancshares Company	LINCO Bancshares, Inc.	Common Stock	Common Stock Delta Bancshares Company	Common Stock LINCO Bancshares, Inc.	Additional Paid-in Capital	Additional Paid-in Capital Delta Bancshares Company	Additional Paid-in Capital LINCO Bancshares, Inc.	Retained Earnings	Deferred Compensation	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Beginning balance at Dec. 31, 2020	$ 568,228			$ 71,449			$ 297,806			$ 197,726	$ 2,980	$ 17,095	$ (18,828)
Net income	4,109									4,109
Other comprehensive loss, net tax	(12,008)											(12,008)
Cash dividends on common stock	(3,427)									(3,427)
Issuance of common shares pursuant to the dividend reinvestment plan	171			17			154
Issuance of common shares pursuant to the deferred compensation plan	18			3			15
Issuance of restricted shares pursuant to 2017 stock incentive plan	943			111			832
Issuance of common shares pursuant to 2017 stock incentive plan	85			10			75
Issuance of common shares pursuant to the employee stock purchase plan	75			13			62
Issuance of common shares pursuant to the acquisition, net proceeds			$ 44,191			$ 5,049			$ 39,142
Deferred compensation											(71)		71
Tax benefit related to deferred compensation distributions	179						179
Grant of restricted units pursuant to 2017 stock incentive plan	1,216						1,216
Release of restricted units pursuant to 2017 stock incentive plan	(584)						(584)
Vested restricted shares/units compensation expense	(1,312)										(1,312)
Ending balance at Mar. 31, 2021	601,884			76,652			338,897			198,408	1,597	5,087	(18,757)
Beginning balance at Dec. 31, 2021	633,894			76,835			340,419			234,162	2,517	(831)	(19,208)
Net income	16,616									16,616
Other comprehensive loss, net tax	(73,197)											(73,197)
Cash dividends on common stock	(3,973)									(3,973)
Issuance of common shares pursuant to the deferred compensation plan	83			8			75
Issuance of restricted shares pursuant to 2017 stock incentive plan	2,259			219			2,040
Issuance of common shares pursuant to 2017 stock incentive plan	199			20			179
Issuance of common shares pursuant to the employee stock purchase plan	124			13			111
Issuance of common shares pursuant to the acquisition, net proceeds		$ 92,172			$ 9,169			$ 83,003
Issuance costs pursuant to acquisition of Delta Bancshares Company	(31)						(31)
Purchase of shares of treasury stock	(11)												(11)
Deferred compensation	(2,571)										(2,518)		(53)
Grant of restricted units pursuant to 2017 stock incentive plan	1,529						1,529
Release of restricted units pursuant to 2017 stock incentive plan	(1,216)						(1,216)
Vested restricted shares/units compensation expense	508						39				469
Ending balance at Mar. 31, 2022	$ 666,385			$ 86,264			$ 426,148			$ 246,805	$ 468	$ (74,028)	$ (19,272)

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash dividends declared per common share	$ 0.220	$ 0.205
Issuance of common shares pursuant to the Dividend Reinvestment Plan (in shares)		4,896
Stock issued during period, shares, deferred compensation	1,939	18,397
Restricted stock issued during period, shares, pursuant to the 2017 stock incentive plan	54,834	27,750
Restricted stock issued during period, shares, pursuant to the 2017 stock incentive plan	4,950	2,375
Stock issued during period, shares, employee stock purchase plans	3,149	3,142
Purchase of treasury shares (in shares)	262
Delta Bancshares Company
Stock Issued During Period, Shares, Acquisitions	2,292,270
LINCO Bancshares, Inc.
Stock Issued During Period, Shares, Acquisitions		1,262,246

XML

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 16,616	$ 4,109
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	2,952	12,136
Depreciation, amortization and accretion, net	3,777	2,692
Change in cash surrender value of bank owned life insurance	(844)	(637)
Stock-based compensation expense	508	262
Operating lease payments	(722)	(711)
Gain on investment securities, net	0	(4)
Gain on sales and write downs of other real estate owned, net	(210)	(35)
Loss on sale of loans	38	0
Loss on sale of other assets	4	0
Gain on sale of loans held for sale, net	(415)	(1,229)
(Increase) decrease in accrued interest receivable	(725)	2,034
Increase in accrued interest payable	745	262
Origination of loans held for sale	(18,931)	(42,379)
Proceeds from sale of loans held for sale	20,057	40,839
Increase in other investment	(487)	(84)
Decrease in other assets	2,616	454
Increase (decrease) in other liabilities	(846)	3,844
Net cash provided by operating activities	24,133	21,553
Cash flows from investing activities:
Proceeds from maturities of certificates of deposit investments	490	0
Proceeds from maturities of securities available-for-sale	39,854	68,541
Proceeds from maturities of securities held-to-maturity	5,000	0
Purchases of securities available-for-sale	(7,806)	(177,116)
Net (increase) decrease in loans	(41,434)	26,319
Purchases of premises and equipment	(27)	(1,195)
Proceeds from sales of other real property owned	475	116
Investment in banked owned life insurance	0	(25,000)
Net cash provided by acquisition	67,323	27,061
Net cash provided by (used in) investing activities	63,875	(81,274)
Cash flows from financing activities:
Net (decrease) increase in deposits	(29,558)	54,499
Increase in repurchase agreements	5,535	5,566
Proceeds from FHLB advances	20,000	0
Repayment of FHLB advances	(25,000)	(5,000)
Proceeds from issuance of common stock	406	179
Direct expenses related to capital transactions	(29)	0
Purchase of treasury stock	(11)	0
Dividends paid on common stock	(3,973)	(3,257)
Net cash (used in) provided by financing activities	(32,630)	51,987
Increase (decrease) in cash and cash equivalents	55,378	(7,734)
Cash and cash equivalents at beginning of period	168,602	417,281
Cash and cash equivalents at end of period	223,980	409,547
Cash paid during the period for:
Interest	2,503	3,183
Income taxes	0	0
Supplemental disclosures of noncash investing and financing activities
Loans transferred to other real estate	198	45
Initial recognition of right-of-use assets	715	0
Initial recognition of lease liabilities	715	0
Dividends reinvested in common stock	0	171
Net tax benefit related to option and deferred compensation plans	0	179
LINCO Bancshares, Inc.
Supplemental disclosures of noncash investing and financing activities
Fair value of assets acquired	750,063	1,173,443
Cash paid	15,150	103,500
Common stock issued	92,172	44,191
Total consideration paid	107,322	147,691
Fair value of liabilities assumed	$ 642,741	$ 1,025,752

XML

Basis of Accounting and Consolidation

3 Months Ended

Mar. 31, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Accounting and Consolidation

Note 1 -- Basis of Accounting and Consolidation

The unaudited condensed consolidated financial statements include the accounts of First Mid Bancshares, Inc. (“Company”) and its wholly owned subsidiaries: First Mid Bank & Trust, N.A. (“First Mid Bank”), Jefferson Bank and Trust Company (“Jefferson Bank”), First Mid Wealth Management Company, First Mid Insurance Group, Inc. (“First Mid Insurance”), and First Mid Captive, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. The financial information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods ended March 31, 2022 and 2021, and all such adjustments are of a normal recurring nature. Certain amounts in the prior year’s consolidated financial statements may have been reclassified to conform to the March 31, 2022 presentation and there was no impact on net income or stockholders’ equity. The results of the interim period ended March 31, 2022 are not necessarily indicative of the results expected for the year ending December 31, 2022. The Company operates as a one-segment entity for financial reporting purposes. The 2021 year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and related footnote disclosures although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report on Form 10-K.

COVID-19

The COVID-19 outbreak is an unprecedented event that provides significant economic uncertainty for a broad spectrum of industries. The Company is focused on supporting its customers, communities and employees during this unique operating environment. Throughout this document, the Company describes the impact COVID-19 is having, actions taken as a result of COVID-19, and certain risks to the Company that COVID-19 creates or exacerbates, as well as management's outlook on the current COVID-19 situation.

Delta Bancshares Company

On July 28, 2021, the Company and Brock Sub LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company (“Delta Merger Sub”), entered into an Agreement and Plan of Merger (the “Delta Merger Agreement”) with Delta Bancshares Company, a Missouri corporation (“Delta”), pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of Delta pursuant to a business combination whereby Delta merged with and into Merger Sub, whereupon the separate corporate existence of Delta ceased and Merger Sub continued as the surviving company and a wholly-owned subsidiary of First Mid (the “Delta Merger”). The Delta Merger was completed on February 14, 2022.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Delta Merger, each share of common stock, par value $10.00 per share, of Delta issued and outstanding immediately prior to the effective time of the Delta Merger (other than shares held in treasury by Delta) converted into and became the right to receive cash and shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration paid by the Company at the closing of the Delta Merger to Delta’s shareholders and option holders was approximately $15.15 million in cash and 2,292,270 shares of Company common stock. Delta’s outstanding stock options vested upon consummation of the Delta Merger, and all outstanding Delta options that were unexercised prior to the effective time of the Delta Merger were cashed out.

It is anticipated that Delta’s wholly owned bank subsidiary, Jefferson Bank, will be merged with and into First Mid Bank during the second quarter of 2022. At the time of the bank merger, Jefferson Bank’s banking offices will become branches of First Mid Bank. As of March 31, 2022, Jefferson Bank had total consolidated assets of approximately $748 million, loans of approximately $434 million and total deposits of approximately $561 million.

LINCO Bancshares, Inc.  

On September 25, 2020, the Company and Eval Sub Inc., a wholly owned subsidiary of the Company ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with LINCO Bancshares, Inc., the former parent of Providence Bank ("LINCO"), and the sellers as defined therein, pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of LINCO pursuant to a business combination whereby Merger Sub merged with and into LINCO, whereupon the separate corporate existence of Merger Sub ceased and LINCO continued as the surviving company and a wholly owned subsidiary of the Company (the "LINCO Merger").

9

Subject to the terms and conditions of the Merger Agreement, at the effective time of the LINCO Merger, each share of common stock, par value $1.00 per share, of LINCO issued and outstanding immediately prior to the effective time of the LINCO Merger (other than shares held in treasury by LINCO) was converted into and become the right to receive, cash or shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration payable by the Company at the closing of the Merger was $103.5 million in cash and 1,262,246 shares of the Company’s common stock, provided that the shareholders of LINCO collectively elected pursuant to the Merger Agreement to receive varying amounts of cash or shares of common stock of the Company as consideration in the Merger. In addition, immediately prior to the closing of the proposed merger, LINCO paid a special dividend to its shareholders in the aggregate amount of $13 million.

The LINCO Merger closed on February 22, 2021, and Providence Bank merged into First Mid Bank on May 15, 2021.

Website

The Company maintains a website at www.firstmid.com. All periodic and current reports of the Company and amendments to these reports filed with the Securities and Exchange Commission (“SEC”) can be accessed, free of charge, through this website as soon as reasonably practicable after these materials are filed with the SEC.

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

2021 Loan Purchase

On September 10, 2021, First Mid Bank completed an acquisition of loans in the St. Louis Metro market totaling $208 million.  There were no loans purchased with deteriorated credit.  First Mid Bank also assumed $215 million of related customer deposits and recorded a core deposit intangible asset of approximately $4.9 million that is being amortized on an accelerated basis over ten years.  

Stock Plans

At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the First Mid-Illinois Bancshares, Inc. 2017 Stock Incentive Plan (“SI Plan”). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term. The SI Plan is intended to provide a means whereby directors, employees, consultants and advisors of the Company and its subsidiaries may sustain a sense of proprietorship and personal involvement in the continued development and financial success of the Company and its subsidiaries, thereby advancing the interests of the Company and its stockholders. Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of common stock of the Company on the terms and conditions established in the SI Plan.

Following the stockholders’ approval at the 2021 annual meeting of the Company, a maximum of 399,983 shares of common stock may be issued under the SI Plan. There have been no stock options awarded under any Company plan since 2008. The Company has awarded 26,000 and 13,175 shares of restricted stock during 2022 and 2021, respectively, and 37,150 and 35,400 restricted stock units during 2022 and 2021, respectively.

Employee Stock Purchase Plan

At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP is intended to promote the interests of the Company by providing eligible employees with the opportunity to purchase shares of common stock of the Company at a 15% discount through payroll deductions. The ESPP is also intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code.

A maximum of 600,000 shares of common stock may be issued under the ESPP. As of March 31, 2022, 34,833 shares have been issued pursuant to the ESPP. During the three months ended March 31, 2022 and 2021, 3,149 shares and 3,142 shares, respectively, were issued pursuant to the ESPP.

10

Captive Insurance Company

First Mid Captive, Inc. (the “Captive"), a wholly owned subsidiary of the Company which was formed and began operations in December 2019, is a Nevada-based captive insurance company. The Captive insures against certain risks unique to operations of the Company and its subsidiaries for which insurance may not be currently available or economically feasible in today's insurance marketplace. The Captive pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. The Captive is subject to regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance. It has elected to be taxed under Section 831(b) of the Internal Revenue Code. Pursuant to Section 831(b), if gross premiums do not exceed $2,450,000, then the Captive is taxable solely on its investment income. The Captive is included in the Company's consolidated financial statements and its federal income return.

Bank Owned Life Insurance

First Mid Bank has purchased life insurance policies on certain senior management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts that are probable at settlement.

Revenue Recognition

Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), establishes a revenue recognition model for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Most of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans and investment securities, and revenue related to mortgage servicing activities, which are subject to other accounting standards. A description of the revenue-generating activities that are within the scope of ASC 606, and included in other income in the Company’s condensed consolidated statements of income are as follows:

Trust revenues. The Company generates fee income from providing fiduciary services through its subsidiary, First Mid Wealth Management Company. Fees are billed in arrears based upon the preceding period account balance. Revenue from farm management services is recorded when the service is complete, for example when crops are sold.

Brokerage commissions. Revenue is recorded at the beginning of each quarter through billing to customers based on the account asset size on the last day of the previous quarter. If a withdrawal of funds takes place, a prorated refund may occur; this is reflected within the same quarter as the original billing occurred. All performance obligations are met within the same quarter that the revenue is recorded.

Insurance commissions. The Company’s insurance agency subsidiary, First Mid Insurance, receives commissions on premiums of new and renewed business policies. First Mid Insurance records commission revenue on direct bill policies as the cash is received. For agency bill policies, First Mid Insurance retains its commission portion of the customer premium payment and remits the balance to the carrier. In both cases, the entire performance obligation is held by the carriers.

Service charges on deposits. The Company generates revenue from fees charged for deposit account maintenance, overdrafts, wire transfers, and check fees. The revenue related to deposit fees is recognized at the time the performance obligation is satisfied.

ATM/debit card revenue. The Company generates revenue through service charges on the use of its ATM machines and interchange income from the use of Company issued credit and debit cards. The revenue is recognized at the time the service is used and the performance obligation is satisfied.

Other income. Treasury management fees and lock box fees are received and recorded after the service performance obligation is completed. Merchant bank card fees are received from various vendors; however, the performance obligation is with the vendors. The Company records gains on the sale of loans and the sale of OREO properties after the transactions are complete and transfer of ownership has occurred.

As each of the Company’s facilities is in markets with similar economies, no disaggregation of revenue is necessary.

11

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive loss included in stockholders’ equity as of March 31, 2022 and December 31, 2021 are as follows (in thousands):

	Unrealized Gain (Loss) on Securities
March 31, 2022
Net unrealized loss on securities available-for-sale	$	(104,265	)
Tax benefit		30,237
Balance at March 31, 2022	$	(74,028	)
December 31, 2021
Net unrealized loss on securities available-for-sale	$	(1,170	)
Tax benefit		339
Balance at December 31, 2021	$	(831	)

Amounts reclassified from accumulated other comprehensive income and the affected line items in the statements of income during the three months ended March 31, 2022 and 2021, were as follows (in thousands):

	Amounts Reclassified from Other Comprehensive Income
	Three months ended March 31,
	2022		2021			Affected Line Item in the Statements of Income
Realized gains on available-for-sale securities	$	—	$	4		Securities gains, net
Tax effect		—		(1	)	Income taxes
Total reclassifications out of accumulated other comprehensive income	$	—	$	3		Net reclassified amount

See “Note 3 – Investment Securities” for more detailed information regarding unrealized losses on available-for-sale securities.

Adoption of New Accounting Guidance

Accounting Standards Update 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). In March 2022, FASB issued ASU 2022-02. The amendments in this update eliminate the accounting guidance and related disclosures for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty and requiring an entity to disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and are applied prospectively, except with respect to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method. Early adoption of the amendments in this update is permitted. An entity may elect to early adopt the amendments regarding TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The adoption of this accounting guidance is not expected to have a material impact on the Company's consolidated financial statements.

12

XML

Earnings Per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Note 2 -- Earnings Per Share

Basic net income per common share available to common stockholders is calculated as net income less preferred stock dividends divided by the weighted average number of common shares outstanding. Diluted net income per common share available to common stockholders is computed using the weighted average number of common shares outstanding, increased by the Company’s stock options, unless anti-dilutive.

The components of basic and diluted net income per common share available to common stockholders for the three months ended March 31, 2022 and 2021 were as follows:

	Three months ended March 31,
	2022		2021
Basic net income per common share
Available to common stockholders:
Net income	$	16,616,000	$	4,109,000
Weighted average common shares outstanding		19,295,860		17,299,927
Basic earnings per common share	$	0.86	$	0.24
Diluted net income per common share
Available to common stockholders:
Net income applicable to diluted earnings per share	$	16,616,000	$	4,109,000
Weighted average common shares outstanding		19,295,860		17,299,927
Dilutive potential common shares: restricted stock awarded		62,597		53,020
Diluted weighted average common shares outstanding		19,358,457		17,352,947
Diluted earnings per common share	$	0.86	$	0.24

There were no shares excluded when computing diluted earnings per share for the three months ended March 31, 2022 and 2021 because they were anti-dilutive.

XML

Investment Securities

3 Months Ended

Mar. 31, 2022

Investments Debt And Equity Securities [Abstract]

Investment Securities

13

Note 3 -- Investment Securities

The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at March 31, 2022 and December 31, 2021 were as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2022
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	264,466	$	37	$	(16,527	)	$	247,976
Obligations of states and political subdivisions		386,489		2,713		(30,523	)		358,679
Mortgage-backed securities: GSE residential		820,448		245		(59,166	)		761,527
Other securities		99,812		274		(1,318	)		98,768
Total available-for-sale	$	1,571,215	$	3,269	$	(107,534	)	$	1,466,950
Held-to-maturity:
Other investments	$	2,998	$	—	$	—		$	2,998
Total held-to-maturity	$	2,998	$	—	$	—		$	2,998
December 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	208,598	$	80	$	(4,863	)	$	203,815
Obligations of states and political subdivisions		383,991		12,123		(657	)		395,457
Mortgage-backed securities: GSE residential		799,456		4,292		(12,710	)		791,038
Other securities		30,546		671		(105	)		31,112
Total available-for-sale	$	1,422,591	$	17,166	$	(18,335	)	$	1,421,422
Held-to-maturity:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	5,001	$	5	$	—		$	5,006
Other investments		2,029		—		—			2,029
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	7,030	$	5	$	—		$	7,035

The Company also had $369,000 and $397,000 of equity securities, at fair value, as of March 31, 2022 and December 31, 2021, respectively. The Company's held-to-maturity securities are government agency-backed securities for which the risk of loss is minimal. As such, as of March 31, 2022, the Company did not record an allowance for credit losses on its held-to-maturity securities.

Realized gains and losses resulting from sales of securities were as follows during the three months ended March 31, 2022 and 2021 (in thousands):

	Three months March 31,
	2022		2021
Gross gains	$	—	$	4
Gross losses		—		—

14

The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at March 31, 2022 and the weighted average yield for each range of maturities (dollars in thousands):

	One year or less			After 1 through 5 years			After 5 through 10 years			After ten years			Total
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	155,050		$	82,575		$	10,351		$	—		$	247,976
Obligations of state and political subdivisions		20,894			94,654			241,873			1,258			358,679
Mortgage-backed securities: GSE residential		9,460			139,057			611,067			1,943			761,527
Other securities		22,747			74,575			1,446			—			98,768
Total available-for-sale investments	$	208,151		$	390,861		$	864,737		$	3,201		$	1,466,950
Weighted average yield		1.47	%		2.34	%		1.76	%		2.93	%		1.87	%
Full tax-equivalent yield		1.59	%		2.58	%		1.94	%		3.43	%		2.06	%
Held to maturity:
Other investments	$	—		$	—		$	—		$	2,998		$	2,998
Total held-to-maturity	$	—		$	—		$	—		$	2,998		$	2,998
Weighted average yield		—	%		—	%		—	%		—	%		—	%
Full tax-equivalent yield		—	%		—	%		—	%		—	%		—	%

The weighted average yields are calculated based on the amortized cost and effective yields weighted for the scheduled maturity of each security. Tax-equivalent yields have been calculated using a 21% tax rate. With the exception of obligations of the U.S. Treasury and other U.S. government agencies and corporations, there were no investment securities of any single issuer, the book value of which exceeded 10% of stockholders' equity at March 31, 2022.

Investment securities carried at approximately $665 million and $590 million at March 31, 2022 and December 31, 2021, respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law.

The following table presents the aging of gross unrealized losses and fair value by investment category as of March 31, 2022 and December 31, 2021 (in thousands):

	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2022
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	124,219	$	(5,410	)	$	116,577	$	(11,117	)	$	240,796	$	(16,527	)
Obligations of states and political subdivisions		231,248		(29,282	)		6,399		(1,241	)		237,647		(30,523	)
Mortgage-backed securities: GSE residential		546,117		(37,044	)		193,648		(22,122	)		739,765		(59,166	)
Other securities		80,465		(1,260	)		2,515		(58	)		82,980		(1,318	)
Total	$	982,049	$	(72,996	)	$	319,139	$	(34,538	)	$	1,301,188	$	(107,534	)
December 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	48,316	$	(1,927	)	$	139,846	$	(2,936	)	$	188,162	$	(4,863	)
Obligations of states and political subdivisions		61,535		(657	)		—		—			61,535		(657	)
Mortgage-backed securities: GSE residential		562,699		(11,019	)		46,504		(1,691	)		609,203		(12,710	)
Other securities		7,976		(105	)		—		—			7,976		(105	)
Total	$	680,526	$	(13,708	)	$	186,350	$	(4,627	)	$	866,876	$	(18,335	)

15

U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies. At March 31, 2022 there were fourteen available-for-sale securities with a fair value of $116,577,000 and unrealized losses of $11,117,000 in a continuous unrealized loss position for twelve months or more.  At December 31, 2021, there were six available-for-sale securities with a fair value of $139,846,000 and unrealized losses of $2,936,000 in a continuous unrealized loss position for twelve months or more. There were no held-to-maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies in a continuous unrealized loss position for twelve months or more.

Obligations of states and political subdivisions. At March 31, 2022, there were five obligations of states and political subdivisions with a fair value of $6,399,000 and unrealized losses of $1,241,000 in a continuous unrealized loss position for twelve months or more. At December 31, 2021there were no obligations of states and political subdivisions in a continuous unrealized loss position for twelve months or more.  

Mortgage-backed Securities: GSE Residential. At March 31, 2022, there were forty two mortgage-backed securities with a fair value of $193,648,000 and unrealized losses of $22,122,000 in a continuous unrealized loss position for twelve months or more. At December 31, 2021 there were fifteen mortgage-backed securities with a fair value of $46,504,000 and unrealized losses of $1,691,000 in a continuous unrealized loss position for twelve months or more.

Other securities.  At March 31, 2022, there were three other securities with a fair value of $2,515,000 and unrealized losses of $58,000 in a continuous unrealized loss position for twelve months or more. At December 31, 2021, there were no other securities in a continuous unrealized loss position for twelve months or more.

The Company does not believe any unrealized losses as of March 31, 2022 represents other than temporary impairment ("OTTI"). However, given the uncertainty of the financial markets, the Company may be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced, and the resulting loss recognized in the period the other-than-temporary impairment is identified.

XML

Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

Loans and Allowance for Credit Losses

Note 4 – Loans and Allowance for Credit Losses

Loans are stated at amortized cost net of an allowance for credit losses. Amortized cost is the unpaid principal net of unearned premiums and discounts, and net deferred origination fees and costs. Deferred loan origination fees are reduced by loan origination costs and are amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method. Interest on substantially all loans is credited to income based on the principal amount outstanding.

A summary of loans at March 31, 2022 and December 31, 2021 follows (in thousands):

	March 31, 2022		December 31, 2021
Construction and land development	$	131,784	$	145,156
Agricultural real estate		280,946		279,001
1-4 family residential properties		417,231		399,932
Multifamily residential properties		370,654		298,974
Commercial real estate		1,971,833		1,666,764
Loans secured by real estate		3,172,448		2,789,827
Agricultural loans		121,532		151,344
Commercial and industrial loans		938,041		834,061
Consumer loans		89,651		78,538
All other loans		142,720		143,738
Total gross loans		4,464,392		3,997,508
Less: loans held for sale		2,037		2,748
		4,462,355		3,994,760
Less:
Net deferred loan fees, premiums and discounts		9,831		1,985
Allowance for credit losses		58,474		54,655
Net loans	$	4,394,050	$	3,938,120

Loans expected to be sold are classified as held for sale in the consolidated financial statements and are recorded at the lower of aggregate cost or fair value, taking into consideration future commitments to sell the loans. These loans are primarily for 1-4 family residential properties.

Accrued interest on loans, which is excluded from the amortized cost of the balances above, totaled $15.2 million and $14.7 million

16

at March 31, 2022 and December 31, 2021, respectively.

Most of the Company’s business activities are with customers located near the Company's branch locations in Illinois, Missouri, and Texas. At March 31, 2022, the Company’s loan portfolio included $402.7 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $283.6 million was concentrated in corn and other grain farming. Total loans to borrowers whose businesses are directly related to agriculture decreased $28.1 million from $430.8 million at December 31, 2021 due to seasonal timing of cash flow requirements. Loans concentrated in corn and other grain farming decreased $13.8 million from $297.4 million at December 31, 2021. The Company's underwriting practices include collateralization of loans. Any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in loan losses within the agricultural portfolio.

In addition, the Company has $208.8 million of loans to motels and hotels. The performance of these loans is dependent on borrower specific issues as well as the general level of business and personal travel within the region. While the Company adheres to sound underwriting standards, a prolonged period of reduced business or personal travel could result in an increase in nonperforming loans to this business segment and potentially in loan losses. The Company also has $874.1 million of loans to lessors of non-residential buildings, and $537.7 million of loans to lessors of residential buildings and dwellings. 

The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the board of directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation and most borrowers are below regulatory thresholds. The Company can occasionally have outstanding balances to one borrower up to but not exceeding the regulatory threshold should underwriting guidelines warrant. Most of the Company’s loans are to businesses located in the geographic market areas served by the Company’s branch bank system. Additionally, a significant portion of the collateral securing the loans in the portfolio is located within the Company’s primary geographic footprint. In general, the Company adheres to loan underwriting standards consistent with industry guidelines for all loan segments.

The Company’s lending can be summarized into the following primary areas:

Commercial Real Estate Loans. Commercial real estate loans are generally comprised of loans to small business entities to purchase or expand structures in which the business operations are housed, loans to owners of real estate who lease space to non-related commercial entities, loans for construction and land development, loans to hotel operators, and loans to owners of multi-family residential structures, such as apartment buildings. Commercial real estate loans are underwritten based on historical and projected cash flows of the borrower and secondarily on the underlying real estate pledged as collateral on the debt. For the various types of commercial real estate loans, minimum criteria have been established within the Company’s loan policy regarding debt service coverage while maximum limits on loan-to-value and amortization periods have been defined. Maximum loan-to-value ratios range from 65% to 80% depending upon the type of real estate collateral, while the desired minimum debt coverage ratio is 1.20x. Amortization periods for commercial real estate loans are generally limited to twenty or twenty five years, depending on the loan-to-value. The Company’s commercial real estate portfolio is below the thresholds that would designate a concentration in commercial real estate lending, as established by the federal banking regulators.

Commercial and Industrial Loans. Commercial and industrial loans are primarily comprised of working capital loans used to purchase inventory and fund accounts receivable that are secured by business assets other than real estate. These loans are generally written for one year or less. Also, equipment financing is provided to businesses with these loans generally limited to 80% of the value of the collateral and amortization periods limited to seven years. Commercial loans are often accompanied by a personal guaranty of the principal owners of a business. Like commercial real estate loans, the underlying cash flow of the business is the primary consideration in the underwriting process. The financial condition of commercial borrowers is monitored at least annually with the type of financial information required determined by the size of the relationship. Measures employed by the Company for businesses with higher risk profiles include the use of government- assisted lending programs through the Small Business Administration and U.S. Department of Agriculture.

Agricultural and Agricultural Real Estate Loans. Agricultural loans are generally comprised of seasonal operating lines to cash grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop. Loan-to-value ratios on loans secured by farmland generally do not exceed 65% and have amortization periods limited to twenty-five years. Federal government-assistance lending programs through the Farm Service Agency are used to mitigate the level of credit risk when deemed appropriate.

17

Residential Real Estate Loans. Residential real estate loans generally include loans for the purchase or refinance of residential real estate properties consisting of one-to-four units and home equity loans and lines of credit. The Company sells most of its long-term fixed rate residential real estate loans to secondary market investors. The Company also releases the servicing of these loans upon sale. Residential real estate loans are typically underwritten to conform to industry standards including criteria for maximum debt-to-income and loan-to-value ratios as well as minimum credit scores. Loans secured by first liens on residential real estate held in the portfolio typically do not exceed 80% of the value of the collateral and have amortization periods of twenty-five years or less. The Company does not originate subprime mortgage loans.

Consumer Loans. Consumer loans are primarily comprised of loans to individuals for personal and household purposes such as the purchase of an automobile or other living expenses. Minimum underwriting criteria have been established that consider credit score, debt-to-income ratio, employment history, and collateral coverage. Typically, consumer loans are set up on monthly payments with amortization periods based on the type and age of the collateral.

Other Loans. Other loans consist primarily of loans to municipalities to support community projects such as infrastructure improvements or equipment purchases. Underwriting guidelines for these loans are consistent with those established for commercial loans with the additional repayment source of the taxing authority of the municipality.

Allowance for Credit Losses

The allowance for credit losses represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining contractual life of the assets. The provision for credit losses is the charge against current earnings that is determined by the Company as the amount needed to maintain an adequate allowance for credit losses. In determining the adequacy of the allowance for credit losses, and therefore the provision to be charged to current earnings, the Company relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by the overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net loan losses, the level and composition of nonaccrual, past due and troubled debt restructurings, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates. The Company estimates the appropriate level of allowance for credit losses by evaluating large individually evaluated loans separately from non-individually evaluated loans.

Individually Evaluated Loans

The Company individually evaluates certain loans for impairment. In general, these loans have been internally identified via the Company’s loan grading system as credits requiring management’s attention due to underlying problems in the borrower’s business or collateral concerns. This evaluation considers expected future cash flows, the value of collateral and other factors that may impact the borrower’s ability to make payments when due. For loans greater than $250,000, impairment is individually measured each quarter using one of three alternatives: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price, if available; or (3) the fair value of the collateral less costs to sell for collateral dependent loans and loans for which foreclosure is deemed to be probable. A specific allowance is assigned when expected cash flows or collateral are less than the carrying amount of the loan. The carrying value of the loan reflects reductions from prior charge-offs.

Non-Individually Evaluated Loans

Non-individually evaluated loans comprise the vast majority of the Company’s total loan portfolio and include loans in accrual status and those credits not identified as troubled debt restructurings. A small portion of these loans are considered “criticized” due to the risk rating assigned reflecting elevated credit risk due to characteristics, such as a strained cash flow position, associated with the individual borrowers. Criticized loans are those assigned risk ratings of Special Mention, Substandard, or Doubtful.

To determine the allowance, the loan portfolio is segmented based on similar risk characteristics. The allowance for credit losses is estimated using a discounted cash flow (DCF) methodology. The DCF projects future cash flows over the life of the loan portfolio. Probability of default (PD) and loss given default (LGD) are key components in calculating expected losses in this model. The PD is forecasted using a regression model that determines the likelihood of default with a forward-looking forecast of unemployment rates. The LGD is the percentage of defaulted loans that is ultimately charged off. The allowance is calculated as the net present value of the expected cash flows less the amortized cost basis of the loans. Prior to 2022, the allowance for credit losses was measured on a collective (pool) basis for non-individually evaluated loans with similar risk characteristics. Historical credit loss experience provided the basis for the estimate of expected credit losses. Adjustments to expected losses are made using qualitative factors for relevant to each loan segment including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. In addition, a forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period.

18

The Company also considers specific current economic events occurring globally, in the U.S. and in its local markets. In March 2020, in response to the COVID-19 outbreak, its significant disruptions in the U.S. economy and impacts on local markets, First Mid Bank offered a 90-day commercial deferral program, primarily to hotel and restaurant borrowers. In accordance with interagency guidance issued in March 2020, these short-term deferrals are not considered troubled debt restructurings. These deferrals were, however, considered in the factors used to estimate the required allowance for credit losses for non-individually evaluated loans. Other COVID-19 related impacts considered included revenue losses of businesses required to restrict or cease services, income loss to workers laid off as a result of COVID-19 restrictions, various federal and state government stimulus programs and additional deferral programs offered by First Mid Bank beginning in April 2020. Other events considered include the status of trade agreements with China, scheduled increases in minimum wage and changes to the minimum salary threshold for overtime provisions, current and projected unemployment rates, current and projected grain and oil prices and economies of local markets where customers work and operate.

Within each pool, risk elements are evaluated that have specific impacts to the borrowers within the pool. These, along with the general risks and events, and the specific lending policies and procedures by loan type described above, are analyzed to estimate the qualitative factors used to adjust the historical loss rates.

During the current period, the following assumptions and factors were considered when determining the historical loss rate and any potential adjustments by loan pool.

Construction and Land Development Loans. Historical losses in this segment remained very low. Current activity in this industry was deemed essential and has continued during COVID-19. While staffing shortages and supply chain disruptions cause risk in this segment, most projects are associated with financially strong borrowers. The qualitative factor for this segment was not changed.

Agricultural Real Estate Loans. Historical losses in the segment remain very low. Farmland values have increased over an extended period of time and there are no indications that this will change in the next year. There was a slight decrease to the qualitative factor for this segment.

1- 4 Family Residential Properties Loans. COVID-19 has impacted the finances of consumers from layoffs and furloughs resulting from employers that must reduce or suspend operations. Increased risk in this segment includes consumer ability to make mortgage and rent payments. Some of this impact was offset by governmental actions such as stimulus payments and extended unemployment benefits. First Mid Bank also offered short-term loan payment deferral to borrowers in this segment.  There was no change to the qualitative factors for this segment.

Commercial Real Estate Loans. This segment includes the Company's majority of exposure to the hotel industry which has been significantly impacted by COVID-19 events. Other impacted industries in this segment include restaurants and retail establishments. The qualitative factors on both non-owner occupied and owner-occupied loans for this segment were not changed.

Agricultural Loans. Losses in this segment are very low. Commodity prices have been elevated and yields have been strong.  The qualitative factor of this segment was decreased slightly.

Commercial and Industrial Loans. The COVID-19 impacts include forced closures and scaled-back services for many industries within this segment including retailers, restaurants, and video gaming establishments. Some of this risk was offset by government relief programs as well as, First Mid Bank's payment deferral program. The qualitative factor for this segment was not changed.

Consumer Loans. The financial status of many borrowers was impacted by COVID-19 events including layoffs and reduced hours. Some of this impact was offset by government stimulus programs, increased paid leave and increased and extended unemployment benefits. Additionally, First Mid Bank has offered a short-term payment deferral program. The qualitative factor for this segment was not changed.

Acquired Loans. Prior to January 1, 2020 loans acquired with evidence of credit deterioration since origination and for which it was probable that all contractually required payments would not be collected were considered purchased credit impaired at the time of acquisition. Purchase credit-impaired ("PCI") loans were accounted for under ASC 310-30, Receivables--Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"), and were initially measured at fair value, which included the estimated future credit losses expected to be incurred over the life of the loan.

Accordingly, an allowance for credit losses related to these loans was not carried over and recorded at the acquisition date. The cash flows expected to be collected were estimated using current key assumptions, such as default rates, value of underlying collateral, severity and prepayment speeds.

Subsequent to January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is

19

added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date. Accordingly, on January 1, 2020, the amortized cost basis of the PCD loans were adjusted to reflect the addition of $833,000 to the allowance for credit losses.

For acquired loans not deemed purchased credit deteriorated at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. At the acquisition date, an initial allowance for expected credit losses is estimated and recorded as credit loss expense. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

The following table presents the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2022 (in thousands):

	Construction and Land Development			Agricultural Real Estate		1-4 Family Residential Properties		Commercial Real Estate		Agricultural Loans		Commercial and Industrial			Consumer Loans			Total
Three months ended March 31, 2022
Beginning balance	$	1,743		$	1,257	$	2,330	$	26,246	$	983	$	19,241		$	2,855		$	54,655
Initial allowance on loans purchased with credit deterioration		272			—		3		478		—		94			16			863
Provision for credit loss expense		(25	)		714		1,264		3,613		68		(2,045	)		(637	)		2,952
Loans charged off		2			—		72		339		—		3			358			774
Recoveries collected		—			—		203		347		—		61			167			778
Ending balance	$	1,988		$	1,971	$	3,728	$	30,345	$	1,051	$	17,348		$	2,043		$	58,474

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2021 and for the year ended December 31, 2021 (in thousands):

	Construction and Land Development		Agricultural Real Estate		1-4 Family Residential Properties			Commercial Real Estate		Agricultural Loans			Commercial and Industrial		Consumer Loans		Total
Three months ended March 31, 2021
Beginning balance (prior to adoption of ASC 326)	$	1,666	$	1,084	$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Initial allowance on loans purchased with credit deterioration		261		44		328			646		—			795		—		2,074
Provision for credit loss expense		359		500		617			5,902		(645	)		4,674		729		12,136
Loans charged off		—		—		182			480		—			18		288		968
Recoveries collected		—		—		8			9		—			18		231		266
Ending balance	$	2,286	$	1,628	$	3,093		$	25,737	$	881		$	18,954	$	2,839	$	55,418
Twelve months ended December 31, 2021
Beginning balance (prior to adoption of ASC 326)	$	1,666	$	1,084	$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Impact of adopting ASC 326		261		44		328			646		—			795		—		2,074
Provision for credit loss expense		21		129		(160	)		6,415		(544	)		7,940		1,350		15,151
Loans charged off		205		—		371			535		—			3,118		1,405		5,634
Recoveries collected		—		—		211			60		1			139		743		1,154
Ending balance	$	1,743	$	1,257	$	2,330		$	26,246	$	983		$	19,241	$	2,855	$	54,655

20

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For individually evaluated loans that are considered solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 180 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

21

The following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of March 31, 2022 (in thousands):

	Collateral								Allowance
	Real Estate		Business Assets		Other		Total		for Credit Losses
Construction and land development	$	475	$	—	$	—	$	475	$	215
1-4 family residential properties		1,375		—		—		1,375		133
Multifamily residential properties		1,658		—		—		1,658		—
Commercial real estate		9,657		—		—		9,657		605
Loans secured by real estate		13,165		—		—		13,165		953
Commercial and industrial loans		—		1,132		—		1,132		192
Consumer loans		—		—		4	4			—
Total loans	$	13,165	$	1,132	$	4	$	14,301	$	1,145

Credit Quality

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, collateral support, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Company uses the following definitions for risk ratings which are commensurate with a loan considered “criticized”:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current sound-worthiness and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing factors, conditions and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans.

22

The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of March 31, 2022 (in thousands):

	Term Loans by Origination Year												Revolving
Risk rating	2022		2021		2020		2019		2018		Prior		Loans		Total
March 31, 2022
Construction and land development loans
Pass	$	7,333	$	47,220	$	33,352	$	26,873	$	2,599	$	13,533	$	—	$	130,910
Special mention		—		107		—		—		—		—		—		107
Substandard		—		—		—		—		—		487		—		487
Total	$	7,333	$	47,327	$	33,352	$	26,873	$	2,599	$	14,020	$	—	$	131,504
Agricultural real estate loans
Pass	$	27,996	$	91,907	$	64,989	$	26,672	$	39,318	$	18,288	$	427	$	269,597
Special mention		825		46		259		3,499		390		5,504		—		10,523
Substandard		—		—		—		—		244		629		—		873
Total	$	28,821	$	91,953	$	65,248	$	30,171	$	39,952	$	24,421	$	427	$	280,993
1-4 family residential property loans
Pass	$	17,076	$	95,294	$	101,585	$	38,664	$	49,229	$	92,832	$	2,898	$	397,578
Special mention		—		158		—		1,915		1,796		3,098		40		7,007
Substandard		46		367		499		492		1,366		9,245		632		12,647
Total	$	17,122	$	95,819	$	102,084	$	41,071	$	52,391	$	105,175	$	3,570	$	417,232
Commercial real estate loans
Pass	$	157,560	$	563,350	$	409,771	$	317,733	$	224,746	$	614,381	$	218	$	2,287,759
Special mention		1,733		1,431		1,101		1,887		1,268		17,831		—		25,251
Substandard		3,889		499		851		704		5,824		10,470		—		22,237
Total	$	163,182	$	565,280	$	411,723	$	320,324	$	231,838	$	642,682	$	218	$	2,335,247
Agricultural loans
Pass	$	35,055	$	48,882	$	11,860	$	4,502	$	2,330	$	2,067	$	—	$	104,696
Special mention		3,859		9,913		346		2,648		129		64		—		16,959
Substandard		30		6		—		17		—		—		—		53
Total	$	38,944	$	58,801	$	12,206	$	7,167	$	2,459	$	2,131	$	—	$	121,708
Commercial and industrial loans
Pass	$	116,681	$	326,191	$	149,215	$	88,980	$	58,513	$	292,322	$	39,894	$	1,071,796
Special mention		370		694		274		1,639		174		1,023		—		4,174
Substandard		—		587		360		32		128		1,115		—		2,222
Total	$	117,051	$	327,472	$	149,849	$	90,651	$	58,815	$	294,460	$	39,894	$	1,078,192
Consumer loans
Pass	$	11,315	$	29,356	$	19,264	$	16,484	$	5,049	$	5,321	$	2,475	$	89,264
Special mention		—		64		32		35		8		—		—		139
Substandard		12		96		23		22		59		70		—		282
Total	$	11,327	$	29,516	$	19,319	$	16,541	$	5,116	$	5,391	$	2,475	$	89,685
Total loans
Pass	$	373,016	$	1,202,200	$	790,036	$	519,908	$	381,784	$	1,038,744	$	45,912	$	4,351,600
Special mention		6,787		12,413		2,012		11,623		3,765		27,520		40		64,160
Substandard		3,977		1,555		1,733		1,267		7,621		22,016		632		38,801
Total	$	383,780	$	1,216,168	$	793,781	$	532,798	$	393,170	$	1,088,280	$	46,584	$	4,454,561

23

The following tables present the credit risk profile of the Company’s loan portfolio based on risk rating category as of December 31, 2021 (in thousands):

	Term Loans by Origination Year												Revolving
Risk rating	2021		2020		2019		2018		2017		Prior		Loans		Total
December 31, 2021
Construction and land development loans
Pass	$	38,656	$	34,774	$	23,505	$	34,358	$	3,760	$	9,433	$	—	$	144,486
Special mention		110		—		—		—		—		—		—		110
Substandard		—		—		—		483		—		39		—		522
Total	$	38,766	$	34,774	$	23,505	$	34,841	$	3,760	$	9,472	$	—	$	145,118
Agricultural real estate loans
Pass	$	78,793	$	64,159	$	25,713	$	30,203	$	12,142	$	54,808	$	—	$	265,818
Special mention		872		259		4,028		384		69		6,087		—		11,699
Substandard		—		—		392		187		57		1,119		—		1,755
Total	$	79,665	$	64,418	$	30,133	$	30,774	$	12,268	$	62,014	$	—	$	279,272
1-4 family residential property loans
Pass	$	78,889	$	94,404	$	35,554	$	44,248	$	30,735	$	52,131	$	42,800	$	378,761
Special mention		234		—		1,934		499		2,601		1,196		41		6,505
Substandard		355		496		1,534		1,302		3,458		7,250		652		15,047
Total	$	79,478	$	94,900	$	39,022	$	46,049	$	36,794	$	60,577	$	43,493	$	400,313
Commercial real estate loans
Pass	$	568,200	$	417,334	$	299,973	$	174,448	$	150,811	$	304,585	$	—	$	1,915,351
Special mention		3,185		1,206		1,836		1,295		10,609		8,632		—		26,763
Substandard		2,007		714		6,242		1,179		4,646		8,238		—		23,026
Total	$	573,392	$	419,254	$	308,051	$	176,922	$	166,066	$	321,455	$	—	$	1,965,140
Agricultural loans
Pass	$	105,378	$	17,903	$	5,612	$	2,822	$	924	$	1,316	$	—	$	133,955
Special mention		13,725		436		2,648		150		13		64		—		17,036
Substandard		350		18		—		—		—		125		—		493
Total	$	119,453	$	18,357	$	8,260	$	2,972	$	937	$	1,505	$	—	$	151,484
Commercial and industrial loans
Pass	$	279,814	$	167,662	$	119,702	$	76,022	$	22,888	$	302,962	$	—	$	969,050
Special mention		613		399		1,463		182		477		819		—		3,953
Substandard		506		34		133		621		24		1,433		—		2,751
Total	$	280,933	$	168,095	$	121,298	$	76,825	$	23,389	$	305,214	$	—	$	975,754
Consumer loans
Pass	$	27,948	$	19,033	$	16,978	$	5,505	$	4,297	$	1,244	$	—	$	75,005
Special mention		68		54		38		9		—		—		—		169
Substandard		585		58		308		678		43		1,596		—		3,268
Total	$	28,601	$	19,145	$	17,324	$	6,192	$	4,340	$	2,840	$	—	$	78,442
Total loans
Pass	$	1,177,678	$	815,269	$	527,037	$	367,606	$	225,557	$	726,479	$	42,800	$	3,882,426
Special mention		18,807		2,354		11,947		2,519		13,769		16,798		41		66,235
Substandard		3,803		1,320		8,609		4,450		8,228		19,800		652		46,862
Total	$	1,200,288	$	818,943	$	547,593	$	374,575	$	247,554	$	763,077	$	43,493	$	3,995,523

24

The following table presents the Company’s loan portfolio aging analysis at March 31, 2022 and December 31, 2021 (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
March 31, 2022
Construction and land development	$	93	$	12	$	203	$	308	$	131,196	$	131,504	$	—
Agricultural real estate		243		139		1,813		2,195		278,798		280,993		—
1-4 family residential properties		2,080		253		1,644		3,977		413,255		417,232		—
Multifamily residential properties		—		—		580		580		369,346		369,926		—
Commercial real estate		2,317		—		11,305		13,622		1,951,699		1,965,321		—
Loans secured by real estate		4,733		404		15,545		20,682		3,144,294		3,164,976		—
Agricultural loans		—		—		321		321		121,387		121,708		—
Commercial and industrial loans		572		54		1,486		2,112		933,342		935,454		—
Consumer loans		271		213		119		603		89,082		89,685		—
All other loans		—		—		—		—		142,738		142,738		—
Total loans	$	5,576	$	671	$	17,471	$	23,718	$	4,430,843	$	4,454,561	$	—
December 31, 2021
Construction and land development	$	159	$	199	$	203	$	561	$	144,557	$	145,118	$	—
Agricultural real estate		—		222		1		223		279,049		279,272		—
1-4 family residential properties		2,532		914		2,012		5,458		394,855		400,313		—
Multifamily residential properties		—		—		1,676		1,676		297,266		298,942		—
Commercial real estate		8,930		640		2,484		12,054		1,654,144		1,666,198		—
Loans secured by real estate		11,621		1,975		6,376		19,972		2,769,871		2,789,843		—
Agricultural loans		—		10		588		598		150,886		151,484		—
Commercial and industrial loans		381		302		1,156		1,839		830,169		832,008		—
Consumer loans		388		47		118		553		77,889		78,442		—
All other loans		1,854		—		—		1,854		141,892		143,746		—
Total loans	$	14,244	$	2,334	$	8,238	$	24,816	$	3,970,707	$	3,995,523	$	—

Individually Evaluated Loans

Within all loan portfolio segments, loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Impaired loans, excluding certain troubled debt restructured loans, are placed on nonaccrual status. Impaired loans include nonaccrual loans and loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. It is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being modified remain on nonaccrual status until, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. If the restructured loan is on accrual status prior to being modified, the loan is reviewed to determine if the modified loan should remain on accrual status.

The Company’s policy is to discontinue the accrual of interest income on all loans for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Interest on loans determined to be troubled debt restructurings is recognized on an accrual basis in accordance with the restructured terms if the loan is in compliance with the modified terms. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.

The amount of interest income recognized by the Company within the periods stated above was due to loans modified in troubled debt restructurings that remain on accrual status.  

25

Non-Accrual Loans

The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated for which no allowance was recorded as of March 31, 2022 and December 31, 2021 (in thousands). There were no loans past due over eighty-nine days that were still accruing.

	March 31, 2022				December 31, 2021
	Nonaccrual with no Allowance for		Total		Nonaccrual with no Allowance for		Total
	Credit Loss		Nonaccrual		Credit Loss		Nonaccrual
Construction and land development	$	—	$	—	$	25	$	25
Agricultural real estate		273		1,296		237		336
1-4 family residential properties		4,344		5,144		5,252		5,252
Multifamily residential properties		1,886		1,886		1,982		1,982
Commercial real estate		7,938		8,341		7,554		7,920
Loans secured by real estate		14,441		16,667		15,050		15,515
Agricultural loans		15		230		560		560
Commercial and industrial loans		1,905		2,293		936		1,851
Consumer loans		140		140		179		179
All other loans		—		—		—		—
Total loans	$	16,501	$	19,330	$	16,725	$	18,105

Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $95,000 and $154,000 for the three months ended March 31, 2022 and 2021, respectively.

Troubled Debt Restructuring

The balance of troubled debt restructurings ("TDRs") at March 31, 2022 and December 31, 2021 was $5.5 million and $5.8 million, respectively. There was $581,000 and $765,000 in specific reserves established with respect to these loans as of March 31, 2022 and December 31, 2021, respectively. As troubled debt restructurings, these loans are included in nonperforming loans. The modification of the terms of these loans included one or a combination of the following: a reduction of stated interest rate of the loan; an extension of the maturity date and change in payment terms; or a permanent reduction of the recorded investment in the loan.

The following table presents the Company’s recorded balance of troubled debt restructurings at March 31, 2022 and December 31, 2021 (in thousands).

Troubled debt restructurings:	March 31, 2022		December 31, 2021
Agricultural real estate	$	245	$	245
1-4 family residential properties		1,228		1,353
Commercial real estate		3,231		3,355
Loans secured by real estate		4,704		4,953
Agricultural loans		193		228
Commercial and industrial loans		459		479
Consumer loans		94		109
All other loans		—		23
Total	$	5,450	$	5,792
Performing troubled debt restructurings:
Agricultural real estate	$	245	$	245
1-4 family residential properties		668		882
Commercial real estate		2,010		2,552
Loans secured by real estate		2,923		3,679
Agricultural loans		—		—
Commercial and industrial loans		171		179
Consumer loans		41		50
All other loans		—		23
Total	$	3,135	$	3,931

26

The following table presents loans modified as TDRs during the three months ended March 31, 2022, as a result of various modified loan factors (in thousands). The change in the recorded investment from pre-modification to post- modification was not material.

	March 31, 2022					March 31, 2021
	Number of		Recorded		Type of	Number of		Recorded		Type of
	Modifications		Investment		Modifications	Modifications		Investment		Modifications
1-4 family residential properties		4	$	143	(b)(c)		—	$	—
Commercial real estate		2		197	(b)		—		—
Loans secured by real estate		6		340			—		—
Consumer loans		—		—			2		16	(b)
Total		6	$	340			2	$	16

Type of modifications:

(a) Reduction of stated interest rate of loan

(b) Change in payment terms

(c) Extension of maturity date

(d) Permanent reduction of the recorded investment

A loan is considered to be in payment default once it is 90 days past due under the modified terms. There were three loans modified as troubled debt restructurings during the prior twelve months that experienced defaults for three months ended March 31, 2022. There was one loan modified as troubled debt restructuring during the prior twelve months that experienced defaults as of December 31, 2021.

The balance of real estate owned includes $4,794,000 and $4,984,000 of foreclosed real estate properties recorded as a result of obtaining physical possession of the property at March 31, 2022 and December 31, 2021, respectively. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure procedures are in process was $410,000 and $411,000 at March 31, 2022 and December 31, 2021, respectively.

Purchased Credit Deteriorated (PCD) Loans

The Company has acquired loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans at acquisition date is as follows (in thousands):

	Delta Acquisition			LINCO Acquisition
Purchase price of purchase credit deteriorated loans at acquisition	$	18,796		$	64,647
Allowance for credit losses at acquisition		(863	)		(2,074	)
Non-credit discount/(premium) at acquisition		(523	)		(187	)
Fair value of purchased credit deteriorated loans at acquisition	$	17,410		$	62,386

XML

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

27

Note 5 -- Goodwill and Intangible Assets

The Company has goodwill from business combinations, intangible assets from branch acquisitions, identifiable intangible assets assigned to core deposit relationships and customer lists of First Mid Wealth Management Company and First Mid Insurance. The following table presents gross carrying value and accumulated amortization by major intangible asset class as of March 31, 2022 and December 31, 2021 (in thousands):

	March 31, 2022				December 31, 2021
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Goodwill not subject to amortization (effective 1/1/02)	$	144,225	$	3,760	$	115,613	$	3,760
Intangibles from branch acquisition		3,015		3,015		3,015		3,015
Core deposit intangibles		45,355		25,074		39,435		24,085
Other intangibles		20,561		7,240		20,561		6,808
	$	213,156	$	39,089	$	178,624	$	37,668

During the first quarter of 2022, goodwill of $28.6 million was provisionally recorded for the acquisition and merger of Delta Bancshares Company.  All this goodwill was assigned to the banking unit of the Company.   

During the second quarter of 2021, goodwill of $1.4 million was recorded for the acquisition of certain assets used by BBM & Associates Inc., in connection with its trucking insurance business.  All this goodwill was assigned to First Mid Insurance.  

Goodwill of $8.9 million was provisionally recorded for the acquisition and merger of LINCO Bancshares, Inc. (“LINCO”) during the first quarter of 2021. All this goodwill was assigned to the banking unitt of the Company. This goodwill was subsequently adjusted to $5.4 million to reflect adjustments made to finalize the purchase accounting.

The following table provides a reconciliation of the purchase price paid for the acquisition of Delta and the amount of goodwill recorded (in thousands):

Unallocated purchase price				$	29,791
Less purchase accounting adjustments:
Fair value of securities	$	(2,836	)
Fair value of loans, net		(3,399	)
Fair value of premises and equipment		3,508
Fair value of time deposits		(1,759	)
Fair value of FHLB advances		(75	)
Core deposit intangible		5,920
Other assets		(623	)
Other liabilities		444
					1,180
				$	28,611

28

The following table provides a reconciliation of the purchase price paid for the acquisition of LINCO and the amount of goodwill recorded (in thousands):

Unallocated purchase price				$	12,248
Less purchase accounting adjustments:
Fair value of securities	$	264
Fair value of loans, net		(2,818	)
Fair value of other real estate owned		915
Fair value of premises and equipment		6,360
Fair value of time deposits		(2,081	)
Fair value of FHLB advances		(975	)
Core deposit intangible		2,025
Other assets		3,293
Other liabilities		(184	)
					6,799
				$	5,449

The Company has mortgage servicing rights acquired in previous acquisitions. The following table summarizes the activity pertaining to mortgage servicing rights included in intangible assets as of March 31, 2022, March 31, 2021 and December 31, 2021 (in thousands):

	March 31, 2022			March 31, 2021			December 31, 2021
Beginning balance	$	420		$	516		$	516
Fair market value adjustment		106			210			544
Mortgage servicing rights amortized		(101	)		(177	)		(629	)
Interest only strip		7			2			(11	)
Ending balance	$	432		$	551		$	420

Total amortization expense for three months ended March 31, 2022 and 2021 was as follows (in thousands):

	Three months ended March 31,
	2022		2021
Core deposit intangibles	$	989	$	710
Customer list intangibles		432		333
Mortgage servicing rights		101		177
	$	1,522	$	1,220

Aggregate amortization expense for the current year and estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands):

Aggregate amortization expense:
For period 01/01/22-03/31/22	$	1,522
Estimated amortization expense:
For period 04/01/22-12/31/22		4,681
For year ended 12/31/23		5,799
For year ended 12/31/24		5,291
For year ended 12/31/25		4,741
For year ended 12/31/26		3,852

In accordance with the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” codified within ASC 350, the Company performed testing of goodwill for impairment as of September 30, 2021 and determined that, as of that date, goodwill was not impaired. Management also concluded that the remaining amounts and amortization periods were appropriate for all intangible assets. 

XML

Repurchase Agreements and Other Borrowings

3 Months Ended

Mar. 31, 2022

Repurchase Agreements And Other Borrowings [Abstract]

Repurchase Agreements and Other Borrowings

29

Note 6 -- Repurchase Agreements and Other Borrowings

Securities sold under agreements to repurchase were $187.3 million at March 31, 2022, increase of $41.1 million from $146.3 million at December 31, 2021. The increase during the first three months of 2022 was primarily due to changes in business cash flow needs. All the transactions have overnight maturities with a weighted average rate of 0.21%.

The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., declare bankruptcy), the Company could cancel the repurchase agreement (i.e., cease payment of principal and interest), and attempt collection on the amount of collateral value in excess of the repurchase agreement fair value. The collateral is held by a third-party financial institution in the counterparty's custodial account. The counterparty has the right to sell or repledge the investment securities. For government entity repurchase agreements, the collateral is held by the Company in a segregated custodial account under a tri-party agreement. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional securities. The Company closely monitors collateral levels to ensure adequate levels are maintained, while mitigating the potential of over-collateralization in the event of counterparty default.

Collateral pledged by class for repurchase agreements are as follows (in thousands):

	March 31, 2022		December 31, 2021
US Treasury securities and obligations of U.S. government corporations and agencies	$	61,370	$	53,782
Mortgage-backed securities: GSE: residential		125,956		92,486
Miscellaneous		—		—
Total	$	187,326	$	146,268

FHLB borrowings, before net premiums of $538,074, were $125.9 million and $86 million at March 31, 2022 and December 31, 2021, respectively. At March 31, 2022 the advances were as follows:

Advance		Term (in years)		Interest Rate	Maturity Date
$	15,000,000	3 months		0.35%	April 4, 2022
	5,000,000		1.0	0.00%	May 31, 2022
	5,000,000		3.0	2.41%	May 31, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	20,000,000	3 months		0.80%	June 23, 2022
	5,000,000		3.0	1.73%	July 12, 2022
	5,000,000		8.0	2.40%	January 9, 2023
	5,000,000		4.0	2.44%	May 30, 2023
	5,000,000		3.5	1.51%	July 31, 2023
	5,000,000		3.5	0.77%	September 11, 2023
	5,000,000		5.0	1.54%	July 12, 2024
	10,000,000		5.0	1.45%	December 31, 2024
	5,000,000		5.0	0.91%	March 10, 2025
	5,857,785		10.0	2.64%	December 23, 2025
	5,000,000		10.0	1.15%	October 3, 2029
	5,000,000		10.0	1.12%	October 3, 2029
	10,000,000		10.0	1.39%	December 31, 2029

30

XML

Fair Value of Assets and Liabilities

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

Note 7 -- Fair Value of Assets and Liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Following is a description of the inputs and valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Available-for-Sale Securities. The fair value of available-for-sale securities is determined by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independent sources of market parameters, including but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Fair value determinations for Level 3 measurements of securities are the responsibility of the Treasury function of the Company. The Company contracts with a pricing specialist to generate fair value estimates on a monthly basis. The Treasury function of the Company challenges the reasonableness of the assumptions used and reviews the methodology to ensure the estimated fair value complies with accounting standards generally accepted in the United States, analyzes the changes in fair value and compares these changes to internally developed expectations and monitors these changes for appropriateness.

Derivatives. The fair value of derivatives is based on models using observable market data as of the measurement date and are therefore classified in Level 2 of the valuation hierarchy.

31

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of March 31, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2022
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	247,976	$	—	$	247,976	$	—
Obligations of states and political subdivisions		358,679		—		358,679		—
Mortgage-backed securities		761,527		—		761,527		—
Other securities		98,768		—		98,768		—
Total available-for-sale securities		1,466,950		—		1,466,950		—
Equity securities		369		369		—		—
Derivative assets: interest rate swaps		2,286		—		2,286		—
Total assets	$	1,469,605	$	369	$	1,469,236	$	—
Derivative liabilities: interest rate swaps	$	2,167	$	—	$	2,167	$	—
December 31, 2021
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	203,815	$	—	$	203,815	$	—
Obligations of states and political subdivisions		395,457		—		395,358		99
Mortgage-backed securities		791,038		—		791,038		—
Other securities		31,112		—		31,112		—
Total available-for-sale securities		1,421,422		—		1,421,323		99
Equity securities		397		397		—		—
Derivative assets: interest rate swaps		809		—		809		—
Total assets	$	1,422,628	$	397	$	1,422,132	$	99
Derivative liabilities: interest rate swaps	$	1,476	$	—	$	1,476	$	—

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2022 and 2021 is summarized as follows (in thousands):

	Obligation of State and Political Subdivisions
	Three months ended
	March 31, 2022			March 31, 2021
Beginning balance	$	99		$	794
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Total gains or losses:
Included in net income		—			1
Included in other comprehensive income (loss)		—			—
Purchases, issuances, sales and settlements:
Purchases		—			—
Issuances		—			—
Sales		—			(181	)
Settlements		(99	)		—
Ending balance	$	—		$	614
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$	—		$	—

32

Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Collateral Dependent Loans. Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment and estimating fair value include using the fair value of the collateral for collateral dependent loans.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Individually evaluated loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method.

Management establishes a specific allowance for individually evaluated loans that have an estimated fair value that is below the carrying value. The total carrying amount of loans for which a change in specific allowance has occurred as of March 31, 2022 was $5,741,000 and a fair value of $4,596,000 resulting in specific loss exposures of $1,145,000.

When there is little prospect of collecting principal or interest, loans, or portions of loans, may be charged-off to the allowance for credit losses. Losses are recognized in the period an obligation becomes uncollectible. The recognition of a loss does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan even though partial recovery may be affected in the future.

Foreclosed Assets Held For Sale. Other real estate owned acquired through loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for credit losses. Due to the subjective nature of establishing the fair value when the asset is acquired, the actual fair value of the other real estate owned, or foreclosed asset could differ from the original estimate. If it is determined that fair value declines subsequent to foreclosure, a valuation allowance is recorded through noninterest expense. Operating costs associated with the assets after acquisition are also recorded as noninterest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other noninterest expense. The total carrying amount of other real estate owned as of March 31, 2022 was $4,794,000. Other real estate owned included in the total carrying amount and measured at fair value on a nonrecurring basis during the period amounted to $28,000.

Mortgage Servicing Rights. As of March 31, 2022, mortgage servicing rights had a carrying value of $367,000 and a fair value of $432,000 resulting in a valuation reserve of $65,000. The fair value used to determine the valuation reserve for mortgage servicing rights was estimated using the discounted cash flow models. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the fair value hierarchy.

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2022
Collateral dependent loans	$	4,596	$	—	$	—	$	4,596
Foreclosed assets held for sale		28		—		—		28
Mortgage servicing rights		432		—		—		432
December 31, 2021
Collateral dependent loans	$	6,750	$	—	$	—	$	6,750
Foreclosed assets held for sale		2,068		—		—		2,068
Mortgage servicing rights		420		—		—		420

33

Sensitivity of Significant Unobservable Inputs

The following table presents quantitative information about unobservable inputs used in Level 3 fair value measurements other than goodwill at March 31, 2022.

March 31, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Collateral dependent loans	$	4,596	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		28	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		432	Third party valuations	PSA standard prepayment model rate	177 - 438		189

December 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Collateral dependent loans	$	6,750	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		2,068	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		420	Third party valuations	PSA standard prepayment model rate	205 - 513		273

34

The following tables present estimated fair values of the Company’s financial instruments at March 31, 2022 and December 31, 2021 in accordance with ASC 825 (in thousands):

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2022
Financial assets
Cash and due from banks	$	218,072	$	218,072	$	218,072	$	—	$	—
Federal funds sold		5,908		5,908		5,908		—		—
Certificates of deposit investments		1,960		1,960		—		1,960		—
Available-for-sale securities		1,466,950		1,466,950		—		1,466,950		—
Held-to-maturity securities		2,998		2,998		2,998		—		—
Equity securities		369		369		369		—		—
Loans held for sale		2,037		2,037		—		2,037		—
Loans net of allowance for credit losses		4,394,050		4,280,190		—		—		4,280,190
Interest receivable		22,365		22,365		—		22,365		—
Federal Reserve Bank stock		13,845		13,845		—		13,845		—
Federal Home Loan Bank stock		6,484		6,484		—		6,484		—
Financial liabilities
Deposits	$	5,487,305	$	5,482,217	$	—	$	4,821,794	$	660,423
Securities sold under agreements to repurchase		187,326		152,086		—		152,086		—
Interest payable		2,466		2,466		—		2,466		—
Federal Home Loan Bank borrowings		126,396		123,295		—		123,295		—
Subordinated debt, net		94,438		94,438				94,438
Junior subordinated debentures, net		19,237		15,458		—		15,458		—
December 31, 2021
Financial assets
Cash and due from banks	$	167,242	$	167,242	$	167,242	$	—	$	—
Federal funds sold		1,360		1,360		1,360		—		—
Certificates of deposit investments		2,450		2,450		—		2,450		—
Available-for-sale securities		1,421,422		1,421,422		—		1,421,323		99
Held-to-maturity securities		7,030		7,034		2,029		5,005		—
Equity securities		397		397		397		—		—
Loans held for sale		2,748		2,748		—		2,748		—
Loans net of allowance for credit losses		3,938,120		3,889,870		—		—		3,889,870
Interest receivable		19,868		19,868		—		19,868		—
Federal Reserve Bank stock		13,845		13,845		—		13,845		—
Federal Home Loan Bank stock		6,484		6,484		—		6,484		—
Financial liabilities
Deposits	$	4,956,486	$	4,956,738	$	—	$	4,394,434	$	562,304
Securities sold under agreements to repurchase		146,268		146,274		—		146,274		—
Interest payable		1,346		1,346		—		1,346		—
Federal Home Loan Bank borrowings		86,446		86,248		—		86,248		—
Subordinated debt, net		94,400		94,400		—		94,400		—
Junior subordinated debentures, net		19,195		15,012		—		15,012		—

XML

Business Combinations

3 Months Ended

Mar. 31, 2022

Business Combinations [Abstract]

Business Combinations

Note 8 – Business Combinations

On July 28, 2021, the Company and Brock Sub LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company (“Delta Merger Sub”), entered into an Agreement and Plan of Merger (the “Delta Merger Agreement”) with Delta Bancshares Company, a Missouri corporation (“Delta”), pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of Delta pursuant to a business combination whereby Delta merged with and into Delta Merger Sub, whereupon the separate corporate existence of Delta ceased and Delta Merger Sub continued as the surviving company and a wholly-owned subsidiary of First Mid (the “Delta Merger”). The Delta Merger was completed on February 14, 2022.

35

Subject to the terms and conditions of the Delta Merger Agreement, at the effective time of the Delta Merger, each share of common stock, par value $10.00 per share, of Delta issued and outstanding immediately prior to the effective time of the Delta Merger (other than shares held in treasury by Delta) converted into and became the right to receive cash and shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration paid by the Company at the closing of the Delta Merger to Delta’s shareholders and option holders was approximately $15.15 million in cash and 2,292,270 shares of Company common stock. Delta’s outstanding stock options vested upon consummation of the Delta Merger, and all outstanding Delta options that were unexercised prior to the effective time of the Delta Merger were cashed out.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business Combinations ("ASC 805"),” and accordingly the assets and liabilities were recorded at their estimated fair values as of the date of acquisition. Fair values are subject to refinement for up to one year after the closing date of February 14, 2022 as additional information regarding the closing date fair values become available. The total consideration paid was used to determine the amount of goodwill resulting from the transaction. As the total consideration paid exceeded the net assets acquired, goodwill of $28.6 million was recorded for the acquisition. Goodwill recorded in the transaction, which reflects the synergies and economies of scale expected from combining operations and the enhanced revenue opportunities from the Company’s service capabilities, is not tax deductible, and was all assigned to the banking segment of the Company.

	Acquired			Fair Value			As Recorded by
(In thousands)	Book Value			Adjustments			Jefferson Bank
Assets
Cash and due from banks	$	82,473		$	—		$	82,473
Investment securities		184,959			(2,836	)		182,123
Loans		426,433			(7,924	)		418,509
Allowance for credit losses		(5,388	)		4,525			(863	)
Premises and equipment		5,522			3,508			9,030
Goodwill		14			28,597			28,611
Core deposit intangible		—			5,920			5,920
Bank owned life insurance		15,822						15,822
Right of use asset		—			717			717
Other assets		9,061			(1,340	)		7,721
Total assets acquired	$	718,896		$	31,167		$	750,063
Liabilities
Deposits	$	558,619		$	1,759		$	560,378
Securities sold under agreements to repurchase		35,523			—			35,523
FHLB advances		45,000			75			45,075
Lease liability		—			717			717
Other liabilities		2,209			(1,161	)		1,048
Total liabilities assumed		641,351			1,390			642,741
Net assets acquired	$	77,545		$	29,777		$	107,322
Consideration paid
Cash							$	15,150
Common stock								92,172
							$	107,322

The Company has recognized approximately $785,000, pre-tax, of acquisition costs for the Delta Merger. Of this amount, $535,000 was recognized during 2022. These costs are included in salaries and benefits, legal and professional and other expense. Of the $7.9 million adjustment to loans, $8.2 million is being accreted to interest income over the remaining term of the loans. The remaining $300,000 was the elimination of deferred fees and unearned discounts previously recorded by Jefferson Bank. The Company also recorded approximately $863,000 directly to the allowance for credit losses for loans identified as PCD. Of the $426 million of loans acquired, approximately $18.8 million was identified as PCD.

The differences between fair value and acquired value of the assumed time deposits of $1.8 million and the assumed FHLB advances of $75,000, are being amortized to interest expense over the remaining life of the liabilities. The core deposit intangible asset, with a fair value of $5.9 million, is being amortized on an accelerated basis over its estimated life of 10 years.

36

The following unaudited pro forma condensed combined financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the Delta Merger taken place at the beginning of the period (dollars in thousands, except per share data):

	Three months ended March 31,
	2022		2021
Net interest income	$	44,200	$	40,966
Provision for loan losses		2,952		14,136
Non-interest income		21,088		18,528
Non-interest expense		40,575		39,653
Income before taxes		21,761		5,705
Income tax expense (benefit)		4,797		887
Net income (loss)	$	16,964	$	4,818
Earnings per share
Basic	$	0.88	$	0.28
Diluted		0.88		0.28
Basic weighted average shares o/s		19,295,860		17,299,927
Diluted weighted average shares o/s		19,358,457		17,352,947

On September 25, 2020, the Company and Eval Sub Inc., a newly formed Illinois corporation and wholly-owned subsidiary of the Company ("Eval Merger Sub"), entered into an Agreement and Plan of Merger (the "LINCO Merger Agreement") with LINCO Bancshares, Inc., a Missouri corporation ("LINCO"), and the sellers as defined therein, pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of LINCO pursuant to a business combination whereby Eval Merger Sub merged with and into LINCO, whereupon the separate corporate existence of Merger Sub ceased and LINCO continued as the surviving company and a wholly-owned subsidiary of the Company (the "LINCO Merger"). The LINCO Merger closed on February 22, 2021.

Subject to the terms and conditions of the LINCO Merger Agreement, at the effective time of the LINCO Merger, each share of common stock, par value $1.00 per share, of LINCO issued and outstanding immediately prior to the effective time of the LINCO Merger (other than shares held in treasury by LINCO) was converted into and become the right to receive, cash or shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration paid by the Company at the closing of the LINCO Merger was $103.5 million in cash and 1,262,246 shares of the Company’s common stock. In addition, immediately prior to the closing of the proposed merger, LINCO paid a special dividend to its shareholders in the aggregate amount of $13 million.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business Combinations ("ASC 805"),” and accordingly the assets and liabilities were recorded at their estimated fair values as of the date of acquisition. Fair values are subject to refinement for up to one year after the closing date of February 22, 2021 as additional information regarding the closing date fair values become available. The total consideration paid was used to determine the amount of goodwill resulting from the transaction. As the total consideration paid exceeded the net assets acquired, goodwill of $5.4 million was recorded for the acquisition. Goodwill recorded in the transaction, which reflects the synergies and economies of scale expected from combining operations and the enhanced revenue opportunities from the Company’s service capabilities, is not tax deductible, and was all assigned to the banking segment of the Company.

37

	Acquired			Fair Value			As Recorded by
(In thousands)	Book Value			Adjustments			Providence Bank
Assets
Cash and due from banks	$	130,561		$	—		$	130,561
Investment securities		119,234			264			119,498
Loans		838,377			(9,401	)		828,976
Allowance for credit losses		(8,656	)		6,583			(2,073	)
Other real estate owned		8,435			915			9,350
Premises and equipment		23,440			6,360			29,800
Goodwill		20,503			(15,054	)		5,449
Core deposit intangible		123			2,025			2,148
Right of use asset		—			794			794
Other assets		43,697			2,499			46,196
Total assets acquired	$	1,175,714		$	(5,015	)	$	1,170,699
Liabilities
Deposits	$	988,329		$	2,081		$	990,410
Securities sold under agreements to repurchase		—			—			—
FHLB advances		26,941			975			27,916
Other borrowings		—			—			—
Lease liability		—			794			794
Other liabilities		4,498			(610	)		3,888
Total liabilities assumed		1,019,768			3,240			1,023,008
Net assets acquired	$	155,946		$	(8,255	)	$	147,691
Consideration paid
Cash							$	103,500
Common stock								44,191
							$	147,691

38

The Company has recognized approximately $9 million, pre-tax, of acquisition costs for the LINCO acquisition. Of this amount, $8.5 million was recognized during the first three months of 2021. These costs are included in salaries and benefits, legal and professional and other expense. Of the $9.4 million adjustment to loans, $11.1 million is being accreted to interest income over the remaining term of the loans. The remaining $1.7 million was the elimination of deferred fees and unearned discounts previously recorded by Providence Bank. The Company also recorded approximately $2 million directly to the allowance for credit losses for loans identified as PCD. Of the $838 million of loans acquired, approximately $64.6 million was identified as PCD.

The differences between fair value and acquired value of the assumed time deposits of $2.1 million and the assumed FHLB advances of $975,000, are being amortized to interest expense over the remaining life of the liabilities. The core deposit intangible asset, with a fair value of $2.1 million, is being amortized on an accelerated basis over its estimated life of 10 years.

The following unaudited pro forma condensed combined financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the LINCO acquisition taken place at the beginning of the period (dollars in thousands, except per share data):

	Three months ended
	March 31, 2021
Net interest income	$	38,237
Provision for loan losses		12,136
Non-interest income		17,749
Non-interest expense		37,659
Income before taxes		6,191
Income tax expense (benefit)		1,078
Net income (loss)	$	5,113
Earnings per share
Basic	$	0.30
Diluted		0.29
Basic weighted average shares o/s		17,299,927
Diluted weighted average shares o/s		17,352,947

XML

Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Leases

Note 9 -- Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). As of March 31, 2022, substantially all the Company's leases are operating leases for real estate property for bank branches, ATM locations, and office space.

These leases are generally for periods of 1 to 25 years with various renewal options. The Company elected the optional transition method permitted by Topic 842. Under this method, the Company recognizes and measures leases that exist at the application date and prior comparative periods are not adjusted. In addition, the Company elected the package of practical expedients:

1. An entity need not reassess whether any expired or existing contracts contain leases.

2. An entity need not reassess the lease classification for any expired or existing leases.

3. An entity need not reassess initial direct costs for any existing leases.

The Company has also elected the practical expedient, which may be elected separately or in conjunction with the package noted above, to use hindsight in determining the lease term and in assessing the right-of-use assets. This expedient must be applied consistently to all leases. Lastly, the Company has elected to use the practical expedient to include both lease and non-lease components as a single component and account for it as a lease. In addition, the Company has elected to not include short-term leases (i.e. leases with terms of twelve months or less) or equipment leases (primarily copiers) deemed immaterial, on the consolidated balance sheets.

39

For leases in effect at January 1, 2019 and for leases commencing thereafter, the Company recognizes a lease liability and a right-of-use asset, based on the present value of lease payments over the lease term. The discount rate used in determining present value was the Company's incremental borrowing rate which is the FHLB fixed advance rate based on the remaining lease term as of January 1, 2019, or the commencement date for leases subsequently entered into. The following table contains supplemental balance sheet information related to leases (dollars in thousands):

	March 31, 2022			March 31, 2021			December 31, 2021
Operating lease right-of-use assets	$	15,242		$	17,424		$	15,116
Operating lease liabilities		15,458			17,578			15,322
Weighted-average remaining lease term (in years)		6.9			6.8			6.6
Weighted-average discount rate		2.67	%		2.63	%		2.70	%

Certain of the Company's leases contain options to renew the lease; however, not all renewal options are included in the calculation of lease liabilities as they are not reasonably certain to be exercised. The Company's leases do not contain residual value guarantees or material variable lease payments. The Company does not have any other material restrictions or covenants imposed by leases that would impact the Company's ability to pay dividends or cause the Company to incur additional financial obligations.

Maturities of lease liabilities were as follows (in thousands):

Year ending December 31,
	2022	$	2,221
	2021		2,416
	2022		2,044
	2023		1,713
	2024		1,714
Thereafter			7,645
Total lease payments			17,753
Less imputed interest			(2,295	)
Total lease liability		$	15,458

The components of lease expense for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

	Three months ended March 31,
	2022			2021
Operating lease cost	$	629		$	708
Short-term lease cost		27			35
Variable lease cost		266			137
Total lease cost		922			880
Income from subleases		(100	)		(153	)
Net lease cost	$	822		$	727

As the Company elected not to separate lease and non-lease components, the variable lease cost primarily represents variable payment such as common area maintenance and copier expense. The Company does not have any material sub-lease agreements. Cash paid for amounts included in the measurement of lease liabilities was (in thousands):

	March 31, 2022		March 31, 2021
Operating cash flows from operating leases	$	722	$	711

XML

Derivatives

3 Months Ended

Mar. 31, 2022

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives

40

Note 10 – Derivatives

The Company utilizes an interest rate swap, designated as a fair value hedge, to mitigate the risk of changing interest rates on the fair value of a fixed rate commercial real estate loan. For derivative instruments that are designed and qualify as a fair value hedge, the gain or loss on the derivative instrument, as well as the offsetting loss or gain in the hedged asset attributable to the hedged risk, is recognized in current earnings.

Derivatives Designated as Hedging Instruments

The following table provides the outstanding notional balances and fair values of outstanding derivatives designated as hedging instruments as of March 31, 2022 and December 31, 2021 (in thousands):

	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
March 31, 2022
Fair value hedges:
Interest rate swap agreements	Other liabilities	7.1	$	13,839	$	(2,167	)
December 31, 2021
Fair value hedges:
Interest rate swap agreements	Other liabilities	7.3	$	13,900	$	(1,476	)

The effects of the fair value hedges on the Company's income statement during the three months ended March 31, 2022 and 2021 were as follows (in thousands):

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Derivatives	2022			2021
Interest rate swap agreements	Interest income on loans	$	(785	)	$	(743	)

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Hedged Items	2022		2021
Interest rate swap agreements	Interest income on loans	$	785	$	743

As of March 31, 2022, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustment for fair value hedges (in thousands):

Line Item in the Balance Sheet in Which the Hedge Item is Included	Carrying Amount of the Hedged Asset		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
Loans	$	13,958	$	(118	)

Derivatives Not Designated as Hedging Instruments

The following amounts represent the notional amounts and gross fair value of derivative contracts not designated as hedging instruments outstanding during the three months ended March 31, 2022 (dollars in thousands):

March 31, 2022	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
Interest rate swap agreements	Other assets	5.8	$	40,435	$	2,286
Interest rate swap agreements	Other liabilities	5.8		40,435		(2,286	)

41

XML

Basis of Accounting and Consolidation (Policies)

3 Months Ended

Mar. 31, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Accounting and Consolidation

The unaudited condensed consolidated financial statements include the accounts of First Mid Bancshares, Inc. (“Company”) and its wholly owned subsidiaries: First Mid Bank & Trust, N.A. (“First Mid Bank”), Jefferson Bank and Trust Company (“Jefferson Bank”), First Mid Wealth Management Company, First Mid Insurance Group, Inc. (“First Mid Insurance”), and First Mid Captive, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. The financial information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods ended March 31, 2022 and 2021, and all such adjustments are of a normal recurring nature. Certain amounts in the prior year’s consolidated financial statements may have been reclassified to conform to the March 31, 2022 presentation and there was no impact on net income or stockholders’ equity. The results of the interim period ended March 31, 2022 are not necessarily indicative of the results expected for the year ending December 31, 2022. The Company operates as a one-segment entity for financial reporting purposes. The 2021 year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and related footnote disclosures although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report on Form 10-K.

COVID-19

COVID-19

The COVID-19 outbreak is an unprecedented event that provides significant economic uncertainty for a broad spectrum of industries. The Company is focused on supporting its customers, communities and employees during this unique operating environment. Throughout this document, the Company describes the impact COVID-19 is having, actions taken as a result of COVID-19, and certain risks to the Company that COVID-19 creates or exacerbates, as well as management's outlook on the current COVID-19 situation.

Acquisitions

Delta Bancshares Company

On July 28, 2021, the Company and Brock Sub LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company (“Delta Merger Sub”), entered into an Agreement and Plan of Merger (the “Delta Merger Agreement”) with Delta Bancshares Company, a Missouri corporation (“Delta”), pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of Delta pursuant to a business combination whereby Delta merged with and into Merger Sub, whereupon the separate corporate existence of Delta ceased and Merger Sub continued as the surviving company and a wholly-owned subsidiary of First Mid (the “Delta Merger”). The Delta Merger was completed on February 14, 2022.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Delta Merger, each share of common stock, par value $10.00 per share, of Delta issued and outstanding immediately prior to the effective time of the Delta Merger (other than shares held in treasury by Delta) converted into and became the right to receive cash and shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration paid by the Company at the closing of the Delta Merger to Delta’s shareholders and option holders was approximately $15.15 million in cash and 2,292,270 shares of Company common stock. Delta’s outstanding stock options vested upon consummation of the Delta Merger, and all outstanding Delta options that were unexercised prior to the effective time of the Delta Merger were cashed out.

It is anticipated that Delta’s wholly owned bank subsidiary, Jefferson Bank, will be merged with and into First Mid Bank during the second quarter of 2022. At the time of the bank merger, Jefferson Bank’s banking offices will become branches of First Mid Bank. As of March 31, 2022, Jefferson Bank had total consolidated assets of approximately $748 million, loans of approximately $434 million and total deposits of approximately $561 million.

LINCO Bancshares, Inc.  

On September 25, 2020, the Company and Eval Sub Inc., a wholly owned subsidiary of the Company ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with LINCO Bancshares, Inc., the former parent of Providence Bank ("LINCO"), and the sellers as defined therein, pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of LINCO pursuant to a business combination whereby Merger Sub merged with and into LINCO, whereupon the separate corporate existence of Merger Sub ceased and LINCO continued as the surviving company and a wholly owned subsidiary of the Company (the "LINCO Merger").

9

Subject to the terms and conditions of the Merger Agreement, at the effective time of the LINCO Merger, each share of common stock, par value $1.00 per share, of LINCO issued and outstanding immediately prior to the effective time of the LINCO Merger (other than shares held in treasury by LINCO) was converted into and become the right to receive, cash or shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration payable by the Company at the closing of the Merger was $103.5 million in cash and 1,262,246 shares of the Company’s common stock, provided that the shareholders of LINCO collectively elected pursuant to the Merger Agreement to receive varying amounts of cash or shares of common stock of the Company as consideration in the Merger. In addition, immediately prior to the closing of the proposed merger, LINCO paid a special dividend to its shareholders in the aggregate amount of $13 million.

The LINCO Merger closed on February 22, 2021, and Providence Bank merged into First Mid Bank on May 15, 2021.

General Litigation

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

Loan Purchase

2021 Loan Purchase

On September 10, 2021, First Mid Bank completed an acquisition of loans in the St. Louis Metro market totaling $208 million.  There were no loans purchased with deteriorated credit.  First Mid Bank also assumed $215 million of related customer deposits and recorded a core deposit intangible asset of approximately $4.9 million that is being amortized on an accelerated basis over ten years.  

Stock Plans

Stock Plans

At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the First Mid-Illinois Bancshares, Inc. 2017 Stock Incentive Plan (“SI Plan”). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term. The SI Plan is intended to provide a means whereby directors, employees, consultants and advisors of the Company and its subsidiaries may sustain a sense of proprietorship and personal involvement in the continued development and financial success of the Company and its subsidiaries, thereby advancing the interests of the Company and its stockholders. Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of common stock of the Company on the terms and conditions established in the SI Plan.

Following the stockholders’ approval at the 2021 annual meeting of the Company, a maximum of 399,983 shares of common stock may be issued under the SI Plan. There have been no stock options awarded under any Company plan since 2008. The Company has awarded 26,000 and 13,175 shares of restricted stock during 2022 and 2021, respectively, and 37,150 and 35,400 restricted stock units during 2022 and 2021, respectively.

Employee Stock Purchase Plan

Employee Stock Purchase Plan

At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP is intended to promote the interests of the Company by providing eligible employees with the opportunity to purchase shares of common stock of the Company at a 15% discount through payroll deductions. The ESPP is also intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code.

A maximum of 600,000 shares of common stock may be issued under the ESPP. As of March 31, 2022, 34,833 shares have been issued pursuant to the ESPP. During the three months ended March 31, 2022 and 2021, 3,149 shares and 3,142 shares, respectively, were issued pursuant to the ESPP.

Captive Insurance Company

10

Captive Insurance Company

First Mid Captive, Inc. (the “Captive"), a wholly owned subsidiary of the Company which was formed and began operations in December 2019, is a Nevada-based captive insurance company. The Captive insures against certain risks unique to operations of the Company and its subsidiaries for which insurance may not be currently available or economically feasible in today's insurance marketplace. The Captive pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. The Captive is subject to regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance. It has elected to be taxed under Section 831(b) of the Internal Revenue Code. Pursuant to Section 831(b), if gross premiums do not exceed $2,450,000, then the Captive is taxable solely on its investment income. The Captive is included in the Company's consolidated financial statements and its federal income return.

Bank Owned Life Insurance

Bank Owned Life Insurance

First Mid Bank has purchased life insurance policies on certain senior management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts that are probable at settlement.

Revenue Recognition

Revenue Recognition

Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), establishes a revenue recognition model for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Most of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans and investment securities, and revenue related to mortgage servicing activities, which are subject to other accounting standards. A description of the revenue-generating activities that are within the scope of ASC 606, and included in other income in the Company’s condensed consolidated statements of income are as follows:

Trust revenues. The Company generates fee income from providing fiduciary services through its subsidiary, First Mid Wealth Management Company. Fees are billed in arrears based upon the preceding period account balance. Revenue from farm management services is recorded when the service is complete, for example when crops are sold.

Brokerage commissions. Revenue is recorded at the beginning of each quarter through billing to customers based on the account asset size on the last day of the previous quarter. If a withdrawal of funds takes place, a prorated refund may occur; this is reflected within the same quarter as the original billing occurred. All performance obligations are met within the same quarter that the revenue is recorded.

Insurance commissions. The Company’s insurance agency subsidiary, First Mid Insurance, receives commissions on premiums of new and renewed business policies. First Mid Insurance records commission revenue on direct bill policies as the cash is received. For agency bill policies, First Mid Insurance retains its commission portion of the customer premium payment and remits the balance to the carrier. In both cases, the entire performance obligation is held by the carriers.

Service charges on deposits. The Company generates revenue from fees charged for deposit account maintenance, overdrafts, wire transfers, and check fees. The revenue related to deposit fees is recognized at the time the performance obligation is satisfied.

ATM/debit card revenue. The Company generates revenue through service charges on the use of its ATM machines and interchange income from the use of Company issued credit and debit cards. The revenue is recognized at the time the service is used and the performance obligation is satisfied.

Other income. Treasury management fees and lock box fees are received and recorded after the service performance obligation is completed. Merchant bank card fees are received from various vendors; however, the performance obligation is with the vendors. The Company records gains on the sale of loans and the sale of OREO properties after the transactions are complete and transfer of ownership has occurred.

As each of the Company’s facilities is in markets with similar economies, no disaggregation of revenue is necessary.

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive loss included in stockholders’ equity as of March 31, 2022 and December 31, 2021 are as follows (in thousands):

	Unrealized Gain (Loss) on Securities
March 31, 2022
Net unrealized loss on securities available-for-sale	$	(104,265	)
Tax benefit		30,237
Balance at March 31, 2022	$	(74,028	)
December 31, 2021
Net unrealized loss on securities available-for-sale	$	(1,170	)
Tax benefit		339
Balance at December 31, 2021	$	(831	)

Amounts reclassified from accumulated other comprehensive income and the affected line items in the statements of income during the three months ended March 31, 2022 and 2021, were as follows (in thousands):

	Amounts Reclassified from Other Comprehensive Income
	Three months ended March 31,
	2022		2021			Affected Line Item in the Statements of Income
Realized gains on available-for-sale securities	$	—	$	4		Securities gains, net
Tax effect		—		(1	)	Income taxes
Total reclassifications out of accumulated other comprehensive income	$	—	$	3		Net reclassified amount

See “Note 3 – Investment Securities” for more detailed information regarding unrealized losses on available-for-sale securities.

Adoption of New Accounting Guidance

Adoption of New Accounting Guidance

Accounting Standards Update 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”). In March 2022, FASB issued ASU 2022-02. The amendments in this update eliminate the accounting guidance and related disclosures for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty and requiring an entity to disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and are applied prospectively, except with respect to the recognition and measurement of TDRs, where an entity has the option to apply a modified retrospective transition method. Early adoption of the amendments in this update is permitted. An entity may elect to early adopt the amendments regarding TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The adoption of this accounting guidance is not expected to have a material impact on the Company's consolidated financial statements.

XML

Basis of Accounting and Consolidation (Tables)

3 Months Ended

Mar. 31, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Schedule of Components of Accumulated Other Comprehensive loss

The components of accumulated other comprehensive loss included in stockholders’ equity as of March 31, 2022 and December 31, 2021 are as follows (in thousands):

	Unrealized Gain (Loss) on Securities
March 31, 2022
Net unrealized loss on securities available-for-sale	$	(104,265	)
Tax benefit		30,237
Balance at March 31, 2022	$	(74,028	)
December 31, 2021
Net unrealized loss on securities available-for-sale	$	(1,170	)
Tax benefit		339
Balance at December 31, 2021	$	(831	)

Schedule of Amounts Reclassified from Accumulated Other Comprehensive Income

Amounts reclassified from accumulated other comprehensive income and the affected line items in the statements of income during the three months ended March 31, 2022 and 2021, were as follows (in thousands):

	Amounts Reclassified from Other Comprehensive Income
	Three months ended March 31,
	2022		2021			Affected Line Item in the Statements of Income
Realized gains on available-for-sale securities	$	—	$	4		Securities gains, net
Tax effect		—		(1	)	Income taxes
Total reclassifications out of accumulated other comprehensive income	$	—	$	3		Net reclassified amount

XML

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Components of Basic and Diluted Net Income per Common Share

The components of basic and diluted net income per common share available to common stockholders for the three months ended March 31, 2022 and 2021 were as follows:

	Three months ended March 31,
	2022		2021
Basic net income per common share
Available to common stockholders:
Net income	$	16,616,000	$	4,109,000
Weighted average common shares outstanding		19,295,860		17,299,927
Basic earnings per common share	$	0.86	$	0.24
Diluted net income per common share
Available to common stockholders:
Net income applicable to diluted earnings per share	$	16,616,000	$	4,109,000
Weighted average common shares outstanding		19,295,860		17,299,927
Dilutive potential common shares: restricted stock awarded		62,597		53,020
Diluted weighted average common shares outstanding		19,358,457		17,352,947
Diluted earnings per common share	$	0.86	$	0.24

XML

Investment Securities (Tables)

3 Months Ended

Mar. 31, 2022

Investments Debt And Equity Securities [Abstract]

Available for Sale and Held for Maturity Securities

The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at March 31, 2022 and December 31, 2021 were as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2022
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	264,466	$	37	$	(16,527	)	$	247,976
Obligations of states and political subdivisions		386,489		2,713		(30,523	)		358,679
Mortgage-backed securities: GSE residential		820,448		245		(59,166	)		761,527
Other securities		99,812		274		(1,318	)		98,768
Total available-for-sale	$	1,571,215	$	3,269	$	(107,534	)	$	1,466,950
Held-to-maturity:
Other investments	$	2,998	$	—	$	—		$	2,998
Total held-to-maturity	$	2,998	$	—	$	—		$	2,998
December 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	208,598	$	80	$	(4,863	)	$	203,815
Obligations of states and political subdivisions		383,991		12,123		(657	)		395,457
Mortgage-backed securities: GSE residential		799,456		4,292		(12,710	)		791,038
Other securities		30,546		671		(105	)		31,112
Total available-for-sale	$	1,422,591	$	17,166	$	(18,335	)	$	1,421,422
Held-to-maturity:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	5,001	$	5	$	—		$	5,006
Other investments		2,029		—		—			2,029
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	7,030	$	5	$	—		$	7,035

Realized Gains and Losses From Sale of Securities

Realized gains and losses resulting from sales of securities were as follows during the three months ended March 31, 2022 and 2021 (in thousands):

	Three months March 31,
	2022		2021
Gross gains	$	—	$	4
Gross losses		—		—

Investments Classified by Contractual Maturity Date

The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at March 31, 2022 and the weighted average yield for each range of maturities (dollars in thousands):

	One year or less			After 1 through 5 years			After 5 through 10 years			After ten years			Total
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	155,050		$	82,575		$	10,351		$	—		$	247,976
Obligations of state and political subdivisions		20,894			94,654			241,873			1,258			358,679
Mortgage-backed securities: GSE residential		9,460			139,057			611,067			1,943			761,527
Other securities		22,747			74,575			1,446			—			98,768
Total available-for-sale investments	$	208,151		$	390,861		$	864,737		$	3,201		$	1,466,950
Weighted average yield		1.47	%		2.34	%		1.76	%		2.93	%		1.87	%
Full tax-equivalent yield		1.59	%		2.58	%		1.94	%		3.43	%		2.06	%
Held to maturity:
Other investments	$	—		$	—		$	—		$	2,998		$	2,998
Total held-to-maturity	$	—		$	—		$	—		$	2,998		$	2,998
Weighted average yield		—	%		—	%		—	%		—	%		—	%
Full tax-equivalent yield		—	%		—	%		—	%		—	%		—	%

Fair Value of Investments with Sustained Gross Unrealized Losses

The following table presents the aging of gross unrealized losses and fair value by investment category as of March 31, 2022 and December 31, 2021 (in thousands):

	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2022
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	124,219	$	(5,410	)	$	116,577	$	(11,117	)	$	240,796	$	(16,527	)
Obligations of states and political subdivisions		231,248		(29,282	)		6,399		(1,241	)		237,647		(30,523	)
Mortgage-backed securities: GSE residential		546,117		(37,044	)		193,648		(22,122	)		739,765		(59,166	)
Other securities		80,465		(1,260	)		2,515		(58	)		82,980		(1,318	)
Total	$	982,049	$	(72,996	)	$	319,139	$	(34,538	)	$	1,301,188	$	(107,534	)
December 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	48,316	$	(1,927	)	$	139,846	$	(2,936	)	$	188,162	$	(4,863	)
Obligations of states and political subdivisions		61,535		(657	)		—		—			61,535		(657	)
Mortgage-backed securities: GSE residential		562,699		(11,019	)		46,504		(1,691	)		609,203		(12,710	)
Other securities		7,976		(105	)		—		—			7,976		(105	)
Total	$	680,526	$	(13,708	)	$	186,350	$	(4,627	)	$	866,876	$	(18,335	)

XML

Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

Summary of Loans

A summary of loans at March 31, 2022 and December 31, 2021 follows (in thousands):

	March 31, 2022		December 31, 2021
Construction and land development	$	131,784	$	145,156
Agricultural real estate		280,946		279,001
1-4 family residential properties		417,231		399,932
Multifamily residential properties		370,654		298,974
Commercial real estate		1,971,833		1,666,764
Loans secured by real estate		3,172,448		2,789,827
Agricultural loans		121,532		151,344
Commercial and industrial loans		938,041		834,061
Consumer loans		89,651		78,538
All other loans		142,720		143,738
Total gross loans		4,464,392		3,997,508
Less: loans held for sale		2,037		2,748
		4,462,355		3,994,760
Less:
Net deferred loan fees, premiums and discounts		9,831		1,985
Allowance for credit losses		58,474		54,655
Net loans	$	4,394,050	$	3,938,120

Allowance for Credit Losses Based on Portfolio Segment

The following table presents the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2022 (in thousands):

	Construction and Land Development			Agricultural Real Estate		1-4 Family Residential Properties		Commercial Real Estate		Agricultural Loans		Commercial and Industrial			Consumer Loans			Total
Three months ended March 31, 2022
Beginning balance	$	1,743		$	1,257	$	2,330	$	26,246	$	983	$	19,241		$	2,855		$	54,655
Initial allowance on loans purchased with credit deterioration		272			—		3		478		—		94			16			863
Provision for credit loss expense		(25	)		714		1,264		3,613		68		(2,045	)		(637	)		2,952
Loans charged off		2			—		72		339		—		3			358			774
Recoveries collected		—			—		203		347		—		61			167			778
Ending balance	$	1,988		$	1,971	$	3,728	$	30,345	$	1,051	$	17,348		$	2,043		$	58,474

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2021 and for the year ended December 31, 2021 (in thousands):

	Construction and Land Development		Agricultural Real Estate		1-4 Family Residential Properties			Commercial Real Estate		Agricultural Loans			Commercial and Industrial		Consumer Loans		Total
Three months ended March 31, 2021
Beginning balance (prior to adoption of ASC 326)	$	1,666	$	1,084	$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Initial allowance on loans purchased with credit deterioration		261		44		328			646		—			795		—		2,074
Provision for credit loss expense		359		500		617			5,902		(645	)		4,674		729		12,136
Loans charged off		—		—		182			480		—			18		288		968
Recoveries collected		—		—		8			9		—			18		231		266
Ending balance	$	2,286	$	1,628	$	3,093		$	25,737	$	881		$	18,954	$	2,839	$	55,418
Twelve months ended December 31, 2021
Beginning balance (prior to adoption of ASC 326)	$	1,666	$	1,084	$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Impact of adopting ASC 326		261		44		328			646		—			795		—		2,074
Provision for credit loss expense		21		129		(160	)		6,415		(544	)		7,940		1,350		15,151
Loans charged off		205		—		371			535		—			3,118		1,405		5,634
Recoveries collected		—		—		211			60		1			139		743		1,154
Ending balance	$	1,743	$	1,257	$	2,330		$	26,246	$	983		$	19,241	$	2,855	$	54,655

Amortized Cost Basis of Collateral-Dependent Loans by Class of Loans Individually Evaluated

21

The following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of March 31, 2022 (in thousands):

	Collateral								Allowance
	Real Estate		Business Assets		Other		Total		for Credit Losses
Construction and land development	$	475	$	—	$	—	$	475	$	215
1-4 family residential properties		1,375		—		—		1,375		133
Multifamily residential properties		1,658		—		—		1,658		—
Commercial real estate		9,657		—		—		9,657		605
Loans secured by real estate		13,165		—		—		13,165		953
Commercial and industrial loans		—		1,132		—		1,132		192
Consumer loans		—		—		4	4			—
Total loans	$	13,165	$	1,132	$	4	$	14,301	$	1,145

Credit Risk Profile of Loan Portfolio on Amortized Cost Basis Based on Risk Rating Category

22

The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of March 31, 2022 (in thousands):

	Term Loans by Origination Year												Revolving
Risk rating	2022		2021		2020		2019		2018		Prior		Loans		Total
March 31, 2022
Construction and land development loans
Pass	$	7,333	$	47,220	$	33,352	$	26,873	$	2,599	$	13,533	$	—	$	130,910
Special mention		—		107		—		—		—		—		—		107
Substandard		—		—		—		—		—		487		—		487
Total	$	7,333	$	47,327	$	33,352	$	26,873	$	2,599	$	14,020	$	—	$	131,504
Agricultural real estate loans
Pass	$	27,996	$	91,907	$	64,989	$	26,672	$	39,318	$	18,288	$	427	$	269,597
Special mention		825		46		259		3,499		390		5,504		—		10,523
Substandard		—		—		—		—		244		629		—		873
Total	$	28,821	$	91,953	$	65,248	$	30,171	$	39,952	$	24,421	$	427	$	280,993
1-4 family residential property loans
Pass	$	17,076	$	95,294	$	101,585	$	38,664	$	49,229	$	92,832	$	2,898	$	397,578
Special mention		—		158		—		1,915		1,796		3,098		40		7,007
Substandard		46		367		499		492		1,366		9,245		632		12,647
Total	$	17,122	$	95,819	$	102,084	$	41,071	$	52,391	$	105,175	$	3,570	$	417,232
Commercial real estate loans
Pass	$	157,560	$	563,350	$	409,771	$	317,733	$	224,746	$	614,381	$	218	$	2,287,759
Special mention		1,733		1,431		1,101		1,887		1,268		17,831		—		25,251
Substandard		3,889		499		851		704		5,824		10,470		—		22,237
Total	$	163,182	$	565,280	$	411,723	$	320,324	$	231,838	$	642,682	$	218	$	2,335,247
Agricultural loans
Pass	$	35,055	$	48,882	$	11,860	$	4,502	$	2,330	$	2,067	$	—	$	104,696
Special mention		3,859		9,913		346		2,648		129		64		—		16,959
Substandard		30		6		—		17		—		—		—		53
Total	$	38,944	$	58,801	$	12,206	$	7,167	$	2,459	$	2,131	$	—	$	121,708
Commercial and industrial loans
Pass	$	116,681	$	326,191	$	149,215	$	88,980	$	58,513	$	292,322	$	39,894	$	1,071,796
Special mention		370		694		274		1,639		174		1,023		—		4,174
Substandard		—		587		360		32		128		1,115		—		2,222
Total	$	117,051	$	327,472	$	149,849	$	90,651	$	58,815	$	294,460	$	39,894	$	1,078,192
Consumer loans
Pass	$	11,315	$	29,356	$	19,264	$	16,484	$	5,049	$	5,321	$	2,475	$	89,264
Special mention		—		64		32		35		8		—		—		139
Substandard		12		96		23		22		59		70		—		282
Total	$	11,327	$	29,516	$	19,319	$	16,541	$	5,116	$	5,391	$	2,475	$	89,685
Total loans
Pass	$	373,016	$	1,202,200	$	790,036	$	519,908	$	381,784	$	1,038,744	$	45,912	$	4,351,600
Special mention		6,787		12,413		2,012		11,623		3,765		27,520		40		64,160
Substandard		3,977		1,555		1,733		1,267		7,621		22,016		632		38,801
Total	$	383,780	$	1,216,168	$	793,781	$	532,798	$	393,170	$	1,088,280	$	46,584	$	4,454,561

23

The following tables present the credit risk profile of the Company’s loan portfolio based on risk rating category as of December 31, 2021 (in thousands):

	Term Loans by Origination Year												Revolving
Risk rating	2021		2020		2019		2018		2017		Prior		Loans		Total
December 31, 2021
Construction and land development loans
Pass	$	38,656	$	34,774	$	23,505	$	34,358	$	3,760	$	9,433	$	—	$	144,486
Special mention		110		—		—		—		—		—		—		110
Substandard		—		—		—		483		—		39		—		522
Total	$	38,766	$	34,774	$	23,505	$	34,841	$	3,760	$	9,472	$	—	$	145,118
Agricultural real estate loans
Pass	$	78,793	$	64,159	$	25,713	$	30,203	$	12,142	$	54,808	$	—	$	265,818
Special mention		872		259		4,028		384		69		6,087		—		11,699
Substandard		—		—		392		187		57		1,119		—		1,755
Total	$	79,665	$	64,418	$	30,133	$	30,774	$	12,268	$	62,014	$	—	$	279,272
1-4 family residential property loans
Pass	$	78,889	$	94,404	$	35,554	$	44,248	$	30,735	$	52,131	$	42,800	$	378,761
Special mention		234		—		1,934		499		2,601		1,196		41		6,505
Substandard		355		496		1,534		1,302		3,458		7,250		652		15,047
Total	$	79,478	$	94,900	$	39,022	$	46,049	$	36,794	$	60,577	$	43,493	$	400,313
Commercial real estate loans
Pass	$	568,200	$	417,334	$	299,973	$	174,448	$	150,811	$	304,585	$	—	$	1,915,351
Special mention		3,185		1,206		1,836		1,295		10,609		8,632		—		26,763
Substandard		2,007		714		6,242		1,179		4,646		8,238		—		23,026
Total	$	573,392	$	419,254	$	308,051	$	176,922	$	166,066	$	321,455	$	—	$	1,965,140
Agricultural loans
Pass	$	105,378	$	17,903	$	5,612	$	2,822	$	924	$	1,316	$	—	$	133,955
Special mention		13,725		436		2,648		150		13		64		—		17,036
Substandard		350		18		—		—		—		125		—		493
Total	$	119,453	$	18,357	$	8,260	$	2,972	$	937	$	1,505	$	—	$	151,484
Commercial and industrial loans
Pass	$	279,814	$	167,662	$	119,702	$	76,022	$	22,888	$	302,962	$	—	$	969,050
Special mention		613		399		1,463		182		477		819		—		3,953
Substandard		506		34		133		621		24		1,433		—		2,751
Total	$	280,933	$	168,095	$	121,298	$	76,825	$	23,389	$	305,214	$	—	$	975,754
Consumer loans
Pass	$	27,948	$	19,033	$	16,978	$	5,505	$	4,297	$	1,244	$	—	$	75,005
Special mention		68		54		38		9		—		—		—		169
Substandard		585		58		308		678		43		1,596		—		3,268
Total	$	28,601	$	19,145	$	17,324	$	6,192	$	4,340	$	2,840	$	—	$	78,442
Total loans
Pass	$	1,177,678	$	815,269	$	527,037	$	367,606	$	225,557	$	726,479	$	42,800	$	3,882,426
Special mention		18,807		2,354		11,947		2,519		13,769		16,798		41		66,235
Substandard		3,803		1,320		8,609		4,450		8,228		19,800		652		46,862
Total	$	1,200,288	$	818,943	$	547,593	$	374,575	$	247,554	$	763,077	$	43,493	$	3,995,523

24

Loan Portfolio Aging Analysis

The following table presents the Company’s loan portfolio aging analysis at March 31, 2022 and December 31, 2021 (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
March 31, 2022
Construction and land development	$	93	$	12	$	203	$	308	$	131,196	$	131,504	$	—
Agricultural real estate		243		139		1,813		2,195		278,798		280,993		—
1-4 family residential properties		2,080		253		1,644		3,977		413,255		417,232		—
Multifamily residential properties		—		—		580		580		369,346		369,926		—
Commercial real estate		2,317		—		11,305		13,622		1,951,699		1,965,321		—
Loans secured by real estate		4,733		404		15,545		20,682		3,144,294		3,164,976		—
Agricultural loans		—		—		321		321		121,387		121,708		—
Commercial and industrial loans		572		54		1,486		2,112		933,342		935,454		—
Consumer loans		271		213		119		603		89,082		89,685		—
All other loans		—		—		—		—		142,738		142,738		—
Total loans	$	5,576	$	671	$	17,471	$	23,718	$	4,430,843	$	4,454,561	$	—
December 31, 2021
Construction and land development	$	159	$	199	$	203	$	561	$	144,557	$	145,118	$	—
Agricultural real estate		—		222		1		223		279,049		279,272		—
1-4 family residential properties		2,532		914		2,012		5,458		394,855		400,313		—
Multifamily residential properties		—		—		1,676		1,676		297,266		298,942		—
Commercial real estate		8,930		640		2,484		12,054		1,654,144		1,666,198		—
Loans secured by real estate		11,621		1,975		6,376		19,972		2,769,871		2,789,843		—
Agricultural loans		—		10		588		598		150,886		151,484		—
Commercial and industrial loans		381		302		1,156		1,839		830,169		832,008		—
Consumer loans		388		47		118		553		77,889		78,442		—
All other loans		1,854		—		—		1,854		141,892		143,746		—
Total loans	$	14,244	$	2,334	$	8,238	$	24,816	$	3,970,707	$	3,995,523	$	—

Amortized Cost Basis of Loans on Nonaccrual Status and Nonaccrual Loans Individually Evaluated

The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated for which no allowance was recorded as of March 31, 2022 and December 31, 2021 (in thousands). There were no loans past due over eighty-nine days that were still accruing.

	March 31, 2022				December 31, 2021
	Nonaccrual with no Allowance for		Total		Nonaccrual with no Allowance for		Total
	Credit Loss		Nonaccrual		Credit Loss		Nonaccrual
Construction and land development	$	—	$	—	$	25	$	25
Agricultural real estate		273		1,296		237		336
1-4 family residential properties		4,344		5,144		5,252		5,252
Multifamily residential properties		1,886		1,886		1,982		1,982
Commercial real estate		7,938		8,341		7,554		7,920
Loans secured by real estate		14,441		16,667		15,050		15,515
Agricultural loans		15		230		560		560
Commercial and industrial loans		1,905		2,293		936		1,851
Consumer loans		140		140		179		179
All other loans		—		—		—		—
Total loans	$	16,501	$	19,330	$	16,725	$	18,105

Recorded Balance of Troubled Debt Restructurings

The following table presents the Company’s recorded balance of troubled debt restructurings at March 31, 2022 and December 31, 2021 (in thousands).

Troubled debt restructurings:	March 31, 2022		December 31, 2021
Agricultural real estate	$	245	$	245
1-4 family residential properties		1,228		1,353
Commercial real estate		3,231		3,355
Loans secured by real estate		4,704		4,953
Agricultural loans		193		228
Commercial and industrial loans		459		479
Consumer loans		94		109
All other loans		—		23
Total	$	5,450	$	5,792
Performing troubled debt restructurings:
Agricultural real estate	$	245	$	245
1-4 family residential properties		668		882
Commercial real estate		2,010		2,552
Loans secured by real estate		2,923		3,679
Agricultural loans		—		—
Commercial and industrial loans		171		179
Consumer loans		41		50
All other loans		—		23
Total	$	3,135	$	3,931

Loans Modified as Troubled Debt Restructurings

The following table presents loans modified as TDRs during the three months ended March 31, 2022, as a result of various modified loan factors (in thousands). The change in the recorded investment from pre-modification to post- modification was not material.

	March 31, 2022					March 31, 2021
	Number of		Recorded		Type of	Number of		Recorded		Type of
	Modifications		Investment		Modifications	Modifications		Investment		Modifications
1-4 family residential properties		4	$	143	(b)(c)		—	$	—
Commercial real estate		2		197	(b)		—		—
Loans secured by real estate		6		340			—		—
Consumer loans		—		—			2		16	(b)
Total		6	$	340			2	$	16

Type of modifications:

(a) Reduction of stated interest rate of loan

(b) Change in payment terms

(c) Extension of maturity date

(d) Permanent reduction of the recorded investment

Summary of Purchased Credit Deteriorated (PCD) Loans

The Company has acquired loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans at acquisition date is as follows (in thousands):

	Delta Acquisition			LINCO Acquisition
Purchase price of purchase credit deteriorated loans at acquisition	$	18,796		$	64,647
Allowance for credit losses at acquisition		(863	)		(2,074	)
Non-credit discount/(premium) at acquisition		(523	)		(187	)
Fair value of purchased credit deteriorated loans at acquisition	$	17,410		$	62,386

XML

Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of Intangible Assets and Goodwill

The following table presents gross carrying value and accumulated amortization by major intangible asset class as of March 31, 2022 and December 31, 2021 (in thousands):

	March 31, 2022				December 31, 2021
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Goodwill not subject to amortization (effective 1/1/02)	$	144,225	$	3,760	$	115,613	$	3,760
Intangibles from branch acquisition		3,015		3,015		3,015		3,015
Core deposit intangibles		45,355		25,074		39,435		24,085
Other intangibles		20,561		7,240		20,561		6,808
	$	213,156	$	39,089	$	178,624	$	37,668

Intangible Assets Mortgage Servicing Rights

The Company has mortgage servicing rights acquired in previous acquisitions. The following table summarizes the activity pertaining to mortgage servicing rights included in intangible assets as of March 31, 2022, March 31, 2021 and December 31, 2021 (in thousands):

	March 31, 2022			March 31, 2021			December 31, 2021
Beginning balance	$	420		$	516		$	516
Fair market value adjustment		106			210			544
Mortgage servicing rights amortized		(101	)		(177	)		(629	)
Interest only strip		7			2			(11	)
Ending balance	$	432		$	551		$	420

Schedule of Intangible Assets Amortization Expense

Total amortization expense for three months ended March 31, 2022 and 2021 was as follows (in thousands):

	Three months ended March 31,
	2022		2021
Core deposit intangibles	$	989	$	710
Customer list intangibles		432		333
Mortgage servicing rights		101		177
	$	1,522	$	1,220

Schedule of Expected Amortization Expense

Aggregate amortization expense for the current year and estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands):

Aggregate amortization expense:
For period 01/01/22-03/31/22	$	1,522
Estimated amortization expense:
For period 04/01/22-12/31/22		4,681
For year ended 12/31/23		5,799
For year ended 12/31/24		5,291
For year ended 12/31/25		4,741
For year ended 12/31/26		3,852

Delta Bancshares Company

Schedule of Reconciliation of Purchase Price Paid for Acquisition and Goodwill Recorded

The following table provides a reconciliation of the purchase price paid for the acquisition of Delta and the amount of goodwill recorded (in thousands):

Unallocated purchase price				$	29,791
Less purchase accounting adjustments:
Fair value of securities	$	(2,836	)
Fair value of loans, net		(3,399	)
Fair value of premises and equipment		3,508
Fair value of time deposits		(1,759	)
Fair value of FHLB advances		(75	)
Core deposit intangible		5,920
Other assets		(623	)
Other liabilities		444
					1,180
				$	28,611

LINCO Bancshares, Inc.

Schedule of Reconciliation of Purchase Price Paid for Acquisition and Goodwill Recorded

The following table provides a reconciliation of the purchase price paid for the acquisition of LINCO and the amount of goodwill recorded (in thousands):

Unallocated purchase price				$	12,248
Less purchase accounting adjustments:
Fair value of securities	$	264
Fair value of loans, net		(2,818	)
Fair value of other real estate owned		915
Fair value of premises and equipment		6,360
Fair value of time deposits		(2,081	)
Fair value of FHLB advances		(975	)
Core deposit intangible		2,025
Other assets		3,293
Other liabilities		(184	)
					6,799
				$	5,449

XML

Repurchase Agreements and Other Borrowings (Tables)

3 Months Ended

Mar. 31, 2022

Repurchase Agreements And Other Borrowings [Abstract]

Schedule of Securities Financing Transactions

Collateral pledged by class for repurchase agreements are as follows (in thousands):

	March 31, 2022		December 31, 2021
US Treasury securities and obligations of U.S. government corporations and agencies	$	61,370	$	53,782
Mortgage-backed securities: GSE: residential		125,956		92,486
Miscellaneous		—		—
Total	$	187,326	$	146,268

Federal Home Loan Bank, Advances

FHLB borrowings, before net premiums of $538,074, were $125.9 million and $86 million at March 31, 2022 and December 31, 2021, respectively. At March 31, 2022 the advances were as follows:

Advance		Term (in years)		Interest Rate	Maturity Date
$	15,000,000	3 months		0.35%	April 4, 2022
	5,000,000		1.0	0.00%	May 31, 2022
	5,000,000		3.0	2.41%	May 31, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	20,000,000	3 months		0.80%	June 23, 2022
	5,000,000		3.0	1.73%	July 12, 2022
	5,000,000		8.0	2.40%	January 9, 2023
	5,000,000		4.0	2.44%	May 30, 2023
	5,000,000		3.5	1.51%	July 31, 2023
	5,000,000		3.5	0.77%	September 11, 2023
	5,000,000		5.0	1.54%	July 12, 2024
	10,000,000		5.0	1.45%	December 31, 2024
	5,000,000		5.0	0.91%	March 10, 2025
	5,857,785		10.0	2.64%	December 23, 2025
	5,000,000		10.0	1.15%	October 3, 2029
	5,000,000		10.0	1.12%	October 3, 2029
	10,000,000		10.0	1.39%	December 31, 2029

XML

Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

31

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of March 31, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2022
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	247,976	$	—	$	247,976	$	—
Obligations of states and political subdivisions		358,679		—		358,679		—
Mortgage-backed securities		761,527		—		761,527		—
Other securities		98,768		—		98,768		—
Total available-for-sale securities		1,466,950		—		1,466,950		—
Equity securities		369		369		—		—
Derivative assets: interest rate swaps		2,286		—		2,286		—
Total assets	$	1,469,605	$	369	$	1,469,236	$	—
Derivative liabilities: interest rate swaps	$	2,167	$	—	$	2,167	$	—
December 31, 2021
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	203,815	$	—	$	203,815	$	—
Obligations of states and political subdivisions		395,457		—		395,358		99
Mortgage-backed securities		791,038		—		791,038		—
Other securities		31,112		—		31,112		—
Total available-for-sale securities		1,421,422		—		1,421,323		99
Equity securities		397		397		—		—
Derivative assets: interest rate swaps		809		—		809		—
Total assets	$	1,422,628	$	397	$	1,422,132	$	99
Derivative liabilities: interest rate swaps	$	1,476	$	—	$	1,476	$	—

Fair Value of Assets Measured on a Recurring Basis Using Significant Unobservable Inputs

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2022 and 2021 is summarized as follows (in thousands):

	Obligation of State and Political Subdivisions
	Three months ended
	March 31, 2022			March 31, 2021
Beginning balance	$	99		$	794
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Total gains or losses:
Included in net income		—			1
Included in other comprehensive income (loss)		—			—
Purchases, issuances, sales and settlements:
Purchases		—			—
Issuances		—			—
Sales		—			(181	)
Settlements		(99	)		—
Ending balance	$	—		$	614
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$	—		$	—

Assets Measured at Fair Value on a Nonrecurring Basis

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2022
Collateral dependent loans	$	4,596	$	—	$	—	$	4,596
Foreclosed assets held for sale		28		—		—		28
Mortgage servicing rights		432		—		—		432
December 31, 2021
Collateral dependent loans	$	6,750	$	—	$	—	$	6,750
Foreclosed assets held for sale		2,068		—		—		2,068
Mortgage servicing rights		420		—		—		420

Significant Unobservable Inputs Used in Valuation of Level 3 Fair Value Measurements

The following table presents quantitative information about unobservable inputs used in Level 3 fair value measurements other than goodwill at March 31, 2022.

March 31, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Collateral dependent loans	$	4,596	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		28	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		432	Third party valuations	PSA standard prepayment model rate	177 - 438		189

December 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Collateral dependent loans	$	6,750	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		2,068	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		420	Third party valuations	PSA standard prepayment model rate	205 - 513		273

Summary of Estimated Fair Values of Company Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments at March 31, 2022 and December 31, 2021 in accordance with ASC 825 (in thousands):

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2022
Financial assets
Cash and due from banks	$	218,072	$	218,072	$	218,072	$	—	$	—
Federal funds sold		5,908		5,908		5,908		—		—
Certificates of deposit investments		1,960		1,960		—		1,960		—
Available-for-sale securities		1,466,950		1,466,950		—		1,466,950		—
Held-to-maturity securities		2,998		2,998		2,998		—		—
Equity securities		369		369		369		—		—
Loans held for sale		2,037		2,037		—		2,037		—
Loans net of allowance for credit losses		4,394,050		4,280,190		—		—		4,280,190
Interest receivable		22,365		22,365		—		22,365		—
Federal Reserve Bank stock		13,845		13,845		—		13,845		—
Federal Home Loan Bank stock		6,484		6,484		—		6,484		—
Financial liabilities
Deposits	$	5,487,305	$	5,482,217	$	—	$	4,821,794	$	660,423
Securities sold under agreements to repurchase		187,326		152,086		—		152,086		—
Interest payable		2,466		2,466		—		2,466		—
Federal Home Loan Bank borrowings		126,396		123,295		—		123,295		—
Subordinated debt, net		94,438		94,438				94,438
Junior subordinated debentures, net		19,237		15,458		—		15,458		—
December 31, 2021
Financial assets
Cash and due from banks	$	167,242	$	167,242	$	167,242	$	—	$	—
Federal funds sold		1,360		1,360		1,360		—		—
Certificates of deposit investments		2,450		2,450		—		2,450		—
Available-for-sale securities		1,421,422		1,421,422		—		1,421,323		99
Held-to-maturity securities		7,030		7,034		2,029		5,005		—
Equity securities		397		397		397		—		—
Loans held for sale		2,748		2,748		—		2,748		—
Loans net of allowance for credit losses		3,938,120		3,889,870		—		—		3,889,870
Interest receivable		19,868		19,868		—		19,868		—
Federal Reserve Bank stock		13,845		13,845		—		13,845		—
Federal Home Loan Bank stock		6,484		6,484		—		6,484		—
Financial liabilities
Deposits	$	4,956,486	$	4,956,738	$	—	$	4,394,434	$	562,304
Securities sold under agreements to repurchase		146,268		146,274		—		146,274		—
Interest payable		1,346		1,346		—		1,346		—
Federal Home Loan Bank borrowings		86,446		86,248		—		86,248		—
Subordinated debt, net		94,400		94,400		—		94,400		—
Junior subordinated debentures, net		19,195		15,012		—		15,012		—

XML

Business Combinations (Tables)

3 Months Ended

Mar. 31, 2022

Delta Bancshare Company

Business Acquisition [Line Items]

Estimated Fair Values of Assets Acquired and Liabilities Assumed

	Acquired			Fair Value			As Recorded by
(In thousands)	Book Value			Adjustments			Jefferson Bank
Assets
Cash and due from banks	$	82,473		$	—		$	82,473
Investment securities		184,959			(2,836	)		182,123
Loans		426,433			(7,924	)		418,509
Allowance for credit losses		(5,388	)		4,525			(863	)
Premises and equipment		5,522			3,508			9,030
Goodwill		14			28,597			28,611
Core deposit intangible		—			5,920			5,920
Bank owned life insurance		15,822						15,822
Right of use asset		—			717			717
Other assets		9,061			(1,340	)		7,721
Total assets acquired	$	718,896		$	31,167		$	750,063
Liabilities
Deposits	$	558,619		$	1,759		$	560,378
Securities sold under agreements to repurchase		35,523			—			35,523
FHLB advances		45,000			75			45,075
Lease liability		—			717			717
Other liabilities		2,209			(1,161	)		1,048
Total liabilities assumed		641,351			1,390			642,741
Net assets acquired	$	77,545		$	29,777		$	107,322
Consideration paid
Cash							$	15,150
Common stock								92,172
							$	107,322

Unaudited Pro Forma Condensed Combined Financial Information

36

The following unaudited pro forma condensed combined financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the Delta Merger taken place at the beginning of the period (dollars in thousands, except per share data):

	Three months ended March 31,
	2022		2021
Net interest income	$	44,200	$	40,966
Provision for loan losses		2,952		14,136
Non-interest income		21,088		18,528
Non-interest expense		40,575		39,653
Income before taxes		21,761		5,705
Income tax expense (benefit)		4,797		887
Net income (loss)	$	16,964	$	4,818
Earnings per share
Basic	$	0.88	$	0.28
Diluted		0.88		0.28
Basic weighted average shares o/s		19,295,860		17,299,927
Diluted weighted average shares o/s		19,358,457		17,352,947

LINCO Bancshares, Inc.

Business Acquisition [Line Items]

Estimated Fair Values of Assets Acquired and Liabilities Assumed

	Acquired			Fair Value			As Recorded by
(In thousands)	Book Value			Adjustments			Providence Bank
Assets
Cash and due from banks	$	130,561		$	—		$	130,561
Investment securities		119,234			264			119,498
Loans		838,377			(9,401	)		828,976
Allowance for credit losses		(8,656	)		6,583			(2,073	)
Other real estate owned		8,435			915			9,350
Premises and equipment		23,440			6,360			29,800
Goodwill		20,503			(15,054	)		5,449
Core deposit intangible		123			2,025			2,148
Right of use asset		—			794			794
Other assets		43,697			2,499			46,196
Total assets acquired	$	1,175,714		$	(5,015	)	$	1,170,699
Liabilities
Deposits	$	988,329		$	2,081		$	990,410
Securities sold under agreements to repurchase		—			—			—
FHLB advances		26,941			975			27,916
Other borrowings		—			—			—
Lease liability		—			794			794
Other liabilities		4,498			(610	)		3,888
Total liabilities assumed		1,019,768			3,240			1,023,008
Net assets acquired	$	155,946		$	(8,255	)	$	147,691
Consideration paid
Cash							$	103,500
Common stock								44,191
							$	147,691

38

Unaudited Pro Forma Condensed Combined Financial Information

The following unaudited pro forma condensed combined financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the LINCO acquisition taken place at the beginning of the period (dollars in thousands, except per share data):

	Three months ended
	March 31, 2021
Net interest income	$	38,237
Provision for loan losses		12,136
Non-interest income		17,749
Non-interest expense		37,659
Income before taxes		6,191
Income tax expense (benefit)		1,078
Net income (loss)	$	5,113
Earnings per share
Basic	$	0.30
Diluted		0.29
Basic weighted average shares o/s		17,299,927
Diluted weighted average shares o/s		17,352,947

XML

Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Summary of Supplemental Balance Sheet Information

The following table contains supplemental balance sheet information related to leases (dollars in thousands):

	March 31, 2022			March 31, 2021			December 31, 2021
Operating lease right-of-use assets	$	15,242		$	17,424		$	15,116
Operating lease liabilities		15,458			17,578			15,322
Weighted-average remaining lease term (in years)		6.9			6.8			6.6
Weighted-average discount rate		2.67	%		2.63	%		2.70	%

Summary of Maturities of Lease Liabilities

Maturities of lease liabilities were as follows (in thousands):

Year ending December 31,
	2022	$	2,221
	2021		2,416
	2022		2,044
	2023		1,713
	2024		1,714
Thereafter			7,645
Total lease payments			17,753
Less imputed interest			(2,295	)
Total lease liability		$	15,458

Summary of Components of Lease Expense

The components of lease expense for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

	Three months ended March 31,
	2022			2021
Operating lease cost	$	629		$	708
Short-term lease cost		27			35
Variable lease cost		266			137
Total lease cost		922			880
Income from subleases		(100	)		(153	)
Net lease cost	$	822		$	727

Summary of Operating Lease Cash Flows

Cash paid for amounts included in the measurement of lease liabilities was (in thousands):

	March 31, 2022		March 31, 2021
Operating cash flows from operating leases	$	722	$	711

XML

Derivatives (Tables)

3 Months Ended

Mar. 31, 2022

Derivative [Line Items]

Summary of Derivative Instruments, Gain (Loss)

The effects of the fair value hedges on the Company's income statement during the three months ended March 31, 2022 and 2021 were as follows (in thousands):

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Derivatives	2022			2021
Interest rate swap agreements	Interest income on loans	$	(785	)	$	(743	)

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Hedged Items	2022		2021
Interest rate swap agreements	Interest income on loans	$	785	$	743

Summary of Cumulative Basis Adjustment of Fair Value Hedges

As of March 31, 2022, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustment for fair value hedges (in thousands):

Line Item in the Balance Sheet in Which the Hedge Item is Included	Carrying Amount of the Hedged Asset		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
Loans	$	13,958	$	(118	)

Not Designated as Hedging Instrument

Derivative [Line Items]

Summary of Fair Value Derivative Instruments

The following amounts represent the notional amounts and gross fair value of derivative contracts not designated as hedging instruments outstanding during the three months ended March 31, 2022 (dollars in thousands):

March 31, 2022	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
Interest rate swap agreements	Other assets	5.8	$	40,435	$	2,286
Interest rate swap agreements	Other liabilities	5.8		40,435		(2,286	)

Fair Value Hedging | Designated As Hedging Instrument

Derivative [Line Items]

Summary of Fair Value Derivative Instruments

The following table provides the outstanding notional balances and fair values of outstanding derivatives designated as hedging instruments as of March 31, 2022 and December 31, 2021 (in thousands):

	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
March 31, 2022
Fair value hedges:
Interest rate swap agreements	Other liabilities	7.1	$	13,839	$	(2,167	)
December 31, 2021
Fair value hedges:
Interest rate swap agreements	Other liabilities	7.3	$	13,900	$	(1,476	)

XML

Basis of Accounting and Consolidation - Additional Information (Details) - USD ($)				3 Months Ended		12 Months Ended	47 Months Ended
	Feb. 14, 2022	Sep. 10, 2021	Feb. 22, 2021	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Mar. 31, 2022	Jul. 28, 2021	Sep. 25, 2020
Summary Of Significant Accounting Policies [Line Items]
Common stock, par value (in dollars per share)				$ 4	$ 4		$ 4
Assets				$ 6,632,006,000		$ 5,986,582,000	$ 6,632,006,000
Loans				4,394,050,000		3,938,120,000	4,394,050,000
Deposits		$ 215,000,000		$ 5,487,305,000		$ 4,956,486,000	$ 5,487,305,000
Loans acquired		208,000,000
Core deposit intangible asset		$ 4,900,000
Amortization period		10 years
Stock plans, term				10 years
Maximum number of shares to be issued in stock incentive plan (in shares)				399,983			399,983
Employee discount for employee stock purchase plan				15.00%
Employee stock purchase plan, number of shares authorized				600,000			600,000
Stock issued during period, shares, employee stock purchase plans				3,149	3,142		34,833
Captive maximum gross premiums				$ 2,450,000
Stock Options
Summary Of Significant Accounting Policies [Line Items]
Common stock awarded in SI plan (in shares)				0
Restricted Stock
Summary Of Significant Accounting Policies [Line Items]
Common stock awarded in SI plan (in shares)				26,000		13,175
Restricted Stock Units (RSUs)
Summary Of Significant Accounting Policies [Line Items]
Common stock awarded in SI plan (in shares)				37,150		35,400
Delta Bancshares Company
Summary Of Significant Accounting Policies [Line Items]
Percentage of issued and outstanding shares acquired								100.00%
Common stock, par value (in dollars per share)								$ 10.00
Share Price								$ 4.00
Consideration payable in cash	$ 15,150,000
Consideration payable in shares	2,292,270
Assets				$ 748,000,000			$ 748,000,000
Loans				434,000,000			434,000,000
Deposits				$ 561,000,000			$ 561,000,000
LINCO Bancshares, Inc.
Summary Of Significant Accounting Policies [Line Items]
Percentage of issued and outstanding shares acquired									100.00%
Common stock, par value (in dollars per share)									$ 1.00
Share Price									$ 4.00
Consideration payable in cash			$ 103,500,000
Consideration payable in shares			1,262,246
Dividends			$ 13,000,000

XML

Basis of Accounting and Consolidation - Schedule of Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Balance	$ 666,385	$ 633,894	$ 601,884	$ 568,228
Accumulated Other Comprehensive Loss
Net unrealized loss on securities available-for-sale	(104,265)	(1,170)
Tax benefit	30,237	339
Balance	$ (74,028)	$ (831)	$ 5,087	$ 17,095

XML

Basis of Accounting and Consolidation - Schedule of Amounts Reclassified from Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Realized gains on available-for-sale securities		$ 4
Tax effect	$ (4,654)	(668)
Total reclassifications out of accumulated other comprehensive income		3
Accumulated Defined Benefit Plans Adjustment Attributable to Parent
Realized gains on available-for-sale securities		4
Tax effect		$ (1)

XML

Earnings Per Share - Components of Basic and Diluted Net Income Per Common Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Basic Net Income per Common Share Available to Common Stockholders:
Net income	$ 16,616,000	$ 4,109,000
Weighted average common shares outstanding	19,295,860	17,299,927
Basic earnings per common share	$ 0.86	$ 0.24
Diluted Net Income per Common Share Available to Common Stockholders:
Net income applicable to diluted earnings per share	$ 16,616,000	$ 4,109,000
Weighted average common shares outstanding	19,295,860	17,299,927
Dilutive potential common shares: restricted stock awarded	62,597	53,020
Diluted weighted average common shares outstanding	19,358,457	17,352,947
Diluted earnings per common share	$ 0.86	$ 0.24

XML

Earnings Per Share - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share [Abstract]
Number of anti-dilutive shares excluded when computing diluted earnings per share	0	0

XML

Investment Securities - Available for Sale and Held for Maturity Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021
Available-for-sale: [Abstract]
Amortized Cost	$ 1,571,215	$ 1,422,591
Gross Unrealized Gains	3,269	17,166
Gross Unrealized (Losses)	(107,534)	(18,335)
Fair Value	1,466,950	1,421,422
Held-to-maturity: [Abstract]
Held-to-maturity	2,998	7,030
Gross Unrealized Gains	0	5
Unrealized (Losses)	0	0
Fair Value	2,998	7,035	$ 7,035
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Available-for-sale: [Abstract]
Amortized Cost	264,466	208,598
Gross Unrealized Gains	37	80
Gross Unrealized (Losses)	(16,527)	(4,863)
Fair Value	247,976	203,815
Held-to-maturity: [Abstract]
Held-to-maturity		5,001
Gross Unrealized Gains		5
Unrealized (Losses)		0
Fair Value		5,006
Obligations of States and Political Subdivisions
Available-for-sale: [Abstract]
Amortized Cost	386,489	383,991
Gross Unrealized Gains	2,713	12,123
Gross Unrealized (Losses)	(30,523)	(657)
Fair Value	358,679	395,457
Mortgage-backed Securities: GSE Residential
Available-for-sale: [Abstract]
Amortized Cost	820,448	799,456
Gross Unrealized Gains	245	4,292
Gross Unrealized (Losses)	(59,166)	(12,710)
Fair Value	761,527	791,038
Other Securities
Available-for-sale: [Abstract]
Amortized Cost	99,812	30,546
Gross Unrealized Gains	274	671
Gross Unrealized (Losses)	(1,318)	(105)
Fair Value	98,768	31,112
Other Investments
Held-to-maturity: [Abstract]
Held-to-maturity	2,998	2,029
Gross Unrealized Gains	0	0
Unrealized (Losses)	0	0
Fair Value	$ 2,998	$ 2,029

XML

Investment Securities - Additional Information (Details)	3 Months Ended
	Mar. 31, 2022 USD ($) Security	Dec. 31, 2021 USD ($) Security
Schedule Of Available For Sale Securities [Line Items]
Equity securities, at fair value	$ 369,000	$ 397,000
Tax rate used to calculate tax-equivalent yields (in hundredths)	21.00%
Percentage investment book value exceeds stockholders' equity (in hundredths)	10.00%
Debt securities, available-for-sale, restricted	$ 665,000,000	590,000,000
Available-for-sale, 12 months or longer, Fair Value	319,139,000	186,350,000
12 months or longer, unrealized losses	$ 34,538,000	$ 4,627,000
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Schedule Of Available For Sale Securities [Line Items]
Number of securities in unrealized loss positions | Security	14	6
Available-for-sale, 12 months or longer, Fair Value	$ 116,577,000	$ 139,846,000
12 months or longer, unrealized losses	$ 11,117,000	$ 2,936,000
Held-to-maturity, securities in unrealized loss positions, qualitative disclosure, number of positions | Security		0
Obligations of States and Political Subdivisions
Schedule Of Available For Sale Securities [Line Items]
Number of securities in unrealized loss positions | Security	5	0
Available-for-sale, 12 months or longer, Fair Value	$ 6,399,000	$ 0
12 months or longer, unrealized losses	$ 1,241,000	$ 0
Mortgage-backed Securities: GSE Residential
Schedule Of Available For Sale Securities [Line Items]
Number of securities in unrealized loss positions | Security	42	15
Available-for-sale, 12 months or longer, Fair Value	$ 193,648,000	$ 46,504,000
12 months or longer, unrealized losses	$ 22,122,000	$ 1,691,000
Other Securities
Schedule Of Available For Sale Securities [Line Items]
Number of securities in unrealized loss positions | Security	3	0
Available-for-sale, 12 months or longer, Fair Value	$ 2,515,000	$ 0
12 months or longer, unrealized losses	$ 58,000	$ 0

XML

Investment Securities - Realized Gains and Losses From Sale of Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Realized Investment Gains (Losses) [Abstract]
Gross gains	$ 0	$ 4
Gross losses	$ 0	$ 0

XML

Investment Securities - Investments Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	$ 208,151
Available-for-sale investments, After 1 through 5 years	390,861
Available-for-sale investments, After 5 through 10 years	864,737
Available-for-sale investments, After ten years	3,201
Available-for-sale investments, Fair Value	$ 1,466,950	$ 1,421,422
Available-for-sale, Weighted average yield, One year or less (in hundredths)	1.47%
Available-for-sale , Weighted average yield,After 1 through 5 years (in hundredths)	2.34%
Available-for-sale, Weighted average yield,After 5 through 10 years (in hundredths)	1.76%
Available-for-sale , Weighted average yield,After ten years (in hundredths)	2.93%
Available-for-sale , Weighted average yield,Total (in hundredths)	1.87%
Available-for-sale, Full Tax-equivalent yield, One year or less (in hundredths)	1.59%
Available-for-sale, Full Tax-equivalent yield,After 1 through 5 years (in hundredths)	2.58%
Available-for-sale, Full Tax-equivalent yield, After 5 through 10 years (in hundredths)	1.94%
Available-for-sale, Full Tax-equivalent yield,After ten years (in hundredths)	3.43%
Available-for-sale, Full Tax-equivalent yield,Total (in hundredths)	2.06%
Held-to-maturity, Maturity [Abstract]
Held-to-maturity, One Year or less	$ 0
Held-to-maturity, After1 through 5 years	0
Held-to-maturity, After 5 through 10 years	0
Held-to-maturity, After ten years	2,998
Held-to-maturity	$ 2,998	7,030
Held To Maturity Weighted average yield, One year or less	0.00%
Held To Maturity Weighted average yield, After 1 through 5 years	0.00%
Held To Maturity Weighted average yield After 5 through 10 years	0.00%
Held To Maturity Weighted average yield After ten years	0.00%
Held To Maturity Weighted average yield ,Total	0.00%
Held To Maturity, Full tax-equivalent yield , One year or less	0.00%
Held To Maturity, Full tax-equivalent yield , After 1 through 5 years	0.00%
Held To Maturity, Full tax-equivalent yield , After 5 through 10 years	0.00%
Held To Maturity, Full tax-equivalent yield , After ten years	0.00%
Held To Maturity, Full tax-equivalent yield , Total	0.00%
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	$ 155,050
Available-for-sale investments, After 1 through 5 years	82,575
Available-for-sale investments, After 5 through 10 years	10,351
Available-for-sale investments, After ten years	0
Available-for-sale investments, Fair Value	247,976	203,815
Held-to-maturity, Maturity [Abstract]
Held-to-maturity		5,001
Obligations of States and Political Subdivisions
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	20,894
Available-for-sale investments, After 1 through 5 years	94,654
Available-for-sale investments, After 5 through 10 years	241,873
Available-for-sale investments, After ten years	1,258
Available-for-sale investments, Fair Value	358,679	395,457
Mortgage-backed Securities: GSE Residential
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	9,460
Available-for-sale investments, After 1 through 5 years	139,057
Available-for-sale investments, After 5 through 10 years	611,067
Available-for-sale investments, After ten years	1,943
Available-for-sale investments, Fair Value	761,527	791,038
Other Securities
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	22,747
Available-for-sale investments, After 1 through 5 years	74,575
Available-for-sale investments, After 5 through 10 years	1,446
Available-for-sale investments, After ten years	0
Available-for-sale investments, Fair Value	98,768	31,112
Other Investments
Held-to-maturity, Maturity [Abstract]
Held-to-maturity, One Year or less	0
Held-to-maturity, After1 through 5 years	0
Held-to-maturity, After 5 through 10 years	0
Held-to-maturity, After ten years	2,998
Held-to-maturity	$ 2,998	$ 2,029

XML

Investment Securities - Fair Value of Investments with Sustained Gross Unrealized Losses (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	$ 982,049,000	$ 680,526,000
Available-for-sale, Less than 12 months, Unrealized Losses	(72,996,000)	(13,708,000)
Available-for-sale, 12 months or longer, Fair Value	319,139,000	186,350,000
Available-for-sale, 12 months or longer, Unrealized losses	(34,538,000)	(4,627,000)
Available-for-sale, Total Fair Value	1,301,188,000	866,876,000
Available-for-sale, Total Unrealized Losses	(107,534,000)	(18,335,000)
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	124,219,000	48,316,000
Available-for-sale, Less than 12 months, Unrealized Losses	(5,410,000)	(1,927,000)
Available-for-sale, 12 months or longer, Fair Value	116,577,000	139,846,000
Available-for-sale, 12 months or longer, Unrealized losses	(11,117,000)	(2,936,000)
Available-for-sale, Total Fair Value	240,796,000	188,162,000
Available-for-sale, Total Unrealized Losses	(16,527,000)	(4,863,000)
Obligations of States and Political Subdivisions
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	231,248,000	61,535,000
Available-for-sale, Less than 12 months, Unrealized Losses	(29,282,000)	(657,000)
Available-for-sale, 12 months or longer, Fair Value	6,399,000	0
Available-for-sale, 12 months or longer, Unrealized losses	(1,241,000)	0
Available-for-sale, Total Fair Value	237,647,000	61,535,000
Available-for-sale, Total Unrealized Losses	(30,523,000)	(657,000)
Mortgage-backed Securities: GSE Residential
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	546,117,000	562,699,000
Available-for-sale, Less than 12 months, Unrealized Losses	(37,044,000)	(11,019,000)
Available-for-sale, 12 months or longer, Fair Value	193,648,000	46,504,000
Available-for-sale, 12 months or longer, Unrealized losses	(22,122,000)	(1,691,000)
Available-for-sale, Total Fair Value	739,765,000	609,203,000
Available-for-sale, Total Unrealized Losses	(59,166,000)	(12,710,000)
Other Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	80,465,000	7,976,000
Available-for-sale, Less than 12 months, Unrealized Losses	(1,260,000)	(105,000)
Available-for-sale, 12 months or longer, Fair Value	2,515,000	0
Available-for-sale, 12 months or longer, Unrealized losses	(58,000)	0
Available-for-sale, Total Fair Value	82,980,000	7,976,000
Available-for-sale, Total Unrealized Losses	$ (1,318,000)	$ (105,000)

XML

Loans and Allowance for Credit Losses - Summary of Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 4,464,392	$ 3,997,508
Loans held for sale	2,037	2,748
Loans and leases receivable gross excluding loans held for sale	4,462,355	3,994,760
Net deferred loan fees, premiums and discounts	9,831	1,985
Allowance for credit losses	58,474	54,655	$ 55,418	$ 41,910
Net loans	4,394,050	3,938,120
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	3,172,448	2,789,827
Construction and Land Development | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	131,784	145,156
Allowance for credit losses	1,988	1,743	2,286	1,666
Agricultural | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	280,946	279,001
Allowance for credit losses	1,971	1,257	1,628	1,084
Commercial | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,971,833	1,666,764
Allowance for credit losses	30,345	26,246	25,737	19,660
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	121,532	151,344
Allowance for credit losses	1,051	983	881	1,526
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	938,041	834,061
Allowance for credit losses	17,348	19,241	18,954	13,485
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	89,651	78,538
Allowance for credit losses	2,043	2,855	2,839	2,167
All Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	142,720	143,738
1-4 Family | Residential Properties | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	417,231	399,932
Allowance for credit losses	3,728	2,330	$ 3,093	$ 2,322
Multifamily | Residential Properties | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 370,654	$ 298,974

XML

Loans and Allowance for Credit Losses - Additional Information (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2022 USD ($) alternative Loan_modified	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) Loan_modified	Dec. 31, 2020 USD ($)	Jan. 01, 2020 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accrued interest on loans	$ 15,200,000		$ 14,700,000
Minimum value of loans individually measured for impairment	$ 250,000
Number of alternatives for measuring impaired loans receivable | alternative	3
Allowance for credit losses	$ 58,474,000	$ 55,418,000	54,655,000	$ 41,910,000
Interest lost on nonaccrual loans	95,000	154,000
Troubled debt restructurings balance	5,450,000		5,792,000
Loans receivable, modifications, allowance	$ 581,000		$ 765,000,000,000
Troubled debt restructurings balance | Loan_modified	3		1
Real estate acquired through foreclosure	$ 4,794,000		$ 4,984,000
Mortgage loans secured by real estate In foreclosure	$ 410,000		411,000
Accounting Standards Update 2016-13 | Financial Asset Acquired with Credit Deterioration | Restatement Adjustment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses					$ 833,000
Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amortization period of loans	25 years
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Debt coverage ratio	1.20x
Commercial Real Estate | Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum loan-to-value ratio (in hundredths)	65.00%
Amortization period of loans	20 years
Commercial Real Estate | Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum loan-to-value ratio (in hundredths)	80.00%
1-4 Family Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Period when loans charged-down	180 days
Motels and Hotels Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 208,800,000
Non-residential Buildings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	874,100,000
Residential Buildings and Dwellings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	537,700,000
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled debt restructurings balance	$ 4,704,000		4,953,000
Unsecured Open-end Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Period when loans charged-down	180 days
Other Secured Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Period when loans charged-down	120 days
Agricultural
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 402,700,000		430,800,000
Increase (decrease) in accounts and notes receivable	$ (28,100,000)
Maximum loan-to-value ratio (in hundredths)	65.00%
Amortization period of loans	25 years
Loans receivable, time period	1 year
Agricultural | Corn and Other Grain Farming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 283,600,000		297,400,000
Increase (decrease) in accounts and notes receivable	(13,800,000)
Agricultural | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	$ 1,971,000	1,628,000	1,257,000	1,084,000
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum loan-to-value ratio (in hundredths)	80.00%
Amortization period of loans	7 years
Loans receivable, time period	1 year
Allowance for credit losses	$ 17,348,000	$ 18,954,000	19,241,000	$ 13,485,000
Troubled debt restructurings balance	$ 459,000		$ 479,000
Residential Properties | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum loan-to-value ratio (in hundredths)	80.00%
Amortization period of loans	25 years

XML

Loans and Allowance for Credit Losses - Allowance for Credit Losses Based on Portfolio Segment (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	$ 54,655	$ 41,910	$ 41,910
Initial allowance on loans purchased with credit deterioration	863	2,074
Provision for credit loss expense	2,952	12,136	15,151
Loans charged off	774	968	5,634
Recoveries collected	778	266	1,154
Allowance for credit losses, Ending Balance	58,474	55,418	54,655
Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		2,074	2,074
Construction and Land Development | Real Estate Loan
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	1,743	1,666	1,666
Initial allowance on loans purchased with credit deterioration	272	261
Provision for credit loss expense	(25)	359	21
Loans charged off	2	0	205
Recoveries collected	0	0	0
Allowance for credit losses, Ending Balance	1,988	2,286	1,743
Construction and Land Development | Real Estate Loan | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		261	261
Agricultural | Real Estate Loan
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	1,257	1,084	1,084
Initial allowance on loans purchased with credit deterioration	0	44
Provision for credit loss expense	714	500	129
Loans charged off	0	0	0
Recoveries collected	0	0	0
Allowance for credit losses, Ending Balance	1,971	1,628	1,257
Agricultural | Real Estate Loan | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		44	44
Residential Properties | Real Estate Loan | 1-4 Family
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	2,330	2,322	2,322
Initial allowance on loans purchased with credit deterioration	3	328
Provision for credit loss expense	1,264	617	(160)
Loans charged off	72	182	371
Recoveries collected	203	8	211
Allowance for credit losses, Ending Balance	3,728	3,093	2,330
Residential Properties | Real Estate Loan | 1-4 Family | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		328	328
Commercial | Real Estate Loan
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	26,246	19,660	19,660
Initial allowance on loans purchased with credit deterioration	478	646
Provision for credit loss expense	3,613	5,902	6,415
Loans charged off	339	480	535
Recoveries collected	347	9	60
Allowance for credit losses, Ending Balance	30,345	25,737	26,246
Commercial | Real Estate Loan | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		646	646
Agricultural Loans
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	983	1,526	1,526
Initial allowance on loans purchased with credit deterioration	0	0
Provision for credit loss expense	68	(645)	(544)
Loans charged off	0	0	0
Recoveries collected	0	0	1
Allowance for credit losses, Ending Balance	1,051	881	983
Agricultural Loans | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		0	0
Commercial and Industrial Loans
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	19,241	13,485	13,485
Initial allowance on loans purchased with credit deterioration	94	795
Provision for credit loss expense	(2,045)	4,674	7,940
Loans charged off	3	18	3,118
Recoveries collected	61	18	139
Allowance for credit losses, Ending Balance	17,348	18,954	19,241
Commercial and Industrial Loans | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		795	795
Consumer Loans
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	2,855	2,167	2,167
Initial allowance on loans purchased with credit deterioration	16	0
Provision for credit loss expense	(637)	729	1,350
Loans charged off	358	288	1,405
Recoveries collected	167	231	743
Allowance for credit losses, Ending Balance	$ 2,043	2,839	2,855
Consumer Loans | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		$ 0	$ 0

XML

Loans and Allowance for Credit Losses - Amortized Cost Basis of Collateral-Dependent Loans by Class of Loans Individually Evaluated (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	$ 14,301
Allowance for Credit Losses	1,145
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,132
Allowance for Credit Losses	192
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	4
Allowance for Credit Losses	0
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	13,165
Real Estate | Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,132
Business Assets | Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,132
Business Assets | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Other Property
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	4
Other Property | Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Other Property | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	4
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	13,165
Allowance for Credit Losses	953
Real Estate Loan | Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	475
Allowance for Credit Losses	215
Real Estate Loan | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	9,657
Allowance for Credit Losses	605
Real Estate Loan | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	13,165
Real Estate Loan | Real Estate | Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	475
Real Estate Loan | Real Estate | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	9,657
Real Estate Loan | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Business Assets | Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Business Assets | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Other Property
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Other Property | Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Other Property | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
1-4 Family | Real Estate Loan | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,375
Allowance for Credit Losses	133
1-4 Family | Real Estate Loan | Real Estate | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,375
1-4 Family | Real Estate Loan | Business Assets | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
1-4 Family | Real Estate Loan | Other Property | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Multifamily | Real Estate Loan | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,658
Allowance for Credit Losses	0
Multifamily | Real Estate Loan | Real Estate | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,658
Multifamily | Real Estate Loan | Business Assets | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Multifamily | Real Estate Loan | Other Property | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	$ 0

XML

Loans and Allowance for Credit Losses - Credit Risk Profile of Loan Portfolio on Amortized Cost Basis Based on Risk Rating Category (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Credit Quality Information [Abstract]
Current fiscal year	$ 383,780	$ 1,200,288
Fiscal year before current fiscal year	1,216,168	818,943
Two years before current fiscal year	793,781	547,593
Three years before current fiscal year	532,798	374,575
Four years before current fiscal year	393,170	247,554
Prior	1,088,280	763,077
Revolving Loans	46,584	43,493
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	4,454,561	3,995,523
Pass
Credit Quality Information [Abstract]
Current fiscal year	373,016	1,177,678
Fiscal year before current fiscal year	1,202,200	815,269
Two years before current fiscal year	790,036	527,037
Three years before current fiscal year	519,908	367,606
Four years before current fiscal year	381,784	225,557
Prior	1,038,744	726,479
Revolving Loans	45,912	42,800
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	4,351,600	3,882,426
Special Mention
Credit Quality Information [Abstract]
Current fiscal year	6,787	18,807
Fiscal year before current fiscal year	12,413	2,354
Two years before current fiscal year	2,012	11,947
Three years before current fiscal year	11,623	2,519
Four years before current fiscal year	3,765	13,769
Prior	27,520	16,798
Revolving Loans	40	41
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	64,160	66,235
Substandard
Credit Quality Information [Abstract]
Current fiscal year	3,977	3,803
Fiscal year before current fiscal year	1,555	1,320
Two years before current fiscal year	1,733	8,609
Three years before current fiscal year	1,267	4,450
Four years before current fiscal year	7,621	8,228
Prior	22,016	19,800
Revolving Loans	632	652
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	38,801	46,862
Agricultural Loans
Credit Quality Information [Abstract]
Current fiscal year	38,944	119,453
Fiscal year before current fiscal year	58,801	18,357
Two years before current fiscal year	12,206	8,260
Three years before current fiscal year	7,167	2,972
Four years before current fiscal year	2,459	937
Prior	2,131	1,505
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	121,708	151,484
Agricultural Loans | Pass
Credit Quality Information [Abstract]
Current fiscal year	35,055	105,378
Fiscal year before current fiscal year	48,882	17,903
Two years before current fiscal year	11,860	5,612
Three years before current fiscal year	4,502	2,822
Four years before current fiscal year	2,330	924
Prior	2,067	1,316
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	104,696	133,955
Agricultural Loans | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	3,859	13,725
Fiscal year before current fiscal year	9,913	436
Two years before current fiscal year	346	2,648
Three years before current fiscal year	2,648	150
Four years before current fiscal year	129	13
Prior	64	64
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	16,959	17,036
Agricultural Loans | Substandard
Credit Quality Information [Abstract]
Current fiscal year	30	350
Fiscal year before current fiscal year	6	18
Two years before current fiscal year	0	0
Three years before current fiscal year	17	0
Four years before current fiscal year	0	0
Prior	0	125
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	53	493
Commercial Industrial And Other Portfolio Segment
Credit Quality Information [Abstract]
Current fiscal year	117,051	280,933
Fiscal year before current fiscal year	327,472	168,095
Two years before current fiscal year	149,849	121,298
Three years before current fiscal year	90,651	76,825
Four years before current fiscal year	58,815	23,389
Prior	294,460	305,214
Revolving Loans	39,894	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	1,078,192	975,754
Commercial Industrial And Other Portfolio Segment | Pass
Credit Quality Information [Abstract]
Current fiscal year	116,681	279,814
Fiscal year before current fiscal year	326,191	167,662
Two years before current fiscal year	149,215	119,702
Three years before current fiscal year	88,980	76,022
Four years before current fiscal year	58,513	22,888
Prior	292,322	302,962
Revolving Loans	39,894	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	1,071,796	969,050
Commercial Industrial And Other Portfolio Segment | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	370	613
Fiscal year before current fiscal year	694	399
Two years before current fiscal year	274	1,463
Three years before current fiscal year	1,639	182
Four years before current fiscal year	174	477
Prior	1,023	819
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	4,174	3,953
Commercial Industrial And Other Portfolio Segment | Substandard
Credit Quality Information [Abstract]
Current fiscal year	0	506
Fiscal year before current fiscal year	587	34
Two years before current fiscal year	360	133
Three years before current fiscal year	32	621
Four years before current fiscal year	128	24
Prior	1,115	1,433
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	2,222	2,751
Consumer Loans
Credit Quality Information [Abstract]
Current fiscal year	11,327	28,601
Fiscal year before current fiscal year	29,516	19,145
Two years before current fiscal year	19,319	17,324
Three years before current fiscal year	16,541	6,192
Four years before current fiscal year	5,116	4,340
Prior	5,391	2,840
Revolving Loans	2,475	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	89,685	78,442
Consumer Loans | Pass
Credit Quality Information [Abstract]
Current fiscal year	11,315	27,948
Fiscal year before current fiscal year	29,356	19,033
Two years before current fiscal year	19,264	16,978
Three years before current fiscal year	16,484	5,505
Four years before current fiscal year	5,049	4,297
Prior	5,321	1,244
Revolving Loans	2,475	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	89,264	75,005
Consumer Loans | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	0	68
Fiscal year before current fiscal year	64	54
Two years before current fiscal year	32	38
Three years before current fiscal year	35	9
Four years before current fiscal year	8	0
Prior	0	0
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	139	169
Consumer Loans | Substandard
Credit Quality Information [Abstract]
Current fiscal year	12	585
Fiscal year before current fiscal year	96	58
Two years before current fiscal year	23	308
Three years before current fiscal year	22	678
Four years before current fiscal year	59	43
Prior	70	1,596
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	282	3,268
Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	3,164,976	2,789,843
Real Estate Loan | Construction and Land Development
Credit Quality Information [Abstract]
Current fiscal year	7,333	38,766
Fiscal year before current fiscal year	47,327	34,774
Two years before current fiscal year	33,352	23,505
Three years before current fiscal year	26,873	34,841
Four years before current fiscal year	2,599	3,760
Prior	14,020	9,472
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	131,504	145,118
Real Estate Loan | Construction and Land Development | Pass
Credit Quality Information [Abstract]
Current fiscal year	7,333	38,656
Fiscal year before current fiscal year	47,220	34,774
Two years before current fiscal year	33,352	23,505
Three years before current fiscal year	26,873	34,358
Four years before current fiscal year	2,599	3,760
Prior	13,533	9,433
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	130,910	144,486
Real Estate Loan | Construction and Land Development | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	0	110
Fiscal year before current fiscal year	107	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	107	110
Real Estate Loan | Construction and Land Development | Substandard
Credit Quality Information [Abstract]
Current fiscal year	0	0
Fiscal year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	483
Four years before current fiscal year	0	0
Prior	487	39
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	487	522
Real Estate Loan | Agricultural
Credit Quality Information [Abstract]
Current fiscal year	28,821	79,665
Fiscal year before current fiscal year	91,953	64,418
Two years before current fiscal year	65,248	30,133
Three years before current fiscal year	30,171	30,774
Four years before current fiscal year	39,952	12,268
Prior	24,421	62,014
Revolving Loans	427	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	280,993	279,272
Real Estate Loan | Agricultural | Pass
Credit Quality Information [Abstract]
Current fiscal year	27,996	78,793
Fiscal year before current fiscal year	91,907	64,159
Two years before current fiscal year	64,989	25,713
Three years before current fiscal year	26,672	30,203
Four years before current fiscal year	39,318	12,142
Prior	18,288	54,808
Revolving Loans	427	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	269,597	265,818
Real Estate Loan | Agricultural | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	825	872
Fiscal year before current fiscal year	46	259
Two years before current fiscal year	259	4,028
Three years before current fiscal year	3,499	384
Four years before current fiscal year	390	69
Prior	5,504	6,087
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	10,523	11,699
Real Estate Loan | Agricultural | Substandard
Credit Quality Information [Abstract]
Current fiscal year	0	0
Fiscal year before current fiscal year	0	0
Two years before current fiscal year	0	392
Three years before current fiscal year	0	187
Four years before current fiscal year	244	57
Prior	629	1,119
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	873	1,755
Real Estate Loan | Commercial And Multifamily Portfolio Segment
Credit Quality Information [Abstract]
Current fiscal year	163,182	573,392
Fiscal year before current fiscal year	565,280	419,254
Two years before current fiscal year	411,723	308,051
Three years before current fiscal year	320,324	176,922
Four years before current fiscal year	231,838	166,066
Prior	642,682	321,455
Revolving Loans	218	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	2,335,247	1,965,140
Real Estate Loan | Commercial And Multifamily Portfolio Segment | Pass
Credit Quality Information [Abstract]
Current fiscal year	157,560	568,200
Fiscal year before current fiscal year	563,350	417,334
Two years before current fiscal year	409,771	299,973
Three years before current fiscal year	317,733	174,448
Four years before current fiscal year	224,746	150,811
Prior	614,381	304,585
Revolving Loans	218	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	2,287,759	1,915,351
Real Estate Loan | Commercial And Multifamily Portfolio Segment | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	1,733	3,185
Fiscal year before current fiscal year	1,431	1,206
Two years before current fiscal year	1,101	1,836
Three years before current fiscal year	1,887	1,295
Four years before current fiscal year	1,268	10,609
Prior	17,831	8,632
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	25,251	26,763
Real Estate Loan | Commercial And Multifamily Portfolio Segment | Substandard
Credit Quality Information [Abstract]
Current fiscal year	3,889	2,007
Fiscal year before current fiscal year	499	714
Two years before current fiscal year	851	6,242
Three years before current fiscal year	704	1,179
Four years before current fiscal year	5,824	4,646
Prior	10,470	8,238
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	22,237	23,026
1-4 Family | Real Estate Loan
Credit Quality Information [Abstract]
Current fiscal year	17,122	79,478
Fiscal year before current fiscal year	95,819	94,900
Two years before current fiscal year	102,084	39,022
Three years before current fiscal year	41,071	46,049
Four years before current fiscal year	52,391	36,794
Prior	105,175	60,577
Revolving Loans	3,570	43,493
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	417,232	400,313
1-4 Family | Real Estate Loan | Pass
Credit Quality Information [Abstract]
Current fiscal year	17,076	78,889
Fiscal year before current fiscal year	95,294	94,404
Two years before current fiscal year	101,585	35,554
Three years before current fiscal year	38,664	44,248
Four years before current fiscal year	49,229	30,735
Prior	92,832	52,131
Revolving Loans	2,898	42,800
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	397,578	378,761
1-4 Family | Real Estate Loan | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	0	234
Fiscal year before current fiscal year	158	0
Two years before current fiscal year	0	1,934
Three years before current fiscal year	1,915	499
Four years before current fiscal year	1,796	2,601
Prior	3,098	1,196
Revolving Loans	40	41
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	7,007	6,505
1-4 Family | Real Estate Loan | Substandard
Credit Quality Information [Abstract]
Current fiscal year	46	355
Fiscal year before current fiscal year	367	496
Two years before current fiscal year	499	1,534
Three years before current fiscal year	492	1,302
Four years before current fiscal year	1,366	3,458
Prior	9,245	7,250
Revolving Loans	632	652
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	$ 12,647	$ 15,047

XML

Loans and Allowance for Credit Losses - Loan Portfolio Aging Analysis (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Loans Receivable Aging Analysis [Abstract]
Total Past Due	$ 4,452,524	$ 3,992,775
Total Loans Receivable	4,454,561	3,995,523
Total Loans> 90 Days and Accruing	0	0
Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	3,164,976	2,789,843
Total Loans> 90 Days and Accruing	0	0
Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	417,232	400,313
Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	131,504	145,118
Total Loans> 90 Days and Accruing	0	0
Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	280,993	279,272
Total Loans> 90 Days and Accruing	0	0
Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	417,232	400,313
Total Loans> 90 Days and Accruing	0	0
Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	369,926	298,942
Total Loans> 90 Days and Accruing	0	0
Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	1,965,321	1,666,198
Total Loans> 90 Days and Accruing	0	0
Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	121,708	151,484
Total Loans> 90 Days and Accruing	0	0
Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	935,454	832,008
Total Loans> 90 Days and Accruing	0	0
Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	89,685	78,442
Total Loans> 90 Days and Accruing	0	0
All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	142,738	143,746
Total Loans> 90 Days and Accruing	0	0
Financial Asset, 30 to 59 Days Past Due
Loans Receivable Aging Analysis [Abstract]
Total Past Due	5,576	14,244
Financial Asset, 30 to 59 Days Past Due | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	4,733	11,621
Financial Asset, 30 to 59 Days Past Due | Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	93	159
Financial Asset, 30 to 59 Days Past Due | Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	243	0
Financial Asset, 30 to 59 Days Past Due | Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Past Due	2,080	2,532
Financial Asset, 30 to 59 Days Past Due | Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	0
Financial Asset, 30 to 59 Days Past Due | Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	2,317	8,930
Financial Asset, 30 to 59 Days Past Due | Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	0
Financial Asset, 30 to 59 Days Past Due | Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	572	381
Financial Asset, 30 to 59 Days Past Due | Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	271	388
Financial Asset, 30 to 59 Days Past Due | All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	1,854
Financial Asset, 60 to 89 Days Past Due
Loans Receivable Aging Analysis [Abstract]
Total Past Due	671	2,334
Financial Asset, 60 to 89 Days Past Due | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	404	1,975
Financial Asset, 60 to 89 Days Past Due | Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	12	199
Financial Asset, 60 to 89 Days Past Due | Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	139	222
Financial Asset, 60 to 89 Days Past Due | Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Past Due	253	914
Financial Asset, 60 to 89 Days Past Due | Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	0
Financial Asset, 60 to 89 Days Past Due | Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	640
Financial Asset, 60 to 89 Days Past Due | Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	10
Financial Asset, 60 to 89 Days Past Due | Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	54	302
Financial Asset, 60 to 89 Days Past Due | Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	213	47
Financial Asset, 60 to 89 Days Past Due | All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	0
Financial Asset, Equal to or Greater than 90 Days Past Due
Loans Receivable Aging Analysis [Abstract]
Total Past Due	17,471	8,238
Financial Asset, Equal to or Greater than 90 Days Past Due | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	15,545	6,376
Financial Asset, Equal to or Greater than 90 Days Past Due | Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	203	203
Financial Asset, Equal to or Greater than 90 Days Past Due | Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,813	1
Financial Asset, Equal to or Greater than 90 Days Past Due | Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,644	2,012
Financial Asset, Equal to or Greater than 90 Days Past Due | Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Past Due	580	1,676
Financial Asset, Equal to or Greater than 90 Days Past Due | Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	11,305	2,484
Financial Asset, Equal to or Greater than 90 Days Past Due | Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	321	588
Financial Asset, Equal to or Greater than 90 Days Past Due | Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,486	1,156
Financial Asset, Equal to or Greater than 90 Days Past Due | Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	119	118
Financial Asset, Equal to or Greater than 90 Days Past Due | All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	0
Total Past Due
Loans Receivable Aging Analysis [Abstract]
Total Past Due	23,718	24,816
Total Past Due | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	20,682	19,972
Total Past Due | Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	308	561
Total Past Due | Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	2,195	223
Total Past Due | Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Past Due	3,977	5,458
Total Past Due | Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Past Due	580	1,676
Total Past Due | Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	13,622	12,054
Total Past Due | Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	321	598
Total Past Due | Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	2,112	1,839
Total Past Due | Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	603	553
Total Past Due | All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	1,854
Current
Loans Receivable Aging Analysis [Abstract]
Total Past Due	4,430,843	3,970,707
Current | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	3,144,294	2,769,871
Current | Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	131,196	144,557
Current | Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	278,798	279,049
Current | Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Past Due	413,255	394,855
Current | Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Past Due	369,346	297,266
Current | Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,951,699	1,654,144
Current | Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	121,387	150,886
Current | Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	933,342	830,169
Current | Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	89,082	77,889
Current | All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	$ 142,738	$ 141,892

XML

Loans and Allowance for Credit Losses - Amortized Cost Basis of Loans on Nonaccrual Status and Nonaccrual Loans Individually Evaluated (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	$ 16,501	$ 16,725
Financing Receivable, Nonaccrual	19,330	18,105
Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	0	25
Financing Receivable, Nonaccrual	0	25
Agricultural Real Estate Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	273	237
Financing Receivable, Nonaccrual	1,296	336
1-4 Family Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	4,344	5,252
Financing Receivable, Nonaccrual	5,144	5,252
Multifamily Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	1,886	1,982
Financing Receivable, Nonaccrual	1,886	1,982
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	7,938	7,554
Financing Receivable, Nonaccrual	8,341	7,920
Loans Secured by Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	14,441	15,050
Financing Receivable, Nonaccrual	16,667	15,515
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	15	560
Financing Receivable, Nonaccrual	230	560
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	1,905	936
Financing Receivable, Nonaccrual	2,293	1,851
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	140	179
Financing Receivable, Nonaccrual	140	179
All Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	0	0
Financing Receivable, Nonaccrual	$ 0	$ 0

XML

Loans and Allowance for Credit Losses - Recorded Balance of Troubled Debt Restructurings (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	$ 5,450	$ 5,792
Financing Receivable Modifications Performing Recorded Investment	3,135	3,931
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	4,704	4,953
Financing Receivable Modifications Performing Recorded Investment	2,923	3,679
Residential Properties | Real Estate Loan | 1-4 Family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	1,228	1,353
Financing Receivable Modifications Performing Recorded Investment	668	882
Agricultural Real Estate Loans | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	245	245
Financing Receivable Modifications Performing Recorded Investment	245	245
Commercial | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	3,231	3,355
Financing Receivable Modifications Performing Recorded Investment	2,010	2,552
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	193	228
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	459	479
Financing Receivable Modifications Performing Recorded Investment	171	179
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	94	109
Financing Receivable Modifications Performing Recorded Investment	$ 41	50
All Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance		23
Financing Receivable Modifications Performing Recorded Investment		$ 23

XML

Loans and Allowance for Credit Losses - Loans Modified as Troubled Debt Restructurings (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) Modification	Mar. 31, 2021 USD ($) Modification
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	6	2
Financing Receivables, Modifications during Period, Balance | $	$ 340	$ 16
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	6	0
Financing Receivables, Modifications during Period, Balance | $	$ 340	$ 0
Real Estate Loan | 1-4 Family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	4	0
Financing Receivables, Modifications during Period, Balance | $	$ 143	$ 0
Commercial Real Estate | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	2	0
Financing Receivables, Modifications during Period, Balance | $	$ 197	$ 0
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	0	2
Financing Receivables, Modifications during Period, Balance | $	$ 0	$ 16

XML

Loans and Allowance for Credit Losses - Summary of Purchased Credit Deteriorated (PCD) Loans (Details) - USD ($)			3 Months Ended
	Feb. 14, 2022	Feb. 22, 2021	Mar. 31, 2022
Delta Bancshare Company
Summary Of Purchased Credit Deteriorated Loans [Line Items]
Purchase price of purchase credit deteriorated loans at acquisition			$ 18,796,000
Allowance for credit losses at acquisition	$ (863,000)		(863,000)
Non-credit discount/(premium) at acquisition			(523,000)
Fair value of purchased credit deteriorated loans at acquisition			17,410,000
LINCO Bancshares, Inc.
Summary Of Purchased Credit Deteriorated Loans [Line Items]
Purchase price of purchase credit deteriorated loans at acquisition			64,647,000
Allowance for credit losses at acquisition		$ (2,000,000)	(2,074,000)
Non-credit discount/(premium) at acquisition			(187,000)
Fair value of purchased credit deteriorated loans at acquisition			$ 62,386,000

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Finite Lived Intangible Assets [Line Items]
Goodwill, Gross Carrying Value	$ 144,225	$ 115,613
Goodwill, Accumulated Amortization	3,760	3,760
Goodwill and Intangible Assets, Gross Carrying Value	213,156	178,624
Goodwill and Intangible Assets, Accumulated Amortization	39,089	37,668
Intangibles from Branch Acquisition
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Gross Carrying Value	3,015	3,015
Intangible Assets, Accumulated Amortization	3,015	3,015
Core Deposit Intangibles
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Gross Carrying Value	45,355	39,435
Intangible Assets, Accumulated Amortization	25,074	24,085
Other Intangibles
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Gross Carrying Value	20,561	20,561
Intangible Assets, Accumulated Amortization	$ 7,240	$ 6,808

XML

Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2021	Mar. 31, 2021	Feb. 22, 2021
Finite Lived Intangible Assets [Line Items]
Goodwill	$ 140,465	$ 111,853
Delta Bancshares Company
Finite Lived Intangible Assets [Line Items]
Goodwill	28,611
BBM & Associates, Inc.
Finite Lived Intangible Assets [Line Items]
Goodwill			$ 1,400
LINCO Bancshares, Inc.
Finite Lived Intangible Assets [Line Items]
Goodwill	$ 5,449			$ 8,900	$ 5,449

XML

Goodwill and Intangible Assets - Schedule of Reconciliation of Purchase Price Paid for Acquisition and Goodwill Recorded (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Feb. 22, 2021
Less purchase accounting adjustments:
Goodwill	$ 140,465	$ 111,853
Delta Bancshares Company
Goodwill [Line Items]
Unallocated purchase price	29,791
Less purchase accounting adjustments:
Fair value of securities	(2,836)
Fair value of loans, net	(3,399)
Fair value of premises and equipment	3,508
Fair value of time deposits	(1,759)
Fair value of FHLB advances	(75)
Core deposit intangible	5,920
Other assets	(623)
Other liabilities	444
Goodwill, purchase accounting adjustments	1,180
Goodwill	28,611
LINCO Bancshares, Inc.
Goodwill [Line Items]
Unallocated purchase price	12,248
Less purchase accounting adjustments:
Fair value of securities	264
Fair value of loans, net	(2,818)
Fair value of other real estate owned	915
Fair value of premises and equipment	6,360
Fair value of time deposits	(2,081)
Fair value of FHLB advances	(975)
Core deposit intangible	2,025
Other assets	3,293
Other liabilities	(184)
Goodwill, purchase accounting adjustments	6,799
Goodwill	$ 5,449		$ 8,900	$ 5,449

XML

Goodwill and Intangible Assets - Intangible Assets Mortgage Servicing Rights (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Finite Lived Intangible Assets [Line Items]
Fair market value adjustment	$ (65,000)
Mortgage Servicing Rights
Finite Lived Intangible Assets [Line Items]
Beginning balance	420,000	$ 516,000	$ 516,000
Fair market value adjustment	106,000	210,000	544,000
Mortgage servicing rights amortized	(101,000)	(177,000)	(629,000)
Interest only strip	7,000	2,000	(11,000)
Ending balance	$ 432,000	$ 551,000	$ 420,000

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Finite Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 1,522	$ 1,220
Core Deposit Intangibles
Finite Lived Intangible Assets [Line Items]
Amortization of intangible assets	989	710
Customer List Intangibles
Finite Lived Intangible Assets [Line Items]
Amortization of intangible assets	432	333
Mortgage Servicing Rights
Finite Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 101	$ 177

XML

Goodwill and Intangible Assets - Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Aggregate amortization expense:
For period 01/01/22-03/31/22	$ 1,522	$ 1,220
Estimated amortization expense:
For period 04/01/22-12/31/22	4,681
For year ended 12/31/23	5,799
For year ended 12/31/24	5,291
For year ended 12/31/25	4,741
For year ended 12/31/26	$ 3,852

XML

Repurchase Agreements and Other Borrowings - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Repurchase Agreements And Other Borrowings [Abstract]
Securities sold under agreements to repurchase	$ 187,326,000	$ 146,268,000
Securities sold under agreements to repurchase increase (decrease)	$ 41,100,000
Securities sold under agreements to repurchase weighted average rate	0.21%
FHLB borrowings	$ 125,900,000	$ 86,000,000
FHLB premium on borrowing	$ 538,074

XML

Repurchase Agreements and Other Borrowings - Schedule of Securities Financing Transactions (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets Sold Under Agreements To Repurchase [Line Items]
Securities pledged to Repurchase Agreements	$ 187,326	$ 146,268
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Assets Sold Under Agreements To Repurchase [Line Items]
Securities pledged to Repurchase Agreements	61,370	53,782
Mortgage-backed Securities: GSE Residential
Assets Sold Under Agreements To Repurchase [Line Items]
Securities pledged to Repurchase Agreements	125,956	92,486
Miscellaneous
Assets Sold Under Agreements To Repurchase [Line Items]
Securities pledged to Repurchase Agreements	$ 0	$ 0

XML

Repurchase Agreements and Other Borrowings - Federal Home Loan Bank, Advances (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 125,900,000	$ 86,000,000
Interest Rate 0.35% - Maturity Date April 4, 2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 15,000,000
Federal Home Loan Bank Advances, Term (in years)	3 months
Federal Home Loan Bank, Advances, Interest Rate	0.35%
Federal Home Loan Bank, Advances, Maturity Date	Apr. 04, 2022
Interest Rate 0.00% - Maturity Date May 31,2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	1 year
Federal Home Loan Bank, Advances, Interest Rate	0.00%
Federal Home Loan Bank, Advances, Maturity Date	May 31, 2022
Interest Rate 2.41% - Maturity Date May 31, 2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years
Federal Home Loan Bank, Advances, Interest Rate	2.41%
Federal Home Loan Bank, Advances, Maturity Date	May 31, 2022
Interest Rate 2.12% - Maturity Date June 7, 2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years
Federal Home Loan Bank, Advances, Interest Rate	2.12%
Federal Home Loan Bank, Advances, Maturity Date	Jun. 07, 2022
Interest Rate 2.12% - Maturity Date June 7, 2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years
Federal Home Loan Bank, Advances, Interest Rate	2.12%
Federal Home Loan Bank, Advances, Maturity Date	Jun. 07, 2022
Interest Rate 0.80% - Maturity Date June 23, 2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 20,000,000
Federal Home Loan Bank Advances, Term (in years)	3 months
Federal Home Loan Bank, Advances, Interest Rate	0.80%
Federal Home Loan Bank, Advances, Maturity Date	Jun. 23, 2022
Interest Rate 1.73% - Maturity Date July 12, 2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years
Federal Home Loan Bank, Advances, Interest Rate	1.73%
Federal Home Loan Bank, Advances, Maturity Date	Jul. 12, 2022
Interest Rate 2.40% - Maturity Date January 9, 2023
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	8 years
Federal Home Loan Bank, Advances, Interest Rate	2.40%
Federal Home Loan Bank, Advances, Maturity Date	Jan. 09, 2023
Interest Rate 2.44% - Maturity Date May 30, 2023
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	4 years
Federal Home Loan Bank, Advances, Interest Rate	2.44%
Federal Home Loan Bank, Advances, Maturity Date	May 30, 2023
Interest Rate 1.51% - Maturity Date July 31, 2023
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years 6 months
Federal Home Loan Bank, Advances, Interest Rate	1.51%
Federal Home Loan Bank, Advances, Maturity Date	Jul. 31, 2023
Interest Rate 0.77% - Maturity Date September 11, 2023
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years 6 months
Federal Home Loan Bank, Advances, Interest Rate	0.77%
Federal Home Loan Bank, Advances, Maturity Date	Sep. 11, 2023
Interest Rate 1.54% - Maturity Date July 12, 2024
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	5 years
Federal Home Loan Bank, Advances, Interest Rate	1.54%
Federal Home Loan Bank, Advances, Maturity Date	Jul. 12, 2024
Interest Rate 1.45% - Maturity Date December 31, 2024
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 10,000,000
Federal Home Loan Bank Advances, Term (in years)	5 years
Federal Home Loan Bank, Advances, Interest Rate	1.45%
Federal Home Loan Bank, Advances, Maturity Date	Dec. 31, 2024
Interest Rate 0.91% - Maturity Date March 10, 2025
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	5 years
Federal Home Loan Bank, Advances, Interest Rate	0.91%
Federal Home Loan Bank, Advances, Maturity Date	Mar. 10, 2025
Interest Rate 2.64% - Maturity Date December 23, 2025
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,857,785
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	2.64%
Federal Home Loan Bank, Advances, Maturity Date	Dec. 23, 2025
Interest Rate 1.15% - Maturity Date October 3, 2029
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	1.15%
Federal Home Loan Bank, Advances, Maturity Date	Oct. 03, 2029
Interest Rate 1.12% - Maturity Date October 3, 2029
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	1.12%
Federal Home Loan Bank, Advances, Maturity Date	Oct. 03, 2029
Interest Rate 1.39% - Maturity Date December 31, 2029
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 10,000,000
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	1.39%
Federal Home Loan Bank, Advances, Maturity Date	Dec. 31, 2029

XML

Fair Value of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Available-for-sale securities:
Total available-for-sale securities	$ 1,466,950,000	$ 1,421,422,000
Equity securities, at fair value	369,000	397,000
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Available-for-sale securities:
Total available-for-sale securities	247,976,000	203,815,000
Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	358,679,000	395,457,000
Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	761,527,000	791,038,000
Other Securities
Available-for-sale securities:
Total available-for-sale securities	98,768,000	31,112,000
Fair Value, Recurring
Available-for-sale securities:
Total available-for-sale securities	1,466,950,000	1,421,422,000
Equity securities, at fair value	369,000	397,000
Derivative assets, Interest rate swaps	2,286,000	809,000
Total assets	1,469,605,000	1,422,628,000
Derivative liabilities, Interest rate swaps	2,167,000	1,476,000
Fair Value, Recurring | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Available-for-sale securities:
Total available-for-sale securities	247,976,000	203,815,000
Fair Value, Recurring | Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	358,679,000	395,457,000
Fair Value, Recurring | Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	761,527,000	791,038,000
Fair Value, Recurring | Other Securities
Available-for-sale securities:
Total available-for-sale securities	98,768,000	31,112,000
Quoted Prices in Active Markets for Identical Assets (Level 1)
Available-for-sale securities:
Total available-for-sale securities	0	0
Equity securities, at fair value	369,000	397,000
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring
Available-for-sale securities:
Total available-for-sale securities	0	0
Equity securities, at fair value	369,000	397,000
Derivative assets, Interest rate swaps	0	0
Total assets	369,000	397,000
Derivative liabilities, Interest rate swaps	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Available-for-sale securities:
Total available-for-sale securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Other Securities
Available-for-sale securities:
Total available-for-sale securities	0	0
Significant Other Observable Inputs (Level 2)
Available-for-sale securities:
Total available-for-sale securities	1,466,950,000	1,421,323,000
Equity securities, at fair value	0	0
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring
Available-for-sale securities:
Total available-for-sale securities	1,466,950,000	1,421,323,000
Equity securities, at fair value	0	0
Derivative assets, Interest rate swaps	2,286,000	809,000
Total assets	1,469,236,000	1,422,132,000
Derivative liabilities, Interest rate swaps	2,167,000	1,476,000
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Available-for-sale securities:
Total available-for-sale securities	247,976,000	203,815,000
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	358,679,000	395,358,000
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	761,527,000	791,038,000
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | Other Securities
Available-for-sale securities:
Total available-for-sale securities	98,768,000	31,112,000
Significant Unobservable Inputs (Level 3)
Available-for-sale securities:
Total available-for-sale securities	0	99,000
Equity securities, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring
Available-for-sale securities:
Total available-for-sale securities	0	99,000
Equity securities, at fair value	0	0
Derivative assets, Interest rate swaps	0	0
Total assets	0	99,000
Derivative liabilities, Interest rate swaps	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies
Available-for-sale securities:
Total available-for-sale securities	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	0	99,000
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Other Securities
Available-for-sale securities:
Total available-for-sale securities	$ 0	$ 0

XML

Fair Value of Assets and Liabilities - Fair Value of Assets Measured on a Recurring Basis Using Significant Unobservable Inputs (Details) - Obligations of States and Political Subdivisions - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 99	$ 794
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Total gains or losses:
Included in net income	0	1
Included in other comprehensive income (loss)	0	0
Purchases, issuances, sales and settlements:
Purchases	0	0
Issuances	0	0
Sales	0	(181)
Settlements	(99)	0
Ending balance	0	614
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$ 0	$ 0

XML

Fair Value of Assets and Liabilities - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Allowance for Credit Losses	$ 1,145,000
Other real estate owned	4,794,000		$ 4,984,000
Mortgage servicing rights (MSR) impairment (recovery)	65,000
Mortgage Servicing Rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Finite-lived intangible assets, net	432,000	$ 551,000	420,000	$ 516,000
Mortgage servicing rights (MSR) impairment (recovery)	(106,000)	$ (210,000)	$ (544,000)
Fair Value, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Carrying amount of loans with a specific allowance	5,741,000
Fair value of loans with a specific allowance	4,596,000
Allowance for Credit Losses	1,145,000
Fair Value, Nonrecurring | Mortgage Servicing Rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Indefinite-lived contractual rights	367,000
Finite-lived intangible assets, net	432,000
Fair Value, Nonrecurring | Carrying Amount
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Other real estate owned	4,794,000
Fair Value, Nonrecurring | Fair Value
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Other real estate owned	$ 28,000

XML

Fair Value of Assets and Liabilities - Assets Measured at Fair Value on a Nonrecurring Basis (Details) - Fair Value, Nonrecurring - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Collateral Dependent Loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	$ 4,596	$ 6,750
Foreclosed Assets Held-for-sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	28	2,068
Mortgage Servicing Rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	432	420
Quoted Prices in Active Markets for Identical Assets (Level 1) | Collateral Dependent Loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreclosed Assets Held-for-sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage Servicing Rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	0	0
Significant Other Observable Inputs (Level 2) | Collateral Dependent Loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	0	0
Significant Other Observable Inputs (Level 2) | Foreclosed Assets Held-for-sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	0	0
Significant Other Observable Inputs (Level 2) | Mortgage Servicing Rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	0	0
Significant Unobservable Inputs (Level 3) | Collateral Dependent Loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	4,596	6,750
Significant Unobservable Inputs (Level 3) | Foreclosed Assets Held-for-sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	28	2,068
Significant Unobservable Inputs (Level 3) | Mortgage Servicing Rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	$ 432	$ 420

XML

Fair Value of Assets and Liabilities - Significant Unobservable Inputs Used in Valuation of Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Mortgage Servicing Rights | Minimum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights	177.00%	205.00%
Mortgage Servicing Rights | Maximum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights	438.00%	513.00%
Mortgage Servicing Rights | Weighted Average | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights	189.00%	273.00%
Collateral Dependent Loans | Minimum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Collateral dependent loans	0.00%	0.00%
Collateral Dependent Loans | Maximum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Collateral dependent loans	40.00%	40.00%
Collateral Dependent Loans | Weighted Average | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Collateral dependent loans	20.00%	20.00%
Foreclosed Assets Held-for-sale | Minimum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Collateral dependent loans	0.00%	0.00%
Foreclosed Assets Held-for-sale | Maximum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Collateral dependent loans	40.00%	40.00%
Foreclosed Assets Held-for-sale | Weighted Average | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Collateral dependent loans	35.00%	35.00%
Fair Value, Nonrecurring | Mortgage Servicing Rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	$ 432	$ 420
Fair Value, Nonrecurring | Collateral Dependent Loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	4,596	6,750
Fair Value, Nonrecurring | Collateral Dependent Loans | Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	4,596	6,750
Fair Value, Nonrecurring | Foreclosed Assets Held-for-sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	$ 28	$ 2,068

XML

Fair Value of Assets and Liabilities - Summary of Estimated Fair Values of Company Financial Instruments (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021
Financial assets
Total available-for-sale securities	$ 1,466,950,000	$ 1,421,422,000
Held-to-maturity securities	2,998,000	7,035,000	$ 7,035,000
Equity securities	369,000	397,000
Fair Value, Inputs, Level 1 [Member]
Financial assets
Cash and due from banks	218,072,000	167,242,000
Federal funds sold	5,908,000	1,360,000
Certificates of deposit investments	0	0
Total available-for-sale securities	0	0
Held-to-maturity securities	2,998,000	2,029,000
Equity securities	369,000	397,000
Loans held for sale	0	0
Loans net of allowance for credit losses	0	0
Interest receivable	0	0
Federal Reserve Bank stock	0	0
Federal Home Loan Bank stock	0	0
Financial liabilities
Deposits	0	0
Securities sold under agreements to repurchase	0	0
Interest payable	0	0
Federal Home Loan Bank borrowings	0	0
Fair Value, Inputs, Level 1 [Member] | Subordinated Debt
Financial liabilities
Subordinated debt, net	0	0
Fair Value, Inputs, Level 1 [Member] | Junior Subordinated Debentures
Financial liabilities
Subordinated debt, net	0	0
Fair Value, Inputs, Level 2 [Member]
Financial assets
Cash and due from banks	0	0
Federal funds sold	0	0
Certificates of deposit investments	1,960,000	2,450,000
Total available-for-sale securities	1,466,950,000	1,421,323,000
Held-to-maturity securities	0	5,005,000
Equity securities	0	0
Loans held for sale	2,037,000	2,748,000
Loans net of allowance for credit losses	0	0
Interest receivable	22,365,000	19,868,000
Federal Reserve Bank stock	13,845,000	13,845,000
Federal Home Loan Bank stock	6,484,000	6,484,000
Financial liabilities
Deposits	4,821,794,000	4,394,434,000
Securities sold under agreements to repurchase	152,086,000	146,274,000
Interest payable	2,466,000	1,346,000
Federal Home Loan Bank borrowings	123,295,000	86,248,000
Fair Value, Inputs, Level 2 [Member] | Subordinated Debt
Financial liabilities
Subordinated debt, net	94,438,000	94,400,000
Fair Value, Inputs, Level 2 [Member] | Junior Subordinated Debentures
Financial liabilities
Subordinated debt, net	15,458,000	15,012,000
Level 3
Financial assets
Cash and due from banks	0	0
Federal funds sold	0	0
Certificates of deposit investments	0	0
Total available-for-sale securities	0	99,000
Held-to-maturity securities	0	0
Equity securities	0	0
Loans held for sale	0	0
Loans net of allowance for credit losses	4,280,190,000	3,889,870,000
Interest receivable	0	0
Federal Reserve Bank stock	0	0
Federal Home Loan Bank stock	0	0
Financial liabilities
Deposits	660,423,000	562,304,000
Securities sold under agreements to repurchase	0	0
Interest payable	0	0
Federal Home Loan Bank borrowings	0	0
Level 3 | Subordinated Debt
Financial liabilities
Subordinated debt, net	0	0
Level 3 | Junior Subordinated Debentures
Financial liabilities
Subordinated debt, net	0	0
Carrying Amount
Financial assets
Cash and due from banks	218,072,000	167,242,000
Federal funds sold	5,908,000	1,360,000
Certificates of deposit investments	1,960,000	2,450,000
Total available-for-sale securities	1,466,950,000	1,421,422,000
Held-to-maturity securities	2,998,000	7,030,000
Equity securities	369,000	397,000
Loans held for sale	2,037,000	2,748,000
Loans net of allowance for credit losses	4,394,050,000	3,938,120,000
Interest receivable	22,365,000	19,868,000
Federal Reserve Bank stock	13,845,000	13,845,000
Federal Home Loan Bank stock	6,484,000	6,484,000
Financial liabilities
Deposits	5,487,305,000	4,956,486,000
Securities sold under agreements to repurchase	187,326,000	146,268,000
Interest payable	2,466,000	1,346,000
Federal Home Loan Bank borrowings	126,396,000	86,446,000
Carrying Amount | Subordinated Debt
Financial liabilities
Subordinated debt, net	94,438,000	94,400,000
Carrying Amount | Junior Subordinated Debentures
Financial liabilities
Subordinated debt, net	19,237,000	19,195,000
Fair Value
Financial assets
Cash and due from banks	218,072,000	167,242,000
Federal funds sold	5,908,000	1,360,000
Certificates of deposit investments	1,960,000	2,450,000
Total available-for-sale securities	1,466,950,000	1,421,422,000
Held-to-maturity securities	2,998,000	7,034,000
Equity securities	369,000	397,000
Loans held for sale	2,037,000	2,748,000
Loans net of allowance for credit losses	4,280,190,000	3,889,870,000
Interest receivable	22,365,000	19,868,000
Federal Reserve Bank stock	13,845,000	13,845,000
Federal Home Loan Bank stock	6,484,000	6,484,000
Financial liabilities
Deposits	5,482,217,000	4,956,738,000
Securities sold under agreements to repurchase	152,086,000	146,274,000
Interest payable	2,466,000	1,346,000
Federal Home Loan Bank borrowings	123,295,000	86,248,000
Fair Value | Subordinated Debt
Financial liabilities
Subordinated debt, net	94,438,000	94,400,000
Fair Value | Junior Subordinated Debentures
Financial liabilities
Subordinated debt, net	$ 15,458,000	$ 15,012,000

XML

Business Combinations - Additional Information (Details) - USD ($)			3 Months Ended
	Feb. 14, 2022	Feb. 22, 2021	Mar. 31, 2022	Jul. 28, 2021	Mar. 31, 2021	Sep. 25, 2020
Business Acquisition [Line Items]
Common stock, par value (in dollars per share)			$ 4		$ 4
Delta Bancshare Company
Business Acquisition [Line Items]
Percentage of issued and outstanding shares acquired				100.00%
Common stock, par value (in dollars per share)				$ 10.00
Share Price				$ 4.00
Consideration paid in cash	$ 15,150,000
Consideration paid in shares	2,292,270
Goodwill acquired during period	$ 28,600,000
Pre-tax of acquisition costs	785,000		$ 535,000
Loans	418,509,000
Accreted to interest income over the remaining term of loans	8,200,000
Elimination of deferred fees and unearned discounts previously recorded by Jefferson Bank	300,000
Allowance for credit losses for loans identified as PCD	863,000		863,000
Purchased credit deteriorated loans			18,796,000
Change in acquired time deposits	560,378,000
Change in FHLB advances	45,075,000
Delta Bancshare Company | Core Deposit Intangibles
Business Acquisition [Line Items]
Intangible asset fair value	$ 5,920,000
Intangible asset estimated useful life	10 years
Delta Bancshare Company | Fair Value Adjustments
Business Acquisition [Line Items]
Loans	$ (7,924,000)
Change in acquired time deposits	1,759,000
Change in FHLB advances	75,000
Delta Bancshare Company | Fair Value Adjustments | Core Deposit Intangibles
Business Acquisition [Line Items]
Intangible asset fair value	5,920,000
Delta Bancshare Company | Acquired Book Value
Business Acquisition [Line Items]
Loans	426,433,000
Purchased credit deteriorated loans	18,800,000
Change in acquired time deposits	558,619,000
Change in FHLB advances	45,000,000
Delta Bancshare Company | Acquired Book Value | Core Deposit Intangibles
Business Acquisition [Line Items]
Intangible asset fair value	$ 0
LINCO Bancshares, Inc.
Business Acquisition [Line Items]
Percentage of issued and outstanding shares acquired						100.00%
Common stock, par value (in dollars per share)						$ 1.00
Share Price						$ 4.00
Consideration paid in cash		$ 103,500,000
Consideration paid in shares		1,262,246
Dividends paid		$ 13,000,000
Goodwill acquired during period		5,400,000
Pre-tax of acquisition costs		9,000,000			$ 8,500,000
Loans		828,976,000
Accreted to interest income over the remaining term of loans		11,100,000
Elimination of deferred fees and unearned discounts previously recorded by Jefferson Bank		1,700,000
Allowance for credit losses for loans identified as PCD		2,000,000	2,074,000
Purchased credit deteriorated loans			$ 64,647,000
Change in acquired time deposits		990,410,000
Change in FHLB advances		27,916,000
LINCO Bancshares, Inc. | Core Deposit Intangibles
Business Acquisition [Line Items]
Intangible asset fair value		$ 2,148,000
Intangible asset estimated useful life		10 years
LINCO Bancshares, Inc. | Fair Value Adjustments
Business Acquisition [Line Items]
Loans		$ (9,401,000)
Change in acquired time deposits		2,081,000
Change in FHLB advances		975,000
LINCO Bancshares, Inc. | Fair Value Adjustments | Core Deposit Intangibles
Business Acquisition [Line Items]
Intangible asset fair value		2,025,000
LINCO Bancshares, Inc. | Acquired Book Value
Business Acquisition [Line Items]
Loans		838,377,000
Purchased credit deteriorated loans		64,600,000
Change in acquired time deposits		988,329,000
Change in FHLB advances		26,941,000
LINCO Bancshares, Inc. | Acquired Book Value | Core Deposit Intangibles
Business Acquisition [Line Items]
Intangible asset fair value		$ 123,000

XML

Business Combinations - Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($)	Feb. 14, 2022	Feb. 22, 2021	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021
Assets
Goodwill			$ 140,465,000	$ 111,853,000
Delta Bancshare Company
Assets
Cash and due from banks	$ 82,473,000
Investment securities	182,123,000
Loans	418,509,000
Allowance for credit losses	(863,000)
Premises and equipment	9,030,000
Goodwill	28,611,000
Other assets	7,721,000
Total assets acquired	750,063,000
Liabilities
Deposits	560,378,000
Securities sold under agreements to repurchase	35,523,000
FHLB advances	45,075,000
Lease liability	717,000
Other liabilities	1,048,000
Total liabilities assumed	642,741,000
Net assets acquired	107,322,000
Consideration paid
Consideration payable in cash	15,150,000
Common stock	92,172,000
Total consideration paid	107,322,000
Delta Bancshare Company | Core Deposit Intangibles
Assets
Intangible assets	5,920,000
Delta Bancshare Company | Bank Owned Life Insurance
Assets
Intangible assets	15,822,000
Delta Bancshare Company | Right of Use Asset
Assets
Intangible assets	717,000
Delta Bancshare Company | Acquired Book Value
Assets
Cash and due from banks	82,473,000
Investment securities	184,959,000
Loans	426,433,000
Allowance for credit losses	(5,388,000)
Premises and equipment	5,522,000
Goodwill	14,000
Other assets	9,061,000
Total assets acquired	718,896,000
Liabilities
Deposits	558,619,000
Securities sold under agreements to repurchase	35,523,000
FHLB advances	45,000,000
Lease liability	0
Other liabilities	2,209,000
Total liabilities assumed	641,351,000
Net assets acquired	77,545,000
Delta Bancshare Company | Acquired Book Value | Core Deposit Intangibles
Assets
Intangible assets	0
Delta Bancshare Company | Acquired Book Value | Bank Owned Life Insurance
Assets
Intangible assets	15,822,000
Delta Bancshare Company | Acquired Book Value | Right of Use Asset
Assets
Intangible assets	0
Delta Bancshare Company | Fair Value Adjustments
Assets
Cash and due from banks	0
Investment securities	(2,836,000)
Loans	(7,924,000)
Allowance for credit losses	4,525,000
Premises and equipment	3,508,000
Goodwill	28,597,000
Other assets	(1,340,000)
Total assets acquired	31,167,000
Liabilities
Deposits	1,759,000
Securities sold under agreements to repurchase	0
FHLB advances	75,000
Lease liability	717,000
Other liabilities	(1,161,000)
Total liabilities assumed	1,390,000
Net assets acquired	29,777,000
Delta Bancshare Company | Fair Value Adjustments | Core Deposit Intangibles
Assets
Intangible assets	5,920,000
Delta Bancshare Company | Fair Value Adjustments | Right of Use Asset
Assets
Intangible assets	$ 717,000
LINCO Bancshares, Inc.
Assets
Cash and due from banks		$ 130,561,000
Investment securities		119,498,000
Loans		828,976,000
Allowance for credit losses		(2,073,000)
Other real estate owned		9,350,000
Premises and equipment		29,800,000
Goodwill		5,449,000	$ 5,449,000		$ 8,900,000
Other assets		46,196,000
Total assets acquired		1,170,699,000
Liabilities
Deposits		990,410,000
Securities sold under agreements to repurchase		0
FHLB advances		27,916,000
Other borrowings		0
Lease liability		794,000
Other liabilities		3,888,000
Total liabilities assumed		1,023,008,000
Net assets acquired		147,691,000
Consideration paid
Consideration payable in cash		103,500,000
Common stock		44,191,000
Total consideration paid		147,691,000
LINCO Bancshares, Inc. | Core Deposit Intangibles
Assets
Intangible assets		2,148,000
LINCO Bancshares, Inc. | Right of Use Asset
Assets
Intangible assets		794,000
LINCO Bancshares, Inc. | Acquired Book Value
Assets
Cash and due from banks		130,561,000
Investment securities		119,234,000
Loans		838,377,000
Allowance for credit losses		(8,656,000)
Other real estate owned		8,435,000
Premises and equipment		23,440,000
Goodwill		20,503,000
Other assets		43,697,000
Total assets acquired		1,175,714,000
Liabilities
Deposits		988,329,000
Securities sold under agreements to repurchase		0
FHLB advances		26,941,000
Other borrowings		0
Lease liability		0
Other liabilities		4,498,000
Total liabilities assumed		1,019,768,000
Net assets acquired		155,946,000
LINCO Bancshares, Inc. | Acquired Book Value | Core Deposit Intangibles
Assets
Intangible assets		123,000
LINCO Bancshares, Inc. | Acquired Book Value | Right of Use Asset
Assets
Intangible assets		0
LINCO Bancshares, Inc. | Fair Value Adjustments
Assets
Cash and due from banks		0
Investment securities		264,000
Loans		(9,401,000)
Allowance for credit losses		6,583,000
Other real estate owned		915,000
Premises and equipment		6,360,000
Goodwill		(15,054,000)
Other assets		2,499,000
Total assets acquired		(5,015,000)
Liabilities
Deposits		2,081,000
Securities sold under agreements to repurchase		0
FHLB advances		975,000
Other borrowings		0
Lease liability		794,000
Other liabilities		(610,000)
Total liabilities assumed		3,240,000
Net assets acquired		(8,255,000)
LINCO Bancshares, Inc. | Fair Value Adjustments | Core Deposit Intangibles
Assets
Intangible assets		2,025,000
LINCO Bancshares, Inc. | Fair Value Adjustments | Right of Use Asset
Assets
Intangible assets		$ 794,000

XML

Business Combinations - Unaudited Pro Forma Condensed Combined Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Business Acquisition [Line Items]
Net interest income		$ 38,237
Provision for loan losses		12,136
Non-interest income		17,749
Non-interest expense		37,659
Income before taxes		6,191
Income tax expense (benefit)		1,078
Net income (loss)		$ 5,113
Earnings per share
Basic		$ 0.30
Diluted		$ 0.29
Basic weighted average shares o/s		17,299,927
Diluted weighted average shares o/s		17,352,947
Delta Bancshare Company
Business Acquisition [Line Items]
Net interest income	$ 44,200	$ 40,966
Provision for loan losses	2,952	14,136
Non-interest income	21,088	18,528
Non-interest expense	40,575	39,653
Income before taxes	21,761	5,705
Income tax expense (benefit)	4,797	887
Net income (loss)	$ 16,964	$ 4,818
Earnings per share
Basic	$ 0.88	$ 0.28
Diluted	$ 0.88	$ 0.28
Basic weighted average shares o/s	19,295,860	17,299,927
Diluted weighted average shares o/s	19,358,457	17,352,947

XML

Leases - Additional Information (Details)	Mar. 31, 2022
Minimum
Lessee Lease Description [Line Items]
Renewal term	1 year
Maximum
Lessee Lease Description [Line Items]
Renewal term	25 years

XML

Leases - Summary of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021
Leases, Operating [Abstract]
Operating lease right-of-use assets	$ 15,242	$ 15,116	$ 17,424
Operating lease liabilities	$ 15,458	$ 15,322	$ 17,578
Weighted-average remaining lease term (in years)	6 years 10 months 24 days	6 years 7 months 6 days	6 years 9 months 18 days
Weighted-average discount rate	2.67%	2.70%	2.63%

XML

Leases - Summary of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2022	$ 2,221
2021	2,416
2022	2,044
2023	1,713
2024	1,714
Thereafter	7,645
Total lease payments	17,753
Less imputed interest	(2,295)
Operating lease liabilities	$ 15,458	$ 15,322	$ 17,578

XML

Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Lease, Cost [Abstract]
Operating lease cost	$ 629	$ 708
Short-term lease cost	27	35
Variable lease cost	266	137
Total lease cost	922	880
Income from subleases	(100)	(153)
Net lease cost	$ 822	$ 727

XML

Leases - Summary of Operating Lease Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases [Abstract]
Operating cash flows from operating leases	$ 722	$ 711

XML

Derivatives - Schedule of Derivative Instruments (Details) - Fair Value Hedging - Designated As Hedging Instrument - Interest Rate Swap Agreements - Other Liabilities - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2020
Derivative [Line Items]
Derivative, Weighted Average Remaining Maturity (Years)	7 years 1 month 6 days	7 years 3 months 18 days
Derivative Liability, Notional Amount	$ 13,839	$ 13,900
Derivative Liability, Estimated Value	$ (2,167)	$ (1,476)

XML

Derivatives - Summary of Derivative Instruments, Gain (Loss) (Details) - Fair Value Hedging - Interest Rate Swap Agreements - Interest Income On Loans - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative [Line Items]
Gain (Loss) on Derivative	$ (785)	$ (743)
Gain (Loss) on Hedged Item	$ 785	$ 743

XML

Derivatives - Summary of Hedged Instrument (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Hedged Instruments [Abstract]
Carrying Amount of the Hedged Asset	$ 13,958
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset	$ (118)

XML

Derivatives - Summary of Non Hedge Instruments (Details) - Not Designated as Hedging Instrument - Interest Rate Swap Agreements $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Other Assets
Derivative [Line Items]
Derivative, Weighted Average Remaining Maturity (Years)	6 years 3 months 18 days
Derivative Assets, Notional Amount	$ 40,435
Derivative Assets, Estimated Value	$ 2,286
Other Liabilities
Derivative [Line Items]
Derivative, Weighted Average Remaining Maturity (Years)	6 years 3 months 18 days
Derivative Liability, Notional Amount	$ 40,435
Derivative Liability, Estimated Value	$ (2,286)