GlobeNewswire Inc | Jan 28, 2021 08:00AM EST

January 28, 2021

MATTOON, Ill., Jan. 28, 2021 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the Company) today announced its financial results for the quarter and full year period ended December 31, 2020.

Highlights

-- Record quarterly net income of $13.6 million, or $0.81 diluted EPS -- Received regulatory approval on pending acquisition of LINCO Bancshares, Inc. (LINCO) -- Assisted customers on the forgiveness of $93.4 million in Paycheck Protection Program (PPP) loans -- Announced branch optimization plan with completion now anticipated by mid-year 2021 -- Wealth Management assets under management increased 7% for the year to $4.5 billion -- Announcing change to quarterly dividend from semi-annual dividend beginning in 2021

2020 was an incredible year with a combination of significant challenges and tremendous opportunities, said Joe Dively, Chairman and Chief Executive Officer. The First Mid team stepped up for our customers and shareholders, and I am proud of all that we accomplished. We ended the year with a record quarter of financial results, including working with our customers in the PPP forgiveness process, while completing a very successful subordinated debt offering and receiving regulatory approval for the pending acquisition of LINCO Bancshares, Inc.

We are excited about the new year with the second round of PPP underway, the branch optimization plan to be completed by mid-year, and the expected close of the LINCO acquisition in February. The deepened presence in the St. Louis metro market and geographic diversity into mid-Missouri and Texas increases our growth prospects, strengthens our balance sheet, and is estimated to provide over 20% earnings accretion. The customers and employees are excited about the expanded product set and are ready to move forward with a combined company that we believe will be better and stronger, Dively concluded.

Net Interest Income

Net interest income for the fourth quarter of 2020 increased by $0.9 million, or 2.8% compared to the third quarter of 2020. Interest income increased by $1.3 million and interest expense increased $0.4 million from the previous quarter. The increase in interest income was partially driven by fee income from the PPP loans. The PPP fee income was $3.2 million in the fourth quarter compared to $1.0 million in the third quarter of 2020. At year end, the Company had $3.5 million of unrealized fee income on the first round of PPP loans remaining. Total accretion income was $0.3 million, which was a decline of $0.1 million from the previous quarter. Interest expense was impacted by an additional $0.9 million of interest on the $96 million of subordinated debt that was raised in connection with the pending LINCO acquisition and for general corporate purposes. Excluding this, interest expense declined by $0.5 million in the quarter.

In comparison to the fourth quarter of 2019, net interest income increased $2.5 million, or 7.9%. The increase was primarily the result of higher interest income on loans and lower interest expense outpacing the decline in investment income. Interest expense decreased by $1.4 million compared to the fourth quarter of last year, despite the additional $0.9 million of interest expense on the new subordinated debt.

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.17% for the fourth quarter of 2020, which was flat compared to the prior quarter. Both earning asset yields and cost of funds increased by two basis points. Earning asset yields were impacted by PPP fee income and cost of funds were impacted by the new subordinated debt interest expense. Excluding the subordinated debt interest, the net interest margin would have been 8 basis points higher.

In comparison to the fourth quarter of 2019, the net interest margin decreased 40 basis points with accretion income representing $1.5 million, or 17 basis points of the decline. Earning asset yields were down 66 basis points and average cost of funds declined by 26 basis points compared to the same period.

Loan Portfolio

Total loans ended the quarter at $3.14 billion, representing a decrease of $97.8 million compared to the prior quarter. The decline included $93.4 million of forgiven PPP loans. At year end, the Company had $168.3 million of PPP loans remaining on the balance sheet. For the year, and excluding PPP and acquired loans, loan balances increased $91.8 million, or 3.4%.

The Company continues to see its loan deferrals trending lower. As of January 19, 2021, outstanding deferrals totaled $49.4 million, or 1.6% of the loan portfolio. Hotels represent the largest deferral category at 84% of the total outstanding deferrals. Most remaining deferrals are paying interest with only principal deferred.

Asset Quality

The Companys asset quality measures continue to reflect a strong credit culture. As of December 31, 2020, the allowance for credit losses, excluding $168.3 million of PPP loans, was 1.41% of total loans, the ratio of non-performing loans to total loans was 0.90%, and the allowance for credit losses to non-performing loans was 149.0%. Non-performing loans increased $5.7 million to $28.1 million at quarter end. Non-performing assets to total assets was 0.65% at quarter end. Net charge-offs were $0.6 million during the fourth quarter compared to $0.3 million in the prior quarter. During the quarter, the Company completed a review of all its internally identified COVID watch list loans, including those remaining on or coming off deferrals. The review, along with other changes to classifications unrelated to COVID, resulted in an increase to special mention loans by $31.9 million to $137.8 million and an increase to substandard loans by $4.4 million to $59.5 million. The increases were primarily in the hotel and restaurant sectors. The Company does not currently expect material losses from those specific downgrades that occurred in the quarter. The Companys total past dues improved to 0.44% at year-end 2020 versus 0.55% at the end of the third quarter.

Provision expense was recorded in the amount of $0.6 million in the fourth quarter, in line with net charge-offs. The reserve was flat compared to the prior quarter on a slightly lower loan balance, excluding PPP. The economic outlook has significantly improved for the Agriculture sector, while the COVID driven restrictions continue to provide macro-economic uncertainty in certain sectors.

Deposits

Total deposits ended the quarter at $3.69 billion, which represented an increase of $72.9 million from the prior quarter. Noninterest bearing deposits increased $99.3 million, while interest bearing deposits declined by $26.4 million. The Companys average rate on cost of funds was 0.41% for the quarter compared to 0.39% in the prior quarter and 0.67% in the fourth quarter of 2019. Excluding the interest on the subordinated debt raised during the quarter in connection with the pending LINCO acquisition, the average cost of funds would have been 0.33%.

Noninterest Income

Noninterest income for the fourth quarter of 2020 was $15.5 million compared to $13.6 million in the third quarter. The increase compared to the prior quarter was due to the strong performance in the farm management and real estate areas of the wealth management division and higher insurance and mortgage banking revenues. The strength of First Mids noninterest income continues to be a strategic differentiator providing significant diversification for the Company.

In comparison to the fourth quarter of 2019, noninterest income increased $0.7 million, or 4.5%. The year-over-year increase was driven by wealth management, insurance, debit card fees and mortgage banking income, partially offset by lower service charges, less securities gains and a decline in the other non-interest income category.

Noninterest Expenses

Noninterest expense for the fourth quarter totaled $30.3 million compared to $26.9 million in the third quarter. The current quarter included $0.4 million, or approximately $0.02 EPS, of acquisition related costs. Consistent with the prior year, incentive compensation increased with the seasonal growth for the farm real estate sales within the wealth management business as well as the strong overall financial performance for the quarter.

In comparison to the fourth quarter of 2019, noninterest expenses increased $2.7 million. The increase was primarily due to acquisition costs and higher incentive costs from increased revenues and net income.

The Companys efficiency ratio, on a tax equivalent basis and inclusive of acquisition costs, for the fourth quarter 2020 was 59.0% compared to 54.9% in the prior quarter and 57.2% for the same period last year.

Regulatory Capital Levels and Dividend

The Companys capital levels remained strong and comfortably above the well capitalized levels. Capital levels ended the period as follows:

Total capital to risk-weighted assets 18.82%Tier 1 capital to risk-weighted assets 14.63%Common equity tier 1 capital to risk-weighted assets 14.03%Leverage ratio 10.22%

The Companys Board of Directors has determined it is in the best interest of shareholders to change from its historical semi-annual dividend to a quarterly dividend beginning in 2021. Therefore, the Board of Directors approved a quarterly dividend in the amount of $0.205 payable on March 1, 2021 for shareholders of record on February 19, 2021. The dividend amount is exactly half of the most recent semi-annual dividend that was paid in December.

About First Mid: First Mid Bancshares, Inc. (First Mid) is the parent company of First Mid Bank & Trust, N.A., First Mid Insurance Group, Inc. and First Mid Wealth Management Co. First Mid is a $4.7 billion community-focused organization that provides a full-suite of financial services including banking, wealth management, brokerage, Ag services, and insurance through a sizeable network of locations throughout Illinois and eastern Missouri and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in their work and their ability to serve our customers well over the last 155 years. More information about the Company is available on our website at www.firstmid.com.

Non-GAAP Measures: In addition to reports presented in accordance with generally accepted accounting principles (GAAP), this release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Companys financial performance. Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported. These non-GAAP financial measures are detailed as supplemental tables and include Net Interest Margin, tax equivalent, Tangible Book Value per Common Share, and Common Equity Tier 1 Capital to Risk Weighted Assets. While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP. These non-GAAP financial measures may also differ from the similar measures presented by other companies.

Forward Looking Statements:This document may contain certain forward-looking statements about First Mid Bancshares, Inc. (First Mid) and LINCO Bancshares, Inc., a Missouri corporation (LINCO), such as discussions of First Mids and LINCOs pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. First Mid and LINCO intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1955. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid and LINCO, are identified by use of the words believe, expect, intend, anticipate, estimate, project, or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, the possibility that any of the anticipated benefits of the proposed transactions between First Mid and LINCO will not be realized or will not be realized within the expected time period; the risk that integration of the operations of LINCO 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 obtain the required stockholder approval; the failure to satisfy other conditions to completion of the proposed transactions; the failure of the proposed transactions to close for any other reason; the effect of the announcement of the transaction on customer relationships and operating results; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; changes in interest rates; general economic conditions and those in the market areas of First Mid and LINCO; legislative/regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mids and LINCOs loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid and LINCO; accounting principles, policies and guidelines; the severity, magnitude and duration of COVID-19 pandemic, the direct and indirect impact of such pandemic, including responses to the pandemic by the government, commercial customers' businesses, the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mids and LINCOs liquidity and capital positions, impair the ability of First Mids and LINCOs borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses, and the impact of the COVID-19 pandemic on First Mids and LINCOs financial results, including possible lost revenue and increased expenses (including cost of capital), as well as possible goodwill impairment charges. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mids financial results, are included in First Mids filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

Investor Contact: Aaron HoltVP, Shareholder Relations217-258-0463 aholt@firstmid.com

Matt SmithChief Financial Officer217-258-1528msmith@firstmid.com

Tables Follow

FIRST MID BANCSHARES, INC.Condensed Consolidated Balance Sheets(In thousands, unaudited) As of December 31, September 30, December 31, 2020 2020 2019 Assets Cash and cash $ 417,281 $ 232,385 $ 85,080 equivalentsInvestment securities 887,169 750,122 760,215 Loans (including loans 3,138,419 3,236,247 2,695,347 held for sale)Less allowance for (41,910 ) (41,915 ) (26,911 )loan lossesNet loans 3,096,509 3,194,332 2,668,436 Premises and 58,206 59,356 59,491 equipment, netGoodwill and 128,120 129,287 133,257 intangibles, netBank owned life 68,955 68,519 67,225 insuranceOther assets 70,108 75,127 65,722 Total assets $ 4,726,348 $ 4,509,128 $ 3,839,426 Liabilities and Stockholders' EquityDeposits: Non-interest bearing $ 936,926 $ 837,602 $ 633,331 Interest bearing 2,755,858 2,782,234 2,284,035 Total deposits 3,692,784 3,619,836 2,917,366 Repurchase agreement with 206,937 170,345 208,109 customersOther borrowings 93,969 93,954 118,895 Junior subordinated 19,027 18,985 18,858 debenturesSubordinated debt 94,253 - - Other liabilities 51,150 44,999 49,589 Total liabilities 4,158,120 3,948,119 3,312,817 Total stockholders' 568,228 561,009 526,609 equityTotal liabilities and $ 4,726,348 $ 4,509,128 $ 3,839,426 stockholders' equity

FIRST MID BANCSHARES, INC.Condensed Consolidated Statements of Income(In thousands, except per share data, unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019Interest income:Interest andfees on $ 33,254 $ 31,206 $ 126,814 $ 126,825loansInterest oninvestment 4,226 5,101 16,966 21,043securitiesInterest onfederalfunds sold & 90 214 361 1,853otherdepositsTotalinterest 37,570 36,521 144,141 149,721incomeInterest expense:Interest on 2,617 4,447 12,751 18,939depositsInterest onsecuritiessold under 68 240 488 911agreementstorepurchaseInterest onother 371 610 1,877 2,721borrowingsInterest onjr. 143 240 682 1,476subordinateddebenturesInterest onsubordinated 931 0 931 0debtTotalinterest 4,130 5,537 16,729 24,047expenseNet interest 33,440 30,984 127,412 125,674incomeProvisionfor loan 603 2,737 16,103 6,433lossesNet interestincome after 32,837 28,247 111,309 119,241provisionfor loanNon-interest income:Wealthmanagement 5,232 5,027 16,153 15,570revenuesInsurance 3,477 3,361 17,477 16,029commissionsService 1,527 1,985 5,862 7,837chargesSecurities 193 479 1,106 802gains, netMortgagebanking 1,870 579 5,075 1,746revenuesATM/debit 2,369 2,100 8,962 8,491card revenueOther 879 1,342 4,885 5,542Totalnon-interest 15,547 14,873 59,520 56,017incomeNon-interest expense:Salaries andemployee 19,151 15,942 66,452 62,578benefitsNetoccupancyand 3,962 4,305 16,708 17,680equipmentexpenseNet otherreal estateowned (20 ) 30 42 443(income)expenseFDIC 458 (170 ) 1,309 219insuranceAmortizationof 1,200 1,296 5,062 5,848intangibleassetsStationary 275 269 1,080 1,104and suppliesLegal andprofessional 1,220 1,451 5,427 5,164expenseMarketingand 434 573 1,616 2,031donationsOther 3,651 3,905 13,391 16,925Totalnon-interest 30,331 27,601 111,087 111,992expenseIncomebefore 18,053 15,519 59,742 63,266income taxesIncome taxes 4,484 3,543 14,472 15,323Net income $ 13,569 $ 11,976 $ 45,270 $ 47,943 Per Share InformationBasicearnings per $ 0.81 $ 0.72 $ 2.71 $ 2.88common shareDilutedearnings per 0.81 0.72 2.70 2.87common shareDividendsper common 0.41 0.40 0.81 0.76share Weightedaverage 16,735,926 16,667,370 16,716,880 16,675,269sharesoutstandingDilutedweightedaverage 16,779,129 16,699,876 16,762,856 16,709,476sharesoutstanding

FIRST MID BANCSHARES, INC.Condensed Consolidated Statements of Income(In thousands, except per share data, unaudited) For the Quarter Ended December 31, September June 30, March 31, December 31, 30, 2020 2020 2020 2020 2019 Interest income:Interest andfees on $ 33,254 $ 32,151 $ 31,382 $ 30,027 $ 31,206 loansInterest oninvestment 4,226 4,074 4,077 4,589 5,101 securitiesInterest onfederalfunds sold & 90 70 76 125 214 otherdepositsTotalinterest 37,570 36,295 35,535 34,741 36,521 incomeInterest expense:Interest on 2,617 3,168 3,105 3,861 4,447 depositsInterest onsecuritiessold under 68 68 158 194 240 agreementstorepurchaseInterest onother 371 395 516 595 610 borrowingsInterest onjr. 143 147 174 218 240 subordinateddebenturesInterest onsubordinated 931 - - - - debtTotalinterest 4,130 3,778 3,953 4,868 5,537 expenseNet interest 33,440 32,517 31,582 29,873 30,984 incomeProvisionfor loan 603 3,883 6,136 5,481 2,737 lossesNet interestincome after 32,837 28,634 25,446 24,392 28,247 provisionfor loanNon-interest income:Wealthmanagement 5,232 3,468 3,827 3,626 5,027 revenuesInsurance 3,477 3,291 4,088 6,621 3,361 commissionsService 1,527 1,446 1,111 1,778 1,985 chargesSecurities 193 95 287 531 479 gains, netMortgagebanking 1,870 1,661 1,236 308 579 revenuesATM/debit 2,369 2,367 2,239 1,987 2,100 card revenueOther 879 1,250 1,097 1,659 1,342 Totalnon-interest 15,547 13,578 13,885 16,510 14,873 incomeNon-interest expense:Salaries andemployee 19,151 15,346 15,455 16,500 15,942 benefitsNetoccupancyand 3,962 4,363 4,141 4,242 4,305 equipmentexpenseNet otherreal estateowned (20 ) 110 (2 ) (46 ) 30 (income)expenseFDIC 458 469 289 93 (170 )insuranceAmortizationof 1,200 1,277 1,290 1,295 1,296 intangibleassetsStationary 275 262 275 268 269 and suppliesLegal andprofessional 1,220 1,320 1,489 1,398 1,451 expenseMarketingand 434 387 314 481 573 donationsOther 3,651 3,393 2,847 3,500 3,905 Totalnon-interest 30,331 26,927 26,098 27,731 27,601 expenseIncomebefore 18,053 15,285 13,233 13,171 15,519 income taxesIncome taxes 4,484 3,720 3,096 3,172 3,543 Net income $ 13,569 $ 11,565 $ 10,137 $ 9,999 $ 11,976

FIRST MID BANCSHARES, INC.Consolidated Financial Highlights and Ratios(Dollars in thousands, except per share data)(Unaudited)

As of and for the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2020 2020 2020 2020 2019 Loan Portfolio Construction and $ 122,479 $ 167,515 $ 180,934 $ 123,326 $ 94,142 land developmentFarm real estate 254,341 256,230 251,382 242,891 240,241 loans1-4 Familyresidential 325,762 339,172 342,036 325,128 336,427 propertiesMultifamilyresidential 189,632 139,255 141,015 139,734 153,948 propertiesCommercial real 1,174,300 1,177,571 1,123,540 1,002,868 995,702 estateLoans secured by 2,066,514 2,079,743 2,038,907 1,833,947 1,820,460 real estateAgricultural 137,352 141,074 149,043 139,136 136,124 operating loansCommercial and 738,313 807,668 811,169 565,789 528,973 industrial loansConsumer loans 78,002 80,348 82,084 82,104 83,183 All other loans 118,238 127,414 124,059 123,322 126,607 Total loans 3,138,419 3,236,247 3,205,262 2,744,298 2,695,347 Deposit PortfolioNon-interestbearing demand $ 936,926 $ 837,602 $ 817,623 $ 642,384 $ 633,331 depositsInterest bearing 1,031,183 1,053,691 938,710 827,387 850,956 demand depositsSavings deposits 499,427 485,241 474,545 441,998 428,778 Money Market 748,179 736,262 625,361 441,381 419,801 Time deposits 477,069 507,040 529,588 555,477 584,500 Total deposits 3,692,784 3,619,836 3,385,827 2,908,627 2,917,366 Asset Quality Non-performing $ 28,123 $ 22,439 $ 23,096 $ 24,463 $ 27,818 loansNon-performing 30,616 24,712 25,397 27,306 31,538 assetsNet charge-offs 608 349 631 1,188 2,567 Allowance for loanlosses to 149.02 % 186.80 % 166.18 % 134.39 % 96.74 %non-performingloansAllowance for loanlosses to total 1.41%^1 1.41%^1 1.30%^1 1.20 % 1.00 %loans outstandingNonperformingloans to total 0.90 % 0.69 % 0.72 % 0.89 % 1.03 %loansNonperformingassets to total 0.65 % 0.55 % 0.57 % 0.71 % 0.82 %assets Common Share DataCommon shares 16,741,208 16,731,684 16,728,190 16,702,484 16,673,480 outstandingBook value per $ 33.94 $ 33.53 $ 32.84 $ 31.91 $ 31.58 common shareTangible bookvalue per common 26.29 25.80 25.02 24.00 23.59 shareMarket price of 33.66 24.95 26.23 23.74 35.25 stock Key PerformanceRatios and MetricsEnd of period $ 4,367,717 $ 4,130,186 $ 4,093,511 $ 3,492,271 $ 3,464,144 earning assetsAverage earning 4,238,388 4,113,846 3,942,832 3,451,123 3,464,200 assetsAverage rate onaverage earning 3.58 % 3.56 % 3.68 % 4.11 % 4.24 %assets (taxequivalent)Average rate on 0.41 % 0.39 % 0.43 % 0.60 % 0.67 %cost of fundsNet interestmargin (tax 3.17 % 3.17 % 3.25 % 3.51 % 3.57 %equivalent)Return on 1.18 % 1.03 % 0.94 % 1.05 % 1.25 %average assetsReturn onaverage common 9.66 % 8.31 % 7.47 % 7.48 % 9.17 %equityEfficiency ratio(tax equivalent) 59.02 % 54.85 % 54.27 % 57.14 % 57.23 %^2Full-timeequivalent 824 816 828 835 827 employees ^1 Excludes PaymentProtection Program loans.^2 Represents non-interest expense divided by the sum of fully tax equivalentnet interest income and non-interest income. Non-interest expense adjustmentsexclude foreclosed property expenseand amortization of intangibles.Net-interest income includes tax equivalent adjustments and non-interest incomeexcludes gains and losses on the sale of investment securities.

FIRST MID BANCSHARES, INC.Net Interest Margin(In thousands, unaudited)

For the Quarter Ended December 2020 QTD Average Average Balance Interest RateINTEREST EARNING ASSETS Interest bearing deposits $ 236,894 $ 75 0.13 %Federal funds sold 1,304 - 0.00 %Certificates of deposits 2,695 15 2.21 %investmentsInvestment Securities: Taxable (total less municipals) 581,245 2,647 1.82 %Tax-exempt (Municipals) 240,398 1,997 3.32 %Loans (net of unearned income) 3,175,852 33,436 4.19 % Total interest earning assets 4,238,388 38,170 3.58 % NONEARNING ASSETS Cash and due from banks 86,239 Premises and equipment 58,740 Other nonearning assets 258,129 Allowance for loan losses (43,026 ) Total assets $ 4,598,470 INTEREST BEARING LIABILITIES Demand deposits $ 1,743,053 $ 900 0.21 %Savings deposits 494,802 107 0.09 %Time deposits 491,046 1,610 1.30 %Total interest bearing deposits 2,728,901 2,617 0.38 %Repurchase agreements 189,686 68 0.14 %FHLB advances 93,959 371 1.57 %Federal funds purchased 0 0 0.00 %Subordinated debt 89,128 931 4.16 %Jr. subordinated debentures 18,999 143 2.99 %Other borrowings 0 0 0.00 %Total borrowings 391,772 1,513 1.54 %Total interest bearing liabilities 3,120,673 4,130 0.53 % NONINTEREST BEARING LIABILITIES Demand deposits 867,035 Average cost of 0.41 % fundsOther liabilities 48,684 Stockholders' equity 562,078 Total liabilities & stockholders' $ 4,598,470 equity Net Interest Earnings / Spread $ 34,040 3.05 % Impact of Non-Interest Bearing 0.12 %Funds Tax effected yield on interest earning assets 3.17 %

FIRST MID BANCSHARES, INC.Reconciliation of Non-GAAP Financial Measures(In thousands, unaudited) As of and for the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2020 2020 2020 2020 2019 Net interestincome as $ 33,440 $ 32,517 $ 31,582 $ 29,873 $ 30,984 reportedNet interestincome, (tax 34,040 33,084 32,118 30,393 31,517 equivalent)Averageearning 4,238,388 4,113,846 3,942,832 3,451,123 3,464,200 assetsNet interestmargin (tax 3.17 % 3.17 % 3.25 % 3.51 % 3.57 %equivalent) ^1 Commonstockholder's $ 568,228 $ 561,009 $ 549,273 $ 533,051 $ 526,609 equityGoodwill andintangibles, 128,120 129,287 130,656 132,199 133,257 netCommon shares 16,741 16,732 16,728 16,702 16,673 outstandingTangible BookValue per $ 26.29 $ 25.80 $ 25.02 $ 24.00 $ 23.59 common share Common equitytier 1 $ 439,299 $ 431,342 $ 417,326 $ 410,565 $ 398,536 capitalRisk weighted 3,132,049 3,101,591 3,101,449 2,854,102 2,822,648 assetsCommon equitytier 1 capital 14.03 % 13.91 % 13.46 % 14.39 % 14.12 %to risk weightedassets ^2 ^1 Annualized and calculated on a tax equivalent basis where interest earned ontax-exempt securities and loans is adjusted to an amount comparable to interestsubjectto normal income taxes assuming a federal tax rate of 21% and includesthe impact of non-interest bearing funds. ^2 Defined as total common equity adjusted for gains/(losses) lessgoodwill and intangibles divided by risk weighted assets as of period end.