GlobeNewswire Inc | Oct 29, 2020 08:01AM EDT

October 29, 2020

MATTOON, Ill., Oct. 29, 2020 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the Company) today announced its financial results for the quarter and year-to-date period ended September 30, 2020.

Highlights

-- Net income of $11.6 million, or $0.69 diluted EPS -- Loan growth of 1% with strong asset quality metrics -- Announced the pending acquisition of LINCO Bancshares, Inc. -- Completed a public offering of $96.0 million of fixed-to-floating rate subordinated notes in early October -- Board approves next semi-annual dividend at $0.41, an increase of 2.5% -- Awarded Central/Southern Illinois SBA Lender of the Year for 7th consecutive year -- Named Americas Best Bank in Illinois by Newsweek

The third quarter was an eventful one for First Mid as we delivered strong financial results and announced the pending acquisition of LINCO Bancshares, Inc. (LINCO) and its subsidiary Providence Bank, said Joe Dively, Chairman and Chief Executive Officer. In addition, in early October, we completed a $96.0 million subordinated notes offering with pricing at 3.95% fixed-to-floating due 2030. We were extremely pleased with the demand and execution of the offering.

We were excited to receive the recognition from both the SBA and Newsweek. Our team has done an excellent job in adding value to our customers whether it has been navigating through the multiple stimulus options or expanding the relationships through the many services we have to offer. Despite operating in a more challenging environment, our net interest income was higher by 4.5% and noninterest income increased by 5.1% compared to the same quarter last year. Our asset quality metrics have continued to improve with another decline in non-performing loans and the lowest quarterly net charge-offs in two and a half years. Outstanding loan deferrals have continued to trend lower and are now at 2.2% of outstanding loans. Our strong capital levels increased in the quarter and we are well positioned to continue to execute on our strategic plan, Dively added.

Finally, the acquisition of LINCO will deepen our presence in the St. Louis metro market and expand our geographic diversity into mid-Missouri and Texas. The culture and vision of the two companies align very closely with both organizations having a long history of delivering excellent service to customers and communities. I have been to all of the Providence Bank markets participating in small group meetings with employees and there is excitement about the larger and more diverse set of products to offer the Providence Bank customers, Dively concluded.

Net Interest Income

Net interest income for the third quarter of 2020 increased by $0.9 million, or 3.0% compared to the second quarter of 2020. Interest income increased by $0.8 million and interest expense decreased $0.2 million. The increase in interest income was driven by loan growth and the first full quarter of financial benefits from Paycheck Protection Program (PPP) loans. Total accretion income was $0.4 million, which was a decline of $0.1 million from the previous quarter. Interest expense declined primarily due to lower balances and rates on Federal Home Loan Bank advances and CDs.

In comparison to the third quarter of 2019, net interest income increased $1.4 million, or 4.5%. The increase was primarily the result of higher interest income and lower interest expense outpacing the decline in investment income. Interest expense decreased by $2.7 million compared to the third quarter of last year.

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.17% for the third quarter of 2020 compared to 3.25% in the prior quarter primarily due to the full quarter impact of PPP loans on the balance sheet and the increase in excess liquidity. Earning asset yields declined by 12 basis points on a combination of lower loan and investment yields. Average cost of funds declined by 4 basis points to 0.39%.

In comparison to the third quarter of 2019, net interest margin decreased 43 basis points. Earning asset yields were down 79 basis points on a combination of lower rates, the impact of PPP loans and a decline in accretion income of $2.2 million. Average cost of funds declined by 40 basis points on lower rates in all categories.

Loan Portfolio

Total loans ended the quarter at $3.24 billion, representing an increase of $31.0 million compared to the prior quarter. The third quarter ending balance included approximately $261.7 million in PPP loans. On a year-over-year basis, loans increased $612.7 million, or 23.4%. Excluding PPP and $183.0 million in loans acquired from Stifel Bank in the second quarter of 2020, balances increased $168.0 million, or 6.4%.

The Company has a diversified loan portfolio that lessens the risks from economic challenges in any particular sector. At quarter end, the more vulnerable sectors due to COVID-19, excluding PPP loans, were: 1) Hotels, which represented 4.1% of outstanding loans, 2) Retail Shopping/Strip centers at 4.0% of outstanding loans, and 3) Restaurants, which represented 2.9% of outstanding loans. Most of the largest borrowers in the hotel and restaurant sector own and operate multiple businesses across various industries providing a diverse cash flow stream to support their loans and have provided personal guarantees. First Mids retail loans included borrowers who sell home goods and other products that have performed well throughout the pandemic.

The Company began offering a 90-day principal and interest deferral program primarily for the hotel and restaurant sector in late March. Subsequently, the Company offered a principal only deferral program to select borrowers upon request primarily in the commercial real estate market. For those deferrals that included principal and interest, nearly half continued to pay interest during the deferral period. For any second deferrals, the agreement included only a deferral of principal. The Company also offered a residential mortgage and consumer principal and interest deferral program. As of October 19th, 2020, the Company had total outstanding deferrals of $72.1 million, or 2.2% of total outstanding loans.

Asset Quality

The Companys asset quality measures continue to reflect a strong credit culture. The allowance for credit losses, excluding $261.7 million of PPP loans, was 1.41% of total loans. The ratio of non-performing loans to total loans was 0.69%, and the allowance for credit losses to non-performing loans was 186.8%. Non-performing loans declined $0.7 million to $22.4 million at quarter end. Non-performing assets to total assets declined to 0.55%. Net charge-offs were $0.3 million during the third quarter compared to $0.6 million in the prior quarter.

Provision expense was recorded in the amount of $3.9 million in the third quarter reflecting $3.6 million of a reserve build above the $0.3 million in net charge-offs. This reserve build was recorded under Accounting Standards Update 2016-13 known as the current expected credit loss model. The Companys required allowance for credit loss was calculated using a combination of, among other things, historical loss experience and the uncertainty of future macro-economic conditions and forecasts.

Deposits

Total deposits ended the quarter at $3.62 billion, which represented an increase of $234.0 million from the prior quarter. The increase includes approximately $60.0 million of customer deposits that converted in July to First Mid for the loan relationships acquired from Stifel Bank in the second quarter. In addition, the increase in deposits includes the movement of funds from repurchase agreements, which declined $179.9 million. The Companys average rate on cost of funds was 0.39% for the quarter compared to 0.43% in the prior quarter and 0.79% in the third quarter of 2019.

Noninterest Income

Noninterest income for the third quarter of 2020 was $13.6 million compared to $13.9 million in the second quarter. The decrease compared to prior quarter is tied to the seasonality of the business lines, as the third quarter has historically been the lowest in insurance revenues and there are typically less farm real estate sales in wealth management.

In comparison to the third quarter of 2019, noninterest income increased $0.7 million, or 5.1%. The year-over-year increase was primarily driven by wealth management and mortgage banking income, partially offset by lower service charge revenue.

Noninterest Expenses

Noninterest expense for the third quarter totaled $26.9 million compared to $26.1 million in the second quarter. The increase was primarily due to higher FDIC insurance expense on a change in rates and higher average assets, as well as deferred costs related to PPP that occurred in the second quarter. The third quarter included $0.1 million of acquisition related costs.

In comparison to the third quarter of 2019, noninterest expenses increased $1.0 million. The increase was primarily from higher salaries and benefits costs and an increase in FDIC insurance from higher average assets and 2019 credits.

The Companys efficiency ratio, on a tax equivalent basis, for the third quarter 2020 was 54.9% compared to 54.3% in the prior quarter and 54.7% for the same period last year.

Regulatory Capital Levelsand 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 15.73%Tier 1 capital to risk-weighted assets 14.52%Common equity tier 1 capital to risk-weighted assets 13.91%Leverage ratio 10.33%

The Companys Board of Directors approved its next semi-annual dividend in the amount of $0.41, representing a 2.5% increase. The dividend is payable on December 15, 2020 for shareholders of record on December 1, 2020.

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 $4.5 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, including receipt of required regulatory and other approvals; 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 September 30, December 31, September 30, 2020 2019 2019 Assets Cash and cash equivalents $ 232,385 $ 85,080 $ 108,229 Investment securities 750,122 760,215 811,573 Loans (including loans 3,236,247 2,695,347 2,623,558 held for sale)Less allowance for credit (41,915 ) (26,911 ) (26,741 )lossesNet loans 3,194,332 2,668,436 2,596,817 Premises and equipment, 59,356 59,491 59,724 netGoodwill and intangibles, 129,287 133,257 134,461 netBank owned life insurance 68,519 67,225 66,786 Other assets 75,127 65,722 60,139 Total assets $ 4,509,128 $ 3,839,426 $ 3,837,729 Liabilities and Stockholders' EquityDeposits: Non-interest bearing $ 837,602 $ 633,331 $ 596,518 Interest bearing 2,782,234 2,284,035 2,392,407 Total deposits 3,619,836 2,917,366 2,988,925 Repurchase agreement with 170,345 208,109 174,530 customersOther borrowings 93,954 118,895 80,862 Junior subordinated 18,985 18,858 29,126 debenturesOther liabilities 44,999 49,589 42,327 Total liabilities 3,948,119 3,312,817 3,315,770 Total stockholders' 561,009 526,609 521,959 equityTotal liabilities and $ 4,509,128 $ 3,839,426 $ 3,837,729 stockholders' equity

FIRST MID BANCSHARES, INC.Condensed Consolidated Statements of Income(In thousands, except per share data, unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Interest income:Interest andfees on $ 32,151 $ 31,976 $ 93,560 $ 95,619 loansInterest oninvestment 4,074 5,297 12,740 15,942 securitiesInterest onfederalfunds sold & 70 305 271 1,639 otherdepositsTotalinterest 36,295 37,578 106,571 113,200 incomeInterest expense:Interest on 3,168 5,174 10,134 14,492 depositsInterest onsecuritiessold under 68 196 420 671 agreementstorepurchaseInterest onother 395 691 1,506 2,111 borrowingsInterest onsubordinated 147 392 539 1,236 debtTotalinterest 3,778 6,453 12,599 18,510 expenseNet interest 32,517 31,125 93,972 94,690 incomeProvisionfor loan 3,883 2,658 15,500 3,696 lossesNet interestincome after 28,634 28,467 78,472 90,994 provisionfor loanNon-interest income:Wealthmanagement 3,468 3,311 10,921 10,543 revenuesInsurance 3,291 3,242 14,000 12,557 commissionsService 1,446 2,091 4,335 5,852 chargesSecurities 95 51 913 323 gains, netMortgagebanking 1,661 582 3,205 1,167 revenuesATM/debit 2,367 2,173 6,593 6,391 card revenueOther 1,250 1,467 4,006 4,311 Totalnon-interest 13,578 12,917 43,973 41,144 incomeNon-interest expense:Salaries andemployee 15,346 14,497 47,301 46,636 benefitsNetoccupancyand 4,363 4,377 12,746 13,375 equipmentexpenseNet otherreal estateowned 110 172 62 413 (income)expenseFDIC 469 (87 ) 851 389 insuranceAmortizationof 1,277 1,373 3,862 4,552 intangibleassetsStationary 262 284 805 835 and suppliesLegal andprofessional 1,320 1,215 4,207 3,713 expenseMarketingand 387 1,038 1,182 2,670 donationsOther 3,393 3,025 9,740 11,808 Totalnon-interest 26,927 25,894 80,756 84,391 expenseIncomebefore 15,285 15,490 41,689 47,747 income taxesIncome taxes 3,720 3,820 9,988 11,780 Net income $ 11,565 $ 11,670 $ 31,701 $ 35,967 Per Share InformationBasicearnings per $ 0.69 $ 0.70 $ 1.90 $ 2.16 common shareDilutedearnings per 0.69 0.70 1.89 2.15 common share Weightedaverage 16,728,191 16,684,395 16,710,485 16,677,932 sharesoutstandingDilutedweightedaverage 16,775,099 16,719,175 16,757,393 16,712,712 sharesoutstanding

FIRST MID BANCSHARES, INC.Condensed Consolidated Statements of Income(In thousands, except per share data, unaudited) For the Quarter Ended September June 30, March 31, December 31, September 30, 30, 2020 2020 2020 2019 2019Interest income:Interest andfees on $ 32,151 $ 31,382 $ 30,027 $ 31,206 $ 31,976 loansInterest oninvestment 4,074 4,077 4,589 5,101 5,297 securitiesInterest onfederalfunds sold & 70 76 125 214 305 otherdepositsTotalinterest 36,295 35,535 34,741 36,521 37,578 incomeInterest expense:Interest on 3,168 3,105 3,861 4,447 5,174 depositsInterest onsecuritiessold under 68 158 194 240 196 agreementstorepurchaseInterest onother 395 516 595 610 691 borrowingsInterest onsubordinated 147 174 218 240 392 debtTotalinterest 3,778 3,953 4,868 5,537 6,453 expenseNet interest 32,517 31,582 29,873 30,984 31,125 incomeProvisionfor loan 3,883 6,136 5,481 2,737 2,658 lossesNet interestincome after 28,634 25,446 24,392 28,247 28,467 provisionfor loanNon-interest income:Wealthmanagement 3,468 3,827 3,626 5,027 3,311 revenuesInsurance 3,291 4,088 6,621 3,361 3,353 commissionsService 1,446 1,111 1,778 1,985 2,091 chargesSecurities 95 287 531 479 51 gains, netMortgagebanking 1,661 1,236 308 579 582 revenuesATM/debit 2,367 2,239 1,987 2,100 2,173 card revenueOther 1,250 1,097 1,659 1,342 1,356 Totalnon-interest 13,578 13,885 16,510 14,873 12,917 incomeNon-interest expense:Salaries andemployee 15,346 15,455 16,500 15,942 14,497 benefitsNetoccupancyand 4,363 4,141 4,242 4,305 4,377 equipmentexpenseNet otherreal estateowned 110 (2 ) (46 ) 30 172 (income)expenseFDIC 469 289 93 (170 ) (87 )insuranceAmortizationof 1,277 1,290 1,295 1,296 1,373 intangibleassetsStationary 262 275 268 269 284 and suppliesLegal andprofessional 1,320 1,489 1,398 1,451 1,215 expenseMarketingand 387 314 481 573 523 donationsOther 3,393 2,847 3,500 3,905 3,540 Totalnon-interest 26,927 26,098 27,731 27,601 25,894 expenseIncomebefore 15,285 13,233 13,171 15,519 15,490 income taxesIncome taxes 3,720 3,096 3,172 3,543 3,820 Net income $ 11,565 $ 10,137 $ 9,999 $ 11,976 $ 11,670

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

As of and for the Quarter Ended September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019 Loan Portfolio Construction and $ 167,515 $ 180,934 $ 123,326 $ 94,142 $ 68,821 land developmentFarm real estate 256,230 251,382 242,891 240,241 229,715 loans1-4 Familyresidential 339,172 342,036 325,128 336,427 347,370 propertiesMultifamilyresidential 139,255 141,015 139,734 153,948 154,859 propertiesCommercial real 1,177,571 1,123,540 1,002,868 995,702 954,992 estateLoans secured by 2,079,743 2,038,907 1,833,947 1,820,460 1,755,757 real estateAgricultural 141,074 149,043 139,136 136,124 121,650 operating loansCommercial and 807,668 811,169 565,789 528,973 543,937 industrial loansConsumer loans 80,348 82,084 82,104 83,183 83,171 All other loans 127,414 124,059 123,322 126,607 119,043 Total loans 3,236,247 3,205,262 2,744,298 2,695,347 2,623,558 Deposit PortfolioNon-interestbearing demand $ 837,602 $ 817,623 $ 642,384 $ 633,331 $ 596,518 depositsInterest bearing 1,053,691 938,710 827,387 850,956 899,763 demand depositsSavings deposits 485,241 474,545 441,998 428,778 431,497 Money Market 736,262 625,361 441,381 419,801 435,517 Time deposits 507,040 529,588 555,477 584,500 625,630 Total deposits 3,619,836 3,385,827 2,908,627 2,917,366 2,988,925 Asset Quality Non-performing $ 22,439 $ 23,096 $ 24,463 $ 27,818 $ 24,203 loansNon-performing 24,712 25,397 27,306 31,538 28,645 assetsNet charge-offs 349 631 1,188 2,567 2,276 Allowance forcredit losses to 186.80 % 166.18 % 134.39 % 96.74 % 110.49 %non-performingloansAllowance forcredit losses to 1.41%^1 1.30%^1 1.20 % 1.00 % 1.02 %total loansoutstandingNonperformingloans to total 0.69 % 0.72 % 0.89 % 1.03 % 0.92 %loansNonperformingassets to total 0.55 % 0.57 % 0.71 % 0.82 % 0.75 %assets Common Share DataCommon shares 16,731,684 16,728,190 16,702,484 16,673,480 16,663,095 outstandingBook value per $ 33.53 $ 32.84 $ 31.91 $ 31.58 $ 31.32 common shareTangible bookvalue per common 25.80 25.02 24.00 23.59 23.25 shareMarket price of 24.95 26.23 23.74 35.25 34.62 stock Key PerformanceRatios and MetricsEnd of period $ 4,130,186 $ 4,093,511 $ 3,492,271 $ 3,464,144 $ 3,444,775 earning assetsAverage earning 4,113,846 3,942,832 3,451,123 3,464,200 3,444,088 assetsAverage rate onaverage earning 3.56 % 3.68 % 4.11 % 4.24 % 4.39 %assets (taxequivalent)Average rate on 0.39 % 0.43 % 0.60 % 0.67 % 0.79 %cost of fundsNet interestmargin (tax 3.17 % 3.25 % 3.51 % 3.57 % 3.60 %equivalent)Return on 1.03 % 0.94 % 1.05 % 1.25 % 1.22 %average assetsReturn onaverage common 8.31 % 7.47 % 7.48 % 9.17 % 9.04 %equityEfficiency ratio(tax equivalent) 54.85 % 54.27 % 57.14 % 57.23 % 54.69 %^2Full-timeequivalent 816 828 835 827 830 employees ^1 Excludes Payment Protection 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 September 2020 QTD Average Average Balance Interest RateINTEREST EARNING ASSETS Interest bearing deposits 147,930 $ 51 0.14 %Federal funds sold 1,291 1 0.31 %Certificates of deposits 3,188 18 2.25 %investmentsInvestment Securities: Taxable (total less municipals) 542,821 2,639 1.94 %Tax-exempt (Municipals) 208,937 1,818 3.48 %Loans (net of unearned income) 3,209,679 32,335 4.01 % Total interest earning assets 4,113,846 36,862 3.56 % NONEARNING ASSETS Cash and due from banks 89,108 Premises and equipment 58,905 Other nonearning assets 256,464 Allowance for credit losses (40,051 ) Total assets $ 4,478,272 INTEREST BEARING LIABILITIES Demand deposits $ 1,753,148 $ 1,043 0.24 %Savings deposits 481,128 102 0.08 %Time deposits 525,266 2,023 1.53 %Total interest bearing deposits 2,759,542 3,168 0.46 %Repurchase agreements 183,720 68 0.15 %FHLB advances 98,510 395 1.60 %Federal funds purchased 0 0 0.00 %Subordinated debt 18,957 147 3.08 %Other borrowings 0 0 0.00 %Total borrowings 301,187 610 0.81 %Total interest bearing 3,060,729 3,778 0.49 %liabilities NONINTEREST BEARING LIABILITIES Demand deposits 813,404 Average cost of 0.39 % fundsOther liabilities 47,350 Stockholders' equity 556,789 Total liabilities & $ 4,478,272 stockholders' equity Net Interest Earnings / Spread $ 33,084 3.07 % Impact of Non-Interest Bearing 0.10 %Funds Tax effected yield on interest 3.17 %earning assets

FIRST MID BANCSHARES, INC.Reconciliation of Non-GAAP Financial Measures(In thousands, unaudited) As of and for the Quarter Ended September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019 Net interestincome as $ 32,517 $ 31,582 $ 29,873 $ 30,984 $ 31,125 reportedNet interestincome, (tax 33,084 32,118 30,393 31,517 31,659 equivalent)Averageearning 4,113,846 3,942,832 3,451,123 3,464,200 3,444,088 assetsNet interestmargin (tax 3.17 % 3.25 % 3.51 % 3.57 % 3.60 %equivalent) ^1 Commonstockholder's $ 561,009 $ 549,273 $ 533,051 $ 526,609 $ 521,959 equityGoodwill andintangibles, 129,287 130,656 132,199 133,257 134,461 netCommon shares 16,732 16,728 16,702 16,673 16,663 outstandingTangible BookValue per $ 25.80 $ 25.02 $ 24.00 $ 23.59 $ 23.25 common share Common equitytier 1 $ 431,342 $ 417,326 $ 410,565 $ 398,536 $ 391,429 capitalRisk weighted 3,101,591 3,101,449 2,854,102 2,822,648 2,923,245 assetsCommon equitytier 1capital to 13.91 % 13.46 % 14.39 % 14.12 % 13.39 %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) less goodwill andintangibles divided by risk weighted assets as of period end.