GlobeNewswire Inc | Jul 30, 2020 08:00AM EDT

July 30, 2020

MATTOON, Ill., July 30, 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 June 30, 2020.

Highlights

-- Net income of $10.1 million, or $0.60 diluted EPS -- Organic loan growth up 8.5% year-over-year, excluding Paycheck Protection Program (PPP) and loans acquired April 21st (the Acquired Loans) -- Strong start with the Acquired Loans and lenders in the St. Louis metro market -- Continued supporting our communities with $260 million in total loans under the PPP

I am proud of the strength and perseverance of the First Mid team as we have played and continue to play a key role in the support and success of the customers and communities we serve, said Joe Dively, Chairman and Chief Executive Officer. Our SBA expertise, along with our commitment to our communities, has allowed us to gain a significant number of new customers through the Paycheck Protection Program that will provide long-term value.

We delivered another solid quarter of financial results despite a reserve build for the uncertain macro-economic conditions. The team of commercial lenders and loan relationships we acquired in the second quarter have integrated successfully and are off to a great start. As our markets have either partially or fully reopened, our commercial customers who were most impacted by the shelter-in-place orders are seeing positive trends in their businesses. While it is early in the process, approximately 80% of borrowers who have ended their initial 90-day deferral program have not needed extensions, Dively added.

Finally, as you can see from our historical and consistent performance through various cycles, we have a very experienced underwriting team with a laser focus on asset quality. While this may be a headwind to growth during booming economic times, this culture and philosophy outperforms in periods such as the current cycle. When you combine our credit quality with our strong balance sheet and capital, we are uniquely positioned to not only manage the uncertainties that lie ahead, but also to take advantage of all opportunities to enhance shareholder value, Dively concluded.

Net Interest Income

Net interest income for the second quarter of 2020 increased by $1.7 million, or 5.7% compared to the first quarter of 2020. Interest income increased by $0.8 million and interest expense decreased $0.9 million. The increase in interest income was primarily driven by the growth in balances from the Acquired Loans and PPP loans, partially offset by less securities income, lower loan yields and less accretion income. Total accretion income was $0.5 million, which was a decline of $0.3 million from the previous quarter. Interest expense declined due to the changes made to rates following the Federal Reserve cutting rates in March, including maturing CDs and Federal Home Loan Bank advances.

In comparison to the second quarter of 2019, net interest income increased $0.3 million, or 0.9%. The increase was primarily attributable to a $2.3 million decline in interest expense, partially offset by lower interest income with accretion income down $2.1 million from the same quarter last year.

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.25% for the second quarter of 2020 compared to 3.51% in the prior quarter. The PPP loans carry a 1% interest rate and were dilutive to the margin by approximately 16 basis points in the quarter. In addition, total accretion of $0.5 million for the second quarter was down from $0.8 million in the prior quarter. Excluding the PPP and accretion income, net interest margin declined by 5 basis points in the quarter with lower yields on earning assets partially offset by lower funding costs.

In comparison to the second quarter of 2019, net interest margin decreased 39 basis points. The year-over-year decrease was primarily due to the impact of the PPP loans and a $2.1 million decline in accretion income. Excluding PPP loans and accretion income, net interest margin increased one basis point in the current period compared to the second quarter of 2019.

Loan Portfolio

Total loans ended the quarter at $3.21 billion, representing an increase of $461.0 million compared to the prior quarter. The second quarter ending balance included approximately $259.6 million in PPP loans. Excluding the PPP loans and the $183.0 million in Acquired Loans, balances increased organically by approximately $18.4 million. On a year-over-year basis, loans increased $658.7 million, or 25.9%. Excluding PPP and Acquired Loans, balances increased $216.1 million, or 8.5%.

The Company has a diversified loan portfolio. The Company decided to continue to provide additional disclosures on industry segments with escalated monitoring and stress testing from the COVID-19 shelter in place. At quarter end, the more vulnerable sectors due to COVID-19, excluding PPP loans, were: 1) Retail Shopping/Strip centers, which represented 4.2% of outstanding loans, 2) Hotels, which represented 4.1% of outstanding loans, and 3) Restaurants, which represented 3.0% 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.

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 deferral program to select borrowers upon request primarily in the commercial real estate market. In addition, the Company offered a residential mortgage and consumer principal and interest deferral program. As of July 17th, 2020, approximately 80%, or $141.3 million, of the $177.5 million in deferred loans that reached the end of the original deferral period were not extended to a new deferral period. After reaching a peak of approximately $424.0 million in deferrals, the Company had total outstanding deferrals of $282.6 million, or 8.8% of total outstanding loans on July 17th, 2020.

The Company will continue to monitor and grant additional deferrals based upon the facts and circumstances of each borrowers financial position. These loan deferrals and modifications have been executed consistent with the CARES Act and are not included in our non-performing loans.

Asset Quality

The Companys asset quality measures continue to reflect a strong credit culture. The allowance for loan losses, excluding $259.6 million of PPP loans, was 1.30% of total loans. Also, the remaining fair value mark on certain acquired loans represents seven basis points in addition to the current allowance. The ratio of non-performing loans to total loans was 0.72%, and the allowance for loan losses to non-performing loans was 166.2%. Non-performing loans declined $1.4 million to $23.1 million at quarter end. Non-performing assets to total assets declined to 0.57%. Net charge-offs were $0.6 million during the second quarter compared to $1.2 million in the prior quarter.

Provision expense was recorded in the amount of $6.1 million in the second quarter reflecting $5.5 million of a reserve build above the $0.6 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.

Deposits

Total deposits ended the quarter at $3.39 billion, which represented an increase of $477.2 million from the prior quarter. The increase includes approximately $160.0 million of funding under the depository agreement setup for the acquired loans. The Companys average rate on cost of funds was 0.43% for the quarter compared to 0.60% in the first quarter and 0.76% in the second quarter of 2019. Total interest-bearing deposit costs declined by 17 basis points in the first quarter 2020 and declined by 32 basis points year-over-year.

Noninterest Income

Noninterest income for the second quarter of 2020 was $13.9 million compared to $16.5 million in the first quarter and $13.6 million in the second quarter of last year. The decrease compared to first quarter was primarily driven by the timing of insurance revenues, which are seasonally higher in the first quarter. Excluding insurance revenues, noninterest income was essentially flat in the second quarter 2020. In addition, the current period included a negative $0.2 million mortgage servicing rights valuation adjustment.

In comparison to the second quarter of 2019, noninterest income increased $0.3 million, or 2.2% with increases in insurance, wealth management, and mortgage banking more than offsetting declines in services charges and late fees recorded in other income. The Companys fee businesses continue to provide significant diversification and are a valuable and consistent income generator. Our First Mid Wealth Management division ended the quarter with $4.1 billion in assets under management.

Noninterest Expenses

Noninterest expense for the second quarter totaled $26.1 million compared to $27.7 million in the first quarter and $30.2 million in the second quarter last year. The current quarter was lower than the first quarter primarily due to the seasonality of our business lines as well as the deferral of loan origination costs related to the PPP loans.

The second quarter of 2019 included $2.4 million of costs related to the Soy Capital acquisition and integration versus $0.1 million of acquisition costs in the current period. The remaining year-over-year decline was primarily driven by lower occupancy and equipment costs, less OREO expense, and lower amortization of intangibles.

The Company will be closing two branches in the third quarter of 2020 as part of its ongoing initiative to optimize its branch network and manage its cost structure. The continued increase in the use of the Companys advanced digital platform and the location of other nearby First Mid locations is expected to minimize any disruption to the customer.

The Companys efficiency ratio, on a tax equivalent basis, for the second quarter 2020 improved to 54.3% compared to 57.1% in the prior quarter and 62.3% for the same period last year.

Regulatory Capital Levels

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 15.19%Tier 1 capital to risk-weighted assets 14.07%Common equity tier 1 capital to risk-weighted assets 13.46%Leverage ratio 10.43%

Capital levels declined in the period compared to the prior quarter as the Company paid its semi-annual dividend of $0.40 per share in June and the balance sheet increased from both organic growth and Acquired Loans.

About Us: First Mid Bancshares, Inc. (First Mid) is the parent company of First Mid Bank & Trust, N.A., First Mid Insurance Group, Inc. and First Mid Wealth Management Co. Our mission is to fulfill the financial needs of our communities with exceptional personal service, professionalism and integrity, and deliver meaningful value and results for our customers and shareholders.

First Mid is a $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. Our stock is traded in The NASDAQ Stock Market LLC under the ticker symbol FMBH.

Non-GAAP Measures: In addition to reports presented in accordance with generally accepted accounting principles (GAAP), this release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the 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, such as discussions of First Mids pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses, planned schedules and impacts from COVID-19. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1955. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid, are identified by use of the words believe, expect, intend, anticipate, estimate, project, or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative/regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mids loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; accounting principles, policies and guidelines; the severity, magnitude and duration of the COVID-19 pandemic; the direct and indirect impact of such pandemic, including responses to the pandemic by the government, businesses and consumers, on First Mids operations and personnel, commercial activity and demand across First Mids business and customers businesses; the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mids liquidity and capital positions, impair the ability of First Mids 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 financial results, including possible lost revenue and increased expenses (including the cost of capital), as well as possible goodwill impairment charges. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mids financial results, are included in First Mids filings with the Securities and Exchange Commission (the SEC), including its Annual Reports on Form 10-K. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

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

Tables Follow

FIRST MID BANCSHARES, INC.Condensed Consolidated Balance Sheets(In thousands, unaudited) As of June 30, December 31, June 30, 2020 2019 2019 Assets Cash and cash equivalents $ 238,487 $ 85,080 $ 168,416 Investment securities 727,154 760,215 833,763 Loans (including loans 3,205,262 2,695,347 2,546,543 held for sale)Less allowance for loan (38,381 ) (26,911 ) (26,359 )lossesNet loans 3,166,881 2,668,436 2,520,184 Premises and equipment, 58,905 59,491 59,898 netGoodwill and intangibles, 130,656 133,257 135,762 netBank owned life insurance 68,084 67,225 66,347 Other assets 68,144 65,722 58,471 Total assets $ 4,458,311 $ 3,839,426 $ 3,842,841 Liabilities and Stockholders' EquityDeposits: Non-interest bearing $ 817,623 $ 633,331 $ 603,823 Interest bearing 2,568,204 2,284,035 2,408,667 Total deposits 3,385,827 2,917,366 3,012,490 Repurchase agreement with 350,288 208,109 152,264 customersOther borrowings 103,939 118,895 95,826 Junior subordinated 18,942 18,858 29,084 debenturesOther liabilities 50,042 49,589 44,219 Total liabilities 3,909,038 3,312,817 3,333,883 Total stockholders' 549,273 526,609 508,958 equityTotal liabilities and $ 4,458,311 $ 3,839,426 $ 3,842,841 stockholders' equity

FIRST MID BANCSHARES, INC.Condensed Consolidated Statements of Income(In thousands, except per share data, unaudited) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019Interest income:Interest andfees on $ 31,382 $ 31,539 $ 61,409 $ 63,643loansInterest oninvestment 4,077 5,436 8,666 10,645securitiesInterest onfederalfunds sold & 76 596 201 1,334otherdepositsTotalinterest 35,535 37,571 70,276 75,622incomeInterest expense:Interest on 3,105 4,940 6,966 9,318depositsInterest onsecuritiessold under 158 215 352 475agreementstorepurchaseInterest onother 516 697 1,111 1,420borrowingsInterest onsubordinated 174 406 392 844debtTotalinterest 3,953 6,258 8,821 12,057expenseNet interest 31,582 31,313 61,455 63,565incomeProvisionfor loan 6,136 91 11,617 1,038lossesNet interestincome after 25,446 31,222 49,838 62,527provisionfor loanNon-interest income:Wealthmanagement 3,827 3,587 7,453 7,232revenuesInsurance 4,088 3,760 10,709 9,315commissionsService 1,111 1,959 2,889 3,761chargesSecurities 287 218 818 272gains, netMortgagebanking 1,236 346 1,544 585revenuesATM/debit 2,239 2,202 4,226 4,218card revenueOther 1,097 1,516 2,756 2,844Totalnon-interest 13,885 13,588 30,395 28,227incomeNon-interest expense:Salaries andemployee 15,455 15,565 31,955 32,139benefitsNetoccupancyand 4,141 4,543 8,383 8,998equipmentexpenseNet otherreal estateowned (2 ) 188 (48 ) 241(income)expenseFDIC 289 197 382 476insuranceAmortizationof 1,290 1,823 2,585 3,179intangibleassetsStationary 275 264 543 551and suppliesLegal andprofessional 1,489 1,304 2,887 2,498expenseMarketingand 314 481 795 935donationsOther 2,847 5,822 6,347 9,480Totalnon-interest 26,098 30,187 53,829 58,497expenseIncomebefore 13,233 14,623 26,404 32,257income taxesIncome taxes 3,096 3,642 6,268 7,960Net income $ 10,137 $ 10,981 $ 20,136 $ 24,297 Per Share InformationBasicearnings per $ 0.61 $ 0.66 $ 1.21 $ 1.46common shareDilutedearnings per 0.60 0.66 1.20 1.45common share Weightedaverage 16,709,886 16,683,194 16,701,536 16,674,646sharesoutstandingDilutedweightedaverage 16,756,794 16,717,974 16,748,444 16,709,426sharesoutstanding

FIRST MID BANCSHARES, INC.Condensed Consolidated Statements of Income(In thousands, except per share data, unaudited) For the Quarter Ended June 30, March 31, December 31, September June 30, 30, 2020 2020 2019 2019 2019Interest income:Interest andfees on $ 31,382 $ 30,027 $ 31,206 $ 31,976 $ 31,539loansInterest oninvestment 4,077 4,589 5,101 5,297 5,436securitiesInterest on federalfunds sold & other 125 214 305 596depositsTotalinterest 35,535 34,741 36,521 37,578 37,571incomeInterest expense:Interest on 3,105 3,861 4,447 5,174 4,940depositsInterest on securitiessold under agreements 194 240 196 215to repurchaseInterest onother 516 595 610 691 697borrowingsInterest onsubordinated 174 218 240 392 406debtTotalinterest 3,953 4,868 5,537 6,453 6,258expenseNet interest 31,582 29,873 30,984 income 31,125 31,313Provisionfor loan 6,136 5,481 2,737 2,658 91lossesNet interest income after provision for 24,392 28,247 28,467 31,222loanNon-interest income:Wealthmanagement 3,827 3,626 5,027 3,311 3,587revenuesInsurance 4,088 6,621 3,361 3,353 3,760commissionsService 1,111 1,778 1,985 2,091 1,959chargesSecurities 287 531 479 51 218gains, netMortgagebanking 1,236 308 579 582 346revenuesATM/debit 2,239 1,987 2,100 2,173 2,202card revenueOther 1,097 1,659 1,342 1,356 1,516Totalnon-interest 13,885 16,510 14,873 12,917 13,588incomeNon-interest expense:Salaries andemployee 15,455 16,500 15,942 14,497 15,565benefitsNetoccupancyand 4,141 4,242 4,305 4,377 4,543equipmentexpenseNet other real estate (46 ) 30 172 188owned (income) expenseFDIC 289 93 (170 ) (87 ) 197insuranceAmortizationof 1,290 1,295 1,296 1,373 1,823intangibleassetsStationary 275 268 269 284 264and suppliesLegal andprofessional 1,489 1,398 1,451 1,215 1,304expenseMarketingand 314 481 573 523 481donationsOther 2,847 3,500 3,905 3,540 5,822Totalnon-interest 26,098 27,731 27,601 25,894 30,187expenseIncomebefore 13,233 13,171 15,519 15,490 14,623income taxesIncome taxes 3,096 3,172 3,543 3,820 3,642Net income $ 10,137 $ 9,999 $ 11,976 $ $ 11,670 10,981

FIRST MID BANCSHARES, INC.Consolidated Financial Highlights and Ratios(Dollars in thousands, except per share data)(Unaudited) As of and for the Quarter Ended June 30, March 31, December 31, September 30, June 30, 2020 2020 2019 2019 2019 Loan Portfolio Construction and $ 180,934 $ 123,326 $ 94,142 $ 68,821 $ 57,069 land developmentFarm real estate 251,382 242,891 240,241 229,715 229,924 loans1-4 Familyresidential 342,036 325,128 336,427 347,370 355,143 propertiesMultifamilyresidential 141,015 139,734 153,948 154,859 167,709 propertiesCommercial real 1,123,540 1,002,868 995,702 954,992 888,711 estateLoans secured by 2,038,907 1,833,947 1,820,460 1,755,757 1,698,556 real estateAgricultural 149,043 139,136 136,124 121,650 118,216 operating loansCommercial and 811,169 565,789 528,973 543,937 530,405 industrial loansConsumer loans 82,084 82,104 83,183 83,171 84,907 All other loans 124,059 123,322 126,607 119,043 114,459 Total loans 3,205,262 2,744,298 2,695,347 2,623,558 2,546,543 Deposit PortfolioNon-interestbearing demand $ 817,623 $ 642,384 $ 633,331 $ 596,518 $ 603,823 depositsInterest bearing 938,710 827,387 850,956 899,763 844,931 demand depositsSavings deposits 474,545 441,998 428,778 431,497 438,769 Money Market 625,361 441,381 419,801 435,517 473,160 Time deposits 529,588 555,477 584,500 625,630 651,807 Total deposits 3,385,827 2,908,627 2,917,366 2,988,925 3,012,490 Asset Quality Non-performing $ 23,096 $ 24,463 $ 27,818 $ 24,203 $ 25,773 loansNon-performing 25,397 27,306 31,538 28,645 29,380 assetsNet charge-offs 631 1,188 2,567 2,276 436 Allowance for loanlosses to 166.18 % 134.39 % 96.74 % 110.49 % 102.27 %non-performingloansAllowance for loanlosses to total 1.30%^1 1.20 % 1.00 % 1.02 % 1.04 %loans outstandingNonperformingloans to total 0.72 % 0.89 % 1.03 % 0.92 % 1.01 %loansNonperformingassets to total 0.57 % 0.71 % 0.82 % 0.75 % 0.77 %assets Common Share DataCommon shares 16,728,190 16,702,484 16,673,480 16,663,095 16,694,316 outstandingBook value per $ 32.84 $ 31.91 $ 31.58 $ 31.32 $ 30.49 common shareTangible bookvalue per common 25.02 24.00 23.59 23.25 22.35 shareMarket price of 26.23 23.74 35.25 34.62 34.92 stock Key PerformanceRatios and MetricsEnd of period $ 4,093,511 $ 3,492,271 $ 3,464,144 $ 3,444,775 $ 3,447,695 earning assetsAverage earning 3,942,832 3,451,123 3,464,200 3,444,088 3,470,776 assetsAverage rate onaverage earning 3.68 % 4.11 % 4.24 % 4.39 % 4.40 %assets (taxequivalent)Average rate on 0.43 % 0.60 % 0.67 % 0.79 % 0.76 %cost of fundsNet interestmargin (tax 3.25 % 3.51 % 3.57 % 3.60 % 3.64 %equivalent)Return on 0.94 % 1.05 % 1.25 % 1.22 % 1.15 %average assetsReturn onaverage common 7.47 % 7.48 % 9.17 % 9.04 % 8.80 %equityEfficiency ratio(tax equivalent) 54.27 % 57.14 % 57.23 % 54.69 % 62.31 %^2Full-timeequivalent 828 835 827 830 826 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 expense and 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 June 2020 QTD Average Average Balance Interest RateINTEREST EARNING ASSETS Interest bearing deposits $ 152,090 $ 55 0.15 %Federal funds sold 1,069 - 0.00 %Certificates of deposits 4,154 21 2.03 %investmentsInvestment Securities: Taxable (total less municipals) 507,466 2,751 2.17 %Tax-exempt (Municipals) 182,585 1,678 3.68 %Loans (net of unearned income) 3,095,468 31,566 4.10 % Total interest earning assets 3,942,832 36,071 3.68 % NONEARNING ASSETS Cash and due from banks 80,492 Premises and equipment 59,155 Other nonearning assets 254,386 Allowance for loan losses (36,215 ) Total assets $ 4,300,650 INTEREST BEARING LIABILITIES Demand deposits $ 1,464,173 $ 697 0.19 %Savings deposits 465,281 98 0.08 %Time deposits 541,413 2,310 1.72 %Total interest bearing deposits 2,470,867 3,105 0.51 %Repurchase agreements 301,810 158 0.21 %FHLB advances 114,368 505 1.78 %Federal funds purchased 0 0 0.00 %Subordinated debt 18,915 174 3.70 %Other borrowings 1,868 11 2.37 %Total borrowings 436,961 848 0.78 %Total interest bearing liabilities 2,907,828 3,953 0.55 % NONINTEREST BEARING LIABILITIES Demand deposits 799,332 Average cost of 0.43 % fundsOther liabilities 50,804 Stockholders' equity 542,686 Total liabilities & stockholders' $ 4,300,650 equity Net Interest Earnings / Spread $ 32,118 3.13 % Impact of Non-Interest Bearing 0.12 %Funds Tax effected yield on interest 3.25 %earning assets

FIRST MID BANCSHARES, INC.Reconciliation of Non-GAAP Financial Measures(In thousands, unaudited) As of and for the Quarter Ended June 30, March 31, December 31, September 30, June 30, 2020 2020 2019 2019 2019 Net interestincome as $ 31,582 $ 29,873 $ 30,984 $ 31,125 $ 31,313 reportedNet interestincome, (tax 32,118 30,393 31,517 31,659 31,850 equivalent)Average earning 3,942,832 3,451,123 3,464,200 3,444,088 3,470,776 assetsNet interestmargin (tax 3.25 % 3.51 % 3.57 % 3.60 % 3.64 %equivalent) ^1 Commonstockholder's $ 549,273 $ 533,051 $ 526,609 $ 521,959 $ 508,958 equityGoodwill and 130,656 132,199 133,257 134,461 135,762 intangibles, netCommon shares 16,728 16,702 16,673 16,663 16,695 outstandingTangible BookValue per common $ 25.02 $ 24.00 $ 23.59 $ 23.25 $ 22.35 share Common equity $ 417,326 $ 410,565 $ 398,536 $ 391,429 $ 379,581 tier 1 capitalRisk weighted 3,101,449 2,854,102 2,822,648 2,923,245 2,935,236 assetsCommon equitytier 1 capital 13.46 % 14.39 % 14.12 % 13.39 % 12.93 %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 interestsubject to 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.