First Mid Bancshares, Inc 8-K, filed Apr 26, 2023
First Mid Bancshares, Inc. (FMBH)
About this 8-K
First Mid Bancshares, Inc filed this 8-K on April 26, 2023.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
_______________________________
(Exact name of registrant as specified in its charter)
_______________________________
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
_______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
On April 26, 2023, the Company issued a press release to report its results of operations and financial condition as of and for the quarter ended March 31, 2023. A copy of this press release is included in Exhibit 99.1 to this Form 8-K and incorporated into this item 2.02 by reference.
The information furnished pursuant to this Item 2.02 and the related exhibits shall not be deemed "filed" by First Mid for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Forward Looking Statements
This document may contain certain forward-looking statements about First Mid and Blackhawk, such as discussions of First Mid’s and Blackhawk’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. 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 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid and Blackhawk, 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 Blackhawk will not be realized or will not be realized within the expected time period; the risk that integration of the operations of Blackhawk 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 First Mid and Blackhawk; 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 First Mid’s and Blackhawk’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid and Blackhawk; accounting principles, policies and guidelines; and the impact of the global COVID-19 pandemic on First Mid’s or Blackhawk’s businesses, the ability to complete the proposed transactions or any of the other foregoing risks. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mid’s financial results, are included in First Mid’s filings with the 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.
Important Information about the Merger and Additional Information
First Mid will file a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The registration statement will include a proxy statement of Blackhawk that also constitutes a prospectus of First Mid, which will be sent to the shareholders of Blackhawk. Investors in Blackhawk are urged to read the proxy statement/prospectus, which will contain important information, including detailed risk factors, when it becomes available. The proxy statement/prospectus and other documents which will be filed by First Mid with the SEC will be available free of charge at the SEC’s website, www.sec.gov. These documents also can be obtained free of charge by accessing First Mid’s website at www.firstmid.com under the tab “Investors Relations” and then under “SEC Filings.” Alternatively, when available, these documents can be obtained free of charge from First Mid upon written request to First Mid Bancshares, P.O. Box 499, Mattoon, IL 61938, Attention: Investor Relations; or from Blackhawk upon written request to Blackhawk Bancorp, Inc., 400 Broad St., Beloit, WI 53511-6223, Attention: Todd J. James, President & CEO. A final proxy statement/prospectus will be mailed to the shareholders of Blackhawk.
Participants in the Solicitation
First Mid and Blackhawk, and certain of their respective directors, executive officers and other members of management and employees, are participants in the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of First Mid is set forth in the proxy statement for its 2023 annual meeting of stockholders, which was filed with the SEC on March 15, 2023. These documents can be obtained free of charge from the sources provided above. Investors may obtain additional information regarding the interests of such participants in the proposed transactions by reading the proxy statement/prospectus for such proposed transactions when it becomes available.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
(d) Exhibits.
Exhibit Index
| Exhibit No. | Description | |
| 99.1 | Press Release, dated April 26, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FIRST MID BANCSHARES, INC. | ||
| Date: April 26, 2023 | By: | /s/ Joseph R. Dively |
| Joseph R. Dively | ||
| Chairman, President and Chief Executive Officer | ||
EXHIBIT 99.1
First Mid Bancshares, Inc. Announces First Quarter 2023 Results
MATTOON, Ill., April 26, 2023 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended March 31, 2023.
Highlights
- Net income of $19.2 million, or $0.93 diluted EPS
- Adjusted net income (non-GAAP) of $19.7 million, or $0.96 diluted EPS
- Record quarter of insurance revenues reflects unique diversification helping deliver record quarterly noninterest income
- Strong asset quality performance with decline in nonperforming loans and substandard loans, minimal net charge-offs, and past dues down to less than $10 million
- Implemented efficiency improvements and early retirement initiative to deliver annual cost savings of $2.2 million
- Announced the acquisition of Blackhawk Bancorp, Inc. continuing the Company’s diversification strategy and enhancing funding and liquidity profile
- Board of Directors declared regular quarterly dividend of $0.23 per share
“Our unique income diversification helped deliver a solid start to the year,” said Joe Dively, Chairman and Chief Executive Officer. “It was clearly an eventful quarter as we continued our strategic initiatives and managed through the increased challenges in our industry. Financially, the quarter was highlighted by a record quarter in our insurance business, continued strength in our asset quality, and an efficiency initiative that will lower expenses by approximately $2.2 million per year.”
“In addition, after a long history of working together on various customer opportunities and strategic considerations, we announced the merger with Blackhawk Bancorp, Inc. The cultural alignment of the two organizations will make for a smooth integration and help us to maintain the strong customer relationships and commitments to communities Blackhawk has delivered for many years. We are planning to hit the ground running with our broader array of services that customers and employees can be excited about,” Dively concluded.
Net Interest Income
Net interest income for the first quarter of 2023 decreased by $2.5 million, or 5.4% compared to the fourth quarter of 2022. Interest income increased by $3.0 million and interest expense increased by $5.4 million. The increase in interest income was primarily driven by a higher average rate on earning assets. Accretion income decreased by $0.2 million in the period to $0.4 million and ended the quarter with a remaining discount of $6.5 million. The increase in interest expense was primarily driven by higher interest rates and increased competition for funding.
In comparison to the first quarter of 2022, net interest income decreased $0.3 million, or 0.8%. The decrease was primarily the result of funding costs increasing at a faster pace than organic earning asset growth and repricing.
Net Interest Margin
Net interest margin, on a tax equivalent basis, was 2.94% for the first quarter of 2023, which was 13 basis points lower compared to the prior quarter. Earning asset yields increased 25 basis points, while the average cost of funds increased 38 basis points.
In comparison to the first quarter of last year, the net interest margin decreased 13 basis points, with earning asset yields higher by 99 basis points and average cost of funds higher by 112 basis points.
Loan Portfolio
Total loans ended the quarter at $4.76 billion, representing a decrease of $65.6 million compared to the prior quarter. The decrease was primarily due to elevated payoffs in commercial real estate from customer asset sales and the seasonal nature of agriculture operating loans. In addition, line of credit draws decreased by $34.0 million in the quarter, which was driven by higher rates and strong customer balance sheets. The loan pipeline still has solid opportunities, but customers are expressing some caution due to continued economic uncertainty, and we expect growth to moderate from prior periods.
Asset Quality
The Company has strength in its long-standing and disciplined credit culture, which allows it to remain consistent in underwriting regardless of the economic cycle. Asset quality metrics for March 31, 2023 reflect those efforts. The allowance for credit losses at the end of the quarter was flat from the prior period at 1.22% of total loans. Also at quarter end, the ratio of non-performing loans to total loans was down to 0.32%, and the allowance for credit losses to non-performing loans was 384%. The ratio of nonperforming assets to total assets was down to 0.29% at quarter end. Nonperforming loans and nonperforming assets both decreased in the period. The Company recognized minimal net charge-offs during the first quarter.
Provision expense was recorded as a credit of $0.8 million in the first quarter. The credit was primarily driven by the decline in loan balances, decline in substandard loans, and a decline in past dues, partially offset by an increase in qualitative factors for the growing uncertainty on the macro-economic conditions. The allowance totaled $58.2 million at the end of the quarter, which represents significantly more than the $37.2 million of total cumulative net charge-offs the Company has experienced over the last 20 years.
Deposits
Total deposits ended the quarter at $5.03 billion, which represented a decrease of $226.2 million from the prior quarter. Noninterest-bearing deposits increased by $5.7 million in the quarter. A majority of the overall deposit decline in the period was attributable to one customer. As previously mentioned, the Company received approximately $225 million of deposits in the third quarter of last year related to a customer’s sale of certain assets. These funds were known to be temporary deposits on the Company’s balance sheet as they would be deployed for capital and operating needs of the customer. Most of this outflow occurred during the period with approximately $50 million of the balance remaining as of March 31, 2023. The Company has no other large customer deposit concentrations similar to this one. The Company has not lost a customer related to the industry’s deposit security concerns subsequent to the bank failures in March. Approximately 99% of the Company’s deposit accounts are less than $250,000. The average account balance for all deposit customers is approximately $25,000. The percentage of deposits that were uninsured at quarter end was 25.9%.
Outside of the previously mentioned customer, deposit flows throughout the quarter were relatively similar to prior periods where rate competition was a key determinant to the migration. Late in the first quarter, the Company saw an increase in the competitive landscape resulting in higher matching and promotional rates to normalize deposit flows. In addition, deposit security became a more common discussion topic, and the Company met customer needs and maintained deposit relationships by moving approximately $93 million of deposits into the Intrafi Network for the FDIC insurance coverage.
Noninterest Income
Noninterest income for the first quarter of 2023 was $22.5 million compared to $18.2 million in the fourth quarter of 2022. The increase compared to the prior quarter was primarily due to both organic and seasonal growth within the insurance business and approximately $0.7 million in a bank owned life insurance claim. Insurance and wealth management revenues represented 62% of total noninterest income reflecting the diversification of our revenue sources. Noninterest income represented approximately 34.2% of total revenue in the period.
In comparison to the first quarter of 2022, noninterest income increased $1.4 million, or 6.6%. The year-over-year increase was driven by strong growth in our insurance business of $1.4 million and a bank owned life insurance claim of $0.7 million, partially offset by lower wealth management and mortgage income.
Noninterest Expenses
Noninterest expense for the first quarter of 2023 totaled $41.6 million compared to $39.4 million in the fourth quarter. The increase was primarily driven by $0.7 million of nonrecurring acquisition and severance related costs and higher producer incentive-based compensation tied to the record high insurance revenue. During the quarter, the Company implemented an efficiency initiative. This project resulted in nonrecurring severance costs of $0.5 million recorded in the period and will result in approximately $2.2 million of ongoing annual savings.
In comparison to the first quarter of 2022, noninterest expenses increased $1.2 million. The increase was primarily due to a full quarter of expenses from the Jefferson acquisition, higher incentive-based compensation tied to insurance revenues, and overall inflationary pressures.
The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the first quarter 2023 was 59.0% compared to 58.1% in the prior quarter and 58.6% for the same period last year.
Capital Levels and Dividend
The Company’s capital levels remained strong and comfortably above the “well capitalized” levels. Capital levels ended the period as follows:
| Total capital to risk-weighted assets | 15.74% |
| Tier 1 capital to risk-weighted assets | 12.88% |
| Common equity tier 1 capital to risk-weighted assets | 12.51% |
| Leverage ratio | 9.89% |
The Company’s Board of Directors approved a regular quarterly dividend in the amount of $0.23 payable on June 1, 2023 for shareholders of record on May 17, 2023.
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 $6.7 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, Missouri and Texas, and a loan production office in the greater Indianapolis area. Together, the First Mid team takes great pride in their work and their ability to serve customers well over the last 158 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 Company’s financial performance. Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported. These non-GAAP financial measures are detailed as supplemental tables and include “Adjusted Net Income,” “Adjusted Diluted EPS,” “Efficiency Ratio,” “Net Interest Margin, tax equivalent,” and “Tangible Book Value per Common Share”. 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 and Blackhawk, such as discussions of First Mid’s and Blackhawk’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. 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 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid and Blackhawk, 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 Blackhawk will not be realized or will not be realized within the expected time period; the risk that integration of the operations of Blackhawk 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 First Mid and Blackhawk; 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 First Mid’s and Blackhawk’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid and Blackhawk; accounting principles, policies and guidelines; and the impact of the global COVID-19 pandemic on First Mid’s or Blackhawk’s businesses, the ability to complete the proposed transactions or any of the other foregoing risks. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mid’s financial results, are included in First Mid’s filings with the 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.
Important Information about the Merger and Additional Information
First Mid will file a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The registration statement will include a proxy statement of Blackhawk that also constitutes a prospectus of First Mid, which will be sent to the shareholders of Blackhawk. Investors in Blackhawk are urged to read the proxy statement/prospectus, which will contain important information, including detailed risk factors, when it becomes available. The proxy statement/prospectus and other documents which will be filed by First Mid with the SEC will be available free of charge at the SEC’s website, www.sec.gov. These documents also can be obtained free of charge by accessing First Mid’s website at www.firstmid.com under the tab “Investors Relations” and then under “SEC Filings.” Alternatively, when available, these documents can be obtained free of charge from First Mid upon written requestto First Mid Bancshares, P.O. Box 499, Mattoon, IL 61938, Attention: Investor Relations; or from Blackhawk upon written request to Blackhawk Bancorp, Inc., 400 Broad Street, Beloit, WI 53511, Attention: Todd J. James, President & CEO. A final proxy statement/prospectus will be mailed to the shareholders of Blackhawk.
Participants in the Solicitation
First Mid and Blackhawk, and certain of their respective directors, executive officers and other members of management and employees, are participants in the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of First Mid is set forth in the proxy statement for its 2023 annual meeting of stockholders, which was filed with the SEC on March 15, 2023. These documents can be obtained free of charge from the sources provided above. Investors may obtain additional information regarding the interests of such participants in the proposed transactions by reading the proxy statement/prospectus for such proposed transactions when it becomes available.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Investor Contact:
Aaron Holt
VP, Shareholder Relations
217-258-0463
aholt@firstmid.com
Matt Smith
Chief Financial Officer
217-258-1528
msmith@firstmid.com
| FIRST MID BANCSHARES, INC. | ||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||
| (In thousands, unaudited) | ||||||||||||
| As of | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 169,134 | $ | 152,433 | $ | 223,980 | ||||||
| Investment securities | 1,217,754 | 1,223,720 | 1,472,277 | |||||||||
| Loans (including loans held for sale) | 4,760,631 | 4,826,212 | 4,454,561 | |||||||||
| Less allowance for credit losses | (58,223 | ) | (59,093 | ) | (58,474 | ) | ||||||
| Net loans | 4,702,408 | 4,767,119 | 4,396,087 | |||||||||
| Premises and equipment, net | 90,178 | 90,473 | 89,319 | |||||||||
| Goodwill and intangibles, net | 168,373 | 169,897 | 174,499 | |||||||||
| Bank owned life insurance | 151,366 | 151,756 | 149,041 | |||||||||
| Other assets | 183,637 | 188,817 | 126,803 | |||||||||
| Total assets | $ | 6,682,850 | $ | 6,744,215 | $ | 6,632,006 | ||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Deposits: | ||||||||||||
| Non-interest bearing | $ | 1,262,181 | $ | 1,256,514 | $ | 1,373,881 | ||||||
| Interest bearing | 3,768,597 | 4,000,487 | 4,113,424 | |||||||||
| Total deposits | 5,030,778 | 5,257,001 | 5,487,305 | |||||||||
| Repurchase agreement with customers | 228,664 | 221,414 | 187,326 | |||||||||
| Other borrowings | 595,021 | 465,071 | 126,396 | |||||||||
| Junior subordinated debentures | 19,406 | 19,364 | 19,237 | |||||||||
| Subordinated debt | 94,593 | 94,553 | 94,438 | |||||||||
| Other liabilities | 52,523 | 53,657 | 50,919 | |||||||||
| Total liabilities | 6,020,985 | 6,111,060 | 5,965,621 | |||||||||
| Total stockholders' equity | 661,865 | 633,155 | 666,385 | |||||||||
| Total liabilities and stockholders' equity | $ | 6,682,850 | $ | 6,744,215 | $ | 6,632,006 | ||||||
| FIRST MID BANCSHARES, INC. | ||||||||
| Condensed Consolidated Statements of Income | ||||||||
| (In thousands, except per share data, unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| Interest income: | ||||||||
| Interest and fees on loans | $ | 56,236 | $ | 39,908 | ||||
| Interest on investment securities | 7,127 | 7,170 | ||||||
| Interest on federal funds sold & other deposits | 308 | 67 | ||||||
| Total interest income | 63,671 | 47,145 | ||||||
| Interest expense: | ||||||||
| Interest on deposits | 12,767 | 2,148 | ||||||
| Interest on securities sold under agreements to repurchase | 1,463 | 67 | ||||||
| Interest on other borrowings | 4,883 | 276 | ||||||
| Interest on jr. subordinated debentures | 379 | 146 | ||||||
| Interest on subordinated debt | 988 | 986 | ||||||
| Total interest expense | 20,480 | 3,623 | ||||||
| Net interest income | 43,191 | 43,522 | ||||||
| Provision for credit losses | (817 | ) | 2,952 | |||||
| Net interest income after provision for loan | 44,008 | 40,570 | ||||||
| Non-interest income: | ||||||||
| Wealth management revenues | 5,514 | 5,975 | ||||||
| Insurance commissions | 8,480 | 7,104 | ||||||
| Service charges | 2,203 | 2,056 | ||||||
| Net securities gains/(losses) | (46 | ) | 0 | |||||
| Mortgage banking revenues | 150 | 444 | ||||||
| ATM/debit card revenue | 3,083 | 2,898 | ||||||
| Other | 3,095 | 2,611 | ||||||
| Total non-interest income | 22,479 | 21,088 | ||||||
| Non-interest expense: | ||||||||
| Salaries and employee benefits | 26,071 | 24,302 | ||||||
| Net occupancy and equipment expense | 6,005 | 6,155 | ||||||
| Net other real estate owned (income) expense | 133 | (33 | ) | |||||
| FDIC insurance | 463 | 426 | ||||||
| Amortization of intangible assets | 1,522 | 1,522 | ||||||
| Stationary and supplies | 292 | 311 | ||||||
| Legal and professional expense | 1,690 | 1,734 | ||||||
| ATM/debit card expense | 1,223 | 1,078 | ||||||
| Marketing and donations | 654 | 873 | ||||||
| Other | 3,524 | 4,020 | ||||||
| Total non-interest expense | 41,577 | 40,388 | ||||||
| Income before income taxes | 24,910 | 21,270 | ||||||
| Income taxes | 5,730 | 4,654 | ||||||
| Net income | $ | 19,180 | $ | 16,616 | ||||
| Per Share Information | ||||||||
| Basic earnings per common share | $ | 0.94 | $ | 0.86 | ||||
| Diluted earnings per common share | 0.93 | 0.86 | ||||||
| Weighted average shares outstanding | 20,492,254 | 19,295,860 | ||||||
| Diluted weighted average shares outstanding | 20,563,972 | 19,358,457 | ||||||
| FIRST MID BANCSHARES, INC. | |||||||||||||||||
| Condensed Consolidated Statements of Income | |||||||||||||||||
| (In thousands, except per share data, unaudited) | |||||||||||||||||
| For the Quarter Ended | |||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||
| Interest income: | |||||||||||||||||
| Interest and fees on loans | $ | 56,236 | $ | 53,128 | $ | 49,278 | $ | 43,555 | $ | 39,908 | |||||||
| Interest on investment securities | 7,127 | 7,285 | 7,302 | 7,623 | 7,170 | ||||||||||||
| Interest on federal funds sold & other deposits | 308 | 296 | 174 | 105 | 67 | ||||||||||||
| Total interest income | 63,671 | 60,709 | 56,754 | 51,283 | 47,145 | ||||||||||||
| Interest expense: | |||||||||||||||||
| Interest on deposits | 12,767 | 9,227 | 4,915 | 2,523 | 2,148 | ||||||||||||
| Interest on securities sold under agreements to repurchase | 1,463 | 1,163 | 428 | 137 | 67 | ||||||||||||
| Interest on other borrowings | 4,883 | 3,345 | 1,927 | 645 | 276 | ||||||||||||
| Interest on jr. subordinated debentures | 379 | 315 | 241 | 166 | 146 | ||||||||||||
| Interest on subordinated debt | 988 | 987 | 986 | 986 | 986 | ||||||||||||
| Total interest expense | 20,480 | 15,037 | 8,497 | 4,457 | 3,623 | ||||||||||||
| Net interest income | 43,191 | 45,672 | 48,257 | 46,826 | 43,522 | ||||||||||||
| Provision for credit losses | (817 | ) | 805 | 142 | 907 | 2,952 | |||||||||||
| Net interest income after provision for loan | 44,008 | 44,867 | 48,115 | 45,919 | 40,570 | ||||||||||||
| Non-interest income: | |||||||||||||||||
| Wealth management revenues | 5,514 | 6,201 | 4,843 | 5,473 | 5,975 | ||||||||||||
| Insurance commissions | 8,480 | 4,719 | 4,158 | 5,641 | 7,104 | ||||||||||||
| Service charges | 2,203 | 2,375 | 2,445 | 2,236 | 2,056 | ||||||||||||
| Securities gains, net | (46 | ) | (48 | ) | 79 | 2 | - | ||||||||||
| Mortgage banking revenues | 150 | 65 | 355 | 289 | 444 | ||||||||||||
| ATM/debit card revenue | 3,083 | 3,209 | 3,101 | 3,214 | 2,898 | ||||||||||||
| Other | 3,095 | 1,686 | 1,810 | 1,704 | 2,611 | ||||||||||||
| Total non-interest income | 22,479 | 18,207 | 16,791 | 18,559 | 21,088 | ||||||||||||
| Non-interest expense: | |||||||||||||||||
| Salaries and employee benefits | 26,071 | 23,610 | 24,877 | 25,768 | 24,302 | ||||||||||||
| Net occupancy and equipment expense | 6,005 | 6,126 | 5,903 | 6,073 | 6,155 | ||||||||||||
| Net other real estate owned (income) expense | 133 | 87 | 58 | 218 | (33 | ) | |||||||||||
| FDIC insurance | 463 | 464 | 479 | 436 | 426 | ||||||||||||
| Amortization of intangible assets | 1,522 | 1,537 | 1,598 | 1,633 | 1,522 | ||||||||||||
| Stationary and supplies | 292 | 298 | 361 | 325 | 311 | ||||||||||||
| Legal and professional expense | 1,690 | 1,607 | 1,770 | 1,885 | 1,734 | ||||||||||||
| ATM/debit card expense | 1,223 | 1,309 | 1,243 | 670 | 1,078 | ||||||||||||
| Marketing and donations | 654 | 681 | 739 | 706 | 873 | ||||||||||||
| Other | 3,524 | 3,653 | 4,521 | 3,801 | 4,020 | ||||||||||||
| Total non-interest expense | 41,577 | 39,372 | 41,549 | 41,515 | 40,388 | ||||||||||||
| Income before income taxes | 24,910 | 23,702 | 23,357 | 22,963 | 21,270 | ||||||||||||
| Income taxes | 5,730 | 3,063 | 5,418 | 5,205 | 4,654 | ||||||||||||
| Net income | $ | 19,180 | $ | 20,639 | $ | 17,939 | $ | 17,758 | $ | 16,616 | |||||||
| Per Share Information | |||||||||||||||||
| Basic earnings per common share | $ | 0.94 | $ | 1.01 | $ | 0.88 | $ | 0.87 | $ | 0.86 | |||||||
| Diluted earnings per common share | 0.93 | 1.01 | 0.88 | 0.86 | 0.86 | ||||||||||||
| Weighted average shares outstanding | 20,492,254 | 20,461,046 | 20,454,669 | 20,448,799 | 19,295,860 | ||||||||||||
| Diluted weighted average shares outstanding | 20,563,972 | 20,535,220 | 20,535,215 | 20,529,523 | 19,358,457 | ||||||||||||
| FIRST MID BANCSHARES, INC. | |||||||||||||||||||
| Consolidated Financial Highlights and Ratios | |||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Loan Portfolio | |||||||||||||||||||
| Construction and land development | $ | 159,157 | $ | 144,264 | $ | 142,801 | $ | 141,072 | $ | 131,504 | |||||||||
| Farm real estate loans | 401,957 | 410,327 | 360,424 | 350,159 | 280,993 | ||||||||||||||
| 1-4 Family residential properties | 424,545 | 440,180 | 436,625 | 424,230 | 417,232 | ||||||||||||||
| Multifamily residential properties | 301,808 | 294,346 | 298,321 | 330,600 | 369,926 | ||||||||||||||
| Commercial real estate | 2,003,647 | 2,030,011 | 1,996,338 | 1,976,654 | 1,965,321 | ||||||||||||||
| Loans secured by real estate | 3,291,114 | 3,319,128 | 3,234,509 | 3,222,715 | 3,164,976 | ||||||||||||||
| Agricultural operating loans | 146,847 | 166,838 | 160,511 | 142,406 | 121,708 | ||||||||||||||
| Commercial and industrial loans | 1,078,021 | 1,082,960 | 1,064,033 | 1,036,987 | 935,454 | ||||||||||||||
| Consumer loans | 88,430 | 97,775 | 100,783 | 94,828 | 89,685 | ||||||||||||||
| All other loans | 156,219 | 159,511 | 160,454 | 151,727 | 142,738 | ||||||||||||||
| Total loans | 4,760,631 | 4,826,212 | 4,720,290 | 4,648,663 | 4,454,561 | ||||||||||||||
| Deposit Portfolio | |||||||||||||||||||
| Non-interest bearing demand deposits | $ | 1,262,181 | $ | 1,256,514 | $ | 1,334,686 | $ | 1,369,756 | $ | 1,373,881 | |||||||||
| Interest bearing demand deposits | 1,419,791 | 1,389,283 | 1,364,306 | 1,453,932 | 1,482,556 | ||||||||||||||
| Savings deposits | 639,691 | 636,699 | 657,592 | 683,944 | 685,228 | ||||||||||||||
| Money Market | 878,452 | 1,267,726 | 1,443,060 | 1,158,724 | 1,280,129 | ||||||||||||||
| Time deposits | 830,663 | 706,779 | 683,554 | 652,622 | 665,511 | ||||||||||||||
| Total deposits | 5,030,778 | 5,257,001 | 5,483,198 | 5,318,978 | 5,487,305 | ||||||||||||||
| Asset Quality | |||||||||||||||||||
| Non-performing loans | $ | 15,163 | $ | 19,170 | $ | 20,812 | $ | 19,981 | $ | 22,465 | |||||||||
| Non-performing assets | 19,225 | 23,539 | 25,143 | 24,190 | 27,269 | ||||||||||||||
| Net charge-offs (recoveries) | 53 | 489 | 440 | 307 | (5 | ) | |||||||||||||
| Allowance for credit losses to non-performing loans | 383.98 | % | 308.26 | % | 282.42 | % | 295.66 | % | 260.29 | % | |||||||||
| Allowance for credit losses to total loans outstanding | 1.22 | % | 1.22 | % | 1.25 | % | 1.27 | % | 1.31 | % | |||||||||
| Nonperforming loans to total loans | 0.32 | % | 0.40 | % | 0.44 | % | 0.43 | % | 0.50 | % | |||||||||
| Nonperforming assets to total assets | 0.29 | % | 0.35 | % | 0.38 | % | 0.36 | % | 0.41 | % | |||||||||
| Special Mention loans | 47,022 | 39,853 | 25,298 | 35,849 | 64,160 | ||||||||||||||
| Substandard and Doubtful loans | 29,931 | 34,352 | 37,378 | 38,155 | 38,801 | ||||||||||||||
| Common Share Data | |||||||||||||||||||
| Common shares outstanding | 20,519,717 | 20,452,376 | 20,454,636 | 20,448,799 | 20,437,183 | ||||||||||||||
| Book value per common share | $ | 32.26 | $ | 30.96 | $ | 29.37 | $ | 30.63 | $ | 32.61 | |||||||||
| Tangible book value per common share (2) | 24.05 | 22.65 | 21.01 | 22.17 | 24.07 | ||||||||||||||
| Market price of stock | 27.22 | 32.08 | 31.97 | 35.67 | 38.49 | ||||||||||||||
| Key Performance Ratios and Metrics | |||||||||||||||||||
| End of period earning assets | $ | 5,995,674 | $ | 6,063,953 | $ | 5,975,619 | $ | 6,024,815 | $ | 6,038,542 | |||||||||
| Average earning assets | 6,052,264 | 6,000,106 | 6,063,061 | 5,975,821 | 5,817,752 | ||||||||||||||
| Average rate on average earning assets (tax equivalent) | 4.32 | % | 4.07 | % | 3.77 | % | 3.50 | % | 3.33 | % | |||||||||
| Average rate on cost of funds | 1.38 | % | 1.00 | % | 0.56 | % | 0.30 | % | 0.26 | % | |||||||||
| Net interest margin (tax equivalent) (2) | 2.94 | % | 3.07 | % | 3.21 | % | 3.20 | % | 3.07 | % | |||||||||
| Return on average assets | 1.15 | % | 1.24 | % | 1.07 | % | 1.08 | % | 1.05 | % | |||||||||
| Return on average common equity | 12.11 | % | 13.51 | % | 11.18 | % | 11.02 | % | 9.95 | % | |||||||||
| Efficiency ratio (tax equivalent) (2) | 59.01 | % | 58.07 | % | 59.64 | % | 58.45 | % | 58.59 | % | |||||||||
| Full-time equivalent employees | 988 | 1,043 | 1,051 | 1,025 | 1,050 | ||||||||||||||
| 1 Excludes Paycheck Protection Loans | |||||||||||||||||||
| 2 Non-GAAP financial measure. Refer to reconciliation to the comparable GAAP measure. | |||||||||||||||||||
| FIRST MID BANCSHARES, INC. | |||||||||
| Net Interest Margin | |||||||||
| (In thousands, unaudited) | |||||||||
| For the Quarter Ended March 31, 2023 | |||||||||
| QTD Average | Average | ||||||||
| Balance | Interest | Rate | |||||||
| INTEREST EARNING ASSETS | |||||||||
| Interest bearing deposits | $ | 15,688 | $ | 209 | 5.40 | % | |||
| Federal funds sold | 7,753 | 85 | 4.45 | % | |||||
| Certificates of deposits investments | 1,789 | 14 | 3.17 | % | |||||
| Investment Securities: | |||||||||
| Taxable (total less municipals) | 957,951 | 5,163 | 2.16 | % | |||||
| Tax-exempt (Municipals) | 280,828 | 2,486 | 3.54 | % | |||||
| Loans (net of unearned income) | 4,788,255 | 56,469 | 4.78 | % | |||||
| Total interest earning assets | 6,052,264 | 64,426 | 4.32 | % | |||||
| NONEARNING ASSETS | |||||||||
| Cash and due from banks | 135,145 | ||||||||
| Premises and equipment | 90,345 | ||||||||
| Other nonearning assets | 475,022 | ||||||||
| Allowance for loan losses | (59,558 | ) | |||||||
| Total assets | $ | 6,693,218 | |||||||
| INTEREST BEARING LIABILITIES | |||||||||
| Demand deposits | $ | 2,504,073 | $ | 9,655 | 1.56 | % | |||
| Savings deposits | 640,347 | 191 | 0.12 | % | |||||
| Time deposits | 699,328 | 2,921 | 1.69 | % | |||||
| Total interest bearing deposits | 3,843,748 | 12,767 | 1.35 | % | |||||
| Repurchase agreements | 231,012 | 1,463 | 2.57 | % | |||||
| FHLB advances | 540,156 | 4,874 | 3.66 | % | |||||
| Federal funds purchased | 778 | 9 | 4.69 | % | |||||
| Subordinated debt | 94,567 | 987 | 4.23 | % | |||||
| Jr. subordinated debentures | 19,385 | 379 | 7.93 | % | |||||
| Other debt | - | - | 0.00 | % | |||||
| Total borrowings | 885,898 | 7,712 | 3.53 | % | |||||
| Total interest bearing liabilities | 4,729,646 | 20,479 | 1.76 | % | |||||
| NONINTEREST BEARING LIABILITIES | |||||||||
| Demand deposits | 1,273,527 | Average cost of funds | 1.38 | % | |||||
| Other liabilities | 56,456 | ||||||||
| Stockholders' equity | 633,589 | ||||||||
| Total liabilities & stockholders' equity | $ | 6,693,218 | |||||||
| Net Interest Earnings / Spread | $ | 43,947 | 2.56 | % | |||||
| Impact of Non-Interest Bearing Funds | 0.38 | % | |||||||
| Tax effected yield on interest earning assets | 2.94 | % | |||||||
| FIRST MID BANCSHARES, INC. | |||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||
| (In thousands, unaudited) | |||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Net interest income as reported | $ | 43,191 | $ | 45,672 | $ | 48,257 | $ | 46,826 | $ | 43,522 | |||||||||
| Net interest income, (tax equivalent) | 43,947 | 46,464 | 49,060 | 47,625 | 44,292 | ||||||||||||||
| Average earning assets | 6,052,264 | 6,000,106 | 6,063,061 | 5,975,821 | 5,817,752 | ||||||||||||||
| Net interest margin (tax equivalent) | 2.94 | % | 3.07 | % | 3.21 | % | 3.20 | % | 3.07 | % | |||||||||
| Common stockholder's equity | $ | 661,865 | $ | 633,155 | $ | 600,715 | $ | 626,268 | $ | 666,385 | |||||||||
| Goodwill and intangibles, net | 168,373 | 169,897 | 170,897 | 172,871 | 174,499 | ||||||||||||||
| Common shares outstanding | 20,520 | 20,452 | 20,455 | 20,449 | 20,437 | ||||||||||||||
| Tangible Book Value per common share | $ | 24.05 | $ | 22.65 | $ | 21.01 | $ | 22.17 | $ | 24.07 | |||||||||
| FIRST MID BANCSHARES, INC. | |||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||
| (In thousands, except per share data, unaudited) | |||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Adjusted earnings Reconciliation | |||||||||||||||||||
| Net Income - GAAP | $ | 19,180 | $ | 20,639 | $ | 17,939 | $ | 17,758 | $ | 16,616 | |||||||||
| Adjustments (post-tax): (1) | |||||||||||||||||||
| Acquisition ACL on non-PCD assets in provision expense | - | - | - | - | 1,580 | ||||||||||||||
| Nonrecurring severance expense | 416 | - | - | - | - | ||||||||||||||
| Integration and acquisition expenses | 135 | 131 | 524 | 777 | 469 | ||||||||||||||
| Total non-recurring adjustments (non-GAAP) | $ | 551 | $ | 131 | $ | 524 | $ | 777 | $ | 2,049 | |||||||||
| Adjusted earnings - non-GAAP | $ | 19,731 | $ | 20,770 | $ | 18,463 | $ | 18,535 | $ | 18,665 | |||||||||
| Adjusted diluted earnings per share (non-GAAP) | $ | 0.96 | $ | 1.01 | $ | 0.90 | $ | 0.90 | $ | 0.96 | |||||||||
| Efficiency Ratio Reconciliation | |||||||||||||||||||
| Noninterest expense - GAAP | $ | 41,577 | $ | 39,372 | $ | 41,549 | $ | 41,515 | $ | 40,388 | |||||||||
| Other real estate owned property income (expense) | (133 | ) | (87 | ) | (58 | ) | (218 | ) | 33 | ||||||||||
| Amortization of intangibles | (1,522 | ) | (1,537 | ) | (1,598 | ) | (1,633 | ) | (1,522 | ) | |||||||||
| Nonrecurring severance expense | (527 | ) | - | - | - | - | |||||||||||||
| Integration and acquisition expenses | (171 | ) | (166 | ) | (663 | ) | (983 | ) | (594 | ) | |||||||||
| Adjusted noninterest expense (non-GAAP) | $ | 39,224 | $ | 37,582 | $ | 39,230 | $ | 38,681 | $ | 38,305 | |||||||||
| Net interest income -GAAP | $ | 43,192 | $ | 45,672 | $ | 48,257 | $ | 46,826 | $ | 43,522 | |||||||||
| Effect of tax-exempt income (1) | 755 | 792 | 803 | 799 | 770 | ||||||||||||||
| Adjusted net interest income (non-GAAP) | $ | 43,947 | $ | 46,464 | $ | 49,060 | $ | 47,625 | $ | 44,292 | |||||||||
| Noninterest income - GAAP | $ | 22,479 | $ | 18,207 | $ | 16,791 | $ | 18,559 | $ | 21,088 | |||||||||
| Net (gain)/loss on securities sales | 46 | 48 | (79 | ) | (2 | ) | - | ||||||||||||
| Adjusted noninterest income (non-GAAP) | $ | 22,525 | $ | 18,255 | $ | 16,712 | $ | 18,557 | $ | 21,088 | |||||||||
| Adjusted total revenue (non-GAAP) | $ | 66,472 | $ | 64,719 | $ | 65,772 | $ | 66,182 | $ | 65,380 | |||||||||
| Efficiency ratio (non-GAAP) | 59.01 | % | 58.07 | % | 59.64 | % | 58.45 | % | 58.59 | % | |||||||||
| (1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%. | |||||||||||||||||||