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What changed in FIRST MID BANCSHARES, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FIRST MID BANCSHARES, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+251 added−271 removedSource: 10-K (2025-02-28) vs 10-K (2024-03-06)

Top changes in FIRST MID BANCSHARES, INC.'s 2024 10-K

251 paragraphs added · 271 removed · 223 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

63 edited+13 added−20 removed93 unchanged
Biggest changeOver 50% of the Company’s workforce contributed to its annual United Way campaign which resulted in a total contribution to the United Way of over $133,000. Business Strategies Vision Statement. The Company’s vision statement is to be a nimble, independent, community-focused financial organization committed to quality, growth and earned independence for the benefit of all stakeholders. Growth Strategy.
Biggest changeThe Company’s vision statement is to be a nimble, independent, community-focused financial organization committed to quality, growth and earned independence for the benefit of all stakeholders. Growth Strategy. The Company believes that growth of revenues and its customer base is vital to the goal of increasing the value of its shareholders’ investment.
Trust preferred securities outstanding as of May 19, 2010 that were issued by bank holding companies with total consolidated assets of less than $15 billion, such as the Company, will continue to count as Tier 1 capital. • Provides for new disclosure and other requirements relating to executive compensation and corporate governance. • Changes standards for Federal preemption of state laws related to federally chartered institutions and their subsidiaries. • Provides mortgage reform provisions including (i) a customer’s ability to repay, (ii) restricting variable-rate lending by requiring the ability to repay to be determined for variable-rate loans by requiring lenders to evaluate using the maximum rate that will apply during the first five years of a variable-rate loan term, and (iii) making more loans subject to provisions for higher cost loans and new disclosures. • Creates a financial stability oversight council that will recommend to the Federal Reserve increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity. • Permanently increases the deposit insurance coverage to $250 thousand and allows depository institutions to pay interest on checking accounts. • Requires publicly traded bank holding companies with assets of $10 billion or more to establish a risk committee responsible for enterprise-wide risk management practices. • Limits and regulates, under the provisions of the Act known as the Volker Rule, a financial institution's ability to engage in proprietary trading or to own or invest in certain private equity and hedge funds.
Trust 7 preferred securities outstanding as of May 19, 2010 that were issued by bank holding companies with total consolidated assets of less than $15 billion, such as the Company, will continue to count as Tier 1 capital. • Provides for disclosure and other requirements relating to executive compensation and corporate governance. • Changes standards for Federal preemption of state laws related to federally chartered institutions and their subsidiaries. • Provides mortgage reform provisions including (i) a customer’s ability to repay, (ii) restricting variable-rate lending by requiring the ability to repay to be determined for variable-rate loans by requiring lenders to evaluate using the maximum rate that will apply during the first five years of a variable-rate loan term, and (iii) making more loans subject to provisions for higher cost loans and new disclosures. • Creates a financial stability oversight council that will recommend to the Federal Reserve increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity. • Permanently increases the deposit insurance coverage to $250 thousand and allows depository institutions to pay interest on checking accounts. • Requires publicly traded bank holding companies with assets of $10 billion or more to establish a risk committee responsible for enterprise-wide risk management practices. • Limits and regulates, under the provisions of the Act known as the Volker Rule, a financial institution's ability to engage in proprietary trading or to own or invest in certain private equity and hedge funds.
The extent of the regulators’ powers depends on whether the institution in question is “well-capitalized,” “adequately- capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized.” Depending upon the capital category to which an institution is assigned, the regulators’ corrective powers include: requiring the submission of a capital restoration plan; placing limits on asset growth and restrictions on activities; requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired; restricting transactions with affiliates; restricting the interest rate the institution may pay on deposits; ordering a new election of directors of the institution; requiring that senior executive officers or directors be dismissed; prohibiting the institution from accepting deposits from correspondent banks; requiring the institution to divest certain subsidiaries; prohibiting the payment of principal or interest on subordinated debt; and in the most severe cases, appointing a conservator or receiver for the institution.
The extent of the regulators’ powers depends on whether the institution in question is “well-capitalized,” “adequately- capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized.” Depending upon the capital category to which an institution is assigned, the regulators’ corrective powers include: requiring the submission of a capital restoration plan; placing limits on asset growth and restrictions on activities; requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired; restricting transactions with affiliates; restricting the interest rate the institution may pay on deposits; ordering a new election of directors of the institution; requiring that senior executive officers or directors be dismissed; prohibiting the institution from 9 accepting deposits from correspondent banks; requiring the institution to divest certain subsidiaries; prohibiting the payment of principal or interest on subordinated debt; and in the most severe cases, appointing a conservator or receiver for the institution.
For purposes of these capital standards, Tier 1 capital consists primarily of permanent stockholders’ equity, less intangible assets (other than certain mortgage servicing rights and purchased credit card relationships), and total capital means Tier 1 capital plus certain other debt and equity instruments which do not qualify as Tier 1 capital, limited amounts of unrealized gains on equity securities and a portion of the Company’s allowance for credit losses.
For purposes of these capital standards, Tier 1 capital consists primarily of permanent stockholders’ equity, less intangible assets (other than certain mortgage servicing rights and purchased credit card relationships), and total 8 capital means Tier 1 capital plus certain other debt and equity instruments which do not qualify as Tier 1 capital, limited amounts of unrealized gains on equity securities and a portion of the Company’s allowance for credit losses.
Failure to comply with these laws and regulations could lead to substantial penalties, operating restrictions, and reputational damage to the financial institution. Supplemental Item – Executive Officers of the Registrant The executive officers of the Company are elected annually by the Company’s Board of Directors and are identified below. Name (Age) Position With Company Joseph R.
Failure to comply with these laws and regulations could lead to substantial penalties, operating restrictions, and reputational damage to the financial institution. 10 Supplemental Item – Executive Officers of the Registrant The executive officers of the Company are elected annually by the Company’s Board of Directors and are identified below. Name (Age) Position With Company Joseph R.
A bank holding company that is not also a financial holding company is limited to 8 engaging in banking and such other activities as determined by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.
A bank holding company that is not also a financial holding company is limited to engaging in banking and such other activities as determined by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.
An unsatisfactory record can substantially delay or block the transaction. First Mid Bank received satisfactory CRA ratings from its regulator in its most recent CRA examination. 10 Consumer Laws and Regulations.
An unsatisfactory record can substantially delay or block the transaction. First Mid Bank received satisfactory CRA ratings from its regulator in its most recent CRA examination. Consumer Laws and Regulations.
He was with Consolidated Communications Holdings, Inc. in Mattoon, Illinois from 2003 to May 2011. Michael L. Taylor, age 55, has been Senior Executive Vice President since 2014 and Chief Operating Officer since July 2017. He served as Chief Financial Officer of the Company from 2000 to 2017.
He was with Consolidated Communications Holdings, Inc. in Mattoon, Illinois from 2003 to May 2011. Michael L. Taylor, age 56, has been Senior Executive Vice President since 2014 and Chief Operating Officer since July 2017. He served as Chief Financial Officer of the Company from 2000 to 2017.
During the year ended December 31, 2023, First Mid Bank was not required to increase capital to an amount in excess of the minimum regulatory requirements, and capital ratios exceeded those required for categorization as well-capitalized under the capital adequacy guidelines established by bank regulatory agencies.
During the year ended December 31, 2024, First Mid Bank was not required to increase capital to an amount in excess of the minimum regulatory requirements, and capital ratios exceeded those required for categorization as well-capitalized under the capital adequacy guidelines established by bank regulatory agencies.
He served as Executive Vice President from 2007 to 2014 and as Vice President from 2000 to 2007. He was with AMCORE Bank in Rockford, Illinois from 1996 to 2000. Matthew K. Smith, age 49, has been Executive Vice President of the Company since November 2016 and Chief Financial Officer since July 2017.
He served as Executive Vice President from 2007 to 2014 and as Vice President from 2000 to 2007. He was with AMCORE Bank in Rockford, Illinois from 1996 to 2000. Matthew K. Smith, age 50, has been Executive Vice President of the Company since November 2016 and Chief Financial Officer since July 2017.
Dively, age 64, is the Chairman of the Board of Directors, President and Chief Executive Officer of the Company since January 1, 2014 and the President of First Mid Bank since May 2011. Prior to assuming these positions in the Company, he was the Senior Executive Vice President of the Company beginning in May 2011.
Dively, age 65, is the Chairman of the Board of Directors, President and Chief Executive Officer of the Company since January 1, 2014 and the President of First Mid Bank since May 2011. Prior to assuming these positions in the Company, he was the Senior Executive Vice President of the Company beginning in May 2011.
Beesley, age 52, has been Executive Vice President of the Company and Chief Trust & Wealth Management Officer of First Mid Bank since March 2015 and First Mid Wealth Management Company since July 2018. He served as Senior Vice President from May 2007 to March 2015. Clay M.
Beesley, age 53, has been Executive Vice President of the Company and Chief Trust & Wealth Management Officer of First Mid Bank since March 2015 and First Mid Wealth Management Company since July 2018. He served as Senior Vice President from May 2007 to March 2015. Clay M.
McRae, age 58, has been Executive Vice President of the Company and Executive Vice President, Chief Lending Officer of First Mid Bank since January 2022. He was Chief Credit Officer from January 2017 to December 2021.
McRae, age 59, has been Executive Vice President of the Company and Executive Vice President, Chief Lending Officer of First Mid Bank since January 2022. He was Chief Credit Officer from January 2017 to December 2021.
Dean, age 49, has been Executive Vice President of the Company since January 2019 and Senior Vice President of the Company since 2010 and Senior Vice President and Chief Insurance Services Officer of the First Mid Bank and Chief Executive Officer of First Mid Insurance since September 2014.
Dean, age 50, has been Executive Vice President of the Company since January 2019 and Senior Vice President of the Company since 2010 and Senior Vice President and Chief Insurance Services Officer of the First Mid Bank and Chief Executive Officer of First Mid Insurance since September 2014.
He served as Director of Finance from November 2016 to July 2017. He was Treasurer and Vice President of Finance and Investor Relations with Consolidated Communications, Inc from 1997 to 2016 and with Marine Bank in Springfield, Illinois prior. Eric S.
He served as Director of Finance from November 2016 to July 2017. He was Treasurer and Vice President of Finance and Investor Relations with Consolidated Communications, Inc from 1997 to 2016 and with Marine Bank prior. Eric S.
Rhonda Gatons, age 52, has been Executive Vice President of the Company since April of 2022 and Director of Human Resources since March 2016. Prior to joining the Company, she was the Director of Human Resources at Midland States Bank. Stas R. Wolak, age 48, has been Executive Vice President and the Chief Retail Banking Officer since February 2024.
Rhonda Gatons, age 53, has been Executive Vice President of the Company since April of 2022 and Director of Human Resources since March 2016. Prior to joining the Company, she was the Director of Human Resources at Midland States Bank. Stas R. Wolak, age 49, has been Executive Vice President and the Chief Retail Banking Officer since February 2024.
The Commitment to the Communities program encourages employees to be engaged in the communities where they live and work. In 2023, the Company’s employees volunteered 19,066 hours to organizations in their communities. The Company also encourages employees to serve in leadership roles in these organizations as part of their professional development.
The Commitment to the Communities program encourages employees to be engaged in the communities where they live and work. In 2024, the Company’s employees volunteered 22,321 hours to organizations in their communities, compared to 19,066 hours in 2023. The Company also encourages employees to serve in leadership roles in these organizations as part of their professional development.
The Senior Loan Committee, consisting of the senior management, must approve all underwriting decisions in excess of $10 million and up to $30 million. The Board of Directors must approve all underwriting decisions in excess of $30 million. The legal lending limit for First Mid Bank was $128.1 million at December 31, 2023.
The Senior Loan Committee, consisting of the senior management, must approve all underwriting decisions in excess of $10 million and up to $30 million. The Board of Directors must approve all underwriting decisions in excess of $30 million. The legal lending limit for First Mid Bank was $132.1 million at December 31, 2024.
During the years ended December 31, 2023, 2022, and 2021 the Company expensed supervisory fees totaling $703,000, $868,000, and $745,000, respectively. Changes in total expense are due to changes in assessment rates and increases in total assets of First Mid Bank. 9 Capital Requirements.
During the years ended December 31, 2024, 2023, and 2022 the Company expensed supervisory fees totaling $774,000, $703,000, and $868,000, respectively. Changes in total expense are due to changes in assessment rates and increases in total assets of First Mid Bank. Capital Requirements.
First Mid Bank's total risk-based capital ratio was 14.22%, Tier 1 risk-based ratio was 13.17%, common equity Tier 1 ratio was 13.17% and leverage ratio was 10.23%. Prompt Corrective Action. Federal law provides the federal banking regulators with broad power to take prompt corrective action to resolve the problems of undercapitalized institutions.
First Mid Bank's total risk-based capital ratio was 14.51%, Tier 1 risk-based ratio was 13.40%, common equity Tier 1 ratio was 13.40% and leverage ratio was 10.82%. Prompt Corrective Action. Federal law provides the federal banking regulators with broad power to take prompt corrective action to resolve the problems of undercapitalized institutions.
As described above, First Mid Bank exceeded minimum capital requirements under applicable guidelines as of December 31, 2023. As of December 31, 2023, approximately $82.1 million was available to be paid as dividends to the Company by First Mid Bank.
As described above, First Mid Bank exceeded minimum capital requirements under applicable guidelines as of December 31, 2024. As of December 31, 2024, approximately $74.5 million was available to be paid as dividends to the Company by First Mid Bank.
As an FDIC-insured institution, banks are required to pay deposit insurance premium assessments to the FDIC. A number of requirements with respect to the FDIC insurance system have affected results, including insurance assessment rates. The Company expensed $3,339,000, $1,805,000 and $1,604,000 for its insurance assessment during 2023, 2022, and 2021 respectively. OCC Assessments.
As an FDIC-insured institution, banks are required to pay deposit insurance premium assessments to the FDIC. A number of requirements with respect to the FDIC insurance system have affected results, including insurance assessment rates. The Company expensed $3.5 million, $3.3 million and $1.8 million for its insurance assessment during 2024, 2023, and 2022 respectively. OCC Assessments.
As of December 31, 2023, the Company had regulatory capital, calculated on a consolidated basis, in excess of the Federal Reserve Board’s minimum requirements, and its capital ratios exceeded those required for categorization as well-capitalized under the capital adequacy guidelines established by bank regulatory agencies with a total risk-based capital ratio of 14.84%, a Tier 1 risk-based ratio of 12.02%, a common equity Tier 1 capital ratio of 11.62% and a leverage ratio of 9.33%.
As of December 31, 2024, the Company had regulatory capital, calculated on a consolidated basis, in excess of the Federal Reserve Board’s minimum requirements, and its capital ratios exceeded those required for categorization as well-capitalized under the capital adequacy guidelines established by bank regulatory agencies with a total risk-based capital ratio of 15.37%, a Tier 1 risk-based ratio of 12.82%, a common equity Tier 1 capital ratio of 12.42% and a leverage ratio of 10.33%.
The Company offers a wide array of benefits for its employees including: • Medical, Dental, and Vision Insurance Plans • Flexible Spending Accounts • Health Savings Accounts with a Company Matching Contribution • Company provided Life Insurance • Company provided Long Term Disability • Company provided Premier Checking Account • 401(k) Plan including a Company Match • Profit Sharing Contribution • Employee Stock Purchase Plan with an Employee Discount • Voluntary Ancillary Insurance Plans • Paid Time Off (Vacation, Sick, Volunteer and Personal Time) • Maternity/Paternity Paid Leave • Tuition Reimbursement • Computer Purchase Program • Dress Professional Program 4 • Service Anniversary/Retirement Recognition & Award • Chairman’s Award – Top Peer Recognition • Volunteer Time Recognition • Company Apparel – Company Pays 50% • Opportunity for Bonus and Stock awards • Employee Referral Program Encouraging Volunteerism The Company invests in and contributes to the growth and development of its communities.
The Company continues to offer a wide array of benefits for its employees including: • Medical, Dental, and Vision Insurance Plans • Flexible Spending Accounts • Health Savings Accounts with a Company Matching Contribution • Company provided Life and AD&D Insurance • Company provided Long Term Disability • Company provided Employee Assistance Program • Company provided Checking Account • 401(k) Plan including a Company Match • Employee Stock Purchase Plan with an Employee Discount • Voluntary Ancillary Insurance Plans (Employee, Spouse, and Child Life and AD&D, Short-Term Disability, Accident, and Critical Illness) • Paid Time Off (Vacation, Sick, Volunteer and Personal Time) • Maternity/Paternity Paid Leave • Tuition Reimbursement • Computer Purchase Program • Dress Professional Program • Service Anniversary/Retirement Recognition and Award • Chairman’s Award – Top Peer Recognition • Volunteer Time Recognition • Company Apparel – Company Pays 50% • Opportunity for Bonus and Stock awards • Employee Referral Program • Verizon Cell Phone Discount 4 • First Mid Marketplace Discount Program • Job Shadowing Encouraging Volunteerism The Company invests in and contributes to the growth and development of its communities.
All periodic and current reports of the Company and amendments to these reports filed with the Securities and Exchange Commission (“SEC”) can be accessed, free of charge, through this website and at www.sec.gov as soon as reasonably practicable after these materials are filed with the SEC. Blackhawk Bancorp, Inc. On March 20, 2023, First Mid Bancshares, Inc.
Website The Company maintains a website at www.firstmid.com. All periodic and current reports of the Company and amendments to these reports filed with the Securities and Exchange Commission (“SEC”) can be accessed, free of charge, through this website and at www.sec.gov as soon as reasonably practicable after these materials are filed with the SEC. Blackhawk Bancorp, Inc.
While the underlying nature of lending will result in some amount of credit losses, First Mid's credit loss experience has been good with average net charge offs amounting to $3.8 million (0.08% of total loans) over the past five years. Nonperforming loans were $20.1 million (0.36% of total loans) at December 31, 2023.
While the underlying nature of lending will result in some amount of credit losses, First Mid's credit loss experience has been good with average net charge offs amounting to $2.6 million (0.06% of total loans) over the past five years. Nonperforming loans were $29.8 million (0.53% of total loans) at December 31, 2024.
Dively (64) Chairman of the Board of Directors, President and Chief Executive Officer Michael L. Taylor (55) Senior Executive Vice President and Chief Operating Officer Matthew K. Smith (49) Executive Vice President and Chief Financial Officer Eric S. McRae (58) Executive Vice President Bradley L. Beesley (52) Executive Vice President Clay M. Dean (49) Executive Vice President Amanda D.
Dively (65) Chairman of the Board of Directors, President and Chief Executive Officer Michael L. Taylor (56) Senior Executive Vice President and Chief Operating Officer Matthew K. Smith (50) Executive Vice President and Chief Financial Officer Eric S. McRae (59) Executive Vice President Bradley L. Beesley (53) Executive Vice President Clay M. Dean (50) Executive Vice President Amanda D.
The purpose of this engaging program is to educate leaders that their role is to coach and mentor their team members. Regular one-on-one meetings with purposeful conversations is an expectation because it leads to better results and engagement of their team.
This interactive program targets executive, upper, and mid-level management, 3 emphasizing the importance of coaching and mentoring team members. The purpose of this engaging program is to educate leaders that their role is to coach and mentor their team members. Regular one-on-one meetings with purposeful conversations is an expectation because it leads to better results and engagement of their team.
Prior to joining the Company, he was the Corporate Counsel of Petersen Health Care, Inc., from 2008 to July 2019, and an attorney at Heller, Holmes & Associates from 1996 to 2008. Jordan Read, age 34, has been Senior Vice President and Chief Risk Officer of First Mid Bank since August 2021.
Prior to joining the Company, he was the Corporate Counsel of Petersen Health Care, Inc., from 2008 to July 2019, and an attorney at Heller, Holmes & Associates from 1996 to 2008. Megan McElwee, age 37, has been Senior Vice President and Chief Credit Officer since January 2022.
The process includes identifying potential successors for different positions and assessing their readiness level to fill the role should it become vacant. Management focuses on intentional development with activities needed to prepare the employee for the next level. Total Rewards The Company is committed to offering a competitive total rewards package for its employees which includes compensation and benefits.
The process includes identifying potential successors for different positions and assessing their readiness level to fill the role should it become vacant. Management focuses on intentional development with activities needed to prepare the employee for the next level.
During 2023, First Mid Bank operated branches in the Illinois counties of Adams, Boone, Champaign, Christian, Clark, Coles, Cumberland, Douglas, Dupage, Edgar, Effingham, Jackson, Jefferson, Knox, Lawrence, Macon, Madison, McHenry, McLean, Moultrie, Peoria, Piatt, Saline, St.
During 2024, First Mid Bank operated branches in the Illinois counties of Adams, Boone, Champaign, Christian, Clark, Coles, Cumberland, Douglas, Edgar, Effingham, Jackson, Jefferson, Kane, Knox, Lawrence, Macon, Madison, McHenry, McLean, Moultrie, Peoria, Piatt, Saline, St. Clair, Wabash, White, Williamson, and Winnebago, Missouri counties of Boone, Camden, Cole, Lincoln, St. Charles and St.
Anya Schuetz, age 49, has been Vice President and Director of Project Management since 2013. Jeremy R. Frieburg, age 43, has been Senior Vice President and the Chief Information Officer since February 2024. Prior to joining the Company, he was a Chief Information Officer for INB, N.A. from 2021 to 2024.
She served as Vice President from January 2013 to January 2023. 11 Jeremy R. Frieburg, age 44, has been Senior Vice President and the Chief Information Officer since February 2024. Prior to joining the Company, he was a Chief Information Officer for INB, N.A. from 2021 to 2024.
He served as Senior Vice President, Chief Deposit Services Officer of First Mid Bank from November 2012 to September 2014 and as Senior Vice President, Director of Treasury Management of First Mid Bank from 2010 to 2012. Amanda D.
He served as Senior Vice President, Chief Deposit Services Officer of First Mid Bank from November 2012 to September 2014 and as Senior Vice President, Director of Treasury Management of First Mid Bank from 2010 to 2012. Amanda D. Lewis, age 45, has been Chief Operations Officer since July 2023 and Executive Vice President of the Company since January 2019.
Lewis, age 44, has been Executive Vice President of the Company since January 2019 and Senior Vice President of the Company and Senior Vice President, Retail Banking Officer of First Mid Bank since September 2014. She served as Vice President, Director of Marketing from 2001 until September 2014.
She served as Senior Vice President of the Company and Senior Vice President, Retail Banking Officer of First Mid Bank from September 2014 to July 2023 and as Vice President, Director of Marketing from 2001 until September 2014.
Lewis (44) Executive Vice President Rhonda Gatons (52) Executive Vice President Stas R. Wolak (48) Executive Vice President David Hiden (61) Senior Vice President Jason Crowder (53) Senior Vice President Jordan Read (34) Senior Vice President Megan McElwee (36) Senior Vice President Anya Schuetz (49) Senior Vice President Jeremy R. Frieburg (43) Senior Vice President Joseph R.
Lewis (45) Executive Vice President Rhonda Gatons (53) Executive Vice President Stas R. Wolak (49) Executive Vice President Jordan Read (35) Executive Vice President Jason Crowder (54) Senior Vice President Megan McElwee (37) Senior Vice President Anya Schuetz (50) Senior Vice President Jeremy R. Frieburg (44) Senior Vice President Joseph R.
After the formal training, the participants continue to expand their learning by participating in follow up cohort groups for the following six months. In 2023, the Company provided leadership training to 22 managers through our Leader of Leaders and Leader of Others programs. Lastly, succession planning is conducted annually for the Company’s most senior leaders and high impact roles.
After the formal training, participants deepen their learning through six months of follow-up cohort meetings, guided by the CEO and CHRO. In 2024, the Company further supported leadership growth by training 44 managers through its Leader of Leaders and Leader of Others programs. Lastly, succession planning is conducted annually for the Company’s most senior leaders and high impact roles.
The IMLAFA contains anti-money laundering measures affecting insured depository institutions, broker-dealers, and certain other financial institutions. The IMLAFA requires U.S. financial institutions to adopt policies and procedures to combat money laundering and grants the Secretary of the Treasury broad authority to establish regulations and to impose requirements and restrictions on financial institutions’ operations.
The IMLAFA requires U.S. financial institutions to adopt policies and procedures to combat money laundering and grants the Secretary of the Treasury broad authority to establish regulations and to impose requirements and restrictions on financial institutions’ operations. The Company has established policies and procedures for compliance with the IMLAFA and the related regulations.
These personnel attempt to match products and services with the particular financial needs of individual customers and prospective customers. Many senior officers of the organization are required to attend monthly meetings where they report on their business development efforts and results. Executive management uses these meetings as an educational and risk management opportunity as well.
Many senior officers of the organization are required to attend monthly meetings where they report on their business development efforts and results. Executive management uses these meetings as an educational and risk management opportunity as well. Cross-selling opportunities are encouraged and measured between the business lines.
In addition, the Company provided more than 50 hourly and salaried employees with spot bonuses in recognition of significant projects, as well as provided over 100 employees with a bonus for the extra work during an acquisition. For benefits, the Company provided a third medical plan option with lower deductibles for employees.
In addition, the Company provided more than 50 hourly and salaried employees with spot bonuses in recognition of work on significant projects, as well as provided over 140 employees with a bonus for the extra work during an acquisition. To further support employees, the Company enhanced its benefits offering to promote health and financial well-being.
Operationally, the Company centralizes most administrative and operational tasks within its home office in Mattoon, Illinois. This allows branches to maintain customer focus, helps assure compliance with banking regulations, keeps fixed administrative costs at as low a level as practicable, and allows for better management of risk inherent in the business.
This allows branches to maintain customer focus, helps assure compliance with banking regulations, keeps fixed administrative costs at as low a level as practicable, and allows for better management of risk inherent in the business. The Company also utilizes technology where practicable in daily banking activities to reduce the potential for human error.
The Company strives for employee engagement at all levels of the organization. The judgments, experiences and capabilities of these employees are used to create an environment where meeting the needs of our customer, communities and stockholders is always a priority. Strategy for Operations & Infrastructure.
The judgments, experiences and capabilities of these employees are used to create an environment where meeting the needs of our customer, communities and stockholders is always a priority. Strategy for Operations and Infrastructure. Operationally, the Company centralizes most administrative and operational tasks within its home office in Mattoon, Illinois.
Dodd-Frank Wall Street Reform and Consumer Protection Act The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) was signed into law on July 21, 2010. Generally, the Act is effective the day after it was signed into law, but different effective dates apply to specific sections of the law.
Generally, the Act is effective the day after it was signed into law, but different effective dates apply to specific sections of the law.
During 2023, the Company’s net interest margin on a tax-effected basis decreased to 3.05% as of December 31, 2023 from 3.13% in December 31, 2022 primarily due to higher interest rates driving increased funding costs at a rate faster than the repricing of earning assets.
For 2024, the Company’s net interest margin on a tax-effected basis increased to 3.34% as of December 31, 2024 from 3.05% in December 31, 2023 primarily due to the repricing of earning assets catching up to the increased cost of funding experienced in 2023.
Maintaining a work environment where every employee is treated with dignity and respect is essential to ensuring that employees can devote their full attention to performing their jobs to the best of their ability. The Company understands that its success is dependent on continuing to strengthen its culture of inclusion.
Creating and maintaining a work environment where every employee is treated with dignity and respect is fundamental to ensuring they can fully focus on performing their jobs to the best of their ability. The Company recognizes that its success depends on continually strengthening its culture of inclusion, where all employees feel valued and empowered to contribute.
Diversity and Inclusion The Company’s commitment to diversity starts with its Board of Directors, which oversees the culture and holds management accountable to build and maintain a diverse and inclusive environment. Management believes a diverse workforce is critical to sustainable success. To improve results and increase accountability, the Company named its first Diversity, Equity and Inclusion ("DEI") officer in 2022.
Diversity and Inclusion The Company’s commitment to diversity and inclusion starts with its Board of Directors, which oversees the culture and holds management accountable to build and maintain a diverse and inclusive environment.
Talent Engagement During the last six years, the Company has partnered with a trusted industry leader to conduct an annual employee engagement survey. Employee participation in the engagement survey was 98.4% for 2023. The high level of participation in the survey provides the Company confidence that the results are meaningful and that the areas identified as needing improvement are genuine.
Talent Engagement For the past seven years, the Company has partnered with a trusted industry leader to conduct an annual employee engagement survey. In 2024, 96% of employees participated, providing a high level of confidence that the results accurately reflect employee sentiment and highlight genuine areas for improvement.
Prior to joining the Company, he was the Sales and Client Experience Director at PNC Bank from 2013 to 2023. David Hiden, age 61, has been Senior Vice President since July 2018. He was Chief Information Officer until February 2024. 11 Jason Crowder, age 53 has been Senior Vice President and General Counsel of the Company since August 2019.
Prior to joining the Company, he was the Sales and Client Experience Director at PNC Bank from 2013 to 2023. Jordan Read, age 35, has been Executive Vice President for the Company since January 2024 and Senior Vice President and Chief Risk Officer of First Mid Bank since August 2021.
He was Director of Internal Audit of Enterprise Bank and Trust from 2018 to 2021. Megan McElwee, age 36, has been Senior Vice President and Chief Credit Officer since January 2022. She served as Vice President and Director of Credit Administration from 2021 to 2022, Credit Administration Manager from 2017 to 2021, and Credit Officer from 2011 to 2017.
She served as Vice President and Director of Credit Administration from 2021 to 2022, Credit Administration Manager from 2017 to 2021, and Credit Officer from 2011 to 2017. Anya Schuetz, age 50, has been Senior Vice President since February 2023 and Director of Project Management since January 2013.
Management attempts to grow in two primary ways: • by organic growth through adding new customers and selling more products and services to existing customers; and • by strategic acquisitions. Virtually all of the Company’s customer-contact personnel, in each of its business lines, are engaged in organic growth efforts to one degree or another.
Virtually all of the Company’s customer-contact personnel, in each of its business lines, are engaged in organic growth efforts to one degree or another. These personnel attempt to match products and services with the particular financial needs of individual customers and prospective customers.
The GLB Act also amended the Investment Advisers Act of 1940 to require the registration of banks that act as investment advisers for mutual funds.
The GLB Act also amended the Investment Advisers Act of 1940 to require the registration of banks that act as investment advisers for mutual funds. The Company believes that it has taken the necessary actions to comply with these requirements of the GLB Act and the regulations adopted under them.
Cross-selling opportunities are encouraged and measured between the business lines. Within the community banking line, the Company has focused on a variety of lending and deposit services products that meet the needs of the communities it serves. The Company has achieved significant growth in these areas.
Within the community banking line, the Company has focused on a variety of lending and deposit services products that meet the needs of the communities it serves. The Company has achieved significant growth in these areas. Total commercial real estate loans have increased from $1.2 billion at December 31, 2020 to $2.4 billion at December 31, 2024.
Frontline employees are chosen by management to mentor and train new hires on core systems, customer service and processing customer transactions. The new employee spends the first ten days of employment working one on one with a peer learning on the job.
One example is The Banker Basics Mentor Program, designed to develop its frontline employees. In this program, experienced team members are selected by management to mentor and train new hires, focusing on core systems, customer service, and transaction processing. New employees spend their first ten days working one-on-one with a peer, gaining valuable on-the-job learning and support.
The Company also utilizes technology where practicable in daily banking activities to reduce the potential for human error. While the Company does not employ every new technology that is introduced, it attempts to be competitive with other banking organizations with respect to operational and customer technology. Shareholder Strategy.
While the Company does not employ every new technology that is introduced, it attempts to be competitive with other banking organizations with respect to operational and customer technology. Shareholder Strategy. The Company strives to provide a competitive dividend as well as the opportunity for stock price appreciation. 5 Risk Management Strategy. The Company maintains a comprehensive risk management framework.
When reviewing acquisition possibilities, the Company focuses on those organizations where there is a cultural fit with its existing operations and where there is a strong likelihood of building shareholder value. Customer Strategy. The Company uses its market and customer knowledge to build relationships that provide high-value customer experiences that continually improve customer satisfaction and loyalty. Employee Strategy .
Growth through acquisitions has been an integral part of the Company’s strategy for an extended period of time. When reviewing acquisition possibilities, the Company focuses on those organizations where there is a cultural fit with its existing operations and where there is a strong likelihood of building shareholder value. Customer Strategy.
First Mid Bank served sixty-four different communities with fifty-nine separate locations in Illinois, eighteen locations in Missouri, three locations in Wisconsin, one location in Texas, and one loan production office in Indiana. Website The Company maintains a website at www.firstmid.com.
Louis, Wisconsin county of Rock, and the Texas county of Tarrant. Each branch primarily serves the community in which it is located. First Mid Bank served sixty-three different communities with fifty-nine separate locations in Illinois, eighteen locations in Missouri, three locations in Wisconsin, one location in Texas, and one office in Indiana dedicated for agency finance and loan production.
Supervision and Regulation General Financial institutions, financial services companies, and their holding companies are extensively regulated under federal and state law.
The Blackhawk Merger closed August 15, 2023 and Blackhawk Bank was merged into First Mid Bank on December 1, 2023. 6 Supervision and Regulation General Financial institutions, financial services companies, and their holding companies are extensively regulated under federal and state law.
The Company has also focused on growing its commercial and retail deposit base through growth in checking, money markets and customer repurchase agreement balances. The wealth management line has focused its growth efforts on estate planning and investment services for individuals and employee benefit services for businesses as well as, farm management and brokerage services.
The wealth management line has focused its growth efforts on estate planning and investment services for individuals and employee benefit services for businesses as well as, farm management and brokerage services. The insurance brokerage line has focused on increasing property and casualty, senior insurance products and group medical insurance for businesses and personal lines insurance to individuals.
The Company has established policies and procedures for compliance with the IMLAFA and the related regulations. The Company has designated an officer solely responsible for ensuring compliance with existing regulations and monitoring changes to the regulations as they occur.
The Company has designated an officer solely responsible for ensuring compliance with existing regulations and monitoring changes to the regulations as they occur. Dodd-Frank Wall Street Reform and Consumer Protection Act The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) was signed into law on July 21, 2010.
On August 15, 2023, the Company acquired Blackhawk Bank, which was merged into First Mid Bank on December 1, 2023.
On August 15, 2023, the Company acquired Blackhawk Bank, which was merged into First Mid Bank on December 1, 2023. During the quarter ended September 30, 2024 and June 30, 2023 the Company acquired Mid Rivers Insurance Group, Inc. and Purdum, Gray, Ingledue, Beck, Inc. both companies were subsequently merged into First Mid Insurance.
In addition, the implementation of Leadership Development Training in 2023 provided all managers with information to enhance their skills with the hiring process, coaching, crucial conversations, and employee engagement. The Company also provides leadership training based on the book The Leadership Pipeline . This training is provided for executive, upper and mid-level management employees and is highly interactive.
To enhance leadership skills, in 2021 the Company implemented the Leadership Development Training: New to Manager Role program. This training equips managers with essential skills in hiring, coaching, holding crucial conversations, and driving employee engagement. Additionally, the Company provides advanced leadership training based on the principles outlined in the book The Leadership Pipeline .
The Company believes that it has taken the necessary actions to comply with these requirements of the GLB Act and the regulations adopted under them. 7 Anti-Terrorism Legislation The USA PATRIOT Act of 2001 included the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (the “IMLAFA”).
Anti-Terrorism Legislation The USA PATRIOT Act of 2001 included the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (the “IMLAFA”). The IMLAFA contains anti-money laundering measures affecting insured depository institutions, broker-dealers, and certain other financial institutions.
This award recognizes individuals in the organization who have consistently performed above expectations or achieved extraordinary results while exemplifying the Company’s core values. The CEO hosts an all employee call each quarter to share Company information and ongoing initiatives with Company employees.
To celebrate outstanding contributions, the Company’s CEO sponsors the annual Chairman’s Award for Excellence. This prestigious award allows employees to nominate peers who have consistently exceed expectations or achieve exceptional results while embodying the Company’s core values. The CEO also hosts a quarterly all-employee call to keep the workforce informed about Company updates and key initiatives.
The Company believes that growth of revenues and its customer base is vital to the goal of increasing the value of its shareholders’ investment. The Company strives to create shareholder value by maintaining a strong balance sheet and increasing profits.
The Company strives to create shareholder value by maintaining a strong balance sheet and increasing profits. Management attempts to grow in two primary ways: • by organic growth through adding new customers and selling more products and services to existing customers; and • by strategic acquisitions.
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The DEI officer reports directly to the CEO. As of December 31, 2023, the Company employed 1219 employees with 95% of those full-time and 5% part-time. The Company’s current employee base include 70% females, 11% minorities, and 2% veterans. The Company’s commitment to diversity resulted in a year over year increase in minorities within its workforce from 8% to 11%.
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During these calls, employees are encouraged to submit questions for management to address. A cherished tradition of these calls is the recognition of top-performing employees, both for their achievements at work and their positive impact in the communities the Company serves. Talent Development The Company supports the personal and professional development of its employees through a variety of initiatives.
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The increased diversity within the Company’s team is due to its emphasis on partnering with organizations that enable job postings to reach a greater percentage of diverse applicants. The Company is proud of its workforce and the opportunity to further diversify its team going forward.
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Employees are offered tuition reimbursement of up to $3,500 annually for eligible educational courses, empowering them to pursue continued education and skill development. Additionally, all employees complete annual regulatory training tailored to their specific job functions, through a partnership with a third-party provider.
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The ability to target areas for improvement has resulted in the overall engagement score increasing each year. The Company’s CEO has an annual award called the Chairman’s Award for Excellence which allows employees to nominate peers who have gone above and beyond.
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To further enhancing learning, employees have access to a robust library of career development content within the Company’s online learning management system. Development opportunities also include a job-shadowing program, allowing employees to observe and experience other roles within the organization.
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In addition to sharing important updates, employees are encouraged to submit questions in advance or during the call to be answered by management. Finally, a tradition of the quarterly call is to recognize the Company’s top performers, both at work and in the communities we serve.
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This program helps employees explore potential career paths, identify roles that align with their goals, and gain a broader understanding of the Company. Together, these initiatives reflect the Company’s ongoing commitment to fostering employee growth and supporting their career advancement. The Company offers a range of professional development trainings to support job-specific skills, leadership growth, and compliance requirements.
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Talent Development The Company supports the personal and professional development of its employees in a variety of ways. First, the Company offers tuition reimbursement to support employee's continued education and development by providing employees up to $3,500 annually for eligible educational courses.
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Total Rewards The Company is committed to enhancing employee’s overall experience by offering a competitive total rewards package, including compensation and benefits, designed to support and reward their contributions. In 2024, the Company prioritized its workforce by making meaningful investments to ensure ongoing competitiveness in the market.
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All employees also receive annual regulatory training, and, by partnering with a 3 rd party, the Company can tailor the training to fit the job functions of its employees. In addition, employees can access a variety of career development content within the online learning management system to expand their skills.
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For compensation, the Company increased the starting rate of pay an additional $0.50 per hour, for the second consecutive year, positively impacting many entry level employees.
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The Company provides for development opportunities through a program that allows employees the opportunity to shadow other roles. This gives the employee the chance to observe and experience a new role and determine what positions might be an ideal fit for advancement opportunities.
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Additionally, market pay adjustments were implemented for employees with 3 years of tenure or more and a certain performance score, helping to address wage compression and bring their pay closer to the midpoint of the salary range. All salary range bands were increased by 7%, providing employees with even greater opportunities for growth and earning potential within their roles.
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In addition, those that participate develop a broader knowledge of the Company as a whole. 3 Professional development training is provided to support job function, leadership, and compliance. The Banker Basics Mentor Program is an example of the Company's efforts to develop its frontline employees.
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A chronic condition management program was introduced at no cost to employees and their covered dependents enrolled in our medical plans, providing valuable resources to manage their health effectively.
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The Company invested in its workforce during 2023 by increasing merit raises and increasing the employer's portion of group insurance expense. In 2022, the Company addressed inflation by awarding employees making $70,000 or less a 3% wage increase outside of the normal annual wage review, so the Company is well positioned to retain its workforce.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe ongoing recovery or a 14 resurgence of COVID 19 could have a material impact on the Company’s results of operations and heighten other of our known risks. The Company may issue additional common stock or other equity securities in the future which could dilute the ownership interest of existing stockholders .
Biggest changeOther Business Risks The Company may issue additional common stock or other equity securities in the future which could dilute the ownership interest of existing stockholders .
This type of liquidity risk arises whenever the maturities of financial instruments included in assets and liabilities differ. The Company’s liquidity can be affected by a variety of factors, including general economic conditions, market disruption, operational problems affecting third parties or the Company, unfavorable pricing, competition, the Company’s credit rating and regulatory restrictions.
This type of liquidity risk arises whenever the maturities of financial instruments included 12 in assets and liabilities differ. The Company’s liquidity can be affected by a variety of factors, including general economic conditions, market disruption, operational problems affecting third parties or the Company, unfavorable pricing, competition, the Company’s credit rating and regulatory restrictions.
Conditions such as inflation, recession, unemployment, changes in 13 interest rates, money supply and other factors beyond the Company’s control may adversely affect its asset quality, deposit levels and loan demand and, therefore, its earnings. The Company’s profitability depends significantly on economic conditions in the geographic region in which it operates.
Conditions such as inflation, recession, unemployment, changes in interest rates, money supply and other factors beyond the Company’s control may adversely affect its asset quality, deposit levels and loan demand and, therefore, its earnings. The Company’s profitability depends significantly on economic conditions in the geographic region in which it operates.
The actions and commercial soundness of other financial institutions could affect the Company’s ability to engage in routine funding transactions. Financial services institutions are interrelated as a result of clearing, counterparty or other relationships. The Company has exposure to different counterparties and executes transactions with various counterparties in the financial industry.
The actions and commercial soundness of other financial institutions could affect the Company’s ability to engage in routine funding transactions. Financial services institutions are interrelated as a result of 13 clearing, counterparty or other relationships. The Company has exposure to different counterparties and executes transactions with various counterparties in the financial industry.
This could have a material adverse impact on the Company’s accumulated other comprehensive loss and shareholders’ equity depending upon the direction of the fluctuations. 12 Furthermore, future downgrades or defaults in these securities could result in future classifications as other-than-temporarily impaired.
This could have a material adverse impact on the Company’s accumulated other comprehensive loss and shareholders’ equity depending upon the direction of the fluctuations. Furthermore, future downgrades or defaults in these securities could result in future classifications as other-than-temporarily impaired.
In addition, any enforcement matters could impact supervisory and CRA ratings, which may restrict or limit the Company’s activities. The Company operates in a highly competitive industry and market area .
In addition, any enforcement matters could impact supervisory and CRA ratings, which may restrict or limit the Company’s activities. 14 The Company operates in a highly competitive industry and market area .
If the Company’s stock price declines from levels at December 31, 2023, management will evaluate the goodwill balance for impairment, and if the values of the business has declined, the Company could recognize an impairment charge for its goodwill. Management performed its annual goodwill impairment assessment as of September 30, 2023.
If the Company’s stock price declines from levels at December 31, 2024, management will evaluate the goodwill balance for impairment, and if the values of the business has declined, the Company could recognize an impairment charge for its goodwill. Management performed its annual goodwill impairment assessment as of September 30, 2024.
Overall economic conditions affecting businesses and consumers, including the current difficult economic conditions and market disruptions, could impact the Company’s credit losses. In addition, real estate valuations could also impact the Company’s credit losses as the Company maintains $3.8 billion in loans secured by commercial, agricultural, and residential real estate.
Overall economic conditions affecting businesses and consumers, including the current difficult economic conditions and market disruptions, could impact the Company’s credit losses. In addition, real estate valuations could also impact the Company’s credit losses as the Company maintains $3.9 billion in loans secured by commercial, agricultural, and residential real estate.
A significant decline in real estate values could have a negative effect on the Company’s financial condition and results of operations. In addition, the Company’s total loan balances by industry exceeded 25% of total risk-based capital for each of four industries as of December 31, 2023. A listing of these industries is contained in under “Item 7.
A significant decline in real estate values could have a negative effect on the Company’s financial condition and results of operations. In addition, the Company’s total loan balances by industry exceeded 25% of total risk-based capital for each of three industries as of December 31, 2024. A listing of these industries is contained in under “Item 7.
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Other Business Risks The COVID-19 pandemic had a negative impact on the economy and the Company, it's workforce, and the operations of our borrowers, customers, and business partners.
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In particular, we experienced financial losses due to various operational factors impacting us or our borrowers, customers, or business partners, including but not limited to: • declines in collateral values; • third party disruptions, including outages at network providers and other suppliers; • increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity; and Even though the COVID 19 impact has lessened, the Company may continue to experience adverse impacts to our business as a result of the virus’s global economic impact, including the availability of credit, adverse impacts on our liquidity and any recession that has occurred or may occur in the future.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHinks holds multiple security accreditations and 24 years of experience in cybersecurity, software development, systems, networking, and other technology-related roles within public and private industries, with 14 years in IT leadership roles. Mr. Hinks has been employed with the Company since 2019, overseeing information security, disaster recovery, vendor management, and physical security.
Biggest changeHinks holds multiple security accreditations and 25 years of experience in cybersecurity, software development, systems, networking, and other technology-related roles within public and private industries, with 15 years in IT leadership roles. Mr. Hinks has been 15 employed with the Company since 2019, overseeing information security, disaster recovery, vendor management, and physical security.
Through this evolving program, the Company assesses the risks from cybersecurity threats that impact the Company’s third-party service providers with whom the Company shares personal identifying and confidential 15 information. The Company continues to evolve the oversight processes to mature how the Company identifies and manages cybersecurity risks associated with the products or services the Company procures from third parties.
Through this evolving program, the Company assesses the risks from cybersecurity threats that impact the Company’s third-party service providers with whom the Company shares personal identifying and confidential information. The Company continues to evolve the oversight processes to mature how the Company identifies and manages cybersecurity risks associated with the products or services the Company procures from third parties.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFirst Mid Bank also conducts business through numerous facilities, owned and leased, located in twenty-eight counties throughout Illinois, six throughout Missouri, one county in Wisconsin, and one county in Texas. Of the eighty-one other banking offices operated by First Mid Bank, sixty-three are owned and eighteen are leased from non-affiliated third parties.
Biggest changeFirst Mid Insurance also uses a building owned by First Mid Bank at 1501 Broadway Avenue. First Mid Bank also conducts business through numerous facilities, owned, leased, and located on land only leases in twenty-eight counties throughout Illinois, six throughout Missouri, one county in Wisconsin, and one county in Texas.
The net investment of the Company and subsidiaries in real estate and equipment at December 31, 2023 was $101.4 million.
The Company believes these facilities are suitable and adequate to operate its banking and related business. The net investment of the Company and subsidiaries in real estate and equipment at December 31, 2024 was $100.2 million.
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First Mid Bank also has a loan production office and an agency finance office in metro Indianapolis. None of the properties owned by the Company are subject to any major encumbrances. The Company believes these facilities are suitable and adequate to operate its banking and related business.
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Of the eighty-two banking offices operated by First Mid Bank, sixty-one are owned, seventeen are leased from non-affiliated third parties, and four are located in land only leases with non-affiliated third parties.
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First Mid Bank also has an office in metro Indianapolis, Indiana that provides agency finance and loan production services and an office in Roscoe, Illinois that provides processing services for mortgage banking. In addition to having employees throughout the First Mid Bank footprint, First Mid Insurance Group and First Mid Wealth Management conduct business in numerous other facilities.
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First Mid Insurance leases facilities located in three counties in Illinois and two counties in Missouri from non-affiliated third parties. First Mid Wealth Management leases facilities located in three counties in Illinois from non-affiliated third parties. None of the properties owned by the Company are subject to any major encumbrances.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor further discussion of the Bank’s dividend restrictions, see Item1 – “Business” – “First Mid Bank” – “Dividends” and Note 16 – “Dividend Restrictions” herein. 16 The following table summarizes share repurchase activity for the fourth quarter of 2023: ISSUER PURCHASES OF EQUITY SECURITIES Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs at End of Period October 1, 2023 – October 31, 2023 — $ — — $ 4,061,000 November 1, 2023 – November 30, 2023 — — — 4,061,000 December 1, 2023 – December 31, 2023 13,311 34.65 13,311 3,600,000 Total 13,311 $ 34.65 13,311 $ 3,600,000 All of the repurchase activity that occurred during 2023 resulted from shares withheld to cover taxes on employee stock vesting.
Biggest changeThe following table summarizes share repurchase activity for the fourth quarter of 2024: ISSUER PURCHASES OF EQUITY SECURITIES Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs at End of Period October 1, 2024 – October 31, 2024 — $ — — $ 3,600,000 November 1, 2024 – November 30, 2024 — — — 3,600,000 December 1, 2024 – December 31, 2024 15,978 41.23 15,978 2,941,000 Total 15,978 $ 41.23 15,978 $ 2,941,000 All of the repurchase activity that occurred during 2024 resulted from shares withheld to cover taxes on employee stock vesting.
The Company’s shareholders are entitled to receive dividends as are declared by the Board of Directors, which considered quarterly payment of dividends during 2023. The ability of the Company to pay dividends, as well as fund its operations, is dependent upon receipt of dividends from First Mid Bank.
The Company’s shareholders are entitled to receive dividends as are declared by the Board of Directors, which considered quarterly payment of dividends during 2024. The ability of the Company to pay dividends, as well as fund its operations, is dependent upon receipt of dividends from First Mid Bank.
There were no other shares repurchased during 2023. Since August 5, 1998, the Board of Directors has approved repurchase programs pursuant to which the Company may repurchase a total of approximately $76.7 million of the Company’s common stock. ITEM 6. [Reserved]
There were no other shares repurchased during 2024. Since August 5, 1998, the Board of Directors has approved repurchase programs pursuant to which the Company may repurchase a total of approximately $76.7 million of the Company’s common stock. 16 ITEM 6. [Reserved]
Regulatory authorities limit the amount of dividends that can be paid by First Mid Bank without prior approval from such authorities.
Regulatory authorities limit the amount of dividends that can be paid by First Mid Bank without prior approval from such authorities. For further discussion of the Bank’s dividend restrictions, see Item 1 – “Business” – “First Mid Bank” – “Dividends” and Note 16 – “Dividend Restrictions” herein.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe 20 Company’s average balances, fully tax equivalent interest income and interest expense, and rates earned or paid for major balance sheet categories are set forth in the following table (dollars in thousands): Year Ended Year Ended Year Ended December 31, 2023 December 31, 2022 December 31, 2021 Average Average Average Average Average Average Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets Interest-bearing deposits $ 82,640 $ 5,107 6.18 % $ 56,517 $ 492 0.87 % $ 268,523 $ 357 0.13 % Federal funds sold 8,299 419 5.05 % 5,772 113 1.96 % 1,335 — 0.03 % Certificates of deposit investments 1,822 98 5.37 % 1,756 37 2.10 % 2,606 56 2.13 % Investment securities Taxable 964,898 24,307 2.52 % 1,053,511 20,595 1.95 % 923,600 15,598 1.69 % Tax-exempt (Municipals)(TE)(1) 276,417 9,889 3.58 % 328,832 11,121 3.38 % 299,833 9,264 3.09 % Loans (TE)(1)(2)(3) 5,079,949 263,406 5.19 % 4,518,566 186,697 4.13 % 3,778,174 160,362 4.24 % Total earning assets 6,414,025 303,226 4.73 % 5,964,954 219,055 3.67 % 5,274,071 185,637 3.51 % Cash and due from banks 133,237 123,306 95,902 Premises and equipment 94,897 88,744 79,913 Other assets 520,944 439,545 333,115 Allowance for credit losses (62,878 ) (58,876 ) (53,188 ) Total assets $ 7,100,225 $ 6,557,673 $ 5,729,813 Liabilities and stockholders' equity Deposits: Demand deposits, interest-bearing $ 2,618,452 47,939 1.83 % $ 2,598,480 13,709 0.53 % $ 2,217,281 4,258 0.19 % Savings deposits 663,760 739 0.11 % 666,334 570 0.09 % 611,379 487 0.08 % Time deposits 961,162 28,616 2.98 % 655,240 4,534 0.69 % 671,056 4,292 0.64 % Total interest-bearing deposits 4,243,374 77,294 1.82 % 3,920,054 18,813 0.48 % 3,499,716 9,037 0.26 % Securities sold under agreements to repurchase 225,307 6,565 2.91 % 202,242 1,795 0.89 % 173,762 231 0.13 % FHLB advances 462,197 16,779 3.63 % 276,401 6,184 2.24 % 107,518 1,514 1.41 % Federal funds purchased 192 10 5.21 % 481 9 2 % — — — Subordinated debt 99,638 4,196 4.18 % 94,471 3,945 4.18 % 94,321 3,939 4.18 % Junior subordinated debentures 21,337 1,859 8.87 % 19,275 868 4.50 % 19,105 541 2.83 % Other debt — — — % 14 — — % — — — % Total borrowings 808,671 29,409 3.64 % 592,884 12,801 2.16 % 394,706 6,225 1.58 % Total interest-bearing liabilities 5,052,045 106,703 2.11 % 4,512,938 31,614 0.70 % 3,894,422 15,262 0.39 % Demand deposits 1,312,023 1,356,912 1,164,877 Other liabilities 53,838 46,811 56,388 Stockholders’ equity 682,319 641,012 614,126 Total liabilities and stockholders' equity $ 7,100,225 $ 6,557,673 $ 5,729,813 Net interest income $ 196,523 $ 187,441 $ 170,375 Net interest spread 2.62 % 2.97 % 3.12 % Impact of non-interest-bearing funds 0.43 % 0.16 % 0.09 % TE net yield on interest-earning assets 3.05 % 3.13 % 3.21 % (1) Tax-exempt income is shown on a fully tax equivalent basis.
Biggest changeThe Company’s 19 average balances, fully tax equivalent interest income and interest expense, and rates earned or paid for major balance sheet categories are set forth in the following table (dollars in thousands): Year Ended Year Ended Year Ended December 31, 2024 December 31, 2023 December 31, 2022 Average Average Average Average Average Average Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets Interest-bearing deposits $ 145,502 $ 7,900 5.42 % $ 82,640 $ 5,107 6.18 % $ 56,517 $ 492 0.87 % Federal funds sold 297 53 18.00 % 8,299 419 5.05 % 5,772 113 1.96 % Certificates of deposit investments 3,053 144 4.71 % 1,822 98 5.37 % 1,756 37 2.10 % Investment securities Taxable 879,221 21,510 2.42 % 964,898 24,307 2.52 % 1,053,511 20,595 1.95 % Tax-exempt (Municipals)(TE)(1) 273,995 9,574 3.49 % 276,417 9,889 3.58 % 328,832 11,121 3.38 % Loans (TE)(1)(2)(3) 5,558,527 321,498 5.78 % 5,079,949 263,406 5.19 % 4,518,566 186,697 4.13 % Total earning assets 6,860,595 360,679 5.25 % 6,414,025 303,226 4.73 % 5,964,954 219,055 3.67 % Cash and due from banks 98,932 133,237 123,306 Premises and equipment 101,529 94,897 88,744 Other assets 603,998 520,944 439,545 Allowance for credit losses (68,805 ) (62,878 ) (58,876 ) Total assets $ 7,596,249 $ 7,100,225 $ 6,557,673 Liabilities and stockholders' equity Deposits: Demand deposits, interest-bearing $ 3,040,397 67,999 2.24 % $ 2,618,452 47,939 1.83 % $ 2,598,480 13,709 0.53 % Savings deposits 675,622 810 0.12 % 663,760 739 0.11 % 666,334 570 0.09 % Time deposits 1,019,629 38,110 3.74 % 961,162 28,616 2.98 % 655,240 4,534 0.69 % Total interest-bearing deposits 4,735,648 106,919 2.26 % 4,243,374 77,294 1.82 % 3,920,054 18,813 0.48 % Securities sold under agreements to repurchase 221,789 6,448 2.91 % 225,307 6,565 2.91 % 202,242 1,795 0.89 % FHLB advances 239,949 8,673 3.61 % 462,197 16,779 3.63 % 276,401 6,184 2.24 % Federal funds purchased — 1 — % 192 10 5 % 481 9 1.87 % Subordinated debt 99,313 4,454 4.48 % 99,638 4,196 4.18 % 94,471 3,945 4.18 % Junior subordinated debentures 24,168 2,156 8.92 % 21,337 1,859 8.87 % 19,275 868 4.50 % Other debt 1 — — % — — — % 14 — — % Total borrowings 585,220 21,732 3.71 % 808,671 29,409 3.64 % 592,884 12,801 2.16 % Total interest-bearing liabilities 5,320,868 128,651 2.42 % 5,052,045 106,703 2.11 % 4,512,938 31,614 0.70 % Demand deposits 1,407,537 1,312,023 1,356,912 Other liabilities 50,665 53,838 46,811 Stockholders’ equity 817,179 682,319 641,012 Total liabilities and stockholders' equity $ 7,596,249 $ 7,100,225 $ 6,557,673 Net interest income $ 231,791 $ 196,523 $ 187,441 Net interest spread 2.83 % 2.62 % 2.97 % Impact of non-interest-bearing funds 0.51 % 0.43 % 0.16 % TE net yield on interest-earning assets 3.34 % 3.05 % 3.13 % (1) Tax-exempt income is shown on a fully tax equivalent basis.
The Company believes the allowance for credit losses for loans is the critical accounting policy that requires the most significant judgments and assumptions used in the preparation of its consolidated financial statements. The allowance for credit losses for loans represents the best estimate of losses inherent in the existing loan portfolio.
Allowance for Credit Losses - Loans. The Company believes the allowance for credit losses for loans is the critical accounting policy that requires the most significant judgments and assumptions used in the preparation of its consolidated financial statements. The allowance for credit losses for loans represents the best estimate of losses inherent in the existing loan portfolio.
Adjustments to historical loss information are made for relevant factors to each pool including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. The Company estimates the appropriate level of allowance for credit losses for impaired loans by evaluating them separately.
Adjustments to historical loss information are made for relevant factors to each pool including merger and acquisition activity, economic conditions, changes in policies, procedures and underwriting, and concentrations. The Company estimates the appropriate level of allowance for credit losses for impaired loans by evaluating them separately.
The Company may also redeem the Notes at any time, including prior to October 15, 2025, at the Company’s option, in whole but not in part, if: (i) a change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to but excluding the redemption date.
The Company may also redeem the Notes at any time, including prior to October 15, 2025, at the Company’s option, in whole but not in part, if: (i) a change or prospective 31 change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to but excluding the redemption date.
Repurchase Agreements and Other Borrowings 30 Securities sold under agreements to repurchase are short-term obligations of First Mid Bank. These obligations are collateralized with certain government securities that are direct obligations of the United States or one of its agencies. These retail repurchase agreements are a cash management service to its corporate customers.
Repurchase Agreements and Other Borrowings Securities sold under agreements to repurchase are short-term obligations of First Mid Bank. These obligations are collateralized with certain government securities that are direct obligations of the United States or one of its agencies. These retail repurchase agreements are a cash management service to its corporate customers.
If the estimated value of investments is less than the cost or amortized 18 cost, the Company evaluates whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment.
If the estimated value of investments is less than the cost or amortized cost, the Company evaluates whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment.
For information on credit loss experience and nonperforming loans, see “Nonperforming Loans and Repossessed Assets” and “Loan Quality and Allowance for credit losses” herein. Other Income An important source of the Company’s revenue is derived from other income.
For information on credit loss experience and nonperforming loans, see “Nonperforming Loans and Nonperforming Other Assets” and “Loan Quality and Allowance for Credit Losses” herein. Other Income An important source of the Company’s revenue is derived from other income.
For the Years Ended December 31, 2023, 2022, and 2021 Overview This overview of management’s discussion and analysis highlights selected information in this document and may not contain all the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting estimates, you should carefully read this entire document.
For the Years Ended December 31, 2024, 2023, and 2022 Overview This overview of management’s discussion and analysis highlights selected information in this document and may not contain all the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting estimates, you should carefully read this entire document.
As a result of the Company’s acquisition activity, goodwill, an intangible asset with an indefinite life, is reflected on the balance sheets. Goodwill is evaluated for impairment annually, unless there are factors present that indicate a potential impairment, in which case, the goodwill impairment test is performed more frequently than annually. 19 Fair Value Measurements.
As a result of the Company’s acquisition activity, goodwill, an intangible asset with an indefinite life, is reflected on the consolidated balance sheets. Goodwill is evaluated for impairment annually, unless there are factors present that indicate a potential impairment, in which case, the goodwill impairment test is performed more frequently than annually. Fair Value Measurements.
Core deposit intangible assets, with finite lives will be tested for impairment when changes in events or circumstances indicate that its carrying amount may not be recoverable. Core deposit intangible assets were tested for impairment during 2023 as part of the goodwill impairment test and no impairment was deemed necessary.
Core deposit intangible assets, with finite lives will be tested for impairment when changes in events or circumstances indicate that its carrying amount may not be recoverable. Core deposit intangible assets were tested for impairment during 2024 as part of the goodwill impairment test and no impairment was deemed necessary.
The types and maturities of securities purchased are 24 primarily based on the Company’s current and projected liquidity and interest rate sensitivity positions.
The types and maturities of securities purchased are primarily based on the Company’s current and projected liquidity and interest rate sensitivity positions.
While MBS and CMOs are no longer explicitly rated by credit rating agencies, the industry recognizes that they are backed by agencies which have an implied government guarantee. 25 Loans The loan portfolio (net of unearned interest) is the largest category of the Company’s earning assets.
While MBS and CMOs are no longer explicitly rated by credit rating agencies, the industry recognizes that they are backed by agencies which have an implied government guarantee. 24 Loans The loan portfolio (net of unearned interest) is the largest category of the Company’s earning assets.
Availability of the funds is subject to First Mid Bank meeting minimum regulatory capital requirements for total capital to risk-weighted assets and Tier 1 capital to total average assets. As of December 31, 2023, First Mid Bank met these regulatory requirements. • First Mid Bank can borrow from the Federal Home Loan Bank as a source of liquidity.
Availability of the funds is subject to First Mid Bank meeting minimum regulatory capital requirements for total capital to risk-weighted assets and Tier 1 capital to total average assets. As of December 31, 2024, First Mid Bank met these regulatory requirements. • First Mid Bank can borrow from the Federal Home Loan Bank as a source of liquidity.
(2) Nonaccrual loans have been included in the average balances. Balances are net of unaccreted discount related to loans acquired. (3) Includes loans held for sale 21 Changes in net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense.
(2) Nonaccrual loans have been included in the average balances. Balances are net of unaccreted discount related to loans acquired. (3) Includes loans held for sale 20 Changes in net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense.
The table below presents the credit ratings as of December 31, 2023 for certain investment securities (in thousands): Average Credit Rating of Fair Value at December 31, 2023 (1) Amortized Estimated Not Cost Fair Value AAA AA +/- A +/- BBB +/- Rated Available-for-sale: U.S.
The table below presents the credit ratings as of December 31, 2024 for certain investment securities (in thousands): Average Credit Rating of Fair Value at December 31, 2024 (1) Amortized Estimated Not Cost Fair Value AAA AA +/- A +/- BBB +/- Rated Available-for-sale: U.S.
In total cash and cash equivalents decreased by $9.4 million from year-end 2022. For the year ended December 31, 2022, net cash of $65.8 million was provided from operating activities, $178.7 million was used in investing activities, and $96.7 million was provided by financing activities. In total cash and cash equivalents decreased by $16.2 million from year-end 2021.
For the year ended December 31, 2022, net cash of $65.8 million was provided from operating activities, $178.7 million was used in investing activities, and $96.7 million was provided by financing activities. In total cash and cash equivalents decreased by $16.2 million from year-end 2021.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis are intended to provide a better understanding of the consolidated financial condition and results of operations of the Company and its subsidiaries for the years ended December 31, 2023, 2022, and 2021.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis are intended to provide a better understanding of the consolidated financial condition and results of operations of the Company and its subsidiaries for the years ended December 31, 2024, 2023, and 2022.
The following table sets forth the amortized cost of the available-for-sale and held-to-maturity securities for the last three years (dollars in thousands): December 31, 2023 2022 2021 Weighted Weighted Weighted Amortized Average Amortized Average Amortized Average Cost Yield Cost Yield Cost Yield U.S.
The following table sets forth the amortized cost of the available-for-sale and held-to-maturity securities for the last three years (dollars in thousands): December 31, 2024 2023 2022 Weighted Weighted Weighted Amortized Average Amortized Average Amortized Average Cost Yield Cost Yield Cost Yield U.S.
The Company and First Mid Bank have capital ratios above the minimum regulatory capital requirements and, as of December 31, 2023, the Company and First Mid Bank had capital ratios above the levels required for categorization as well-capitalized under the capital adequacy guidelines established by the bank regulatory agencies.
The Company and First Mid Bank have capital ratios above the minimum regulatory capital requirements and, as of December 31, 2024, the Company and First Mid Bank had capital ratios above the levels required for categorization as well-capitalized under the capital adequacy guidelines established by the bank regulatory agencies.
A tabulation of the Company and First Mid Bank's capital ratios as of December 31, 2023 follows: Total Risk- based Capital Ratio Tier One Risk-based Capital Ratio Common Equity Tier 1 Capital Ratio Tier One Leverage Ratio (Capital to Average Assets) First Mid Bancshares, Inc.
A tabulation of the Company and First Mid Bank's capital ratios as of December 31, 2024 follows: Total Risk- based Capital Ratio Tier 1 Risk-based Capital Ratio Common Equity Tier 1 Capital Ratio Tier One Leverage Ratio (Capital to Average Assets) First Mid Bancshares, Inc.
The $10 million in proceeds from the trust preferred issuance and an additional $310,000 for the Company’s investment in common equity of Trust II, a total of $10,310,000, was invested in junior subordinated debentures of the Company.
The $10.0 million in proceeds from the trust preferred issuance and an additional $310,000 for the Company’s investment in common equity of Trust II, a total of $10.3 million, was invested in junior subordinated debentures of the Company.
Capital Ratios For 2023, the minimum regulatory ratios required for minimum capital adequacy purposes plus the capital buffer are 10.5% for the Total Risk-based capital ratio, 8.5% for the Tier 1 Risk-based capital ratio, 7.0% for the Common Equity Tier 1 capital ratio, and 4.0% for the Tier 1 Leverage ratio.
Capital Ratios For 2024, the minimum regulatory ratios required for minimum capital adequacy purposes plus the capital buffer are 10.5% for the Total Risk-based capital ratio, 8.5% for the Tier 1 Risk-based capital ratio, 7.0% for the Common Equity Tier 1 capital ratio, and 4.0% for the Tier 1 Leverage ratio.
This loan was renewed on April 7, 2023 for one year as a revolving credit agreement with a maximum available balance of $15 million. The interest rate is floating at 2.25% over the federal funds rate. The Company and its subsidiary banks were in compliance with the existing covenants at December 31, 2023 and 2022.
This loan was renewed on April 5, 2024 for one year as a revolving credit agreement with a maximum available balance of $15 million. The interest rate is floating at 2.25% over the federal funds rate. The Company and its subsidiary banks were in compliance with the existing covenants at December 31, 2024 and 2023.
The underlying junior subordinated debentures issued by the Company to Trust II mature in 2036, bore interest at a fixed rate of 6.98% paid quarterly until June 15, 2011 and then converted to floating rate (LIBOR plus 160 basis points) after June 15, 2011 (7.25% and 6.37% at December 31, 2023 and 2022, respectively).
The underlying junior subordinated debentures issued by the Company to Trust II mature in 2036, bore interest at a fixed rate of 6.98% paid quarterly until June 15, 2011 and then converted to floating rate (LIBOR plus 160 basis points) after June 15, 2011 (6.81% and 7.25% at December 31, 2024 and 2023, respectively).
The Company enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. The total outstanding commitments at December 31, 2023, 2022, and 2021 were $1.3 billion, $1.2 billion, and $1.0 billion, respectively.
The Company enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. The total outstanding commitments at December 31, 2024, 2023, and 2022 were $1.4 billion, $1.3 billion, and $1.2 billion, respectively.
The Company issued, pursuant to DCP: • 0 common shares during 2023 • 8,378 common shares during 2022, and • 9,513 common shares during 2021 First Retirement and Savings Plan. The First Retirement Savings Plan ("401(k) plan") was effective beginning in 1985. Employees are eligible to participate in the 401(k) plan after three months of service with the Company.
The Company issued, pursuant to DCP: • 0 common shares during 2024 • 0 common shares during 2023, and • 8,378 common shares during 2022 First Retirement and Savings Plan. The First Retirement Savings Plan ("401(k) plan") was effective beginning in 1985. Employees are eligible to participate in the 401(k) plan after three months of service with the Company.
The $4,000,000 of trust preferred securities and an additional $124,000 investment in common equity of BHST II is invested in junior subordinated debentures issued to BHST II. The subordinated debentures mature in 2035, bear interest at three-month LIBOR plus 205 basis points (7.69% at December 31, 2023) and resets quarterly.
The $4.0 million of trust preferred securities and an additional $124,000 investment in common equity of BHST II is invested in junior subordinated debentures issued to BHST II. The subordinated debentures mature in 2035, bear interest at three-month LIBOR plus 205 basis points (7.25% and 7.69% at December 31, 2024 and 2023, respectively) and resets quarterly.
The Company’s capital position remains strong and the Company has consistently maintained regulatory capital ratios above the “well-capitalized” standards. The Company’s Tier 1 capital ratio to risk weighted assets ratio at December 31, 2023, 2022, and 2021 was 12.02%, 12.40%, and 12.51%, respectively.
The Company’s capital position remains strong and the Company has consistently maintained regulatory capital ratios above the “well-capitalized” standards. The Company’s Tier 1 capital ratio to risk weighted assets ratio at December 31, 2024, 2023, and 2022 was 12.82%, 12.02%, and 12.40%, respectively.
The balance of real estate loans held for sale, included in the balances shown above, amounted to $5.0 million and $0.3 million as of December 31, 2023 and 2022, respectively. Commercial and commercial real estate loans generally involve higher credit risks than residential real estate and consumer loans.
The balance of real estate loans held for sale, included in the balances shown above, amounted to $6.6 million and $5.0 million as of December 31, 2024 and 2023, respectively. Commercial and commercial real estate loans generally involve higher credit risks than residential real estate and consumer loans.
Troubled debt restructurings are loans on which, due to deterioration in the borrower’s financial condition, the original terms have been modified in favor of the borrower or either principal or interest has been forgiven. Repossessed assets represent property acquired as the result of borrower defaults on loans.
Restructured loans are loans on which, due to deterioration in the borrower’s financial condition, the original terms have been modified in favor of the borrower or either principal or interest has been forgiven. Repossessed assets represent property acquired as the result of borrower defaults on loans.
At December 31, 2023, the Company classified the cost basis of its common stock issued and held in trust in connection with the DCP of approximately $5.2 million as treasury stock. The Company also classified the cost basis of its related deferred compensation obligation of approximately $5.2 million as an equity instrument (deferred compensation).
At December 31, 2024, the Company classified the cost basis of its common stock issued and held in trust in connection with the DCP of approximately $5.9 million as treasury stock. The Company also classified the cost basis of its related deferred compensation obligation of approximately $5.9 million as an equity instrument (deferred compensation).
The increase in provision expense in 2023 was primarily related to the acquisition of Blackhawk Bank. The decrease in provision expense in 2022 was primarily due to the required provision in 2021 tied to the Providence Bank acquisition. Net charge-offs were $0.3 million during 2023, $1.2 million during 2022 and $4.5 million during 2021.
The decrease in provision expense in 2024 was primarily due to the required provision in 2023 tied to the Blackhawk Bank acquisition. The increase in provision expense in 2023 was primarily related to the acquisition of Blackhawk Bank. Net charge-offs were $4.1 million during 2024, $0.3 million during 2023 and $1.2 million during 2022.
Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of Common Stock of the Company on the terms and conditions established in the SI Plan. A maximum of 149,983 shares of common stock may be issued under the SI Plan.
Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of Common Stock of the Company on the terms and conditions established in the SI Plan. A maximum of 550,000 shares of common stock may be issued under the SI Plan.
The $6,000,000 of trust preferred securities and an additional $186,000 additional investment in common equity of FBTCST I is invested in junior subordinated debentures issued to FBTCST I. The subordinated debentures mature in 2035, bear interest at three-month LIBOR plus 170 basis points (7.35% and 6.62% at December 31, 2023 and 2022, respectively) and resets quarterly.
The $6.0 million of trust preferred securities and an additional $186,000 additional investment in common equity of FBTCST I is invested in junior subordinated debentures issued to FBTCST I. The subordinated debentures mature in 2035, bear interest at three-month LIBOR plus 170 basis points (6.91% and 7.35% at December 31, 2024 and 2023, respectively) and resets quarterly.
(2) Includes demand loans, past due loans and overdrafts. 26 As of December 31, 2023, loans with maturities over one year consisted of approximately $3.1 billion in fixed rate loans and approximately $1.7 billion in variable rate loans. The loan maturities noted above are based on the contractual provisions of the individual loans.
(2) Includes demand loans, past due loans and overdrafts. As of December 31, 2024, loans with maturities over one year consisted of approximately $2.7 billion in fixed rate loans and approximately $1.9 billion in variable rate loans. The loan maturities noted above are based on the contractual provisions of the individual loans.
The Company’s operations (and therefore its loans) are concentrated in east central Illinois, an area where agriculture is the dominant industry. Accordingly, lending and other business relationships with agriculture-based businesses are critical to the Company’s success. At December 31, 2023, the Company’s loan portfolio included $588.5 million of loans to borrowers whose businesses are directly related to agriculture.
The Company’s operations (and therefore its loans) are concentrated in east central Illinois, an area where agriculture is the dominant industry. Accordingly, lending and other business relationships with agriculture-based businesses are critical to the Company’s success. At December 31, 2024, the Company’s loan portfolio included $630.6 million of loans to borrowers whose businesses are directly related to agriculture.
At December 31, 2023, the excess collateral at the FHLB would support approximately $856.2 million of additional advances for First Mid Bank. • First Mid Bank is a member of the Federal Reserve System and can borrow funds provided that sufficient collateral is pledged. • In addition, as of December 31, 2023, the Company had a revolving credit agreement in the amount of $15 million with The Northern Trust Company with an outstanding balance of $0 and $15 million in available funds.
At December 31, 2024, the excess collateral at the FHLB would support approximately $1,633.4 million of additional advances for First Mid Bank. • First Mid Bank is a member of the Federal Reserve System and can borrow funds provided that sufficient collateral is pledged. • In addition, as of December 31, 2024, the Company had a revolving credit agreement in the amount of $15 million with The Northern Trust Company with an outstanding balance of $0 and $15 million in available funds.
In 2023 the Company maintained account relationships with various public entities throughout its market areas. These public entities had total balances of $381.3 million and $319.4 million in various checking accounts and time deposits as of December 31, 2023 and 2022, respectively. These balances are subject to change depending upon the cash flow needs of the public entity.
In 2024 the Company maintained account relationships with various public entities throughout its market areas. These public entities had total balances of $261.2 million and $381.3 million in various checking accounts and time deposits as of December 31, 2024 and 2023, respectively. These balances are subject to change depending upon the cash flow needs of the public entity.
At December 31, 2023, the allowance for credit losses amounted to $68.7 million or 1.23% of total loans. At December 31, 2022, the allowance for credit losses amounted to $59.1 million or 1.22% of total loans.
At December 31, 2023, the allowance for credit losses amounted to $68.7 million or 1.23% of total loans.
The $4,000,000 of trust preferred securities and an additional $124,000 additional investment in common equity of CLST I, is invested in junior subordinated debentures issued to CLST I. The subordinated debentures mature in 2025, bear interest at three-month LIBOR plus 185 basis points (7.50% and 6.47% at December 31, 2023 and 2022, respectively) and resets quarterly.
The $4.0 million of trust preferred securities and an additional $124,000 additional investment in common equity of CLST I, is invested in junior subordinated debentures issued to CLST I. The subordinated debentures mature in 2025, bear interest at three-month LIBOR plus 185 basis points (7.06% and 7.50% at December 31, 2024 and 2023, respectively) and resets quarterly.
(2) Nonaccrual loans have been included in the average balances. Balances are net of unaccreted discount related to loans acquired. Net interest income on a tax-effected basis increased $9.1 million or 4.8% in 2023 compared to an increase of $17.1 million or 10.0% in 2022.
(2) Nonaccrual loans have been included in the average balances. Balances are net of unaccreted discount related to loans acquired. Net interest income on a tax-effected basis increased $35.3 million or 17.9% in 2024 compared to an increase of $9.1 million or 4.8% in 2023.
The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. A maximum of 34 600,000 shares of common stock may be issued under the ESPP. As of December 31, 2023, 2022, and 2021, 38,989, 23,055, and 11,748 shares, respectively were issued pursuant to ESPP.
The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. A maximum of 600,000 shares of common stock may be issued under the ESPP. As of December 31, 2024, 2023, and 2022, 32,936, 38,989, and 23,055 shares, respectively were issued pursuant to ESPP.
Details for these sources include: • First Mid Bank has $120 million available in overnight federal fund lines, including $30 million from First Horizon Bank, $20 million from U.S. Bank, N.A., $20 million from BMO Bank, N.A., $10 million from Wells Fargo Bank, N.A., $15 million from The Northern Trust Company and $25 million from Zions Bank.
Details for these sources include: • First Mid Bank has $130 million available in overnight federal fund lines, including $30 million from First Horizon Bank, N.A., $25 million from Zions Bank, $20 million from U.S. Bank, N.A., $20 million from BMO Bank, N.A., $20 million from Bankers' Bank., and $15 million from The Northern Trust Company.
During 2023, 2022, and 2021, the Company awarded 45,986 and 63,150, and 48,575 shares as stock and stock unit awards, respectively. This SI Plan is more fully described in Note 13 - Stock Incentive Plan. Stock Repurchase Program.
During 2024, 2023, and 2022, the Company awarded 80,332 and 45,986, and 63,150 shares as stock and stock unit awards, respectively. This SI Plan is more fully described in Note 13 - Stock Incentive Plan. Stock Repurchase Program.
These have an impact on the Company’s consolidated financial condition and results of consolidated operations. Net income was $68.9 million, $73.0 million, and $51.5 million and diluted earnings per share were $3.15, $3.60, and $2.87 for the years ended December 31, 2023, 2022, and 2021, respectively.
These have an impact on the Company’s consolidated financial condition and results of consolidated operations. Net income was $78.9 million, $68.9 million, and $73.0 million and diluted earnings per share were $3.30, $3.15, and $3.60 for the years ended December 31, 2024, 2023, and 2022, respectively.
The Company’s provision for credit losses was $6.1 million for 2023, compared to $4.8 million for 2022, and $15.2 million for 2021. The increase in provision expense for 2023 was primarily due to the acquisition of Blackhawk Bank. The decrease of provision expense in 2022 was primarily due to the provision requirements in 2021 for the acquisition of Providence Bank.
The Company’s provision for credit losses was $5.6 million for 2024, compared to $6.1 million for 2023, and $4.8 million for 2022. The decrease of provision expense in 2024 was primarily due to the provision requirements in 2023 for the acquisition of Blackhawk Bank. The increase in provision expense for 2023 was primarily due to the acquisition of Blackhawk Bank.
The primary reasons for the more significant year-to-year changes in other expense components are as follows: • Salaries and employee benefits, the largest component of other expense, increased primarily due to the acquisition of Blackhawk Bank an increase in incentive compensation and commission, increases for merit raises and applicable payroll taxes, and an increase in employee group insurance expense, partially offset by a decline in bonus accrual expense.
The primary reasons for the more significant year-to-year changes in other expense components are as follows: • Salaries and employee benefits, the largest component of other expense, increased in 2024 was due to former Blackhawk Bank employees being present the entire calendar year, increase in the bonus accrual, incentive compensation, share based compensation, merit increases and applicable payroll taxes The increase in 2023 was primarily due to the acquisition of Blackhawk Bank, an increase in incentive compensation and commission, increases for merit raises and applicable payroll taxes, and an increase in employee group insurance expense, partially offset by a decline in bonus accrual expense.
From and including the date of issuance to, but excluding May 14, 2026, the notes will bear interest at an initial rate of 3.5% per annum. From and including May 14, 2026 to, but excluding the maturity date, the notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 285 basis points.
From and including May 14, 2026 to, but excluding the maturity date, the notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 285 basis points.
The Company estimates expected credit losses over the contractual period that the Company is exposed to credit risk via a contractual obligation to extend credit unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is included in other liabilities in the consolidated balance sheets. Other Real Estate Owned.
The Company estimates expected credit losses over the contractual period that the Company is exposed to credit risk via a contractual obligation to extend credit unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses 18 on off-balance sheet credit exposures is included in other liabilities in the consolidated balance sheets. Deferred Income Tax Assets/Liabilities.
The following table presents information concerning the aggregate amount of nonperforming loans and repossessed assets (in thousands): December 31, 2023 2022 2021 2020 2019 Nonaccrual loans $ 18,832 $ 15,956 $ 18,105 $ 23,750 $ 25,118 Troubled debt restructurings which are performing in accordance with revised terms 1,296 3,214 3,931 4,373 2,700 Total nonperforming loans 20,128 19,170 22,036 28,123 27,818 Repossessed assets 1,164 4,369 5,019 2,493 3,720 Total nonperforming loans and repossessed assets $ 21,292 $ 23,539 $ 27,055 $ 30,616 $ 31,538 Nonperforming loans to loans, before allowance for credit losses 0.36 % 0.40 % 0.55 % 0.90 % 1.03 % Nonperforming loans and repossessed assets to loans, before allowance for credit losses 0.38 % 0.49 % 0.68 % 0.98 % 1.17 % The $2.9 million increase in nonaccrual loans during 2023 resulted from the net of $18.9 million of loans put on nonaccrual status, offset by $0.7 million of loans transferred to other real estate owned, $0.2 million of loans charged off and $15.1 million of loans becoming current or paid-off.
The following table presents information concerning the aggregate amount of nonperforming loans and repossessed assets (in thousands): December 31, 2024 2023 2022 2021 2020 Nonaccrual loans $ 28,775 $ 18,832 $ 15,956 $ 18,105 $ 23,750 Modified loans which are performing in accordance with revised terms 1,060 1,296 3,214 3,931 4,373 Total nonperforming loans 29,835 20,128 19,170 22,036 28,123 Repossessed assets 2,195 1,164 4,369 5,019 2,493 Total nonperforming loans and repossessed assets $ 32,030 $ 21,292 $ 23,539 $ 27,055 $ 30,616 Nonperforming loans to loans, before allowance for credit losses 0.53 % 0.36 % 0.40 % 0.55 % 0.90 % Nonperforming loans and repossessed assets to loans, before allowance for credit losses 0.56 % 0.38 % 0.49 % 0.68 % 0.98 % The $9.9 million increase in nonaccrual loans during 2024 resulted from the net of $18.8 million of loans put on nonaccrual status, offset by $4.7 million of loans transferred to other real estate owned, $3.3 million of loans charged off and $0.8 million of loans becoming current or paid-off.
Senior management is actively involved in business development efforts and the maintenance and monitoring of credit underwriting and approval. The loan review system and controls are designed to identify, monitor, and address asset quality problems in an accurate and timely manner.
Management and the Board of Directors of the Company review these policies at least annually. Senior management is actively involved in business development efforts and the maintenance and monitoring of credit underwriting and approval. The loan review system and controls are designed to identify, monitor, and address asset quality problems in an accurate and timely manner.
Analysis of the allowance for credit losses for the past five years and of changes in the allowance for these periods is summarized as follows (dollars in thousands): 2023 2022 2021 2020 2019 Average loans outstanding, net of unearned income $ 5,079,949 $ 4,518,566 $ 3,778,142 $ 3,003,488 $ 2,598,718 Adjustment for adoption of ASU 2016-13 — — — 1,672 — Allowance-beginning of period 59,093 54,655 41,910 28,583 26,189 Initial allowance on loans purchased with credit deterioration 3,791 863 2,074 — — Charge-offs: Construction and land development 14 2 205 13 — 1-4 family residential properties 87 191 371 393 1,477 Commercial real estate 25 414 535 830 1,743 Agricultural loans 408 93 — — 24 Commercial and industrial loans 529 870 3,118 1,991 1,828 Consumer loans 1,568 1,380 1,405 617 1,254 Total charge-offs 2,631 2,950 5,634 3,844 6,326 Recoveries: Construction and land development — 100 — — — 1-4 family residential properties 216 359 211 299 91 Commercial real estate 805 385 60 169 12 Agricultural loans 38 54 1 — — Commercial and industrial loans 576 208 139 179 155 Consumer loans 683 613 743 421 357 Total recoveries 2,318 1,719 1,154 1,068 615 Net charge-offs 313 1,231 4,480 2,776 5,711 Provision for credit losses 6,104 4,806 15,151 16,103 6,433 Allowance-end of period $ 68,675 $ 59,093 $ 54,655 $ 41,910 $ 26,911 Ratio of annualized net charge-offs to average loans 0.01 % 0.03 % 0.12 % 0.09 % 0.22 % Ratio of allowance for credit losses to loans outstanding (less unearned interest at end of period) 1.23 % 1.22 % 1.37 % 1.34 % 1.00 % Ratio of allowance for credit losses to nonperforming loans 341.2 % 308.3 % 248.0 % 149.0 % 96.7 % The ratio of the allowance for credit losses to nonperforming loans was 341.2% as of December 31, 2023 compared to 308.3% as of December 31, 2022.
Analysis of the allowance for credit losses for the past five years and of changes in the allowance for these periods is summarized as follows (dollars in thousands): 2024 2023 2022 2021 2020 Average loans outstanding, net of unearned income $ 5,558,527 $ 5,079,949 $ 4,518,566 $ 3,778,142 $ 3,003,488 Adjustment for adoption of ASU 2016-13 — — — — 1,672 Allowance-beginning of period 68,675 59,093 54,655 41,910 28,583 Initial allowance on loans purchased with credit deterioration — 3,791 863 2,074 — Charge-offs: Construction and land development — 14 2 205 13 1-4 family residential properties 195 87 191 371 393 Commercial real estate 451 25 414 535 830 Agricultural loans 2,410 408 93 — — Commercial and industrial loans 688 529 870 3,118 1,991 Consumer loans 2,004 1,568 1,380 1,405 617 Total charge-offs 5,748 2,631 2,950 5,634 3,844 Recoveries: Construction and land development 5 — 100 — — 1-4 family residential properties 339 216 359 211 299 Commercial real estate 184 805 385 60 169 Agricultural loans 75 38 54 1 — Commercial and industrial loans 330 576 208 139 179 Consumer loans 687 683 613 743 421 Total recoveries 1,620 2,318 1,719 1,154 1,068 Net charge-offs 4,128 313 1,231 4,480 2,776 Provision for credit losses 5,635 6,104 4,806 15,151 16,103 Allowance-end of period $ 70,182 $ 68,675 $ 59,093 $ 54,655 $ 41,910 Ratio of annualized net charge-offs to average loans 0.07 % 0.01 % 0.03 % 0.12 % 0.09 % Ratio of allowance for credit losses to loans outstanding (less unearned interest at end of period) 1.24 % 1.23 % 1.22 % 1.37 % 1.34 % Ratio of allowance for credit losses to nonperforming loans 235.2 % 341.2 % 308.3 % 248.0 % 149.0 % The ratio of the allowance for credit losses to nonperforming loans was 235.2% as of December 31, 2024 compared to 341.2% as of December 31, 2023.
The Company’s policy is to discontinue the accrual of interest income on any loan for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal.
Repossessed assets include primarily repossessed real estate and automobiles. The Company’s policy is to discontinue the accrual of interest income on any loan for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal.
The following table shows the Company’s annualized performance ratios for the years ended December 31, 2023, 2022, and 2021: 2023 2022 2021 Return on average assets 0.97 % 1.11 % 0.90 % Return on average common equity 10.10 % 11.38 % 8.38 % Average common equity to average assets (non-GAAP) 9.61 % 9.77 % 10.72 % Total assets at December 31, 2023, 2022, and 2021 were $7.59 billion, $6.74 billion, and $5.99 billion, respectively.
The following table shows the Company’s annualized performance ratios for the years ended December 31, 2024, 2023, and 2022: 2024 2023 2022 Return on average assets 1.04 % 0.97 % 1.11 % Return on average common equity 9.67 % 10.10 % 11.38 % Average common equity to average assets (non-GAAP) 10.76 % 9.61 % 9.77 % Total assets at December 31, 2024, 2023, and 2022 were $7.52 billion, $7.59 billion, and $6.74 billion, respectively.
This loan was renewed on April 7, 2023 for one year as a revolving credit agreement. The interest rate is floating at 2.25% over the federal funds rate. The loan includes requirements for operating and capital ratios. The Company and its subsidiary banks were in compliance with the existing covenants at December 31, 2023 and 2022.
This loan was renewed on April 5, 2024 for one year as a revolving credit agreement. The interest rate is floating at 2.25% over the federal funds rate. The loan is unsecured. The Company and its subsidiary banks were in compliance with the existing covenants at December 31, 2024 and 2023.
Provision for Credit Losses The provision for credit losses in 2023 was $6.1 million compared to $4.8 million in 2022 and $15.2 million in 2021. Nonperforming loans increased to $20.1 million at December 31, 2023 from $19.2 million at December 31, 2022 and $22.0 million at December 31, 2021.
Provision for Credit Losses The provision for credit losses in 2024 was $5.6 million compared to $6.1 million in 2023 and $4.8 million in 2022. Nonperforming loans increased to $29.8 million at December 31, 2024 from $20.1 million at December 31, 2023 and $19.2 million at December 31, 2022.
ALCO meets at least monthly to review the Company’s exposure to interest rate changes as indicated by the various techniques and to make necessary changes in the composition terms and/or rates of the assets and liabilities. 33 Capital Resources At December 31, 2023, the Company’s stockholders' equity had increased approximately $160.0 million, or 25.3%, to $793.2 million from $633.2 million as of December 31, 2022.
ALCO meets at least monthly to review the Company’s exposure to interest rate changes as indicated by the various techniques and to make necessary changes in the composition terms and/or rates of the assets and liabilities. 33 Capital Resources At December 31, 2024, the Company’s stockholders' equity had increased approximately $53.2 million, or 6.7%, to $846.4 million from $793.2 million as of December 31, 2023.
The increase in this ratio is primarily due to an increase in the allowance. Management believes that the overall estimate of the allowance for credit losses appropriately accounts for probable losses attributable to current exposures. During 2023, the Company had net charge-offs of $313,000 compared to $1,231,000 in 2022.
The decrease in this ratio is primarily due to a increase in nonperforming loans. Management believes that the overall estimate of the allowance for credit losses appropriately accounts for probable losses attributable to current exposures. During 2024, the Company had net charge-offs of $4.1 million compared to $313,000 in 2023.
FHLB advances represent borrowings by the First Mid Bank to economically fund loan demand. At December 31, 2023 FHLB advances totaled $264 million with a weighted-average interest rate of 3.58% and maturities from May 2024 to December 2029.
FHLB advances represent borrowings by the First Mid Bank to economically fund loan demand. At December 31, 2024, FHLB advances totaled $242.4 million with a weighted-average interest rate of 3.97% and maturities from March 2025 to December 2029.
At December 31, 2022 FHLB advances totaled $465 million with a weighted-average interest rate of 3.48% and maturities from January 2023 to December 2032. The Company is party to a revolving credit agreement with The Northern Trust Company in the amount of $15 million. The balance on this line of credit was $0 as of December 31, 2023.
At December 31, 2023, FHLB advances totaled $263.6 million with a weighted-average interest rate of 3.58% and maturities from May 2024 to December 2029. The Company is party to a revolving credit agreement with The Northern Trust Company in the amount of $15 million. The balance on this line of credit was $0 as of December 31, 2024.
For the year ended December 31, 2022, the Company had $10 million of floating rate trust preferred securities outstanding through Trust II, and in September 2016, the Company acquired $4 million of floating rate trust preferred securities from First Clover Leaf under Clover Leaf Statutory Trust I and on May 1, 2018, the Company acquired $6 million of floating rate trust preferred securities from First BancTrust Corporation.
For the year ended December 31, 2024, the Company had $10 million of floating rate trust preferred securities outstanding through Trust II, in September 2016, the Company acquired $4 million of floating rate trust preferred securities from First Clover Leaf under Clover Leaf Statutory Trust I, on May 1, 2018, the Company acquired $6 million of floating rate trust preferred securities from First BancTrust Corporation, and on August 15, 2023, the Company also acquired $5.2 million of floating rate trust preferred securities from Blackhawk Bancorp, Inc.
The Company classifies its investments in debt securities as either held-to-maturity or available-for-sale. Securities classified as held-to-maturity are recorded at amortized cost. Available-for-sale and equity securities are carried at fair value. Fair value calculations are based on quoted market prices when such prices are available.
The Company classifies its investments in debt securities as either held-to-maturity or available-for-sale. Securities classified as held-to-maturity are recorded at amortized cost. Available-for-sale and equity securities are carried at fair value.
Year-end total nonperforming loans were $20.1 million at December 31, 2023 compared to $19.2 million at December 31, 2022, and $22.0 million at December 31, 2021. Repossessed Assets balances totaled $1.2 million at December 31, 2023 compared to $4.4 million at December 31, 2022, and $5.0 million at December 31, 2021.
Year-end total nonperforming loans were $29.8 million at December 31, 2024 compared to $20.1 million at December 31, 2023, and $19.2 million at December 31, 2022. Repossessed Assets balances totaled $2.2 million at December 31, 2024 compared to $1.2 million at December 31, 2023, and $4.4 million at December 31, 2022.
During 2023, net income contributed $68.9 million to equity before the payment of dividends to stockholders of $19.6 million. The change in market value of available-for-sale investment securities decreased stockholders' equity by $15.1 million, net of tax. Stock Plans Deferred Compensation Plan.
During 2024, net income contributed $78.9 million to equity before the payment of dividends to stockholders of $22.4 million. The change in market value of available-for-sale investment securities decreased stockholders' equity by $6.0 million, net of tax. Stock Plans Deferred Compensation Plan.
Since August 5, 1998, the Board of Directors has approved repurchase programs pursuant to which the Company may repurchase a total of approximately $76.7 million of the Company’s common stock. During 2023, the Company repurchased 13,481 shares (0.06% of common shares) at a total price of approximately $465,000.
Since August 5, 1998, the Board of Directors has approved repurchase programs pursuant to which the Company may repurchase a total of approximately $76.7 million of the Company’s common stock. During 2024, the Company repurchased 15,978 shares (0.07% of common shares) at a total price of approximately $659,000.
During 2022, the Company repurchased 10,647 (0.05% of common shares) at a total price of approximately $341,000. All of these shares were a result of shares withheld for taxes on vested employee stock incentives. As of December 31, 2023, approximately $3.6 million remains available for purchase under the repurchase programs. Treasury stock is further affected by activity in the DCP.
During 2023, the Company repurchased 13,481 (0.06% of common shares) at a total price of approximately $465,000. All of these shares were a result of shares withheld for taxes on vested employee stock incentives. As of December 31, 2024, approximately $2.9 million remains available for purchase under the repurchase programs. Treasury stock is further affected by activity in the DCP.
The primary reasons for the more significant year-to-year changes in other income components are as follows: • Wealth management revenues decreased in 2023 primarily due to lower commodity prices and higher interest rates resulting in less farm management income.
The primary reasons for the more significant year-to-year changes in other income components are as follows: • Wealth management revenues increased in 2024 primarily due to growth in net brokerage fees and trust management fees. The decrease in 2023 was primarily due to lower commodity prices and higher interest rates resulting in less farm management income.
The increase in 2022 was primarily due to the acquisition of Jefferson Bank. When purchasing investment securities, the Company considers its overall liquidity and interest rate risk profile, as well as the adequacy of expected returns relative to the risks assumed.
The decrease in 2023 was primarily due to the amortization of the portfolio and securities sold after the acquisition of Blackhawk Bank. When purchasing investment securities, the Company considers its overall liquidity and interest rate risk profile, as well as the adequacy of expected returns relative to the risks assumed.
The allowance for credit losses, in management's judgment, was allocated as follows to cover probable credit losses (dollars in thousands): December 31, 2023 December 31, 2022 December 31, 2021 % of loans to % of loans to % of loans to Allowance for credit losses total loans Allowance for credit losses total loans Allowance for credit losses total loans Construction and land development $ 2,918 3.7 % $ 2,250 3.0 % $ 1,743 3.6 % Agriculture real estate 1,366 7.0 % 1,433 8.5 % 1,257 7.0 % 1-4 family residential 4,220 9.7 % 3,742 9.1 % 2,330 10.0 % Commercial real estate 31,758 48.5 % 28,157 48.2 % 26,246 49.2 % Agricultural loans 705 3.5 % 585 3.5 % 983 3.8 % Commercial and industrial 25,450 26.0 % 20,808 25.7 % 19,241 24.4 % Consumer 2,258 1.6 % 2,118 2.0 % 2,855 2.0 % Total allocated 68,675 100.0 % 59,093 100.0 % 54,655 100.0 % Allowance at end of year $ 68,675 100.0 % $ 59,093 100.0 % $ 54,655 100.0 % 29 December 31, 2020 December 31, 2019 % of loans to % of loans to Allowance for credit losses total loans Allowance for credit losses total loans Construction and land development $ 1,666 3.9 % $ 1,146 3.5 % Agriculture real estate 1,084 8.1 % 1,093 8.9 % 1-4 family residential 2,322 10.4 % 1,386 12.5 % Commercial real estate 19,660 43.4 % 11,198 42.6 % Agricultural loans 1,526 4.4 % 1,386 5.1 % Commercial and industrial 13,485 27.3 % 9,273 24.3 % Consumer 2,167 2.5 % 1,429 3.1 % Total allocated 41,910 100.0 % 26,911 100.0 % Allowance at end of year $ 41,910 100.0 % $ 26,911 100.0 % Deposits Funding of the Company’s earning assets is substantially provided by a combination of consumer, commercial and public fund deposits.
The allowance is allocated to the individual loan categories by a specific allocation for all classified loans plus a percentage of loans not classified based on historical losses and other factors. 28 The allowance for credit losses, in management's judgment, was allocated as follows to cover probable credit losses (dollars in thousands): December 31, 2024 December 31, 2023 December 31, 2022 % of loans to % of loans to % of loans to Allowance for credit losses total loans Allowance for credit losses total loans Allowance for credit losses total loans Construction and land development $ 3,275 4.2 % $ 2,918 3.7 % $ 2,250 3.0 % Agriculture real estate 1,361 6.9 % 1,366 7.0 % 1,433 8.5 % 1-4 family residential 3,579 8.8 % 4,220 9.7 % 3,742 9.1 % Commercial real estate 32,669 48.5 % 31,758 48.5 % 28,157 48.2 % Agricultural loans 1,957 4.2 % 705 3.5 % 585 3.5 % Commercial and industrial 25,602 26.5 % 25,450 26.0 % 20,808 25.7 % Consumer 1,739 0.9 % 2,258 1.6 % 2,118 2.0 % Allowance at end of year $ 70,182 100.0 % $ 68,675 100.0 % $ 59,093 100.0 % December 31, 2021 December 31, 2020 % of loans to % of loans to Allowance for credit losses total loans Allowance for credit losses total loans Construction and land development $ 1,743 3.6 % $ 1,666 3.9 % Agriculture real estate 1,257 7.0 % 1,084 8.1 % 1-4 family residential 2,330 10.0 % 2,322 10.4 % Commercial real estate 26,246 49.2 % 19,660 43.4 % Agricultural loans 983 3.8 % 1,526 4.4 % Commercial and industrial 19,241 24.4 % 13,485 27.3 % Consumer 2,855 2.0 % 2,167 2.5 % Allowance at end of year $ 54,655 100.0 % $ 41,910 100.0 % Deposits Funding of the Company’s earning assets is substantially provided by a combination of consumer, commercial and public fund deposits.
By comparing the volumes of interest-bearing assets and liabilities that have contractual maturities and repricing points at various times in the future, management can gain insight into the amount of interest rate risk embedded in the balance sheet.
The Company has also assumed prepayments of loan assets in amounts consistent with market expectations. By comparing the volumes of interest-bearing assets and liabilities that have contractual maturities, repricing points, and prepayments at various times in the future, management can gain insight into the amount of interest rate risk embedded in the balance sheet.
Effects of Inflation Unlike industrial companies, virtually all of the assets and liabilities of the Company are monetary in nature. As a result, interest rates have a more significant impact on the Company’s performance than the effects of general levels of inflation.
See Note 9 – “Repurchase Agreements and Other Borrowings” for a more detailed description. 35 Effects of Inflation Unlike industrial companies, virtually all of the assets and liabilities of the Company are monetary in nature. As a result, interest rates have a more significant impact on the Company’s performance than the effects of general levels of inflation.
From and including October 15, 2025 to, but excluding the maturity date or earlier redemption, the Notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 383 basis points, or such other rate as determined pursuant to the Supplemental Indenture, provided that in no event shall the applicable floating interest rate be less than zero per annum. 31 The Company may, beginning with the interest payment date of October 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption.
From and including October 15, 2025 to, but excluding the maturity date or earlier redemption, the Notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 383 basis points, or such other rate as determined pursuant to the Supplemental Indenture, provided that in no event shall the applicable floating interest rate be less than zero per annum.
The Company also recognized $0 of deferred gains, recorded $1.9 million of write downs on seven real estate properties owned, and recorded a $2.3 million decrease fair market value discount. Loan Quality and Allowance for Credit Losses The allowance for credit losses represents management’s estimate of the reserve necessary to adequately account for probable losses existing in the current portfolio.
The Company also recognized no deferred gains, recorded $47,000 of write downs on one real estate properties owned, and recorded no change in fair market value discount. Loan Quality and Allowance for Credit Losses The allowance for credit losses represents management’s estimate of the reserve necessary to adequately account for probable losses existing in the current portfolio.
The year-to-date net yield on interest-earning assets excluding the TE adjustments of $3,060,000, $3,164,000, and $2,624,000 for 2023, 2022, and 2021, respectively, were 3.00%, 3.08%, and 3.17% at December 31, 2023, 2022, and 2021, respectively.
The year-to-date net yield on interest-earning assets excluding the TE adjustments of $3.1 million, $3.1 million, and $3.2 million for 2024, 2023, and 2022, respectively, were 3.28%, 3.00%, and 3.08% at December 31, 2024, 2023, and 2022, respectively.
As of December 31, 2023, there were 506,272 shares unassigned but available to be issued under the ESPP.
As of December 31, 2024, there were 473,336 shares unassigned but available to be issued under the ESPP.
The increase in 2023 was primarily due to securities sold soon after the close of the acquisition of Blackhawk Bank. • The increase in mortgage banking income during 2023 was primarily due to the acquisition of Blackhawk Bank.
The gain in 2023 were primarily due to securities sold soon after the close of the acquisition of Blackhawk Bank. • The increase in mortgage banking income during 2024 was primarily due to Blackhawk Bank being present the entire calendar year.
Loans sold balances were as follows: • $57.5 million (representing 413 loans) in 2023 • $62.3 million (representing 422 loans) in 2022 • $149.0 million (representing 1,011 loans) in 2021 First Mid Bank generally releases the servicing rights on loans sold into the secondary market. • Revenue from ATMs and debit cards increased in 2023 primarily due to the acquisition of Blackhawk Bank and in 2022 primarily due to the acquisition of Jefferson Bank. • Bank owned life insurance increased during 2023 due to the addition of Blackhawk Bank and higher interest rates.
Loans sold balances were as follows: • $125.5 million (representing 821 loans) in 2024 • $57.5 million (representing 413 loans) in 2023 • $62.3 million (representing 422 loans) in 2022 First Mid Bank generally releases the servicing rights on loans sold into the secondary market. • Revenue from ATMs and debit cards increased in 2024 primarily due to Blackhawk Bank being present the entire calendar year and in 2023 primarily due to the acquisition of Blackhawk Bank. • Bank owned life insurance decreased during 2024 due to the lower interest rates during part of the year.
Amortized cost is the principal balance outstanding, net of purchase discounts and premiums, fair value hedge accounting adjustments and deferred loan fees and costs. Accrued interest is reported separately and is included in interest receivable in the consolidated balance sheets. Allowance for Credit Losses - Loans.
The remainder of the impairment is recorded in other comprehensive income (loss). Loans. Loans are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase discounts and premiums, fair value hedge accounting adjustments and deferred loan fees and costs. Accrued interest is reported separately and is included in interest receivable in the consolidated balance sheets.
At December 31, 2023 and 2022, First Mid Bank did have industry loan concentrations in excess of 25% of total risk-based capital in the following industries (dollars in thousands): December 31, 2023 December 31, 2022 Principal % Outstanding Principal % Outstanding balance Loans balance Loans Other grain farming $ 472,456 8.47 % $ 445,241 9.23 % Lessors of non-residential buildings 1,086,152 19.46 % 956,120 19.81 % Lessors of residential buildings and dwellings 541,858 9.71 % 453,219 9.39 % Hotels and motels 215,386 3.86 % 209,837 4.35 % The Company had no further industry loan concentrations in excess of 25% of total risk-based capital.
At December 31, 2024 and 2023, First Mid Bank did have industry loan concentrations in excess of 25% of total risk-based capital in the following industries (dollars in thousands): December 31, 2024 December 31, 2023 Principal % Outstanding Principal % Outstanding balance Loans balance Loans Other grain farming $ 507,555 8.95 % $ 472,456 8.47 % Lessors of non-residential buildings 1,049,372 18.50 % 1,086,152 19.46 % Lessors of residential buildings and dwellings 557,285 9.82 % 541,858 9.71 % Hotels and motels — — % 215,386 3.86 % The Company had no further industry loan concentrations in excess of 25% of total risk-based capital.
The following table summarizes the composition of nonaccrual loans (dollars in thousands): December 31, 2023 December 31, 2022 Balance % of Total Balance % of Total Construction and land development $ — — % $ 14 0.1 % Agricultural real estate 1,146 6.1 % 1,258 7.9 % 1-4 family residential properties 4,940 26.2 % 4,943 31.0 % Multifamily residential properties — — % 672 4.2 % Commercial real estate 10,237 54.3 % 7,640 47.8 % Loans secured by real estate 16,323 86.6 % 14,527 91.0 % Agricultural loans — — % 57 0.4 % Commercial and industrial loans 1,931 10.3 % 1,098 6.9 % Consumer loans 578 3.1 % 274 1.7 % Total loans $ 18,832 100.0 % $ 15,956 100.0 % 27 Interest income that would have been reported if nonaccrual and restructured loans had been performing totaled $412,000, $103,000 and $308,000 for the years ended December 31, 2023, 2022, and 2021, respectively.
The following table summarizes the composition of nonaccrual loans (dollars in thousands): December 31, 2024 December 31, 2023 Balance % of Total Balance % of Total Construction and land development $ 6 — % $ — — % Agricultural real estate 2,213 7.7 % 1,146 6.1 % 1-4 family residential properties 4,937 17.2 % 4,940 26.2 % Multifamily residential properties — — % — — % Commercial real estate 7,716 26.8 % 10,237 54.3 % Loans secured by real estate 14,872 51.7 % 16,323 86.6 % Agricultural loans 11,521 40.0 % — — % Commercial and industrial loans 2,071 7.2 % 1,931 10.3 % Consumer loans 311 1.1 % 578 3.1 % Total loans $ 28,775 100.0 % $ 18,832 100.0 % 26 Interest income that would have been reported if nonaccrual and restructured loans had been performing totaled $1.4 million, $412,000 and $103,000 for the years ended December 31, 2024, 2023, and 2022, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations – Interest Rate Sensitivity.” Based on the financial analysis performed as of December 31, 2023, which considers how the specific interest rate scenario would be expected to impact each interest-earning asset and each interest-bearing liability, the Company estimates that changes in the prime interest rate would impact First Mid Bank's performance, on a consolidated basis, as follows: Increase (Decrease) In December 31, 2023 Net Interest Income Return On Average Equity ($000) (%) 2023=10.10% Prime rate is 8.50% Prime rate increase of: 200 basis points to 10.50% $ (4,473 ) (2.32 )% (0.59 )% 100 basis points to 9.50% (1,640 ) (0.85 )% (0.22 )% Prime rate decrease of: 100 basis points to 7.50% 1,781 0.92 % 0.23 % 200 basis points to 6.50% 1,366 0.71 % 0.18 % The following table shows the same analysis for First Mid Bank performance as of December 31, 2022: Increase (Decrease) In December 31, 2022 Net Interest Income Return On Average Equity ($000) (%) 2022=11.38% Prime rate is 7.50% Prime rate increase of: 200 basis points to 9.50% $ (331 ) (0.21 )% (0.05 )% 100 basis points to 8.50% 36 0.02 % 0.01 % Prime rate decrease of: 100 basis points to 6.50% 1,863 1.17 % 0.26 % 200 basis points to 5.50% 2,044 1.29 % 0.28 % The Company's Board of Directors has adopted an interest rate risk policy that establishes maximum decreases in the percentage change in net interest income of 5% in a 100 basis point rate shift and 10% in a 200 basis point rate shift.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations – Interest Rate Sensitivity.” Based on the financial analysis performed as of December 31, 2024, which considers how the specific interest rate scenario would be expected to impact each interest-earning asset and each interest-bearing liability, the Company estimates that changes in the prime interest rate would impact First Mid Bank's performance, on a consolidated basis, as follows: Increase (Decrease) In December 31, 2024 Net Interest Income Return On Average Equity ($000) (%) 2024=9.65% Prime rate is 7.50% Prime rate increase of: 200 basis points to 9.50% $ 4,891 2.36 % 0.54 % 100 basis points to 8.50% 4,304 2.08 % 0.47 % Prime rate decrease of: 100 basis points to 6.50% (2,550 ) (1.23 )% (0.28 )% 200 basis points to 5.50% (4,211 ) (2.04 )% (0.47 )% The following table shows the same analysis for First Mid Bank performance as of December 31, 2023: Increase (Decrease) In December 31, 2023 Net Interest Income Return On Average Equity ($000) (%) 2023=10.10% Prime rate is 8.50% Prime rate increase of: 200 basis points to 10.50% $ (4,473 ) (2.32 )% (0.59 )% 100 basis points to 9.50% (1,640 ) (0.85 )% (0.22 )% Prime rate decrease of: 100 basis points to 7.50% 1,781 0.92 % 0.23 % 200 basis points to 6.50% 1,366 0.71 % 0.18 % The Company's Board of Directors has adopted an interest rate risk policy that establishes maximum decreases in the percentage change in net interest income of 5% in a 100 basis point rate shift and 10% in a 200 basis point rate shift.
The results above are based on one-time “shock” moves and ramped rate increases and do not take into account any management response or mitigating action. 36 Interest rate sensitivity analysis is also used to measure the Company’s interest risk by computing estimated changes in the Economic Value of Equity (“EVE”) of the First Mid Bank under various interest rate shocks.
The results above are based on one-time “shock” moves and ramped rate increases and do not take into account any management response or mitigating action. Interest rate sensitivity analysis is also used to measure the Company’s interest risk by computing estimated changes in the Economic Value of Equity (“EVE”) of the First Mid Bank under various interest rate shocks.
At December 31, 2023, the estimated changes in EVE were inside the Company’s policy guidelines that normally allow for a change in capital of +/-10% from the base case scenario under a 100 basis point shock and within the guidelines of +/- 20% from the base case scenario under a 200 basis point shock.
At December 31, 2024, the estimated changes in EVE were inside the Company’s policy guidelines that normally allow for a change in capital of +/-10% from the base case scenario under a 100 basis point shock and within the guidelines of +/- 20% from the base case scenario under a 200 basis point shock.
Changes In Economic Value of Equity Interest Rates (basis points) Amount of Change ($000) Percent of Change (%) December 31, 2023 +200 bp $ (75,500 ) (6.6 )% +100 bp (28,249 ) (2.5 )% -200 bp 11,597 1.0 % -100 bp 21,499 1.9 % December 31, 2022 +200 bp $ (30,992 ) (3.0 )% +100 bp (13,333 ) (1.3 )% -200 bp 16,153 1.6 % -100 bp 17,371 1.7 % As indicated above, at December 31, 2023, in the event of a sudden and sustained increase in prevailing market interest rates, the EVE would be expected to decrease if rates increased 100 or 200 basis points.
Changes In Economic Value of Equity Interest Rates (basis points) Amount of Change ($000) Percent of Change (%) December 31, 2024 +200 bp $ (153,538 ) (10.4 )% +100 bp (57,075 ) (3.9 )% -200 bp 37,317 2.5 % -100 bp 39,216 2.6 % December 31, 2023 +200 bp $ (75,500 ) (6.6 )% +100 bp (28,249 ) (2.5 )% -200 bp 11,597 1.0 % -100 bp 21,499 1.9 % As indicated above, at December 31, 2024, in the event of a sudden and sustained increase in prevailing market interest rates, the EVE would be expected to decrease if rates increased 100 or 200 basis points.
The following table presents the Company's projected change in EVE, on a consolidated basis, for the various rate shock levels at December 31, 2023 and 2022 (in thousands). All market risk sensitive instruments presented in the tables are held-to-maturity or available-for-sale. The Bank has no trading securities.
EVE is an expression of the long-term interest rate risk in the balance sheet as a whole. 36 The following table presents the Company's projected change in EVE, on a consolidated basis, for the various rate shock levels at December 31, 2024 and 2023 (in thousands). All market risk sensitive instruments presented in the tables are held-to-maturity or available-for-sale.
EVE is determined by calculating the net present value of each asset and liability category by rate shock. The net differential between assets and liabilities is the EVE. EVE is an expression of the long-term interest rate risk in the balance sheet as a whole.
EVE is determined by calculating the net present value of each asset and liability category by rate shock. The net differential between assets and liabilities is the EVE.

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