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What changed in FIRST MID BANCSHARES, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FIRST MID BANCSHARES, INC.'s 2024 and 2025 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 2025 report.

+279 added−295 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in FIRST MID BANCSHARES, INC.'s 2025 10-K

279 paragraphs added · 295 removed · 232 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

64 edited+3 added−5 removed100 unchanged
Biggest changeHe was Director of Internal Audit of Enterprise Bank and Trust from 2018 to 2021. Jason Crowder, age 54, has been Senior Vice President and General Counsel of the Company since August 2019.
Biggest changeRead, age 36, has been with the Company since 2021. He has been Executive Vice President of the Company since January 2024 and Chief Financial Officer of the Company since June 2025, and Chief Risk Officer of the Company since August 2021. He was Director of Internal Audit of Enterprise Bank & Trust from 2018 to 2021. Eric S.
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.
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 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. 7 • 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 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.
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.
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.
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.
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.
This interactive program targets executive, upper, and mid-level management, 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.
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.
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. Risk Management Strategy. The Company maintains a comprehensive risk management framework.
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.
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.
Under a rebuttable presumption established by the Federal Reserve Board, the acquisition of 10% or more of a class of voting stock of a bank holding company with a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, such as the Company, would, under the circumstances set forth in the presumption, constitute acquisition of control of the Company.
Under a rebuttable presumption established by the Federal Reserve Board, the acquisition of 10% or more of a class of voting stock of a bank holding company with a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as 8 amended, such as the Company, would, under the circumstances set forth in the presumption, constitute acquisition of control of the Company.
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 .
To enhance leadership skills, 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 has invested, and will continue to invest, significant resources to ensure the quality, experience and training of our loan officers in order to keep credit losses at a minimum. In addition to the human element of credit risk management, the Company’s loan policies address the additional aspects of credit risk.
The Company has invested, and will continue to invest, significant resources to ensure the quality, experience and training of our loan officers in order to keep credit losses to a minimum. In addition to the human element of credit risk management, the Company’s loan policies address the additional aspects of credit risk.
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 Blackhawk Merger closed August 15, 2023 and Blackhawk Bank was merged into First Mid Bank on December 1, 2023. Supervision and Regulation General Financial institutions, financial services companies, and their holding companies are extensively regulated under federal and state law.
Most lending personnel have signature authority that allows them to lend up to a certain amount based on their own judgment as to the creditworthiness of a borrower. The amount of the signature authority is based on the lending officers’ experience and training.
Most lending personnel have signature authority that allows them to lend up to a certain amount 5 based on their own judgment as to the creditworthiness of a borrower. The amount of the signature authority is based on the lending officers’ experience and training.
Notwithstanding the availability of funds for dividends, however, the OCC may prohibit the payment of any dividends if the OCC, as applicable, determines that such payment would constitute an unsafe or unsound practice. Affiliate and Insider Transactions.
Notwithstanding the availability of funds for dividends, however, the OCC may prohibit the payment of any dividends if the OCC, as applicable, determines that such payment would constitute an unsafe or unsound practice. 9 Affiliate and Insider Transactions.
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.
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 training to support job-specific skills, leadership growth, and compliance requirements.
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.
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 different communities with fifty-four 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.
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.
During the year ended December 31, 2025, 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.
The Company utilizes a comprehensive set of operational policies and procedures that have been developed over time. These policies are continually reviewed by management, the Chief Risk Officer, and the Board of Directors. The Company’s internal audit function completes procedures to ensure compliance with these policies.
The Company utilizes a comprehensive set of operational policies and procedures that have been developed over time. These policies are continually reviewed by management, the Chief Risk Officer, and the Board of Directors. The Company’s internal audit function completes procedures to verify compliance with these policies.
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.
During 2025, First Mid Bank operated branches in the Illinois counties of Adams, Boone, Champaign, 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.
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.
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 Premier 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) • Extra Vacation Week Buy Program • Maternity/Paternity Company 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 Short Term Incentives and Long Term Incentives • Employee Referral Program • Verizon Cell Phone Discount • First Mid Marketplace Discount Program • Job Shadowing 4 Encouraging Volunteerism The Company invests in and contributes to the growth and development of its communities.
As a result, the growth and earnings performance of the Company can be affected not only by management decisions and general economic conditions, but also by the requirements of applicable state and federal statutes and regulations and the policies of various governmental regulatory authorities including, but not limited to, the Office of the Comptroller of the Currency (the “OCC”), the Federal Reserve Board, the Federal Deposit Insurance Corporation (the “FDIC”), the Missouri Division of Finance (“MDOF”), the Internal Revenue Service and state taxing authorities.
As a result, the growth and earnings performance of the Company can be affected not only by management decisions and general economic conditions, but also by the requirements of applicable state and federal statutes and regulations and the policies of various governmental regulatory authorities including, but not limited to, the Office of the Comptroller of the Currency (the “OCC”), the Federal Reserve Board, the Federal Deposit Insurance Corporation (the “FDIC”), the Internal Revenue Service and state taxing authorities.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each share of common stock, par value $0.01 per share, of Blackhawk issued and outstanding immediately prior to the effective time of the Merger (other than shares held in treasury by Blackhawk and dissenting shares) were converted into and become the right to receive 1.15 shares of common stock, par value $4.00 per share, of First Mid and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.
Subject to the terms and conditions of the Blackhawk Merger Agreement, at the effective time of the Blackhawk Merger, each share of common stock, par value $0.01 per share, of Blackhawk issued and outstanding immediately prior to the effective time of the Blackhawk Merger (other than shares held in treasury by Blackhawk and dissenting shares) were converted into and became the right to receive 1.15 shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.
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.
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 ranges were increased by 4%, providing employees with even greater opportunities for growth and earning potential within their roles.
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 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, $3.5 million and $3.3 million for its insurance assessment during 2025, 2024, and 2023 respectively. OCC Assessments.
Approximately 72% of the Company’s total revenues were derived from lending activities in the fiscal year ended December 31, 2024. The Company has also focused on growing its commercial and retail deposit base through growth in checking, money markets and customer repurchase agreement balances.
Approximately 74% of the Company’s total revenues were derived from lending activities in the fiscal year ended December 31, 2025. The Company has also focused on growing its commercial and retail deposit base through growth in checking, money markets and customer repurchase agreement balances.
On an aggregate basis, the total consideration payable by First Mid at the closing of the Merger to Blackhawk’s shareholders and equity award holders was 3,290,222 shares of First Mid common stock valued at $93.51 million and $1,928 of cash in lieu of fractional shares.
On an aggregate basis, the total consideration payable by the Company at the closing of the Blackhawk Merger to Blackhawk’s shareholders and equity award holders was 3,290,222 shares of Company common stock valued at $93.51 million and $1,928 of cash in lieu of fractional shares.
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.
Total Rewards The Company is committed to enhancing employees’ overall experience by offering a competitive total rewards package, including compensation and benefits, designed to support and reward their contributions. In 2025, the Company prioritized its workforce by making meaningful investments to ensure ongoing competitiveness in the market.
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.
During the years ended December 31, 2025, 2024, and 2023 the Company expensed supervisory fees totaling $661,000, $774,000, and $703,000, respectively. Changes in total expense are due to changes in assessment rates and increases in total assets of First Mid Bank. Capital Requirements.
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 described above, First Mid Bank exceeded minimum capital requirements under applicable guidelines as of December 31, 2025. As of December 31, 2025, approximately $54.5 million was available to be paid as dividends to the Company by First Mid Bank.
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.
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 $1.7 billion at December 31, 2021 to $2.6 billion at December 31, 2025.
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.
First Mid Bank's total risk-based capital ratio was 14.47%, Tier 1 risk-based ratio was 13.29%, common equity Tier 1 ratio was 13.29% and leverage ratio was 10.88%. 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.
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 Commitment to the Communities program encourages employees to be engaged in the communities where they live and work. In 2025, the Company’s employees volunteered 18,685 hours to organizations in their communities, compared to 22,321 hours in 2024. 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 $132.1 million at December 31, 2024.
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 $136.5 million at December 31, 2025.
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.
She has been Executive Vice President of the Company since April of 2022 and Chief Human Resources Officer of the Company 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 with the Company since 2024.
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.
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 $3.1 million (0.06% of total loans) over the past five years. Nonperforming loans were $31.9 million (0.53% of total loans) at December 31, 2025.
Over 41% of the Company’s workforce contributed to its annual United Way campaign and contributed an impressive $78,000. The Company matches 100% of those donations in the sequent year which resulted in a total contribution to the United Way of over $167,000 back to our communities in 2024. Business Strategies Vision Statement.
Approximately, 38% of the Company’s workforce contributed to its annual United Way campaign and contributed an impressive $80,000. The Company matches 100% of those donations in the sequent year which resulted in a total contribution to the United Way of over $165,000 back to our communities in 2025. Business Strategies Vision Statement.
(“First Mid”) and Eagle Sub LLC, a newly formed Wisconsin limited liability company and wholly-owned subsidiary of First Mid (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Blackhawk Bancorp, Inc., a Wisconsin corporation (“Blackhawk”), pursuant to which, among other things, First Mid agreed to acquire 100% of the issued and outstanding shares of Blackhawk pursuant to a business combination whereby Blackhawk will merge with and into Merger Sub, whereupon the separate corporate existence of Blackhawk will cease and Merger Sub will continue as the surviving company and a wholly-owned subsidiary of First Mid (the “Blackhawk Merger”).
On March 20, 2023, the Company and Eagle Sub LLC, a newly formed Wisconsin limited liability company and wholly-owned subsidiary of the Company (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Blackhawk Merger Agreement”) with Blackhawk Bancorp, Inc., a Wisconsin corporation (“Blackhawk”), pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of Blackhawk pursuant to a business combination whereby Blackhawk merged with and into Merger Sub, whereupon the separate corporate existence of Blackhawk ceased and Merger Sub continued as the surviving company and a wholly-owned subsidiary of the Company (the “Blackhawk Merger”).
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.
For compensation, the Company increased the starting rate of pay an additional $1.00 per hour, for the third consecutive year, positively impacting many entry level employees.
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%.
As of December 31, 2025, 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 15.67%, a Tier 1 risk-based ratio of 13.55%, a common equity Tier 1 capital ratio of 13.16% and a leverage ratio of 11.07%.
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.
Diversity and Inclusion The Company’s commitment to diversity and inclusion begins with the Board of Directors, which provides oversight of our culture and holds management accountable to build and maintain a diverse and inclusive environment.
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.
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, the Company acquired Mid Rivers Insurance Group, Inc. which was subsequently merged into First Mid Insurance.
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.
Lastly, succession planning is conducted annually for the Company’s most senior leaders and high impact roles. 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.
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.
This prestigious award allows employees to nominate peers who have consistently exceeded expectations or achieved exceptional results while exemplifying the Company’s core values. The CEO also hosts a quarterly all-employee call to keep the workforce informed about Company updates and strategic initiatives.
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.
During these calls, employees are encouraged to submit questions in advance for management to address which fosters open communication and transparency. 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.
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.
He has been Executive Vice President of the Company since April 2025 and General Counsel of the Company since August 2019. 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 E.
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.
Frieburg, age 45, has been with the Company since 2024. He has been Senior Vice President and the Chief Information Officer of the Company since February 2024. Prior to joining the Company, he was a Chief Information Officer for INB, N.A. from 2021 to 2024.
Federal and state laws and regulations generally applicable to financial institutions and financial services companies, such as the Company and its subsidiaries, regulate, among other things, the scope of business, investments, reserves against deposits, capital levels relative to operations, the nature and amount of collateral for loans, the establishment of branches, mergers, consolidations and dividends.
The Company is unable to predict the nature or extent of the effects that fiscal or monetary policies, economic controls or new federal or state legislation may have on its business and earnings in the future. 6 Federal and state laws and regulations generally applicable to financial institutions and financial services companies, such as the Company and its subsidiaries, regulate, among other things, the scope of business, investments, reserves against deposits, capital levels relative to operations, the nature and amount of collateral for loans, the establishment of branches, mergers, consolidations and dividends.
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.
In addition, the Company provided more than a hundred hourly and salaried employees with spot bonuses in recognition of work on significant projects as well as the core system conversion. To further support employees, the Company enhanced its benefits by promoting health and financial well-being.
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.
He served as Executive Vice President of the Company since November 2016 and Chief Financial Officer of the Company from July 2017 to June 2025. He was Treasurer and Vice President of Finance and Investor Relations with Consolidated Communications, Inc from 1997 to 2016 and with Marine Bank prior. Michael L.
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.
Additionally, all employees complete annual regulatory training tailored to their specific job functions, through a partnership with a third-party provider. To further enhance 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.
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.
After the 3 formal training, participants deepen their learning through six months of follow-up cohort meetings, guided by the CEO and CHRO. In 2025, the Company further supported leadership growth by training almost fifty managers through its Leader of Leaders and Leader of Others programs.
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.
Talent Engagement For the past eight years, the Company has partnered with a trusted industry leader to conduct an annual employee engagement survey. In 2025, 98% of employees participated, providing strong confidence that the results accurately reflect meaningful employee feedback and highlight genuine areas for improvement. To celebrate outstanding contributions, the Company’s CEO sponsors the annual Chairman’s Award for Excellence.
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.
Taylor, age 57, has been with the Company since 2000. He has been Senior Executive Vice President of the Company since 2014 and Chief Operating Officer of the Company since July 2017. He served as Chief Financial Officer of the Company from 2000 to 2017. He served as Executive Vice President of the Company from 2007 to 2014. Jordan D.
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 has been Executive Vice President and the Chief Retail Banking Officer of the Company since February 2024. Prior to joining the Company, he was the Sales and Client Experience Director at PNC Bank from 2013 to 2023. Jason M. Crowder, age 55, has been with the Company since 2019.
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 has been Executive Vice President of the Company since January 2019 and Chief Insurance Services Officer of the Company since 2015. He has severed as Chief Executive Officer and President of First Mid Insurance since September 2014. Amanda D. Lewis, age 46, has been with the Company since 2001.
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.
Dively (66) Chairman of the Board of Directors and Chief Executive Officer Matthew K. Smith (51) President Michael L. Taylor (57) Senior Executive Vice President and Chief Operating Officer Jordan D. Read (36) Executive Vice President and Chief Financial and Risk Officer Eric S. McRae (60) Executive Vice President and Chief Lending Officer Bradley L.
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.
He has been Executive Vice President of the Company and Chief Wealth Management Officer of the Company since 2015. He has been Chief Executive Officer and President of First Mid Wealth Management Company since 2018. Clay M. Dean, age 51, has been with the Company since 2010.
Human Capital The Company seeks to provide a work environment that attracts, develops, and retains top talent. The Company’s culture is derived from its core values: Integrity, Motivation, Professionalism, Accountability, Commitment, and Teamwork. These values are the framework for providing employees an engaging work experience that allows for career fulfillment and growth.
Human Capital The Company is committed to building a workplace that attracts, develops, and retains top talent. The culture is grounded in six core values: Integrity, Motivation, Professionalism, Accountability, Commitment, and Teamwork. These values guide how we operate and support an engaging employee experience that encourages career growth, fulfillment, and long term success.
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.
Talent Development The Company supports the personal and professional development of its employees through a variety of initiatives. Employees are offered tuition reimbursement of up to $3,500 annually for eligible educational courses, empowering them to pursue continued education and skill development.
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.
For 2025, the Company’s net interest margin on a tax-effected basis increased to 3.70% as of December 31, 2025 from 3.34% in December 31, 2024 primarily due to continued focus on loan pricing on new and renewed loans, continued efforts to increase the performance of the investment portfolio, and a decrease in funding costs.
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.
She has been Executive Vice President of the Company since January 2019 and Chief Operations Officer for the Company since July 2023. She served as Senior Vice President of the Company from 2014 to 2019. Rhonda R. Gatons, age 54, has been with the Company since 2016.
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.
Dively, age 66, has been with the Company since 2011. He has been the Chairman of the Board of Directors and Chief Executive Officer of the Company since January 2014. He was the President of the Company from January 2014 to June 2025.
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.
McRae, age 60, has been with the Company since 1999. He has been Executive Vice President of the Company since 2008. He has been Chief Lending Officer of the Company since January 2022. Bradley L. Beesley, age 54, has been with the Company since 2007.
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.
Prior to joining the Company, she was a Vice President and Director of Consumer Marketing Strategy at Commerce Bank. Anya Y. Schuetz, age 51, has been with the Company since 2013. She has been Senior Vice President of the Company since February 2023 and Director of Project Management of the Company since January 2013. Jeremy R.
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.
Prior to assuming these positions in the Company, he was the Senior Executive Vice President of the Company beginning in May 2011. Matthew K. Smith, age 51, has been with the Company since 2016. He has been President of the Company since June 2025.
Removed
On March 20, 2023, First Mid Bancshares, Inc.
Added
Beesley (54) Executive Vice President and Chief Wealth Management Officer Clay M. Dean (51) Executive Vice President and Chief Insurance Services Officer Amanda D. Lewis (46) Executive Vice President and Chief Operations Officer Rhonda R. Gatons (54) Executive Vice President and Chief Human Resources Officer Stas R. Wolak (49) Executive Vice President and Chief Retail Banking Officer Jason M.
Removed
The Company is unable to predict the nature or extent of the effects that fiscal or monetary policies, economic controls or new federal or state legislation may have on its business and earnings in the future.
Added
Crowder (55) Executive Vice President and General Counsel Megan E. McElwee (38) Executive Vice President and Chief Credit Officer Regina P. Nelson (55) Executive Vice President and Chief Marketing Officer Anya Y. Schuetz (51) Senior Vice President and Director of Project Management Jeremy R. Frieburg (45) Senior Vice President and Chief Information Officer 10 Joseph R.
Removed
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.
Added
McElwee, age 38, has been with the Company since 2011. She has been Executive Vice President of the Company since April 2025 and Chief Credit Officer of the Company since January 2022. Regina P. Nelson, age 55, has been with the Company since 2025. She has been Executive Vice President and Chief Marketing Officer of the Company since November 2025.
Removed
He served as Senior Lender of First Mid Bank from December 2008 to December 2016 and he served as President of the Decatur region from 2001 to December 2008. Bradley L.
Removed
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile certain protective policies and procedures are in place, the nature and sophistication of the threats continue to evolve. The Company may be required to expend significant additional resources in the future to modify and enhance these protective measures.
Biggest changeManagement cannot assert that any such failures, interruption or security breaches will not occur, or if they do occur that they will be adequately addressed. While certain protective policies and procedures are in place, the nature and sophistication of the threats continue to evolve.
Continued volatility in the market value of certain of the investment securities, whether caused by changes in market perceptions of credit risk, as reflected in the expected market yield of the security, or actual defaults in the portfolio could result in significant fluctuations in the value of the securities.
Continued volatility in the market value of certain investment securities, whether caused by changes in market perceptions of credit risk, as reflected in the expected market yield of the security, or actual defaults in the portfolio could result in significant fluctuations in the value of the securities.
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.
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.
These shifts in investing priorities may result in adverse effects on the market price of the Company’s securities to the extent that investors determine that the Company has not made sufficient progress on ESG matters. The Company’s business could suffer if it fails to attract and retain skilled people .
These shifts in investing priorities may result in adverse effects on the market price of the Company’s securities to the extent that investors determine that the Company has not made sufficient progress on ESG matters. 13 The Company’s business could suffer if it fails to attract and retain skilled people .
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.
If the Company’s stock price declines from levels at December 31, 2025, 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, 2025.
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.
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, 2025. A 11 listing of these industries is contained in under “Item 7.
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.
Overall economic conditions affecting businesses and consumers, including the current 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 $4.1 billion in loans secured by commercial, agricultural, and residential real estate.
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 .
In addition, any enforcement matters could impact supervisory and CRA ratings, which may restrict or limit the Company’s activities. Business results could be negatively effected by new regulatory accounting standards required to be implemented by the Company. The Company operates in a highly competitive industry and market area .
The security and integrity of these systems could be threatened by a variety of interruptions or information security breaches, including those caused by computer hacking, cyber-attacks, electronic fraudulent activity, or attempted theft of financial assets. Management cannot assert that any such failures, interruption or security breaches will not occur, or if they do occur that they will be adequately addressed.
The security and integrity of these systems could be threatened by a variety of interruptions or information security breaches, including those 12 caused by computer hacking, cyber-attacks, electronic fraudulent activity, or attempted theft of financial assets.
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.
Decline in the strength and stability of other financial institutions may adversely affect the Company’s business. 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.
A large percentage of the Company’s loans are to individuals and businesses in Illinois, consequently, any decline in the economy of this market area could have a materially adverse effect on the Company’s financial condition and results of operations. Decline in the strength and stability of other financial institutions may adversely affect the Company’s business.
The Company’s profitability depends significantly on economic conditions in the geographic region in which it operates. A large percentage of the Company’s loans are to individuals and businesses in Illinois, consequently, any decline in the economy of this market area could have a materially adverse effect on the Company’s financial condition and results of operations.
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.
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. These adverse conditions could lead to the Company having a diminished capacity for dividend payments.
Additionally, the Company faces the risk of operational disruption, failure, termination, or capacity constraints of any of the third parties that facilitate its business activities, including exchanges, clearing agents, clearing houses or other financial intermediaries. Such parties could also be the source of an attack on, or breach of, its operational systems.
The Company may be required to expend significant additional resources in the future to modify and enhance these protective measures. Additionally, the Company faces the risk of operational disruption, failure, termination, or capacity constraints of any of the third parties that facilitate its business activities, including exchanges, clearing agents, clearing houses or other financial intermediaries.
Added
Such parties could also be the source of an attack on, or breach of, its operational systems.
Added
The Company has exposure to different counterparties and executes transactions with various counterparties in the financial industry.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of the Company’s cybersecurity risk management process, the Company conducts an annual “tabletop” exercise during which the Company simulates cybersecurity incidents to ensure that the Company is prepared to respond to such an incident and to highlight any areas for potential improvement in the Company’s cyber incident preparedness.
Biggest changeThe Company has also established an Incident Response Plan that outlines steps and responsibilities to be taken during a cybersecurity incident. As part of the Company’s cybersecurity risk management process, the Company conducts an annual “tabletop” exercise during which the Company simulates cybersecurity incidents to assess preparedness and identify opportunities for improvement.
The Company’s cybersecurity risk management processes include technical security controls, policy enforcement mechanisms, monitoring systems, employee training, contractual arrangements, tools and related services from third-party providers, and management oversight to assess, identify and manage material risks from cybersecurity threats.
The Company’s cybersecurity risk management processes include technical security controls, policy enforcement mechanisms, monitoring systems, employee training, contractual arrangements, tools and related services from third-party providers, and management oversight to 14 assess, identify and manage material risks from cybersecurity threats.
ITEM 1C. CYBERSECURITY Risk management and strategy The Company’s Information Security strategy prioritizes detection, analysis and response to known, anticipated or unexpected threats; effective management of security risks; and resiliency against incidents.
ITEM 1C. CYBERSECURITY Risk management and strategy The Company’s Information Security strategy prioritizes the identification, analysis and response to known, anticipated or unexpected threats; effective management of security risks; and resiliency against incidents.
The Company also leverages industry associations, third-party benchmarking, the results from regular internal and third-party audits, threat intelligence feeds, and other similar resources to inform the Company’s cybersecurity processes and allocate resources.
The Company leverages industry associations, third-party benchmarking, the results from regular internal and third-party audits, including penetration testing, threat intelligence feeds, and other similar resources to inform the Company’s cybersecurity processes and allocate resources.
In the event of a potentially material cybersecurity event, the Incident Response Team (IRT) is notified and briefed, and meetings with that team and/or Executive Committee members are held, with the Board of Directors being briefed, as appropriate.
In the event of a potentially material cybersecurity incident, the Incident Response Team is notified and briefed, and meetings with the Incident Response Team, which includes management, are held, with the Board of Directors being briefed, as appropriate.
Through the Company’s cybersecurity risk management process, the Company continuously monitors cybersecurity vulnerabilities and potential attack vectors to Company systems, and the Company evaluates the potential operational and financial effects of any threat and of cybersecurity countermeasures made to defend against such threats.
Through the Company’s cybersecurity risk management process, the Company monitors on an ongoing basis cybersecurity vulnerabilities and potential attack vectors to Company systems, and evaluates the potential operational and financial effects of identified threats and related countermeasures.
The Company periodically engages third-party consultants to assist us in assessing, enhancing, implementing, and monitoring the Company’s cybersecurity risk management programs and responding to any incidents.
The Company also periodically engages third-party consultants to assist in assessing, enhancing, implementing, and monitoring the Company’s cybersecurity risk management programs and responding to incidents. The Company conducts tabletop testing of business continuity plans as outlined in the Company’s Business Continuity Management Program.
The Company’s Information Security Officer provides presentations to the Risk Oversight Committee and the Board, on cybersecurity risks quarterly. These briefings may include assessments of cyber risks, the threat landscape, updates on incidents, and reports on the Company’s investments in cybersecurity risk mitigation and governance.
The Company’s Information Security Risk Officer, who is a member of the risk management team reporting to the Chief Financial and Risk Officer, provides quarterly briefings to the ROC and the Board Risk Committee on cybersecurity risks. These briefings may include assessments of cyber risks, the threat landscape, updates on material incidents, and information regarding cybersecurity risk mitigation and governance.
The Company implements risk-based controls to protect the Company’s information, information systems, business operations, products and related services, and the information of the Company’s customers. The Company has adopted security-control principles based on the Federal Financial Institutions Examination Council (FFIEC) Cyber Security Assessment Tool (CAT), and other industry-recognized standards, and contractual requirements, as applicable.
The Company has policies in place, including an Information Security Program to implement risk-based controls to protect the Company’s information, information systems, business operations, products and related services, and the information of the Company’s customers. The Company has adopted security-control principles based on generally accepted industry-recognized standards, and contractual requirements, as applicable.
The Company has established a cybersecurity vendor risk management program, which is a cross-functional program that forms part of the Company’s Enterprise Risk Management program and is supported by the Company’s security, compliance, and third-party partners.
The Company has established a Vendor Management Program that forms part of the Company’s Enterprise Risk Management program and is supported by the Company’s security, compliance, and third-party partners. Through this program, the Company assesses cybersecurity risks associated with third-party service providers with whom the Company shares personal identifying and confidential information.
The Company maintains security programs that include physical, administrative and technical safeguards, and the Company maintains plans and procedures whose objective is to help the Company prevent and timely and effectively respond to cybersecurity threats or incidents.
The Company maintains security programs that include physical, administrative and technical safeguards and maintains plans and procedures intended to assist the Company in preventing and appropriately responding to cybersecurity threats or incidents.
Governance The Company’s Board of Directors has overall responsibility for risk oversight, with its committees assisting the Board in performing this function.
Governance The Company’s Board of Directors has overall responsibility for risk oversight, with its committees assisting the Board in performing this function. Oversight of cybersecurity risk has been delegated to the Board Risk Committee and Audit Committee, each of which reports to the full Board on a quarterly basis.
The Company has experienced, and may in the future experience, whether directly or through the Company’s third-party partners, cybersecurity incidents.
The Company continues to enhance its oversight processes to mature how cybersecurity risks associated with third-party products and services are identified and managed. The Company has experienced, and may in the future experience, whether directly or through the Company’s third-party partners, cybersecurity incidents.
This exercise is conducted at both the technical level and senior management level. In addition, all employees are required to pass mandatory cybersecurity training courses on an annual basis and receive bi-weekly phishing simulations to provide “experiential learning” on how to recognize phishing attempts.
These exercises are conducted at both the technical and senior management levels. In addition, all employees are required to complete mandatory annual cybersecurity training courses and participate in bi-weekly phishing simulations Designed to enhance awareness of social engineering threats.
The Company’s Information Security Officer (ISO), James Hinks, leads our cybersecurity program and oversees the Company's Security Operations Team (SOC), supporting our security functions of identifying, preventing, detecting, responding, and recovering. The SOC team comprises personnel with extensive experience in information technology across the private and public sectors. Mr.
The Chief Technology Officer oversees the Company’s Security Operations Team, which supports the Company’s efforts to identify, prevent, detect, respond to and recover from cybersecurity threats. The Security Operations Team is comprised of personnel with extensive information technology experience across both public and private sectors.
Hinks 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.
The Chief Technology Officer has over 25 years of experience across cybersecurity, software development, systems, networking, and other technology- disciplines, including significant experience in technology leadership roles. 15
Removed
The Company continues to integrate the Company’s cyber practice within the Company’s Risk Oversight Committee, and Enterprise Risk Management program, both of which are overseen by the Company’s Board of Directors and provide frameworks for identifying and tracking cyber-related business and compliance risks across the Organization.
Added
Vendors with access to personal identifying and confidential information are subject to more rigorous initial and more frequent ongoing due diligence, including reviews of Service Organization Control 2 reports, information security policies, vulnerability and penetration tests, human resource policies, and business continuity plans.
Removed
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.
Added
The Company maintains cyber insurance coverage intended to help mitigate certain potential losses related to cybersecurity incidents. For further discussion about these risks, see “Item 1A. Risk Factors – Operational Risks” The Company integrates its cybersecurity practices into the Company’s Enterprise Risk Management program to enhance the identification, assessment, and monitoring of cyber-related operational, regulatory, and compliance risks.
Removed
The Company’s Board of Directors has delegated oversight of risks related to cybersecurity to two Board committees, the Risk Oversight Committee and Audit Committee, and each committee reports on its activities and findings to the Board on a quarterly cadence. The Audit Committee is charged with reviewing the Company’s cybersecurity processes for assessing key strategic, operational, and compliance risks.
Added
The Enterprise Risk Management Program, Information Security Program, Incident Response Plan, Business Continuity Management Program, and Vendor Management Program are approved by the Company’s Risk Oversight Committee (ROC), which is a management committee overseen by the Company’s Board of Directors and chaired by the Company’s Chief Financial and Risk Officer.
Added
The ROC brings together a multidisciplinary group to take an enterprise-wide view risk and promote risk awareness and sound risk management practices. Subcommittees and working groups are also in place to discuss technical expertise on specific areas of risk within the Company and provide updates to ROC.
Added
The Board Risk Committee oversees management’s implementation and maintenance of the Company’s cybersecurity risk program and management’s response to material issues. The Audit Committee reviews the Company’s cybersecurity processes and compliance with governance policies and procedures. The Enterprise Risk Management program is reviewed and approved by the Board Risk Committee.
Added
The Information Security Risk Officer has over 20 years of experience in information security and network administration, including extensive experience in the banking industry, and holds multiple industry-recognized certifications. The Company’s Chief Technology Officer, who reports to the Chief Information Officer, provides oversight of the Company’s cybersecurity program as part of broader technology leadership responsibilities.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFirst 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.
Biggest changeIn 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. First Mid Insurance leases facilities located in four counties in Illinois and two counties in Missouri from non-affiliated third parties.
First 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.
First Mid Bank also conducts business through numerous facilities, owned, leased, and located on land only leases in twenty-seven counties throughout Illinois, six throughout Missouri, one county in Wisconsin, and one county in Texas.
The main office of First Mid Bank is located at 1515 Charleston Avenue, Mattoon, Illinois and is owned by First Mid Bank. First Mid Bank also owns a building located at 1520 Charleston Avenue, which is used by First Mid Insurance, and by First Mid Bank for back-room operations.
First Mid Bank also owns a building located at 1520 Charleston Avenue, which is used by First Mid Insurance, and by First Mid Bank for back-room operations. First Mid Insurance also uses a building owned by First Mid Bank at 1501 Broadway Avenue.
In addition, the Company owns facilities located at 1500 Wabash Avenue, Mattoon, Illinois, and 1420 Wabash Avenue, Mattoon, Illinois, which are used by branch support operations, and 1100 Broadway Avenue, Mattoon, Illinois which is used by loan operations, and a facility located at 1321 Charleston Avenue, Mattoon, Illinois which is used by First Mid Wealth Management Company.
In addition, First Mid Bank owns facilities located at 1420 Wabash Avenue, Mattoon, Illinois, which is used by branch support operations and 1100 Broadway Avenue, Mattoon, Illinois which is used by loan operations. The main office of First Mid Bank is located at 1515 Charleston Avenue, Mattoon, Illinois and is owned by First Mid Bank.
ITEM 2. P ROPERTIES The Company's headquarters is located at 1421 Charleston Avenue, Mattoon Illinois. This location is also used by the deposit operations department of First Mid Bank.
ITEM 2. P ROPERTIES The Company's headquarters is located at 1421 Charleston Avenue, Mattoon Illinois and is owned and used by First Mid Bank for various operation purposes.
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.
First Mid Wealth Management owns a facility located at 1321 Charleston Avenue, Mattoon, Illinois and 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. The Company believes these facilities are suitable and adequate to operate its banking and related business.
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.
Of the seventy-six banking offices operated by First Mid Bank, fifty-five are owned, eighteen are leased from non-affiliated third parties, and three are located in land only leases with non-affiliated third parties. First Mid Bank also has an office in metro Indianapolis, Indiana that provides agency finance.
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.
The net investment of the Company and subsidiaries in real estate and equipment at December 31, 2025 was $90.8 million.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+1 added−1 removed2 unchanged
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.
Biggest changeThe following table summarizes share repurchase activity for the fourth quarter of 2025: 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, 2025 – October 31, 2025 — $ — — $ 42,876,000 November 1, 2025 – November 30, 2025 — — — 45,672,000 December 1, 2025 – December 31, 2025 — — — 46,800,000 Total — $ — — $ 46,800,000 On June 24, 2025, the Board of Directors approved a repurchase program (the "2025 Repurchase Program"), which became effective on July 1, 2025.
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.
The Company’s shareholders are entitled to receive dividends as are declared by the Board of Directors, which considered quarterly payment of dividends during 2025. The ability of the Company to pay dividends, as well as fund its operations, is dependent upon receipt of dividends from First Mid Bank.
Removed
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]
Added
The 2025 Repurchase Program supersedes all previous repurchase plans and authorizes the Company to repurchase up to 1.2 million shares of the Company's common stock. During 2025, the Company did not repurchase any shares through this plan. ITEM 6. [Reserved] 16

Item 7. Management's Discussion & Analysis

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

123 edited+35 added−54 removed62 unchanged
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.
Biggest changeThe 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, 2025 December 31, 2024 December 31, 2023 Average Average Average Average Average Average Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets Interest-bearing deposits $ 155,839 $ 5,307 3.41 % $ 145,502 $ 7,900 5.42 % $ 82,640 $ 5,107 6.18 % Federal funds sold 76 3 3.67 % 297 53 18.00 % 8,299 419 5.05 % Certificates of deposit investments 2,297 103 4.47 % 3,053 144 4.71 % 1,822 98 5.37 % Investment securities (1) 1,106,919 30,822 2.78 % 1,153,216 31,084 2.67 % 1,241,315 34,196 3.05 % Loans (TE)(1)(2)(3) 5,749,728 339,842 5.91 % 5,558,527 321,498 5.78 % 5,079,949 263,406 5.19 % Total earning assets 7,014,859 376,077 5.36 % 6,860,595 360,679 5.25 % 6,414,025 303,226 4.73 % Other nonearning assets 726,346 804,459 749,078 Allowance for credit losses (71,802 ) (68,805 ) (62,878 ) Total assets $ 7,669,403 $ 7,596,249 $ 7,100,225 Liabilities and stockholders' equity Deposits: Demand deposits, interest-bearing $ 3,132,691 61,312 1.96 % $ 3,040,397 67,999 2.24 % $ 2,618,452 47,939 1.83 % Savings deposits 633,186 775 0.12 % 675,622 810 0.12 % 663,760 739 0.11 % Time deposits 1,074,940 36,240 3.37 % 1,019,629 38,110 3.74 % 961,162 28,616 2.98 % Total interest-bearing deposits 4,840,817 98,327 2.03 % 4,735,648 106,919 2.26 % 4,243,374 77,294 1.82 % Securities sold under agreements to repurchase 199,430 4,490 2.25 % 221,789 6,448 2.91 % 225,307 6,565 2.91 % FHLB advances 226,121 8,370 3.70 % 239,949 8,673 3.61 % 462,197 16,779 3.63 % Federal funds purchased 39 7 17.95 % — 1 — % 192 10 5.21 % Subordinated debt 76,140 3,790 4.98 % 99,313 4,454 4.48 % 99,638 4,196 4.18 % Junior subordinated debentures 24,376 1,817 7.45 % 24,168 2,156 8.92 % 21,337 1,859 8.87 % Other debt 361 24 7 % 1 — — % — — — % Total borrowings 526,467 18,498 3.51 % 585,220 21,732 3.71 % 808,671 29,409 3.64 % Total interest-bearing liabilities 5,367,284 116,825 2.18 % 5,320,868 128,651 2.42 % 5,052,045 106,703 2.11 % Demand deposits 1,353,150 1,407,537 1,312,023 Other liabilities 52,991 50,665 53,838 Stockholders’ equity 895,978 817,179 682,319 Total liabilities and stockholders' equity $ 7,669,403 $ 7,596,249 $ 7,100,225 Net interest income $ 259,252 $ 231,791 $ 196,523 Net interest spread 3.18 % 2.83 % 2.62 % TE net yield on interest-earning assets 3.70 % 3.34 % 3.05 % (1) Tax-exempt income is shown on a fully tax equivalent basis.
Employee Stock Purchase Plan . At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP provides eligible employees with the opportunity to purchase shares of common stock of the Company at a 15% discount through payroll deductions.
At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP provides eligible employees with the opportunity to purchase shares of common stock of the Company at a 15% discount through payroll deductions.
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.
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.
Financial obligations consist of the need for funds to meet extensions of credit, deposit withdrawals and debt servicing. The Company’s liquidity management focuses on the ability to obtain funds economically through assets that may be converted into cash at minimal costs or through other sources.
Financial obligations consist of the need for funds to meet extensions of credit, deposit withdrawals and debt servicing. The Company’s liquidity management focuses 33 on the ability to obtain funds economically through assets that may be converted into cash at minimal costs or through other sources.
Net interest income represents the difference between total interest income earned on earning assets and total interest expense paid on interest-bearing liabilities. The amount of interest income is dependent upon many factors, including the volume and mix of earning assets, the general level of interest rates and the dynamics of changes in interest rates.
Net interest income represents the difference between total interest income earned on earning assets and total interest expense paid on interest-bearing liabilities. The amount of interest income is dependent upon many factors, including the volume and 18 mix of earning assets, the general level of interest rates and the dynamics of changes in interest rates.
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 information on credit loss experience and nonperforming loans, see “Nonperforming Loans and Nonperforming Other Assets” and “Loan Quality and Allowance for Credit Losses” herein. 20 Other Income An important source of the Company’s revenue is derived from other income.
New issuances of trust preferred securities, however, would not count as Tier 1 regulatory capital. 32 In addition to requirements of the Dodd-Frank Act discussed above, the act also required the federal banking agencies to adopt rules that prohibit banks and their affiliates from engaging in proprietary trading and investing in and sponsoring certain unregistered investment companies (defined as hedge funds and private equity funds).
New issuances of trust preferred securities, however, would not count as Tier 1 regulatory capital. 31 In addition to requirements of the Dodd-Frank Act discussed above, the act also required the federal banking agencies to adopt rules that prohibit banks and their affiliates from engaging in proprietary trading and investing in and sponsoring certain unregistered investment companies (defined as hedge funds and private equity funds).
The Company has no general policy regarding renewals and borrower requests, which are handled on a case-by-case basis. 25 Nonperforming Loans and Nonperforming Other Assets Nonperforming loans include: (a) loans accounted for on a nonaccrual basis; (b) accruing loans contractually past due ninety days or more as to interest or principal payments; and (c) loans not included in (a) and (b) above which are defined as “modified”.
The Company has no general policy regarding renewals and borrower requests, which are handled on a case-by-case basis. 24 Nonperforming Loans and Nonperforming Other Assets Nonperforming loans include: (a) loans accounted for on a nonaccrual basis; (b) accruing loans contractually past due ninety days or more as to interest or principal payments; and (c) loans not included in (a) and (b) above which are defined as “modified”.
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.
For the Years Ended December 31, 2025, 2024, and 2023 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.
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.
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, 2025, 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 20 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 19 Changes in net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense.
The Company continues to focus its strategies and emphasis on retail core deposits, the major component of funding sources.
The Company continues to focus its strategies and emphasis on commercial and retail core deposits, the major component of funding sources.
The Company attempts to maintain a balance between monetary assets and monetary liabilities, over time, to offset these potential effects.
The Company attempts to maintain a balance between monetary assets and monetary liabilities, over time, to offset these potential effects. 34
In total cash and cash equivalents decreased by $21.8 million from year-end 2023. For the year ended December 31, 2023, net cash of $72.4 million was provided from operating activities, $474.4 million was provided from investing activities, and $556.2 million was used in financing activities. In total cash and cash equivalents decreased by $9.4 million from year-end 2022.
For the year ended December 31, 2023, net cash of $72.4 million was provided from operating activities, $474.4 million was provided from investing activities, and $556.2 million was used in financing activities. In total cash and cash equivalents decreased by $9.4 million from year-end 2022.
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.
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, 2025, 2024, and 2023.
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 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, 2025 2024 2023 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, 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.
The Company and First Mid Bank have capital ratios above the minimum regulatory capital requirements and, as of December 31, 2025, 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, 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.
A tabulation of the Company and First Mid Bank's capital ratios as of December 31, 2025 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.
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.
Capital Ratios For 2025, 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.
The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1955.
The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
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.
This loan was renewed on April 4, 2025 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, 2025 and 2024.
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 Company also recognized no deferred gains, recorded $377,000 of write-downs on three 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.
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.
This loan was renewed on April 4, 2025 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, 2025 and 2024.
Management reviews economic factors including the potential for reduced cash flow for commercial operating loans from reduction in sales or increased operating costs, decreased occupancy rates for commercial buildings, reduced levels of home sales for commercial land developments, the uncertainty regarding grain prices, increased operating costs for farmers, and increased levels of unemployment and bankruptcy impacting consumers’ ability to pay.
Management reviews economic factors including the potential for reduced cash flow for commercial operating loans from reduction in sales or increased operating costs, decreased occupancy rates for commercial buildings, the uncertainty regarding grain prices, increased operating costs for farmers, and increased levels of unemployment impacting consumers’ ability to pay.
An estimate of potential losses inherent in the loan portfolio are determined and an allowance for those losses is established by considering factors including historical loss rates, expected cash flows and estimated collateral values. In assessing these factors, the Company uses relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts.
An estimate of potential losses inherent in the loan portfolio are determined and an allowance for those losses is established by considering factors including loan loss experience, expected cash flows and estimated collateral values. In assessing these factors, the Company uses relevant available information, from internal and external sources, relating to, current conditions and reasonable and supportable forecasts.
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.
The balance of real estate loans held for sale, included in the balances shown above, amounted to $5.2 million and $6.6 million as of December 31, 2025 and 2024, respectively. Commercial and commercial real estate loans generally involve higher credit risks than residential real estate and consumer loans.
From and including the date of issuance to, but excluding October 15, 2025, the Notes will bear interest at an initial rate of 3.95% per annum.
From and including the date of issuance to, but excluding October 15, 2025, the Notes bore interest at an initial rate of 3.95% per annum.
(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.
(2) Includes demand loans, past due loans and overdrafts. As of December 31, 2025, loans with maturities over one year consisted of approximately $2.5 billion in fixed rate loans and approximately $2.1 billion in variable rate loans. The loan maturities noted above are based on the contractual provisions of the individual loans.
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.
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 (7.5% and 3.95% at December 31, 2025 and 2024, respectively).
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.
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, 2025, 2024, and 2023, 29,313, 32,936, and 38,989 shares, respectively were issued pursuant to ESPP.
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 $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 SOFR plus 205 basis points (6.02% and 7.25% at December 31, 2025 and 2024, respectively) and resets quarterly.
The $1.0 million of trust preferred securities and an additional $31,000 investment in common equity of BHST I is invested in junior subordinated debentures issued to BHST I. The subordinated debentures mature in 2032, bear interest at three-month LIBOR plus 325 basis points (8.17% and 8.87% at December 31, 2024 and 2023, respectively) and resets quarterly.
The $1.0 million of trust preferred securities and an additional $31,000 investment in common equity of BHST I is invested in junior subordinated debentures issued to BHST I. The subordinated debentures mature in 2032, bear interest at three-month SOFR plus 325 basis points (7.20% and 8.17% at December 31, 2025 and 2024, respectively) and resets quarterly.
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.
The Company’s operations (and therefore its loans) are concentrated in 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, 2025, the Company’s loan portfolio included $681.4 million of loans to borrowers whose businesses are directly related to agriculture.
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.
The year-to-date net yield on interest-earning assets excluding the TE adjustments of $3.1 million, $3.1 million, and $3.1 million for 2025, 2024, and 2023, respectively, were 3.65%, 3.28%, and 3.00% at December 31, 2025, 2024, and 2023, respectively.
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.
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 matured in 2025, bear interest at three-month SOFR plus 185 basis points (5.84% and 7.06% at December 31, 2025 and 2024, 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.
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 SOFR plus 170 basis points (5.69% and 6.91% at December 31, 2025 and 2024, respectively) and resets quarterly.
Net loan balances increased to $5.60 billion at December 31, 2024, from $5.51 billion at December 31, 2023, and from $4.77 billion at December 31, 2022. The increase in 2024 was primarily due to organic growth within the established footprint.
Net loan balances increased to $5.94 billion at December 31, 2025, from $5.60 billion at December 31, 2024, and from $5.51 billion at December 31, 2023. The increase in 2025 was primarily due to organic growth within the established footprint.
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 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 (SOFR plus 160 basis points) after June 15, 2011 (5.59% and 6.81% at December 31, 2025 and 2024, respectively).
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).
At December 31, 2025, the Company classified the cost basis of its common stock issued and held in trust in connection with the DCP of approximately $6.8 million as treasury stock. The Company also classified the cost basis of its related deferred compensation obligation of approximately $6.8 million as an equity instrument (deferred compensation).
(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.
(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 $27.5 million or 11.8% in 2025 compared to an increase of $35.3 million or 17.9% in 2024.
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.
During 2025, 2024, and 2023, the Company awarded 84,097 and 80,332, and 45,986 shares as stock and stock unit awards, respectively. This SI Plan is more fully described in Note 13 - Stock Incentive Plan. Stock Repurchase Program.
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.
The decrease in this ratio is primarily due to an 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 2025, the Company had net charge-offs of $5.2 million compared to $4.1 million in 2024.
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.
The following table shows the Company’s annualized performance ratios for the years ended December 31, 2025, 2024, and 2023: 2025 2024 2023 Return on average assets 1.20 % 1.04 % 0.97 % Return on average common equity 10.24 % 9.67 % 10.10 % Average common equity to average assets (non-GAAP) 11.68 % 10.76 % 9.61 % Total assets at December 31, 2025, 2024, and 2023 were $7.97 billion, $7.52 billion, and $7.59 billion, respectively.
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.
The decrease in provision expense in 2024 was primarily due to the required provision in 2023 tied to the Blackhawk Bank acquisition. Net charge-offs were $5.2 million during 2025, $4.1 million during 2024 and $0.3 million during 2023.
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.
These have an impact on the Company’s consolidated financial condition and results of consolidated operations. Net income was $91.7 million, $78.9 million, and $68.9 million and diluted earnings per share were $3.83, $3.30, and $3.15 for the years ended December 31, 2025, 2024, and 2023, respectively.
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.
Adjustments to this experience 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 individually evaluated loans by evaluating them separately.
From and including May 14, 2031 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 255 basis points.
From and including the date of issuance to, but excluding May 14, 2031, the notes will bear interest at an initial rate of 3.875% per annum. From and including May 14, 2031 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 255 basis points.
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.
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.
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.
Year-end total nonperforming loans were $31.9 million at December 31, 2025 compared to $29.8 million at December 31, 2024, and $20.1 million at December 31, 2023. Repossessed Assets balances totaled $2.9 million at December 31, 2025 compared to $2.7 million at December 31, 2024, and $1.2 million at December 31, 2023.
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.
The following table presents information concerning the aggregate amount of nonperforming loans and repossessed assets (dollars in thousands): December 31, 2025 2024 2023 2022 2021 Nonaccrual loans $ 31,053 $ 28,775 $ 18,832 $ 15,956 $ 18,105 Modified loans which are performing in accordance with revised terms 895 1,060 1,296 3,214 3,931 Total nonperforming loans 31,948 29,835 20,128 19,170 22,036 Repossessed assets 2,859 2,722 1,164 4,369 5,019 Total nonperforming loans and repossessed assets $ 34,807 $ 32,557 $ 21,292 $ 23,539 $ 27,055 Nonperforming loans to loans, before allowance for credit losses 0.53 % 0.53 % 0.36 % 0.40 % 0.55 % Nonperforming loans and repossessed assets to loans, before allowance for credit losses 0.58 % 0.56 % 0.38 % 0.49 % 0.68 % The $2.3 million increase in nonaccrual loans during 2025 resulted from the net of $20.3 million of loans put on nonaccrual status, offset by no loans transferred to other real estate owned, $4.9 million of loans charged off and $13.1 million of loans becoming current or paid-off.
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.
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. 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, 2025.
Availability of the funds is subject to the pledging of collateral to the Federal Home Loan Bank collateral that can be pledged includes one-to-four family residential real estate loans and securities.
Availability of the funds is subject to the pledging of collateral to the Federal Home Loan Bank. Collateral that is pledged includes one-to-four family residential real estate loans, commercial real estate loans, multi-family loans, and farmland.
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.
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.
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.
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. 32 Capital Resources At December 31, 2025, the Company’s stockholders' equity had increased approximately $112.3 million, or 13.3%, to $958.7 million from $846.4 million as of December 31, 2024.
The following table summarizes the composition of the loan portfolio, including loans held for sale, for the last five years (dollars in thousands): Outstanding 2024 Loans 2023 2022 2021 2020 Construction and land development $ 236,093 4.2 % $ 205,077 $ 144,264 $ 145,118 $ 122,479 Agricultural real estate 390,760 6.9 % 391,132 410,327 279,272 254,341 1-4 family residential properties 496,597 8.8 % 542,469 440,180 400,313 325,762 Multifamily residential properties 332,644 5.9 % 319,129 294,346 298,942 189,632 Commercial real estate 2,417,585 42.6 % 2,384,704 2,030,011 1,666,198 1,174,300 Loans secured by real estate 3,873,679 68.4 % 3,842,511 3,319,128 2,789,843 2,066,514 Agricultural loans 239,671 4.2 % 196,272 166,838 151,484 137,352 Commercial and industrial loans 1,335,920 23.6 % 1,266,159 1,082,960 832,008 738,313 Consumer loans 53,960 1.0 % 91,014 97,775 78,442 78,002 All other loans 169,232 2.8 % 184,609 159,511 143,746 118,238 Total loans $ 5,672,462 100.0 % $ 5,580,565 $ 4,826,212 $ 3,995,523 $ 3,138,419 Loan balances increased by $91.9 million or 1.6% from December 31, 2023 to December 31, 2024.
The following table summarizes the composition of the loan portfolio, including loans held for sale, for the last five years (dollars in thousands): Outstanding 2025 Loans % 2024 2023 2022 2021 Construction and land development $ 360,687 6.0 % $ 236,093 $ 205,077 $ 144,264 $ 145,118 Agricultural real estate 373,408 6.2 % 390,760 391,132 410,327 279,272 1-4 family residential properties 489,854 8.1 % 496,597 542,469 440,180 400,313 Multifamily residential properties 339,482 5.6 % 332,644 319,129 294,346 298,942 Commercial real estate 2,564,670 42.7 % 2,417,585 2,384,704 2,030,011 1,666,198 Loans secured by real estate 4,128,101 68.6 % 3,873,679 3,842,511 3,319,128 2,789,843 Agricultural loans 308,275 5.1 % 239,671 196,272 166,838 151,484 Commercial and industrial loans 1,381,598 23.0 % 1,335,920 1,266,159 1,082,960 832,008 Consumer loans 31,918 0.5 % 53,960 91,014 97,775 78,442 All other loans 161,482 2.8 % 169,232 184,609 159,511 143,746 Total loans $ 6,011,374 100.0 % $ 5,672,462 $ 5,580,565 $ 4,826,212 $ 3,995,523 Loan balances increased by $338.9 million or 6.0% from December 31, 2024 to December 31, 2025.
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.
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): 2025 2024 2023 2022 2021 Average loans outstanding, net of unearned income $ 5,749,728 $ 5,558,527 $ 5,079,949 $ 4,518,566 $ 3,778,142 Allowance-beginning of period 70,182 68,675 59,093 54,655 41,910 Initial allowance on loans purchased with credit deterioration — — 3,791 863 2,074 Charge-offs: Construction and land development 107 — 14 2 205 1-4 family residential properties 156 195 87 191 371 Commercial real estate 1,197 451 25 414 535 Agricultural loans 2,503 2,410 408 93 — Commercial and industrial loans 2,485 688 529 870 3,118 Consumer loans 1,425 2,004 1,568 1,380 1,405 Total charge-offs 7,873 5,748 2,631 2,950 5,634 Recoveries: Construction and land development — 5 — 100 — Agricultural real estate 53 — — — — 1-4 family residential properties 264 339 216 359 211 Commercial real estate 114 184 805 385 60 Agricultural loans 1,022 75 38 54 1 Commercial and industrial loans 586 330 576 208 139 Consumer loans 606 687 683 613 743 Total recoveries 2,645 1,620 2,318 1,719 1,154 Net charge-offs 5,228 4,128 313 1,231 4,480 Provision for credit losses 9,921 5,635 6,104 4,806 15,151 Allowance-end of period $ 74,875 $ 70,182 $ 68,675 $ 59,093 $ 54,655 Ratio of annualized net charge-offs to average loans 0.09 % 0.07 % 0.01 % 0.03 % 0.12 % Ratio of allowance for credit losses to loans outstanding (less unearned interest at end of period) 1.25 % 1.24 % 1.23 % 1.22 % 1.37 % Ratio of allowance for credit losses to nonperforming loans 234.4 % 235.2 % 341.2 % 308.3 % 248.0 % The ratio of the allowance for credit losses to nonperforming loans was 234.4% as of December 31, 2025 compared to 235.2% as of December 31, 2024.
The following table summarizes the composition of repossessed assets (dollars in thousands): December 31, 2024 December 31, 2023 Balance % of Total Balance % of Total Construction and land development $ 1,084 39.8 % $ 1,130 97.1 % 1-4 family residential properties 568 20.9 % 33 2.8 % Commercial real estate 527 19.4 % 0 — Total real estate 2,179 80.1 % 1,163 99.9 % Consumer loans 543 19.9 % 1 0.1 % Total repossessed collateral $ 2,722 100.0 % $ 1,164 100.0 % Repossessed assets sold during 2024 resulted in net gains of $1.3 million related to real estate asset sales and $57,000 of net gains related to other assets sales.
The following table summarizes the composition of repossessed assets (dollars in thousands): December 31, 2025 December 31, 2024 Balance % of Total Balance % of Total Construction and land development $ 772 27.0 % $ 1,084 39.8 % 1-4 family residential properties 56 2.0 % 568 20.9 % Commercial real estate 2,029 71.0 % 527 19.4 % Total real estate 2,857 99.9 % 2,179 80.1 % Consumer loans 2 0.1 % 543 19.9 % Total repossessed collateral $ 2,859 100.0 % $ 2,722 100.0 % Repossessed assets sold during 2025 resulted in net gains of $52,000 related to real estate asset sales and $1,000 of net gains related to other assets sales.
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.
FHLB advances represent borrowings by the First Mid Bank to economically fund loan demand. At December 31, 2025, FHLB advances totaled $270.0 million with a weighted-average interest rate of 3.44% and maturities from June 2026 to March 2035.
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.
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.
Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and assumptions, which could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company. Investment in Debt and Equity Securities.
Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and assumptions, which could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company. Allowance for Credit Losses - Loans.
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.
At December 31, 2024, the allowance for credit losses amounted to $70.2 million or 1.24% of total loans. 27 The allowance for credit losses, in management's judgment, was allocated as follows to cover probable credit losses (dollars in thousands): December 31, 2025 December 31, 2024 December 31, 2023 % 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 $ 5,129 6.0 % $ 3,275 4.2 % $ 2,918 3.7 % Agriculture real estate 1,283 6.2 % 1,361 6.9 % 1,366 7.0 % 1-4 family residential 3,753 8.1 % 3,579 8.8 % 4,220 9.7 % Commercial real estate 35,589 48.3 % 32,669 48.5 % 31,758 48.5 % Agricultural loans 1,401 5.1 % 1,957 4.2 % 705 3.5 % Commercial and industrial 26,285 25.9 % 25,602 26.5 % 25,450 26.0 % Consumer 1,435 0.4 % 1,739 0.9 % 2,258 1.6 % Allowance at end of year $ 74,875 100.0 % $ 70,182 100.0 % $ 68,675 100.0 % December 31, 2022 December 31, 2021 % of loans to % of loans to Allowance for credit losses total loans Allowance for credit losses total loans Construction and land development $ 2,250 3.0 % $ 1,743 3.6 % Agriculture real estate 1,433 8.5 % 1,257 7.0 % 1-4 family residential 3,742 9.1 % 2,330 10.0 % Commercial real estate 28,157 48.2 % 26,246 49.2 % Agricultural loans 585 3.5 % 983 3.8 % Commercial and industrial 20,808 25.7 % 19,241 24.4 % Consumer 2,118 2.0 % 2,855 2.0 % Allowance at end of year $ 59,093 100.0 % $ 54,655 100.0 % Deposits Funding of the Company’s earning assets is substantially provided by a combination of consumer, commercial and public fund deposits.
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.
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. Following the stockholders' approval at the 2025 annual meeting of the Company, a maximum of 1 million shares of common stock may be issued under the SI Plan.
As of December 31, 2024, there were 473,336 shares unassigned but available to be issued under the ESPP.
As of December 31, 2025, there were 444,023 shares unassigned but available to be issued under the ESPP.
Other borrowings consist of Federal Home Loan Bank (“FHLB”) advances, federal funds purchased, loans (short-term or long-term debt) that the Company has outstanding, subordinated debt and junior subordinated debentures. 30 Information relating to securities sold under agreements to repurchase and other borrowings as December 31, 2024, 2023, and 2022 is presented below (dollars in thousands): 2024 2023 2022 Securities sold under agreements to repurchase $ 204,122 $ 213,721 $ 221,414 Federal Home Loan Bank advances: FHLB-overnight 90,000 — 65,000 Fixed term – due in one year or less 7,435 60,000 110,040 Fixed term – due after one year 145,085 203,787 290,031 Subordinated debt 87,472 106,755 94,553 Junior subordinated debentures 24,280 24,058 19,364 Total $ 558,394 $ 608,321 $ 800,402 Average interest rate at end of period 3.30 % 4.41 % 2.52 % Maximum outstanding at any month-end: Securities sold under agreements to repurchase $ 282,285 $ 231,650 $ 257,061 Federal funds purchased — — 10,000 Federal Home Loan Bank advances: FHLB-overnight 90,000 150,000 310,000 Fixed term – due in one year or less 65,000 105,024 160,048 Fixed term – due after one year 223,744 415,005 290,031 Subordinated debt 106,934 106,755 94,553 Junior subordinated debentures 24,280 24,058 19,364 Averages for the period (YTD): Securities sold under agreements to repurchase $ 221,789 $ 225,307 $ 202,242 Federal funds purchased — 192 481 Federal Home Loan Bank advances: FHLB-overnight 560 55,104 100,084 Fixed term – due in one year or less 45,587 95,669 94,247 Fixed term – due after one year 193,802 311,424 82,070 Subordinated debt 99,313 99,638 94,471 Junior subordinated debentures 24,168 21,337 19,275 Debt: Loans due in one year or less — — 14 Total $ 585,219 $ 808,671 $ 592,884 Average interest rate during the period 3.71 % 2.16 % 2.16 % Securities sold under agreements to repurchase decreased $9.6 million during 2024 primarily due to the seasonal demands in balances and change in cash flow needs of various customers.
Other borrowings consist of Federal Home Loan Bank (“FHLB”) advances, federal funds purchased, loans (short-term or long-term debt) that the Company has outstanding, subordinated debt and junior subordinated debentures. 29 Information relating to securities sold under agreements to repurchase and other borrowings as December 31, 2025, 2024, and 2023 is presented below (dollars in thousands): 2025 2024 2023 Securities sold under agreements to repurchase $ 196,716 $ 204,122 $ 213,721 Federal Home Loan Bank advances: FHLB-overnight — 90,000 — Fixed term – due in one year or less 25,000 7,435 60,000 Fixed term – due after one year 245,000 145,085 203,787 Other borrowings: Federal funds purchased — — — Debt due in one year or less — — — Subordinated debt 60,008 87,472 106,755 Junior subordinated debentures 24,454 24,280 24,058 Total $ 551,178 $ 558,394 $ 608,321 Average interest rate at end of period 3.54 % 3.30 % 4.41 % Maximum outstanding at any month-end: Securities sold under agreements to repurchase $ 219,772 $ 282,285 $ 231,650 Federal Home Loan Bank advances: FHLB-overnight 25,000 90,000 150,000 Fixed term – due in one year or less 50,000 65,000 105,024 Fixed term – due after one year 245,000 223,744 415,005 Other borrowings: Federal funds purchased — — — Debt due in one year or less 4,000 — — Subordinated debt 87,505 106,934 106,755 Junior subordinated debentures 24,454 24,280 24,058 Averages for the period (YTD): Securities sold under agreements to repurchase $ 199,430 $ 221,789 $ 225,307 Federal Home Loan Bank advances: FHLB-overnight 6,142 560 55,104 Fixed term – due in one year or less 16,616 45,587 95,669 Fixed term – due after one year 203,363 193,802 311,424 Other borrowings: Federal funds purchased 39 — 192 Loans due in one year or less 361 — — Subordinated debt 76,140 99,313 99,638 Junior subordinated debentures 24,376 24,168 21,337 Total $ 526,467 $ 585,219 $ 808,671 Average interest rate during the period 3.51 % 3.71 % 2.16 % Securities sold under agreements to repurchase decreased $7.4 million during 2025 primarily due to the seasonal demands in balances and change in cash flow needs of various customers.
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 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 Company files U.S. federal and state of Florida, Illinois, Indiana, Missouri, and Wisconsin income tax returns. 23 Analysis of Consolidated Balance Sheets Securities The Company’s overall investment objectives are to insulate the investment portfolio from undue credit risk, maintain adequate liquidity, insulate capital against changes in market value and control excessive changes in earnings while optimizing investment performance.
Analysis of Consolidated Balance Sheets Securities The Company’s overall investment objectives are to insulate the investment portfolio from undue credit risk, maintain adequate liquidity, insulate capital against changes in market value and control excessive changes in earnings while optimizing investment performance.
Non-interest income increased to $96.3 million in 2024 compared to $86.8 million in 2023 and $74.7 million in 2022. The increase in 2024 was primarily due to the Blackhawk Bank acquisition being present for a full calendar year and the increase in insurance commissions due to the acquisition of Mid Rivers Insurance Group in 2024.
The increase in 2024 was primarily due to the Blackhawk Bank acquisition being present for a full calendar year and the increase in insurance commissions due to the acquisition of Mid Rivers Insurance Group in 2024. Non-interest expenses increased to $222.2 million in 2025 compared to $215.0 million in 2024, and $185.7 million in 2023.
During 2023, there were significant charge-offs of one agricultural operating loan to one borrower of $181,000 and a significant charge-off of one commercial operating loan to one borrower of $353,000. At December 31, 2024, the allowance for credit losses amounted to $70.2 million or 1.24% of total loans.
During 2024, there were significant charge-offs of two commercial real estate loans to two borrowers of $451,000, one agricultural operating loan to one borrower of $2.1 million, and a significant charge-off of one commercial operating loan to one borrower of $466,000. At December 31, 2025, the allowance for credit losses amounted to $74.9 million or 1.25% of total loans.
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.
During 2025, net income contributed $91.7 million to equity before the payment of dividends to stockholders of $23.4 million. The change in market value of available-for-sale investment securities increased stockholders' equity by $41.1 million, net of tax. Stock Plans Deferred Compensation Plan.
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.
These balances are subject to change depending upon the cash flow needs of the public entity. 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.
Stock Incentive Plan. At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the 2017 Stock Incentive Plan ("SI Plan"). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term.
Employees are eligible to participate in the 401(k) plan after three months of service with the Company. Stock Incentive Plan. At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the 2017 Stock Incentive Plan ("SI Plan"). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term.
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.
At December 31, 2025 and 2024, 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, 2025 December 31, 2024 Principal % Outstanding Principal % Outstanding balance Loans balance Loans Other grain farming $ 577,903 9.61 % $ 507,555 8.95 % Lessors of non-residential buildings 1,109,224 18.45 % 1,049,372 18.50 % Lessors of residential buildings and dwellings 641,822 10.68 % 557,285 9.82 % Hotels and motels 225,569 3.75 % — — The Company had no further industry loan concentrations in excess of 25% of total risk-based capital.
The following table sets forth the major components of other expense for the last three years (dollars in thousands): Change From Prior Year 2024 2023 2024 2023 2022 $ % $ % Salaries and employee benefits $ 124,134 $ 104,962 $ 98,594 $ 19,172 18.3 % $ 6,368 6.5 % Net occupancy and equipment expense 30,407 26,946 24,257 3,461 12.8 % 2,689 11.1 % Net other real estate owned expense 411 1,862 330 (1,451 ) -77.9 % 1,532 464.2 % FDIC insurance expense 3,463 3,339 1,805 124 3.7 % 1,534 85.0 % Amortization of other intangible assets 13,556 9,127 6,290 4,429 48.5 % 2,837 45.1 % Stationery and supplies 1,885 1,346 1,295 539 40.0 % 51 3.9 % Legal and professional 12,944 7,379 6,996 5,565 75.4 % 383 5.5 % Marketing and donations 3,418 3,005 2,999 413 13.7 % 6 0.2 % ATM / debit card expense 6,384 5,322 4,300 1,062 20.0 % 1,022 23.8 % Other expense 18,381 22,452 15,995 (4,071 ) -18.1 % 6,457 40.4 % Total other expense $ 214,983 $ 185,740 $ 162,861 $ 29,243 15.7 % $ 22,879 14.0 % Total non-interest expense increased to $215.0 million in 2024 from $185.7 million in 2023 and $162.9 million in 2022.
The following table sets forth the major components of other expense for the last three years (dollars in thousands): Change From Prior Year 2025 2024 2025 2024 2023 $ % $ % Salaries and employee benefits $ 134,615 $ 124,134 $ 104,962 $ 10,481 8.4 % $ 19,172 18.3 % Net occupancy and equipment expense 36,579 30,407 26,946 6,172 20.3 % 3,461 12.8 % Net other real estate owned expense 539 411 1,862 128 31.1 % (1,451 ) -77.9 % FDIC insurance expense 3,476 3,463 3,339 13 0.4 % 124 3.7 % Amortization of other intangible assets 12,443 13,556 9,127 (1,113 ) -8.2 % 4,429 48.5 % Stationery and supplies 1,770 1,885 1,346 (115 ) -6.1 % 539 40.0 % Legal and professional 10,746 12,944 7,379 (2,198 ) -17.0 % 5,565 75.4 % Marketing and donations 3,348 3,418 3,005 (70 ) -2.0 % 413 13.7 % ATM / debit card expense 6,945 6,384 5,322 561 8.8 % 1,062 20.0 % Other expense 11,786 18,381 22,452 (6,595 ) -35.9 % (4,071 ) -18.1 % Total other expense $ 222,247 $ 214,983 $ 185,740 $ 7,264 3.4 % $ 29,243 15.7 % Total non-interest expense increased to $222.2 million in 2025 from $215.0 million in 2024 and $185.7 million in 2023.
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.
The following table summarizes the composition of nonaccrual loans (dollars in thousands): December 31, 2025 December 31, 2024 Balance % of Total Balance % of Total Construction and land development $ 5 — % $ 6 — % Agricultural real estate 1,181 3.80 % 2,213 7.70 % 1-4 family residential properties 5,763 18.60 % 4,937 17.20 % Multifamily residential properties 371 1.20 % — — % Commercial real estate 10,381 33.40 % 7,716 26.80 % Loans secured by real estate 17,701 57.00 % 14,872 51.70 % Agricultural loans 19 0.10 % 11,521 40.00 % Commercial and industrial loans 1,967 6.30 % 2,071 7.20 % Consumer loans 182 0.60 % 311 1.11 % All other loans 11,184 36.00 % — — % Total loans $ 31,053 100.00 % $ 28,775 100.01 % 25 Interest income that would have been reported if nonaccrual and restructured loans had been performing totaled $1.2 million, $1.4 million and $412,000 for the years ended December 31, 2025, 2024, and 2023, respectively.
The following table sets forth the major components of other income for the last three years (in thousands): Change From Prior Year 2024 2023 2024 2023 2022 $ % $ % Wealth management revenues $ 22,818 $ 20,793 $ 22,492 $ 2,025 9.7 % $ (1,699 ) -7.6 % Insurance commissions 28,552 24,814 21,622 3,738 15.1 % 3,192 14.8 % Service charges 12,362 10,881 9,112 1,481 13.6 % 1,769 19.4 % Securities gains (losses), net (433 ) 3,383 33 (3,816 ) -112.8 % 3,350 10151.5 % Mortgage banking, net 3,957 2,282 1,190 1,675 73.4 % 1,092 91.8 % ATM / debit card revenue 16,807 14,347 12,422 2,460 17.1 % 1,925 15.5 % Bank owned life insurance 4,728 4,957 3,559 (229 ) -4.6 % 1,398 39.3 % Other income 7,495 5,329 4,252 2,166 40.6 % 1,077 25.3 % Total other income $ 96,286 $ 86,786 $ 74,682 $ 9,500 10.9 % $ 12,104 16.2 % Total non-interest income increased to $96.3 million in 2024 compared to $86.8 million in 2023 and $74.7 million in 2022.
The following table sets forth the major components of other income for the last three years (dollars in thousands): Change From Prior Year 2025 2024 2025 2024 2023 $ % $ % Wealth management revenues $ 22,941 $ 22,818 $ 20,793 $ 123 0.5 % $ 2,025 9.7 % Insurance commissions 32,295 28,552 24,814 3,743 13.1 % 3,738 15.1 % Service charges 12,297 12,362 10,881 (65 ) -0.5 % 1,481 13.6 % Securities gains (losses), net (2,509 ) (433 ) 3,383 (2,076 ) 479.4 % (3,816 ) -112.8 % Mortgage banking, net 3,660 3,957 2,282 (297 ) -7.5 % 1,675 73.4 % ATM / debit card revenue 16,411 16,807 14,347 (396 ) -2.4 % 2,460 17.1 % Bank owned life insurance 5,475 4,728 4,957 747 15.8 % (229 ) -4.6 % Other income 2,481 7,495 5,329 (5,014 ) -66.9 % 2,166 40.6 % Total other income $ 93,051 $ 96,286 $ 86,786 $ (3,235 ) -3.4 % $ 9,500 10.9 % Total non-interest income decreased and increased, respectively, to $93.1 million in 2025 compared to $96.3 million in 2024 and $86.8 million in 2023.
The $1.6 million increase in repossessed assets during 2024 resulted from the net of $5.3 million of additional assets repossessed, $3.7 million of repossessed assets sold, $47,000 of writedowns on existing assets, and no deferred fair value marks were recognized.
The $137,000 increase in repossessed assets during 2025 resulted from the net of $2.0 million of additional assets repossessed, $1.5 million of repossessed assets sold, $377,000 of write-downs on existing assets, and no deferred fair value marks were recognized.
Of this amount, $507.6 million was concentrated in other grain farming. Total loans to borrowers whose businesses are directly related to agriculture increased $42.1 million from $588.5 million at December 31, 2023 while loans concentrated in other grain farming increased $35.1 million from $472.5 million at December 31, 2023.
Of this amount, $577.9 million was concentrated in other grain farming. Total loans to borrowers whose businesses are directly related to agriculture increased $50.9 million from $630.6 million at December 31, 2024 while loans concentrated in other grain farming increased $70.3 million from $507.6 million at December 31, 2024.
The increase in 2023 was due to normal inflationary increases. • ATM and debit card expenses increased during 2024 primarily due to an increase in electronic transactions following the acquisition of Blackhawk Bank being present the entire calendar year.
The increase in 2024 was due to nonrecurring expenses associated with technology investment upgrades. • ATM and debit card expenses increased during 2024 primarily due to an increase in electronic transactions following the acquisition of Blackhawk Bank being present the entire calendar year. • Other operating expenses decreased in 2024 primarily due to the majority of acquisition costs associated with Blackhawk Bank occurring in 2023.
See Note 17 – “Commitments and Contingent Liabilities” herein for further information. Critical Accounting Policies and Use of Significant Estimates The Company has established various accounting policies that govern the application of U.S. generally accepted accounting principles in the preparation of the Company’s consolidated financial statements.
Critical Accounting Policies and Use of Significant Estimates The Company has established various accounting policies that govern the application of U.S. generally accepted accounting principles in the preparation of the Company’s consolidated financial statements. The significant accounting policies of the Company are described in the footnotes to the consolidated financial statements.
(Consolidated) 15.37 % 12.82 % 12.42 % 10.33 % First Mid Bank 14.51 % 13.40 % 13.40 % 10.82 % 34 Liquidity Liquidity represents the ability of the Company and its subsidiaries to meet all present and future financial obligations arising in the daily operations of the business.
(Consolidated) 15.67 % 13.55 % 13.16 % 11.07 % First Mid Bank 14.47 % 13.29 % 13.29 % 10.88 % Liquidity Liquidity represents the ability of the Company and its subsidiaries to meet all present and future financial obligations arising in the daily operations of the business.

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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, 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.
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, 2025, 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, 2025 Net Interest Income Return On Average Equity ($000) (%) 2024=10.24% Prime rate is 6.75% Prime rate increase of: 200 basis points to 8.75% $ 10,057 4.47 % 1.00 % 100 basis points to 7.75% 5,857 2.60 % 0.58 % Prime rate decrease of: 100 basis points to 5.75% (5,895 ) (2.62 )% (0.59 )% 200 basis points to 4.75% (9,392 ) (4.17 )% (0.95 )% The following table shows the same analysis for First Mid Bank performance as of December 31, 2024: 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 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.
Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in the table. Finally, the ability of many borrowers to repay their adjustable-rate debt may decrease in the event of an interest rate increase. 37
Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in the table. Finally, the ability of many borrowers to repay their adjustable-rate debt may decrease in the event of an interest rate increase. 36
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.
At December 31, 2025, 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, 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.
Changes In Economic Value of Equity Interest Rates (basis points) Amount of Change ($000) Percent of Change (%) December 31, 2025 +200 bp $ (90,413 ) (5.3 )% +100 bp (22,429 ) (1.3 )% -200 bp (92,437 ) (5.4 )% -100 bp (14,099 ) (0.8 )% 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 % 35 As indicated above, at December 31, 2025, 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.
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.
The following table presents the Company's projected change in EVE, on a consolidated basis, for the various rate shock levels at December 31, 2025 and 2024 (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 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 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.

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