What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-07 · 221 added, 138 removed, 1065 unchanged (25% of the section changed)

3 unchanged sentences

(In thousands, except share data)

March 31, 2024

June 30, 2024

December 31, 2023

6 unchanged sentences

Investment securities:

Available-for-sale, at fair value (amortized cost of $ 1,342,603 and $ 1,363,721 at March 31, 2024 and December 31, 2023, respectively)

Held-to-maturity, at amortized cost (estimated fair value of $ 2,282 and $ 2,286 at March 31, 2024 and December 31, 2023, respectively)

Available-for-sale, at fair value (amortized cost of $ 1,311,109 and $ 1,363,721 at June 30, 2024 and December 31, 2023, respectively)

Held-to-maturity, at amortized cost (estimated fair value of $ 2,277 and $ 2,286 at June 30, 2024 and December 31, 2023, respectively)

Equity securities, at fair value

38 unchanged sentences

Three months ended

Six months ended

(In thousands, except per share data)

21 unchanged sentences

Service charges

Securities gains (losses), net

Securities losses, net

Mortgage banking revenue, net

22 unchanged sentences

Three months ended

Six months ended

(In thousands)

Other comprehensive income (loss)

Unrealized gains (losses) on available-for-sale securities, net of tax benefit (expense) of $ 4,225 and ($ 5,544 ) for three months ended March 31, 2024 and 2023, respectively

reclassification adjustment for realized gains (losses) included in net income, net of tax benefit (expense) of $ 0 and ($ 13 ) for three months ended March 31, 2024 and 2023, respectively

Unrealized gains (losses) on available-for-sale securities, net of tax benefit (expense) of ($ 208 ) and ($ 5,583 ) for three months ended June 30, 2024 and 2023, respectively and $ 4,017 and $ 39 for the six months ended June 30, 2024 and 2023, respectively

reclassification adjustment for realized gains (losses) included in net income, net of tax benefit (expense) of $ 43 and $ 1 for three months ended June 30, 2024 and 2023, respectively and $ 43 and $ 14 for the six months ended June 30, 2024 and 2023, respectively

Other comprehensive income (loss), net of taxes

3 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

For the three months ended March 31, 2024

For the three months ended June 30, 2024 and 2023

(In thousands)

Comprehensive

Income (Loss)

March 31, 2024

Other comprehensive income, net tax

Cash dividends on common stock ( .230 /share)

Forfeiture of 384 restricted shares pursuant to the 2017 stock incentive plan

Issuance of 7,323 common shares pursuant to the employee stock purchase plan

Grant of restricted units pursuant to 2017 stock incentive plan

Deferred compensation

Vested restricted shares/units compensation expense

June 30, 2024

March 31, 2023

Other comprehensive loss, net tax

Cash dividends on common stock ( .230 /share)

Forfeiture of 700 restricted shares pursuant to the 2017 stock incentive plan

Issuance of 9,175 common shares pursuant to the employee stock purchase plan

Deferred compensation

Vested restricted shares/units compensation expense

June 30, 2023

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

For the six months ended June 30, 2024

(In thousands)

Comprehensive

December 31, 2023

8 unchanged sentences

Vested restricted shares/units compensation expense

March 31, 2024

June 30, 2024

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

For the three months ended March 31, 2023

For the six months ended June 30, 2023

(In thousands)

1 unchanged sentence

December 31, 2022

Other comprehensive income, net tax

Other comprehensive loss, net tax

Cash dividends on common stock ( .460 /share)

Issuance of 55,198 restricted shares pursuant to 2017 stock incentive plan

Issuance of 54,498 restricted shares pursuant to 2017 stock incentive plan, net of forfeitures

Issuance of 4,350 common shares pursuant to 2017 stock incentive plan

5 unchanged sentences

Vested restricted shares/units compensation expense

March 31, 2023

June 30, 2023

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Stateme nts of Cash Flows (unaudited)

Three months ended March 31,

Six months ended June 30,

(In thousands)

10 unchanged sentences

Gain on sale of loans held for sale, net

Gain on repayment of subordinated debentures

Increase in accrued interest receivable

11 unchanged sentences

Purchase of securities held-to-maturity

Income increasing amortized cost of HTM securities

Net decrease in loans

1 unchanged sentence

Proceeds from sales of other real property owned

Proceeds from bank owned life insurance death benefit

Net cash used in acquisition

Net cash provided by investing activities

Cash flows from financing activities:

Net increase (decrease) in deposits

(Decrease) increase in repurchase agreements

Net decrease in deposits

Decrease in repurchase agreements

Proceeds from FHLB advances

Repayment of FHLB advances

Repayment of subordinated debenture

Proceeds from issuance of common stock

1 unchanged sentence

Dividends paid on common stock

Net cash provided by (used in) financing activities

Net cash used in financing activities

Increase in cash and cash equivalents

4 unchanged sentences

Condensed Consolidated Statements of Cash Flows (unaudited)

Three months ended March 31,

Six months ended June 30,

(In thousands)

1 unchanged sentence

Cash paid during the period for:

Income taxes, net of refunds

Supplemental disclosures of noncash investing and financing activities

10 unchanged sentences

All significant intercompany balances and transactions have been eliminated in consolidation.

The financial information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods ended March 31, 2024 and 2023, and all such adjustments are of a normal recurring nature.

Certain amounts in the prior year’s consolidated financial statements may have been reclassified to conform to the March 31, 2024 presentation and there was no impact on net income or stockholders’ equity.

The results of the interim period ended March 31, 2024 are not necessarily indicative of the results expected for the year ending December 31, 2024.

The financial information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods ended June 30, 2024 and 2023, and all such adjustments are of a normal recurring nature.

Certain amounts in the prior year’s consolidated financial statements may have been reclassified to conform to the June 30, 2024 presentation and there was no impact on net income or stockholders’ equity.

The results of the interim period ended June 30, 2024 are not necessarily indicative of the results expected for the year ending December 31, 2024.

The Company operates as a one-segment entity for financial reporting purposes.

21 unchanged sentences

There have been no stock options awarded under any Company plan since 2008.

The Company has awarded 53,766 and 60,550 shares of restricted stock during the three months ended March 31, 2024 and 2023, respectively, and 39,150 and 37,900 restricted stock units during the three months ended March 31, 2024 and 2023 , respectively.

The Company has awarded 53,766 and 59,950 shares of restricted stock during the six months ended June 30, 2024 and 2023, respectively, and 39,150 and 37,900 restricted stock units during the six months ended June 30, 2024 and 2023 , respectively.

Employee Stock Purchase Plan

4 unchanged sentences

A maximum of 600,000 shares of common stock may be issued under the ESPP.

During the three months ended March 31, 2024 and 2023, 8,612 shares and 7,963 shares, respectively, were issued pursuant to the ESPP.

During the six months ended June 30, 2024 and 2023, 15,935 shares and 17,138 shares, respectively, were issued pursuant to the ESPP.

Captive Insurance Company

41 unchanged sentences

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss included in stockholders’ equity as of March 31, 2024 and December 31, 2023 are as follows (in thousands):

The components of accumulated other comprehensive loss included in stockholders’ equity as of June 30, 2024 and December 31, 2023 are as follows (in thousands):

Unrealized Losses on Securities

March 31, 2024

June 30, 2024

Net unrealized losses on securities available-for-sale

Balance at March 31, 2024

Balance at June 30, 2024

December 31, 2023

1 unchanged sentence

Balance at December 31, 2023

Amounts reclassified from accumulated other comprehensive loss and the affected line items in the statements of income during the three months ended March 31, 2024 and 2023, were as follows (in thousands):

Amounts reclassified from accumulated other comprehensive loss and the affected line items in the statements of income during the three and six months ended June 30, 2024 and 2023, were as follows (in thousands):

Amounts Reclassified from

1 unchanged sentence

Three months ended

Six months ended

Affected Line Item in the Statements of Income

4 unchanged sentences

See “Note 3 – Investment Securities” for more detailed information regarding unrealized losses on available-for-sale securities.

New Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board issued ASU No.

2023-09, Income Tax (Topic 740):

Improvements to Income Tax Disclosures.

The amendments expand the disclosure requirements of income taxes, primarily related to the income tax rate reconciliation and income taxes paid with the intention to enhance transparency and decision usefulness of income tax disclosures.

The amendments are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The adoption of this accounting pronouncement will have no impact on the Financial Statements aside from additional disclosures presented in the Notes to Consolidated Financial Statements.

Note 2 -- Earnings Per Share

1 unchanged sentence

Diluted net income per common share available to common stockholders is computed using the weighted average number of common shares outstanding, increased by the Company’s stock options, unless anti-dilutive.

The components of basic and diluted net income per common share available to common stockholders for the three months ended March 31, 2024 and 2023 were as follows:

The components of basic and diluted net income per common share available to common stockholders for the three and six months ended June 30, 2024 and 2023 were as follows:

Three months ended

Six months ended

Basic net income per common share

10 unchanged sentences

Diluted earnings per common share

There were no shares excluded when computing diluted earnings per share for the three months ended March 31, 2024 and 2023 because they were anti-dilutive.

There were no shares excluded when computing diluted earnings per share for the three and six months ended June 30, 2024 and 2023 because they were anti-dilutive.

Note 3 -- Investment Securities

The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at March 31, 2024 and December 31, 2023 were as follows (in thousands):

March 31, 2024

The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at June 30, 2024 and December 31, 2023 were as follows (in thousands):

June 30, 2024

Available-for-sale:

21 unchanged sentences

Total held-to-maturity

The Company also had $ 4,298,000 and $ 4,074,000 of equity securities, at fair value, as of March 31, 2024 and December 31, 2023, respectively.

The Company also had $ 4,258,000 and $ 4,074,000 of equity securities, at fair value, as of June 30, 2024 and December 31, 2023, respectively.

The Company's held-to-maturity securities are annuities for which the risk of loss is minimal.

As such, as of March 31, 2024, the Company did not record an allowance for credit losses on its held-to-maturity securities.

Realized gains and losses resulting from sales of securities were as follows during the three months ended March 31, 2024 and 2023 (in thousands):

As such, as of June 30, 2024, the Company did not record an allowance for credit losses on its held-to-maturity securities.

Realized gains and losses resulting from sales of securities were as follows during the three and six months ended June 30, 2024 and 2023 (in thousands):

Three months ended

The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at March 31, 2024 and the weighted average yield for each range of maturities (dollars in thousands):

Six months ended

The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at June 30, 2024 and the weighted average yield for each range of maturities (dollars in thousands):

Available-for-sale:

17 unchanged sentences

Treasury and other U.S.

government agencies and corporations, there were no investment securities of any single issuer, the book value of which exceeded 10 % of stockholders' equity at March 31, 2024.

Investment securities carried at approximately $ 820 million and $ 831 million at March 31, 2024 and December 31, 2023, respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law.

The following table presents the aging of gross unrealized losses and fair value by investment category as of March 31, 2024 and December 31, 2023 (in thousands):

government agencies and corporations, there were no investment securities of any single issuer, the book value of which exceeded 10 % of stockholders' equity at June 30, 2024.

Investment securities carried at approximately $ 728 million and $ 831 million at June 30, 2024 and December 31, 2023, respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law.

The following table presents the aging of gross unrealized losses and fair value by investment category as of June 30, 2024 and December 31, 2023 (in thousands):

Less than 12 months

12 months or more

March 31, 2024

June 30, 2024

Available-for-sale:

15 unchanged sentences

Government Corporations and Agencies.

At March 31, 2024 there were six hundred twenty-five available-for-sale securities with a fair value of $ 206.0 million and unrealized losses of $ 27.2 million in a continuous unrealized loss position for twelve months or more.

At June 30, 2024 there were thirty-two available-for-sale securities with a fair value of $ 196.3 million and unrealized losses of $ 25.2 million in a continuous unrealized loss position for twelve months or more.

At December 31, 2023, there were thirty-six available-for-sale securities with a fair value of $ 210.1 million and unrealized losses of $ 26.2 million in a continuous unrealized loss position for twelve months or more.

3 unchanged sentences

Obligations of states and political subdivisions.

At March 31, 2024, there were two hundred fifty-five obligations of states and political subdivisions with a fair value of $ 248.2 million and unrealized losses of $ 52.5 million in a continuous unrealized loss position for twelve months or more.

At June 30, 2024, there were zero obligations of states and political subdivisions with a fair value of $ 247.1 million and unrealized losses of $ 56.1 million in a continuous unrealized loss position for twelve months or more.

At December 31, 2023 there were two hundred thirty-seven obligations of states and political subdivisions with a fair value of $ 241.6 million and unrealized losses of $ 49.0 million in a continuous unrealized loss position for twelve months or more.

1 unchanged sentence

GSE Residential.

At March 31, 2024, there were two hundred sixty-three mortgage-backed securities with a fair value of $ 545.9 million and unrealized losses of $ 119.6 million in a continuous unrealized loss position for twelve months or more.

At June 30, 2024, there were two hundred fifty mortgage-backed securities with a fair value of $ 535.9 million and unrealized losses of $ 114.5 million in a continuous unrealized loss position for twelve months or more.

At December 31, 2023, there were two hundred sixty-three mortgage-backed securities with a fair value of $ 566.2 million and unrealized losses of $ 113.0 million in a continuous unrealized loss position for twelve months or more.

Other securities.

At March 31, 2024, there were forty-two other securities with a fair value of $ 57.4 million and unrealized losses of $ 3.8 million in a continuous unrealized loss position for twelve months or more.

At June 30, 2024, there were forty other securities with a fair value of $ 57.2 million and unrealized losses of $ 4.1 million in a continuous unrealized loss position for twelve months or more.

At December 31, 2023, there were forty-three other securities with a fair value of $ 57.9 million and unrealized losses of $ 4.4 million in a continuous unrealized loss position for twelve months or more.

4 unchanged sentences

Interest on substantially all loans is credited to income based on the principal amount outstanding.

A summary of loans at March 31, 2024 and December 31, 2023 follows (in thousands):

March 31, 2024

A summary of loans at June 30, 2024 and December 31, 2023 follows (in thousands):

June 30, 2024

December 31, 2023

15 unchanged sentences

These loans are primarily for 1-4 family residential properties.

Accrued interest on loans, which is excluded from the amortized cost of the balances above, totaled $ 31.3 million and $ 29.9 million at March 31, 2024 and December 31, 2023, respectively.

Accrued interest on loans, which is excluded from the amortized cost of the balances above, totaled $ 32.3 million and $ 29.9 million at June 30, 2024 and December 31, 2023, respectively.

Most of the Company’s business activities are with customers located near the Company's branch locations in Illinois, Missouri, Texas, and Wisconsin.

At March 31, 2024, the Company’s loan portfolio included $ 602.9 million of loans to borrowers whose businesses are directly related to agriculture.

At June 30, 2024, the Company’s loan portfolio included $ 601.6 million of loans to borrowers whose businesses are directly related to agriculture.

Of this amount, $ 490.2 million was concentrated in corn and other grain farming.

3 unchanged sentences

Any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in loan losses within the agricultural portfolio.

In addition, the Company has $ 223.1 million of loans to motels and hotels.

The performance of these loans is dependent on borrower specific issues as well as the general level of business and personal travel within the region.

While the Company adheres to sound underwriting standards, a prolonged period of reduced business or personal travel could result in an increase in nonperforming loans to this business segment and potentially in loan losses.

The Company also has $ 1.07 billion of loans to lessors of non-residential buildings, and $ 562.3 million of loans to lessors of residential buildings and dwellings.

13 unchanged sentences

The Company’s commercial real estate portfolio is below the thresholds that would designate a concentration in commercial real estate lending, as established by the federal banking regulators.

The following table represents the gross commercial real estate loans by property type as of June 30, 2024 (in thousands):

June 30, 2024

Commercial real estate

Owner occupied

Non owner occupied

Shopping centers and malls

Hotels and motels

Industrial and warehouse

Skilled nursing facility

Medical office

Assisted living facility

Other property types

Total commercial real estate

Commercial and Industrial Loans.

41 unchanged sentences

(2) the loan’s observable market price, if available;

or (3) the fair value of the collateral less costs to sell for collateral dependent loans and loans for which foreclosure is deemed to be probable.

or (3) the fair value of the collateral less costs to sell for collateral dependent

loans and loans for which foreclosure is deemed to be probable.

A specific allowance is assigned when expected cash flows or collateral are less than the carrying amount of the loan.

13 unchanged sentences

Historical credit loss experience provided the basis for the estimate of expected credit losses.

Adjustments to expected losses are made using qualitative factors for relevant to each loan segment including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting,

and concentrations.

In addition, a forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period.

7 unchanged sentences

Historical losses in this segment remain very low.

While staffing shortages and supply chain disruptions cause risk in this segment, most projects are associated with financially strong borrowers.

The qualitative factors for this segment were increased due to higher levels of loans compared to the Company's internal policy limits

While inflationary pressures have caused some risk in this segment, most projects are associated with financially strong borrowers.

The qualitative factors for this segment, on a net basis, declined by a minor amount for the quarter due to balances falling below an internal concentration threshold.

Agricultural Real Estate Loans.

2 unchanged sentences

There was no change to the qualitative factors for this segment.

1- 4 Family Residential Properties Loans.

Residential Real Estate Non Owner Occupied Loans.

The loan segment has remained stable throughout the last several years.

1 unchanged sentence

There was no change to the qualitative factors for this segment.

Commercial Real Estate Loans.

This segment includes the Company's largest balances and the largest allowance for credit losses.

The qualitative factors on non-owner occupied loans for this segment were increased due to the economic uncertainty and rate repricing risks in today's market along with the level of balances compared to the Company's internal policy limits.

Residential Real Estate Owner Occupied Loans.

The loan segment has remained stable throughout the last several years.

Both adversely classified and past dues have been consistent.

There was no change to the qualitative factors for this segment.

These loans are a small segment to overall loan balances.

In the period, past dues increased to a level that resulted in a significant increase to the qualitative factors for this segment.

Commercial Real Estate Owner Occupied Loans.

This segment has remained stable, despite macro concerns over commercial real estate.

The Company has previously increased qualitative factors for those conditions, but believes the stability in the portfolio for the period did not require the need for additional adjustments.

Commercial Real Estate Non Owner Occupied Loans.

This segment includes the Company's largest balances.

While qualitative factors had been increased in past periods for the economic uncertainty in the macro conditions, the Company did not believe any additional changes were warranted other than minor decrease for falling below the internal concentration thresholds for factor adjustments.

Agricultural Loans.

Losses in this segment are very low.

Commodity prices have been volatile and yield expectations have been lowered due to the lack of rain.

The qualitative factors of this segment were increased due to this higher level of risk.

Commodity prices have been volatile but yield expectations are increasing from previous concerns from the weather.

The qualitative factors of this segment were increased in prior periods and the Company

did not believe any further increase was warranted in this period.

Commercial and Industrial Loans.

This segment includes the second largest balance of allowance for credit losses.

The qualitative factors for this segment were not changed in the periods .

This segment includes the largest balance of allowance for credit losses.

The qualitative factors for this segment were not changed in the periods as the allowance is viewed as appropriate for the current risk and outlook.

Most of the repricing for higher rates in this loan segment has already occurred.

Consumer Loans.

This segment is the smallest portion of the Company's loan portfolio.

This segment is anticipated to be impacted by any recession that may appear.

In addition, the risk has increased for cash flow challenges for any borrower who have student loans that have been or will soon be returned to payments.

The qualitative factors for this segment were not changed on a net basis in the period.

Higher risk due to macro-economic conditions were offset by a decline in the severity of past dues for the loan segment.

This segment is a small portion of the Company's loan portfolio.

This segment will likely be impacted by any recession that may appear and already been impacted by the inflationary pressures.

The current allowance for this segment is appropriate for the risk and, therefore, there were no changes to the qualitative factors period.

Acquired Loans.

12 unchanged sentences

The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

The following table presents the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2024 (in thousands):

The following table presents the activity in the allowance for credit losses based on portfolio segment for the three and six months ended June 30, 2024 (in thousands):

and Industrial

Three months ended

March 31, 2024

June 30, 2024

Beginning balance

Initial allowance on loans purchased with credit deterioration

Provision for credit loss expense

2 unchanged sentences

Ending balance

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2023 and for the year ended December 31, 2023 (in thousands):

Six months ended

June 30, 2024

Beginning balance

Provision for credit loss expense

Loans charged off

Recoveries collected

Ending balance

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three and six months ended June 30, 2023 and for the year ended December 31, 2023 (in thousands):

Construction and Land Development

6 unchanged sentences

Three months ended

March 31, 2023

June 30, 2023

Beginning balance

Initial allowance on loans purchased with credit deterioration

Provision for credit loss expense

2 unchanged sentences

Ending balance

Six months ended

June 30, 2023

Beginning balance

Provision for credit loss expense

Loans charged off

Recoveries collected

Ending balance

Twelve months ended

13 unchanged sentences

Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

The following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of March 31, 2024 (in thousands):

Construction and land development

1-4 family residential properties

2 unchanged sentences

Loans secured by real estate

Agricultural loans

Commercial and industrial loans

Consumer loans

Credit Quality

12 unchanged sentences

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans.

The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of March 31, 2024 (in thousands):

The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of June 30, 2024 (in thousands):

Term Loans by Origination Year

March 31, 2024

June 30, 2024

Construction and land development loans

47 unchanged sentences

Current period gross writeoffs

The following table presents the Company’s loan portfolio aging analysis at March 31, 2024 and December 31, 2023 (in thousands):

The following table presents the Company’s loan portfolio aging analysis at June 30, 2024 and December 31, 2023 (in thousands):

> 90 Days and

March 31, 2024

June 30, 2024

Construction and land development

36 unchanged sentences

Non-Accrual Loans

The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated for which no allowance was recorded as of March 31, 2024 and December 31, 2023 (in thousands).

The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated for which no allowance was recorded as of June 30, 2024 and December 31, 2023 (in thousands).

There were no loans past due over eighty-nine days that were still accruing.

March 31, 2024

June 30, 2024

December 31, 2023

4 unchanged sentences

1-4 family residential properties

Multifamily residential properties

Commercial real estate

Loans secured by real estate

Agricultural loans

Commercial and industrial loans

Consumer loans

All other loans

Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $ 267,000 and $ 79,000 for the three months ended March 31, 2024 and 2023, respectively.

Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $ 487,000 and $ 122,000 for the six months ended June 30, 2024 and 2023, respectively.

Loan Modification Disclosures Pursuant to ASU 2022-02

The following table shows the amortized cost of loans at March 31, 2024 and 2023 that were both experiencing financial difficulty and modified segregated by portfolio segment and type of modification.

The following table shows the amortized cost of loans at June 30, 2024 and 2023 that were both experiencing financial difficulty and modified segregated by portfolio segment and type of modification.

The percentage of the amortized cost of loans that were modified to borrowers in financial distress as compared to outstanding loans is also presented below.

Modifications

March 31, 2024

June 30, 2024

Agricultural real estate

4 unchanged sentences

Consumer loans

March 31, 2023

June 30, 2023

Agricultural real estate

5 unchanged sentences

The Company closely monitors the performance of loans that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table shows the performance of such loans that have been modified in the last twelve months ended March 31, 2024 and 2023.

March 31, 2024

Commercial real estate

Loans secured by real estate

March 31, 2023

The following table shows the performance of such loans that have been modified in the last twelve months ended June 30, 2024 and 2023.

June 30, 2024

1-4 family residential properties

Commercial real estate

Loans secured by real estate

The following table shows the financial effect of loan modifications during the current quarter to borrowers experiencing financial difficulty for the three months ended March 31, 2024 and 2023.

Commercial and industrial loans

Consumer loans

June 30, 2023

Consumer loans

The following table shows the financial effect of loan modifications during the current quarter to borrowers experiencing financial difficulty for the three and six months ended June 30, 2024 and 2023.

Weighted Average

2 unchanged sentences

Term Extension

March 31, 2024

June 30, 2024

Commercial and industrial loans

Consumer loans

March 31, 2023

June 30, 2023

Commercial and industrial loans

1 unchanged sentence

A loan is considered to be in payment default once it is 90 days past due under the modified terms.

There were no loans modified during the prior twelve months that experienced defaults for three months ended March 31, 2024 or for the three months ended March 31, 2023.

There were no loans modified during the prior twelve months that experienced defaults for six months ended June 30, 2024 or for the three and six months ended June 30, 2023.

Purchased Credit Deteriorated (PCD) Loans

7 unchanged sentences

The Company has goodwill from business combinations, intangible assets from branch acquisitions, identifiable intangible assets assigned to core deposit relationships and customer lists of First Mid Wealth Management Company and First Mid Insurance.

The following table presents gross carrying value and accumulated amortization by major intangible asset class as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024

The following table presents gross carrying value and accumulated amortization by major intangible asset class as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

December 31, 2023

28 unchanged sentences

The Company has mortgage servicing rights acquired in previous acquisitions.

The following table summarizes the activity pertaining to mortgage servicing rights included in intangible assets as of March 31, 2024, March 31, 2023 and December 31, 2023 (in thousands):

March 31, 2024

March 31, 2023

The following table summarizes the activity pertaining to mortgage servicing rights included in intangible assets as of June 30, 2024, June 30, 2023 and December 31, 2023 (in thousands):

June 30, 2024

June 30, 2023

December 31, 2023

5 unchanged sentences

Ending balance

Total amortization expense for three months ended March 31, 2024 and 2023 was as follows (in thousands):

Total amortization expense for three and six months ended June 30, 2024 and 2023 was as follows (in thousands):

Three months ended

Six months ended

Core deposit intangibles

14 unchanged sentences

Note 6 -- Repurchase Agreements and Other Borrowings

Securities sold under agreements to repurchase were $ 210.7 million at March 31, 2024, an decrease of $ 3.0 million from $ 213.7 million at December 31, 2023.

Securities sold under agreements to repurchase were $ 206.0 million at June 30, 2024, an decrease of $ 7.8 million from $ 213.7 million at December 31, 2023.

All the transactions have overnight maturities with a weighted average rate of 3.14 % .

7 unchanged sentences

Collateral pledged by class for repurchase agreements are as follows (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

2 unchanged sentences

Mortgage-backed securities:

Gross FHLB borrowings, were $ 238.6 million and $ 263.6 million at March 31, 2024 and December 31, 2023, respectively.

At March 31, 2024 the advances were as follows:

Gross FHLB borrowings, were $ 263.6 million and $ 263.6 million at June 30, 2024 and December 31, 2023, respectively.

At June 30, 2024 the advances were as follows:

Term (in years)

37 unchanged sentences

The fair value of derivatives is based on models using observable market data as of the measurement date and are therefore classified in Level 2 of the valuation hierarchy.

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of March 31, 2024 and December 31, 2023 (in thousands):

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of June 30, 2024 and December 31, 2023 (in thousands):

Fair Value Measurements Using

2 unchanged sentences

for Identical

March 31, 2024

June 30, 2024

Available-for-sale securities:

25 unchanged sentences

interest swaps

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2024 and 2023 is summarized as follows (in thousands):

Three months ended March 31, 2024

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2024 and 2023 is summarized as follows (in thousands):

Three months ended June 30, 2024

Six months ended June 30, 2024

Obligation of State and Political Subdivisions

Beginning balance

1 unchanged sentence

Ending balance

Three months ended March 31, 2023

Three months ended June 30, 2023

Six months ended June 30, 2023

Obligation of State and Political Subdivisions

Beginning balance

Transfers into Level 3

Transfers out of Level 3

Ending balance

7 unchanged sentences

Management establishes a specific allowance for individually evaluated loans that have an estimated fair value that is below the carrying value.

The total carrying amount of loans for which a change in specific allowance has occurred as of March 31, 2024 was $ 1.3 million and a fair value of $ 1.0 million resulting in specific loss exposures of $ 324,000 .

The total carrying amount of loans for which a change in specific allowance has occurred as of June 30, 2024 was $ 899,000 and a fair value of $ 597,000 resulting in specific loss exposures of $ 302,000 .

When there is little prospect of collecting principal or interest, loans, or portions of loans, may be charged-off to the allowance for credit losses.

8 unchanged sentences

Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other noninterest expense.

The total carrying amount of other real estate owned as of March 31, 2024 was $ 1.3 million .

The total carrying amount of other real estate owned as of June 30, 2024 was $ 1.5 million .

Other real estate owned included in the total carrying amount and measured at fair value on a nonrecurring basis during the period amounted to $ 0 .

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2024 and December 31, 2023 (in thousands):

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2024 and December 31, 2023 (in thousands):

Fair Value Measurements Using

2 unchanged sentences

for Identical

March 31, 2024

June 30, 2024

Collateral dependent loans

4 unchanged sentences

Sensitivity of Significant Unobservable Inputs

The following table presents quantitative information about unobservable inputs used in Level 3 fair value measurements other than goodwill at March 31, 2024 and December 31, 2023.

March 31, 2024

The following table presents quantitative information about unobservable inputs used in Level 3 fair value measurements other than goodwill at June 30, 2024 and December 31, 2023.

June 30, 2024

Unobservable Inputs

11 unchanged sentences

Discount to reflect realizable value less estimated selling costs

The following tables present estimated fair values of the Company’s financial instruments at March 31, 2024 and December 31, 2023 in accordance with ASC 825 (in thousands):

March 31, 2024

The following tables present estimated fair values of the Company’s financial instruments at June 30, 2024 and December 31, 2023 in accordance with ASC 825 (in thousands):

June 30, 2024

Financial assets

38 unchanged sentences

On August 15, 2023, the Company completed its acquisition of Blackhawk Bancorp, Inc.

(“Blackhawk”) pursuant to an Agreement

and Plan of Merger Agreement, dated March 20, 2023 (the “Agreement”).

(“Blackhawk”) pursuant to an Agreement and Plan of Merger Agreement, dated March 20, 2023 (the “Agreement”).

Pursuant to the Agreement, Blackhawk was merged with and into the Company.

2 unchanged sentences

ASC 805 requires assets purchased and liabilities assumed to be recorded at their respective fair values at the date of acquisition.

The Company determined the fair value of loans, core deposit intangibles, mortgage servicing rights, time deposits, real property, and subordinated debt with the assistance of third-party valuations and appraisals.

The Company determined the fair value of loans, core deposit

intangibles, mortgage servicing rights, time deposits, real property, and subordinated debt with the assistance of third-party valuations and appraisals.

A preliminary summary of the fair value of assets received and liabilities assumed are as follows:

29 unchanged sentences

The inputs and assumptions used in the fair value estimate of the loan portfolio include credit mark, discount rate, prepayment speed, and foreclosure lag.

Cash flows were adjusted by estimating future credit losses and the rate

of prepayments.

Cash flows were adjusted by estimating future credit losses and the rate of prepayments.

Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans.

29 unchanged sentences

Three months ended

Six months ended

Net interest income

8 unchanged sentences

Acquisition costs are expensed as incurred as a component of non-interest expense and primarily include, but are not limited to, severance costs, professional services, data processing fees, and marketing and advertising expenses.

The Company incurred acquisition costs related to the Blackhawk acquisition, pre-tax, of $ 2.2 million and $ 93,000 , respectively, during the three months ended March 31, 2024 and March 31, 2023.

The Company incurred acquisition costs related to the Blackhawk acquisition, pre-tax, of $ 2.38 million and $ 561,000 , respectively, during the six months ended June 30, 2024 and June 30, 2023 and $ 175,000 and $ 468,000 , respectively, during the three months ended June 30, 2024 and June 30, 2023.

Note 9 -- Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842).

As of March 31, 2024, substantially all the Company's leases are operating leases for real estate property for bank branches, ATM locations, and office space.

As of June 30, 2024, substantially all the Company's leases are operating leases for real estate property for bank branches, ATM locations, and office space.

These leases are generally for periods of 1 to 25 years with various renewal options.

13 unchanged sentences

The following table contains supplemental balance sheet information related to leases (dollars in thousands):

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

December 31, 2023

12 unchanged sentences

Total lease liability

The components of lease expense for the three months ended March 31, 2024 and 2023 were as follows (in thousands):

The components of lease expense for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

Three months ended

Six months ended

Operating lease cost

7 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities was (in thousands):

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

Operating cash flows from operating leases

3 unchanged sentences

Derivatives Designated as Hedging Instruments

The following table provides the outstanding notional balances and fair values of outstanding derivatives designated as hedging instruments as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024

The following table provides the outstanding notional balances and fair values of outstanding derivatives designated as hedging instruments as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

Fair value hedges:

5 unchanged sentences

Other liabilities

The effects of the fair value hedges on the Company's income statement during the three months ended March 31, 2024 and 2023 were as follows (in thousands):

The effects of the fair value hedges on the Company's income statement during the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

Three months ended

Six months ended

Location of Gain (Loss) on Derivatives

2 unchanged sentences

Three months ended

Six months ended

Location of Gain (Loss) on Hedged Items

1 unchanged sentence

Interest income on loans

As of March 31, 2024, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustment for fair value hedges (in thousands):

As of June 30, 2024, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustment for fair value hedges (in thousands):

Line Item in the Balance Sheet in Which

5 unchanged sentences

Derivatives Not Designated as Hedging Instruments

The following amounts represent the notional amounts and gross fair value of derivative contracts not designated as hedging instruments outstanding during the three months ended March 31, 2024 (dollars in thousands):

March 31, 2024

The following amounts represent the notional amounts and gross fair value of derivative contracts not designated as hedging instruments outstanding during the six months ended June 30, 2024 (dollars in thousands):

June 30, 2024

Interest rate swap agreements

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements