FIRST MID BANCSHARES, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS First Mid Bancshares, Inc. Condensed Consolida ted Balance Sheets (unaudited) (In thousands, except share data) March 31, 2026 December 31, 2025 Assets Cash and due from banks: Non-interest-bearing $ 64,893 $ 57,224 Interest-bearing 411,190 197,620 Federal funds sold 949 76 Cash and cash equivalents 477,032 254,920 Certificates of deposit 3,060 1,740 Investment securities: Available-for-sale, at fair value (amortized cost of $ 1,325,037 and $ 1,215,813 at March 31, 2026 and December 31, 2025, respectively) 1,176,071 1,076,883 Held-to-maturity, at amortized cost (estimated fair value of $ 2,271 and $ 2,288 at March 31, 2026 and December 31, 2025, respectively) 2,271 2,288 Equity securities, at fair value 4,717 4,588 Loans held for sale, at fair value 4,909 5,203 Loans 6,939,367 6,006,171 Less allowance for credit losses ( 86,814 ) ( 74,875 ) Net loans 6,852,553 5,931,296 Interest receivable 46,753 39,949 Other real estate owned, net 5,529 2,857 Premises and equipment, net 101,935 90,782 Goodwill, net 203,391 203,391 Intangible assets, net 73,956 49,625 Bank owned life insurance 186,042 174,915 Right of use assets 13,411 12,674 Current tax assets — 714 Deferred tax assets 61,834 45,453 Other assets 75,153 69,380 Total assets $ 9,288,617 $ 7,966,658 Liabilities and stockholders’ equity Deposits: Non-interest-bearing $ 1,489,747 $ 1,392,534 Interest-bearing 6,057,892 5,002,739 Total deposits 7,547,639 6,395,273 Repurchase agreements with customers 208,811 196,716 Interest payable 6,600 5,782 Other borrowings 295,106 270,000 Subordinated debt, net 60,072 60,008 Junior subordinated debt, net 34,022 24,454 Lease liabilities 13,954 13,210 Current tax liabilities 10,602 — Other liabilities 35,185 42,523 Total liabilities 8,211,991 7,007,966 Commitments and contingent liabilities (Note 12) Stockholders’ equity: Common stock ($ 4 par value; authorized 45,000,000 shares; issued 27,307,663 and 24,671,969 shares in March 31, 2026 and December 31, 2025, respectively; outstanding 26,609,307 and 23,986,299 shares in March 31, 2026 and December 31, 2025, respectively) 111,231 100,688 Additional paid-in capital 614,974 516,984 Retained earnings 483,886 463,543 Deferred compensation ( 205 ) 2,654 Accumulated other comprehensive loss ( 108,708 ) ( 101,301 ) Treasury stock, at cost ( 698,356 and 685,670 shares in March 31, 2026 and December 31, 2025) ( 24,552 ) ( 23,876 ) Total stockholders’ equity 1,076,626 958,692 Total liabilities and stockholders’ equity $ 9,288,617 $ 7,966,658 See accompanying notes to unaudited condensed consolidated financial statements. 2 First Mid Bancshares, Inc. Condensed Consolidated State ments of Income (unaudited) Three months ended March 31, (In thousands, except per share data) 2026 2025 Interest income: Interest and fees on loans $ 90,986 $ 79,918 Interest on investment securities Taxable 6,012 4,982 Exempt from federal income tax 1,873 1,795 Interest on certificates of deposit 21 36 Interest on federal funds sold 2 1 Interest on deposits with other financial institutions 1,726 827 Total interest income 100,620 87,559 Interest expense: Interest on deposits 24,774 23,722 Interest on repurchase agreements with customers 1,025 1,180 Interest on other borrowings 2,398 1,831 Interest on subordinated debt 1,170 949 Interest on junior subordinated debt 468 468 Total interest expense 29,835 28,150 Net interest income 70,785 59,409 Provision for credit losses 2,598 1,652 Net interest income after provision for credit losses 68,187 57,757 Other income: Wealth management revenues 6,375 5,800 Insurance commissions 10,807 9,925 Service charges 3,080 2,901 Investment securities gains (losses), net 20 ( 181 ) Mortgage banking revenue, net 721 711 ATM / debit card revenue 4,135 3,646 Bank owned life insurance 1,340 1,687 Other income ( 37 ) 375 Total other income 26,441 24,864 Other expense: Salaries and employee benefits 35,016 31,748 Net occupancy and equipment expense 9,826 8,479 Net other real estate owned expense 212 101 FDIC insurance expense 940 849 Amortization of intangible assets 3,301 3,231 Stationery and supplies 302 431 Legal and professional 2,700 3,076 ATM / debit card expense 1,807 1,831 Marketing and donations 824 852 Other expense 5,797 3,874 Total other expense 60,725 54,472 Income before income taxes 33,903 28,149 Income taxes 7,576 5,978 Net income $ 26,327 $ 22,171 Per share data: Basic net income per common share $ 1.06 $ 0.93 Diluted net income per common share 1.06 0.93 See accompanying notes to unaudited condensed consolidated financial statements. 3 First Mid Bancshares, Inc. Condensed Consolidated Statements o f Comprehensive Income (unaudited) Three months ended March 31, (In thousands) 2026 2025 Net income $ 26,327 $ 22,171 Other comprehensive income (loss) Unrealized gains (losses) on available-for-sale securities, net of taxes of $ 2,778 and ($ 2,594 ) for three months ended March 31, 2026 and 2025, respectively ( 7,392 ) 6,902 Less: reclassification adjustment for realized gains (losses) included in net income, net of taxes of ($ 5 ) and $ 50 for three months ended March 31, 2026 and 2025, respectively 15 ( 131 ) Other comprehensive income (loss), net of taxes ( 7,407 ) 7,033 Comprehensive income $ 18,920 $ 29,204 See accompanying notes to unaudited condensed consolidated financial statements. 4 First Mid Bancshares, Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) For the three months ended March 31, 2026 (In thousands) Common Stock Additional Paid-In- Capital Retained Earnings Deferred Compensation Accumulated Other Comprehensive Loss Treasury Stock Total December 31, 2025 $ 100,688 $ 516,984 $ 463,543 $ 2,654 $ ( 101,301 ) $ ( 23,876 ) $ 958,692 Net income — — 26,327 — — — 26,327 Other comprehensive income, net of tax — — — — ( 7,407 ) — ( 7,407 ) Dividends on common stock ($ .25 per share) — — ( 5,984 ) — — — ( 5,984 ) Issuance of 81,913 restricted common shares pursuant to 2017 stock incentive plan, net of forfeitures 328 3,241 — — — — 3,569 Issuance of 6,975 common shares pursuant to 2017 stock incentive plan, net of forfeitures 28 276 — — — — 304 Issuance of 6,975 common shares pursuant to the employee stock purchase plan 28 194 — — — — 222 Issuance of 2,539,831 common shares pursuant to acquisition of Two Rivers Financial Group, Inc. 10,159 93,999 — — — — 104,158 Purchase of 12,686 treasury shares — — — — — ( 500 ) ( 500 ) Deferred compensation — — — ( 3,563 ) — ( 176 ) ( 3,739 ) Grant of restricted stock units pursuant to the 2017 stock incentive plan — 2,299 — — — — 2,299 Release of restricted stock units pursuant to 2017 stock incentive plan — ( 2,070 ) — — — — ( 2,070 ) Vested restricted shares/units compensation expense — 51 — 704 — — 755 March 31, 2026 $ 111,231 $ 614,974 $ 483,886 $ ( 205 ) $ ( 108,708 ) $ ( 24,552 ) $ 1,076,626 5 First Mid Bancshares, Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) For the three months ended March 31, 2025 (In thousands) Common Stock Additional Paid-In- Capital Retained Earnings Deferred Compensation Accumulated Other Comprehensive Loss Treasury Stock Total December 31, 2024 $ 100,258 $ 512,810 $ 395,189 $ 2,756 $ ( 142,383 ) $ ( 22,239 ) $ 846,391 Net income — — 22,171 — — — 22,171 Other comprehensive income, net of tax — — — — 7,033 — 7,033 Dividends on common stock ($ .24 per share) — — ( 5,727 ) — — — ( 5,727 ) Issuance of 73,618 restricted common shares pursuant to 2017 stock incentive plan, net of forfeitures 294 2,575 — — — — 2,869 Issuance of 5,600 common shares pursuant to 2017 stock incentive plan, net of forfeitures 22 196 — — — — 218 Issuance of 6,891 common shares pursuant to the employee stock purchase plan 28 188 — — — — 216 Deferred compensation — — — ( 2,779 ) — ( 181 ) ( 2,960 ) Grant of restricted stock units pursuant to the 2017 stock incentive plan — 1,791 — — — — 1,791 Release of restricted stock units pursuant to 2017 stock incentive plan — ( 1,634 ) — — — — ( 1,634 ) Vested restricted shares/units compensation expense — 49 — 532 — — 581 March 31, 2025 $ 100,602 $ 515,975 $ 411,633 $ 509 $ ( 135,350 ) $ ( 22,420 ) $ 870,949 See accompanying notes to unaudited condensed consolidated financial statements. 6 First Mid Bancshares, Inc. Condensed Consolidated Stateme nts of Cash Flows (unaudited) Three months ended March 31, (In thousands) 2026 2025 Cash flows from operating activities: Net income $ 26,327 $ 22,171 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 2,598 1,652 Depreciation, amortization and accretion, net 5,356 4,996 Change in cash surrender value of bank owned life insurance ( 1,340 ) ( 1,200 ) Gain on cash surrender value of bank owned life insurance — ( 487 ) Stock-based compensation expense 865 688 Operating lease payments ( 852 ) ( 822 ) Loss (gain) on sale of investment securities, net ( 20 ) 181 Loss on sales and write-downs of other real estate owned, net 52 80 Loss on sale of premises and equipment 6 14 Gain on sale of loans held for sale, net ( 927 ) ( 641 ) Loss on repayment of subordinated debt — 289 Gain on repayment of other borrowings — ( 85 ) Decrease (increase) in accrued interest receivable ( 2,396 ) 1,186 Increase in accrued interest payable 31 1,486 Origination of loans held for sale ( 34,261 ) ( 25,500 ) Proceeds from sale of loans held for sale 33,924 29,111 Decrease (increase) in other assets ( 2,245 ) 21,118 Decrease in other liabilities ( 2,041 ) ( 6,353 ) Net cash provided by operating activities 25,077 47,884 Cash flows from investing activities: Proceeds from maturities of certificates of deposits 840 980 Purchases of certificates of deposits ( 2,160 ) — Proceeds from sales of investment securities available-for-sale 167,803 8,291 Proceeds from maturities of investment securities available-for-sale 24,027 23,927 Purchases of investment securities available-for-sale ( 131,846 ) ( 500 ) Purchase of investment securities held-to-maturity ( 3 ) ( 21 ) Net increase in loans ( 63,743 ) ( 31,149 ) Purchases of premises and equipment ( 1,960 ) ( 1,930 ) Proceeds from sale of premises and equipment 20 3,500 Proceeds from sales of other real property owned, net 270 33 Proceeds from bank owned life insurance death benefit — 1,414 Purchase of other investments ( 1,984 ) — Net cash provided by acquisition 88,269 — Net cash provided by investing activities 79,533 4,545 Cash flows from financing activities: Net increase in deposits 111,573 73,284 Increase in repurchase agreements with customers 12,095 15,650 Proceeds from other borrowings — 54,000 Repayment of other borrowings ( 206 ) ( 101,435 ) Repayment of subordinated debt — ( 8,381 ) Proceeds from issuance of common stock 524 434 Purchase of treasury stock ( 500 ) — Dividends paid on common stock ( 5,984 ) ( 5,727 ) Net cash provided by financing activities 117,502 27,825 Increase in cash and cash equivalents 222,112 80,254 Cash and cash equivalents at beginning of period 254,920 121,216 Cash and cash equivalents at end of period $ 477,032 $ 201,470 7 First Mid Bancshares, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) Three months ended March 31, (In thousands) 2026 2025 Supplemental disclosures of cash flow information Cash paid (received) during the period for: Interest $ 29,017 $ 26,805 Income taxes, net of refunds US Federal $ — $ ( 1,009 ) State of Illinois ( 206 ) ( 154 ) State of Wisconsin ( 80 ) — Other — ( 28 ) Total income taxes, net of refunds $ ( 286 ) $ ( 1,191 ) Supplemental disclosures of noncash investing and financing activities Loans transferred to other real estate owned $ 2,023 $ — Fixed assets transferred to other real estate owned 950 — Initial recognition of right-of-use assets in exchange for lease liabilities 57 668 Supplemental disclosures for purchases of capital stock Fair value of assets acquired $ 1,186,786 $ 11,449 Consideration paid: Cash paid 2 9,000 Common stock issued 104,159 — Total consideration paid 104,161 9,000 Fair value of liabilities assumed $ 1,082,625 $ 2,449 See accompanying notes to unaudited condensed consolidated financial statements. 8 Notes to Condensed Consolidated Financial Statements (unaudited) Note 1 -- Basis of Accou nting and Consolidation The unaudited condensed consolidated financial statements include the accounts of First Mid Bancshares, Inc. (“Company”) and its wholly owned subsidiaries: First Mid Bank & Trust, N.A. (“First Mid Bank”), Two Rivers Bank & Trust (“Two Rivers Bank”), First Mid Wealth Management Company (“First Mid Wealth Management”), First Mid Insurance Group, Inc. (“First Mid Insurance”), and First Mid Captive, Inc. (“the Captive”). 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, 2026 and 2025, 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, 2026 presentation and there was no impact on net income or stockholders’ equity. The results of the interim period ended March 31, 2026 are not necessarily indicative of the results expected for the year-ending December 31, 2026. The 2025 year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and related footnote disclosures, although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2025 Annual Report on Form 10-K. Acquisitions Downs Insurance Agency, Inc. During the quarter ended March 31, 2026, Downs Insurance Agency, Inc. (DIA) customer list was acquired by the Company for a purchase price of $ 1.4 million and immediately assigned to First Mid Insurance Group. Two Rivers Financial Group, Inc. On October 29, 2025, the Company and Star Sub LLC, a newly formed Iowa limited liability company and wholly-owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement” ) with Two Rivers Financial Group, Inc., an Iowa corporation (Two Rivers), pursuant to which, among other things, the Company agreed to acquire 100 % of the issued and outstanding shares of Two Rivers pursuant to a business combination whereby Two Rivers would merge with and into Star Sub LLC, whereupon the separate corporate existence of Two Rivers would cease and Star Sub LLC would continue as a surviving company and a wholly-owned subsidiary of the Company (the “Merger”). Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each share of common stock of Two Rivers issued and outstanding immediately prior to the effective time of the Merger (other than shares held in treasury by Two Rivers) was converted into and became the right to receive 1.225 shares of common stock of the Company, and cash-in-lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments. On an aggregate basis, the total consideration payable by the Company at the closing of the Merger to Two Rivers shareholders and equity award holders was 2,539,831 shares of the Company common stock valued at $ 104.2 million and $ 2,000 of cash-in-lieu of fractional shares. It is anticipated that Two Rivers Bank will be merged with and into First Mid Bank in June 2026. At which time, Two Rivers Bank offices will become branches of First Mid Bank. Ray Farm Management During the quarter ended December 31, 2025, Ray Farm Management Services, Inc.’s (RFMS) customer list was acquired by the Company for a purchase price of $ 764,000 and immediately assigned to First Mid Wealth Management. AAdvantage Insurance Group LLC During the quarter ended September 30, 2025, a portion of AAdvantage Insurance Group LLC’s (AAIG) customer list was acquired by the Company for a purchase price of $ 2.8 million and immediately assigned to First Mid Insurance Group. Mid Rivers Insurance Group, Inc. During the quarter ended September 30, 2024, Mid Rivers Insurance Group, Inc. (MRIG) was acquired by the Company for a purchase price of $ 10.1 million and immediately merged into First Mid Insurance Group. Note 5 and 8 provide further information on the intangibles acquired in the above acquisitions. 9 Summary of Significant Accounting Policies Segment Reporting The Company operates as a single segment entity for financial reporting purposes. The Chief Financial and Risk Officer, Jordan Read (CFO), serves as the Company’s chief operating decision maker (CODM). The CODM allocates resources and assesses performance of the Company based on the consolidated performance, excluding all significant intercompany balances and transactions, of the Company and its wholly owned subsidiaries and does not significantly utilize disaggregated segment financial information for decision-making and resource allocation. As of March 31, 2026, management has reviewed the requirements of generally accepted accounting principles and has determined that no additional segment disclosures are required. Specifically, • the Company does not use the tracked performance on the disaggregated segment level for decision-making or resource allocation purposes, • no significant segment-specific expenses or performance metrics are used internally for decision-making or resource allocation purposes, and • the level of financial consolidation presented in these financial statements aligns with the CODM’s internal reporting and decision-making process. Based on this assessment the Company’s financial statement disclosures fully comply with generally accepted accounting principles, and no additional qualitative segment disclosures are necessary. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss included in stockholders’ equity as of March 31, 2026 and December 31, 2025 are as follows (in thousands): Unrealized Losses on Securities March 31, 2026 Net unrealized losses on securities available-for-sale $ ( 148,966 ) Tax benefit 40,258 Balance at March 31, 2026 $ ( 108,708 ) December 31, 2025 Net unrealized losses on securities available-for-sale $ ( 138,930 ) Tax benefit 37,629 Balance at December 31, 2025 $ ( 101,301 ) Amounts reclassified from accumulated other comprehensive loss and the affected line items in the statements of income during the three months ended March 31, 2026 and 2025, were as follows (in thousands): Amounts Reclassified from Other Comprehensive Income (Loss) Three months ended March 31, Affected Line Item in the 2026 2025 Statements of Income Realized gain (loss) on available-for-sale securities, net $ 20 $ ( 181 ) Investment securities gains (losses), net (total reclassified amount before tax) Income tax benefit (expense) ( 5 ) 50 Income taxes Total reclassifications out of accumulated other comprehensive income (loss) $ 15 $ ( 131 ) Net reclassified amount See “Note 3 – Investment Securities” for more detailed information regarding unrealized losses on available-for-sale securities. 10 New Accounting Pronouncements In November 2024, the Financial Accounting Standards Board issued ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to require additional disclosures within the notes to the financial statements about certain expense items. Specifically, disaggregation of income statement captions that contain expenses within the following five categories is required: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization (“DD&A”) costs recognized as part of oil- and gas-producing activities or other amounts of depletion expense. Further, this update requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. This update provides a practical expedient for banks and bank holding companies to continue presenting salaries and employee benefits in conformity with SEC Rule 210.9-04 instead of requiring those entities to apply the employee compensation definition included in Subtopic 220-40. The amendments in this update may be applied on either a prospective or retrospective basis and will be effective for the Company beginning with the annual reporting period ending December 31, 2027, and interim reporting periods beginning January 1, 2028. The Company does not expect adoption of this ASU to have any impact on its financial position or results of operations because it only results in additional disclosures. In November 2025, the Financial Accounting Standards Board (FASB) published Accounting Standards Update (ASU) 2025-08 , Financial Instruments Credit Losses (Topic 326): Purchased Loans (ASU 2025-08). The update was published with the intent to eliminate the current expected credit loss (CECL) “double count” on non-Purchase Credit Deteriorated (PCD) Loans. The update accomplishes this through using “gross up” methodology that is similar to the methodology used on PCD Loans. In the new method all “purchased seasoned loans” are grossed up for the Allowance of Credit Losses (ACL) expected on the loans. Purchased seasoned loans are defined as either: • a loan that is obtained through a business combination accounted for using the acquisition method (most common for the Company) • a loan obtained through a transfer that is not a business combination accounted for using the acquisition method or initially recognized through the consolidation of a variable interest entity and these loans must meet both of following criteria: • the loan is obtained more than 90 days after its origination date; and • the acquirer was not involved in the loan’s origination. The Company adopted this standard as of January 1, 2026 . Note 2 -- Earnings Per Share Basic net income per common share available to common stockholders is calculated as net income less preferred stock dividends divided by the weighted average number of common shares outstanding. Diluted net income per common share available to common stockholders is computed using the weighted average number of common shares outstanding, increased by the assumed conversion of the Company’s convertible preferred stock and the Company’s stock options and restricted stock awarded, 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, 2026 and 2025 were as follows: Three months ended March 31, 2026 2025 Basic net income per common share available to common stockholders: Net income available to common stockholders $ 26,327,000 $ 22,171,000 Weighted average common shares outstanding 24,777,247 23,858,817 Basic earnings per common share $ 1.06 $ 0.93 Diluted net income per common share available to common stockholders: Net income available to common stockholders $ 26,327,000 $ 22,171,000 Weighted average common shares outstanding 24,777,247 23,858,817 Dilutive potential common shares: Restricted stock awarded 116,555 100,411 Diluted weighted average common shares outstanding 24,893,802 23,959,228 Diluted earnings per common share $ 1.06 $ 0.93 11 There were no shares not considered in computing diluted earnings per share for the three months ended March 31, 2026 and 2025 . 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, 2026 and December 31, 2025 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value March 31, 2026 Available-for-sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 153,813 $ — $ ( 10,234 ) $ 143,579 Obligations of states and political subdivisions 327,480 234 ( 52,478 ) 275,236 Mortgage-backed securities (1) 819,041 1,258 ( 86,948 ) 733,351 Corporate bonded debt 24,703 — ( 798 ) 23,905 Total available-for-sale $ 1,325,037 $ 1,492 $ ( 150,458 ) $ 1,176,071 Held-to-maturity: Other securities $ 2,271 $ — $ — $ 2,271 December 31, 2025 Available-for-sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 153,859 $ 3 $ ( 9,782 ) $ 144,080 Obligations of states and political subdivisions 327,950 341 ( 47,658 ) 280,633 Mortgage-backed securities (1) 705,728 2,458 ( 83,520 ) 624,666 Corporate bonded debt 28,276 — ( 772 ) 27,504 Total available-for-sale $ 1,215,813 $ 2,802 $ ( 141,732 ) $ 1,076,883 Held-to-maturity: Other securities $ 2,288 $ — $ — $ 2,288 (1) Mortgage-backed securities include mortgage-backed securities (MBS) and collateralized mortgage obligation (CMO) issues from the following government sponsored enterprises: FHLMC, FNMA, GNMA and FHLB. The Company also had $ 4.7 million and $ 4.6 million of equity securities, at fair value, as of March 31, 2026 and December 31, 2025, respectively. All the Company's held-to-maturity securities are government agency-backed securities for which the risk of loss is minimal. As such, as of March 31, 2026, the Company did not record an allowance for credit losses on its held-to-maturity securities. Proceeds from sales of available-for-sale investment securities, realized gains and losses and income tax expense were as follows during the three months ended March 31, 2026 and 2025 (in thousands): Three months ended March 31, 2026 2025 Proceeds from sales $ 167,803 $ 8,291 Gross gains 20 — Gross losses — ( 181 ) Income tax benefit (expense) ( 5 ) 49 12 The following table presents the aging of gross unrealized losses and fair value by investment category as of March 31, 2026 and December 31, 2025 (in thousands): Less than 12 months 12 months or more Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses March 31, 2026 Available-for-sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 797 $ — $ 142,331 $ ( 10,234 ) $ 143,128 $ ( 10,234 ) Obligations of states and political subdivisions 32,023 ( 431 ) 225,095 ( 52,047 ) 257,118 ( 52,478 ) Mortgage-backed securities (1) 170,102 ( 3,042 ) 465,341 ( 83,906 ) 635,443 ( 86,948 ) Corporate bonded debt 3,975 ( 24 ) 17,180 ( 774 ) 21,155 ( 798 ) Total $ 206,897 $ ( 3,497 ) $ 849,947 $ ( 146,961 ) $ 1,056,844 $ ( 150,458 ) December 31, 2025 Available-for-sale: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ — $ — $ 142,833 $ ( 9,782 ) $ 142,833 $ ( 9,782 ) Obligations of states and political subdivisions 5,923 ( 8 ) 246,076 ( 47,650 ) 251,999 ( 47,658 ) Mortgage-backed securities (1) 11,327 ( 102 ) 480,583 ( 83,418 ) 491,910 ( 83,520 ) Corporate bonded debt 3,967 ( 33 ) 19,203 ( 739 ) 23,170 ( 772 ) Total $ 21,217 $ ( 143 ) $ 888,695 $ ( 141,589 ) $ 909,912 $ ( 141,732 ) (1) Mortgage-backed securities include mortgage-backed securities (MBS) and collateralized mortgage obligation (CMO) issues from the following government sponsored enterprises: FHLMC, FNMA, GNMA and FHLB. At March 31, 2026, there were four hundred sixty-three available-for-sale securities with a fair value of $ 849.9 million and unrealized losses of $ 147.0 million in a continuous unrealized loss position for twelve months or more. At December 31, 2025, there were four hundred eighty-eight available-for-sale securities with a fair value of $ 888.7 million and unrealized losses of $ 141.6 million in a continuous unrealized loss position for twelve months or more. At March 31, 2026 and December 31, 2025, there were no held-to-maturity securities in a continuous unrealized loss position for twelve months or more. The Company does not consider available-for-sale securities with unrealized losses at March 31, 2026 , to be experiencing credit losses and recognized no resulting allowance for credit losses. The Company does not intend to sell a significant amount of the investments unless they are acquired and subsequently marked to fair value, and it is more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost basis, which may be the maturity dates of the securities. The unrealized losses occurred as a result of changes in interest rates, market spreads, and market conditions after purchase. 13 Note 4 -- Loans and Allowance for Credit Losses Loans are stated at the principal amount outstanding net of unearned discounts, unearned income, and allowance for credit losses. Unearned income includes deferred loan origination fees reduced by loan origination costs and is amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method. Interest on substantially all loans is credited to income based on the principal amount outstanding. A summary of loans at March 31, 2026 and December 31, 2025 follows (in thousands): March 31, 2026 December 31, 2025 Construction and land development $ 319,945 $ 361,678 Agricultural real estate 405,226 374,143 1-4 family residential properties 746,704 494,258 Multifamily residential properties 457,705 340,324 Commercial real estate 2,972,812 2,582,404 Loans secured by real estate 4,902,392 4,152,807 Agricultural loans 370,124 307,290 Commercial and industrial loans 1,502,384 1,385,421 Consumer loans 39,672 32,109 All other loans 179,008 161,604 Total gross loans 6,993,580 6,039,231 Less: loans held for sale 4,909 5,203 Total gross loans held for investment 6,988,671 6,034,028 Less: Net deferred loan fees, premiums, and discounts 49,304 27,857 Allowance for credit losses 86,814 74,875 Net loans $ 6,852,553 $ 5,931,296 Net loans increased $ 921.3 million as of March 31, 2026 compared to December 31, 2025. Loans expected to be sold are classified as held for sale in the consolidated financial statements and are recorded at the lower of aggregate cost or fair value, taking into consideration future commitments to sell the loans. 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 $ 40.1 million and $ 35.1 million at March 31, 2026 and December 31, 2025, respectively. The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the board of directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation; however, limits well below the regulatory thresholds are generally observed. The vast majority of the Company’s loans are to businesses located in the geographic market areas served by the Company’s branch network. Additionally, a significant portion of the collateral securing the loans in the portfolio is located within the Company’s primary geographic footprint. In general, the Company adheres to loan underwriting standards consistent with industry guidelines for all loan segments. The Company’s lending can be summarized into the following primary areas: Commercial Real Estate Loans. Commercial real estate loans are generally comprised of loans to small business entities to purchase or expand structures in which the business operations are housed, loans to owners of real estate who lease space to non-related commercial entities, loans for construction and land development, loans to hotel and motel operators, and loans to owners of multifamily residential structures, such as apartment buildings. Commercial real estate loans are underwritten based on historical and projected cash flows of the borrower and secondarily on the underlying real estate pledged as collateral on the debt. For the various types of commercial real estate loans, minimum criteria have been established within the Company’s loan policy regarding debt service coverage while maximum limits on loan-to-value and amortization periods have been defined. Maximum loan-to-value ratios range from 65 % to 85 % depending upon the type of real estate collateral, while the desired minimum debt coverage ratio is 1.20x to 1.35x . Amortization periods for commercial real estate loans are generally limited to twenty to thirty years , depending on the collateral type and loan-to-value. The Company’s commercial real estate portfolio is below the threshold of 300 percent of the Company's total capital that would designate a concentration in commercial real estate lending, as established by the federal banking regulators. 14 The following table represents the gross commercial real estate loans by property type as of March 31, 2026 (in thousands): March 31, 2026 December 31, 2025 First Mid Bank Commercial real estate Owner occupied $ 744,435 $ 747,512 Non-owner occupied Shopping centers and malls 270,895 264,961 Industrial and warehouse 247,069 237,522 Hotels and motels 216,141 218,073 Skilled nursing facility 192,441 187,875 Assisted living facility 168,834 170,733 Office 162,049 160,524 Retail 112,492 112,169 RV parks and campgrounds 99,159 104,267 Other property types 388,656 378,768 First Mid Bank total commercial real estate $ 2,602,171 $ 2,582,404 Two Rivers Bank Commercial real estate Owner occupied $ 97,705 $ — Non-owner occupied 272,936 — Two Rivers Bank total commercial real estate $ 370,641 $ — Total commercial real estate $ 2,972,812 $ 2,582,404 Commercial and Industrial Loans. Commercial and industrial loans are primarily comprised of working capital loans used to purchase inventory and fund accounts receivable that are secured by business assets other than real estate. These loans are generally written for one year or less. Also, equipment financing is provided to businesses with these loans generally limited to 80 % of the value of the collateral and amortization periods limited to seven years . Commercial loans are often accompanied by a personal guaranty of the principal owners of a business. Like commercial real estate loans, the underlying cash flow of the business is the primary consideration in the underwriting process. The financial condition of commercial borrowers is monitored at least annually with the type of financial information required to be determined by the size of the relationship. Measures employed by the Company for businesses with higher risk profiles include the use of government-assisted lending programs through the Small Business Administration and U.S. Department of Agriculture. Agricultural and Agricultural Real Estate Loans. Agricultural loans are generally comprised of seasonal operating lines to grain farmers to plant and harvest corn and soybeans, term loans to fund the purchase of equipment, and the Company's Direct Merchant Finance product to fund crop inputs, primarily seed. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop. The Direct Merchant Finance loans are typically written for one year and are generally unsecured. Loan-to-value ratios on loans secured by farmland generally do not exceed 80 % and have amortization periods ranging from twenty-five to thirty years depending on the loan-to-value. Federal government-assistance lending programs through the Farm Service Agency are used to mitigate the level of credit risk when deemed appropriate. Residential Real Estate Loans. Residential real estate loans generally include loans for the purchase or refinance of residential real estate properties consisting of one-to-four units and home equity loans and lines of credit. The Company sells most of its long-term fixed rate residential real estate loans to secondary market investors. The Company also releases the servicing of these loans upon sale. Residential real estate loans are typically underwritten to conform to industry standards including criteria for maximum debt-to-income and loan-to-value ratios as well as minimum credit scores. Loans secured by first liens on residential real estate held in the portfolio typically do not exceed 80 % of the value of the collateral and have amortization periods of twenty-five years or less. The Company does not originate subprime mortgage loans. Consumer Loans. Consumer loans are primarily comprised of loans to individuals for personal and household purposes such as the purchase of an automobile or other living expenses. Minimum underwriting criteria have been established that consider credit score, debt-to-income ratio, employment history, and collateral coverage. Typically, consumer loans are set up on monthly payments with amortization periods based on the type and age of the collateral. 15 Construction and land development loans. Construction and land development loans are generally comprised of loans of all sizes, across many different industries, and can include properties for commercial businesses or land development or for residential use such as multifamily properties. Commercial and land development loans are underwritten based on historical and projected cash flows of the borrower and secondarily on the underlying real estate pledged as collateral on the debt. Construction and land development loans include unique risks that require enhanced diligence by lending personnel. For these loans, documentation requirements have been established within policy, and a specific checklist is followed. Additionally, based on the type of construction loan, the policy is also followed to designate the construction and land development loans as high-volatility commercial real estate if the loan meets the criteria. To ensure consistent construction loan monitoring, loans greater than $ 2 million must be monitored by the Bank’s construction monitoring staff. The policy also establishes maximum loan-to-value/amortizations, terms, construction periods, cash investments, pre-sale/lease, and other requirements and are specific to the type of property including non-farm, non-residential secured loans as well as multifamily, 1-4 family non-owner occupied, land acquisition/development/vacant lot acquisition, and raw land. Maximum loan-to-value ratios range from 65 % to 80 % depending upon the type of real estate collateral. Amortization periods for construction and land development loans are generally limited to twenty to thirty years , depending on the collateral type and loan-to-value. The Company’s construction and land development portfolio is below the threshold of 100 percent of the Company's total capital that would designate a concentration in construction and land development lending, as established by the federal banking regulators. Other Loans. Other loans consist primarily of loans to municipalities to support community projects such as infrastructure improvements or equipment purchases. Underwriting guidelines for these loans are consistent with those established for commercial loans with the additional repayment source of the taxing authority of the municipality. Allowance for Credit Losses The allowance for credit losses represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining contractual life of the assets. The provision for credit losses is the charge against current earnings that is determined by the Company as the amount needed to maintain an adequate allowance for credit losses. In determining the adequacy of the allowance for credit losses, and therefore the provision to be charged to current earnings, the Company relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by the overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net credit losses, the level and composition of nonaccrual, past due and modified loans, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates. The Company estimates the appropriate level of allowance for credit losses by evaluating large substandard, and large impaired loans separately from other loans. Individually Evaluated Loans The Company individually evaluates certain loans for impairment. Loans are individually evaluated for expected credit losses when their principal balance exceeds $ 250,000 , and they are in nonaccrual status, their risk rating assigned is Substandard and their principal balances exceeds $ 5 million, or they are designated as having a modification or probable of being foreclosed. For loans that allowance for credit loss is individually measured each quarter one of three alternatives is used: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (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. A specific allowance is assigned when expected cash flows or collateral are less than the carrying amount of the loan. The carrying value of the loan reflects reductions from prior charge-offs. Non-Individually Evaluated Loans Non-individually evaluated loans comprise the vast majority of the Company’s total loan portfolio and include all loans not mentioned above in the individually evaluated loans section. A small portion of these loans are considered “criticized” due to the risk rating assigned reflecting elevated credit risk due to characteristics, such as a strained cash flow position, associated with the individual borrowers. Criticized loans are those assigned risk ratings of Special Mention, Substandard, or Doubtful. The Company first bifurcates the loan portfolio into segments that share risk characteristics and then utilizes a discounted cash flow (DCF) method to measure the ACL on loans collectively evaluated that are sub-segmented by credit risk levels. The DCF method incorporates assumptions for probability of default, loss given default, prepayments, and curtailments over the contractual term of the loans. In determining the probability of default, the Company utilized regression analysis that includes the use of peer data to determine certain economic factors that are relevant loss drivers in the portfolio segments based on historical evaluations. National 16 unemployment is a loss driver used in all portfolios. Within each pool, factors are evaluated that have specific impacts to the borrowers within the pool. These, along with the general risks and events, and the specific lending policies and procedures by loan type described above, are analyzed to estimate the qualitative factors used to adjust the historical loss rates. During the current period, the following assumptions and factors were considered when determining the historical loss rate and any potential adjustments by loan pool. Construction and Land Development Loans. Historical losses in this segment remain very low. While inflationary pressures have caused some risk in this segment, most projects are associated with financially strong borrowers. The qualitative factors for this segment increased for the period due to past due levels increasing primarily from the addition of the Two Rivers Bank loan portfolio. Agricultural Real Estate Loans. Historical losses in the segment remain very low. Farmland values have increased over an extended period of time. While values have declined slightly from their peak, values have held up well overall. This continues to drive low loan to values in this segment. The qualitative factors for this segment were unchanged during the quarter. Residential Real Estate Non-Owner Occupied Loans. The loan segment increased in the quarter from the addition of the Two Rivers Bank loan portfolio. The qualitative factors for this segment increased during the quarter due to this addition, including products not historically offered by First Mid Bank and variations in credit administration of the loans acquired. Residential Real Estate Owner Occupied Loans. The loan segment increased in the quarter from the addition of the Two Rivers Bank loan portfolio. The qualitative factors for this segment increased during the quarter due to this addition, including products not historically offered by First Mid Bank and variations in the credit administration of the loans acquired. The qualitative factors for this loan segment also increased due to an increase in past dues. HELOC Loans. These loans are a small segment to overall loan balances. There was no change to the qualitative factors for this segment during the year. Commercial Real Estate Owner Occupied Loans. This segment has remained stable, reflecting less uncertainty to recessionary risks that were high in prior years with the rapid movement in interest rates and inflationary pressures. The quarter ended with lower past dues in this loan segment, which reduced the qualitative factors. Commercial Real Estate Non-Owner Occupied Loans. This segment includes the Company's largest balances. The portfolio showed overall stability during the quarter and no changes to qualitative factors were made for this segment. Agricultural Loans. Losses in this segment include the Company's Direct Merchant Financing product, which inherently comes with higher overall risk of losses. Overall past dues in this segment increased during the quarter and drove a higher qualitative factor adjustment. Commercial and Industrial Loans. Most of the repricing to higher rates in this loan segment has already occurred. There were no changes to qualitative factors during the quarter. Consumer Loans. This segment is a small portion of the Company's loan portfolio. Historical net charge-offs have been immaterial in this segment. No changes to qualitative factors were made during the quarter. 17 The following table presents the balance in the allowance for credit losses and the recorded investment in loans based on portfolio segment and impairment method as of the three months ended March 31, 2026 (in thousands): Construction and Land Development Agricultural Real Estate 1-4 Family Residential Properties Commercial Real Estate Agricultural Loans Commercial and Industrial Consumer Loans Total Three months ended March 31, 2026 Beginning balance $ 5,129 $ 1,283 $ 3,753 $ 35,589 $ 1,401 $ 26,285 $ 1,435 $ 74,875 Initial allowance on loans acquired 986 184 2,140 5,360 76 1,904 191 10,841 Provision (release) for credit loss expense ( 1,175 ) ( 12 ) ( 117 ) 1,780 1,176 615 331 2,598 Loans charged off — ( 40 ) ( 26 ) ( 1,111 ) — ( 291 ) ( 498 ) ( 1,966 ) Recoveries collected — — 193 1 10 40 222 466 Ending balance $ 4,940 $ 1,415 $ 5,943 $ 41,619 $ 2,663 $ 28,553 $ 1,681 $ 86,814 The following table presents the balance in the allowance for credit losses and the recorded investment in loans based on portfolio segment and impairment method as of the three months ended March 31, 2025 (in thousands): Construction and Land Development Agricultural Real Estate 1-4 Family Residential Properties Commercial Real Estate Agricultural Loans Commercial and Industrial Consumer Loans Total Three months ended March 31, 2025 Beginning balance $ 3,275 $ 1,361 $ 3,579 $ 32,669 $ 1,957 $ 25,602 $ 1,739 $ 70,182 Initial allowance on loans acquired — — — — — — — — Provision (release) for credit loss expense 456 ( 69 ) ( 14 ) ( 125 ) 809 559 36 1,652 Loans charged off — — ( 39 ) ( 338 ) ( 1,117 ) ( 223 ) ( 366 ) ( 2,083 ) Recoveries collected — — 18 8 — 90 184 300 Ending balance $ 3,731 $ 1,292 $ 3,544 $ 32,214 $ 1,649 $ 26,028 $ 1,593 $ 70,051 Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period where the uncollectible loss is reasonably determined. For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral. The Company charges off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to time frames established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 180 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. 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. 18 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, 2026 and December 31, 2025 (in thousands): Collateral Allowance for Credit Losses Three months ended March 31, 2026 Real Estate Business Assets Other Total Construction and land development $ 8,465 $ — $ — $ 8,465 $ 620 Agricultural real estate 506 — — 506 — 1-4 family residential properties 262 — — 262 16 Multifamily residential properties 358 — — 358 — Commercial real estate 27,839 — — 27,839 163 Loans secured by real estate 37,430 — — 37,430 799 Agricultural loans — — 628 628 628 Commercial and industrial loans — 7,996 29 8,025 2 Other loans — 10,854 — 10,854 165 Total loans $ 37,430 $ 18,850 $ 657 $ 56,937 $ 1,594 Twelve months ended December 31, 2025 Construction and land development $ — $ — $ — $ — $ — Agricultural real estate 111 — — 111 — 1-4 family residential properties 600 — — 600 — Multifamily residential properties 371 — — 371 — Commercial real estate 30,208 — — 30,208 13 Loans secured by real estate 31,290 — — 31,290 13 Agricultural loans — — — — — Commercial and industrial loans — 7,123 29 7,152 392 Other loans — 11,184 — 11,184 84 Total loans $ 31,290 $ 18,307 $ 29 $ 49,626 $ 489 Credit Quality The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral support, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Company uses the following definitions for risk ratings, which are commensurate with a loan considered “criticized”: Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current sound-worthiness and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing factors, conditions, and values, highly questionable and improbable. 19 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 based on rating category and payment activity as of March 31, 2026 (in thousands): March 31, 2026 Term Loans by Origination Year Revolving Risk rating 2026 2025 2024 2023 2022 Prior Loans Total Construction and land development loans Pass $ 114,672 $ 115,440 $ 5,549 $ 11,944 $ 32,841 $ 27,000 $ — $ 307,446 Special mention — — 457 — 342 — — 799 Substandard — — 4,968 5 464 3,041 — 8,478 Total $ 114,672 $ 115,440 $ 10,974 $ 11,949 $ 33,647 $ 30,041 $ — $ 316,723 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Agricultural real estate loans Pass $ 41,672 $ 28,126 $ 14,734 $ 96,710 $ 142,215 $ 682 $ — $ 324,139 Special mention 918 2,361 893 32,019 21,924 4,775 — 62,890 Substandard 1,033 — — 757 11,301 663 — 13,754 Total $ 43,623 $ 30,487 $ 15,627 $ 129,486 $ 175,440 $ 6,120 $ — $ 400,783 Current period gross write-offs $ — $ — $ — $ — $ — $ 40 $ — $ 40 1-4 family residential properties Pass $ 77,345 $ 46,338 $ 49,723 $ 110,835 $ 318,391 $ 15,728 $ 102,440 $ 720,800 Special mention — — — 179 681 — — 860 Substandard 125 581 574 834 7,976 1,357 946 12,393 Total $ 77,470 $ 46,919 $ 50,297 $ 111,848 $ 327,048 $ 17,085 $ 103,386 $ 734,053 Current period gross write-offs $ — $ — $ — $ — $ 16 $ 10 $ — $ 26 Commercial real estate loans Pass $ 489,277 $ 251,123 $ 309,047 $ 655,550 $ 1,533,869 $ 96,953 $ — $ 3,335,819 Special mention — 418 1,227 12,817 5,204 5,213 — 24,879 Substandard — 8,668 13,597 5,519 11,683 4,044 — 43,511 Total $ 489,277 $ 260,209 $ 323,871 $ 673,886 $ 1,550,756 $ 106,210 $ — $ 3,404,209 Current period gross write-offs $ — $ — $ — $ 753 $ 358 $ — $ — $ 1,111 Agricultural loans Pass $ 185,712 $ 37,265 $ 11,289 $ 16,573 $ 21,424 $ 66,582 $ — $ 338,845 Special mention 16,584 8,519 236 676 155 54 — 26,224 Substandard 1,732 294 1,403 770 453 1,210 — 5,862 Total $ 204,028 $ 46,078 $ 12,928 $ 18,019 $ 22,032 $ 67,846 $ — $ 370,931 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial loans Pass $ 441,881 $ 217,030 $ 96,263 $ 209,636 $ 532,065 $ 92,451 $ — $ 1,589,326 Special mention 18,941 9,905 2,975 9,211 22,675 271 — 63,978 Substandard — 1,418 2,132 1,312 18,839 975 — 24,676 Total $ 460,822 $ 228,353 $ 101,370 $ 220,159 $ 573,579 $ 93,697 $ — $ 1,677,980 Current period gross write-offs $ — $ — $ — $ 290 $ — $ 1 $ — $ 291 Consumer loans Pass $ 9,634 $ 4,539 $ 3,847 $ 11,842 $ 6,623 $ 2,641 $ — $ 39,126 Special mention — — — 18 — — — 18 Substandard — 25 22 197 196 9 — 449 Doubtful 2 2 — — — — — 4 Total $ 9,636 $ 4,566 $ 3,869 $ 12,057 $ 6,819 $ 2,650 $ — $ 39,597 Current period gross write-offs $ — $ — $ 8 $ 6 $ 40 $ 444 $ — $ 498 Total loans Pass $ 1,360,193 $ 699,861 $ 490,452 $ 1,113,090 $ 2,587,428 $ 302,037 $ 102,440 $ 6,655,501 Special mention 36,443 21,203 5,788 54,920 50,981 10,313 — 179,648 Substandard 2,890 10,986 22,696 9,394 50,912 11,299 946 109,123 Doubtful 2 2 — — — — — 4 Total $ 1,399,528 $ 732,052 $ 518,936 $ 1,177,404 $ 2,689,321 $ 323,649 $ 103,386 $ 6,944,276 Current period gross write-offs $ — $ — $ 8 $ 1,049 $ 414 $ 495 $ — $ 1,966 20 The following tables present the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of December 31, 2025 (in thousands): December 31, 2025 Term Loans by Origination Year Revolving Risk rating 2025 2024 2023 2022 2021 Prior Loans Total Construction and land development loans Pass $ 114,696 $ 99,757 $ 119,602 $ 5,167 $ 6,048 $ 14,659 $ — $ 359,929 Special mention — — 398 — — 348 — 746 Substandard — — — 5 — 7 — 12 Total $ 114,696 $ 99,757 $ 120,000 $ 5,172 $ 6,048 $ 15,014 $ — $ 360,687 Current period gross write-offs $ — $ — $ 107 $ — $ — $ — $ — $ 107 Agricultural real estate loans Pass $ 42,758 $ 22,040 $ 12,609 $ 107,950 $ 61,357 $ 87,939 $ — $ 334,653 Special mention 228 339 806 22,343 1,331 7,810 — 32,857 Substandard 598 194 — 224 392 4,490 — 5,898 Total $ 43,584 $ 22,573 $ 13,415 $ 130,517 $ 63,080 $ 100,239 $ — $ 373,408 Current period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — 1-4 family residential properties Pass $ 54,180 $ 31,041 $ 28,668 $ 62,974 $ 64,512 $ 144,475 $ 92,629 $ 478,479 Special mention — — — 185 93 760 — 1,038 Substandard 127 529 584 624 670 6,946 857 10,337 Total $ 54,307 $ 31,570 $ 29,252 $ 63,783 $ 65,275 $ 152,181 $ 93,486 $ 489,854 Current period gross write-offs $ — $ 12 $ 9 $ — $ — $ 135 $ — $ 156 Commercial real estate loans Pass $ 459,831 $ 217,098 $ 157,923 $ 597,491 $ 498,456 $ 916,195 $ — $ 2,846,994 Special mention — 371 1,150 12,931 248 4,760 — 19,460 Substandard — 5,000 15,295 6,246 2,394 8,763 — 37,698 Total $ 459,831 $ 222,469 $ 174,368 $ 616,668 $ 501,098 $ 929,718 $ — $ 2,904,152 Current period gross write-offs $ — $ 699 $ — $ 391 $ — $ 107 $ — $ 1,197 Agricultural loans Pass $ 230,666 $ 45,361 $ 7,684 $ 10,151 $ 6,363 $ 2,560 $ — $ 302,785 Special mention 1,209 76 11 — 23 — — 1,319 Substandard 451 367 2,484 845 24 — — 4,171 Total $ 232,326 $ 45,804 $ 10,179 $ 10,996 $ 6,410 $ 2,560 $ — $ 308,275 Current period gross write-offs $ — $ 280 $ 1,081 $ 836 $ 306 $ — $ — $ 2,503 Commercial and industrial loans Pass $ 431,942 $ 214,908 $ 82,977 $ 210,658 $ 159,029 $ 357,077 $ — $ 1,456,591 Special mention 19,409 8,898 2,542 7,965 61 26,193 — 65,068 Substandard — 1,397 2,180 1,008 219 16,617 — 21,421 Total $ 451,351 $ 225,203 $ 87,699 $ 219,631 $ 159,309 $ 399,887 $ — $ 1,543,080 Current period gross write-offs $ — $ — $ 163 $ 225 $ 497 $ 1,600 $ — $ 2,485 Consumer loans Pass $ 5,619 $ 2,555 $ 2,812 $ 12,861 $ 5,511 $ 2,119 $ — $ 31,477 Special mention — — — 22 — — — 22 Substandard — 30 9 171 132 77 — 419 Total $ 5,619 $ 2,585 $ 2,821 $ 13,054 $ 5,643 $ 2,196 $ — $ 31,918 Current period gross write-offs $ 5 $ 23 $ 27 $ 99 $ 43 $ 1,228 $ — $ 1,425 Total loans Pass $ 1,339,692 $ 632,760 $ 412,275 $ 1,007,252 $ 801,276 $ 1,525,024 $ 92,629 $ 5,810,908 Special mention 20,846 9,684 4,907 43,446 1,756 39,871 — 120,510 Substandard 1,176 7,517 20,552 9,123 3,831 36,900 857 79,956 Total $ 1,361,714 $ 649,961 $ 437,734 $ 1,059,821 $ 806,863 $ 1,601,795 $ 93,486 $ 6,011,374 Current period gross write-offs $ 5 $ 1,014 $ 1,387 $ 1,551 $ 846 $ 3,070 $ — $ 7,873 21 The following table presents the Company’s loan portfolio, on an amortized cost basis, aging analysis at March 31, 2026 and December 31, 2025 (in thousands): 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Receivable Total Loans > 90 Days and Accruing March 31, 2026 Construction and land development $ — $ 3,266 $ 3,439 $ 6,705 $ 310,018 $ 316,723 $ — Agricultural real estate 162 — 841 1,003 399,780 400,783 — 1-4 family residential properties 5,676 943 1,577 8,196 725,857 734,053 — Multifamily residential properties 107 — 145 252 455,933 456,185 — Commercial real estate 4,980 450 3,458 8,888 2,939,136 2,948,024 — Loans secured by real estate 10,925 4,659 9,460 25,044 4,830,724 4,855,768 — Agricultural loans 695 17 2,520 3,232 367,699 370,931 — Commercial and industrial loans 1,238 561 1,814 3,613 1,495,466 1,499,079 — Consumer loans 285 72 85 442 39,155 39,597 — All other loans — — — — 178,901 178,901 — Total loans $ 13,143 $ 5,309 $ 13,879 $ 32,331 $ 6,911,945 $ 6,944,276 $ — Percent of total loans 0.47 % December 31, 2025 Construction and land development $ — $ — $ — $ — $ 360,687 $ 360,687 $ — Agricultural real estate — — 841 841 372,567 373,408 — 1-4 family residential properties 4,725 1,630 1,687 8,042 481,812 489,854 — Multifamily residential properties — — — — 339,482 339,482 — Commercial real estate 712 228 5,671 6,611 2,558,059 2,564,670 — Loans secured by real estate 5,437 1,858 8,199 15,494 4,112,607 4,128,101 — Agricultural loans — 19 — 19 308,256 308,275 — Commercial and industrial loans 414 205 904 1,523 1,380,075 1,381,598 — Consumer loans 329 44 111 484 31,434 31,918 — All other loans — — — — 161,482 161,482 — Total loans $ 6,180 $ 2,126 $ 9,214 $ 17,520 $ 5,993,854 $ 6,011,374 $ — Percent of total loans 0.29 % Nonaccrual Loans Within all loan portfolio segments, loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Impaired loans, excluding certain modified loans, are placed on nonaccrual status. Impaired loans include nonaccrual loans and loans modified in restructuring where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. It is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being modified remain on nonaccrual status until, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. If the restructured loan is on accrual status prior to being modified, the loan is reviewed to determine if the modified loan should remain on accrual status. The Company’s policy is to discontinue the accrual of interest income on all loans for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year's income. Subsequent receipts on nonaccrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Interest on loans determined to be modified is recognized on an accrual basis in accordance with the restructured terms if the loan is in compliance with the modified terms. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status. 22 The amount of interest income recognized by the Company within the periods stated above was due to loans modified in restructuring that remain on accrual status. The following table presents the Company’s recorded balance of nonaccrual loans as of March 31, 2026 and December 31, 2025 (in thousands). This table excludes performing purchased credit deteriorated loans and performing loans modified. March 31, 2026 December 31, 2025 Nonaccrual with no Allowance for Total Nonaccrual with no Allowance for Total Credit Loss Nonaccrual Credit Loss Nonaccrual Construction and land development $ 3,796 $ 8,470 $ 5 $ 5 Agricultural real estate 1,562 1,562 1,181 1,181 1-4 family residential properties 6,158 7,680 4,940 5,763 Multifamily residential properties 503 503 371 371 Commercial real estate 8,033 8,347 10,109 10,381 Loans secured by real estate 20,052 26,562 16,606 17,701 Agricultural loans 1,909 2,537 19 19 Commercial and industrial loans 3,028 3,057 1,232 1,967 Consumer loans 181 181 182 182 All other loans 1,823 10,854 1,942 11,184 Total loans $ 26,993 $ 43,191 $ 19,981 $ 31,053 The aggregate principal balances of nonaccrual, past due ninety days or more loans were $ 43.2 million and $ 31.1 million at March 31, 2026 and December 31, 2025, respectively. Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $ 501,000 and $ 471,000 for the three months ended March 31, 2026 and 2025, respectively. Loan Modifications to Borrowers Experiencing Financial Difficulty The following table shows the amortized cost of loans at March 31, 2026 and 2025 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. Total Payment Term Interest Class of Delay Extension Rate Financing Investment Modifications Reduction Receivable March 31, 2026 Agricultural real estate $ 283 $ — $ — — % 1-4 family residential properties 32 1,061 — 0.02 % Commercial real estate 1,262 — 505 0.03 % Loans secured by real estate 1,577 1,061 505 0.05 % Commercial and industrial loans 418 211 — 0.01 % Consumer loans — 3 — — % Total $ 1,995 $ 1,275 $ 505 0.06 % March 31, 2025 Agricultural real estate $ 304 $ — $ — 0.01 % 1-4 family residential properties 42 748 — 0.01 % Commercial real estate 822 158 979 0.03 % Loans secured by real estate 1,168 906 979 0.05 % Commercial and industrial loans 859 87 — 0.02 % Consumer loans 2 7 — — % Total $ 2,029 $ 1,000 $ 979 0.07 % 23 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, 2026 and 2025. 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due March 31, 2026 Commercial real estate — — — — March 31, 2025 Commercial real estate 174 — — 174 The following table shows the financial effect of loan modifications during the quarter ended March 31, 2026 and 2025 to borrowers experiencing financial difficulty. Weighted Average Weighted Average Interest Rate Term Extension Reduction (in months) March 31, 2026 Commercial real estate — % — Commercial and industrial loans — % 12 March 31, 2025 Commercial real estate 1.00 % — Commercial and industrial loans — % — A loan is considered to be in payment default once it is 90 days past due under the modified terms. There were one and four loans modified during the prior twelve months that experienced payment defaults for the three months ended March 31, 2026 and 2025, respectively. At March 31, 2026 and December 31, 2025, the balance of real estate owned included $ 5.5 million and $ 2.9 million respectively of foreclosed real estate properties recorded as a result of obtaining physical possession of the property. At March 31, 2026 and December 31, 2025, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceeds were in process were $ 6.0 million and $ 1.3 million , respectively. Note 5 -- Goodwill and Intangible Assets The Company has goodwill from business combinations, identifiable intangible assets assigned to core deposit relationships and customer l ists of business lines acquired. The following table presents gross carrying amount and accumulated amortization by major intangible as set class as of March 31, 2026 and December 31, 2025 (in thousands): March 31, 2026 December 31, 2025 Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Goodwill $ 207,151 $ 3,760 $ 207,151 $ 3,760 Core deposit intangibles 101,185 55,547 79,945 53,285 Customer list intangibles 40,814 16,805 34,420 16,021 Total $ 349,150 $ 76,112 $ 321,516 $ 73,066 Core deposit intangibles are being amortized over a period of 10 years and other intangibles, primarily customer lists, are being amortized over periods ranging from 3 to 12 years. During the quarter ended March 31, 2026, a customer list intangible asset of $ 1.4 million was recorded for the acquisition of DIA’s customer list in connection with its insurance business. The purchase consideration given to DIA matches the amount of intangible assets recorded. 24 No goodwill was recorded for the acquisition and merger of Two Rivers during the first quarter of 2026. The following table provides a reconciliation of the purchase price paid for the acquisition of Two Rivers and the lack of goodwill recorded (in thousands): Unallocated purchase price $ ( 14,671 ) Purchase accounting adjustments: Decrease in fair value of securities $ 6,074 Decrease in fair value of loans, net 17,145 Decrease in fair value of premises and equipment 1,552 Decrease on time deposits ( 131 ) Decrease in fair value of junior subordinated debt and other borrowings ( 253 ) Increase in core deposit intangible ( 17,056 ) Customer list intangible ( 5,043 ) Recapture of existing goodwill 20,657 Other assets ( 8,274 ) Total purchase accounting adjustments 14,671 Resulting goodwill from acquisition $ — In December 2025, a customer list intangible asset of $ 764,000 was recorded for the acquisition of RFMS customer list in connection with its farm management business. The purchase consideration given to RFMS matches the amount of intangible assets recorded. During the quarter ended September 30, 2025, a customer list intangible asset of $ 2.8 million was recorded for the acquisition of a portion of AAIG's customer list in connection with its insurance business. The purchase consideration given to AAIG matches the amount of intangible assets recorded. During the quarter ended September 30, 2024, goodwill of $ 6.9 million was recorded for the acquisition of the stock of Mid Rivers Insurance Group, Inc., in connection with its insurance business. The following provides a reconciliation of the purchase price paid for Mid Rivers Insurance Group, Inc. and the amount of goodwill recorded (in thousands): Unallocated purchase price $ 10,059 Less purchase accounting adjustments: Insurance Company intangible $ 4,305 Other liabilities ( 1,176 ) Total purchase accounting adjustments 3,129 Resulting goodwill from acquisition $ 6,930 The unpaid principal balance of mortgage loans serviced for others was $ 495.7 million , $ 557.6 million , and $ 509.7 million as of March 31, 2026, March 31, 2025, and December 31, 2025 , respectively. The Company has mortgage servicing rights acquired in previous acquisitions. Mortgage servicing rights are accounted for under the amortization method. The following table summarizes the activity pertaining to the mortgage servicing rights included in intangible assets as of three months ended March 31, 2026 and 2025 (in thousands): March 31, 2026 March 31, 2025 Beginning balance $ 4,566 $ 5,629 Adjustment to valuation reserve — 1 Mortgage servicing rights amortized ( 255 ) ( 287 ) Interest only strip ( 2 ) ( 5 ) Ending balance $ 4,309 $ 5,338 Fair value of portfolio $ 5,430 $ 6,500 25 Total amortization expense for three months ended March 31, 2026 and 2025 was as follows (in thousands): Three months ended March 31, 2026 2025 Core deposit intangibles $ 2,262 $ 2,263 Customer list intangibles 784 681 Mortgage servicing rights 255 287 Total $ 3,301 $ 3,231 Estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands): Aggregate amortization expense: For period 01/01/26-03/31/26 $ 3,301 Estimated amortization expense: For period 04/01/26-12/31/26 11,509 For year-ended 12/31/27 13,911 For year-ended 12/31/28 12,276 For year-ended 12/31/29 10,502 For year-ended 12/31/30 8,117 The weighted average amortization period for core deposit, customer lists and total intangibles was 3.40 , 4.77 , and 3.87 years respectively, at March 31, 2026. In accordance with GAAP, the Company performed its annual testing of goodwill for impairment as of September 30, 2025 and determined that, as of that date, goodwill was not impaired. The goodwill of a reporting unit is tested for impairment between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Management also concluded that the remaining amounts and amortization periods were appropriate for all intangible assets. Note 6 -- Repurchase Agreements and Other Borrowings Securities sold under agreements to repurchase have overnight maturities and a weighted average rate of 2.04 % . The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., declare bankruptcy), the Company could cancel the repurchase agreement (i.e., cease payment of principal and interest), and attempt collection on the amount of collateral value in excess of the repurchase agreement fair value. The collateral is held by a third-party financial institution in the counterparty's custodial account. The counterparty has the right to sell or repledge the investment securities. For government entity repurchase agreements, the collateral is held by the Company in a segregated custodial account under a tri- party agreement. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional securities. The Company closely monitors collateral levels to ensure adequate levels are maintained, while mitigating the potential of over-collateralization in the event of counterparty default. Repurchase agreements by class of collateral pledged are as follows (in thousands): March 31, 2026 December 31, 2025 US Treasury securities and obligations of U.S. government corporations and agencies $ 60,723 $ 55,863 Mortgage-backed securities (1) 148,088 140,853 Total $ 208,811 $ 196,716 (1) Mortgage-backed securities include mortgage-backed securities (MBS) and collateralized mortgage obligation (CMO) issues from the following government sponsored enterprises: FHLMC, FNMA, GNMA and FHLB. 26 FHLB advances represent borrowings by First Mid Bank and Two Rivers Bank to fund loan demand. Advances were $ 275.2 million and $ 270.0 million at March 31, 2026 and December 31, 2025, respectively. At March 31, 2026, the advances were as follows: Advance Term (in years) Interest Rate Maturity Date $ 19,397 7.0 2.46 % May 29, 2026 22,149 10.0 1.74 % June 5, 2026 25,000,000 3.0 4.40 % June 15, 2026 14,546 15.0 3.87 % July 1, 2026 14,365 15.0 3.68 % July 20, 2026 2,400,000 3.0 4.79 % September 8, 2026 19,538 15.0 2.26 % September 9, 2026 57,319 7.0 2.11 % September 11, 2026 66,169 7.0 1.80 % October 9, 2026 94,344 7.0 1.81 % January 29, 2027 102,811 7.0 1.52 % March 1, 2027 25,000,000 3.0 4.37 % May 10, 2027 25,000,000 3.0 4.32 % May 17, 2027 22,083 15.0 2.38 % August 6, 2027 11,070 15.0 2.42 % August 9, 2027 204,236 10.0 2.72 % January 26, 2028 25,000,000 5.0 3.95 % June 29, 2028 261,208 10.0 2.10 % June 20, 2029 25,000,000 5.0 3.93 % June 27, 2029 182,238 10.0 2.01 % August 2, 2029 5,000,000 10.0 1.15 % October 3, 2029 5,000,000 10.0 1.12 % October 3, 2029 10,000,000 10.0 1.39 % December 31, 2029 25,000,000 5.0 3.46 % February 7, 2030 412,756 10.0 1.06 % March 6, 2030 415,533 10.0 1.29 % March 15, 2030 25,000,000 5.0 3.16 % August 14, 2030 358,310 10.0 0.89 % November 4, 2030 50,000,000 5.0 2.92 % November 25, 2030 502,036 10.0 0.83 % February 14, 2031 25,000,000 10.0 2.71 % March 5, 2035 $ 275,180,108 Note 7 -- Disclosures of Fair Values of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2 Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Following is a description of the inputs and valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. 27 Available-for-Sale Securities. The fair value of available-for-sale securities is determined by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sources market parameters, including but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Equity Securities. The fair value of current equity securities is determined by obtaining quoted market prices in an active market and are classified within Level 1. In cases where quoted market prices are not available, fair values are estimated by using quoted prices of securities with similar characteristics and are classified in Level 2 of the valuation hierarchy. Derivatives. 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. Loans Held for Sale. The fair values are estimated by using quoted prices of loans with similar characteristics and are therefore classified in Level 2 of the valuation hierarchy. The following table presents the Company’s assets 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, 2026 and December 31, 2025 (in thousands): Fair Value Measurements Using: Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) March 31, 2026 Available-for-sale securities: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 143,579 $ — $ 143,579 $ — Obligations of states and political subdivisions 275,236 — 275,236 — Mortgage-backed securities 733,351 — 725,876 7,475 Corporate bonded debt 23,905 — 21,146 2,759 Total available-for-sale securities 1,176,071 — 1,165,837 10,234 Equity securities 4,717 4,717 — — Loans held for sale 4,909 — 4,909 — Derivative assets: interest rate swaps 1,721 — 1,721 — Total assets $ 1,187,418 $ 4,717 $ 1,172,467 $ 10,234 Derivative liabilities: interest rate swaps $ 1,241 $ — $ 1,241 $ — December 31, 2025 Available-for-sale securities: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 144,080 $ — $ 144,080 $ — Obligations of states and political subdivisions 280,633 — 280,633 — Mortgage-backed securities 624,666 — 624,666 — Corporate bonded debt 27,504 — 24,745 2,759 Total available-for-sale securities 1,076,883 — 1,074,124 2,759 Equity securities 4,588 4,588 — — Loans held for sale 5,203 — 5,203 — Derivative assets: interest rate swaps 1,728 — 1,728 — Total assets $ 1,088,402 $ 4,588 $ 1,081,055 $ 2,759 Derivative liabilities: interest rate swaps $ 1,247 $ — $ 1,247 $ — 28 The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the years ended three months ended March 31, 2026 and 2025 is summarized as follows (in thousands): Three months ended March 31, 2026 2025 Beginning balance $ 2,759 $ 5,759 Purchases 7,475 — Ending balance $ 10,234 $ 5,759 Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. Collateral Dependent Loans. Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment and estimating fair value include using the fair value of the collateral for collateral dependent loans. If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Impaired loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method. Management establishes a specific allowance for 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, 2026 was $ 21.6 million and a fair value of $ 19.9 million resulting in specific loss exposures of $ 1.7 million . As of December 31, 2025, the total carrying amount of loans for which a change in specific allowance occurred was $ 11.0 million . These loans had a fair value of $ 10.4 million which resulted in specific loss exposures of $ 605,000 . 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. Losses are recognized in the period an obligation becomes uncollectible. The recognition of a loss does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan even though partial recovery may be affected in the future. Foreclosed Assets Held for Sale. Other real estate owned acquired through loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for credit losses. Due to the subjective nature of establishing fair value when the asset is acquired, the actual fair value of the other real estate owned or foreclosed asset could differ from the original estimate. If it is determined that fair value declines subsequent to foreclosure, a valuation allowance is recorded through non-interest expense. Operating costs associated with the assets after acquisition are also recorded as non-interest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other non-interest expenses. The total carrying amount of other real estate owned as of March 31, 2026 was $ 5.5 million . Other real estate owned included in the total carrying amount and measured at fair value on a nonrecurring basis during the year amounted to $ 317,000 . The total carrying amount of other real estate owned as of December 31, 2025 was $ 2.9 million . Other real estate owned included in the total carrying amount and measured at fair value on a nonrecurring basis during the year amounted to $ 605,000 . 29 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, 2026 and December 31, 2025 (in thousands): Fair Value Measurements Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Fair Value (Level 1) (Level 2) (Level 3) March 31, 2026 Collateral dependent loans $ 19,916 $ — $ — $ 19,916 Foreclosed assets held for sale 317 — — 317 December 31, 2025 Collateral dependent loans $ 10,389 $ — $ — $ 10,389 Foreclosed assets held for sale 605 — — 605 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, 2026 and December 31, 2025. Fair Value Valuation Range (in thousands) Technique Unobservable Inputs (Weighted Average) March 31, 2026 Collateral dependent loans $ 19,916 Third party valuations Discount to reflect realizable value 0 %- 40 % ( 20 %) Foreclosed assets held for sale 317 Third party valuations Discount to reflect realizable value less estimated selling costs 0 %- 40 % ( 35 %) December 31, 2025 Collateral dependent loans $ 10,389 Third party valuations Discount to reflect realizable value 0 % - 40 % ( 20 %) Foreclosed assets held for sale 605 Third party valuations Discount to reflect realizable value less estimated selling costs 0 % - 40 % ( 35 %) 30 The following tables present estimated fair values of the Company’s financial instruments at March 31, 2026 and December 31, 2025 (in thousands): Carrying Amount Fair Value Level 1 Level 2 Level 3 March 31, 2026 Financial assets Cash and due from banks $ 476,083 $ 476,083 $ 476,083 $ — $ — Federal funds sold 949 949 949 — — Certificates of deposit 3,060 3,060 — 3,060 — Available-for-sale investment securities 1,176,071 1,176,071 — 1,165,837 10,234 Held-to-maturity investment securities 2,271 2,271 2,271 — — Equity investment securities 4,717 4,717 4,717 — — Loans held for sale 4,909 4,909 — 4,909 — Loans net of allowance for credit losses 6,939,367 6,653,493 — — 6,653,493 Interest receivable 46,753 46,753 — 46,753 — Federal Reserve Bank stock 19,855 19,855 — 19,855 — Federal Home Loan Bank stock 12,341 12,341 — 12,341 — Financial liabilities Deposits $ 7,547,639 $ 7,476,423 $ — $ 5,972,507 $ 1,503,916 Repurchase agreements with customers 208,811 208,811 — 208,811 — Interest payable 6,600 6,600 — 6,600 — Other borrowings 295,106 294,417 — 294,417 — Subordinated debt, net 60,072 60,961 — 60,961 — Junior subordinated debt, net 34,022 32,435 — 32,435 — December 31, 2025 Financial assets Cash and due from banks $ 254,844 $ 254,844 $ 254,844 $ — $ — Federal funds sold 76 76 76 — — Certificates of deposit 1,740 1,740 — 1,740 — Available-for-sale investment securities 1,076,883 1,076,883 — 1,074,124 2,759 Held-to-maturity investment securities 2,288 2,288 2,288 — — Equity investment securities 4,588 4,588 4,588 — — Loans held for sale 5,203 5,203 — 5,203 — Loans net of allowance for credit losses 5,931,296 5,761,258 — — 5,761,258 Interest receivable 39,949 39,949 — 39,949 — Federal Reserve Bank stock 19,855 19,855 — 19,855 — Federal Home Loan Bank stock 11,351 11,351 — 11,351 — Financial liabilities Deposits $ 6,395,273 $ 6,322,439 $ — $ 5,265,780 $ 1,056,659 Repurchase agreements with customers 196,716 196,716 — 196,716 — Interest payable 5,782 5,782 — 5,782 — Other borrowings 270,000 270,338 — 270,338 — Subordinated debt, net 60,008 60,800 — 60,800 — Junior subordinated debt, net 24,454 22,083 — 22,083 — Note 8 -- Business Combinations On February 28, 2026, the Company completed its acquisition of Two Rivers Financial Group, Inc. (“Two Rivers”) pursuant to an Agreement and Plan of Merger Agreement, dated October 29, 2025 (the “Agreement”). Pursuant to the Agreement, Two Rivers was merged with and into the Company. Two Rivers shareholders received 1.225 shares of the Company's common stock for each share of Two Rivers common stock. The Company accounted for the Two Rivers acquisition as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”). 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 31 intangibles, time deposits, real property, jr. subordinated debt, a note payable, leases, FHLB borrowings and a customer list intangible 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: (In thousands) Assets Cash and due from banks $ 88,972 Loans held for sale 43 Loans, net 860,534 Investments-available for sale 169,780 FHLB stock 989 Premises and equipment 11,743 Accrued interest receivable 4,408 Prepaid expenses 954 Other assets 12,889 Core deposit intangible 21,240 Customer list intangible 5,043 Deferred tax asset 10,191 Total assets acquired $ 1,186,786 Liabilities Deposits $ 1,040,793 FHLB advance 5,308 Note payable 20,004 Junior subordinated debt, net 9,526 Accrued interest payable 829 Accrued and other liabilities 6,165 Total liabilities assumed 1,082,625 Net assets acquired $ 104,161 Total consideration $ 104,161 Goodwill / bargain purchase $ — The following table presents a summary of consideration transferred: (In thousands, except shares) Common stock issued ( 2,539,831 shares) $ 104,159 Cash consideration 2 Purchase price $ 104,161 The Company recorded no goodwill or bargain purchase in connection with the acquisition of Two Rivers. The goodwill calculation is provisional for up to one year after the acquisition and could be adjusted in subsequent quarters during 2026 if additional relevant information to the fair values listed above become available. The descriptions below describe the methods used to determine the fair value of significant assets acquired and liabilities assumed, as presented above: Loans, net . The fair value of the loan portfolio was calculated on an individual loan basis using a discounted cash flow analysis, with results presented and assumptions applied on a summary basis. This analysis took into consideration the contractual terms of the loans and assumptions related to the cost of debt, cost of equity, servicing cost, and other liquidity/risk premium considerations to estimate the projected cash flows. The inputs and assumptions used in the fair value estimate of the loan portfolio include loss rates, discount rate, prepayment speed, and foreclosure lag. 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. Premises and equipment . The fair value of the real estate acquired was determined by using third party real estate appraisers. The appraisals factored in the condition of the property and comparable sales of similar properties in similar markets. The appraisals allocated the value of each property between land and building and the properties were recorded at the appraised value on the balance sheet as of the date of the acquisition. 32 Core deposit intangible. The Company identified customer relationships, in the form of core deposit intangibles, as an identified intangible asset. Core deposit intangibles derive value from the expected future benefits or earnings capacity attributable to the acquired core deposits. The fair value of the core deposit intangible was estimated by identifying the expected future benefits of the core deposits and discounting those benefits back to present value. The core deposit intangible will be amortized over its estimated useful life of approximately 10 years using the sum of the months digits accelerated method. Customer list intangible. The Company identified wealth management trust customer relationships, in the form of customer list intangible, as an identified intangible asset. Customer list intangibles derive value from the expected future benefits or earnings capacity attributable to the acquired trust customer relationships. The fair value of the customer list intangible was estimated by identifying the expected future benefits of the customer relationships and discounting those benefits back to present value. The customer list intangible will be amortized over its estimated useful life of approximately 11 years using the straight-line method. Deposits. The fair value of demand deposit and interest checking deposit accounts was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. The fair value of time deposits was estimated by discounting the contractual future cash flow using market rates offered for time deposits of similar remaining maturities. FHLB borrowings, note payable, and jr. subordinated debt. The FHLB borrowings, note payable, and jr. subordinated debt was fair valued using an income approach. Cash flows were calculated using the instrument’s annualized contractual rate and discounted to present value using market rates for similar types of borrowing arrangements. Accounting for acquired loans. Loans acquired are recorded at fair value with no carryover of the related allowance for credit losses. Purchased-credit deteriorated loans (“PCD”) are loans that have experienced more than insignificant credit deterioration since origination and are recorded at the purchase price. The allowance for credit losses is determined at the loan level. Non-PCD loans have not experienced a more than insignificant deterioration in credit quality since origination. Under ASU 2025-08, these loans are referred to as purchased seasoned loans and accounted for similarly to the PCD loans. PCD and purchased seasoned loan’s purchase price and the allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. In accordance with ASC 326, Financial Instruments – Credit Losses , immediately following the acquisition the Company established a $ 10.8 million allowance for credit losses on the $ 896.2 million of acquired loans. The following table provides a summary of loans purchased as part of the Two Rivers acquisition as of the acquisition date: (In thousands) Unpaid principal balance $ 896,204 Allowance for credit losses at acquisition ( 10,841 ) Non-credit discount on acquired loans ( 24,786 ) Fair value of loans $ 860,577 33 The following unaudited pro forma condensed combined financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the Two Rivers Merger taken place at the beginning of the period (dollars in thousands, except per share data): Three months ended March 31, 2026 2025 Net interest income $ 77,091 $ 68,234 Provision for credit losses 2,598 1,849 Non-interest income 28,498 27,725 Non-interest expense 69,530 65,067 Income before income taxes 33,461 29,043 Income tax expense 7,718 6,103 Net income available to common stockholders $ 25,743 $ 22,940 Earnings per share Basic $ 0.97 $ 0.87 Diluted $ 0.97 $ 0.87 Basic weighted average shares outstanding 26,470,468 26,398,648 Diluted weighted average shares outstanding 26,587,023 26,499,059 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 Two Rivers acquisition, pre-tax, of $ 2.1 million during the three months ended March 31, 2026 and no related acquisition costs were incurred during the three months ended March 31, 2025. Note 9 -- Leases The Company recognizes a lease liability and a right-of-use asset, based on the present value of lease payments over the lease term. The discount rate used in determining the present value is the Company's incremental borrowing rate which is the FHLB fixed advance rate based on the lease commencement date. In addition, the Company has elected not to include short-term leases (i.e., leases with terms of twelve months or less) or equipment leases (primarily copiers) deemed immaterial, on the consolidated balance sheets. The following table contains supplemental balance sheet information related to leases (dollars in thousands): March 31, 2026 December 31, 2025 Operating lease right-of-use assets $ 13,411 $ 12,674 Operating lease liabilities 13,954 13,210 Weighted-average remaining lease term (in years) 4.3 4.4 Weighted-average discount rate 3.57 % 3.54 % Certain of the Company's leases contain options to renew the lease; however, not all renewal options are included in the calculation of lease liabilities as they are not reasonably certain to be exercised. The Company's leases do not contain residual value guarantees or material variable lease payments. The Company does not have any other material restrictions or covenants imposed by leases that would impact the Company's ability to pay dividends or cause the Company to incur additional financial obligations. Future minimum lease payments under operating leases are (in thousands): Operating Leases 2026 $ 2,799 2027 3,402 2028 2,753 2029 2,271 2030 1,541 Thereafter 2,685 Total minimum lease payments 15,451 Less imputed interest ( 1,497 ) Total lease liabilities $ 13,954 34 The components of lease expense for the three months ended March 31, 2026 and 2025 were as follows (in thousands): Three months ended March 31, 2026 2025 Operating lease cost $ 912 $ 826 Short-term lease cost 37 31 Variable lease cost 173 343 Total lease cost 1,122 1,200 Income from subleases ( 77 ) ( 80 ) Net lease cost $ 1,045 $ 1,120 As the Company elected not to separate lease and non-lease components, the variable lease cost primarily represents variable payment such as common area maintenance and copier expense. The Company does not have any material sub-lease agreements. In October 2025, the Company recognized a $ 630,000 gain on the sale of their branch location in St. Louis, MO and subsequently leased the property back from the buyer with a lease term ending on December 31, 2026. Cash paid for amounts included in the measurement of lease liabilities was (in thousands): March 31, 2026 March 31, 2025 Operating cash flows from operating leases $ 852 $ 822 Note 10 -- Derivatives The Company utilizes interest rate swaps, designated as fair value hedges, to mitigate the risk of changing interest rates on the fair value of fixed rate loans. For derivative instruments that are designed and qualify as a fair value hedge, the gain or loss on the derivative instrument, as well as the offsetting loss or gain in the hedged asset attributable to the hedged risk, is recognized in current earnings. Derivatives Designated as Hedging Instruments The following table provides the outstanding notional balances and fair value of outstanding derivatives designated as hedging instruments as of March 31, 2026 and December 31, 2025 (in thousands): Derivative Balance Sheet Location Weighted Average Remaining Maturity (Years) Notional Amount Estimated Value March 31, 2026 Interest rate swap agreements Other liabilities 3.1 $ 11,901 $ ( 1,241 ) December 31, 2025 Interest rate swap agreements Other liabilities 3.3 $ 11,974 $ ( 1,247 ) The effects of the fair value hedges on the Company's income statement during the three months ended March 31, 2026 and 2025 were as follows (in thousands): Three months ended March 31, Derivative Location of Gain (Loss) on Derivative 2026 2025 Interest rate swap agreements Interest income on loans $ ( 1 ) $ ( 263 ) Three months ended March 31, Derivative Location of Gain (Loss) on Hedged Items 2026 2025 Interest rate swap agreements Interest income on loans $ 1 $ 263 35 T he following amounts were recorded on the balance sheet related to the cumulative basis adjustment for fair value hedges as of March 31, 2026 and December 31, 2025 (in thousands): Line Item in the Balance Sheet in Which the Hedge Items are Included Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets March 31, 2026 Loans $ 11,421 $ ( 480 ) December 31, 2025 Loans 11,493 ( 481 ) Derivatives Not Designated as Hedging Instruments The following table provides the outstanding notional balances and fair value of outstanding derivatives not designated as hedging instruments as of the three months ended March 31, 2026 and December 31, 2025 (dollars in thousands): Balance Sheet Location Weighted Average Remaining Maturity (Years) Notional Amount Estimated Value March 31, 2026 Interest rate swap agreements Other assets 2.7 $ 24,238 $ 1,721 Interest rate swap agreements Loans 2.7 24,238 ( 480 ) Interest rate swap agreements Other liabilities 2.7 24,238 1,241 December 31, 2025 Interest rate swap agreements Other assets 3.0 $ 27,233 $ 1,728 Interest rate swap agreements Loans 3.0 27,233 481 Interest rate swap agreements Other liabilities 3.0 27,233 1,247 Note 11 -- Regulatory Capital The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Bank holding companies follow minimum regulatory requirements established by the Board of Governors of the Federal Reserve System (“Federal Reserve System”), First Mid Bank follows similar minimum regulatory requirements established for national banks by the Office of the Comptroller of the Currency (“OCC”). Two Rivers Bank follows similar minimum regulatory requirements established for Iowa banks by the Iowa Division of Banking and qualifies to be a community bank and utilize the community bank leverage ratio. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary action by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Company and its subsidiary banks to maintain minimum capital amounts and ratios (set forth in the table below). Management believes that, as of March 31, 2026 and December 31, 2025, the Company and First Mid Bank and Two Rivers Bank met all capital adequacy requirements. As of December 31, 2025, the most recent notification from the primary regulators categorized First Mid Bank and Two Rivers Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, minimum total risk-based capital, Tier 1 risk-based capital, Common Equity Tier 1 risk-based capital, and Tier 1 leverage ratios must be maintained as set forth in the following table. At March 31, 2026, there were no conditions or events since the most recent notification that management believes has changed this categorization. 36 Actual Required Minimum for Capital Adequacy Purposes with Capital Buffer To Be Well-Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio March 31, 2026 Total capital (to risk-weighted assets) Company $ 1,109,373 15.48 % $ 752,330 > 10.50 % N/A N/A First Mid Bank 918,376 14.48 % 665,941 > 10.50 % $ 634,229 > 10.00 % Two Rivers Bank 116,694 13.95 % 87,862 > 10.50 % 83,678 > 10.00 % Tier 1 capital (to risk-weighted assets) Company 972,518 13.57 % 609,029 > 8.50 % N/A N/A First Mid Bank 842,769 13.29 % 539,095 > 8.50 % 507,384 > 8.00 % Two Rivers Bank 115,518 13.81 % 71,126 > 8.50 % 66,942 > 8.00 % Common equity tier 1 capital (to risk-weighted assets) Company 938,496 13.10 % 501,553 > 7.00 % N/A N/A First Mid Bank 842,769 13.29 % 443,961 > 7.00 % 412,249 > 6.50 % Two Rivers Bank 115,518 13.81 % 58,574 > 7.00 % 54,391 > 6.50 % Tier 1 capital (to average assets) Company 972,518 10.62 % 366,286 > 4.00 % N/A N/A First Mid Bank 842,769 10.75 % 313,474 > 4.00 % 391,842 > 5.00 % Two Rivers Bank 115,518 9.94 % 46,467 > 4.00 % 58,084 > 5.00 % December 31, 2025 Total capital (to risk-weighted assets) Company $ 989,634 15.67 % $ 663,053 > 10.50 % N/A N/A First Mid Bank 910,047 14.47 % 660,282 > 10.50 % $ 628,840 > 10.00 % Tier 1 capital (to risk-weighted assets) Company 855,405 13.55 % 536,757 > 8.50 % N/A N/A First Mid Bank 835,826 13.29 % 534,514 > 8.50 % 503,072 > 8.00 % Common equity tier 1 capital (to risk-weighted assets) Company 830,951 13.16 % 442,035 > 7.00 % N/A N/A First Mid Bank 835,826 13.29 % 440,188 > 7.00 % 408,746 > 6.50 % Tier 1 capital (to average assets) Company 855,405 11.07 % 308,994 > 4.00 % N/A N/A First Mid Bank 835,826 10.88 % 307,361 > 4.00 % 384,201 > 5.00 % The Company's risk-weighted assets, capital, and capital ratios for March 31, 2026 were computed in accordance with Basel III capital rules. As of March 31, 2026 , the Company, First Mid Bank and Two Rivers Bank had capital ratios above the required minimums for regulatory capital adequacy, and First Mid Bank and Two Rivers Bank had capital ratios that qualified it for treatment as well-capitalized under the regulatory framework for prompt corrective action with respect to banks. 37 Note 12 -- Commitments and Contingent Liabilities First Mid Bank and Two Rivers Bank enter into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of their customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. Each of these instruments involves, to varying degrees, elements of credit, interest rate, and liquidity risk in excess of the amounts recognized in the consolidated balance sheets. The Company uses the same credit policies and requires similar collateral in approving lines of credit and commitments and issuing letters of credit as it does in making loans. The exposure to credit losses on financial instruments is represented by the contractual amount of these instruments. However, the Company does not anticipate any material losses from these instruments and has adequately reserved for these instruments. The off-balance sheet financial instruments whose contract amounts represent credit risk at March 31, 2026 and December 31, 2025 were as follows (in thousands): March 31, 2026 December 31, 2025 Unused commitments and lines of credit: Commercial real estate $ 226,184 $ 214,028 Commercial operating 774,829 675,087 Home equity 128,947 119,456 Other 357,169 371,322 Total $ 1,487,129 $ 1,379,893 Standby letters of credit $ 14,937 $ 17,575 Commitments to originate credit represent approved commercial, residential real estate and home equity loans that generally are expected to be funded within ninety days . Lines of credit are agreements by which the Company agrees to provide a borrowing accommodation up to a stated amount as long as there is no violation of any condition established in the loan agreement. Both commitments to originate credit and lines of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the lines and some commitments are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued by the Company to guarantee the financial performance of customers to third parties. Standby letters of credit are primarily issued to facilitate trade or support borrowing arrangements and generally expire in one year or less . The credit risk involved in issuing letters of credit is essentially the same as that involved in extending credit facilities to customers. The maximum amount of credit that would be extended under letters of credit is equal to the total off-balance sheet contract amount of such instrument at March 31, 2026. The Company's deferred revenue under standby letters of credit was nominal. The Company is also subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition of ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.