FIRST MID BANCSHARES, INC. (FMBH)

CIK: 0000700565. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-02-27.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=700565. Latest filing source: 0001193125-26-080847.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000700565.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000700565.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-213797.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to provide a better understanding of the consolidated financial condition and results of operations of the Company and its subsidiaries for the three months ended March 31, 2026 and 2025. This discussion and analysis should be read in conjunction with the consolidated financial statements, related notes and selected financial data appearing elsewhere in this report.

Website

The Company maintains a website at www.firstmid.com. All periodic and current reports of the Company and amendments to these reports filed with the Securities and Exchange Commission (“SEC”) can be accessed, free of charge, through this website and at www.sec.gov as soon as reasonably practicable after these materials are filed with the SEC.

Forward-Looking Statements

This document may contain certain forward-looking statements about the Company, such as discussions of the Company’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company are identified by use of the words “believe,”

38

“expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, the possibility that any of the anticipated benefits of the proposed transactions between First Mid and Two Rivers will not be realized within the expected time period; the risk that integration of the operations of Two Rivers with First Mid will be materially delayed or will be more costly or difficult than expected; the effect of the announcement of the proposed transactions on customer relationships and operating results; the possibility that the proposed transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events; changes in interest rates; general economic conditions and those in the market areas of the Company; legislative and/or regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of the Company’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of the Company; accounting principles, policies and guidelines; or any of the other foregoing risks. Additional information concerning the Company, including additional factors and risks that could materially affect the Company’s financial results, are included in the Company’s filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, the Company does not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

Overview

This overview of management’s discussion and analysis highlights selected information in this document and may not contain all the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting estimates you should carefully read this entire document. These have an impact on the Company’s consolidated financial condition and results of consolidated operations.

Net income was $26.3 million and $22.2 million for the three months ended March 31, 2026 and 2025, respectively and diluted net income per common share was $1.06 and $0.93 for the three months ended March 31, 2026 and 2025, respectively.

Three months ended

Year-ended

March 31, 2026

March 31, 2025

December 31, 2025

Return on average assets

1.26

%

1.19

%

1.20

%

Return on average common equity

10.45

%

10.35

%

10.24

%

Average common equity to average assets (non-GAAP)

12.10

%

11.46

%

11.68

%

Total assets were $9.3 billion at March 31, 2026, compared to $8.0 billion as of December 31, 2025. Net loan balances were $6.9 billion at March 31, 2026 compared to $5.9 billion at December 31, 2025.

Total deposit balances increased to $7.5 billion at March 31, 2026 from $6.4 billion at December 31, 2025. The increase was primarily due to the acquisition of Two Rivers Bank.

Net interest margin (tax equivalent), defined as net interest income divided by average interest-earning assets, was 3.78% for the three months ended March 31, 2026, up from 3.60% for the same period in 2025. This increase was primarily due to an increase in earning asset yields and decreased funding costs.

Net interest income before the provision for credit losses was $70.8 million compared to net interest income of $59.4 million for the same period in 2025. The increase in net interest income was primarily due to the addition of the Two Rivers Bank loan portfolio, as well as the increased net interest margin as mentioned above.

Total non-interest income of $26.4 million increased $1.6 million or 6.3% from $24.9 million for the same period last year. The increase in non-interest income resulted primarily from the addition of Two Rivers Bank, an increase in insurance commissions, and an increase in wealth management revenues.

Total non-interest expense of $60.7 million increased $6.3 million or 11.5% from $54.5 million for the same period last year. The increase was primarily due to increases in salaries, employee benefits, net occupancy, equipment expenses, and integration expenses due to the acquisition of Two Rivers in the first quarter of 2026.

39

Following is a summary of the factors that contributed to the changes in net income (in thousands):

Change in

Net Income

2026 versus 2025

Three months ended

March 31, 2026

Net interest income

$

11,376

Provision for credit losses

(946

)

Other income, including securities transactions

1,577

Other expenses

(6,253

)

Income taxes

(1,598

)

Increase in net income

$

4,156

Credit quality is an area of importance to the Company. Total nonperforming loans were $44.1 million at March 31, 2026, compared to $26.6 million at March 31, 2025 and $31.9 million at December 31, 2025. See the discussion under the heading “Loan Quality and Allowance for Credit Losses” for a detailed explanation of these balances. Repossessed asset balances totaled $5.5 million at March 31, 2026 compared to $2.1 million at March 31, 2025 and $2.9 million at December 31, 2025.

The Company’s provision for credit losses for the three months ended March 31, 2026 and 2025 was $2.6 million and $1.7 million, respectively. The increase in provision expense was expected as the industry returns to a normal credit cycle from historically low credit losses.

The Company’s capital position remains strong, and the Company has consistently maintained regulatory capital ratios above the “well-capitalized” standards. The Company’s Tier 1 capital to risk weighted assets ratio at March 31, 2026 and 2025 and December 31, 2025 was 13.57%, 13.13% and 13.55%, respectively. The Company’s total capital to risk weighted assets ratio at March 31, 2026 and 2025, and December 31, 2025 was 15.48%, 15.59% and 15.67%, respectively.

The Company’s liquidity position remains sufficient to fund operations and meet the requirements of borrowers, depositors, and creditors. The Company maintains various sources of liquidity to fund its cash needs. See “Liquidity” herein for a full listing of its sources and anticipated significant contractual obligations.

The Company 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 its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. The total outstanding commitments at March 31, 2026 and 2025, were $1.5 billion and $1.5 billion, respectively. See Note 12 - “Commitments and Contingent Liabilities” herein for further information.

Critical Accounting Policies and Use of Significant Estimates

The Company has established various accounting policies that govern the application of U.S. generally accepted accounting principles in the preparation of the Company’s consolidated financial statements. The significant accounting policies and use of significant estimates of the Company are described in the footnotes to the consolidated financial statements included in the Company’s 2025 Annual Report on Form 10-K.

Results of Operations

Net Interest Income

The largest source of operating revenue for the Company is net interest income. Net interest income represents the difference between total interest income earned on earning assets and total interest expense paid on interest-bearing liabilities. The amount of interest income is dependent upon many factors, including the volume and mix of earning assets, the general level of interest rates and the dynamics of changes in interest rates. The cost of funds necessary to support earning assets varies with the volume and mix of interest-bearing liabilities and the rates paid to attract and retain such funds.

For analytical purposes, net interest income is presented on a full tax equivalent (TE) basis in the table that follows. The federal statutory rate in effect of 21% for 2026 and 2025 was used. The TE analysis portrays the income tax benefits associated with the tax-exempt assets. The year-to-date net yield on interest-earning assets excluding the TE adjustments of $796,000 and $753,000 for 2026 and 2025, respectively, were 3.74% and 3.56% at March 31, 2026 and 2025, respectively.

40

The Company’s average balances, fully tax equivalent interest income and interest expense, and rates earned or paid for major balance sheet categories are set forth for the three months ended March 31, 2026 and 2025 in the following table (dollars in thousands):

Three months ended March 31, 2026

Three months ended March 31, 2025

Average

Average

Average

Average

Balance

Interest

Rate

Balance

Interest

Rate

Assets

Interest-bearing deposits

$

235,370

$

1,726

2.97

%

$

70,701

$

827

4.74

%

Federal funds sold

376

2

1.91

%

75

1

3.83

%

Certificates of deposit

1,883

21

4.51

%

3,162

36

4.59

%

Investment securities (1)

1,147,980

8,383

2.92

%

1,090,099

7,254

2.66

%

Loans (TE)(1)(2)(3)

6,285,114

91,284

5.89

%

5,605,821

80,194

5.80

%

Total earning assets

7,670,723

101,416

5.36

%

6,769,858

88,312

5.29

%

Other nonearning assets

737,565

777,177

Allowance for credit losses

(79,202

)

(70,620

)

Total assets

$

8,329,086

$

7,476,415

Liabilities and stockholders' equity

Deposits:

Demand deposits, interest-bearing

$

3,388,750

$

14,870

1.78

%

$

3,039,621

$

14,900

1.99

%

Savings deposits

680,418

398

0.24

%

640,687

164

0.10

%

Time deposits

1,228,401

9,506

3.14

%

1,022,200

8,658

3.44

%

Total interest-bearing deposits

5,297,569

24,774

1.90

%

4,702,508

23,722

2.05

%

Repurchase agreements with customers

204,173

1,025

2.04

%

201,679

1,180

2.37

%

FHLB advances

271,784

2,335

3.48

%

194,324

1,807

3.77

%

Federal funds purchased

—

—

—

%

—

—

—

%

Subordinated debt, net

60,030

1,170

7.90

%

82,608

949

4.66

%

Junior subordinated debt, net

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-27. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis are intended to provide a better understanding of the consolidated financial condition and results of operations of the Company and its subsidiaries for the years ended December 31, 2025, 2024, and 2023. This discussion and analysis should be read in conjunction with the consolidated financial statements, related notes and selected financial data appearing elsewhere in this report.

Forward-Looking Statements

This report may contain certain forward-looking statements, such as discussions of the Company’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses, and planned schedules. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are identified by use of the words “believe,” ”expect,” ”intend,” ”anticipate,” ”estimate,” ”project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including those described in Item 1A. “Risk Factors” and other sections of the Company’s Annual Report on Form 10-K and the Company’s other filings with the SEC, and changes in interest rates, general economic conditions and those in the Company’s market area, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios and the valuation of the investment portfolio, the Company’s success in raising capital, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area and accounting principles, policies and guidelines. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

For the Years Ended December 31, 2025, 2024, and 2023 Overview

This overview of management’s discussion and analysis highlights selected information in this document and may not contain all the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting estimates, you should carefully read this entire document. These have an impact on the Company’s consolidated financial condition and results of consolidated operations.

Net income was $91.7 million, $78.9 million, and $68.9 million and diluted earnings per share were $3.83, $3.30, and $3.15 for the years ended December 31, 2025, 2024, and 2023, respectively. The following table shows the Company’s annualized performance ratios for the years ended December 31, 2025, 2024, and 2023:

2025

2024

2023

Return on average assets

1.20

%

1.04

%

0.97

%

Return on average common equity

10.24

%

9.67

%

10.10

%

Average common equity to average assets (non-GAAP)

11.68

%

10.76

%

9.61

%

Total assets at December 31, 2025, 2024, and 2023 were $7.97 billion, $7.52 billion, and $7.59 billion, respectively. Net loan balances increased to $5.94 billion at December 31, 2025, from $5.60 billion at December 31, 2024, and from $5.51 billion at December 31, 2023. The increase in 2025 was primarily due to organic growth within the established footprint.

Total deposit balances increased to $6.40 billion at December 31, 2025 from $6.06 billion at December 31, 2024 which was a decrease from $6.12 billion at December 31, 2023. The increase in 2025 was primarily due to an increase in CD's, brokered CDs, and non-interest bearing deposits.

The decrease in 2024 was due primarily to a reduction in brokered CDs and purchased CDs as part of the Company's strategy to reduce its cost of funds.

Net interest margin (tax effected), defined as net interest income divided by average interest-earning assets, was 3.70% for 2025, 3.34% for 2024 and 3.05% for 2023. The increase in 2025 was primarily due to the continued efforts on improving loan yields for new and renewed loans, continued efforts to increase the performance of the investment portfolio, and a decrease in funding costs. The increase in 2024 was primarily due to efforts on improving loan yields for new and renewed loans.

Net interest income increased to $256.2 million in 2025 from $228.7 million in 2024 and $193.5 million in 2023. During 2025 and 2024, the increase in net interest income was primarily due to the previously mentioned explanation for the increase in net interest margin (tax effected).

Non-interest income decreased and increased, respectively, to $93.1 million in 2025 compared to $96.3 million in 2024 and $86.8 million in 2023. The decrease in 2025 was primarily due to the losses recognized on the sale of low performing securities in the investment portfolio. The increase in 2024 was primarily due to the Blackhawk Bank acquisition being present for a full calendar year and the increase in insurance commissions due to the acquisition of Mid Rivers Insurance Group in 2024.

Non-interest expenses increased to $222.2 million in 2025 compared to $215.0 million in 2024, and $185.7 million in 2023. The increase in 2025 was primarily due to the increase in incentive compensation related to over performance of budgeted financial metrics partially offset by gains on the sale of buildings as part of a branch optimization project that reduced in other expenses. The increase in 2024 is primarily due to increased employees and locations from the Blackhawk Bank acquisition being present for a full calendar year.

17

Following is a summary of the factors that contributed to the changes in net income (in thousands):

2025 vs 2024

2024 vs 2023

Net interest income

$

27,437

$

35,265

Provision for credit losses

(4,286

)

469

Other income, including securities transactions

(3,235

)

9,500

Other expenses

(7,264

)

(29,243

)

Income taxes

199

(6,028

)

Increase (decrease) in net income

$

12,851

$

9,963

Credit quality is an area of importance to the Company. Year-end total nonperforming loans were $31.9 million at December 31, 2025 compared to $29.8 million at December 31, 2024, and $20.1 million at December 31, 2023. Repossessed Assets balances totaled $2.9 million at December 31, 2025 compared to $2.7 million at December 31, 2024, and $1.2 million at December 31, 2023. The Company’s provision for credit losses was $9.9 million for 2025, compared to $5.6 million for 2024, and $6.1 million for 2023. The increase in provision expense for 2025 was expected as the industry returns to a normal credit cycle. The decrease of provision expense in 2024 was primarily due to the provision requirements in 2023 for the acquisition of Blackhawk Bank.

The Company’s capital position remains strong and the Company has consistently maintained regulatory capital ratios above the “well-capitalized” standards. The Company’s Tier 1 capital ratio to risk weighted assets ratio at December 31, 2025, 2024, and 2023 was 13.55%, 12.82%, and 12.02%, respectively. The Company’s total capital to risk weighted assets ratio at December 31, 2025, 2024, and 2023 was 15.67%, 15.37% and 14.84%, respectively. The increases in 2025 and 2024 were primarily due to net income of the Company exceeding dividends paid to shareholders.

The Company’s liquidity position remains sufficient to fund operations and meet the requirements of borrowers, depositors, and creditors. The Company maintains various sources of liquidity to fund its cash needs. See “Liquidity” herein for a full listing of its sources and anticipated significant contractual obligations.

The Company enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. The total outstanding commitments at December 31, 2025, 2024, and 2023 were $1.4 billion, $1.4 billion, and $1.3 billion, respectively. See Note 17 – “Commitments and Contingent Liabilities” herein for further information.

Critical Accounting Policies and Use of Significant Estimates

The Company has established various accounting policies that govern the application of U.S. generally accepted accounting principles in the preparation of the Company’s consolidated financial statements. The significant accounting policies of the Company are described in the footnotes to the consolidated financial statements. Certain accounting policies involve significant judgments and assumptions by management that have a material impact on the carrying value of certain assets and liabilities; management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and assumptions, which could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company.

Allowance for Credit Losses - Loans. The Company believes the allowance for credit losses for loans is the critical accounting policy that requires the most significant judgments and assumptions used in the preparation of its consolidated financial statements. The allowance for credit losses is a valuation account to adjust the cost basis to the amount expected to be collected, based on the Company's loss experience, current conditions, and reasonable and supportable forecasts. It represents the best estimate of losses inherent in the existing loan portfolio. An estimate of potential losses inherent in the loan portfolio are determined and an allowance for those losses is established by considering factors including loan loss experience, expected cash flows and estimated collateral values. In assessing these factors, the Company uses relevant available information, from internal and external sources, relating to, current conditions and reasonable and supportable forecasts.

In order to determine the allowance for credit losses, the portfolio is segregated into pools for not individually evaluated loans that share similar risk characteristics. The Company's credit loss experience provides the basis for the estimate of expected credit losses. Adjustments to this experience are made for relevant factors to each pool including merger and acquisition activity, economic conditions, changes in policies, procedures and underwriting, and concentrations. The Company estimates the appropriate level of allowance for credit losses for individually evaluated loans by evaluating them separately. A specific allowance is assigned to a loan when expected cash flows or collateral are less than the carrying amount of the loan.

Income Taxes. The Company is subject to the federal income tax laws of the United States, and the tax laws of the states and other jurisdictions where we conduct business. Due to the complexity of these laws, taxpayers and the taxing authorities may subject these laws to different interpretations. Management must make conclusions and estimates about the application of these innately intricate laws, related regulations, and case law. When preparing the Company’s income tax returns, management attempts to make reasonable interpretations of the tax laws. Taxing authorities have the ability to challenge management’s analysis of the tax law or any reinterpretation management makes in its ongoing assessment of facts and the developing case law. Management assesses the reasonableness of its effective tax rate quarterly based on its current estimate of net income and the applicable taxes expected for the full year. On a quarterly basis, management also reviews circumstances and developments in tax law affecting the reasonableness of deferred tax assets and liabilities and reserves for contingent tax liabilities.

Results of Operations

Net Interest Income

The largest source of operating revenue for the Company is net interest income. Net interest income represents the difference between total interest income earned on earning assets and total interest expense paid on interest-bearing liabilities. The amount of interest income is dependent upon many factors, including the volume and

18

mix of earning assets, the general level of interest rates and the dynamics of changes in interest rates. The cost of funds necessary to support earning assets varies with the volume and mix of interest-bearing liabilities and the rates paid to attract and retain such funds.

Net interest income is the excess of interest received from earning assets over interest paid on interest-bearing liabilities. For analytical purposes, net interest income is presented on a full tax equivalent (TE) basis in the table that follows. The federal statutory rate in effect of 21% was used for all years. The TE analysis portrays the income tax benefits associated with the tax-exempt assets. The year-to-date net yield on interest-earning assets excluding the TE adjustments of $3.1 million, $3.1 million, and $3.1 million for 2025, 2024, and 2023, respectively, were 3.65%, 3.28%, and 3.00% at December 31, 2025, 2024, and 2023, respectively. The Company’s average balances, fully tax equivalent interest income and interest expense, and rates earned or paid for major balance sheet categories are set forth in the following table (dollars in thousands):

Year Ended

Year Ended

Year Ended

December 31, 2025

December 31, 2024

December 31, 2023

Average

Average

Average

Average

Average

Average

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

Assets

Interest-bearing deposits

$

155,839

$

5,307

3.41

%

$

145,502

$

7,900

5.42

%

$

82,640

$

5,107

6.18

%

Federal funds sold

76

3

3.67

%

297

53

18.00

%

8,299

419

5.05

%

Certificates of deposit investments

2,297

103

4.47

%

3,053

144

4.71

%

1,822

98

5.37

%

Investment securities (1)

1,106,919

30,822

2.78

%

1,153,216

31,084

2.67

%

1,241,315

34,196

3.05

%

Loans (TE)(1)(2)(3)

5,749,728

339,842

5.91

%

5,558,527

321,498

5.78

%

5,079,949

263,406

5.19

%

Total earning assets

7,014,859

376,077

5.36

%

6,860,595

360,679

5.25

%

6,414,025

303,226

4.73

%

Other nonearning assets

726,346

804,459

749,078

Allowance for credit losses

(71,802

)

(68,805

)

(62,878

)

Total assets

$

7,669,403

$

7,596,249

$

7,100,225

Liabilities and stockholders' equity

Deposits:

Demand deposits, interest-bearing

$

3,132,691

61,312

1.96

%

$

3,040,397

67,999

2.24

%

$

2,618,452

47,939

1.83

%

Savings deposits

633,186

775

0.12

%

675,622

810

0.12

%

663,760

739

0.11

%

Time deposits

1,074,940

36,240

3.37

%

1,019,629

38,110

3.74

%

961,162

28,616

2.98

%

Total interest-bearing deposits

4,840,817

98,327

2.03

%

4,735,648

106,919

2.26

%

4,243,374

77,294

1.82

%

Securities sold under agreements to repurchase

199,430

4,490

2.25

%

221,789

6,448

2.91

%

225,307

6,565

2.91

%

FHLB advances

226,121

8,370

3.70

%

239,949

8,673

3.61

%

462,197

16,779

3.63

%

Federal funds purchased

39

7

17.95

%

—

1

—

%

192

10

5.21

%

Subordinated debt

76,140

3,790

4.98

%

99,313

4,454

4.48

%

99,638

4,196

4.18

%

Junior subordinated debentures

24,376

1,817

7.45

%

24,168

2,156

8.92

%

21,337

1,859

8.87

%

Other debt

361

24

7

%

1

—

—

%

—

—

—

%

Total borrowings

526,467

18,498

3.51

%

585,220

21,732

3.71

%

808,671

29,409

3.64

%

Total interest-bearing liabilities

5,367,284

116,825

2.18

%

5,320,868

128,651

2.42

%

5,052,045

106,703

2.11

%

Demand deposits

1,353,150

1,407,537

1,312,023

Other liabilities

52,991

50,665

53,838

Stockholders’ equity

895,978

817,179

682,319

Total liabilities and stockholders' equity

$

7,669,403

$

7,596,249

$

7,100,225

Net interest income

$

259,252

$

231,791

$

196,523

Net interest spread

3.18

%

2.83

%

2.62

%

TE net yield on interest-earning assets

3.70

%

3.34

%

3.05

%

(1)
Tax-exempt income is shown on a fully tax equivalent basis.

(2)
Nonaccrual loans have been included in the average balances. Balances are net of unaccreted discount related to loans acquired.

(3)
Includes loans held for sale

19

Changes in net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense. The following table summarizes the approximate relative contribution of changes in average volume and interest rates to changes in net interest income for the past two years (in thousands):

2025 Compared to 2024

2024 Compared to 2023

Increase (Decrease)

Increase (Decrease)

Total

Total

Change

Volume (1)

Rate (1)

Change

Volume (1)

Rate (1)

Earning assets:

Interest-bearing deposits

$

(2,593

)

$

523

$

(3,116

)

$

2,793

$

3,486

$

(693

)

Federal funds sold

(50

)

(24

)

(26

)

(366

)

(687

)

321

Certificates of deposit investments

(41

)

(34

)

(7

)

46

59

(13

)

Investment securities (1)

(25

)

(1,245

)

1,220

(3,349

)

(2,183

)

(1,166

)

Loans (2)

18,344

11,092

7,252

58,089

26,325

31,764

Total interest income

15,635

10,312

5,323

57,213

27,000

30,213

Interest-bearing liabilities:

Deposits:

Demand deposits, interest-bearing

(6,687

)

2,020

(8,707

)

20,060

8,392

11,668

Savings deposits

(35

)

(35

)

—

71

12

59

Time deposits

(1,870

)

2,010

(3,880

)

9,494

1,828

7,666

Total interest-bearing deposits

(8,592

)

3,995

(12,587

)

29,625

10,232

19,393

Securities sold under agreements to repurchase

(1,958

)

(603

)

(1,355

)

(117

)

(117

)

—

FHLB advances

(303

)

(513

)

210

(8,106

)

(8,015

)

(91

)

Federal funds purchased

6

—

6

(9

)

(5

)

(4

)

Subordinated debt

(664

)

(1,121

)

457

258

(14

)

272

Junior subordinated debentures

(339

)

19

(358

)

297

251

46

Other debt

24

—

24

—

—

—

Total borrowings

(3,234

)

(2,218

)

(1,016

)

(7,677

)

(7,900

)

223

Total interest expense

(11,826

)

1,777

(13,603

)

21,948

2,332

19,616

Net interest income

$

27,461

$

8,535

$

18,926

$

35,265

$

24,668

$

10,597

(1)
Changes attributable to the combined impact of volume and rate have been allocated proportionately to the change due to volume and the change due to rate.

(2)
Nonaccrual loans have been included in the average balances. Balances are net of unaccreted discount related to loans acquired.

Net interest income on a tax-effected basis increased $27.5 million or 11.8% in 2025 compared to an increase of $35.3 million or 17.9% in 2024. Net interest income on a tax-effected basis and tax effected net interest margin increased primarily due to the continued focus on loan yields for new and renewed loans, continued efforts to increase the performance of the investment portfolio, and a decrease in funding costs.

In 2025, average earning assets increased by $154.3 million, or 2.2%, and average interest-bearing liabilities increased by $46.4 million or 0.9%. These increases were primarily due to organic growth.

Provision for Credit Losses

The provision for credit losses in 2025 was $9.9 million compared to $5.6 million in 2024 and $6.1 million in 2023. Nonperforming loans increased to $31.9 million at December 31, 2025 from $29.8 million at December 31, 2024 and $20.1 million at December 31, 2023. The increase in provision expense in 2025 was expected as the industry returns to a normal credit cycle. The decrease in provision expense in 2024 was primarily due to the required provision in 2023 tied to the Blackhawk Bank acquisition. Net charge-offs were $5.2 million during 2025, $4.1 million during 2024 and $0.3 million during 2023. For information on credit loss experience and nonperforming loans, see “Nonperforming Loans and Nonperforming Other Assets” and “Loan Quality and Allowance for Credit Losses” herein.

20

Other Income

An important source of the Company’s revenue is derived from other income. The following table sets forth the major components of other income for the last three years (dollars in thousands):

Change From Prior Year

2025

2024

2025

2024

2023

$

%

$

%

Wealth management revenues

$

22,941

$

22,818

$

20,793

$

123

0.5

%

$

2,025

9.7

%

Insurance commissions

32,295

28,552

24,814

3,743

13.1

%

3,738

15.1

%

Service charges

12,297

12,362

10,881

(65

)

-0.5

%

1,481

13.6

%

Securities gains (losses), net

(2,509

)

(433

)

3,383

(2,076

)

479.4

%

(3,816

)

-112.8

%

Mortgage banking, net

3,660

3,957

2,282

(297

)

-7.5

%

1,675

73.4

%

ATM / debit card revenue

16,411

16,807

14,347

(396

)

-2.4

%

2,460

17.1

%

Bank owned life insurance

5,475

4,728

4,957

747

15.8

%

(229

)

-4.6

%

Other income

2,481

7,495

5,329

(5,014

)

-66.9

%

2,166

40.6

%

Total other income

$

93,051

$

96,286

$

86,786

$

(3,235

)

-3.4

%

$

9,500

10.9

%

Total non-interest income decreased and increased, respectively, to $93.1 million in 2025 compared to $96.3 million in 2024 and $86.8 million in 2023. The primary reasons for the more significant year-to-year changes in other income components are as follows:

•
Wealth management revenues increased in 2024 primarily due to growth in net brokerage fees and trust management fees. Total assets under management were $6.6 billion at December 31, 2025 compared to $6.4 billion at December 31, 2024 and $6.1 billion at December 31, 2023.

•
Insurance commissions increased in 2025 primarily due to Mid Rivers Insurance Group Inc. acquisition being present the entire calendar year and the acquisition of part of AAdvantage Insurance Group LLC's book of business in July 2025 accompanied by organic growth. The increase in 2024 was primarily due the acquisition of Mid Rivers Insurance Group and Purdum, Gray, Ingledue, Beck Inc. Insurance being present the entire calendar year.

•
Fees from service charges increased in 2024 primarily due to Blackhawk Bank being present the entire calendar year.

•
Net securities losses in 2025 were $2.5 million compared to losses of $433,000 in 2024 and gains $3.4 million in 2023. The losses in 2025 and 2024 were due to management's efforts to improve earning asset yields through the sales of low-yielding bonds.

•
The increase in mortgage banking income during 2024 was primarily due to Blackhawk Bank being present the entire calendar year.

•
Revenue from ATMs and debit cards increased in 2024 primarily due to Blackhawk Bank being present the entire calendar year.

•
Other income decreased during 2025 primarily due to the repurchase of subordinated debt resulting in a gain in 2024 instead of a loss in 2025, recognition of contingent income accrued by Blackhawk Bank prior to their acquisition in 2024, and gains on the sale of fixed assets being presented in other income in 2024 compared to other expenses in 2025. Other income increased during 2024 primarily due to Blackhawk Bank being present the entire calendar year.

Other Expense

The major categories of other expense include salaries and employee benefits, occupancy and equipment expenses and other operating expenses associated with day-to-day operations. The following table sets forth the major components of other expense for the last three years (dollars in thousands):

Change From Prior Year

2025

2024

2025

2024

2023

$

%

$

%

Salaries and employee benefits

$

134,615

$

124,134

$

104,962

$

10,481

8.4

%

$

19,172

18.3

%

Net occupancy and equipment expense

36,579

30,407

26,946

6,172

20.3

%

3,461

12.8

%

Net other real estate owned expense

539

411

1,862

128

31.1

%

(1,451

)

-77.9

%

FDIC insurance expense

3,476

3,463

3,339

13

0.4

%

124

3.7

%

Amortization of other intangible assets

12,443

13,556

9,127

(1,113

)

-8.2

%

4,429

48.5

%

Stationery and supplies

1,770

1,885

1,346

(115

)

-6.1

%

539

40.0

%

Legal and professional

10,746

12,944

7,379

(2,198

)

-17.0

%

5,565

75.4

%

Marketing and donations

3,348

3,418

3,005

(70

)

-2.0

%

413

13.7

%

ATM / debit card expense

6,945

6,384

5,322

561

8.8

%

1,062

20.0

%

Other expense

11,786

18,381

22,452

(6,595

)

-35.9

%

(4,071

)

-18.1

%

Total other expense

$

222,247

$

214,983

$

185,740

$

7,264

3.4

%

$

29,243

15.7

%

Total non-interest expense increased to $222.2 million in 2025 from $215.0 million in 2024 and $185.7 million in 2023. The primary reasons for the more significant year-to-year changes in other expense components are as follows:

•
Salaries and employee benefits, the largest component of other expense, increased in 2025, which was primarily due to an increase in incentive compensation for exceeding budgeted financial metrics, increases for merit raises and applicable payroll taxes, and an increase in employee group insurance expense. The increase in 2024 was primarily due to former Blackhawk Bank employees being present the entire calendar year, increase in

21

incentive compensation, share based compensation, merit increases and applicable payroll taxes. There were 1,170 full-time equivalent employees at December 31, 2025, compared to 1,198 at December 31, 2024, and 1,187 at December 31, 2023.

•
Occupancy and equipment expense increase in 2025 was primarily due to the presentation of telecommunication expense in this category in 2025 compared to other expenses in 2024 and nonrecurring expense related to technology projects. The increase in 2024 was primarily due to additional properties added in the acquisition of Blackhawk Bank being present the entire calendar year.

•
Net other real estate owned expense decreased in 2024 primarily due to the large expenses occurring in 2023.

•
Amortization of other intangibles decreased in 2025 as expected due to the scheduled amortization of previously acquired intangible assets. The increase during 2024 was primarily due to additional core deposit intangibles added from the acquisition of Blackhawk Bank being present the entire calendar year.

•
Legal and professional expense decreased in 2025 primarily due to a decrease in the nonrecurring expenses present in 2024. The increase in 2024 was due to nonrecurring expenses associated with technology investment upgrades.

•
ATM and debit card expenses increased during 2024 primarily due to an increase in electronic transactions following the acquisition of Blackhawk Bank being present the entire calendar year.

•
Other operating expenses decreased in 2024 primarily due to the majority of acquisition costs associated with Blackhawk Bank occurring in 2023. The decrease in 2024 was primarily due to the above mentioned gains on the sale of fixed assets being presented in other income in 2024 compared to other expenses in 2025 and the above mentioned presentation of telecommunication expenses in this category in 2025 compared to other expenses in 2024.

Income Taxes

Income tax expense amounted to $25.3 million in 2025 compared to $25.5 million in 2024, and $19.5 million in 2023. Effective tax rates were 21.6% for 2025, 24.5% for 2024, and 22.0% for 2023. The Company files U.S. federal and state of Florida, Illinois, Indiana, Missouri, Texas, and Wisconsin income tax returns.

Analysis of Consolidated Balance Sheets

Securities

The Company’s overall investment objectives are to insulate the investment portfolio from undue credit risk, maintain adequate liquidity, insulate capital against changes in market value and control excessive changes in earnings while optimizing investment performance. The types and maturities of securities purchased are primarily based on the Company’s current and projected liquidity and interest rate sensitivity positions. The following table sets forth the amortized cost of the available-for-sale and held-to-maturity securities for the last three years (dollars in thousands):

December 31,

2025

2024

2023

Weighted

Weighted

Weighted

Amortized

Average

Amortized

Average

Amortized

Average

Cost

Yield

Cost

Yield

Cost

Yield

U.S. Treasury securities and obligations of U.S. government corporations and agencies

$

153,859

1.24

%

$

212,513

1.28

%

$

237,875

1.28

%

Obligations of states and political subdivisions

327,950

2.32

%

324,046

2.28

%

337,835

2.31

%

Mortgage-backed securities (1)

705,728

2.35

%

653,760

1.88

%

714,216

1.91

%

Other securities

30,564

4.28

%

69,396

4.27

%

76,081

3.65

%

Total securities

$

1,218,101

2.25

%

$

1,259,715

2.01

%

$

1,366,007

2.00

%

(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 December 31, 2025, the amortized cost of the Company’s investment portfolio decreased by $41.6 million from December 31, 2024 primarily due to calls, maturities, paydowns, and sales of securities partially offset by purchases designed to raise the rate of return of the portfolio. The decrease in 2024 was for the same previously mentioned reason as 2025. When purchasing investment securities, the Company considers its overall liquidity and interest rate risk profile, as well as the adequacy of expected returns relative to the risks assumed.

22

The table below presents the credit ratings as of December 31, 2025 for certain investment securities (in thousands):

Average Credit Rating of Fair Value at December 31, 2025 (1)

Amortized

Estimated

Not

Cost

Fair Value

AAA

AA +/-

A +/-

BBB +/-

 BBB -

Rated

Available-for-sale:

U.S. Treasury securities and obligations of U.S. government corporations and agencies

$

153,859

$

144,080

$

—

$

144,080

$

—

$

—

$

—

$

—

Obligations of state and political subdivisions

327,950

280,633

38,025

196,405

44,778

—

—

1,425

Mortgage-backed securities (2)

705,728

624,666

—

—

—

—

—

624,666

Corporate bonded debt

28,276

27,504

—

—

4,823

4,086

—

18,595

Total available-for-sale

$

1,215,813

$

1,076,883

$

38,025

$

340,485

$

49,601

$

4,086

$

—

$

644,686

Held-to-maturity:

Other securities

$

2,288

$

2,288

$

—

$

—

$

—

$

—

$

—

$

2,288

Equity securities:

Federal Agricultural Mtg Corp

$

85

$

450

$

450

Midwest Independent BankersBank

150

227

227

Equalized Community Development Fund

3,911

3,911

3,911

Total Equity

$

4,146

$

4,588

$

—

$

—

$

—

$

—

$

—

$

4,588

(1) Credit ratings reflect the lowest current rating assigned by a nationally recognized credit rating agency.

(2) 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. While MBS and CMOs are no longer explicitly rated by credit rating agencies, the industry recognizes that they are backed by agencies which have an implied government guarantee.

The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost at December 31, 2025 and the weighted average yield for each range of maturities (dollars in thousands):

One

After 1

After 5

year or

through

through

After

less

5 years

10 years

ten years

Total

Available-for-sale:

U.S. Treasury securities and obligations of U.S. government corporations and agencies

$

134,148

$

9,932

$

—

$

—

$

144,080

Obligations of state and political subdivisions

48,445

224,134

7,713

341

280,633

Mortgage-backed securities (1)

3,295

21,130

43,791

556,450

624,666

Corporate bonded debt

21,210

6,294

—

—

27,504

Total available-for-sale

$

207,098

$

261,490

$

51,504

$

556,791

$

1,076,883

Weighted average yield

1.90

%

2.22

%

2.58

%

2.35

%

2.25

%

Full tax equivalent yield

2.08

%

2.72

%

2.87

%

2.36

%

2.42

%

Held-to-maturity:

Other securities

$

—

$

—

$

—

$

2,288

$

2,288

Total held-to-maturity

$

—

$

—

$

—

$

2,288

$

2,288

Weighted average yield

—

%

—

%

—

%

—

%

—

%

Full tax equivalent yield

—

%

—

%

—

%

—

%

—

%

(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 weighted average yields are calculated on the basis of the amortized cost and effective yields weighted for the scheduled maturity of each security. Tax equivalent yields have been calculated using a 21% tax rate. With the exception of obligations of the U.S. Treasury and other U.S. government agencies and corporations, there were no investment securities of any single issuer, which the book value exceeded 10% of stockholders' equity at December 31, 2025. Investment securities carried at approximately $474 million and $633 million at December 31, 2025 and 2024, respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law.

23

Loans

The loan portfolio (net of unearned interest) is the largest category of the Company’s earning assets. The following table summarizes the composition of the loan portfolio, including loans held for sale, for the last five years (dollars in thousands):

Outstanding

2025

Loans %

2024

2023

2022

2021

Construction and land development

$

360,687

6.0

%

$

236,093

$

205,077

$

144,264

$

145,118

Agricultural real estate

373,408

6.2

%

390,760

391,132

410,327

279,272

1-4 family residential properties

489,854

8.1

%

496,597

542,469

440,180

400,313

Multifamily residential properties

339,482

5.6

%

332,644

319,129

294,346

298,942

Commercial real estate

2,564,670

42.7

%

2,417,585

2,384,704

2,030,011

1,666,198

Loans secured by real estate

4,128,101

68.6

%

3,873,679

3,842,511

3,319,128

2,789,843

Agricultural loans

308,275

5.1

%

239,671

196,272

166,838

151,484

Commercial and industrial loans

1,381,598

23.0

%

1,335,920

1,266,159

1,082,960

832,008

Consumer loans

31,918

0.5

%

53,960

91,014

97,775

78,442

All other loans

161,482

2.8

%

169,232

184,609

159,511

143,746

Total loans

$

6,011,374

100.0

%

$

5,672,462

$

5,580,565

$

4,826,212

$

3,995,523

Loan balances increased by $338.9 million or 6.0% from December 31, 2024 to December 31, 2025. Loan balances increased by $91.9 million or 1.6% from December 31, 2023 to December 31, 2024. The balances of loans sold into the secondary market were $167.6 million in 2025 compared to $125.3 million in 2024. The balance of real estate loans held for sale, included in the balances shown above, amounted to $5.2 million and $6.6 million as of December 31, 2025 and 2024, respectively.

Commercial and commercial real estate loans generally involve higher credit risks than residential real estate and consumer loans. Because payments on loans secured by commercial real estate or equipment are often dependent upon the successful operation and management of the underlying assets, repayment of such loans may be influenced to a great extent by conditions in the market or the economy. The Company does not have any sub-prime mortgages or credit card loans outstanding which are also generally considered to be higher credit risk.

First Mid Bank does not have a concentration, as defined by the regulatory agencies, in construction and land development loans or commercial real estate loans as a percentage of total risk-based capital for the periods shown above. At December 31, 2025 and 2024, First Mid Bank did have industry loan concentrations in excess of 25% of total risk-based capital in the following industries (dollars in thousands):

December 31, 2025

December 31, 2024

Principal

% Outstanding

Principal

% Outstanding

balance

Loans

balance

Loans

Other grain farming

$

577,903

9.61

%

$

507,555

8.95

%

Lessors of non-residential buildings

1,109,224

18.45

%

1,049,372

18.50

%

Lessors of residential buildings and dwellings

641,822

10.68

%

557,285

9.82

%

Hotels and motels

225,569

3.75

%

—

—

The Company had no further industry loan concentrations in excess of 25% of total risk-based capital.

The following table presents the balance of loans outstanding as of December 31, 2025, by contractual maturities (in thousands):

Maturity (1)

One year

or less(2)

Over 1 through

5 years

Over

5 years

Total

Construction and land development

$

49,996

$

211,400

$

99,291

$

360,687

Agricultural real estate

22,870

143,736

206,802

373,408

1-4 family residential properties

35,939

91,194

362,721

489,854

Multifamily residential properties

137,741

148,301

53,440

339,482

Commercial real estate

360,252

1,539,235

665,183

2,564,670

Loans secured by real estate

606,798

2,133,866

1,387,437

4,128,101

Agricultural loans

227,698

79,563

1,014

308,275

Commercial and industrial loans

511,107

507,363

363,128

1,381,598

Consumer loans

3,230

27,658

1,030

31,918

All other loans

26,677

20,332

114,473

161,482

Total loans

$

1,375,510

$

2,768,782

$

1,867,082

$

6,011,374

(1)
Based upon remaining contractual maturity.

(2)
Includes demand loans, past due loans and overdrafts.

As of December 31, 2025, loans with maturities over one year consisted of approximately $2.5 billion in fixed rate loans and approximately $2.1 billion in variable rate loans. The loan maturities noted above are based on the contractual provisions of the individual loans. The Company has no general policy regarding renewals and borrower requests, which are handled on a case-by-case basis.

24

Nonperforming Loans and Nonperforming Other Assets

Nonperforming loans include: (a) loans accounted for on a nonaccrual basis; (b) accruing loans contractually past due ninety days or more as to interest or principal payments; and (c) loans not included in (a) and (b) above which are defined as “modified”. Repossessed assets include primarily repossessed real estate and automobiles.

The Company’s policy is to discontinue the accrual of interest income on any loan for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. 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.

Restructured loans are loans on which, due to deterioration in the borrower’s financial condition, the original terms have been modified in favor of the borrower or either principal or interest has been forgiven. Repossessed assets represent property acquired as the result of borrower defaults on loans. These assets are recorded at estimated fair value, less estimated selling costs, at the time of foreclosure or repossession. Write-downs occurring at foreclosure are charged against the allowance for credit losses. On an ongoing basis, properties are appraised as required by market indications and applicable regulations. Write-downs for subsequent declines in value are recorded in non-interest expense in other real estate owned along with other expenses related to maintaining the properties.

The following table presents information concerning the aggregate amount of nonperforming loans and repossessed assets (dollars in thousands):

December 31,

2025

2024

2023

2022

2021

Nonaccrual loans

$

31,053

$

28,775

$

18,832

$

15,956

$

18,105

Modified loans which are performing in accordance with revised terms

895

1,060

1,296

3,214

3,931

Total nonperforming loans

31,948

29,835

20,128

19,170

22,036

Repossessed assets

2,859

2,722

1,164

4,369

5,019

Total nonperforming loans and repossessed assets

$

34,807

$

32,557

$

21,292

$

23,539

$

27,055

Nonperforming loans to loans, before allowance for credit losses

0.53

%

0.53

%

0.36

%

0.40

%

0.55

%

Nonperforming loans and repossessed assets to loans, before allowance for credit losses

0.58

%

0.56

%

0.38

%

0.49

%

0.68

%

The $2.3 million increase in nonaccrual loans during 2025 resulted from the net of $20.3 million of loans put on nonaccrual status, offset by no loans transferred to other real estate owned, $4.9 million of loans charged off and $13.1 million of loans becoming current or paid-off.

The following table summarizes the composition of nonaccrual loans (dollars in thousands):

December 31, 2025

December 31, 2024

Balance

% of Total

Balance

% of Total

Construction and land development

$

5

—

%

$

6

—

%

Agricultural real estate

1,181

3.80

%

2,213

7.70

%

1-4 family residential properties

5,763

18.60

%

4,937

17.20

%

Multifamily residential properties

371

1.20

%

—

—

%

Commercial real estate

10,381

33.40

%

7,716

26.80

%

Loans secured by real estate

17,701

57.00

%

14,872

51.70

%

Agricultural loans

19

0.10

%

11,521

40.00

%

Commercial and industrial loans

1,967

6.30

%

2,071

7.20

%

Consumer loans

182

0.60

%

311

1.11

%

All other loans

11,184

36.00

%

—

—

%

Total loans

$

31,053

100.00

%

$

28,775

100.01

%

25

Interest income that would have been reported if nonaccrual and restructured loans had been performing totaled $1.2 million, $1.4 million and $412,000 for the years ended December 31, 2025, 2024, and 2023, respectively.

The $137,000 increase in repossessed assets during 2025 resulted from the net of $2.0 million of additional assets repossessed, $1.5 million of repossessed assets sold, $377,000 of write-downs on existing assets, and no deferred fair value marks were recognized. The following table summarizes the composition of repossessed assets (dollars in thousands):

December 31, 2025

December 31, 2024

Balance

% of Total

Balance

% of Total

Construction and land development

$

772

27.0

%

$

1,084

39.8

%

1-4 family residential properties

56

2.0

%

568

20.9

%

Commercial real estate

2,029

71.0

%

527

19.4

%

Total real estate

2,857

99.9

%

2,179

80.1

%

Consumer loans

2

0.1

%

543

19.9

%

Total repossessed collateral

$

2,859

100.0

%

$

2,722

100.0

%

Repossessed assets sold during 2025 resulted in net gains of $52,000 related to real estate asset sales and $1,000 of net gains related to other assets sales. The Company also recognized no deferred gains, recorded $377,000 of write-downs on three real estate properties owned, and recorded no change in fair market value discount.

Loan Quality and Allowance for Credit Losses

The allowance for credit losses represents management’s estimate of the reserve necessary to adequately account for probable losses existing in the current portfolio. The provision for credit losses is the charge against current earnings that is determined by management 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, management 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 overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Once identified, the magnitude of exposure to individual borrowers is quantified in the form of specific allocations of the allowance for credit losses. Management considers collateral values and guarantees in the determination of such specific allocations. Additional factors considered by management in evaluating the overall adequacy of the allowance include historical net credit losses, the level and composition of nonaccrual, past due and renegotiated 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.

Management reviews economic factors including the potential for reduced cash flow for commercial operating loans from reduction in sales or increased operating costs, decreased occupancy rates for commercial buildings, the uncertainty regarding grain prices, increased operating costs for farmers, and increased levels of unemployment impacting consumers’ ability to pay. Each of these economic uncertainties was taken into consideration in developing the level of the reserve. Management considers the allowance for credit losses a critical accounting policy.

Management recognizes there are risk factors that are inherent in the Company’s loan portfolio. All financial institutions face risk factors in their loan portfolios because risk exposure is a function of the business. The Company’s operations (and therefore its loans) are concentrated in central Illinois, an area where agriculture is the dominant industry. Accordingly, lending and other business relationships with agriculture-based businesses are critical to the Company’s success. At December 31, 2025, the Company’s loan portfolio included $681.4 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $577.9 million was concentrated in other grain farming. Total loans to borrowers whose businesses are directly related to agriculture increased $50.9 million from $630.6 million at December 31, 2024 while loans concentrated in other grain farming increased $70.3 million from $507.6 million at December 31, 2024. While the Company adheres to sound underwriting practices, including collateralization of loans, any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in credit losses within the agricultural portfolio. The Company also has $1.1 billion of loans to lessors of non-residential buildings, $225.6 million of loans concentrated in hotels and motels, and $641.8 million of loans to lessors of residential buildings and dwellings.

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. Most 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.

26

The Company minimizes credit risk by adhering to sound underwriting and credit review policies. Management and the Board of Directors of the Company review these policies at least annually. Senior management is actively involved in business development efforts and the maintenance and monitoring of credit underwriting and approval. The loan review system and controls are designed to identify, monitor, and address asset quality problems in an accurate and timely manner. On a quarterly basis, the Board of Directors and management review the status of problem loans and determine a best estimate of the allowance. In addition to internal policies and controls, regulatory authorities periodically review asset quality and the overall adequacy of the allowance for credit losses.

Analysis of the allowance for credit losses for the past five years and of changes in the allowance for these periods is summarized as follows (dollars in thousands):

2025

2024

2023

2022

2021

Average loans outstanding, net of unearned income

$

5,749,728

$

5,558,527

$

5,079,949

$

4,518,566

$

3,778,142

Allowance-beginning of period

70,182

68,675

59,093

54,655

41,910

Initial allowance on loans purchased with credit deterioration

—

—

3,791

863

2,074

Charge-offs:

Construction and land development

107

—

14

2

205

1-4 family residential properties

156

195

87

191

371

Commercial real estate

1,197

451

25

414

535

Agricultural loans

2,503

2,410

408

93

—

Commercial and industrial loans

2,485

688

529

870

3,118

Consumer loans

1,425

2,004

1,568

1,380

1,405

Total charge-offs

7,873

5,748

2,631

2,950

5,634

Recoveries:

Construction and land development

—

5

—

100

—

Agricultural real estate

53

—

—

—

—

1-4 family residential properties

264

339

216

359

211

Commercial real estate

114

184

805

385

60

Agricultural loans

1,022

75

38

54

1

Commercial and industrial loans

586

330

576

208

139

Consumer loans

606

687

683

613

743

Total recoveries

2,645

1,620

2,318

1,719

1,154

Net charge-offs

5,228

4,128

313

1,231

4,480

Provision for credit losses

9,921

5,635

6,104

4,806

15,151

Allowance-end of period

$

74,875

$

70,182

$

68,675

$

59,093

$

54,655

Ratio of annualized net charge-offs to average loans

0.09

%

0.07

%

0.01

%

0.03

%

0.12

%

Ratio of allowance for credit losses to loans outstanding (less unearned interest at end of period)

1.25

%

1.24

%

1.23

%

1.22

%

1.37

%

Ratio of allowance for credit losses to nonperforming loans

234.4

%

235.2

%

341.2

%

308.3

%

248.0

%

The ratio of the allowance for credit losses to nonperforming loans was 234.4% as of December 31, 2025 compared to 235.2% as of December 31, 2024. The decrease in this ratio is primarily due to an increase in nonperforming loans. Management believes that the overall estimate of the allowance for credit losses appropriately accounts for probable losses attributable to current exposures.

During 2025, the Company had net charge-offs of $5.2 million compared to $4.1 million in 2024. During 2025, there were significant charge-offs of two commercial real estate loans to two borrowers of $1 million, one construction and land development loan to one borrower of $107,000, nine agricultural operating loans to eight borrowers of $1.8 million, and ten commercial operating loans to eight borrowers of $2.3 million. During 2024, there were significant charge-offs of two commercial real estate loans to two borrowers of $451,000, one agricultural operating loan to one borrower of $2.1 million, and a significant charge-off of one commercial operating loan to one borrower of $466,000.

At December 31, 2025, the allowance for credit losses amounted to $74.9 million or 1.25% of total loans. At December 31, 2024, the allowance for credit losses amounted to $70.2 million or 1.24% of total loans.

27

The allowance for credit losses, in management's judgment, was allocated as follows to cover probable credit losses (dollars in thousands):

December 31, 2025

December 31, 2024

December 31, 2023

% of loans to

% of loans to

% of loans to

Allowance for

credit losses

total

loans

Allowance for

credit losses

total

loans

Allowance for

credit losses

total

loans

Construction and land development

$

5,129

6.0

%

$

3,275

4.2

%

$

2,918

3.7

%

Agriculture real estate

1,283

6.2

%

1,361

6.9

%

1,366

7.0

%

1-4 family residential

3,753

8.1

%

3,579

8.8

%

4,220

9.7

%

Commercial real estate

35,589

48.3

%

32,669

48.5

%

31,758

48.5

%

Agricultural loans

1,401

5.1

%

1,957

4.2

%

705

3.5

%

Commercial and industrial

26,285

25.9

%

25,602

26.5

%

25,450

26.0

%

Consumer

1,435

0.4

%

1,739

0.9

%

2,258

1.6

%

Allowance at end of year

$

74,875

100.0

%

$

70,182

100.0

%

$

68,675

100.0

%

December 31, 2022

December 31, 2021

% of loans to

% of loans to

Allowance for

credit losses

total

loans

Allowance for

credit losses

total

loans

Construction and land development

$

2,250

3.0

%

$

1,743

3.6

%

Agriculture real estate

1,433

8.5

%

1,257

7.0

%

1-4 family residential

3,742

9.1

%

2,330

10.0

%

Commercial real estate

28,157

48.2

%

26,246

49.2

%

Agricultural loans

585

3.5

%

983

3.8

%

Commercial and industrial

20,808

25.7

%

19,241

24.4

%

Consumer

2,118

2.0

%

2,855

2.0

%

Allowance at end of year

$

59,093

100.0

%

$

54,655

100.0

%

Deposits

Funding of the Company’s earning assets is substantially provided by a combination of consumer, commercial and public fund deposits. The Company continues to focus its strategies and emphasis on commercial and retail core deposits, the major component of funding sources. The following table sets forth the average deposits and weighted average rates for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands):

2025

2024

2023

Average

Balance

Weighted

Average

Rate

Average

Balance

Weighted

Average

Rate

Average

Balance

Weighted

Average

Rate

Demand deposits:

Non-interest-bearing

$

1,353,150

—

%

$

1,407,537

—

%

$

1,312,023

—

%

Interest-bearing

3,132,691

1.96

%

3,040,397

2.24

%

2,618,452

1.83

%

Savings

633,186

0.12

%

675,622

0.12

%

663,760

0.11

%

Time deposits

1,074,940

3.37

%

1,019,629

3.74

%

961,162

2.98

%

Total average deposits

$

6,193,967

1.59

%

$

6,143,185

1.74

%

$

5,555,397

1.40

%

As of December 31, 2025, 2024, and 2023, the Company held $1.7 billion, $1.6 billion, and $1.7 billion, respectively, of uninsured deposits for customers.

The following table sets forth the high and low month-end balances for the years ended December 31, 2025, 2024, and 2023 (in thousands):

2025

2024

2023

High month-end balances of total deposits

$

6,395,273

$

6,242,937

$

6,346,324

Low month-end balances of total deposits

6,081,565

6,057,095

5,030,778

In 2025, the average balance of deposits increased by $50.8 million from 2024. The increase in 2025 was primarily due to an increase in time deposits through organic growth and use of brokered CDs. The increase in 2024 was primarily due to deposits added in the acquisition of Blackhawk Bank being present the entire calendar year.

28

Balances of time deposits of more than $250,000 include time deposits maintained for public fund entities and consumer time deposits. The following table sets forth the maturity of time deposits of more than $250,000 (in thousands):

December 31,

2025

2024

2023

Three months or less

$

230,788

$

160,545

$

70,578

Over three months through twelve months

129,513

130,242

216,904

Over one year through three years

57,451

48,784

48,701

Over three years

2,512

1,965

35,494

Total

$

420,264

$

341,536

$

371,677

The balance of time deposits of more than $250,000 increased $78.7 million from December 31, 2024 to December 31, 2025. The increase was primarily attributable to a combination of higher wholesale deposit balances and targeted internal marketing efforts, implemented to attract new time deposit funding to support the Company's liquidity needs. The balance of time deposits of more than $250,000 decreased $30.1 million from December 31, 2023 to December 31, 2024. The decrease was primarily due to intentional efforts to lower funding costs by reducing non-relationship time deports.

In 2025 the Company maintained account relationships with various public entities throughout its market areas. These public entities had total balances of $193.6 million and $261.2 million in various checking accounts and time deposits as of December 31, 2025 and 2024, respectively. These balances are subject to change depending upon the cash flow needs of the public entity.

Repurchase Agreements and Other Borrowings

Securities sold under agreements to repurchase are short-term obligations of First Mid Bank. These obligations are collateralized with certain government securities that are direct obligations of the United States or one of its agencies. These retail repurchase agreements are a cash management service to its corporate customers. Other borrowings consist of Federal Home Loan Bank (“FHLB”) advances, federal funds purchased, loans (short-term or long-term debt) that the Company has outstanding, subordinated debt and junior subordinated debentures.

29

Information relating to securities sold under agreements to repurchase and other borrowings as December 31, 2025, 2024, and 2023 is presented below (dollars in thousands):

2025

2024

2023

Securities sold under agreements to repurchase

$

196,716

$

204,122

$

213,721

Federal Home Loan Bank advances:

FHLB-overnight

—

90,000

—

Fixed term – due in one year or less

25,000

7,435

60,000

Fixed term – due after one year

245,000

145,085

203,787

Other borrowings:

Federal funds purchased

—

—

—

Debt due in one year or less

—

—

—

Subordinated debt

60,008

87,472

106,755

Junior subordinated debentures

24,454

24,280

24,058

Total

$

551,178

$

558,394

$

608,321

Average interest rate at end of period

3.54

%

3.30

%

4.41

%

Maximum outstanding at any month-end:

Securities sold under agreements to repurchase

$

219,772

$

282,285

$

231,650

Federal Home Loan Bank advances:

FHLB-overnight

25,000

90,000

150,000

Fixed term – due in one year or less

50,000

65,000

105,024

Fixed term – due after one year

245,000

223,744

415,005

Other borrowings:

Federal funds purchased

—

—

—

Debt due in one year or less

4,000

—

—

Subordinated debt

87,505

106,934

106,755

Junior subordinated debentures

24,454

24,280

24,058

Averages for the period (YTD):

Securities sold under agreements to repurchase

$

199,430

$

221,789

$

225,307

Federal Home Loan Bank advances:

FHLB-overnight

6,142

560

55,104

Fixed term – due in one year or less

16,616

45,587

95,669

Fixed term – due after one year

203,363

193,802

311,424

Other borrowings:

Federal funds purchased

39

—

192

Loans due in one year or less

361

—

—

Subordinated debt

76,140

99,313

99,638

Junior subordinated debentures

24,376

24,168

21,337

Total

$

526,467

$

585,219

$

808,671

Average interest rate during the period

3.51

%

3.71

%

2.16

%

Securities sold under agreements to repurchase decreased $7.4 million during 2025 primarily due to the seasonal demands in balances and change in cash flow needs of various customers. FHLB advances represent borrowings by the First Mid Bank to economically fund loan demand. At December 31, 2025, FHLB advances totaled $270.0 million with a weighted-average interest rate of 3.44% and maturities from June 2026 to March 2035. At December 31, 2024, FHLB advances totaled $242.4 million with a weighted-average interest rate of 3.97% and maturities from March 2025 to December 2029.

The Company is party to a revolving credit agreement with The Northern Trust Company in the amount of $15 million. The balance on this line of credit was $0 as of December 31, 2025. This loan was renewed on April 4, 2025 for one year as a revolving credit agreement with a maximum available balance of $15 million. The interest rate is floating at 2.25% over the federal funds rate. The Company and its subsidiary banks were in compliance with the existing covenants at December 31, 2025 and 2024.

On October 6, 2020, the Company issued and sold $96.0 million in aggregate principal amount of its 3.95% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”). The Notes were issued pursuant to the Indenture, dated as of October 6, 2020 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of October 6, 2020 (the “Supplemental Indenture”), between the Company and the Trustee. The Base Indenture, as amended and supplemented by the Supplemental Indenture, governs the terms of the Notes and provides that the Notes are unsecured, subordinated debt obligations of the Company and will mature on October 15, 2030. From and including the date of issuance to, but excluding October 15, 2025, the Notes bore interest at an initial rate of 3.95% per annum. From and including October 15, 2025 to, but excluding the maturity date or earlier redemption, the Notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 383 basis points, or such other rate as determined pursuant to the Supplemental Indenture, provided that in no event shall the applicable floating interest rate be less than zero per annum (7.5% and 3.95% at December 31, 2025 and 2024, respectively). On June 7, 2024, August 27, 2024, and September 6, 2024, the Company repurchased in open market transactions and subsequently

30

cancelled $4.0 million, $15.0 million, and $1.0 million respectively, of the outstanding Notes. On October 15, 2025, the Company paid down $20 million of the outstanding Notes. As a result, as of December 31, 2025, $56 million in aggregate principal amount of the Notes remain issued and outstanding.

The Company may, beginning with the interest payment date of October 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the Notes at any time, including prior to October 15, 2025, at the Company’s option, in whole but not in part, if: (i) a change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to but excluding the redemption date.

On August 15, 2023, the Company assumed, as part of the Blackhawk Bancorp, Inc. acquisition, $7.5 million principal amount of 3.5% Fixed-to-Floating Rate Subordinated Notes due 2031 (“Blackhawk Subordinated Debt I”). Blackhawk Subordinated Debt I was issued pursuant to Indenture between the Company and UMB Bank, as trustee. This Indenture governs the terms of the Blackhawk Subordinated Debt I and provides that such notes are unsecured, subordinated debt obligations of the Company and will mature on May 14, 2031. From and including the date of issuance to, but excluding May 14, 2026, the notes will bear interest at an initial rate of 3.5% per annum. From and including May 14, 2026 to, but excluding the maturity date, the notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 285 basis points. On February 5, 2025, the Company repurchased in open market transactions and subsequently cancelled $3.0 million of the outstanding Blackhawk Subordinated Debt I Notes. As a result, as of December 31, 2025, $4.5 million in aggregate principal amount of Blackhawk Subordinated Debt I Notes remain issued and outstanding.

On August 15, 2023, the Company assumed, as part of the Blackhawk Bancorp, Inc. acquisition, $7.5 million principal amount of 3.875% Fixed-to-Floating Rate Subordinated Notes due 2036 (“Blackhawk Subordinated Debt II”). Blackhawk Subordinated Debt II was issued pursuant to Indenture between the Company and UMB Bank, as trustee. This Indenture governs the terms of the Blackhawk Subordinated Debt II and provides that such notes are unsecured, subordinated debt obligations of the Company and will mature on May 14, 2036. From and including the date of issuance to, but excluding May 14, 2031, the notes will bear interest at an initial rate of 3.875% per annum. From and including May 14, 2031 to, but excluding the maturity date, the notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 255 basis points. On February 5, 2025, the Company repurchased in open market transactions and subsequently cancelled $7.0 million of the outstanding Blackhawk Subordinated Debt II Notes. As a result, as of December 31, 2025, $500,000 in aggregate principal amount of Blackhawk Subordinated Debt II Notes remain issued and outstanding.

On April 26, 2006, the Company completed the issuance and sale of $10 million of fixed/floating rate trust preferred securities through First Mid-Illinois Statutory Trust II (“Trust II”), a statutory business trust and wholly owned unconsolidated subsidiary of the Company, as part of a pooled offering. The Company established Trust II for the purpose of issuing the trust preferred securities. The $10.0 million in proceeds from the trust preferred issuance and an additional $310,000 for the Company’s investment in common equity of Trust II, a total of $10.3 million, was invested in junior subordinated debentures of the Company. The underlying junior subordinated debentures issued by the Company to Trust II mature in 2036, bore interest at a fixed rate of 6.98% paid quarterly until June 15, 2011 and then converted to floating rate (SOFR plus 160 basis points) after June 15, 2011 (5.59% and 6.81% at December 31, 2025 and 2024, respectively). The net proceeds to the Company were used for general corporate purposes, including the Company’s acquisition of Mansfield Bancorp, Inc. in 2006.

On September 8, 2016, the Company assumed the trust preferred securities of Clover Leaf Statutory Trust I (“CLST I”), a statutory business trust that was a wholly owned unconsolidated subsidiary of First Clover Financial. The $4.0 million of trust preferred securities and an additional $124,000 additional investment in common equity of CLST I, is invested in junior subordinated debentures issued to CLST I. The subordinated debentures matured in 2025, bear interest at three-month SOFR plus 185 basis points (5.84% and 7.06% at December 31, 2025 and 2024, respectively) and resets quarterly.

On May 1, 2018, the Company assumed the trust preferred securities of FBTC Statutory Trust I (“FBTCST I”), a statutory business trust that was a wholly owned unconsolidated subsidiary of First BancTrust Corporation. The $6.0 million of trust preferred securities and an additional $186,000 additional investment in common equity of FBTCST I is invested in junior subordinated debentures issued to FBTCST I. The subordinated debentures mature in 2035, bear interest at three-month SOFR plus 170 basis points (5.69% and 6.91% at December 31, 2025 and 2024, respectively) and resets quarterly.

On August 15, 2023, the Company assumed the trust preferred securities of Blackhawk Statutory Trust I (“BHST I”), a statutory business trust that was a wholly owned unconsolidated subsidiary of Blackhawk Bancorp, Inc. The $1.0 million of trust preferred securities and an additional $31,000 investment in common equity of BHST I is invested in junior subordinated debentures issued to BHST I. The subordinated debentures mature in 2032, bear interest at three-month SOFR plus 325 basis points (7.20% and 8.17% at December 31, 2025 and 2024, respectively) and resets quarterly.

On August 15, 2023, the Company assumed the trust preferred securities of Blackhawk Statutory Trust II (“BHST II”), a statutory business trust that was a wholly owned unconsolidated subsidiary of Blackhawk Bancorp, Inc. The $4.0 million of trust preferred securities and an additional $124,000 investment in common equity of BHST II is invested in junior subordinated debentures issued to BHST II. The subordinated debentures mature in 2035, bear interest at three-month SOFR plus 205 basis points (6.02% and 7.25% at December 31, 2025 and 2024, respectively) and resets quarterly.

The trust preferred securities issued by Trust II, CLST I, FBTCST I, BHST I, and BHST II are included as Tier 1 capital of the Company for regulatory capital purposes. On March 1, 2005, the Federal Reserve Board adopted a final rule that allows the continued limited inclusion of trust preferred securities in the calculation of Tier 1 capital for regulatory purposes. The final rule provided a five-year transition period, ending September 30, 2010, for application of the revised quantitative limits. On March 17, 2009, the Federal Reserve Board adopted an additional final rule that delayed the effective date of the new limits on inclusion of trust preferred securities in the calculation of Tier 1 capital until March 31, 2012. The application of the revised quantitative limits did not and is not expected to have a significant impact on its calculation of Tier 1 capital for regulatory purposes or its classification as well-capitalized. The Dodd-Frank Act, signed into law July 21, 2010, removes trust preferred securities as a permitted component of a holding company’s Tier 1 capital after a three-year phase-in period beginning January 1, 2013 for larger holding companies. For holding companies with less than $15 billion in consolidated assets, existing issues of trust preferred securities are grandfathered and not subject to this new restriction. New issuances of trust preferred securities, however, would not count as Tier 1 regulatory capital.

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In addition to requirements of the Dodd-Frank Act discussed above, the act also required the federal banking agencies to adopt rules that prohibit banks and their affiliates from engaging in proprietary trading and investing in and sponsoring certain unregistered investment companies (defined as hedge funds and private equity funds). This rule is generally referred to as the “Volcker Rule.” On December 10, 2013, the federal banking agencies issued final rules to implement the prohibitions required by the Volcker Rule. Following the publication of the final rule, and in reaction to concerns in the banking industry regarding the adverse impact the final rule’s treatment of certain collateralized debt instruments has on community banks, the federal banking agencies approved a final rule to permit banking entities to retain interests in certain collateralized debt obligations backed primarily by trust preferred securities. Under the final rule, the agencies permit the retention of an interest in or sponsorship of covered funds by banking entities under $15 billion in assets if (1) the collateralized debt obligation was established and issued prior to May 19, 2010, (2) the banking entity reasonably believes that the offering proceeds received by the collateralized debt obligation were invested primarily in qualifying trust preferred collateral, and (3) the banking entity’s interests in the collateralized debt obligation was acquired on or prior to December 10, 2013. Although the Volcker Rule impacts many large banking entities, the Company does not currently anticipate that the Volcker Rule will have a material effect on the operations of the Company or First Mid Bank.

Interest Rate Sensitivity

The Company seeks to maximize its net interest margin while maintaining an acceptable level of interest rate risk. Interest rate risk can be defined as the amount of forecasted net interest income that may be gained or lost due to changes in the interest rate environment, a variable over which management has no control. Interest rate risk, or sensitivity, arises when the maturity or repricing characteristics of interest-bearing assets differ significantly from the maturity or repricing characteristics of interest-bearing liabilities. The Company monitors its interest rate sensitivity position to maintain a balance between rate sensitive assets and rate sensitive liabilities. This balance serves to limit the adverse effects of changes in interest rates. The Company’s asset liability management committee (ALCO) oversees the interest rate sensitivity position and directs the overall allocation of funds.

In the banking industry, a traditional way to measure potential net interest income exposure to changes in interest rates is through a technique known as “static GAP” analysis which measures the cumulative differences between the amounts of assets and liabilities maturing or repricing at various intervals. The Company has also assumed prepayments of loan assets in amounts consistent with market expectations. By comparing the volumes of interest-bearing assets and liabilities that have contractual maturities, repricing points, and prepayments at various times in the future, management can gain insight into the amount of interest rate risk embedded in the balance sheet.

The following table sets forth the Company’s interest rate repricing GAP for selected maturity periods at December 31, 2025 (dollars in thousands):

Rate Sensitive Within

1 year

1-3 years

3-5 years

Thereafter

Total

Fair Value

Interest-earning assets:

Federal funds sold and other interest-bearing deposits

$

197,696

$

—

$

—

$

—

$

197,696

$

197,696

Certificates of deposit investments

1,740

—

—

—

1,740

1,740

Taxable investment securities

85,628

186,300

168,489

377,882

818,299

818,299

Nontaxable investment securities

48,445

57,453

43,125

116,437

265,460

265,460

Loans

3,586,665

1,672,391

562,900

189,418

6,011,374

5,761,258

Total

$

3,920,174

$

1,916,144

$

774,514

$

683,737

$

7,294,569

$

7,044,453

Interest-bearing liabilities:

Savings and NOW accounts

$

1,262,045

$

—

$

—

$

1,472,737

$

2,734,782

$

2,734,782

Money market accounts

1,138,464

—

—

—

1,138,464

1,138,464

Other time deposits

988,464

123,759

17,270

—

1,129,493

1,056,659

Short-term borrowings/debt

196,716

—

—

—

196,716

196,716

Long-term borrowings/debt

209,070

100,000

45,000

392

354,462

353,221

Total

$

3,794,759

$

223,759

$

62,270

$

1,473,129

$

5,553,917

$

5,479,842

Rate sensitive assets – rate sensitive liabilities

$

125,415

$

1,692,385

$

712,244

$

(789,392

)

$

1,740,652

Cumulative GAP

$

125,415

$

1,817,800

$

2,530,045

$

1,740,652

Cumulative amounts as % of total rate sensitive assets

1.7

%

23.2

%

9.8

%

(10.8

)%

Cumulative ratio

1.7

%

24.9

%

34.7

%

23.9

%

The static GAP analysis shows that at December 31, 2025, the Company was liability sensitive, on a cumulative basis, through the twelve-month time horizon. This indicates that future increases in interest rates could have an adverse effect on net interest income. There are several ways the Company measures and manages the exposure to interest rate sensitivity, including static GAP analysis. The Company’s ALCO also uses other financial models to project interest income under various rate scenarios and prepayment/extension assumptions consistent with First Mid Bank’s historical experience and with known industry trends. ALCO meets at least monthly to review the Company’s exposure to interest rate changes as indicated by the various techniques and to make necessary changes in the composition terms and/or rates of the assets and liabilities.

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Capital Resources

At December 31, 2025, the Company’s stockholders' equity had increased approximately $112.3 million, or 13.3%, to $958.7 million from $846.4 million as of December 31, 2024. During 2025, net income contributed $91.7 million to equity before the payment of dividends to stockholders of $23.4 million. The change in market value of available-for-sale investment securities increased stockholders' equity by $41.1 million, net of tax.

Stock Plans

Deferred Compensation Plan. The Company follows the provisions of the Emerging Issues Task Force Issue No. 97-14, “Accounting for Deferred Compensation Arrangements Where Amounts Earned Are Held in a Rabbi Trust and Invested” (“EITF 97-14”), which was codified into ASC 710-10, for purposes of the First Mid Bancshares, Inc. Amended and Restated Deferred Compensation Plan (“DCP”). At December 31, 2025, the Company classified the cost basis of its common stock issued and held in trust in connection with the DCP of approximately $6.8 million as treasury stock. The Company also classified the cost basis of its related deferred compensation obligation of approximately $6.8 million as an equity instrument (deferred compensation).

The DCP was effective as of June 1984. The purpose of the DCP is to enable directors, advisory directors, and key employees the opportunity to defer a portion of the fees and cash compensation paid by the Company as a means of maximizing the effectiveness and flexibility of compensation arrangements. The Company invests all participants’ deferrals in shares of common stock. Dividends paid on the shares are credited to participants’ DCP accounts and invested in additional shares.

First Retirement and Savings Plan. The First Retirement Savings Plan ("401(k) plan") was effective beginning in 1985. Employees are eligible to participate in the 401(k) plan after three months of service with the Company.

Stock Incentive Plan. At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the 2017 Stock Incentive Plan ("SI Plan"). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term. At the Annual Meeting of Stockholders held on April 30, 2025, the stockholders approved amendments to the SI Plan to change the name of the plan to the 2025 Stock Incentive Plan and to extend the term of the plan to January 21, 2035. The SI Plan is intended to provide a means whereby directors, employees, consultants and advisors of the Company and its Subsidiaries may sustain a sense of proprietorship and personal involvement in the continued development and financial success of the Company and its Subsidiaries, thereby advancing the interests of the Company and its stockholders. Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of Common Stock of the Company on the terms and conditions established in the SI Plan.

Following the stockholders' approval at the 2025 annual meeting of the Company, a maximum of 1 million shares of common stock may be issued under the SI Plan. During 2025, 2024, and 2023, the Company awarded 84,097 and 80,332, and 45,986 shares as stock and stock unit awards, respectively. This SI Plan is more fully described in Note 13 - Stock Incentive Plan.

Stock Repurchase Program. On June 24, 2025, the Board of Directors approved a repurchase program (the "2025 Repurchase Program"), which became effective on July 1, 2025. The 2025 Repurchase Program supersedes all previous repurchase plans and authorizes the Company to repurchase up to 1.2 million shares of the Company’s common stock. During 2025, the Company did not repurchase any shares. As of December 31, 2025, the Company had approximately 1.2 million shares or approximately $46.8 million in remaining capacity under the 2025 Repurchase Program.

Although the Company adopted the repurchase plan, the Company may make discretionary repurchases in the open market or in privately negotiated transactions from time to time. The timing, manner, price and amount of any such repurchases will be determined by the Company at its discretion and will depend upon a variety of factors including economic and market conditions, price, applicable legal requirements and other factors.

Employee Stock Purchase Plan. At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP provides eligible employees with the opportunity to purchase shares of common stock of the Company at a 15% discount through payroll deductions. The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. A maximum of 600,000 shares of common stock may be issued under the ESPP. As of December 31, 2025, 2024, and 2023, 29,313, 32,936, and 38,989 shares, respectively were issued pursuant to ESPP. As of December 31, 2025, there were 444,023 shares unassigned but available to be issued under the ESPP.

Capital Ratios

For 2025, the minimum regulatory ratios required for minimum capital adequacy purposes plus the capital buffer are 10.5% for the Total Risk-based capital ratio, 8.5% for the Tier 1 Risk-based capital ratio, 7.0% for the Common Equity Tier 1 capital ratio, and 4.0% for the Tier 1 Leverage ratio. The Company and First Mid Bank have capital ratios above the minimum regulatory capital requirements and, as of December 31, 2025, the Company and First Mid Bank had capital ratios above the levels required for categorization as well-capitalized under the capital adequacy guidelines established by the bank regulatory agencies. A tabulation of the Company and First Mid Bank's capital ratios as of December 31, 2025 follows:

Total Risk-

based

Capital Ratio

Tier 1

Risk-based

Capital Ratio

Common Equity

Tier 1 Capital

Ratio

Tier One Leverage Ratio (Capital to Average Assets)

First Mid Bancshares, Inc. (Consolidated)

15.67

%

13.55

%

13.16

%

11.07

%

First Mid Bank

14.47

%

13.29

%

13.29

%

10.88

%

Liquidity

Liquidity represents the ability of the Company and its subsidiaries to meet all present and future financial obligations arising in the daily operations of the business. Financial obligations consist of the need for funds to meet extensions of credit, deposit withdrawals and debt servicing. The Company’s liquidity management focuses

33

on the ability to obtain funds economically through assets that may be converted into cash at minimal costs or through other sources. The Company’s other sources of cash include overnight federal fund lines, Federal Home Loan Bank advances, the ability to borrow at the Federal Reserve Bank of Chicago, and the Company’s operating line of credit with The Northern Trust Company. Details for these sources include:

•
First Mid Bank has $130 million available in overnight federal fund lines, including $30 million from First Horizon Bank, N.A., $25 million from Zions Bank, $20 million from U.S. Bank, N.A., $20 million from BMO Bank, N.A., $20 million from Bankers' Bank., and $15 million from The Northern Trust Company. Availability of the funds is subject to First Mid Bank meeting minimum regulatory capital requirements for total capital to risk-weighted assets and Tier 1 capital to total average assets. As of December 31, 2025, First Mid Bank met these regulatory requirements.

•
First Mid Bank can borrow from the Federal Home Loan Bank as a source of liquidity. Availability of the funds is subject to the pledging of collateral to the Federal Home Loan Bank. Collateral that is pledged includes one-to-four family residential real estate loans, commercial real estate loans, multi-family loans, and farmland. At December 31, 2025, the excess collateral at the FHLB would support approximately $1.6 billion of additional advances for First Mid Bank.

•
First Mid Bank is a member of the Federal Reserve System and can borrow funds provided that sufficient collateral is pledged.

•
First Mid Bank has received formal approval from the Federal Reserve Bank and can participate in the Borrower-in-Custody (BIC) program. As a result, the Bank can pledge loans as collateral at the Federal Reserve Bank's Discount Window while retaining custody of the pledged loans. The program enhanced our contingent liquidity position by approximately $316.0 million as of December 31, 2025.

•
In addition, as of December 31, 2025, the Company had a revolving credit agreement in the amount of $15 million with The Northern Trust Company with an outstanding balance of $0 and $15 million in available funds. This loan was renewed on April 4, 2025 for one year as a revolving credit agreement. The interest rate is floating at 2.25% over the federal funds rate. The loan is unsecured. The Company and its subsidiary banks were in compliance with the existing covenants at December 31, 2025 and 2024.

Management continues to monitor its expected liquidity requirements carefully, focusing primarily on cash flows from:

•
lending activities, including loan commitments, letters of credit and mortgage prepayment assumptions;

•
deposit activities, including seasonal demand of private and public funds;

•
investing activities, including prepayments of mortgage-backed securities and call provisions on U.S. Treasury and government agency securities; and

•
operating activities, including scheduled debt repayments and dividends to stockholders.

The following table summarizes significant contractual obligations and other commitments at December 31, 2025 (in thousands):

Total

Less than

1 year

1-3 years

3-5 years

More than

5 years

Time deposits

$

1,129,493

$

988,464

$

123,759

$

17,270

$

—

Debt

84,462

—

—

—

84,462

Other borrowings

466,716

221,716

75,000

145,000

25,000

Operating leases

14,658

3,292

5,492

3,347

2,527

Supplemental retirement

2,025

50

350

300

1,325

$

1,697,354

$

1,213,522

$

204,601

$

165,917

$

113,314

For the year ended December 31, 2025, net cash of $130.9 million was provided from operating activities, $302.6 million was used in investing activities, and $305.5 million was provided by financing activities. In total cash and cash equivalents increased by $133.7 million from year-end 2024.

For the year ended December 31, 2024, net cash of $124.4 million was provided from operating activities, $7.5 million was used in investing activities, and $138.8 million was used in financing activities. In total cash and cash equivalents decreased by $21.8 million from year-end 2023.

For the year ended December 31, 2023, net cash of $72.4 million was provided from operating activities, $474.4 million was provided from investing activities, and $556.2 million was used in financing activities. In total cash and cash equivalents decreased by $9.4 million from year-end 2022.

Effects of Inflation

Unlike industrial companies, virtually all of the assets and liabilities of the Company are monetary in nature. As a result, interest rates have a more significant impact on the Company’s performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or experience the same magnitude of changes as goods and services, since such prices are affected by inflation. In the current economic environment, liquidity and interest rate adjustments are features of the Company’s assets and liabilities that are important to the maintenance of acceptable performance levels. The Company attempts to maintain a balance between monetary assets and monetary liabilities, over time, to offset these potential effects.

34