First Mid Bancshares, Inc. Announces Third Quarter 2026 Results

First Mid posts record earnings, grows deposits, and announces two acquisitions.

What the company is saying

First Mid Bancshares, Inc. reports net income of $33.3 million and diluted EPS of $1.25 for the third quarter of 2026, highlighting a record high for quarterly earnings. The company emphasizes strong asset quality, noting lower criticized assets and negligible net charge-offs, and frames deposit growth as solid despite loan balances declining due to higher payoff activity. CEO Matthew Smith stresses a strategic focus on revenue diversification and fee business growth, particularly through the acquisition of Winship Farm Management and the pending acquisition of Evergreen Bancshares, Inc. The company also completed a $14.8 million loss sale of investment securities to generate $175.8 million in cash, which it plans to reinvest at higher rates with an earn back period of less than two years. The board declared a $0.26 per share quarterly dividend, reinforcing confidence in ongoing profitability. The announcement maintains a confident, data-driven tone, with management providing clear explanations for changes in loan and deposit balances, interest income, and expense trends.

What the data suggests

The quarter ended September 30, 2026 saw net income of $33.3 million and adjusted net income of $33.6 million, with diluted EPS at $1.25 and adjusted EPS at $1.26. Total loans stood at $6.85 billion, down $85.8 million for the quarter, mainly due to commercial real estate payoffs, while total deposits increased by $44.2 million to $7.62 billion. Net interest income was $79.4 million, down $0.3 million sequentially, as a $1.8 million rise in interest income was offset by a $2.1 million increase in interest expense, reflecting higher funding costs and deposit pricing competition. Compared to the prior year, net interest income rose $13.0 million (19.6%), driven by organic growth and the Two Rivers Bank & Trust acquisition. Asset quality improved: criticized assets fell $45.9 million, special mention loans dropped $37.6 million to $101.5 million, substandard loans declined $8.3 million to $131.6 million, and non-performing loans rose modestly by $1.8 million to $43.1 million. The allowance for credit losses was $86.5 million (1.26% of loans), with net charge-offs at $0.2 million and a provision release of $0.3 million. Non-interest income was $27.2 million, down from $28.8 million in Q2 but up from $22.9 million a year ago. Wealth management revenues were $7.4 million, Ag Services $2.0 million, and insurance commissions $7.5 million. Non-interest expense fell to $65.0 million from $70.6 million, as merger-related costs declined. Capital ratios remain strong: total capital to risk-weighted assets is 15.79%, tier 1 is 14.39%, CET1 is 13.91%, and leverage is 11.29%. Tangible book value per share decreased $0.06, or 0.2%, due to a $32.3 million increase in unrealized investment losses, partially offset by earnings. The company paid off $10.0 million in subordinated debt. The pending Evergreen Bancshares and Winship Farm Management acquisitions are positioned as growth drivers, but their financial impact is not yet realized.

Analysis

The announcement is a comprehensive quarterly financial disclosure with detailed, realised metrics for net income, EPS, loan and deposit balances, asset quality, and capital ratios. The majority of claims are factual and supported by numerical data, including both GAAP and non-GAAP profitability measures, satisfying the requirements for a strong_positive signal. Forward-looking statements are limited and proportionate, such as the expectation to reinvest securities sale proceeds at higher rates (with a specified earn-back period) and the anticipated addition of acres under management from an acquisition. These projections are modest, time-bounded, and do not dominate the narrative. There is no evidence of exaggerated language or narrative inflation; the tone is positive but grounded in realised results. No large capital outlay is paired with only long-dated, uncertain returns, and the capital actions disclosed (securities sale, debt repayment) are already executed. The gap between narrative and evidence is minimal.

Risk flags

• ●Loan balances declined by $85.8 million during the quarter, primarily due to elevated payoffs in commercial real estate, which could signal ongoing pressure on loan growth if payoff activity remains high or new loan origination lags.
• ●The $14.8 million realized loss on the sale of investment securities, while intended to be offset by higher reinvestment yields, introduces reinvestment risk if market rates decline or if the company is unable to achieve the projected earn back period of less than two years.
• ●Deposit growth of $44.2 million was concentrated in money market accounts, which increased by $198.8 million, potentially increasing funding cost sensitivity and exposing the company to rate-driven deposit outflows if market conditions change.
• ●The pending Evergreen Bancshares and Winship Farm Management acquisitions carry integration and execution risk, including the potential for higher-than-expected costs, cultural challenges, or delays in realizing anticipated revenue and operational synergies.
• ●Non-performing loans increased by $1.8 million to $43.1 million, and the ACL to non-performing loans ratio declined from 211% to 201%, indicating some incremental credit risk despite overall asset quality improvement.

Bottom line

First Mid Bancshares delivered record quarterly earnings, strong capital ratios, and improved asset quality, while continuing to grow deposits and diversify revenue streams. The company is actively repositioning its balance sheet, taking a $14.8 million loss to generate $175.8 million in cash for reinvestment at higher rates, with a targeted earn back period of under two years. Both the pending Evergreen Bancshares and Winship Farm Management acquisitions are positioned as strategic growth drivers, though their financial benefits remain to be realized and will require successful integration. Risks include continued loan runoff, reinvestment execution, and deposit cost pressures, as well as integration challenges from the acquisitions. The dividend remains steady at $0.26 per share, and capital levels are robust. Investors should focus on the pace of loan growth stabilization, reinvestment returns, and the closing and integration of announced acquisitions as key near-term catalysts. The most important takeaway is that First Mid is executing on both earnings growth and strategic repositioning, but must deliver on integration and reinvestment to sustain momentum.

Announcement summary

(NASDAQ:FMBH) First Mid Bancshares, Inc. announced financial results for the quarter ended September 30, 2026. Net income for the quarter was $33.3 million, or $1.25 diluted EPS. Adjusted quarterly net income was $33.6 million, or $1.26 diluted EPS. The company announced the pending acquisition of Evergreen Bancshares, Inc. Total loans at quarter end were $6.85 billion, representing a quarterly decrease of $85.8 million. Total deposits were $7.62 billion, a quarterly increase of $44.2 million. The company reported a quarterly return on average assets of 1.45%. In late October 2026, First Mid completed the sale of investment securities with a weighted average yield of 1.51% for a loss of $14.8 million, generating $175.8 million in cash, which is expected to be reinvested at higher rates with an earn back period of less than 2 years. The company agreed to acquire Winship Farm Management, which is expected to add over 8,600 acres under management over the next 3 years. The Board of Directors declared a regular quarterly dividend of $0.26 per share, payable on December 1, 2026 to shareholders of record as of November 16, 2026. Net interest income for the third quarter was $79.4 million, a decrease of $0.3 million from the prior quarter, primarily due to a decline in average loan balances and increased funding costs. Interest income increased by $1.8 million, while interest expense increased by $2.1 million. Accretion income for the quarter was $3.8 million. Compared to the third quarter of 2025, net interest income increased by $13.0 million, or 19.6%. Interest income was higher by $20.6 million, including a $0.7 million increase in accretion income, primarily due to organic earning asset growth and the addition of Two Rivers Bank & Trust. Interest expense was higher by $7.6 million compared to the third quarter of last year. Net interest margin, on a tax equivalent basis, was 3.76% for the third quarter, a decrease of 3 basis points from the prior quarter. The yield on earning assets improved by 6 basis points, but was outpaced by the increase in the average cost of funds. Total loans decreased by $85.8 million for the quarter, primarily in commercial real estate loans due to elevated payoffs and disciplined pricing decisions. Asset quality improved with overall criticized assets declining $45.9 million. Special mention loans decreased by $37.6 million to $101.5 million, and substandard loans decreased by $8.3 million to $131.6 million. Non-performing loans increased by $1.8 million to $43.1 million. The allowance for credit losses ended the period at $86.5 million, with an ACL to total loans ratio of 1.26%. An unearned discount of $37.1 million remains at quarter end. Provision expense of $0.3 million was released during the quarter, and net charge offs were $0.2 million. The ratio of non-performing loans to total loans was 0.63%. The ACL to non-performing loans ratio was 201%. The ratio of non-performing assets to total assets remained flat at 0.51%. Money market accounts grew by $198.8 million compared to the prior quarter. The average cost of interest-bearing deposits for the quarter was 2.16%, an increase of 18 basis points. Non-interest income for the third quarter was $27.2 million, compared to $28.8 million in the prior quarter and $22.9 million in the third quarter of 2025. Wealth management revenues were $7.4 million. Ag Services revenue was $2.0 million, compared to $1.9 million in the prior quarter and $1.8 million in the third quarter of 2025. Insurance commissions were $7.5 million, $1.3 million lower than the second quarter, but $0.4 million higher than the third quarter of 2025. Non-interest expense for the third quarter totaled $65.0 million, compared to $70.6 million in the second quarter. Acquisition-related expenses related to Two Rivers were $0.4 million, compared to $7.1 million in the prior quarter. Salaries and benefits expense increased by $1.0 million compared to the prior quarter. The efficiency ratio for the third quarter was 56.13%, compared to 54.39% in the prior quarter and 58.75% for the same period last year. Capital levels ended the period as follows: total capital to risk-weighted assets 15.79%, tier 1 capital to risk-weighted assets 14.39%, common equity tier 1 capital to risk-weighted assets 13.91%, and leverage ratio 11.29%. Tangible book value per share decreased $0.06, or 0.2%, during the third quarter, driven by an increase in the unrealized loss position in the investment portfolio of $32.3 million, which lowered tangible book value per share by $1.21, materially offset by earnings growth. The company paid off $10.0 million of subordinated debt with cash on hand during the quarter.

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