First Mid Posts Record Q1 Earnings After Major Iowa Acquisition

MATTOON, IL – April 29, 2026 – First Mid Bancshares, Inc. (NASDAQ: FMBH) today announced record-breaking first-quarter financial results, largely propelled by its recent strategic acquisition of Two Rivers Financial Group, Inc. The Mattoon-based company reported a net income of $26.3 million, or $1.06 per diluted share, marking a significant milestone as it simultaneously navigates its expansion into Iowa and addresses emerging headwinds in the agricultural sector.

The quarter was defined by the closing of the Two Rivers deal on February 28, a move that immediately and substantially reshaped First Mid's balance sheet. The acquisition added $1.04 billion in deposits and $871.4 million in loans, pushing the company's total assets to $9.3 billion.

“We are pleased to start the year with such strong financial results, highlighted by record quarterly earnings per share and net income,” said Joseph Dively, Chairman and CEO. “We continue to build on the momentum of 2025 and are excited to welcome the new customers and talented employees following our acquisition of Two Rivers.”

The Iowa Gambit: A Strategic Expansion

The acquisition of Two Rivers represents more than just a financial transaction; it marks a significant geographic and strategic pivot for First Mid. By entering the Iowa market, the company diversifies its footprint beyond its established presence in Illinois, Missouri, Texas, and Wisconsin. This expansion is a key part of a broader trend among regional banks, which are increasingly pursuing mergers and acquisitions to achieve economies of scale, enhance technological capabilities, and navigate rising regulatory costs.

The integration of Two Rivers appears to be proceeding on schedule. First Mid has filed the necessary applications to merge Two Rivers Bank & Trust into its primary banking subsidiary, with the full merger expected to be completed late in the second quarter, pending regulatory approval. In a decisive post-acquisition move, First Mid sold Two Rivers' entire investment portfolio for $168.2 million and began reinvesting a majority of the proceeds at higher rates, a strategy that quickly benefited the company's interest income.

Management has emphasized a smooth transition for customers and employees. “The integration efforts for the merger of the banks are progressing as expected, and we remain confident that the strategic combination will enhance shareholder value as we continue to diversify our footprint into Iowa,” Dively stated. To ensure leadership continuity and leverage local expertise, Shane Zimmerman, the former CEO and President of Two Rivers Bank & Trust, has joined First Mid as an Executive Vice President and Divisional President, tasked with overseeing the new Iowa markets.

A Balancing Act: Record Profits and Rising Risk

While the acquisition fueled top-line growth, First Mid also demonstrated strong underlying performance. The bank's net interest margin, a critical measure of profitability, expanded by 5 basis points to 3.78%. This improvement was driven by a combination of factors, including benefits from the repricing of its loan and investment portfolios and what President Matthew Smith described as being “diligent when pricing both sides of the balance sheet.” The company also reported solid organic growth of $65.3 million in loans and $100.4 million in deposits, impressive figures for what is historically a seasonally slow quarter.

However, the strong earnings report is juxtaposed with signs of increasing credit risk, particularly within the agricultural sector. The company's non-performing loans increased by $12.1 million during the quarter to a total of $44.1 million, or 0.63% of total loans. The acquired Two Rivers portfolio accounted for $11.0 million of this increase.

More telling is the rise in loans flagged for potential future issues. Special mention loans surged by $59.1 million to $179.6 million, with the report noting that the increase beyond the Two Rivers acquisition was “primarily driven by agricultural credit downgrades.” Similarly, substandard loans increased, with agricultural credits being a primary driver. The company acknowledged that cash flows in the agricultural segment “continue to be pressured.”

Despite these indicators, First Mid expressed confidence in its risk management, stating that its agricultural borrowers’ balance sheets “overall remain strong with equity from real estate and equipment.” The bank does not currently anticipate significant losses stemming from the credit downgrades, signaling a belief that its portfolio is resilient enough to withstand the current normalization of credit risk from historical lows.

Fortifying the Balance Sheet and Rewarding Shareholders

The influx from the Two Rivers acquisition dramatically expanded First Mid's scale. Total loans swelled to $6.94 billion, and total deposits reached $7.55 billion. This growth was accompanied by record insurance commissions of $10.8 million for the quarter, highlighting the strength of the company's diversified revenue streams.

First Mid's capital levels remain robust and well above the “well capitalized” regulatory thresholds, with a Common Equity Tier 1 (CET1) capital ratio of 13.10%. This strong capital position allowed the company to continue its shareholder return program.

“We were able to take advantage of our strong capital position and market volatility during the quarter by repurchasing $0.5 million of shares,” noted President Matthew Smith. “We remain committed to deploying capital where it generates the highest long-term return for our shareholders.”

In a further sign of confidence, the Board of Directors declared a regular quarterly dividend of $0.25 per share, payable on June 1, 2026. This continues First Mid's long history of providing consistent returns to its investors as it embarks on this new chapter of expanded regional influence.