v3.26.1
Basis of Accounting and Consolidation (Policies)
 6 Months Ended
Jun. 30, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Accounting and Consolidation

The unaudited condensed consolidated financial statements include the accounts of First Mid Bancshares, Inc. (“Company”) and its wholly owned subsidiaries: First Mid Bank & Trust, N.A. (“First Mid Bank”), First Mid Wealth Management Company (“First Mid Wealth Management”), First Mid Insurance Group, Inc. (“First Mid Insurance”), and First Mid Captive, Inc. (“the Captive”). All significant intercompany balances and transactions have been eliminated in consolidation. The financial information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods ended June 30, 2026 and 2025, and all such adjustments are of a normal recurring nature. Certain amounts in the prior year’s consolidated financial statements may have been reclassified to conform to the June 30, 2026 presentation and there was no impact on net income or stockholders’ equity. The results of the interim period ended June 30, 2026 are not necessarily indicative of the results expected for the year-ending December 31, 2026. The 2025 year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and related footnote disclosures, although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2025 Annual Report on Form 10-K.
Acquisitions

Acquisitions

Downs Insurance Agency, Inc. During the quarter ended March 31, 2026, Downs Insurance Agency, Inc. (“DIA”) customer list was acquired by the Company for a purchase price of $1.4 million.

Two Rivers Financial Group, Inc. On October 29, 2025, the Company and Star Sub LLC, a newly formed Iowa limited liability company and wholly-owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Two Rivers Financial Group, Inc., an Iowa corporation (“Two Rivers”), pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of Two Rivers pursuant to a business combination whereby Two Rivers would merge with and into Star Sub LLC, whereupon the separate corporate existence of Two Rivers would cease and Star Sub LLC would continue as a surviving company and a wholly-owned subsidiary of the Company (the “Merger”).

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each share of common stock of Two Rivers issued and outstanding immediately prior to the effective time of the Merger (other than shares held in treasury by Two Rivers) was converted into and became the right to receive 1.225 shares of common stock of the Company, and cash-in-lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments. On an aggregate basis, the total consideration payable by the Company at the closing of the Merger to Two Rivers shareholders and equity award holders was 2,539,831 shares of the Company common stock valued at $104.2 million and $3,000 of cash-in-lieu of fractional shares.

Two Rivers Bank was merged with and into First Mid Bank in June 2026 at which time, Two Rivers Bank offices became branches of First Mid Bank.

Ray Farm Management During the quarter ended December 31, 2025, Ray Farm Management Services, Inc.’s (“RFMS”) customer list was acquired by the Company for a purchase price of $764,000.

AAdvantage Insurance Group LLC During the quarter ended September 30, 2025, a portion of AAdvantage Insurance Group LLC’s (“AAIG”) customer list was acquired by the Company for a purchase price of $2.8 million.

Mid Rivers Insurance Group, Inc. During the quarter ended September 30, 2024, Mid Rivers Insurance Group, Inc. (“MRIG”) was acquired by the Company for a purchase price of $10.1 million and immediately merged into First Mid Insurance Group.

Notes 5 and 8 provide further information on the intangibles acquired in the above acquisitions.
Segment Reporting

Segment Reporting

The Company operates as a single segment entity for financial reporting purposes. The Chief Financial and Risk Officer, Jordan Read (CFO), serves as the Company’s chief operating decision maker (CODM). The CODM allocates resources and assesses performance of the Company based on the consolidated performance, excluding all significant intercompany balances and transactions, of the Company and its wholly owned subsidiaries and does not significantly utilize disaggregated segment financial information for decision-making and resource allocation. As of June 30, 2026, management has reviewed the requirements of generally accepted accounting principles and has determined that no additional segment disclosures are required. Specifically,

•
the Company does not use the tracked performance on the disaggregated segment level for decision-making or resource allocation purposes,
•
no significant segment-specific expenses or performance metrics are used internally for decision-making or resource allocation purposes, and
•
the level of financial consolidation presented in these financial statements aligns with the CODM’s internal reporting and decision-making process.

Based on this assessment the Company’s financial statement disclosures fully comply with generally accepted accounting principles, and no additional qualitative segment disclosures are necessary.
Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss included in stockholders’ equity as of June 30, 2026 and December 31, 2025 are as follows (in thousands):

 

 

Unrealized Losses on Securities

 

June 30, 2026

 

 

 

Net unrealized losses on securities available-for-sale

 

$

(143,861

)

Tax benefit

 

 

39,037

 

Balance at June 30, 2026

 

$

(104,824

)

 

 

 

December 31, 2025

 

 

 

Net unrealized losses on securities available-for-sale

 

$

(138,930

)

Tax benefit

 

 

37,629

 

Balance at December 31, 2025

 

$

(101,301

)

 

Amounts reclassified from accumulated other comprehensive income (loss) and the affected line items in the statements of income during the three and six months ended June 30, 2026 and 2025, were as follows (in thousands):

 

 

Amounts Reclassified from Other Comprehensive Income (Loss)

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

 

 

June 30,

 

 

June 30,

 

 

Affected Line Item in the

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

Statements of Income

Realized gain (loss) on available-for-sale securities, net

 

$

63

 

 

$

—

 

 

$

83

 

 

$

(181

)

 

Investment securities gains (losses), net (total reclassified amount before tax)

Income tax benefit (expense)

 

 

(17

)

 

 

—

 

 

 

(23

)

 

 

50

 

 

 Income taxes

Total reclassifications out of accumulated other comprehensive income (loss)

 

$

46

 

 

$

—

 

 

$

60

 

 

$

(131

)

 

Net reclassified amount

 

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

New Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to require additional disclosures within the notes to the financial statements about certain expense items. Specifically, disaggregation of income statement captions that contain expenses within the following five categories is required: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization (“DD&A”) costs recognized as part of oil- and gas-producing activities or other amounts of depletion expense. Further, this update requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. This update provides a practical expedient for banks and bank holding companies to continue presenting salaries and employee benefits in conformity with SEC Rule 210.9-04 instead of requiring those entities to apply the employee compensation definition included in Subtopic 220-40. The amendments in this update may be applied on either a prospective or retrospective basis and will be effective for the Company beginning with the annual reporting period ending December 31, 2027, and interim reporting periods beginning January 1, 2028. The Company does not expect adoption of this ASU to have any impact on its financial position or results of operations because it only results in additional disclosures.

In November 2025, the FASB published ASU 2025-08, Financial Instruments Credit Losses (Topic 326): Purchased Loans (ASU 2025-08). The update was published with the intent to eliminate the current expected credit loss (CECL) “double count” on non-Purchase Credit Deteriorated (PCD) Loans. The update accomplishes this through using “gross up” methodology that is similar to the methodology used on PCD Loans. In the new method all “purchased seasoned loans” are grossed up for the Allowance of Credit Losses (ACL) expected on the loans. Purchased seasoned loans are defined as either:

•
a loan that is obtained through a business combination accounted for using the acquisition method (most common for the Company)
•
a loan obtained through a transfer that is not a business combination accounted for using the acquisition method or initially recognized through the consolidation of a variable interest entity and these loans must meet both of following criteria:
•
the loan is obtained more than 90 days after its origination date; and
•
the acquirer was not involved in the loan’s origination.

The Company adopted this standard as of January 1, 2026.