Breaking Down First Mid Bancshares, Inc. (FMBH) Financial Health: Key Insights for Investors

You are looking at First Mid Bancshares, Inc. (FMBH) and wondering if the regional bank story still holds up in this climate. The short answer is yes, but the details matter a lot more than the headline. The Q3 2025 results show a company building momentum, not just coasting, posting a quarterly net income of $22.5 million. That's a strong number, and the adjusted diluted earnings per share (EPS) of $0.97, which beat analyst consensus, is a clear signal of operational discipline. The real story is the net interest margin (NIM), the core profitability measure for a bank, which expanded to a healthy 3.80%, marking their sixth consecutive quarter of growth. But, to be fair, you have to ask: can they sustain that growth while their total loans sit at $5.82 billion? We need to defintely analyze how they are managing asset quality and funding costs to keep that margin expansion going.

Revenue Analysis

You're looking for the core engine driving First Mid Bancshares, Inc. (FMBH)'s performance, and the answer is clear: it's a net interest margin story, but with a critical, growing non-interest income component. The firm's primary revenue stream is Net Interest Income (NII), which accounted for roughly 71% of total revenue over the last twelve months ending Q2 2025, with Non-interest Income making up the remaining 29%.

The good news is that the core lending business is performing well. For the third quarter of 2025, Net Interest Income was a strong $66.4 million, representing a significant year-over-year increase of 15.3% compared to Q3 2024. This growth is a direct result of the Net Interest Margin (NIM) expanding to 3.80% in Q3 2025, marking the sixth straight quarter of NII improvement. That's a defintely solid trend.

The Non-interest Income stream, while smaller, is vital for diversification and includes fee-based services like wealth management, insurance, and agricultural (Ag) services. Total revenue for the second quarter of 2025 was $93.40 million, a 5.3% rise from the prior year. This balanced approach helps cushion the bank against interest rate volatility, which is smart positioning in this market.

Here's the quick math on the segment contributions from the 2025 results:

• Net Interest Income (NII) is the dominant driver, showing a 15.3% year-over-year growth in Q3 2025.
• Non-interest Income, which was $23.6 million in Q2 2025, provides a necessary buffer.
• Wealth Management and Insurance were key growth drivers in Q1 2025, with a combined year-over-year increase of 8.2% in noninterest income.

Segment Revenue Breakdown and Opportunities

While Net Interest Income is the top-line story, you need to watch the fee-based segments for their stability and growth potential. The Insurance segment, for instance, achieved a record high revenue quarter in Q1 2025, showing resilience despite a challenging industry environment. However, not all segments are up; you see pressures in areas directly tied to the macro-economy.

Specifically, Wealth Management revenue in Q3 2025 was $5.1 million, which was down $0.7 million from Q3 2024, a decline attributed primarily to lower commodity prices impacting the Ag Services side. Also, debit card fee income was down $0.6 million in Q1 2025, a clear signal of a pullback in consumer spending. What this estimate hides is the potential for a quick bounce-back in these fee-based revenues once commodity prices stabilize and consumer confidence returns.

The firm is actively working to enhance its Ag Services revenue, which was $1.8 million in Q3 2025, through strategic moves like the pending acquisition of Ray Farm Management Services, Inc., expected to close in Q4 2025 and add approximately 9,000 acres under management. That acquisition is a clear action to diversify and deepen their niche expertise. For a full picture of the company's financial standing, you should review the full analysis at Breaking Down First Mid Bancshares, Inc. (FMBH) Financial Health: Key Insights for Investors.

The primary risk here is that the bank's NII growth, which is currently excellent, is highly sensitive to the interest rate environment. If rates drop faster than expected, that 3.80% NIM will compress, so you need to keep a close eye on their cost of funds. Still, the strategic acquisitions in Ag Services show management is thinking long-term about revenue diversification. Next step: Review the loan portfolio composition to assess the quality of the assets driving that NII growth.

Profitability Metrics

You're looking for a clear picture of how efficiently First Mid Bancshares, Inc. (FMBH) turns revenue into profit, and the 2025 numbers defintely show a business with strong core banking performance, even as operating costs remain a focus. The direct takeaway is that while the net profit margin is robust and expanding, their operational efficiency ratio trails the industry average, suggesting room for cost management improvement.

For a bank, we translate the traditional profitability metrics a bit. We look at Net Interest Income (NII) plus Non-interest Income as the top-line revenue. For the third quarter of 2025, First Mid Bancshares reported total revenue of approximately $89.3 million. The real story is what's left after expenses.

Gross, Operating, and Net Profit Margins

The core of a bank's profitability is its Net Interest Margin (NIM)-essentially its gross profit margin. First Mid Bancshares' NIM on a tax-equivalent basis expanded to 3.80% in Q3 2025, which is a key indicator of their ability to manage funding costs and earn higher yields on assets. This marks a strong trend, being the fifth consecutive quarter of net interest income growth.

Here's the quick math on the quarterly margins for Q3 2025, which gives us a clearer operating view:

• Gross Income (Total Revenue): $89.3 million
• Operating Profit (Pre-Provision, Pre-Tax): Approximately $32.15 million (Total Revenue of $89.3M minus Non-interest Expense of $57.15M)
• Operating Profit Margin: Roughly 36.0%
• Net Profit (Net Income): $22.5 million
• Net Profit Margin: Approximately 25.2%

The Net Profit Margin for the trailing twelve months (TTM) as of October 2025 is even better, climbing to 25.7%, up from 24.1% a year prior. That's a powerful sign the company is retaining a larger share of its revenue as profit, which is what you want to see.

Comparison and Operational Efficiency

When you compare First Mid Bancshares to the industry, the picture is mixed, which is typical for a well-run regional bank. Their profitability has been on a strong upward trend, with earnings growth of 14.7% over the past year, outpacing their five-year average of 13.6%.

However, operational efficiency-how well they control non-interest expenses-is where the opportunity lies. We use the efficiency ratio for this (Non-interest Expense / Net Operating Revenue). The lower the number, the better the cost management. The US banking industry reported an aggregate efficiency ratio of 56.2% in Q1 2025. First Mid Bancshares' adjusted efficiency ratio was 58.9% in Q1 2025 and improved slightly to 58.09% in Q2 2025. They are still a few points shy of the industry benchmark, but the trend is moving in the right direction.

The Return on Equity (ROE) is another key metric. First Mid Bancshares reported an ROE of 10.27% as of November 2025. This is just under the 11% return on equity generated by the broader banking industry in Q3 2024. The difference is small, but it shows they are slightly less efficient at turning shareholder equity into profit than the average peer.

Here is a snapshot of the key profitability ratios:

The operational efficiency improvement is crucial. Management is clearly aware of this, having completed a core system conversion and closing eight branches in Q3 2025, which should drive down that non-interest expense over time. You can dive deeper into the ownership structure and market sentiment by Exploring First Mid Bancshares, Inc. (FMBH) Investor Profile: Who's Buying and Why?

Next step: Look at the non-interest expense line item in the next quarterly report to see if the cost-saving actions have translated into a lower efficiency ratio. That's the most actionable insight right now.

Debt vs. Equity Structure

You're looking at First Mid Bancshares, Inc. (FMBH) capital structure, and the short answer is that they lean slightly more on debt than the average regional bank, but not in a way that signals immediate distress. The company is actively managing its leverage, using a mix of debt for growth and equity for strategic acquisitions, which is a smart balancing act in this interest rate environment.

As of the most recent quarter, First Mid Bancshares, Inc. carries approximately $564.84 million in total debt on its balance sheet. This debt-a blend of short-term borrowings and longer-term notes-is the engine that helps fund their lending activities. For a bank, debt is fundamentally part of the business model, but you defintely want to watch the ratio of that debt against their shareholder equity.

Here's the quick math on their financial leverage (the Debt-to-Equity ratio):

• Total Debt: Approximately $551.0 million
• Total Equity: Approximately $932.2 million
• Calculated Debt-to-Equity Ratio: 0.59

A Debt-to-Equity ratio of 0.59 means that for every dollar of shareholder equity, First Mid Bancshares, Inc. uses 59 cents of debt to finance its assets. That's higher than the US Regional Banks industry average of 0.5 as of November 2025. So, while the leverage is manageable, it shows a slightly more aggressive use of debt capital compared to peers.

The company has been proactive in managing its debt costs. In the first quarter of 2025, First Mid Bancshares, Inc. reduced its outstanding Federal Home Loan Bank (FHLB) borrowings and subordinated debt by a combined $55.5 million. That's a clear move to lower overall funding costs and de-risk the balance sheet. Plus, they have a key decision point coming up: the option to redeem their $96.0 million Fixed-to-Floating Rate Subordinated Notes, which were originally issued in 2020, on or after October 15, 2025. This potential refinancing event will be crucial for their future interest expense.

The balance between debt financing and equity funding is best illustrated by their growth strategy. First Mid Bancshares, Inc. uses debt to support its core lending business and manage liquidity, but they often rely on equity for larger, strategic moves. For instance, the agreement to acquire Two Rivers Financial Group, announced on October 30, 2025, involves consideration primarily consisting of shares of First Mid common stock, converting Two Rivers shareholders' equity. This non-cash, stock-based approach helps preserve cash and maintain a healthy regulatory capital position, which is critical for any bank. For a deeper dive into who is investing in FMBH's equity, you might want to check out Exploring First Mid Bancshares, Inc. (FMBH) Investor Profile: Who's Buying and Why?

The company's long-term debt is viewed as relatively stable, with Kroll Bond Rating Agency assigning a BBB rating to the 2030 Subordinated Notes. This rating reflects a decent credit quality, which helps keep their cost of debt reasonable.

Liquidity and Solvency

You're looking for a clear read on First Mid Bancshares, Inc. (FMBH)'s ability to meet its short-term obligations, and for a bank, that analysis is defintely different than for a manufacturer. The headline is that First Mid Bancshares maintains a strong, stable cash-generating profile, but its traditional liquidity ratios look low, which is normal for a financial institution.

When you look at the Current Ratio and Quick Ratio (the acid-test ratio), you'll see a number that would alarm you for a typical company. First Mid Bancshares' quick ratio, for instance, has been consistently low, hitting a 0.0x for the fiscal year ending December 2024. Here's the quick math: for a bank, customer deposits are technically 'current liabilities' since they can be withdrawn quickly. But the bank's primary assets-loans-aren't 'current assets' because they take years to pay off. So, the ratio will always be near zero or very low, but it doesn't signal distress.

The real measure of liquidity for a bank is its cash flow and capital position. The working capital trend is a great example. Working capital (current assets minus current liabilities) for a bank like First Mid Bancshares is often negative because those massive deposit liabilities outweigh the immediate cash and short-term investments. Instead of focusing on a negative working capital number, we look at the stability of the deposit base and the quality of the loan portfolio, which remains strong. For a deeper dive into their long-term strategy that supports this stability, check out the Mission Statement, Vision, & Core Values of First Mid Bancshares, Inc. (FMBH).

Moving to the Cash Flow Statement, the picture is one of consistent cash generation and active balance sheet management. The cash flow trends for the 2025 fiscal year show a healthy operating core, supported by strong financing activity.

• Operating Cash Flow: Net cash from continuing operating activities was stable at $33,040,000 in Q3 2025, reflecting consistent cash generation from core banking operations.
• Investing Cash Flow: While the exact figure isn't broken out, a bank's investing activities are dominated by changes in the loan portfolio and investment securities. Given that total loans grew to $5.8 billion by Q2 2025, you can infer a significant net cash outflow for investing, which is a good sign of lending growth.
• Financing Cash Flow: This has been robust, with net cash from financing activities at $100,192,000 in Q3 2025 and $78,469,000 in Q2 2025. This primarily reflects ongoing access to capital markets and stable deposit growth, which is crucial for funding their lending activities.

The key strength here is the consistent operating cash flow, plus the ability to raise capital and deposits. This means First Mid Bancshares has a strong, reliable source of cash to cover its obligations, even with a low traditional quick ratio.

Valuation Analysis

You're looking at First Mid Bancshares, Inc. (FMBH) and asking the core question: is it a bargain, or is the market right to keep it priced where it is? The quick takeaway is that First Mid Bancshares, Inc. appears reasonably valued to slightly undervalued based on traditional bank metrics as of late 2025, but its stock is trading near the lower end of its 52-week range, suggesting a potential opportunity if you believe in the analyst consensus.

The stock has traded in a wide range over the last year, from a 52-week low of $27.58 to a high of $43.86. With the stock price recently hovering around $35.99, it's sitting well below the high, which is a signal to check the fundamentals. The valuation ratios are what really tell the story for a regional bank like this one.

Here's the quick math on the key valuation multiples, using the latest available trailing twelve months (TTM) data for the 2025 fiscal year:

• Price-to-Earnings (P/E): The TTM P/E ratio is 9.82x. This is a low multiple, especially compared to the broader market, suggesting the stock is inexpensive relative to its earnings per share (EPS) of $3.65.
• Price-to-Book (P/B): The P/B ratio stands at 0.92x. Honestly, for a bank, trading below a P/B of 1.0x is a classic sign of undervaluation, meaning you are buying the company for less than the net value of its assets on the balance sheet.
• Price-to-Tangible-Book (P/TBV): A more precise measure for banks is the Price-to-Tangible-Book Value, which is 1.26x. This is still a healthy, conservative multiple for a bank with solid asset quality.

What this estimate hides is the Enterprise Value-to-EBITDA (EV/EBITDA) ratio. For a financial institution like First Mid Bancshares, Inc., this metric is generally not applicable (N/A). Banks' capital structures are fundamentally different from industrial companies, so P/E and P/B are defintely the right tools here. You can learn more about the institutional interest in the company by Exploring First Mid Bancshares, Inc. (FMBH) Investor Profile: Who's Buying and Why?

The dividend picture is also solid. First Mid Bancshares, Inc. offers a TTM dividend yield of 2.78%, based on an annualized dividend of approximately $1.00 per share [cite: 6 in previous step]. The payout ratio is a sustainable 27.2% [cite: 2 in previous step], which means the company is only using about a quarter of its earnings to pay shareholders, leaving plenty of room for reinvestment or dividend growth.

Analyst sentiment is cautiously optimistic. The consensus rating from analysts is a 'Hold', but with a 12-month average price target of $43.20. This target suggests an upside of over 19% from the current price, indicating that even the 'Hold' rating implies a belief that the stock should appreciate significantly from its current level.

Risk Factors

You're looking at First Mid Bancshares, Inc. (FMBH) and seeing solid Q3 2025 numbers-like the adjusted diluted earnings per share (EPS) of $0.97 and a net interest margin (NIM) of 3.80%-but a seasoned investor knows you must map the risks before committing capital. The core challenge for FMBH, like any regional bank, is managing the dual pressure of a shifting macroeconomic landscape and intense local competition.

The biggest external risks are the ones every bank faces: changes in interest rates, general economic conditions, and legislative or regulatory shifts. For FMBH, a sudden economic downturn could stress their loan portfolio, which totaled $5.82 billion as of Q3 2025. While their asset quality looks strong right now, with non-performing loans at just 0.38% of total loans, you still need to watch for migration from special mention to substandard loans, a trend they flagged in the third quarter. That's a subtle but defintely important early warning sign.

Internally, the primary risks revolve around operational efficiency and credit quality in a competitive market. Here's the quick math: managing a $6.29 billion deposit base while maintaining a competitive cost of funds is tough when rivals are fighting for every dollar. Their recent efficiency ratio was 58.75% in Q3 2025, which is a good number, but it requires constant focus to keep it there.

• Interest Rate Risk: Volatility in the Federal Reserve's monetary policy directly affects their NIM.
• Credit Quality Risk: A downturn could hurt commercial real estate and agriculture-related loans, which are key segments.
• Competition: Both larger national banks and smaller community banks are vying for FMBH's customers and deposits.
• Regulatory Changes: New rules from the U.S. Treasury or Federal Reserve Board could increase compliance costs.

The management team is not sitting still; they are actively working to mitigate these risks. Their strategy is centered on operational streamlining and diversification. They completed a core operating system conversion and closed 8 full-service branches in Q3 2025, aligning with the shift to digital banking and aiming to lower non-interest expenses. This branch optimization is a clear move to improve that efficiency ratio further.

Also, strategic acquisitions, like the pending deal for Two Rivers Financial Group, Inc., are a concrete action to diversify their geographic footprint and revenue streams, moving them into the state of Iowa. Plus, the CEO has consistently highlighted a disciplined credit culture and diversified revenue sources as their defense against economic disruptions. Their Allowance for Credit Losses (ACL) to non-performing loans ratio stood at a healthy 328.5% in Q3 2025, which shows they have a substantial cushion against potential defaults.

To be fair, the success of these acquisitions and the long-term cost savings from the system conversion are still to be fully realized. What this estimate hides is the integration risk-merging two banks is never seamless. You can learn more about their long-term vision in the Mission Statement, Vision, & Core Values of First Mid Bancshares, Inc. (FMBH).

Here is a snapshot of the key financial metrics that reflect their risk profile and mitigation efforts:

The next step is to monitor the Q4 2025 earnings release, particularly the commentary on loan growth and any changes in the special mention loan category. Finance: track the integration costs of the new acquisitions quarterly.

Growth Opportunities

You need to know where First Mid Bancshares, Inc. (FMBH) is going, not just where it's been, and the near-term outlook points to growth driven by calculated expansion and tech upgrades, even with regional banking headwinds. The key takeaway is that strategic acquisitions and a major digital overhaul are setting the stage for future earnings accretion, despite a mixed revenue forecast for the immediate future.

Here's the quick math on the 2025 outlook: consensus analyst estimates peg First Mid Bancshares, Inc.'s full-year 2025 Earnings Per Share (EPS) at around $3.97, a solid increase of approximately 14.49% year-over-year. Revenue is projected to hit roughly $259.46 million, growing by about 13.44%. That's a defintely healthy growth rate for a regional bank in this climate.

Strategic Expansion and Market Reach

The most concrete near-term growth driver is market expansion through acquisition. On October 30, 2025, First Mid Bancshares, Inc. announced a definitive agreement to acquire Two Rivers Financial Group, Inc.. This isn't just a simple asset grab; it's a strategic move into attractive Iowa markets, adding 14 branches and a significant book of business.

The Two Rivers deal brings in approximately $1.1 billion in total assets, $988 million in deposits, and a substantial $1.2 billion in trust and wealth management assets under management as of September 30, 2025. Plus, the transaction is expected to be approximately 12.3% accretive to EPS in 2027, which is a clear financial benefit for shareholders down the road. They also announced the pending acquisition of Ray Farm Management Services in Q3 2025, which bolsters their non-banking services. This disciplined acquisition history is a core competitive advantage.

• Expand footprint into Iowa with 14 new branches.
• Add $1.2 billion in wealth management assets.
• Anticipate 12.3% EPS accretion post-integration.

Technology and Competitive Advantages

First Mid Bancshares, Inc. is actively investing in technology to drive efficiency and product innovation. They completed a core operating system conversion in late October 2025, which is a massive undertaking that should streamline operations and reduce costs. Earlier in the year, they finished a retail online system conversion, giving customers a better product and a stronger platform to grow relationships across different business lines.

In July 2025, the bank selected Jack Henry to modernize its technology infrastructure, which is a big step toward operational efficiency and scalability. This investment in digital capabilities-including new Customer Relationship Management (CRM) software and a mortgage origination platform planned for 2025-positions the bank well against both traditional and non-traditional competitors. The bank's revenue diversification is also a strong point, with non-interest income, largely from its insurance agency and wealth management division, accounting for nearly 30% of total revenue.

You can see the bank's core focus on community and growth in their Mission Statement, Vision, & Core Values of First Mid Bancshares, Inc. (FMBH).

As a final point on stability, the bank maintains a conservative risk profile, with a 20-year average net charge-off rate of just 0.14%, which gives them a cushion to execute on these growth plans.

Here is a summary of the 2025 financial outlook based on analyst consensus and recent performance:

The next action for you is to monitor the Q4 2025 earnings release for any updates on the cost-saving projections from the core system conversion and the expected closing timeline for the Two Rivers acquisition, which is targeted for Q1 2026.