First Mid Bancshares, Inc. (FMBH): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed view of where First Mid Bancshares, Inc. (FMBH) is placing its bets and generating its cash flow, so let's map their business lines onto the four quadrants of the Boston Consulting Group Matrix using the latest 2025 data. Honestly, the picture shows high-growth Stars like the Insurance Group and a 3.80% Net Interest Margin driving momentum, while the core franchise keeps things stable with $6.29 billion in deposits acting as solid Cash Cows. Still, we need to watch the Dogs, like the 8 branch closures, and see if the big Question Mark investments-like the Digital Platform conversion-pay off big. Dive in to see exactly where FMBH needs to invest, hold, or divest resources right now.

Background of First Mid Bancshares, Inc. (FMBH)

You're looking at First Mid Bancshares, Inc. (FMBH), which is the parent company for a group of financial service providers, including First Mid Bank & Trust, First Mid Insurance Group, Inc., and First Mid Wealth Management Co. This organization has been around for a long time, with its oldest subsidiary, First Mid Bank & Trust, tracing its roots back to chartering in 1865. As of late 2025, First Mid Bancshares operates as a community-focused organization with $7.7 billion in assets, based in Mattoon, Illinois.

First Mid Bancshares structures its operations around three main lines of business. First, there's the Community Banking segment, which handles commercial, retail, and agricultural banking services through its deposit and loan products. As of the third quarter of 2025, the total loan portfolio stood at $5.82 billion, and total deposits reached $6.29 billion. The bank has been performing well, reporting a record high quarterly net income of $22.5 million for the quarter ending September 30, 2025, with its net interest margin expanding to 3.80% on a tax equivalent basis.

Next up is the Insurance Brokerage business, where First Mid Insurance Group, Inc. plays a significant role. Honestly, this unit is quite established, being recognized as the largest community bank-owned insurance company in Illinois and ranking in the top 10 across the United States for its full suite of insurance products. For the second quarter of 2025, this segment brought in $7.8 million in insurance revenues.

Finally, the Wealth Management line offers estate planning, investment, and farm management services for both individuals and businesses. By the third quarter of 2025, First Mid Bancshares was managing approximately $6.4 billion in wealth management assets. The revenues from this specific business line were $5.1 million for the third quarter of 2025, though this was slightly down from the prior quarter, partially due to lower commodity prices.

In terms of market presence, First Mid Bancshares serves a network of locations across Illinois, Missouri, Texas, and Wisconsin, plus a loan production office near Indianapolis. Based on deposit market share data from mid-2025, the company held the 11th spot in its operating market with a 2.6% share across the counties it serves. The management team is also actively pursuing growth, having announced an agreement on October 30, 2025, to acquire Two Rivers Financial Group, Inc., with the bank merger expected to close in the second quarter of 2026.

First Mid Bancshares, Inc. (FMBH) - BCG Matrix: Stars

You're looking at the business units within First Mid Bancshares, Inc. (FMBH) that are leading their respective segments, demanding significant investment to maintain their high market share in growing areas. These Stars are the engine for future Cash Cows, but they currently consume cash to fuel that growth.

The Insurance Group, a key component here, demonstrated strong momentum, posting insurance commissions of $7.1 million for the third quarter of 2025. While this represented a sequential decrease of $0.8 million compared to the second quarter due to seasonality, it still showed year-over-year strength, increasing by $1.1 million compared to the third quarter of 2024 from both organic growth and prior strategic acquisitions.

Core asset yield management is clearly working, positioning this segment for future stability. The Net Interest Margin (NIM), calculated on a tax equivalent basis, expanded to 3.80% for the third quarter of 2025. This represented a quarterly increase of 8 basis points, driven by higher earning asset yields while the company maintained its funding costs. This expansion helped drive the sixth consecutive quarter of growth in net interest income.

The loan portfolio shows healthy, diversified growth, which is exactly what you want to see from a Star segment needing support. Total loans ended the third quarter at $5.82 billion, marking a quarterly increase of $57.0 million, or 1.0%. This growth wasn't concentrated; it was well diversified across several key areas.

To further secure market leadership and growth potential, First Mid Bancshares, Inc. announced the pending acquisition of Two Rivers Financial Group, Inc. in Iowa, a strategic move to expand its footprint into attractive new markets. This transaction, announced October 29, 2025, is structured as a 100% stock deal. Based on First Mid Bancshares, Inc.'s closing price of $36.80 on October 28, 2025, the aggregate consideration is approximately $94.1 million.

This acquisition is a clear investment in future market share, designed to transition this growth into a Cash Cow position once the Iowa market matures. Here are the key forward-looking figures related to this strategic move:

• Two Rivers Financial Group, Inc. had approximately $1.1 billion in total assets as of September 30, 2025.
• The transaction is estimated to be approximately 12.3% accretive to First Mid Bancshares, Inc.'s earnings per share in 2027.
• Estimated tangible book value per share dilution is expected to be earned back in 2.1 years.
• First Mid Bancshares, Inc. expects to achieve cost savings of approximately 27% of Two Rivers Financial Group, Inc.'s noninterest expense.

Shane Zimmerman, CEO and President of Two Rivers Bank & Trust, formally agreed to join First Mid Bancshares, Inc. as an Executive Vice President and Divisional President. Finance: draft 13-week cash view by Friday.

First Mid Bancshares, Inc. (FMBH) - BCG Matrix: Cash Cows

Cash Cows for First Mid Bancshares, Inc. are the business units that dominate mature segments, generating excess cash flow to fund other areas of the company. These units benefit from high market share and require minimal new investment to maintain their strong position.

Core Deposit Base represents a prime example of a Cash Cow, providing the stable, low-cost funding essential for lending operations. As of the third quarter of 2025, this base totaled $6.29 billion, showing a quarterly increase of 1.6%, or $99.3 million. This funding stability is a key characteristic of a mature, high-share operation.

The Community Banking Franchise operates in a mature, regional market where First Mid Bancshares, Inc. has established deep roots. While specific market share percentages across all 36 counties are not detailed here, the organization is a community-focused entity with total assets around $7.8 billion. Strategic moves, such as the completion of a branch optimization project closing 8 full-service branches during Q3 2025, are designed to improve efficiency and increase cash flow from this established footprint, aligning perfectly with Cash Cow management strategy.

Wealth Management functions as a reliable fee-income generator, another classic Cash Cow role. As of Q3 2025, this division was managing a substantial $6.4 billion in assets. This segment contributes diversified, non-interest income, which accounted for approximately 28% of revenue over the last 12 months leading up to Q3 2025.

The Consistent quarterly dividend reflects the reliable profitability extracted from these mature operations. The Board declared a regular quarterly dividend of $0.25 per share in Q3 2025, payable on December 1, 2025. This results in an annual dividend of $1.00 per share, representing a trailing yield of approximately 2.7% based on recent trading prices. The company has increased its dividends for 11 successive years, underscoring the sustainability of the cash flow supporting this shareholder return.

Here are the key financial metrics supporting the Cash Cow classification for First Mid Bancshares, Inc. as of the third quarter of 2025:

The management focus for these units is on maintaining productivity and extracting maximum cash flow, as evidenced by the recent efficiency-driving actions:

• Completed core operating system conversion for process efficiencies.
• Closed 8 full-service branches to align with digital preferences.
• Maintained a modest dividend payout ratio of approximately 26% of profit.
• Achieved six consecutive quarters of growth in net interest income.

The strength of these Cash Cows is what funds the pursuit of growth elsewhere in the portfolio. You see this clearly when looking at the earnings coverage; the quarterly net income was $22.5 million, easily covering the declared dividend obligation.

First Mid Bancshares, Inc. (FMBH) - BCG Matrix: Dogs

The Dogs quadrant in the Boston Consulting Group Matrix represents business units or products operating in low-growth markets with a low relative market share. For First Mid Bancshares, Inc. (FMBH), these areas typically consume management time and capital without offering significant returns, making them candidates for minimization or divestiture.

Non-performing Loans (NPLs)

Non-performing Loans (NPLs) represent legacy credit quality issues that, even with improvement, still require dedicated management time and capital allocation. At the end of the first quarter of 2025, the ratio of non-performing loans to total loans stood at 0.47%, with NPLs declining by $3.2 million to $26.6 million at that quarter end. By the third quarter of 2025, this ratio improved further, settling at 0.38% of total loans, which was in line with the prior quarter. While the trend is positive, the ongoing need to manage these assets, alongside special mention loans which totaled $61.2 million at September 30, 2025, suggests a drag on resources relative to high-growth areas. Non-performing assets to total assets decreased to 0.30% by Q3 2025. It's a unit that breaks even, but ties up capital.

Legacy Branch Network

The physical branch network, a traditional banking asset, increasingly fits the Dog profile due to the migration toward digital channels. First Mid Bancshares, Inc. took decisive action to address this inefficiency in the third quarter of 2025. The company completed its branch optimization project, which involved the closure of 8 full-service branches across its footprint during that quarter. This move directly aligns with the strategy to avoid expensive turn-around plans for low-return assets and increase efficiency, acknowledging the shift in customer preferences to a more digital first mindset. The efficiency ratio for Q3 2025, as adjusted, was 58.75%, an improvement from 61.33% in the same period last year, partly driven by such optimization efforts.

Debit Card Fee Income

Revenue streams that are stagnant or declining, even from a small base, can be categorized here if they lack growth potential. Debit card fee income specifically showed weakness early in 2025. For the first quarter of 2025, this income saw a decline of $0.6 million, which management attributed primarily to less usage stemming from a pullback in overall consumer spending. While fee income overall remains diversified, this specific component demonstrated low growth characteristics. For context, Debit Card Revenue was listed as a component of total fee income, which for the last twelve months ending September 30, 2025, accounted for approximately 26% of total revenue.

Farm Real Estate and Consumer Loans

Within the loan portfolio, certain segments showed modest contraction during the third quarter of 2025, suggesting lower growth or market share in those specific areas compared to areas like Construction and Land Development. Specifically, Farm real estate, multi-family residential properties, and consumer loans saw modest declines in the quarter ended September 30, 2025. The total loan portfolio was $5.82 billion at that date. The Agriculture loan portfolio, which includes Farm Real Estate, totaled $679 million, representing 12% of outstanding loans as of September 30, 2025. The components of this Ag portfolio as of that date were:

The modest decline in Farm Real Estate loans, despite the historically low net charge-offs in that segment over the last 25 years, places it under scrutiny as a low-growth area relative to the bank's overall growth drivers. You need to look hard at where capital is being deployed.

• Non-performing Loans (NPLs) to Total Loans ratio at Q3 2025: 0.38%.
• NPLs at Q1 2025 end: $26.6 million.
• Full-service branches closed in Q3 2025: 8.
• Debit card fee income decline in Q1 2025: $0.6 million.
• Loan segments with modest declines in Q3 2025: Farm Real Estate, Consumer Loans.

First Mid Bancshares, Inc. (FMBH) - BCG Matrix: Question Marks

You're looking at the areas of First Mid Bancshares, Inc. (FMBH) that are operating in growing markets but currently hold a smaller slice of that market, demanding significant cash investment for future potential.

These units are consuming resources now, hoping to transition into Stars. The key is monitoring the investment returns against the growth trajectory. Here is the data supporting the classification of these specific areas as Question Marks as of the latest 2025 reporting periods.

The strategic moves in Ag Services and the ongoing digital platform overhaul represent the primary cash demands in this quadrant.

• New Ag Services expansion, including the pending acquisition of Ray Farm Management Services, Inc.
• Digital Banking Platform, following the successful Q1 2025 retail online system conversion.
• Technology Initiatives, specifically the core operating system conversion completed in Q3 2025.
• Special Mention Loans, which show an uncertain credit risk profile requiring close monitoring.

The investment in the agricultural sector is concrete, aiming to capture more market share in a sector where First Mid Bancshares, Inc. is already active. The pending acquisition of Ray Farm Management Services, Inc., announced in October 2025, is expected to close on December 30, 2025, and will add approximately 9,000 acres under management to First Mid Ag Services.

The financial context for these growth areas is set against a backdrop of strong overall performance, which provides the necessary cash flow to fund these investments. For instance, First Mid Bancshares, Inc. reported record high quarterly net income of \$23.4 million in Q2 2025, and the Net Interest Margin tax equivalent expanded to 3.80% in Q3 2025.

Here is a look at the specific financial metrics tied to these Question Mark areas:

The technology spend is significant, as it is foundational. The successful Q1 2025 retail online system conversion involved \$1.0 million in nonrecurring expenses. Furthermore, the completion of the core operating system conversion in Q3 2025 represents a major upfront cost for future efficiency.

The credit quality metrics show an area demanding immediate attention, which aligns with the risk profile of a Question Mark that could degrade into a Dog if not addressed. The Special Mention Loans balance grew to \$81.8 million in Q2 2025, an increase of \$7.8 million over the first quarter.

You need to watch the investment allocation here closely. Consider the following key figures:

• Total Loans (as of Q2 2025): \$5.77 billion.
• Total Deposits (as of Q2 2025): \$6.19 billion.
• Noninterest Expense (Q1 2025): \$54.5 million.

The strategy here is clear: heavy investment in the Ag Services niche via acquisition and the full rollout/adoption of the new digital platform, while simultaneously managing the growing pool of Special Mention Loans. Finance: draft 13-week cash view by Friday.