third quarter of 2026
Filed Oct 29, 2026Net income of $33.3 million, or $1.25 diluted EPS; adjusted quarterly net income of $33.6 million, or $1.26 diluted EPS.
Third-quarter earnings reached a record high, net interest income increased $13.0 million year over year, asset quality improved in criticized categories, and deposits grew. Sequential net interest income and fee income declined, net interest margin contracted, and commercial real estate payoffs reduced loans.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net incomeGAAP | $33.3M | – | – |
| Diluted earnings per common shareGAAP | $1.25 | – | – |
| Basic earnings per common shareGAAP | $1.26 | – | – |
| Adjusted earningsnon-GAAP | $33.62M | – | – |
| Adjusted diluted earnings per sharenon-GAAP | $1.26 | – | – |
| Total interest incomeGAAP | $116.7M | increased by $1.8 million | – |
| Total interest expenseGAAP | $37.34M | increased by $2.1 million | – |
| Net interest incomeGAAP | $79.4M | decrease of $0.3 million | increased $13.0 million, or 19.6% |
| Net interest income, tax equivalentnon-GAAP | $80.22M | – | – |
| Net interest margin, tax equivalentnon-GAAP | 3.76% | decrease of 3 basis points | – |
| Provision (release of provision) for credit lossesGAAP | −$299K | – | – |
| Total non-interest incomeGAAP | $27.2M | – | – |
| Total non-interest expenseGAAP | $65M | – | – |
| Adjusted noninterest expensenon-GAAP | $60.30M | – | – |
| Adjusted total revenuenon-GAAP | $107.4M | – | – |
| Efficiency ratio, tax equivalentnon-GAAP | 56.13% | – | – |
| Return on average assetsGAAP | 1.45% | – | – |
| Adjusted return on average assetsnon-GAAP | 1.46% | – | – |
| Return on average common equityGAAP | 12.07% | – | – |
| Adjusted return on average common equitynon-GAAP | 12.19% | – | – |
| Total loansother | $6.85B | quarterly decrease of $85.8 million | – |
| Total depositsother | $7.62B | quarterly increase of $44.2 million | – |
| Cash and cash equivalentsother | $511.3M | – | – |
| Investment securitiesother | $1.34B | – | – |
| Allowance for credit lossesother | $86.5M | – | – |
| Total assetsother | $9.39B | – | – |
| Other borrowingsother | $359.2M | – | – |
| Junior subordinated debenturesother | $34.13M | – | – |
| Subordinated debtother | $22.77M | – | – |
| Total stockholders' equityother | $1.10B | – | – |
| Non-performing loansother | $43.1M | modest increase of $1.8 million | – |
| Non-performing assetsother | $48.10M | – | – |
| Net charge-offs (recoveries)other | $200K | – | – |
| Allowance for credit losses to total loans outstandingother | 1.26% | 1 basis point increase | – |
| Non-performing loans to total loansother | 0.63% | – | – |
| Allowance for credit losses to non-performing loansother | 200.83% | – | – |
| Non-performing assets to total assetsother | 0.51% | remained flat | – |
| Special Mention loansother | $101.5M | decreased by $37.6 million | – |
| Substandard and Doubtful loansother | $131.6M | decreased by $8.3 million | – |
| Total capital to risk-weighted assetsother | 15.79% | – | – |
| Tier 1 capital to risk-weighted assetsother | 14.39% | – | – |
| Common equity tier 1 capital to risk-weighted assetsother | 13.91% | – | – |
| Leverage ratioother | 11.29% | – | – |
| Tangible book value per sharenon-GAAP | $31.09 | decreased $0.06, or 0.2% | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Wealth management revenuesSeasonality. | $7.4M | decreased $0.8 million | – |
| Insurance commissionsSeasonality of contingent revenues. | $7.5M | $1.3 million lower than the second quarter | increase of $0.4 million compared to the third quarter of 2025 |
| Ag Services revenueReported at $1.9 million in the prior quarter and $1.8 million in the third quarter of 2025. | $2M | – | – |
| Service chargesNo driver disclosed. | $4.16M | – | – |
| Mortgage banking revenuesNo driver disclosed. | $946K | – | – |
| ATM/debit card revenueNo driver disclosed. | $4.9M | – | – |
| Commercial real estate loansThe quarterly loan decrease was primarily in commercial real estate loans, driven by the partial collateral sale of a multi-location business and subsequent loan payoff. | $2.82B | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- The Board of Directors declared a regular quarterly dividend of $0.26 per share.
- The dividend is payable on December 1, 2026 to shareholders of record as of November 16, 2026.
- During the quarter, the Company paid off $10.0 million of subordinated debt with cash on hand.
What drove it
- Net interest income increased year over year primarily from organic earning asset growth and the addition of Two Rivers Bank & Trust.
- Sequential net interest income declined as average loan balances fell and the cost of funding increased from rate increases and continued deposit pricing competition.
- Money market accounts increased $198.8 million from the prior quarter, driven by the deposit product refresh in early 2026 and continued marketing.
- Criticized-asset declines were driven by upgrades, paydowns, and external refinances.
- Third-quarter non-interest expense declined primarily because Two Rivers acquisition-related expenses were $0.4 million versus $7.1 million in the prior quarter.
- The Company announced a pending acquisition of Evergreen Bancshares, Inc. and agreed to acquire Winship Farm Management, which is expected to add over 8,600 acres under management over the next 3 years.
Concerns
- Total loans decreased $85.8 million during the quarter due to elevated payoffs and disciplined pricing decisions.
- Net interest margin, on a tax equivalent basis, decreased 3 basis points from the prior quarter as the increase in average cost of funds outpaced the earning-asset yield improvement.
- Non-performing loans increased $1.8 million to $43.1 million and the ratio of non-performing loans to total loans increased from 0.60% to 0.63%.
- The investment securities sale generated a $14.8 million loss that will be reflected in fourth-quarter results.
- Tangible book value per share decreased $0.06, or 0.2%, as the unrealized loss position in the investment portfolio increased $32.3 million.
What to watch
- Reinvestment of the $175.8 million cash proceeds from the October 26, 2026 securities sale, for which the Company expects an earn back period of less than 2 years.
- Deposit pricing competition and the average cost of interest-bearing deposits, which was 2.16% for the quarter.
- Loan growth after commercial real estate payoffs and customer collateral sales.
- Closing, approvals, integration costs, and anticipated benefits of the pending Evergreen acquisition.
- Fourth-quarter recognition of the $14.8 million loss on investment securities sold.
Balance sheet and cash flow
- Cash and cash equivalents were $511,334 (in thousands) as of September 30, 2026.
- Total assets were $9,390,320 (in thousands) as of September 30, 2026.
- Total deposits were $7.62 billion, a quarterly increase of $44.2 million.
- On October 26, 2026, the Company sold investment securities with a weighted average yield of 1.51% for a loss of $14.8 million, providing $175.8 million in cash. The transaction will be reflected in fourth-quarter financial results.
- An unearned discount of $37.1 million remained at quarter end.
Analysis
First Mid reported a record high quarter of earnings, with GAAP net income of $33.3 million and diluted EPS of $1.25. Adjusted earnings were $33.6 million and adjusted diluted EPS was $1.26. Net interest income was $79.4 million, up $13.0 million, or 19.6%, from the third quarter of 2025. The year-over-year increase reflected organic earning-asset growth and the addition of Two Rivers Bank & Trust.
Sequentially, net interest income decreased $0.3 million as lower average loan balances and higher funding costs outweighed a 6-basis-point improvement in earning-asset yield. Tax-equivalent net interest margin was 3.76%, down 3 basis points from the prior quarter. The average cost of interest-bearing deposits was 2.16%, up 18 basis points from the end of the previous quarter, with management citing rate movements and deposit pricing competition.
Deposit growth was positive, with total deposits increasing $44.2 million to $7.62 billion. Money market accounts rose $198.8 million following the early-2026 product refresh and continued marketing. Loans ended at $6.85 billion, down $85.8 million, primarily because of commercial real estate payoffs associated with a partial collateral sale by a multi-location business. Asset quality improved in criticized categories, as special mention loans declined $37.6 million and substandard loans declined $8.3 million, although non-performing loans increased $1.8 million to $43.1 million.
Fee income was mixed sequentially. Total non-interest income was $27.2 million versus $28.8 million in the prior quarter, with wealth management revenue and insurance commissions affected by seasonality. Total non-interest expense fell to $65.0 million from $70.6 million because acquisition-related expenses declined to $0.4 million from $7.1 million. The adjusted efficiency ratio was 56.13%, compared with 54.39% in the prior quarter and 58.75% a year earlier.
Capital levels remained above well-capitalized levels, and the Company declared a $0.26 quarterly dividend. First Mid also paid off $10.0 million of subordinated debt. After quarter end, the Company sold securities for a $14.8 million loss and received $175.8 million in cash, which it expects to reinvest at higher rates with an earn back period of less than 2 years. The release contained no quantitative earnings guidance. Strategic activity includes the pending Evergreen Bancshares acquisition and the agreed acquisition of Winship Farm Management.
Management, verbatim
We delivered another strong period of financial results highlighted by a record high quarter of earnings. Asset quality was strong with lower classifieds and negligible net charge-offs during the quarter. Deposit growth was solid, while loan growth was pressured due to higher payoff activity from customer collateral sales. We continue to put a strategic focus on revenue diversification and fee business growth through the acquisition of Winship Farm Management.
Matthew Smith, Chief Executive Officer
I am pleased to announce our pending acquisition of Evergreen Bancshares and its subsidiary American Bank of Freedom. We are excited to welcome their employees and customers to the First Mid family. This acquisition will deepen and extend our presence in Missouri, Illinois, and Indiana while better positioning us to move past the $10 billion asset threshold.
Matthew Smith, Chief Executive Officer
Not in the filing
stated, not guessed- Forward quantitative guidance was not provided.
- Prior-period guidance was not provided.
- GAAP total revenue was not reported.
- Gross margin was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Share repurchases were not reported.
- A GAAP tax rate was not reported.
- Quarterly average loan balances were discussed but not reported as a standalone comparison metric.
- No separate reportable operating segments were disclosed.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.