First Mid(US:FMBH)2025-02-28 18:45Financial Performance - Net income for 2024 was $78.9 million, with diluted earnings per share of $3.30, compared to $68.9 million and $3.15 in 2023, and $73.0 million and $3.60 in 2022[155]. - Total assets at December 31, 2024, were $7.52 billion, a decrease from $7.59 billion in 2023, and an increase from $6.74 billion in 2022[155]. - Net loan balances increased to $5.60 billion in 2024 from $5.51 billion in 2023, and $4.77 billion in 2022, primarily due to organic growth[155]. - Total deposit balances decreased to $6.06 billion in 2024 from $6.12 billion in 2023, but increased from $5.26 billion in 2022[156]. - Net interest income rose to $228.7 million in 2024, up from $193.5 million in 2023, and $184.3 million in 2022, largely due to the full-year impact of the Blackhawk Bank acquisition[158]. - Non-interest income increased to $96.3 million in 2024 from $86.8 million in 2023, and $74.7 million in 2022, attributed to the Blackhawk Bank acquisition and increased insurance commissions[159]. - Non-interest expenses increased to $215.0 million in 2024 from $185.7 million in 2023, and $162.9 million in 2022, mainly due to increased employees and locations from the Blackhawk Bank acquisition[160]. - The Company's Tier 1 capital ratio was 12.82% at December 31, 2024, up from 12.02% in 2023, reflecting strong capital position[162]. Loan and Asset Management - Total commercial real estate loans increased from $1.2 billion at December 31, 2020, to $2.4 billion at December 31, 2024, representing a 100% growth[31]. - The loan portfolio composition includes 42.6% in commercial real estate, 68.4% in loans secured by real estate, and 23.6% in commercial and industrial loans[203]. - Approximately $2.7 billion of loans have maturities over one year and are fixed rate, while $1.9 billion are variable rate loans[208]. - Loans sold into the secondary market amounted to $125.3 million in 2024, compared to $62.2 million in 2023[203]. - The balance of real estate loans held for sale was $6.6 million as of December 31, 2024, compared to $5.0 million in 2023[203]. - Average loans increased by $478.6 million or 9.4% in 2024 compared to 2023[187]. - Nonperforming loans were $29.8 million (0.53% of total loans) at December 31, 2024, which compares favorably with peer financial institutions[38]. Acquisitions and Growth - The Company acquired Blackhawk Bank on August 15, 2023, which was merged into First Mid Bank on December 1, 2023[12]. - The Company also acquired Mid Rivers Insurance Group, Inc. and Purdum, Gray, Ingledue, Beck, Inc. during the quarter ended September 30, 2024[12]. - The Blackhawk Merger closed on August 15, 2023, with First Mid acquiring Blackhawk Bancorp for a total consideration of 3,290,222 shares valued at $93.51 million and $1,928 in cash[45][46]. - The company reported a significant increase in loan balances of $754.4 million or 15.6% from December 31, 2022, primarily due to gross loans acquired from Blackhawk Bank[203]. Risk Management - The Company faces liquidity risk, which could impact its ability to meet financial obligations, including demands for loans and deposit withdrawals[113]. - The Company is exposed to operational risks, including potential cyber-attacks that could disrupt business and lead to financial losses[115]. - The Company is subject to Environmental, Social and Governance (ESG) risks that could negatively affect its reputation and market price of securities[125]. - Climate change presents multi-faceted risks, including operational, credit, and reputational risks, which could materially impact the Company's business and financial condition[127]. - The Company has established a cybersecurity risk management program that includes annual tabletop exercises and mandatory employee training[135]. - The Company's Board of Directors oversees risk management, including cybersecurity risks, through its Risk Oversight and Audit Committees[138]. - The Company has experienced cybersecurity incidents in the past, but they have not materially affected its business strategy or financial condition[137]. Community Engagement and Employee Welfare - In 2024, the Company's employees volunteered 22,321 hours to organizations in their communities, compared to 19,066 hours in 2023, marking an increase of 11.8%[28]. - The Company increased the starting rate of pay by an additional $0.50 per hour for the second consecutive year, positively impacting many entry-level employees[26]. - Over 41% of the Company's workforce contributed to its annual United Way campaign, raising $78,000, which was matched 100% by the Company, resulting in a total contribution of over $167,000[28]. - The number of full-time equivalent employees increased to 1,198 at December 31, 2024, from 1,187 at December 31, 2023[198]. Regulatory Compliance and Capital Ratios - As of December 31, 2024, the Company had a total risk-based capital ratio of 15.37%, a Tier 1 risk-based ratio of 12.82%, a common equity Tier 1 capital ratio of 12.42%, and a leverage ratio of 10.33%, all exceeding regulatory minimums[70]. - First Mid Bank's total risk-based capital ratio was 14.51%, exceeding the minimum regulatory requirement of 10.5%[80]. - The bank's Tier 1 risk-based ratio was 13.40%, well above the required minimum of 8.5%[80]. - The bank's leverage ratio stood at 10.82%, significantly higher than the minimum requirement of 4%[80]. - The bank's common equity Tier 1 ratio was 13.40%, surpassing the minimum requirement of 7%[80]. - The Company is subject to government regulation, which may require significant investment to maintain compliance and could impact operations[130]. Interest Income and Margin - The Company's net interest margin on a tax-effected basis increased to 3.34% as of December 31, 2024, up from 3.05% in December 31, 2023[39]. - Net interest margin (tax effected) improved to 3.34% in 2024 from 3.05% in 2023, and 3.13% in 2022, driven by repricing of earning assets[157]. - The net interest margin increased primarily due to higher interest-bearing liability costs being offset by the repricing of earning assets[186]. - The company reported a net interest spread of 2.83% for 2024, up from 2.62% in 2023[186]. - Total interest income increased by $57.2 million in 2024, with a significant contribution from loans[184].