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FIRST MID BANCSHARES, INC. (FMBH)·Q2 2025 Earnings Summary

Executive Summary

  • Record quarter: net income $23.4M and diluted EPS $0.98; adjusted EPS $0.99; net interest margin (tax equivalent) expanded to 3.72% and net interest income rose for a fifth consecutive quarter .
  • Q2 beat Wall Street: EPS $0.99 vs S&P Global consensus $0.92; revenue $84.9M vs consensus $61.7M; strength driven by higher earning asset yields while maintaining funding costs; accretion income added $0.5M QoQ to $3.4M (EPS and revenue consensus from S&P Global*) .
  • Credit metrics mixed: NPLs improved to 0.38% and ACL coverage to NPLs rose to 325%, but special mention and substandard loans increased sequentially .
  • Capital and shareholder returns: tangible book value per share rose 4.3% QoQ to $26.62; quarterly dividend raised to $0.25 per share, a $0.01 increase .
  • Near-term stock catalysts: margin expansion and dividend hike supportive; watch asset classification trends (special mention/substandard) and fee seasonality for sustainability of beats .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and NII momentum: NIM (tax equivalent) up 12 bps QoQ to 3.72%; net interest income up $4.5M (+7.5%) QoQ and +12.5% YoY, driven by higher yields on earning assets with flat funding costs .
  • Loan and deposit growth: loans +$68.1M (+1.2%) QoQ to $5.77B; deposits +$59.8M (+0.98%) QoQ to $6.19B; growth diversified across construction, ag operating lines, residential, multifamily, and C&I .
  • Shareholder-friendly actions and capital strength: tangible book value/share +4.3% QoQ (to $26.62); dividend raised to $0.25; strong regulatory capital ratios (CET1 12.92%, Tier 1 13.31%, Total 15.76%, leverage 10.73%) .
    Quote: “The second quarter provided a record high quarterly net income along with expansion in net interest income…we delivered growth in both loans and deposits.” — Joe Dively, CEO .

What Went Wrong

  • Fee seasonality and mix: noninterest income declined QoQ to $23.6M from $24.9M on seasonal headwinds in wealth management and insurance (offset by $1.0M debit card incentive) .
  • Rising criticized loan balances: special mention loans +$7.8M QoQ to $81.8M; substandard +$5.1M QoQ to $39.0M, although NPLs fell to $21.9M .
  • Expenses up YoY: noninterest expense $54.8M vs $51.4M in Q2’24 on compensation and incentives; adjusted efficiency ratio improved QoQ but remains in the high-50% range (58.09%) .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Diluted EPS ($)$0.80 $0.93 $0.98
Net Interest Income ($M)$58.95 $59.41 $63.86
Noninterest Income ($M)$26.36 $24.86 $23.59
Net Interest Margin (TE) (%)3.41% 3.60% 3.72%
Efficiency Ratio (TE, adj.) (%)59.51% 58.88% 58.09%
Return on Average Assets (%)1.01% 1.19% 1.20%

Q2 2025 vs S&P Global consensus estimates

MetricQ2 2025 ActualQ2 2025 Consensus*Surprise
EPS ($)0.99 0.92*Beat
Revenue ($M)84.89*61.72*Beat

Values retrieved from S&P Global*.

Segment breakdown (Noninterest income)

Metric ($M)Q4 2024Q1 2025Q2 2025
Wealth Management Revenues$6.28 $5.80 $5.39
Insurance Commissions$6.81 $9.93 $7.84
Service Charges$3.06 $2.90 $3.00
Mortgage Banking Revenues$1.10 $0.71 $1.07
ATM/Debit Card Revenue$4.20 $3.65 $4.64
Other$4.92 $2.06 $1.66
Net Securities Gains/(Losses)$0.00 ($0.18) $0.00
Total Noninterest Income$26.36 $24.86 $23.59

Key KPIs and balance metrics

KPIQ4 2024Q1 2025Q2 2025
Loans (End of Period, $M)$5,672.46 $5,698.86 $5,766.999
Deposits (End of Period, $M)$6,057.10 $6,130.38 $6,190.199
NPLs / Total Loans (%)0.53% 0.47% 0.38%
ACL / Total Loans (%)1.24% 1.23% 1.23%
Special Mention Loans ($M)$57.85 $74.02 $81.82
Substandard & Doubtful Loans ($M)$35.52 $33.88 $39.03
Tangible Book Value/Share ($)$24.46 $25.53 $26.62
Book Value/Share ($)$35.42 $36.32 $37.27

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend/Share ($)Q3 2025 payout$0.24 $0.25 Raised
Net Interest Margin methodology (TE)From Q1 2025 onwardPrior NIM method Method updated; adds ~5 bps vs Q4’24 baseline Methodology change

No explicit quantitative guidance provided for revenue, margins, OpEx, OI&E, tax rate, or segment-specific metrics in Q2 materials .

Earnings Call Themes & Trends

Note: A Q2 2025 earnings call transcript was not available via our sources; themes are synthesized from company press releases/8-Ks.

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Net interest marginNIM up 6 bps QoQ to 3.41% NIM up 19 bps QoQ to 3.60% after methodology change NIM up 12 bps QoQ to 3.72%; underlying +9 bps ex-accretion Improving
Technology investmentsMultiple strategic tech investments completed; cost impact in Q4 Retail online platform conversion completed; $1.0M nonrecurring in Q1 Continued investments; $0.2M nonrecurring in Q2 Ongoing execution
Funding costs/wholesale fundingManaged down wholesale funding; cost of funds fell 17 bps Reduced FHLB + sub debt by $55.5M given strong liquidity Funding costs maintained; avg cost of funds 1.75% Favorable
Credit qualityNPLs 0.53%; specific ag borrower drove Q4 increases NPLs fell; ACL/NPL 263%; special mention rose to $74.0M NPLs further down to 0.38%; ACL/NPL 325%; special mention and substandard rose Mixed: better NPL, higher criticized
Fee income (Insurance/Wealth/Ag)Fee mix strong; noninterest income +21% YoY; Ag sales record Insurance record quarter; Ag Services $2.6M Insurance $7.8M (+$1.3M YoY); wealth $5.4M; debit incentive $1.0M Stable; seasonal variability
Deposits/relationship growthDeposits -0.5% QoQ; mix shift Deposits +1.2% QoQ; time/noninterest bearing growth Deposits +1.0% QoQ; demand/MM/time drove increase Positive

Management Commentary

  • “The second quarter provided a record high quarterly net income along with expansion in net interest income. The quarter reflects our strategic approach to driving a higher return on assets…we delivered growth in both loans and deposits.” — Joe Dively, Chairman & CEO .
  • “We continue to focus on what we can control by maintaining our disciplined credit culture. We continue to make investments in our technology platforms that will position us well for future growth.” — Joe Dively .
  • Q1 context: “We significantly expanded our net interest margin through both an increase in earning asset yields and a decrease in the average cost of funds…successfully completed our retail online system conversion.” — Joe Dively .

Q&A Highlights

  • A Q2 2025 earnings call transcript was not available through our document and web sources; no Q&A themes to report at this time [seekingalpha page indicates no transcript; investor site provides release/presentation only; no transcript link] .

Estimates Context

  • EPS beat: Actual $0.99 vs S&P Global consensus $0.92; drivers include NIM expansion (+12 bps QoQ) and net interest income up 7.5% QoQ while funding costs held steady (EPS consensus from S&P Global*) .
  • Revenue beat: Actual $84.9M vs S&P Global consensus $61.7M; consistent with external coverage citing ~$87.5M revenue (difference reflects reporting definitions), supported by higher loan yields and stable cost of funds (consensus from S&P Global*) .
  • Estimate revisions context: With two consecutive quarters of margin expansion and loan/deposit growth, sell-side may raise NII and EPS estimates for 2H’25, but may temper credit cost assumptions given higher special mention/substandard balances .

Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Earnings quality improving: NIM expansion and NII growth are the core levers; adjusted efficiency ratio trending better at 58.09% as tech investments shift from expense to productivity .
  • Beat-driven momentum: Q2 EPS and revenue beats versus S&P Global consensus suggest near-term estimate and sentiment tailwinds; dividend increase adds support for total return .
  • Credit watchlist: While NPLs improved, rising special mention/substandard indicates pockets of stress; monitor migration and provisioning trajectory .
  • Balance sheet growth: Broad-based loan growth and deposit accretion underpin NII; continued discipline on wholesale funding should preserve spreads if rates drift .
  • Fee income resilience: Insurance revenues up YoY and wealth steady; expect seasonality but diversified fee streams provide ballast for topline .
  • Valuation drivers: Sustained ROA ~1.2% with TBV/share compounding and capital ratios well above “well capitalized” levels support medium-term multiple expansion case if asset quality remains contained .
  • Actionable: Lean long on margin/earnings momentum and dividend hike; hedge exposure to potential upticks in credit costs; reassess after next quarter’s criticized loan trends and NIM trajectory.