Executive Summary

Q3 2025 delivered solid growth: GAAP diluted EPS $0.94 and adjusted diluted EPS $0.97, with net interest margin (TE) expanding to 3.80% and sixth consecutive quarter of NII growth .
Adjusted EPS of $0.97 was essentially in line/slightly above S&P Global consensus $0.967*, while GAAP EPS $0.94 reflected non‑recurring items (technology, branch optimization, securities loss) .
Total loans rose to $5.82B (+1.0% q/q) and deposits to $6.29B (+1.6% q/q), with strong asset quality (NPLs/loans 0.38%, ACL/loans 1.25%) despite some migration to substandard from special mention .
Strategic catalysts: announced 100% stock merger with Two Rivers ($1.1B assets), expected ~12.3% EPS accretion in 2027 and ~2.1-year TBVPS earnback, plus completion of core system conversion and closure of 8 branches to drive efficiency .
Board declared a $0.25 dividend (maintained from Q2), and tangible book value per share increased 6% q/q to $28.21 as AOCI improved by $20.7M .

What Went Well and What Went Wrong

What Went Well

Continued margin expansion and NII growth: NIM (TE) rose to 3.80% (+8 bps q/q) with average earning asset yield at 5.48% while cost of funds held at 1.75% .
Balanced loan and deposit growth: Loans +$57.0M q/q and deposits +$99.3M q/q; non-interest-bearing demand deposits +9.7% q/q on seasonal inflows and business development .
Strategic execution: completed core system conversion and branch optimization (8 closures) to reduce costs and improve processes; management emphasized positioning for future growth .
- “The core system conversion will not only provide cost savings, but will also provide process efficiencies that will set us up well for future growth” — Matthew Smith, President .
- “We completed extensive due diligence and solidified our view that our cultures are closely aligned” — Joseph Dively, Chairman & CEO, on Two Rivers .

What Went Wrong

Noninterest income tempered by a $1.9M securities sale loss as part of portfolio repositioning; wealth management revenue declined y/y on lower commodity prices .
Noninterest expense increased to $57.1M (+$2.4M q/q; +$3.2M y/y), including one-time costs from branch closures and technology enhancements; adjusted efficiency ratio ticked up to 58.75% from 58.09% q/q .
Credit classification migration: special mention loans decreased $20.6M but substandard increased $36.3M due to downgrades of three relationships across industries/geographies (though overall NPA/TA improved to 0.30%) .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Interest Income ($USD Millions)	57.54	59.41	63.86	66.36
Non-Interest Income ($USD Millions)	23.02	24.86	23.59	22.91
Adjusted Total Revenue (non-GAAP) ($USD Millions)	81.93	85.21	88.23	90.58
Diluted EPS (GAAP) ($USD)	0.81	0.93	0.98	0.94
Adjusted Diluted EPS ($USD)	0.83	0.96	0.99	0.97
Net Interest Margin (TE) (%)	3.35	3.60	3.72	3.80
Efficiency Ratio (TE) (%)	61.33	58.88	58.09	58.75
Loans ($USD Billions)	$5.61	$5.70	$5.77	$5.82
Deposits ($USD Billions)	$6.09	$6.13	$6.19	$6.29

Segment and Non-Interest Income Detail

Non-Interest Income Component ($USD Millions)	Q3 2024	Q2 2025	Q3 2025
Wealth Management Revenues	5.82	5.39	5.15
Insurance Commissions	6.00	7.84	7.09
Service Charges	3.12	2.99	3.24
Mortgage Banking Revenues	1.11	1.07	1.26
ATM/Debit Card Revenue	4.27	4.64	4.18
Net Securities Gains/Losses	(0.28)	0.00	(1.93)
Other	2.98	1.66	3.93
Total Non-Interest Income	23.02	23.59	22.91

Key Performance and Asset Quality KPIs

KPI	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Return on Average Assets (%)	1.03	1.19	1.20	1.17
Adjusted ROAA (%)	1.05	1.23	1.23	1.21
Cost of Funds (%)	2.00	1.74	1.75	1.75
ACL / Loans (%)	1.22	1.23	1.23	1.25
NPLs / Loans (%)	0.32	0.47	0.38	0.38
NPA / Total Assets (%)	0.27	0.38	0.31	0.30
ACL / NPLs (%)	377.01	263.36	325.00	328.51
Net Charge-Offs ($USD Millions)	0.80	1.78	1.46	1.59

Estimates vs Actuals (S&P Global)

Metric	Consensus Estimate	Actual	Surprise
Primary EPS (Q3 2025)	$0.967*	$0.97*	+0.3%*
Revenue (Q3 2025)	$65.46M*	$85.92M*	+31.3%*

Values retrieved from S&P Global. Note: Company-reported GAAP diluted EPS was $0.94 and adjusted diluted EPS $0.97 in Q3 2025 . “Revenue” definitions for banks vary; company’s adjusted total revenue was $90.58M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Dividend per Share	Q4 2025 payable Dec 1, 2025	$0.25 (Q2 raised from $0.24)	$0.25 (declared)	Maintained
Formal Revenue/EPS/NIM/OpEx/Tax Guidance	FY/Q4 2025	Not provided	Not provided	N/A
Strategic Actions	Q4 2025–FY 2026	Core conversion/branch optimization in flight	Core system conversion completed; 8 branches closed	Completed execution
M&A	Announced Oct 30, 2025	N/A	Definitive agreement to acquire Two Rivers; expected ~12.3% EPS accretion 2027, ~2.1-year TBVPS earnback	New

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not available in the document set. Themes synthesized from 8‑K, exhibits, and investor presentation.

Topic	Previous Mentions (Q1 2025, Q2 2025)	Current Period (Q3 2025)	Trend
Net Interest Margin and NII	NIM (TE) +19 bps q/q to 3.60; NII growth	NIM (TE) +8 bps q/q to 3.80; sixth consecutive quarter of NII growth	Improving
Deposits and Funding Costs	Deposits +$73M in Q1; cost of funds down; Q2 deposits +$60M; CoF 1.75%	Deposits +$99M; CoF steady at 1.75%; NIBDDA +9.7% q/q	Stable/Positive mix shift
Asset Quality	Low NPA/TA; ACL/loans ~1.23%; some classification changes	NPA/TA 0.30%; ACL/loans 1.25%; substandard up due to three downgrades	Mixed (metrics strong; classifications cautious)
Technology/Digital Investments	Retail online conversion completed in Q1	Core conversion completed; operational efficiencies expected	Executed
M&A/Footprint Diversification	No new transactions; ongoing execution	Announced Two Rivers acquisition; entry into Iowa; strong synergy case	Expanding
Fee Income Drivers	Insurance strength; seasonal wealth mgmt variance	Insurance strong y/y; wealth mgmt pressured by commodity prices; securities loss repositioning	Mixed

Management Commentary

“We executed on our strategic plan to drive greater efficiency by completing the conversion of our core operating system… The core system conversion will not only provide cost savings, but will also provide process efficiencies that will set us up well for future growth” — Matthew Smith, President .
“I am excited to announce the pending acquisition of Two Rivers… we completed extensive due diligence and solidified our view that our cultures are closely aligned” — Joseph Dively, Chairman & CEO .
On deposits mix: “Non-interest-bearing demand deposits grew $128.8 million or 9.7% from the second quarter due to seasonal cash flow fluctuations from a few large depositors as well as continued business development efforts” .
On portfolio repositioning: “The sale of low yielding bonds produced a loss of $1.9 million… proceeds of $35.7 million redeployed at higher rates” .

Q&A Highlights

The Q3 earnings call transcript was not available. Based on the investor presentation and press release, management emphasized NIM expansion drivers (earning asset yield, disciplined funding costs) , balance sheet strength and capital ratios (CET1 13.13%, Total Capital 15.99%) , and strategic rationale for Two Rivers (EPS accretion, earnback, core deposit engine, complementary wealth/ag services) .
Noninterest expense trajectory and one-time items (technology and branch optimization) were highlighted with adjusted efficiency ratio at 58.75% .

Estimates Context

EPS: S&P Global consensus for Q3 2025 was $0.967*, compared to S&P’s actual $0.97*, and company-reported adjusted diluted EPS of $0.97 and GAAP diluted EPS of $0.94 .
Revenue: S&P Global Q3 2025 consensus was $65.46M*, with S&P actual $85.92M*; company’s adjusted total revenue was $90.58M, and GAAP total revenue (NII + noninterest income) was $89.27M .
Takeaway: Results were in line-to-slightly above on adjusted EPS; “Revenue” comparability depends on S&P’s bank revenue definition vs company reporting. Values retrieved from S&P Global.

Key Takeaways for Investors

Operating momentum continues: NIM (TE) at 3.80% and NII growth underpin earnings resilience even as fee lines oscillate with seasonality and commodity-linked wealth mgmt .
Balance sheet quality intact: low NPA/TA (0.30%) and stout ACL/NPL coverage (328.5%) provide protection as classifications migrate in a handful of relationships .
Efficiency programs are tangible: core conversion and branch optimization completed; expect ongoing cost benefits and process efficiencies through 2026 .
Strategic M&A likely a near-term stock driver: Two Rivers adds ~$1.1B assets, high core deposits, and trust/AUM scale in Iowa with modeled EPS accretion and disciplined earnback .
Portfolio repositioning trade-off: $1.9M securities loss redeployed at higher yields—near-term drag, medium-term NII/NIM support .
Dividend maintained at $0.25 with TBVPS up 6% q/q; capital ratios remain well above “well capitalized” thresholds .
Estimate revisions: modest upward bias to adjusted EPS/NII trajectories given margin expansion and deposit mix; watch fee income pacing and classification migration for risk-adjusted outlook .

FIRST MID BANCSHARES, INC. (FMBH)·Q3 2025 Earnings Summary