First Mid Loans Fall to $6.85 Billion as It Announces Major Expansion Deal
Key Facts
First Mid Bancshares reported results for the third quarter ended September 30, 2026, on October 29, posting total loans of $6.85 billion. Loans fell $85.8 million during the quarter, while deposits rose $44.2 million to $7.62 billion. The chief executive said loan growth was affected by increased repayments after clients sold collateral tied to their loans. These moves reflect a divergence between a decline in lending balances and an increase in deposits during the period. The company reported the results in a filing submitted to the U.S. Securities and Exchange Commission.
Net interest income was $79.4 million, down $0.3 million from the second quarter. The company attributed the decline to lower average loan balances and higher funding costs amid competition over deposit pricing. Net interest margin, on a tax-equivalent basis, was 3.76%, down 3 basis points from the previous period. The yield on interest-earning assets improved 6 basis points over the same comparison. But the rise in the average cost of funds more than offset the improvement in yield, according to a company statement carried by Nasdaq.
On asset quality, classified assets fell $45.9 million in the third quarter. The company said the improvement reflected upgrades to the ratings of some loans, along with repayments and refinancing by outside lenders. On expansion, First Mid announced an agreement to acquire Evergreen Bancshares and its subsidiary, American Bank of Freedom. It said the deal would expand its presence in Missouri, Illinois and Indiana, and position it to surpass the $10 billion asset threshold after completion. The statement quoted here did not specify a completion date.
The company also announced the sale of securities on October 26 at a weighted average yield of 1.51%. The sale generated a loss of $14.8 million and provided $175.8 million in cash. The company said it expects to reinvest the proceeds at higher yields, with a payback period of less than two years. The sale is expected to affect fourth-quarter results. The board also approved a quarterly cash dividend of $0.26 per share, payable to shareholders of record on November 16 and to be paid on December 1, 2026.
The results came as the U.S. economy posted real gross domestic product growth at an annual rate of 3.4% in the third quarter, compared with 2.2% in the second quarter. The Bureau of Economic Analysis said investment, consumer spending and government spending contributed to growth, while a decline in exports partly offset it. In trading, the company’s stock closed at $50.52 on October 28. The Bureau of Economic Analysis set November 25 for its second estimate of third-quarter GDP and corporate profits. That estimate will update the economic reading for the same period.