• First Mid Bancshares Inc (NASDAQ:FMBH) reported a net income of $15.1 million for Q3 2023, with an adjusted net income of $17.1 million.

• The company completed the acquisition of Blackhawk Bancorp, Inc. on August 15th, adding approximately $1.2 billion in deposits and $730.2 million in loans.

• Net interest margin improved to 3.06% for the third quarter.

• Noninterest income represented 31% of the total net revenues in the quarter and 32% year-to-date.

• Warning! GuruFocus has detected 3 Warning Signs with FMBH.

First Mid Bancshares Inc (NASDAQ:FMBH) announced its financial results for the third quarter ended September 30, 2023, on October 26, 2023. The company reported a net income of $15.1 million, or $0.68 diluted EPS, and an adjusted net income of $17.1 million, or $0.77 diluted EPS.

Company Performance and Acquisition

First Mid Bancshares Inc (NASDAQ:FMBH) successfully closed the acquisition of Blackhawk Bancorp, Inc. on August 15th, which added approximately $1.2 billion in deposits and $730.2 million in loans. The company also completed a balance sheet restructuring by selling a portion of Blackhawk bonds, which increased its liquidity position and lowered the loan to deposit ratio to 87%.

Financial Highlights

Net interest income for the third quarter of 2023 increased by $8.1 million, or 19.1% compared to the second quarter of 2023. Interest income and interest expense increased in the quarter by $14.3 million and $6.3 million, respectively. The increase in interest income was primarily driven by the addition of Blackhawk and the repricing of loans with higher interest rates.

Noninterest income for the third quarter of 2023 was $23.1 million compared to $19.5 million in the second quarter of 2023. The increase compared to the prior quarter was primarily due to the addition of Blackhawk and a $3.4 million gain on securities sales tied to the balance sheet restructuring after closing the acquisition.

Asset Quality and Capital Levels

The companys strong credit culture continues to be reflected in its asset quality metrics for September 30, 2023. The allowance for credit losses (ACL) increased by $9.6 million to $68.2 million with an ending ACL to total loans ratio of 1.23%. The companys capital levels remained strong and above the well capitalized levels. The total capital to risk-weighted assets was 12.60%, Tier 1 capital to risk-weighted assets was 10.19%, and the leverage ratio was 9.74%.

Looking Forward

First Mid Bancshares Inc (NASDAQ:FMBH) is confident that the strategic combination with Blackhawk will enhance value for its stockholders by driving improved profitability trends and expanding its platform for growth opportunities. The company is also progressing as expected with the integration and operational planning of the acquisition.