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First Mid Bancshares Inc (FMBH) Reports Q1 2024 Earnings: Slightly Surpasses Analyst Expectations

GuruFocus Research
·4-min read

  • Net Income: Reported at $20.5 million, slightly exceeding the estimated $20.37 million.

  • Earnings Per Share (EPS): Achieved $0.86 diluted EPS, surpassing the estimate of $0.85.

  • Revenue: Total interest income for the quarter was $87.7 million, significantly higher than the estimated revenue of $54.96 million.

  • Net Interest Income: Recorded at $55.5 million for the quarter, reflecting a robust year-over-year increase of 28.4% primarily due to the addition of Blackhawk.

  • Noninterest Income: Reached a record high of $24.5 million, driven by strong insurance revenues and wealth management services.

  • Asset Quality: Demonstrated strength with a non-performing loans to total loans ratio of 0.36% and an allowance for credit losses to total loans ratio of 1.24%.

  • Dividend: Declared a regular quarterly dividend of $0.23 per share, maintaining shareholder returns.

On April 24, 2024, First Mid Bancshares Inc (NASDAQ:FMBH) announced its financial results for the first quarter ended March 31, 2024, revealing a performance that slightly surpassed analyst expectations. The company reported a net income of $20.5 million and diluted earnings per share (EPS) of $0.86, both figures marginally higher than the estimated net income of $20.37 million and EPS of $0.85. For a detailed view of the earnings report, refer to the company's 8-K filing.

Company Overview

First Mid Bancshares Inc, headquartered in the United States, operates primarily through its wholly-owned subsidiary, First Mid Bank. The company is engaged in community banking, wealth management, and insurance services, deriving its key revenue from banking operations. It also offers data processing services to affiliates and insurance products and services through its subsidiary.

Financial Performance Highlights

The first quarter of 2024 saw First Mid Bancshares Inc achieving a net interest income of $55.47 million, a significant increase from the previous year's $43.19 million, primarily driven by the addition of Blackhawk. Despite a quarterly decrease due to lower loan balances and reduced accretion income, the year-over-year growth underscores the company's expanding operations and effective integration of acquisitions.

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Noninterest income reached a record high of $24.5 million, driven by robust insurance revenues and wealth management services. This diversification of revenue streams has been pivotal in stabilizing the company's financials against fluctuating interest rates and economic shifts.

Asset Quality and Loan Portfolio

First Mid Bancshares Inc continued to exhibit strong asset quality with a low non-performing loans ratio of 0.36% and a high allowance for credit losses to non-performing loans ratio of 338.6%. The total loans by the end of the quarter stood at $5.50 billion, slightly down from the previous quarter but well diversified across various sectors, minimizing risk exposure.

Capital Strength and Dividends

The company maintained robust capital levels, well above the regulatory requirements for being considered "well-capitalized." The tangible book value per common share increased to $22.49, reflecting earnings growth and a strong balance sheet. Additionally, the Board of Directors declared a regular quarterly dividend of $0.23 per share, underscoring the company's commitment to returning value to shareholders.

Operational Challenges and Outlook

Despite the positive outcomes, First Mid Bancshares faced challenges such as a decrease in net interest income compared to the previous quarter and pressure on funding costs. However, the company's strategic focus on relationship pricing and managing funding costs demonstrates proactive measures to sustain profitability.

Management's Perspective

"Coming off an eventful year for our industry, I am pleased with the way we started 2024," said Joe Dively, Chairman and Chief Executive Officer. "The benefits of adding Blackhawk are shining through with a stable core margin, significant liquidity, and continued asset quality strength. Our revenue diversification continues to be a differentiator for us as we achieved a new record high in noninterest income on the growth and seasonality in insurance revenues."

In conclusion, First Mid Bancshares Inc's first-quarter results reflect a solid start to the year, with financial metrics slightly above analyst expectations and a strategic focus on maintaining a diversified and stable financial profile. The company's ability to navigate industry challenges while capitalizing on growth opportunities positions it well for sustained success in the competitive banking sector.

Explore the complete 8-K earnings release (here) from First Mid Bancshares Inc for further details.

This article first appeared on GuruFocus.