10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                               to                               

Commission file number 0-13368

FIRST MID BANCSHARES, INC.

(Exact name of Registrant as specified in its charter)

Delaware	37-1103704
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

1421 Charleston Avenue
Mattoon, Illinois	61938
(Address of principal executive offices)	(Zip code)

(217) 234-7454

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	FMBH	NASDAQ Global Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of May 11, 2021 16,736,442 common shares, $4.00 par value, were outstanding.

PART I

ITEM 1. FINANCIAL STATEMENTS

First Mid Bancshares, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)	March 31, 2021			December 31, 2020
Assets
Cash and due from banks:
Non-interest bearing	$	78,481		$	75,152
Interest bearing		329,745			340,821
Federal funds sold		1,321			1,308
Cash and cash equivalents		409,547			417,281
Certificates of deposit		2,695			2,695
Investment securities:
Available-for-sale, at fair value		1,087,948			879,240
Held-to-maturity, at amortized cost (estimated fair value of $7,125 and $5,119 at    March 31, 2021 and December 31, 2020, respectively)		7,045			5,016
Equity securities, at fair value		300			218
Loans held for sale		4,693			1,924
Loans		3,938,406			3,136,495
Less allowance for credit losses		(55,418	)		(41,910	)
Net loans		3,882,988			3,094,585
Interest receivable		20,218			19,287
Other real estate owned		13,339			2,489
Premises and equipment, net		86,654			58,206
Goodwill		113,948			104,992
Intangible assets, net		24,658			23,128
Bank owned life insurance		124,925			68,955
Right of use lease assets		17,424			17,209
Other assets		40,888			31,123
Total assets	$	5,837,270		$	4,726,348
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	1,185,181		$	936,926
Interest bearing		3,552,512			2,755,858
Total deposits		4,737,693			3,692,784
Securities sold under agreements to repurchase		212,503			206,937
Interest payable		3,214			2,345
FHLB borrowings		116,861			93,969
Junior subordinated debentures, net		19,069			19,027
Subordinated debt, net		94,289			94,253
Lease liabilities		17,578			17,351
Other liabilities		34,179			31,454
Total liabilities		5,235,386			4,158,120
Stockholders’ Equity:
Common stock, $4 par value; authorized 30,000,000 shares; issued 18,662,947 and    17,361,898 shares in 2021 and 2020, respectively		76,652			71,449
Additional paid-in capital		338,897			297,806
Retained earnings		198,408			197,726
Deferred compensation		1,597			2,980
Accumulated other comprehensive income		5,087			17,095
Less treasury stock at cost, 620,691 shares in 2021 and 2020		(18,757	)		(18,828	)
Total stockholders’ equity		601,884			568,228
Total liabilities and stockholders’ equity	$	5,837,270		$	4,726,348

See accompanying notes to unaudited condensed consolidated financial statements.

2

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Income (unaudited)

(In thousands, except per share data)

	Three months ended March 31,
(In thousands, except per share data)	2021		2020
Interest income:
Interest and fees on loans	$	35,886	$	30,027
Interest on investment securities		4,842		4,589
Interest on certificates of deposit investments		14		31
Interest on federal funds sold		—		2
Interest on deposits with other financial institutions		74		92
Total interest income		40,816		34,741
Interest expense:
Interest on deposits		2,484		3,861
Interest on securities sold under agreements to repurchase		70		194
Interest on FHLB borrowings		374		580
Interest on other borrowings		—		15
Interest on junior subordinated debentures		140		218
Interest on subordinated debentures		984		—
Total interest expense		4,052		4,868
Net interest income		36,764		29,873
Provision for loan losses		12,136		5,481
Net interest income after provision for loan losses		24,628		24,392
Other income:
Wealth management revenues		4,926		3,626
Insurance commissions		5,857		6,621
Service charges		1,364		1,778
Securities gains, net		4		531
Mortgage banking revenue, net		1,409		308
ATM / debit card revenue		2,699		1,987
Bank owned life insurance		637		431
Other		853		1,228
Total other income		17,749		16,510
Other expense:
Salaries and employee benefits		23,487		16,500
Net occupancy and equipment expense		4,970		4,242
Net other real estate owned expense		78		(46	)
FDIC insurance		452		93
Amortization of intangible assets		1,220		1,295
Stationery and supplies		316		268
Legal and professional		1,402		1,398
ATM / debit card		838		605
Marketing and donations		502		481
Other		4,335		2,895
Total other expense		37,600		27,731
Income before income taxes		4,777		13,171
Income taxes		668		3,172
Net income	$	4,109	$	9,999
Per share data:
Basic net income per common share	$	0.24	$	0.60
Diluted net income per common share		0.24		0.60
Cash dividends declared per common share		0.205		—

See accompanying notes to unaudited condensed consolidated financial statements.

3

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Comprehensive Income (unaudited)

	Three months ended March 31,
(in thousands)	2021			2020
Net income	$	4,109		$	9,999
Other Comprehensive Income (Loss)
Unrealized losses on available-for-sale securities, net of taxes of $4,903 and   $1,139 for three months ended March 31, 2021 and 2020, respectively		(12,005	)		(2,789	)
Amortized holding losses on held-to-maturity securities transferred from available-for- sale, net of taxes of $0 and ($5) for three months ended March 31, 2021 and 2020, respectively		—			15
Less: reclassification adjustment for realized gains included in net income, net of taxes of $1 and $154 for three months ended March 31, 2021 and 2020, respectively		(3	)		(377	)
Other comprehensive income, net of taxes		(12,008	)		(3,151	)
Comprehensive income (loss)	$	(7,899	)	$	6,848

See accompanying notes to unaudited condensed consolidated financial statements.

4

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the three months ended March 31, 2021 and 2020

(in thousands)	Common Stock		Additional Paid-In- Capital			Retained Earnings			Deferred Compensation			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
December 31, 2020	$	71,449	$	297,806		$	197,726		$	2,980		$	17,095		$	(18,828	)	$	568,228
Net income		—		—			4,109			—			—			—			4,109
Other comprehensive income, net tax		—		—			—			—			(12,008	)		—			(12,008	)
Cash dividends on common stock (.205/share)		—		—			(3,427	)		—			—			—			(3,427	)
Issuance of 4,896 common shares pursuant to the Dividend Reinvestment Plan		17		154			—			—			—			—			171
Issuance of 18,397 common shares pursuant to Deferred Compensation Plan		3		15			—			—			—			—			18
Issuance of 27,750 restricted shares pursuant to the 2017 Stock Incentive Plan		111		832			—			—			—			—			943
Issuance of 2,375 common shares pursuant to the 2017 Stock Incentive Plan		10		75															85
Issuance of 1,262,246 common shares pursuant to acquisition of LINCO Bancshares, Inc., net proceeds		5,049		39,142															44,191
Issuance of 3,142 common shares pursuant to the Employee Stock Purchase Plan		13		62			—			—			—			—			75
Deferred Compensation		—		—			—			(71	)		—			71			—
Tax benefit related to deferred compensation distributions		—		179			—			—			—			—			179
Grant of restricted units pursuant to 2017 Stock Incentive Plan		—		1,216			—			—			—			—			1,216
Release of restricted units pursuant to 2017 Stock Incentive Plan		—		(584	)		—			—			—			—			(584	)
Vested restricted shares/units compensation expense		—		—			—			(1,312	)		—			—			(1,312	)
March 31, 2021	$	76,652	$	338,897		$	198,408		$	1,597		$	5,087		$	(18,757	)	$	601,884
December 31, 2019	$	71,152	$	295,925		$	166,667		$	2,760		$	8,360		$	(18,255	)	$	526,609
Cumulative change in accounting principal for adoption of ASU 2016-13		—		—			(717	)		—			—			—			(717	)
December 31, 2019 (as adjusted for change in accounting principal)		71,152		295,925			165,950			2,760			8,360			(18,255	)		525,892
Net income		—		—			9,999			—			—			—			9,999
Other comprehensive income, net tax		—		—			—			—			(3,151	)		—			(3,151	)
Issuance of 25,200 restricted shares pursuant to the 2017 Stock Incentive Plan		101		767			—			—			—			—			868
Issuance of 3,804 common shares pursuant to the Employee Stock Purchase Plan		15		71			—			—			—			—			86
Deferred Compensation		—		—			—			(5	)		—			5			—
Tax benefit related to deferred compensation distributions		—		22			—			—			—			—			22
Grant of restricted units pursuant to 2017 Stock Incentive Plan		—		584			—			—			—			—			584
Release of restricted units pursuant to 2017 Stock Incentive Plan				(516	)														(516	)
Vested restricted shares/units compensation expense		—		—			—			(733	)		—			—			(733	)
March 31, 2020	$	71,268	$	296,853		$	175,949		$	2,022		$	5,209		$	(18,250	)	$	533,051

See accompanying notes to unaudited condensed consolidated financial statements.

5

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

	Three months ended March 31,
(In thousands)	2021			2020
Cash flows from operating activities:
Net income	$	4,109		$	9,999
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		12,136			5,481
Depreciation, amortization and accretion, net		2,692			2,721
Change in cash surrender value of bank owned life insurance		(637	)		(431	)
Stock-based compensation expense		262			204
Operating lease payments		(711	)		(677	)
Gains on investment securities, net		(4	)		(531	)
Gain on sales of repossessed assets, net		(35	)		(162	)
Gain on sale of premises and equipment		—			(26	)
Gains on sale of loans held for sale, net		(1,229	)		(353	)
Decrease in accrued interest receivable		2,034			155
(Decrease) increase in accrued interest payable		262			(164	)
Origination of loans held for sale		(42,379	)		(20,039	)
Proceeds from sale of loans held for sale		40,839			20,961
Increase in other investment		(84	)		—
(Increase) decrease in other assets		454			(937	)
Decrease in other liabilities		3,844			413
Net cash provided by operating activities		21,553			16,614
Cash flows from investing activities:
Proceeds from maturities of certificates of deposit investments		—			1,225
Purchases of certificates of deposit investments		—			(980	)
Proceeds from maturities of securities available-for-sale		68,541			108,666
Proceeds from maturities of securities held-to-maturity		—			45,000
Purchases of securities available-for-sale		(177,116	)		(44,830	)
Net (increase) decrease in loans		26,319			(50,059	)
Purchases of premises and equipment		(1,195	)		(786	)
Proceeds from sales of other real property owned		116			1,211
Investment in banked owned life insurance		(25,000	)		—
Net cash provided by acquisition		27,061			—
Net cash (used in) provided by investing activities		(81,274	)		59,447
Cash flows from financing activities:
Net increase (decrease) in deposits		54,499			(8,739	)
Decrease in federal funds purchased		—			(5,000	)
Increase in repurchase agreements		5,566			23,540
Proceeds from FHLB advances		—			15,000
Repayment of FHLB advances		(5,000	)		(9,000	)
Proceeds from long-term debt		—			5,000
Proceeds from issuance of common stock		179			85
Dividends paid on common stock		(3,257	)		—
Net cash provided by financing activities		51,987			20,886
Increase (decrease) in cash and cash equivalents		(7,734	)		96,947
Cash and cash equivalents at beginning of period		417,281			85,080
Cash and cash equivalents at end of period	$	409,547		$	182,027

See accompanying notes to unaudited condensed consolidated financial statements.

6

First Mid Bancshares, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

	Three months ended March 31,
(In thousands)	2021		2020
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	3,183	$	5,100
Income taxes		—		—
Supplemental disclosures of noncash investing and financing activities
Loans transferred to other real estate		45		184
Dividends reinvested in common stock		171		—
Net tax benefit related to option and deferred compensation plans		179		22
Supplemental dislosure of purchase of capital stock of LINCO Bancshares, Inc.
Fair value of assets acquired	$	1,173,443		-
Consideration paid:
Cash paid		103,500		-
Common stock issued		44,191		-
Total consideration paid		147,691
Fair value of liabilities assumed	$	1,025,752		-

7

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1 -- Basis of Accounting and Consolidation

The unaudited condensed consolidated financial statements include the accounts of First Mid Bancshares, Inc. (“Company”) formerly known as First Mid-Illinois Bancshares, Inc., and its wholly owned subsidiaries: First Mid Bank & Trust, N.A. (“First Mid Bank”), Providence Bank (“Providence Bank”), First Mid Wealth Management Company, Mid-Illinois Data Services, Inc. (“MIDS”), First Mid Insurance Group, Inc. (“First Mid Insurance”) and First Mid Captive, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. The financial information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods ended March 31, 2021 and 2020, and all such adjustments are of a normal recurring nature. Certain amounts in the prior year’s consolidated financial statements may have been reclassified to conform to the March 31, 2021 presentation and there was no impact on net income or stockholders’ equity. The results of the interim period ended March 31, 2021 are not necessarily indicative of the results expected for the year ending December 31, 2021. The Company operates as a one-segment entity for financial reporting purposes. The 2020 year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and related footnote disclosures although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2020 Annual Report on Form 10-K.

COVID-19

The COVID-19 outbreak is an unprecedented event that provides significant economic uncertainty for a broad spectrum of industries. The Company is focused on supporting its customers, communities and employees during this unique operating environment. Throughout this document, the Company describes the impact COVID-19 is having, actions taken as a result of COVID-19, and certain risks to the Company that COVID-19 creates or exacerbates, as well as management's outlook on the current COVID-19 situation.

Subordinated Debt Offering

On October 6, 2020, the Company issued and sold $96.0 million in aggregate principal amount of its 3.95% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”).  

The Notes were issued pursuant to the Indenture, dated as of October 6, 2020 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of October 6, 2020 (the “Supplemental Indenture”), between the Company and the Trustee. The Base Indenture, as amended and supplemented by the Supplemental Indenture, governs the terms of the Notes and provides that the Notes are unsecured, subordinated debt obligations of the Company and will mature on October 15, 2030. From and including the date of issuance to, but excluding October 15, 2025, the Notes will bear interest at an initial rate of 3.95% per annum. From and including October 15, 2025 to, but excluding the maturity date or earlier redemption, the Notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 383 basis points, or such other rate as determined pursuant to the Supplemental Indenture, provided that in no event shall the applicable floating interest rate be less than zero per annum.

The Company may, beginning with the interest payment date of October 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the Notes at any time, including prior to October 15, 2025, at the Company’s option, in whole but not in part, if: (i) a change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to but excluding the redemption date.

8

Website

The Company maintains a website at www.firstmid.com. All periodic and current reports of the Company and amendments to these reports filed with the Securities and Exchange Commission (“SEC”) can be accessed, free of charge, through this website as soon as reasonably practicable after these materials are filed with the SEC.

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

Loan Purchase

On April 21, 2020, First Mid Bank completed an acquisition of loans in the St. Louis metro market totaling $183 million. There were no loans purchased with deteriorated credit.

Stock Plans

At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the First Mid-Illinois Bancshares, Inc. 2017 Stock Incentive Plan (“SI Plan”). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term. The SI Plan is intended to provide a means whereby directors, employees, consultants and advisors of the Company and its subsidiaries may sustain a sense of proprietorship and personal involvement in the continued development and financial success of the Company and its subsidiaries, thereby advancing the interests of the Company and its stockholders. Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of common stock of the Company on the terms and conditions established in the SI Plan.

Following the stockholders’ approval at the 2021 annual meeting of the Company, a maximum of 399,983 shares of common stock may be issued under the SI Plan. There have been no stock options awarded under any Company plan since 2008. The Company has awarded 27,750 and 25,200 shares of restricted stock during 2021 and 2020, respectively, and 16,950 and 16,200 restricted stock units during 2021 and 2020, respectively.

Employee Stock Purchase Plan

At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP is intended to promote the interests of the Company by providing eligible employees with the opportunity to purchase shares of common stock of the Company at a 5% discount through payroll deductions. The ESPP is also intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code.

A maximum of 600,000 shares of common stock may be issued under the ESPP. As of March 31, 2021 and 2020, 3,142 shares and 3,804 shares, respectively, were issued pursuant to the ESPP.

Captive Insurance Company

First Mid Captive, Inc. (the “Captive"), a wholly owned subsidiary of the Company which was formed and began operations in December 2019, is a Nevada-based captive insurance company. The Captive insures against certain risks unique to operations of the Company and its subsidiaries for which insurance may not be currently available or economically feasible in today's insurance marketplace. The Captive pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. The Captive is subject to regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance. It has elected to be taxed under Section 831(b) of the Internal Revenue Code. Pursuant to Section 831(b), if gross premiums do not exceed $2,300,000, then the Captive is taxable solely on its investment income. The Captive is included in the Company's consolidated financial statements and its federal income return.

9

Bank Owned Life Insurance

First Mid Bank has purchased life insurance policies on certain senior management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts that are probable at settlement.

Revenue Recognition

Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), establishes a revenue recognition model for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Most of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans and investment securities, and revenue related to mortgage servicing activities, which are subject to other accounting standards. A description of the revenue-generating activities that are within the scope of ASC 606, and included in other income in the Company’s condensed consolidated statements of income are as follows:

Trust revenues. The Company generates fee income from providing fiduciary services through its subsidiary, First Mid Wealth Management Company. Fees are billed in arrears based upon the preceding period account balance. Revenue from farm management services is recorded when the service is complete, for example when crops are sold.

Brokerage commissions. Revenue is recorded at the beginning of each quarter through billing to customers based on the account asset size on the last day of the previous quarter. If a withdrawal of funds takes place, a prorated refund may occur; this is reflected within the same quarter as the original billing occurred. All performance obligations are met within the same quarter that the revenue is recorded.

Insurance commissions. The Company’s insurance agency subsidiary, First Mid Insurance, receives commissions on premiums of new and renewed business policies. First Mid Insurance records commission revenue on direct bill policies as the cash is received. For agency bill policies, First Mid Insurance retains its commission portion of the customer premium payment and remits the balance to the carrier. In both cases, the entire performance obligation is held by the carriers.

Service charges on deposits. The Company generates revenue from fees charged for deposit account maintenance, overdrafts, wire transfers, and check fees. The revenue related to deposit fees is recognized at the time the performance obligation is satisfied.

ATM/debit card revenue. The Company generates revenue through service charges on the use of its ATM machines and interchange income from the use of Company issued credit and debit cards. The revenue is recognized at the time the service is used and the performance obligation is satisfied.

Other income. Treasury management fees and lock box fees are received and recorded after the service performance obligation is completed. Merchant bank card fees are received from various vendors; however, the performance obligation is with the vendors. The Company records gains on the sale of loans and the sale of OREO properties after the transactions are complete and transfer of ownership has occurred.

As each of the Company’s facilities is in markets with similar economies, no disaggregation of revenue is necessary.

10

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income included in stockholders’ equity as of March 31, 2021 and December 31, 2020 are as follows (in thousands):

	Unrealized Gain (Loss) on Securities
March 31, 2021
Net unrealized gains on securities available-for-sale	$	7,165
Tax expense		(2,078	)
Balance at March 31, 2021	$	5,087
December 31, 2020
Net unrealized gains on securities available-for-sale	$	24,077
Tax expense		(6,982	)
Balance at December 31, 2020	$	17,095

Amounts reclassified from accumulated other comprehensive income and the affected line items in the statements of income during the three months ended March 31, 2021 and 2020, were as follows (in thousands):

	Amounts Reclassified from Other Comprehensive Income
	Three months ended March 31,
	2021			2020			Affected Line Item in the Statements of Income
Realized gains on available-for-sale securities	$	4		$	531		Securities gains, net
Tax effect		(1	)		(154	)	Income taxes
Total reclassifications out of accumulated other    comprehensive income	$	3		$	377		Net reclassified amount

See “Note 3 – Investment Securities” for more detailed information regarding unrealized losses on available-for-sale securities.

Adoption of New Accounting Guidance

Accounting Standards Update 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). In August 2018, FASB issued ASU 2018-13. This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. As ASU 2018-13 only revises disclosure requirements, it did not have a material impact on the Company’s consolidated financial statements.

Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments (“ASU 2016-13”). In June 2016, FASB issued ASU 2016-13. The provisions of ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss ("CECL") model to estimate its lifetime "expected credit loss" and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and available-for sale debt securities. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.

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Management formed an internal, cross functional committee in 2017 to evaluate implementation steps and assess the impact ASU 2016-13 would have on the Company’s consolidated financial statements. The committee assigned roles and responsibilities, key tasks to complete, and established a general time-line for implementation. The Company also engaged an outside consultant to assist with the methodology review and data validation, as well as other key aspects of implementing the standard. The committee met periodically to discuss the latest developments and ensure progress was being made. In addition, the committee kept current on evolving interpretations and industry practices related to ASU 2016-13. The committee evaluated and validated data resources and different loss methodologies. Key implementation activities for 2019 included finalization of models, establishing processes and controls, development of supporting analytics and documentation, policies and disclosure, and implementing parallel processing.

The Company adopted ASU 2016-13 using the modified retrospective method for financial assets measured at amortized cost-effective January 1, 2020. Results for the periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts are reported in accordance with the previously applicable accounting standards. The Company recorded a reduction to retained earnings of approximately $717,000 upon adoption of ASU 2016-13. The transition adjustment included an increase to the allowance for credit losses on loans of $1.7 million and an increase to the allowance for credit losses on off-balance sheet credit exposure of $69,000. There was no allowance for credit losses recorded for held-to- maturity debt securities. The transition adjustment included corresponding increases in deferred tax assets.

The Company adopted ASU 2016-13 using the prospective transition approach for financial assets considered purchased credit deteriorated ("PCD") that were previously classified as purchase credit impaired ("PCI") and accounted for under ASC 310-30 effective January 1, 2020. In accordance with the standard, the Company did not reassess whether the PCI assets met the criteria of PCD assets as of the adoption date. The amortized cost of the PCD assets were adjusted to reflect the addition of $833,000 to the allowance for credit losses. The remaining noncredit discount (based on the adjusted amortized cost) will be accreted into interest income at the effective interest rate over the remaining life of the assets.

The following table illustrates the impact of ASU 2016-13 adoption (in thousands):

	January 1, 2020
	As reported		Pre-ASU		Impact of ASU
	under ASU		2016-13		2016-13
	2016-13		Adoption		Adoption
Assets:
Construction & Land Development	$	1,033	$	1,146	$	(113	)
Farm		1,323		1,093		230
1-4 Family Residential Properties		2,142		1,386		756
Commercial Real Estate		11,739		11,198		541
Agricultural		1,023		1,386		(363	)
Commercial & Industrial		9,428		9,273		155
Consumer		1,895		1,429		466
Allowance for credit losses for all loans	$	28,583	$	26,911	$	1,672
Liabilities:
Allowance for credit losses on off-balance sheet exposures	$	69	$	—	$	69

The following table illustrates the impact of ASU 2013-13 adoption for PCD assets previously classified as PCI included in the table above (in thousands):

	January 1, 2020
	As reported		Pre-ASU		Impact of ASU
	under ASU		2016-13		2016-13
	2016-13		Adoption		Adoption
Construction & Land Development	$	291	$	—	$	291
1-4 Family Residential Properties		48		6		42
Commercial Real Estate		818		359		459
Commercial & Industrial		41		—		41
Allowance for credit losses for PCD loans	$	1,198	$	365	$	833

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Note 2 -- Earnings Per Share

Basic net income per common share available to common stockholders is calculated as net income less preferred stock dividends divided by the weighted average number of common shares outstanding. Diluted net income per common share available to common stockholders is computed using the weighted average number of common shares outstanding, increased by the Company’s stock options, unless anti-dilutive.

The components of basic and diluted net income per common share available to common stockholders for the three months ended March 31, 2021 and 2020 were as follows:

	Three months ended March 31,
	2021		2020
Basic Net Income per Common Share
Available to Common Stockholders:
Net income	$	4,109,000	$	9,999,000
Weighted average common shares outstanding		17,299,927		16,693,183
Basic earnings per common share	$	0.24	$	0.60
Diluted Net Income per Common Share
Available to Common Stockholders:
Net income applicable to diluted earnings per share	$	4,109,000	$	9,999,000
Weighted average common shares outstanding		17,299,927		16,693,183
Dilutive potential common shares:
Restricted stock awarded		53,020		46,908
Dilutive potential common shares		53,020		46,908
Diluted weighted average common shares outstanding		17,352,947		16,740,091
Diluted earnings per common share	$	0.24	$	0.60

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There were no shares excluded when computing diluted earnings per share for the three months ended March 31, 2021 and 2020 because they were anti-dilutive.

Note 3 -- Investment Securities

The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at March 31, 2021 and December 31, 2020 were as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	174,789	$	377	$	(3,636	)	$	171,530
Obligations of states and political subdivisions		249,776		9,226		(1,283	)		257,719
Mortgage-backed securities: GSE residential		620,102		7,988		(6,138	)		621,952
Other securities		36,116		699		(68	)		36,747
Total available-for-sale	$	1,080,783	$	18,290	$	(11,125	)	$	1,087,948
Held-to-maturity:
U.S. Treasury securities and obligations of    U.S. government corporations & agencies	$	5,012	$	80	$	—		$	5,092
Annuity		2,033		—		—			2,033
Total held-to-maturity	$	7,045	$	80	$	—		$	7,125
December 31, 2020
Available-for-sale:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	127,067	$	790	$	(788	)	$	127,069
Obligations of states and political subdivisions		237,886		11,995		(37	)		249,844
Mortgage-backed securities: GSE residential		479,470		12,038		(160	)		491,348
Other securities		10,740		252		(13	)		10,979
Total available-for-sale	$	855,163	$	25,075	$	(998	)	$	879,240
Held-to-maturity:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	5,016	$	103	$	—		$	5,119

The Company also had $300,000 and $218,000 of equity securities, at fair value, as of March 31, 2021 and December 31, 2020, respectively. The Company's held-to-maturity securities are government agency-backed securities for which the risk of loss is minimal. As such, as of March 31, 2021, the Company did not record an allowance for credit losses on its held-to-maturity securities.

Realized gains and losses resulting from sales of securities were as follows during the three months ended March 31, 2021 and 2020 (in thousands):

	Three months March 31,
	2021		2020
Gross gains	$	4	$	531
Gross losses		—		—

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The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at March 31, 2021 and the weighted average yield for each range of maturities (dollars in thousands):

	One year or less			After 1 through 5 years			After 5 through 10 years			After ten years			Total
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	105,823		$	54,392		$	11,315		$	—		$	171,530
Obligations of state and political subdivisions		29,540			71,481			152,466			4,232			257,719
Mortgage-backed securities: GSE residential		26,948			293,661			301,343			—			621,952
Other securities		12,042			20,070			4,635			—			36,747
Total available-for-sale investments	$	174,353		$	439,604		$	469,759		$	4,232		$	1,087,948
Weighted average yield		1.87	%		2.28	%		1.69	%		2.57	%		1.96	%
Full tax-equivalent yield		2.06	%		2.45	%		1.94	%		3.52	%		2.17	%
Held to Maturity:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	5,012		$	—		$	—		$	—		$	5,012
Annuity		—									2,033			2,033
Total held-to-maturity	$	5,012		$	—		$	—		$	2,033		$	7,045
Weighted average yield		2.06	%		—	%		—	%		—	%		2.06	%
Full tax-equivalent yield		2.06	%		—	%		—	%		—	%		2.06	%

The weighted average yields are calculated based on the amortized cost and effective yields weighted for the scheduled maturity of each security. Tax-equivalent yields have been calculated using a 21% tax rate. With the exception of obligations of the U.S. Treasury and other U.S. government agencies and corporations, there were no investment securities of any single issuer, the book value of which exceeded 10% of stockholders' equity at March 31, 2021.

Investment securities carried at approximately $621 million and $531 million at March 31, 2021 and December 31, 2020, respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law.

The following table presents the aging of gross unrealized losses and fair value by investment category as of March 31, 2021 and December 31, 2020 (in thousands):

	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	144,404	$	(3,636	)	$	—	$	—		$	144,404	$	(3,636	)
Obligations of states and political subdivisions		51,381		(1,283	)		—		—			51,381		(1,283	)
Mortgage-backed securities: GSE residential		230,029		(5,155	)		129,370		(983	)		359,399		(6,138	)
Other securities		12,679		(68	)		—		—			12,679		(68	)
Total	$	438,493	$	(10,142	)	$	129,370	$	(983	)	$	567,863	$	(11,125	)
December 31, 2020
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	59,211	$	(788	)	$	—	$	—		$	59,211	$	(788	)
Obligations of states and political subdivisions		5,380		(37	)		—		—			5,380		(37	)
Mortgage-backed securities: GSE residential		57,609		(160	)		2,377		—			59,986		(160	)
Other securities		3,977		(13	)		—		—			3,977		(13	)
Total	$	126,177	$	(998	)	$	2,377	$	—		$	128,554	$	(998	)

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U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies. At March 31, 2021 and December 31, 2020, there were no available-for sale or held-to-maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies in a continuous unrealized loss position for twelve months or more.

Obligations of states and political subdivisions. At March 31, 2021 and December 31, 2020, there were no obligations of states and political subdivisions in a continuous loss position for twelve months or more.

Mortgage-backed Securities: GSE Residential. At March 31, 2021, there were twelve mortgage-backed securities with a fair value of $129,370,000 and unrealized losses of $(983,000) in a continuous unrealized loss position for twelve months or more. At December 31, 2020 there were two mortgage-backed securities with a fair value of $2,377,000 and unrealized losses of $0 in a continuous unrealized loss position for twelve months or more.

Other securities.  At March 31, 2021, and December 31, 2020, there were no other securities in a continuous unrealized loss position for twelve months or more.

The Company does not believe any unrealized losses as of March 31, 2021 represents other than temporary impairment ("OTTI"). However, given the uncertainty of the financial markets, the Company may be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced, and the resulting loss recognized in the period the other-than-temporary impairment is identified.

Note 4 – Loans and Allowance for Credit Losses

Loans are stated at amortized cost net of an allowance for credit losses. Amortized cost is the unpaid principal net of unearned premiums and discounts, and net deferred origination fees and costs. Deferred loan origination fees are reduced by loan origination costs and are amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method. Interest on substantially all loans is credited to income based on the principal amount outstanding.

A summary of loans at March 31, 2021 and December 31, 2020 follows (in thousands):

	March 31, 2021			December 31, 2020
Construction and land development	$	165,780		$	122,853
Agricultural real estate		269,759			254,662
1-4 Family residential properties		411,964			325,480
Multifamily residential properties		295,467			189,265
Commercial real estate		1,401,585			1,176,290
Loans secured by real estate		2,544,555			2,068,550
Agricultural loans		121,955			137,333
Commercial and industrial loans		1,020,608			741,819
Consumer loans		90,780			78,023
All other loans		163,901			118,196
Total Gross loans		3,941,799			3,143,921
Less: Loans held for sale		4,693			1,924
		3,937,106			3,141,997
Less:
Net deferred loan fees (costs), premiums and discounts		(1,300	)		5,502
Allowance for credit losses		55,418			41,910
Net loans	$	3,882,988		$	3,094,585

Loans expected to be sold are classified as held for sale in the consolidated financial statements and are recorded at the lower of aggregate cost or fair value, taking into consideration future commitments to sell the loans. These loans are primarily for 1-4 family residential properties.

Accrued interest on loans, which is excluded from the amortized cost of the balances above, totaled $15.6 million and $15.9 million at March 31, 2021 and December 31, 2020, respectively.

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Most of the Company’s business activities are with customers located near the Company's branch locations in Illinois, Missouri and Texas. At March 31, 2021, the Company’s loan portfolio included $390.7 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $278.2 million was concentrated in corn and other grain farming. Total loans to borrowers whose businesses are directly related to agriculture decreased $1.0 million from $391.7 million at December 31, 2020 due to seasonal timing of cash flow requirements. Loans concentrated in corn and other grain farming decreased $30.0 million from $308.2 million at December 31, 2020. The Company's underwriting practices include collateralization of loans. Any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in loan losses within the agricultural portfolio.

In addition, the Company has $126.0 million of loans to motels and hotels. The performance of these loans is dependent on borrower specific issues as well as the general level of business and personal travel within the region. While the Company adheres to sound underwriting standards, a prolonged period of reduced business or personal travel could result in an increase in nonperforming loans to this business segment and potentially in loan losses. The Company also has $426.3 million of loans to lessors of non-residential buildings, $319.8 million of loans to lessors of residential buildings and dwellings, $109.8 million of loans to nursing care facilities, and $121.3 million of loans to other gambling industries.

The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the board of directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation and most borrowers are below regulatory thresholds. The Company can occasionally have outstanding balances to one borrower up to but not exceeding the regulatory threshold should underwriting guidelines warrant. Most of the Company’s loans are to businesses located in the geographic market areas served by the Company’s branch bank system. Additionally, a significant portion of the collateral securing the loans in the portfolio is located within the Company’s primary geographic footprint. In general, the Company adheres to loan underwriting standards consistent with industry guidelines for all loan segments.

The Company’s lending can be summarized into the following primary areas:

Commercial Real Estate Loans. Commercial real estate loans are generally comprised of loans to small business entities to purchase or expand structures in which the business operations are housed, loans to owners of real estate who lease space to non-related commercial entities, loans for construction and land development, loans to hotel operators, and loans to owners of multi-family residential structures, such as apartment buildings. Commercial real estate loans are underwritten based on historical and projected cash flows of the borrower and secondarily on the underlying real estate pledged as collateral on the debt. For the various types of commercial real estate loans, minimum criteria have been established within the Company’s loan policy regarding debt service coverage while maximum limits on loan-to-value and amortization periods have been defined. Maximum loan-to-value ratios range from 65% to 80% depending upon the type of real estate collateral, while the desired minimum debt coverage ratio is 1.20x. Amortization periods for commercial real estate loans are generally limited to twenty years. The Company’s commercial real estate portfolio is well below the thresholds that would designate a concentration in commercial real estate lending, as established by the federal banking regulators.

Commercial and Industrial Loans. Commercial and industrial loans are primarily comprised of working capital loans used to purchase inventory and fund accounts receivable that are secured by business assets other than real estate. These loans are generally written for one year or less. Also, equipment financing is provided to businesses with these loans generally limited to 80% of the value of the collateral and amortization periods limited to seven years. Commercial loans are often accompanied by a personal guaranty of the principal owners of a business. Like commercial real estate loans, the underlying cash flow of the business is the primary consideration in the underwriting process. The financial condition of commercial borrowers is monitored at least annually with the type of financial information required determined by the size of the relationship. Measures employed by the Company for businesses with higher risk profiles include the use of government- assisted lending programs through the Small Business Administration and U.S. Department of Agriculture.

Agricultural and Agricultural Real Estate Loans. Agricultural loans are generally comprised of seasonal operating lines to cash grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop. Loan-to-value ratios on loans secured by farmland generally do not exceed 65% and have amortization periods limited to twenty-five years. Federal government-assistance lending programs through the Farm Service Agency are used to mitigate the level of credit risk when deemed appropriate.

17

Residential Real Estate Loans. Residential real estate loans generally include loans for the purchase or refinance of residential real estate properties consisting of one-to-four units and home equity loans and lines of credit. The Company sells most of its long-term fixed rate residential real estate loans to secondary market investors. The Company also releases the servicing of these loans upon sale. The Company retains all residential real estate loans with balloon payment features. Balloon periods are limited to five years. Residential real estate loans are typically underwritten to conform to industry standards including criteria for maximum debt-to-income and loan-to-value ratios as well as minimum credit scores. Loans secured by first liens on residential real estate held in the portfolio typically do not exceed 80% of the value of the collateral and have amortization periods of twenty-five years or less. The Company does not originate subprime mortgage loans.

Consumer Loans. Consumer loans are primarily comprised of loans to individuals for personal and household purposes such as the purchase of an automobile or other living expenses. Minimum underwriting criteria have been established that consider credit score, debt-to-income ratio, employment history, and collateral coverage. Typically, consumer loans are set up on monthly payments with amortization periods based on the type and age of the collateral.

Other Loans. Other loans consist primarily of loans to municipalities to support community projects such as infrastructure improvements or equipment purchases. Underwriting guidelines for these loans are consistent with those established for commercial loans with the additional repayment source of the taxing authority of the municipality.

Allowance for Credit Losses

The allowance for credit losses represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining contractual life of the assets. The provision for credit losses is the charge against current earnings that is determined by the Company as the amount needed to maintain an adequate allowance for credit losses. In determining the adequacy of the allowance for credit losses, and therefore the provision to be charged to current earnings, the Company relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by the overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net loan losses, the level and composition of nonaccrual, past due and troubled debt restructurings, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates. The Company estimates the appropriate level of allowance for credit losses by evaluating large impaired loans separately from non-impaired loans.

Impaired loans

The Company individually evaluates certain loans for impairment. In general, these loans have been internally identified via the Company’s loan grading system as credits requiring management’s attention due to underlying problems in the borrower’s business or collateral concerns. This evaluation considers expected future cash flows, the value of collateral and also other factors that may impact the borrower’s ability to make payments when due. For loans greater than $250,000, and loans identified as troubled debt restructurings, impairment is individually measured each quarter using one of three alternatives: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price, if available; or (3) the fair value of the collateral less costs to sell for collateral dependent loans and loans for which foreclosure is deemed to be probable. A specific allowance is assigned when expected cash flows or collateral are less than the carrying amount of the loan. The carrying value of the loan reflects reductions from prior charge-offs.

Non-Impaired loans

Non-impaired loans comprise the vast majority of the Company’s total loan portfolio and include loans in accrual status and those credits not identified as troubled debt restructurings. A small portion of these loans are considered “criticized” due to the risk rating assigned reflecting elevated credit risk due to characteristics, such as a strained cash flow position, associated with the individual borrowers. Criticized loans are those assigned risk ratings of Special Mention, Substandard, or Doubtful.

18

Beginning January 1, 2020, the allowance for credit losses was estimated using the current expected credit loss model ("CECL"). The Company uses the Loss Rate method to estimate the historical loss rate for all non-impaired loans. Under this method, the allowance for credit losses is measured on a collective (pool) basis for non-impaired loans with similar risk characteristics. Historical credit loss experience provides the basis for the estimate of expected credit losses. For each pool, a historical loss rate is computed based on the average remaining contractual life of the pool. Adjustments to historical loss rates are made using qualitative factors relevant to each pool including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. In addition, a twelve-month forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period.

The Company also considers specific current economic events occurring globally, in the U.S. and in its local markets. In March 2020, in response to the COVID-19 outbreak, its significant disruptions in the U.S. economy and impacts on local markets, First Mid Bank offered a 90-day commercial deferral program, primarily to hotel and restaurant borrowers. In accordance with interagency guidance issued in March 2020, these short-term deferrals are not considered troubled debt restructurings. These deferrals were, however, considered in the factors used to estimate the required allowance for credit losses for non-impaired loans. Other COVID-19 related impacts considered included revenue losses of businesses required to restrict or cease services, income loss to workers laid off as a result of COVID-19 restrictions, various federal and state government stimulus programs and additional deferral programs offered by First Mid Bank beginning in April 2020. Other events considered include the status of trade agreements with China, scheduled increases in minimum wage and changes to the minimum salary threshold for overtime provisions, current and projected unemployment rates, current and projected grain and oil prices and economies of local markets where customers work and operate.

Within each pool, risk elements are evaluated that have specific impacts to the borrowers within the pool. These, along with the general risks and events, and the specific lending policies and procedures by loan type described above, are analyzed to estimate the qualitative factors used to adjust the historical loss rates.

During the current period, the following assumptions and factors were considered when determining the historical loss rate and any potential adjustments by loan pool.

Construction and Land Development Loans. The average life of the construction and land development segment was determined to be twelve months. Historical losses in this segment remained very low. Current activity in this industry was deemed essential and has continued during COVID-19. There was no adjustment to the qualitative factor for this segment.

Agricultural Real Estate Loans. The average life of the agricultural real estate segment was determined to be thirty-six months. Historical losses in the segment remain very low. Farmland values have remained steady over an extended period of time and there are no indications that this will change in the next year. There was no adjustment to the qualitative factor for this segment.

1- 4 Family Residential Properties Loans. The average life of the 1-4 Family Residential segment was determined to be: Residential Real Estate-non-owner occupied, sixty months; Residential Real Estate-owner occupied, sixty months; Home Equity lines of credit, thirty months. COVID-19 has impacted the finances of consumers from layoffs and furloughs resulting from employers that must reduce or suspend operations. Increased risk in this segment includes consumer ability to make mortgage and rent payments. Some of this impact has been offset by governmental actions such as stimulus payments and extended unemployment benefits. First Mid Bank and Providence Bank have also offered short-term loan payment deferral to borrowers in this segment.  Overall, the historical loss rate for this segment increased slightly.

Commercial Real Estate Loans. The average life of the commercial real estate segment was determined to be thirty-six months. This segment includes the Company's majority of exposure to the hotel industry which has been significantly impacted by COVID-19 events. Other impacted industries in this segment include restaurants and retail establishments. First Mid Bank and Providence Bank have implemented deferral programs for borrowers in this segment in order to ease the impact to these borrowers. There was a slight increase in the historical loss rate for this segment.

Agricultural Loans. The average life of the agricultural segment was determined to be eighteen months. Losses in this segment are very low and it is believed that borrowers in this segment will benefit from current governmental programs such as PPP and MFP. Many farmers are holding grain from the 2019 operating season and should be able to take advantage of an increase in prices. There was no change to the qualitative factor of this segment.

19

Commercial and Industrial Loans. The average life of the commercial and industrial segment was determined to be twenty-four months. The COVID-19 impacts include forced closures and scaled-back services for many industries within this segment including retailers, restaurants, and video gaming establishments. Some of this risk is offset by government relief programs as well as, First Mid Bank and Providence Bank's payment deferral program. There was a slight decrease in the historical loss rate but the qualitative factor for this segment was not changed.

Consumer Loans. The average life of the consumer segment was determined to be thirty-six months. The financial status of many borrowers has been impacted by COVID-19 events including layoffs and reduced hours. Some of this impact has been offset by government stimulus programs, increased paid leave and increased and extended unemployment benefits, however these benefits are now expiring. Additionally, First Mid Bank and Providence Bank have offered a short-term payment deferral program. There was a slight decrease in the historical loss rate for this period and the qualitative factor for the segment was not changed.

Acquired Loans. Prior to January 1, 2020 loans acquired with evidence of credit deterioration since origination and for which it was probable that all contractually required payments would not be collected were considered purchased credit impaired at the time of acquisition. Purchase credit-impaired ("PCI") loans were accounted for under ASC 310-30, Receivables--Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"), and were initially measured at fair value, which included the estimated future credit losses expected to be incurred over the life of the loan.

Accordingly, an allowance for credit losses related to these loans was not carried over and recorded at the acquisition date. The cash flows expected to be collected were estimated using current key assumptions, such as default rates, value of underlying collateral, severity and prepayment speeds.

Subsequent to January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date. Accordingly, on January 1, 2020, the amortized cost basis of the PCD loans were adjusted to reflect the addition of $833,000 to the allowance for credit losses.

For acquired loans not deemed purchased credit deteriorated at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. At the acquisition date, an initial allowance for expected credit losses is estimated and recorded as credit loss expense. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

The following table presents the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2021 (in thousands):

	Construction & Land Development		Agricultural Real Estate		1-4 Family Residential Properties		Commercial Real Estate		Agricultural Loans			Commercial & Industrial		Consumer Loans		Total
Three months ended March 31, 2021
Beginning Balance	$	1,666	$	1,084	$	2,322	$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Initial allowance on loans purchased with credit deterioration		261		44		328		646		-			795		-		2,074
Provision for credit loss expense		359		500		617		5,902		(645	)		4,674		729		12,136
Loans charged off		—		—		182		480		—			18		288		968
Recoveries collected		—		—		8		9		—			18		231		266
Ending balance	$	2,286	$	1,628	$	3,093	$	25,737	$	881		$	18,954	$	2,839	$	55,418

20

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2020 and for the year ended December 31, 2020 (in thousands):

	Construction & Land Development			Agricultural Real Estate			1-4 Family Residential Properties			Commercial Real Estate		Agricultural Loans			Commercial & Industrial		Consumer Loans		Total
Three months ended March 31, 2020
Beginning Balance (prior to adoption of ASC 326)	$	1,146		$	1,093		$	1,386		$	11,198	$	1,386		$	9,273	$	1,429	$	26,911
Impact of adopting ASC 326	$	(113	)	$	230		$	756		$	541	$	(363	)	$	155	$	466		1,672
Provision for credit loss expense		587			12			(77	)		1,961		41			2,815		142		5,481
Loans charged off		—			—			196			84		0			972		171		1,423
Recoveries collected		—			—			62			5		—			23		145		235
Ending balance	$	1,620		$	1,335		$	1,931		$	13,621	$	1,064		$	11,294	$	2,011	$	32,876
Twelve months ended December 31, 2020
Beginning Balance (prior to adoption of ASC 326)	$	1,146		$	1,093		$	1,386		$	11,198	$	1,386		$	9,273	$	1,429	$	26,911
Impact of adopting ASC 326		(113	)		230			756			541		(363	)		155		466		1,672
Provision for credit loss expense		646			(239	)		274			8,581		503			5,869		469		16,103
Loans charged off		13			—			393			829		—			1,991		618		3,844
Recoveries collected		—			—			299			169		—			179		421		1,068
Ending balance	$	1,666		$	1,084		$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 180 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

21

The following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of March 31, 2021 (in thousands):

	Collateral								Allowance
	Real Estate		Business Assets		Other		Total		for Credit Losses
Construction and land development	$	508	$	—	$	—	$	508	$	303
Agricultural real estate		—		—		—		—		—
1-4 Family residential properties		4,436		—		—		4,436		163
Multifamily residential properties		1,914		—		—		1,914		—
Commercial real estate		12,308		—		—		12,308		1,252
Loans secured by real estate		19,166		—		—		19,166		1,718
Agricultural loans		—		—		—		—		—
Commercial and industrial loans		—		3,393		1,909		5,302		808
Consumer loans		—		—		8	8			163
Other loans		—		26		—	26			26
Total loans	$	19,166	$	3,419	$	1,917	$	24,502	$	2,715

Credit Quality

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, collateral support, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Company uses the following definitions for risk ratings which are commensurate with a loan considered “criticized”:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current sound-worthiness and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing factors, conditions and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans.

22

The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of March 31, 2021 (in thousands):

	Term Loans by Origination Year												Revolving
Risk Rating	2021		2020		2019		2018		2017		Prior		Loans		Total
March 31, 2021
Construction & Land Development Loans
Pass	$	6,259	$	55,930	$	35,782	$	44,866	$	12,068	$	9,723	$	—	$	164,628
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		128		0		573		47		—		748
Total	$	6,259	$	55,930	$	35,910	$	44,866	$	12,641	$	9,770	$	—	$	165,376
Agricultural Real Estate Loans
Pass	$	29,531	$	101,049	$	31,082	$	39,931	$	14,717	$	38,968	$	—	$	255,278
Special Mention		825		282		4,337		422		407		6,472		—		12,745
Substandard		—		—		0		707		625		297		—		1,629
Total	$	30,356	$	101,331	$	35,419	$	41,060	$	15,749	$	45,737	$	—	$	269,652
1-4 Family Residential Property Loans
Pass	$	28,885	$	114,918	$	29,974	$	40,369	$	20,251	$	117,623	$	34,265	$	386,285
Special Mention		—		189		2,136		349		2,714		1,190		57		6,635
Substandard		376		299		868		1,814		1,929		13,327		937		19,550
Total	$	29,261	$	115,406	$	32,978	$	42,532	$	24,894	$	132,140	$	35,259	$	412,470
Commercial Real Estate Loans
Pass	$	67,044	$	480,974	$	318,800	$	223,168	$	163,413	$	377,041	$	—	$	1,630,440
Special Mention		954		2,712		1,285		3,268		11,070		24,347		—		43,636
Substandard		—		1,794		37		6,901		2,004		16,057		—		26,793
Total	$	67,998	$	485,480	$	320,122	$	233,337	$	176,487	$	417,445	$	—	$	1,700,869
Agricultural Loans
Pass	$	1,853	$	83,342	$	6,921	$	5,131	$	1,631	$	104	$	—	$	98,982
Special Mention		13,723		3,777		3,769		214		206		159		—		21,848
Substandard		53		44		118		25		—		—		—		240
Total	$	15,629	$	87,163	$	10,808	$	5,370	$	1,837	$	263	$	—	$	121,070
Commercial & Industrial Loans
Pass	$	152,091	$	477,167	$	162,411	$	98,524	$	96,059	$	145,657	$	—	$	1,131,909
Special Mention		1,556		3,248		33,491		804		473		1,895		—		41,467
Substandard		397		343		2,369		447		2,345		2,680		—		8,581
Total	$	154,044	$	480,758	$	198,271	$	99,775	$	98,877	$	150,232	$	—	$	1,181,957
Consumer Loans
Pass	$	7,723	$	35,908	$	33,307	$	11,526	$	138	$	2,681	$	—	$	91,283
Special Mention		—		—		23		21		—		—		—		44
Substandard		13		27		13		90		79		156		—		378
Total	$	7,736	$	35,935	$	33,343	$	11,637	$	217	$	2,837	$	—	$	91,705
Total Loans
Pass	$	293,386	$	1,349,288	$	618,277	$	463,515	$	308,277	$	691,797	$	34,265	$	3,758,805
Special Mention		17,058		10,208		45,041		5,078		14,870		34,063		57		126,375
Substandard		839		2,507		3,533		9,984		7,555		32,564		937		57,919
Total	$	311,283	$	1,362,003	$	666,851	$	478,577	$	330,702	$	758,424	$	35,259	$	3,943,099

23

The following tables present the credit risk profile of the Company’s loan portfolio based on risk rating category as of December 31, 2020 (in thousands):

	Term Loans by Origination Year												Revolving
Risk Rating	2020		2019		2018		2017		2016		Prior		Loans		Total
December 31, 2020
Construction & Land Development Loans
Pass	$	41,842	$	40,989	$	31,500	$	2,760	$	871	$	3,822	$	—	$	121,784
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		128		—		517		—		50		—		695
Total	$	41,842	$	41,117	$	31,500	$	3,277	$	871	$	3,872	$	—	$	122,479
Agricultural Real Estate Loans
Pass	$	73,630	$	34,412	$	37,839	$	16,138	$	13,559	$	58,291	$	—	$	233,869
Special Mention		1,845		3,970		533		469		1,106		11,232		—		19,155
Substandard		—		—		800		208		64		245		—		1,317
Total	$	75,475	$	38,382	$	39,172	$	16,815	$	14,729	$	69,768	$	—	$	254,341
1-4 Family Residential Property Loans
Pass	$	81,366	$	29,695	$	38,163	$	23,086	$	26,676	$	62,942	$	40,363	$	302,291
Special Mention		192		2,142		523		2,720		247		1,578		293		7,695
Substandard		296		695		1,915		1,859		1,996		7,516		1,499		15,776
Total	$	81,854	$	32,532	$	40,601	$	27,665	$	28,919	$	72,036	$	42,155	$	325,762
Commercial Real Estate Loans
Pass	$	368,750	$	237,119	$	171,591	$	148,283	$	143,400	$	215,616	$	—	$	1,284,759
Special Mention		2,469		1,300		6,108		11,262		6,741		16,947		—		44,827
Substandard		1,863		40		7,081		2,022		4,905		18,435		—		34,346
Total	$	373,082	$	238,459	$	184,780	$	161,567	$	155,046	$	250,998	$	—	$	1,363,932
Agricultural Loans
Pass	$	83,377	$	15,680	$	5,978	$	1,838	$	635	$	2,856	$	—	$	110,364
Special Mention		21,070		4,483		694		224		148		38		—		26,657
Substandard		68		238		25		—		—		—		—		331
Total	$	104,515	$	20,401	$	6,697	$	2,062	$	783	$	2,894	$	—	$	137,352
Commercial & Industrial Loans
Pass	$	371,683	$	132,148	$	70,497	$	78,890	$	42,439	$	114,904	$	—	$	810,561
Special Mention		4,116		32,130		849		489		1,101		730		—		39,415
Substandard		889		2,360		532		1,689		136		969		—		6,575
Total	$	376,688	$	166,638	$	71,878	$	81,068	$	43,676	$	116,603	$	—	$	856,551
Consumer Loans
Pass	$	31,609	$	21,384	$	12,084	$	8,279	$	3,150	$	1,022	$	—	$	77,528
Special Mention		—		24		24		1		1		—		—		50
Substandard		15		16		111		95		67		120		—		424
Total	$	31,624	$	21,424	$	12,219	$	8,375	$	3,218	$	1,142	$	—	$	78,002
Total Loans
Pass	$	1,052,257	$	511,427	$	367,652	$	279,274	$	230,730	$	459,453	$	40,363	$	2,941,156
Special Mention		29,692		44,049		8,731		15,165		9,344		30,525		293		137,799
Substandard		3,131		3,477		10,464		6,390		7,168		27,335		1,499		59,464
Total	$	1,085,080	$	558,953	$	386,847	$	300,829	$	247,242	$	517,313	$	42,155	$	3,138,419

24

The following table presents the Company’s loan portfolio aging analysis at March 31, 2021 and December 31, 2020 (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days & Accruing
March 31, 2021
Construction and land development	$	227	$	—	$	128	$	355	$	165,021	$	165,376	$	—
Agricultural real estate		0		—		34		34		269,618		269,652		—
1-4 Family residential properties		1,212		2,400		1,546		5,158		407,312		412,470		—
Multifamily residential properties		39		1,098		—		1,137		296,847		297,984		—
Commercial real estate		846		1,166		1,961		3,973		1,398,912		1,402,885		—
Loans secured by real estate		2,324		4,664		3,669		10,657		2,537,710		2,548,367		—
Agricultural loans		2,153		125		22		2,300		118,770		121,070		—
Commercial and industrial loans		535		257		1,320		2,112		1,015,288		1,017,400		—
Consumer loans		122		50		136		308		91,397		91,705		—
All other loans		59		—		—		59		164,498		164,557		—
Total loans	$	5,193	$	5,096	$	5,147	$	15,436	$	3,927,663	$	3,943,099	$	—
December 31, 2020
Construction and land development	$	—	$	—	$	128	$	128	$	122,351	$	122,479	$	—
Agricultural real estate		1,198		34		0		1,232		253,109		254,341		—
1-4 Family residential properties		1,121		1,105		2,033		4,259		321,503		325,762		—
Multifamily residential properties		—		—		—		—		189,632		189,632		—
Commercial real estate		2,618		341		794		3,753		1,170,547		1,174,300		—
Loans secured by real estate		4,937		1,480		2,955		9,372		2,057,142		2,066,514		—
Agricultural loans		43		—		236		279		137,073		137,352		—
Commercial and industrial loans		2,426		8		1,420		3,854		734,459		738,313		—
Consumer loans		145		50		149		344		77,658		78,002		—
All other loans		—		—		—		0		118,238		118,238		—
Total loans	$	7,551	$	1,538	$	4,760	$	13,849	$	3,124,570	$	3,138,419	$	—

Impaired Loans

Within all loan portfolio segments, loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Impaired loans, excluding certain troubled debt restructured loans, are placed on nonaccrual status. Impaired loans include nonaccrual loans and loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. It is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being modified remain on nonaccrual status until, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. If the restructured loan is on accrual status prior to being modified, the loan is reviewed to determine if the modified loan should remain on accrual status.

The Company’s policy is to discontinue the accrual of interest income on all loans for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Interest on loans determined to be troubled debt restructurings is recognized on an accrual basis in accordance with the restructured terms if the loan is in compliance with the modified terms. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.

25

The following tables present impaired loans as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021						December 31, 2020
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans with a specific allowance:
Construction and land development	$	573	$	573	$	303	$	516	$	516	$	246
Agricultural real estate		—		—		—		—		—		—
1-4 Family residential properties		5,817		5,990		163		4,005		4,157		158
Multifamily residential properties		1,914		1,914		—		1,914		1,914		0
Commercial real estate		12,317		13,062		1,252		11,528		11,794		863
Loans secured by real estate		20,621		21,539		1,718		17,963		18,381		1,267
Agricultural loans		—		228		—		0		228		0
Commercial and industrial loans		5,430		6,996		808		3,523		4,878		664
Consumer loans		182		126		163		112		114		0
Other loans		26		26		26		—		—		—
Total loans	$	26,259	$	28,915	$	2,715	$	21,598	$	23,601	$	1,931
Loans without a specific allowance:
Construction and land development	$	160	$	173	$	—	$	162	$	175	$	—
Agricultural real estate		374		374		—		359		359		—
1-4 Family residential properties		3,971		4,692		—		4,262		4,715		—
Multifamily residential properties		258		259		—		267		267		—
Commercial real estate		450		752		—		552		581		—
Loans secured by real estate		5,213		6,250		—		5,602		6,097		—
Agricultural loans		262		34		—		659		431		—
Commercial and industrial loans		973		3,026		—		907		1,331		—
Consumer loans		229		729		—		218		313		—
Total loans	$	6,677	$	10,039	$	—	$	7,386	$	8,172	$	—
Total loans:
Construction and land development	$	733	$	746	$	303	$	678	$	691	$	246
Agricultural real estate		374		374		—		359		359		—
1-4 Family residential properties		9,788		10,682		163		8,267		8,872		158
Multifamily residential properties		2,172		2,173		—		2,181		2,181		0
Commercial real estate		12,767		13,814		1,252		12,080		12,375		863
Loans secured by real estate		25,834		27,789		1,718		23,565		24,478		1,267
Agricultural loans		262		262		—		659		659		0
Commercial and industrial loans		6,403		10,022		808		4,430		6,209		664
Consumer loans		411		855		163		330		427		0
Other loans		26		26		26		—		—		—
Total loans	$	32,936	$	38,954	$	2,715	$	28,984	$	31,773	$	1,931

26

The following tables present average recorded investment and interest income recognized on impaired loans for the three months ended March 31, 2021 and 2020 (in thousands):

	For the three months ended
	March 31, 2021				March 31, 2020
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
Construction and land development	$	754	$	5	$	600	$	8
Agricultural real estate		957		—		1,202		—
1-4 Family residential properties		9,857		13		8,997		18
Multifamily residential properties		2,294		—		3,323		1
Commercial real estate		13,156		38		8,266		42
Loans secured by real estate		27,018		56		22,388		69
Agricultural loans		262		6		960		—
Commercial and industrial loans		6,455		1		7,402		2
Consumer loans		438		—		544		—
All other loans		26		—		—		—
Total loans	$	34,199	$	63	$	31,294	$	71

The amount of interest income recognized by the Company within the periods stated above was due to loans modified in troubled debt restructurings that remain on accrual status. The average balances of these loans included in impaired loans at March 31, 2021 and 2020, were $4.1 million and $4.4 million, respectively.

Non-Accrual Loans

The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated for which no allowance was recorded as of March 31, 2021 and December 31, 2020 (in thousands). There were no loans past due over eighty-nine days that were still accruing.

	March 31, 2021				December 31, 2020
	Nonaccrual with no Allowance for			Total	Nonaccrual with no Allowance for			Total
	Credit Loss		Nonaccrual		Credit Loss		Nonaccrual
Construction and land development	$	160	$	225	$	162	$	162
Agricultural real estate		374		374		359		359
1-4 Family residential properties		7,116		8,771		6,747		6,930
Multifamily residential properties		2,173		2,173		2,181		2,181
Commercial real estate		3,780		9,516		7,345		8,760
Loans secured by real estate		13,603		21,059		16,794		18,392
Agricultural loans		262		262		659		659
Commercial and industrial loans		3,641		6,137		3,677		4,372
Consumer loans		295		394		327		327
All other loans		0		25
Total loans	$	17,801	$	27,877	$	21,457	$	23,750

Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $1,021,000 and $1,029,000 for the three months ended March 31, 2021 and 2020, respectively.

27

Subsequent to adoption of ASU 2016-13 on January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered PCD loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date.

Troubled Debt Restructuring

The balance of troubled debt restructurings ("TDRs") at March 31, 2021 and December 31, 2020 was $8.7 million and $9.5 million, respectively. There was $929,000 and $1,016,000 in specific reserves established with respect to these loans as of March 31, 2021 and December 31, 2020, respectively. As troubled debt restructurings, these loans are included in nonperforming loans and are classified as impaired which requires that they be individually measured for impairment. The modification of the terms of these loans included one or a combination of the following: a reduction of stated interest rate of the loan; an extension of the maturity date and change in payment terms; or a permanent reduction of the recorded investment in the loan.

The following table presents the Company’s recorded balance of troubled debt restructurings at March 31, 2021 and December 31, 2020 (in thousands).

Troubled debt restructurings:	March 31, 2021		December 31, 2020
1-4 Family residential properties	$	1,381	$	1,603
Commercial real estate		4,594		5,170
Loans secured by real estate		5,975		6,773
Agricultural loans		228		228
Commercial and industrial loans		2,362		2,389
Consumer loans		124		112
Total	$	8,689	$	9,502
Performing troubled debt restructurings:
1-4 Family residential properties	$	1,004	$	1,268
Commercial real estate		3,027		3,045
Loans secured by real estate		4,031		4,313
Commercial and industrial loans		55		58
Consumer loans		17		2
Total	$	4,103	$	4,373

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The following table presents loans modified as TDRs during the three months ended March 31, 2021, as a result of various modified loan factors (in thousands). The change in the recorded investment from pre-modification to post- modification was not material.

	March 31, 2021					March 31, 2020
	Number of		Recorded		Type of	Number of		Recorded		Type of
	Modifications		Investment		Modifications	Modifications		Investment		Modifications
Commercial real estate		—	$	—			1	$	305	(b)(c)(d)
Loans secured by real estate		—		—			1		305
Commercial and industrial loans		—		—			1		7	(b)(c)(d)
Consumer Loans		2		16	(b)		1		11	(c)
Total		2	$	16			3	$	323

Type of modifications:

(a) Reduction of stated interest rate of loan

(b) Change in payment terms

(c) Extension of maturity date

(d) Permanent reduction of the recorded investment

A loan is considered to be in payment default once it is 90 days past due under the modified terms. There were no loans modified as troubled debt restructurings during the prior twelve months that experienced defaults for three months ended March 31, 2021. There were no loans modified as troubled debt restructuring during the prior twelve months that experienced defaults as of December 31, 2020.

The balance of real estate owned includes $13,339,000 and $2,489,000 of foreclosed real estate properties recorded as a result of obtaining physical possession of the property at March 31, 2021 and December 31, 2020, respectively. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure procedures are in process was $634,000 and $713,000 at March 31, 2021 and December 31, 2020, respectively.

Purchased Credit Deteriorated (PCD) Loans

The Company has acquired loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows (in thousands):

	LINCO    Acquisition
Purchase price of loans at acquisition	$	64,647
Allowance for credit losses at acquisition		(2,074	)
Non-credit discount/(premium) at acquisition		(187	)
Fair value of acquired loans at acquisition	$	62,386

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Note 5 -- Goodwill and Intangible Assets

The Company has goodwill from business combinations, intangible assets from branch acquisitions, identifiable intangible assets assigned to core deposit relationships and customer lists of First Mid Wealth Management Company and First Mid Insurance. The following table presents gross carrying value and accumulated amortization by major intangible asset class as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021				December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Goodwill not subject to amortization (effective 1/1/02)	$	117,708	$	3,760	$	108,752	$	3,760
Intangibles from branch acquisition		3,015		3,015		3,015		3,015
Core deposit intangibles		34,503		21,620		32,355		20,910
Other intangibles		16,779		5,555		16,389		5,222
	$	172,005	$	33,950	$	160,511	$	32,907

Goodwill of $9 million was provisionally recorded for the acquisition and merger of LINCO during the first quarter of 2021. All goodwill was assigned to the banking segment of the Company.

The following table provides a reconciliation of the purchase price paid for the acquisition of LINCO and the amount of goodwill recorded (in thousands):

Unallocated purchase price				$	14,992
Less purchase accounting adjustments:
Fair value of securities	$	264
Fair value of loans, net		(2,818	)
Fair value of other real estate owned		915
Fair value of premises and equipment		6,360
Fair value of time deposits		(2,081	)
Fair value of FHLB advances		(975	)
Core deposit intangible		2,025
Other assets		2,530
Other liabilities		(184	)
					6,036
				$	8,956

The Company has mortgage servicing rights acquired in previous acquisitions. The following table summarizes the activity pertaining to mortgage servicing rights included in intangible assets as of March 31, 2021, March 31, 2020 and December 31, 2020 (in thousands):

	March 31, 2021			March 31, 2020			December 31, 2020
Beginning Balance	$	516		$	1,444		$	1,444
Valuation reserve		210			(18	)		(273	)
Mortgage servicing rights amortized		(177	)		(126	)		(593	)
Interest only Strip		2			(4	)		(62	)
Ending Balance	$	551		$	1,296		$	516

Total amortization expense for the three months ended March 31, 2021 and 2020 was as follows (in thousands):

	Three months ended March 31,
	2021		2020
Core deposit intangibles	$	710	$	843
Customer list intangibles		333		326
Mortgage servicing rights		177		126
	$	1,220	$	1,295

Aggregate amortization expense for the current year and estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands):

30

Aggregate amortization expense:
For period 01/01/21-3/31/21	$	1,220
Estimated amortization expense:
For period 04/01/21-12/31/21		3,888
For year ended 12/31/22		3,885
For year ended 12/31/23		3,534
For year ended 12/31/24		3,234
For year ended 12/31/25		2,891
For year ended 12/31/26		2,215

In accordance with the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” codified within ASC 350, the Company performed testing of goodwill for impairment as of September 30, 2020 and determined that, as of that date, goodwill was not impaired. Management also concluded that the remaining amounts and amortization periods were appropriate for all intangible assets.

Note 6 -- Repurchase Agreements and Other Borrowings

Securities sold under agreements to repurchase were $212.5 million at March 31, 2021, an increase of $5.6 million from $206.9 million at December 31, 2020. The increase during the first three months of 2021 was primarily due to changes in business cash flow needs. All the transactions have overnight maturities with a weighted average rate of 0.15%.

The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., declare bankruptcy), the Company could cancel the repurchase agreement (i.e., cease payment of principal and interest), and attempt collection on the amount of collateral value in excess of the repurchase agreement fair value. The collateral is held by a third-party financial institution in the counterparty's custodial account. The counterparty has the right to sell or repledge the investment securities. For government entity repurchase agreements, the collateral is held by the Company in a segregated custodial account under a tri-party agreement. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional securities. The Company closely monitors collateral levels to ensure adequate levels are maintained, while mitigating the potential of over- collateralization in the event of counterparty default.

Collateral pledged by class for repurchase agreements are as follows (in thousands):

	March 31, 2021		December 31, 2020
US Treasury securities and obligations of U.S. government corporations & agencies	$	55,619	$	37,423
Mortgage-backed securities: GSE: residential		156,884		168,480
Miscellaneous		—		1,034
Total	$	212,503	$	206,937

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FHLB borrowings, before net premiums of $921,000, were $115.9 million and $94 million at March 31, 2021 and December 31, 2020, respectively. At March 31, 2021 the advances were as follows:

Advance		Term (in years)		Interest Rate	Maturity Date
$	5,000,000		5.0	1.85%	April 12, 2021
	4,000,000		1.0	2.00%	May 3, 2021
	5,000,000		7.0	2.55%	October 1, 2021
	5,000,000		5.0	2.71%	March 21, 2022
	5,000,000		8.0	2.40%	January 9, 2023
	5,000,000		3.0	2.41%	May 31, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		4.0	2.44%	May 30, 2023
	5,000,000		3.5	1.51%	July 31, 2023
	5,000,000		3.5	0.77%	September 11, 2023
	10,000,000		5.0	1.45%	December 31, 2024
	5,000,000		5.0	0.91%	March 10, 2025
	6,940,511		10.0	2.64%	December 23, 2025
	5,000,000		10.0	1.14%	October 3, 2029
	5,000,000		10.0	1.15%	October 3, 2029
	5,000,000		10.0	1.12%	October 3, 2029
	10,000,000		10.0	1.39%	December 31, 2029
	15,000,000		10.0	1.41%	December 31, 2029

Note 7 -- Fair Value of Assets and Liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Following is a description of the inputs and valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Available-for-Sale Securities. The fair value of available-for-sale securities is determined by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independent sources of market parameters, including but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Fair value determinations for Level 3 measurements of securities are the responsibility of the Treasury function of the Company. The Company contracts with a pricing specialist to generate fair value estimates on a monthly basis. The Treasury function of the Company challenges the reasonableness of the assumptions used and reviews the methodology to ensure the estimated fair value complies with accounting standards generally accepted in the United States, analyzes the changes in fair value and compares these changes to internally developed expectations and monitors these changes for appropriateness.

Derivatives. The fair value of derivatives is based on models using observable market data as of the measurement date and are therefore classified in Level 2 of the valuation hierarchy.

32

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of March 31, 2021 and December 31, 2020 (in thousands):

	Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2021
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government    corporations and agencies	$	171,530	$	—	$	171,530	$	—
Obligations of states and political subdivisions		257,719		—		257,105		614
Mortgage-backed securities		621,952		—		621,952		—
Other securities		36,747		—		36,747		—
Total available-for-sale securities		1,087,948		—		1,087,334		614
Equity securities		300		300		—		—
Derivative assets: interest rate swaps		262		—		262		—
Total assets	$	1,088,510	$	300	$	1,087,596	$	614
Derivative liabilities: interest rate swaps	$	1,013	$	—	$	1,013	$	—
December 31, 2020
Available-for-sale securities:
U.S. Treasury securities and Obligations of U.S. government    corporations and agencies	$	127,069	$	—	$	127,069	$	—
Obligations of states and political subdivisions		249,844		—		249,050		794
Mortgage-backed securities		491,348		—		491,348		—
Other securities		10,979		—		10,979		—
Total available-for-sale securities		879,240		—		878,446		794
Equity securities		218		218		193		—
Derivative assets: interest rate swaps		1,399		-		1,399		—
Total assets	$	880,857	$	218	$	880,038	$	794
Derivative liabilities: interest rate swaps	$	2,892	$	—	$	2,892	$	—

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2021 and 2020 is summarized as follows (in thousands):

	Obligation of State and Political Subdivisions
	Three months ended
	March 31, 2021			March 30, 2020
Beginning balance	$	794		$	973
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Total gains or losses:
Included in net income		1			1
Included in other comprehensive income (loss)		—			—
Purchases, issuances, sales and settlements:
Purchases		—			—
Issuances		—			—
Sales		(181	)		(184	)
Settlements		—			—
Ending balance	$	614		$	790
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$	—		$	—

33

Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Impaired Loans (Collateral Dependent). Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment and estimating fair value include using the fair value of the collateral for collateral dependent loans.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Impaired loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method.

Management establishes a specific allowance for impaired loans that have an estimated fair value that is below the carrying value. The total carrying amount of loans for which a change in specific allowance has occurred as of March 31, 2021 was $15,429,000 and a fair value of $2,696,000 resulting in specific loss exposures of $12,733,000.

When there is little prospect of collecting principal or interest, loans, or portions of loans, may be charged-off to the allowance for credit losses. Losses are recognized in the period an obligation becomes uncollectible. The recognition of a loss does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan even though partial recovery may be affected in the future.

Foreclosed Assets Held For Sale. Other real estate owned acquired through loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for credit losses. Due to the subjective nature of establishing the fair value when the asset is acquired, the actual fair value of the other real estate owned, or foreclosed asset could differ from the original estimate. If it is determined that fair value declines subsequent to foreclosure, a valuation allowance is recorded through noninterest expense. Operating costs associated with the assets after acquisition are also recorded as noninterest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other noninterest expense. The total carrying amount of other real estate owned as of March 31, 2021 was $13,339,000. Other real estate owned included in the total carrying amount and measured at fair value on a nonrecurring basis during the period amounted to $11,292,000.

Mortgage Servicing Rights. As of March 31, 2021, mortgage servicing rights had a carrying value of $920,000 and a fair value of $551,000 resulting in a valuation reserve of $369,000. The fair value used to determine the valuation reserve for mortgage servicing rights was estimated using the discounted cash flow models. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the fair value hierarchy.

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Impaired loans (collateral dependent)	$	12,733	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		11,292	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		551	Third party valuations	PSA standard prepayment model rate	242 - 438		304

December 31, 2020	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Impaired loans (collateral dependent)	$	14,876	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		290	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		517	Third party valuations	PSA standard prepayment model rate	242 - 441		384

34

The following tables present estimated fair values of the Company’s financial instruments at March 31, 2021 and December 31, 2020 in accordance with ASC 825 (in thousands):

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2021
Financial Assets
Cash and due from banks	$	408,226	$	408,226	$	408,226	$	—	$	—
Federal funds sold		1,321		1,321		1,321		—		—
Certificates of deposit investments		2,695		2,695		—		2,695		—
Available-for-sale securities		1,087,948		1,087,948		—		1,087,334		614
Held-to-maturity securities		7,045		7,125		—		7,125		—
Equity securities		300		300		300		—		—
Loans held for sale		4,693		4,693		—		4,693		—
Loans net of allowance for credit losses		3,882,988		3,839,827		—		—		3,839,827
Interest receivable		20,218		20,218		—		20,218		—
Federal Reserve Bank stock		9,401		9,401		—		9,401		—
Federal Home Loan Bank stock		5,450		5,450		—		5,450		—
Financial Liabilities
Deposits	$	4,737,693	$	4,740,802	$	—	$	3,926,107	$	814,695
Securities sold under agreements to repurchase		212,503		212,514		—		212,514		—
Interest payable		3,214		3,214		—		3,214		—
Federal Home Loan Bank borrowings		116,861		117,670		—		117,670		—
Subordinated debt, net		94,289		94,289				94,289
Junior subordinated debentures, net		19,069		14,495		—		14,495		—
December 31, 2020
Financial Assets
Cash and due from banks	$	415,973	$	415,973	$	415,973	$	—	$	—
Federal funds sold		1,308		1,308		1,308		—		—
Certificates of deposit investments		2,695		2,695		—		2,695		—
Available-for-sale securities		879,240		879,240		—		878,446		794
Held-to-maturity securities		5,016		5,119		—		5,119		—
Equity securities		218		218		218		—		—
Loans held for sale		1,924		1,924		—		1,924		—
Loans net of allowance for credit losses		3,094,585		3,056,344		—		—		3,056,344
Interest receivable		19,287		19,287		—		19,287		—
Federal Reserve Bank stock		9,401		9,401		—		9,401		—
Federal Home Loan Bank stock		5,450		5,450		—		5,450		—
Financial Liabilities
Deposits	$	3,692,784	$	3,697,105	$	—	$	3,215,715	$	481,390
Securities sold under agreements to repurchase		206,937		206,945		—		206,945		—
Interest payable		2,345		2,345		—		2,345		—
Federal Home Loan Bank borrowings		93,969		96,669		—		96,669		—
Subordinated debt, net		94,253		94,253		—		94,253		—
Junior subordinated debentures, net		19,027		14,604		—		14,604		—

35

Note 8 – Business Combinations

On September 25, 2020, the Company and Eval Sub Inc., a newly formed Illinois corporation and wholly-owned subsidiary of the Company ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with LINCO Bancshares, Inc., a Missouri corporation ("LINCO"), and the sellers as defined therein, pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of LINCO pursuant to a business combination whereby Merger Sub will merge with and into LINCO, whereupon the separate corporate existence of Merger Sub will cease and LINCO will continue as the surviving company and a wholly-owned subsidiary of the Company (the "Merger").

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each share of common stock, par value $1.00 per share, of LINCO issued and outstanding immediately prior to the effective time of the Merger (other than shares held in treasury by LINCO) will be converted into and become the right to receive, cash or shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration payable by the Company at the closing of the Merger was $103.5 million in cash and 1,262,246 shares of the Company’s common stock, provided that the shareholders of LINCO have collectively elected pursuant to the Merger Agreement to receive varying amounts of cash or shares of common stock of the Company as consideration in the Merger.   In addition, immediately prior to the closing of the proposed merger, LINCO paid a special dividend to its shareholders in the aggregate amount of $13 million.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business
Combinations ("ASC 805"),” and accordingly the assets and liabilities were recorded at their estimated fair values as of the
date of acquisition. Fair values are subject to refinement for up to one year after the closing date of February 22, 2021 as
additional information regarding the closing date fair values become available. The total consideration paid was used to
determine the amount of goodwill resulting from the transaction. As the total consideration paid exceeded the net assets
acquired, goodwill of $8.9 million was recorded for the acquisition. Goodwill recorded in the transaction, which reflects the
synergies and economies of scale expected from combining operations and the enhanced revenue opportunities from the
Company’s service capabilities, is not tax deductible, and was all assigned to the banking segment of the Company.

	Acquired			Fair Value			As Recorded by
	Book Value			Adjustments			Providence Bank
Assets
Cash and due from banks	$	130,561		$	-		$	130,561
Investment Securities		119,234			264			119,498
Loans		838,377			(9,401	)		828,976
Allowance for credit losses		(8,656	)		6,583			(2,073	)
Other real estate owned		8,435			2,456			10,891
Premises and equipment		23,440			4,819			28,259
Goodwill		-			8,956			8,956
Core deposit intangible		123			2,025			2,148
Right of use asset		-			794			794
Other assets		43,697			1,736			45,433
Total assets acquired	$	1,155,211		$	18,232		$	1,173,443
Liabilities
Deposits	$	988,329		$	2,081		$	990,410
Securities sold under agreements to repurchase		-			-			-
FHLB advances		26,941			975			27,916
Other borrowings		-			-			-
Lease liability		-			794			794
Other liabilities		7,242			(610	)		6,632
Total liabilities assumed		1,022,512			3,240			1,025,752
Net assets acquired	$	132,699		$	14,992		$	147,691
Consideration Paid
Cash							$	103,500
Common stock								44,191
							$	147,691

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The Company has recognized approximately $3.1 million, pre-tax, of acquisition costs for the LINCO acquisition. Of this amount, $2.6 million was recognized during the first quarter of 2021. These costs are included in salaries and benefits, legal and professional and other expense. Of the $9.4 million adjustment to loans, $11.1 million is being accreted to interest income over the remaining term of the loans. The remaining $1.7 million was the elimination of deferred fees and unearned discounts previously recorded by Providence Bank. The Company also recorded approximately $2 million directly to the allowance for credit losses for loans identified as PCD. Of the $838 million of loans acquired, approximately $64.6 million was identified as PCD.

The differences between fair value and acquired value of the assumed time deposits of $2.1 million and the assumed FHLB advances of $975,000, are being amortized to interest expense over the remaining life of the liabilities. The core deposit intangible assets, with a fair value of $2 million, will be amortized on an accelerated basis over its estimated life of 10 years.

The following unaudited pro forma condensed combined financial information presents the results of operations of the
Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the LINCO acquisition
taken place at the beginning of the period (dollars in thousands):

	Three months ended                                     March 31, 2021		Three months ended                                     March 31, 2020
Net interest income	$	38,237	$	40,626
Provision for loan losses		12,136		5,492
Non-interest income		17,749		17,651
Non-interest expense		37,659		32,060
Income before taxes		6,191		20,725
Income tax expense (benefit)		1,078		5,277
Net income (loss)	$	5,113	$	15,448
Earnings per share
Basic	$	0.30	$	0.86
Diluted		0.29		0.86
Basic weighted average shares o/s		17,299,927		17,955,429
Diluted weighted average shares o/s		17,352,947		18,002,337

Note 9 -- Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). As of March 31, 2021, substantially all the Company's leases are operating leases for real estate property for bank branches, ATM locations, and office space.

These leases are generally for periods of 1 to 25 years with various renewal options. The Company elected the optional transition method permitted by Topic 842. Under this method, the Company recognizes and measures leases that exist at the application date and prior comparative periods are not adjusted. In addition, the Company elected the package of practical expedients:

1. An entity need not reassess whether any expired or existing contracts contain leases.

2. An entity need not reassess the lease classification for any expired or existing leases.

3. An entity need not reassess initial direct costs for any existing leases.

The Company has also elected the practical expedient, which may be elected separately or in conjunction with the package noted above, to use hindsight in determining the lease term and in assessing the right-of-use assets. This expedient must be applied consistently to all leases. Lastly, the Company has elected to use the practical expedient to include both lease and non-lease components as a single component and account for it as a lease. In addition, The Company has elected to not include short-term leases (i.e. Leases with terms of twelve months or less) or equipment leases (primarily copiers) deemed immaterial, on the consolidated balance sheets.

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For leases in effect at January 1, 2019 and for leases commencing thereafter, the Company recognizes a lease liability and a right-of-use asset, based on the present value of lease payments over the lease term. The discount rate used in determining present value was the Company's incremental borrowing rate which is the FHLB fixed advance rate based on the remaining lease term as of January 1, 2019, or the commencement date for leases subsequently entered into. The following table contains supplemental balance sheet information related to leases (dollars in thousands):

	March 31, 2021			March 31, 2020			December 31, 2020
Operating lease right-of-use assets	$	17,424		$	16,542		$	17,209
Operating lease liabilities		17,578			16,568			17,351
Weighted-average remaining lease term (in years)		6.8			7.1			7.3
Weighted-average discount rate		2.63	%		3.08	%		2.85	%

Certain of the Company's leases contain options to renew the lease; however, not all renewal options are included in the calculation of lease liabilities as they are not reasonably certain to be exercised. The Company's leases do not contain residual value guarantees or material variable lease payments. The Company does not have any other material restrictions or covenants imposed by leases that would impact the Company's ability to pay dividends or cause the Company to incur additional financial obligations.

Maturities of lease liabilities were as follows (in thousands):

Year ending December 31,
	2021	$	2,226
	2022		2,703
	2023		2,364
	2024		1,942
	2025		1,629
Thereafter			9,150
Total lease payments			20,014
Less imputed interest			(2,436	)
Total lease liability		$	17,578

The components of lease expense for the three months ended March 31, 2021 and 2020 were as follows (in thousands):

	Three months ended March 31,
	2021			2020
Operating lease cost	$	708		$	642
Short-term lease cost		35			46
Variable lease cost		137			169
Total lease cost		880			857
Income from subleases		(153	)		(193	)
Net lease cost	$	727		$	664

As the Company elected not to separate lease and non-lease components, the variable lease cost primarily represents variable payment such as common area maintenance and copier expense. The Company does not have any material sub-lease agreements. Cash paid for amounts included in the measurement of lease liabilities was (in thousands):

	March 31, 2021		March 31, 2020
Operating cash flows from operating leases	$	711	$	677

Note 10 – Derivatives

The Company utilizes an interest rate swap, designated as a fair value hedge, to mitigate the risk of changing interest rates on the fair value of a fixed rate commercial real estate loan. For derivative instruments that are designed and qualify as a fair value hedge, the gain or loss on the derivative instrument, as well as the offsetting loss or gain in the hedged asset attributable to the hedged risk, is recognized in current earnings.

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Derivatives Designated as Hedging Instruments

The following table provides the outstanding notional balances and fair values of outstanding derivatives designated as hedging instruments as of March 31, 2021 and December 31, 2020 (in thousands):

	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
March 31, 2021
Fair Value Hedges:
Interest rate swap agreements	Other liabilities	8.1 years	$	14,276	$	(1,013	)
December 31, 2020
Fair Value Hedges:
Interest rate swap agreements	Other liabilities	8.3 years	$	14,334	$	(2,892	)

The effects of the fair value hedges on the Company's income statement during the three months ended March 31, 2021 and 2020 were as follows (in thousands):

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Derivatives	2021			2020
Interest rate swap agreements	Interest income on loans	$	(743	)	$	(1,384	)

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Hedged Items	2021		2020
Interest rate swap agreements	Interest income on loans	$	743	$	1,384

As of March 31, 2021, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustment for fair value hedges (in thousands):

Line Item in the Balance Sheet in Which the Hedge Item is Included	Carrying Amount of the Hedged Asset		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
Loans	$	13,525	$	751

Derivatives Not Designated as Hedging Instruments

The following amounts represent the notional amounts and gross fair value of derivative contracts not designated as hedging instruments outstanding during the three months ended March 31, 2021 and 2020  (in thousands):

September 30, 2020	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
Interest rate swap agreements	Other assets	6.8	$	42,223	$	262
Interest rate swap agreements	Other liabilities	6.8		42,223		(262	)

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to provide a better understanding of the consolidated financial condition and results of operations of the Company and its subsidiaries as of, and for the three months ended March 31, 2021 and 2020. This discussion and analysis should be read in conjunction with the consolidated financial statements, related notes and selected financial data appearing elsewhere in this report.

Forward-Looking Statements

This report may contain certain forward-looking statements, such as discussions of the Company’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses, planned schedules and COVID-19. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are identified by use of the words “believe,” ”expect,” ”intend,” ”anticipate,” ”estimate,” ”project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including those described in Item 1A-“Risk Factors” and other sections of the Company’s Annual Report on Form 10-K and the Company’s other filings with the SEC, and the possibility that any of the anticipated benefits of the closed transaction between First Mid and LINCO will not be realized or will not be realized within the expected time period; the risk that integration of the operations of LINCO with First Mid will be materially delayed or will be more costly or difficult than expected; changes in interest rates, general economic conditions and those in the Company’s market area, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios and the valuation of the investment portfolio, the Company’s success in raising capital and effecting and integrating acquisitions, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area and accounting principles, policies and guidelines, the severity, magnitude and duration of COVID-19 pandemic, the direct and indirect impact of such pandemic, including responses to the pandemic by the government, businesses customers' businesses, the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect the Company's liquidity and capital positions, impair the ability of the Company's borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses, and the impact of the COVID-19 pandemic on the Company's financial results, including possible lost revenue and increased expenses (including cost of capital), as well as possible goodwill impairment charges. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise. Further information concerning the Company and its business, including a discussion of these and additional factors that could materially affect the Company’s financial results, is included in the Company’s 2019 Annual Report on Form 10-K under the headings “Item 1. Business" and “Item 1A. Risk Factors."

COVID-19 Impact

The COVID-19 outbreak is an unprecedented event that provides significant economic uncertainty for a broad spectrum of industries. The spread of this outbreak has caused significant disruptions in the U.S. economy and some of these impacts will be long lasting. As it continues to evolve it is not clear when or how the pandemic-driven contraction will recover. Congress, the President, and the Federal Reserve have taken several actions designed to cushion the economic fallout. Most notably, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law at the end of March 2020 as a $2 trillion legislative package. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. Many of the CARES Act provisions, as well as other recent legislative and regulatory efforts, are expected to have a material impact on financial institutions. The Company's strong track record and revenue diversification provide a solid foundation for earnings and capital. The Company is focused on supporting its customers, communities, and employees during this unique operating environment. Following is a description of the impact COVID-19 is having, actions taken because of COVID-19, and certain risks to the Company that COVID-19 creates or exacerbates, as well as management's outlook on the current COVID-19 situation.

Lending operations and accommodations to customers. Beginning in March 2020, First Mid Bank offered a 90-day commercial deferral program, primarily to hotel and restaurant borrowers. Subsequently, additional deferrals were offered on an individual case basis and a broader program was offered to residential and consumer customers. As of March 31, 2021, a total of $50.6 million was deferred through these programs. In accordance with interagency guidance issued in March 2020, these short-term deferrals are not considered troubled debt restructurings.

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Beginning April 3, 2020, with the passage of the initial Paycheck Protection Program (“PPP”), administered by the Small Business Administration (“SBA”), the Company actively participated in assisting existing and new customers with applications for resources through the program. PPP loans have a two-year term and earn interest at 1%. The Company believes that most of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program. As of March 31, 2021, the Company has outstanding 2,732 PPP loans totaling $259.7 million with the SBA. It is the Company’s understanding that loans funded through the PPP program are fully guaranteed by the U.S. government and as such do not represent a credit risk.

Employees. The Company has a business continuity plan in place that was executed in March 2020. Approximately half of the Company's workforce has the ability to work remotely with secure connections. In addition, various preventative and personal hygiene measures, in accordance with CDC guidelines have been implemented. To protect and ensure the safety of employees, as well as customers, all branch locations were transitioned to drive-thru use only. Most branch lobbies were re-opened in mid-June and the Company continues to monitor each location. The Company increased the number of available sick days to every employee impacted in anyway by COVID-19 and offered financial assistance for any employee with need.

Asset impairment. The Company does not believe that any impairment exists due to COVID-19 to goodwill and other intangible assets, long-lived assets, mortgage servicing rights ("MSRs"), right of use assets, or available-for-sale investment securities at this time. While certain valuation assumptions and judgements will change to account for COVID-19 related circumstances, the Company does not expect significant changes in methodology used to determine the fair value of assets in accordance with GAAP. It is uncertain whether prolonged effects of COVID-19 will result in future impairment charges related to any of these assets.

Capital and liquidity. The Company's and First Mid Bank's capital levels are higher today than during the Great Recession of 2008. The Company’s current allowance for credit losses could absorb net charge offs greater than the total of all net charge offs over the last 20 years. The Company’s aggregate net charge offs over the last 20 years through March 31, 2021, were $33.2 million. Current capital levels also support the Company's recent loan stress testing of the most vulnerable industry sectors impacted by COVID-19.

The Company maintains access to multiple sources of liquidity. Currently, the Company's total liquidity sources could provide $2.3 billion of total available capacity as of March 31, 2021.

Management's outlook. The Company's current financial position is strong and the fundamental earning capabilities of its currently existing operations is solid. Due to the uncertain economic outlook related to the COVID-19 crisis and the potential for loan losses and other asset impairments, it is anticipated that reserve levels will remain elevated compared to recent historical trends. All processes, procedures and internal controls are expected to continue as outlined in existing applicable policies despite remote working status of many employees. While the Company does not currently anticipate any material changes or deficiencies to its capital or liquidity sources, uncertainties about duration and overall effects on the economy could result in more adverse effects than expected.

Overview

This overview of management’s discussion and analysis highlights selected information in this document and may not contain all the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting estimates which have an impact on the Company’s financial condition and results of operations you should carefully read this entire document.

Net income was $4,109,000 and $9,999,000 for the three months ended March 31, 2021 and 2020, respectively. Diluted net income per common share was $0.24 and $0.60 for the three months ended March 31, 2021 and 2020.

The following table shows the Company’s annualized performance ratios for three months ended March 31, 2021 and 2020, compared to the performance ratios for the year ended December 31, 2020:

	Three months ended						Year ended
	March 31, 2021			March 31, 2020			December 31, 2020
Return on average assets		0.32	%		1.05	%		1.05	%
Return on average common equity		2.78	%		7.48	%		8.24	%
Average equity to average assets		11.41	%		13.97	%		12.76	%

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Total assets were $5.8 billion at March 31, 2021, compared to $4.7 billion as of December 31, 2020. From December 31, 2020 to March 31, 2021, cash and interest-bearing deposits decreased $7.7 million, net loan balances increased $788.4 million and investment securities increased $210.8 million. Net loan balances were $3.88 billion at March 31, 2021 compared to $3.09 billion at December 31, 2020. The increases were primarily due to the acquisition of Providence Bank during the first quarter of 2021.

Net interest margin, on a tax equivalent basis, defined as net interest income divided by average interest-earning assets, was 3.16% for the three months ended March 31, 2021, down from 3.51% for the same period in 2020. This decrease was primarily due to lower yields on loans and investments. Net interest income before the provision for loan losses was $36.8 million compared to net interest income of $29.9 million for the same period in 2020. The increase in net interest income was primarily due to the acquisition of Providence Bank during the first quarter of 2021.

Total non-interest income of $17.7 million increased $1.2 million or 7.5% from $16.5 million for the same period last year. The increase in non-interest income resulted primarily from an increase in wealth management revenues, and income from Providence Bank.

Total non-interest expense of $37.6 million increased $9.9 million or 35.6% from $27.7 million for the same period last year. The increase was primarily due to costs related to the acquisition of LINCO during the first quarter of 2021, and expenses from Providence Bank.

Following is a summary of the factors that contributed to the changes in net income (in thousands):

	Change in Net Income
	2021 versus 2020
		Three months ended March 31, 2021
Net interest income		$	6,891
Provision for loan losses			(6,655	)
Other income, including securities transactions			1,239
Other expenses			(9,869	)
Income taxes			2,504
Decrease in net income		$	(5,890	)

Credit quality is an area of importance to the Company. Total nonperforming loans were $32.0 million at March 31, 2021, compared to $24.5 million at March 31, 2020 and $28.1 million at December 31, 2020. See the discussion under the heading “Loan Quality and Allowance for Loan Losses” for a detailed explanation of these balances. Repossessed asset balances totaled $13.3 million at March 31, 2021 compared to $2.8 million at March 31, 2020 and $2.5 million at December 31, 2020. The increases in nonperforming loans and repossessed assets were due to the acquisition of Providence Bank.

The Company’s provision for loan losses for the three months ended March 31, 2021 and 2020 was $12,136,000 and $5,481,000, respectively. This increase was due to recording initial provision for credit losses for Providence Bank loans of $11.5 million, offset by lower provision expense for First Mid Bank during the first quarter of 2021 compared to 2020 when ASC 2016-13 was adopted. Total loans past due 30 days or more were 0.39% of loans at March 31, 2021 compared to 1.43% at March 31, 2020, and 0.44% of loans at December 31, 2020. The decline in this ratio was primarily due to the increase in loan balances. Loans secured by both commercial and residential real estate comprised approximately 64.6% of the loan portfolio as of March 31, 2021 and 65.8% as of December 31, 2020

The Company’s capital position remains strong and the Company has consistently maintained regulatory capital ratios above the “well-capitalized” standards. The Company’s Tier 1 capital to risk weighted assets ratio calculated under the regulatory risk-based capital requirements at March 31, 2021 and 2020 and December 31, 2020 was 10.74%, 15.05% and 14.63%, respectively. The Company’s total capital to risk weighted assets ratio calculated under the regulatory risk-based capital requirements at March 31, 2021 and 2020, and December 31, 2020 was 13.75%, 16.13% and 18.82%, respectively. The decrease in these ratios from December 31, 2020 was primarily due to the acquisition of LINCO offset by net income added to retained earnings.

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On March 27, 2020, the federal banking regulatory agencies, issued an interim final rule which provided an option to delay the estimated impact on regulatory capital of ASU 2016-13, which was effective January 1, 2020. The initial impact of adoption of ASU 2016-13 as well as 25% of the quarterly increases in the allowance for credit losses subsequent to adoption of ASU 2016-13 ("CECL adjustments") will be delayed for two years. After two years, the cumulative amount of these adjustments will be phased out of the regulatory capital calculation over a three-year period, with 75% of the adjustments included in year three, 50% of the adjustments included in year four and 25% of the adjustments included in year five. After five years, the temporary delay of ASU 2016-13 adoption will be fully reversed. The Company has elected this option.

The Company’s liquidity position remains sufficient to fund operations and meet the requirements of borrowers, depositors, and creditors. The Company maintains various sources of liquidity to fund its cash needs. See the discussion under the heading “Liquidity” for a full listing of sources and anticipated significant contractual obligations.

The Company enters into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. The total outstanding commitments at March 31, 2021 and 2020, were $850 million and $596 million, respectively.

Federal Deposit Insurance Corporation Insurance Coverage. As FDIC-insured institutions, First Mid Bank and Providence Bank are required to pay deposit insurance premium assessments to the FDIC. Several requirements with respect to the FDIC insurance system have affected results, including insurance assessment rates.

On September 30, 2018, the Deposit Insurance Fund Reserve Ratio reached 1.36 percent. Because the reserve ratio exceeded 1.35 percent, two deposit insurance assessment changes occurred under the FDIC regulations:

• Surcharges on large banks (total consolidated assets of less than $10 billion) ended; the last surcharge on large banks was collected on December 28, 2018.

• Small banks (total consolidated assets of less than $10 billion) were awarded assessment credits for the portion of their assets that contributed to the growth in the reserve ratio from 1.15 percent to 1.35 percent, to be applied when the reserve ratio is at least 1.38 percent.

On August 20, 2019, the FDIC Board approved a Notice of Proposed Rulemaking which amended the Small Bank Credits regulation to permit credit usage when the reserve ratio is at least 1.35 percent (rather than 1.38%). Additionally, after eight quarters of credit usage, the FDIC would remit the remaining full nominal value to each bank. Eligible banks were notified in January 24, 2019 with preliminary estimate of their share of small bank assessment credits. First Mid Bank's Small Bank Credit was $931,853. A portion of the credit was applied to the second and third quarter assessments paid in 2019 and the fourth quarter assessment paid in 2020. The remaining credit of approximately $163,700 was applied to the Company's assessment for the first quarter of 2020.

The Company expensed $452,045 and $93,000 for the assessment during the first three months of 2021 and 2020, respectively. The increase in 2021 expense was due to a remaining small bank credit utilized during the first quarter of 2020.

Basel III. In September 2010, the Basel Committee on Banking Supervision proposed higher global minimum capital standards, including a minimum Tier 1 common capital ratio and additional capital and liquidity requirements. On July 2, 2013, the Federal Reserve Board approved a final rule to implement these reforms and changes required by the Dodd-Frank Act. This final rule was subsequently adopted by the OCC and the FDIC.

The final rule includes new risk-based capital and leverage ratios:

(i) a common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%. The rule also establishes a “capital conservation buffer” of 2.5% above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital and would result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement was being phased in beginning in January 2016 at 0.625% of risk weighted assets and will increase by that amount each year until fully implemented in January 2019. An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if its capital level falls below the buffer amount.

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On March 27, 2020, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (the "agencies") issued and interim final rule ("IFR") that delays the estimated impact on regulatory capital stemming from the implementation of ASU 2016-13 for a transition period of up to five years ("CECL IFR"). The goal of the CECL IFR is to provide regulatory relief to banking organizations that are required to adopt ASU 2016-13 as of January 1, 2020 in order to allow them to better focus on support lending to credit-worthy households and businesses. The CECL IFR is calibrated to approximate the difference in allowances under ASU 2016-13 relative to the previous incurred loss methodology for the first two years of the transition period. The cumulative difference at the end of the second year of the transition period is then phased into regulatory capital over a three-year transition period. A banking organization's five-year transition period under CECL IFR begins on the date it would have been required to adopt ASU 2016-13 under U.S. GAAP regardless of whether the banking organization uses the statutory relief offered under the CARES Act.

See discussion under the heading "Capital Resources" for a description of the Company's, First Mid Bank's and Providence Bank’s risk-based capital.

Critical Accounting Policies and Use of Significant Estimates

The Company has established various accounting policies that govern the application of U.S. generally accepted accounting principles in the preparation of the Company’s consolidated financial statements. The significant accounting policies of the Company are described in the footnotes to the consolidated financial statements included in the Company’s 2019 Annual Report on Form 10-K. Certain accounting policies involve significant judgments and assumptions by management that have a material impact on the carrying value of certain assets and liabilities; management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and assumptions, which could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company.

Investment in Debt and Equity Securities. The Company classifies its investments in debt and equity securities as either held-to-maturity or available-for-sale in accordance with Statement of Financial Accounting Standards (SFAS) No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” which was codified into ASC 320. Securities classified as held-to-maturity are recorded at amortized cost. Available-for-sale securities are carried at fair value. Fair value calculations are based on quoted market prices when such prices are available. If quoted market prices are not available, estimates of fair value are computed using a variety of techniques, including extrapolation from the quoted prices of similar instruments or recent trades for thinly traded securities, fundamental analysis, or through obtaining purchase quotes. Due to the subjective nature of the valuation process, it is possible that the actual fair values of these investments could differ from the estimated amounts, thereby affecting the financial position, results of operations and cash flows of the Company. If the estimated value of investments is less than the cost or amortized cost, the Company evaluates whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment. If such an event or change has occurred and the Company determines that the impairment is other-than-temporary, a further determination is made as to the portion of impairment that is related to credit loss. The impairment of the investment that is related to the credit loss is expensed in the period in which the event or change occurred. The remainder of the impairment is recorded in other comprehensive income (loss).

Allowance for Credit Losses - Held-to-Maturity Securities. Currently all the Company's held-to-maturity securities are government agency-backed securities for which the risk of loss is minimal. Accordingly, the Company does not record an allowance for credit losses on held-to-maturity securities.

Loans. Loans are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase discounts and premiums, fair value hedge accounting adjustments and deferred loan fees and costs. Accrued interest is reported separately and is included in interest receivable in the consolidated balance sheets.

Allowance for Credit Losses - Loans. The Company believes the allowance for credit losses for loans is the critical accounting policy that requires the most significant judgments and assumptions used in the preparation of its consolidated financial statements. The allowance for credit losses for loans represents the best estimate of losses inherent in the existing loan portfolio. An estimate of potential losses inherent in the loan portfolio are determined and an allowance for those losses is established by considering factors including historical loss rates, expected cash flows and estimated collateral values. In assessing these factors, the Company uses relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts.

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The allowance for credit losses is measured on a collective (pool) basis for non-impaired loans with similar risk characteristics. Historical credit loss experience provides the basis for the estimate of expected credit losses. Adjustments to historical loss information are made for relevant factors to each pool including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. The Company estimates the appropriate level of allowance for credit losses for impaired loans by evaluating them separately. A specific allowance is assigned to an impaired loan when expected cash flows or collateral are less than the carrying amount of the loan.

Allowance for Credit Losses - Off-Balance Sheet Credit Exposures. The Company estimates expected credit losses over the contractual period that the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is included in other liabilities in the consolidated balance sheets.

Other Real Estate Owned. Other real estate owned acquired through loan foreclosure is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for loan losses. Due to the subjective nature of establishing the fair value when the asset is acquired, the actual fair value of the other real estate owned or foreclosed asset could differ from the original estimate. If it is determined that fair value temporarily declines subsequent to foreclosure, a valuation allowance is recorded through noninterest expense.

Operating costs associated with the assets after acquisition are also recorded as noninterest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other noninterest expense.

Mortgage Servicing Rights. The Company has elected to measure mortgage servicing rights under the amortization method. Using this method, servicing rights are amortized in proportion to and over the period of estimated net servicing income. The amortized assets are assessed for impairment based on fair value at each reporting date. Impairment is determined by stratifying rights into tranches based on predominant characteristics, such as interest rate, loan type and investor type.

Impairment is recognized through a valuation reserve, to the extent that fair value is less than the carrying amount of the servicing assets. Fair value in excess of the carrying amount of servicing assets is not recognized.

Deferred Income Tax Assets/Liabilities. The Company’s net deferred income tax asset arises from differences in the dates that items of income and expense enter our reported income and taxable income. Deferred tax assets and liabilities are established for these items as they arise. From an accounting standpoint, deferred tax assets are reviewed to determine if they are realizable based on the historical level of taxable income, estimates of future taxable income and the reversals of deferred tax liabilities. In most cases, the realization of the deferred tax asset is based on future profitability. If the Company were to experience net operating losses for tax purposes in a future period, the realization of deferred tax assets would be evaluated for a potential valuation reserve.

Additionally, the Company reviews its uncertain tax positions annually under FASB Interpretation No. 48 (FIN No. 48), “Accounting for Uncertainty in Income Taxes,” codified within ASC 740. An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be recognized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. A significant amount of judgment is applied to determine both whether the tax position meets the "more likely than not" test as well as to determine the largest amount of tax benefit that is greater than 50% likely to be recognized. Differences between the position taken by management and that of taxing authorities could result in a reduction of a tax benefit or increase to tax liability, which could adversely affect future income tax expense.

Impairment of Goodwill and Intangible Assets. Core deposit and customer relationships, which are intangible assets with a finite life, are recorded on the Company’s consolidated balance sheets. These intangible assets were capitalized as a result of past acquisitions and are being amortized over their estimated useful lives of up to 15 years. Core deposit intangible assets, with finite lives will be tested for impairment when changes in events or circumstances indicate that its carrying amount may not be recoverable. Core deposit intangible assets were tested for impairment as of September 30, 2020 as part of the goodwill impairment test and no impairment was identified.

As a result of the Company’s acquisition activity, goodwill, an intangible asset with an indefinite life, is reflected on the consolidated balance sheets. Goodwill is evaluated for impairment annually, unless there are factors present that indicate a potential impairment, in which case, the goodwill impairment test is performed more frequently than annually.

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Fair Value Measurements. The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company estimates the fair value of a financial instrument using a variety of valuation methods. Where financial instruments are actively traded and have quoted market prices, quoted market prices are used for fair value. When the financial instruments are not actively traded, other observable market inputs, such as quoted prices of securities with similar characteristics, may be used, if available, to determine fair value. When observable market prices do not exist, the Company estimates fair value. The Company’s valuation methods consider factors such as liquidity and concentration concerns. Other factors such as model assumptions, market dislocations, and unexpected correlations can affect estimates of fair value. Imprecision in estimating these factors can impact the amount of revenue or loss recorded.

SFAS No. 157, “Fair Value Measurements”, which was codified into ASC 820, establishes a framework for measuring the fair value of financial instruments that considers the attributes specific to particular assets or liabilities and establishes a three-level hierarchy for determining fair value based on the transparency of inputs to each valuation as of the fair value measurement date.

The three levels are defined as follows:

• Level 1 — quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 — inputs include quoted prices for similar assets and liabilities in active markets, quoted prices of identical or similar assets or liabilities in markets that are not active, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 — inputs that are unobservable and significant to the fair value measurement.

At the end of each quarter, the Company assesses the valuation hierarchy for each asset or liability measured. From time to time, assets or liabilities may be transferred within hierarchy levels due to changes in availability of observable market inputs to measure fair value at the measurement date. Transfers into or out of hierarchy levels are based upon the fair value at the beginning of the reporting period. A more detailed description of the fair values measured at each level of the fair value hierarchy can be found in Note 7 – Fair Value of Assets and Liabilities.

Results of Consolidated Operations

Net Interest Income

The largest source of revenue for the Company is net interest income. Net interest income represents the difference between total interest income earned on earning assets and total interest expense paid on interest-bearing liabilities. The amount of interest income is dependent upon many factors, including the volume and mix of earning assets, the general level of interest rates and the dynamics of changes in interest rates. The cost of funds necessary to support earning assets varies with the volume and mix of interest-bearing liabilities and the rates paid to attract and retain such funds.

Net interest income is the excess of interest received from earning assets over interest paid on interest-bearing liabilities. For analytical purposes, net interest income is presented on a full tax equivalent ("TE") basis in the table that follows. The federal statutory rate in effect of 21% for 2020 and 2019 was used. The TE analysis portrays the income tax benefits associated with the tax-exempt assets. The year-to-date net yield on interest-earning assets excluding the TE adjustments of $595,000 and $520,000 for 2021 and 2020, respectively were 3.11% and 3.45% at March 31, 2021 and March 31, 2020.

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The Company’s average balances, fully tax equivalent interest income and interest expense, and rates earned or paid for major balance sheet categories are set forth for the three months ended March 31, 2021 and 2020 in the following table (dollars in thousands):

	Three months ended March 31, 2021								Three months ended March 31, 2020
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
Assets
Interest-bearing deposits with other financial    institutions	$	278,295		$	74		0.11	%	$	23,824		$	91		1.54	%
Federal funds sold		1,316			—		0.03	%		926			2		0.87	%
Certificates of deposit		2,695			14		2.14	%		5,064			31		2.46	%
Investment securities:
Taxable		761,727			3,249		1.71	%		543,799			3,339		2.46	%
Tax-exempt (1)		248,188			2,016		3.25	%		174,459			1,582		3.63	%
Loans net of unearned income (TE) (2)		3,477,754			36,058		4.20	%		2,703,051			30,215		4.50	%
Total earning assets		4,769,975			41,411		3.52	%		3,451,123			35,260		4.11	%
Cash and due from banks		84,392								93,283
Premises and equipment		68,282								59,476
Other assets		296,284								251,359
Allowance for loan losses		(46,735	)							(29,990	)
Total assets	$	5,172,198							$	3,825,251
Liabilities and Stockholders' Equity
Interest-bearing deposits
Demand deposits	$	1,876,378		$	886		0.19	%	$	1,264,489		$	1,092		0.35	%
Savings deposits		579,632			136		0.10	%		435,480			119		0.11	%
Time deposits		623,852			1,462		0.95	%		570,132			2,650		1.87	%
Total Interest-bearing deposits		3,079,862			2,484		0.33	%		2,270,101			3,861		0.68	%
Securities sold under agreements to repurchase		198,670			70		0.14	%		202,693			194		0.38	%
FHLB advances		102,081			374		1.49	%		120,146			580		1.94	%
Federal funds purchased		—			—		0.00	%		2,110			10		1.91	%
Subordinated debt		94,266			984		4.23	%		—			—		0.00	%
Junior subordinated debentures		19,041			140		2.98	%		18,873			218		4.65	%
Other debt		—			—		0.00	%		769			4		2
Total borrowings		414,058			1,568		1.54	%		344,591			1,006		1.17	%
Total interest-bearing liabilities		3,493,920			4,052		0.47	%		2,614,692			4,867		0.75	%
Non interest-bearing demand deposits		1,033,741					0.36	%		628,588					0.60	%
Other liabilities		54,346								47,539
Stockholders' equity		590,191								534,432
Total liabilities & equity	$	5,172,198							$	3,825,251
Net interest income				$	37,359							$	30,393
Net interest spread							3.05	%							3.36	%
Impact of non interest-bearing funds							0.11	%							0.15	%
TE Net yield on interest-earning assets							3.16	%							3.51	%

1. The tax-exempt income is shown on a tax equivalent basis.

2. Nonaccrual loans and loans held for sale are included in the average balances. Balances are net of unaccreted discount related to loans acquired.

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Changes in net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense. The following table summarizes the approximate relative contribution of changes in average volume and interest rates to changes in net interest income for the three months ended March 31, 2021, compared to the same period in 2020 (in thousands):

	Three months ended March 31, 2021 compared to 2020 Increase / (Decrease)
	Total
	Change			Volume (1)			Rate (1)
Earning Assets:
Interest-bearing deposits	$	(17	)	$	612		$	(629	)
Federal funds sold		(2	)		4			(6	)
Certificates of deposit investments		(17	)		(13	)		(4	)
Investment securities:
Taxable		(90	)		4,581			(4,671	)
Tax-exempt (2)		434			613			(179	)
Loans (2) (3)		5,843			17,898			(12,055	)
Total interest income	$	6,151		$	23,695		$	(17,544	)
Interest-Bearing Liabilities:
Interest-bearing deposits
Demand deposits	$	(206	)	$	1,975		$	(2,181	)
Savings deposits		17			82			(65	)
Time deposits		(1,188	)		1,496			(2,684	)
Securities sold under agreements to repurchase		(124	)		(4	)		(120	)
FHLB advances		(206	)		(81	)		(125	)
Federal Funds Purchased		(10	)		(5	)		(5	)
Subordinated debt		984			931			53
Junior subordinated debentures		(78	)		14			(92	)
Other debt		(4	)		(2	)		(2	)
Total interest expense		(815	)		4,406			(5,221	)
Net interest income	$	6,966		$	19,289		$	(12,323	)

1. Changes attributable to the combined impact of volume and rate have been allocated proportionately to the change due to volume and the change due to rate.

2. The tax-exempt income is shown on a tax-equivalent basis.

3. Nonaccrual loans have been included in the average balances.

Tax equivalent net interest income increased $7.0 million, or 22.9%, to $37.4 million for the three months ended March 31, 2021, from $30.4 million for the same period in 2019. Net interest income increased primarily due to the acquisition of Providence Bank during the first quarter of 2021. The net interest margin decreased primarily due to a lower interest rates on loans and investments.

For the three months ended March 31, 2021, average earning assets increased $1.3 billion, or 38.2%, and average interest-bearing liabilities increased $879.2 million or 33.6% compared with average balances for the same period in 2020.

The changes in average balances for these periods are shown below:

• Average interest-bearing deposits with other financial institutions increased $254.5 million or 1068.1%.

• Average federal funds sold increased $0.4 million or 42.1%.

• Average certificates of deposits investments decreased $2.4 million or 46.8%

• Average loans increased by $774.7 million or 28.7%.

• Average securities increased by $291.7 million or 40.6%.

• Average interest-bearing customer deposits increased by $809.8 million or 35.7%

• Average securities sold under agreements to repurchase decreased by $4.0 million or 2.0%.

• Average borrowings and other debt increased by $73.5 million or 51.8%.

• Net interest margin decreased to 3.16% for the first three months of 2021 from 3.51% for the first three months of 2020.

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Provision for Loan Losses

The provision for loan losses for the three months ended March 31, 2021 and 2020 was $12.1 million and $5.5 million, respectively. This increase was due to recording initial provision for credit losses for Providence Bank loans of $11.5 million, offset by lower provision expense for First Mid Bank during the first quarter of 2021 compared to 2020 when ASC 2016-13 was adopted. Net charge-offs were $702,000 for the three months ended March 31, 2021, compared to net charge offs of $1.2 million for March 31, 2020. Nonperforming loans were $32.0 million and $24.5 million as of March 31, 2021 and 2020, respectively. For information on loan loss experience and nonperforming loans, see discussion under the “Nonperforming Loans” and “Loan Quality and Allowance for Loan Losses” sections below.

Other Income

An important source of the Company’s revenue is other income. The following table sets forth the major components of other income for the three months ended March 31, 2021 and 2020 (in thousands):

	Three months March 31, 2021
	2021		2020		$ Change			% Change
Wealth management revenues	$	4,926	$	3,626	$	1,300			35.9	%
Insurance commissions		5,857		6,621		(764	)		-11.5	%
Service charges		1,364		1,778		(414	)		-23.3	%
Security gains, net		4		531		(527	)		-99.2	%
Mortgage banking revenue, net		1,409		308		1,101			357.5	%
ATM / debit card revenue		2,699		1,987		712			35.8	%
Bank Owned Life Insurance		637		431		206			47.8	%
Other		853		1,228		(375	)		-30.5	%
Total other income	$	17,749	$	16,510	$	1,239			7.5	%

Following are explanations of the changes in these other income categories for the three months ended March 31, 2021 compared to the same period in 2020:

• Wealth management revenues increased due to increases in all lines of business within Wealth Management.

• Insurance commissions decreased primarily due to a decrease in contingency income for the period compared to the same period last year.

• Fees from service charges decreased due to an increase in waived commercial service charges.

• Gains from the sale of securities during the first quarter of 2021 and 2020 were $3,900 and $531,000, respectively.

• The increase in mortgage banking income was due to an increase in mortgage refinancing activity and fees from loans sold in the secondary market. Loans sold balances were as follows:

• $108.3 million (representing 263 loans) for the three months ended March 31, 2021

• $20.6 million (representing 151 loans) for the three months ended March 31, 2020

First Mid Bank and Providence Bank generally releases the servicing rights on loans sold into the secondary market.

• Revenue from ATMs and debit cards increased due to an increase in activity during the quarter.

• Bank owned life insurance income increased approximately $206,000 during the period in 2021 compared to the same period in 2020, due to $25 million of additional purchased during the first quarter and $30.3 million added through the acquisition of Providence Bank.

• Other income declined primarily due a swap upfront fee received in 2020 that did not recur in 2021.

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Other Expense

The following table sets forth the major components of other expense for the three months ended March 31, 2021 and 2020 (in thousands):

	Three months March 31, 2021
	2021		2020			$ Change			% Change
Salaries and employee benefits	$	23,487	$	16,500		$	6,987			42.3	%
Net occupancy and equipment expense		4,970		4,242			728			17.2	%
Net other real estate owned expense		78		(46	)		124			269.6	%
FDIC insurance		452		93			359			386.0	%
Amortization of intangible assets		1,220		1,295			(75	)		-5.8	%
Stationery and supplies		316		268			48			17.9	%
Legal and professional		1,402		1,398			4			0.3	%
Marketing and donations		502		481			21			4.4	%
ATM/debit card expense		838		605			233			38.5	%
Other operating expenses		4,335		2,895			1,440			49.7	%
Total other expense	$	37,600	$	27,731		$	9,869			35.6	%

Following are explanations for the changes in these other expense categories for the three months ended March 31, 2021 compared to the same period in 2020:

• The increase in salaries and employee benefits, the largest component of other expense, is primarily due to an increase in incentive compensation and commissions, group insurance expense, share-based compensation expense, increases for merit raises and applicable payroll taxes, and the addition of Providence Bank for part of the first quarter of 2021. There were 983 and 835 full-time equivalent employees at March 31, 2021 and 2020, respectively.

• The decrease in occupancy and equipment expense was due to a decrease in expense for software and other uncapitalized equipment offset by an increase in rent expense.

• The increase in net other real estate owned expense was primarily due to properties acquired with the acquisition of Providence Bank.

• Expense for amortization of intangible assets decreased due to less amortization for core deposit intangibles for the three months ended March 31, 2021 compared to 2020.

• The increase in other operating expenses was primarily due to an increase in costs to acquire LINCO and additional expenses from the operation of Providence Bank.

• On a net basis, all other categories of operating expenses increased slightly during the period compared to last year primarily due to the operation of Providence Bank.

Income Taxes

Total income tax expense amounted to $668,000 (14.0% effective tax rate) for the three months ended March 31, 2021, compared to $3.2 million (24.1% effective tax rate) for the same period in 2020. The decline in effective rate is primarily resulting from costs incurred in the acquisition of LINCO and Providence Bank.

The Company files U.S. federal and state of Illinois, Indiana, and Missouri income tax returns. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2018.

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Analysis of Consolidated Balance Sheets

Securities

The Company’s overall investment objectives are to insulate the investment portfolio from undue credit risk, maintain adequate liquidity, insulate capital against changes in market value and control excessive changes in earnings while optimizing investment performance. The types and maturities of securities purchased are primarily based on the Company’s current and projected liquidity and interest rate sensitivity positions. The following table sets forth the amortized cost of the available-for-sale and held-to-maturity securities as of March 31, 2021 and December 31, 2020 (dollars in thousands)

	March 31, 2021					December 31, 2020
	Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield
U.S. Treasury securities and obligations of U.S. government    corporations and agencies	$	179,801		1.20	%	$	132,083		1.25	%
Obligations of states and political subdivisions		249,776		2.65	%		237,886		2.72	%
Mortgage-backed securities: GSE residential		620,102		1.76	%		479,470		1.92	%
Other securities		38,148		4.39	%		10,740		5.22	%
Total securities	$	1,087,827		1.95	%	$	860,179		2.08	%

At March 31, 2021, the Company’s investment portfolio increased by $227.6 million from December 31, 2020 primarily due to securities added with the acquisition of Providence Bank. When purchasing investment securities, the Company considers its overall liquidity and interest rate risk profile, as well as the adequacy of expected returns relative to the risks assumed.  The table below presents the credit ratings as of March 31, 2021 for certain investment securities (in thousands):

					Average Credit Rating of Fair Value at March 31, 2021 (1)
	Amortized Cost		Estimated Fair Value		AAA		AA +/-		A +/-		BBB +/-		< BBB -		Not rated
Available-for-sale:
U.S. Treasury securities and    obligations of U.S. government    corporations and agencies	$	174,789	$	171,530	$	29,261	$	131,290	$	—	$	—	$	—	$	10,980
Obligations of state and political    subdivisions		249,776		257,719		20,117		173,117		63,244		—		—		1,241
Mortgage-backed securities (2)		620,102		621,952		1,073		—		—		—		—		620,879
Other securities		36,116		36,747		—		—		—		—		—		36,747
Total available-for-sale	$	1,080,783	$	1,087,948	$	50,451	$	304,407	$	63,244	$	—	$	—	$	669,847
Held-to-maturity:
U.S. Treasury securities and    obligations of U.S. government    corporations and agencies	$	5,012	$	5,092	$	—	$	5,092	$	—	$	—	$	—	$	—
Annuity		2,033		2,033												2,033
Total held-to-maturity	$	7,045	$	7,125	$	—	$	5,092	$	—	$	—	$	—	$	2,033
Equity securities:
Federal Agricultural Mtg Corp	$	84	$	300	$	—	$	—	$	—	$	—	$	—	$	300

1. Credit ratings reflect the lowest current rating assigned by a nationally recognized credit rating agency.

2. Mortgage-backed securities include mortgage-backed securities (MBS) and collateralized mortgage obligation (CMO) issues from the following government sponsored enterprises: FHLMC, FNMA, GNMA and FHLB. While MBS and CMOs are no longer explicitly rated by credit rating agencies, the industry recognizes that they are backed by agencies which have an implied government guarantee.

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Loans

The loan portfolio is the largest category of the Company’s earning assets. The following table summarizes the composition of the loan portfolio at amortized cost, including loans held for sale, as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021					December 31, 2020
	Amortized Cost		% Outstanding Loans			Amortized Cost		% Outstanding Loans
Construction and land development	$	165,376		4.2	%	$	122,479		3.9	%
Agricultural real estate		269,652		6.8	%		254,341		8.1	%
1-4 Family residential properties		412,470		10.5	%		325,762		10.4	%
Multifamily residential properties		297,984		7.6	%		189,632		6.0	%
Commercial real estate		1,402,885		35.6	%		1,174,300		37.4	%
Loans secured by real estate		2,548,367		64.6	%		2,066,514		65.8	%
Agricultural loans		121,070		3.1	%		137,352		4.4	%
Commercial and industrial loans		1,017,400		25.8	%		738,313		23.5	%
Consumer loans		91,705		2.3	%		78,002		2.5	%
All other loans		164,557		4.2	%		118,238		3.8	%
Total loans	$	3,943,099		100.0	%	$	3,138,419		100.0	%

Loan balances increased $804.7 million, or 25.6% of which approximately $838 million were loans acquired with Providence Bank and $259.7 million were PPP loans. The balance of real estate loans held for sale, included in the balances shown above, amounted to $4.7 million and $1.9 million as of March 31, 2021 and December 31, 2020, respectively.

Commercial and commercial real estate loans generally involve higher credit risks than residential real estate and consumer loans. Because payments on loans secured by commercial real estate or equipment are often dependent upon the successful operation and management of the underlying assets, repayment of such loans may be influenced to a great extent by conditions in the market or the economy. The Company does not have any sub-prime mortgages or credit card loans outstanding which are also generally considered to be higher credit risk.

Loans are geographically dispersed in central and southern Illinois, the St. Louis Metro area and central Missouri, and Texas. While these regions have experienced some economic stress during 2021 and 2020, the Company does not consider these locations high risk areas since these regions have not experienced the significant declines in real estate values seen in some other areas in the United States.

The Company does not have a concentration, as defined by the regulatory agencies, in construction and land development loans or commercial real estate loans as a percentage of total risk-based capital for the periods shown above. At March 31, 2021 and December 31, 2020, the Company did have industry loan concentrations that exceeded 25% of total risk-based capital in the following industries (dollars in thousands):

	March 31, 2021					December 31, 2020
	Principal balance		% Outstanding Loans			Principal balance		% Outstanding Loans
Other grain farming	$	278,186		7.06	%	$	308,202		9.82	%
Lessors of non-residential buildings		426,294		10.81	%		420,175		13.39	%
Lessors of residential buildings & dwellings		319,777		8.11	%		313,268		9.98	%
Other gambling industries		121,283		3.08	%		119,549		3.81	%
Hotels and motels		126,016		3.20	%		124,755		3.98	%
Nursing care facilities (skilled nursing)		109,839		2.79	%		114,937		3.66	%

The concentration of nursing care facilities was less than 25% of total risk-based capital as of March 31, 2021 however is shown for comparative purposes. The Company had no further industry loan concentrations in excess of 25% of total risk- based capital.

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The following table presents the balance of loans outstanding as of March 31, 2021, by contractual maturities (in thousands):

	Maturity (1)
	One year or less(2)		Over 1 through 5 years		Over 5 years		Total
Construction and land development	$	31,740	$	84,287	$	49,349	$	165,376
Agricultural real estate		29,201		99,640		140,811		269,652
1-4 Family residential properties		29,086		75,631		307,753		412,470
Multifamily residential properties		29,627		164,465		103,892		297,984
Commercial real estate		168,171		569,110		665,604		1,402,885
Loans secured by real estate		287,825		993,133		1,267,409		2,548,367
Agricultural loans		71,515		46,750		2,805		121,070
Commercial and industrial loans		250,797		582,829		183,774		1,017,400
Consumer loans		4,968		68,502		18,235		91,705
All other loans		73,130		24,041		67,386		164,557
Total loans	$	688,235	$	1,715,255	$	1,539,609	$	3,943,099

1. Based upon remaining contractual maturity.

2. Includes demand loans, past due loans and overdrafts.

As of March 31, 2021, loans with maturities over one year consisted of approximately $2.5 billion in fixed rate loans and approximately $719 million in variable rate loans. The loan maturities noted above are based on the contractual provisions of the individual loans. The Company has no general policy regarding renewals and borrower requests, which are handled on a case-by-case basis.

Nonperforming Loans and Nonperforming Other Assets

Nonperforming loans include: (a) loans accounted for on a nonaccrual basis; (b) accruing loans contractually past due ninety days or more as to interest or principal payments; and (c) loans not included in (a) and (b) above which are defined as “troubled debt restructurings”. Repossessed assets include primarily repossessed real estate and automobiles.

The Company’s policy is to discontinue the accrual of interest income on any loan for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal.

Restructured loans are loans on which, due to deterioration in the borrower’s financial condition, the original terms have been modified in favor of the borrower or either principal or interest has been forgiven. Repossessed assets represent property acquired as the result of borrower defaults on loans. These assets are recorded at estimated fair value, less estimated selling costs, at the time of foreclosure or repossession. Write-downs occurring at foreclosure are charged against the allowance for loan losses. On an ongoing basis, properties are appraised as required by market indications and applicable regulations. Write-downs for subsequent declines in value are recorded in non-interest expense in other real estate owned along with other expenses related to maintaining the properties.

The following table presents information concerning the aggregate amount of nonperforming loans and repossessed assets at March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021			December 31, 2020
Nonaccrual loans	$	27,877		$	23,750
Restructured loans which are performing in accordance with revised terms		4,104			4,373
Total nonperforming loans		31,981			28,123
Repossessed assets		13,339			2,493
Total nonperforming loans and repossessed assets	$	45,320		$	30,616
Nonperforming loans to loans, before allowance for loan losses		0.81	%		0.90	%
Nonperforming loans and repossessed assets to loans, before allowance for loan losses		1.15	%		0.98	%

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The $4,127,000 increase in nonaccrual loans during 2021 resulted from the net of $6,120,000 of loans put on nonaccrual status offset by $1,336,000 of loans becoming current or paid-off, $45,000 of loans transferred to other real estate and $612,000 of loans charged off. The following table summarizes the composition of nonaccrual loans (in thousands):

	March 31, 2021					December 31, 2020
	Balance		% of Total			Balance		% of Total
Construction and land development	$	225		0.8	%	$	162		0.7	%
Agricultural real estate		374		1.3	%		359		1.5	%
1-4 Family residential properties		8,771		31.5	%		6,930		29.2	%
Multifamily Residential properties		2,173		7.8	%		2,181		9.2	%
Commercial real estate		9,516		34.2	%		8,760		36.9	%
Loans secured by real estate		21,059		75.6	%		18,392		77.4	%
Agricultural loans		262		0.9	%		659		2.8	%
Commercial and industrial loans		6,137		22.0	%		4,372		18.4	%
Consumer loans		394		1.4	%		327		1.4	%
Other loans		25		0.1	%		—		0.0	%
Total loans	$	27,877		100.0	%	$	23,750		100.0	%

Interest income that would have been reported if nonaccrual and restructured loans had been performing totaled $154,000 and $221,000 for the three months ended March 31, 2021 and 2020, respectively.

The $10,846,000 increase in repossessed assets during the first three months of 2021 resulted from $45,000 of additional assets repossessed and $53,000 of repossessed assets sold, a write down of one asset of $37,000 and assets added from the acquisition of Providence Bank of approximately $10.9 million. The following table summarizes the composition of repossessed assets (in thousands):

	March 31, 2021					December 31, 2020
	Balance		% of Total			Balance		% of Total
Construction and land development	$	4,839		36.3	%	$	1,436		57.6	%
1-4 family residential properties		6,778		50.8	%		71		2.8	%
Commercial real estate		1,722		12.9	%		982		39.4	%
Total real estate		13,339		100.0	%		2,489		99.8	%
Consumer loans		—		0.0	%		4		0.2	%
Total repossessed collateral	$	13,339		100.0	%	$	2,493		100.0	%

Repossessed assets sold during the first three months of 2021 resulted in net gains of $72,000, of which $71,000 of net gains was related to real estate asset sales and $1,000 of net losses was related to other repossessed assets. Additionally, $37,000 of losses were recognized due to write down of one asset. Repossessed assets sold during the same period in 2020 resulted in net gains of $162,000, of which $170,000 of net losses was related to real estate asset sales and $8,000 of net gains was related to other repossessed assets.

Loan Quality and Allowance for Credit Losses

The allowance for credit losses represents management’s estimate of the reserve necessary to adequately account for probable losses existing in the current portfolio. The provision for loan losses is the charge against current earnings that is determined by management as the amount needed to maintain an adequate allowance for loan losses. In determining the adequacy of the allowance for loan losses, and therefore the provision to be charged to current earnings, management relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Factors considered by management in evaluating the overall adequacy of the allowance include a migration analysis of the historical net loan losses by loan segment, the level and composition of nonaccrual, past due and renegotiated loans, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates.

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Management reviews economic factors including the potential for reduced cash flow for commercial operating loans from reduction in sales or increased operating costs, decreased occupancy rates for commercial buildings, reduced levels of home sales for commercial land developments, the uncertainty regarding grain prices, increased operating costs for farmers, and increased levels of unemployment and bankruptcy impacting consumer’s ability to pay. Each of these economic uncertainties was taken into consideration in developing the level of the reserve. Management considers the allowance for loan losses a critical accounting policy.

Management recognizes there are risk factors that are inherent in the Company’s loan portfolio. All financial institutions face risk factors in their loan portfolios because risk exposure is a function of the business. The Company’s operations (and therefore its loans) are concentrated in east central Illinois, an area where agriculture is the dominant industry. Accordingly, lending and other business relationships with agriculture-based businesses are critical to the Company’s success. At March 31, 2021, the Company’s loan portfolio included $390.7 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $278.2 million was concentrated in other grain farming. Total loans to borrowers whose businesses are directly related to agriculture decreased $1.0 million from $391.7 million at December 31, 2020 while loans concentrated in other grain farming decreased $30.0 million from $308.2 million at December 31, 2020. While the Company adheres to sound underwriting practices, including collateralization of loans, any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in loan losses within the agricultural portfolio. In addition, the Company has $126.0 million of loans to motels and hotels. The performance of these loans is dependent on borrower specific issues as well as the general level of business and personal travel within the region. While the Company adheres to sound underwriting standards, a prolonged period of reduced business or personal travel could result in an increase in nonperforming loans to this business segment and potentially in loan losses. The Company also has $426.3 million of loans to lessors of non-residential buildings, $319.8 million of loans to lessors of residential buildings and dwellings, and $121.3 million of loans to other gambling industries.

The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the Board of Directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation; however, limits well below the regulatory thresholds are generally observed. Most of the Company’s loans are to businesses located in the geographic market areas served by the Company’s branch bank system. Additionally, a significant portion of the collateral securing the loans in the portfolio is located within the Company’s primary geographic footprint. In general, the Company adheres to loan underwriting standards consistent with industry guidelines for all loan segments.

The Company minimizes credit risk by adhering to sound underwriting and credit review policies. Management and the board of directors of the Company review these policies at least annually. Senior management is actively involved in business development efforts and the maintenance and monitoring of credit underwriting and approval. The loan review system and controls are designed to identify, monitor and address asset quality problems in an accurate and timely manner. The board of directors and management review the status of problem loans each month and formally determine a best estimate of the allowance for loan losses on a quarterly basis. In addition to internal policies and controls, regulatory authorities periodically review asset quality and the overall adequacy of the allowance for loan losses.

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Analysis of the allowance for credit losses as of March 31, 2021 and 2020, and of changes in the allowance for the three months ended March 31, 2021 and 2020, is as follows (dollars in thousands):

	Three months ended March 31,
	2021			2020
Average loans outstanding, net of unearned income	$	3,477,754		$	2,703,051
Allowance-prior year end of period		41,910			26,911
Adjustment for adoption of ASU 2013-16		—			1,672
Allowance - beginning of period		41,910			28,583
Initial allowance on loans purchased with credit deterioration		2,074			—
Charge-offs:
Construction & Land Development		—			—
1-4 Family residential		182			196
Commercial Real Estate		480			84
Agricultural		—			—
Commercial & Industrial		18			972
Consumer		288			171
Total charge-offs		968			1,423
Recoveries:
1-4 Family Residential		8			62
Commercial Real Estate		9			5
Commercial & Industrial		18			23
Consumer		231			145
Total recoveries		266			235
Net charge-offs (recoveries)		702			1,188
Provision for loan losses		12,136			5,481
Allowance-end of period	$	55,418		$	32,876
Ratio of annualized net charge-offs to average loans		0.08	%		0.18	%
Ratio of allowance for credit losses to loans outstanding (at amortized cost)		1.41	%		1.20	%
Ratio of allowance for credit losses to nonperforming loans		173	%		134	%

Excluding the fully guaranteed PPP loans, the ratio of allowance for credit losses to loans outstanding was 1.50% as of March 31, 2021. The increase in the allowance for credit losses to nonperforming loans ratio is primarily due to the increase in the allowance for credit losses and a decline in nonperforming loans at March 31, 2021 compared to March 31, 2020. The increase in allowance for credit losses is primarily due to the day one provision required to be recorded in the acquisition of loans with Providence Bank.

During the first three months of 2021, the Company had net charge-offs of $702,000 compared to net charge-offs of $1,188,000 in 2020. During the first three months of 2021, there was a significant charge-off of one commercial real estate loans of one borrower totaling $480,000. During the first three months of 2020, there was one significant charge off on one loan to a commercial borrower of $836,200.

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Deposits

Funding of the Company’s earning assets is substantially provided by a combination of consumer, commercial and public fund deposits. The Company continues to focus its strategies and emphasis on retail core deposits, the major component of funding sources. The following table sets forth the average deposits and weighted average rates for the three months ended March 31, 2021 and 2020 and for the year ended December 31, 2020 (dollars in thousands):

	Three months ended March 31, 2021					Three months ended March 31, 2020					Year ended December 31, 2020
	Average Balance		Weighted Average Rate			Average Balance		Weighted Average Rate			Average Balance		Weighted Average Rate
Demand deposits:
Non-interest-bearing	$	1,033,741	—%			$	628,588	—%			$	777,435	—%
Interest-bearing		1,876,378		0.19	%		1,264,489		0.35	%		1,557,264		0.24	%
Savings		579,632		0.10	%		435,480		0.11	%		469,276		0.09	%
Time deposits		623,852		0.95	%		570,132		1.86	%		531,834		1.61	%
Total average deposits	$	4,113,603		0.25	%	$	2,898,689		0.54	%	$	3,335,809		0.38	%

During the first three months of 2021, the average balance of deposits increased by $777.8 million from the average balance for the year ended December 31, 2020. Average non-interest-bearing deposits increased by $256.3 million, average interest-bearing balances increased by $319.1 million, savings account balances increased $110.4 million and balances of time deposits increased $92.0 million. These increases were primarily due to deposits added in the acquisition of Providence Bank.

The following table sets forth the high and low month-end balances for the three months ended March 31, 2021 and 2020 and for the year ended December 31, 2020 (in thousands):

	Three months ended                      March 31, 2021		Three months ended                      March 31, 2020		Year ended December 31, 2020
High month-end balances of total deposits	$	4,737,693	$	2,932,973	$	3,692,784
Low month-end balances of total deposits		3,725,741		2,873,260		2,873,260

Balances of time deposits of $100,000 or more include time deposits maintained for public fund entities and consumer time deposits. The following table sets forth the maturity of time deposits of $100,000 or more at March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021		December 31, 2020
3 months or less	$	126,122	$	72,945
Over 3 through 6 months		127,404		49,710
Over 6 through 12 months		334,529		88,682
Over 12 months		79,133		72,070
Total	$	667,188	$	283,407

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Repurchase Agreements and Other Borrowings

Securities sold under agreements to repurchase are short-term obligations of First Mid Bank. These obligations are collateralized with certain government securities that are direct obligations of the United States or one of its agencies. These retail repurchase agreements are offered as a cash management service to its corporate customers. Other borrowings consist of Federal Home Loan Bank (“FHLB”) advances, federal funds purchased, loans (short-term or long-term debt) that the Company has outstanding and junior subordinated debentures. Information relating to securities sold under agreements to repurchase and other borrowings as of March 31, 2021 and December 31, 2020 is presented below (dollars in thousands):

	March 31, 2021			December 31, 2020
Securities sold under agreements to repurchase	$	212,503		$	206,937
Federal Home Loan Bank advances:
Fixed term – due in one year or less		18,984			18,984
Fixed term – due after one year		97,877			74,985
Other borrowings:
Fed funds		—			—
Subordinated debt		94,289			94,253
Junior subordinated debentures		19,069			19,027
Total	$	442,722		$	414,186
Average interest rate at end of period		1.39	%		0.81	%
Maximum outstanding at any month-end:
Securities sold under agreements to repurchase	$	212,503		$	350,288
Federal Home Loan Bank advances:
FHLB-Overnight		—			—
Fixed term – due in one year or less		18,984			66,000
Fixed term – due after one year		97,877			74,895
Other borrowings:
Federal funds purchased		—			8,000
Debt due in one year or less		—			5,000
Debt due after one year		—			—
Subordinated debt		94,289			94,256
Junior subordinated debentures		19,069			19,027
Averages for the period (YTD):
Securities sold under agreements to repurchase	$	198,670		$	219,298
Federal Home Loan Bank advances:
FHLB-overnight		—			1,831
Fixed term – due in one year or less		17,406			24,858
Fixed term – due after one year		84,675			79,999
Other borrowings:
Federal funds purchased		—			525
Loans due in one year or less		—			656
Loans due after one year		—			—
Subordinated debt		94,266			22,403
Junior subordinated debentures		19,041			18,936
Total	$	414,058		$	370,338
Average interest rate during the period		1.52	%		1.07	%

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Securities sold under agreements to repurchase increased $5.6 million during the first three months of 2021 primarily due to the cash flow needs of various customers. FHLB advances represent borrowings by First Mid Bank and Providence Bank to economically fund loan demand. At March 31, 2021 the fixed term advances, before net premiums of $921,000, consisted of $115.9 million as follows:

Advance		Term (in years)		Interest Rate	Maturity Date
$	5,000,000		5.0	1.85%	April 12, 2021
	4,000,000		1.0	2.00%	May 3, 2021
	5,000,000		7.0	2.55%	October 1, 2021
	5,000,000		5.0	2.71%	March 21, 2022
	5,000,000		8.0	2.40%	January 9, 2023
	5,000,000		3.0	2.41%	May 31, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		4.0	2.44%	May 30, 2023
	5,000,000		3.5	1.51%	July 31, 2023
	5,000,000		3.5	0.77%	September 11, 2023
	10,000,000		5.0	1.45%	December 31, 2024
	5,000,000		5.0	0.91%	March 10, 2025
	6,940,511		10.0	2.64%	December 23, 2025
	5,000,000		10.0	1.14%	October 3, 2029
	5,000,000		10.0	1.15%	October 3, 2029
	5,000,000		10.0	1.12%	October 3, 2029
	10,000,000		10.0	1.39%	December 31, 2029
	15,000,000		10.0	1.41%	December 31, 2029

The Company is party to a revolving credit agreement with The Northern Trust Company in the amount of $15 million. There was no balance on this line of credit as of March 31, 2021. This loan was renewed on April 9, 2021 for one year as a revolving credit agreement. The interest rate is floating at 2.25% over the federal funds rate. The loan is secured by the stock of First Mid Bank. The Company and First Mid Bank were in compliance with the existing covenants at March 31, 2021 and 2020, and December 31, 2020.

On October 6, 2020, the Company issued and sold $96.0 million in aggregate principal amount of its 3.95% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”).  The Notes were issued pursuant to the Indenture, dated as of October 6, 2020 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of October 6, 2020 (the “Supplemental Indenture”), between the Company and the Trustee. The Base Indenture, as amended and supplemented by the Supplemental Indenture, governs the terms of the Notes and provides that the Notes are unsecured, subordinated debt obligations of the Company and will mature on October 15, 2030. From and including the date of issuance to, but excluding October 15, 2025, the Notes will bear interest at an initial rate of 3.95% per annum. From and including October 15, 2025 to, but excluding the maturity date or earlier redemption, the Notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 383 basis points, or such other rate as determined pursuant to the Supplemental Indenture, provided that in no event shall the applicable floating interest rate be less than zero per annum.

The Company may, beginning with the interest payment date of October 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the Notes at any time, including prior to October 15, 2025, at the Company’s option, in whole but not in part, if: (i) a change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to but excluding the redemption date.

On April 26, 2006, the Company completed the issuance and sale of $10 million of fixed/floating rate trust preferred securities through First Mid-Illinois Statutory Trust II (“Trust II”), a statutory business trust and wholly owned unconsolidated subsidiary of the Company, as part of a pooled offering. The Company established Trust II for the purpose of issuing the trust preferred securities. The $10 million in proceeds from the trust preferred issuance and an additional $310,000 for the Company’s investment in common equity of Trust II, a total of $10,310 000, was invested in junior subordinated debentures of the Company. The underlying junior subordinated debentures issued by the Company to Trust II mature in 2036, bore interest at a fixed rate of 6.98% paid quarterly until June 15, 2011 and then converted to floating rate (LIBOR plus 160 basis points, 1.78% and 1.82% at March 31, 2021 and December 31, 2020, respectively).

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On September 8, 2016, the Company assumed the trust preferred securities of Clover Leaf Statutory Trust I (“CLST I”), a statutory business trust that was a wholly owned unconsolidated subsidiary of First Clover Financial. The $4,000,000 of trust preferred securities and an additional $124,000 additional investment in common equity of CLST I, is invested in junior subordinated debentures issued to CLST I. The subordinated debentures mature in 2025, bear interest at three-month LIBOR plus 185 basis points (2.03% and 2.07% at March 31, 2021 and December 31, 2020, respectively) and resets quarterly.

On May 1, 2018, the Company assumed the trust preferred securities of FBTC Statutory Trust I (“FBTCST I”), a statutory business trust that was a wholly owned unconsolidated subsidiary of First BancTrust Corporation. The $6,000,000 of trust preferred securities and an additional $186,000 additional investment in common equity of FBTCST I is invested in junior subordinated debentures issued to FBTCST I. The subordinated debentures mature in 2035, bear interest at three-month LIBOR plus 170 basis points (1.88% and 2.44% at March 31, 2021 and December 31, 2020, respectively) and resets quarterly.

The trust preferred securities issued by Trust II, CLST I and FBTCST I are included as Tier 1 capital of the Company for regulatory capital purposes. On March 1, 2005, the Federal Reserve Board adopted a final rule that allows the continued limited inclusion of trust preferred securities in the calculation of Tier 1 capital for regulatory purposes. The final rule provided a five-year transition period, ending September 30, 2010, for application of the revised quantitative limits. On March 17, 2009, the Federal Reserve Board adopted an additional final rule that delayed the effective date of the new limits on inclusion of trust preferred securities in the calculation of Tier 1 capital until March 31, 2012. The application of the revised quantitative limits did not and is not expected to have a significant impact on its calculation of Tier 1 capital for regulatory purposes or its classification as well-capitalized. The Dodd-Frank Act, signed into law July 21, 2010, removes trust preferred securities as a permitted component of a holding company’s Tier 1 capital after a three-year phase-in period beginning January 1, 2013 for larger holding companies. For holding companies with less than $15 billion in consolidated assets, existing issues of trust preferred securities are grandfathered and not subject to this new restriction.

Similarly, the final rule implementing the Basel III reforms allows holding companies with less than $15 billion in consolidated assets as of December 31, 2009 to continue to count toward Tier 1 capital any trust preferred securities issued before May 19, 2010. New issuances of trust preferred securities, however, would not count as Tier 1 regulatory capital.

In addition to requirements of the Dodd-Frank Act discussed above, the act also required the federal banking agencies to adopt certain rules that prohibit banks and their affiliates from engaging in proprietary trading and investing in and sponsoring certain unregistered investment companies (defined as hedge funds and private equity funds). This rule is generally referred to as the “Volcker Rule.” The rules permit the retention of an interest in or sponsorship of covered funds by banking entities under $15 billion in assets (such as the Company) if (1) the collateralized debt obligation was established and issued prior to May 19, 2010, (2) the banking entity reasonably believes that the offering proceeds received by the collateralized debt obligation were invested primarily in qualifying trust preferred collateral, and (3) the banking entity’s interests in the collateralized debt obligation was acquired on or prior to December 10, 2013. The Company does not currently anticipate that the Volcker Rule will have a material effect on the operations of the Company, First Mid Bank or Providence Bank. On June 25, 2020, the agencies announced that certain restrictions under the Volcker Rule applicable to large banking entities will be eased commencing October 1, 2020.

Interest Rate Sensitivity

The Company seeks to maximize its net interest margin while maintaining an acceptable level of interest rate risk. Interest rate risk can be defined as the amount of forecasted net interest income that may be gained or lost due to changes in the interest rate environment, a variable over which management has no control. Interest rate risk, or sensitivity, arises when the maturity or repricing characteristics of interest-bearing assets differ significantly from the maturity or repricing characteristics of interest- bearing liabilities. The Company monitors its interest rate sensitivity position to maintain a balance between rate sensitive assets and rate sensitive liabilities. This balance serves to limit the adverse effects of changes in interest rates. The Company’s asset liability management committee (ALCO) oversees the interest rate sensitivity position and directs the overall allocation of funds.

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In the banking industry, a traditional way to measure potential net interest income exposure to changes in interest rates is through a technique known as “static GAP” analysis which measures the cumulative differences between the amounts of assets and liabilities maturing or repricing at various intervals. By comparing the volumes of interest-bearing assets and liabilities that have contractual maturities and repricing points at various times in the future, management can gain insight into the amount of interest rate risk embedded in the balance sheet. The following table sets forth the Company’s interest rate repricing GAP for selected maturity periods at March 31, 2021 (dollars in thousands):

	Rate Sensitive Within
	1 years			1-2 years			2-3 years			3-4 years			4-5 years			Thereafter			Total		Fair Value
Interest-earning assets:
Federal funds sold and other    interest-bearing deposits	$	331,066		$	—		$	—		$	—		$	—		$	—		$	331,066	$	331,066
Certificates of deposit investments		980			1,715			—		—				—		—				2,695		2,695
Taxable investment securities		130,978			127,482			114,465			110,812			43,819			315,174			842,730		842,730
Nontaxable investment securities		37,250			13,785			13,750			17,927			16,016			153,835			252,563		252,643
Loans		1,341,946			639,970			461,940			597,510			448,676			453,057			3,943,099		3,899,938
Total	$	1,842,220		$	782,952		$	590,155		$	726,249		$	508,511		$	922,066		$	5,372,153	$	5,329,072
Interest-bearing liabilities:
Savings and NOW accounts	$	496,434		$	171,251		$	171,251		$	171,251		$	171,251		$	755,542		$	1,936,980	$	1,936,980
Money market accounts		527,665			33,838			33,838			33,838			33,838			140,929			803,946		803,946
Other time deposits		669,953			87,194			23,041			19,888			11,439			71			811,586		814,695
Short-term borrowings/debt		212,503			—			—		—				—			—			212,503		212,514
Long-term borrowings/debt		38,053			20,326			15,206			15,000			101,634			40,000			230,219		226,454
Total	$	1,944,608		$	312,609		$	243,336		$	239,977		$	318,162		$	936,542		$	3,995,234	$	3,994,589
Rate sensitive assets – rate    sensitive liabilities	$	(102,388	)	$	470,343		$	346,819		$	486,272		$	190,349		$	(14,476	)	$	1,376,919
Cumulative GAP		(102,388	)		367,955			714,774			1,201,046			1,391,395			1,376,919
Cumulative amounts as % of    total Rate sensitive assets		-1.9	%		8.8	%		6.5	%		9.1	%		3.5	%		-0.3	%
Cumulative Ratio		-1.9	%		6.8	%		13.3	%		22.4	%		25.9	%		25.6	%

The static GAP analysis shows that at March 31, 2021, the Company was liability sensitive, on a cumulative basis, through the twelve-month time horizon. This indicates that future increases in interest rates could have an adverse effect on net interest income. There are several ways the Company measures and manages the exposure to interest rate sensitivity, including static GAP analysis. The Company’s ALCO also uses other financial models to project interest income under various rate scenarios and prepayment/extension assumptions consistent with First Mid Bank’s historical experience and with known industry trends. ALCO meets at least monthly to review the Company’s exposure to interest rate changes as indicated by the various techniques and to make necessary changes in the composition terms and/or rates of the assets and liabilities. The Company is currently experiencing downward pressure on asset yields resulting from the extended period of historically low interest rates and heightened competition for loans. A continuation of this environment could result in a decline in interest income and the net interest margin.

Capital Resources

At March 31, 2021, the Company’s stockholders' equity increased $33.7 million, or 5.9%, to $602 million from $568 million as of December 31, 2020. During the first three months of 2021, net income contributed $4.1 million to equity before the payment of dividends to stockholders. The change in market value of available-for-sale investment securities decreased stockholders' equity by $12.0 million, net of tax. Dividends of $3.4 million were paid during the first quarter of 2021. The acquisition of LINCO also increase stockholders’ equity $44.2 million.

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Bank holding companies follow minimum regulatory requirements established by the Board of Governors of the Federal Reserve System (“Federal Reserve System”), and First Mid Bank and Providence Bank follow similar minimum regulatory requirements established for banks by the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation, as applicable. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary action by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Company and its subsidiary banks to maintain a minimum capital amounts and ratios (set forth in the table below). Management believes that, as of March 31, 2021 and December 31, 2020, the Company, First Mid Bank and Providence Bank met all capital adequacy requirements.

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As permitted by the interim final rule issued on March 27, 2020 by the federal banking regulatory agencies, the Company has elected the option to delay the estimated impact on regulatory capital of adopting ASU 2016-13, which was effective January 1, 2020. The initial impact of adoption of ASU 2016-13, as well as 25% of the quarterly increases in allowance for credit losses subsequent to adoption of ASU 2016-13 will be delayed for two years. After two years, the cumulative amount of these adjustments will be phased out of the regulatory capital calculation over a three-year period, with 75% of the adjustments included in year three, 50% of the adjustments included in year four and 25% of the adjustments included in year five. After five years, the temporary delay of ASU 2016-13 adoption will be fully reversed.

To be categorized as well-capitalized, total risk-based capital, Tier 1 risk-based capital, common equity Tier 1 risk-based capital and Tier 1 leverage ratios must be maintained as set forth in the following table (dollars in thousands):

	Actual					Required Minimum For Capital Adequacy Purposes			To Be Well-Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio	Amount		Ratio
March 31, 2021
Total Capital (to risk-weighted    assets)
Company	$	636,910		13.75	%	$	486,239	> 10.50%	N/A		N/A
First Mid Bank		453,194		14.56			326,900	> 10.50	$	311,334	> 10.00%
Providence Bank		139,480		17.12			85,564	> 10.50	$	81,490	> 10.00%
Tier 1 Capital (to risk-weighted    assets)
Company		497,506		10.74			393,622	> 8.50	N/A		N/A
First Mid Bank		415,986		13.36			264,633	> 8.50		249,067	> 8.00
Providence Bank		131,573		16.15			69,266	> 8.50		65,192	> 8.00
Common Equity Tier 1 Capital    (to risk-weighted assets)
Company		478,437		10.33			324,160	> 7.00	N/A		N/A
First Mid Bank		415,986		13.36			217,933	> 7.00		202,367	> 6.50
Providence Bank		131,573		16.15			57,043	> 7.00		52,968	> 6.50
Tier 1 Capital (to average    assets)
Company		497,506		10.74			202,161	> 4.00	N/A		N/A
First Mid Bank		415,986		13.36			183,401	> 4.00		229,252	> 5.00
Providence Bank		131,573		16.15			42,143	> 4.00		52,678	> 5.00
December 31, 2020
Total Capital (to risk-weighted    assets)
Company	$	589,352		18.82	%	$	328,865	> 10.50%	N/A		N/A
First Mid Bank		446,308		14.30			327,685	> 10.50	$	312,081	> 10.00%
Tier 1 Capital (to risk-weighted    assets)
Company		458,325		14.63			266,224	> 8.50	N/A		N/A
First Mid Bank		409,534		13.12			265,269	> 8.50		249,665	> 8.00
Common Equity Tier 1 Capital    (to risk-weighted assets)
Company		439,299		14.03			219,243	> 7.00	N/A		N/A
First Mid Bank		409,534		13.12			218,457	> 7.00		202,853	> 6.50
Tier 1 Capital (to average    assets)
Company		458,325		10.22			179,302	> 4.00	N/A		N/A
First Mid Bank		409,534		9.18			178,497	> 4.00		223,121	> 5.00

The Company's risk-weighted assets, capital, and capital ratios for March 31, 2021 are computed in accordance with Basel III capital rules which were effective January 1, 2015. See heading "Basel III" in the Overview section of this report for a more detailed description of the Basel III rules. As of March 31, 2021, the Company, First Mid Bank and Providence Bank had capital ratios above the required minimums for regulatory capital adequacy, and First Mid Bank and Providence Bank had capital ratios that qualified it for treatment as well-capitalized under the regulatory framework for prompt corrective action with respect to banks.

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Stock Plans

Participants may purchase Company stock under the following four plans of the Company: The Deferred Compensation Plan, the First Retirement and Savings Plan, the Dividend Reinvestment Plan, and the Stock Incentive Plan. For more detailed information on these plans, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the 2017 Stock Incentive Plan ("SI Plan"). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term. The SI Plan is intended to provide a means whereby directors, employees, consultants and advisors of the Company and its Subsidiaries may sustain a sense of proprietorship and personal involvement in the continued development and financial success of the Company and its Subsidiaries, thereby advancing the interests of the Company and its stockholders. Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of Common Stock of the Company on the terms and conditions established in the SI Plan.

Following the stockholders’ approval at the 2021 annual meeting of the Company, a maximum of 399,983 shares of common stock may be issued under the SI Plan. The Company awarded 27,750 and 25,200 restricted stock awards during 2020 and 2019, respectively and 35,400 and 16,950 as stock unit awards during 2020 and 2019, respectively.

Employee Stock Purchase Plan

At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP is intended to promote the interests of the Company by providing eligible employees with the opportunity to purchase shares of common stock of the Company at a 5% discount through payroll deductions. The ESPP is also intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. A maximum of 600,000 shares of common stock may be issued under the ESPP. During the three months ended March 31, 2021 and 2020, 3,142 shares and 3,804 shares, respectively, were issued pursuant to the ESPP.

Stock Repurchase Program

Since August 5, 1998, the Board of Directors has approved repurchase programs pursuant to which the Company may repurchase a total of approximately $76.7 million of the Company’s common stock. During the quarter, the Company repurchased no shares. The Company has approximately $4.7 million in remaining capacity under its existing repurchase program.

Although the Company adopted the repurchase plan, the Company may make discretionary repurchases in the open market or in privately negotiated transactions from time to time. The timing, manner, price and amount of any such repurchases will be determined by the Company at its discretion and will depend upon a variety of factors including economic and market conditions, price, applicable legal requirements and other factors.

Liquidity

Liquidity represents the ability of the Company and its subsidiaries to meet all present and future financial obligations arising in the daily operations of the business. Financial obligations consist of the need for funds to meet extensions of credit, deposit withdrawals and debt servicing. The Company’s liquidity management focuses on the ability to obtain funds economically through assets that may be converted into cash at minimal costs or through other sources. The Company’s other sources of cash include overnight federal fund lines, Federal Home Loan Bank advances, deposits of the State of Illinois, the ability to borrow at the Federal Reserve Bank of Chicago, and the Company’s operating line of credit with The Northern Trust Company.

Details of the Company's liquidity sources include:

• First Mid Bank has $100 million available in overnight federal fund lines, including $30 million from First Horizon Bank, N.A., $20 million from U.S. Bank, N.A., $10 million from Wells Fargo Bank, N.A., $15 million from The Northern Trust Company and $25 million from Zions Bank. Availability of the funds is subject to First Mid Bank meeting minimum regulatory capital requirements for total capital to risk-weighted assets and Tier 1 capital to total average assets. As of March 31, 2021, First Mid Bank met these regulatory requirements.

• First Mid Bank and Providence Bank can borrow from the Federal Home Loan Bank as a source of liquidity. Availability of the funds is subject to the pledging of collateral to the Federal Home Loan Bank. Collateral that can be pledged includes one-to-four family residential real estate loans and securities. At March 31, 2021, the excess collateral at the FHLB would support approximately $812 million of additional advances for First Mid Bank and Providence Bank.

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• First Mid Bank is a member of the Federal Reserve System and can borrow funds provided that sufficient collateral is pledged.

• In addition, as of March 31, 2021, the Company had a revolving credit agreement in the amount of $15 million with The Northern Trust Company with an outstanding balance of $0 million and $15 million in available funds. This loan was renewed on April 9, 2021 for one year as a revolving credit agreement. The interest rate is floating at 2.25% over the federal funds rate. The loan is secured by the stock of First Mid Bank, including requirements for operating and capital ratios. The Company and its subsidiary bank were in compliance with the existing covenants at March 31, 2021 and 2020 and December 31, 2020.

Management continues to monitor its expected liquidity requirements carefully, focusing primarily on cash flows from:

• lending activities, including loan commitments, letters of credit and mortgage prepayment assumptions;

• deposit activities, including seasonal demand of private and public funds;

• investing activities, including prepayments of mortgage-backed securities and call provisions on U.S. Treasury and government agency securities; and

• operating activities, including scheduled debt repayments and dividends to stockholders.

The following table summarizes significant contractual obligations and other commitments at March 31, 2021 (in thousands):

			Less than						More than
	Total		1 year		1-3 years		3-5 years		5 years
Time deposits	$	811,586	$	669,953	$	110,235	$	31,327	$	71
Debt		113,358		—		—		—		113,358
Other borrowing		329,364		231,487		35,326		15,206		47,345
Operating leases		20,009		2,908		4,901		3,428		8,772
Supplemental retirement		419		50		100		100		169
	$	1,274,736	$	904,398	$	150,562	$	50,061	$	169,715

For the three months ended March 31, 2021, net cash of $21.6 million was provided by operating activities, $81.3 million was used in investing activities, and $52.0 million was provided by financing activities. In total, cash and cash equivalents decreased by $7.7 million since year-end 2020.

Off-Balance Sheet Arrangements

First Mid Bank and Providence Bank enter into financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include lines of credit, letters of credit and other commitments to extend credit. Each of these instruments involves, to varying degrees, elements of credit, interest rate and liquidity risk in excess of the amounts recognized in the consolidated balance sheets. The Company uses the same credit policies and requires similar collateral in approving lines of credit and commitments and issuing letters of credit as it does in making loans. The exposure to credit losses on financial instruments is represented by the contractual amount of these instruments. However, the Company does not anticipate any losses from these instruments. The off-balance sheet financial instruments whose contract amounts represent credit risk at March 31, 2021 and December 31, 2020 were as follows (in thousands):

	March 31, 2021		December 31, 2020
Unused commitments and lines of credit:
Commercial real estate	$	98,463	$	56,309
Commercial operating		419,682		396,345
Home equity		54,927		40,464
Other		263,538		112,327
Total	$	836,610	$	605,445
Standby letters of credit	$	13,183	$	10,048

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Commitments to originate credit represent approved commercial, residential real estate and home equity loans that generally are expected to be funded within ninety days. Lines of credit are agreements by which the Company agrees to provide a borrowing accommodation up to a stated amount as long as there is no violation of any condition established in the loan agreement. Both commitments to originate credit and lines of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the lines and some commitments are expected to expire without being drawn upon, the total amounts do not necessarily represent future cash requirements.

Standby letters of credit are conditional commitments issued by the Company to guarantee the financial performance of customers to third parties. Standby letters of credit are primarily issued to facilitate trade or support borrowing arrangements and generally expire in one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending credit facilities to customers. The maximum amount of credit that would be extended under letters of credit is equal to the total off-balance sheet contract amount of such instrument. The Company's deferred revenue under standby letters of credit was nominal.

The Company is also subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition of ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in the market risk faced by the Company since December 31, 2020. For information regarding the Company’s market risk, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective. Further, there have been no changes in the Company’s internal control over financial reporting during the last fiscal quarter that have materially affected or that are reasonably likely to affect materially the Company’s internal control over financial reporting.

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PART II

ITEM 1. LEGAL PROCEEDINGS

From time to time the Company and its subsidiaries may be involved in litigation that the Company believes is a type common to our industry. None of any such existing claims are believed to be individually material at this time to the Company, although the outcome of any such existing claims cannot be predicted with certainty.

ITEM 1A. RISK FACTORS

Various risks and uncertainties, some of which are difficult to predict and beyond the Company’s control, could negatively impact the Company. As a financial institution, the Company is exposed to interest rate risk, liquidity risk, credit risk, operational risk, risks from economic or market conditions, and general business risks among others. Adverse experience with these or other risks could have a material impact on the Company’s financial condition and results of operations, as well as the value of its common stock. See the risk factors and “Supervision and Regulation” described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES
Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
Total		0	$	0.00		0	$	4,660,000

See heading “Stock Repurchase Program” for more information regarding stock purchases.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

The exhibits required by Item 601 of Regulation S-K and filed herewith are listed in the Exhibit Index that precedes the Signature Page and the exhibits filed.

Exhibit Number	Exhibit Index to Quarterly Report on Form 10-Q Description and Filing or Incorporation Reference
2.1	First Amendment to Agreement and Plan of Merger, dated as of February 21, 2021, by and among First Mid Bancshares, Inc., Eval Sub Inc., a Missouri corporation, Eval Sub Inc., a Delaware corporation, LINCO Bancshares, Inc., and the sellers named therein (incorporated by reference to Exhibit 2.1 to First Mid Bancshares, Inc.’s Current Report on Form 8-K filed with the SEC on February 22, 2021).
10.1	Second Amendment to Sixth Amended and Restated Credit Agreement by and between First Mid Bancshares, Inc. and The Northern Trust Company, dated as of January 26, 2021 (incorporated by reference to Exhibit 10.1 to First Mid Bancshares, Inc.’s Current Report on Form 8-K filed with the SEC on January 27, 2021).
10.2	Registration Rights Agreement, dated as of February 22, 2021, by and between First Mid Bancshares, Inc. and the stockholder named therein (incorporated by reference to Exhibit 10.1 to First Mid Bancshares, Inc.’s Current Report on Form 8-K filed with the SEC on February 22, 2021).
10.3	Third Amendment to Sixth Amended and Restate Credit Agreement by and between First Mid Bancshares, Inc. and The Northern Trust Company, dated as of April 9, 2021 (incorporated by reference to Exhibit 10.1 to First Mid Bancshares, Inc.'s Current Report on Form 8-K filed with the SEC on April 12, 2021.
10.4	2017 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to First Mid Bancshares, Inc.’s Current Report on Form 8-K filed with the SEC on April 30, 2021).
31.1	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (formatted as Inline XBRL and contained in Exhibits 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FIRST MID BANCSHARES, INC.

(Registrant)

Date: May 10, 2021

/s/ Joseph R. Dively

Joseph R. Dively

President and Chief Executive Officer

/s/ Matthew K. Smith

Matthew K. Smith

Chief Financial Officer

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EX-31.1

Exhibit 31.1

Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002

I, Joseph R. Dively, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First Mid Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2021

By:	/s/ Joseph R. Dively
Joseph R. Dively
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002

I, Matthew K. Smith, certify that:

1. I have reviewed this report on Form 10-Q of First Mid Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2021

By:	/s/ Matthew K. Smith
Matthew K. Smith
Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification pursuantto 18 U.S.C. section 1350, as adopted pursuantto

section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of First Mid Bancshares, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph R. Dively, PresidentandChiefExecutiveOfficeroftheCompany,certify,pursuantto18U.S.C.§1350,asadoptedpursuantto§906ofthe Sarbanes-Oxley Act of 2002,that:

(1) TheReportfullycomplieswiththerequirementsofsection13(a)or15(d)oftheSecuritiesExchangeActof1934; and

(2) TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresults of operations of theCompany.

Date: May 10, 2021

/s/ Joseph R. Dively

Joseph R. Dively

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification pursuantto 18 U.S.C. section 1350, as adopted pursuantto

In connection with the Quarterly Report of First Mid Bancshares, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew K. Smith, ChiefFinancialOfficeroftheCompany,certify,pursuantto18U.S.C.§1350,asadoptedpursuantto§906oftheSarbanes-Oxley Act of 2002,that:

(1) TheReportfullycomplieswiththerequirementsofsection13(a)or15(d)oftheSecuritiesExchangeActof1934; and

(2) TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresults of operations of theCompany.

Date: May 10, 2021

/s/ Matthew K. Smith

Matthew K. Smith

Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 11, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Registrant Name	FIRST MID BANCSHARES, INC.
Entity Central Index Key	0000700565
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		16,736,442
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock
Trading Symbol	FMBH
Security Exchange Name	NASDAQ
Entity File Number	0-13368
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	37-1103704
Entity Address, Address Line One	1421 Charleston Avenue
Entity Address, City or Town	Mattoon
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	61938
City Area Code	217
Local Phone Number	234-7454
Document Quarterly Report	true
Document Transition Report	false

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Cash and due from banks:
Non-interest bearing	$ 78,481,000	$ 75,152,000
Interest bearing	329,745,000	340,821,000
Federal funds sold	1,321,000	1,308,000
Cash and cash equivalents	409,547,000	417,281,000
Certificates of deposit	2,695,000	2,695,000
Investment securities:
Available-for-sale, at fair value	1,087,948,000	879,240,000
Held-to-maturity, at amortized cost (estimated fair value of $7,125 and $5,119 at March 31, 2021 and December 31, 2020, respectively)	7,045,000	5,016,000
Equity securities, at fair value	300,000	218,000
Loans held for sale	4,693,000	1,924,000
Loans	3,938,406,000	3,136,495,000
Less allowance for credit losses	(55,418,000)	(41,910,000)
Net loans	3,882,988,000	3,094,585,000
Interest receivable	20,218,000	19,287,000
Other real estate owned	13,339,000	2,489,000
Premises and equipment, net	86,654,000	58,206,000
Goodwill	113,948,000	104,992,000
Intangible assets, net	24,658,000	23,128,000
Bank owned life insurance	124,925,000	68,955,000
Right of use lease assets	17,424,000	17,209,000
Other assets	40,888,000	31,123,000
Total assets	5,837,270,000	4,726,348,000
Deposits:
Non-interest bearing	1,185,181,000	936,926,000
Interest bearing	3,552,512,000	2,755,858,000
Total deposits	4,737,693,000	3,692,784,000
Securities sold under agreements to repurchase	212,503,000	206,937,000
Interest payable	3,214,000	2,345,000
FHLB borrowings	116,861,000	93,969,000
Junior subordinated debentures, net	19,069,000	19,027,000
Subordinated debt, net	94,289,000	94,253,000
Lease liabilities	17,578,000	17,351,000
Other liabilities	34,179,000	31,454,000
Total liabilities	5,235,386,000	4,158,120,000
Stockholders’ Equity:
Common stock, $4 par value; authorized 30,000,000 shares; issued 18,662,947 and 17,361,898 shares in 2021 and 2020, respectively	76,652,000	71,449,000
Additional paid-in capital	338,897,000	297,806,000
Retained earnings	198,408,000	197,726,000
Deferred compensation	1,597,000	2,980,000
Accumulated other comprehensive income	5,087,000	17,095,000
Less treasury stock at cost, 620,691 shares in 2021 and 2020	(18,757,000)	(18,828,000)
Total stockholders’ equity	601,884,000	568,228,000
Total liabilities and stockholders’ equity	$ 5,837,270,000	$ 4,726,348,000

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Investment securities:
Held-to-maturity, at fair value	$ 7,125	$ 5,119
Stockholders’ Equity:
Common stock, par value (in dollars per share)	$ 4	$ 4
Common stock, authorized (in shares)	30,000,000	30,000,000
Common stock, issued (in shares)	18,662,947	17,361,898
Treasury stock (in shares)	620,691	620,691

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Condensed Consolidated Statements of Income (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Interest income:
Interest and fees on loans	$ 35,886,000	$ 30,027,000
Interest on investment securities	4,842,000	4,589,000
Interest on certificates of deposit investments	14,000	31,000
Interest on federal funds sold		2,000
Interest on deposits with other financial institutions	74,000	92,000
Total interest income	40,816,000	34,741,000
Interest expense:
Interest on deposits	2,484,000	3,861,000
Interest on securities sold under agreements to repurchase	70,000	194,000
Interest on FHLB borrowings	374,000	580,000
Interest on other borrowings	0	15,000
Interest on junior subordinated debentures	140,000	218,000
Interest on subordinated debentures	984,000
Total interest expense	4,052,000	4,868,000
Net interest income	36,764,000	29,873,000
Provision for loan losses	12,136,000	5,481,000
Net interest income after provision for loan losses	24,628,000	24,392,000
Other income:
Wealth management revenues	4,926,000	3,626,000
Insurance commissions	5,857,000	6,621,000
Service charges	1,364,000	1,778,000
Securities gains, net	4,000	531,000
Mortgage banking revenue, net	1,409,000	308,000
ATM / debit card revenue	2,699,000	1,987,000
Bank owned life insurance	637,000	431,000
Other	853,000	1,228,000
Total other income	17,749,000	16,510,000
Other expense:
Salaries and employee benefits	23,487,000	16,500,000
Net occupancy and equipment expense	4,970,000	4,242,000
Net other real estate owned expense	78,000	(46,000)
FDIC insurance	452,000	93,000
Amortization of intangible assets	1,220,000	1,295,000
Stationery and supplies	316,000	268,000
Legal and professional	1,402,000	1,398,000
ATM / debit card	838,000	605,000
Marketing and donations	502,000	481,000
Other	4,335,000	2,895,000
Total other expense	37,600,000	27,731,000
Income before income taxes	4,777,000	13,171,000
Income taxes	668,000	3,172,000
Net income	$ 4,109,000	$ 9,999,000
Per share data:
Basic net income per common share	$ 0.24	$ 0.60
Diluted net income per common share	0.24	$ 0.60
Cash dividends declared per common share	$ 0.205

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Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 4,109,000	$ 9,999,000
Other Comprehensive Income (Loss)
Unrealized losses on available-for-sale securities, net of taxes of $4,903 and $1,139 for three months ended March 31, 2021 and 2020, respectively	(12,005,000)	(2,789,000)
Amortized holding losses on held-to-maturity securities transferred from available-for- sale, net of taxes of $0 and ($5) for three months ended March 31, 2021 and 2020, respectively		15,000
Less: reclassification adjustment for realized gains included in net income, net of taxes of $1 and $154 for three months ended March 31, 2021 and 2020, respectively	(3,000)	(377,000)
Other comprehensive income, net of taxes	(12,008,000)	(3,151,000)
Comprehensive income (loss)	$ (7,899,000)	$ 6,848,000

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Condensed Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Other Comprehensive Income (Loss)
Unrealized gains (losses) on available-for-sale securities, taxes	$ 4,903	$ 1,139
Amortized holding losses on held-to-maturity securities transferred from available-for-sale, taxes	0	(5)
Reclassification adjustment for realized gains included in net income, taxes	$ 1	$ 154

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Total	Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Cumulative Effect, Period of Adoption, Adjustment	LINCO Bancshares, Inc.	Common Stock	Common Stock Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Common Stock LINCO Bancshares, Inc.	Additional Paid-in Capital	Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Additional Paid-in Capital LINCO Bancshares, Inc.	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Deferred Compensation	Deferred Compensation Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) Cumulative Effect, Period of Adoption, Adjusted Balance [Member]	Treasury Stock	Treasury Stock Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Beginning balance at Dec. 31, 2019	$ 526,609,000	$ 525,892,000			$ 71,152,000	$ 71,152,000		$ 295,925,000	$ 295,925,000		$ 166,667,000	$ 165,950,000		$ 2,760,000	$ 2,760,000	$ 8,360,000	$ 8,360,000	$ (18,255,000)	$ (18,255,000)
Beginning balance (ASU 2016-13) at Dec. 31, 2019			$ (717,000)										$ (717,000)
Net income	9,999,000										9,999,000
Other comprehensive income, net tax	(3,151,000)															(3,151,000)
Issuance of restricted shares pursuant to the 2017 Stock Incentive Plan	868,000				101,000			767,000
Issuance of common shares pursuant to the Employee Stock Purchase Plan	86,000				15,000			71,000
Deferred Compensation														(5,000)				5,000
Tax benefit related to deferred compensation distributions	22,000							22,000
Grant of restricted units pursuant to 2017 Stock Incentive Plan	584,000							584,000
Release of restricted units pursuant to 2017 Stock Incentive Plan	(516,000)							(516,000)
Vested restricted shares/units compensation expense	(733,000)													(733,000)
Ending balance at Mar. 31, 2020	533,051,000				71,268,000			296,853,000			175,949,000			2,022,000		5,209,000		(18,250,000)
Beginning balance at Dec. 31, 2020	568,228,000				71,449,000			297,806,000			197,726,000			2,980,000		17,095,000		(18,828,000)
Net income	4,109,000										4,109,000
Other comprehensive income, net tax	(12,008,000)															(12,008,000)
Cash dividends on common stock	(3,427,000)										(3,427,000)
Issuance of common shares pursuant to the Dividend Reinvestment Plan	171,000				17,000			154,000
Issuance of common shares pursuant to the Deferred Compensation Plan	18,000				3,000			15,000
Issuance of restricted shares pursuant to the 2017 Stock Incentive Plan	943,000				111,000			832,000
Issuance of 2,375 common shares pursuant to the 2017 Stock Incentive Plan	85,000				10,000			75,000
Issuance of 1,262,246 common shares pursuant to acquisition of LINCO Bancshares, Inc., net proceeds				$ 44,191,000			$ 5,049,000			$ 39,142,000
Issuance of common shares pursuant to the Employee Stock Purchase Plan	75,000				13,000			62,000
Deferred Compensation														(71,000)				71,000
Tax benefit related to deferred compensation distributions	179,000							179,000
Grant of restricted units pursuant to 2017 Stock Incentive Plan	1,216,000							1,216,000
Release of restricted units pursuant to 2017 Stock Incentive Plan	(584,000)							(584,000)
Vested restricted shares/units compensation expense	(1,312,000)													(1,312,000)
Ending balance at Mar. 31, 2021	$ 601,884,000				$ 76,652,000			$ 338,897,000			$ 198,408,000			$ 1,597,000		$ 5,087,000		$ (18,757,000)

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash dividends declared per common share	$ 0.205
Issuance of common shares pursuant to the Dividend Reinvestment Plan (in shares)	4,896
Stock issued during period, shares, deferred compensation	18,397
Restricted stock issued during period, shares, pursuant to the 2017 stock incentive plan	27,750	25,200
Common stock issued during period, shares, pursuant to the 2017 stock incentive plan	2,375
Stock issued during period, shares, employee stock purchase plans	3,142	3,804
LINCO Bancshares, Inc.
Stock Issued During Period, Shares, Acquisitions	1,262,246

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Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net income	$ 4,109	$ 9,999
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	12,136	5,481
Depreciation, amortization and accretion, net	2,692	2,721
Change in cash surrender value of bank owned life insurance	(637)	(431)
Stock-based compensation expense	262	204
Operating lease payments	(711)	(677)
Gains on investment securities, net	(4)	(531)
Gain on sales of repossessed assets, net	(35)	(162)
Gain on sale of premises and equipment	0	(26)
Gains on sale of loans held for sale, net	(1,229)	(353)
Decrease in accrued interest receivable	2,034	155
(Decrease) increase in accrued interest payable	262	(164)
Origination of loans held for sale	(42,379)	(20,039)
Proceeds from sale of loans held for sale	40,839	20,961
Increase in other investment	(84)	0
(Increase) decrease in other assets	454	(937)
Decrease in other liabilities	3,844	413
Net cash provided by operating activities	21,553	16,614
Cash flows from investing activities:
Proceeds from maturities of certificates of deposit investments	0	1,225
Purchases of certificates of deposit investments	0	(980)
Proceeds from maturities of securities available-for-sale	68,541	108,666
Proceeds from maturities of securities held-to-maturity	0	45,000
Purchases of securities available-for-sale	(177,116)	(44,830)
Net (increase) decrease in loans	26,319	(50,059)
Purchases of premises and equipment	(1,195)	(786)
Proceeds from sales of other real property owned	116	1,211
Investment in banked owned life insurance	(25,000)	0
Net cash provided by acquisition	27,061	0
Net cash (used in) provided by investing activities	(81,274)	59,447
Cash flows from financing activities:
Net increase (decrease) in deposits	54,499	(8,739)
Decrease in federal funds purchased	0	(5,000)
Increase in repurchase agreements	5,566	23,540
Proceeds from FHLB advances	0	15,000
Repayment of FHLB advances	(5,000)	(9,000)
Proceeds from long-term debt	0	5,000
Proceeds from issuance of common stock	179	85
Dividends paid on common stock	(3,257)	0
Net cash provided by financing activities	51,987	20,886
Increase (decrease) in cash and cash equivalents	(7,734)	96,947
Cash and cash equivalents at beginning of period	417,281	85,080
Cash and cash equivalents at end of period	409,547	182,027
Cash paid during the period for:
Interest	3,183	5,100
Income taxes	0	0
Supplemental disclosures of noncash investing and financing activities
Loans transferred to other real estate	45	184
Dividends reinvested in common stock	171	0
Net tax benefit related to option and deferred compensation plans	179	22
LINCO Bancshares, Inc.
Supplemental disclosure of purchase of capital stock:
Fair value of assets acquired	1,173,443	0
Cash paid	103,500	0
Common stock issued	44,191	0
Total consideration paid	147,691	0
Fair value of liabilities assumed	$ 1,025,752	$ 0

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Basis of Accounting and Consolidation

3 Months Ended

Mar. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Accounting and Consolidation

Note 1 -- Basis of Accounting and Consolidation

The unaudited condensed consolidated financial statements include the accounts of First Mid Bancshares, Inc. (“Company”) formerly known as First Mid-Illinois Bancshares, Inc., and its wholly owned subsidiaries: First Mid Bank & Trust, N.A. (“First Mid Bank”), Providence Bank (“Providence Bank”), First Mid Wealth Management Company, Mid-Illinois Data Services, Inc. (“MIDS”), First Mid Insurance Group, Inc. (“First Mid Insurance”) and First Mid Captive, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. The financial information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods ended March 31, 2021 and 2020, and all such adjustments are of a normal recurring nature. Certain amounts in the prior year’s consolidated financial statements may have been reclassified to conform to the March 31, 2021 presentation and there was no impact on net income or stockholders’ equity. The results of the interim period ended March 31, 2021 are not necessarily indicative of the results expected for the year ending December 31, 2021. The Company operates as a one-segment entity for financial reporting purposes. The 2020 year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and related footnote disclosures although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2020 Annual Report on Form 10-K.

COVID-19

The COVID-19 outbreak is an unprecedented event that provides significant economic uncertainty for a broad spectrum of industries. The Company is focused on supporting its customers, communities and employees during this unique operating environment. Throughout this document, the Company describes the impact COVID-19 is having, actions taken as a result of COVID-19, and certain risks to the Company that COVID-19 creates or exacerbates, as well as management's outlook on the current COVID-19 situation.

Subordinated Debt Offering

On October 6, 2020, the Company issued and sold $96.0 million in aggregate principal amount of its 3.95% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”).  

The Notes were issued pursuant to the Indenture, dated as of October 6, 2020 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of October 6, 2020 (the “Supplemental Indenture”), between the Company and the Trustee. The Base Indenture, as amended and supplemented by the Supplemental Indenture, governs the terms of the Notes and provides that the Notes are unsecured, subordinated debt obligations of the Company and will mature on October 15, 2030. From and including the date of issuance to, but excluding October 15, 2025, the Notes will bear interest at an initial rate of 3.95% per annum. From and including October 15, 2025 to, but excluding the maturity date or earlier redemption, the Notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 383 basis points, or such other rate as determined pursuant to the Supplemental Indenture, provided that in no event shall the applicable floating interest rate be less than zero per annum.

The Company may, beginning with the interest payment date of October 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the Notes at any time, including prior to October 15, 2025, at the Company’s option, in whole but not in part, if: (i) a change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to but excluding the redemption date.

8

Website

The Company maintains a website at www.firstmid.com. All periodic and current reports of the Company and amendments to these reports filed with the Securities and Exchange Commission (“SEC”) can be accessed, free of charge, through this website as soon as reasonably practicable after these materials are filed with the SEC.

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

Loan Purchase

On April 21, 2020, First Mid Bank completed an acquisition of loans in the St. Louis metro market totaling $183 million. There were no loans purchased with deteriorated credit.

Stock Plans

At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the First Mid-Illinois Bancshares, Inc. 2017 Stock Incentive Plan (“SI Plan”). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term. The SI Plan is intended to provide a means whereby directors, employees, consultants and advisors of the Company and its subsidiaries may sustain a sense of proprietorship and personal involvement in the continued development and financial success of the Company and its subsidiaries, thereby advancing the interests of the Company and its stockholders. Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of common stock of the Company on the terms and conditions established in the SI Plan.

Following the stockholders’ approval at the 2021 annual meeting of the Company, a maximum of 399,983 shares of common stock may be issued under the SI Plan. There have been no stock options awarded under any Company plan since 2008. The Company has awarded 27,750 and 25,200 shares of restricted stock during 2021 and 2020, respectively, and 16,950 and 16,200 restricted stock units during 2021 and 2020, respectively.

Employee Stock Purchase Plan

At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP is intended to promote the interests of the Company by providing eligible employees with the opportunity to purchase shares of common stock of the Company at a 5% discount through payroll deductions. The ESPP is also intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code.

A maximum of 600,000 shares of common stock may be issued under the ESPP. As of March 31, 2021 and 2020, 3,142 shares and 3,804 shares, respectively, were issued pursuant to the ESPP.

Captive Insurance Company

First Mid Captive, Inc. (the “Captive"), a wholly owned subsidiary of the Company which was formed and began operations in December 2019, is a Nevada-based captive insurance company. The Captive insures against certain risks unique to operations of the Company and its subsidiaries for which insurance may not be currently available or economically feasible in today's insurance marketplace. The Captive pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. The Captive is subject to regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance. It has elected to be taxed under Section 831(b) of the Internal Revenue Code. Pursuant to Section 831(b), if gross premiums do not exceed $2,300,000, then the Captive is taxable solely on its investment income. The Captive is included in the Company's consolidated financial statements and its federal income return.

9

Bank Owned Life Insurance

First Mid Bank has purchased life insurance policies on certain senior management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts that are probable at settlement.

Revenue Recognition

Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), establishes a revenue recognition model for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Most of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans and investment securities, and revenue related to mortgage servicing activities, which are subject to other accounting standards. A description of the revenue-generating activities that are within the scope of ASC 606, and included in other income in the Company’s condensed consolidated statements of income are as follows:

Trust revenues. The Company generates fee income from providing fiduciary services through its subsidiary, First Mid Wealth Management Company. Fees are billed in arrears based upon the preceding period account balance. Revenue from farm management services is recorded when the service is complete, for example when crops are sold.

Brokerage commissions. Revenue is recorded at the beginning of each quarter through billing to customers based on the account asset size on the last day of the previous quarter. If a withdrawal of funds takes place, a prorated refund may occur; this is reflected within the same quarter as the original billing occurred. All performance obligations are met within the same quarter that the revenue is recorded.

Insurance commissions. The Company’s insurance agency subsidiary, First Mid Insurance, receives commissions on premiums of new and renewed business policies. First Mid Insurance records commission revenue on direct bill policies as the cash is received. For agency bill policies, First Mid Insurance retains its commission portion of the customer premium payment and remits the balance to the carrier. In both cases, the entire performance obligation is held by the carriers.

Service charges on deposits. The Company generates revenue from fees charged for deposit account maintenance, overdrafts, wire transfers, and check fees. The revenue related to deposit fees is recognized at the time the performance obligation is satisfied.

ATM/debit card revenue. The Company generates revenue through service charges on the use of its ATM machines and interchange income from the use of Company issued credit and debit cards. The revenue is recognized at the time the service is used and the performance obligation is satisfied.

Other income. Treasury management fees and lock box fees are received and recorded after the service performance obligation is completed. Merchant bank card fees are received from various vendors; however, the performance obligation is with the vendors. The Company records gains on the sale of loans and the sale of OREO properties after the transactions are complete and transfer of ownership has occurred.

As each of the Company’s facilities is in markets with similar economies, no disaggregation of revenue is necessary.

10

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income included in stockholders’ equity as of March 31, 2021 and December 31, 2020 are as follows (in thousands):

	Unrealized Gain (Loss) on Securities
March 31, 2021
Net unrealized gains on securities available-for-sale	$	7,165
Tax expense		(2,078	)
Balance at March 31, 2021	$	5,087
December 31, 2020
Net unrealized gains on securities available-for-sale	$	24,077
Tax expense		(6,982	)
Balance at December 31, 2020	$	17,095

Amounts reclassified from accumulated other comprehensive income and the affected line items in the statements of income during the three months ended March 31, 2021 and 2020, were as follows (in thousands):

	Amounts Reclassified from Other Comprehensive Income
	Three months ended March 31,
	2021			2020			Affected Line Item in the Statements of Income
Realized gains on available-for-sale securities	$	4		$	531		Securities gains, net
Tax effect		(1	)		(154	)	Income taxes
Total reclassifications out of accumulated other    comprehensive income	$	3		$	377		Net reclassified amount

See “Note 3 – Investment Securities” for more detailed information regarding unrealized losses on available-for-sale securities.

Adoption of New Accounting Guidance

Accounting Standards Update 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). In August 2018, FASB issued ASU 2018-13. This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. As ASU 2018-13 only revises disclosure requirements, it did not have a material impact on the Company’s consolidated financial statements.

Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments (“ASU 2016-13”). In June 2016, FASB issued ASU 2016-13. The provisions of ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss ("CECL") model to estimate its lifetime "expected credit loss" and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and available-for sale debt securities. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.

11

Management formed an internal, cross functional committee in 2017 to evaluate implementation steps and assess the impact ASU 2016-13 would have on the Company’s consolidated financial statements. The committee assigned roles and responsibilities, key tasks to complete, and established a general time-line for implementation. The Company also engaged an outside consultant to assist with the methodology review and data validation, as well as other key aspects of implementing the standard. The committee met periodically to discuss the latest developments and ensure progress was being made. In addition, the committee kept current on evolving interpretations and industry practices related to ASU 2016-13. The committee evaluated and validated data resources and different loss methodologies. Key implementation activities for 2019 included finalization of models, establishing processes and controls, development of supporting analytics and documentation, policies and disclosure, and implementing parallel processing.

The Company adopted ASU 2016-13 using the modified retrospective method for financial assets measured at amortized cost-effective January 1, 2020. Results for the periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts are reported in accordance with the previously applicable accounting standards. The Company recorded a reduction to retained earnings of approximately $717,000 upon adoption of ASU 2016-13. The transition adjustment included an increase to the allowance for credit losses on loans of $1.7 million and an increase to the allowance for credit losses on off-balance sheet credit exposure of $69,000. There was no allowance for credit losses recorded for held-to- maturity debt securities. The transition adjustment included corresponding increases in deferred tax assets.

The Company adopted ASU 2016-13 using the prospective transition approach for financial assets considered purchased credit deteriorated ("PCD") that were previously classified as purchase credit impaired ("PCI") and accounted for under ASC 310-30 effective January 1, 2020. In accordance with the standard, the Company did not reassess whether the PCI assets met the criteria of PCD assets as of the adoption date. The amortized cost of the PCD assets were adjusted to reflect the addition of $833,000 to the allowance for credit losses. The remaining noncredit discount (based on the adjusted amortized cost) will be accreted into interest income at the effective interest rate over the remaining life of the assets.

The following table illustrates the impact of ASU 2016-13 adoption (in thousands):

	January 1, 2020
	As reported		Pre-ASU		Impact of ASU
	under ASU		2016-13		2016-13
	2016-13		Adoption		Adoption
Assets:
Construction & Land Development	$	1,033	$	1,146	$	(113	)
Farm		1,323		1,093		230
1-4 Family Residential Properties		2,142		1,386		756
Commercial Real Estate		11,739		11,198		541
Agricultural		1,023		1,386		(363	)
Commercial & Industrial		9,428		9,273		155
Consumer		1,895		1,429		466
Allowance for credit losses for all loans	$	28,583	$	26,911	$	1,672
Liabilities:
Allowance for credit losses on off-balance sheet exposures	$	69	$	—	$	69

The following table illustrates the impact of ASU 2013-13 adoption for PCD assets previously classified as PCI included in the table above (in thousands):

	January 1, 2020
	As reported		Pre-ASU		Impact of ASU
	under ASU		2016-13		2016-13
	2016-13		Adoption		Adoption
Construction & Land Development	$	291	$	—	$	291
1-4 Family Residential Properties		48		6		42
Commercial Real Estate		818		359		459
Commercial & Industrial		41		—		41
Allowance for credit losses for PCD loans	$	1,198	$	365	$	833

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Earnings Per Share

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Note 2 -- Earnings Per Share

Basic net income per common share available to common stockholders is calculated as net income less preferred stock dividends divided by the weighted average number of common shares outstanding. Diluted net income per common share available to common stockholders is computed using the weighted average number of common shares outstanding, increased by the Company’s stock options, unless anti-dilutive.

The components of basic and diluted net income per common share available to common stockholders for the three months ended March 31, 2021 and 2020 were as follows:

	Three months ended March 31,
	2021		2020
Basic Net Income per Common Share
Available to Common Stockholders:
Net income	$	4,109,000	$	9,999,000
Weighted average common shares outstanding		17,299,927		16,693,183
Basic earnings per common share	$	0.24	$	0.60
Diluted Net Income per Common Share
Available to Common Stockholders:
Net income applicable to diluted earnings per share	$	4,109,000	$	9,999,000
Weighted average common shares outstanding		17,299,927		16,693,183
Dilutive potential common shares:
Restricted stock awarded		53,020		46,908
Dilutive potential common shares		53,020		46,908
Diluted weighted average common shares outstanding		17,352,947		16,740,091
Diluted earnings per common share	$	0.24	$	0.60

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There were no shares excluded when computing diluted earnings per share for the three months ended March 31, 2021 and 2020 because they were anti-dilutive.

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Investment Securities

3 Months Ended

Mar. 31, 2021

Investments Debt And Equity Securities [Abstract]

Investment Securities

Note 3 -- Investment Securities

The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at March 31, 2021 and December 31, 2020 were as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	174,789	$	377	$	(3,636	)	$	171,530
Obligations of states and political subdivisions		249,776		9,226		(1,283	)		257,719
Mortgage-backed securities: GSE residential		620,102		7,988		(6,138	)		621,952
Other securities		36,116		699		(68	)		36,747
Total available-for-sale	$	1,080,783	$	18,290	$	(11,125	)	$	1,087,948
Held-to-maturity:
U.S. Treasury securities and obligations of    U.S. government corporations & agencies	$	5,012	$	80	$	—		$	5,092
Annuity		2,033		—		—			2,033
Total held-to-maturity	$	7,045	$	80	$	—		$	7,125
December 31, 2020
Available-for-sale:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	127,067	$	790	$	(788	)	$	127,069
Obligations of states and political subdivisions		237,886		11,995		(37	)		249,844
Mortgage-backed securities: GSE residential		479,470		12,038		(160	)		491,348
Other securities		10,740		252		(13	)		10,979
Total available-for-sale	$	855,163	$	25,075	$	(998	)	$	879,240
Held-to-maturity:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	5,016	$	103	$	—		$	5,119

The Company also had $300,000 and $218,000 of equity securities, at fair value, as of March 31, 2021 and December 31, 2020, respectively. The Company's held-to-maturity securities are government agency-backed securities for which the risk of loss is minimal. As such, as of March 31, 2021, the Company did not record an allowance for credit losses on its held-to-maturity securities.

Realized gains and losses resulting from sales of securities were as follows during the three months ended March 31, 2021 and 2020 (in thousands):

	Three months March 31,
	2021		2020
Gross gains	$	4	$	531
Gross losses		—		—

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The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at March 31, 2021 and the weighted average yield for each range of maturities (dollars in thousands):

	One year or less			After 1 through 5 years			After 5 through 10 years			After ten years			Total
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	105,823		$	54,392		$	11,315		$	—		$	171,530
Obligations of state and political subdivisions		29,540			71,481			152,466			4,232			257,719
Mortgage-backed securities: GSE residential		26,948			293,661			301,343			—			621,952
Other securities		12,042			20,070			4,635			—			36,747
Total available-for-sale investments	$	174,353		$	439,604		$	469,759		$	4,232		$	1,087,948
Weighted average yield		1.87	%		2.28	%		1.69	%		2.57	%		1.96	%
Full tax-equivalent yield		2.06	%		2.45	%		1.94	%		3.52	%		2.17	%
Held to Maturity:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	5,012		$	—		$	—		$	—		$	5,012
Annuity		—									2,033			2,033
Total held-to-maturity	$	5,012		$	—		$	—		$	2,033		$	7,045
Weighted average yield		2.06	%		—	%		—	%		—	%		2.06	%
Full tax-equivalent yield		2.06	%		—	%		—	%		—	%		2.06	%

The weighted average yields are calculated based on the amortized cost and effective yields weighted for the scheduled maturity of each security. Tax-equivalent yields have been calculated using a 21% tax rate. With the exception of obligations of the U.S. Treasury and other U.S. government agencies and corporations, there were no investment securities of any single issuer, the book value of which exceeded 10% of stockholders' equity at March 31, 2021.

Investment securities carried at approximately $621 million and $531 million at March 31, 2021 and December 31, 2020, respectively, were pledged to secure public deposits and repurchase agreements and for other purposes as permitted or required by law.

The following table presents the aging of gross unrealized losses and fair value by investment category as of March 31, 2021 and December 31, 2020 (in thousands):

	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	144,404	$	(3,636	)	$	—	$	—		$	144,404	$	(3,636	)
Obligations of states and political subdivisions		51,381		(1,283	)		—		—			51,381		(1,283	)
Mortgage-backed securities: GSE residential		230,029		(5,155	)		129,370		(983	)		359,399		(6,138	)
Other securities		12,679		(68	)		—		—			12,679		(68	)
Total	$	438,493	$	(10,142	)	$	129,370	$	(983	)	$	567,863	$	(11,125	)
December 31, 2020
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	59,211	$	(788	)	$	—	$	—		$	59,211	$	(788	)
Obligations of states and political subdivisions		5,380		(37	)		—		—			5,380		(37	)
Mortgage-backed securities: GSE residential		57,609		(160	)		2,377		—			59,986		(160	)
Other securities		3,977		(13	)		—		—			3,977		(13	)
Total	$	126,177	$	(998	)	$	2,377	$	—		$	128,554	$	(998	)

15

U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies. At March 31, 2021 and December 31, 2020, there were no available-for sale or held-to-maturity U.S. Treasury securities and obligations of U.S. government corporations and agencies in a continuous unrealized loss position for twelve months or more.

Obligations of states and political subdivisions. At March 31, 2021 and December 31, 2020, there were no obligations of states and political subdivisions in a continuous loss position for twelve months or more.

Mortgage-backed Securities: GSE Residential. At March 31, 2021, there were twelve mortgage-backed securities with a fair value of $129,370,000 and unrealized losses of $(983,000) in a continuous unrealized loss position for twelve months or more. At December 31, 2020 there were two mortgage-backed securities with a fair value of $2,377,000 and unrealized losses of $0 in a continuous unrealized loss position for twelve months or more.

Other securities.  At March 31, 2021, and December 31, 2020, there were no other securities in a continuous unrealized loss position for twelve months or more.

The Company does not believe any unrealized losses as of March 31, 2021 represents other than temporary impairment ("OTTI"). However, given the uncertainty of the financial markets, the Company may be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced, and the resulting loss recognized in the period the other-than-temporary impairment is identified.

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Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Loans and Allowance for Credit Losses

Note 4 – Loans and Allowance for Credit Losses

Loans are stated at amortized cost net of an allowance for credit losses. Amortized cost is the unpaid principal net of unearned premiums and discounts, and net deferred origination fees and costs. Deferred loan origination fees are reduced by loan origination costs and are amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method. Interest on substantially all loans is credited to income based on the principal amount outstanding.

A summary of loans at March 31, 2021 and December 31, 2020 follows (in thousands):

	March 31, 2021			December 31, 2020
Construction and land development	$	165,780		$	122,853
Agricultural real estate		269,759			254,662
1-4 Family residential properties		411,964			325,480
Multifamily residential properties		295,467			189,265
Commercial real estate		1,401,585			1,176,290
Loans secured by real estate		2,544,555			2,068,550
Agricultural loans		121,955			137,333
Commercial and industrial loans		1,020,608			741,819
Consumer loans		90,780			78,023
All other loans		163,901			118,196
Total Gross loans		3,941,799			3,143,921
Less: Loans held for sale		4,693			1,924
		3,937,106			3,141,997
Less:
Net deferred loan fees (costs), premiums and discounts		(1,300	)		5,502
Allowance for credit losses		55,418			41,910
Net loans	$	3,882,988		$	3,094,585

Loans expected to be sold are classified as held for sale in the consolidated financial statements and are recorded at the lower of aggregate cost or fair value, taking into consideration future commitments to sell the loans. These loans are primarily for 1-4 family residential properties.

Accrued interest on loans, which is excluded from the amortized cost of the balances above, totaled $15.6 million and $15.9 million at March 31, 2021 and December 31, 2020, respectively.

16

Most of the Company’s business activities are with customers located near the Company's branch locations in Illinois, Missouri and Texas. At March 31, 2021, the Company’s loan portfolio included $390.7 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $278.2 million was concentrated in corn and other grain farming. Total loans to borrowers whose businesses are directly related to agriculture decreased $1.0 million from $391.7 million at December 31, 2020 due to seasonal timing of cash flow requirements. Loans concentrated in corn and other grain farming decreased $30.0 million from $308.2 million at December 31, 2020. The Company's underwriting practices include collateralization of loans. Any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in loan losses within the agricultural portfolio.

In addition, the Company has $126.0 million of loans to motels and hotels. The performance of these loans is dependent on borrower specific issues as well as the general level of business and personal travel within the region. While the Company adheres to sound underwriting standards, a prolonged period of reduced business or personal travel could result in an increase in nonperforming loans to this business segment and potentially in loan losses. The Company also has $426.3 million of loans to lessors of non-residential buildings, $319.8 million of loans to lessors of residential buildings and dwellings, $109.8 million of loans to nursing care facilities, and $121.3 million of loans to other gambling industries.

The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the board of directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation and most borrowers are below regulatory thresholds. The Company can occasionally have outstanding balances to one borrower up to but not exceeding the regulatory threshold should underwriting guidelines warrant. Most of the Company’s loans are to businesses located in the geographic market areas served by the Company’s branch bank system. Additionally, a significant portion of the collateral securing the loans in the portfolio is located within the Company’s primary geographic footprint. In general, the Company adheres to loan underwriting standards consistent with industry guidelines for all loan segments.

The Company’s lending can be summarized into the following primary areas:

Commercial Real Estate Loans. Commercial real estate loans are generally comprised of loans to small business entities to purchase or expand structures in which the business operations are housed, loans to owners of real estate who lease space to non-related commercial entities, loans for construction and land development, loans to hotel operators, and loans to owners of multi-family residential structures, such as apartment buildings. Commercial real estate loans are underwritten based on historical and projected cash flows of the borrower and secondarily on the underlying real estate pledged as collateral on the debt. For the various types of commercial real estate loans, minimum criteria have been established within the Company’s loan policy regarding debt service coverage while maximum limits on loan-to-value and amortization periods have been defined. Maximum loan-to-value ratios range from 65% to 80% depending upon the type of real estate collateral, while the desired minimum debt coverage ratio is 1.20x. Amortization periods for commercial real estate loans are generally limited to twenty years. The Company’s commercial real estate portfolio is well below the thresholds that would designate a concentration in commercial real estate lending, as established by the federal banking regulators.

Commercial and Industrial Loans. Commercial and industrial loans are primarily comprised of working capital loans used to purchase inventory and fund accounts receivable that are secured by business assets other than real estate. These loans are generally written for one year or less. Also, equipment financing is provided to businesses with these loans generally limited to 80% of the value of the collateral and amortization periods limited to seven years. Commercial loans are often accompanied by a personal guaranty of the principal owners of a business. Like commercial real estate loans, the underlying cash flow of the business is the primary consideration in the underwriting process. The financial condition of commercial borrowers is monitored at least annually with the type of financial information required determined by the size of the relationship. Measures employed by the Company for businesses with higher risk profiles include the use of government- assisted lending programs through the Small Business Administration and U.S. Department of Agriculture.

Agricultural and Agricultural Real Estate Loans. Agricultural loans are generally comprised of seasonal operating lines to cash grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop. Loan-to-value ratios on loans secured by farmland generally do not exceed 65% and have amortization periods limited to twenty-five years. Federal government-assistance lending programs through the Farm Service Agency are used to mitigate the level of credit risk when deemed appropriate.

17

Residential Real Estate Loans. Residential real estate loans generally include loans for the purchase or refinance of residential real estate properties consisting of one-to-four units and home equity loans and lines of credit. The Company sells most of its long-term fixed rate residential real estate loans to secondary market investors. The Company also releases the servicing of these loans upon sale. The Company retains all residential real estate loans with balloon payment features. Balloon periods are limited to five years. Residential real estate loans are typically underwritten to conform to industry standards including criteria for maximum debt-to-income and loan-to-value ratios as well as minimum credit scores. Loans secured by first liens on residential real estate held in the portfolio typically do not exceed 80% of the value of the collateral and have amortization periods of twenty-five years or less. The Company does not originate subprime mortgage loans.

Consumer Loans. Consumer loans are primarily comprised of loans to individuals for personal and household purposes such as the purchase of an automobile or other living expenses. Minimum underwriting criteria have been established that consider credit score, debt-to-income ratio, employment history, and collateral coverage. Typically, consumer loans are set up on monthly payments with amortization periods based on the type and age of the collateral.

Other Loans. Other loans consist primarily of loans to municipalities to support community projects such as infrastructure improvements or equipment purchases. Underwriting guidelines for these loans are consistent with those established for commercial loans with the additional repayment source of the taxing authority of the municipality.

Allowance for Credit Losses

The allowance for credit losses represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining contractual life of the assets. The provision for credit losses is the charge against current earnings that is determined by the Company as the amount needed to maintain an adequate allowance for credit losses. In determining the adequacy of the allowance for credit losses, and therefore the provision to be charged to current earnings, the Company relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by the overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net loan losses, the level and composition of nonaccrual, past due and troubled debt restructurings, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates. The Company estimates the appropriate level of allowance for credit losses by evaluating large impaired loans separately from non-impaired loans.

Impaired loans

The Company individually evaluates certain loans for impairment. In general, these loans have been internally identified via the Company’s loan grading system as credits requiring management’s attention due to underlying problems in the borrower’s business or collateral concerns. This evaluation considers expected future cash flows, the value of collateral and also other factors that may impact the borrower’s ability to make payments when due. For loans greater than $250,000, and loans identified as troubled debt restructurings, impairment is individually measured each quarter using one of three alternatives: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price, if available; or (3) the fair value of the collateral less costs to sell for collateral dependent loans and loans for which foreclosure is deemed to be probable. A specific allowance is assigned when expected cash flows or collateral are less than the carrying amount of the loan. The carrying value of the loan reflects reductions from prior charge-offs.

Non-Impaired loans

Non-impaired loans comprise the vast majority of the Company’s total loan portfolio and include loans in accrual status and those credits not identified as troubled debt restructurings. A small portion of these loans are considered “criticized” due to the risk rating assigned reflecting elevated credit risk due to characteristics, such as a strained cash flow position, associated with the individual borrowers. Criticized loans are those assigned risk ratings of Special Mention, Substandard, or Doubtful.

18

Beginning January 1, 2020, the allowance for credit losses was estimated using the current expected credit loss model ("CECL"). The Company uses the Loss Rate method to estimate the historical loss rate for all non-impaired loans. Under this method, the allowance for credit losses is measured on a collective (pool) basis for non-impaired loans with similar risk characteristics. Historical credit loss experience provides the basis for the estimate of expected credit losses. For each pool, a historical loss rate is computed based on the average remaining contractual life of the pool. Adjustments to historical loss rates are made using qualitative factors relevant to each pool including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. In addition, a twelve-month forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period.

The Company also considers specific current economic events occurring globally, in the U.S. and in its local markets. In March 2020, in response to the COVID-19 outbreak, its significant disruptions in the U.S. economy and impacts on local markets, First Mid Bank offered a 90-day commercial deferral program, primarily to hotel and restaurant borrowers. In accordance with interagency guidance issued in March 2020, these short-term deferrals are not considered troubled debt restructurings. These deferrals were, however, considered in the factors used to estimate the required allowance for credit losses for non-impaired loans. Other COVID-19 related impacts considered included revenue losses of businesses required to restrict or cease services, income loss to workers laid off as a result of COVID-19 restrictions, various federal and state government stimulus programs and additional deferral programs offered by First Mid Bank beginning in April 2020. Other events considered include the status of trade agreements with China, scheduled increases in minimum wage and changes to the minimum salary threshold for overtime provisions, current and projected unemployment rates, current and projected grain and oil prices and economies of local markets where customers work and operate.

Within each pool, risk elements are evaluated that have specific impacts to the borrowers within the pool. These, along with the general risks and events, and the specific lending policies and procedures by loan type described above, are analyzed to estimate the qualitative factors used to adjust the historical loss rates.

During the current period, the following assumptions and factors were considered when determining the historical loss rate and any potential adjustments by loan pool.

Construction and Land Development Loans. The average life of the construction and land development segment was determined to be twelve months. Historical losses in this segment remained very low. Current activity in this industry was deemed essential and has continued during COVID-19. There was no adjustment to the qualitative factor for this segment.

Agricultural Real Estate Loans. The average life of the agricultural real estate segment was determined to be thirty-six months. Historical losses in the segment remain very low. Farmland values have remained steady over an extended period of time and there are no indications that this will change in the next year. There was no adjustment to the qualitative factor for this segment.

1- 4 Family Residential Properties Loans. The average life of the 1-4 Family Residential segment was determined to be: Residential Real Estate-non-owner occupied, sixty months; Residential Real Estate-owner occupied, sixty months; Home Equity lines of credit, thirty months. COVID-19 has impacted the finances of consumers from layoffs and furloughs resulting from employers that must reduce or suspend operations. Increased risk in this segment includes consumer ability to make mortgage and rent payments. Some of this impact has been offset by governmental actions such as stimulus payments and extended unemployment benefits. First Mid Bank and Providence Bank have also offered short-term loan payment deferral to borrowers in this segment.  Overall, the historical loss rate for this segment increased slightly.

Commercial Real Estate Loans. The average life of the commercial real estate segment was determined to be thirty-six months. This segment includes the Company's majority of exposure to the hotel industry which has been significantly impacted by COVID-19 events. Other impacted industries in this segment include restaurants and retail establishments. First Mid Bank and Providence Bank have implemented deferral programs for borrowers in this segment in order to ease the impact to these borrowers. There was a slight increase in the historical loss rate for this segment.

Agricultural Loans. The average life of the agricultural segment was determined to be eighteen months. Losses in this segment are very low and it is believed that borrowers in this segment will benefit from current governmental programs such as PPP and MFP. Many farmers are holding grain from the 2019 operating season and should be able to take advantage of an increase in prices. There was no change to the qualitative factor of this segment.

19

Commercial and Industrial Loans. The average life of the commercial and industrial segment was determined to be twenty-four months. The COVID-19 impacts include forced closures and scaled-back services for many industries within this segment including retailers, restaurants, and video gaming establishments. Some of this risk is offset by government relief programs as well as, First Mid Bank and Providence Bank's payment deferral program. There was a slight decrease in the historical loss rate but the qualitative factor for this segment was not changed.

Consumer Loans. The average life of the consumer segment was determined to be thirty-six months. The financial status of many borrowers has been impacted by COVID-19 events including layoffs and reduced hours. Some of this impact has been offset by government stimulus programs, increased paid leave and increased and extended unemployment benefits, however these benefits are now expiring. Additionally, First Mid Bank and Providence Bank have offered a short-term payment deferral program. There was a slight decrease in the historical loss rate for this period and the qualitative factor for the segment was not changed.

Acquired Loans. Prior to January 1, 2020 loans acquired with evidence of credit deterioration since origination and for which it was probable that all contractually required payments would not be collected were considered purchased credit impaired at the time of acquisition. Purchase credit-impaired ("PCI") loans were accounted for under ASC 310-30, Receivables--Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"), and were initially measured at fair value, which included the estimated future credit losses expected to be incurred over the life of the loan.

Accordingly, an allowance for credit losses related to these loans was not carried over and recorded at the acquisition date. The cash flows expected to be collected were estimated using current key assumptions, such as default rates, value of underlying collateral, severity and prepayment speeds.

Subsequent to January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date. Accordingly, on January 1, 2020, the amortized cost basis of the PCD loans were adjusted to reflect the addition of $833,000 to the allowance for credit losses.

For acquired loans not deemed purchased credit deteriorated at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. At the acquisition date, an initial allowance for expected credit losses is estimated and recorded as credit loss expense. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

The following table presents the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2021 (in thousands):

	Construction & Land Development		Agricultural Real Estate		1-4 Family Residential Properties		Commercial Real Estate		Agricultural Loans			Commercial & Industrial		Consumer Loans		Total
Three months ended March 31, 2021
Beginning Balance	$	1,666	$	1,084	$	2,322	$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Initial allowance on loans purchased with credit deterioration		261		44		328		646		-			795		-		2,074
Provision for credit loss expense		359		500		617		5,902		(645	)		4,674		729		12,136
Loans charged off		—		—		182		480		—			18		288		968
Recoveries collected		—		—		8		9		—			18		231		266
Ending balance	$	2,286	$	1,628	$	3,093	$	25,737	$	881		$	18,954	$	2,839	$	55,418

20

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2020 and for the year ended December 31, 2020 (in thousands):

	Construction & Land Development			Agricultural Real Estate			1-4 Family Residential Properties			Commercial Real Estate		Agricultural Loans			Commercial & Industrial		Consumer Loans		Total
Three months ended March 31, 2020
Beginning Balance (prior to adoption of ASC 326)	$	1,146		$	1,093		$	1,386		$	11,198	$	1,386		$	9,273	$	1,429	$	26,911
Impact of adopting ASC 326	$	(113	)	$	230		$	756		$	541	$	(363	)	$	155	$	466		1,672
Provision for credit loss expense		587			12			(77	)		1,961		41			2,815		142		5,481
Loans charged off		—			—			196			84		0			972		171		1,423
Recoveries collected		—			—			62			5		—			23		145		235
Ending balance	$	1,620		$	1,335		$	1,931		$	13,621	$	1,064		$	11,294	$	2,011	$	32,876
Twelve months ended December 31, 2020
Beginning Balance (prior to adoption of ASC 326)	$	1,146		$	1,093		$	1,386		$	11,198	$	1,386		$	9,273	$	1,429	$	26,911
Impact of adopting ASC 326		(113	)		230			756			541		(363	)		155		466		1,672
Provision for credit loss expense		646			(239	)		274			8,581		503			5,869		469		16,103
Loans charged off		13			—			393			829		—			1,991		618		3,844
Recoveries collected		—			—			299			169		—			179		421		1,068
Ending balance	$	1,666		$	1,084		$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 180 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

21

The following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of March 31, 2021 (in thousands):

	Collateral								Allowance
	Real Estate		Business Assets		Other		Total		for Credit Losses
Construction and land development	$	508	$	—	$	—	$	508	$	303
Agricultural real estate		—		—		—		—		—
1-4 Family residential properties		4,436		—		—		4,436		163
Multifamily residential properties		1,914		—		—		1,914		—
Commercial real estate		12,308		—		—		12,308		1,252
Loans secured by real estate		19,166		—		—		19,166		1,718
Agricultural loans		—		—		—		—		—
Commercial and industrial loans		—		3,393		1,909		5,302		808
Consumer loans		—		—		8	8			163
Other loans		—		26		—	26			26
Total loans	$	19,166	$	3,419	$	1,917	$	24,502	$	2,715

Credit Quality

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, collateral support, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Company uses the following definitions for risk ratings which are commensurate with a loan considered “criticized”:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current sound-worthiness and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing factors, conditions and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans.

22

The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of March 31, 2021 (in thousands):

	Term Loans by Origination Year												Revolving
Risk Rating	2021		2020		2019		2018		2017		Prior		Loans		Total
March 31, 2021
Construction & Land Development Loans
Pass	$	6,259	$	55,930	$	35,782	$	44,866	$	12,068	$	9,723	$	—	$	164,628
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		128		0		573		47		—		748
Total	$	6,259	$	55,930	$	35,910	$	44,866	$	12,641	$	9,770	$	—	$	165,376
Agricultural Real Estate Loans
Pass	$	29,531	$	101,049	$	31,082	$	39,931	$	14,717	$	38,968	$	—	$	255,278
Special Mention		825		282		4,337		422		407		6,472		—		12,745
Substandard		—		—		0		707		625		297		—		1,629
Total	$	30,356	$	101,331	$	35,419	$	41,060	$	15,749	$	45,737	$	—	$	269,652
1-4 Family Residential Property Loans
Pass	$	28,885	$	114,918	$	29,974	$	40,369	$	20,251	$	117,623	$	34,265	$	386,285
Special Mention		—		189		2,136		349		2,714		1,190		57		6,635
Substandard		376		299		868		1,814		1,929		13,327		937		19,550
Total	$	29,261	$	115,406	$	32,978	$	42,532	$	24,894	$	132,140	$	35,259	$	412,470
Commercial Real Estate Loans
Pass	$	67,044	$	480,974	$	318,800	$	223,168	$	163,413	$	377,041	$	—	$	1,630,440
Special Mention		954		2,712		1,285		3,268		11,070		24,347		—		43,636
Substandard		—		1,794		37		6,901		2,004		16,057		—		26,793
Total	$	67,998	$	485,480	$	320,122	$	233,337	$	176,487	$	417,445	$	—	$	1,700,869
Agricultural Loans
Pass	$	1,853	$	83,342	$	6,921	$	5,131	$	1,631	$	104	$	—	$	98,982
Special Mention		13,723		3,777		3,769		214		206		159		—		21,848
Substandard		53		44		118		25		—		—		—		240
Total	$	15,629	$	87,163	$	10,808	$	5,370	$	1,837	$	263	$	—	$	121,070
Commercial & Industrial Loans
Pass	$	152,091	$	477,167	$	162,411	$	98,524	$	96,059	$	145,657	$	—	$	1,131,909
Special Mention		1,556		3,248		33,491		804		473		1,895		—		41,467
Substandard		397		343		2,369		447		2,345		2,680		—		8,581
Total	$	154,044	$	480,758	$	198,271	$	99,775	$	98,877	$	150,232	$	—	$	1,181,957
Consumer Loans
Pass	$	7,723	$	35,908	$	33,307	$	11,526	$	138	$	2,681	$	—	$	91,283
Special Mention		—		—		23		21		—		—		—		44
Substandard		13		27		13		90		79		156		—		378
Total	$	7,736	$	35,935	$	33,343	$	11,637	$	217	$	2,837	$	—	$	91,705
Total Loans
Pass	$	293,386	$	1,349,288	$	618,277	$	463,515	$	308,277	$	691,797	$	34,265	$	3,758,805
Special Mention		17,058		10,208		45,041		5,078		14,870		34,063		57		126,375
Substandard		839		2,507		3,533		9,984		7,555		32,564		937		57,919
Total	$	311,283	$	1,362,003	$	666,851	$	478,577	$	330,702	$	758,424	$	35,259	$	3,943,099

23

The following tables present the credit risk profile of the Company’s loan portfolio based on risk rating category as of December 31, 2020 (in thousands):

	Term Loans by Origination Year												Revolving
Risk Rating	2020		2019		2018		2017		2016		Prior		Loans		Total
December 31, 2020
Construction & Land Development Loans
Pass	$	41,842	$	40,989	$	31,500	$	2,760	$	871	$	3,822	$	—	$	121,784
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		128		—		517		—		50		—		695
Total	$	41,842	$	41,117	$	31,500	$	3,277	$	871	$	3,872	$	—	$	122,479
Agricultural Real Estate Loans
Pass	$	73,630	$	34,412	$	37,839	$	16,138	$	13,559	$	58,291	$	—	$	233,869
Special Mention		1,845		3,970		533		469		1,106		11,232		—		19,155
Substandard		—		—		800		208		64		245		—		1,317
Total	$	75,475	$	38,382	$	39,172	$	16,815	$	14,729	$	69,768	$	—	$	254,341
1-4 Family Residential Property Loans
Pass	$	81,366	$	29,695	$	38,163	$	23,086	$	26,676	$	62,942	$	40,363	$	302,291
Special Mention		192		2,142		523		2,720		247		1,578		293		7,695
Substandard		296		695		1,915		1,859		1,996		7,516		1,499		15,776
Total	$	81,854	$	32,532	$	40,601	$	27,665	$	28,919	$	72,036	$	42,155	$	325,762
Commercial Real Estate Loans
Pass	$	368,750	$	237,119	$	171,591	$	148,283	$	143,400	$	215,616	$	—	$	1,284,759
Special Mention		2,469		1,300		6,108		11,262		6,741		16,947		—		44,827
Substandard		1,863		40		7,081		2,022		4,905		18,435		—		34,346
Total	$	373,082	$	238,459	$	184,780	$	161,567	$	155,046	$	250,998	$	—	$	1,363,932
Agricultural Loans
Pass	$	83,377	$	15,680	$	5,978	$	1,838	$	635	$	2,856	$	—	$	110,364
Special Mention		21,070		4,483		694		224		148		38		—		26,657
Substandard		68		238		25		—		—		—		—		331
Total	$	104,515	$	20,401	$	6,697	$	2,062	$	783	$	2,894	$	—	$	137,352
Commercial & Industrial Loans
Pass	$	371,683	$	132,148	$	70,497	$	78,890	$	42,439	$	114,904	$	—	$	810,561
Special Mention		4,116		32,130		849		489		1,101		730		—		39,415
Substandard		889		2,360		532		1,689		136		969		—		6,575
Total	$	376,688	$	166,638	$	71,878	$	81,068	$	43,676	$	116,603	$	—	$	856,551
Consumer Loans
Pass	$	31,609	$	21,384	$	12,084	$	8,279	$	3,150	$	1,022	$	—	$	77,528
Special Mention		—		24		24		1		1		—		—		50
Substandard		15		16		111		95		67		120		—		424
Total	$	31,624	$	21,424	$	12,219	$	8,375	$	3,218	$	1,142	$	—	$	78,002
Total Loans
Pass	$	1,052,257	$	511,427	$	367,652	$	279,274	$	230,730	$	459,453	$	40,363	$	2,941,156
Special Mention		29,692		44,049		8,731		15,165		9,344		30,525		293		137,799
Substandard		3,131		3,477		10,464		6,390		7,168		27,335		1,499		59,464
Total	$	1,085,080	$	558,953	$	386,847	$	300,829	$	247,242	$	517,313	$	42,155	$	3,138,419

24

The following table presents the Company’s loan portfolio aging analysis at March 31, 2021 and December 31, 2020 (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days & Accruing
March 31, 2021
Construction and land development	$	227	$	—	$	128	$	355	$	165,021	$	165,376	$	—
Agricultural real estate		0		—		34		34		269,618		269,652		—
1-4 Family residential properties		1,212		2,400		1,546		5,158		407,312		412,470		—
Multifamily residential properties		39		1,098		—		1,137		296,847		297,984		—
Commercial real estate		846		1,166		1,961		3,973		1,398,912		1,402,885		—
Loans secured by real estate		2,324		4,664		3,669		10,657		2,537,710		2,548,367		—
Agricultural loans		2,153		125		22		2,300		118,770		121,070		—
Commercial and industrial loans		535		257		1,320		2,112		1,015,288		1,017,400		—
Consumer loans		122		50		136		308		91,397		91,705		—
All other loans		59		—		—		59		164,498		164,557		—
Total loans	$	5,193	$	5,096	$	5,147	$	15,436	$	3,927,663	$	3,943,099	$	—
December 31, 2020
Construction and land development	$	—	$	—	$	128	$	128	$	122,351	$	122,479	$	—
Agricultural real estate		1,198		34		0		1,232		253,109		254,341		—
1-4 Family residential properties		1,121		1,105		2,033		4,259		321,503		325,762		—
Multifamily residential properties		—		—		—		—		189,632		189,632		—
Commercial real estate		2,618		341		794		3,753		1,170,547		1,174,300		—
Loans secured by real estate		4,937		1,480		2,955		9,372		2,057,142		2,066,514		—
Agricultural loans		43		—		236		279		137,073		137,352		—
Commercial and industrial loans		2,426		8		1,420		3,854		734,459		738,313		—
Consumer loans		145		50		149		344		77,658		78,002		—
All other loans		—		—		—		0		118,238		118,238		—
Total loans	$	7,551	$	1,538	$	4,760	$	13,849	$	3,124,570	$	3,138,419	$	—

Impaired Loans

Within all loan portfolio segments, loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Impaired loans, excluding certain troubled debt restructured loans, are placed on nonaccrual status. Impaired loans include nonaccrual loans and loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. It is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being modified remain on nonaccrual status until, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. If the restructured loan is on accrual status prior to being modified, the loan is reviewed to determine if the modified loan should remain on accrual status.

The Company’s policy is to discontinue the accrual of interest income on all loans for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Interest on loans determined to be troubled debt restructurings is recognized on an accrual basis in accordance with the restructured terms if the loan is in compliance with the modified terms. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.

25

The following tables present impaired loans as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021						December 31, 2020
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans with a specific allowance:
Construction and land development	$	573	$	573	$	303	$	516	$	516	$	246
Agricultural real estate		—		—		—		—		—		—
1-4 Family residential properties		5,817		5,990		163		4,005		4,157		158
Multifamily residential properties		1,914		1,914		—		1,914		1,914		0
Commercial real estate		12,317		13,062		1,252		11,528		11,794		863
Loans secured by real estate		20,621		21,539		1,718		17,963		18,381		1,267
Agricultural loans		—		228		—		0		228		0
Commercial and industrial loans		5,430		6,996		808		3,523		4,878		664
Consumer loans		182		126		163		112		114		0
Other loans		26		26		26		—		—		—
Total loans	$	26,259	$	28,915	$	2,715	$	21,598	$	23,601	$	1,931
Loans without a specific allowance:
Construction and land development	$	160	$	173	$	—	$	162	$	175	$	—
Agricultural real estate		374		374		—		359		359		—
1-4 Family residential properties		3,971		4,692		—		4,262		4,715		—
Multifamily residential properties		258		259		—		267		267		—
Commercial real estate		450		752		—		552		581		—
Loans secured by real estate		5,213		6,250		—		5,602		6,097		—
Agricultural loans		262		34		—		659		431		—
Commercial and industrial loans		973		3,026		—		907		1,331		—
Consumer loans		229		729		—		218		313		—
Total loans	$	6,677	$	10,039	$	—	$	7,386	$	8,172	$	—
Total loans:
Construction and land development	$	733	$	746	$	303	$	678	$	691	$	246
Agricultural real estate		374		374		—		359		359		—
1-4 Family residential properties		9,788		10,682		163		8,267		8,872		158
Multifamily residential properties		2,172		2,173		—		2,181		2,181		0
Commercial real estate		12,767		13,814		1,252		12,080		12,375		863
Loans secured by real estate		25,834		27,789		1,718		23,565		24,478		1,267
Agricultural loans		262		262		—		659		659		0
Commercial and industrial loans		6,403		10,022		808		4,430		6,209		664
Consumer loans		411		855		163		330		427		0
Other loans		26		26		26		—		—		—
Total loans	$	32,936	$	38,954	$	2,715	$	28,984	$	31,773	$	1,931

26

The following tables present average recorded investment and interest income recognized on impaired loans for the three months ended March 31, 2021 and 2020 (in thousands):

	For the three months ended
	March 31, 2021				March 31, 2020
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
Construction and land development	$	754	$	5	$	600	$	8
Agricultural real estate		957		—		1,202		—
1-4 Family residential properties		9,857		13		8,997		18
Multifamily residential properties		2,294		—		3,323		1
Commercial real estate		13,156		38		8,266		42
Loans secured by real estate		27,018		56		22,388		69
Agricultural loans		262		6		960		—
Commercial and industrial loans		6,455		1		7,402		2
Consumer loans		438		—		544		—
All other loans		26		—		—		—
Total loans	$	34,199	$	63	$	31,294	$	71

The amount of interest income recognized by the Company within the periods stated above was due to loans modified in troubled debt restructurings that remain on accrual status. The average balances of these loans included in impaired loans at March 31, 2021 and 2020, were $4.1 million and $4.4 million, respectively.

Non-Accrual Loans

The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated for which no allowance was recorded as of March 31, 2021 and December 31, 2020 (in thousands). There were no loans past due over eighty-nine days that were still accruing.

	March 31, 2021				December 31, 2020
	Nonaccrual with no Allowance for			Total	Nonaccrual with no Allowance for			Total
	Credit Loss		Nonaccrual		Credit Loss		Nonaccrual
Construction and land development	$	160	$	225	$	162	$	162
Agricultural real estate		374		374		359		359
1-4 Family residential properties		7,116		8,771		6,747		6,930
Multifamily residential properties		2,173		2,173		2,181		2,181
Commercial real estate		3,780		9,516		7,345		8,760
Loans secured by real estate		13,603		21,059		16,794		18,392
Agricultural loans		262		262		659		659
Commercial and industrial loans		3,641		6,137		3,677		4,372
Consumer loans		295		394		327		327
All other loans		0		25
Total loans	$	17,801	$	27,877	$	21,457	$	23,750

Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $1,021,000 and $1,029,000 for the three months ended March 31, 2021 and 2020, respectively.

27

Subsequent to adoption of ASU 2016-13 on January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered PCD loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date.

Troubled Debt Restructuring

The balance of troubled debt restructurings ("TDRs") at March 31, 2021 and December 31, 2020 was $8.7 million and $9.5 million, respectively. There was $929,000 and $1,016,000 in specific reserves established with respect to these loans as of March 31, 2021 and December 31, 2020, respectively. As troubled debt restructurings, these loans are included in nonperforming loans and are classified as impaired which requires that they be individually measured for impairment. The modification of the terms of these loans included one or a combination of the following: a reduction of stated interest rate of the loan; an extension of the maturity date and change in payment terms; or a permanent reduction of the recorded investment in the loan.

The following table presents the Company’s recorded balance of troubled debt restructurings at March 31, 2021 and December 31, 2020 (in thousands).

Troubled debt restructurings:	March 31, 2021		December 31, 2020
1-4 Family residential properties	$	1,381	$	1,603
Commercial real estate		4,594		5,170
Loans secured by real estate		5,975		6,773
Agricultural loans		228		228
Commercial and industrial loans		2,362		2,389
Consumer loans		124		112
Total	$	8,689	$	9,502
Performing troubled debt restructurings:
1-4 Family residential properties	$	1,004	$	1,268
Commercial real estate		3,027		3,045
Loans secured by real estate		4,031		4,313
Commercial and industrial loans		55		58
Consumer loans		17		2
Total	$	4,103	$	4,373

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The following table presents loans modified as TDRs during the three months ended March 31, 2021, as a result of various modified loan factors (in thousands). The change in the recorded investment from pre-modification to post- modification was not material.

	March 31, 2021					March 31, 2020
	Number of		Recorded		Type of	Number of		Recorded		Type of
	Modifications		Investment		Modifications	Modifications		Investment		Modifications
Commercial real estate		—	$	—			1	$	305	(b)(c)(d)
Loans secured by real estate		—		—			1		305
Commercial and industrial loans		—		—			1		7	(b)(c)(d)
Consumer Loans		2		16	(b)		1		11	(c)
Total		2	$	16			3	$	323

Type of modifications:

(a) Reduction of stated interest rate of loan

(b) Change in payment terms

(c) Extension of maturity date

(d) Permanent reduction of the recorded investment

A loan is considered to be in payment default once it is 90 days past due under the modified terms. There were no loans modified as troubled debt restructurings during the prior twelve months that experienced defaults for three months ended March 31, 2021. There were no loans modified as troubled debt restructuring during the prior twelve months that experienced defaults as of December 31, 2020.

The balance of real estate owned includes $13,339,000 and $2,489,000 of foreclosed real estate properties recorded as a result of obtaining physical possession of the property at March 31, 2021 and December 31, 2020, respectively. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure procedures are in process was $634,000 and $713,000 at March 31, 2021 and December 31, 2020, respectively.

Purchased Credit Deteriorated (PCD) Loans

The Company has acquired loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows (in thousands):

	LINCO    Acquisition
Purchase price of loans at acquisition	$	64,647
Allowance for credit losses at acquisition		(2,074	)
Non-credit discount/(premium) at acquisition		(187	)
Fair value of acquired loans at acquisition	$	62,386

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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

29

Note 5 -- Goodwill and Intangible Assets

The Company has goodwill from business combinations, intangible assets from branch acquisitions, identifiable intangible assets assigned to core deposit relationships and customer lists of First Mid Wealth Management Company and First Mid Insurance. The following table presents gross carrying value and accumulated amortization by major intangible asset class as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021				December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Goodwill not subject to amortization (effective 1/1/02)	$	117,708	$	3,760	$	108,752	$	3,760
Intangibles from branch acquisition		3,015		3,015		3,015		3,015
Core deposit intangibles		34,503		21,620		32,355		20,910
Other intangibles		16,779		5,555		16,389		5,222
	$	172,005	$	33,950	$	160,511	$	32,907

Goodwill of $9 million was provisionally recorded for the acquisition and merger of LINCO during the first quarter of 2021. All goodwill was assigned to the banking segment of the Company.

The following table provides a reconciliation of the purchase price paid for the acquisition of LINCO and the amount of goodwill recorded (in thousands):

Unallocated purchase price				$	14,992
Less purchase accounting adjustments:
Fair value of securities	$	264
Fair value of loans, net		(2,818	)
Fair value of other real estate owned		915
Fair value of premises and equipment		6,360
Fair value of time deposits		(2,081	)
Fair value of FHLB advances		(975	)
Core deposit intangible		2,025
Other assets		2,530
Other liabilities		(184	)
					6,036
				$	8,956

The Company has mortgage servicing rights acquired in previous acquisitions. The following table summarizes the activity pertaining to mortgage servicing rights included in intangible assets as of March 31, 2021, March 31, 2020 and December 31, 2020 (in thousands):

	March 31, 2021			March 31, 2020			December 31, 2020
Beginning Balance	$	516		$	1,444		$	1,444
Valuation reserve		210			(18	)		(273	)
Mortgage servicing rights amortized		(177	)		(126	)		(593	)
Interest only Strip		2			(4	)		(62	)
Ending Balance	$	551		$	1,296		$	516

Total amortization expense for the three months ended March 31, 2021 and 2020 was as follows (in thousands):

	Three months ended March 31,
	2021		2020
Core deposit intangibles	$	710	$	843
Customer list intangibles		333		326
Mortgage servicing rights		177		126
	$	1,220	$	1,295

Aggregate amortization expense for the current year and estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands):

30

Aggregate amortization expense:
For period 01/01/21-3/31/21	$	1,220
Estimated amortization expense:
For period 04/01/21-12/31/21		3,888
For year ended 12/31/22		3,885
For year ended 12/31/23		3,534
For year ended 12/31/24		3,234
For year ended 12/31/25		2,891
For year ended 12/31/26		2,215

In accordance with the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” codified within ASC 350, the Company performed testing of goodwill for impairment as of September 30, 2020 and determined that, as of that date, goodwill was not impaired. Management also concluded that the remaining amounts and amortization periods were appropriate for all intangible assets.

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Repurchase Agreements and Other Borrowings

3 Months Ended

Mar. 31, 2021

Repurchase Agreements And Other Borrowings [Abstract]

Repurchase Agreements and Other Borrowings

Note 6 -- Repurchase Agreements and Other Borrowings

Securities sold under agreements to repurchase were $212.5 million at March 31, 2021, an increase of $5.6 million from $206.9 million at December 31, 2020. The increase during the first three months of 2021 was primarily due to changes in business cash flow needs. All the transactions have overnight maturities with a weighted average rate of 0.15%.

The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., declare bankruptcy), the Company could cancel the repurchase agreement (i.e., cease payment of principal and interest), and attempt collection on the amount of collateral value in excess of the repurchase agreement fair value. The collateral is held by a third-party financial institution in the counterparty's custodial account. The counterparty has the right to sell or repledge the investment securities. For government entity repurchase agreements, the collateral is held by the Company in a segregated custodial account under a tri-party agreement. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional securities. The Company closely monitors collateral levels to ensure adequate levels are maintained, while mitigating the potential of over- collateralization in the event of counterparty default.

Collateral pledged by class for repurchase agreements are as follows (in thousands):

	March 31, 2021		December 31, 2020
US Treasury securities and obligations of U.S. government corporations & agencies	$	55,619	$	37,423
Mortgage-backed securities: GSE: residential		156,884		168,480
Miscellaneous		—		1,034
Total	$	212,503	$	206,937

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FHLB borrowings, before net premiums of $921,000, were $115.9 million and $94 million at March 31, 2021 and December 31, 2020, respectively. At March 31, 2021 the advances were as follows:

Advance		Term (in years)		Interest Rate	Maturity Date
$	5,000,000		5.0	1.85%	April 12, 2021
	4,000,000		1.0	2.00%	May 3, 2021
	5,000,000		7.0	2.55%	October 1, 2021
	5,000,000		5.0	2.71%	March 21, 2022
	5,000,000		8.0	2.40%	January 9, 2023
	5,000,000		3.0	2.41%	May 31, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		4.0	2.44%	May 30, 2023
	5,000,000		3.5	1.51%	July 31, 2023
	5,000,000		3.5	0.77%	September 11, 2023
	10,000,000		5.0	1.45%	December 31, 2024
	5,000,000		5.0	0.91%	March 10, 2025
	6,940,511		10.0	2.64%	December 23, 2025
	5,000,000		10.0	1.14%	October 3, 2029
	5,000,000		10.0	1.15%	October 3, 2029
	5,000,000		10.0	1.12%	October 3, 2029
	10,000,000		10.0	1.39%	December 31, 2029
	15,000,000		10.0	1.41%	December 31, 2029

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Fair Value of Assets and Liabilities

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

Note 7 -- Fair Value of Assets and Liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Following is a description of the inputs and valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Available-for-Sale Securities. The fair value of available-for-sale securities is determined by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independent sources of market parameters, including but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Fair value determinations for Level 3 measurements of securities are the responsibility of the Treasury function of the Company. The Company contracts with a pricing specialist to generate fair value estimates on a monthly basis. The Treasury function of the Company challenges the reasonableness of the assumptions used and reviews the methodology to ensure the estimated fair value complies with accounting standards generally accepted in the United States, analyzes the changes in fair value and compares these changes to internally developed expectations and monitors these changes for appropriateness.

Derivatives. The fair value of derivatives is based on models using observable market data as of the measurement date and are therefore classified in Level 2 of the valuation hierarchy.

32

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of March 31, 2021 and December 31, 2020 (in thousands):

	Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2021
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government    corporations and agencies	$	171,530	$	—	$	171,530	$	—
Obligations of states and political subdivisions		257,719		—		257,105		614
Mortgage-backed securities		621,952		—		621,952		—
Other securities		36,747		—		36,747		—
Total available-for-sale securities		1,087,948		—		1,087,334		614
Equity securities		300		300		—		—
Derivative assets: interest rate swaps		262		—		262		—
Total assets	$	1,088,510	$	300	$	1,087,596	$	614
Derivative liabilities: interest rate swaps	$	1,013	$	—	$	1,013	$	—
December 31, 2020
Available-for-sale securities:
U.S. Treasury securities and Obligations of U.S. government    corporations and agencies	$	127,069	$	—	$	127,069	$	—
Obligations of states and political subdivisions		249,844		—		249,050		794
Mortgage-backed securities		491,348		—		491,348		—
Other securities		10,979		—		10,979		—
Total available-for-sale securities		879,240		—		878,446		794
Equity securities		218		218		193		—
Derivative assets: interest rate swaps		1,399		-		1,399		—
Total assets	$	880,857	$	218	$	880,038	$	794
Derivative liabilities: interest rate swaps	$	2,892	$	—	$	2,892	$	—

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2021 and 2020 is summarized as follows (in thousands):

	Obligation of State and Political Subdivisions
	Three months ended
	March 31, 2021			March 30, 2020
Beginning balance	$	794		$	973
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Total gains or losses:
Included in net income		1			1
Included in other comprehensive income (loss)		—			—
Purchases, issuances, sales and settlements:
Purchases		—			—
Issuances		—			—
Sales		(181	)		(184	)
Settlements		—			—
Ending balance	$	614		$	790
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$	—		$	—

33

Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Impaired Loans (Collateral Dependent). Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment and estimating fair value include using the fair value of the collateral for collateral dependent loans.

If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Impaired loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method.

Management establishes a specific allowance for impaired loans that have an estimated fair value that is below the carrying value. The total carrying amount of loans for which a change in specific allowance has occurred as of March 31, 2021 was $15,429,000 and a fair value of $2,696,000 resulting in specific loss exposures of $12,733,000.

When there is little prospect of collecting principal or interest, loans, or portions of loans, may be charged-off to the allowance for credit losses. Losses are recognized in the period an obligation becomes uncollectible. The recognition of a loss does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan even though partial recovery may be affected in the future.

Foreclosed Assets Held For Sale. Other real estate owned acquired through loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The adjustment at the time of foreclosure is recorded through the allowance for credit losses. Due to the subjective nature of establishing the fair value when the asset is acquired, the actual fair value of the other real estate owned, or foreclosed asset could differ from the original estimate. If it is determined that fair value declines subsequent to foreclosure, a valuation allowance is recorded through noninterest expense. Operating costs associated with the assets after acquisition are also recorded as noninterest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and posted to other noninterest expense. The total carrying amount of other real estate owned as of March 31, 2021 was $13,339,000. Other real estate owned included in the total carrying amount and measured at fair value on a nonrecurring basis during the period amounted to $11,292,000.

Mortgage Servicing Rights. As of March 31, 2021, mortgage servicing rights had a carrying value of $920,000 and a fair value of $551,000 resulting in a valuation reserve of $369,000. The fair value used to determine the valuation reserve for mortgage servicing rights was estimated using the discounted cash flow models. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the fair value hierarchy.

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Impaired loans (collateral dependent)	$	12,733	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		11,292	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		551	Third party valuations	PSA standard prepayment model rate	242 - 438		304

December 31, 2020	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Impaired loans (collateral dependent)	$	14,876	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		290	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		517	Third party valuations	PSA standard prepayment model rate	242 - 441		384

34

The following tables present estimated fair values of the Company’s financial instruments at March 31, 2021 and December 31, 2020 in accordance with ASC 825 (in thousands):

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2021
Financial Assets
Cash and due from banks	$	408,226	$	408,226	$	408,226	$	—	$	—
Federal funds sold		1,321		1,321		1,321		—		—
Certificates of deposit investments		2,695		2,695		—		2,695		—
Available-for-sale securities		1,087,948		1,087,948		—		1,087,334		614
Held-to-maturity securities		7,045		7,125		—		7,125		—
Equity securities		300		300		300		—		—
Loans held for sale		4,693		4,693		—		4,693		—
Loans net of allowance for credit losses		3,882,988		3,839,827		—		—		3,839,827
Interest receivable		20,218		20,218		—		20,218		—
Federal Reserve Bank stock		9,401		9,401		—		9,401		—
Federal Home Loan Bank stock		5,450		5,450		—		5,450		—
Financial Liabilities
Deposits	$	4,737,693	$	4,740,802	$	—	$	3,926,107	$	814,695
Securities sold under agreements to repurchase		212,503		212,514		—		212,514		—
Interest payable		3,214		3,214		—		3,214		—
Federal Home Loan Bank borrowings		116,861		117,670		—		117,670		—
Subordinated debt, net		94,289		94,289				94,289
Junior subordinated debentures, net		19,069		14,495		—		14,495		—
December 31, 2020
Financial Assets
Cash and due from banks	$	415,973	$	415,973	$	415,973	$	—	$	—
Federal funds sold		1,308		1,308		1,308		—		—
Certificates of deposit investments		2,695		2,695		—		2,695		—
Available-for-sale securities		879,240		879,240		—		878,446		794
Held-to-maturity securities		5,016		5,119		—		5,119		—
Equity securities		218		218		218		—		—
Loans held for sale		1,924		1,924		—		1,924		—
Loans net of allowance for credit losses		3,094,585		3,056,344		—		—		3,056,344
Interest receivable		19,287		19,287		—		19,287		—
Federal Reserve Bank stock		9,401		9,401		—		9,401		—
Federal Home Loan Bank stock		5,450		5,450		—		5,450		—
Financial Liabilities
Deposits	$	3,692,784	$	3,697,105	$	—	$	3,215,715	$	481,390
Securities sold under agreements to repurchase		206,937		206,945		—		206,945		—
Interest payable		2,345		2,345		—		2,345		—
Federal Home Loan Bank borrowings		93,969		96,669		—		96,669		—
Subordinated debt, net		94,253		94,253		—		94,253		—
Junior subordinated debentures, net		19,027		14,604		—		14,604		—

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Business Combinations

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Business Combinations

Note 8 – Business Combinations

On September 25, 2020, the Company and Eval Sub Inc., a newly formed Illinois corporation and wholly-owned subsidiary of the Company ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with LINCO Bancshares, Inc., a Missouri corporation ("LINCO"), and the sellers as defined therein, pursuant to which, among other things, the Company agreed to acquire 100% of the issued and outstanding shares of LINCO pursuant to a business combination whereby Merger Sub will merge with and into LINCO, whereupon the separate corporate existence of Merger Sub will cease and LINCO will continue as the surviving company and a wholly-owned subsidiary of the Company (the "Merger").

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each share of common stock, par value $1.00 per share, of LINCO issued and outstanding immediately prior to the effective time of the Merger (other than shares held in treasury by LINCO) will be converted into and become the right to receive, cash or shares of common stock, par value $4.00 per share, of the Company and cash in lieu of fractional shares, less any applicable taxes required to be withheld, and subject to certain potential adjustments.  On an aggregate basis, the total consideration payable by the Company at the closing of the Merger was $103.5 million in cash and 1,262,246 shares of the Company’s common stock, provided that the shareholders of LINCO have collectively elected pursuant to the Merger Agreement to receive varying amounts of cash or shares of common stock of the Company as consideration in the Merger.   In addition, immediately prior to the closing of the proposed merger, LINCO paid a special dividend to its shareholders in the aggregate amount of $13 million.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business
Combinations ("ASC 805"),” and accordingly the assets and liabilities were recorded at their estimated fair values as of the
date of acquisition. Fair values are subject to refinement for up to one year after the closing date of February 22, 2021 as
additional information regarding the closing date fair values become available. The total consideration paid was used to
determine the amount of goodwill resulting from the transaction. As the total consideration paid exceeded the net assets
acquired, goodwill of $8.9 million was recorded for the acquisition. Goodwill recorded in the transaction, which reflects the
synergies and economies of scale expected from combining operations and the enhanced revenue opportunities from the
Company’s service capabilities, is not tax deductible, and was all assigned to the banking segment of the Company.

	Acquired			Fair Value			As Recorded by
	Book Value			Adjustments			Providence Bank
Assets
Cash and due from banks	$	130,561		$	-		$	130,561
Investment Securities		119,234			264			119,498
Loans		838,377			(9,401	)		828,976
Allowance for credit losses		(8,656	)		6,583			(2,073	)
Other real estate owned		8,435			2,456			10,891
Premises and equipment		23,440			4,819			28,259
Goodwill		-			8,956			8,956
Core deposit intangible		123			2,025			2,148
Right of use asset		-			794			794
Other assets		43,697			1,736			45,433
Total assets acquired	$	1,155,211		$	18,232		$	1,173,443
Liabilities
Deposits	$	988,329		$	2,081		$	990,410
Securities sold under agreements to repurchase		-			-			-
FHLB advances		26,941			975			27,916
Other borrowings		-			-			-
Lease liability		-			794			794
Other liabilities		7,242			(610	)		6,632
Total liabilities assumed		1,022,512			3,240			1,025,752
Net assets acquired	$	132,699		$	14,992		$	147,691
Consideration Paid
Cash							$	103,500
Common stock								44,191
							$	147,691

36

The Company has recognized approximately $3.1 million, pre-tax, of acquisition costs for the LINCO acquisition. Of this amount, $2.6 million was recognized during the first quarter of 2021. These costs are included in salaries and benefits, legal and professional and other expense. Of the $9.4 million adjustment to loans, $11.1 million is being accreted to interest income over the remaining term of the loans. The remaining $1.7 million was the elimination of deferred fees and unearned discounts previously recorded by Providence Bank. The Company also recorded approximately $2 million directly to the allowance for credit losses for loans identified as PCD. Of the $838 million of loans acquired, approximately $64.6 million was identified as PCD.

The differences between fair value and acquired value of the assumed time deposits of $2.1 million and the assumed FHLB advances of $975,000, are being amortized to interest expense over the remaining life of the liabilities. The core deposit intangible assets, with a fair value of $2 million, will be amortized on an accelerated basis over its estimated life of 10 years.

The following unaudited pro forma condensed combined financial information presents the results of operations of the
Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the LINCO acquisition
taken place at the beginning of the period (dollars in thousands):

	Three months ended                                     March 31, 2021		Three months ended                                     March 31, 2020
Net interest income	$	38,237	$	40,626
Provision for loan losses		12,136		5,492
Non-interest income		17,749		17,651
Non-interest expense		37,659		32,060
Income before taxes		6,191		20,725
Income tax expense (benefit)		1,078		5,277
Net income (loss)	$	5,113	$	15,448
Earnings per share
Basic	$	0.30	$	0.86
Diluted		0.29		0.86
Basic weighted average shares o/s		17,299,927		17,955,429
Diluted weighted average shares o/s		17,352,947		18,002,337

XML

Leases

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

Note 9 -- Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). As of March 31, 2021, substantially all the Company's leases are operating leases for real estate property for bank branches, ATM locations, and office space.

These leases are generally for periods of 1 to 25 years with various renewal options. The Company elected the optional transition method permitted by Topic 842. Under this method, the Company recognizes and measures leases that exist at the application date and prior comparative periods are not adjusted. In addition, the Company elected the package of practical expedients:

1. An entity need not reassess whether any expired or existing contracts contain leases.

2. An entity need not reassess the lease classification for any expired or existing leases.

3. An entity need not reassess initial direct costs for any existing leases.

The Company has also elected the practical expedient, which may be elected separately or in conjunction with the package noted above, to use hindsight in determining the lease term and in assessing the right-of-use assets. This expedient must be applied consistently to all leases. Lastly, the Company has elected to use the practical expedient to include both lease and non-lease components as a single component and account for it as a lease. In addition, The Company has elected to not include short-term leases (i.e. Leases with terms of twelve months or less) or equipment leases (primarily copiers) deemed immaterial, on the consolidated balance sheets.

37

For leases in effect at January 1, 2019 and for leases commencing thereafter, the Company recognizes a lease liability and a right-of-use asset, based on the present value of lease payments over the lease term. The discount rate used in determining present value was the Company's incremental borrowing rate which is the FHLB fixed advance rate based on the remaining lease term as of January 1, 2019, or the commencement date for leases subsequently entered into. The following table contains supplemental balance sheet information related to leases (dollars in thousands):

	March 31, 2021			March 31, 2020			December 31, 2020
Operating lease right-of-use assets	$	17,424		$	16,542		$	17,209
Operating lease liabilities		17,578			16,568			17,351
Weighted-average remaining lease term (in years)		6.8			7.1			7.3
Weighted-average discount rate		2.63	%		3.08	%		2.85	%

Certain of the Company's leases contain options to renew the lease; however, not all renewal options are included in the calculation of lease liabilities as they are not reasonably certain to be exercised. The Company's leases do not contain residual value guarantees or material variable lease payments. The Company does not have any other material restrictions or covenants imposed by leases that would impact the Company's ability to pay dividends or cause the Company to incur additional financial obligations.

Maturities of lease liabilities were as follows (in thousands):

Year ending December 31,
	2021	$	2,226
	2022		2,703
	2023		2,364
	2024		1,942
	2025		1,629
Thereafter			9,150
Total lease payments			20,014
Less imputed interest			(2,436	)
Total lease liability		$	17,578

The components of lease expense for the three months ended March 31, 2021 and 2020 were as follows (in thousands):

	Three months ended March 31,
	2021			2020
Operating lease cost	$	708		$	642
Short-term lease cost		35			46
Variable lease cost		137			169
Total lease cost		880			857
Income from subleases		(153	)		(193	)
Net lease cost	$	727		$	664

As the Company elected not to separate lease and non-lease components, the variable lease cost primarily represents variable payment such as common area maintenance and copier expense. The Company does not have any material sub-lease agreements. Cash paid for amounts included in the measurement of lease liabilities was (in thousands):

	March 31, 2021		March 31, 2020
Operating cash flows from operating leases	$	711	$	677

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Derivatives

3 Months Ended

Mar. 31, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives

Note 10 – Derivatives

The Company utilizes an interest rate swap, designated as a fair value hedge, to mitigate the risk of changing interest rates on the fair value of a fixed rate commercial real estate loan. For derivative instruments that are designed and qualify as a fair value hedge, the gain or loss on the derivative instrument, as well as the offsetting loss or gain in the hedged asset attributable to the hedged risk, is recognized in current earnings.

38

Derivatives Designated as Hedging Instruments

The following table provides the outstanding notional balances and fair values of outstanding derivatives designated as hedging instruments as of March 31, 2021 and December 31, 2020 (in thousands):

	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
March 31, 2021
Fair Value Hedges:
Interest rate swap agreements	Other liabilities	8.1 years	$	14,276	$	(1,013	)
December 31, 2020
Fair Value Hedges:
Interest rate swap agreements	Other liabilities	8.3 years	$	14,334	$	(2,892	)

The effects of the fair value hedges on the Company's income statement during the three months ended March 31, 2021 and 2020 were as follows (in thousands):

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Derivatives	2021			2020
Interest rate swap agreements	Interest income on loans	$	(743	)	$	(1,384	)

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Hedged Items	2021		2020
Interest rate swap agreements	Interest income on loans	$	743	$	1,384

As of March 31, 2021, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustment for fair value hedges (in thousands):

Line Item in the Balance Sheet in Which the Hedge Item is Included	Carrying Amount of the Hedged Asset		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
Loans	$	13,525	$	751

Derivatives Not Designated as Hedging Instruments

The following amounts represent the notional amounts and gross fair value of derivative contracts not designated as hedging instruments outstanding during the three months ended March 31, 2021 and 2020  (in thousands):

September 30, 2020	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
Interest rate swap agreements	Other assets	6.8	$	42,223	$	262
Interest rate swap agreements	Other liabilities	6.8		42,223		(262	)

39

XML

Basis of Accounting and Consolidation (Policies)

3 Months Ended

Mar. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Accounting and Consolidation

The unaudited condensed consolidated financial statements include the accounts of First Mid Bancshares, Inc. (“Company”) formerly known as First Mid-Illinois Bancshares, Inc., and its wholly owned subsidiaries: First Mid Bank & Trust, N.A. (“First Mid Bank”), Providence Bank (“Providence Bank”), First Mid Wealth Management Company, Mid-Illinois Data Services, Inc. (“MIDS”), First Mid Insurance Group, Inc. (“First Mid Insurance”) and First Mid Captive, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. The financial information reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods ended March 31, 2021 and 2020, and all such adjustments are of a normal recurring nature. Certain amounts in the prior year’s consolidated financial statements may have been reclassified to conform to the March 31, 2021 presentation and there was no impact on net income or stockholders’ equity. The results of the interim period ended March 31, 2021 are not necessarily indicative of the results expected for the year ending December 31, 2021. The Company operates as a one-segment entity for financial reporting purposes. The 2020 year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and related footnote disclosures although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2020 Annual Report on Form 10-K.

COVID-19

COVID-19

The COVID-19 outbreak is an unprecedented event that provides significant economic uncertainty for a broad spectrum of industries. The Company is focused on supporting its customers, communities and employees during this unique operating environment. Throughout this document, the Company describes the impact COVID-19 is having, actions taken as a result of COVID-19, and certain risks to the Company that COVID-19 creates or exacerbates, as well as management's outlook on the current COVID-19 situation.

Subordinated Debt Offering

Subordinated Debt Offering

On October 6, 2020, the Company issued and sold $96.0 million in aggregate principal amount of its 3.95% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”).  

The Notes were issued pursuant to the Indenture, dated as of October 6, 2020 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of October 6, 2020 (the “Supplemental Indenture”), between the Company and the Trustee. The Base Indenture, as amended and supplemented by the Supplemental Indenture, governs the terms of the Notes and provides that the Notes are unsecured, subordinated debt obligations of the Company and will mature on October 15, 2030. From and including the date of issuance to, but excluding October 15, 2025, the Notes will bear interest at an initial rate of 3.95% per annum. From and including October 15, 2025 to, but excluding the maturity date or earlier redemption, the Notes will bear interest at a floating rate equal to three-month Term SOFR plus a spread of 383 basis points, or such other rate as determined pursuant to the Supplemental Indenture, provided that in no event shall the applicable floating interest rate be less than zero per annum.

The Company may, beginning with the interest payment date of October 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the Notes at any time, including prior to October 15, 2025, at the Company’s option, in whole but not in part, if: (i) a change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to but excluding the redemption date.

General Litigation

General Litigation

The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

Loan Purchase

Loan Purchase

On April 21, 2020, First Mid Bank completed an acquisition of loans in the St. Louis metro market totaling $183 million. There were no loans purchased with deteriorated credit.

Stock Plans

Stock Plans

At the Annual Meeting of Stockholders held April 26, 2017, the stockholders approved the First Mid-Illinois Bancshares, Inc. 2017 Stock Incentive Plan (“SI Plan”). The SI Plan was implemented to succeed the Company’s 2007 Stock Incentive Plan, which had a ten-year term. The SI Plan is intended to provide a means whereby directors, employees, consultants and advisors of the Company and its subsidiaries may sustain a sense of proprietorship and personal involvement in the continued development and financial success of the Company and its subsidiaries, thereby advancing the interests of the Company and its stockholders. Accordingly, directors and selected employees, consultants and advisors may be provided the opportunity to acquire shares of common stock of the Company on the terms and conditions established in the SI Plan.

Following the stockholders’ approval at the 2021 annual meeting of the Company, a maximum of 399,983 shares of common stock may be issued under the SI Plan. There have been no stock options awarded under any Company plan since 2008. The Company has awarded 27,750 and 25,200 shares of restricted stock during 2021 and 2020, respectively, and 16,950 and 16,200 restricted stock units during 2021 and 2020, respectively.

Employee Stock Purchase Plan

Employee Stock Purchase Plan

At the Annual Meeting of Stockholders held April 25, 2018, the stockholders approved the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (“ESPP”). The ESPP is intended to promote the interests of the Company by providing eligible employees with the opportunity to purchase shares of common stock of the Company at a 5% discount through payroll deductions. The ESPP is also intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code.

A maximum of 600,000 shares of common stock may be issued under the ESPP. As of March 31, 2021 and 2020, 3,142 shares and 3,804 shares, respectively, were issued pursuant to the ESPP.

Captive Insurance Company

Captive Insurance Company

First Mid Captive, Inc. (the “Captive"), a wholly owned subsidiary of the Company which was formed and began operations in December 2019, is a Nevada-based captive insurance company. The Captive insures against certain risks unique to operations of the Company and its subsidiaries for which insurance may not be currently available or economically feasible in today's insurance marketplace. The Captive pools resources with several other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. The Captive is subject to regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance. It has elected to be taxed under Section 831(b) of the Internal Revenue Code. Pursuant to Section 831(b), if gross premiums do not exceed $2,300,000, then the Captive is taxable solely on its investment income. The Captive is included in the Company's consolidated financial statements and its federal income return.

Bank Owned Life Insurance

9

Bank Owned Life Insurance

First Mid Bank has purchased life insurance policies on certain senior management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts that are probable at settlement.

Revenue Recognition

Revenue Recognition

Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), establishes a revenue recognition model for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Most of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans and investment securities, and revenue related to mortgage servicing activities, which are subject to other accounting standards. A description of the revenue-generating activities that are within the scope of ASC 606, and included in other income in the Company’s condensed consolidated statements of income are as follows:

Trust revenues. The Company generates fee income from providing fiduciary services through its subsidiary, First Mid Wealth Management Company. Fees are billed in arrears based upon the preceding period account balance. Revenue from farm management services is recorded when the service is complete, for example when crops are sold.

Brokerage commissions. Revenue is recorded at the beginning of each quarter through billing to customers based on the account asset size on the last day of the previous quarter. If a withdrawal of funds takes place, a prorated refund may occur; this is reflected within the same quarter as the original billing occurred. All performance obligations are met within the same quarter that the revenue is recorded.

Insurance commissions. The Company’s insurance agency subsidiary, First Mid Insurance, receives commissions on premiums of new and renewed business policies. First Mid Insurance records commission revenue on direct bill policies as the cash is received. For agency bill policies, First Mid Insurance retains its commission portion of the customer premium payment and remits the balance to the carrier. In both cases, the entire performance obligation is held by the carriers.

Service charges on deposits. The Company generates revenue from fees charged for deposit account maintenance, overdrafts, wire transfers, and check fees. The revenue related to deposit fees is recognized at the time the performance obligation is satisfied.

ATM/debit card revenue. The Company generates revenue through service charges on the use of its ATM machines and interchange income from the use of Company issued credit and debit cards. The revenue is recognized at the time the service is used and the performance obligation is satisfied.

Other income. Treasury management fees and lock box fees are received and recorded after the service performance obligation is completed. Merchant bank card fees are received from various vendors; however, the performance obligation is with the vendors. The Company records gains on the sale of loans and the sale of OREO properties after the transactions are complete and transfer of ownership has occurred.

As each of the Company’s facilities is in markets with similar economies, no disaggregation of revenue is necessary.

10

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income included in stockholders’ equity as of March 31, 2021 and December 31, 2020 are as follows (in thousands):

	Unrealized Gain (Loss) on Securities
March 31, 2021
Net unrealized gains on securities available-for-sale	$	7,165
Tax expense		(2,078	)
Balance at March 31, 2021	$	5,087
December 31, 2020
Net unrealized gains on securities available-for-sale	$	24,077
Tax expense		(6,982	)
Balance at December 31, 2020	$	17,095

Amounts reclassified from accumulated other comprehensive income and the affected line items in the statements of income during the three months ended March 31, 2021 and 2020, were as follows (in thousands):

	Amounts Reclassified from Other Comprehensive Income
	Three months ended March 31,
	2021			2020			Affected Line Item in the Statements of Income
Realized gains on available-for-sale securities	$	4		$	531		Securities gains, net
Tax effect		(1	)		(154	)	Income taxes
Total reclassifications out of accumulated other    comprehensive income	$	3		$	377		Net reclassified amount

See “Note 3 – Investment Securities” for more detailed information regarding unrealized losses on available-for-sale securities.

Adoption of New Accounting Guidance

Adoption of New Accounting Guidance

Accounting Standards Update 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). In August 2018, FASB issued ASU 2018-13. This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. As ASU 2018-13 only revises disclosure requirements, it did not have a material impact on the Company’s consolidated financial statements.

Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments (“ASU 2016-13”). In June 2016, FASB issued ASU 2016-13. The provisions of ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss ("CECL") model to estimate its lifetime "expected credit loss" and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and available-for sale debt securities. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.

11

Management formed an internal, cross functional committee in 2017 to evaluate implementation steps and assess the impact ASU 2016-13 would have on the Company’s consolidated financial statements. The committee assigned roles and responsibilities, key tasks to complete, and established a general time-line for implementation. The Company also engaged an outside consultant to assist with the methodology review and data validation, as well as other key aspects of implementing the standard. The committee met periodically to discuss the latest developments and ensure progress was being made. In addition, the committee kept current on evolving interpretations and industry practices related to ASU 2016-13. The committee evaluated and validated data resources and different loss methodologies. Key implementation activities for 2019 included finalization of models, establishing processes and controls, development of supporting analytics and documentation, policies and disclosure, and implementing parallel processing.

The Company adopted ASU 2016-13 using the modified retrospective method for financial assets measured at amortized cost-effective January 1, 2020. Results for the periods beginning after January 1, 2020 are presented under ASU 2016-13 while prior period amounts are reported in accordance with the previously applicable accounting standards. The Company recorded a reduction to retained earnings of approximately $717,000 upon adoption of ASU 2016-13. The transition adjustment included an increase to the allowance for credit losses on loans of $1.7 million and an increase to the allowance for credit losses on off-balance sheet credit exposure of $69,000. There was no allowance for credit losses recorded for held-to- maturity debt securities. The transition adjustment included corresponding increases in deferred tax assets.

The Company adopted ASU 2016-13 using the prospective transition approach for financial assets considered purchased credit deteriorated ("PCD") that were previously classified as purchase credit impaired ("PCI") and accounted for under ASC 310-30 effective January 1, 2020. In accordance with the standard, the Company did not reassess whether the PCI assets met the criteria of PCD assets as of the adoption date. The amortized cost of the PCD assets were adjusted to reflect the addition of $833,000 to the allowance for credit losses. The remaining noncredit discount (based on the adjusted amortized cost) will be accreted into interest income at the effective interest rate over the remaining life of the assets.

The following table illustrates the impact of ASU 2016-13 adoption (in thousands):

	January 1, 2020
	As reported		Pre-ASU		Impact of ASU
	under ASU		2016-13		2016-13
	2016-13		Adoption		Adoption
Assets:
Construction & Land Development	$	1,033	$	1,146	$	(113	)
Farm		1,323		1,093		230
1-4 Family Residential Properties		2,142		1,386		756
Commercial Real Estate		11,739		11,198		541
Agricultural		1,023		1,386		(363	)
Commercial & Industrial		9,428		9,273		155
Consumer		1,895		1,429		466
Allowance for credit losses for all loans	$	28,583	$	26,911	$	1,672
Liabilities:
Allowance for credit losses on off-balance sheet exposures	$	69	$	—	$	69

The following table illustrates the impact of ASU 2013-13 adoption for PCD assets previously classified as PCI included in the table above (in thousands):

	January 1, 2020
	As reported		Pre-ASU		Impact of ASU
	under ASU		2016-13		2016-13
	2016-13		Adoption		Adoption
Construction & Land Development	$	291	$	—	$	291
1-4 Family Residential Properties		48		6		42
Commercial Real Estate		818		359		459
Commercial & Industrial		41		—		41
Allowance for credit losses for PCD loans	$	1,198	$	365	$	833

XML

Basis of Accounting and Consolidation (Tables)

3 Months Ended

Mar. 31, 2021

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

Schedule of Components of Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income included in stockholders’ equity as of March 31, 2021 and December 31, 2020 are as follows (in thousands):

	Unrealized Gain (Loss) on Securities
March 31, 2021
Net unrealized gains on securities available-for-sale	$	7,165
Tax expense		(2,078	)
Balance at March 31, 2021	$	5,087
December 31, 2020
Net unrealized gains on securities available-for-sale	$	24,077
Tax expense		(6,982	)
Balance at December 31, 2020	$	17,095

Schedule of Amounts Reclassified from Accumulated Other Comprehensive Income

Amounts reclassified from accumulated other comprehensive income and the affected line items in the statements of income during the three months ended March 31, 2021 and 2020, were as follows (in thousands):

	Amounts Reclassified from Other Comprehensive Income
	Three months ended March 31,
	2021			2020			Affected Line Item in the Statements of Income
Realized gains on available-for-sale securities	$	4		$	531		Securities gains, net
Tax effect		(1	)		(154	)	Income taxes
Total reclassifications out of accumulated other    comprehensive income	$	3		$	377		Net reclassified amount

ASU 2016-13

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

Schedule of Impact of ASU 2016-13 Adoption

The following table illustrates the impact of ASU 2016-13 adoption (in thousands):

	January 1, 2020
	As reported		Pre-ASU		Impact of ASU
	under ASU		2016-13		2016-13
	2016-13		Adoption		Adoption
Assets:
Construction & Land Development	$	1,033	$	1,146	$	(113	)
Farm		1,323		1,093		230
1-4 Family Residential Properties		2,142		1,386		756
Commercial Real Estate		11,739		11,198		541
Agricultural		1,023		1,386		(363	)
Commercial & Industrial		9,428		9,273		155
Consumer		1,895		1,429		466
Allowance for credit losses for all loans	$	28,583	$	26,911	$	1,672
Liabilities:
Allowance for credit losses on off-balance sheet exposures	$	69	$	—	$	69

The following table illustrates the impact of ASU 2013-13 adoption for PCD assets previously classified as PCI included in the table above (in thousands):

	January 1, 2020
	As reported		Pre-ASU		Impact of ASU
	under ASU		2016-13		2016-13
	2016-13		Adoption		Adoption
Construction & Land Development	$	291	$	—	$	291
1-4 Family Residential Properties		48		6		42
Commercial Real Estate		818		359		459
Commercial & Industrial		41		—		41
Allowance for credit losses for PCD loans	$	1,198	$	365	$	833

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Components of Basic and Diluted Net Income per Common Share

The components of basic and diluted net income per common share available to common stockholders for the three months ended March 31, 2021 and 2020 were as follows:

	Three months ended March 31,
	2021		2020
Basic Net Income per Common Share
Available to Common Stockholders:
Net income	$	4,109,000	$	9,999,000
Weighted average common shares outstanding		17,299,927		16,693,183
Basic earnings per common share	$	0.24	$	0.60
Diluted Net Income per Common Share
Available to Common Stockholders:
Net income applicable to diluted earnings per share	$	4,109,000	$	9,999,000
Weighted average common shares outstanding		17,299,927		16,693,183
Dilutive potential common shares:
Restricted stock awarded		53,020		46,908
Dilutive potential common shares		53,020		46,908
Diluted weighted average common shares outstanding		17,352,947		16,740,091
Diluted earnings per common share	$	0.24	$	0.60

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2021

Investments Debt And Equity Securities [Abstract]

Available for Sale and Held for Maturity Securities

The amortized cost, gross unrealized gains and losses and estimated fair values for available-for-sale and held-to-maturity securities by major security type at March 31, 2021 and December 31, 2020 were as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
March 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	174,789	$	377	$	(3,636	)	$	171,530
Obligations of states and political subdivisions		249,776		9,226		(1,283	)		257,719
Mortgage-backed securities: GSE residential		620,102		7,988		(6,138	)		621,952
Other securities		36,116		699		(68	)		36,747
Total available-for-sale	$	1,080,783	$	18,290	$	(11,125	)	$	1,087,948
Held-to-maturity:
U.S. Treasury securities and obligations of    U.S. government corporations & agencies	$	5,012	$	80	$	—		$	5,092
Annuity		2,033		—		—			2,033
Total held-to-maturity	$	7,045	$	80	$	—		$	7,125
December 31, 2020
Available-for-sale:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	127,067	$	790	$	(788	)	$	127,069
Obligations of states and political subdivisions		237,886		11,995		(37	)		249,844
Mortgage-backed securities: GSE residential		479,470		12,038		(160	)		491,348
Other securities		10,740		252		(13	)		10,979
Total available-for-sale	$	855,163	$	25,075	$	(998	)	$	879,240
Held-to-maturity:
U.S. Treasury securities and obligations of U.S.    government corporations & agencies	$	5,016	$	103	$	—		$	5,119

Realized Gains and Losses From Sale of Securities

Realized gains and losses resulting from sales of securities were as follows during the three months ended March 31, 2021 and 2020 (in thousands):

	Three months March 31,
	2021		2020
Gross gains	$	4	$	531
Gross losses		—		—

Investments Classified by Contractual Maturity Date

The following table indicates the expected maturities of investment securities classified as available-for-sale presented at fair value, and held-to-maturity presented at amortized cost, at March 31, 2021 and the weighted average yield for each range of maturities (dollars in thousands):

	One year or less			After 1 through 5 years			After 5 through 10 years			After ten years			Total
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	105,823		$	54,392		$	11,315		$	—		$	171,530
Obligations of state and political subdivisions		29,540			71,481			152,466			4,232			257,719
Mortgage-backed securities: GSE residential		26,948			293,661			301,343			—			621,952
Other securities		12,042			20,070			4,635			—			36,747
Total available-for-sale investments	$	174,353		$	439,604		$	469,759		$	4,232		$	1,087,948
Weighted average yield		1.87	%		2.28	%		1.69	%		2.57	%		1.96	%
Full tax-equivalent yield		2.06	%		2.45	%		1.94	%		3.52	%		2.17	%
Held to Maturity:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	5,012		$	—		$	—		$	—		$	5,012
Annuity		—									2,033			2,033
Total held-to-maturity	$	5,012		$	—		$	—		$	2,033		$	7,045
Weighted average yield		2.06	%		—	%		—	%		—	%		2.06	%
Full tax-equivalent yield		2.06	%		—	%		—	%		—	%		2.06	%

Fair Value of Investments with Sustained Gross Unrealized Losses

The following table presents the aging of gross unrealized losses and fair value by investment category as of March 31, 2021 and December 31, 2020 (in thousands):

	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2021
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	144,404	$	(3,636	)	$	—	$	—		$	144,404	$	(3,636	)
Obligations of states and political subdivisions		51,381		(1,283	)		—		—			51,381		(1,283	)
Mortgage-backed securities: GSE residential		230,029		(5,155	)		129,370		(983	)		359,399		(6,138	)
Other securities		12,679		(68	)		—		—			12,679		(68	)
Total	$	438,493	$	(10,142	)	$	129,370	$	(983	)	$	567,863	$	(11,125	)
December 31, 2020
Available-for-sale:
U.S. Treasury securities and obligations of    U.S. government corporations and agencies	$	59,211	$	(788	)	$	—	$	—		$	59,211	$	(788	)
Obligations of states and political subdivisions		5,380		(37	)		—		—			5,380		(37	)
Mortgage-backed securities: GSE residential		57,609		(160	)		2,377		—			59,986		(160	)
Other securities		3,977		(13	)		—		—			3,977		(13	)
Total	$	126,177	$	(998	)	$	2,377	$	—		$	128,554	$	(998	)

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Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Summary of Loans

A summary of loans at March 31, 2021 and December 31, 2020 follows (in thousands):

	March 31, 2021			December 31, 2020
Construction and land development	$	165,780		$	122,853
Agricultural real estate		269,759			254,662
1-4 Family residential properties		411,964			325,480
Multifamily residential properties		295,467			189,265
Commercial real estate		1,401,585			1,176,290
Loans secured by real estate		2,544,555			2,068,550
Agricultural loans		121,955			137,333
Commercial and industrial loans		1,020,608			741,819
Consumer loans		90,780			78,023
All other loans		163,901			118,196
Total Gross loans		3,941,799			3,143,921
Less: Loans held for sale		4,693			1,924
		3,937,106			3,141,997
Less:
Net deferred loan fees (costs), premiums and discounts		(1,300	)		5,502
Allowance for credit losses		55,418			41,910
Net loans	$	3,882,988		$	3,094,585

Allowance for Credit Losses Based on Portfolio Segment

The following table presents the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2021 (in thousands):

	Construction & Land Development		Agricultural Real Estate		1-4 Family Residential Properties		Commercial Real Estate		Agricultural Loans			Commercial & Industrial		Consumer Loans		Total
Three months ended March 31, 2021
Beginning Balance	$	1,666	$	1,084	$	2,322	$	19,660	$	1,526		$	13,485	$	2,167	$	41,910
Initial allowance on loans purchased with credit deterioration		261		44		328		646		-			795		-		2,074
Provision for credit loss expense		359		500		617		5,902		(645	)		4,674		729		12,136
Loans charged off		—		—		182		480		—			18		288		968
Recoveries collected		—		—		8		9		—			18		231		266
Ending balance	$	2,286	$	1,628	$	3,093	$	25,737	$	881		$	18,954	$	2,839	$	55,418

20

The following tables present the activity in the allowance for credit losses based on portfolio segment for the three months ended March 31, 2020 and for the year ended December 31, 2020 (in thousands):

	Construction & Land Development			Agricultural Real Estate			1-4 Family Residential Properties			Commercial Real Estate		Agricultural Loans			Commercial & Industrial		Consumer Loans		Total
Three months ended March 31, 2020
Beginning Balance (prior to adoption of ASC 326)	$	1,146		$	1,093		$	1,386		$	11,198	$	1,386		$	9,273	$	1,429	$	26,911
Impact of adopting ASC 326	$	(113	)	$	230		$	756		$	541	$	(363	)	$	155	$	466		1,672
Provision for credit loss expense		587			12			(77	)		1,961		41			2,815		142		5,481
Loans charged off		—			—			196			84		0			972		171		1,423
Recoveries collected		—			—			62			5		—			23		145		235
Ending balance	$	1,620		$	1,335		$	1,931		$	13,621	$	1,064		$	11,294	$	2,011	$	32,876
Twelve months ended December 31, 2020
Beginning Balance (prior to adoption of ASC 326)	$	1,146		$	1,093		$	1,386		$	11,198	$	1,386		$	9,273	$	1,429	$	26,911
Impact of adopting ASC 326		(113	)		230			756			541		(363	)		155		466		1,672
Provision for credit loss expense		646			(239	)		274			8,581		503			5,869		469		16,103
Loans charged off		13			—			393			829		—			1,991		618		3,844
Recoveries collected		—			—			299			169		—			179		421		1,068
Ending balance	$	1,666		$	1,084		$	2,322		$	19,660	$	1,526		$	13,485	$	2,167	$	41,910

Amortized Cost Basis of Collateral-Dependent Loans by Class of Loans Individually Evaluated

21

The following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of March 31, 2021 (in thousands):

	Collateral								Allowance
	Real Estate		Business Assets		Other		Total		for Credit Losses
Construction and land development	$	508	$	—	$	—	$	508	$	303
Agricultural real estate		—		—		—		—		—
1-4 Family residential properties		4,436		—		—		4,436		163
Multifamily residential properties		1,914		—		—		1,914		—
Commercial real estate		12,308		—		—		12,308		1,252
Loans secured by real estate		19,166		—		—		19,166		1,718
Agricultural loans		—		—		—		—		—
Commercial and industrial loans		—		3,393		1,909		5,302		808
Consumer loans		—		—		8	8			163
Other loans		—		26		—	26			26
Total loans	$	19,166	$	3,419	$	1,917	$	24,502	$	2,715

Credit Risk Profile of Loan Portfolio on Amortized Cost Basis Based on Risk Rating Category

22

The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of March 31, 2021 (in thousands):

	Term Loans by Origination Year												Revolving
Risk Rating	2021		2020		2019		2018		2017		Prior		Loans		Total
March 31, 2021
Construction & Land Development Loans
Pass	$	6,259	$	55,930	$	35,782	$	44,866	$	12,068	$	9,723	$	—	$	164,628
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		128		0		573		47		—		748
Total	$	6,259	$	55,930	$	35,910	$	44,866	$	12,641	$	9,770	$	—	$	165,376
Agricultural Real Estate Loans
Pass	$	29,531	$	101,049	$	31,082	$	39,931	$	14,717	$	38,968	$	—	$	255,278
Special Mention		825		282		4,337		422		407		6,472		—		12,745
Substandard		—		—		0		707		625		297		—		1,629
Total	$	30,356	$	101,331	$	35,419	$	41,060	$	15,749	$	45,737	$	—	$	269,652
1-4 Family Residential Property Loans
Pass	$	28,885	$	114,918	$	29,974	$	40,369	$	20,251	$	117,623	$	34,265	$	386,285
Special Mention		—		189		2,136		349		2,714		1,190		57		6,635
Substandard		376		299		868		1,814		1,929		13,327		937		19,550
Total	$	29,261	$	115,406	$	32,978	$	42,532	$	24,894	$	132,140	$	35,259	$	412,470
Commercial Real Estate Loans
Pass	$	67,044	$	480,974	$	318,800	$	223,168	$	163,413	$	377,041	$	—	$	1,630,440
Special Mention		954		2,712		1,285		3,268		11,070		24,347		—		43,636
Substandard		—		1,794		37		6,901		2,004		16,057		—		26,793
Total	$	67,998	$	485,480	$	320,122	$	233,337	$	176,487	$	417,445	$	—	$	1,700,869
Agricultural Loans
Pass	$	1,853	$	83,342	$	6,921	$	5,131	$	1,631	$	104	$	—	$	98,982
Special Mention		13,723		3,777		3,769		214		206		159		—		21,848
Substandard		53		44		118		25		—		—		—		240
Total	$	15,629	$	87,163	$	10,808	$	5,370	$	1,837	$	263	$	—	$	121,070
Commercial & Industrial Loans
Pass	$	152,091	$	477,167	$	162,411	$	98,524	$	96,059	$	145,657	$	—	$	1,131,909
Special Mention		1,556		3,248		33,491		804		473		1,895		—		41,467
Substandard		397		343		2,369		447		2,345		2,680		—		8,581
Total	$	154,044	$	480,758	$	198,271	$	99,775	$	98,877	$	150,232	$	—	$	1,181,957
Consumer Loans
Pass	$	7,723	$	35,908	$	33,307	$	11,526	$	138	$	2,681	$	—	$	91,283
Special Mention		—		—		23		21		—		—		—		44
Substandard		13		27		13		90		79		156		—		378
Total	$	7,736	$	35,935	$	33,343	$	11,637	$	217	$	2,837	$	—	$	91,705
Total Loans
Pass	$	293,386	$	1,349,288	$	618,277	$	463,515	$	308,277	$	691,797	$	34,265	$	3,758,805
Special Mention		17,058		10,208		45,041		5,078		14,870		34,063		57		126,375
Substandard		839		2,507		3,533		9,984		7,555		32,564		937		57,919
Total	$	311,283	$	1,362,003	$	666,851	$	478,577	$	330,702	$	758,424	$	35,259	$	3,943,099

23

The following tables present the credit risk profile of the Company’s loan portfolio based on risk rating category as of December 31, 2020 (in thousands):

	Term Loans by Origination Year												Revolving
Risk Rating	2020		2019		2018		2017		2016		Prior		Loans		Total
December 31, 2020
Construction & Land Development Loans
Pass	$	41,842	$	40,989	$	31,500	$	2,760	$	871	$	3,822	$	—	$	121,784
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		128		—		517		—		50		—		695
Total	$	41,842	$	41,117	$	31,500	$	3,277	$	871	$	3,872	$	—	$	122,479
Agricultural Real Estate Loans
Pass	$	73,630	$	34,412	$	37,839	$	16,138	$	13,559	$	58,291	$	—	$	233,869
Special Mention		1,845		3,970		533		469		1,106		11,232		—		19,155
Substandard		—		—		800		208		64		245		—		1,317
Total	$	75,475	$	38,382	$	39,172	$	16,815	$	14,729	$	69,768	$	—	$	254,341
1-4 Family Residential Property Loans
Pass	$	81,366	$	29,695	$	38,163	$	23,086	$	26,676	$	62,942	$	40,363	$	302,291
Special Mention		192		2,142		523		2,720		247		1,578		293		7,695
Substandard		296		695		1,915		1,859		1,996		7,516		1,499		15,776
Total	$	81,854	$	32,532	$	40,601	$	27,665	$	28,919	$	72,036	$	42,155	$	325,762
Commercial Real Estate Loans
Pass	$	368,750	$	237,119	$	171,591	$	148,283	$	143,400	$	215,616	$	—	$	1,284,759
Special Mention		2,469		1,300		6,108		11,262		6,741		16,947		—		44,827
Substandard		1,863		40		7,081		2,022		4,905		18,435		—		34,346
Total	$	373,082	$	238,459	$	184,780	$	161,567	$	155,046	$	250,998	$	—	$	1,363,932
Agricultural Loans
Pass	$	83,377	$	15,680	$	5,978	$	1,838	$	635	$	2,856	$	—	$	110,364
Special Mention		21,070		4,483		694		224		148		38		—		26,657
Substandard		68		238		25		—		—		—		—		331
Total	$	104,515	$	20,401	$	6,697	$	2,062	$	783	$	2,894	$	—	$	137,352
Commercial & Industrial Loans
Pass	$	371,683	$	132,148	$	70,497	$	78,890	$	42,439	$	114,904	$	—	$	810,561
Special Mention		4,116		32,130		849		489		1,101		730		—		39,415
Substandard		889		2,360		532		1,689		136		969		—		6,575
Total	$	376,688	$	166,638	$	71,878	$	81,068	$	43,676	$	116,603	$	—	$	856,551
Consumer Loans
Pass	$	31,609	$	21,384	$	12,084	$	8,279	$	3,150	$	1,022	$	—	$	77,528
Special Mention		—		24		24		1		1		—		—		50
Substandard		15		16		111		95		67		120		—		424
Total	$	31,624	$	21,424	$	12,219	$	8,375	$	3,218	$	1,142	$	—	$	78,002
Total Loans
Pass	$	1,052,257	$	511,427	$	367,652	$	279,274	$	230,730	$	459,453	$	40,363	$	2,941,156
Special Mention		29,692		44,049		8,731		15,165		9,344		30,525		293		137,799
Substandard		3,131		3,477		10,464		6,390		7,168		27,335		1,499		59,464
Total	$	1,085,080	$	558,953	$	386,847	$	300,829	$	247,242	$	517,313	$	42,155	$	3,138,419

24

Loan Portfolio Aging Analysis

The following table presents the Company’s loan portfolio aging analysis at March 31, 2021 and December 31, 2020 (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days & Accruing
March 31, 2021
Construction and land development	$	227	$	—	$	128	$	355	$	165,021	$	165,376	$	—
Agricultural real estate		0		—		34		34		269,618		269,652		—
1-4 Family residential properties		1,212		2,400		1,546		5,158		407,312		412,470		—
Multifamily residential properties		39		1,098		—		1,137		296,847		297,984		—
Commercial real estate		846		1,166		1,961		3,973		1,398,912		1,402,885		—
Loans secured by real estate		2,324		4,664		3,669		10,657		2,537,710		2,548,367		—
Agricultural loans		2,153		125		22		2,300		118,770		121,070		—
Commercial and industrial loans		535		257		1,320		2,112		1,015,288		1,017,400		—
Consumer loans		122		50		136		308		91,397		91,705		—
All other loans		59		—		—		59		164,498		164,557		—
Total loans	$	5,193	$	5,096	$	5,147	$	15,436	$	3,927,663	$	3,943,099	$	—
December 31, 2020
Construction and land development	$	—	$	—	$	128	$	128	$	122,351	$	122,479	$	—
Agricultural real estate		1,198		34		0		1,232		253,109		254,341		—
1-4 Family residential properties		1,121		1,105		2,033		4,259		321,503		325,762		—
Multifamily residential properties		—		—		—		—		189,632		189,632		—
Commercial real estate		2,618		341		794		3,753		1,170,547		1,174,300		—
Loans secured by real estate		4,937		1,480		2,955		9,372		2,057,142		2,066,514		—
Agricultural loans		43		—		236		279		137,073		137,352		—
Commercial and industrial loans		2,426		8		1,420		3,854		734,459		738,313		—
Consumer loans		145		50		149		344		77,658		78,002		—
All other loans		—		—		—		0		118,238		118,238		—
Total loans	$	7,551	$	1,538	$	4,760	$	13,849	$	3,124,570	$	3,138,419	$	—

Impaired Loans

25

The following tables present impaired loans as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021						December 31, 2020
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans with a specific allowance:
Construction and land development	$	573	$	573	$	303	$	516	$	516	$	246
Agricultural real estate		—		—		—		—		—		—
1-4 Family residential properties		5,817		5,990		163		4,005		4,157		158
Multifamily residential properties		1,914		1,914		—		1,914		1,914		0
Commercial real estate		12,317		13,062		1,252		11,528		11,794		863
Loans secured by real estate		20,621		21,539		1,718		17,963		18,381		1,267
Agricultural loans		—		228		—		0		228		0
Commercial and industrial loans		5,430		6,996		808		3,523		4,878		664
Consumer loans		182		126		163		112		114		0
Other loans		26		26		26		—		—		—
Total loans	$	26,259	$	28,915	$	2,715	$	21,598	$	23,601	$	1,931
Loans without a specific allowance:
Construction and land development	$	160	$	173	$	—	$	162	$	175	$	—
Agricultural real estate		374		374		—		359		359		—
1-4 Family residential properties		3,971		4,692		—		4,262		4,715		—
Multifamily residential properties		258		259		—		267		267		—
Commercial real estate		450		752		—		552		581		—
Loans secured by real estate		5,213		6,250		—		5,602		6,097		—
Agricultural loans		262		34		—		659		431		—
Commercial and industrial loans		973		3,026		—		907		1,331		—
Consumer loans		229		729		—		218		313		—
Total loans	$	6,677	$	10,039	$	—	$	7,386	$	8,172	$	—
Total loans:
Construction and land development	$	733	$	746	$	303	$	678	$	691	$	246
Agricultural real estate		374		374		—		359		359		—
1-4 Family residential properties		9,788		10,682		163		8,267		8,872		158
Multifamily residential properties		2,172		2,173		—		2,181		2,181		0
Commercial real estate		12,767		13,814		1,252		12,080		12,375		863
Loans secured by real estate		25,834		27,789		1,718		23,565		24,478		1,267
Agricultural loans		262		262		—		659		659		0
Commercial and industrial loans		6,403		10,022		808		4,430		6,209		664
Consumer loans		411		855		163		330		427		0
Other loans		26		26		26		—		—		—
Total loans	$	32,936	$	38,954	$	2,715	$	28,984	$	31,773	$	1,931

26

Average Recorded Investment and Interest Income Recognized on Impaired Loans

The following tables present average recorded investment and interest income recognized on impaired loans for the three months ended March 31, 2021 and 2020 (in thousands):

	For the three months ended
	March 31, 2021				March 31, 2020
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
Construction and land development	$	754	$	5	$	600	$	8
Agricultural real estate		957		—		1,202		—
1-4 Family residential properties		9,857		13		8,997		18
Multifamily residential properties		2,294		—		3,323		1
Commercial real estate		13,156		38		8,266		42
Loans secured by real estate		27,018		56		22,388		69
Agricultural loans		262		6		960		—
Commercial and industrial loans		6,455		1		7,402		2
Consumer loans		438		—		544		—
All other loans		26		—		—		—
Total loans	$	34,199	$	63	$	31,294	$	71

Amortized Cost Basis of Loans on Nonaccrual Status and Nonaccrual Loans Individually Evaluated

The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated for which no allowance was recorded as of March 31, 2021 and December 31, 2020 (in thousands). There were no loans past due over eighty-nine days that were still accruing.

	March 31, 2021				December 31, 2020
	Nonaccrual with no Allowance for			Total	Nonaccrual with no Allowance for			Total
	Credit Loss		Nonaccrual		Credit Loss		Nonaccrual
Construction and land development	$	160	$	225	$	162	$	162
Agricultural real estate		374		374		359		359
1-4 Family residential properties		7,116		8,771		6,747		6,930
Multifamily residential properties		2,173		2,173		2,181		2,181
Commercial real estate		3,780		9,516		7,345		8,760
Loans secured by real estate		13,603		21,059		16,794		18,392
Agricultural loans		262		262		659		659
Commercial and industrial loans		3,641		6,137		3,677		4,372
Consumer loans		295		394		327		327
All other loans		0		25
Total loans	$	17,801	$	27,877	$	21,457	$	23,750

Recorded Balance of Troubled Debt Restructurings

The following table presents the Company’s recorded balance of troubled debt restructurings at March 31, 2021 and December 31, 2020 (in thousands).

Troubled debt restructurings:	March 31, 2021		December 31, 2020
1-4 Family residential properties	$	1,381	$	1,603
Commercial real estate		4,594		5,170
Loans secured by real estate		5,975		6,773
Agricultural loans		228		228
Commercial and industrial loans		2,362		2,389
Consumer loans		124		112
Total	$	8,689	$	9,502
Performing troubled debt restructurings:
1-4 Family residential properties	$	1,004	$	1,268
Commercial real estate		3,027		3,045
Loans secured by real estate		4,031		4,313
Commercial and industrial loans		55		58
Consumer loans		17		2
Total	$	4,103	$	4,373

Loans Modified as Troubled Debt Restructurings During Period

28

The following table presents loans modified as TDRs during the three months ended March 31, 2021, as a result of various modified loan factors (in thousands). The change in the recorded investment from pre-modification to post- modification was not material.

	March 31, 2021					March 31, 2020
	Number of		Recorded		Type of	Number of		Recorded		Type of
	Modifications		Investment		Modifications	Modifications		Investment		Modifications
Commercial real estate		—	$	—			1	$	305	(b)(c)(d)
Loans secured by real estate		—		—			1		305
Commercial and industrial loans		—		—			1		7	(b)(c)(d)
Consumer Loans		2		16	(b)		1		11	(c)
Total		2	$	16			3	$	323

Type of modifications:

(a) Reduction of stated interest rate of loan

(b) Change in payment terms

(c) Extension of maturity date

(d) Permanent reduction of the recorded investment

Summary of Purchased Credit Deteriorated (PCD) Loans

The Company has acquired loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows (in thousands):

	LINCO    Acquisition
Purchase price of loans at acquisition	$	64,647
Allowance for credit losses at acquisition		(2,074	)
Non-credit discount/(premium) at acquisition		(187	)
Fair value of acquired loans at acquisition	$	62,386

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

The following table presents gross carrying value and accumulated amortization by major intangible asset class as of March 31, 2021 and December 31, 2020 (in thousands):

	March 31, 2021				December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Goodwill not subject to amortization (effective 1/1/02)	$	117,708	$	3,760	$	108,752	$	3,760
Intangibles from branch acquisition		3,015		3,015		3,015		3,015
Core deposit intangibles		34,503		21,620		32,355		20,910
Other intangibles		16,779		5,555		16,389		5,222
	$	172,005	$	33,950	$	160,511	$	32,907

Schedule of Reconciliation of Purchase Price Paid for Acquisition and Goodwill Recorded

The following table provides a reconciliation of the purchase price paid for the acquisition of LINCO and the amount of goodwill recorded (in thousands):

Unallocated purchase price				$	14,992
Less purchase accounting adjustments:
Fair value of securities	$	264
Fair value of loans, net		(2,818	)
Fair value of other real estate owned		915
Fair value of premises and equipment		6,360
Fair value of time deposits		(2,081	)
Fair value of FHLB advances		(975	)
Core deposit intangible		2,025
Other assets		2,530
Other liabilities		(184	)
					6,036
				$	8,956

Intangible Assets Mortgage Servicing Rights

The Company has mortgage servicing rights acquired in previous acquisitions. The following table summarizes the activity pertaining to mortgage servicing rights included in intangible assets as of March 31, 2021, March 31, 2020 and December 31, 2020 (in thousands):

	March 31, 2021			March 31, 2020			December 31, 2020
Beginning Balance	$	516		$	1,444		$	1,444
Valuation reserve		210			(18	)		(273	)
Mortgage servicing rights amortized		(177	)		(126	)		(593	)
Interest only Strip		2			(4	)		(62	)
Ending Balance	$	551		$	1,296		$	516

Schedule of Intangible Assets Amortization Expense

Total amortization expense for the three months ended March 31, 2021 and 2020 was as follows (in thousands):

	Three months ended March 31,
	2021		2020
Core deposit intangibles	$	710	$	843
Customer list intangibles		333		326
Mortgage servicing rights		177		126
	$	1,220	$	1,295

Schedule of Expected Amortization Expense

Aggregate amortization expense for the current year and estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands):

30

Aggregate amortization expense:
For period 01/01/21-3/31/21	$	1,220
Estimated amortization expense:
For period 04/01/21-12/31/21		3,888
For year ended 12/31/22		3,885
For year ended 12/31/23		3,534
For year ended 12/31/24		3,234
For year ended 12/31/25		2,891
For year ended 12/31/26		2,215

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Repurchase Agreements and Other Borrowings (Tables)

3 Months Ended

Mar. 31, 2021

Repurchase Agreements And Other Borrowings [Abstract]

Schedule of Securities Financing Transactions

Collateral pledged by class for repurchase agreements are as follows (in thousands):

	March 31, 2021		December 31, 2020
US Treasury securities and obligations of U.S. government corporations & agencies	$	55,619	$	37,423
Mortgage-backed securities: GSE: residential		156,884		168,480
Miscellaneous		—		1,034
Total	$	212,503	$	206,937

Federal Home Loan Bank, Advances

FHLB borrowings, before net premiums of $921,000, were $115.9 million and $94 million at March 31, 2021 and December 31, 2020, respectively. At March 31, 2021 the advances were as follows:

Advance		Term (in years)		Interest Rate	Maturity Date
$	5,000,000		5.0	1.85%	April 12, 2021
	4,000,000		1.0	2.00%	May 3, 2021
	5,000,000		7.0	2.55%	October 1, 2021
	5,000,000		5.0	2.71%	March 21, 2022
	5,000,000		8.0	2.40%	January 9, 2023
	5,000,000		3.0	2.41%	May 31, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		3.0	2.12%	June 7, 2022
	5,000,000		4.0	2.44%	May 30, 2023
	5,000,000		3.5	1.51%	July 31, 2023
	5,000,000		3.5	0.77%	September 11, 2023
	10,000,000		5.0	1.45%	December 31, 2024
	5,000,000		5.0	0.91%	March 10, 2025
	6,940,511		10.0	2.64%	December 23, 2025
	5,000,000		10.0	1.14%	October 3, 2029
	5,000,000		10.0	1.15%	October 3, 2029
	5,000,000		10.0	1.12%	October 3, 2029
	10,000,000		10.0	1.39%	December 31, 2029
	15,000,000		10.0	1.41%	December 31, 2029

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Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

32

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of March 31, 2021 and December 31, 2020 (in thousands):

	Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2021
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government    corporations and agencies	$	171,530	$	—	$	171,530	$	—
Obligations of states and political subdivisions		257,719		—		257,105		614
Mortgage-backed securities		621,952		—		621,952		—
Other securities		36,747		—		36,747		—
Total available-for-sale securities		1,087,948		—		1,087,334		614
Equity securities		300		300		—		—
Derivative assets: interest rate swaps		262		—		262		—
Total assets	$	1,088,510	$	300	$	1,087,596	$	614
Derivative liabilities: interest rate swaps	$	1,013	$	—	$	1,013	$	—
December 31, 2020
Available-for-sale securities:
U.S. Treasury securities and Obligations of U.S. government    corporations and agencies	$	127,069	$	—	$	127,069	$	—
Obligations of states and political subdivisions		249,844		—		249,050		794
Mortgage-backed securities		491,348		—		491,348		—
Other securities		10,979		—		10,979		—
Total available-for-sale securities		879,240		—		878,446		794
Equity securities		218		218		193		—
Derivative assets: interest rate swaps		1,399		-		1,399		—
Total assets	$	880,857	$	218	$	880,038	$	794
Derivative liabilities: interest rate swaps	$	2,892	$	—	$	2,892	$	—

Fair Value of Assets Measured on a Recurring Basis Using Significant Unobservable Inputs

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2021 and 2020 is summarized as follows (in thousands):

	Obligation of State and Political Subdivisions
	Three months ended
	March 31, 2021			March 30, 2020
Beginning balance	$	794		$	973
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Total gains or losses:
Included in net income		1			1
Included in other comprehensive income (loss)		—			—
Purchases, issuances, sales and settlements:
Purchases		—			—
Issuances		—			—
Sales		(181	)		(184	)
Settlements		—			—
Ending balance	$	614		$	790
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$	—		$	—

Significant Assumptions Used in Valuation of Level 3 Financial Instruments

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Impaired loans (collateral dependent)	$	12,733	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		11,292	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		551	Third party valuations	PSA standard prepayment model rate	242 - 438		304

December 31, 2020	Fair Value		Valuation Technique	Unobservable Inputs	Range	Weighted Average
Impaired loans (collateral dependent)	$	14,876	Third party valuations	Discount to reflect realizable value	0% - 40%	20%
Foreclosed assets held for sale		290	Third party valuations	Discount to reflect realizable value less estimated selling costs	0% - 40%	35%
Mortgage servicing rights		517	Third party valuations	PSA standard prepayment model rate	242 - 441		384

Summary of Estimated Fair Values of Company Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments at March 31, 2021 and December 31, 2020 in accordance with ASC 825 (in thousands):

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2021
Financial Assets
Cash and due from banks	$	408,226	$	408,226	$	408,226	$	—	$	—
Federal funds sold		1,321		1,321		1,321		—		—
Certificates of deposit investments		2,695		2,695		—		2,695		—
Available-for-sale securities		1,087,948		1,087,948		—		1,087,334		614
Held-to-maturity securities		7,045		7,125		—		7,125		—
Equity securities		300		300		300		—		—
Loans held for sale		4,693		4,693		—		4,693		—
Loans net of allowance for credit losses		3,882,988		3,839,827		—		—		3,839,827
Interest receivable		20,218		20,218		—		20,218		—
Federal Reserve Bank stock		9,401		9,401		—		9,401		—
Federal Home Loan Bank stock		5,450		5,450		—		5,450		—
Financial Liabilities
Deposits	$	4,737,693	$	4,740,802	$	—	$	3,926,107	$	814,695
Securities sold under agreements to repurchase		212,503		212,514		—		212,514		—
Interest payable		3,214		3,214		—		3,214		—
Federal Home Loan Bank borrowings		116,861		117,670		—		117,670		—
Subordinated debt, net		94,289		94,289				94,289
Junior subordinated debentures, net		19,069		14,495		—		14,495		—
December 31, 2020
Financial Assets
Cash and due from banks	$	415,973	$	415,973	$	415,973	$	—	$	—
Federal funds sold		1,308		1,308		1,308		—		—
Certificates of deposit investments		2,695		2,695		—		2,695		—
Available-for-sale securities		879,240		879,240		—		878,446		794
Held-to-maturity securities		5,016		5,119		—		5,119		—
Equity securities		218		218		218		—		—
Loans held for sale		1,924		1,924		—		1,924		—
Loans net of allowance for credit losses		3,094,585		3,056,344		—		—		3,056,344
Interest receivable		19,287		19,287		—		19,287		—
Federal Reserve Bank stock		9,401		9,401		—		9,401		—
Federal Home Loan Bank stock		5,450		5,450		—		5,450		—
Financial Liabilities
Deposits	$	3,692,784	$	3,697,105	$	—	$	3,215,715	$	481,390
Securities sold under agreements to repurchase		206,937		206,945		—		206,945		—
Interest payable		2,345		2,345		—		2,345		—
Federal Home Loan Bank borrowings		93,969		96,669		—		96,669		—
Subordinated debt, net		94,253		94,253		—		94,253		—
Junior subordinated debentures, net		19,027		14,604		—		14,604		—

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Business Combinations (Tables)

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Estimated Fair Values of Assets Acquired and Liabilities Assumed

	Acquired			Fair Value			As Recorded by
	Book Value			Adjustments			Providence Bank
Assets
Cash and due from banks	$	130,561		$	-		$	130,561
Investment Securities		119,234			264			119,498
Loans		838,377			(9,401	)		828,976
Allowance for credit losses		(8,656	)		6,583			(2,073	)
Other real estate owned		8,435			2,456			10,891
Premises and equipment		23,440			4,819			28,259
Goodwill		-			8,956			8,956
Core deposit intangible		123			2,025			2,148
Right of use asset		-			794			794
Other assets		43,697			1,736			45,433
Total assets acquired	$	1,155,211		$	18,232		$	1,173,443
Liabilities
Deposits	$	988,329		$	2,081		$	990,410
Securities sold under agreements to repurchase		-			-			-
FHLB advances		26,941			975			27,916
Other borrowings		-			-			-
Lease liability		-			794			794
Other liabilities		7,242			(610	)		6,632
Total liabilities assumed		1,022,512			3,240			1,025,752
Net assets acquired	$	132,699		$	14,992		$	147,691
Consideration Paid
Cash							$	103,500
Common stock								44,191
							$	147,691

36

Unaudited Pro Forma Condensed Combined Financial Information

The following unaudited pro forma condensed combined financial information presents the results of operations of the
Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the LINCO acquisition
taken place at the beginning of the period (dollars in thousands):

	Three months ended                                     March 31, 2021		Three months ended                                     March 31, 2020
Net interest income	$	38,237	$	40,626
Provision for loan losses		12,136		5,492
Non-interest income		17,749		17,651
Non-interest expense		37,659		32,060
Income before taxes		6,191		20,725
Income tax expense (benefit)		1,078		5,277
Net income (loss)	$	5,113	$	15,448
Earnings per share
Basic	$	0.30	$	0.86
Diluted		0.29		0.86
Basic weighted average shares o/s		17,299,927		17,955,429
Diluted weighted average shares o/s		17,352,947		18,002,337

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Leases (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Summary of Supplemental Balance Sheet Information

The following table contains supplemental balance sheet information related to leases (dollars in thousands):

	March 31, 2021			March 31, 2020			December 31, 2020
Operating lease right-of-use assets	$	17,424		$	16,542		$	17,209
Operating lease liabilities		17,578			16,568			17,351
Weighted-average remaining lease term (in years)		6.8			7.1			7.3
Weighted-average discount rate		2.63	%		3.08	%		2.85	%

Summary of Maturities of Lease Liabilities

Maturities of lease liabilities were as follows (in thousands):

Year ending December 31,
	2021	$	2,226
	2022		2,703
	2023		2,364
	2024		1,942
	2025		1,629
Thereafter			9,150
Total lease payments			20,014
Less imputed interest			(2,436	)
Total lease liability		$	17,578

Summary of Components of Lease Expense

The components of lease expense for the three months ended March 31, 2021 and 2020 were as follows (in thousands):

	Three months ended March 31,
	2021			2020
Operating lease cost	$	708		$	642
Short-term lease cost		35			46
Variable lease cost		137			169
Total lease cost		880			857
Income from subleases		(153	)		(193	)
Net lease cost	$	727		$	664

Summary of Operating Lease Cash Flows

Cash paid for amounts included in the measurement of lease liabilities was (in thousands):

	March 31, 2021		March 31, 2020
Operating cash flows from operating leases	$	711	$	677

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Derivatives (Tables)

3 Months Ended

Mar. 31, 2021

Derivative [Line Items]

Summary of Derivative Instruments, Gain (Loss)

The effects of the fair value hedges on the Company's income statement during the three months ended March 31, 2021 and 2020 were as follows (in thousands):

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Derivatives	2021			2020
Interest rate swap agreements	Interest income on loans	$	(743	)	$	(1,384	)

		Three months ended March 31,
Derivative	Location of Gain (Loss) on Hedged Items	2021		2020
Interest rate swap agreements	Interest income on loans	$	743	$	1,384

Summary of Cumulative Basis Adjustment of Fair Value Hedges

As of March 31, 2021, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustment for fair value hedges (in thousands):

Line Item in the Balance Sheet in Which the Hedge Item is Included	Carrying Amount of the Hedged Asset		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
Loans	$	13,525	$	751

Not Designated as Hedging Instrument

Derivative [Line Items]

Summary of Fair Value Derivative Instruments

The following amounts represent the notional amounts and gross fair value of derivative contracts not designated as hedging instruments outstanding during the three months ended March 31, 2021 and 2020  (in thousands):

September 30, 2020	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
Interest rate swap agreements	Other assets	6.8	$	42,223	$	262
Interest rate swap agreements	Other liabilities	6.8		42,223		(262	)

Fair Value Hedging | Designated As Hedging Instrument

Derivative [Line Items]

Summary of Fair Value Derivative Instruments

The following table provides the outstanding notional balances and fair values of outstanding derivatives designated as hedging instruments as of March 31, 2021 and December 31, 2020 (in thousands):

	Balance Sheet Location	Weighted Average Remaining Maturity (Years)	Notional Amount		Estimated Value
March 31, 2021
Fair Value Hedges:
Interest rate swap agreements	Other liabilities	8.1 years	$	14,276	$	(1,013	)
December 31, 2020
Fair Value Hedges:
Interest rate swap agreements	Other liabilities	8.3 years	$	14,334	$	(2,892	)

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Basis of Accounting and Consolidation - Additional Information (Details) - USD ($)			3 Months Ended		12 Months Ended
	Oct. 06, 2020	Jan. 02, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Apr. 21, 2020	Jan. 01, 2020	Dec. 31, 2019
Basis Of Accounting And Consolidation [Line Items]
Loans acquired						$ 183,000,000
Stock plans, term			10 years
Maximum number of shares to be issued in stock incentive plan (in shares)			399,983
Employee discount for employee stock purchase plan			5.00%
Employee stock purchase plan, number of shares authorized			600,000
Stock issued during period, shares, employee stock purchase plans			3,142	3,804
Captive maximum gross premiums			$ 2,300,000
Cumulative change in accounting principal			601,884,000	$ 533,051,000	$ 568,228,000			$ 526,609,000
Allowance for credit losses on loans			$ 55,418,000	$ 32,876,000	$ 41,910,000			26,911,000
ASU 2016-13
Basis Of Accounting And Consolidation [Line Items]
Allowance for credit losses on loans							$ 28,583,000
Off-balance sheet, credit loss, liability							69,000
Allowance for credit losses, held-to-maturity debt securities							0
Amortized cost of PCD assets reflected the addition to allowance for credit losses		$ 833,000
ASU 2016-13 | Impact of ASU
Basis Of Accounting And Consolidation [Line Items]
Allowance for credit losses on loans							1,672,000
Off-balance sheet, credit loss, liability							69,000
Cumulative Effect, Period of Adoption, Adjustment | ASU 2016-13
Basis Of Accounting And Consolidation [Line Items]
Cumulative change in accounting principal							$ 717,000	(717,000)
Allowance for credit losses on loans								$ 1,672,000
Stock Options
Basis Of Accounting And Consolidation [Line Items]
Common stock awarded in SI plan (in shares)			0
Restricted Stock
Basis Of Accounting And Consolidation [Line Items]
Common stock awarded in SI plan (in shares)			27,750		25,200
Restricted Stock Units (RSUs)
Basis Of Accounting And Consolidation [Line Items]
Common stock awarded in SI plan (in shares)			16,950		16,200
3.95% Subordinated Notes due 2030
Basis Of Accounting And Consolidation [Line Items]
Aggregate principal amount	$ 96,000,000.0
Fixed-to-Floating Rate	3.95%
Maturity date	Oct. 15, 2030
Redemption description	The Company may, beginning with the interest payment date of October 15, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the Notes at any time, including prior to October 15, 2025, at the Company’s option, in whole but not in part, if: (i) a change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended; in each case, at a redemption price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to but excluding the redemption date.
3.95% Subordinated Notes due 2030 | SOFR
Basis Of Accounting And Consolidation [Line Items]
Description floating rate basis	three-month Term SOFR
Basis points	3.83%

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Basis of Accounting and Consolidation - Schedule of Components of Accumulated Other Comprehensive Income (Details) - Accumulated Other Comprehensive Income - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Net unrealized gains on securities available-for-sale	$ 7,165	$ 24,077
Tax expense	(2,078)	(6,982)
Balance	$ 5,087	$ 17,095

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Basis of Accounting and Consolidation - Schedule of Amounts Reclassified from Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Realized gains on available-for-sale securities	$ 4	$ 531
Tax effect	(668)	(3,172)
Total reclassifications out of accumulated other comprehensive income	3	377
Accumulated Defined Benefit Plans Adjustment Attributable to Parent
Realized gains on available-for-sale securities	4	531
Tax effect	$ (1)	$ (154)

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Basis of Accounting and Consolidation - Schedule of Impact of ASU 2016-13 Adoption (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Jan. 01, 2020	Dec. 31, 2019
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans	$ 55,418,000	$ 41,910,000	$ 32,876,000		$ 26,911,000
Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					26,911,000
Allowance for credit losses on off-balance sheet exposures					0
ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				$ 28,583,000
Allowance for credit losses on off-balance sheet exposures				69,000
ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				1,672,000
Allowance for credit losses on off-balance sheet exposures				69,000
Construction & Land Development | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					1,146,000
Construction & Land Development | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				1,033,000
Construction & Land Development | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				(113,000)
Farm | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					1,093,000
Farm | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				1,323,000
Farm | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				230,000
1-4 Family Residential Properties | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					1,386,000
1-4 Family Residential Properties | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				2,142,000
1-4 Family Residential Properties | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				756,000
Commercial Real Estate | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					11,198,000
Commercial Real Estate | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				11,739,000
Commercial Real Estate | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				541,000
Agricultural | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					1,386,000
Agricultural | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				1,023,000
Agricultural | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				(363,000)
Commercial & Industrial | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					9,273,000
Commercial & Industrial | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				9,428,000
Commercial & Industrial | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				155,000
Consumer | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					$ 1,429,000
Consumer | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				1,895,000
Consumer | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				$ 466,000

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Basis of Accounting and Consolidation - Schedule of Impact of ASU 2016-13 Adoption of PCD Assets Previously Classified as PCI (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Jan. 01, 2020	Dec. 31, 2019
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans	$ 55,418,000	$ 41,910,000	$ 32,876,000		$ 26,911,000
Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					26,911,000
ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				$ 28,583,000
ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				1,672,000
Construction & Land Development | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					1,146,000
Construction & Land Development | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				1,033,000
Construction & Land Development | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				(113,000)
1-4 Family Residential Properties | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					1,386,000
1-4 Family Residential Properties | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				2,142,000
1-4 Family Residential Properties | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				756,000
Commercial Real Estate | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					11,198,000
Commercial Real Estate | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				11,739,000
Commercial Real Estate | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				541,000
Commercial & Industrial | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					9,273,000
Commercial & Industrial | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				9,428,000
Commercial & Industrial | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				155,000
Financial Asset Acquired with Credit Deterioration | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					365,000
Financial Asset Acquired with Credit Deterioration | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				1,198,000
Financial Asset Acquired with Credit Deterioration | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				833,000
Financial Asset Acquired with Credit Deterioration | Construction & Land Development | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					0
Financial Asset Acquired with Credit Deterioration | Construction & Land Development | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				291,000
Financial Asset Acquired with Credit Deterioration | Construction & Land Development | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				291,000
Financial Asset Acquired with Credit Deterioration | 1-4 Family Residential Properties | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					6,000
Financial Asset Acquired with Credit Deterioration | 1-4 Family Residential Properties | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				48,000
Financial Asset Acquired with Credit Deterioration | 1-4 Family Residential Properties | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				42,000
Financial Asset Acquired with Credit Deterioration | Commercial Real Estate | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					359,000
Financial Asset Acquired with Credit Deterioration | Commercial Real Estate | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				818,000
Financial Asset Acquired with Credit Deterioration | Commercial Real Estate | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				459,000
Financial Asset Acquired with Credit Deterioration | Commercial & Industrial | Pre-ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans					$ 0
Financial Asset Acquired with Credit Deterioration | Commercial & Industrial | ASU 2016-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				41,000
Financial Asset Acquired with Credit Deterioration | Commercial & Industrial | ASU 2016-13 | Impact of ASU
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Allowance for credit losses on loans				$ 41,000

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Earnings Per Share - Components of Basic and Diluted Net Income Per Common Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Basic Net Income per Common Share Available to Common Stockholders:
Net income	$ 4,109,000	$ 9,999,000
Weighted average common shares outstanding	17,299,927	16,693,183
Basic earnings per common share	$ 0.24	$ 0.60
Diluted Net Income per Common Share Available to Common Stockholders:
Net income applicable to diluted earnings per share	$ 4,109,000	$ 9,999,000
Weighted average common shares outstanding	17,299,927	16,693,183
Dilutive potential common shares:
Restricted stock awarded	53,020	46,908
Dilutive potential common shares	53,020	46,908
Diluted weighted average common shares outstanding	17,352,947	16,740,091
Diluted earnings per common share	$ 0.24	$ 0.60

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Earnings Per Share - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share [Abstract]
Number of anti-dilutive shares excluded when computing diluted earnings per share	0	0

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Investment Securities - Available for Sale and Held for Maturity Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available-for-sale: [Abstract]
Amortized Cost	$ 1,080,783	$ 855,163
Gross Unrealized Gains	18,290	25,075
Gross Unrealized (Losses)	(11,125)	(998)
Fair Value	1,087,948	879,240
Held-to-maturity: [Abstract]
Held-to-maturity	7,045	5,016
Gross Unrealized Gains	80
Unrealized (Losses)	0
Fair Value	7,125	5,119
U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Available-for-sale: [Abstract]
Amortized Cost	174,789	127,067
Gross Unrealized Gains	377	790
Gross Unrealized (Losses)	(3,636)	(788)
Fair Value	171,530	127,069
Held-to-maturity: [Abstract]
Held-to-maturity	5,012	5,016
Gross Unrealized Gains	80	103
Unrealized (Losses)	0	0
Fair Value	5,092	5,119
Obligations of States and Political Subdivisions
Available-for-sale: [Abstract]
Amortized Cost	249,776	237,886
Gross Unrealized Gains	9,226	11,995
Gross Unrealized (Losses)	(1,283)	(37)
Fair Value	257,719	249,844
Mortgage-backed Securities: GSE Residential
Available-for-sale: [Abstract]
Amortized Cost	620,102	479,470
Gross Unrealized Gains	7,988	12,038
Gross Unrealized (Losses)	(6,138)	(160)
Fair Value	621,952	491,348
Other Securities
Available-for-sale: [Abstract]
Amortized Cost	36,116	10,740
Gross Unrealized Gains	699	252
Gross Unrealized (Losses)	(68)	(13)
Fair Value	36,747	$ 10,979
Annuity
Held-to-maturity: [Abstract]
Held-to-maturity	2,033
Gross Unrealized Gains	0
Unrealized (Losses)	0
Fair Value	$ 2,033

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Investment Securities - Additional Information (Details)	3 Months Ended
	Mar. 31, 2021 USD ($) Security	Dec. 31, 2020 USD ($) Security
Schedule Of Available For Sale Securities [Line Items]
Equity securities, at fair value | $	$ 300,000	$ 218,000
Tax rate used to calculate tax-equivalent yields (in hundredths)	21.00%
Percentage investment book value exceeds stockholders' equity (in hundredths)	10.00%
Debt securities, available-for-sale, restricted | $	$ 621,000,000	$ 531,000,000
U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Schedule Of Available For Sale Securities [Line Items]
Held-to-maturity, securities in unrealized loss positions, qualitative disclosure, number of positions | Security	0	0
Obligations of States and Political Subdivisions
Schedule Of Available For Sale Securities [Line Items]
Number of securities in unrealized loss positions | Security	0	0
Mortgage-backed Securities: GSE Residential
Schedule Of Available For Sale Securities [Line Items]
Number of securities in unrealized loss positions | Security	12	2
12 months or longer, fair value | $	$ 129,370,000	$ 2,377,000
12 months or longer, unrealized losses | $	$ (983,000)	$ 0
Other Securities
Schedule Of Available For Sale Securities [Line Items]
Number of securities in unrealized loss positions | Security	0	0

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Investment Securities - Realized Gains and Losses From Sale of Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Realized Investment Gains (Losses) [Abstract]
Gross gains	$ 4	$ 531
Gross losses	$ 0	$ 0

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Investment Securities - Investments Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	$ 174,353
Available-for-sale investments, After 1 through 5 years	439,604
Available-for-sale investments, After 5 through 10 years	469,759
Available-for-sale investments, After ten years	4,232
Available-for-sale investments, Fair Value	$ 1,087,948	$ 879,240
Available-for-sale, Weighted average yield, One year or less (in hundredths)	1.87%
Available-for-sale , Weighted average yield,After 1 through 5 years (in hundredths)	2.28%
Available-for-sale, Weighted average yield,After 5 through 10 years (in hundredths)	1.69%
Available-for-sale , Weighted average yield,After ten years (in hundredths)	2.57%
Available-for-sale , Weighted average yield,Total (in hundredths)	1.96%
Available-for-sale, Full Tax-equivalent yield, One year or less (in hundredths)	2.06%
Available-for-sale, Full Tax-equivalent yield,After 1 through 5 years (in hundredths)	2.45%
Available-for-sale, Full Tax-equivalent yield, After 5 through 10 years (in hundredths)	1.94%
Available-for-sale, Full Tax-equivalent yield,After ten years (in hundredths)	3.52%
Available-for-sale, Full Tax-equivalent yield,Total (in hundredths)	2.17%
Held-to-maturity, Maturity [Abstract]
Held-to-maturity, One Year or less	$ 5,012
Held-to-maturity, After1 through 5 years	0
Held-to-maturity, After 5 through 10 years	0
Held-to-maturity, After ten years	2,033
Held-to-maturity	$ 7,045	5,016
Held To Maturity Weighted average yield, One year or less	2.06%
Held To Maturity Weighted average yield, After 1 through 5 years	0.00%
Held To Maturity Weighted average yield After 5 through 10 years	0.00%
Held To Maturity Weighted average yield After ten years	0.00%
Held To Maturity Weighted average yield ,Total	2.06%
Held To Maturity, Full tax-equivalent yield , One year or less	2.06%
Held To Maturity, Full tax-equivalent yield , After 1 through 5 years	0.00%
Held To Maturity, Full tax-equivalent yield , After 5 through 10 years	0.00%
Held To Maturity, Full tax-equivalent yield , After ten years	0.00%
Held To Maturity, Full tax-equivalent yield , Total	2.06%
U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	$ 105,823
Available-for-sale investments, After 1 through 5 years	54,392
Available-for-sale investments, After 5 through 10 years	11,315
Available-for-sale investments, After ten years	0
Available-for-sale investments, Fair Value	171,530	127,069
Held-to-maturity, Maturity [Abstract]
Held-to-maturity, One Year or less	5,012
Held-to-maturity, After1 through 5 years	0
Held-to-maturity, After 5 through 10 years	0
Held-to-maturity, After ten years	0
Held-to-maturity	5,012	5,016
Obligations of States and Political Subdivisions
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	29,540
Available-for-sale investments, After 1 through 5 years	71,481
Available-for-sale investments, After 5 through 10 years	152,466
Available-for-sale investments, After ten years	4,232
Available-for-sale investments, Fair Value	257,719	249,844
Mortgage-backed Securities: GSE Residential
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	26,948
Available-for-sale investments, After 1 through 5 years	293,661
Available-for-sale investments, After 5 through 10 years	301,343
Available-for-sale investments, After ten years	0
Available-for-sale investments, Fair Value	621,952	491,348
Other Securities
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale investments, One year or less	12,042
Available-for-sale investments, After 1 through 5 years	20,070
Available-for-sale investments, After 5 through 10 years	4,635
Available-for-sale investments, After ten years	0
Available-for-sale investments, Fair Value	36,747	$ 10,979
Annuity
Held-to-maturity, Maturity [Abstract]
Held-to-maturity, One Year or less	0
Held-to-maturity, After1 through 5 years	0
Held-to-maturity, After 5 through 10 years	0
Held-to-maturity, After ten years	2,033
Held-to-maturity	$ 2,033

XML

Investment Securities - Fair Value of Investments with Sustained Gross Unrealized Losses (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	$ 438,493	$ 126,177
Available-for-sale, Less than 12 months, Unrealized Losses	(10,142)	(998)
Available-for-sale, 12 months or longer, Fair Value	129,370	2,377
Available-for-sale, 12 months or longer, Unrealized losses	(983)	0
Available-for-sale, Total Fair Value	567,863	128,554
Available-for-sale, Total Unrealized Losses	(11,125)	(998)
U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	144,404	59,211
Available-for-sale, Less than 12 months, Unrealized Losses	(3,636)	(788)
Available-for-sale, 12 months or longer, Fair Value	0	0
Available-for-sale, 12 months or longer, Unrealized losses	0	0
Available-for-sale, Total Fair Value	144,404	59,211
Available-for-sale, Total Unrealized Losses	(3,636)	(788)
Obligations of States and Political Subdivisions
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	51,381	5,380
Available-for-sale, Less than 12 months, Unrealized Losses	(1,283)	(37)
Available-for-sale, 12 months or longer, Fair Value	0	0
Available-for-sale, 12 months or longer, Unrealized losses	0	0
Available-for-sale, Total Fair Value	51,381	5,380
Available-for-sale, Total Unrealized Losses	(1,283)	(37)
Mortgage-backed Securities: GSE Residential
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	230,029	57,609
Available-for-sale, Less than 12 months, Unrealized Losses	(5,155)	(160)
Available-for-sale, 12 months or longer, Fair Value	129,370	2,377
Available-for-sale, 12 months or longer, Unrealized losses	(983)	0
Available-for-sale, Total Fair Value	359,399	59,986
Available-for-sale, Total Unrealized Losses	(6,138)	(160)
Other Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure [Abstract]
Available-for-sale, Less than 12 months, Fair Value	12,679	3,977
Available-for-sale, Less than 12 months, Unrealized Losses	(68)	(13)
Available-for-sale, 12 months or longer, Fair Value	0	0
Available-for-sale, 12 months or longer, Unrealized losses	0	0
Available-for-sale, Total Fair Value	12,679	3,977
Available-for-sale, Total Unrealized Losses	$ (68)	$ (13)

XML

Loans and Allowance for Credit Losses - Summary of Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 3,941,799	$ 3,143,921
Loans held for sale	4,693	1,924
Loans and leases receivable gross excluding loans held for sale	3,937,106	3,141,997
Net deferred loan fees (costs), premiums and discounts	(1,300)	5,502
Allowance for credit losses	55,418	41,910	$ 32,876	$ 26,911
Net loans	3,882,988	3,094,585
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	2,544,555	2,068,550
Construction and Land Development | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	165,780	122,853
Allowance for credit losses	2,286	1,666	1,620	1,146
Agricultural | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	269,759	254,662
Allowance for credit losses	1,628	1,084	1,335	1,093
Commercial | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,401,585	1,176,290
Allowance for credit losses	25,737	19,660	13,621	11,198
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	121,955	137,333
Allowance for credit losses	881	1,526	1,064	1,386
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,020,608	741,819
Allowance for credit losses	18,954	13,485	11,294	9,273
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	90,780	78,023
Allowance for credit losses	2,839	2,167	2,011	1,429
All Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	163,901	118,196
1-4 Family | Residential Properties | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	411,964	325,480
Allowance for credit losses	3,093	2,322	$ 1,931	$ 1,386
Multifamily | Residential Properties | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 295,467	$ 189,265

XML

Loans and Allowance for Credit Losses - Additional Information (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2021 USD ($) alternative Loan_modified	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) Loan_modified	Jan. 01, 2020 USD ($)	Dec. 31, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accrued interest on loans	$ 15,600,000		$ 15,900,000
Minimum value of loans individually measured for impairment	$ 250,000
Number of alternatives for measuring impaired loans receivable | alternative	3
Allowance for credit losses	$ 55,418,000	$ 32,876,000	41,910,000		$ 26,911,000
Financing receivable modifications performing recorded investment	4,103,000	4,400,000	4,373,000
Interest lost on nonaccrual loans	1,021,000	1,029,000
Troubled debt restructurings balance	8,689,000		9,502,000
Loans receivable, modifications, allowance	929,000		1,016,000
Real estate acquired through foreclosure	13,339,000		2,489,000
Mortgage loans secured by real estate In foreclosure	$ 634,000		$ 713,000
Financial Asset, Equal to or Greater than 90 Days Past Due
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled debt restructurings balance | Loan_modified	0		0
Accounting Standards Update 2016-13
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				$ 28,583,000
Accounting Standards Update 2016-13 | Impact of ASU
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				1,672,000
Accounting Standards Update 2016-13 | Financial Asset Acquired with Credit Deterioration
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				1,198,000
Accounting Standards Update 2016-13 | Financial Asset Acquired with Credit Deterioration | Impact of ASU
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				833,000
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Debt coverage ratio	1.20x
Amortization period of loans	20 years
Commercial Real Estate | Accounting Standards Update 2016-13
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				11,739,000
Commercial Real Estate | Accounting Standards Update 2016-13 | Impact of ASU
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				541,000
Commercial Real Estate | Accounting Standards Update 2016-13 | Financial Asset Acquired with Credit Deterioration
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				818,000
Commercial Real Estate | Accounting Standards Update 2016-13 | Financial Asset Acquired with Credit Deterioration | Impact of ASU
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				459,000
Commercial Real Estate | Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum loan-to-value ratio (in hundredths)	65.00%
Commercial Real Estate | Maximum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum loan-to-value ratio (in hundredths)	80.00%
1-4 Family Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Period when loans charged-down	180 days
1-4 Family Residential Properties | Accounting Standards Update 2016-13
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				2,142,000
1-4 Family Residential Properties | Accounting Standards Update 2016-13 | Impact of ASU
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				756,000
1-4 Family Residential Properties | Accounting Standards Update 2016-13 | Financial Asset Acquired with Credit Deterioration
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				48,000
1-4 Family Residential Properties | Accounting Standards Update 2016-13 | Financial Asset Acquired with Credit Deterioration | Impact of ASU
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses				$ 42,000
Motels and Hotels Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 126,000,000.0
Non-residential Buildings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	426,300,000
Residential Buildings and Dwellings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	319,800,000
Nursing Care Facilities
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	109,800,000
Other Gambling Industries
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	121,300,000
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing receivable modifications performing recorded investment	4,031,000		$ 4,313,000
Troubled debt restructurings balance	$ 5,975,000		6,773,000
Unsecured Open-end Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Period when loans charged-down	180 days
Other Secured Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Period when loans charged-down	120 days
Agricultural
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 390,700,000		391,700,000
Increase (decrease) in accounts and notes receivable	$ (1,000,000.0)
Maximum loan-to-value ratio (in hundredths)	65.00%
Amortization period of loans	25 years
Loans receivable, time period	1 year
Agricultural | Corn and Other Grain Farming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 278,200,000		308,200,000
Increase (decrease) in accounts and notes receivable	30,000,000.0
Agricultural | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	$ 1,628,000	1,335,000	1,084,000		1,093,000
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum loan-to-value ratio (in hundredths)	80.00%
Amortization period of loans	7 years
Loans receivable, time period	1 year
Allowance for credit losses	$ 18,954,000	$ 11,294,000	13,485,000		$ 9,273,000
Financing receivable modifications performing recorded investment	55,000		58,000
Troubled debt restructurings balance	$ 2,362,000		$ 2,389,000
Residential Properties | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Maximum loan-to-value ratio (in hundredths)	80.00%
Amortization period of loans	25 years
Balloon period	five years

XML

Loans and Allowance for Credit Losses - Allowance for Credit Losses Based on Portfolio Segment (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	$ 41,910	$ 26,911	$ 26,911
Initial allowance on loans purchased with credit deterioration	2,074
Provision for credit loss expense	12,136	5,481	16,103
Loans charged off	968	1,423	3,844
Recoveries collected	266	235	1,068
Allowance for credit losses, Ending Balance	55,418	32,876	41,910
Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		1,672	1,672
Construction and Land Development | Real Estate Loan
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	1,666	1,146	1,146
Initial allowance on loans purchased with credit deterioration	261
Provision for credit loss expense	359	587	646
Loans charged off	0	0	13
Recoveries collected	0	0	0
Allowance for credit losses, Ending Balance	2,286	1,620	1,666
Construction and Land Development | Real Estate Loan | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		(113)	(113)
Agricultural | Real Estate Loan
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	1,084	1,093	1,093
Initial allowance on loans purchased with credit deterioration	44
Provision for credit loss expense	500	12	(239)
Loans charged off	0	0	0
Recoveries collected	0	0	0
Allowance for credit losses, Ending Balance	1,628	1,335	1,084
Agricultural | Real Estate Loan | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		230	230
Residential Properties | Real Estate Loan | 1-4 Family
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	2,322	1,386	1,386
Initial allowance on loans purchased with credit deterioration	328
Provision for credit loss expense	617	(77)	274
Loans charged off	182	196	393
Recoveries collected	8	62	299
Allowance for credit losses, Ending Balance	3,093	1,931	2,322
Residential Properties | Real Estate Loan | 1-4 Family | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		756	756
Commercial | Real Estate Loan
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	19,660	11,198	11,198
Initial allowance on loans purchased with credit deterioration	646
Provision for credit loss expense	5,902	1,961	8,581
Loans charged off	480	84	829
Recoveries collected	9	5	169
Allowance for credit losses, Ending Balance	25,737	13,621	19,660
Commercial | Real Estate Loan | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		541	541
Agricultural Loans
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	1,526	1,386	1,386
Initial allowance on loans purchased with credit deterioration	0
Provision for credit loss expense	(645)	41	503
Loans charged off	0	0	0
Recoveries collected	0	0	0
Allowance for credit losses, Ending Balance	881	1,064	1,526
Agricultural Loans | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		(363)	(363)
Commercial and Industrial Loans
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	13,485	9,273	9,273
Initial allowance on loans purchased with credit deterioration	795
Provision for credit loss expense	4,674	2,815	5,869
Loans charged off	18	972	1,991
Recoveries collected	18	23	179
Allowance for credit losses, Ending Balance	18,954	11,294	13,485
Commercial and Industrial Loans | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		155	155
Consumer Loans
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance	2,167	1,429	1,429
Initial allowance on loans purchased with credit deterioration	0
Provision for credit loss expense	729	142	469
Loans charged off	288	171	618
Recoveries collected	231	145	421
Allowance for credit losses, Ending Balance	$ 2,839	2,011	2,167
Consumer Loans | Cumulative Change in Accounting Principal, Adjustment | ASU 2016-13
Allowance for loan losses [Abstract]
Allowance for credit losses, Beginning Balance		$ 466	$ 466

XML

Loans and Allowance for Credit Losses - Amortized Cost Basis of Collateral-Dependent Loans by Class of Loans Individually Evaluated (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	$ 24,502
Allowance for Credit Losses	2,715	$ 1,931
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Allowance for Credit Losses	0	0
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	5,302
Allowance for Credit Losses	808	664
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	8
Allowance for Credit Losses	163	0
All Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	26
Allowance for Credit Losses	26	0
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	19,166
Real Estate | Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate | Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate | All Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	3,419
Business Assets | Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Business Assets | Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	3,393
Business Assets | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Business Assets | All Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	26
Other Property
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,917
Other Property | Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Other Property | Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,909
Other Property | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	8
Other Property | All Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	19,166
Allowance for Credit Losses	1,718	1,267
Real Estate Loan | Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	508
Allowance for Credit Losses	303	246
Real Estate Loan | Agricultural
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Allowance for Credit Losses	0	0
Real Estate Loan | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	12,308
Allowance for Credit Losses	1,252	863
Real Estate Loan | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	19,166
Real Estate Loan | Real Estate | Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	508
Real Estate Loan | Real Estate | Agricultural
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Real Estate | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	12,308
Real Estate Loan | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Business Assets | Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Business Assets | Agricultural
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Business Assets | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Other Property
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Other Property | Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Other Property | Agricultural
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Real Estate Loan | Other Property | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
1-4 Family | Real Estate Loan | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	4,436
Allowance for Credit Losses	163	158
1-4 Family | Real Estate Loan | Real Estate | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	4,436
1-4 Family | Real Estate Loan | Business Assets | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
1-4 Family | Real Estate Loan | Other Property | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Multifamily | Real Estate Loan | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,914
Allowance for Credit Losses	0	$ 0
Multifamily | Real Estate Loan | Real Estate | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	1,914
Multifamily | Real Estate Loan | Business Assets | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	0
Multifamily | Real Estate Loan | Other Property | Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	$ 0

XML

Loans and Allowance for Credit Losses - Credit Risk Profile of Loan Portfolio on Amortized Cost Basis Based on Risk Rating Category (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Credit Quality Information [Abstract]
Current fiscal year	$ 311,283	$ 1,085,080
Fiscal year before current fiscal year	1,362,003	558,953
Two years before current fiscal year	666,851	386,847
Three years before current fiscal year	478,577	300,829
Four years before current fiscal year	330,702	247,242
Prior	758,424	517,313
Revolving Loans	35,259	42,155
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	3,943,099	3,138,419
Pass
Credit Quality Information [Abstract]
Current fiscal year	293,386	1,052,257
Fiscal year before current fiscal year	1,349,288	511,427
Two years before current fiscal year	618,277	367,652
Three years before current fiscal year	463,515	279,274
Four years before current fiscal year	308,277	230,730
Prior	691,797	459,453
Revolving Loans	34,265	40,363
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	3,758,805	2,941,156
Special Mention
Credit Quality Information [Abstract]
Current fiscal year	17,058	29,692
Fiscal year before current fiscal year	10,208	44,049
Two years before current fiscal year	45,041	8,731
Three years before current fiscal year	5,078	15,165
Four years before current fiscal year	14,870	9,344
Prior	34,063	30,525
Revolving Loans	57	293
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	126,375	137,799
Substandard
Credit Quality Information [Abstract]
Current fiscal year	839	3,131
Fiscal year before current fiscal year	2,507	3,477
Two years before current fiscal year	3,533	10,464
Three years before current fiscal year	9,984	6,390
Four years before current fiscal year	7,555	7,168
Prior	32,564	27,335
Revolving Loans	937	1,499
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	57,919	59,464
Agricultural Loans
Credit Quality Information [Abstract]
Current fiscal year	15,629	104,515
Fiscal year before current fiscal year	87,163	20,401
Two years before current fiscal year	10,808	6,697
Three years before current fiscal year	5,370	2,062
Four years before current fiscal year	1,837	783
Prior	263	2,894
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	121,070	137,352
Agricultural Loans | Pass
Credit Quality Information [Abstract]
Current fiscal year	1,853	83,377
Fiscal year before current fiscal year	83,342	15,680
Two years before current fiscal year	6,921	5,978
Three years before current fiscal year	5,131	1,838
Four years before current fiscal year	1,631	635
Prior	104	2,856
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	98,982	110,364
Agricultural Loans | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	13,723	21,070
Fiscal year before current fiscal year	3,777	4,483
Two years before current fiscal year	3,769	694
Three years before current fiscal year	214	224
Four years before current fiscal year	206	148
Prior	159	38
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	21,848	26,657
Agricultural Loans | Substandard
Credit Quality Information [Abstract]
Current fiscal year	53	68
Fiscal year before current fiscal year	44	238
Two years before current fiscal year	118	25
Three years before current fiscal year	25	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	240	331
Consumer Loans
Credit Quality Information [Abstract]
Current fiscal year	7,736	31,624
Fiscal year before current fiscal year	35,935	21,424
Two years before current fiscal year	33,343	12,219
Three years before current fiscal year	11,637	8,375
Four years before current fiscal year	217	3,218
Prior	2,837	1,142
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	91,705	78,002
Consumer Loans | Pass
Credit Quality Information [Abstract]
Current fiscal year	7,723	31,609
Fiscal year before current fiscal year	35,908	21,384
Two years before current fiscal year	33,307	12,084
Three years before current fiscal year	11,526	8,279
Four years before current fiscal year	138	3,150
Prior	2,681	1,022
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	91,283	77,528
Consumer Loans | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	0	0
Fiscal year before current fiscal year	0	24
Two years before current fiscal year	23	24
Three years before current fiscal year	21	1
Four years before current fiscal year	0	1
Prior	0	0
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	44	50
Consumer Loans | Substandard
Credit Quality Information [Abstract]
Current fiscal year	13	15
Fiscal year before current fiscal year	27	16
Two years before current fiscal year	13	111
Three years before current fiscal year	90	95
Four years before current fiscal year	79	67
Prior	156	120
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	378	424
Commercial and Industrial Loans
Credit Quality Information [Abstract]
Current fiscal year	154,044	376,688
Fiscal year before current fiscal year	480,758	166,638
Two years before current fiscal year	198,271	71,878
Three years before current fiscal year	99,775	81,068
Four years before current fiscal year	98,877	43,676
Prior	150,232	116,603
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	1,181,957	856,551
Commercial and Industrial Loans | Pass
Credit Quality Information [Abstract]
Current fiscal year	152,091	371,683
Fiscal year before current fiscal year	477,167	132,148
Two years before current fiscal year	162,411	70,497
Three years before current fiscal year	98,524	78,890
Four years before current fiscal year	96,059	42,439
Prior	145,657	114,904
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	1,131,909	810,561
Commercial and Industrial Loans | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	1,556	4,116
Fiscal year before current fiscal year	3,248	32,130
Two years before current fiscal year	33,491	849
Three years before current fiscal year	804	489
Four years before current fiscal year	473	1,101
Prior	1,895	730
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	41,467	39,415
Commercial and Industrial Loans | Substandard
Credit Quality Information [Abstract]
Current fiscal year	397	889
Fiscal year before current fiscal year	343	2,360
Two years before current fiscal year	2,369	532
Three years before current fiscal year	447	1,689
Four years before current fiscal year	2,345	136
Prior	2,680	969
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	8,581	6,575
Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	2,548,367	2,066,514
Real Estate Loan | Construction and Land Development
Credit Quality Information [Abstract]
Current fiscal year	6,259	41,842
Fiscal year before current fiscal year	55,930	41,117
Two years before current fiscal year	35,910	31,500
Three years before current fiscal year	44,866	3,277
Four years before current fiscal year	12,641	871
Prior	9,770	3,872
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	165,376	122,479
Real Estate Loan | Construction and Land Development | Pass
Credit Quality Information [Abstract]
Current fiscal year	6,259	41,842
Fiscal year before current fiscal year	55,930	40,989
Two years before current fiscal year	35,782	31,500
Three years before current fiscal year	44,866	2,760
Four years before current fiscal year	12,068	871
Prior	9,723	3,822
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	164,628	121,784
Real Estate Loan | Construction and Land Development | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	0	0
Fiscal year before current fiscal year	0	0
Two years before current fiscal year	0	0
Three years before current fiscal year	0	0
Four years before current fiscal year	0	0
Prior	0	0
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	0	0
Real Estate Loan | Construction and Land Development | Substandard
Credit Quality Information [Abstract]
Current fiscal year	0	0
Fiscal year before current fiscal year	0	128
Two years before current fiscal year	128	0
Three years before current fiscal year	0	517
Four years before current fiscal year	573	0
Prior	47	50
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	748	695
Real Estate Loan | Agricultural
Credit Quality Information [Abstract]
Current fiscal year	30,356	75,475
Fiscal year before current fiscal year	101,331	38,382
Two years before current fiscal year	35,419	39,172
Three years before current fiscal year	41,060	16,815
Four years before current fiscal year	15,749	14,729
Prior	45,737	69,768
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	269,652	254,341
Real Estate Loan | Agricultural | Pass
Credit Quality Information [Abstract]
Current fiscal year	29,531	73,630
Fiscal year before current fiscal year	101,049	34,412
Two years before current fiscal year	31,082	37,839
Three years before current fiscal year	39,931	16,138
Four years before current fiscal year	14,717	13,559
Prior	38,968	58,291
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	255,278	233,869
Real Estate Loan | Agricultural | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	825	1,845
Fiscal year before current fiscal year	282	3,970
Two years before current fiscal year	4,337	533
Three years before current fiscal year	422	469
Four years before current fiscal year	407	1,106
Prior	6,472	11,232
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	12,745	19,155
Real Estate Loan | Agricultural | Substandard
Credit Quality Information [Abstract]
Current fiscal year	0	0
Fiscal year before current fiscal year	0	0
Two years before current fiscal year	0	800
Three years before current fiscal year	707	208
Four years before current fiscal year	625	64
Prior	297	245
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	1,629	1,317
Real Estate Loan | Commercial
Credit Quality Information [Abstract]
Current fiscal year	67,998	373,082
Fiscal year before current fiscal year	485,480	238,459
Two years before current fiscal year	320,122	184,780
Three years before current fiscal year	233,337	161,567
Four years before current fiscal year	176,487	155,046
Prior	417,445	250,998
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	1,700,869	1,363,932
Real Estate Loan | Commercial | Pass
Credit Quality Information [Abstract]
Current fiscal year	67,044	368,750
Fiscal year before current fiscal year	480,974	237,119
Two years before current fiscal year	318,800	171,591
Three years before current fiscal year	223,168	148,283
Four years before current fiscal year	163,413	143,400
Prior	377,041	215,616
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	1,630,440	1,284,759
Real Estate Loan | Commercial | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	954	2,469
Fiscal year before current fiscal year	2,712	1,300
Two years before current fiscal year	1,285	6,108
Three years before current fiscal year	3,268	11,262
Four years before current fiscal year	11,070	6,741
Prior	24,347	16,947
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	43,636	44,827
Real Estate Loan | Commercial | Substandard
Credit Quality Information [Abstract]
Current fiscal year	0	1,863
Fiscal year before current fiscal year	1,794	40
Two years before current fiscal year	37	7,081
Three years before current fiscal year	6,901	2,022
Four years before current fiscal year	2,004	4,905
Prior	16,057	18,435
Revolving Loans	0	0
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	26,793	34,346
1-4 Family | Real Estate Loan | Residential Properties
Credit Quality Information [Abstract]
Current fiscal year	29,261	81,854
Fiscal year before current fiscal year	115,406	32,532
Two years before current fiscal year	32,978	40,601
Three years before current fiscal year	42,532	27,665
Four years before current fiscal year	24,894	28,919
Prior	132,140	72,036
Revolving Loans	35,259	42,155
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	412,470	325,762
1-4 Family | Real Estate Loan | Residential Properties | Pass
Credit Quality Information [Abstract]
Current fiscal year	28,885	81,366
Fiscal year before current fiscal year	114,918	29,695
Two years before current fiscal year	29,974	38,163
Three years before current fiscal year	40,369	23,086
Four years before current fiscal year	20,251	26,676
Prior	117,623	62,942
Revolving Loans	34,265	40,363
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	386,285	302,291
1-4 Family | Real Estate Loan | Residential Properties | Special Mention
Credit Quality Information [Abstract]
Current fiscal year	0	192
Fiscal year before current fiscal year	189	2,142
Two years before current fiscal year	2,136	523
Three years before current fiscal year	349	2,720
Four years before current fiscal year	2,714	247
Prior	1,190	1,578
Revolving Loans	57	293
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	6,635	7,695
1-4 Family | Real Estate Loan | Residential Properties | Substandard
Credit Quality Information [Abstract]
Current fiscal year	376	296
Fiscal year before current fiscal year	299	695
Two years before current fiscal year	868	1,915
Three years before current fiscal year	1,814	1,859
Four years before current fiscal year	1,929	1,996
Prior	13,327	7,516
Revolving Loans	937	1,499
Loans Receivable Aging Analysis [Abstract]
Total Loans Receivable	$ 19,550	$ 15,776

XML

Loans and Allowance for Credit Losses - Loan Portfolio Aging Analysis (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Loans Receivable Aging Analysis [Abstract]
Total Past Due	$ 15,436	$ 13,849
Current	3,927,663	3,124,570
Total Loans Receivable	3,943,099	3,138,419
Total Loans> 90 Days &Accruing	0	0
Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	10,657	9,372
Current	2,537,710	2,057,142
Total Loans Receivable	2,548,367	2,066,514
Total Loans> 90 Days &Accruing	0	0
Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	355	128
Current	165,021	122,351
Total Loans Receivable	165,376	122,479
Total Loans> 90 Days &Accruing	0	0
Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	34	1,232
Current	269,618	253,109
Total Loans Receivable	269,652	254,341
Total Loans> 90 Days &Accruing	0	0
Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Past Due	5,158	4,259
Current	407,312	321,503
Total Loans Receivable	412,470	325,762
Total Loans> 90 Days &Accruing	0	0
Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,137	0
Current	296,847	189,632
Total Loans Receivable	297,984	189,632
Total Loans> 90 Days &Accruing	0	0
Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	3,973	3,753
Current	1,398,912	1,170,547
Total Loans Receivable	1,402,885	1,174,300
Total Loans> 90 Days &Accruing	0	0
Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	2,300	279
Current	118,770	137,073
Total Loans Receivable	121,070	137,352
Total Loans> 90 Days &Accruing	0	0
Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	2,112	3,854
Current	1,015,288	734,459
Total Loans Receivable	1,017,400	738,313
Total Loans> 90 Days &Accruing	0	0
Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	308	344
Current	91,397	77,658
Total Loans Receivable	91,705	78,002
Total Loans> 90 Days &Accruing	0	0
All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	59	0
Current	164,498	118,238
Total Loans Receivable	164,557	118,238
Total Loans> 90 Days &Accruing	0	0
Financial Asset, 30 to 59 Days Past Due
Loans Receivable Aging Analysis [Abstract]
Total Past Due	5,193	7,551
Financial Asset, 30 to 59 Days Past Due | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	2,324	4,937
Financial Asset, 30 to 59 Days Past Due | Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	227	0
Financial Asset, 30 to 59 Days Past Due | Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	1,198
Financial Asset, 30 to 59 Days Past Due | Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,212	1,121
Financial Asset, 30 to 59 Days Past Due | Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Past Due	39	0
Financial Asset, 30 to 59 Days Past Due | Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	846	2,618
Financial Asset, 30 to 59 Days Past Due | Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	2,153	43
Financial Asset, 30 to 59 Days Past Due | Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	535	2,426
Financial Asset, 30 to 59 Days Past Due | Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	122	145
Financial Asset, 30 to 59 Days Past Due | All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	59	0
Financial Asset, 60 to 89 Days Past Due
Loans Receivable Aging Analysis [Abstract]
Total Past Due	5,096	1,538
Financial Asset, 60 to 89 Days Past Due | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	4,664	1,480
Financial Asset, 60 to 89 Days Past Due | Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	0
Financial Asset, 60 to 89 Days Past Due | Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	34
Financial Asset, 60 to 89 Days Past Due | Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Past Due	2,400	1,105
Financial Asset, 60 to 89 Days Past Due | Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,098	0
Financial Asset, 60 to 89 Days Past Due | Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,166	341
Financial Asset, 60 to 89 Days Past Due | Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	125	0
Financial Asset, 60 to 89 Days Past Due | Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	257	8
Financial Asset, 60 to 89 Days Past Due | Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	50	50
Financial Asset, 60 to 89 Days Past Due | All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	0
Financial Asset, Equal to or Greater than 90 Days Past Due
Loans Receivable Aging Analysis [Abstract]
Total Past Due	5,147	4,760
Financial Asset, Equal to or Greater than 90 Days Past Due | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	3,669	2,955
Financial Asset, Equal to or Greater than 90 Days Past Due | Construction and Land Development | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	128	128
Financial Asset, Equal to or Greater than 90 Days Past Due | Agricultural | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	34	0
Financial Asset, Equal to or Greater than 90 Days Past Due | Residential Properties | Real Estate Loan | 1-4 Family
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,546	2,033
Financial Asset, Equal to or Greater than 90 Days Past Due | Residential Properties | Real Estate Loan | Multifamily
Loans Receivable Aging Analysis [Abstract]
Total Past Due	0	0
Financial Asset, Equal to or Greater than 90 Days Past Due | Commercial | Real Estate Loan
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,961	794
Financial Asset, Equal to or Greater than 90 Days Past Due | Agricultural Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	22	236
Financial Asset, Equal to or Greater than 90 Days Past Due | Commercial and Industrial Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	1,320	1,420
Financial Asset, Equal to or Greater than 90 Days Past Due | Consumer Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	136	149
Financial Asset, Equal to or Greater than 90 Days Past Due | All Other Loans
Loans Receivable Aging Analysis [Abstract]
Total Past Due	$ 0	$ 0

XML

Loans and Allowance for Credit Losses - Impaired Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Loans with a specific allowance:
Recorded Balance	$ 26,259	$ 21,598
Unpaid Principal Balance	28,915	23,601
Specific Allowance	2,715	1,931
Loans without a specific allowance:
Recorded Balance	6,677	7,386
Unpaid Principal Balance	10,039	8,172
Total loans:
Recorded Balance	32,936	28,984
Unpaid Principal Balance	38,954	31,773
Real Estate Loan
Loans with a specific allowance:
Recorded Balance	20,621	17,963
Unpaid Principal Balance	21,539	18,381
Specific Allowance	1,718	1,267
Loans without a specific allowance:
Recorded Balance	5,213	5,602
Unpaid Principal Balance	6,250	6,097
Total loans:
Recorded Balance	25,834	23,565
Unpaid Principal Balance	27,789	24,478
Construction and Land Development | Real Estate Loan
Loans with a specific allowance:
Recorded Balance	573	516
Unpaid Principal Balance	573	516
Specific Allowance	303	246
Loans without a specific allowance:
Recorded Balance	160	162
Unpaid Principal Balance	173	175
Total loans:
Recorded Balance	733	678
Unpaid Principal Balance	746	691
Agricultural | Real Estate Loan
Loans with a specific allowance:
Recorded Balance	0	0
Unpaid Principal Balance	0	0
Specific Allowance	0	0
Loans without a specific allowance:
Recorded Balance	374	359
Unpaid Principal Balance	374	359
Total loans:
Recorded Balance	374	359
Unpaid Principal Balance	374	359
Residential Properties | Real Estate Loan | 1-4 Family
Loans with a specific allowance:
Recorded Balance	5,817	4,005
Unpaid Principal Balance	5,990	4,157
Specific Allowance	163	158
Loans without a specific allowance:
Recorded Balance	3,971	4,262
Unpaid Principal Balance	4,692	4,715
Total loans:
Recorded Balance	9,788	8,267
Unpaid Principal Balance	10,682	8,872
Residential Properties | Real Estate Loan | Multifamily
Loans with a specific allowance:
Recorded Balance	1,914	1,914
Unpaid Principal Balance	1,914	1,914
Specific Allowance	0	0
Loans without a specific allowance:
Recorded Balance	258	267
Unpaid Principal Balance	259	267
Total loans:
Recorded Balance	2,172	2,181
Unpaid Principal Balance	2,173	2,181
Commercial | Real Estate Loan
Loans with a specific allowance:
Recorded Balance	12,317	11,528
Unpaid Principal Balance	13,062	11,794
Specific Allowance	1,252	863
Loans without a specific allowance:
Recorded Balance	450	552
Unpaid Principal Balance	752	581
Total loans:
Recorded Balance	12,767	12,080
Unpaid Principal Balance	13,814	12,375
Agricultural Loans
Loans with a specific allowance:
Recorded Balance	0	0
Unpaid Principal Balance	228	228
Specific Allowance	0	0
Loans without a specific allowance:
Recorded Balance	262	659
Unpaid Principal Balance	34	431
Total loans:
Recorded Balance	262	659
Unpaid Principal Balance	262	659
Commercial and Industrial Loans
Loans with a specific allowance:
Recorded Balance	5,430	3,523
Unpaid Principal Balance	6,996	4,878
Specific Allowance	808	664
Loans without a specific allowance:
Recorded Balance	973	907
Unpaid Principal Balance	3,026	1,331
Total loans:
Recorded Balance	6,403	4,430
Unpaid Principal Balance	10,022	6,209
Consumer Loans
Loans with a specific allowance:
Recorded Balance	182	112
Unpaid Principal Balance	126	114
Specific Allowance	163	0
Loans without a specific allowance:
Recorded Balance	229	218
Unpaid Principal Balance	729	313
Total loans:
Recorded Balance	411	330
Unpaid Principal Balance	855	427
All Other Loans
Loans with a specific allowance:
Recorded Balance	26	0
Unpaid Principal Balance	26	0
Specific Allowance	26	$ 0
Loans without a specific allowance:
Recorded Balance	26
Unpaid Principal Balance	26
Total loans:
Recorded Balance	26
Unpaid Principal Balance	$ 26

XML

Loans and Allowance for Credit Losses - Average Recorded Investment and Interest Income Recognized on Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	$ 34,199	$ 31,294
Interest Income Recognized	63	71
Real Estate Loan
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	27,018	22,388
Interest Income Recognized	56	69
Construction and Land Development | Real Estate Loan
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	754	600
Interest Income Recognized	5	8
Agricultural | Real Estate Loan
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	957	1,202
Interest Income Recognized	0	0
Residential Properties | Real Estate Loan | 1-4 Family
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	9,857	8,997
Interest Income Recognized	13	18
Residential Properties | Real Estate Loan | Multifamily
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	2,294	3,323
Interest Income Recognized	0	1
Commercial | Real Estate Loan
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	13,156	8,266
Interest Income Recognized	38	42
Agricultural Loans
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	262	960
Interest Income Recognized	6	0
Commercial and Industrial Loans
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	6,455	7,402
Interest Income Recognized	1	2
Consumer Loans
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	438	544
Interest Income Recognized	0	0
All Other Loans
Average recorded investment and interest income recognized [Abstract]
Average Investment in Impaired Loans	26	0
Interest Income Recognized	$ 0	$ 0

XML

Loans and Allowance for Credit Losses - Amortized Cost Basis of Loans on Nonaccrual Status and Nonaccrual Loans Individually Evaluated (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	$ 17,801	$ 21,457
Financing Receivable, Nonaccrual	27,877	23,750
Construction and Land Development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	160	162
Financing Receivable, Nonaccrual	225	162
Agricultural Real Estate Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	374	359
Financing Receivable, Nonaccrual	374	359
1-4 Family Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	7,116	6,747
Financing Receivable, Nonaccrual	8,771	6,930
Multifamily Residential Properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	2,173	2,181
Financing Receivable, Nonaccrual	2,173	2,181
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	3,780	7,345
Financing Receivable, Nonaccrual	9,516	8,760
Loans Secured by Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	13,603	16,794
Financing Receivable, Nonaccrual	21,059	18,392
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	262	659
Financing Receivable, Nonaccrual	262	659
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	3,641	3,677
Financing Receivable, Nonaccrual	6,137	4,372
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	295	327
Financing Receivable, Nonaccrual	394	327
All Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Nonaccrual, No Allowance	0	0
Financing Receivable, Nonaccrual	$ 25	$ 0

XML

Loans and Allowance for Credit Losses - Recorded Balance of Troubled Debt Restructurings (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	$ 8,689	$ 9,502
Financing Receivable Modifications Performing Recorded Investment	4,103	4,373	$ 4,400
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	5,975	6,773
Financing Receivable Modifications Performing Recorded Investment	4,031	4,313
Residential Properties | Real Estate Loan | 1-4 Family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	1,381	1,603
Financing Receivable Modifications Performing Recorded Investment	1,004	1,268
Commercial | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	4,594	5,170
Financing Receivable Modifications Performing Recorded Investment	3,027	3,045
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	228	228
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	2,362	2,389
Financing Receivable Modifications Performing Recorded Investment	55	58
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled Debt Restructurings Balance	124	112
Financing Receivable Modifications Performing Recorded Investment	$ 17	$ 2

XML

Loans and Allowance for Credit Losses - Loans Modified as Troubled Debt Restructurings During Period (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) Modification	Mar. 31, 2020 USD ($) Modification
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	2	3
Financing Receivables, Modifications during Period, Balance | $	$ 16	$ 323
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	0	1
Financing Receivables, Modifications during Period, Balance | $	$ 0	$ 305
Commercial Real Estate | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	0	1
Financing Receivables, Modifications during Period, Balance | $	$ 0	$ 305
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	0	1
Financing Receivables, Modifications during Period, Balance | $	$ 0	$ 7
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivables, Modifications during Period, Number | Modification	2	1
Financing Receivables, Modifications during Period, Balance | $	$ 16	$ 11

XML

Loans and Allowance for Credit Losses - Summary of Purchased Credit Deteriorated (PCD) Loans (Details) - LINCO Bancshares, Inc. - USD ($) $ in Thousands		3 Months Ended
	Feb. 22, 2021	Mar. 31, 2021
Summary Of Purchased Credit Deteriorated Loans [Line Items]
Purchase price of loans at acquisition		$ 64,647
Allowance for credit losses at acquisition	$ (2,000)	(2,074)
Non-credit discount/(premium) at acquisition		(187)
Fair value of acquired loans at acquisition		$ 62,386

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Finite Lived Intangible Assets [Line Items]
Goodwill, Gross Carrying Value	$ 117,708	$ 108,752
Goodwill, Accumulated Amortization	3,760	3,760
Goodwill and Intangible Assets, Gross Carrying Value	172,005	160,511
Goodwill and Intangible Assets, Accumulated Amortization	33,950	32,907
Intangibles from Branch Acquisition
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Gross Carrying Value	3,015	3,015
Intangible Assets, Accumulated Amortization	3,015	3,015
Core Deposit Intangibles
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Gross Carrying Value	34,503	32,355
Intangible Assets, Accumulated Amortization	21,620	20,910
Other Intangibles
Finite Lived Intangible Assets [Line Items]
Intangible Assets, Gross Carrying Value	16,779	16,389
Intangible Assets, Accumulated Amortization	$ 5,555	$ 5,222

XML

Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Feb. 22, 2021	Dec. 31, 2020
Finite Lived Intangible Assets [Line Items]
Goodwill	$ 113,948		$ 104,992
LINCO Bancshares, Inc.
Finite Lived Intangible Assets [Line Items]
Goodwill	$ 8,956	$ 8,956

XML

Goodwill and Intangible Assets - Schedule of Reconciliation of Purchase Price Paid for Acquisition and Goodwill Recorded (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Feb. 22, 2021	Dec. 31, 2020
Less purchase accounting adjustments:
Goodwill	$ 113,948		$ 104,992
LINCO Bancshares, Inc.
Goodwill [Line Items]
Unallocated purchase price	14,992
Less purchase accounting adjustments:
Fair value of securities	264
Fair value of loans, net	(2,818)
Fair value of other real estate owned	915
Fair value of premises and equipment	6,360
Fair value of time deposits	(2,081)
Fair value of FHLB advances	(975)
Core deposit intangible	2,025
Other assets	2,530
Other liabilities	(184)
Goodwill, purchase accounting adjustments	6,036
Goodwill	$ 8,956	$ 8,956

XML

Goodwill and Intangible Assets - Intangible Assets Mortgage Servicing Rights (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Finite Lived Intangible Assets [Line Items]
Valuation reserve	$ (369,000)
Mortgage Servicing Rights
Finite Lived Intangible Assets [Line Items]
Beginning Balance	516,000	$ 1,444,000	$ 1,444,000
Valuation reserve	210,000	(18,000)	(273,000)
Mortgage servicing rights amortized	(177,000)	(126,000)	(593,000)
Interest only Strip	2,000	(4,000)	(62,000)
Ending Balance	$ 551,000	$ 1,296,000	$ 516,000

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Finite Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 1,220	$ 1,295
Core Deposit Intangibles
Finite Lived Intangible Assets [Line Items]
Amortization of intangible assets	710	843
Customer List Intangibles
Finite Lived Intangible Assets [Line Items]
Amortization of intangible assets	333	326
Mortgage Servicing Rights
Finite Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 177	$ 126

XML

Goodwill and Intangible Assets - Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Aggregate amortization expense:
For period 01/01/21-3/31/21	$ 1,220	$ 1,295
Estimated amortization expense:
For period 04/01/21-12/31/21	3,888
For year ended 12/31/22	3,885
For year ended 12/31/23	3,534
For year ended 12/31/24	3,234
For year ended 12/31/25	2,891
For year ended 12/31/26	$ 2,215

XML

Repurchase Agreements and Other Borrowings - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Repurchase Agreements And Other Borrowings [Abstract]
Securities sold under agreements to repurchase	$ 212,503,000	$ 206,937,000
Securities sold under agreements to repurchase increase (decrease)	$ 5,600,000
Securities sold under agreements to repurchase weighted average rate	0.15%
FHLB borrowings	$ 115,900,000	$ 94,000,000
FHLB premium on borrowing	$ 921,000

XML

Repurchase Agreements and Other Borrowings - Schedule of Securities Financing Transactions (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Assets Sold Under Agreements To Repurchase [Line Items]
Securities pledged to Repurchase Agreements	$ 212,503	$ 206,937
U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Assets Sold Under Agreements To Repurchase [Line Items]
Securities pledged to Repurchase Agreements	55,619	37,423
Mortgage-backed Securities: GSE Residential
Assets Sold Under Agreements To Repurchase [Line Items]
Securities pledged to Repurchase Agreements	156,884	168,480
Miscellaneous
Assets Sold Under Agreements To Repurchase [Line Items]
Securities pledged to Repurchase Agreements	$ 0	$ 1,034

XML

Repurchase Agreements and Other Borrowings - Federal Home Loan Bank, Advances (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 115,900,000	$ 94,000,000
Interest Rate 1.85% - Maturity Date April 12, 2021
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	5 years
Federal Home Loan Bank, Advances, Interest Rate	1.85%
Federal Home Loan Bank, Advances, Maturity Date	Apr. 12, 2021
Interest Rate 2.00% - Maturity Date May 3, 2021
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 4,000,000
Federal Home Loan Bank Advances, Term (in years)	1 year
Federal Home Loan Bank, Advances, Interest Rate	2.00%
Federal Home Loan Bank, Advances, Maturity Date	May 03, 2021
Interest Rate 2.55% - Maturity Date October 1, 2021
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	7 years
Federal Home Loan Bank, Advances, Interest Rate	2.55%
Federal Home Loan Bank, Advances, Maturity Date	Oct. 01, 2021
Interest Rate 2.71% - Maturity Date March 21, 2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	5 years
Federal Home Loan Bank, Advances, Interest Rate	2.71%
Federal Home Loan Bank, Advances, Maturity Date	Mar. 21, 2022
Interest Rate 2.40% - Maturity Date January 9, 2023
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	8 years
Federal Home Loan Bank, Advances, Interest Rate	2.40%
Federal Home Loan Bank, Advances, Maturity Date	Jan. 09, 2023
Interest Rate 2.41% - Maturity Date May 31, 2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years
Federal Home Loan Bank, Advances, Interest Rate	2.41%
Federal Home Loan Bank, Advances, Maturity Date	May 31, 2022
Interest Rate 2.12% - Maturity Date June 7, 2022
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years
Federal Home Loan Bank, Advances, Interest Rate	2.12%
Federal Home Loan Bank, Advances, Maturity Date	Jun. 07, 2022
Interest Rate 2.44% - Maturity Date May 30, 2023
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	4 years
Federal Home Loan Bank, Advances, Interest Rate	2.44%
Federal Home Loan Bank, Advances, Maturity Date	May 30, 2023
Interest Rate 1.51% - Maturity Date July 31, 2023
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years 6 months
Federal Home Loan Bank, Advances, Interest Rate	1.51%
Federal Home Loan Bank, Advances, Maturity Date	Jul. 31, 2023
Interest Rate 0.77% - Maturity Date September 11, 2023
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	3 years 6 months
Federal Home Loan Bank, Advances, Interest Rate	0.77%
Federal Home Loan Bank, Advances, Maturity Date	Sep. 11, 2023
Interest Rate 1.45% - Maturity Date December 31, 2024
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 10,000,000
Federal Home Loan Bank Advances, Term (in years)	5 years
Federal Home Loan Bank, Advances, Interest Rate	1.45%
Federal Home Loan Bank, Advances, Maturity Date	Dec. 31, 2024
Interest Rate 0.91% - Maturity Date March 10, 2025
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	5 years
Federal Home Loan Bank, Advances, Interest Rate	0.91%
Federal Home Loan Bank, Advances, Maturity Date	Mar. 10, 2025
Interest Rate 2.64% - Maturity Date December 23, 2025
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 6,940,511
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	2.64%
Federal Home Loan Bank, Advances, Maturity Date	Dec. 23, 2025
Interest Rate 1.14% - Maturity Date October 3, 2029
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	1.14%
Federal Home Loan Bank, Advances, Maturity Date	Oct. 03, 2029
Interest Rate 1.15% - Maturity Date October 3, 2029
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	1.15%
Federal Home Loan Bank, Advances, Maturity Date	Oct. 03, 2029
Interest Rate 1.12% - Maturity Date October 3, 2029
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 5,000,000
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	1.12%
Federal Home Loan Bank, Advances, Maturity Date	Oct. 03, 2029
Interest Rate 1.39% - Maturity Date December 31, 2029
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 10,000,000
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	1.39%
Federal Home Loan Bank, Advances, Maturity Date	Dec. 31, 2029
Interest Rate 1.41% - Maturity Date December 31, 2029
Federal Home Loan Bank Advances Branch Of F H L B Bank [Line Items]
Federal Home Loan Bank Advances	$ 15,000,000
Federal Home Loan Bank Advances, Term (in years)	10 years
Federal Home Loan Bank, Advances, Interest Rate	1.41%
Federal Home Loan Bank, Advances, Maturity Date	Dec. 31, 2029

XML

Fair Value of Assets and Liabilities - Assets Measured at Fair Value on Recurring Basis (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Available-for-sale securities:
Total available-for-sale securities	$ 1,087,948,000	$ 879,240,000
Equity securities, at fair value	300,000	218,000
U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Available-for-sale securities:
Total available-for-sale securities	171,530,000	127,069,000
Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	257,719,000	249,844,000
Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	621,952,000	491,348,000
Other Securities
Available-for-sale securities:
Total available-for-sale securities	36,747,000	10,979,000
Fair Value, Recurring
Available-for-sale securities:
Total available-for-sale securities	1,087,948,000	879,240,000
Equity securities, at fair value	300,000	218,000
Derivative assets, Interest rate swaps	262,000	1,399,000
Total assets	1,088,510,000	880,857,000
Derivative liabilities, Interest rate swaps	1,013,000	2,892,000
Fair Value, Recurring | U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Available-for-sale securities:
Total available-for-sale securities	171,530,000	127,069,000
Fair Value, Recurring | Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	257,719,000	249,844,000
Fair Value, Recurring | Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	621,952,000	491,348,000
Fair Value, Recurring | Other Securities
Available-for-sale securities:
Total available-for-sale securities	36,747,000	10,979,000
Quoted Prices in Active Markets for Identical Assets (Level 1)
Available-for-sale securities:
Total available-for-sale securities	0	0
Equity securities, at fair value	300,000	218,000
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring
Available-for-sale securities:
Total available-for-sale securities	0	0
Equity securities, at fair value	300,000	218,000
Derivative assets, Interest rate swaps	0	0
Total assets	300,000	218,000
Derivative liabilities, Interest rate swaps	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Available-for-sale securities:
Total available-for-sale securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | Other Securities
Available-for-sale securities:
Total available-for-sale securities	0	0
Significant Other Observable Inputs (Level 2)
Available-for-sale securities:
Total available-for-sale securities	1,087,334,000	878,446,000
Equity securities, at fair value	0	0
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring
Available-for-sale securities:
Total available-for-sale securities	1,087,334,000	878,446,000
Equity securities, at fair value	0	193,000
Derivative assets, Interest rate swaps	262,000	1,399,000
Total assets	1,087,596,000	880,038,000
Derivative liabilities, Interest rate swaps	1,013,000	2,892,000
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Available-for-sale securities:
Total available-for-sale securities	171,530,000	127,069,000
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	257,105,000	249,050,000
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	621,952,000	491,348,000
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | Other Securities
Available-for-sale securities:
Total available-for-sale securities	36,747,000	10,979,000
Significant Unobservable Inputs (Level 3)
Available-for-sale securities:
Total available-for-sale securities	614,000	794,000
Equity securities, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring
Available-for-sale securities:
Total available-for-sale securities	614,000	794,000
Equity securities, at fair value	0	0
Derivative assets, Interest rate swaps	0	0
Total assets	614,000	794,000
Derivative liabilities, Interest rate swaps	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | U.S. Treasury Securities and Obligations of U.S. Government Corporations & Agencies
Available-for-sale securities:
Total available-for-sale securities	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Obligations of States and Political Subdivisions
Available-for-sale securities:
Total available-for-sale securities	614,000	794,000
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Mortgage-backed Securities
Available-for-sale securities:
Total available-for-sale securities	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring | Other Securities
Available-for-sale securities:
Total available-for-sale securities	$ 0	$ 0

XML

Fair Value of Assets and Liabilities - Fair Value of Assets Measured on a Recurring Basis Using Significant Unobservable Inputs (Details) - Obligations of States and Political Subdivisions - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 794	$ 973
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Total gains or losses:
Included in net income	1	1
Included in other comprehensive income (loss)	0	0
Purchases, issuances, sales and settlements:
Purchases	0	0
Issuances	0	0
Sales	(181)	(184)
Settlements	0	0
Ending balance	614	790
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$ 0	$ 0

XML

Fair Value of Assets and Liabilities - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Unpaid Principal Balance	$ 28,915,000		$ 23,601,000
Recorded Balance	26,259,000		21,598,000
Allowance for Credit Losses	2,715,000		1,931,000
Other real estate owned	13,339,000		2,489,000
Mortgage servicing rights (MSR) impairment (recovery)	369,000
Mortgage Servicing Rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Finite-lived intangible assets, net	551,000	$ 1,296,000	516,000	$ 1,444,000
Mortgage servicing rights (MSR) impairment (recovery)	(210,000)	$ 18,000	$ 273,000
Fair Value, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Unpaid Principal Balance	15,429,000
Recorded Balance	2,696,000
Allowance for Credit Losses	12,733,000
Fair Value, Nonrecurring | Mortgage Servicing Rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Indefinite-lived contractual rights	920,000
Finite-lived intangible assets, net	551,000
Fair Value, Nonrecurring | Carrying Amount
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Other real estate owned	13,339,000
Fair Value, Nonrecurring | Fair Value
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Other real estate owned	$ 11,292,000

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Fair Value of Assets and Liabilities - Significant Assumptions Used in Valuation of Level 3 Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Impaired Loans (Collateral Dependent) | Minimum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans (collateral dependent)	0.00%	0.00%
Impaired Loans (Collateral Dependent) | Maximum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans (collateral dependent)	40.00%	40.00%
Impaired Loans (Collateral Dependent) | Weighted Average | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans (collateral dependent)	20.00%	20.00%
Foreclosed Assets Held-for-sale | Minimum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans (collateral dependent)	0.00%	0.00%
Foreclosed Assets Held-for-sale | Maximum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans (collateral dependent)	40.00%	40.00%
Foreclosed Assets Held-for-sale | Weighted Average | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans (collateral dependent)	35.00%	35.00%
Mortgage Servicing Rights | Minimum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights	242.00%	242.00%
Mortgage Servicing Rights | Maximum | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights	438.00%	441.00%
Mortgage Servicing Rights | Weighted Average | Level 3 | Third Party Valuations
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Mortgage servicing rights	304.00%	384.00%
Fair Value, Nonrecurring | Impaired Loans (Collateral Dependent)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	$ 12,733	$ 14,876
Fair Value, Nonrecurring | Foreclosed Assets Held-for-sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	11,292	290
Fair Value, Nonrecurring | Mortgage Servicing Rights
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Assets, Fair Value	$ 551	$ 517

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Fair Value of Assets and Liabilities - Summary of Estimated Fair Values of Company Financial Instruments (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Financial Assets
Total available-for-sale securities	$ 1,087,948,000	$ 879,240,000
Held-to-maturity securities	7,125,000	5,119,000
Equity securities	300,000	218,000
Fair Value, Inputs, Level 1 [Member]
Financial Assets
Cash and due from banks	408,226,000	415,973,000
Federal funds sold	1,321,000	1,308,000
Certificates of deposit investments	0	0
Total available-for-sale securities	0	0
Held-to-maturity securities	0	0
Equity securities	300,000	218,000
Loans held for sale	0	0
Loans net of allowance for credit losses	0	0
Interest receivable	0	0
Federal Reserve Bank stock	0	0
Federal Home Loan Bank stock	0	0
Financial Liabilities
Deposits	0	0
Securities sold under agreements to repurchase	0	0
Interest payable	0	0
Federal Home Loan Bank borrowings	0	0
Fair Value, Inputs, Level 1 [Member] | Subordinated Debt
Financial Liabilities
Subordinated debt, net	0	0
Fair Value, Inputs, Level 1 [Member] | Junior Subordinated Debentures
Financial Liabilities
Subordinated debt, net	0	0
Fair Value, Inputs, Level 2 [Member]
Financial Assets
Cash and due from banks	0	0
Federal funds sold	0	0
Certificates of deposit investments	2,695,000	2,695,000
Total available-for-sale securities	1,087,334,000	878,446,000
Held-to-maturity securities	7,125,000	5,119,000
Equity securities	0	0
Loans held for sale	4,693,000	1,924,000
Loans net of allowance for credit losses	0	0
Interest receivable	20,218,000	19,287,000
Federal Reserve Bank stock	9,401,000	9,401,000
Federal Home Loan Bank stock	5,450,000	5,450,000
Financial Liabilities
Deposits	3,926,107,000	3,215,715,000
Securities sold under agreements to repurchase	212,514,000	206,945,000
Interest payable	3,214,000	2,345,000
Federal Home Loan Bank borrowings	117,670,000	96,669,000
Fair Value, Inputs, Level 2 [Member] | Subordinated Debt
Financial Liabilities
Subordinated debt, net	94,289,000	94,253,000
Fair Value, Inputs, Level 2 [Member] | Junior Subordinated Debentures
Financial Liabilities
Subordinated debt, net	14,495,000	14,604,000
Level 3
Financial Assets
Cash and due from banks	0	0
Federal funds sold	0	0
Certificates of deposit investments	0	0
Total available-for-sale securities	614,000	794,000
Held-to-maturity securities	0	0
Equity securities	0	0
Loans held for sale	0	0
Loans net of allowance for credit losses	3,839,827,000	3,056,344,000
Interest receivable	0	0
Federal Reserve Bank stock	0	0
Federal Home Loan Bank stock	0	0
Financial Liabilities
Deposits	814,695,000	481,390,000
Securities sold under agreements to repurchase	0	0
Interest payable	0	0
Federal Home Loan Bank borrowings	0	0
Level 3 | Subordinated Debt
Financial Liabilities
Subordinated debt, net	0	0
Level 3 | Junior Subordinated Debentures
Financial Liabilities
Subordinated debt, net	0	0
Carrying Amount
Financial Assets
Cash and due from banks	408,226,000	415,973,000
Federal funds sold	1,321,000	1,308,000
Certificates of deposit investments	2,695,000	2,695,000
Total available-for-sale securities	1,087,948,000	879,240,000
Held-to-maturity securities	7,045,000	5,016,000
Equity securities	300,000	218,000
Loans held for sale	4,693,000	1,924,000
Loans net of allowance for credit losses	3,882,988,000	3,094,585,000
Interest receivable	20,218,000	19,287,000
Federal Reserve Bank stock	9,401,000	9,401,000
Federal Home Loan Bank stock	5,450,000	5,450,000
Financial Liabilities
Deposits	4,737,693,000	3,692,784,000
Securities sold under agreements to repurchase	212,503,000	206,937,000
Interest payable	3,214,000	2,345,000
Federal Home Loan Bank borrowings	116,861,000	93,969,000
Carrying Amount | Subordinated Debt
Financial Liabilities
Subordinated debt, net	94,289,000	94,253,000
Carrying Amount | Junior Subordinated Debentures
Financial Liabilities
Subordinated debt, net	19,069,000	19,027,000
Fair Value
Financial Assets
Cash and due from banks	408,226,000	415,973,000
Federal funds sold	1,321,000	1,308,000
Certificates of deposit investments	2,695,000	2,695,000
Total available-for-sale securities	1,087,948,000	879,240,000
Held-to-maturity securities	7,125,000	5,119,000
Equity securities	300,000	218,000
Loans held for sale	4,693,000	1,924,000
Loans net of allowance for credit losses	3,839,827,000	3,056,344,000
Interest receivable	20,218,000	19,287,000
Federal Reserve Bank stock	9,401,000	9,401,000
Federal Home Loan Bank stock	5,450,000	5,450,000
Financial Liabilities
Deposits	4,740,802,000	3,697,105,000
Securities sold under agreements to repurchase	212,514,000	206,945,000
Interest payable	3,214,000	2,345,000
Federal Home Loan Bank borrowings	117,670,000	96,669,000
Fair Value | Subordinated Debt
Financial Liabilities
Subordinated debt, net	94,289,000	94,253,000
Fair Value | Junior Subordinated Debentures
Financial Liabilities
Subordinated debt, net	$ 14,495,000	$ 14,604,000

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Business Combinations - Additional Information (Details) - USD ($)			3 Months Ended
	Feb. 22, 2021	Sep. 25, 2020	Mar. 31, 2021	Dec. 31, 2020
Business Acquisition [Line Items]
Common stock, par value (in dollars per share)			$ 4	$ 4
LINCO Bancshares, Inc.
Business Acquisition [Line Items]
Percentage of issued and outstanding shares acquired		100.00%
Common stock, par value (in dollars per share)		$ 1.00
Share Price		$ 4.00
Consideration payable in cash	$ 103,500,000	$ 103,500,000
Consideration payable in shares		1,262,246
Dividends paid		$ 13,000,000
Goodwill acquired during period	8,900,000
Pre-tax of acquisition costs	3,100,000		$ 2,600,000
Loans	828,976,000
Accreted to interest income over the remaining term of loans	11,100,000
Elimination of deferred fees and unearned discounts previously recorded by Providence Bank	1,700,000
Allowance for credit losses for loans identified as PCD	2,000,000		2,074,000
Purchased credit deteriorated loans			$ 64,647,000
Change in acquired time deposits	990,410,000
Change in FHLB advances	27,916,000
LINCO Bancshares, Inc. | Core Deposit Intangibles
Business Acquisition [Line Items]
Intangible assets fair value	$ 2,148,000
Intangible asset estimated useful life	10 years
LINCO Bancshares, Inc. | Fair Value Adjustments
Business Acquisition [Line Items]
Loans	$ (9,401,000)
Change in acquired time deposits	2,081,000
Change in FHLB advances	975,000
LINCO Bancshares, Inc. | Fair Value Adjustments | Core Deposit Intangibles
Business Acquisition [Line Items]
Intangible assets fair value	2,025,000
LINCO Bancshares, Inc. | Acquired Book Value
Business Acquisition [Line Items]
Loans	838,377,000
Purchased credit deteriorated loans	64,600,000
Change in acquired time deposits	988,329,000
Change in FHLB advances	26,941,000
LINCO Bancshares, Inc. | Acquired Book Value | Core Deposit Intangibles
Business Acquisition [Line Items]
Intangible assets fair value	$ 123,000

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Business Combinations - Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($)	Feb. 22, 2021	Sep. 25, 2020	Mar. 31, 2021	Dec. 31, 2020
Assets
Goodwill			$ 113,948,000	$ 104,992,000
LINCO Bancshares, Inc.
Assets
Cash and due from banks	$ 130,561,000
Investment Securities	119,498,000
Loans	828,976,000
Allowance for credit losses	(2,073,000)
Other real estate owned	10,891,000
Premises and equipment	28,259,000
Goodwill	8,956,000		$ 8,956,000
Other assets	45,433,000
Total assets acquired	1,173,443,000
Liabilities
Deposits	990,410,000
Securities sold under agreements to repurchase	0
FHLB advances	27,916,000
Other borrowings	0
Lease liability	794,000
Other liabilities	6,632,000
Total liabilities assumed	1,025,752,000
Net assets acquired	147,691,000
Consideration Paid
Consideration payable in cash	103,500,000	$ 103,500,000
Common stock	44,191,000
Total Consideration Paid	147,691,000
LINCO Bancshares, Inc. | Core Deposit Intangibles
Assets
Intangible assets	2,148,000
LINCO Bancshares, Inc. | Right of Use Asset
Assets
Intangible assets	794,000
LINCO Bancshares, Inc. | Acquired Book Value
Assets
Cash and due from banks	130,561,000
Investment Securities	119,234,000
Loans	838,377,000
Allowance for credit losses	(8,656,000)
Other real estate owned	8,435,000
Premises and equipment	23,440,000
Goodwill	0
Other assets	43,697,000
Total assets acquired	1,155,211,000
Liabilities
Deposits	988,329,000
Securities sold under agreements to repurchase	0
FHLB advances	26,941,000
Other borrowings	0
Lease liability	0
Other liabilities	7,242,000
Total liabilities assumed	1,022,512,000
Net assets acquired	132,699,000
LINCO Bancshares, Inc. | Acquired Book Value | Core Deposit Intangibles
Assets
Intangible assets	123,000
LINCO Bancshares, Inc. | Acquired Book Value | Right of Use Asset
Assets
Intangible assets	0
LINCO Bancshares, Inc. | Fair Value Adjustments
Assets
Cash and due from banks	0
Investment Securities	264,000
Loans	(9,401,000)
Allowance for credit losses	6,583,000
Other real estate owned	2,456,000
Premises and equipment	4,819,000
Goodwill	8,956,000
Other assets	1,736,000
Total assets acquired	18,232,000
Liabilities
Deposits	2,081,000
Securities sold under agreements to repurchase	0
FHLB advances	975,000
Other borrowings	0
Lease liability	794,000
Other liabilities	(610,000)
Total liabilities assumed	3,240,000
Net assets acquired	14,992,000
LINCO Bancshares, Inc. | Fair Value Adjustments | Core Deposit Intangibles
Assets
Intangible assets	2,025,000
LINCO Bancshares, Inc. | Fair Value Adjustments | Right of Use Asset
Assets
Intangible assets	$ 794,000

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Business Combinations - Unaudited Pro Forma Condensed Combined Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Business Combinations [Abstract]
Net interest income	$ 38,237	$ 40,626
Provision for loan losses	12,136	5,492
Non-interest income	17,749	17,651
Non-interest expense	37,659	32,060
Income before taxes	6,191	20,725
Income tax expense (benefit)	1,078	5,277
Net income (loss)	$ 5,113	$ 15,448
Earnings per share
Basic	$ 0.30	$ 0.86
Diluted	$ 0.29	$ 0.86
Basic weighted average shares o/s	17,299,927	17,955,429
Diluted weighted average shares o/s	17,352,947	18,002,337

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Leases - Additional Information (Details)	Mar. 31, 2021
Minimum
Lessee Lease Description [Line Items]
Renewal term	1 year
Maximum
Lessee Lease Description [Line Items]
Renewal term	25 years

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Leases - Summary of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020
Leases, Operating [Abstract]
Operating lease right-of-use assets	$ 17,424	$ 17,209	$ 16,542
Operating lease liabilities	$ 17,578	$ 17,351	$ 16,568
Weighted-average remaining lease term (in years)	6 years 9 months 18 days	7 years 3 months 18 days	7 years 1 month 6 days
Weighted-average discount rate	2.63%	2.85%	3.08%

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Leases - Summary of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2021	$ 2,226
2022	2,703
2023	2,364
2024	1,942
2025	1,629
Thereafter	9,150
Total lease payments	20,014
Less imputed interest	(2,436)
Operating lease liabilities	$ 17,578	$ 17,351	$ 16,568

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Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Lease, Cost [Abstract]
Operating lease cost	$ 708	$ 642
Short-term lease cost	35	46
Variable lease cost	137	169
Total lease cost	880	857
Income from subleases	(153)	(193)
Net lease cost	$ 727	$ 664

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Leases - Summary of Operating Lease Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Leases [Abstract]
Operating cash flows from operating leases	$ 711	$ 677

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Derivatives - Schedule of Derivative Instruments (Details) - Fair Value Hedging - Designated As Hedging Instrument - Interest Rate Swap Agreements - Other Liabilities - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Derivative [Line Items]
Derivative, Weighted Average Remaining Maturity (Years)	8 years 1 month 6 days	8 years 3 months 18 days
Derivative Liability, Notional Amount	$ 14,276	$ 14,334
Derivative Liability, Estimated Value	$ (1,013)	$ (2,892)

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Derivatives - Summary of Derivative Instruments, Gain (Loss) (Details) - Fair Value Hedging - Interest Rate Swap Agreements - Interest Income On Loans - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Derivative [Line Items]
Gain (Loss) on Derivative	$ (743)	$ (1,384)
Gain (Loss) on Hedged Item	$ 743	$ 1,384

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Derivatives - Summary of Hedged Instrument (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Hedged Instruments [Abstract]
Carrying Amount of the Hedged Asset	$ 13,525
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset	$ 751

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Derivatives - Summary of Non Hedge Instruments (Details) - Not Designated as Hedging Instrument - Interest Rate Swap Agreements $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Other Assets
Derivative [Line Items]
Derivative, Weighted Average Remaining Maturity (Years)	6 years 9 months 18 days
Derivative Assets, Notional Amount	$ 42,223
Derivative Assets, Estimated Value	$ 262
Other Liabilities
Derivative [Line Items]
Derivative, Weighted Average Remaining Maturity (Years)	6 years 9 months 18 days
Derivative Liability, Notional Amount	$ 42,223
Derivative Liability, Estimated Value	$ (262)