First Mid Bancshares

To fulfill the financial needs of our communities by being the premier technology-enabled community banking franchise in the Midwest.

First Mid Bancshares SWOT Analysis

Updated: October 4, 2025 • 2025-Q4 Analysis

How to Use This Analysis

This analysis for First Mid Bancshares was created using Alignment.io™ methodology - a proven strategic planning system trusted in over 75,000 strategic planning projects. We've designed it as a helpful companion for your team's strategic process, leveraging leading AI models to analyze publicly available data.

While this represents what AI sees from public data, you know your company's true reality. That's why we recommend using Alignment.io and The System of Alignment™ to conduct your strategic planning—using these AI-generated insights as inspiration and reference points to blend with your team's invaluable knowledge.

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The First Mid Bancshares SWOT analysis reveals a well-managed regional bank at a strategic crossroads. Its greatest strength is a disciplined M&A playbook, providing a clear path to inorganic growth. However, this is juxtaposed against a key weakness: an efficiency ratio that trails best-in-class peers, indicating operational drag. The primary opportunity lies in deepening the cross-sell between its banking, wealth, and insurance verticals—a synergy not yet fully realized. The most significant threat is persistent Net Interest Margin compression from intense deposit competition. To fulfill its mission, First Mid must leverage its M&A strength while aggressively automating operations and modernizing its digital channels to protect its core community banking franchise from both larger banks and nimble fintechs. The path forward requires balancing growth with rigorous cost discipline.

Commerce Bancshares Old National Bancorp Busey Bank Midland States Bancorp Local credit unions

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To fulfill the financial needs of our communities by being the premier technology-enabled community banking franchise in the Midwest.

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Strengths

M&A: Proven ability to identify, execute, & integrate acquisitions
DIVERSIFIED: Strong noninterest income from wealth and insurance
CAPITAL: Solid regulatory capital ratios provide a buffer for growth
CREDIT: Consistent, disciplined underwriting maintains asset quality
LOYALTY: Entrenched, loyal customer base in core rural markets

Weaknesses

EFFICIENCY: Efficiency ratio (~63%) lags more efficient peers (<55%)
SCALE: Lacks the scale and marketing budget of super-regional banks
DIGITAL: Digital offerings are functional but lack cutting-edge UX
FUNDING: Increased reliance on higher-cost wholesale funding sources
GEOGRAPHY: Revenue concentration in Illinois and Missouri economies

Opportunities

CROSS-SELL: Deepen relationships by selling wealth/insurance to bank clients
AUTOMATION: Use RPA and AI to reduce back-office operating expenses
EXPANSION: Acquire smaller banks in adjacent, faster-growing states
NIM: Potential for Net Interest Margin expansion in a stable rate environment
SPECIALTY: Grow specialty lending verticals like healthcare or C&I

Threats

COMPETITION: Intense deposit competition from national banks & credit unions
RATES: Prolonged inverted yield curve compressing net interest margin
RECESSION: Economic downturn in the Midwest impacting loan demand & quality
REGULATION: Scrutiny on M&A and interchange fees from regulators
CYBERSECURITY: Constant threat of sophisticated cyberattacks on data

Key Priorities

EFFICIENCY: Drive down efficiency ratio below 60% via tech/automation
GROWTH: Execute one accretive acquisition and deepen cross-sell synergy
DIGITAL: Modernize digital platform to improve UX and attract new clients
RISK: Proactively manage credit and funding risk in an uncertain economy

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First Mid Bancshares OKR

Updated: October 4, 2025 • 2025-Q4 Analysis

The First Mid Bancshares OKR plan is a focused and data-driven blueprint for creating shareholder value. It wisely prioritizes operational efficiency and risk management—the foundational elements required to earn the right to grow. The objectives are not generic; they are direct responses to the core challenges identified in the SWOT, particularly the need to improve the efficiency ratio and modernize the digital experience. The key results are specific, measurable, and outcome-oriented, shifting the focus from activity to impact. This plan provides the clarity and alignment needed to navigate the competitive banking landscape, ensuring that growth from future acquisitions is built upon a profitable and resilient operating model.

Commerce Bancshares Old National Bancorp Busey Bank Midland States Bancorp Local credit unions

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To fulfill the financial needs of our communities by being the premier technology-enabled community banking franchise in the Midwest.

OPERATIONAL LIFT

Achieve top-quartile operational efficiency in our peer group.

RATIO: Reduce the adjusted efficiency ratio from 63% to a sustainable sub-58% level by year-end.
AUTOMATION: Implement RPA in 3 key back-office functions to save 10,000 manual hours annually.
PROCUREMENT: Consolidate vendor contracts to achieve a $2M reduction in noninterest expenses.
BRANCH: Optimize branch network by consolidating 2 locations and enhancing digital service adoption.

ACCELERATE GROWTH

Fuel profitable growth through acquisition and deeper synergy.

ACQUISITION: Identify and sign a definitive agreement for one financially accretive bank acquisition.
CROSS-SELL: Increase number of banking clients with wealth/insurance products by 15% via new referral program.
SYNERGY: Fully realize all projected cost savings from the prior year's acquisition by Q3.
PIPELINE: Grow the commercial loan pipeline by 20% in newly acquired markets through targeted outreach.

DIGITAL FIRST

Deliver a modern, seamless digital customer experience.

ONBOARDING: Launch fully digital account opening, securing 5,000 new accounts through the channel.
ADOPTION: Increase active mobile banking users by 25% through a targeted marketing and education campaign.
RATINGS: Improve the average app store rating from 3.8 to 4.5 stars based on user feedback.
SUPPORT: Reduce routine customer service call volume by 20% by enhancing self-service digital features.

FORTRESS BALANCE SHEET

Proactively manage risk through a volatile economic cycle.

CREDIT: Maintain non-performing loans (NPLs) as a percentage of total loans below 0.50%.
FUNDING: Grow noninterest-bearing deposits by 5% to improve overall cost of funds.
STRESS: Conduct enterprise-wide stress tests for a severe downturn scenario with zero regulatory issues.
CONCENTRATION: Reduce the CRE concentration as a percentage of capital from 280% to below 260%.

METRICS

Return on Avg. Tangible Common Equity: >15%
Efficiency Ratio (FTE): <58%
Total Assets: >$8.5 Billion

VALUES

Community Focused
Integrity
Exceptional Service
Stewardship

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First Mid Bancshares Retrospective

AI-Powered Insights

Claude

Gemini

GPT

First Mid Bancshares Q4 2024 Earnings Release & 10-K Report
First Mid Bancshares Investor Presentation (Feb 2025)
Company Website (firstmid.com) Leadership and About Us pages
Public financial data sources (e.g., Yahoo Finance, SEC EDGAR)

Commerce Bancshares Old National Bancorp Busey Bank Midland States Bancorp Local credit unions

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To fulfill the financial needs of our communities by being the premier technology-enabled community banking franchise in the Midwest.

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What Went Well

LOANS: Solid organic loan growth in commercial real estate and C&I portfolios
CREDIT: Asset quality remained strong with very low net charge-offs
WEALTH: Wealth management division showed resilient fee income growth
CAPITAL: Maintained robust capital levels well above regulatory minimums
INTEGRATION: Successful systems conversion of most recent acquisition

Not So Well

NIM: Net interest margin compressed due to rising deposit and funding costs
EXPENSES: Noninterest expenses were elevated, impacting efficiency ratio
DEPOSITS: Noninterest-bearing deposit balances saw continued runoff
MORTGAGE: Mortgage banking income declined due to the high-rate environment
STOCK: Share price underperformed the regional bank index (KBW)

Learnings

FUNDING: The cost and mix of funding are now critical drivers of profitability
EFFICIENCY: Organic growth alone cannot overcome expense pressures; automation is key
RELATIONSHIPS: Core deposit relationships are more valuable than ever
DIVERSIFICATION: Noninterest income provides crucial stability in volatile rate cycles
COMMUNICATION: Market requires clear communication on path to improved efficiency

Action Items

COSTS: Implement a formal expense reduction program targeting Q2 completion
DEPOSITS: Launch new deposit-gathering products for commercial operating accounts
PRICING: Re-evaluate loan pricing models to better reflect funding costs
DIGITAL: Accelerate rollout of digital account opening to attract core deposits
INVESTORS: Clearly articulate efficiency improvement plan on next earnings call

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Organization	SWOT Analysis	OKR Plan	Top 6	Retrospective

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First Mid Bancshares Market

AI-Powered Insights

Claude

Gemini

GPT

First Mid Bancshares Q4 2024 Earnings Release & 10-K Report
First Mid Bancshares Investor Presentation (Feb 2025)
Company Website (firstmid.com) Leadership and About Us pages
Public financial data sources (e.g., Yahoo Finance, SEC EDGAR)

Founded: 1865
Market Share: Top 5 share in many core rural Illinois and Missouri markets.
Customer Base: SMBs, agricultural producers, and retail customers in the Midwest.
Category:
Regional Banking
SIC Code: 6021 National Commercial Banks
NAICS Code: 522110 Commercial Banking
Location: Mattoon, Illinois
Zip Code: 61938
Congressional District: IL-15 SPRINGFIELD
Employees: 1100

Competitors

Commerce Bancshares View Analysis

Old National Bancorp View Analysis

Busey Bank Request Analysis

Midland States Bancorp View Analysis

Local credit unions Request Analysis

Products & Services

No products or services data available

Distribution Channels

First Mid Bancshares Business Model Analysis

AI-Powered Insights

Claude

Gemini

GPT

First Mid Bancshares Q4 2024 Earnings Release & 10-K Report
First Mid Bancshares Investor Presentation (Feb 2025)
Company Website (firstmid.com) Leadership and About Us pages
Public financial data sources (e.g., Yahoo Finance, SEC EDGAR)

Problem

SMBs need capital & cash management
Families need mortgages and savings
High-net-worth clients need wealth advice
Communities need a local financial partner

Solution

Commercial loans and treasury services
Personalized retail banking products
Trust, investment, and insurance services
Community reinvestment and sponsorships

Key Metrics

Efficiency Ratio
Return on Average Assets (ROAA)
Net Interest Margin (NIM)
Loan & Deposit Growth

Unique

Integrated banking, wealth, insurance model
Deep agricultural lending expertise
Local decision-making and community focus
Proven M&A execution and integration

Advantage

Sticky, low-cost core deposit base
Long-term customer relationships and trust
Strong brand recognition in core markets
Economies of scale in rural markets

Channels

Branch network & relationship managers
Online and mobile banking platforms
Wealth advisors and insurance agents
Community involvement and events

Customer Segments

Small-to-medium sized businesses (SMBs)
Agricultural producers and businesses
Retail consumers and households
High-net-worth individuals and trusts

Costs

Salaries and employee benefits
Interest expense on deposits
Technology and data processing fees
Occupancy and equipment expenses

First Mid Bancshares Product Market Fit Analysis

Updated: October 4, 2025

First Mid simplifies the financial lives of businesses and families in our communities. It combines the personalized service of a local bank with sophisticated wealth management and insurance solutions, all accessible through modern digital platforms. This integrated approach, built on over 150 years of trust, provides clients with a clearer path to their financial goals, backed by experts who know their name.

RELATIONSHIP: We provide personalized service from local experts who know you.

INTEGRATION: We simplify your finances with banking, wealth, and insurance in one place.

TECHNOLOGY: We offer modern digital tools to bank anytime, anywhere, with ease.

Before State

Fragmented financial relationships
Impersonal service from large banks
Limited access to sophisticated wealth advice

After State

Integrated financial management
Trusted, personal banking relationship
Holistic view of financial health

Negative Impacts

Missed financial opportunities
Feeling like just another number
Inconvenience of managing multiple providers

Positive Outcomes

Optimized wealth and business growth
Confidence in financial decisions
Simplified financial life

Key Metrics

Customer Retention Rate

~94% (est.)

Net Promoter Score (NPS)

35 (est.)

Digital User Growth Rate

12% YoY (est.)

Customer Feedback/Reviews

~50 on G2 (via affiliates)

Repeat Purchase Rates

High via cross-selling services

Requirements

Proactive relationship managers
Seamless digital banking platform
Competitive product offerings

Why First Mid Bancshares

Empower local bankers with decision authority
Invest in user-friendly mobile/online tools
Integrate banking, wealth, insurance views

First Mid Bancshares Competitive Advantage

Our people know you and your community
One-stop shop for all financial needs
Decades of proven trust and stability

Proof Points

Over 150 years serving our communities
$4B+ in assets under management
Consistently high customer retention rates

First Mid Bancshares Market Positioning

AI-Powered Insights

Claude

Gemini

GPT

First Mid Bancshares Q4 2024 Earnings Release & 10-K Report
First Mid Bancshares Investor Presentation (Feb 2025)
Company Website (firstmid.com) Leadership and About Us pages
Public financial data sources (e.g., Yahoo Finance, SEC EDGAR)

Strategic pillars derived from our vision-focused SWOT analysis

Disciplined M&A to expand footprint & services.

Invest in tech to enhance customer experience & efficiency.

Deepen local relationships to drive organic growth.

Grow noninterest income from wealth & insurance.

What You Do

Provide comprehensive banking, wealth, and insurance solutions.

Target Market

Midwest communities, businesses, and agricultural producers.

Differentiation

Deep community roots and local decision-making
Integrated model of banking, wealth, and insurance

Revenue Streams

Net interest income from loans and investments
Fee income from wealth, insurance, and deposit services

First Mid Bancshares Operations and Technology

AI-Powered Insights

Claude

Gemini

GPT

First Mid Bancshares Q4 2024 Earnings Release & 10-K Report
First Mid Bancshares Investor Presentation (Feb 2025)
Company Website (firstmid.com) Leadership and About Us pages
Public financial data sources (e.g., Yahoo Finance, SEC EDGAR)

Company Operations

Organizational Structure: Bank holding company with distinct banking/wealth/insurance lines.
Supply Chain: Core banking tech from Fiserv, Jack Henry; local vendors.
Tech Patents: None, relies on partnerships with core banking software providers.
Website: https://www.firstmid.com/

Top Clients

Board Members

First Mid Bancshares Competitive Forces

Threat of New Entry

LOW: High regulatory hurdles, capital requirements, and compliance costs make starting a new bank (de novo) difficult and rare.

Supplier Power

MODERATE: Core tech providers (Fiserv, Jack Henry) have pricing power. Depositors (suppliers of capital) demand higher rates, increasing costs.

Buyer Power

HIGH: Customers have many banking choices and can easily compare rates online. Digital tools reduce switching costs for non-core relationships.

Threat of Substitution

MODERATE: Fintechs and neobanks offer substitutes for payments, lending, and investing, though they lack the full-service, trusted relationship.

Competitive Rivalry

HIGH: Intense rivalry from national banks (Chase, BofA), super-regionals (PNC, US Bank), and local credit unions for loans and deposits.

Analysis of AI Strategy

Updated: October 4, 2025 • 2025-Q4 Analysis

The First Mid Bancshares AI SWOT analysis highlights a significant opportunity to enhance operational efficiency and risk management. The bank's core strength is its rich, proprietary customer data across multiple financial services, which can fuel targeted AI applications. However, this is severely constrained by a lack of in-house AI talent and legacy infrastructure. The most immediate opportunities are not in moonshot projects, but in deploying proven AI for back-office automation (RPA) and partnering with specialized vendors for advanced fraud detection and underwriting tools. The primary threat is not building a foundational model, but falling behind agile fintechs who leverage AI to chip away at customer relationships with superior digital experiences. The strategic imperative is to be a smart AI adopter, focusing on high-ROI, low-risk applications that directly improve the efficiency ratio and strengthen the balance sheet.

Commerce Bancshares Old National Bancorp Busey Bank Midland States Bancorp Local credit unions

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To fulfill the financial needs of our communities by being the premier technology-enabled community banking franchise in the Midwest.

Strengths

DATA: Proprietary transaction & loan data for training targeted models
TRUST: Existing customer trust provides a channel for AI-driven advice
RELATIONSHIPS: Bankers can validate and personalize AI-generated insights
COMPLIANCE: Strong existing compliance framework to govern AI usage
DIVERSE: Data across banking, wealth, and insurance for holistic models

Weaknesses

TALENT: Lack of in-house AI/ML engineering and data science expertise
INFRASTRUCTURE: Legacy core systems and data silos hinder AI integration
SCALE: Insufficient data volume to train foundational models from scratch
BUDGET: Limited R&D budget for AI experimentation vs. large competitors
CULTURE: Risk-averse culture may be slow to adopt new AI technologies

Opportunities

AUTOMATION: Use GenAI to automate loan processing and compliance checks
UNDERWRITING: AI models to improve credit scoring and identify risk faster
MARKETING: Hyper-personalize product offers based on customer behavior
FRAUD: Real-time AI fraud detection to reduce losses and protect clients
SERVICE: AI-powered chatbots to handle routine customer service inquiries 24/7

Threats

FINTECH: Fintech competitors using AI to offer superior, cheaper products
SECURITY: AI models creating new vulnerabilities for cyberattacks
REGULATION: Regulatory uncertainty and bias concerns for AI in lending
COST: High cost of third-party AI solutions eroding profitability
OBSOLESCENCE: Falling behind competitors in AI adoption becomes a major risk

Key Priorities

AUTOMATION: Prioritize AI for back-office automation to reduce OpEx
PARTNERSHIP: Partner with fintechs for specific AI tools (e.g., fraud)
DATA: Invest in data governance to create a clean, unified data lake
RISK: Use AI to enhance fraud detection and credit monitoring capabilities

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First Mid Bancshares Financial Performance

AI-Powered Insights

Claude

Gemini

GPT

First Mid Bancshares Q4 2024 Earnings Release & 10-K Report
First Mid Bancshares Investor Presentation (Feb 2025)
Company Website (firstmid.com) Leadership and About Us pages
Public financial data sources (e.g., Yahoo Finance, SEC EDGAR)

Profit: Net Income (TTM): $78.2 Million

Market Cap: $650 Million

Stock Performance

Annual Report: Available on the Investor Relations website.

Debt: Subordinated Debt: ~$150 Million

ROI Impact: NIM compression and higher funding costs are impacting ROA and ROE.

SWOT Index

Composite strategic assessment with 10-year outlook

/ 100

Regional Powerhouse

ICM Index

STRATEGIC ADVISOR ASSESSMENT

First Mid scores as a strong Regional Powerhouse. Its North Star ambition is category-defining, but achievability is tempered by executional risk in digital transformation. The SWOT is balanced, reflecting a mature company with solid strengths but facing significant margin pressure. OKRs are high-quality and directly address weaknesses, boosting the score. The 10-year growth is modest, reflecting a mature industry and the primary growth lever being disciplined, serial M&A rather than exponential organic expansion.

SWOT Factors

Upside: 71.3 Risk: 70.0

OKR Impact

AI Leverage

Top 3 Strategic Levers

Drive efficiency ratio below 58% to fuel investment.

Execute accretive M&A to consolidate fragmented markets.

Modernize digital channels to defend and grow core deposits.

AI Disclosure

This report was created using the Alignment Method—our proprietary process for guiding AI to reveal how it interprets your business and industry. These insights are for informational purposes only and do not constitute financial, legal, tax, or investment advice.

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