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First Mid Bancshares

To serve communities as a trusted financial partner by becoming the premier Midwest regional institution

First Mid Bancshares logo

SWOT Analysis

Strategic pillars derived from our vision-focused SWOT analysis

1

COMMUNITY

Deep local market penetration and relationship banking

2

ACQUISITION

Strategic consolidation of smaller community banks

3

DIGITAL

Technology-enabled customer experience transformation

Updated: September 29, 2025 • 2025-Q3 Analysis

First Mid stands at a critical juncture where its traditional strengths in community banking and acquisition expertise must evolve rapidly. The bank's 160-year heritage and deep Illinois relationships provide a solid foundation, but digital transformation is no longer optional. The consolidation opportunity remains robust, yet each acquisition must now include technology capabilities, not just deposits. Success requires balancing the personal touch that differentiates community banking with the digital convenience customers increasingly demand. The geographic concentration in Illinois creates both intimate market knowledge and systemic risk. Management must accelerate the digital roadmap while preserving the relationship-centric culture that drives customer loyalty. The window for transformation is narrowing as fintech competitors gain traction in traditionally bank-dominated segments.

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To serve communities as a trusted financial partner by becoming the premier Midwest regional institution

Strengths

  • ACQUISITION: 15+ successful mergers driving geographic expansion and growth
  • COMMUNITY: Strong local market presence with 58 locations across Illinois
  • AGRICULTURAL: Specialized expertise in farm lending within core market areas
  • CAPITAL: Strong balance sheet with $3.4B assets supporting growth plans
  • RELATIONSHIPS: 160-year history building deep customer loyalty and trust

Weaknesses

  • SCALE: $3.4B asset size limits competitive positioning vs larger peers
  • TECHNOLOGY: Digital banking capabilities lag behind fintech competitors
  • CONCENTRATION: Heavy Illinois exposure creates geographic risk dependency
  • MARGINS: Net interest margin pressure from competitive rate environment
  • TALENT: Limited resources to attract top technology and digital expertise

Opportunities

  • CONSOLIDATION: Abundant community bank acquisition targets in region
  • DIGITAL: Accelerated technology adoption creates market share opportunities
  • WEALTH: Growing affluent customer base seeking comprehensive services
  • COMMERCIAL: Small business lending demand increasing in recovery market
  • ESG: Environmental and agricultural sustainability financing demand

Threats

  • FINTECH: Digital-first competitors capturing younger customer segments
  • REGULATION: Increasing compliance costs disproportionately impact smaller
  • RATES: Rising rate environment pressuring loan demand and credit quality
  • COMPETITION: Larger regional banks expanding into core Illinois markets
  • ECONOMY: Agricultural sector volatility impacts core customer base

Key Priorities

  • ACQUISITION: Accelerate strategic mergers to achieve scale and efficiency
  • DIGITAL: Invest heavily in technology to compete with fintech disruptors
  • DIVERSIFICATION: Expand geographic and sector exposure beyond Illinois
  • TALENT: Recruit technology leaders to drive digital transformation

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To serve communities as a trusted financial partner by becoming the premier Midwest regional institution

SCALE FAST

Accelerate strategic mergers to achieve competitive scale

  • TARGETS: Complete due diligence on 3 acquisition targets within 180 days timeline
  • INTEGRATION: Successfully close and integrate 1 strategic acquisition this fiscal year
  • SYNERGIES: Achieve $2.5M annual cost synergies from completed acquisitions
GO DIGITAL

Transform technology to compete with fintech disruptors

  • PLATFORM: Launch new digital banking platform with enhanced mobile capabilities
  • AUTOMATION: Implement AI chatbot handling 60% of routine customer inquiries
  • LENDING: Deploy automated credit decisioning for loans under $250K threshold
EXPAND REACH

Diversify geographic and sector exposure beyond Illinois

  • MARKETS: Enter 2 new adjacent state markets through strategic partnerships
  • SECTORS: Grow non-agricultural commercial lending by 25% year-over-year
  • WEALTH: Increase wealth management AUM by 35% through advisor recruitment
BUILD TALENT

Recruit technology leaders to drive transformation

  • LEADERSHIP: Hire Chief Technology Officer with fintech experience background
  • RETENTION: Achieve 90% retention rate for top-performing relationship managers
  • SKILLS: Train 80% of staff on new digital banking platform capabilities
METRICS
  • Return on Assets: 1.15%
  • Efficiency Ratio: 58%
  • Customer NPS: 55
VALUES
  • Community Focus
  • Relationship Banking

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First Mid Bancshares logo

First Mid Bancshares Retrospective

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To serve communities as a trusted financial partner by becoming the premier Midwest regional institution

What Went Well

  • LENDING: Commercial loan portfolio growth exceeded market expectations
  • DEPOSITS: Strong deposit retention despite competitive rate environment
  • CREDIT: Asset quality metrics remained stable through economic uncertainty
  • ACQUISITION: Successfully integrated recent bank acquisitions on schedule
  • CAPITAL: Maintained strong capital ratios above regulatory minimums

Not So Well

  • MARGINS: Net interest margin compression from competitive pressures
  • EXPENSES: Operating expenses increased faster than revenue growth rates
  • TECHNOLOGY: Digital banking platform upgrades delayed implementation
  • TALENT: Key personnel turnover in commercial lending division
  • EFFICIENCY: Cost-to-income ratio deteriorated from prior year levels

Learnings

  • RATES: Interest rate sensitivity requires better asset-liability mgmt
  • COMPETITION: Pricing pressure demands operational efficiency improvements
  • DIGITAL: Customer expectations for technology capabilities accelerating
  • TALENT: Retention strategies needed for key relationship managers
  • SCALE: Size limitations impact technology investment capabilities

Action Items

  • EFFICIENCY: Implement cost reduction initiatives across all divisions
  • TECHNOLOGY: Accelerate digital banking platform upgrade timeline
  • TALENT: Develop retention programs for high-performing staff members
  • DIVERSIFICATION: Expand revenue streams beyond traditional banking

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First Mid Bancshares logo

First Mid Bancshares Market

Competitors
Busey Bank logo
Busey Bank
Hickory Point Bank logo
Hickory Point Bank
CNB Bank logo
CNB Bank
First National Bank logo
First National Bank
Peoples Bank logo
Peoples Bank
Products & Services
No products or services data available
Distribution Channels

First Mid Bancshares Product Market Fit Analysis

Updated: September 29, 2025

First Mid serves Illinois communities with personalized banking solutions backed by 160 years of local expertise. The bank combines relationship-focused service with comprehensive financial products, helping individuals and businesses thrive through deep community knowledge and agricultural lending specialization that larger institutions cannot match.

1

Local expertise and relationships

2

Comprehensive financial solutions

3

Community commitment and accessibility



Before State

  • Limited banking options in rural markets
  • Impersonal big bank service

After State

  • Comprehensive local banking partner
  • Personalized relationship banking

Negative Impacts

  • Higher costs
  • Poor service quality

Positive Outcomes

  • Lower costs
  • Better service
  • Local expertise

Key Metrics

Customer satisfaction 4.2/5
NPS score 45

Requirements

  • Strong local presence
  • Experienced bankers

Why First Mid Bancshares

  • Community focus
  • Relationship building

First Mid Bancshares Competitive Advantage

  • Local market knowledge
  • Agricultural expertise

Proof Points

  • 85K customers
  • 58 locations
  • 160-year history
First Mid Bancshares logo

First Mid Bancshares Market Positioning

What You Do

  • Full-service community banking and wealth mgmt

Target Market

  • Individuals, businesses, ag customers in IL

Differentiation

  • Local market expertise
  • Agricultural lending focus

Revenue Streams

  • Net interest income
  • Fee-based services
First Mid Bancshares logo

First Mid Bancshares Operations and Technology

Company Operations
  • Organizational Structure: Public company with subsidiary banks
  • Supply Chain: Core banking systems and fintech partners
  • Tech Patents: Limited proprietary technology
  • Website: https://www.firstmid.com
Top Clients

First Mid Bancshares Competitive Forces

Threat of New Entry

MEDIUM: Regulatory barriers protect but fintech and credit unions enter with lower overhead cost structures

Supplier Power

MEDIUM: Core banking system vendors have moderate power but switching costs limit negotiation leverage significantly

Buyer Power

HIGH: Customers easily compare rates online and switch banks creating pressure on pricing and service delivery

Threat of Substitution

HIGH: Digital payment systems, fintech lending platforms, and investment apps replacing traditional banking

Competitive Rivalry

HIGH: Intense competition from regional banks, credit unions, and fintech startups in Illinois market with pricing pressure

First Mid Bancshares logo

Analysis of AI Strategy

Updated: September 29, 2025 • 2025-Q3 Analysis

First Mid's AI opportunity lies in augmenting its relationship banking model rather than replacing it. The bank's rich customer data and transaction history provide excellent training datasets for predictive models. Prioritizing AI in lending operations offers immediate ROI through faster credit decisions and improved risk assessment. However, implementation must be gradual and customer-centric, ensuring AI enhances rather than depersonalizes the community banking experience that differentiates First Mid from larger competitors.

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To serve communities as a trusted financial partner by becoming the premier Midwest regional institution

Strengths

  • DATA: Rich customer transaction history for predictive analytics models
  • RELATIONSHIPS: Personal banking data enables AI-powered personalization
  • OPERATIONS: Manual processes ripe for AI automation and efficiency gains

Weaknesses

  • INFRASTRUCTURE: Legacy core banking systems limit AI implementation
  • EXPERTISE: Limited in-house AI and machine learning talent and capabilities
  • INVESTMENT: Smaller scale constrains AI technology investment capacity

Opportunities

  • LENDING: AI credit decisioning can improve speed and accuracy significantly
  • CUSTOMER: Chatbots and virtual assistants enhance service availability
  • RISK: Fraud detection and regulatory compliance automation potential

Threats

  • FINTECH: AI-native competitors with superior recommendation engines
  • PRIVACY: Data security and customer privacy concerns limit AI adoption
  • REGULATORY: Banking AI regulations may constrain implementation options

Key Priorities

  • LENDING: Implement AI credit decisioning to improve loan processing speed
  • CUSTOMER: Deploy chatbots for routine service inquiries and support
  • OPERATIONS: Automate back-office processes using AI workflow tools

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First Mid Bancshares Financial Performance

Profit: $38.4 million net income
Market Cap: $685 million
Annual Report: Available on investor relations
Debt: $125 million subordinated debt
ROI Impact: 1.12% ROA target

SWOT Index

Composite strategic assessment with 10-year outlook

First Mid Bancshares logo
51.8 / 100
Market Consolidator
ICM Index
2.35×
STRATEGIC ADVISOR ASSESSMENT

First Mid represents a solid regional consolidator with proven acquisition capabilities but faces significant digital transformation challenges. Strong community relationships and agricultural expertise provide defensive moats, yet scale limitations and technology gaps constrain long-term competitiveness against fintech disruption.

SWOT Factors
53.1
Upside: 74.5 Risk: 68.2
OKR Impact
45.0
AI Leverage
35

Top 3 Strategic Levers

1

Accelerate strategic acquisitions for scale advantages

2

Invest aggressively in digital transformation capabilities

3

Diversify beyond Illinois geographic concentration risk

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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About Alignment LLC

Alignment LLC specializes in AI-powered business analysis. Through the Alignment Method, we combine advanced prompting, structured frameworks, and expert oversight to deliver actionable insights that help companies understand how AI sees their data and market position.