FIRST MID BANCSHARES, INC. Goodwill & Intangibles Disclosure
Note 7 -- 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 business lines acquired. The following table presents gross carrying amount and accumulated amortization by major intangible asset class as of December 31, 2025 and 2024 (in thousands):
|
|
2025 |
|
|
2024 |
|
||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Gross |
|
|
Accumulated |
|
||||
|
|
Value |
|
|
Amortization |
|
|
Value |
|
|
Amortization |
|
||||
Goodwill |
|
$ |
207,151 |
|
|
$ |
3,760 |
|
|
$ |
207,151 |
|
|
$ |
3,760 |
|
Core deposit intangibles |
|
|
79,945 |
|
|
|
53,285 |
|
|
|
79,945 |
|
|
|
44,736 |
|
Customer list intangibles |
|
|
34,420 |
|
|
|
16,021 |
|
|
|
30,857 |
|
|
|
13,180 |
|
|
|
$ |
324,531 |
|
|
$ |
76,081 |
|
|
$ |
320,968 |
|
|
$ |
64,691 |
|
Core deposit intangibles are being amortized over a period of 10 years and other intangibles, primarily customer lists, are being amortized over periods ranging from 3 to 12 years.
In December 2025, a customer list intangible asset of $764,000 was recorded for the acquisition of RFMS customer list in connection with its farm management business. First Mid Wealth Management was assigned all of this intangible asset. The purchase consideration given to RFMS matches the amount of intangible assets recorded.
During the quarter ended September 30, 2025, a customer list intangible asset of $2.8 million was recorded for the acquisition of a portion of AAIG's customer list in connection with its insurance business. First Mid Insurance was assigned all of this intangible asset. The purchase consideration given to AAIG matches the amount of intangible assets recorded.
During the quarter ended September 30, 2024, goodwill of $6.9 million was recorded for the acquisition of the stock of Mid Rivers Insurance Group, Inc., in connection with its insurance business. First Mid Insurance was assigned all this goodwill.
The following provides a reconciliation of the purchase price paid for Mid Rivers Insurance Group, Inc. and the amount of goodwill recorded (in thousands):
Unallocated purchase price |
|
|
|
|
$ |
10,059 |
|
|
Less purchase accounting adjustments: |
|
|
|
|
|
|
||
Insurance Company intangible |
|
$ |
4,305 |
|
|
|
|
|
Other liabilities |
|
|
(1,176 |
) |
|
|
|
|
|
|
|
|
|
|
3,129 |
|
|
Resulting goodwill from acquisition |
|
|
|
|
$ |
6,930 |
|
|
Goodwill of $50.1 million was recorded for the acquisition and merger of Blackhawk Bancorp, Inc. during the third quarter of 2023. All this goodwill was assigned to the banking unit of the Company. The goodwill will not be deductible for tax purposes.
The following table provides a reconciliation of the purchase price paid for the acquisition of Blackhawk and the amount of goodwill recorded (in thousands):
Unallocated purchase price |
|
|
|
|
$ |
26,955 |
|
|
Less purchase accounting adjustments: |
|
|
|
|
|
|
||
Fair value of securities |
|
$ |
(25,521 |
) |
|
|
|
|
Fair value of loans, net |
|
|
(43,477 |
) |
|
|
|
|
Fair value of premises and equipment |
|
|
(3,856 |
) |
|
|
|
|
Fair value of time deposits |
|
|
2,311 |
|
|
|
|
|
Fair value of subordinated and jr subordinated debentures |
|
|
3,707 |
|
|
|
|
|
Increase in core deposit intangible |
|
|
33,731 |
|
|
|
|
|
Increase in mortgage servicing rights |
|
|
3,344 |
|
|
|
|
|
Other assets |
|
|
6,619 |
|
|
|
|
|
|
|
|
|
|
|
(23,142 |
) |
|
Resulting goodwill from acquisition |
|
|
|
|
$ |
50,097 |
|
|
During the quarter ended June 30, 2023, goodwill of $6.0 million was recorded for the acquisition of the stock of Purdum, Gray, Ingledue, Beck, Inc., in connection with its insurance business. First Mid Insurance was assigned all this goodwill.
The following provides a reconciliation of the purchase price paid for Purdum, Gray, Ingledue, Beck, Inc. and the amount of goodwill recorded (in thousands):
Unallocated purchase price |
|
|
|
|
$ |
10,145 |
|
|
Less purchase accounting adjustments: |
|
|
|
|
|
|
||
Insurance Company intangible |
|
$ |
5,770 |
|
|
|
|
|
Other liabilities |
|
|
(1,576 |
) |
|
|
|
|
|
|
|
|
|
|
4,194 |
|
|
Resulting goodwill from acquisition |
|
|
|
|
$ |
5,951 |
|
|
The unpaid principal balance of mortgage loans serviced for others was $509.7 million and $572.6 million at December 31, 2025 and 2024, respectively. Mortgage servicing rights are accounted for under the amortization method. The following table summarizes the activity pertaining to the mortgage servicing rights included in intangible assets as of December 31, 2025 and 2024 (in thousands):
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Beginning balance |
|
$ |
5,629 |
|
|
$ |
6,859 |
|
Adjustment to valuation reserve |
|
|
1 |
|
|
|
7 |
|
Mortgage servicing rights amortized |
|
|
(1,053 |
) |
|
|
(1,226 |
) |
Interest only strip |
|
|
(11 |
) |
|
|
(11 |
) |
Ending balance |
|
$ |
4,566 |
|
|
$ |
5,629 |
|
Fair value of portfolio |
|
$ |
5,596 |
|
|
$ |
6,716 |
|
Total amortization expense for the years ended December 31, 2025, 2024, and 2023 was as follows (in thousands):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Core deposit intangibles |
|
$ |
8,549 |
|
|
$ |
9,770 |
|
|
$ |
6,534 |
|
Customer list intangibles |
|
|
2,841 |
|
|
|
2,560 |
|
|
|
2,069 |
|
Mortgage servicing rights |
|
|
1,053 |
|
|
|
1,226 |
|
|
|
524 |
|
|
|
$ |
12,443 |
|
|
$ |
13,556 |
|
|
$ |
9,127 |
|
Estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands):
For year ended 12/31/26 |
|
$ |
10,925 |
|
For year ended 12/31/27 |
|
|
9,661 |
|
For year ended 12/31/28 |
|
|
8,447 |
|
For year ended 12/31/29 |
|
|
7,095 |
|
For year ended 12/31/30 |
|
|
5,417 |
|
The weighted average amortization period for core deposit, customer lists and total intangibles was 2.91, 4.22 and 3.44 years respectively, at December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Mar 6, 2024 | |
| 2022 | Mar 3, 2023 | |
| 2021 | Mar 2, 2022 | |
| 2020 | Mar 8, 2021 | |
| 2019 | Mar 9, 2020 | |
| 2018 | Mar 5, 2019 | |
| 2017 | Mar 2, 2018 | |
| 2016 | Mar 6, 2017 | |
| 2015 | Mar 4, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.