425: First Mid to Acquire Two Rivers Financial Group

First Mid Bancshares, Inc. announces its acquisition of Two Rivers Financial Group, Inc., aiming to expand services and geographic reach.

Summary

• First Mid Bancshares, Inc., holding company for First Mid Bank & Trust, N.A., will acquire Two Rivers Financial Group, Inc., holding company for Two Rivers Bank & Trust.
• The acquisition is driven by the need for community banks to join forces to build stronger, larger, and more diverse institutions in the current economic environment.
• This partnership aims to better equip the combined entity to handle regulatory guidelines, risk management demands, and technology advancements.
• The transaction is expected to be completed in early 2026, contingent upon regulatory and other required approvals.
• A merger of the banks is anticipated in the summer of 2026.
• Customers of Two Rivers Bank & Trust will gain access to a broader range of financial solutions, expanded brokerage and retirement services, and a larger network of branches and ATMs across Illinois, Missouri, Wisconsin, and Iowa.
• All current Two Rivers branch locations are anticipated to remain open due to the complementary nature of the branch networks.

Sentiment

Score: 8

Explanation: The filing presents a highly positive outlook on the acquisition, emphasizing benefits for customers, expanded services, and a stronger combined entity. It frames the merger as a strategic move to address industry challenges and enhance growth opportunities.

Positives

• Expanded services for customers, including agricultural services, wealth management, insurance, brokerage, and retirement services.
• Increased geographic diversity and a larger network of branches and ATMs across Illinois, Missouri, Wisconsin, and Iowa.
• Anticipation that all current Two Rivers branch locations will remain open, ensuring continuity for customers.
• Creation of a stronger, larger, and more diverse institution better equipped to handle regulatory, risk management, and technology pressures.
• Combining of companies with extremely similar cultures and commitment to communities.

Risks

• The possibility that any anticipated benefits of the proposed transactions will not be realized or will not be realized within the expected time period.
• The risk that integration of the operations of Two Rivers with First Mid will be materially delayed or will be more costly or difficult than expected.
• Inability to complete the proposed transactions due to the failure to satisfy conditions, including required regulatory, shareholder, and other approvals.
• The failure of the proposed transactions to close for any other reason.
• The effect of the announcement of the proposed transactions on customer relationships and operating results.
• The possibility that the proposed transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events.
• Changes in interest rates.
• General economic conditions and those in the market areas of First Mid and Two Rivers.
• Legislative and/or 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 First Mid's and Two Rivers' loan or investment portfolios and the valuation of those investment portfolios.
• Demand for loan products.
• Deposit flows.
• Competition and demand for financial services in the market areas of First Mid and Two Rivers.
• Accounting principles, policies, and guidelines.

Future Outlook

The transaction is expected to close in early 2026, with the bank merger following in the summer of 2026. The combined entity anticipates offering an expanded range of financial solutions, brokerage, and retirement services, alongside a larger branch and ATM network across Illinois, Missouri, Wisconsin, and Iowa. All current Two Rivers branch locations are expected to remain open.

Management Comments

• "We are pleased to announce that First Mid Bancshares, Inc. will acquire Two Rivers Financial Group, Inc."
• "Two Rivers Financial Group, Inc. hand selected First Mid to expand its services and network in order to best serve our customers, now and in the future."
• "In today's economic environment, it is essential for community banks to join together, building a stronger, larger, more diverse institution."
• "We believe the combining of our companies, with extremely similar cultures and commitment to our communities, will provide our customers with greater opportunities."
• "Both organizations share a strong commitment to serving customers and communities with exceptional service and professionalism."
• "This transition means you'll have access to an even broader range of financial solutions, expanded brokerage and retirement services, and a larger network of branches and ATMs across Illinois, Missouri, Wisconsin, and Iowa."

Industry Context

The announcement highlights a trend of consolidation within the community banking sector, driven by increasing pressures from regulatory guidelines, risk management demands, and technological advancements. Mergers like this aim to create larger, more diverse institutions better equipped to navigate these challenges and expand service offerings.

Stakeholder Impact

• **Shareholders (Two Rivers):** Will receive a proxy statement/prospectus with important information, including detailed risk factors, regarding the proposed transaction.
• **Customers (Two Rivers Bank & Trust):** Will gain access to a broader range of financial solutions, expanded brokerage and retirement services, and a larger network of branches and ATMs. Existing services will continue until the merger, and all current branches are expected to remain open.
• **Employees:** While not explicitly stated, the intent to keep all branches open suggests a degree of continuity for branch-level employees, though broader organizational impacts are not detailed.
• **Communities:** The combined entity emphasizes a strong commitment to serving communities, suggesting continued local presence and support.

Next Steps

• First Mid will file a registration statement on Form S-4 with the SEC, which will include a proxy statement/prospectus for Two Rivers shareholders.
• Two Rivers shareholders are urged to read the proxy statement/prospectus when it becomes available.
• Additional information about First Mid Bank & Trust services and any changes will be provided to customers as the banks move closer to combining.
• Customers should continue to use existing checks, debit/ATM cards, mobile, and online banking services until the transaction is complete.
• Customers can call Two Rivers Bank & Trust at (888) 226-6063 or visit local branches for questions.
• Customers can follow updates on the transition process online.

Key Dates

Keywords

Merger, Acquisition, Banking, Financial Services, Community Bank, First Mid Bancshares, Two Rivers Financial Group, Wealth Management, Insurance, Agricultural Services, Branch Network