First Mid Bancshares Inc (NASDAQ: FMBH) is stepping up its game with a deal to merge with Two Rivers Financial Group Inc (OTCQX: TRVR), expanding its community banking reach into Iowa. This all-stock deal, worth about $94 million, will have Two Rivers shareholders receiving 1.225 shares of First Mid for each share they own. It’s a move that not only grows First Mid’s presence geographically but also strengthens its ties to local communities in central and southeastern Iowa through Two Rivers’ 14 branches.
Two Rivers isn’t new to the local scene, having roots going back to 1904. The company manages roughly $1.1 billion in assets, mostly tied up in loans and deposits. For First Mid, this merger isn’t just about increasing numbers on a balance sheet. It’s about partnering with a bank that shares its community-focused philosophy. Both sides prioritize meaningful local relationships and want to keep supporting their neighborhoods with trusted financial services.
From a financial viewpoint, the merger is expected to have a positive impact on First Mid’s earnings per share, with a predicted increase of 12.3% by 2027. While the deal will cause some dilution in tangible book value initially, First Mid expects to recover that in just over two years. They are also aiming to cut about 27% of Two Rivers’ noninterest expenses, which should make the combined company more efficient. Even with these adjustments, First Mid plans to stay on firm ground, maintaining a strong capital position with a common equity tier 1 ratio around 12.8%.
Strategically, this deal marks First Mid’s first expansion into Iowa, branching out beyond its current bases in Illinois, Missouri, Texas, and Wisconsin. The company’s leadership sees this as a logical step to diversify geographically and tap into new markets with growth potential. Joseph R. Dively, First Mid’s Chairman and CEO, sees this as progress in their ongoing growth story grounded in community banking.
Two Rivers’ leadership shares this outlook. Frank Delaney, Chairman and Interim CEO, expressed enthusiasm about joining forces with a company that respects their community-first approach and promises to enhance service delivery. Shane Zimmerman, the CEO of Two Rivers Bank & Trust who will become an executive at First Mid, emphasized that building lasting community connections remains a priority post-merger.
Management continuity is clearly a focus, with Zimmerman set to take on a senior leadership role at First Mid. The boards of both companies have unanimously approved the merger, which is expected to close in early 2026 pending regulatory and shareholder approvals. After closing, Two Rivers Bank & Trust locations will operate under First Mid Bank, with integration of operations and systems following suit.
First Mid itself is no small player. With $7.8 billion in assets and a mix of banking, wealth management, insurance, and agricultural services, the company has a deep-rooted presence in the Midwest. Adding Two Rivers increases its scale and reinforces its commitment to community-centered service. Combined, the two firms bring over 160 years of experience serving Midwestern communities.
This merger is about more than size, it’s about doing community banking well. With shared values and a clear strategy, First Mid and Two Rivers are setting themselves up to offer strong financial services while preserving the local touch that customers trust. The deal should give First Mid a solid footing to grow further while staying rooted in the communities it serves.
