Key Insights

• Significant control over First Mid Bancshares by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 46% ownership
• Insider ownership in First Mid Bancshares is 15%

A look at the shareholders of First Mid Bancshares, Inc. (NASDAQ:FMBH) can tell us which group is most powerful. The group holding the most number of shares in the company, around 43% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that reaped the most benefits after last week's 7.9% price gain, institutions also received a 41% cut.

In the chart below, we zoom in on the different ownership groups of First Mid Bancshares.

What Does The Institutional Ownership Tell Us About First Mid Bancshares?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

First Mid Bancshares already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see First Mid Bancshares' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in First Mid Bancshares. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 7.5% of shares outstanding. With 5.3% and 5.1% of the shares outstanding respectively, Elizabeth Laurie and The Vanguard Group, Inc. are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of First Mid Bancshares

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of First Mid Bancshares, Inc.. Insiders have a US$115m stake in this US$756m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over First Mid Bancshares. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand First Mid Bancshares better, we need to consider many other factors. For instance, we've identified 2 warning signs for First Mid Bancshares that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.