Core Viewpoint - German American Bancorp (GABC) has shown a downtrend recently, losing 6.8% over the past four weeks, but a hammer chart pattern suggests a potential trend reversal due to increased buying interest [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottom in the stock price, suggesting that selling pressure may be exhausting [2][5]. - This pattern forms when there is a small candle body with a long lower wick, indicating that the stock opened lower, made a new low, but closed near its opening price, reflecting buying interest [4][5]. - Hammer candles can appear on various timeframes and are used by both short-term and long-term investors [5]. Fundamental Analysis - There has been an upward trend in earnings estimate revisions for GABC, which is a bullish indicator and correlates with near-term stock price movements [7]. - The consensus EPS estimate for the current year has increased by 0.9% over the last 30 days, indicating analysts' optimism about GABC's earnings potential [8]. - GABC holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10].

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the unaudited consolidated financial statements and management's discussion and analysis for German American Bancorp, Inc [Unaudited Financial Statements](index=6&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Presents the unaudited consolidated financial statements for German American Bancorp, Inc. as of June 30, 2025, reflecting significant growth from the Heartland BancCorp acquisition [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased by 31.5% to $8.28 billion at June 30, 2025, primarily due to the Heartland BancCorp acquisition Consolidated Balance Sheet Highlights (in $ thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$8,280,142** | **$6,295,910** | | Loans, Net | $5,663,918 | $4,080,466 | | Goodwill | $377,976 | $179,025 | | **Total Liabilities** | **$7,210,638** | **$5,580,843** | | Total Deposits | $6,954,686 | $5,329,075 | | **Total Shareholders' Equity** | **$1,069,504** | **$715,067** | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q2 2025 rose to $31.4 million, driven by a 59% increase in net interest income following the Heartland acquisition Income Statement Highlights - Q2 (in $ thousands, except EPS) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Income | $73,155 | $45,971 | | Provision for Credit Losses | $1,200 | $625 | | Non-interest Income | $16,733 | $18,923 | | Non-interest Expense | $49,517 | $37,674 | | **Net Income** | **$31,361** | **$20,530** | | **Diluted EPS** | **$0.84** | **$0.69** | Income Statement Highlights - Six Months (in $ thousands, except EPS) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net Interest Income | $139,727 | $90,965 | | Provision for Credit Losses | $16,500 | $1,525 | | Non-interest Income | $31,573 | $34,745 | | Non-interest Expense | $102,299 | $74,412 | | **Net Income** | **$41,878** | **$39,552** | | **Diluted EPS** | **$1.16** | **$1.33** | [Consolidated Statements of Comprehensive Income (Loss)](index=12&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income for Q2 2025 was $33.5 million, with H1 2025 at $54.8 million, influenced by net income and securities valuation changes Comprehensive Income (Loss) Summary (in $ thousands) | Period | Net Income | Other Comprehensive Income (Loss) | Comprehensive Income (Loss) | | :--- | :--- | :--- | :--- | | **Q2 2025** | $31,361 | $2,121 | $33,482 | | **Q2 2024** | $20,530 | $19,086 | $39,616 | | **H1 2025** | $41,878 | $12,904 | $54,782 | | **H1 2024** | $39,552 | $(809) | $38,743 | [Consolidated Statements of Changes in Shareholders' Equity](index=14&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity increased to $1.07 billion at June 30, 2025, primarily due to the $320.0 million stock issuance for the Heartland acquisition - The acquisition of Heartland BancCorp was the main contributor to the increase in shareholders' equity, with the issuance of **7,742,723 shares** adding **$320.0 million**[26](index=26&type=chunk) - The company declared and paid cash dividends of **$0.29 per share** in both Q1 and Q2 2025, totaling **$21.6 million** for the six-month period[26](index=26&type=chunk) [Consolidated Statements of Cash Flows](index=15&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased by $11.4 million in H1 2025, driven by operating and investing activities, offset by financing outflows Cash Flow Summary - Six Months Ended June 30 (in $ thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $64,844 | $42,562 | | Net Cash from Investing Activities | $110,540 | $154,205 | | Net Cash from Financing Activities | $(164,028) | $17,222 | | **Net Change in Cash and Cash Equivalents** | **$11,356** | **$213,989** | [Notes to Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies and financial figures, including the insurance business sale, securities, loans, segments, and the Heartland acquisition [Note 3 – Sale of Insurance Assets](index=18&type=section&id=Note%203%20%E2%80%93%20Sale%20of%20Insurance%20Assets) Details the June 1, 2024, sale of German American Insurance, Inc. for $40.0 million cash, resulting in a $36.5 million pre-tax gain Gain on Sale of Insurance Assets (in $ thousands) | Description | Amount | | :--- | :--- | | Gross Purchase Price | $40,000 | | Write-off of Goodwill and Intangibles | $(1,332) | | Working Capital Adjustment | $(345) | | **Net Purchase Price** | **$38,323** | | Transaction Costs | $(1,816) | | **Pre-tax Gain on Sale** | **$36,507** | | **After-tax Gain on Sale** | **$27,476** | [Note 5 – Securities](index=19&type=section&id=Note%205%20%E2%80%93%20Securities) Details the $1.57 billion available-for-sale securities portfolio, which had a net unrealized loss of $262.4 million as of June 30, 2025 - In June/July 2024, the company restructured its securities portfolio, selling **$375.3 million** in securities for a pre-tax loss of approximately **$34.9 million**[46](index=46&type=chunk) - As of June 30, 2025, securities with a fair value of **$1.13 billion** were in a continuous unrealized loss position, totaling **$266.3 million** in losses, primarily due to market interest rate fluctuations[49](index=49&type=chunk) [Note 7 – Loans](index=22&type=section&id=Note%207%20%E2%80%93%20Loans) Total loans grew to $5.75 billion at June 30, 2025, largely due to the Heartland acquisition, with ACL increasing to $75.5 million Loan Portfolio Composition (in $ thousands) | Loan Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial and Industrial | $734,551 | $591,785 | | Commercial Real Estate | $3,096,728 | $2,224,872 | | Agricultural | $461,420 | $431,037 | | Residential Mortgage | $798,343 | $357,448 | | Retail (Home Equity, Consumer, etc.) | $574,324 | $448,872 | | **Total Loans** | **$5,748,360** | **$4,133,267** | - The company acquired loans with a fair value of **$1.50 billion** in the Heartland acquisition on February 1, 2025[59](index=59&type=chunk)[60](index=60&type=chunk) - The Allowance for Credit Losses (ACL) increased from **$44.4 million** at year-end 2024 to **$75.5 million** at June 30, 2025, including a **$15.9 million** allowance for acquired PCD loans and a **$16.2 million** 'Day 2' CECL provision related to the Heartland acquisition[64](index=64&type=chunk) [Note 9 – Segment Information](index=34&type=section&id=Note%209%20%E2%80%93%20Segment%20Information) Details the company's two primary segments, Core Banking and Wealth Management Services, following the June 2024 insurance operations sale - The company ceased insurance-related activities after selling the assets of its insurance subsidiary, German American Insurance, Inc. (GAI), on **June 1, 2024**[105](index=105&type=chunk) Segment Profit and Assets - Q2 2025 (in $ thousands) | Segment | Segment Profit (Loss) Before Taxes | Segment Assets | | :--- | :--- | :--- | | Core Banking | $40,408 | $8,252,469 | | Wealth Management Services | $1,500 | $15,829 | | Insurance | $— | $— | | Other / Eliminations | $(2,737) | $11,844 | | **Consolidated Total** | **$39,171** | **$8,280,142** | [Note 16 – Business Combinations](index=50&type=section&id=Note%2016%20%E2%80%93%20Business%20Combinations) Details the February 1, 2025, acquisition of Heartland BancCorp for $343.1 million, adding $1.94 billion in assets and $199.0 million in goodwill Heartland Acquisition Summary (in $ thousands) | Item | Value | | :--- | :--- | | **Fair Value of Total Consideration** | **$343,109** | | Cash Paid | $23,102 | | Equity Instruments Issued | $320,007 | | **Total Identifiable Net Assets Acquired** | **$144,158** | | **Goodwill Recognized** | **$198,951** | - The acquisition is consistent with the company's strategy to build a regional presence in Southern Indiana, Kentucky, and Ohio[176](index=176&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant impact of the Heartland BancCorp acquisition on financial condition and results, highlighting growth, margin expansion, and stable credit quality [Management Overview](index=53&type=section&id=Management%20Overview) The first half of 2025 was marked by the Heartland BancCorp acquisition, contributing to Q2 net income of $31.4 million and adjusted EPS of $0.86 - Completed the acquisition of Heartland BancCorp on **February 1, 2025**, adding **20 banking offices** in Columbus, Ohio, and Greater Cincinnati[188](index=188&type=chunk) Q2 2025 Performance vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (as reported) | $31,361,000 | $20,530,000 | | EPS (as reported) | $0.84 | $0.69 | | Adjusted Net Income (Non-GAAP) | $32,058,000 | $20,351,000 | | Adjusted EPS (Non-GAAP) | $0.86 | $0.69 | [Critical Accounting Policies and Estimates](index=54&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Identifies critical accounting policies including ACL, securities valuation, income tax, and goodwill, noting a Q1 2025 shift in ACL estimation method - The determination of the Allowance for Credit Losses (ACL) is inherently subjective and requires significant estimates regarding future cash flows, economic conditions, and other factors[197](index=197&type=chunk)[198](index=198&type=chunk) - On **March 31, 2025**, the company changed its ACL estimation method to a discounted cash flow model to better evaluate multiple economic scenarios[206](index=206&type=chunk) - Goodwill is not amortized but is tested for impairment annually on **December 31**, with no impairment indicated at the last testing date[211](index=211&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Operating results for Q2 and H1 2025 were significantly boosted by the Heartland acquisition, driving net interest income growth and margin expansion Net Interest Margin (Tax-Equivalent) | Period | Net Interest Margin | | :--- | :--- | | Q2 2025 | 3.92% | | Q2 2024 | 3.34% | | H1 2025 | 3.94% | | H1 2024 | 3.34% | - Accretion of discounts on acquired loans contributed **18 basis points** to the net interest margin in Q2 2025[219](index=219&type=chunk) - Q2 2025 non-interest expense increased **31% YoY** to **$49.5 million**, primarily driven by operating costs from the Heartland acquisition[241](index=241&type=chunk) [Financial Condition](index=65&type=section&id=Financial%20Condition) Total assets grew to $8.28 billion, loans to $5.75 billion, and deposits to $6.95 billion, primarily due to the Heartland acquisition - Total assets increased to **$8.28 billion** at June 30, 2025, largely due to the Heartland acquisition[259](index=259&type=chunk) - Excluding acquired loans, organic loan growth was approximately **5%** on an annualized basis in H1 2025[261](index=261&type=chunk) - Non-performing assets rose to **$25.1 million** (**0.30% of assets**) from **$11.1 million** (**0.18% of assets**), with the increase largely attributable to the Heartland acquisition, including a single adversely classified commercial relationship[270](index=270&type=chunk)[271](index=271&type=chunk) [Capital Resources and Liquidity](index=68&type=section&id=Capital%20Resources%20and%20Liquidity) The company maintains a strong capital and liquidity position, with shareholders' equity at $1.07 billion and regulatory capital ratios exceeding minimums Regulatory Capital Ratios (Consolidated) | Ratio | 6/30/2025 | Minimum for Capital Adequacy | | :--- | :--- | :--- | | Total Capital (to RWA) | 15.21% | 8.00% | | Tier 1 Capital (to RWA) | 13.53% | 6.00% | | Common Equity Tier 1 (to RWA) | 13.00% | 4.50% | | Tier 1 Capital (to Average Assets) | 10.93% | 4.00% | - The company plans to redeem the **$24.3 million** of outstanding Heartland Notes on **September 15, 2025**, funded from cash on hand[280](index=280&type=chunk)[288](index=288&type=chunk) - The company has not repurchased any shares under its **1.0 million share** repurchase plan[277](index=277&type=chunk) [Use of Non-GAAP Financial Measures](index=70&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Provides reconciliations of GAAP to non-GAAP financial measures, excluding specific non-recurring items to assess core operational performance Non-GAAP Reconciliation - Net Income and EPS (in $ thousands) | Metric | Q2 2025 | H1 2025 | | :--- | :--- | :--- | | Net Income, as reported | $31,361 | $41,878 | | Adjustments (Merger costs, CECL Day 2) | $697 | $17,467 | | **Adjusted Net Income** | **$32,058** | **$59,345** | | EPS, as reported | $0.84 | $1.16 | | **Adjusted EPS** | **$0.86** | **$1.64** | [Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses primary market risks, liquidity and interest rate risk, with net interest income projected to increase by 0.70% in a +200 bps rate shock Interest Rate Sensitivity of Net Interest Income (Next 12 Months) | Rate Change Scenario | % Change in Net Interest Income | | :--- | :--- | | +200 bps | +0.70% | | +100 bps | +0.34% | | -100 bps | -1.11% | | -200 bps | -3.33% | [Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of **June 30, 2025**[310](index=310&type=chunk) - No material changes in internal control over financial reporting occurred during the second fiscal quarter of **2025**[311](index=311&type=chunk) [PART II. OTHER INFORMATION](index=75&type=section&id=PART%20II.%20OTHER%20INFORMATION) Presents other required information, including legal proceedings, risk factors, equity sales, defaults, and exhibits [Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings) Reports no pending legal proceedings beyond routine litigation incidental to business operations - There are no pending legal proceedings, other than routine litigation incidental to the business[312](index=312&type=chunk) [Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the 2024 Annual Report on Form 10-K - No material changes to risk factors have occurred since the **2024 Annual Report on Form 10-K**[313](index=313&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any equity securities during the quarter, with 1.0 million shares remaining available under the plan - The company has a board-approved plan to repurchase up to **1.0 million shares** of its common stock, but no shares were repurchased during the second quarter of **2025**[319](index=319&type=chunk) [Defaults Upon Senior Securities](index=75&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Reports no defaults upon senior securities - None[320](index=320&type=chunk) [Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[321](index=321&type=chunk) [Other Information](index=75&type=section&id=Item%205.%20Other%20Information) Reports no undisclosed Form 8-K information or Rule 10b5-1 trading arrangement adoptions or terminations by directors or officers - During Q2 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement[326](index=326&type=chunk) [Exhibits](index=77&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and XBRL data files - The exhibits include the Agreement and Plan of Reorganization for the Heartland acquisition (incorporated by reference), articles of incorporation, bylaws, and Sarbanes-Oxley certifications[328](index=328&type=chunk)

Company Overview - German American Bancorp (GABC) is located in Jasper and operates in the Finance sector, with a year-to-date share price change of -3.43% [3] - The company currently pays a dividend of $0.29 per share, resulting in a dividend yield of 2.99%, which is slightly below the Banks - Midwest industry's yield of 3.07% but significantly higher than the S&P 500's yield of 1.46% [3] Dividend Performance - The current annualized dividend of GABC is $1.16, reflecting a year-over-year increase of 7.4% [4] - Over the past five years, GABC has raised its dividend five times, achieving an average annual increase of 8.99% [4] - The company's current payout ratio stands at 39%, indicating that it distributes 39% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year 2025, GABC anticipates solid earnings growth, with the Zacks Consensus Estimate projecting earnings of $3.36 per share, which corresponds to a year-over-year growth rate of 18.73% [5] Investment Appeal - GABC is characterized as an attractive dividend play and a compelling investment opportunity, currently holding a Zacks Rank of 2 (Buy) [6]

Core Insights - German American Bancorp (GABC) reported a revenue of $89.89 million for the quarter ended June 2025, marking a 38.5% increase year-over-year [1] - The earnings per share (EPS) for the quarter was $0.86, up from $0.69 in the same quarter last year, exceeding the consensus EPS estimate of $0.83 by 3.61% [1] Financial Performance Metrics - The efficiency ratio was reported at 51.3%, better than the average estimate of 52.4% from three analysts [4] - The net interest margin stood at 3.9%, matching the average estimate from three analysts [4] - Net charge-offs to average loans were 0.1%, consistent with the average estimate from two analysts [4] - Total average interest-earning assets were $7.61 billion, slightly below the average estimate of $7.67 billion from two analysts [4] - Net gains on sales of loans were $1 million, compared to the estimated $1.81 million from three analysts [4] - Total non-interest income was $16.73 million, exceeding the average estimate of $16.36 million from three analysts [4] - Net interest income (FTE) was reported at $74.43 million, slightly below the average estimate of $74.81 million from two analysts [4] - Service charges on deposit accounts were $3.71 million, below the average estimate of $3.85 million from two analysts [4] - Net interest income was $73.16 million, compared to the average estimate of $73.49 million from two analysts [4] Stock Performance - Shares of German American Bancorp have returned +2.1% over the past month, while the Zacks S&P 500 composite increased by +4.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - German American Bancorp (GABC) reported quarterly earnings of $0.86 per share, exceeding the Zacks Consensus Estimate of $0.83 per share, and showing an increase from $0.69 per share a year ago, indicating a positive earnings surprise of +3.61% [1] Financial Performance - The company achieved revenues of $89.89 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.38%, and up from $64.89 million year-over-year [2] - Over the last four quarters, German American Bancorp has consistently surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance and Outlook - Since the beginning of the year, German American Bancorp shares have decreased by approximately 0.8%, contrasting with the S&P 500's gain of 8.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Earnings Estimate Revisions - The trend for earnings estimate revisions for German American Bancorp was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - The current consensus EPS estimate for the upcoming quarter is $0.86 on revenues of $90.2 million, and for the current fiscal year, it is $3.35 on revenues of $352.35 million [7] Industry Context - The Banks - Midwest industry, to which German American Bancorp belongs, is currently ranked in the top 20% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

[Executive Summary & Company Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Highlights) German American Bancorp, Inc. reported strong Q2 2025 results, driven by the Heartland acquisition, strategic initiatives, and consistent shareholder returns, demonstrating robust financial health and growth prospects [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) German American Bancorp, Inc. reported strong second quarter 2025 results with significant growth in net income and EPS, driven by core net interest margin expansion, strong net interest income growth, operating leverage, and efficiency gains from the Heartland merger | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----------------------- | :--------------- | :--------------- | :---------- | | Net Income | $31.4 Million | $10.5 Million | +$20.9 Million | | Earnings Per Share (EPS) | $0.84 | $0.30 | +180% | | Adjusted Net Income (Q1 2025) | - | $27.3 Million | - | | Adjusted EPS (Q1 2025) | - | $0.79 | - | - Q1 2025 results were impacted by **$5.9 Million** in one-time merger-related costs and **$16.2 Million** in CECL model "Day 2" provision (total after-tax impact of **$16.8 Million**)[1](index=1&type=chunk) - The loan portfolio achieved approximately **7%** annualized organic growth, with healthy credit metrics, non-performing assets at **0.30%** of period-end assets, and non-performing loans at **0.44%** of period-end loans[2](index=2&type=chunk) - Non-interest income increased by **13%** quarter-over-quarter, primarily driven by wealth management fees, interchange fees, and residential mortgage loan sales gains[4](index=4&type=chunk) - Non-interest expense decreased by **6.2%** quarter-over-quarter, with the core efficiency ratio improving from **54.13%** in Q1 to **50.23%** in Q2[5](index=5&type=chunk)[6](index=6&type=chunk) [Strategic Initiatives & Outlook](index=2&type=section&id=Strategic%20Initiatives%20%26%20Outlook) Management is pleased with the integration progress of the Heartland acquisition and optimistic about future growth and profitability, expecting benefits from yield curve normalization, ongoing operational expense optimization, and strong loan activity - The Heartland Bank operating system conversion was smooth, with minimal impact on employees and customers[8](index=8&type=chunk) - The company is encouraged by the normalization of the yield curve, continued integration and optimization of Heartland operating expenses, and the outlook for loan growth in both existing and newly acquired markets[8](index=8&type=chunk) - The company is committed to driving future profitability and long-term shareholder value through strong community presence, sound financial condition, and a disciplined growth approach[8](index=8&type=chunk) [Dividend Declaration & Industry Recognition](index=2&type=section&id=Dividend%20Declaration%20%26%20Industry%20Recognition) The Board declared a quarterly cash dividend of $0.29 per share, and the company again received the 2024 Raymond James Community Banker Cup, highlighting its exceptional financial performance and stability - The Board declared a regular quarterly cash dividend of **$0.29** per share, payable on August 20, 2025, to shareholders of record as of August 10, 2025[7](index=7&type=chunk) - In June 2025, the company was again awarded the 2024 Raymond James Community Banker Cup, recognizing the top **10%** of community banks for profitability, operating efficiency, and balance sheet metrics[8](index=8&type=chunk) [Balance Sheet Analysis](index=3&type=section&id=Balance%20Sheet%20Analysis) The company's balance sheet reflects significant growth from the Heartland acquisition, with diversified assets, healthy credit quality, and strong capital ratios, despite a slight quarter-over-quarter decrease in total deposits [Heartland Acquisition Impact](index=3&type=section&id=Heartland%20Acquisition%20Impact) The company completed the acquisition of Heartland on February 1, 2025, integrating Heartland and its subsidiary Heartland Bank, significantly increasing assets, loans, and deposits, and expanding its Ohio presence - The Heartland acquisition was completed on February 1, 2025, with Heartland Bank integrated into German American Bank[9](index=9&type=chunk) Heartland Acquisition Financial Impact | Metric | Amount (Approx.) | | :----------------- | :---------- | | Total Assets | $1.94 Billion | | Total Loans | $1.58 Billion | | Total Deposits | $1.73 Billion | | Common Stock Issued | 7.74 Million shares | | Cash Payment | $23.1 Million | [Assets Overview](index=3&type=section&id=Assets%20Overview) Total assets slightly decreased quarter-over-quarter due to lower deposits and short-term investments, but significantly increased year-over-year, driven by the Heartland acquisition and organic loan growth, with a diversified loan portfolio led by commercial real estate [Total Assets](index=3&type=section&id=Total%20Assets) Total assets saw a slight quarter-over-quarter decrease but a substantial year-over-year increase, primarily driven by the Heartland acquisition and organic loan growth Total Assets | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------- | :------------- | :------------- | :------------- | | Total Assets | $8.280 Billion | $8.419 Billion | $6.217 Billion | | QoQ Change | -$139.6 Million | - | - | | YoY Change | - | - | +$2.063 Billion | - The quarter-over-quarter decrease in total assets was primarily due to a reduction in total deposits, leading to lower short-term investments[10](index=10&type=chunk) - The year-over-year increase in total assets was mainly attributable to the Heartland acquisition and continued organic loan growth[10](index=10&type=chunk) [Loan Portfolio](index=3&type=section&id=Loan%20Portfolio) The loan portfolio experienced robust annualized organic growth in Q2, maintaining a stable and diversified composition across various categories and geographies Loan Portfolio | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------- | :------------- | :------------- | :------------- | | Total Loans | $5.748 Billion | $5.655 Billion | $4.044 Billion | | QoQ Growth (Annualized) | +7% | - | - | | YoY Growth | - | - | +$1.704 Billion | - Loan growth in the second quarter was broadly distributed across all loan categories, industry segments, and geographic regions[11](index=11&type=chunk) - The loan portfolio composition remained relatively stable and diversified, with commercial real estate loans accounting for **54%**, followed by commercial and industrial loans at **14%**, and residential mortgage loans at **14%**[12](index=12&type=chunk)[13](index=13&type=chunk) [Allowance for Credit Losses](index=4&type=section&id=Allowance%20for%20Credit%20Losses) The allowance for credit losses increased significantly year-over-year, primarily due to the Heartland acquisition, maintaining a healthy coverage ratio relative to total loans Allowance for Credit Losses | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------- | :------------- | :------------- | | Allowance for Credit Losses | $75.5 Million | $75.2 Million | $43.9 Million | | Allowance for Credit Losses to Period End Loans | 1.32% | 1.33% | 1.09% | - The Heartland acquisition resulted in an increase of **$32.1 Million** in the allowance for credit losses, with **$16.2 Million** recorded through the CECL model "Day 2" provision[15](index=15&type=chunk) [Non-Performing Assets](index=4&type=section&id=Non-Performing%20Assets) Non-performing assets increased quarter-over-quarter and year-over-year, largely attributable to the Heartland acquisition, yet remain a small percentage of total assets and loans Non-Performing Assets | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------- | :------------- | :------------- | :------------- | | Non-Performing Assets | $25.1 Million | $18.6 Million | $7.3 Million | | Non-Performing Assets to Total Assets | 0.30% | 0.22% | 0.12% | | Non-Performing Loans to Total Loans | 0.44% | 0.33% | 0.18% | - The increase in non-performing assets is primarily associated with the Heartland acquisition, particularly a single acquired commercial relationship[18](index=18&type=chunk) - Non-performing assets from the Heartland acquisition totaled approximately **$10.3 Million** as of June 30, 2025[18](index=18&type=chunk) [Liabilities Overview](index=5&type=section&id=Liabilities%20Overview) Total deposits decreased quarter-over-quarter as the company leveraged its strong liquidity to reduce higher-cost deposits post-Heartland acquisition, while non-interest-bearing demand deposits remained robust, accounting for over 27% of total deposits [Total Deposits](index=5&type=section&id=Total%20Deposits) Total deposits experienced a slight quarter-over-quarter decrease as the company optimized its deposit base, but showed significant year-over-year growth, with non-interest-bearing deposits remaining stable Total Deposits | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------- | :------------- | :------------- | :------------- | | Total Deposits | $6.955 Billion | $7.098 Billion | $5.314 Billion | | QoQ Change | -$143.2 Million | - | - | | YoY Change | - | - | +$1.641 Billion | - The quarter-over-quarter decrease in deposits was primarily related to time deposits and interest-bearing demand accounts within the Heartland deposit base, due to post-merger pricing strategy alignment[19](index=19&type=chunk) - Non-interest-bearing deposits remained relatively stable as a percentage of total deposits, at approximately **27%**[20](index=20&type=chunk) [Capital Adequacy](index=5&type=section&id=Capital%20Adequacy) As of June 30, 2025, the company and its bank maintained capital levels well above minimum requirements, with the bank meeting the necessary conditions to be considered 'well-capitalized' - The company and the bank's capital levels significantly exceeded minimum requirements, with the bank meeting "well-capitalized" standards[21](index=21&type=chunk) Capital Ratios | Capital Ratio | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------- | :------------- | :------------- | | Total Capital (Risk-Weighted Assets) - Consolidated | 15.21% | 15.01% | 16.78% | | Tier 1 (Core) Capital (Risk-Weighted Assets) - Consolidated | 13.53% | 13.26% | 15.19% | | Common Equity Tier 1 (CET 1) Capital Ratio - Consolidated | 13.00% | 12.73% | 14.49% | | Tier 1 Capital (Average Assets) - Consolidated | 10.93% | 11.80% | 11.92% | [Results of Operations](index=6&type=section&id=Results%20of%20Operations) The company's operating performance in Q2 2025 showed strong net income growth, driven by increased net interest income and reduced acquisition-related expenses, despite some fluctuations in non-interest income and expenses [Net Income and Earnings Per Share](index=6&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) Net income and EPS showed strong quarter-over-quarter growth, driven by reduced one-time acquisition-related expenses in Q1 and the full contribution from Heartland operations, with adjusted net income and EPS also increasing Net Income and EPS | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | | Net Income | $31,361,000 | $10,517,000 | $20,530,000 | | Earnings Per Share (EPS) | $0.84 | $0.30 | $0.69 | | Adjusted Net Income | $32,058,000 | $27,287,000 | $20,351,000 | | Adjusted EPS | $0.86 | $0.79 | $0.69 | - Q2 2025 EPS increased by **180%** quarter-over-quarter and **22%** year-over-year[24](index=24&type=chunk) - Q2 2025 included **$929,000** (after-tax **$697,000**) in acquisition-related expenses, significantly lower than Q1's **$5,932,000** (after-tax **$4,620,000**)[26](index=26&type=chunk) [Net Interest Income and Margin](index=7&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income significantly increased both quarter-over-quarter and year-over-year in Q2 2025, primarily due to higher average earning assets from the Heartland acquisition and improved net interest margin (excluding acquired loan discount accretion), while tax-equivalent net interest margin slightly decreased QoQ but significantly improved YoY Net Interest Income and Margin | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | | Net Interest Income (Non-Tax Equivalent) | $73,155,000 | $66,572,000 | $45,971,000 | | QoQ Growth | +$6,583,000 (+10%) | - | - | | YoY Growth | +$27,184,000 (+59%) | - | - | | Tax-Equivalent Net Interest Margin | 3.92% | 3.96% | 3.34% | | Acquired Loan Discount Accretion Contribution to NIM | 18 bps | 24 bps | 2 bps | - Net interest income growth was primarily attributed to increased average earning assets from the Heartland acquisition and an improved net interest margin (excluding the impact of acquired loan discount accretion)[30](index=30&type=chunk)[31](index=31&type=chunk) - The continued improvement in net interest margin (excluding acquired loan discount accretion) was mainly driven by higher yields on earning assets and lower deposit costs[33](index=33&type=chunk) [Provision for Credit Losses and Asset Quality](index=8&type=section&id=Provision%20for%20Credit%20Losses%20and%20Asset%20Quality) The provision for credit losses significantly decreased in Q2 2025, primarily because Q1 included the 'Day 2' CECL provision related to the Heartland acquisition, with net charge-offs remaining low Provision for Credit Losses and Net Charge-offs | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | | Provision for Credit Losses | $1,200,000 | $15,300,000 | $625,000 | | Net Charge-offs | $848,000 | $486,000 | $433,000 | | Net Charge-offs to Average Loans (Annualized) | 6 bps | 4 bps | 4 bps | - The Q1 2025 provision for credit losses included **$16,200,000** in "Day 2" CECL provision related to the Heartland acquisition[34](index=34&type=chunk) [Non-Interest Income](index=8&type=section&id=Non-Interest%20Income) Non-interest income increased quarter-over-quarter due to improvements in existing businesses and Heartland's contribution, but decreased year-over-year primarily due to the sale of German American Insurance, Inc. (GAI) assets in Q2 2024 Total Non-Interest Income | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | | Total Non-Interest Income | $16,733,000 | $14,840,000 | $18,923,000 | | QoQ Growth | +$1,893,000 (+13%) | - | - | | YoY Decrease | -$2,190,000 (-12%) | - | - | | Adjusted Non-Interest Income | $16,733,000 | $14,840,000 | $13,983,000 | - Non-interest income growth quarter-over-quarter was primarily driven by wealth management fees, interchange fees, and residential mortgage loan sales gains[4](index=4&type=chunk) [Wealth Management Fees](index=9&type=section&id=Wealth%20Management%20Fees) Wealth management fees increased quarter-over-quarter and year-over-year, driven by seasonal tax-related fees, new business, and the Heartland acquisition Wealth Management Fees | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------- | :--------------- | :--------------- | :--------------- | | Wealth Management Fees | $4,165,000 | $3,836,000 | $3,783,000 | | QoQ Growth | +$329,000 (+9%) | - | - | | YoY Growth | +$382,000 (+10%) | - | - | - Growth was primarily attributed to seasonal tax-related fees from clients, strong new business results, and the Heartland acquisition, partially offset by a weaker stock market during the first two months of the second quarter[40](index=40&type=chunk) [Service Charges on Deposit Accounts](index=9&type=section&id=Service%20Charges%20on%20Deposit%20Accounts) Service charges on deposit accounts increased quarter-over-quarter and year-over-year, primarily due to the Heartland acquisition and higher customer utilization of deposit services Service Charges on Deposit Accounts | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | | Service Charges on Deposit Accounts | $3,714,000 | $3,486,000 | $3,093,000 | | QoQ Growth | +$228,000 (+7%) | - | - | | YoY Growth | +$621,000 (+20%) | - | - | - Growth was primarily attributed to the Heartland acquisition and increased customer utilization of deposit services[41](index=41&type=chunk) [Insurance Revenues](index=9&type=section&id=Insurance%20Revenues) Insurance revenues were not recognized in Q2 and Q1 2025 due to the sale of German American Insurance, Inc. assets in Q2 2024 Insurance Revenues | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------- | :--------------- | :--------------- | :--------------- | | Insurance Revenues | $0 | $0 | $1,506,000 | - No insurance revenue was recognized in Q2 and Q1 2025 due to the sale of GAI assets on June 1, 2024[42](index=42&type=chunk) [Interchange Fee Income](index=10&type=section&id=Interchange%20Fee%20Income) Interchange fee income increased quarter-over-quarter and year-over-year, driven by seasonally higher customer transaction volumes and the Heartland acquisition Interchange Fee Income | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------- | :--------------- | :--------------- | :--------------- | | Interchange Fee Income | $5,057,000 | $4,421,000 | $4,404,000 | | QoQ Growth | +$636,000 (+14%) | - | - | | YoY Growth | +$653,000 (+15%) | - | - | - Growth was primarily related to seasonally higher customer transaction volumes and the Heartland acquisition[43](index=43&type=chunk) [Other Operating Income](index=10&type=section&id=Other%20Operating%20Income) Other operating income increased quarter-over-quarter and year-over-year, primarily attributable to the Heartland acquisition Other Operating Income | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------- | :--------------- | :--------------- | :--------------- | | Other Operating Income | $2,097,000 | $1,690,000 | $1,213,000 | | QoQ Growth | +$407,000 (+24%) | - | - | | YoY Growth | +$884,000 (+73%) | - | - | - Growth was primarily attributed to the Heartland acquisition[44](index=44&type=chunk) [Net Gains (Losses) on Securities](index=10&type=section&id=Net%20Gains%20(Losses)%20on%20Securities) No net gains or losses on securities were recorded in Q2 and Q1 2025, contrasting with a significant net loss in Q2 2024 related to a securities restructuring transaction Net Gains (Losses) on Securities | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | | Net Gains (Losses) on Securities | $0 | $0 | -$34,893,000 | - No net gains or losses on securities were generated in Q2 and Q1 2025, while the net loss in Q2 2024 was related to a securities restructuring transaction[45](index=45&type=chunk) [Non-Interest Expense](index=10&type=section&id=Non-Interest%20Expense) Non-interest expense decreased quarter-over-quarter primarily due to reduced non-recurring acquisition-related costs, but increased year-over-year, mainly driven by Heartland's operating costs Total Non-Interest Expense | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | | Total Non-Interest Expense | $49,517,000 | $52,782,000 | $37,674,000 | | QoQ Change | -$3,265,000 (-6%) | - | - | | YoY Change | +$11,843,000 (+31%) | - | - | | Adjusted Non-Interest Expense | $48,588,000 | $46,850,000 | $34,203,000 | - The quarter-over-quarter decrease in non-interest expense was due to reduced non-recurring acquisition-related costs, partially offset by the full contribution of Heartland operating costs[46](index=46&type=chunk) - The year-over-year increase in non-interest expense was primarily driven by Heartland's operating costs[46](index=46&type=chunk) [Salaries and Employee Benefits](index=11&type=section&id=Salaries%20and%20Employee%20Benefits) Salaries and employee benefits decreased quarter-over-quarter due to lower non-recurring acquisition-related costs but increased year-over-year due to the Heartland employee base Salaries and Employee Benefits | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | | Salaries and Employee Benefits | $26,638,000 | $28,040,000 | $20,957,000 | | QoQ Change | -$1,402,000 (-5%) | - | - | | YoY Change | +$5,681,000 (+27%) | - | - | - The quarter-over-quarter decrease was primarily attributed to approximately **$1,843,000** in non-recurring acquisition-related salaries and benefits costs in Q1[50](index=50&type=chunk) - The year-over-year increase was primarily due to salaries and benefits costs for the Heartland employee base[50](index=50&type=chunk) [Occupancy, Furniture and Equipment Expense](index=11&type=section&id=Occupancy%2C%20Furniture%20and%20Equipment%20Expense) Occupancy, furniture, and equipment expense increased year-over-year, primarily driven by the operating costs of the Heartland branch network Occupancy, Furniture and Equipment Expense | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------- | :--------------- | :--------------- | :--------------- | | Occupancy, Furniture and Equipment Expense | $4,751,000 | $4,663,000 | $3,487,000 | | QoQ Change | +$88,000 (+2%) | - | - | | YoY Change | +$1,264,000 (+36%) | - | - | - The year-over-year increase was primarily attributed to the operating costs of the Heartland branch network[51](index=51&type=chunk) [Data Processing Fees](index=11&type=section&id=Data%20Processing%20Fees) Data processing fees decreased quarter-over-quarter due to lower acquisition-related costs but increased year-over-year, driven by Heartland's existing systems and acquisition-related expenses Data Processing Fees | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------- | :--------------- | :--------------- | :--------------- | | Data Processing Fees | $4,086,000 | $5,495,000 | $3,019,000 | | QoQ Change | -$1,409,000 (-26%) | - | - | | YoY Change | +$1,067,000 (+35%) | - | - | - The quarter-over-quarter decrease was primarily due to lower acquisition-related costs (approximately **$235,000** in Q2 versus **$1,323,000** in Q1)[52](index=52&type=chunk) - The year-over-year increase was driven by the operating costs of Heartland's existing systems and acquisition-related costs[52](index=52&type=chunk) [Professional Fees](index=12&type=section&id=Professional%20Fees) Professional fees decreased both quarter-over-quarter and year-over-year, primarily due to a reduction in acquisition-related professional service expenses for the Heartland merger Professional Fees | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------- | :--------------- | :--------------- | :--------------- | | Professional Fees | $2,112,000 | $4,184,000 | $3,462,000 | | QoQ Change | -$2,072,000 (-50%) | - | - | | YoY Change | -$1,350,000 (-39%) | - | - | - The quarter-over-quarter and year-over-year decreases were primarily due to reduced professional service fees related to the Heartland acquisition[53](index=53&type=chunk) [Intangible Amortization](index=12&type=section&id=Intangible%20Amortization) Intangible amortization significantly increased both quarter-over-quarter and year-over-year, directly attributable to the Heartland acquisition Intangible Amortization | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------- | :--------------- | :--------------- | :--------------- | | Intangible Amortization | $2,803,000 | $2,070,000 | $532,000 | | QoQ Growth | +$733,000 (+35%) | - | - | | YoY Growth | +$2,271,000 (+427%) | - | - | - The increase was attributed to the Heartland acquisition[54](index=54&type=chunk) [Other Operating Expenses](index=12&type=section&id=Other%20Operating%20Expenses) Other operating expenses increased quarter-over-quarter and year-over-year, primarily due to acquisition-related training costs and Heartland's operational expenses Other Operating Expenses | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------- | :--------------- | :--------------- | :--------------- | | Other Operating Expenses | $6,939,000 | $5,976,000 | $4,598,000 | | QoQ Growth | +$963,000 (+16%) | - | - | | YoY Growth | +$2,341,000 (+51%) | - | - | - The increase was primarily attributed to acquisition-related training costs and Heartland's operating costs[55](index=55&type=chunk) [Company Information](index=12&type=section&id=Company%20Information) This section provides an overview of German American Bancorp, Inc., including its operational footprint, subsidiaries, and a cautionary note regarding forward-looking statements [About German American Bancorp, Inc.](index=12&type=section&id=About%20German%20American%20Bancorp%2C%20Inc.) German American Bancorp, Inc. is a financial holding company headquartered in Jasper, Indiana, operating 94 bank offices across Indiana, Kentucky, and Ohio through its subsidiary German American Bank, also operating as Heartland Bank in specific regions, and owns an investment brokerage subsidiary - German American Bancorp, Inc. (Nasdaq: GABC) is a financial holding company headquartered in Jasper, Indiana[56](index=56&type=chunk) - Through its bank subsidiary, German American Bank, it operates **94** bank offices across Indiana, Kentucky, and Ohio[56](index=56&type=chunk) - In the Columbus and Cincinnati metropolitan areas of Ohio, the company operates under the Heartland Bank brand, a division of German American Bank[56](index=56&type=chunk) - The company also owns an investment brokerage subsidiary, German American Investment Services, Inc[56](index=56&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=12&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This press release contains forward-looking statements, cautioning readers that these statements are based on assumptions and subject to risks, uncertainties, and other factors, where actual results may differ materially from expectations, including interest rate changes, economic conditions, competition, M&A integration risks, and regulatory policies - Forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors, where actual results may differ materially from expectations[57](index=57&type=chunk)[58](index=58&type=chunk) - Factors that could cause actual results to differ include changes in interest rates, adverse economic conditions, changes in liquidity, competitive conditions, M&A integration risks, regulatory actions, and changes in accounting principles[58](index=58&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk) - The company undertakes no obligation to publicly revise these forward-looking statements to reflect future events or circumstances[60](index=60&type=chunk) [Financial Statements](index=15&type=section&id=Financial%20Statements) This section presents the company's consolidated balance sheets, statements of income, and key earnings performance ratios, offering a comprehensive view of its financial position and operational results [Consolidated Balance Sheets](index=15&type=section&id=Consolidated%20Balance%20Sheets) This section provides the consolidated balance sheets as of June 30, 2025, March 31, 2025, and June 30, 2024, detailing the company's assets, liabilities, and shareholders' equity Consolidated Balance Sheets | ASSETS (dollars in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :---------------------------- | :------------ | :------------- | :------------ | | Cash and Due from Banks | $99,871 | $79,113 | $70,418 | | Short-term Investments | 100,777 | 363,678 | 259,401 | | Investment Securities | 1,572,205 | 1,563,037 | 1,374,165 | | Loans Held-for-Sale | 13,880 | 6,713 | 15,419 | | Loans, Net of Unearned Income | 5,739,428 | 5,646,526 | 4,037,127 | | Allowance for Credit Losses | (75,510) | (75,158) | (43,946) | | Net Loans | 5,663,918 | 5,571,368 | 3,993,181 | | Stock in FHLB and Other Restricted Stock | 17,966 | 18,105 | 14,530 | | Premises and Equipment | 139,435 | 141,387 | 105,651 | | Goodwill and Other Intangible Assets | 417,159 | 418,463 | 184,095 | | Other Assets | 254,931 | 257,829 | 200,063 | | TOTAL ASSETS | $8,280,142 | $8,419,693 | $6,216,923 | | LIABILITIES | | | | | Non-interest-bearing Demand Deposits | $1,896,737 | $1,889,673 | $1,448,467 | | Interest-bearing Demand, Savings, and Money Market Accounts | 3,728,031 | 3,788,889 | 2,984,571 | | Time Deposits | 1,329,918 | 1,419,323 | 880,519 | | Total Deposits | 6,954,686 | 7,097,885 | 5,313,557 | | Borrowings | 202,033 | 216,542 | 166,644 | | Other Liabilities | 53,919 | 59,224 | 48,901 | | TOTAL LIABILITIES | 7,210,638 | 7,373,651 | 5,529,102 | | SHAREHOLDERS' EQUITY | | | | | Common Stock and Surplus | 743,230 | 742,431 | 420,434 | | Retained Earnings | 533,834 | 513,292 | 485,256 | | Accumulated Other Comprehensive Income (Loss) | (207,560) | (209,681) | (217,869) | | SHAREHOLDERS' EQUITY | 1,069,504 | 1,046,042 | 687,821 | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $8,280,142 | $8,419,693 | $6,216,923 | | END OF PERIOD SHARES OUTSTANDING | 37,492,814 | 37,481,716 | 29,679,248 | | TANGIBLE BOOK VALUE PER SHARE | $17.40 | $16.74 | $16.97 | [Consolidated Statements of Income](index=16&type=section&id=Consolidated%20Statements%20of%20Income) This section presents the consolidated statements of income for the three and six months ended June 30, 2025, March 31, 2025, and June 30, 2024, detailing interest income, interest expense, net interest income, provision for credit losses, non-interest income, non-interest expense, and net income Consolidated Statements of Income | (dollars in thousands) | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :-------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | INTEREST INCOME | | | | | | | Interest and Fees on Loans | $90,002 | $81,505 | $59,230 | $171,507 | $117,056 | | Interest on Short-term Investments | 3,932 | 2,216 | 2,383 | 6,148 | 2,682 | | Interest and Dividends on Investment Securities | 12,501 | 12,495 | 9,964 | 24,996 | 20,097 | | TOTAL INTEREST INCOME | 106,435 | 96,216 | 71,577 | 202,651 | 139,835 | | INTEREST EXPENSE | | | | | | | Interest on Deposits | 30,635 | 27,028 | 23,385 | 57,663 | 44,374 | | Interest on Borrowings | 2,645 | 2,616 | 2,221 | 5,261 | 4,496 | | TOTAL INTEREST EXPENSE | 33,280 | 29,644 | 25,606 | 62,924 | 48,870 | | NET INTEREST INCOME | 73,155 | 66,572 | 45,971 | 139,727 | 90,965 | | Provision for Credit Losses | 1,200 | 15,300 | 625 | 16,500 | 1,525 | | NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 71,955 | 51,272 | 45,346 | 123,227 | 89,440 | | NON-INTEREST INCOME | | | | | | | Net Gains on Sales of Loans | 997 | 832 | 969 | 1,829 | 1,720 | | Net Gains (Losses) on Securities | — | — | (34,893) | — | (34,858) | | Other Non-interest Income | 15,736 | 14,008 | 52,847 | 29,744 | 67,883 | | TOTAL NON-INTEREST INCOME | 16,733 | 14,840 | 18,923 | 31,573 | 34,745 | | NON-INTEREST EXPENSE | | | | | | | Salaries and Benefits | 26,638 | 28,040 | 20,957 | 54,678 | 42,135 | | Other Non-interest Expenses | 22,879 | 24,742 | 16,717 | 47,621 | 32,277 | | TOTAL NON-INTEREST EXPENSE | 49,517 | 52,782 | 37,674 | 102,299 | 74,412 | | Income before Income Taxes | 39,171 | 13,330 | 26,595 | 52,501 | 49,773 | | Income Tax Expense | 7,810 | 2,813 | 6,065 | 10,623 | 10,221 | | NET INCOME | $31,361 | $10,517 | $20,530 | $41,878 | $39,552 | | BASIC EARNINGS PER SHARE | $0.84 | $0.30 | $0.69 | $1.16 | $1.33 | | DILUTED EARNINGS PER SHARE | $0.84 | $0.30 | $0.69 | $1.16 | $1.33 | | WEIGHTED AVERAGE SHARES OUTSTANDING | 37,479,342 | 34,680,719 | 29,667,770 | 36,087,762 | 29,663,631 | | DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | 37,479,342 | 34,680,719 | 29,667,770 | 36,087,762 | 29,663,631 | [Earnings Performance Ratios & Selected Financial Data](index=17&type=section&id=Earnings%20Performance%20Ratios%20%26%20Selected%20Financial%20Data) This section provides key earnings performance ratios and selected balance sheet data, including return on assets, return on equity, net interest margin, efficiency ratio, and asset quality metrics, to assess the company's financial health and operational efficiency across different periods Earnings Performance Ratios & Selected Financial Data | EARNINGS PERFORMANCE RATIOS | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------- | :------------ | | Annualized Return on Average Assets | 1.49% | 0.55% | 1.32% | | Annualized Return on Average Equity | 11.97% | 4.52% | 12.64% | | Annualized Return on Average Tangible Equity | 19.87% | 7.10% | 17.67% | | Net Interest Margin | 3.92% | 3.96% | 3.34% | | Efficiency Ratio | 51.25% | 61.30% | 36.66% | | Net Overhead Expense to Average Earning Assets | 1.72% | 2.19% | 1.31% | | ASSET QUALITY RATIOS | | | | | Annualized Net Charge-offs to Average Loans | 0.06% | 0.04% | 0.04% | | Allowance for Credit Losses to Period End Loans | 1.32% | 1.33% | 1.09% | | Non-performing Assets to Period End Assets | 0.30% | 0.22% | 0.12% | | Non-performing Loans to Period End Loans | 0.44% | 0.33% | 0.18% | | Loans 30-89 Days Past Due to Period End Loans | 0.46% | 0.36% | 0.32% | | SELECTED BALANCE SHEET & OTHER FINANCIAL DATA | | | | | Average Assets | $8,424,328 | $7,628,810 | $6,230,676 | | Average Earning Assets | $7,605,113 | $6,922,503 | $5,709,014 | | Average Total Loans | $5,678,929 | $5,135,859 | $4,022,612 | | Average Demand Deposits | $1,873,459 | $1,669,722 | $1,421,710 | | Average Interest Bearing Liabilities | $5,447,670 | $4,976,746 | $4,114,351 | | Average Equity | $1,048,227 | $931,386 | $649,886 | | Period End Non-performing Assets | $25,136 | $18,620 | $7,322 | | Period End Non-performing Loans | $25,088 | $18,572 | $7,289 | | Period End Loans 30-89 Days Past Due | $26,294 | $20,093 | $12,766 | | Tax-Equivalent Net Interest Income | $74,425 | $67,891 | $47,497 | | Net Charge-offs during Period | $848 | $486 | $433 | [Non-GAAP Financial Measures](index=18&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to GAAP, aiming to offer clearer insights into core operating performance [Explanation of Non-GAAP Measures](index=18&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company provides non-GAAP financial measures as a supplement to GAAP, aiming to help investors evaluate its operating performance by excluding certain non-core transactions (such as CECL 'Day 2' provision, merger-related expenses, GAI operations and sale, and securities restructuring losses) to enhance period-over-period comparability, and presents efficiency ratio and net interest margin on a tax-equivalent basis for peer comparison - Non-GAAP financial measures are intended to assist investors in evaluating the company's operating performance and enhancing period-over-period comparability[71](index=71&type=chunk) - Adjustments include: CECL "Day 2" provision, non-recurring merger-related expenses for Heartland, operating results and gain on sale of German American Insurance, Inc. (GAI), and the Q2 2024 securities portfolio restructuring loss[71](index=71&type=chunk) - The efficiency ratio and net interest margin are presented on a fully tax-equivalent basis to enhance peer comparison[72](index=72&type=chunk) [Non-GAAP Reconciliations](index=19&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed non-GAAP financial measure reconciliations, adjusting GAAP-reported net income, EPS, non-interest income, non-interest expense, efficiency ratio, and net interest margin to non-GAAP metrics that management believes better reflect core operating performance [Net Income and Earnings Per Share Reconciliation](index=19&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share%20Reconciliation) This table reconciles GAAP net income and earnings per share to adjusted non-GAAP figures, highlighting the impact of specific non-recurring items Net Income and Earnings Per Share Reconciliation | (Dollars in Thousands, except per share amounts) | 06/30/2025 | 03/31/2025 | 06/30/2024 | | :--------------------------------------- | :--------- | :--------- | :--------- | | Net Income, as reported | $31,361 | $10,517 | $20,530 | | Adjustments: | | | | | Plus: CECL Day 2 non-PCD provision | — | 12,150 | — | | Plus: Non-recurring merger-related expenses | 697 | 4,620 | 318 | | Less: Loss on securities restructuring | — | — | (27,189) | | Less: Income from GAI operations | — | — | 210 | | Less: Gain on sale of GAI assets | — | — | 27,476 | | Adjusted Net Income | $32,058 | $27,287 | $20,351 | | Weighted Average Shares Outstanding | 37,479,342 | 34,680,719 | 29,667,770 | | Earnings Per Share, as reported | $0.84 | $0.30 | $0.69 | | Earnings Per Share, as adjusted | $0.86 | $0.79 | $0.69 | [Non-Interest Income and Non-Interest Expense Reconciliation](index=19&type=section&id=Non-Interest%20Income%20and%20Non-Interest%20Expense%20Reconciliation) This table reconciles GAAP non-interest income and expense to adjusted non-GAAP figures, isolating the impact of non-core transactions Non-Interest Income and Non-Interest Expense Reconciliation | (Dollars in Thousands) | 06/30/2025 | 03/31/2025 | 06/30/2024 | | :----------------------------- | :--------- | :--------- | :--------- | | Non-Interest Income | $16,733 | $14,840 | $18,923 | | Less: Loss on securities restructuring | — | — | (34,893) | | Less: Revenue from GAI operations | — | — | 1,510 | | Less: Gain on sale of GAI assets | — | — | 38,323 | | Adjusted Non-Interest Income | $16,733 | $14,840 | $13,983 | | Non-Interest Expense | $49,517 | $52,782 | $37,674 | | Less: Non-recurring merger-related expenses | 929 | 5,932 | 425 | | Less: Expense from GAI operations | — | — | 1,230 | | Less: Expense from sale of GAI assets | — | — | 1,816 | | Adjusted Non-Interest Expense | $48,588 | $46,850 | $34,203 | [Efficiency Ratio Reconciliation](index=20&type=section&id=Efficiency%20Ratio%20Reconciliation) This table reconciles the GAAP efficiency ratio to an adjusted non-GAAP efficiency ratio, providing a clearer view of operational efficiency by excluding certain items Efficiency Ratio Reconciliation | (Dollars in Thousands) | 06/30/2025 | 03/31/2025 | 06/30/2024 | | :------------------------------------------ | :--------- | :--------- | :--------- | | Adjusted Non-Interest Expense (from above) | $48,588 | $46,850 | $34,203 | | Less: Intangible Amortization | 2,803 | 2,070 | 532 | | Adjusted Non-Interest Expense excluding Intangible Amortization | $45,785 | $44,780 | $33,671 | | Net Interest Income | $73,155 | $66,572 | $45,971 | | Add: FTE Adjustment | 1,270 | 1,319 | 1,526 | | Net Interest Income (FTE) | 74,425 | 67,891 | 47,497 | | Adjusted Non-Interest Income (from above) | 16,733 | 14,840 | 13,983 | | Total Adjusted Total Revenue | $91,158 | $82,731 | $61,480 | | Efficiency Ratio | 51.25% | 61.30% | 36.66% | | Adjusted Efficiency Ratio | 50.23% | 54.13% | 54.77% | [Net Interest Margin Reconciliation](index=20&type=section&id=Net%20Interest%20Margin%20Reconciliation) This table reconciles the GAAP net interest margin to an adjusted non-GAAP net interest margin, offering a more comparable view of core lending profitability Net Interest Margin Reconciliation | (Dollars in Thousands) | 06/30/2025 | 03/31/2025 | 06/30/2024 | | :---------------------------------- | :--------- | :--------- | :--------- | | Net Interest Income (FTE) from above | $74,425 | $67,891 | $47,497 | | Less: Accretion of Discount on Acquired Loans | $3,483 | $4,192 | $293 | | Adjusted Net Interest Income (FTE) | $70,942 | $63,699 | $47,204 | | Average Earning Assets | $7,605,113 | $6,922,503 | $5,709,014 | | Net Interest Margin (FTE) | 3.92% | 3.96% | 3.34% | | Adjusted Net Interest Margin (FTE) | 3.74% | 3.72% | 3.32% |

Company Overview - German American Bancorp (GABC) is a financial services holding company based in Jasper, operating in the Finance sector [3] - The company's shares have experienced a price change of -2.56% this year [3] Dividend Information - GABC currently pays a dividend of $0.29 per share, resulting in a dividend yield of 2.96% [3] - The dividend yield of GABC is lower than the Banks - Midwest industry's yield of 3.22% and the S&P 500's yield of 1.6% [3] - The annualized dividend of $1.16 represents a 7.4% increase from the previous year [4] - Over the last 5 years, GABC has increased its dividend 5 times, averaging an annual increase of 9.04% [4] - The current payout ratio for GABC is 39%, indicating that it paid out 39% of its trailing 12-month EPS as dividends [4] Earnings Growth - The Zacks Consensus Estimate for GABC's earnings in 2025 is $3.35 per share, with an expected increase of 18.37% from the previous year [5] Investment Considerations - GABC is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7] - Income investors should note that high-yielding stocks may face challenges during periods of rising interest rates [7]

Company Overview - German American Bancorp (GABC) is a financial services holding company based in Jasper, operating in the Finance sector [3] - The company's shares have experienced a price change of -3.23% this year [3] Dividend Information - GABC currently pays a dividend of $0.29 per share, resulting in a dividend yield of 2.98%, which is lower than the Banks - Midwest industry's yield of 3.18% and the S&P 500's yield of 1.53% [3] - The annualized dividend of $1.16 represents a 7.4% increase from the previous year [4] - Over the last 5 years, GABC has increased its dividend 5 times, averaging an annual increase of 9.04% [4] - The current payout ratio is 39%, indicating that GABC paid out 39% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - GABC is expected to see earnings growth this fiscal year, with the Zacks Consensus Estimate for 2025 at $3.35 per share, reflecting a year-over-year growth rate of 18.37% [5] Investment Perspective - GABC is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7]

Part I [Financial Information](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the core unaudited financial statements for the quarter ended March 31, 2025, compared against prior periods [Unaudited Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents the core unaudited financial statements for the quarter ended March 31, 2025, compared against prior periods, reflecting significant growth driven by the Heartland BancCorp acquisition Consolidated Balance Sheet Highlights (in billions) | Account | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $8.420 | $6.296 | +$2.124 | | Loans, Net | $5.571 | $4.080 | +$1.491 | | Total Deposits | $7.098 | $5.329 | +$1.769 | | Total Shareholders' Equity | $1.046 | $0.715 | +$0.331 | Consolidated Income Statement Highlights (in millions, except per share data) | Account | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $66.572 | $44.994 | +$21.578 | | Provision for Credit Losses | $15.300 | $0.900 | +$14.400 | | Non-interest Income | $14.840 | $15.822 | -$0.982 | | Non-interest Expense | $52.782 | $36.738 | +$16.044 | | Net Income | $10.517 | $19.022 | -$8.505 | | Diluted EPS | $0.30 | $0.64 | -$0.34 | - Net income for Q1 2025 was **$10.5 million**, or **$0.30 per share**, a **53% per-share decline** from Q1 2024, primarily due to costs associated with the Heartland acquisition[168](index=168&type=chunk)[186](index=186&type=chunk) - The quarter's results included significant one-time items: **$5.9 million** in acquisition-related expenses and a **$16.2 million** Day 2 provision for credit losses under CECL for the Heartland portfolio[170](index=170&type=chunk)[187](index=187&type=chunk) - The company completed the sale of its insurance subsidiary, German American Insurance, Inc. (GAI), on June 1, 2024, for **$40.0 million**, resulting in no insurance revenue in Q1 2025[33](index=33&type=chunk)[167](index=167&type=chunk) [Business Combinations (Heartland Acquisition)](index=41&type=section&id=NOTE%2016%20%E2%80%93%20Business%20Combinations) This section details the acquisition of Heartland BancCorp, including its financial impact and the accounting treatment of goodwill and intangible assets - On February 1, 2025, the Company acquired Heartland BancCorp, which added approximately **$1.94 billion** in assets, **$1.58 billion** in loans, and **$1.73 billion** in deposits[146](index=146&type=chunk)[147](index=147&type=chunk) - The acquisition was accounted for using the acquisition method, resulting in the recognition of **$197.5 million** in goodwill and **$40.1 million** in core deposit intangible assets[150](index=150&type=chunk) Heartland Acquisition Consideration and Net Assets (in millions) | Item | Value | | :--- | :--- | | **Consideration** | | | Cash | $23.102 | | Equity Instruments | $320.007 | | **Total Consideration** | **$343.109** | | **Assets/Liabilities** | | | Total Identifiable Net Assets Acquired | $145.627 | | **Goodwill** | **$197.482** | [Loan Portfolio and Credit Quality](index=19&type=section&id=NOTE%207%20%E2%80%93%20Loans) This section analyzes the composition and credit quality of the loan portfolio, including changes in the Allowance for Credit Losses and non-accrual loans Loan Portfolio Composition (in millions) | Loan Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial and Industrial | $732.328 | $591.785 | | Commercial Real Estate | $3,055.074 | $2,224.872 | | Agricultural | $455.678 | $431.037 | | Residential Mortgage | $788.222 | $357.448 | | Other Retail | $543.897 | $448.872 | | **Total Loans** | **$5,654.944** | **$4,133.267** | - The Allowance for Credit Losses (ACL) increased from **$44.4 million** at year-end 2024 to **$75.2 million** at March 31, 2025. The increase includes a **$15.9 million** ACL for acquired Heartland PCD loans and a **$16.2 million** Day 2 CECL provision for the Heartland portfolio[57](index=57&type=chunk) - Effective March 31, 2025, the Company changed its ACL estimation method for most loan segments from a static pool to a discounted cash flow model, resulting in a **$1.7 million decrease** to the allowance[58](index=58&type=chunk) - Total non-accrual loans increased to **$17.9 million** as of March 31, 2025, up from **$10.9 million** at December 31, 2024[73](index=73&type=chunk)[74](index=74&type=chunk) [Securities Portfolio](index=16&type=section&id=NOTE%205%20%E2%80%93%20Securities) This section details the company's securities portfolio, including fair values and unrealized gains or losses Securities Available-for-Sale (in millions) | Security Type | Fair Value (Mar 31, 2025) | Fair Value (Dec 31, 2024) | | :--- | :--- | :--- | | U.S. Treasury | $144.667 | $110.864 | | Obligations of State and Political Subdivisions | $458.834 | $463.169 | | MBS/CMO | $709.425 | $702.179 | | US Gov't Sponsored Entities & Agencies | $249.758 | $241.075 | | **Total** | **$1,562.684** | **$1,517.287** | - As of March 31, 2025, the securities portfolio had gross unrealized losses of **$267.8 million**, primarily concentrated in securities held for 12 months or more. These losses are considered temporary and related to market interest rate fluctuations, with no allowance for credit losses deemed necessary[41](index=41&type=chunk)[43](index=43&type=chunk) [Segment Information](index=30&type=section&id=NOTE%209%20%E2%80%93%20Segment%20Information) This section outlines the financial performance of the company's core banking and wealth management segments following the divestiture of its insurance business - Following the sale of its insurance assets on June 1, 2024, the Company's operations now consist of two primary segments: core banking and wealth management services. As a result, no insurance revenue was recorded in Q1 2025[95](index=95&type=chunk) Segment Profit (Loss) Before Taxes - Q1 2025 (in millions) | Segment | Profit (Loss) Before Taxes | | :--- | :--- | | Core Banking | $16.811 | | Wealth Management Services | $1.410 | | Insurance | $0 | | Other / Eliminations | ($4.891) | | **Consolidated Total** | **$13.330** | [Management's Discussion and Analysis (MD&A)](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant impact of the Heartland BancCorp acquisition on the first quarter 2025 results, including adjusted net income and the sale of the insurance business [Results of Operations](index=47&type=section&id=RESULTS%20OF%20OPERATIONS) Net interest income increased 48% to $66.6 million, with the tax-equivalent net interest margin expanding 61 basis points to 3.96%, significantly boosted by 24 basis points from purchase accounting accretion on acquired loans - Tax-equivalent net interest margin was **3.96%** in Q1 2025, up from **3.35%** in Q1 2024. Accretion of discounts on acquired loans contributed **24 basis points** to the Q1 2025 margin[189](index=189&type=chunk) - The provision for credit losses of **$15.3 million** in Q1 2025 was primarily driven by the **$16.2 million** Day 2 CECL addition for the Heartland acquisition[192](index=192&type=chunk) - Non-interest income fell by **$1.0 million**, or **6%**, mainly because of a **$2.9 million** decline in insurance revenues following the sale of GAI, which was partially offset by growth in other fee income categories from the Heartland acquisition[196](index=196&type=chunk)[197](index=197&type=chunk)[200](index=200&type=chunk) - Non-interest expense increased by **$16.0 million**, or **44%**, driven by Heartland's operating costs and approximately **$5.9 million** in non-recurring acquisition-related expenses[203](index=203&type=chunk) [Financial Condition](index=53&type=section&id=FINANCIAL%20CONDITION) As of March 31, 2025, total assets reached $8.42 billion, a $2.12 billion increase from year-end 2024, driven by the Heartland acquisition, with corresponding growth in loans and deposits Key Balance Sheet Changes (in billions) | Account | March 31, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $8.42 | $6.30 | +$2.12 | | Total Loans | $5.65 | $4.13 | +$1.52 | | Total Deposits | $7.10 | $5.33 | +$1.77 | - The allowance for credit losses increased to **$75.2 million**, representing **1.33%** of period-end loans. This includes a **$32.1 million** addition related to the Heartland loan portfolio[219](index=219&type=chunk)[220](index=220&type=chunk) - Non-performing assets rose to **$18.6 million** (**0.22%** of total assets), up from **$11.1 million** (**0.18%** of total assets) at year-end 2024, with the Heartland acquisition contributing **$5.4 million** to the total[222](index=222&type=chunk) [Capital Resources and Liquidity](index=55&type=section&id=Capital%20Resources) Shareholders' equity increased by $331.0 million to $1.046 billion, primarily due to the issuance of 7.7 million shares valued at $320.0 million for the Heartland acquisition, with all regulatory capital ratios remaining well above 'well-capitalized' minimums - Shareholders' equity increased to **$1.046 billion**, largely due to issuing approximately **7.7 million shares** valued at **$320.0 million** to complete the Heartland acquisition[226](index=226&type=chunk)[227](index=227&type=chunk) Regulatory Capital Ratios | Ratio | 3/31/2025 | 12/31/2024 | Well-Capitalized Guideline | | :--- | :--- | :--- | :--- | | **Consolidated** | | | | | Total Capital | 15.01% | 17.15% | N/A | | Tier 1 Capital | 13.26% | 15.72% | N/A | | CET 1 Capital | 12.73% | 15.02% | N/A | | **Bank** | | | | | Total Capital | 13.47% | 15.02% | 10.00% | | Tier 1 Capital | 12.56% | 14.23% | 8.00% | - The company has significant available liquidity, including borrowing capacity of approximately **$389 million** at the FHLB and **$649 million** at the Federal Reserve Bank as of March 31, 2025[236](index=236&type=chunk) [Use of Non-GAAP Financial Measures](index=58&type=section&id=USE%20OF%20NON-GAAP%20FINANCIAL%20MEASURES) The company presents several non-GAAP financial measures to provide a clearer view of its core operational performance, excluding the CECL Day 2 provision, non-recurring merger expenses, and divested insurance business results Non-GAAP Reconciliation: Net Income and EPS (Q1 2025, in millions) | Item | Amount | | :--- | :--- | | Net Income, as reported | $10.517 | | Plus: CECL Day 2 non-PCD provision (after-tax) | $12.150 | | Plus: Non-recurring merger-related expenses (after-tax) | $4.620 | | **Adjusted Net Income** | **$27.287** | | EPS, as reported | $0.30 | | **EPS, as adjusted** | **$0.79** | [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are liquidity and interest rate risk, monitored via simulation modeling, with net interest income projected to be slightly asset-sensitive Net Interest Income Sensitivity (as of March 31, 2025) | Rate Change Scenario | % Change in Net Interest Income (12-month) | | :--- | :--- | | +200 bps | +0.73% | | +100 bps | +0.47% | | -100 bps | -1.35% | | -200 bps | -3.10% | Net Portfolio Value (NPV) Sensitivity (as of March 31, 2025) | Rate Change Scenario | % Change in NPV | | :--- | :--- | | +200 bps | -8.17% | | +100 bps | -3.69% | | -100 bps | +2.62% | | -200 bps | +3.71% | [Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on management's evaluation, the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the first quarter - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective as of March 31, 2025[259](index=259&type=chunk) - No changes in internal control over financial reporting occurred during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, internal controls[260](index=260&type=chunk) Part II [Other Information](index=64&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section consolidates several required disclosures, including legal proceedings, risk factors, stock repurchases, and Rule 10b5-1 trading arrangements [Other Disclosures](index=64&type=section&id=Item%201.%20Legal%20Proceedings) This section consolidates several required disclosures, including legal proceedings, risk factors, stock repurchases, and Rule 10b5-1 trading arrangements - The company is not a party to any material legal proceedings outside of routine litigation incidental to its business[262](index=262&type=chunk) - There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[263](index=263&type=chunk) - No shares were repurchased during the quarter under the previously announced **1,000,000 share** repurchase plan[265](index=265&type=chunk) - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025[272](index=272&type=chunk)

Core Insights - German American Bancorp (GABC) reported a revenue of $81.41 million for Q1 2025, marking a year-over-year increase of 33.9% and exceeding the Zacks Consensus Estimate of $79.1 million by 2.92% [1] - The company's EPS for the same quarter was $0.79, up from $0.64 a year ago, representing a surprise of 9.72% compared to the consensus estimate of $0.72 [1] Financial Performance Metrics - Efficiency ratio was reported at 61.3%, higher than the estimated 56.3% by analysts [4] - Net Interest Margin stood at 4%, surpassing the average estimate of 3.7% [4] - Net charge-offs to average loans were 0%, compared to the estimated 0.1% [4] - Total Average Interest Earning Assets reached $6.92 billion, exceeding the estimate of $6.85 billion [4] - Net Gains on Sales of Loan were $0.83 million, slightly below the estimated $0.90 million [4] - Total Non-interest Income was reported at $14.84 million, lower than the estimated $15.95 million [4] - Net interest income (FTE) was $67.89 million, compared to the average estimate of $62.41 million [4] - Service charges on deposit accounts were $3.49 million, below the estimated $3.81 million [4] - Net Interest Income was reported at $66.57 million, exceeding the estimate of $63.51 million [4] Stock Performance - Shares of German American Bancorp have returned -3.1% over the past month, outperforming the Zacks S&P 500 composite's -4.3% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]