Company Performance - German American Bancorp (GABC) reported quarterly earnings of $0.79 per share, exceeding the Zacks Consensus Estimate of $0.72 per share, and up from $0.64 per share a year ago, representing an earnings surprise of 9.72% [1] - The company posted revenues of $81.41 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.92%, compared to year-ago revenues of $60.82 million [2] - Over the last four quarters, the company has consistently surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Outlook - The stock has underperformed the market, losing about 9.2% since the beginning of the year, compared to the S&P 500's decline of 6.1% [3] - The current consensus EPS estimate for the coming quarter is $0.82 on revenues of $89.4 million, and for the current fiscal year, it is $3.27 on revenues of $351.25 million [7] - The estimate revisions trend for German American Bancorp is currently favorable, resulting in a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Banks - Midwest industry, to which German American Bancorp belongs, is currently ranked in the top 18% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Q1 2025 Financial & Operational Highlights](index=1&type=section&id=GERMAN%20AMERICAN%20BANCORP,%20INC.%20(GABC)%20REPORTS%20FIRST%20QUARTER%202025%20EARNINGS%3B%20CLOSES%20ON%20HEARTLAND%20MERGER) German American Bancorp reported Q1 2025 earnings significantly impacted by Heartland merger costs, while underlying performance showed positive trends and strategic integration progressed smoothly [Q1 2025 Earnings Summary](index=1&type=section&id=Q1%202025%20Earnings%20Summary) Q1 2025 GAAP net income decreased to $10.5 million ($0.30 EPS) due to $5.9 million merger expenses and a $16.2 million CECL provision, while adjusted net income remained stable at $27.3 million ($0.79 EPS) Q1 2025 Earnings Performance (GAAP vs. Adjusted) | Metric | Q1 2025 (GAAP) | Q4 2024 (GAAP) | Q1 2025 (Adjusted) | Q4 2024 (Adjusted) | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $10.5 million | $23.2 million | $27.3 million | $23.4 million | | **EPS** | $0.30 | $0.78 | $0.79 | $0.79 | - First-quarter earnings were significantly impacted by one-time merger and acquisition costs of **$5.9 million** and a 'Day 2' CECL provision of **$16.2 million** related to the Heartland acquisition, resulting in a total after-tax impact of **$16.8 million**[1](index=1&type=chunk) - Despite merger-related impacts, the quarter showed positive underlying performance, including net interest margin expansion, strong organic loan and deposit growth, and controlled operating expenses[1](index=1&type=chunk) [Strategic Developments and Outlook](index=3&type=section&id=Strategic%20Developments%20and%20Outlook) The company successfully closed the Heartland BancCorp acquisition and completed system conversion, with management expressing confidence in future profitability and shareholder value, supported by a declared $0.29 per share dividend - The Board of Directors declared a regular quarterly cash dividend of **$0.29 per share**, payable on May 20, 2025[8](index=8&type=chunk) - The company was ranked **second** in the nation on the Forbes "America's Best Banks 2025" list, reflecting its financial strength and stability[9](index=9&type=chunk) - CEO D. Neil Dauby highlighted the smooth conversion of Heartland's operating systems post-quarter end and expressed confidence in future growth and profitability driven by the newly combined team[10](index=10&type=chunk) [Financial Condition Analysis (Balance Sheet)](index=5&type=section&id=Balance%20Sheet%20Highlights) The balance sheet reflects significant growth driven by the Heartland acquisition, impacting total assets, loans, and deposits, while maintaining strong capital adequacy [Heartland Acquisition Details](index=5&type=section&id=Heartland%20Acquisition%20Details) German American completed the Heartland BancCorp acquisition on February 1, 2025, adding approximately $1.94 billion in assets, $1.58 billion in loans, and $1.73 billion in deposits, settled with 7.74 million shares and $23.1 million cash Heartland Financials at Acquisition | Metric | Value (approx.) | | :--- | :--- | | Total Assets | $1.94 billion | | Total Loans | $1.58 billion | | Total Deposits | $1.73 billion | - The acquisition was settled with approximately **7.74 million shares** of GABC common stock and **$23.1 million** in cash[12](index=12&type=chunk) [Loan Portfolio](index=5&type=section&id=Loan%20Portfolio) Total loans increased by **$1.52 billion** to **$5.65 billion** due to the Heartland acquisition, with 4% organic growth and diversified composition, while asset quality remained strong with non-performing loans at **0.33%** End of Period Loan Balances (in thousands) | Loan Category | 3/31/2025 | 12/31/2024 | 3/31/2024 | | :--- | :--- | :--- | :--- | | Commercial & Industrial | $812,073 | $671,038 | $646,162 | | Commercial Real Estate | $3,055,074 | $2,224,872 | $2,148,808 | | Agricultural Loans | $455,678 | $431,037 | $400,733 | | Residential Mortgage Loans | $788,222 | $357,448 | $361,236 | | **Total Loans** | **$5,654,944** | **$4,133,267** | **$3,978,919** | - Excluding acquired loans, organic loan growth was **4%** from March 31, 2024, to March 31, 2025. On a linked-quarter basis, organic commercial real estate loans grew **10% annualized**[3](index=3&type=chunk)[16](index=16&type=chunk) - The allowance for credit losses increased to **1.33%** of period-end loans, up from **1.08%** at year-end 2024, mainly due to a **$32.1 million** addition related to the Heartland portfolio[19](index=19&type=chunk)[20](index=20&type=chunk) Asset Quality Metrics | Metric | 3/31/2025 | 12/31/2024 | 3/31/2024 | | :--- | :--- | :--- | :--- | | Non-Performing Assets to Total Assets | 0.22% | 0.18% | 0.16% | | Non-Performing Loans to Total Loans | 0.33% | 0.27% | 0.25% | [Deposits](index=9&type=section&id=Deposits) Total deposits increased by **$1.77 billion** to **$7.10 billion** primarily due to the Heartland acquisition, with non-interest-bearing demand deposits growing organically by **$21 million** (6% annualized) and remaining **27%** of total deposits End of Period Deposit Balances (in thousands) | Deposit Category | 3/31/2025 | 12/31/2024 | 3/31/2024 | | :--- | :--- | :--- | :--- | | Non-interest-bearing Demand | $1,889,673 | $1,399,270 | $1,463,933 | | IB Demand, Savings, and MMDA | $3,788,889 | $3,013,204 | $2,918,459 | | Time Deposits | $1,419,323 | $916,601 | $836,955 | | **Total Deposits** | **$7,097,885** | **$5,329,075** | **$5,219,347** | - The Heartland acquisition contributed **$1.755 billion** in deposits as of March 31, 2025[24](index=24&type=chunk) - Excluding acquisition-related deposits, non-interest bearing demand deposits increased by **$21 million**, or **6%** on an annualized basis, compared to Q4 2024[4](index=4&type=chunk)[5](index=5&type=chunk) [Capital Adequacy](index=10&type=section&id=Capital%20Adequacy) As of March 31, 2025, the company and its subsidiary bank maintained capital levels significantly above minimum requirements, with the bank classified as 'well-capitalized' Capital Ratios | Ratio | 3/31/2025 | 12/31/2024 | 3/31/2024 | | :--- | :--- | :--- | :--- | | **Consolidated** | | | | | CET 1 Capital Ratio | 12.73% | 15.02% | 14.27% | | Tier 1 Capital Ratio | 13.26% | 15.72% | 14.97% | | Total Capital Ratio | 15.23% | 17.15% | 16.57% | | **Bank** | | | | | CET 1 Capital Ratio | 12.56% | 14.23% | 13.73% | [Results of Operations Analysis (Income Statement)](index=11&type=section&id=Results%20of%20Operations%20Highlights%20-%20Quarter%20ended%20March%2031,%202025) The income statement analysis highlights significant increases in net interest income and non-interest expense, largely driven by the Heartland acquisition, alongside a substantial credit loss provision [Net Interest Income & Margin](index=13&type=section&id=Net%20Interest%20Income%20%26%20Margin) Q1 2025 net interest income increased **30%** to **$66.6 million**, driven by higher earning assets and a significant net interest margin expansion to **3.96%**, with **24 basis points** from loan discount accretion Net Interest Margin Analysis | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income (tax-equivalent) | $67.9M | $52.2M | $46.6M | | Net Interest Margin (NIM) | 3.96% | 3.54% | 3.35% | | NIM Contribution from Accretion | 24 bps | 4 bps | 3 bps | - The increase in net interest income was primarily due to a higher level of earning assets from the Heartland acquisition and the expansion of the net interest margin[36](index=36&type=chunk) - Excluding accretion, the NIM improvement was driven by higher yields on earning assets and a lower cost of deposits, partly due to the Federal Reserve's rate actions in late 2024[39](index=39&type=chunk) [Provision for Credit Losses and Net Charge-offs](index=15&type=section&id=Provision%20for%20Credit%20Losses%20and%20Net%20Charge-offs) Q1 2025 provision for credit losses surged to **$15.3 million**, primarily due to a **$16.2 million** 'Day 2' CECL provision from the Heartland acquisition, while net charge-offs remained minimal at **4 basis points** - The Q1 2025 provision for credit losses of **$15.3 million** included a **$16.2 million** provision for the Day 2 CECL addition related to the Heartland acquisition[40](index=40&type=chunk) - Net charge-offs were very low, totaling only **4 basis points** of average loans for the quarter[3](index=3&type=chunk)[41](index=41&type=chunk) [Non-Interest Income](index=15&type=section&id=Non-Interest%20Income) Non-interest income increased **5%** to **$14.8 million** from Q4 2024 due to Heartland's operations, but declined **6%** year-over-year as expected, following the mid-2024 sale of the GAI business Non-Interest Income Breakdown (in thousands) | Category | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Wealth Management Fees | $3,836 | $3,687 | $3,366 | | Service Charges on Deposit Accounts | $3,486 | $3,344 | $2,902 | | Interchange Fee Income | $4,421 | $4,244 | $4,087 | | Insurance Revenues | $0 | $0 | $2,878 | | **Total Non-interest Income** | **$14,840** | **$14,114** | **$15,822** | - The increase in non-interest income compared to Q4 2024 was predominantly driven by the Heartland acquisition[6](index=6&type=chunk)[42](index=42&type=chunk) - The year-over-year decline was due to the sale of the German American Insurance (GAI) assets in the second quarter of 2024, which resulted in no insurance revenue in Q1 2025[43](index=43&type=chunk)[48](index=48&type=chunk) [Non-Interest Expense](index=19&type=section&id=Non-Interest%20Expense) Non-interest expense rose **47%** to **$52.8 million** from Q4 2024, driven by **$5.9 million** in non-recurring Heartland acquisition costs and the inclusion of Heartland's ongoing operating expenses Non-Interest Expense Breakdown (in thousands) | Category | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Salaries and Employee Benefits | $28,040 | $20,404 | $21,178 | | Data Processing Fees | $5,495 | $3,257 | $2,811 | | Professional Fees | $4,184 | $1,178 | $1,595 | | Intangible Amortization | $2,070 | $438 | $578 | | **Total Non-interest Expense** | **$52,782** | **$35,839** | **$36,738** | - Q1 2025 non-interest expense included approximately **$5.9 million** of non-recurring acquisition-related expenses for the Heartland merger[52](index=52&type=chunk) - Excluding one-time costs, the primary driver of the expense increase was the addition of Heartland's operating costs, including salaries, occupancy, and data processing[52](index=52&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) [Financial Statements & Reconciliations](index=27&type=section&id=Financial%20Statements%20%26%20Reconciliations) This section presents the unaudited consolidated financial statements and reconciliations of non-GAAP financial measures, offering a comprehensive view of the company's financial position and performance [Consolidated Financial Statements](index=27&type=section&id=Consolidated%20Financial%20Statements) The report provides unaudited consolidated financial statements, including Balance Sheets and Statements of Income, along with key performance and asset quality ratios for periods ending March 31, 2025, December 31, 2024, and March 31, 2024 - The release contains the Consolidated Balance Sheets as of March 31, 2025, December 31, 2024, and March 31, 2024[70](index=70&type=chunk) - The release contains the Consolidated Statements of Income for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024[73](index=73&type=chunk) - A summary of key earnings performance, asset quality, and balance sheet ratios is provided[76](index=76&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=33&type=section&id=USE%20OF%20NON-GAAP%20FINANCIAL%20MEASURES) Non-GAAP financial measures are provided to exclude the 'Day 2' CECL provision, non-recurring Heartland merger expenses, and divested GAI business results, enhancing comparability for investors - Non-GAAP measures are used to exclude the impact of the Heartland merger's CECL Day 2 provision, non-recurring merger expenses, and the results of the sold GAI insurance business to improve comparability[80](index=80&type=chunk) Non-GAAP Reconciliation - Net Income and EPS (Q1 2025) | (in thousands, except per share) | As Reported (GAAP) | Adjustments | As Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Income | $10,517 | +$16,770 | $27,287 | | Earnings Per Share | $0.30 | +$0.49 | $0.79 | Non-GAAP Reconciliation - Efficiency Ratio (Q1 2025) | Metric | As Reported (GAAP) | As Adjusted (Non-GAAP) | | :--- | :--- | :--- | | Efficiency Ratio | 61.30% | 54.13% |

Company Overview - German American Bancorp (GABC) is a financial services holding company headquartered in Jasper, operating in the Finance sector [3] - The stock has experienced a price decline of 9.55% since the beginning of the year [3] Dividend Information - GABC currently pays a dividend of $0.29 per share, resulting in a dividend yield of 3.19%, which is lower than the Banks - Midwest industry's yield of 3.44% but higher than the S&P 500's yield of 1.69% [3] - The annualized dividend of $1.16 represents a 7.4% increase from the previous year, with a five-year average annual increase of 9.04% [4] - The company's payout ratio stands at 38%, indicating that it distributes 38% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - GABC is projected to see earnings growth this fiscal year, with the Zacks Consensus Estimate for 2025 at $3.27 per share, reflecting a year-over-year growth rate of 15.55% [5] Investment Appeal - GABC is considered an attractive dividend investment, improving stock investing profits and decreasing overall portfolio risk [6] - The company holds a Zacks Rank of 1 (Strong Buy), indicating it is viewed as a compelling investment opportunity [7]

Core Viewpoint - German American Bancorp (GABC) has received an upgrade to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system tracks the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts, and changes in these estimates are strongly correlated with near-term stock price movements [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in stock price movements as they buy or sell shares [4]. Business Improvement Indicators - The rising earnings estimates and the Zacks rating upgrade suggest an improvement in German American Bancorp's underlying business, which could lead to higher stock prices as investors respond positively [5][10]. - The company is expected to earn $3.27 per share for the fiscal year ending December 2025, reflecting a year-over-year change of 15.6% [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of German American Bancorp to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Company Overview - German American Bancorp (GABC) is headquartered in Jasper and operates in the Finance sector, with a stock price change of -2.46% since the beginning of the year [3] - The company currently pays a dividend of $0.29 per share, resulting in a dividend yield of 2.96%, which is slightly below the Banks - Midwest industry's yield of 2.99% but significantly higher than the S&P 500's yield of 1.57% [3] Dividend Performance - The current annualized dividend of $1.16 represents a 7.4% increase from the previous year, and over the last five years, GABC has increased its dividend five times, averaging an annual increase of 8.81% [4] - The company's payout ratio is currently 38%, indicating that it pays out 38% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - GABC is projected to experience earnings growth this fiscal year, with the Zacks Consensus Estimate for 2025 at $3.27 per share, reflecting a year-over-year growth rate of 15.55% [5] Investment Appeal - GABC is considered an attractive dividend play and a compelling investment opportunity, currently holding a Zacks Rank of 1 (Strong Buy) [7]

Economic Conditions and Risks - The company operates primarily in Indiana, Kentucky, and Ohio, making its performance highly dependent on economic conditions in these regions [109]. - Current economic conditions are impacted by inflation rates above the Federal Reserve's target, which could adversely affect profitability and increase loan delinquencies [110]. - Economic slowdowns or health crises could lead to increased delinquencies, defaults, and foreclosures, negatively impacting the company's loan portfolio [115]. - Changes in federal or state tax laws could negatively affect the company's financial condition and results of operations [120]. - The competitive landscape for deposits has been impacted by recent bank failures, which may affect future operating results and capital [127]. Financial Performance - Net income for the year ended December 31, 2024, totaled $83,811,000, or $2.83 per share, a decline of approximately 3% from the previous year's net income of $85,888,000, or $2.91 per share [198]. - The net income for 2024 included merger-related transaction costs of approximately $1,370,000, which amounted to $1,082,000 after-tax, or $0.04 per share [220]. - The sale of substantially all assets of German American Insurance, Inc. resulted in an after-tax gain of approximately $27,476,000, or $0.93 per share, during 2024 [199]. - Non-interest income for the year ended December 31, 2024, increased by $2,399,000, or 4%, totaling $62,660,000 compared to $60,261,000 in 2023 [239][240]. - The effective tax rate increased to 19.5% in 2024, up from 17.1% in 2023, influenced by the GAI asset sale and securities restructuring [253]. Securities and Investment Portfolio - The company has experienced significant unrealized losses in its available-for-sale securities portfolio due to rising market interest rates, which could affect market perceptions and depositor confidence [124]. - A restructuring of the securities portfolio involved selling available-for-sale securities totaling approximately $375.3 million in book value, resulting in an after-tax loss of approximately $27.2 million [194]. - As of December 31, 2024, gross unrealized gains on the available-for-sale securities portfolio totaled approximately $413,000, while gross unrealized losses amounted to approximately $279,166,000 [214]. - The net loss on securities for 2024 was $34,788,000, primarily due to a restructuring transaction, impacting earnings significantly [243]. Credit and Loan Management - The company maintains an allowance for credit losses based on historical loss experience, but if actual loan losses exceed estimates, it could materially impact earnings and financial condition [111]. - The provision for credit losses in 2024 was $2,775,000, compared to $2,550,000 in 2023 and $6,350,000 in 2022 [233]. - The allowance for credit losses was $44.4 million as of December 31, 2024, reflecting a stable risk management approach in the loan portfolio [268]. - The Company has a comprehensive risk-grading and loan review program that includes quarterly reviews of problem loans, delinquencies, and charge-offs [305]. Regulatory and Compliance Risks - The company is subject to extensive federal and state regulations, and changes in these regulations could adversely affect its operations and financial condition [138]. - Legislative and regulatory initiatives related to climate change may increase compliance costs and risks, impacting the company's operations [133]. - The company currently meets the capital requirements set forth in Basel III but may face stricter requirements in the future, which could limit its ability to lend and grow [142]. Operational and Cybersecurity Risks - The company faces risks from potential cyber-attacks and information security breaches, which could disrupt operations and expose it to liability [110]. - Cybersecurity risks are heightened due to the nature of the financial services industry, and breaches could severely damage the company's reputation and operations [150]. - The company has a comprehensive enterprise risk management program that includes cybersecurity as a critical component [163]. Capital and Shareholder Equity - Shareholders' equity rose by $51.5 million to $715.1 million as of December 31, 2024, driven by retained earnings of $52.0 million from net income [256]. - The total capital ratio for the consolidated entity was 17.15% as of December 31, 2024, up from 16.50% in 2023, significantly exceeding the minimum regulatory requirement of 8.00% [262]. - The company’s Tier 1 capital ratio was 15.72% as of December 31, 2024, compared to 14.97% in 2023, indicating strong capital adequacy [262]. Acquisitions and Growth - German American Bancorp completed the acquisition of Heartland BancCorp on February 1, 2025, with Heartland having total assets of approximately $1.97 billion, total loans of approximately $1.56 billion, and total deposits of approximately $1.75 billion [192]. - The company issued approximately 7.74 million shares and paid approximately $23.1 million in cash for the Heartland acquisition [192]. Deposit and Funding Sources - The company had no brokered deposits as of December 31, 2024, and reciprocal deposits totaled $96.8 million, up from $77.9 million in 2023 [295]. - Total funding sources increased by $94.1 million, or 2%, to $5.501 billion in 2024, compared to $5.407 billion in 2023 [289]. - Average core deposits decreased by approximately $98.6 million, or 2%, in 2024 compared to 2023, following a decline of $622.8 million, or 11%, in 2023 compared to 2022 [290].

Group 1 - The stock of German American Bancorp, Inc. (GABC) is experiencing significant attention due to high implied volatility in the options market, particularly for the March 21, 2025 $40 Call option [1] - Implied volatility indicates market expectations for future stock movement, suggesting potential upcoming events that could lead to substantial price changes [2] - German American Bancorp holds a Zacks Rank 1 (Strong Buy) in the Banks – Midwest industry, which is in the top 2% of the Zacks Industry Rank, with analysts increasing earnings estimates significantly over the last 60 days [3] Group 2 - The high implied volatility for German American Bancorp may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay [4]

Core Insights - German American Bancorp (GABC) reported a revenue of $65.15 million for the quarter ended December 2024, reflecting a year-over-year increase of 6.5% and a surprise of +3.41% over the Zacks Consensus Estimate of $63 million [1] - The earnings per share (EPS) for the quarter was $0.78, compared to $0.73 in the same quarter last year, resulting in an EPS surprise of +13.04% against the consensus estimate of $0.69 [1] Financial Performance Metrics - Efficiency ratio was reported at 53.4%, better than the estimated 56% by analysts [4] - Net Interest Margin remained stable at 3.5%, matching the analysts' average estimate [4] - Net charge-offs to average loans were 0%, outperforming the average estimate of 0.1% [4] - Total Average Interest Earning Assets amounted to $5.88 billion, exceeding the average estimate of $5.75 billion [4] - Net Gains on Sales of Loan were $0.63 million, below the estimated $0.88 million [4] - Total Non-interest Income reached $14.11 million, surpassing the average estimate of $13.53 million [4] - Net interest income (FTE) was reported at $52.20 million, exceeding the average estimate of $50.19 million [4] - Service charges on deposit accounts were $3.34 million, slightly above the average estimate of $3 million [4] - Net Interest Income was $51.03 million, compared to the average estimate of $49.26 million [4] Stock Performance - Shares of German American Bancorp have returned -3.3% over the past month, contrasting with the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Group 1 - German American Bancorp (GABC) reported quarterly earnings of $0.78 per share, exceeding the Zacks Consensus Estimate of $0.69 per share, and showing an increase from $0.73 per share a year ago, resulting in an earnings surprise of 13.04% [1] - The company posted revenues of $65.15 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.41%, compared to year-ago revenues of $61.2 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2 - The stock has underperformed the market, losing about 2.5% since the beginning of the year, while the S&P 500 gained 3.7% [3] - The current consensus EPS estimate for the coming quarter is $0.19 on revenues of $73.05 million, and for the current fiscal year, it is $2.67 on revenues of $335.55 million [7] - The Zacks Industry Rank for Banks - Midwest is currently in the top 16% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Earnings Performance - Fourth quarter 2024 earnings were $23.2 million, or $0.78 per share, a 10% increase from the third quarter 2024 earnings of $21.0 million, or $0.71 per share[1]. - Annual earnings for 2024 totaled $83.8 million, or $2.83 per share, a decrease of approximately 3% from 2023 earnings of $85.9 million, or $2.91 per share[6][21]. - Net income for the year ended December 31, 2024, was impacted by a loss of $34,893,000 on a securities portfolio restructuring, equating to $0.92 per share[23]. - Net income for the fourth quarter of 2024 was $23,211,000, or $0.78 per share, reflecting a 10% increase from the third quarter of 2024[39]. - Net income for the three months ended December 31, 2024, was $23,211 thousand, up 7.83% from $21,507 thousand in the same period of 2023[65]. Interest Income and Margin - Net interest income for the fourth quarter 2024 increased by $2.4 million, or 5%, with a net interest margin of 3.54%, reflecting a 7 basis point expansion from the previous quarter[2]. - Total interest income for the year ended December 31, 2024, was $291,043 thousand, a 13.33% increase compared to $256,656 thousand in 2023[65]. - The tax equivalent net interest margin decreased to 3.43% in 2024 from 3.58% in 2023, driven by a 56 basis points increase in the cost of funds[26]. - The tax-equivalent net interest margin for Q4 2024 was 3.54%, up from 3.47% in Q3 2024 and 3.43% in Q4 2023, driven by lower cost of funds and stable yield on earning assets[42]. - Net interest income increased in Q4 2024 compared to Q3 2024 and Q4 2023, primarily due to improved net interest margin and higher average earning assets[41]. Asset and Loan Growth - Total assets increased to $6.296 billion at December 31, 2024, up $143.7 million from December 31, 2023, primarily due to loan growth[11]. - Total loans increased by $63.9 million, or 6% on an annualized basis, with strong growth across most loan categories except residential mortgages[4][12]. - Net loans reached $4,080,466 thousand, an increase of 3.99% from $3,927,317 thousand in the previous year[63]. - Average total loans for the year ended December 31, 2024, were $4,094,333 thousand, reflecting an increase from $3,921,967 thousand in 2023[67]. Non-Interest Income and Expenses - Non-interest income rose by 2%, primarily due to a 3% increase in wealth management fees, while non-interest expenses decreased by $287,000, or 1%[5]. - Non-interest income increased by $2,399,000, or 4%, in 2024, positively impacted by $38,323,000 from the sale of GAI assets[29]. - Non-interest expense totaled $146,377,000 in 2024, an increase of $1,880,000, or 1%, primarily due to professional fees related to the GAI asset sale and a pending merger[34]. - Non-interest income totaled $14,114,000 in Q4 2024, a 2% increase from Q3 2024 but a 9% decline from Q4 2023, largely due to the sale of GAI assets[45]. - Non-interest expense totaled $35,839,000 in Q4 2024, a 1% decline from Q3 2024 and a slight increase from Q4 2023, impacted by merger-related costs[51]. Dividends and Shareholder Value - The company announced a 7.4% increase in its quarterly cash dividend to $0.29 per share, marking the 13th consecutive year of dividend increases[9]. - The pending acquisition of Heartland BancCorp has received all necessary approvals and is expected to drive long-term shareholder value[10]. Credit Quality and Loss Provisions - The company recorded a provision for credit losses of $2,775,000 in 2024, compared to $2,550,000 in 2023[28]. - The company recorded a provision for credit losses of $625,000 in both Q3 and Q4 2024, with net charge-offs totaling $313,000 in Q4 2024[44]. - The allowance for credit losses to period end loans ratio was 1.08% as of December 31, 2024, consistent with 1.10% in the previous year, indicating stable credit quality management[67]. - Non-performing assets to period end assets ratio was 0.18% as of December 31, 2024, compared to 0.15% a year earlier, indicating a slight increase in asset quality concerns[67].