[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]

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]