Core Insights - German American Bancorp, Inc. reported strong second quarter earnings of $20.5 million, or $0.69 per share, reflecting an 8% increase on a per share basis from the previous quarter [1][24]. Financial Performance - The second quarter 2024 operating performance was characterized by a stabilized net interest margin of 3.34%, solid loan and deposit growth, and strong credit metrics [2][4][6]. - Total loans increased by approximately $65 million, or 7% on an annualized basis, with growth across virtually all loan categories [6][17]. - Total deposits rose by approximately $94 million, or 7% on an annualized basis, with non-interest-bearing accounts remaining at 27% of total deposits [5][21]. Non-Interest Income and Expenses - Non-interest income for the second quarter of 2024 totaled $18.9 million, a 20% increase compared to the first quarter of 2024, driven by strong growth in wealth management fees and interchange fee income [34][14]. - Non-interest expenses increased by $936,000, or 3%, compared to the first quarter of 2024, primarily due to professional fees related to the sale of the insurance subsidiary and the pending merger with Heartland BancCorp [42][47]. Strategic Initiatives - The company sold the assets of its wholly-owned subsidiary, German American Insurance, Inc., for $40 million, resulting in a $27.5 million after-tax gain [2][26]. - A restructuring of the securities portfolio was initiated, involving the sale of approximately $375 million in securities, which resulted in an after-tax loss of $27.2 million [2][10][41]. Asset Quality - Non-performing assets totaled $7.3 million, representing 0.12% of total assets, showing improvement from previous quarters [12][21]. - The allowance for credit losses was $43.9 million, representing 1.09% of period-end loans, indicating stable credit quality [18]. Capital Position - Total assets increased to $6.217 billion, with capital ratios remaining well above minimum requirements for capital adequacy [9][23]. - The company's capital ratios included a consolidated total capital ratio of 16.78% and a Tier 1 capital ratio of 15.19% as of June 30, 2024 [23].

Loans Held-for-Sale (1) Tangible Book Value per Share is defined as Total Shareholders' Equity less Goodwill and Other Intangible Assets divided by End of Period Shares Outstanding. | --- | --- | --- | |--------------------|----------------|-------| | | | | | Three Months Ended | | | | June 30, 2024 | March 31, 2024 | | June 30, 2023 June 30, 2024 June 30, 2023 INTEREST INCOME GERMAN AMERICAN BANCORP, INC. (unaudited, dollars in thousands except per share data) GERMAN AMERICAN BANCORP, INC. (unaudited, doll ...

| --- | --- | --- | --- | |-----------------------------------------------------------------------------------|-----------------|-----------------|-----------------| | | 6/30/2024 Ratio | 3/31/2024 Ratio | 6/30/2023 Ratio | | Total Capital (to Risk Weighted Assets) | | | | | Consolidated | 16.78% | 16.57% | 16.06% | | Bank | 14.52% | 14.53% | 14.50% | | Tier 1 (Core) Capital (to Risk Weighted Assets) | | | | | Consolidated | 15.19% | 14.97% | 14.50% | | Bank | 13.72% | 13.73% | 13.76% | | Common Tier 1 (CET ...

Earnings Outlook for German American Bancorp - German American Bancorp is expected to report a year-over-year decline in earnings, with a projected EPS of $0.61, reflecting an 18.7% decrease [10][12] - Revenues are anticipated to be $60.2 million, down 4.7% from the previous year [13] - The consensus EPS estimate has been revised 0.53% lower over the last 30 days, indicating a reassessment by analysts [13] Earnings Surprise Prediction - The company currently has a Zacks Rank of 4, suggesting it is not a compelling earnings-beat candidate [5][8] - The Earnings ESP for German American Bancorp is -0.54%, indicating analysts have become bearish on the company's earnings prospects [16] - Historical performance shows that the company has beaten consensus EPS estimates three out of the last four quarters [18] Comparison with Associated Banc-Corp - Associated Banc-Corp is expected to report an EPS of $0.52, which represents a year-over-year change of -7.1% [20] - Revenues for Associated Banc-Corp are projected to be $331.36 million, reflecting a 1% increase from the previous year [20] - The Earnings ESP for Associated Banc-Corp is also negative, making it difficult to predict an earnings beat [27]

JASPER, Ind., June 03, 2024 (GLOBE NEWSWIRE) -- German American Bancorp, Inc. (Nasdaq: GABC) today announced and closed the sale of the assets of its wholly-owned subsidiary German American Insurance (GAI) to Hilb Group, an industry-leading insurance broker. The all-cash transaction is for $40 million, and creates a significant after-tax gain, net of transaction costs, of approximately $27 million. The purchase price represents approximately four times 2023 GAI revenues and approximately 24 times 2023 GAI a ...

JASPER, Ind., May 20, 2024 (GLOBE NEWSWIRE) -- German American Bank was named to the Forbes America's Best Banks list, ranking 19th among 200 eligible banks. In addition, German American Bank earned accolades as a top community bank with a #15 ranking in the Raymond James Community Bankers Cup awards. About German American Bank German American Bancorp, Inc. is a Nasdaq-traded (symbol: GABC) financial holding company based in Jasper, Indiana. German American, through its banking subsidiary German American Ba ...

[GLOSSARY OF TERMS AND ACRONYMS](index=4&type=section&id=Glossary%20of%20Terms%20and%20Acronyms) This section defines key terms and acronyms used throughout the report, referring to German American Bancorp, Inc. and its consolidated subsidiaries - References to "Company," "we," "our," "us," and similar terms refer to German American Bancorp, Inc. and its consolidated subsidiaries as a whole[11](index=11&type=chunk) - The term "Bank" refers to German American Bank, the Company's bank subsidiary[11](index=11&type=chunk) - Key acronyms defined include ASU, Basel III Rules, CECL, CET1, CRE, FASB, FDIC, FHLB, FRB, GAAP, LIBOR, MBS, NPV, OCC, SEC, SOFR[13](index=13&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the Company [Item 1. Unaudited Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents the unaudited consolidated financial statements for German American Bancorp, Inc. and its subsidiaries for the quarter ended March 31, 2024, along with detailed notes explaining the basis of presentation, accounting policies, and specific financial line items [Consolidated Balance Sheets – March 31, 2024 and December 31, 2023](index=5&type=section&id=Consolidated%20Balance%20Sheets%20%E2%80%93%20March%2031%2C%202024%20and%20December%2031%2C%202023) This section provides a comparative overview of the Company's financial position at March 31, 2024, and December 31, 2023 | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $6,111,929 | $6,152,198 | $(40,269) | -0.65% | | Total Liabilities | $5,456,675 | $5,488,640 | $(31,965) | -0.58% | | Total Shareholders' Equity | $655,254 | $663,558 | $(8,304) | -1.25% | | Securities Available-for-Sale | $1,539,270 | $1,596,832 | $(57,562) | -3.60% | | Loans, Net | $3,928,156 | $3,927,317 | $839 | 0.02% | | Total Deposits | $5,219,347 | $5,252,963 | $(33,616) | -0.64% | [Consolidated Statements of Income – Three Months Ended March 31, 2024 and 2023](index=7&type=section&id=Consolidated%20Statements%20of%20Income%20%E2%80%93%20Three%20Months%20Ended%20March%2031%2C%202024%20and%202023) This section presents the Company's financial performance for the three months ended March 31, 2024, and 2023 | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Net Income | $19,022 | $20,807 | $(1,785) | -8.58% | | Basic Earnings per Share | $0.64 | $0.71 | $(0.07) | -9.86% | | Diluted Earnings per Share | $0.64 | $0.71 | $(0.07) | -9.86% | | Net Interest Income | $44,994 | $49,009 | $(4,015) | -8.19% | | Total Non-Interest Income | $15,822 | $14,967 | $855 | 5.71% | | Total Non-Interest Expense | $36,738 | $37,616 | $(878) | -2.33% | [Consolidated Statements of Comprehensive Income (Loss) – Three Months Ended March 31, 2024 and 2023](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20%E2%80%93%20Three%20Months%20Ended%20March%2031%2C%202024%20and%202023) This section details the Company's comprehensive income and loss for the three months ended March 31, 2024, and 2023 | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net Income | $19,022 | $20,807 | $(1,785) | | Unrealized Holding Gain (Loss) Arising During the Period | $(25,178) | $41,749 | $(66,927) | | Net of Tax (Other Comprehensive Income (Loss)) | $(19,895) | $32,946 | $(52,841) | | Comprehensive Income (Loss) | $(873) | $53,753 | $(54,626) | [Consolidated Statements of Changes in Shareholders' Equity - Three Months Ended March 31, 2024 and 2023](index=11&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20-%20Three%20Months%20Ended%20March%2031%2C%202024%20and%202023) This section outlines changes in the Company's shareholders' equity for the three months ended March 31, 2024, and 2023 | Metric | March 31, 2024 (in thousands) | January 1, 2024 (in thousands) | Change (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | :-------------------- | | Total Shareholders' Equity | $655,254 | $663,558 | $(8,304) | | Net Income | $19,022 | N/A | N/A | | Other Comprehensive Income (Loss) | $(19,895) | N/A | N/A | | Cash Dividends Paid | $(7,955) | N/A | N/A | | Issuance of Common Stock (Restricted Share Grants Net) | $524 | N/A | N/A | - Cash dividends paid were **$0.27 per share** for Q1 2024, up from **$0.25 per share** for Q1 2023[23](index=23&type=chunk) [Consolidated Statements of Cash Flows – Three Months Ended March 31, 2024 and 2023](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%93%20Three%20Months%20Ended%20March%2031%2C%202024%20and%202023) This section details the Company's cash flow activities for the three months ended March 31, 2024, and 2023 | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | | :----------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net Cash from Operating Activities | $23,853 | $31,466 | $(7,613) | | Net Cash from Investing Activities | $28,061 | $145,028 | $(116,967) | | Net Cash from Financing Activities | $(43,774) | $(215,278) | $171,504 | | Net Change in Cash and Cash Equivalents | $8,140 | $(38,784) | $46,924 | | Cash and Cash Equivalents at End of Period | $123,470 | $80,295 | $43,175 | [Notes to Consolidated Financial Statements – March 31, 2024](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%E2%80%93%20March%2031%2C%202024) This section provides detailed explanatory notes to the Company's consolidated financial statements as of March 31, 2024 [NOTE 1 – Basis of Presentation and Market Conditions](index=14&type=section&id=NOTE%201%20%E2%80%93%20Basis%20of%20Presentation%20and%20Market%20Conditions) This note describes the basis of financial statement presentation and relevant market conditions affecting the Company - German American Bancorp, Inc. operates primarily in the banking industry, with financial statements conforming to U.S. GAAP[29](index=29&type=chunk) - Certain prior period financial statements were reclassified to conform to the current presentation, with no effect on net income or total shareholders' equity[29](index=29&type=chunk) [NOTE 2 - Recent Accounting Pronouncements](index=14&type=section&id=NOTE%202%20-%20Recent%20Accounting%20Pronouncements) This note details the Company's adoption and impact of recent accounting pronouncements - The Company adopted ASU 2020-04 (Reference Rate Reform) and transitioned LIBOR-indexed loans to SOFR and other indices[30](index=30&type=chunk) - ASU 2022-02 (Troubled Debt Restructurings and Vintage Disclosures) was adopted prospectively with no material impact to consolidated financial statements[31](index=31&type=chunk) - The Company concluded it does not have a safeguarding obligation under SEC's Staff Accounting Bulletin No. 121 (SAB 121) for crypto-assets[32](index=32&type=chunk) - ASU 2023-02 (Accounting for Investments in Tax Credit Structures) was adopted with no impact on the Company's financial statements or disclosures[35](index=35&type=chunk) [NOTE 3 – Per Share Data](index=15&type=section&id=NOTE%203%20%E2%80%93%20Per%20Share%20Data) This note provides a breakdown of the Company's basic and diluted earnings per share | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------- | :-------------------------------- | :-------------------------------- | | Basic Earnings per Share | $0.64 | $0.71 | | Diluted Earnings per Share | $0.64 | $0.71 | - There were no anti-dilutive shares for the three months ended March 31, 2024 and 2023[36](index=36&type=chunk) [NOTE 4 – Securities](index=15&type=section&id=NOTE%204%20%E2%80%93%20Securities) This note details the Company's securities portfolio, including available-for-sale securities and their fair value adjustments | Securities Available-for-Sale (Fair Value) | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | % Change | | :--------------------------------------- | :---------------------------- | :------------------------------- | :-------------------- | :------- | | Total | $1,539,270 | $1,596,832 | $(57,562) | -3.60% | | Total Gross Unrealized Gains | $339 | $1,337 | $(998) | -74.64% | | Total Gross Unrealized Losses | $(299,980) | $(275,765) | $(24,215) | 8.78% | - The increase in unrealized losses from December 31, 2023, to March 31, 2024, was primarily due to fair value adjustments caused by changes in market interest rates[44](index=44&type=chunk) - No allowance for credit losses was recorded for available-for-sale debt securities at March 31, 2024, or December 31, 2023[44](index=44&type=chunk) [NOTE 5 - Derivatives](index=17&type=section&id=NOTE%205%20-%20Derivatives) This note describes the Company's derivative instruments, their notional amounts, and fair values | Derivative Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | | :---------------- | :---------------------------- | :------------------------------- | :-------------------- | | Notional Amount | $150,251 | $139,751 | $10,500 | | Fair Value (Assets) | $8,287 | $7,458 | $829 | | Fair Value (Liabilities) | $8,294 | $7,467 | $827 | - Interest rate swaps are simultaneously hedged by offsetting instruments with third parties to minimize net risk exposure[47](index=47&type=chunk) - Changes in the fair value of derivatives are reported in earnings as non-interest income, with a gain of **$225 thousand** in Q1 2024 compared to a loss of **$(50) thousand** in Q1 2023[51](index=51&type=chunk) [NOTE 6 – Loans](index=18&type=section&id=NOTE%206%20%E2%80%93%20Loans) This note provides detailed information on the Company's loan portfolio, including classifications and allowance for credit losses | Loan Classification | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | % Change | | :------------------ | :---------------------------- | :------------------------------- | :-------------------- | :------- | | Total Loans (Gross) | $3,978,919 | $3,977,900 | $1,019 | 0.03% | | Allowance for Credit Losses | $(43,754) | $(43,765) | $11 | -0.03% | | Loans, Net | $3,928,156 | $3,927,317 | $839 | 0.02% | | Non-Accrual Loans | $9,898 | $9,136 | $762 | 8.34% | | Allowance for Credit Losses Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Provision (Benefit) for credit loss expense | $900 | $1,100 | | Loans charged-off | $(1,061) | $(1,238) | | Recoveries collected | $150 | $285 | - The Company adopted ASU 2022-02, eliminating troubled debt restructuring recognition and measurement guidance, and had no modified loans for borrowers experiencing financial difficulty in Q1 2024 or Q1 2023[69](index=69&type=chunk)[71](index=71&type=chunk) [NOTE 7 – Repurchase Agreements Accounted for as Secured Borrowings](index=27&type=section&id=NOTE%207%20%E2%80%93%20Repurchase%20Agreements%20Accounted%20for%20as%20Secured%20Borrowings) This note details the Company's repurchase agreements, which are accounted for as secured borrowings | Repurchase Agreements | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :---------------------------- | :------------------------------- | :-------------------- | :------- | | Total | $38,764 | $40,968 | $(2,204) | -5.38% | - Repurchase agreements are short-term borrowings, secured by mortgage-backed securities, and mature overnight and continuously[87](index=87&type=chunk) [NOTE 8 – Segment Information](index=27&type=section&id=NOTE%208%20%E2%80%93%20Segment%20Information) This note provides financial information broken down by the Company's operating segments - The Company operates three primary segments: core banking, wealth management services, and insurance operations[88](index=88&type=chunk) | Segment (Q1 2024) | Net Interest Income (in thousands) | Segment Profit (in thousands) | | :----------------------- | :------------------------------- | :---------------------------- | | Core Banking | $46,218 | $18,905 | | Wealth Management Services | $29 | $1,001 | | Insurance | $1 | $676 | [NOTE 9 – Stock Repurchase Plan](index=28&type=section&id=NOTE%209%20%E2%80%93%20Stock%20Repurchase%20Plan) This note outlines the Company's stock repurchase plan and related activities - The Board of Directors approved a plan in January 2022 to repurchase up to **1,000,000 shares** of common stock, representing approximately **3%** of outstanding shares at the time[94](index=94&type=chunk) - No shares have been repurchased under this plan as of March 31, 2024[94](index=94&type=chunk)[230](index=230&type=chunk) - The Inflation Reduction Act of 2022 imposes a new **1%** excise tax on the fair value of stock repurchased after December 31, 2022[95](index=95&type=chunk) [NOTE 10 – Equity Plans and Equity Based Compensation](index=29&type=section&id=NOTE%2010%20%E2%80%93%20Equity%20Plans%20and%20Equity%20Based%20Compensation) This note details the Company's equity plans and the expense recognized for equity-based compensation - No stock options were granted or outstanding for the three months ended March 31, 2024 and 2023[98](index=98&type=chunk)[104](index=104&type=chunk) | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Restricted Stock Expense | $640 | $539 | | Cash Entitlement Expense | $188 | $182 | - Unrecognized expense associated with restricted stock grants and cash entitlements totaled **$6,188 thousand** as of March 31, 2024[100](index=100&type=chunk) - The 2019 Employee Stock Purchase Plan (ESPP) resulted in **$12 thousand** of expense for both Q1 2024 and Q1 2023[102](index=102&type=chunk) [NOTE 11 – Fair Value](index=30&type=section&id=NOTE%2011%20%E2%80%93%20Fair%20Value) This note describes the Company's fair value measurements and their categorization into different levels - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs)[105](index=105&type=chunk)[106](index=106&type=chunk) | Asset Category (Fair Value) | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :---------------------------- | :------------------------------- | | Total Securities | $1,539,270 | $1,596,832 | | Loans Held-for-Sale | $10,325 | $5,226 | | Derivative Assets | $8,287 | $7,458 | | Derivative Liabilities | $8,294 | $7,467 | - Individually analyzed loans and other real estate are primarily measured using Level 3 inputs, based on appraisals with significant unobservable inputs[109](index=109&type=chunk)[112](index=112&type=chunk)[118](index=118&type=chunk)[120](index=120&type=chunk) [NOTE 12 - Other Comprehensive Income (Loss)](index=35&type=section&id=NOTE%2012%20-%20Other%20Comprehensive%20Income%20(Loss)) This note presents the components of the Company's other comprehensive income (loss) and its accumulated balance | Metric | March 31, 2024 (in thousands) | January 1, 2024 (in thousands) | Change (in thousands) | | :---------------------------------------------- | :---------------------------- | :----------------------------- | :-------------------- | | Ending Balance of Accumulated Other Comprehensive Income (Loss) | $(236,955) | $(217,060) | $(19,895) | | Net Current Period Other Comprehensive Income (Loss) | $(19,895) | N/A | N/A | - The primary driver of the change in accumulated other comprehensive income (loss) was unrealized gains and losses on available-for-sale securities[126](index=126&type=chunk) [NOTE 13 - Revenue Recognition](index=36&type=section&id=NOTE%2013%20-%20Revenue%20Recognition) This note details the Company's non-interest income streams and their recognition | Non-interest Income Stream | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Total Non-interest Income | $15,822 | $14,967 | $855 | 5.71% | | Wealth Management Fees | $3,366 | $2,644 | $722 | 27.31% | | Insurance Revenues | $2,878 | $3,135 | $(257) | -8.20% | | Interchange Fee Income | $4,087 | $4,199 | $(112) | -2.67% | [NOTE 14 – Leases](index=37&type=section&id=NOTE%2014%20%E2%80%93%20Leases) This note provides information on the Company's lease arrangements, including costs and weighted-average terms | Lease Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total Lease Cost | $462 | $503 | | Lease Type | Weighted Average Remaining Lease Term (March 31, 2024) | Weighted Average Discount Rate (March 31, 2024) | | :--------------- | :------------------------------------- | :------------------------------ | | Finance Leases | 8 years | 11.36% | | Operating Leases | 6 years | 3.07% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition for Q1 2024. It highlights a decline in net income due to lower net interest income, partially offset by increased non-interest income and reduced non-interest expense. It also discusses critical accounting policies, loan portfolio stability, deposit trends, capital adequacy, and liquidity [MANAGEMENT OVERVIEW](index=40&type=section&id=MANAGEMENT%20OVERVIEW) This section provides an executive summary of the Company's financial performance and key operational highlights for the quarter - Net income for Q1 2024 totaled **$19,022 thousand** (**$0.64 per share**), a **10%** decline on a per share basis compared to Q1 2023[149](index=149&type=chunk) - The decline in net income was primarily attributable to lower net interest income due to modest net interest margin compression driven by higher deposit costs[149](index=149&type=chunk) - Non-interest income increased **$855 thousand** (**6%**) due to increased wealth management fees, while non-interest expense declined **$878 thousand** (**2%**) due to lower salary expense[149](index=149&type=chunk) - Total loans increased by **$1,019 thousand** compared to year-end 2023, with commercial real estate and retail growth offsetting seasonal agricultural and commercial and industrial line reductions[150](index=150&type=chunk) - Deposits declined approximately **$33,600 thousand** (**3% annualized**) due to a delayed seasonal outflow of public fund deposits, but non-public funds grew[151](index=151&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=40&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) This section outlines the Company's critical accounting policies and estimates that are most susceptible to change, including the allowance for credit losses, valuation of available-for-sale securities, income tax expense, and valuation of goodwill and other intangible assets, all of which involve significant management judgment and are subject to future market factors [Allowance for Credit Losses](index=41&type=section&id=Allowance%20for%20Credit%20Losses) This section details the methodology and key considerations for estimating the allowance for credit losses - The allowance for credit losses is a subjective estimate covering expected credit losses over the loan portfolio's contractual life, determined at least quarterly[153](index=153&type=chunk)[154](index=154&type=chunk) - The Company uses a static pool methodology, historical loss experience, and qualitative adjustments for economic variables like unemployment rate, GDP, and agricultural producer price index[55](index=55&type=chunk)[56](index=56&type=chunk)[159](index=159&type=chunk) - The allowance for credit losses remained stable at March 31, 2024, compared to December 31, 2023[60](index=60&type=chunk)[159](index=159&type=chunk) [Securities Valuation](index=42&type=section&id=Securities%20Valuation) This section describes the Company's policies and procedures for valuing its securities portfolio - Available-for-sale debt securities in unrealized loss positions are evaluated quarterly for impairment related to credit losses[161](index=161&type=chunk) - No allowance for credit losses for available-for-sale debt securities was needed at March 31, 2024[161](index=161&type=chunk) - As of March 31, 2024, gross unrealized gains totaled **$339 thousand** and gross unrealized losses totaled **$299,980 thousand** on available-for-sale securities[161](index=161&type=chunk) [Income Tax Expense](index=42&type=section&id=Income%20Tax%20Expense) This section explains the Company's accounting policies and estimates related to income tax expense - Income tax expense involves estimates related to the valuation allowance on deferred tax assets and loss contingencies from tax examinations[163](index=163&type=chunk) - A valuation allowance reduces deferred tax assets to the amount management believes is more likely than not to be realized[164](index=164&type=chunk) [Goodwill and Other Intangible Assets](index=42&type=section&id=Goodwill%20and%20Other%20Intangible%20Assets) This section outlines the Company's accounting treatment for goodwill and other intangible assets, including impairment testing - Goodwill is not amortized but tested for impairment at least annually, with December 31 selected as the annual test date[165](index=165&type=chunk) - No impairment to Goodwill was indicated based on year-end testing[165](index=165&type=chunk) - Other intangible assets (core deposit and acquired customer relationship intangibles) are amortized over estimated useful lives ranging from **6 to 10 years**[166](index=166&type=chunk) [RESULTS OF OPERATIONS](index=42&type=section&id=RESULTS%20OF%20OPERATIONS) This section details the Company's financial performance for the three months ended March 31, 2024, compared to the same period in 2023, covering net income, net interest income, provision for credit losses, non-interest income, non-interest expense, and income taxes [Net Income](index=42&type=section&id=Net%20Income) This section analyzes the Company's net income and earnings per share for the reporting period | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Income | $19,022 | $20,807 | | Basic Earnings per Share | $0.64 | $0.71 | - The decline in net income was largely the result of lower net interest income, driven by net interest margin compression, as higher deposit costs exceeded improved yields on earning assets[167](index=167&type=chunk) [Net Interest Income](index=44&type=section&id=Net%20Interest%20Income) This section discusses the Company's net interest income and net interest margin performance | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Net Interest Income (non-tax-equivalent) | $44,994 | $49,009 | $(4,015) | -8.19% | | Tax Equivalent Net Interest Margin | 3.35% | 3.69% | -0.34% | -9.21% | | Cost of Funds | 1.67% | 0.84% | 0.83% | 98.81% | - The decline in net interest margin was largely driven by an increase in the cost of funds due to competitive deposit pricing and a shift to higher time deposits[169](index=169&type=chunk) - Accretion of loan discounts on acquired loans contributed approximately **3 basis points** to the net interest margin in Q1 2024, down from **4 basis points** in Q1 2023[170](index=170&type=chunk) [Provision for Credit Losses](index=46&type=section&id=Provision%20for%20Credit%20Losses) This section details the Company's provision for credit losses and net charge-offs | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Provision for Credit Losses | $900 | $1,100 | $(200) | -18.18% | | Net Charge-offs | $911 | $953 | $(42) | -4.41% | | Net Charge-offs (annualized basis of average loans) | 9 basis points | 10 basis points | -1 basis point | -10.00% | - The provision for credit losses was deemed necessary by management to absorb expected losses in the loan portfolio, based on a quarterly evaluation[173](index=173&type=chunk) [Non-interest Income](index=46&type=section&id=Non-interest%20Income) This section analyzes the various components of the Company's non-interest income | Non-interest Income Stream | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Total Non-interest Income | $15,822 | $14,967 | $855 | 5.71% | | Wealth Management Fees | $3,366 | $2,644 | $722 | 27% | | Insurance Revenues | $2,878 | $3,135 | $(257) | -8% | | Other Operating Income | $1,362 | $1,211 | $151 | 12% | | Net Gains on Sales of Loans | $751 | $587 | $164 | 28% | - The increase in wealth management fees was largely attributable to increased assets under management[175](index=175&type=chunk) - The decline in insurance revenues was related to a decrease in contingency revenue, partially offset by increased commercial lines revenue[176](index=176&type=chunk) [Non-interest Expense](index=48&type=section&id=Non-interest%20Expense) This section details the Company's non-interest expenses, including salaries and benefits | Non-interest Expense Item | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | % Change | | :------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Total Non-interest Expense | $36,738 | $37,616 | $(878) | -2% | | Salaries and Employee Benefits | $21,178 | $21,846 | $(668) | -3% | | Intangible Amortization | $578 | $785 | $(207) | -26% | - The decline in salaries and benefits was primarily due to a lower level of full-time equivalent employees and lower incentive compensation[181](index=181&type=chunk) - Intangible amortization decreased due to the accelerated amortization method for core deposit intangibles[182](index=182&type=chunk) [Income Taxes](index=48&type=section&id=Income%20Taxes) This section discusses the Company's income tax expense and effective tax rate | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------- | :-------------------------------- | :-------------------------------- | | Effective Income Tax Rate | 17.9% | 17.6% | - The effective tax rate was lower than the blended statutory rate due to tax-exempt investment income, affordable housing tax credits, and income from subsidiaries in states with no state or local income tax[183](index=183&type=chunk) [FINANCIAL CONDITION](index=48&type=section&id=FINANCIAL%20CONDITION) Total assets slightly declined by **$40.3 million** to **$6.112 billion** at March 31, 2024, primarily due to a decrease in the securities portfolio. Loans remained stable, while deposits experienced a seasonal outflow. Capital levels remained strong, and liquidity was managed through various funding sources - Total assets for the Company totaled **$6.112 billion** at March 31, 2024, representing a decline of **$40.3 million** compared with December 31, 2023[184](index=184&type=chunk) [Securities available for sale](index=48&type=section&id=Securities%20available%20for%20sale) This section details the Company's available-for-sale securities portfolio and its changes - Securities available for sale declined **$57.6 million** as of March 31, 2024, compared with December 31, 2023, primarily due to the utilization of cash flows to fund loan growth and other balance sheet needs[185](index=185&type=chunk) - Current projections indicate approximately **$190.0 million** in principal and interest cash flows from the portfolio over the next twelve months[185](index=185&type=chunk) [Total loans](index=48&type=section&id=Total%20loans) This section provides an overview of the Company's total loan portfolio by category | Loan Category | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | | :---------------------------------- | :---------------------------- | :------------------------------- | :-------------------- | | Total Loans | $3,978,919 | $3,977,900 | $1,019 | | Commercial Real Estate Loans | $2,148,808 | $2,121,835 | $26,973 | | Home Equity and Consumer Loans | $421,980 | $407,889 | $14,091 | | Agricultural Loans | $400,733 | $423,803 | $(23,070) | | Commercial and Industrial Loans and Leases | $646,162 | $661,529 | $(15,367) | - The modest increase in total loans was largely attributable to increased commercial real estate loans and retail loans, partially offset by lower seasonal line utilization for agricultural loans and lower line utilization for commercial and industrial loans[186](index=186&type=chunk) - The commercial real estate portfolio is well-diversified over numerous property types (e.g., Multi-Family Dwellings **21%**, Retail Space **14%**) and by occupancy type (**76%** non-owner occupied)[188](index=188&type=chunk) [Allowance for Credit Losses](index=50&type=section&id=Allowance%20for%20Credit%20Losses) This section discusses the Company's allowance for credit losses in relation to its loan portfolio | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :---------------------------- | :------------------------------- | | Total Allowance for Credit Losses | $43,754 | $43,765 | - The allowance for credit losses represented **1.10%** of period-end loans at both March 31, 2024, and December 31, 2023[191](index=191&type=chunk) - As of March 31, 2024, the Company held net discounts on acquired loans of **$3.6 million**[191](index=191&type=chunk) [Non-performing Assets](index=51&type=section&id=Non-performing%20Assets) This section details the Company's non-performing assets, including non-performing loans | Non-performing Asset Category | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | % Change | | :---------------------------- | :---------------------------- | :------------------------------- | :-------------------- | :------- | | Total Non-performing Assets | $9,983 | $9,191 | $792 | 8.62% | | Non-performing Loans | $9,983 | $9,191 | $792 | 8.62% | | Non-performing Loans to Total Loans | 0.25% | 0.23% | 0.02% | 8.70% | - The modest increase in non-performing loans was related to two commercial credit relationships of less than **$1.0 million** each[192](index=192&type=chunk) [Deposits](index=51&type=section&id=Deposits) This section provides a breakdown of the Company's deposit base by category | Deposit Category | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | % Change | | :------------------------------------- | :---------------------------- | :------------------------------- | :-------------------- | :------- | | Total Deposits | $5,219,347 | $5,252,963 | $(33,616) | -0.64% | | Non-interest-bearing Demand Deposits | $1,463,933 | $1,493,160 | $(29,227) | -1.96% | | Interest-bearing Demand, Savings, & Money Market Accounts | $2,918,459 | $2,992,761 | $(74,302) | -2.48% | | Time Deposits < $100,000 | $328,804 | $289,077 | $39,727 | 13.74% | | Time Deposits of $100,000 or more | $508,151 | $477,965 | $30,186 | 6.31% | - The decline in total deposits was largely attributable to seasonal outflows of public entity funds[193](index=193&type=chunk) - Non-interest bearing deposits remained relatively stable at **28%** of total deposits, and uninsured and uncollateralized deposits were approximately **21%** of total deposits[193](index=193&type=chunk) [Capital Resources](index=52&type=section&id=Capital%20Resources) This section outlines the Company's capital structure and regulatory capital ratios - Shareholders' equity declined by **$8.3 million** to **$655.3 million** at March 31, 2024, primarily due to a **$20.0 million** decrease in accumulated other comprehensive income (loss) related to available-for-sale securities[195](index=195&type=chunk) - The Company and its subsidiary bank remained well-capitalized, exceeding all minimum regulatory capital ratios at March 31, 2024[199](index=199&type=chunk) | Capital Ratio (March 31, 2024) | Consolidated | Bank | | :----------------------------- | :----------- | :------ | | Total Capital (to Risk Weighted Assets) | 16.57% | 14.53% | | Tier 1 (Core) Capital (to Risk Weighted Assets) | 14.97% | 13.73% | | Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets) | 14.27% | 13.73% | | Tier 1 Capital (to Average Assets) | 12.01% | 11.02% | - The Company began the three-year phase-in of CECL's regulatory capital impact on January 1, 2022, with an additional **25%** phased in on January 1, 2024[201](index=201&type=chunk) [Liquidity](index=53&type=section&id=Liquidity) This section discusses the Company's liquidity position and funding sources - Total cash and cash equivalents increased **$8.1 million** during Q1 2024, ending at **$123.5 million**[202](index=202&type=chunk) - Primary funding sources include customer deposits, reciprocal deposits, and short-term borrowings from the FHLB (approx. **$220 million** available) and Federal Reserve Bank (approx. **$186 million** capacity)[203](index=203&type=chunk)[204](index=204&type=chunk) - The parent company had approximately **$83.4 million** of cash and cash equivalents available to meet its cash flow needs at March 31, 2024[205](index=205&type=chunk) [FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS](index=53&type=section&id=FORWARD-LOOKING%20STATEMENTS%20AND%20ASSOCIATED%20RISKS) This section highlights the inherent risks and uncertainties associated with forward-looking statements in the report - Statements regarding future expectations are considered "forward-looking statements" and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially[206](index=206&type=chunk)[208](index=208&type=chunk) - Key risks include changes in interest rates, unfavorable economic conditions, changes in liquidity, competitive conditions, and regulatory actions[209](index=209&type=chunk) - The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made[207](index=207&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company's market risk exposure, primarily liquidity and interest rate risk, is regularly reviewed. Interest rate risk is monitored using computer simulation modeling to estimate the potential impact on its net interest income and net portfolio value (NPV) under various interest rate scenarios - Primary market risks impacting the Company's operations are liquidity risk and interest rate risk[212](index=212&type=chunk) - Interest rate risk is monitored using computer simulation modeling to estimate the potential impact on net interest income and net portfolio value (NPV) under various interest rate scenarios[214](index=214&type=chunk) | Changes in Rates | Net Interest Income Amount (in thousands) | % Change | | :--------------- | :-------------------------------------- | :------- | | +2% | $203,363 | (0.55)% | | +1% | $204,537 | 0.03% | | Base | $204,483 | — | | -1% | $202,203 | (1.12)% | | -2% | $199,037 | (2.66)% | | Changes in Rates | Net Portfolio Value Amount (in thousands) | % Change | | :--------------- | :-------------------------------------- | :------- | | +2% | $636,724 | (15.76)% | | +1% | $696,934 | (7.80)% | | Base | $755,860 | — | | -1% | $805,070 | 6.51% | | -2% | $835,197 | 10.50% | [Item 4. Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2024, the Company's principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective. There were no material changes to the Company's internal control over financial reporting during the first fiscal quarter of 2024 - The Company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of March 31, 2024[224](index=224&type=chunk) - There was no change in the Company's internal control over financial reporting that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting during Q1 2024[225](index=225&type=chunk) [PART II. OTHER INFORMATION](index=57&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) There are no pending legal proceedings, other than routine litigation incidental to the business of the Company's subsidiaries - There are no pending legal proceedings, other than routine litigation incidental to the business of the Company's subsidiaries[227](index=227&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in German American Bancorp, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023[228](index=228&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company did not repurchase any shares of its common stock during January, February, or March 2024 under its publicly announced repurchase plan, which authorizes up to 1,000,000 shares - The Company did not repurchase any shares of its common stock during January, February, or March 2024[230](index=230&type=chunk) - The publicly announced plan, approved January 31, 2022, authorizes the repurchase of up to **1,000,000 shares**[230](index=230&type=chunk) [Item 3. Defaults Upon Senior Securities](index=57&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[231](index=231&type=chunk) [Item 4. Mine Safety Disclosures](index=57&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Not applicable[232](index=232&type=chunk) [Item 5. Other Information](index=57&type=section&id=Item%205.%20Other%20Information) This section states that there is no information required to be disclosed in a Form 8-K, no changes to director nomination procedures, and no insider trading arrangements adopted or terminated by directors or officers in Q1 2024 - No information required to be disclosed in a report on Form 8-K[234](index=234&type=chunk) - No changes to director nomination procedures[236](index=236&type=chunk) - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during Q1 2024[237](index=237&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists all exhibits included with the report or incorporated by reference, such as articles of incorporation, bylaws, stock certificates, indentures, executive management incentive plan descriptions, and Sarbanes-Oxley Act certifications - The report includes various exhibits such as Amended and Restated Articles of Incorporation, Bylaws, Indenture, and Form of Subordinated Note[239](index=239&type=chunk) - Sarbanes-Oxley Act Section 302 and 906 Certifications of Principal Executive Officer and Principal Financial Officer are included[239](index=239&type=chunk) [SIGNATURES](index=59&type=section&id=SIGNATURES) This section contains the official signatures of the Company's principal executive and financial officers, certifying the report's accuracy - The report is signed by D. Neil Dauby (Chairman and Chief Executive Officer), Bradley M. Rust (President and Chief Financial Officer), and Vicki L. Schuler (Senior Vice President, Controller) on May 8, 2024[246](index=246&type=chunk)

German American Bancorp (GABC) reported $60.82 million in revenue for the quarter ended March 2024, representing a year-over-year decline of 5%. EPS of $0.64 for the same period compares to $0.71 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $61.05 million, representing a surprise of -0.38%. The company has not delivered EPS surprise, with the consensus EPS estimate being $0.64.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- a ...

[First Quarter 2024 Earnings Highlights](index=1&type=section&id=First%20Quarter%202024%20Earnings) German American Bancorp's Q1 2024 performance saw a decline in net income due to margin compression, despite strong loan growth and expense control [Performance Summary](index=1&type=section&id=1.1%20Performance%20Summary) Q1 2024 net income of **$19.0 million** ($0.64/share) declined due to net interest margin compression, despite strong loan growth and controlled expenses Quarterly Earnings Comparison | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Income (in millions) | $19.0 | $21.5 | $20.8 | | Earnings Per Share (EPS) ($) | $0.64 | $0.73 | $0.71 | - Positive performance factors in Q1 2024 included **strong commercial real estate and retail loan growth**, **growth in non-public fund deposits**, **solid credit metrics**, and **controlled operating expenses**[2](index=2&type=chunk) - Net interest margin compressed by **8 basis points** to **3.35%** on a linked-quarter basis, as the **12 basis point increase** in funding costs outpaced the **4 basis point increase** in earning asset yield[3](index=3&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.27 per share**, an **8% increase** over the 2023 rate[6](index=6&type=chunk) [Financial Condition](index=2&type=section&id=Balance%20Sheet%20Highlights) The company's financial position reflects stable assets, diversified loan growth, strong asset quality, and robust capital adequacy [Assets](index=2&type=section&id=2.1%20Assets) Total assets were **$6.112 billion** at March 31, 2024, slightly down linked-quarter but up year-over-year due to loan growth Total Assets Comparison | Date | Total Assets (in billions) | | :--- | :--- | | March 31, 2024 | $6.112 | | December 31, 2023 | $6.152 | | March 31, 2023 | $5.997 | - The available-for-sale securities portfolio declined as cash flows were used to fund loan growth, with approximately **$190.0 million** in projected cash flows over the next twelve months[9](index=9&type=chunk) [Loans](index=2&type=section&id=2.2%20Loans) Total loans remained stable linked-quarter at **$3.98 billion** but grew **6%** year-over-year, with diversified portfolio composition End of Period Loan Balances (in thousands) | Loan Type | 3/31/2024 | 12/31/2023 | 3/31/2023 | | :--- | :--- | :--- | :--- | | Commercial & Industrial | $646,162 | $661,529 | $667,306 | | Commercial Real Estate | $2,148,808 | $2,121,835 | $2,000,237 | | Agricultural Loans | $400,733 | $423,803 | $378,587 | | Consumer Loans | $421,980 | $407,889 | $376,398 | | Residential Mortgage | $361,236 | $362,844 | $350,338 | | **Total Loans** | **$3,978,919** | **$3,977,900** | **$3,772,866** | - The loan portfolio is heavily concentrated in commercial real estate (**54%**), with limited office real estate exposure at approximately **4%** of the total portfolio[11](index=11&type=chunk) [Asset Quality](index=3&type=section&id=2.3%20Asset%20Quality) Asset quality remained strong with low non-performing assets (**0.16%**) and stable allowance for credit losses (**1.10%** of loans) Non-performing Assets (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 3/31/2023 | | :--- | :--- | :--- | :--- | | Total Non-Performing Loans | $9,983 | $9,191 | $14,593 | | Total Non-Performing Assets | $9,983 | $9,191 | $14,593 | Key Asset Quality Ratios | Ratio | 3/31/2024 | 12/31/2023 | 3/31/2023 | | :--- | :--- | :--- | :--- | | NPA to Total Assets (%) | 0.16% | 0.15% | 0.24% | | NPL to Total Loans (%) | 0.25% | 0.23% | 0.39% | | Allowance for Credit Losses to Loans (%) | 1.10% | 1.10% | 1.18% | [Deposits](index=4&type=section&id=2.4%20Deposits) Total deposits declined linked-quarter by **$33.6 million** due to seasonal outflows, but grew year-over-year by **$64.5 million** End of Period Deposit Balances (in thousands) | Deposit Type | 3/31/2024 | 12/31/2023 | 3/31/2023 | | :--- | :--- | :--- | :--- | | Non-interest-bearing Demand | $1,463,933 | $1,493,160 | $1,601,206 | | IB Demand, Savings, MMDA | $2,918,459 | $2,992,761 | $3,039,393 | | Time Deposits | $836,955 | $767,042 | $514,296 | | **Total Deposits** | **$5,219,347** | **$5,252,963** | **$5,154,895** | - The linked-quarter decline in deposits was largely due to seasonal outflows of public entity funds, with non-interest bearing deposits stable at **28%** of total deposits[15](index=15&type=chunk) [Capital Adequacy](index=4&type=section&id=2.5%20Capital%20Adequacy) The company and its subsidiary maintained capital levels well in excess of minimum regulatory requirements for well-capitalized status Capital Ratios | Ratio (Consolidated) | 3/31/2024 | 12/31/2023 | 3/31/2023 | | :--- | :--- | :--- | :--- | | Total Capital (to RWA) (%) | 16.57% | 16.50% | 15.89% | | Tier 1 (Core) Capital (to RWA) (%) | 14.97% | 14.97% | 14.32% | | Common Tier 1 (CET 1) (to RWA) (%) | 14.27% | 14.26% | 13.60% | | Tier 1 Capital (to Avg Assets) (%) | 12.01% | 11.75% | 11.08% | [Results of Operations](index=5&type=section&id=Results%20of%20Operations%20Highlights) The company's Q1 2024 operations saw a decline in net income driven by net interest margin compression, partially offset by non-interest income growth [Net Income](index=5&type=section&id=3.1%20Net%20Income) Q1 2024 net income was **$19.0 million** ($0.64/share), representing a decline from both prior quarters Quarterly Net Income Comparison | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Income (in thousands) | $19,022 | $21,507 | $20,807 | | Diluted EPS ($) | $0.64 | $0.73 | $0.71 | [Net Interest Income and Margin](index=5&type=section&id=3.2%20Net%20Interest%20Income%20and%20Margin) Net interest income decreased to **$45.0 million** in Q1 2024, with net interest margin compressing to **3.35%** due to higher funding costs Net Interest Margin and Income (Tax-equivalent) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net Interest Income (in millions) | $46.6 | $47.2 | $50.7 | | Net Interest Margin (%) | 3.35% | 3.43% | 3.69% | | Cost of Funds (%) | 1.67% | 1.55% | 0.84% | - The decline in net interest margin was largely driven by an increase in the cost of funds, which accelerated in Q1 2024 due to highly competitive deposit pricing and customers seeking higher yields[20](index=20&type=chunk)[21](index=21&type=chunk) - Accretion of discounts on acquired loans contributed approximately **3 basis points** to the net interest margin in Q1 2024[22](index=22&type=chunk) [Provision for Credit Losses](index=6&type=section&id=3.3%20Provision%20for%20Credit%20Losses) A provision for credit losses of **$900,000** was recorded in Q1 2024, with net charge-offs stable at **9 basis points** - The company recorded a provision for credit losses of **$900,000** in Q1 2024, compared with no provision in Q4 2023 and **$1,100,000** in Q1 2023[23](index=23&type=chunk) - Net charge-offs were **$911,000**, or an annualized **9 basis points** of average loans, during Q1 2024, comparable to prior quarters[24](index=24&type=chunk) [Non-interest Income](index=6&type=section&id=3.4%20Non-interest%20Income) Non-interest income increased to **$15.8 million** in Q1 2024, driven by wealth management fees and loan sales gains Non-interest Income Breakdown (in thousands) | Income Source | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Wealth Management Fees | $3,366 | $3,198 | $2,644 | | Insurance Revenues | $2,878 | $2,266 | $3,135 | | Interchange Fee Income | $4,087 | $4,371 | $4,199 | | Net Gains on Sales of Loans | $751 | $532 | $587 | | **Total Non-interest Income** | **$15,822** | **$15,594** | **$14,967** | - Wealth management fees increased **27%** YoY, largely due to increased assets under management[27](index=27&type=chunk) - Insurance revenues increased **27%** from Q4 2023 due to seasonal contingency revenue (**$391,000**), but declined **8%** YoY due to lower contingency revenue compared to Q1 2023 (**$945,000**)[28](index=28&type=chunk) [Non-interest Expense](index=8&type=section&id=3.5%20Non-interest%20Expense) Non-interest expense totaled **$36.7 million** in Q1 2024, increasing linked-quarter but decreasing year-over-year Non-interest Expense Breakdown (in thousands) | Expense Category | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Salaries and Employee Benefits | $21,178 | $20,948 | $21,846 | | Occupancy, Furniture and Equipment | $3,804 | $3,513 | $3,820 | | Professional Fees | $1,595 | $1,170 | $1,562 | | **Total Non-interest Expense** | **$36,738** | **$35,734** | **$37,616** | - Salaries and benefits declined **3%** YoY due to a lower number of full-time equivalent employees and lower incentive compensation[33](index=33&type=chunk) - Professional fees increased **36%** linked-quarter, attributable to costs for year-end financial reporting, annual meeting preparations, and talent recruiting[35](index=35&type=chunk) [Company Overview and Forward-Looking Statements](index=8&type=section&id=About%20German%20American%20and%20Forward-Looking%20Statements) This section provides an overview of German American Bancorp and important cautionary notes regarding forward-looking statements [About German American](index=8&type=section&id=4.1%20About%20German%20American) German American Bancorp, Inc. is a financial holding company operating **74** banking offices and various financial subsidiaries - German American Bancorp, Inc. (GABC) operates **74** banking offices in **20** southern Indiana counties and **14** Kentucky counties through its subsidiary, German American Bank[36](index=36&type=chunk) - The company also owns German American Investment Services, Inc. (an investment brokerage) and German American Insurance, Inc. (a property and casualty insurance agency)[36](index=36&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=9&type=section&id=4.2%20Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions that forward-looking statements are subject to risks, including interest rate changes, economic conditions, and cybersecurity threats - The press release contains forward-looking statements subject to risks and uncertainties as defined by the Private Securities Litigation Reform Act of 1995[37](index=37&type=chunk) - Key risk factors that could affect results include changes in interest rates, unfavorable economic conditions, soundness of other financial institutions, changes in liquidity, and potential cyber-attacks[37](index=37&type=chunk) [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated balance sheets, statements of income, and key performance and asset quality ratios [Consolidated Balance Sheets](index=11&type=section&id=5.1%20Consolidated%20Balance%20Sheets) The consolidated balance sheet details the company's financial position, including assets, liabilities, and equity, as of March 31, 2024 Consolidated Balance Sheets (unaudited, in thousands) | | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--- | :--- | :--- | :--- | | **TOTAL ASSETS** | **$6,111,929** | **$6,152,198** | **$5,996,919** | | Net Loans | $3,928,156 | $3,927,317 | $3,724,557 | | Total Deposits | $5,219,347 | $5,252,963 | $5,154,895 | | **TOTAL LIABILITIES** | **$5,456,675** | **$5,488,640** | **$5,391,588** | | **SHAREHOLDERS' EQUITY** | **$655,254** | **$663,558** | **$605,331** | [Consolidated Statements of Income](index=12&type=section&id=5.2%20Consolidated%20Statements%20of%20Income) The consolidated statement of income presents the company's revenues and expenses, resulting in a Q1 2024 net income of **$19.0 million** Consolidated Statements of Income (unaudited, in thousands) | | Three Months Ended | | | | :--- | :--- | :--- | :--- | | | March 31, 2024 | December 31, 2023 | March 31, 2023 | | NET INTEREST INCOME | $44,994 | $45,607 | $49,009 | | Provision for Credit Losses | $900 | $— | $1,100 | | TOTAL NON-INTEREST INCOME | $15,822 | $15,594 | $14,967 | | TOTAL NON-INTEREST EXPENSE | $36,738 | $35,734 | $37,616 | | **NET INCOME** | **$19,022** | **$21,507** | **$20,807** | | **DILUTED EARNINGS PER SHARE** | **$0.64** | **$0.73** | **$0.71** | [Key Performance and Asset Quality Ratios](index=13&type=section&id=5.3%20Key%20Performance%20and%20Asset%20Quality%20Ratios) Key performance ratios, including Return on Average Assets (**1.25%**), declined, while asset quality ratios remained strong and stable Selected Performance and Asset Quality Ratios | Ratio | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Annualized Return on Average Assets (%) | 1.25% | 1.43% | 1.37% | | Annualized Return on Average Equity (%) | 11.58% | 15.45% | 14.39% | | Net Interest Margin (%) | 3.35% | 3.43% | 3.69% | | Efficiency Ratio (%) | 57.92% | 55.87% | 56.08% | | Annualized Net Charge-offs to Avg Loans (%) | 0.09% | 0.09% | 0.10% | | NPA to Period End Assets (%) | 0.16% | 0.15% | 0.24% |

JASPER, Ind., April 29, 2024 (GLOBE NEWSWIRE) -- German American Bancorp, Inc. (NASDAQ:GABC) reported first quarter 2024 earnings of $19.0 million, or $0.64 per share, compared to earnings of $21.5 million, or $0.73 per share, for fourth quarter 2023, and earnings of $20.8 million, or $0.71 per share, for first quarter 2023. First quarter 2024 operating performance was highlighted by strong linked quarter commercial real estate and retail organic loan growth, linked quarter non-public fund deposit growth, s ...