German American(GABC) - 2024 Q2 - Quarterly Results

Financial Performance - Net income for Q2 2024 was $20.53 million, or $0.69 per share, an 8% increase from Q1 2024 but an 8% decline compared to Q2 2023[41] - Net income for the three months ended June 30, 2024, was $20,530 million, a 7.9% increase from $19,022 million in the same period last year[98] - Basic earnings per share increased to $0.69 from $0.64, marking an 7.8% rise year-over-year[98] - Total interest income for the three months ended June 30, 2024, was $71,577 million, an increase of 4.8% from $68,258 million for the same period in 2023[98] - Net interest income after provision for credit losses was $45,346 million, compared to $44,094 million in the previous year, reflecting a year-over-year increase of 2.8%[98] - Total interest expense rose to $25,606 million, up from $23,264 million, indicating an increase of 10.0% compared to the prior year[98] Asset Quality - Non-performing assets decreased to $7.3 million, representing 0.12% of total assets, down from 0.16% in Q1 2024 and 0.21% in Q2 2023[10] - As of June 30, 2024, total non-performing loans decreased to $7,289,000, down 27% from $9,983,000 on March 31, 2024, and down 41% from $12,423,000 on June 30, 2023[59] - Non-performing loans were defined as non-accrual loans and loans past due 90 days or more, indicating ongoing monitoring of asset quality[99] - Provision for credit losses was $625 million, a decrease from $900 million in the same quarter last year, reflecting improved asset quality[98] Capital and Ratios - As of June 30, 2024, total capital to risk-weighted assets ratio was 16.78%, up from 16.57% in the previous quarter and 16.06% a year ago[1] - The allowance for credit losses was $43.9 million, representing 1.09% of period-end loans, slightly down from 1.10% in Q1 2024[22] - Non-performing Loans to Period End decreased to 0.18% as of June 30, 2024, down from 0.25% as of June 30, 2023[1] Loans and Deposits - Total loans increased by $65.3 million, or 7% on an annualized basis, compared to Q1 2024, and by $213.8 million, or 6%, compared to Q2 2023[9] - Total deposits rose by approximately $94 million, or 7% on an annualized basis, compared to Q1 2024, and by $133.9 million, or 3%, compared to Q2 2023[11] - The company reported a total of $5.31 billion in deposit balances as of June 30, 2024, an increase from $5.22 billion in Q1 2024[40] - Total deposits increased to $5,313,557,000 as of June 30, 2024, up 2% from $5,219,347,000 in the previous quarter and up 3% from $5,179,705,000 a year ago[77] Non-Interest Income - Non-interest income for Q2 2024 totaled $18.9 million, an increase of $3.1 million, or 20%, from Q1 2024, and $4.0 million, or 27%, from Q2 2023[30] - Non-interest income totaled $18,923 million, up from $15,822 million, representing a growth of 19.8% year-over-year[98] - Interchange fee income increased by $317,000, or 8%, compared to Q1 2024, reflecting higher customer transaction volume[49] Expenses - Non-interest expense for the quarter ended June 30, 2024, totaled $37,674,000, reflecting a 3% increase from $36,738,000 in the first quarter of 2024 and a 5% increase from $35,726,000 in the second quarter of 2023[64] - Professional fees surged by $1,867,000, or 117%, in Q2 2024 compared to Q1 2024, and increased by $1,848,000, or 115%, compared to Q2 2023, primarily due to asset sales and a pending merger[63] - Salaries and benefits declined by $221,000, or 1%, during the quarter ended June 30, 2024, compared to the first quarter of 2024[81] - Data processing fees increased by $208,000, or 7%, during the second quarter of 2024 compared to the first quarter of 2024, driven by enhancements to digital banking systems[82] - Occupancy, furniture, and equipment expenses decreased by $317,000, or 8%, compared to the previous quarter, while increasing by $44,000, or 1%, compared to the same quarter last year[65] - Advertising and promotion expenses declined by $229,000, or 20%, compared to the previous quarter and by $352,000, or 28%, compared to the same quarter last year[67] Mergers and Acquisitions - The company announced a proposed merger with Heartland BancCorp to enhance profitability and market presence[7] - The proposed merger with Heartland BancCorp is set to be submitted for shareholder consideration, with a Registration Statement to be filed with the SEC[69] Growth and Future Outlook - The company anticipates future financial and operating results to be positively impacted by ongoing growth strategies and potential mergers[85] - The company's tangible book value per share rose to $16.97, compared to $15.82 in the previous quarter and $14.01 a year ago[76]