German American(GABC) - 2024 Q3 - Quarterly Report

Financial Performance - Net interest income after provision for credit losses was $47,969 thousand for the three months ended September 30, 2024, compared to $46,659 thousand for the same period in 2023, an increase of 2.8%[10]. - Net income for Q3 2024 was $21,048 thousand, slightly down from $21,451 thousand in Q3 2023, a decrease of 1.9%[10]. - Basic earnings per share for Q3 2024 were $0.71, unchanged from the previous year[10]. - Net income for the nine months ended September 30, 2024, was $60,600,000, a decrease of 5.5% from $64,381,000 in the same period of 2023[6]. - Basic and diluted earnings per share for the nine months ended September 30, 2024, were both $2.04, down from $2.18 in 2023[6]. - The company reported a total non-interest expense of $36,126 thousand for Q3 2024, up from $35,421 thousand in Q3 2023, an increase of 2%[10]. - Total non-interest income totaled $13,801 thousand for the three months ended September 30, 2024, a decrease of 6.8% from $14,804 thousand in the same period last year[10]. - The company reported a net loss on securities of $34,788 for the nine months ended September 30, 2024, compared to a gain of $40 for the same period in 2023, indicating a significant decline in this area[91]. Asset and Equity Growth - Total assets increased to $6,260,907 thousand as of September 30, 2024, up from $6,152,198 thousand at December 31, 2023, representing a growth of 1.76%[9]. - The company’s total shareholders' equity rose to $744,563 thousand as of September 30, 2024, compared to $663,558 thousand at December 31, 2023, reflecting an increase of 12.2%[9]. - Total deposits increased to $5,271,279 thousand as of September 30, 2024, compared to $5,252,963 thousand at December 31, 2023, marking a growth of 0.35%[9]. - The total fair value of securities available-for-sale as of September 30, 2024, was $1,547,994, with an amortized cost of $1,769,174, indicating unrealized losses of $227,813[32]. Loan and Credit Quality - The total loans net amount increased to $4,017,025 as of September 30, 2024, up from $3,927,317 as of December 31, 2023, reflecting a growth of approximately 2.3%[44]. - The allowance for credit losses increased to $44,124 thousand as of September 30, 2024, compared to $43,765 thousand at December 31, 2023[9]. - The total non-accrual loans as of September 30, 2024, amounted to $9,701,000, compared to $9,136,000 as of December 31, 2023, representing an increase of approximately 6.2%[57]. - The company reported a beginning balance of $43,765,000 for the allowance for credit losses as of September 30, 2024, down from $44,168,000 as of September 30, 2023, reflecting a decline of approximately 0.92%[48]. - The company has considered qualitative adjustments to the allowance for credit losses due to potential increased losses related to economic stress from inflation and rising interest rates[51]. Non-Interest Income and Expenses - Non-interest income increased to $48,546,000 for the nine months ended September 30, 2024, compared to $44,667,000 in 2023, representing an increase of 8.3%[6]. - Wealth management fees for the three months ended September 30, 2024, totaled $3,580, up from $2,957 in the same period of 2023, representing a significant increase of 20.9%[90]. - Insurance revenues for the nine months ended September 30, 2024, decreased to $4,384 thousand from $7,330 thousand in 2023, reflecting the sale of substantially all assets of GAI[139]. - The company reported unrealized holding gains on securities of $54,377,000 for the three months ended September 30, 2024, compared to a loss of $99,787,000 in the same period of 2023[12]. Mergers and Acquisitions - The Company entered into a merger agreement with Heartland BancCorp, expecting to issue approximately 7.66 million shares and pay about $24,967,000 in cash for the acquisition[157]. - The merger is anticipated to enhance the Company's scale and diversify its footprint into Columbus, Ohio, and Greater Cincinnati, expected to be completed in Q1 2025[159][158]. Accounting and Regulatory Changes - The company has transitioned from LIBOR-based loans to term SOFR and other indices, reflecting compliance with recent accounting standards[18]. - The company adopted ASU 2023-02 regarding tax credit structures, with no material impact on financial statements[21]. - The company adopted ASU 2022-02 effective January 1, 2023, eliminating the accounting for troubled debt restructurings[63]. Market and Economic Sensitivity - The Company’s net interest income is projected to change by (0.16)% with a 2% increase in interest rates, and (1.24)% with a 1% decrease[264]. - The net portfolio value is expected to decrease by 12.58% with a 2% increase in interest rates, indicating significant sensitivity to rate changes[266].