German American(GABC) - 2024 Q4 - Annual Results

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