German American Bancorp, Inc. (GABC) Reports Strong Second Quarter 2024 Earnings
German American Bancorp (GABC) reported robust Q2 2024 earnings of $20.5 million, or $0.69 per share, an 8% increase from the previous quarter. The quarter saw a stable net interest margin of 3.34%, solid loan and deposit growth, strong credit metrics, and controlled non-interest expenses. The sale of German American Insurance for $40 million resulted in a $27.5 million after-tax gain, while the restructuring of the securities portfolio incurred a $27.2 million after-tax loss.
The company remained well-capitalized with solid liquidity. Total assets rose to $6.217 billion, reflecting $65 million growth in loans and a $94 million increase in deposits. The company's non-performing assets were 0.12% of total assets. Non-interest income saw a 20% increase, highlighted by a surge in wealth management fees and higher mortgage sales volume. Operating expenses remained controlled, excluding fees related to the insurance sale and pending merger with Heartland BancCorp.
German American Bancorp (GABC) ha riportato utili robusti nel secondo trimestre del 2024 di 20,5 milioni di dollari, pari a 0,69 dollari per azione, con un aumento dell'8% rispetto al trimestre precedente. Durante il trimestre, la margine netto degli interessi è rimasto stabile al 3,34%, con una solida crescita dei prestiti e dei depositi, metriche di credito forti e spese non di interesse controllate. La vendita di German American Insurance per 40 milioni di dollari ha portato a un guadagno di 27,5 milioni di dollari dopo le tasse, mentre la ristrutturazione del portafoglio titoli ha comportato una perdita di 27,2 milioni di dollari dopo le tasse.
L'azienda è rimasta ben capitalizzata con una liquidiità solida. Il totale delle attività è aumentato a 6,217 miliardi di dollari, riflettendo una crescita di 65 milioni di dollari nei prestiti e un aumento di 94 milioni di dollari nei depositi. Gli asset non performanti dell'azienda rappresentavano lo 0,12% del totale delle attività. Il reddito non da interessi ha visto un aumento del 20%, evidenziato da un’impennata delle commissioni sulla gestione patrimoniale e da un aumento del volume delle vendite di mutui. Le spese operative sono rimaste controllate, escluse le commissioni relative alla vendita dell'assicurazione e alla fusione in corso con Heartland BancCorp.
German American Bancorp (GABC) reportó sólidos ingresos en el segundo trimestre de 2024 de 20.5 millones de dólares, o 0.69 dólares por acción, un aumento del 8% en comparación con el trimestre anterior. Durante el trimestre, el margen neto de intereses se mantuvo estable en 3.34%, con un sólido crecimiento en préstamos y depósitos, métricas de crédito fuertes y gastos no relacionados con intereses controlados. La venta de German American Insurance por 40 millones de dólares resultó en una ganancia de 27.5 millones de dólares después de impuestos, mientras que la reestructuración de la cartera de valores incurrió en una pérdida de 27.2 millones de dólares después de impuestos.
La compañía se mantuvo bien capitalizada con sólida liquidez. Los activos totales aumentaron a 6.217 millones de dólares, reflejando un crecimiento de 65 millones de dólares en préstamos y un aumento de 94 millones de dólares en depósitos. Los activos no productivos de la compañía representaron el 0.12% del total de activos. Los ingresos no relacionados con intereses vieron un aumento del 20%, destacado por un aumento en las tarifas de gestión patrimonial y un mayor volumen de ventas de hipotecas. Los gastos operativos se mantuvieron controlados, excluyendo las tarifas relacionadas con la venta de seguros y la fusión pendiente con Heartland BancCorp.
독일 아메리칸 뱅콥(GABC)은 2024년 2분기 기준으로 2천 50만 달러의 견고한 수익을 보고했으며, 이는 주당 0.69 달러로 이전 분기 대비 8% 증가한 수치입니다. 이 분기 동안 순이자 마진은 3.34%로 안정적으로 유지되었고, 대출과 예금의 견고한 증가, 강력한 신용 지표 및 통제된 비이자 비용이 관찰되었습니다. 독일 아메리칸 보험의 4천만 달러 판매로 인해 세후 2천 75만 달러의 이익이 발생했으며, 증권 포트폴리오 재구성으로 인해 세후 2천 72만 달러의 손실이 발생했습니다.
회사는 견실한 유동성과 함께 자본이 충분한 상태를 유지했습니다. 총 자산은 62억 1천7백만 달러로 증가했으며, 이는 대출에서 6천5백만 달러의 성장과 예금에서 9천4백만 달러의 증가를 반영하고 있습니다. 회사의 부실 자산은 총 자산의 0.12%를 차지했습니다. 비이자 수익은 20% 증가했으며, 이는 자산 관리 수수료 급증과 주택담보대출 판매량 증가로 강조되었습니다. 운영 경비는 보험 판매 및 Heartland BancCorp와의 인수 합병 관련 수수료를 제외하고 통제된 상태로 유지되었습니다.
German American Bancorp (GABC) a rapporté des bénéfices robustes pour le deuxième trimestre 2024 de 20,5 millions de dollars, soit 0,69 dollar par action, une augmentation de 8 % par rapport au trimestre précédent. Au cours de ce trimestre, la marge nette d'intérêt est restée stable à 3,34 %, avec une solide croissance des prêts et des dépôts, de bons indicateurs de crédit et des dépenses non d'intérêt contrôlées. La vente de German American Insurance pour 40 millions de dollars a entraîné un gain après impôt de 27,5 millions de dollars, tandis que la restructuration du portefeuille de titres a entraîné une perte après impôt de 27,2 millions de dollars.
L'entreprise est restée bien capitalisée avec une liquidité solide. Les actifs totaux ont augmenté à 6,217 milliards de dollars, reflétant une croissance de 65 millions de dollars dans les prêts et une augmentation de 94 millions de dollars dans les dépôts. Les actifs non performants de l'entreprise représentaient 0,12 % des actifs totaux. Les revenus non d'intérêt ont connu une augmentation de 20 %, mise en évidence par une hausse des frais de gestion de patrimoine et un volume de ventes hypothécaires plus élevé. Les dépenses d'exploitation ont été maintenues sous contrôle, en excluant les frais liés à la vente d'assurance et la fusion en cours avec Heartland BancCorp.
German American Bancorp (GABC) berichtete von einem soliden Gewinn im zweiten Quartal 2024 in Höhe von 20,5 Millionen US-Dollar, was 0,69 US-Dollar pro Aktie entspricht, ein Anstieg um 8 % im Vergleich zum vorherigen Quartal. Im Quartal blieb die Nettomarge der Zinsen stabil bei 3,34 %, mit solidem Wachstum bei Krediten und Einlagen, starken Kreditkennzahlen und kontrollierten außerkapitalen Ausgaben. Der Verkauf der German American Insurance für 40 Millionen US-Dollar führte zu einem Nachsteuergewinn von 27,5 Millionen US-Dollar, während die Umstrukturierung des Wertpapierportfolios einen Nachsteuerverlust von 27,2 Millionen US-Dollar zur Folge hatte.
Das Unternehmen blieb gut kapitalisiert mit solider Liquidität. Die Gesamtrentabilität stieg auf 6,217 Milliarden US-Dollar, was einem Wachstum von 65 Millionen US-Dollar bei Krediten und einem Anstieg von 94 Millionen US-Dollar bei Einlagen entspricht. Die nicht performenden Vermögenswerte des Unternehmens machten 0,12 % der Gesamtrentabilität aus. Die Einnahmen aus außerkapitalen Geschäften verzeichneten einen Anstieg um 20 %, angestoßen durch einen Anstieg der Vermögensverwaltungsgebühren und ein höheres Volumen an Hypothekenverkäufen. Die Betriebskosten blieben unter Kontrolle, ohne die Gebühren im Zusammenhang mit dem Verkaufs der Versicherung und der bevorstehenden Fusion mit Heartland BancCorp zu berücksichtigen.
- Q2 2024 earnings of $20.5 million, up 8% from Q1 2024.
- Solid loan growth, increasing by $65 million or 7% on an annualized basis.
- Deposit growth of $94 million or 7% on an annualized basis.
- Stable net interest margin at 3.34%.
- Strong credit metrics with non-performing assets at 0.12% of total assets.
- $27.5 million after-tax gain from the sale of German American Insurance.
- Non-interest income up 20%, driven by wealth management and mortgage sales.
- Company remained well-capitalized and liquid with total assets of $6.217 billion.
- $27.2 million after-tax loss from securities portfolio restructuring.
- Decline in net interest income compared to Q2 2023.
- Insurance revenues declined due to the sale of German American Insurance.
Insights
German American Bancorp's Q2 2024 results demonstrate solid performance amid strategic moves. The earnings of
Key highlights include:
- Net interest margin held steady at
3.34% , with earning asset yield increases nearly matching funding cost increases. - Loan growth of
7% annualized, with diversified portfolio and office real estate exposure. - Deposit growth of
7% annualized, maintaining a healthy27% in non-interest-bearing accounts. - Strong credit metrics with non-performing assets at just
0.12% of total assets.
The sale of German American Insurance for
The announced merger with Heartland BancCorp, expanding into high-growth Ohio markets, further underscores the company's strategic focus on long-term growth and profitability.
German American's Q2 results reflect the broader banking industry trends while showcasing proactive management. The stable net interest margin of
The company's deposit strategy is noteworthy:
- Maintaining
27% of deposits in non-interest-bearing accounts helps control funding costs. - The shift towards time deposits indicates active customer rate-seeking, a common industry challenge.
- Overall deposit growth of
7% annualized is solid, especially given competitive pressures.
The loan portfolio's diversity and office real estate exposure (
The securities portfolio restructuring, while resulting in a short-term loss, is a forward-looking move. With an expected
The pending merger with Heartland BancCorp is aligned with industry consolidation trends, potentially offering scale benefits and market expansion opportunities.
JASPER, Ind., July 29, 2024 (GLOBE NEWSWIRE) -- German American Bancorp, Inc. (Nasdaq: GABC) reported strong second quarter earnings of
Second quarter 2024 operating performance was highlighted by a stabilized net interest margin, solid loan and deposit growth, continued strong credit metrics, growth in most non-interest income categories and controlled non-interest expense. As previously reported, the Company also sold the assets of its wholly-owned subsidiary, German American Insurance, Inc., during the second quarter, for
The Company views certain non-operating items, like the German American Insurance sale and the restructuring of the securities portfolio, as being unrepresentative of the Company’s core operating performance. As such, the Company generally considers those items as adjustments to net income reported under U.S. generally accepted accounting principles. Nonetheless, as a result of these two transactions, second quarter 2024 net income, on a combined basis, was positively impacted by only
Net interest margin for the second quarter of 2024 was relatively stable at
Second quarter 2024 deposits increased approximately
During the second quarter of 2024, total loans increased
Non-interest income for the second quarter of 2024, compared with the first quarter of 2024, excluding any impact related to the insurance sale and the securities portfolio restructuring, reflected solid growth in most categories, highlighted by an increase in wealth management fees of approximately
Excluding professional fees associated with both the sale of the insurance subsidiary and the recently announced pending merger transaction with Heartland BancCorp, the Company’s operating expenses for the second quarter of 2024 remained well-controlled.
The Company also announced that its Board of Directors declared a regular quarterly cash dividend of
D. Neil Dauby, German American’s Chairman & CEO stated, “We are extremely pleased to deliver a strong second quarter operating performance. In addition, the Company executed on several key strategic initiatives with the sale of its insurance subsidiary and the partial restructuring of our securities portfolio.” In a separate news release, German American also announced today its proposed merger with Heartland BancCorp. Heartland Bank is a premier community bank operating within the high growth markets of Columbus and Cincinnati, Ohio. Dauby added, “This strategic partnership coupled with our balance sheet repositioning will build on our strong quarterly operating performance and position our Company for improved profitability and future success.”
Balance Sheet Highlights
Total assets for the Company totaled
Securities available-for-sale declined
During June 2024, the Company commenced a securities portfolio restructuring transaction whereby available-for-sale securities totaling approximately
June 30, 2024 total loans increased
The composition of the loan portfolio has remained relatively stable and diversified over the past several years, including 2024. The portfolio is most heavily concentrated in commercial real estate loans at
| End of Period Loan Balances | 6/30/2024 | 3/31/2024 | 6/30/2023 | |||||||||
| (dollars in thousands) | ||||||||||||
| Commercial & Industrial Loans | $ | 664,435 | $ | 646,162 | $ | 669,137 | ||||||
| Commercial Real Estate Loans | 2,172,447 | 2,148,808 | 2,021,109 | |||||||||
| Agricultural Loans | 413,742 | 400,733 | 395,466 | |||||||||
| Consumer Loans | 424,647 | 421,980 | 389,440 | |||||||||
| Residential Mortgage Loans | 368,997 | 361,236 | 355,329 | |||||||||
| $ | 4,044,268 | $ | 3,978,919 | $ | 3,830,481 | |||||||
The Company’s allowance for credit losses totaled
Non-performing assets totaled
| Non-performing Assets | |||||||||||
| (dollars in thousands) | |||||||||||
| 6/30/2024 | 3/31/2024 | 6/30/2023 | |||||||||
| Non-Accrual Loans | $ | 6,583 | $ | 9,898 | $ | 11,423 | |||||
| Past Due Loans (90 days or more) | 706 | 85 | 1,000 | ||||||||
| Total Non-Performing Loans | 7,289 | 9,983 | 12,423 | ||||||||
| Other Real Estate | 33 | — | — | ||||||||
| Total Non-Performing Assets | $ | 7,322 | $ | 9,983 | $ | 12,423 | |||||
June 30, 2024 total deposits increased
| End of Period Deposit Balances | 6/30/2024 | 3/31/2024 | 6/30/2023 | |||||||||
| (dollars in thousands) | ||||||||||||
| Non-interest-bearing Demand Deposits | $ | 1,448,467 | $ | 1,463,933 | $ | 1,540,564 | ||||||
| IB Demand, Savings, and MMDA Accounts | 2,984,571 | 2,918,459 | 3,056,396 | |||||||||
| Time Deposits < | 348,025 | 328,804 | 256,504 | |||||||||
| Time Deposits > | 532,494 | 508,151 | 326,241 | |||||||||
| $ | 5,313,557 | $ | 5,219,347 | $ | 5,179,705 | |||||||
At June 30, 2024, the capital levels for the Company and its subsidiary bank, German American Bank (the “Bank”), remained well in excess of the minimum amounts needed for capital adequacy purposes and the Bank’s capital levels met the necessary requirements to be considered well-capitalized.
| 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 1) Capital Ratio (to Risk Weighted Assets) | ||||||||||||
| Consolidated | 14.49 | % | 14.27 | % | 13.78 | % | ||||||
| Bank | 13.72 | % | 13.73 | % | 13.76 | % | ||||||
| Tier 1 Capital (to Average Assets) | ||||||||||||
| Consolidated | 11.92 | % | 12.01 | % | 11.44 | % | ||||||
| Bank | 10.78 | % | 11.02 | % | 10.87 | % | ||||||
Results of Operations Highlights – Quarter ended June 30, 2024
Net income for the second quarter of 2024 totaled
Net income for the second quarter of 2024 was impacted by the previously announced completion of the sale of the assets of its wholly-owned subsidiary German American Insurance, Inc. (“GAI”) to Hilb Group, an industry-leading insurance broker. The all-cash transaction sale price totaled
Net income for the second quarter of 2024 was also impacted by the aforementioned securities portfolio restructuring transaction whereby available securities totaling approximately
| Summary Average Balance Sheet | |||||||||||||||||||||||||||
| (Tax-equivalent basis / dollars in thousands) | |||||||||||||||||||||||||||
| Quarter Ended | Quarter Ended | Quarter Ended | |||||||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||||||||||||||||||
| Principal Balance | Income/ Expense | Yield/ Rate | Principal Balance | Income/ Expense | Yield/ Rate | Principal Balance | Income/ Expense | Yield/ Rate | |||||||||||||||||||
| Assets | |||||||||||||||||||||||||||
| Federal Funds Sold and Other | |||||||||||||||||||||||||||
| Short-term Investments | $ | 180,595 | $ | 2,383 | 5.31 | % | $ | 22,903 | $ | 299 | 5.25 | % | $ | 54,228 | $ | 660 | 4.88 | % | |||||||||
| Securities | 1,505,807 | 11,224 | 2.98 | % | 1,595,700 | 11,537 | 2.89 | % | 1,667,871 | 12,094 | 2.90 | % | |||||||||||||||
| Loans and Leases | 4,022,612 | 59,496 | 5.95 | % | 3,972,232 | 58,067 | 5.88 | % | 3,787,436 | 52,350 | 5.54 | % | |||||||||||||||
| Total Interest Earning Assets | $ | 5,709,014 | $ | 73,103 | 5.14 | % | $ | 5,590,835 | $ | 69,903 | 5.02 | % | $ | 5,509,535 | $ | 65,104 | 4.74 | % | |||||||||
| Liabilities | |||||||||||||||||||||||||||
| Demand Deposit Accounts | $ | 1,421,710 | $ | 1,426,239 | $ | 1,545,455 | |||||||||||||||||||||
| IB Demand, Savings, and | |||||||||||||||||||||||||||
| MMDA Accounts | $ | 3,049,511 | $ | 14,006 | 1.85 | % | $ | 2,969,755 | $ | 12,823 | 1.74 | % | $ | 3,118,225 | $ | 10,035 | 1.29 | % | |||||||||
| Time Deposits | 881,880 | 9,379 | 4.28 | % | 806,976 | 8,166 | 4.07 | % | 546,982 | 3,322 | 2.44 | % | |||||||||||||||
| FHLB Advances and Other Borrowings | 182,960 | 2,221 | 4.88 | % | 196,348 | 2,275 | 4.66 | % | 177,146 | 1,899 | 4.30 | % | |||||||||||||||
| Total Interest-Bearing Liabilities | $ | 4,114,351 | $ | 25,606 | 2.50 | % | $ | 3,973,079 | $ | 23,264 | 2.36 | % | $ | 3,842,353 | $ | 15,256 | 1.59 | % | |||||||||
| Cost of Funds | 1.80 | % | 1.67 | % | 1.11 | % | |||||||||||||||||||||
| Net Interest Income | $ | 47,497 | $ | 46,639 | $ | 49,848 | |||||||||||||||||||||
| Net Interest Margin | 3.34 | % | 3.35 | % | 3.63 | % | |||||||||||||||||||||
During the second quarter of 2024, net interest income, on a non tax-equivalent basis, totaled
The increase in net interest income during the second quarter of 2024 compared with the first quarter of 2024 was primarily driven by a higher level of average earning assets and a relatively stable net interest margin. The higher level of earning assets during the second quarter of 2024 was driven by both loan growth and a higher level of other short-term investments driven by a seasonal increase in deposits. The decline in net interest income during the second quarter of 2024 compared with the second quarter of 2023 was primarily attributable to a decline in the Company’s net interest margin.
The tax-equivalent net interest margin for the quarter ended June 30, 2024 was
The previously described securities portfolio restructuring transaction did not have a meaningful impact on the second quarter of 2024 net interest income or net interest margin as the transaction commenced in the latter part of June 2024. The Company expects the securities restructuring to result in an improved yield of approximately
The Company’s net interest margin and net interest income have been impacted by accretion of loan discounts on acquired loans. Accretion of discounts on acquired loans totaled
During the quarter ended June 30, 2024, the Company recorded a provision for credit losses of
During the quarter ended June 30, 2024, non-interest income totaled
| Quarter Ended | Quarter Ended | Quarter Ended | |||||||||
| Non-interest Income | 6/30/2024 | 3/31/2024 | 6/30/2023 | ||||||||
| (dollars in thousands) | |||||||||||
| Wealth Management Fees | $ | 3,783 | $ | 3,366 | $ | 2,912 | |||||
| Service Charges on Deposit Accounts | 3,093 | 2,902 | 2,883 | ||||||||
| Insurance Revenues | 1,506 | 2,878 | 2,130 | ||||||||
| Company Owned Life Insurance | 525 | 441 | 429 | ||||||||
| Interchange Fee Income | 4,404 | 4,087 | 4,412 | ||||||||
| Other Operating Income | 39,536 | 1,362 | 1,462 | ||||||||
| Subtotal | 52,847 | 15,036 | 14,228 | ||||||||
| Net Gains on Sales of Loans | 969 | 751 | 630 | ||||||||
| Net Gains (Losses) on Securities | (34,893 | ) | 35 | 38 | |||||||
| Total Non-interest Income | $ | 18,923 | $ | 15,822 | $ | 14,896 | |||||
Wealth management fees increased
Insurance revenues declined
Interchange fee income increased
Other operating income increased
Net gains on sales of loans increased
The net loss on securities during the second quarter of 2024 totaled
During the quarter ended June 30, 2024, non-interest expense totaled
| Quarter Ended | Quarter Ended | Quarter Ended | |||||||||
| Non-interest Expense | 6/30/2024 | 3/31/2024 | 6/30/2023 | ||||||||
| (dollars in thousands) | |||||||||||
| Salaries and Employee Benefits | $ | 20,957 | $ | 21,178 | $ | 20,103 | |||||
| Occupancy, Furniture and Equipment Expense | 3,487 | 3,804 | 3,443 | ||||||||
| FDIC Premiums | 710 | 729 | 687 | ||||||||
| Data Processing Fees | 3,019 | 2,811 | 2,803 | ||||||||
| Professional Fees | 3,462 | 1,595 | 1,614 | ||||||||
| Advertising and Promotion | 909 | 1,138 | 1,261 | ||||||||
| Intangible Amortization | 532 | 578 | 734 | ||||||||
| Other Operating Expenses | 4,598 | 4,905 | 5,081 | ||||||||
| Total Non-interest Expense | $ | 37,674 | $ | 36,738 | $ | 35,726 | |||||
Salaries and benefits declined
Occupancy, furniture and equipment expense declined
Data processing fees increased
Professional fees increased
Advertising and promotion expense declined
About German American
German American Bancorp, Inc. is a Nasdaq-listed (symbol: GABC) financial holding company based in Jasper, Indiana. German American, through its banking subsidiary German American Bank, operates 74 banking offices in 20 contiguous southern Indiana counties and 14 counties in Kentucky.
Additional Information About the Merger and Where to Find It
The proposed merger of Heartland BancCorp (“Heartland”) with and into German American Bancorp, Inc. (“German American”) will be submitted to both the German American and Heartland shareholders for their consideration. In connection with the proposed merger, German American will file a Registration Statement on Form S-4 with the U.S. Securities and Exchange Commission (“SEC”) that will include a joint proxy statement for German American and Heartland and a prospectus for German American and other relevant documents concerning the proposed merger. INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE CORRESPONDING JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS, AS THEY WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain a copy of the joint proxy statement/prospectus once filed, as well as other filings containing information about German American, without charge, at the SEC’s website (http://www.sec.gov) or by accessing German American’s website (http://www.germanamerican.com) under the tab “Investor Relations” and then under the heading “Financial Information”. Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to Bradley C. Arnett, Investor Relations, German American Bancorp, Inc., 711 Main Street, Box 810, Jasper, Indiana 47546, telephone 812-482-1314 or to Jennifer Eckert, Investor Relations, Heartland BancCorp, 430 North Hamilton Road, Whitehall, Ohio 43213, telephone 614-337-4600.
German American and Heartland and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of German American and Heartland in connection with the proposed merger. Information about the directors and executive officers of German American is set forth in the proxy statement for German American’s 2024 annual meeting of shareholders, as filed with the SEC on Schedule 14A on March 21, 2024, which information has been updated by German American from time to time in subsequent filings with the SEC. Information about the directors and executive officers of Heartland will be set forth in the joint proxy statement/prospectus relating to the proposed merger. Additional information about the interests of those participants and other persons who may be deemed participants in the transaction may also be obtained by reading the joint proxy statement/prospectus relating to the proposed merger when it becomes available. Free copies of this document may be obtained as described above.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned that, by their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions.
These forward-looking statements include, but are not limited to, statements relating to German American’s goals, intentions and expectations; statements regarding German American’s business plan and growth strategies; statements regarding the asset quality of German American’s loan and investment portfolios; and the expected timing and benefits of the Merger, including future financial and operating results, cost savings, enhanced revenues, and accretion/dilution to reported earnings that may be realized from the Merger; and estimates of German American’s risks and future costs and benefits, whether with respect to the Merger or otherwise.
Actual results and experience could differ materially from the anticipated results or other expectations expressed or implied by these forward-looking statements as a result of a number of factors, including but not limited to, those discussed in this press release. Factors that could cause actual experience to differ from the expectations expressed or implied in this press release include:
- changes in interest rates and the timing and magnitude of any such changes;
- unfavorable economic conditions, including a prolonged period of inflation, and the resulting adverse impact on, among other things, credit quality;
- the soundness of other financial institutions and general investor sentiment regarding the stability of financial institutions;
- changes in our liquidity position;
- the impacts of epidemics, pandemics or other infectious disease outbreaks;
- changes in competitive conditions;
- the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies;
- changes in customer borrowing, repayment, investment and deposit practices;
- changes in fiscal, monetary and tax policies;
- changes in financial and capital markets;
- capital management activities, including possible future sales of new securities, or possible repurchases or redemptions by German American of outstanding debt or equity securities;
- risks of expansion through acquisitions and mergers, such as unexpected credit quality problems of the acquired loans or other assets, unexpected attrition of the customer base or employee base of the acquired institution or branches, and difficulties in integration of the acquired operations;
- factors driving credit losses on investments;
- the impact, extent and timing of technological changes;
- potential cyber-attacks, information security breaches and other criminal activities;
- litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of matters before regulatory agencies, whether pending or commencing in the future;
- actions of the Federal Reserve Board;
- changes in accounting principles and interpretations;
- potential increases of federal deposit insurance premium expense, and possible future special assessments of FDIC premiums, either industry wide or specific to German American’s banking subsidiary;
- actions of the regulatory authorities under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms;
- impacts resulting from possible amendments or revisions to the Dodd-Frank Act and the regulations promulgated thereunder, or to Consumer Financial Protection Bureau rules and regulations;
- the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends;
- with respect to the Merger: (i) failure to obtain necessary regulatory approvals when expected or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction), or the failure of either company to satisfy any of the other closing conditions to the transaction on a timely basis or at all; (ii) the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement; and (iii) the possibility that the anticipated benefits of the transaction, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies, unexpected credit quality problems of the acquired loans or other assets, or unexpected attrition of the customer base of the acquired institution or branches, or as a result of the strength of the economy, competitive factors in the areas where German American and Heartland do business, or as a result of other unexpected factors or events; and
- other risk factors expressly identified in German American’s cautionary language included under the headings “Forward-Looking Statements and Associated Risk” and “Risk Factors” in German American’s Annual Report on Form 10-K for the year ended December 31, 2023, and other documents subsequently filed by German American with the SEC.
Such statements reflect our views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of German American. Readers are cautioned not to place undue reliance on these forward-looking statements. It is intended that these forward-looking statements speak only as of the date they are made. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.
| GERMAN AMERICAN BANCORP, INC. | |||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||
| ASSETS | |||||||||||
| Cash and Due from Banks | $ | 70,418 | $ | 52,839 | $ | 78,223 | |||||
| Short-term Investments | 259,401 | 71,131 | 62,948 | ||||||||
| Investment Securities | 1,374,165 | 1,539,623 | 1,601,062 | ||||||||
| Loans Held-for-Sale | 15,419 | 10,325 | 8,239 | ||||||||
| Loans, Net of Unearned Income | 4,037,127 | 3,971,910 | 3,826,009 | ||||||||
| Allowance for Credit Losses | (43,946 | ) | (43,754 | ) | (44,266 | ) | |||||
| Net Loans | 3,993,181 | 3,928,156 | 3,781,743 | ||||||||
| Stock in FHLB and Other Restricted Stock | 14,530 | 14,630 | 14,856 | ||||||||
| Premises and Equipment | 105,651 | 106,030 | 112,629 | ||||||||
| Goodwill and Other Intangible Assets | 184,095 | 186,022 | 188,130 | ||||||||
| Other Assets | 200,063 | 203,173 | 205,439 | ||||||||
| TOTAL ASSETS | $ | 6,216,923 | $ | 6,111,929 | $ | 6,053,269 | |||||
| LIABILITIES | |||||||||||
| Non-interest-bearing Demand Deposits | $ | 1,448,467 | $ | 1,463,933 | $ | 1,540,564 | |||||
| Interest-bearing Demand, Savings, and Money Market Accounts | 2,984,571 | 2,918,459 | 3,056,396 | ||||||||
| Time Deposits | 880,519 | 836,955 | 582,745 | ||||||||
| Total Deposits | 5,313,557 | 5,219,347 | 5,179,705 | ||||||||
| Borrowings | 166,644 | 191,810 | 227,484 | ||||||||
| Other Liabilities | 48,901 | 45,518 | 43,515 | ||||||||
| TOTAL LIABILITIES | 5,529,102 | 5,456,675 | 5,450,704 | ||||||||
| SHAREHOLDERS’ EQUITY | |||||||||||
| Common Stock and Surplus | 420,434 | 419,520 | 418,033 | ||||||||
| Retained Earnings | 485,256 | 472,689 | 433,384 | ||||||||
| Accumulated Other Comprehensive Income (Loss) | (217,869 | ) | (236,955 | ) | (248,852 | ) | |||||
| SHAREHOLDERS’ EQUITY | 687,821 | 655,254 | 602,565 | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 6,216,923 | $ | 6,111,929 | $ | 6,053,269 | |||||
| END OF PERIOD SHARES OUTSTANDING | 29,679,248 | 29,669,019 | 29,572,783 | ||||||||
| TANGIBLE BOOK VALUE PER SHARE (1) | $ | 16.97 | $ | 15.82 | $ | 14.01 | |||||
| (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. | |||||||||||
| GERMAN AMERICAN BANCORP, INC. | |||||||||||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||||||||||
| Consolidated Statements of Income | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| INTEREST INCOME | |||||||||||||||||||
| Interest and Fees on Loans | $ | 59,230 | $ | 57,826 | $ | 52,202 | $ | 117,056 | $ | 101,263 | |||||||||
| Interest on Short-term Investments | 2,383 | 299 | 660 | 2,682 | 1,005 | ||||||||||||||
| Interest and Dividends on Investment Securities | 9,964 | 10,133 | 10,652 | 20,097 | 21,735 | ||||||||||||||
| TOTAL INTEREST INCOME | 71,577 | 68,258 | 63,514 | 139,835 | 124,003 | ||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||
| Interest on Deposits | 23,385 | 20,989 | 13,357 | 44,374 | 22,328 | ||||||||||||||
| Interest on Borrowings | 2,221 | 2,275 | 1,899 | 4,496 | 4,408 | ||||||||||||||
| TOTAL INTEREST EXPENSE | 25,606 | 23,264 | 15,256 | 48,870 | 26,736 | ||||||||||||||
| NET INTEREST INCOME | 45,971 | 44,994 | 48,258 | 90,965 | 97,267 | ||||||||||||||
| Provision for Credit Losses | 625 | 900 | 550 | 1,525 | 1,650 | ||||||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 45,346 | 44,094 | 47,708 | 89,440 | 95,617 | ||||||||||||||
| NON-INTEREST INCOME | |||||||||||||||||||
| Net Gains on Sales of Loans | 969 | 751 | 630 | 1,720 | 1,217 | ||||||||||||||
| Net Gains (Losses) on Securities | (34,893 | ) | 35 | 38 | (34,858 | ) | 40 | ||||||||||||
| Other Non-interest Income | 52,847 | 15,036 | 14,228 | 67,883 | 28,606 | ||||||||||||||
| TOTAL NON-INTEREST INCOME | 18,923 | 15,822 | 14,896 | 34,745 | 29,863 | ||||||||||||||
| NON-INTEREST EXPENSE | |||||||||||||||||||
| Salaries and Benefits | 20,957 | 21,178 | 20,103 | 42,135 | 41,949 | ||||||||||||||
| Other Non-interest Expenses | 16,717 | 15,560 | 15,623 | 32,277 | 31,393 | ||||||||||||||
| TOTAL NON-INTEREST EXPENSE | 37,674 | 36,738 | 35,726 | 74,412 | 73,342 | ||||||||||||||
| Income before Income Taxes | 26,595 | 23,178 | 26,878 | 49,773 | 52,138 | ||||||||||||||
| Income Tax Expense | 6,065 | 4,156 | 4,755 | 10,221 | 9,208 | ||||||||||||||
| NET INCOME | $ | 20,530 | $ | 19,022 | $ | 22,123 | $ | 39,552 | $ | 42,930 | |||||||||
| BASIC EARNINGS PER SHARE | $ | 0.69 | $ | 0.64 | $ | 0.75 | $ | 1.33 | $ | 1.45 | |||||||||
| DILUTED EARNINGS PER SHARE | $ | 0.69 | $ | 0.64 | $ | 0.75 | $ | 1.33 | $ | 1.45 | |||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 29,667,770 | 29,599,491 | 29,573,042 | 29,633,631 | 29,540,425 | ||||||||||||||
| DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | 29,667,770 | 29,599,491 | 29,573,042 | 29,633,631 | 29,540,425 | ||||||||||||||
| GERMAN AMERICAN BANCORP, INC. | |||||||||||||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||||
| EARNINGS PERFORMANCE RATIOS | |||||||||||||||||||||
| Annualized Return on Average Assets | 1.32 | % | 1.25 | % | 1.47 | % | 1.28 | % | 1.42 | % | |||||||||||
| Annualized Return on Average Equity | 12.64 | % | 11.58 | % | 14.66 | % | 12.11 | % | 14.52 | % | |||||||||||
| Annualized Return on Average Tangible Equity (1) | 17.67 | % | 16.17 | % | 21.32 | % | 16.92 | % | 21.34 | % | |||||||||||
| Net Interest Margin | 3.34 | % | 3.35 | % | 3.63 | % | 3.34 | % | 3.66 | % | |||||||||||
| Efficiency Ratio (2) | 36.66 | % | 57.92 | % | 54.08 | % | 44.77 | % | 55.09 | % | |||||||||||
| Net Overhead Expense to Average Earning Assets (3) | 1.31 | % | 1.50 | % | 1.51 | % | 1.40 | % | 1.57 | % | |||||||||||
| ASSET QUALITY RATIOS | |||||||||||||||||||||
| Annualized Net Charge-offs to Average Loans | 0.04 | % | 0.09 | % | 0.06 | % | 0.07 | % | 0.08 | % | |||||||||||
| Allowance for Credit Losses to Period End Loans | 1.09 | % | 1.10 | % | 1.16 | % | |||||||||||||||
| Non-performing Assets to Period End Assets | 0.12 | % | 0.16 | % | 0.21 | % | |||||||||||||||
| Non-performing Loans to Period End Loans | 0.18 | % | 0.25 | % | 0.32 | % | |||||||||||||||
| Loans 30-89 Days Past Due to Period End Loans | 0.32 | % | 0.29 | % | 0.29 | % | |||||||||||||||
| SELECTED BALANCE SHEET & OTHER FINANCIAL DATA | |||||||||||||||||||||
| Average Assets | $ | 6,230,676 | $ | 6,102,370 | $ | 6,034,900 | $ | 6,166,523 | $ | 6,056,393 | |||||||||||
| Average Earning Assets | $ | 5,709,014 | $ | 5,590,835 | $ | 5,509,535 | $ | 5,649,925 | $ | 5,529,510 | |||||||||||
| Average Total Loans | $ | 4,022,612 | $ | 3,972,232 | $ | 3,787,436 | $ | 3,997,422 | $ | 3,780,650 | |||||||||||
| Average Demand Deposits | $ | 1,421,710 | $ | 1,426,239 | $ | 1,545,455 | $ | 1,423,975 | $ | 1,590,544 | |||||||||||
| Average Interest Bearing Liabilities | $ | 4,114,351 | $ | 3,973,079 | $ | 3,842,353 | $ | 4,043,715 | $ | 3,829,382 | |||||||||||
| Average Equity | $ | 649,886 | $ | 656,781 | $ | 603,666 | $ | 653,334 | $ | 591,183 | |||||||||||
| Period End Non-performing Assets (4) | $ | 7,322 | $ | 9,983 | $ | 12,423 | |||||||||||||||
| Period End Non-performing Loans (5) | $ | 7,289 | $ | 9,983 | $ | 12,423 | |||||||||||||||
| Period End Loans 30-89 Days Past Due (6) | $ | 12,766 | $ | 11,485 | $ | 11,045 | |||||||||||||||
| Tax-Equivalent Net Interest Income | $ | 47,497 | $ | 46,639 | $ | 49,848 | $ | 94,136 | $ | 100,554 | |||||||||||
| Net Charge-offs during Period | $ | 433 | $ | 911 | $ | 599 | $ | 1,344 | $ | 1,552 | |||||||||||
| (1) | Average Tangible Equity is defined as Average Equity less Average Goodwill and Other Intangibles. | ||||||||||||||||||||
| (2) | Efficiency Ratio is defined as Non-interest Expense less Intangible Amortization divided by the sum of Net Interest Income, on a tax-equivalent basis, and Non-interest Income less Net Gains (Losses) on Securities. | ||||||||||||||||||||
| (3) | Net Overhead Expense is defined as Total Non-interest Expense less Total Non-interest Income. | ||||||||||||||||||||
| (4) | Non-performing assets are defined as Non-accrual Loans, Loans Past Due 90 days or more, and Other Real Estate Owned. | ||||||||||||||||||||
| (5) | Non-performing loans are defined as Non-accrual Loans and Loans Past Due 90 days or more. | ||||||||||||||||||||
| (6) | Loans 30-89 days past due and still accruing. | ||||||||||||||||||||
For additional information, contact:
D. Neil Dauby, Chairman and Chief Executive Officer
Bradley M Rust, President and Chief Financial Officer
(812) 482-1314
FAQ
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