More annual reports from German American Bancorp, Inc.:
2024 ReportPeers and competitors of German American Bancorp, Inc.:
Westamerica BancorporationDriving Results. Creating Possibilities. Annual Report Cautionary Note Regarding Forward-Looking Statements Statements made in this Summary Annual Report that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management’s plans and objectives for future operations and expectations about the Company’s financial and business performance and economic and market conditions and trends. Such forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend,” “should,” “would,” “could,” “can,” “may,” “will,” “might” and similar expressions. Forward-looking statements are based on management’s current expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in Item 1, “Business - Forward Looking Statements and Associated Risks,” and Item 1A, “Risk Factors,” in our accompanying Annual Report on Form 10-K and in other documents that we file with or furnish to the Securities and Exchange Commission. These forward-looking statements speak only as of March 3, 2025. We do not undertake, and expressly disclaim, any duty or obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law. Our German American helps individuals, families and businesses achieve their financial dreams to improve their quality of life and place. We support the communities we serve and believe that when a community thrives, its people prosper. Integrity We trust each other in words and actions. We value honesty, transparency and diverse perspectives for high ethical standards in all we do. Relationships We develop relationships based on integrity, trust and mutual respect to create positive outcomes and experiences for all. Excellence Because performance is vital, we are encouraged to take initiative, accept challenges and be collaborative to achieve performance and operating excellence for our customers, shareholders and communities. Service Service to our communities, customers and each other is fun, rewarding and powerful. We develop valuable relationships by providing outstanding service to all. Inclusion We are committed to an inclusive workplace where diverse representation, perspectives and experiences foster an atmosphere of empowerment, collaboration and respect. Our Purpose Values consecutive year of increased cash dividends 13th consecutive fiscal year of double-digit return on equity 20th 1 Dear Shareholders: 2024 was a transformative year for German American as we continued our history of strong financial performance and positioned our company for future continued growth. We delivered our 20th consecutive year of double-digit return on equity and 13th year of increased cash dividends. We remain financially strong with solid liquidity and strong capital. To evolve and better position our company for future success, our 2024 operating performance was highlighted by the sale of the Company’s existing insurance division, the partial restructuring of our securities portfolio and the announced acquisition of Columbus, Ohio, based Heartland BancCorp, bringing our total assets to approximately $8.2 billion at merger close on February 1, 2025. All should provide momentum for solid balance sheet and earnings per share growth into 2025 and allow us to continue on our path of Driving Results and Creating Possibilities. The strategic partnership with Heartland will bring together two high-performing, community-oriented organizations and expand German American’s footprint into Columbus and Cincinnati, Ohio, two of the fastest growing and most vibrant markets in the Midwest. The acquisition is strategically compelling and financially attractive to drive long-term shareholder value. We believe we have the right balance of serving rural, suburban and urban communities across our footprint. ...continued Letter to Our SHAREHOLDERS D. Neil Dauby CHAIRMAN AND CEO History of improved earnings performance Letter to Our SHAREHOLDERS continued... It is always an honor to be recognized and receive national accolades for our outstanding financial performance. In 2024, we were named to the S&P Global Top Performing Community Bank list, Bank Director Top Banks list, Piper Sandler’s Small Cap All-Stars, Raymond James Community Banker’s Cup, Forbes America’s Best Banks list and Newsweek’s Best Regional Bank list. And most recently, the Company was ranked 2nd in the Nation on the prestigious Forbes America’s Best Banks list for 2025. We believe this acknowledges our strong financial focus and stability, as well as our unwavering commitment to excellence for our employees, customers, communities and shareholders. We are extremely excited about the long-term growth potential in connection with a normalizing yield curve, a strong organic growth footprint and the Company’s merger with Heartland BancCorp. We remain enthusiastic and are committed to the vitality and future growth of our Indiana, Kentucky and Ohio communities. Thank you for your continued investment in German American. Sincerely, D. Neil Dauby Chairman and CEO 2 #2 Ranked in the Nation Bradley C. Arnett Executive Vice President, Chief Legal Officer Clay M. Barrett Executive Vice President, Chief Digital and Information Officer Michael F. Beckwith Executive Vice President, Chief Banking Officer D. Neil Dauby Bradley M. Rust Amy D. Jackson W. Scott Powell Our EXECUTIVE TEAM History of SUPERIOR FINANCIAL PERFORMANCE Chairman and Chief Executive Officer President and Chief Financial Officer Executive Vice President, Chief Administrative Officer Executive Vice President, Chief Credit Officer 3 Raymond James Community Bankers Cup Award Forbes America’s Best Banks* #2 in the Nation S&P Global Top Performing Bank in the Nation Top 20 & Top 30 BauerFinancial 5-Star Rating Newsweek Best Banks in America Piper Sandler Small Cap All-Star *©2025 Forbes. All rights reserved. Used under license. Bank Director Magazine Top Banks Top 50 INDIANA KENTUCKY Michigan INDIANA KENTUCKY NASHVILLE, TENNESSEE Louisville Franklin Greenwood Bowling Green Owensboro Glasgow Horse Cave Munfordville Henderson Shelbyville Simpsonville Taylorsville Mt. Washington LaGrange Owenton Elizabethtown Warsaw Vincennes Odon/Cannelburg Washington Loogootee Bedford Bloomington Princeton Oakland City Petersburg Ireland Jasper Huntingburg Dubois Holland Ferdinand Evansville Newburgh Rockport Tell City Seymour North Vernon Columbus Greensburg Madison Hanover Sellersburg New Albany Jeffersonville Louisville Franklin Greenwood Bowling Green Owensboro Glasgow Horse Cave Munfordville Henderson Shelbyville Simpsonville Taylorsville Mt. Washington LaGrange Owenton Elizabethtown Warsaw Vincennes Odon/Cannelburg Washington Loogootee Bedford Bloomington Princeton Oakland City Petersburg Ireland Jasper Huntingburg Dubois Holland Ferdinand Evansville Newburgh Rockport Tell City Seymour North Vernon Columbus Greensburg Madison Hanover Sellersburg New Albany Jeffersonville Florence Ft. Mitchell Ft. Thomas Cincinnati Ft. Mitchell Ft. Thomas Florence Cincinnati German American Bank was founded in an Ohio Valley community rich in German-American heritage, Jasper, Indiana. Over our 115 year history, the bank has grown to become one of the strongest community banks in the Midwest serving Indiana, Kentucky and Ohio and is highly regarded as a premier financial services company with an exceptional community banking model. We follow the same values of our original founders including trust, integrity, lasting relationships, high performance standards and being community focused to help communities thrive so its people can prosper. Our history of strong financial performance is a reflection of the success of our unique business model. 4 Driving RESULTS... OHIO OHIO Newark Johnstown Pickerington Dublin Westerville Hilliard Reynoldsburg Whitehall Gahanna Upper Arlington Columbus Delaware Grove City Newark Johnstown Pickerington Dublin Westerville Hilliard Reynoldsburg Whitehall Gahanna Upper Arlington Columbus Delaware Grove City 5 Creating POSSIBILITIES... Driving results creates possibilities for our employees, clients, communities and shareholders. It affords us the opportunities to invest in client experience measurements and top talented financial professionals. It allows us to grow our brand into new, vibrant markets to help clients bring financial goals to life, elevate a business plan, move into a first home or a dream home and manage money on the go, in the office or on the phone. It gives us the ability to influence the health of our local communities in key areas of economic development, education and overall quality of life. We are committed to always being mindful of the purpose of our organization. As a team, we understand that driving results creates possibilities. 6 Providing a positive work experience 1,000+ employees Maintaining a culture characterized by people who work together to drive success people focused Volunteer hours served in local communities in 2024 6,000+ hours Invested in community support in 2024 to help rural, suburban and urban communities throughout Indiana and Kentucky thrive so their people can prosper Donated to local schools participating in our School Spirit Card program since the program’s inception $540,000 to local schools $215+ million Helping individuals, families and businesses achieve their financial dreams to improve their quality of life and place creating possibilities 7 Shareholders and the Board of Directors German American Bancorp, Inc. Jasper, Indiana We have audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) the consolidated balance sheets of German American Bancorp, Inc. as of December 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, appearing in the Annual Report on Form 10-K, not appearing herein. In our report dated March 3, 2025, also appearing in the Annual Report on Form 10-K, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the consolidated balance sheets and consolidated statements of income presented on pages 10 and 11 is fairly stated, in all material respects, in relation to the consolidated financial statements from which they have been derived. Indianapolis, Indiana March 3, 2025 8 Report of Independent Registered Public ACCOUNTING FIRM /s/ Crowe LLP Crowe LLP The following selected data should be read in conjunction with the Company’s Annual Report on Form 10-K for 2024. 2024 2023 2022 2021 2020 Summary of Operations: Interest Income $ 291,043 $ 256,656 $ 218,926 $ 170,379 $ 174,369 Interest Expense 100,452 66,223 18,342 9,549 19,126 Net Interest Income 190,591 190,433 200,584 160,830 155,243 Provision for Credit Losses 2,775 2,550 6,350 ( 6,500 ) 17,550 Net Interest Income after Provision for Credit Losses 187,816 187,883 194,234 167,330 137,693 Non-interest Income 62,660 60,261 59,133 59,462 54,474 Non-interest Expense 146,377 144,497 154,191 124,007 117,123 Income before Income Taxes 104,099 103,647 99,176 102,785 75,044 Income Tax Expense 20,288 17,759 17,351 18,648 12,834 Net Income $ 83,811 $ 85,888 $ 81,825 $ 84,137 $ 62,210 Year-end Balances: Total Assets $ 6,295,910 $ 6,152,198 $ 6,155,991 $ 5,608,539 $ 4,977,577 Total Loans, Net of Unearned Income 4,124,902 3,971,082 3,784,934 3,004,264 3,088,072 Total Deposits 5,329,075 5,252,963 5,350,051 4,744,316 4,106,530 Total Long-term Debt 153,269 127,969 102,645 83,855 141,624 Total Shareholders’ Equity 715,067 663,558 558,393 668,459 624,709 Average Balances: Total Assets $ 6,233,753 $ 6,037,874 $ 6,514,030 $ 5,369,707 $ 4,729,006 Total Loans, Net of Unearned Income 4,035,670 3,835,157 3,680,708 3,072,302 3,185,542 Total Deposits 5,304,914 5,196,475 5,700,499 4,493,853 3,860,397 Total Shareholders’ Equity 685,862 584,106 610,066 642,934 594,781 Per Share Data: Net Income $ 2.83 $ 2.91 $ 2.78 $ 3.17 $ 2.34 Cash Dividends 1.08 1.00 0.92 0.84 0.76 Book Value at Year-end 24.09 22.43 18.93 25.17 23.57 Tangible Book Value Per Share(1) 17.93 16.12 12.50 20.37 18.63 Other Data at Year-end: Number of Shareholders 3,036 3,065 3,163 3,109 3,218 Number of Employees (Full-time Equivalent) 760 838 854 724 776 Weighted Average Number of Shares 29,656,416 29,557,567 29,464,591 26,537,311 26,539,024 Selected Performance Ratios: Return on Assets 1.34 % 1.42 % 1.26 % 1.57 % 1.32 % Return on Equity 12.22 % 14.70 % 13.41 % 13.09 % 10.46 % Equity to Assets 11.36 % 10.79 % 9.07 % 11.92 % 12.55 % Dividend Payout 38.00 % 34.27 % 33.02 % 26.41 % 32.37 % Net Charge-offs (Recoveries) to Average Loans 0.05 % 0.08 % 0.06 % 0.11 % 0.08 % Allowance for Credit Losses to Loans 1.08 % 1.10 % 1.17 % 1.23 % 1.52 % Net Interest Margin 3.43 % 3.58 % 3.45 % 3.31 % 3.63 % (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. Five Year Summary Dollars in thousands, except share and per share data 9 Consolidated Balance Sheets See Annual Report on Form 10-K. Dollars in thousands, except share and per share data December 31, 2024 2023 Assets Cash and Due from Banks Federal Funds Sold and Other Short-term Investments Cash and Cash Equivalents Interest-bearing Time Deposits with Banks Securities Available-for-Sale, at Fair Value (Amortized Cost $1,796,040 for December 31, 2024; Amortized Cost $1,871,260 for December 31, 2023; No Allowance for Credit Losses) Other Investments Loans Held-for-Sale, at Fair Value Loans Less: Unearned Income Allowance for Credit Losses Loans, Net Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost Premises, Furniture and Equipment, Net Other Real Estate Goodwill Intangible Assets Company Owned Life Insurance Accrued Interest Receivable and Other Assets TOTAL ASSETS Liabilities Non-interest-bearing Demand Deposits Interest-bearing Demand, Savings, and Money Market Accounts Time Deposits Total Deposits FHLB Advances and Other Borrowings Accrued Interest Payable and Other Liabilities TOTAL LIABILITIES Shareholders’ Equity Common Stock, no par value, $1 stated value; 45,000,000 shares authorized Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY End of period shares issued and outstanding $ 78,805 36,525 115,330 500 1,596,832 353 5,226 3,977,900 (6,818 ) (43,765 ) 3,927,317 14,687 106,776 - 180,357 6,307 85,840 112,673 $ 6,152,198 $ 1,493,160 2,992,761 767,042 5,252,963 193,937 41,740 5,488,640 29,585 389,411 461,622 (217,060 ) 663,558 $ 6,152,198 29,584,709 $ 69,249 119,543 188,792 500 1,517,287 353 8,239 4,133,267 (8,365 ) (44,436 ) 4,080,466 14,423 104,045 - 179,025 4,018 86,710 112,052 $ 6,295,910 $ 1,399,270 3,013,204 916,601 5,329,075 210,131 41,637 5,580,843 29,677 392,266 513,588 (220,464 ) 715,067 $ 6,295,910 29,677,093 10 Consolidated Statements of Income Years Ended December 31, 2024 2023 2022 Interest Income Interest and Fees on Loans $ 240,241 $ 212,517 $ 169,158 Interest on Federal Funds Sold and Other Short-term Investments 7,697 1,677 5,765 Interest and Dividends on Securities: Taxable 26,586 20,614 20,453 Non-taxable 16,519 21,848 23,550 TOTAL INTEREST INCOME 291,043 256,656 218,926 Interest Expense Interest on Deposits 90,622 56,916 13,514 Interest on FHLB Advances and Other Borrowings 9,830 9,307 4,828 TOTAL INTEREST EXPENSE 100,452 66,223 18,342 NET INTEREST INCOME 190,591 190,433 200,584 Provision for Credit Losses 2,775 2,550 6,350 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 187,816 187,883 194,234 Non-Interest Income Wealth Management Fees 14,416 11,711 10,076 Service Charges on Deposit Accounts 12,669 11,538 11,457 Insurance Revenues 4,384 9,596 10,020 Company Owned Life Insurance 2,058 1,731 2,264 Interchange Fee Income 17,125 17,452 15,820 Sale of Assets of German American Insurance 38,323 - - Other Operating Income 5,419 5,830 5,116 Net Gains on Sales of Loans 3,054 2,363 3,818 Net Gains (Losses) on Securities (34,788 ) 40 562 TOTAL NON-INTEREST INCOME 62,660 60,261 59,133 Non-Interest Expense Salaries and Employee Benefits 82,257 83,244 84,145 Occupancy, Furniture and Equipment Expense 14,944 14,467 14,921 FDIC Premiums 2,908 2,829 1,860 Data Processing Fees 12,243 11,112 15,406 Professional Fees 8,147 5,575 6,295 Advertising and Promotion 3,939 4,857 4,416 Intangible Amortization 2,032 2,840 3,711 Other Operating Expenses 19,907 19,573 23,437 TOTAL NON-INTEREST EXPENSE 146,377 144,497 154,191 Income before Income Taxes 104,099 103,647 99,176 Income Tax Expense 20,288 17,759 17,351 Net Income $ 83,811 $ 85,888 $ 81,825 Basic Earnings per Share $ 2.83 $ 2.91 $ 2.78 Diluted Earnings per Share $ 2.83 $ 2.91 $ 2.78 Dollars in thousands, except per share data See Annual Report on Form 10-K. 11 12 Diane B. Medley Jack W. Sheidler Ronnie R. Stokes M. Darren Root G. Scott McComb Zachary W. Bawel Angela Curry D. Neil Dauby Sue J. Ellspermann Jason M. Kelly Christina M. Ryan Marc D. Fine Our BOARD OF DIRECTORS 13 Tyson J. Wagler 004CTN3DE5
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