German American Bancorp, Inc. (GABC) Announces Record Earnings for Second Quarter 2026

JASPER, Ind.--( BUSINESS WIRE)--German American Bancorp, Inc. (Nasdaq: GABC) (German American or the “Company”) announced record earnings for the three months ended June 30, 2026. The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.31 per share, which will be payable on August 20, 2026 to shareholders of record as of August 10, 2026.

For the three months ended June 30, 2026, the Company reported net income of $38.2 million, or $1.02 per share, which are the highest level of reported net income and earnings per share in the Company's history. This level of earnings reflects a linked quarter increase of $5.0 million, or approximately 16% on a per share basis, from first quarter 2026 net income of $33.2 million or $0.88 per share. Second quarter 2026 earnings reflect an increase of $6.8 million, or approximately 21% on a per share basis, from the June 30, 2025 prior year same quarter net income of $31.4 million or $0.84 per share.

As discussed in more detail below, the Company’s record financial performance was driven by continued net interest margin expansion, strong growth in loans and non-interest income, and controlled operating expenses. As a result, profitability remained strong as return on average assets for the second quarter of 2026 was 1.80% and ROATCE* was 19.43%. These compared to return on average assets of 1.58% and ROATCE* of 17.08% in the first quarter of 2026 and 1.49% and 19.87% in the second quarter of 2025. At the same time, the Company was able to maintain strong credit metrics throughout the quarter.

___________________________________________

* Represents a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” contained in this release for additional information, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.

Second Quarter 2026 highlights include:

D. Neil Dauby, Chairman and CEO of German American stated, “We are extremely pleased to deliver a record quarterly earnings performance for the second quarter of 2026 and exceed $1 quarterly earnings per share for the first time in our Company’s history. We believe we are well positioned for continued profitability with a strong net interest margin, solid non-interest income production and well controlled expenses. We are encouraged by the strength of our pipeline driven by our strong diversified organic growth footprint as we move into the second half of 2026. Our ability to grow deposits to fund such anticipated growth will be key as we move forward into the future."

Dauby also stated, “We continue to add top talent to our relationship-focused team of professionals, and with their dedicated efforts, we are confident that our strong community presence, healthy financial condition and disciplined approach to growth will continue to drive future profitability and long-term shareholder value. We remain excited and committed to the vitality and future growth of our Indiana, Kentucky and Ohio communities.”

Balance Sheet Highlights

On February 1, 2025, the Company completed its acquisition of Heartland BancCorp (“Heartland”) through the merger of Heartland with and into the Company. Immediately following completion of the Heartland holding company merger, Heartland’s subsidiary bank, Heartland Bank, was merged with and into the Company’s subsidiary bank, German American Bank (the “Bank”). Heartland, headquartered in Whitehall, Ohio, operated 20 retail banking offices located in Columbus, Ohio and Greater Cincinnati. As of the closing of the transaction, Heartland had total assets of approximately $1.94 billion, total loans of approximately $1.58 billion, and total deposits of approximately $1.73 billion. The Company issued approximately 7.74 million shares of its common stock, and paid approximately $23.1 million in cash, in exchange for all of the issued and outstanding shares of common stock of Heartland and in cancellation of all options to acquire Heartland common stock outstanding as of the effective time of the merger.

Total assets for the Company were $8.440 billion at June 30, 2026, representing an increase of $57.5 million compared with March 31, 2026 and an increase of $159.9 million compared with June 30, 2025.

June 30, 2026 total loans increased $82.8 million, or 6% on an annualized basis, compared with March 31, 2026 and increased $192.3 million, or 3%, compared with June 30, 2025. The increase during the second quarter of 2026 compared with March 31, 2026 was broad based across all segments of commercial loans and included growth in home equity lines of credit. The increase was partially mitigated by declines in residential mortgage loans and other retail loans. Commercial real estate loans increased $67.1 million, or 9% on an annualized basis, agricultural loans increased $9.4 million, or 8% on an annualized basis, and commercial and industrial loans increased $0.9 million, or 0.4% on an annualized basis. Retail loans grew by $5.4 million, or 2% on an annualized basis, due in large part to strong home equity loan originations, which were partially offset by a reduced level of residential mortgage loans and consumer loans.

The composition of the loan portfolio has remained relatively stable and diversified over the past several years. The addition of the Heartland loan portfolio during the first quarter of 2025 resulted in only modest changes to the overall portfolio composition, most notably in the residential mortgage loan segment. The portfolio is most heavily weighted in commercial real estate loans at 54% of the portfolio, followed by commercial and industrial loans at 14% of the portfolio, residential mortgage loans at 13% of the portfolio, home equity loans at 9% of the portfolio and agricultural loans at 8% of the portfolio. The Company’s commercial lending is extended to various industries, including multi-family housing and lodging, agribusiness and manufacturing, as well as health care, wholesale, and retail services.

End of Period Loan Balances

6/30/2026

3/31/2026

6/30/2025

(dollars in thousands)

Commercial & Industrial Loans

833,838

832,933

817,546

Commercial Real Estate Loans

3,219,433

3,152,336

3,096,728

Agricultural Loans

476,605

467,204

461,420

Consumer Loans

650,832

638,280

574,323

Residential Mortgage Loans

760,702

767,889

798,343

5,941,410

5,858,642

5,748,360

The Company’s allowance for credit losses totaled $79.4 million at June 30, 2026 compared to $78.5 million at March 31, 2026 and $75.5 million at June 30, 2025. The allowance for credit losses represented 1.34% of period-end loans at June 30, 2026, 1.34% at March 31, 2026 and 1.32% of period-end loans at June 30, 2025.

Under the current expected credit losses ("CECL") model, certain acquired loans continue to carry a fair value discount as well as an allowance for credit losses. As of June 30, 2026, the Company held net discounts on acquired loans of $46.3 million, which included $44.6 million related to the Heartland loan portfolio.

Non-performing assets totaled $26.8 million at June 30, 2026, $29.6 million at March 31, 2026, and $25.1 million at June 30, 2025. Non-performing assets represented 0.32% of total assets at June 30, 2026, 0.35% at March 31, 2026 and 0.30% at June 30, 2025. Non-performing loans represented 0.45% of total loans at June 30, 2026, 0.51% at March 31, 2026, and 0.44% at June 30, 2025. Total non-performing assets from the Heartland acquisition were approximately $17.7 million at June 30, 2026.

Non-performing Assets

(dollars in thousands)

6/30/2026

3/31/2026

6/30/2025

Non-Accrual Loans

26,843

29,556

22,787

Past Due Loans (90 days or more and accruing)

—

2,301

Total Non-Performing Loans

26,846

29,556

25,088

Other Real Estate

—

Total Non-Performing Assets

26,846

29,556

25,136

June 30, 2026 total deposits increased $14.9 million, or 0.9% on an annualized basis, compared to March 31, 2026 and increased $41.1 million, or 0.6%, compared with June 30, 2025. Non-interest bearing deposits as a percent of total deposits have remained relatively stable at approximately 28% at both June 30, 2026 and March 31, 2026, and 27% at June 30, 2025.

End of Period Deposit Balances

6/30/2026

3/31/2026

6/30/2025

(dollars in thousands)

Non-interest-bearing Demand Deposits

1,967,770

1,926,859

1,896,737

IB Demand, Savings, and MMDA Accounts

3,676,343

3,768,529

3,728,031

Time Deposits < $100,000

452,079

459,370

521,802

Time Deposits > $100,000

899,571

826,150

808,116

6,995,763

6,980,908

6,954,686

At June 30, 2026, the capital levels for the Company and 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.

6/30/2026

Ratio

3/31/2026

Ratio

6/30/2025

Ratio

Total Capital (to Risk Weighted Assets)

Consolidated

15.50

15.27

15.21

Bank

14.24

14.03

13.93

Tier 1 (Core) Capital (to Risk Weighted Assets)

Consolidated

14.57

14.35

13.53

Bank

13.31

13.11

13.02

Common Tier 1 (CET 1) Capital Ratio

(to Risk Weighted Assets)

Consolidated

14.06

13.83

13.00

Bank

13.31

13.11

13.02

Tier 1 Capital (to Average Assets)

Consolidated

12.25

12.08

10.93

Bank

11.19

11.04

10.51

Results of Operations Highlights – Quarter ended June 30, 2026

Net income for the quarter ended June 30, 2026 totaled $38,172,000, or $1.02 per share, an increase of 16% on a per share basis compared with the first quarter 2026 net income of $33,152,000, or $0.88 per share, and an increase of 21% on a per share basis compared with the second quarter 2025 net income of $31,361,000, or $0.84 per share. On an adjusted basis, net income for the second quarter of 2025 was $32,058,000, or $0.86 per share. Adjusted net income and adjusted earnings per share are non-GAAP financial measures. Refer to “Use of Non-GAAP Financial Measures” contained in this release for additional information, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.

Summary Average Balance Sheet

(Tax-equivalent basis / dollars in thousands)

Quarter Ended

June 30, 2026

March 31, 2026

June 30, 2025

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

128,925

1,186

3.69

34,897

312

3.63

353,588

3,932

4.46

Securities

1,689,157

14,429

3.42

1,689,729

14,041

3.32

1,572,596

13,395

3.41

Loans and Leases

5,879,528

93,957

6.41

5,872,187

92,705

6.39

5,678,929

90,378

6.38

Total Interest Earning Assets

7,697,610

109,572

5.71

7,596,813

107,058

5.70

7,605,113

107,705

5.68

Liabilities

Demand Deposit Accounts

1,946,872

1,910,931

1,873,459

IB Demand, Savings, and MMDA Accounts

3,776,537

14,021

1.49

3,715,968

13,580

1.48

3,858,196

17,739

1.84

Time Deposits

1,340,636

11,155

3.34

1,293,193

11,118

3.49

1,381,233

12,896

3.75

FHLB Advances and Other Borrowings

170,945

1,798

4.22

216,518

2,159

4.04

208,241

2,645

5.09

Total Interest-Bearing Liabilities

5,288,118

26,974

2.05

5,225,679

26,857

2.08

5,447,670

33,280

2.45

Cost of Funds

1.41

1.44

1.76

Net Interest Income, Tax-Equivalent Basis*

82,598

80,201

74,425

Net Interest Margin

4.30

4.26

3.92

___________________________________________

During the second quarter of 2026, net interest income, on a non tax-equivalent basis, totaled $81,208,000 an increase of $2,357,000, or 3%, compared to the first quarter of 2026 net interest income of $78,851,000 and an increase of $8,053,000, or 11%, compared to the second quarter of 2025 net interest income of $73,155,000.

The improvement in net interest income during the second quarter of 2026 compared with both the first quarter of 2026 and the second quarter of 2025 was the result of an improved net interest margin and a higher level of average earning assets.

The tax equivalent net interest margin for the quarter ended June 30, 2026 was 4.30% compared with 4.26% in the first quarter of 2026 and 3.92% in the second quarter of 2025. The continued improvement in the net interest margin during the second quarter of 2026 compared with both the first quarter of 2026 and second quarter of 2025 was driven by a lower cost of funds primarily attributable to lower deposit costs and improved yields on earning assets.

The Company’s net interest margin and net interest income in all periods presented have been impacted by accretion of loan discounts on acquired loans. Accretion of discounts on acquired loans totaled $3,235,000 during the second quarter of 2026, $3,456,000 during the first quarter of 2026, and $3,483,000 during the second quarter of 2025. Accretion of loan discounts on acquired loans contributed approximately 17 basis points to the net interest margin in the second quarter of 2026, 18 basis points in the first quarter of 2026 and 18 basis points in the second quarter of 2025.

During the quarter ended June 30, 2026, the Company recorded a provision for credit losses of $1,500,000 compared with a provision for credit losses of $2,000,000 in the first quarter of 2026 and a provision for credit losses of $1,200,000 during the second quarter of 2025. Net charge-offs totaled $673,000, or 5 basis points on an annualized basis, of average loans outstanding during the second quarter of 2026 compared with $1,147,000, or 8 basis points on an annualized basis, of average loans during the first quarter of 2026 and $848,000, or 6 basis points on an annualized basis, of average loans during the second quarter of 2025.

During the quarter ended June 30, 2026, non-interest income totaled $18,746,000, an increase of $1,520,000, or 9%, compared with the first quarter of 2026 and an increase of $2,013,000, or 12%, compared with the second quarter of 2025. The increase during the second quarter of 2026 was broad based across all segments compared to the first quarter of 2026 driven in large part by improved wealth management fees and interchange revenue.

Quarter Ended

Non-interest Income

6/30/2026

3/31/2026

6/30/2025

(dollars in thousands)

Wealth Management Fees

5,010

4,509

4,165

Service Charges on Deposit Accounts

3,988

3,826

3,714

Company Owned Life Insurance

667

637

703

Interchange Fee Income

5,328

4,776

5,057

Other Operating Income

2,204

1,995

1,815

Subtotal

17,197

15,743

15,454

Net Gains on Sales of Loans

1,549

1,483

1,279

Net Gains (Losses) on Securities

—

Total Non-interest Income

18,746

17,226

16,733

Wealth management fees increased $501,000, or 11%, during the second quarter of 2026 compared with the first quarter of 2026 and increased $845,000, or 20%, compared with the second quarter of 2025. The increase during the second quarter of 2026 compared with the first quarter of 2026 was primarily attributable to seasonal revenue related to customer tax fees, strong new business results, and continued solid capital markets. The increase during the second quarter of 2026 compared with the second quarter of 2025 was also largely attributable to increased assets under management driven by healthy capital markets throughout the past year and continued strong new business results.

Service charges on deposit accounts increased $162,000, or 4%, during the quarter ended June 30, 2026 compared with the first quarter of 2026 and increased $274,000, or 7%, compared with the second quarter of 2025. The increase during the second quarter of 2026 compared with both the first quarter of 2026 and the second quarter of 2025 was driven by continued increased customer utilization of deposit services.

Interchange fees increased $552,000, or 12%, during the quarter ended June 30, 2026 compared with the first quarter of 2026 and increased $271,000, or 5%, compared with the second quarter of 2025. The increase during the second quarter of 2026 compared with the first quarter of 2026 and the second quarter of 2025 was largely related to a higher level of customer transaction volume.

Net gains on sales of loans increased $66,000, or 4%, during the second quarter of 2026 compared with the first quarter of 2026 and increased $389,000, or 21%, compared with the second quarter of 2025. The increase during the second quarter of 2026 compared with both the first quarter of 2026 and second quarter of 2025 was driven by a higher volume of loans sold. Loan sales totaled $70.8 million during the second quarter of 2026 compared with $52.1 million during the first quarter of 2026 and $50.2 million during the second quarter of 2025.

During the quarter ended June 30, 2026, non-interest expense totaled $50,382,000, a decline of $1,986,000, or 4%, compared with the first quarter of 2026, and an increase of $865,000, or 2%, compared with the second quarter of 2025. The second quarter of 2025 non-interest expenses included approximately $929,000 of non-recurring acquisition-related expenses associated with the Heartland acquisition.

Quarter Ended

Non-interest Expense

6/30/2026

3/31/2026

6/30/2025

(dollars in thousands)

Salaries and Employee Benefits

27,142

28,312

26,638

Occupancy, Furniture and Equipment Expense

5,178

5,336

4,751

FDIC Premiums

936

1,001

888

Data Processing Fees

4,358

4,268

4,086

Professional Fees

2,144

1,991

2,112

Advertising and Promotion

1,240

1,616

1,300

Intangible Amortization

2,362

2,471

2,803

Other Operating Expenses

7,022

7,373

6,939

Total Non-interest Expense

50,382

52,368

49,517

Salaries and benefits declined $1,170,000, or 4%, during the quarter ended June 30, 2026 compared with the first quarter of 2026 and increased $504,000, or 2%, compared with the second quarter of 2025. The decline in salaries and benefits during the second quarter of 2026 compared with the first quarter of 2026 was in part seasonal declines related to annual resets of certain payroll taxes and retirement matching contributions, a decline in incentive compensation and an overall decline in health insurance costs partially mitigated by an increase in variable compensation related to investment services and residential mortgage commissions.

Occupancy, furniture and equipment expense declined $158,000, or 3%, during the second quarter of 2026 compared with the first quarter of 2026 and increased $427,000, or 9%, compared to the second quarter of 2025. The decline during the second quarter of 2026 compared with the first quarter of 2026 was primarily attributable to seasonal increases related to snow removal and utility costs during the first quarter of 2026. The increase during the second quarter of 2026 compared with the second quarter of 2025 was largely attributable to increased levels of real estate taxes, depreciation and repairs and maintenance costs.

Advertising and promotion expense declined $376,000, or 23%, during the second quarter of 2026 compared with the first quarter of 2026 and declined $60,000, or 5%, compared with the second quarter of 2025. The decline during the second quarter of 2026 compared with the first quarter of 2026 was largely driven by increased costs related to the timing of certain donations and sponsorships as well as other elevated customer appreciation expenses during the first quarter of 2026.

Intangible amortization declined $109,000, or 4%, during the second quarter of 2026 compared with the first quarter of 2026 and declined $441,000, or 16%, compared with the second quarter of 2025. The decline during the second quarter of 2026 compared to both the first quarter of 2026 and the second quarter of 2025 was primarily attributable to the accelerated amortization method for which intangibles are amortized.

Other operating expenses declined $351,000, or 5%, during the second quarter of 2026 compared with the first quarter of 2026 and increased $83,000, or 1%, compared with the second quarter of 2025. The decline during the second quarter of 2026 compared with the first quarter of 2026 was largely the result of a decline in the reserves related to unfunded loan commitments.

About German American

German American Bancorp, Inc. (Nasdaq: GABC) is a financial holding company based in Jasper, Indiana. German American, through its banking subsidiary German American Bank, operates 93 banking offices located throughout Indiana (central/southern), Kentucky (northern/central/western), and Ohio (central/ southwest). In Columbus, Ohio and Greater Cincinnati, the Company does business as Heartland Bank, a Division of German American Bank. The Company also owns an investment brokerage subsidiary, German American Investment Services, Inc.

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.

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 prolonged periods 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 trade policies of, and other activities undertaken by, governments, including tariffs, which could have a material adverse effect on our customers and, as a result, our business;

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, including the possibility that the anticipated cost savings and strategic gains, are not realized when expected or at all as a result of 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 impairment charges 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;

the regulatory and financial impacts associated with exceeding $10 billion in total assets;

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; 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, 2025, 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, 2026

March 31, 2026

June 30, 2025

ASSETS

Cash and Due from Banks

79,646

75,956

99,871

Short-term Investments

15,012

48,471

100,777

Investment Securities

1,684,389

1,667,283

1,572,205

Loans Held-for-Sale

5,839

15,451

13,880

Loans, Net of Unearned Income

5,932,235

5,849,428

5,739,428

Allowance for Credit Losses

(79,374

)

(78,547

)

(75,510

)

Net Loans

5,852,861

5,770,881

5,663,918

Stock in FHLB and Other Restricted Stock

17,415

17,509

17,966

Premises and Equipment

137,599

137,311

139,435

Goodwill and Other Intangible Assets

404,364

406,761

417,159

Other Assets

242,873

242,835

254,931

TOTAL ASSETS

8,439,998

8,382,458

8,280,142

LIABILITIES

Non-interest-bearing Demand Deposits

1,967,770

1,926,859

1,896,737

Interest-bearing Demand, Savings, and Money Market Accounts

3,676,343

3,768,529

3,728,031

Time Deposits

1,351,650

1,285,520

1,329,918

Total Deposits

6,995,763

6,980,908

6,954,686

Borrowings

169,037

169,235

202,033

Other Liabilities

63,638

57,728

53,919

TOTAL LIABILITIES

7,228,438

7,207,871

7,210,638

SHAREHOLDERS’ EQUITY

Common Stock and Surplus

745,632

744,813

743,230

Retained Earnings

631,097

604,515

533,834

Accumulated Other Comprehensive Income (Loss)

(165,169

)

(174,741

)

(207,560

)

SHAREHOLDERS’ EQUITY

1,211,560

1,174,587

1,069,504

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

8,439,998

8,382,458

8,280,142

END OF PERIOD SHARES OUTSTANDING

37,576,750

37,565,278

37,492,814

TANGIBLE BOOK VALUE PER SHARE (1)

21.48

20.44

17.40

(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,

2026

March 31,

2026

June 30,

2025

June 30,

2026

June 30,

2025

INTEREST INCOME

Interest and Fees on Loans

93,513

92,273

90,002

185,786

171,507

Interest on Short-term Investments

1,186

312

3,932

1,498

6,148

Interest and Dividends on Investment Securities

13,483

13,123

12,501

26,606

24,996

TOTAL INTEREST INCOME

108,182

105,708

106,435

213,890

202,651

INTEREST EXPENSE

Interest on Deposits

25,176

24,698

30,635

49,874

57,663

Interest on Borrowings

1,798

2,159

2,645

3,957

5,261

TOTAL INTEREST EXPENSE

26,974

26,857

33,280

53,831

62,924

NET INTEREST INCOME

81,208

78,851

73,155

160,059

139,727

Provision for Credit Losses

1,500

2,000

1,200

3,500

16,500

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

79,708

76,851

71,955

156,559

123,227

NON-INTEREST INCOME

Net Gains on Sales of Loans

1,549

1,483

1,279

3,032

2,212

Net Gains (Losses) on Securities

—

Other Non-interest Income

17,197

15,743

15,454

32,940

29,361

TOTAL NON-INTEREST INCOME

18,746

17,226

16,733

35,972

31,573

NON-INTEREST EXPENSE

Salaries and Benefits

27,142

28,312

26,638

55,454

54,678

Other Non-interest Expenses

23,240

24,056

22,879

47,296

47,621

TOTAL NON-INTEREST EXPENSE

50,382

52,368

49,517

102,750

102,299

Income before Income Taxes

48,072

41,709

39,171

89,781

52,501

Income Tax Expense

9,900

8,557

7,810

18,457

10,623

NET INCOME

38,172

33,152

31,361

71,324

41,878

BASIC EARNINGS PER SHARE

1.02

0.88

0.84

1.90

1.16

DILUTED EARNINGS PER SHARE

1.02

0.88

0.84

1.90

1.16

WEIGHTED AVERAGE SHARES OUTSTANDING

37,564,295

37,517,833

37,479,342

37,541,192

36,087,762

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING

37,564,295

37,517,833

37,479,342

37,541,192

36,087,762

GERMAN AMERICAN BANCORP, INC.

(unaudited, dollars in thousands except per share data)

Three Months Ended

Six Months Ended

June 30,

2026

March 31,

2026

June 30,

2025

June 30,

2026

June 30,

2025

EARNINGS PERFORMANCE RATIOS

Annualized Return on Average Assets

1.80

1.58

1.49

1.69

1.04

Annualized Return on Average Equity

12.82

11.20

11.97

12.01

8.46

Annualized Return on Average Tangible Equity (1)

19.43

17.08

19.87

18.26

13.68

Net Interest Margin

4.30

4.26

3.92

4.28

3.94

Efficiency Ratio (2)

47.38

51.21

51.25

49.26

56.04

Net Overhead Expense to Average Earning Assets (3)

1.64

1.85

1.72

1.75

1.95

ASSET QUALITY RATIOS

Annualized Net Charge-offs to Average Loans

0.05

0.08

0.06

0.05

Allowance for Credit Losses to Period End Loans

1.34

1.32

Non-performing Assets to Period End Assets

0.32

0.35

0.30

Non-performing Loans to Period End Loans

0.45

0.51

0.44

Loans 30-89 Days Past Due to Period End Loans

0.22

0.46

SELECTED BALANCE SHEET & OTHER FINANCIAL DATA

Average Assets

8,481,845

8,380,732

8,424,328

8,431,568

8,028,766

Average Earning Assets

7,697,610

7,596,813

7,605,113

7,647,490

7,265,693

Average Total Loans

5,879,528

5,872,187

5,678,929

5,875,878

5,408,894

Average Demand Deposits

1,946,872

1,910,931

1,873,459

1,929,001

1,772,153

Average Interest Bearing Liabilities

5,288,118

5,225,679

5,447,670

5,257,071

5,213,509

Average Equity

1,191,283

1,184,292

1,048,227

1,187,807

990,129

Period End Non-performing Assets (4)

26,846

29,556

25,136

Period End Non-performing Loans (5)

26,846

29,556

25,088

Period End Loans 30-89 Days Past Due (6)

12,898

12,676

26,294

Tax-Equivalent Net Interest Income

82,598

80,201

74,425

162,798

142,316

Net Charge-offs during Period

673

1,147

848

1,820

1,334

(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.

GERMAN AMERICAN BANCORP, INC.

USE OF NON-GAAP FINANCIAL MEASURE

The accounting and reporting policies of German American Bancorp, Inc. (the “Company”) conform to U.S. generally accepted accounting principles (“GAAP”) and general practices within the banking industry. As a supplement to GAAP, the Company has provided certain, non-GAAP financial measures, which it believes are useful because they assist investors in assessing the Company’s operating performance. Specifically, the Company has presented its net income, earnings per share, non-interest expense, efficiency ratio, return on average assets, return on average equity, return on average tangible common equity, and net interest margin on an as adjusted basis for the periods set forth below to reflect the exclusion of the following items: (1) the Current Expected Credit Losses (“CECL”) “Day 2” provision expense for acquired loans that have only insignificant credit deterioration (i.e., non-PCD loans) related to the Heartland merger; and (2) non-recurring expenses related to the Heartland merger. Management believes excluding such items from these financial measures may be useful in assessing the Company’s underlying operational performance since the applicable transactions do not pertain to its core business operations and exclusion may facilitate better comparability between periods. In addition, management believes that by excluding such items the measures are useful to the Company, as well as analysts and investors, in assessing operating performance. Management also believes excluding these items may enhance comparability for peer comparison purposes.

Management believes that it is standard practice in the banking industry to present the efficiency ratio and net interest margin on a fully tax-equivalent basis and that, by doing so, it may enhance comparability for peer comparison purposes. The tax-equivalent adjustment to net interest income (for purposes of the efficiency ratio) and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%.

Although intended to enhance investors’ understanding of the Company’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.

GERMAN AMERICAN BANCORP, INC.

NON-GAAP RECONCILIATIONS

Non-GAAP Reconciliation – Net Income and Earnings Per Share

Three Months Ended

Six Months Ended

(Dollars in Thousands, except per share amounts)

06/30/2026

03/31/2026

06/30/2025

06/30/2026

06/30/2025

Net Income, as reported

38,172

33,152

31,361

71,324

41,878

Adjustments:

Plus: CECL Day 2 non-PCD provision

—

12,150

Plus: Non-recurring merger-related expenses

—

697

—

5,317

Adjusted Net Income

38,172

33,152

32,058

71,324

59,345

Weighted Average Shares Outstanding

37,564,295

37,517,833

37,479,342

37,541,192

36,087,762

Earnings Per Share, as reported

1.02

0.88

0.84

1.90

1.16

Earnings Per Share, as adjusted

1.02

0.88

0.86

1.90

1.64

Non-GAAP Reconciliation – Non-Interest Expense

Three Months Ended

Six Months Ended

(Dollars in Thousands)

06/30/2026

03/31/2026

06/30/2025

06/30/2026

06/30/2025

Non-Interest Expense

50,382

52,368

49,517

102,750

102,299

Less: Non-recurring merger-related expenses

—

929

—

6,861

Adjusted Non-Interest Expense

50,382

52,368

48,588

102,750

95,438

GERMAN AMERICAN BANCORP, INC.

NON-GAAP RECONCILIATIONS

Non-GAAP Reconciliation – Efficiency Ratio

Three Months Ended

Six Months Ended

(Dollars in Thousands)

06/30/2026

03/31/2026

06/30/2025

06/30/2026

06/30/2025

Adjusted Non-Interest Expense (from above)

50,382

52,368

48,588

102,750

95,438

Less: Intangible Amortization

2,362

2,471

2,803

4,833

4,873

Adjusted Non-Interest Expense excluding Intangible Amortization

48,020

49,897

45,785

97,917

90,565

Net Interest Income

81,208

78,851

73,155

160,059

139,727

Add: FTE Adjustment

1,390

1,350

1,270

2,739

2,589

Net Interest Income (FTE)

82,598

80,201

74,425

162,798

142,316

Non-Interest Income

18,746

17,226

16,733

35,972

31,573

Total Adjusted Total Revenue

101,344

97,427

91,158

198,770

173,889

Efficiency Ratio

47.38

51.21

51.25

49.26

56.04

Adjusted Efficiency Ratio

47.38

51.21

50.23

49.26

52.08

Non-GAAP Reconciliation – Net Interest Margin

Three Months Ended

Six Months Ended

(Dollars in Thousands)

06/30/2026

03/31/2026

06/30/2025

06/30/2026

06/30/2025

Net Interest Income (FTE) from above

82,598

80,201

74,425

162,798

142,316

Less: Accretion of Discount on Acquired Loans

3,235

3,456

3,483

6,691

7,675

Adjusted Net Interest Income (FTE)

79,363

76,745

70,942

156,107

134,641

Average Earning Assets

7,697,610

7,596,813

7,605,113

7,647,490

7,265,693

Net Interest Margin (FTE)

4.30

4.26

3.92

4.28

3.94

Adjusted Net Interest Margin (FTE)

4.13

4.08

3.74

4.11

3.73

GERMAN AMERICAN BANCORP, INC.

NON-GAAP RECONCILIATIONS

Non-GAAP Reconciliation – Return on Average Assets

Three Months Ended

Six Months Ended

(Dollars in Thousands)

06/30/2026

03/31/2026

06/30/2025

06/30/2026

06/30/2025

Adjusted Net Income

38,172

33,152

32,058

71,324

59,345

Average Assets

8,481,845

8,380,732

8,424,328

8,431,568

8,028,766

Return on Average Assets, as reported

1.80

1.58

1.49

1.69

1.04

Return on Average Assets, as adjusted

1.80

1.58

1.52

1.69

1.48

Non-GAAP Reconciliation – Return on Average Equity

Three Months Ended

Six Months Ended

(Dollars in Thousands)

6/30/2026

3/31/2026

6/30/2025

6/30/2026

6/30/2025

Adjusted Net Income

38,172

33,152

32,058

71,324

59,345

Average Equity

1,191,283

1,184,292

1,048,227

1,187,807

990,129

Return on Average Equity, as reported

12.82

11.20

11.97

12.01

8.46

Return on Average Equity, as adjusted

12.82

11.20

12.23

12.01

11.99

Non-GAAP Reconciliation – Return on Average Tangible Common Equity

Three Months Ended

Six Months Ended

(Dollars in Thousands)

6/30/2026

3/31/2026

6/30/2025

6/30/2026

6/30/2025

Adjusted Net Income

38,172

33,152

32,058

71,324

59,345

Average Equity, as reported

1,191,283

1,184,292

1,048,227

1,187,807

990,129

Average Intangibles, as reported

405,463

407,940

417,016

406,694

378,011

Average Tangible Common Equity

785,820

776,352

631,211

781,113

612,118

Return on Average Tangible Common Equity, as reported

19.43

17.08

19.87

18.26

13.68

Return on Average Tangible Common Equity, as adjusted

19.43

17.08

20.32

18.26

19.39