German American Bancorp (GABC) investor relations material

Executive summary

• Net income for Q1 2026 was $33.2 million ($0.88 per share), up 193% year-over-year due to prior year merger expenses, but down 7% sequentially.

• Adjusted Q1 2025 net income was $27.3 million ($0.79 per share), excluding non-recurring merger costs and Day 2 CECL provision.

• The Heartland BancCorp acquisition in February 2025 expanded the company’s footprint and contributed to higher average earning assets.

• Return on average assets was 1.58% and return on average tangible common equity was 17.08% for Q1 2026.

• 7% dividend increase announced, marking 14 consecutive years of dividend growth.

Financial highlights

• Net interest income rose 18% year-over-year to $78.9 million in Q1 2026, stable sequentially.

• Net interest margin improved to 4.26%, up 13 bps from Q4 2025, driven by lower deposit and funding costs and improved asset mix.

• Non-interest income increased 16% year-over-year to $17.2 million, with gains in wealth management fees (+18%), service charges (+10%), and loan sales (+59%).

• Non-interest expense was $52.4 million, down 1% year-over-year but up 5% sequentially due to seasonal and merit increases.

• Provision for credit losses was $2.0 million, down from $15.3 million in Q1 2025; allowance for credit losses stood at $78.5 million (1.34% of loans).

Outlook and guidance

• Management expects continued benefits from the Heartland acquisition, with ongoing focus on credit quality, cost control, and integration synergies.

• Net interest income and margin are expected to remain strong, supported by stable funding costs and asset mix.

• The company remains well-capitalized and positioned for further growth in its regional markets.

• Integration of Heartland BancCorp is progressing well, with talent additions in wealth management and commercial lending.

• Management expects continued profitability, supported by a strong lending pipeline and diversified growth.