GABC 10-Q Quarterly Report Sept. 30, 2025

GERMAN AMERICAN BANCORP, INC.

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gabc-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended September 30, 2025

Commission File Number 001-15877

German American Bancorp, Inc.

(Exact name of registrant as specified in its charter)


Indiana						35-1547518
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

711 Main Street , Jasper , Indiana 47546

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: ( 812 ) 482-1314

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company:

Large accelerated filer

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes ☐ No x

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	GABC	Nasdaq Global Select Market

As of November 3, 2025, the registrant had 37,491,797 outstanding shares of Common Stock, no par value.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

Information included in or incorporated by reference in this Quarterly Report on Form 10-Q, our other filings with the Securities and Exchange Commission (the “SEC”) and our press releases or other public statements contains or may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Please refer to the discussions of our forward-looking statements and associated risks in our Annual Report on Form 10-K for the year ended December 31, 2024, in Item 1, “Business - Forward-Looking Statements and Associated Risks” and our discussion of risk factors in Item 1A, “Risk Factors” of that Annual Report on Form 10-K, as updated and supplemented from time to time by our subsequent SEC filings, including by the discussion under the heading “Forward-Looking Statements and Associated Risks” at the conclusion of Item 2 of Part I of this Report (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”), and by the additional risk factors set forth in Part II, Item 1A, “Risk Factors” of this Report.

*****

INDEX


Glossary of Terms and Acronyms		4

PART I. FINANCIAL INFORMATION		6

Item 1.	Unaudited Financial Statements	6

	Consolidated Balance Sheets – September 30, 2025 and December 31, 2024	6

	Consolidated Statements of Income – Three Months Ended September 30, 2025 and 2024	7

	Consolidated Statements of Income – Nine Months Ended September 30, 2025 and 2024	8

	Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2025 and 2024	9

	Consolidated Statements of Changes in Shareholders’ Equity - Three and Nine Months Ended September 30, 2025 and 2024	10

	Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2025 and 2024	12

	Notes to Consolidated Financial Statements – September 30, 2025	13

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	66

Item 4.	Controls and Procedures	67

PART II. OTHER INFORMATION		68

Item 1.	Legal Proceedings	68

Item 1A.	Risk Factors	68

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68

Item 3.	Defaults Upon Senior Securities	68

Item 4.	Mine Safety Disclosures	68

Item 5.	Other Information	68

Item 6.	Exhibits	70

SIGNATURES		71

GLOSSARY OF TERMS AND ACRONYMS

As used in this Report, references to “German American,” “Company,” “we,” “our,” “us,” and similar terms refer to German American Bancorp, Inc. and its consolidated subsidiaries as a whole. Occasionally, we will refer to the terms “German American Bancorp,” “Bancorp,” “parent company” or “holding company” when we mean to refer to only German American Bancorp, Inc. and the term “Bank” when we mean to refer only to German American Bank, the Company’s bank subsidiary.

The terms and acronyms identified below are used throughout this Report, including the Notes to Consolidated Financial Statements. You may find it helpful to refer to this Glossary as you read this Report.

2019 ESPP: German American Bancorp, Inc. 2019 Employee Stock Purchase Plan

2019 LTI Plan: German American Bancorp, Inc. 2019 Long-Term Equity Incentive Plan

ACL: Allowance for credit losses

ASU: Accounting Standards Update

Basel III Rules: Regulatory capital rules agreed to by the Basel Committee on Banking Supervision, as issued by the FRB and OCC and published in the Federal Register on October 11, 2013

CECL: Current expected credit losses, which are the subject of an accounting standard under GAAP

CET1: Common Equity Tier 1

CMO: Collateralized mortgage obligations

CRE: Commercial Real Estate

“Day 2” Adjustment: An adjustment to the provision for credit losses, as required by GAAP, to recognize the full lifetime expected credit loss for non-PCD assets at the time of a business combination. See “CRITICAL ACCOUNTING POLICIES AND ESTIMATES – Allowance for Credit Losses” under Item 7 of this Report (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”).

Dodd-Frank Act: Dodd-Frank Wall Street Reform and Consumer Protection Act

FASB: Financial Accounting Standards Board

FDIC: Federal Deposit Insurance Corporation

federal banking

regulators: The FRB, the OCC, and the FDIC, collectively

FHLB: Federal Home Loan Bank

FRB: Board of Governors of the Federal Reserve System

GAAP: Generally Accepted Accounting Principles in the United States of America

GAI: German American Insurance, Inc.

Heartland: Heartland BancCorp, which was acquired by the Company on February 1, 2025

Heartland Notes: Heartland BancCorp 5.0% Fixed-to-Floating Rate Subordinated Notes Due 2030

MBS: Mortgage-backed securities

NPV: Net portfolio value

OCC: Office of the Comptroller of the Currency

PCD: Purchased with credit deterioration

SEC: Securities and Exchange Commission

SOFR: Secured Overnight Financing Rate

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, dollars in thousands except share and per share data)


	September 30, 2025		December 31, 2024
ASSETS
Cash and Due from Banks	$	112,718	$	69,249
Federal Funds Sold and Other Short-term Investments	142,930		119,543
Cash and Cash Equivalents	255,648		188,792

Interest-bearing Time Deposits with Banks	500		500
Securities Available-for-Sale, at Fair Value (Amortized Cost $ 1,848,461 for September 30, 2025; Amortized Cost $ 1,796,040 for December 31, 2024; No Allowance for Credit Losses)	1,618,017		1,517,287
Other Investments	353		353

Loans Held-for-Sale, at Fair Value	10,058		8,239

Loans	5,787,622		4,133,267
Less: Unearned Income	( 9,117 )		( 8,365 )
Allowance for Credit Losses	( 76,057 )		( 44,436 )
Loans, Net	5,702,448		4,080,466

Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost	17,856		14,423
Premises, Furniture and Equipment, Net	139,850		104,045
Other Real Estate	48		—
Goodwill	375,237		179,025
Intangible Assets	36,419		4,018
Company Owned Life Insurance	108,934		86,710
Accrued Interest Receivable and Other Assets	135,880		112,052
TOTAL ASSETS	$	8,401,248	$	6,295,910

LIABILITIES
Non-interest-bearing Demand Deposits	$	1,938,522	$	1,399,270
Interest-bearing Demand, Savings, and Money Market Accounts	3,714,191		3,013,204
Time Deposits	1,361,789		916,601
Total Deposits	7,014,502		5,329,075

FHLB Advances and Other Borrowings	211,016		210,131
Accrued Interest Payable and Other Liabilities	56,007		41,637
TOTAL LIABILITIES	7,281,525		5,580,843

SHAREHOLDERS’ EQUITY
Common Stock, no par value, $ 1 stated value; 45,000,000 shares authorized	37,493		29,677
Additional Paid-in Capital	706,524		392,266
Retained Earnings	558,086		513,588
Accumulated Other Comprehensive Income (Loss)	( 182,380 )		( 220,464 )
TOTAL SHAREHOLDERS’ EQUITY	1,119,723		715,067
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	8,401,248	$	6,295,910
End of period shares issued and outstanding	37,493,333		29,677,093

See accompanying notes to consolidated financial statements.

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited, dollars in thousands except per share data)


	Three Months Ended September 30,
	2025		2024
INTEREST INCOME
Interest and Fees on Loans	$	93,305	$	61,140
Interest on Federal Funds Sold and Other Short-term Investments	2,084		2,223
Interest and Dividends on Securities:
Taxable	9,268		8,034
Non-taxable	3,440		3,256
TOTAL INTEREST INCOME	108,097		74,653

INTEREST EXPENSE
Interest on Deposits	29,416		23,375
Interest on FHLB Advances and Other Borrowings	2,956		2,684
TOTAL INTEREST EXPENSE	32,372		26,059

NET INTEREST INCOME	75,725		48,594
Provision for Credit Losses	700		625
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	75,025		47,969

NON-INTEREST INCOME
Wealth Management Fees	4,288		3,580
Service Charges on Deposit Accounts	3,927		3,330
Insurance Revenues	—		—
Company Owned Life Insurance	630		476
Interchange Fee Income	5,087		4,390
Gain on Sale of Assets of German American Insurance	—		—
Other Operating Income	3,308		1,251
Net Gains on Sales of Loans	1,189		704
Net Gains on Securities	—		70
TOTAL NON-INTEREST INCOME	18,429		13,801

NON-INTEREST EXPENSE
Salaries and Employee Benefits	25,444		19,718
Occupancy Expense, Furniture and Equipment Expense	5,255		3,880
FDIC Premiums	1,059		755
Data Processing Fees	4,175		3,156
Professional Fees	1,960		1,912
Advertising and Promotion	1,321		941
Intangible Amortization	2,693		484
Other Operating Expenses	7,793		5,280
TOTAL NON-INTEREST EXPENSE	49,700		36,126

Income before Income Taxes	43,754		25,644
Income Tax Expense	8,680		4,596
NET INCOME	$	35,074	$	21,048

Basic Earnings per Share	$	0.94	$	0.71
Diluted Earnings per Share	$	0.94	$	0.71

See accompanying notes to consolidated financial statements.

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited, dollars in thousands except per share data)


	Nine Months Ended September 30,
	2025		2024
INTEREST INCOME
Interest and Fees on Loans	$	264,812	$	178,196
Interest on Federal Funds Sold and Other Short-term Investments	8,232		4,905
Interest and Dividends on Securities:
Taxable	27,528		18,111
Non-taxable	10,176		13,276
TOTAL INTEREST INCOME	310,748		214,488

INTEREST EXPENSE
Interest on Deposits	87,079		67,749
Interest on FHLB Advances and Other Borrowings	8,217		7,180
TOTAL INTEREST EXPENSE	95,296		74,929

NET INTEREST INCOME	215,452		139,559
Provision for Credit Losses	17,200		2,150
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	198,252		137,409

NON-INTEREST INCOME
Wealth Management Fees	12,289		10,729
Service Charges on Deposit Accounts	11,127		9,325
Insurance Revenues	—		4,384
Company Owned Life Insurance	1,908		1,442
Interchange Fee Income	14,565		12,881
Gain on Sale of Assets of German American Insurance	—		38,323
Other Operating Income	6,712		3,826
Net Gains on Sales of Loans	3,401		2,424
Net Gains (Losses) on Securities	—		( 34,788 )
TOTAL NON-INTEREST INCOME	50,002		48,546

NON-INTEREST EXPENSE
Salaries and Employee Benefits	80,122		61,853
Occupancy, Furniture and Equipment Expense	14,669		11,171
FDIC Premiums	2,847		2,194
Data Processing Fees	13,756		8,986
Professional Fees	8,256		6,969
Advertising and Promotion	4,075		2,988
Intangible Amortization	7,566		1,594
Other Operating Expenses	20,708		14,783
TOTAL NON-INTEREST EXPENSE	151,999		110,538

Income before Income Taxes	96,255		75,417
Income Tax Expense	19,303		14,817
NET INCOME	$	76,952	$	60,600

Basic Earnings per Share	$	2.10	$	2.04
Diluted Earnings per Share	$	2.10	$	2.04

See accompanying notes to consolidated financial statements.

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, dollars in thousands)


	Three Months Ended September 30,
	2025		2024

NET INCOME	$	35,074	$	21,048

Other Comprehensive Income:
Unrealized Gains (Losses) on Securities:
Unrealized Holding Gain (Loss) Arising During the Period	31,919		54,377
Reclassification Adjustment for Losses (Gains) Included in Net Income	—		( 70 )
Tax Effect	( 6,739 )		( 11,477 )
Net of Tax	25,180		42,830

Total Other Comprehensive Income	25,180		42,830

COMPREHENSIVE INCOME	$	60,254	$	63,878


	Nine Months Ended September 30,
	2025		2024

NET INCOME	$	76,952	$	60,600

Other Comprehensive Income:
Unrealized Gains (Losses) on Securities:
Unrealized Holding Gain (Loss) Arising During the Period	48,309		18,460
Reclassification Adjustment for Losses (Gains) Included in Net Income	—		34,788
Tax Effect	( 10,225 )		( 11,227 )
Net of Tax	38,084		42,021

Total Other Comprehensive Income	38,084		42,021

COMPREHENSIVE INCOME	$	115,036	$	102,621

See accompanying notes to consolidated financial statements.

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS ’ EQUITY

(unaudited, dollars in thousands)


	Common Stock
	Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balances, January 1, 2025	29,677,093	$	29,677	$	392,266	$	513,588	$	( 220,464 )	$	715,067

Net Income	—	—		—		10,517		—		10,517
Other Comprehensive Income (Loss)	—	—		—		—		10,783		10,783
Cash Dividends ($ 0.29 per share)	—	—		—		( 10,813 )		—		( 10,813 )
Issuance of Common Stock for:
Acquisition of Heartland BancCorp	7,742,723	7,743		312,264		—		—		320,007
Restricted Share Grants Net	61,900	61		420		—		—		481

Balances, March 31, 2025	37,481,716	$	37,481	$	704,950	$	513,292	$	( 209,681 )	$	1,046,042

Net Income	—	—		—		31,361		—		31,361
Other Comprehensive Income (Loss)	—	—		—		—		2,121		2,121
Cash Dividends ($ 0.29 per share)	—	—		—		( 10,819 )		—		( 10,819 )
Issuance of Common Stock for:

Restricted Share Grants Net	11,098	12		787		—		—		799



Balances, June 30, 2025	37,492,814	$	37,493	$	705,737	$	533,834	$	( 207,560 )	$	1,069,504

Net Income	—	—		—		35,074		—		35,074
Other Comprehensive Income (Loss)	—	—		—		—		25,180		25,180
Cash Dividends ($ 0.29 per share)	—	—		—		( 10,822 )		—		( 10,822 )
Issuance of Common Stock for:
Restricted Share Grants Net	519	—		787		—		—		787

Balances, September 30, 2025	37,493,333	$	37,493	$	706,524	$	558,086	$	( 182,380 )	$	1,119,723

See accompanying notes to consolidated financial statements.

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS ’ EQUITY

(unaudited, dollars in thousands)


	Common Stock
	Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balances, January 1, 2024	29,584,709	$	29,585	$	389,411	$	461,622	$	( 217,060 )	$	663,558

Net Income	—	—		—		19,022		—		19,022
Other Comprehensive Income (Loss)	—	—		—		—		( 19,895 )		( 19,895 )
Cash Dividends ($ 0.27 per share)	—	—		—		( 7,955 )		—		( 7,955 )
Issuance of Common Stock for:

Restricted Share Grants Net	84,310	84		440		—		—		524

Balances, March 31, 2024	29,669,019	$	29,669	$	389,851	$	472,689	$	( 236,955 )	$	655,254

Net Income	—	—		—		20,530		—		20,530
Other Comprehensive Income (Loss)	—	—		—		—		19,086		19,086
Cash Dividends ($ 0.27 per share)	—	—		—		( 7,963 )		—		( 7,963 )
Issuance of Common Stock for:

Restricted Share Grants Net	10,229	10		904		—		—		914


Balances, June 30, 2024	29,679,248	$	29,679	$	390,755	$	485,256	$	( 217,869 )	$	687,821

Net Income	—	—		—		21,048		—		21,048
Other Comprehensive Income (Loss)	—	—		—		—		42,830		42,830
Cash Dividends ($ 0.27 per share)	—	—		—		( 7,964 )		—		( 7,964 )
Issuance of Common Stock for:
Restricted Share Grants Net	218	—		828		—		—		828

Balances, September 30, 2024	29,679,466	$	29,679	$	391,583	$	498,340	$	( 175,039 )	$	744,563

See accompanying notes to consolidated financial statements.

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, dollars in thousands)


	Nine Months Ended September 30,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	76,952	$	60,600
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Net (Accretion) Amortization on Securities	( 1,289 )		2,527
Depreciation and Amortization	13,714		6,961
Loans Originated for Sale	( 125,252 )		( 101,914 )
Proceeds from Sales of Loans Held-for-Sale	127,450		100,297
Provision for Credit Losses	17,200		2,150
Gain on Sale of Loans, Net	( 3,401 )		( 2,424 )
(Gain) Loss on Securities, Net	—		34,788
Gain on Sales of Other Real Estate and Repossessed Assets	—		( 37 )
Gain on Debt Extinguishment	( 975 )		—
Loss on Disposition and Donation of Premises and Equipment	37		15
Gain on Disposition of Land	( 45 )		—
Increase in Cash Surrender Value of Company Owned Life Insurance	( 1,564 )		( 1,040 )
Equity Based Compensation	2,067		2,266
Gain on Sale of Assets of German American Insurance, Net	—		( 36,507 )
Change in Assets and Liabilities:
Interest Receivable and Other Assets	6,939		2,340
Interest Payable and Other Liabilities	4,814		( 2,951 )
Net Cash from Operating Activities	116,647		67,071

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from Maturities, Calls, and Redemptions of Securities Available-for-Sale	428,953		218,477

Proceeds from Sales of Securities Available-for-Sale	205,876		402,105
Purchase of Securities Available-for-Sale	( 465,603 )		( 555,810 )

Proceeds from Redemption of Federal Home Loan Bank Stock	3,559		199

Proceeds from Sale of Loans Held for Investment	2,391		—
Loans Made to Customers, Net of Payments Received	( 138,937 )		( 91,891 )
Proceeds from Sales of Other Real Estate	—		70
Property and Equipment Expenditures	( 3,662 )		( 4,391 )

Proceeds from Sales of Land and Buildings	75		—

Proceeds from Sale of German American Insurance Assets	—		40,000
Acquisition of Heartland Bancorp.	22,665		—
Net Cash from Investing Activities	55,317		8,759

CASH FLOWS FROM FINANCING ACTIVITIES
Change in Deposits	( 44,969 )		18,403
Change in Short-term Borrowings	( 28,513 )		( 15,012 )
Advances in Long-term Debt	25,000		75,000
Repayments of Long-term Debt	( 24,172 )		( 50,114 )

Dividends Paid	( 32,454 )		( 23,882 )
Net Cash from Financing Activities	( 105,108 )		4,395

Net Change in Cash and Cash Equivalents	66,856		80,225
Cash and Cash Equivalents at Beginning of Year	188,792		115,330
Cash and Cash Equivalents at End of Period	$	255,648	$	195,555


Cash Paid During the Period for
Interest	$	92,881	$	73,727
Income Taxes	14,815		17,870

Supplemental Non Cash Disclosures
Loans Transferred to Other Real Estate	$	48	$	—
Interest Rate Swap Fair Value Adjustment	$	( 1,659 )	$	( 1,600 )

See Note 16 regarding non-cash transactions included in the acquisition.

See accompanying notes to consolidated financial statements.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 1 – Basis of Presentation and Market Conditions

German American Bancorp, Inc. operates primarily in the banking industry. The accounting and reporting policies of German American Bancorp, Inc. and its subsidiaries (hereinafter collectively referred to as the “Company”) conform to U.S. generally accepted accounting principles. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods reported have been included in the accompanying unaudited consolidated financial statements, and all such adjustments are of a normal recurring nature. It is suggested that these consolidated financial statements and notes be read in conjunction with the financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Certain items included in the prior period financial statements were reclassified to conform to the current presentation. There was no effect on net income or total shareholders’ equity based on these reclassifications.

NOTE 2 - Recent Accounting Pronouncements

Recently Adopted Accounting Guidance

The SEC’s Staff Accounting Bulletin No. 121 (“SAB 121”) provides interpretive guidance regarding the accounting for obligations to safeguard crypto-assets an entity holds for its customers, either directly or through an agent or another third party acting on its behalf. SAB 121 requires an entity to recognize a liability on its balance sheet to reflect the obligation to safeguard the crypto-assets of others, along with a corresponding safeguarding asset, both of which are measured at fair value. The Company has completed an evaluation and concluded that it does not have a safeguarding obligation under SAB 121 and therefore the disclosures do not apply.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. Retrospective application is required. The Company adopted this standard and updated the segment disclosure. See Note 9 for additional information.

Issued But Not Yet Effective

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvement to Income Tax Disclosures”. This updated accounting guidance requires expanded income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. This guidance is effective for annual periods beginning after December 15, 2024 and will be applied on a prospective basis with the option to apply retrospectively. The Company is reviewing this guidance but doesn’t expect it to have a material impact on the Company’s tax disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This guidance requires public companies to disclose specified information about certain costs and expenses in the notes to financial statements at each interim and annual reporting period. Specifically, public companies will be required to disclose in tabular format the amounts of (a) purchases of inventory; (b) employee compensation; (c) depreciation; (d) intangible asset amortization; and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. Within the same tabular disclosure, an entity must disclose certain expense, gain, or loss amounts that are already required to be disclosed under current GAAP. Further, an entity must provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. In addition, an entity must disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, and will be applied on a prospective basis with the option to apply retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on the Company’s financial statements.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 3 – Sale of Insurance Assets

Effective June 1, 2024, the Company completed a sale of substantially all of the assets of its wholly-owned subsidiary, German American Insurance, Inc. (“GAI”), to Hilb Group and ceased insurance-related activities for the Company. The all-cash sales price totaled $ 40,000 and resulted in an after-tax gain, net of transaction costs, of approximately $ 27,476 , or $ 0.93 on a per share basis.


Gross Purchase Price pursuant to Asset Purchase Agreement	$	40,000
Write-off of Goodwill and Intangibles	( 1,332 )
Working Capital Adjustment Settled at Closing	( 345 )
Net Purchase Price	38,323
Transaction Costs	( 1,816 )
Pre-tax Gain on Sale of Insurance Assets	$	36,507
After-tax Gain on Sale of Insurance Assets	$	27,476

Based on management’s review of Accounting Standards Codification 205-20-45, the sale of GAI was determined not to have met all necessary criteria to be considered discontinued operations at, or prior to, the time of the sale.

NOTE 4 – Per Share Data

The computation of Basic Earnings per Share and Diluted Earnings per Share are as follows:


	Three Months Ended September 30,
	2025		2024
Basic Earnings per Share:
Net Income	$	35,074	$	21,048
Weighted Average Shares Outstanding	37,493,028		29,679,464
Basic Earnings per Share	$	0.94	$	0.71

Diluted Earnings per Share:
Net Income	$	35,074	$	21,048

Weighted Average Shares Outstanding	37,493,028		29,679,464
Potentially Dilutive Shares, Net	—		—
Diluted Weighted Average Shares Outstanding	37,493,028		29,679,464
Diluted Earnings per Share	$	0.94	$	0.71

For the three months ended September 30, 2025 and 2024, there were no anti-dilutive shares.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 4 - Per Share Data (continued)


	Nine Months Ended September 30,
	2025		2024
Basic Earnings per Share:
Net Income	$	76,952	$	60,600
Weighted Average Shares Outstanding	36,561,331		29,649,020
Basic Earnings per Share	$	2.10	$	2.04

Diluted Earnings per Share:
Net Income	$	76,952	$	60,600

Weighted Average Shares Outstanding	36,561,331		29,649,020
Potentially Dilutive Shares, Net	—		—
Diluted Weighted Average Shares Outstanding	36,561,331		29,649,020
Diluted Earnings per Share	$	2.10	$	2.04

For the nine months ended September 30, 2025 and 2024, there were no anti-dilutive shares.

NOTE 5 – Securities

The amortized cost, unrealized gross gains and losses recognized in accumulated other comprehensive income (loss), and fair value of securities available-for-sale were as follows:


Securities Available-for-Sale:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

September 30, 2025
U.S. Treasury	$	144,138	$	37	$	—	$	144,175
Obligations of State and Political Subdivisions	603,733		605		( 120,327 )		484,011
MBS/CMO	788,902		4,489		( 86,414 )		706,977
US Gov’t Sponsored Entities & Agencies	311,688		668		( 29,502 )		282,854
Total	$	1,848,461	$	5,799	$	( 236,243 )	$	1,618,017

December 31, 2024
U.S. Treasury	$	110,813	$	51	$	—	$	110,864
Obligations of State and Political Subdivisions	587,963		21		( 124,815 )		463,169
MBS/CMO	817,553		341		( 115,715 )		702,179
US Gov’t Sponsored Entities & Agencies	279,711		—		( 38,636 )		241,075
Total	$	1,796,040	$	413	$	( 279,166 )	$	1,517,287

All mortgage-backed securities in the above table (identified above and throughout this Note 5 as “MBS/CMO”) are residential and multi-family mortgage-backed securities and guaranteed by government sponsored entities. The US Gov’t Sponsored Entities & Agencies in the above table include securities that have underlying collateral of equipment, machinery and commercial real estate.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Securities (continued)

The amortized cost and fair value of securities available-for-sale at September 30, 2025 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay certain obligations with or without call or prepayment penalties. Mortgage-backed securities are not due at a single maturity date and are shown separately.


Securities Available-for-Sale:	Amortized Cost		Fair Value

Due in one year or less	$	146,460	$	146,502
Due after one year through five years	9,816		9,744
Due after five years through ten years	61,121		55,249
Due after ten years	530,474		416,691
MBS/CMO	788,902		706,977
US Gov’t Sponsored Entities & Agencies	311,688		282,854
Total	$	1,848,461	$	1,618,017

During the first quarter of 2025, the Company sold approximately $ 204.9 million in securities that were acquired as part of the February 1, 2025 Heartland acquisition. As the Company had recorded the securities at fair value at the time of closing, no gain or loss was incurred on such sale.

During June and July 2024, the Company undertook a partial restructuring of its securities portfolio by selling available-for-sale securities totaling approximately $ 375.3 million in book value, at a pre-tax loss of approximately $ 34.9 million. The tax-equivalent yield on the bonds sold was approximately 3.12 % with a duration of approximately 7 years. The proceeds from the securities sold were reinvested in the securities portfolio by the end of the third quarter of 2024.

Proceeds from the sales of securities are summarized below:


	Three Months Ended		Three Months Ended
	September 30, 2025		September 30, 2024

Proceeds from Sales	$	500	$	175,738
Gross Gains on Sales	—		70
Gross Losses on Sales	—		—
Income Taxes on Net Gains (Losses)	—		15


	Nine Months Ended		Nine Months Ended
	September 30, 2025		September 30, 2024

Proceeds from Sales	$	205,876	$	402,105
Gross Gains on Sales	—		614
Gross Losses on Sales	—		35,402
Income Taxes on Net Gains (Losses)	—		( 7,305 )

The carrying value of securities pledged to secure repurchase agreements, public and trust deposits, and for other purposes as required by law was $ 998,737 and $ 1,065,880 as of September 30, 2025 and December 31, 2024, respectively.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Securities (continued)

Below is a summary of securities with unrealized losses as of September 30, 2025 and December 31, 2024, presented by length of time the securities have been in a continuous unrealized loss position:


	Less than 12 Months				12 Months or More				Total
September 30, 2025	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss


Obligations of State and Political Subdivisions	$	4,894	$	( 107 )	$	447,248	$	( 120,220 )	$	452,142	$	( 120,327 )
MBS/CMO	3,745		( 42 )		484,310		( 86,372 )		488,055		( 86,414 )
US Gov’t Sponsored Entities & Agencies	23,067		( 177 )		161,749		( 29,325 )		184,816		( 29,502 )
Total	$	31,706	$	( 326 )	$	1,093,307	$	( 235,917 )	$	1,125,013	$	( 236,243 )


	Less than 12 Months				12 Months or More				Total
December 31, 2024	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss


Obligations of State and Political Subdivisions	$	13,249	$	( 231 )	$	445,264	$	( 124,584 )	$	458,513	$	( 124,815 )
MBS/CMO	176,333		( 2,461 )		480,235		( 113,254 )		656,568		( 115,715 )
US Gov’t Sponsored Entities & Agencies	96,132		( 2,989 )		144,943		( 35,647 )		241,075		( 38,636 )
Total	$	285,714	$	( 5,681 )	$	1,070,442	$	( 273,485 )	$	1,356,156	$	( 279,166 )

Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for-sale debt securities in an unrealized loss position, the Company assesses whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is reduced to fair value through income. For available-for sale debt securities that do not meet the criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses “ACL” is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. Unrealized losses at September 30, 2025 and December 31, 2024 are considered temporary and the result of fair value adjustments caused by market interest rate fluctuations. There was no allowance for credit losses for available-for-sale debt securities at September 30, 2025 or December 31, 2024.

Although management has the ability to sell these securities if the need arises, their designation as available-for-sale should not necessarily be interpreted as an indication that management anticipates such sales.

Accrued interest receivable on available-for-sale debt securities totaled $ 8,015 at September 30, 2025 and $ 8,110 at December 31, 2024. Accrued interest receivable is excluded from the estimate of credit losses.

The Company’s equity securities are listed as Other Investments on the Consolidated Balance Sheets and consist of one non-controlling investment in a single banking organization at September 30, 2025 and December 31, 2024. The original investment totaled $ 1,350 and other-than-temporary impairment was previously recorded totaling $ 997 . The Company’s equity securities are considered not to have readily determinable fair value and are carried at cost and evaluated for impairment. At September 30, 2025, there was no additional impairment recognized through earnings.

NOTE 6 - Derivatives

The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. The notional amounts of these interest rate swaps and the offsetting counterparty derivative instruments were $ 138,785 at September 30, 2025 and $ 149,456 at December 31, 2024. These interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 6 - Derivatives (continued)

exposure resulting from such transactions with approved, reputable, independent counterparties with substantially matching terms. The agreements are considered stand-alone derivatives and changes in the fair value of derivatives are reported in earnings as non-interest income. While the derivatives represent economic hedges, they do not qualify as hedges for accounting purposes.

Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Company’s exposure is limited to the replacement value of the contracts rather than the notional, principal or contract amounts. There are provisions in the agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed thresholds are collateralized. In addition, the Company minimizes credit risk through credit approvals, limits, and monitoring procedures.

The following table reflects the fair value of derivative instruments included in the Consolidated Balance Sheets as of:


	September 30, 2025				December 31, 2024
	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in Other Assets:
Interest Rate Swaps	$	138,785	$	4,780	$	149,456	$	6,439

Included in Other Liabilities:
Interest Rate Swaps	$	138,785	$	4,872	$	149,456	$	6,476

The following table presents the effect of derivative instruments on the Consolidated Statements of Income for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Interest Rate Swaps:
Included in Other Operating Income	$	132	$	( 69 )	$	221	$	168

NOTE 7 – Loans

Loans were comprised of the following classifications:


	September 30, 2025		December 31, 2024
Commercial:
Commercial and Industrial Loans	$	730,134	$	591,785
Commercial Real Estate Loans	3,103,181		2,224,872
Agricultural Loans	472,807		431,037
Leases	85,088		79,253
Retail:
Home Equity Loans	456,839		344,808
Consumer Loans	119,642		81,396
Credit Cards	27,261		22,668
Residential Mortgage Loans	792,670		357,448

Subtotal	5,787,622		4,133,267
Less: Unearned Income	( 9,117 )		( 8,365 )
Allowance for Credit Losses	( 76,057 )		( 44,436 )
Loans, Net	$	5,702,448	$	4,080,466

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)

The table above includes $ 99,067 and $ 11,178 of purchase credit deteriorated loans as of September 30, 2025 and December 31, 2024, respectively.

As further described in Note 16, during 2025 the Company acquired loans at fair value as part of a business combination. The table below summarizes the loans acquired on February 1, 2025.


	Acquired Loan Balance		Fair Value Discount		Fair Value
Bank Acquisition	$	1,569,036	$	( 65,658 )	$	1,503,378

The table below summarizes the remaining carrying amount of acquired loans included in the September 30, 2025 table above.


	Commercial and Industrial Loans		Commercial Real Estate Loans		Agricultural Loans		Leases		Consumer Loans		Home Equity Loans		Credit Cards		Residential Mortgage Loans		Total
Loan Balance	$	127,504	$	760,358	$	43,596	$	—	$	27,187	$	57,919	$	—	$	415,709	$	1,432,273
Fair Value (Discount)/Premium	( 3,061 )		( 16,134 )		( 640 )		—		( 222 )		( 959 )		—		( 33,713 )		( 54,729 )

The Company has purchased loans for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of these loans is as follows:


	2025
Purchase Price of Loans at Acquisition	$	107,285
Allowance for Credit Losses at Acquisition	16,503
Non-Credit Discount/(Premium) at Acquisition	5,554
Total	$	129,342

Allowance for Credit Losses for Loans

The following tables present the activity in the allowance for credit losses by portfolio segment for the three months ended September 30, 2025 and 2024:


September 30, 2025	Commercial and Industrial Loans		Commercial Real Estate Loans		Agricultural Loans		Leases		Consumer Loans		Home Equity Loans		Credit Cards		Residential Mortgage Loans		Total
Allowance for Credit Losses:
Beginning Balance	$	17,739	$	38,803	$	3,130	$	1,192	$	691	$	4,334	$	621	$	9,595	$	76,105
Provision (Benefit) for Credit Loss Expense	272		329		98		( 16 )		303		46		26		( 358 )		700
Loans Charged-off	( 384 )		—		—		—		( 446 )		( 71 )		( 182 )		( 43 )		( 1,126 )
Recoveries Collected	6		—		—		—		138		5		208		21		378
Total Ending Allowance Balance	$	17,633	$	39,132	$	3,228	$	1,176	$	686	$	4,314	$	673	$	9,215	$	76,057


September 30, 2024	Commercial and Industrial Loans		Commercial Real Estate Loans		Agricultural Loans		Leases		Consumer Loans		Home Equity Loans		Credit Cards		Residential Mortgage Loans		Total
Allowance for Credit Losses:
Beginning Balance	$	7,200	$	26,598	$	3,697	$	368	$	722	$	2,058	$	413	$	2,890	$	43,946
Provision (Benefit) for Credit Loss Expense	( 137 )		54		211		28		224		72		202		( 29 )		625
Loans Charged-off	( 92 )		—		( 7 )		—		( 364 )		—		( 156 )		—		( 619 )
Recoveries Collected	3		4		—		—		158		—		7		—		172
Total Ending Allowance Balance	$	6,974	$	26,656	$	3,901	$	396	$	740	$	2,130	$	466	$	2,861	$	44,124

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)

The following tables present the activity in the allowance for credit losses by portfolio segment for the nine months ended September 30, 2025 and 2024:


September 30, 2025	Commercial and Industrial Loans		Commercial Real Estate Loans		Agricultural Loans		Leases		Consumer Loans		Home Equity Loans		Credit Cards		Residential Mortgage Loans		Total
Allowance for Credit Losses:
Beginning balance	$	7,059	$	25,818	$	4,917	$	397	$	727	$	2,196	$	520	$	2,802	$	44,436
Change in Accounting Method	1,438		( 3,271 )		( 1,655 )		720		( 284 )		1,056		( 24 )		2,013		( 7 )
2/1/2025 Acquired Heartland PCD	5,246		7,675		3,352		—		20		11		—		199		16,503
Day 2 CECL Provision - Heartland	1,797		7,522		170		—		179		570		—		5,962		16,200
Provision (Benefit) for credit loss expense	2,817		1,414		( 3,556 )		59		789		538		657		( 1,711 )		1,007
Loans charged-off	( 757 )		( 26 )		—		—		( 1,105 )		( 71 )		( 742 )		( 71 )		( 2,772 )
Recoveries collected	33		—		—		—		360		14		262		21		690
Total ending allowance balance	$	17,633	$	39,132	$	3,228	$	1,176	$	686	$	4,314	$	673	$	9,215	$	76,057


September 30, 2024	Commercial and Industrial Loans		Commercial Real Estate Loans		Agricultural Loans		Leases		Consumer Loans		Home Equity Loans		Credit Cards		Residential Mortgage Loans		Total
Allowance for Credit Losses:
Beginning balance	$	7,921	$	25,923	$	3,837	$	346	$	759	$	1,834	$	383	$	2,762	$	43,765
Provision (Benefit) for credit loss expense	( 768 )		1,028		70		50		700		421		550		99		2,150
Loans charged-off	( 223 )		( 308 )		( 8 )		—		( 1,117 )		( 134 )		( 489 )		—		( 2,279 )
Recoveries collected	44		13		2		—		398		9		22		—		488
Total ending allowance balance	$	6,974	$	26,656	$	3,901	$	396	$	740	$	2,130	$	466	$	2,861	$	44,124

The ACL is a valuation account that is deducted from the amortized cost of loans receivable to present the net amount expected to be collected. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed, and subsequent recoveries, if any, are credited to the ACL. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The Company records the changes in the allowance on loans through earnings as a “Provision for Credit Losses” in the Consolidated Statements of Income.

At March 31, 2025, the Company changed its method for estimating the allowance for credit losses to the discounted cash flow model on a prospective basis for all loan segments except for the credit card loan segment. Prior to March 31, 2025, the Company utilized the static pool methodology in determining future credit losses. While both methodologies permit the Company to develop reasonable and supportable forecasts, by utilizing the discounted cash flow method, the Company has the ability to better evaluate multiple economic scenarios by capturing macroeconomic conditions within the model assumptions and calculations. This change in methodology had an insignificant impact on the allowance in 2025.

Management’s judgment in determining the level of the allowance is based on evaluations of historical loan losses, current conditions and reasonable and supportable forecasts relevant to the collectability of loans. The methodology for estimating the amount reported in the ACL is the sum of two main components, an allowance assessed on a collective basis for pools of loans that share similar risk characteristics and an allowance assessed on individual loans that do not share similar risk characteristics with other loans. Loans that share common risk characteristics are evaluated collectively using a discounted cash flow approach. The discounted cash flow approach used by the Company utilizes loan-level cash flow projections, pool-level assumptions, multiple economic scenarios from Moody’s, historical and peer group losses and qualitative assumptions.

Estimated cash flows consider the principal and interest in accordance with the contractual term of the loan and estimated prepayments. Contractual cash flows are based on the amortized cost and are adjusted for balances guaranteed by governmental entities. Estimated cash flows also reflect calculated probabilities of default, loss given default rates, and prepayment and curtailment estimates, as well as qualitative factors. The probability of default estimates are generated using a regression model that estimates the likelihood of a loan being charged-off during its life. The regression model uses combinations of variables to assess historical loss correlations to economic factors and these variables become model forecast inputs for economic factors that are updated in the model each period. As indicated above, the Company uses an economic forecast provided by a third-party for these model inputs.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)

The Company evaluates multiple economic scenarios that are designed to capture a range of supportable macroeconomic conditions, taking into consideration the forecasted direction of the economic and business environment and its likely impact on the estimated allowance as compared to the historical losses over the reasonable and supportable time frame. Economic forecasts for the current period are uploaded to the model, which targets certain forecasted macroeconomic factors, such as unemployment rate, value of construction, agriculture prices, housing price index, vacancy rates, debt service burden, and certain rate and market indices. The Company determines the weighting of each scenario based upon historical trends and economic, monetary, and fiscal conditions within the Company’s footprint that could impact future credit losses.

Loans that do not share similar risk characteristics are evaluated on an individual basis to determine the expected allowance for credit loss. When the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date adjusted for selling costs.

The Company has continued to utilize the following portfolio segments and identified the risk characteristics of each portfolio listed below:

Commercial and Industrial Loans - The principal risk of commercial and industrial loans is that these loans are primarily based on the identified cash flow of the borrower and secondarily on the collateral underlying the loans. Most commercial loans are secured by accounts receivable, inventory and equipment. If cash flow from business operations is reduced, the borrower’s ability to repay the loan may diminish, and over time, it may also be difficult to substantiate current value of inventory and equipment. Repayment of these loans is more sensitive than other types of loans to adverse conditions in the general economy.

Commercial Real Estate Loans - Commercial real estate lending is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. Commercial real estate loans are collateralized by the borrower’s underlying real estate. Therefore, diminished cash flows not only affects the ability to repay the loan, it may also reduce the underlying collateral value.

Agricultural Loans - This portfolio is diversified between real estate financing, equipment financing and lines of credit in various segments including grain production, poultry production and livestock production. Mitigating any concentration of risk that may exist in the Company’s agricultural loan portfolio is the use of federal government guarantee programs.

Leases - Leases are primarily for equipment leased to varying types of businesses. If the cash flow from business operations is reduced, the business’s ability to repay the lease is diminished as well.

Home Equity Loans - Home equity loans are generally secured by 1-4 family residences that are owner-occupied. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by unemployment levels in the market area due to economic conditions.

Consumer Loans - Consumer loan repayment is typically dependent on the borrower remaining employed through the life of the loan as well as the borrower maintaining the underlying collateral adequately.

Credit Cards - Credit card loans are unsecured and repayment is primarily dependent on the personal income of the borrower.

Residential Mortgage Loans - Residential mortgage loans are typically secured by 1-4 family residences that are owner-occupied. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by unemployment levels in the market area due to economic conditions. Repayment may also be impacted by changes in residential property values.

All classes of loans, including loans acquired with deteriorated credit quality, are generally placed on non-accrual status when scheduled principal or interest payments are past due for 90 days or more or when the borrower’s ability to repay becomes doubtful. For purchased loans, the determination is made at the time of acquisition as well as over the life of the loan. Uncollected accrued interest for each class of loans is reversed against income at the time a loan is placed on non-accrual.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)

Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. All classes of loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans are typically charged-off at 180 days past due, or earlier if deemed uncollectible. Exceptions to the non-accrual and charge-off policies are made when the loan is well secured and in the process of collection.

The following tables present the amortized cost in non-accrual loans and loans past due over 89 days still accruing by class of loans as of September 30, 2025 and December 31, 2024:


September 30, 2025	Non-Accrual With No Allowance for Credit Loss (1)		Total Non-Accrual		Loans Past Due Over 89 Days Still Accruing

Commercial and Industrial Loans	$	1,266	$	8,789	$	—
Commercial Real Estate Loans	1,256		7,481		—
Agricultural Loans	1,073		2,393		—
Leases	—		—		—
Home Equity Loans	885		885		—
Consumer Loans	57		57		—
Credit Cards	58		58		—
Residential Mortgage Loans	3,103		4,013		—
Total	$	7,698	$	23,676	$	—

(1) Includes non-accrual loans with no allowance for credit loss and are also included in Total Non-Accrual loans of $ 23,676 .

Interest income on non-accrual loans recognized during the three and nine months ended September 30, 2025 totaled $ 226 and $ 429 , respectively.


December 31, 2024	Non-Accrual With No Allowance for Credit Loss (1)		Total Non-Accrual		Loans Past Due Over 89 Days Still Accruing

Commercial and Industrial Loans	$	1,346	$	5,018	$	—
Commercial Real Estate Loans	1,268		1,745		183
Agricultural Loans	655		765		5
Leases	—		—		—
Home Equity Loans	1,087		1,087		—
Consumer Loans	63		63		—
Credit Cards	54		54		—
Residential Mortgage Loans	1,977		2,202		—
Total	$	6,450	$	10,934	$	188

(1) Includes non-accrual loans with no allowance for credit loss and are also included in Total Non-Accrual loans of $ 10,934 .

Interest income on non-accrual loans recognized during the year ended December 31, 2024 totaled $ 291 .

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)

The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of September 30, 2025 and December 31, 2024:


September 30, 2025	Real Estate		Equipment		Accounts Receivable		Other		Total

Commercial and Industrial Loans	$	10,038	$	7,111	$	—	$	10,178	$	27,327
Commercial Real Estate Loans	36,815		502		—		—		37,317
Agricultural Loans	3,437		204		—		645		4,286
Leases	—		—		—		—		—
Home Equity Loans	424		—		—		—		424
Consumer Loans	10		10		—		—		20
Credit Cards	—		—		—		—		—
Residential Mortgage Loans	1,448		—		—		—		1,448
Total	$	52,172	$	7,827	$	—	$	10,823	$	70,822


December 31, 2024	Real Estate		Equipment		Accounts Receivable		Other		Total

Commercial and Industrial Loans	$	5,986	$	90	$	—	$	58	$	6,134
Commercial Real Estate Loans	7,293		—		—		—		7,293
Agricultural Loans	2,777		263		—		—		3,040
Leases	—		—		—		—		—
Home Equity Loans	423		—		—		—		423
Consumer Loans	10		—		—		—		10
Credit Cards	—		—		—		—		—
Residential Mortgage Loans	523		—		—		—		523
Total	$	17,012	$	353	$	—	$	58	$	17,423

The following tables present the aging of the amortized cost basis in past due loans by class of loans as of September 30, 2025 and December 31, 2024:


September 30, 2025	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Loans Not Past Due		Total
Commercial and Industrial Loans	$	451	$	200	$	7,934	$	8,585	$	721,549	$	730,134
Commercial Real Estate Loans	1,647		929		5,161		7,737		3,095,444		3,103,181
Agricultural Loans	1,019		365		1,221		2,605		470,202		472,807
Leases	—		—		—		—		85,088		85,088
Home Equity Loans	2,509		365		885		3,759		453,080		456,839
Consumer Loans	653		47		57		757		118,885		119,642
Credit Cards	271		133		58		462		26,799		27,261
Residential Mortgage Loans	7,409		2,429		3,754		13,592		779,078		792,670
Total	$	13,959	$	4,468	$	19,070	$	37,497	$	5,750,125	$	5,787,622

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)


December 31, 2024	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Loans Not Past Due		Total
Commercial and Industrial Loans	$	531	$	36	$	4,395	$	4,962	$	586,823	$	591,785
Commercial Real Estate Loans	546		673		1,368		2,587		2,222,285		2,224,872
Agricultural Loans	241		—		428		669		430,368		431,037
Leases	—		—		—		—		79,253		79,253
Home Equity Loans	1,515		544		1,087		3,146		341,662		344,808
Consumer Loans	185		194		63		442		80,954		81,396
Credit Cards	398		98		54		550		22,118		22,668
Residential Mortgage Loans	5,744		3,644		2,035		11,423		346,025		357,448
Total	$	9,160	$	5,189	$	9,430	$	23,779	$	4,109,488	$	4,133,267

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Company prospectively adopted ASU 2022-02, which eliminated the accounting for troubled debt restructurings while establishing a new standard for the treatment of modifications made to borrowers experiencing financial difficulties. As such, effective with the adoption of the new standard, the Company will not include, prospectively, financial difficulty modifications in its presentation of nonperforming loans, nonperforming assets or classified assets. Prior period data, which included troubled debt restructurings, has not been adjusted.

The Company’s loan modifications for borrowers experiencing financial difficulties will typically include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. No modifications during the three or nine months ended September 30, 2025, or the year ended December 31, 2024, resulted in a permanent reduction of the recorded investment in the loan.

During the three and nine months ended September 30, 2025 and 2024, the Company had no modified loans made to borrowers experiencing financial difficulty. There were no modified loans that had a payment default during the three and nine months ended September 30, 2025 and 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. The Company considers a loan to be in payment default once it is 30 days contractually past due under the modified terms.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company classifies loans as to credit risk by individually analyzing loans. This analysis includes commercial and industrial loans, commercial real estate loans, and agricultural loans with an outstanding balance greater than $ 250 . This analysis is typically performed on at least an annual basis. The Company uses the following definitions for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

Based on the analysis performed at September 30, 2025 and December 31, 2024, the risk category of loans by class of loans is as follows:


	Term Loans Amortized Cost Basis by Origination Year
As of September 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and Industrial:
Risk Rating
Pass	$	96,905	$	111,892	$	69,327	$	84,451	$	57,193	$	50,489	$	212,548	$	682,805
Special Mention	1,349		980		2,136		1,292		649		2,582		7,258		16,246
Substandard	100		864		3,112		5,665		4,536		9,880		6,926		31,083
Doubtful	—		—		—		—		—		—		—		—
Total Commercial & Industrial Loans	$	98,354	$	113,736	$	74,575	$	91,408	$	62,378	$	62,951	$	226,732	$	730,134

Current Period Gross Charge-Offs	$	—	$	306	$	—	$	138	$	—	$	77	$	236	$	757

Commercial Real Estate:
Risk Rating
Pass	$	306,962	$	428,190	$	395,842	$	534,455	$	451,968	$	804,623	$	60,613	$	2,982,653
Special Mention	401		2,835		16,711		5,681		15,304		39,417		—		80,349
Substandard	74		—		693		3,165		6,820		29,295		132		40,179
Doubtful	—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	307,437	$	431,025	$	413,246	$	543,301	$	474,092	$	873,335	$	60,745	$	3,103,181

Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	26	$	—	$	26

Agricultural:
Risk Rating
Pass	$	39,779	$	37,640	$	34,027	$	47,469	$	30,116	$	132,789	$	106,705	$	428,525
Special Mention	3,122		2,433		2,936		2,097		3,169		11,800		11,300		36,857
Substandard	—		369		843		64		100		4,997		1,052		7,425
Doubtful	—		—		—		—		—		—		—		—
Total Agricultural Loans	$	42,901	$	40,442	$	37,806	$	49,630	$	33,385	$	149,586	$	119,057	$	472,807

Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Leases:
Risk Rating
Pass	$	24,923	$	26,462	$	21,492	$	5,132	$	3,029	$	4,050	$	—	$	85,088
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total Leases	$	24,923	$	26,462	$	21,492	$	5,132	$	3,029	$	4,050	$	—	$	85,088

Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)


	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and Industrial:
Risk Rating
Pass	$	118,037	$	86,412	$	93,406	$	64,298	$	17,140	$	49,181	$	143,096	$	571,570
Special Mention	147		1,709		787		1,061		1,202		2,044		1,023		7,973
Substandard	108		627		181		3,164		908		3,619		3,635		12,242
Doubtful	—		—		—		—		—		—		—		—
Total Commercial & Industrial Loans	$	118,292	$	88,748	$	94,374	$	68,523	$	19,250	$	54,844	$	147,754	$	591,785

Current Period Gross Charge-Offs	$	—	$	4	$	96	$	64	$	—	$	13	$	46	$	223

Commercial Real Estate:
Risk Rating
Pass	$	327,488	$	315,981	$	410,135	$	394,698	$	187,849	$	502,263	$	39,271	$	2,177,685
Special Mention	433		13,433		1,740		5,395		1,975		12,349		200		35,525
Substandard	—		181		566		5,155		—		5,760		—		11,662
Doubtful	—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	327,921	$	329,595	$	412,441	$	405,248	$	189,824	$	520,372	$	39,471	$	2,224,872

Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	308	$	—	$	308

Agricultural:
Risk Rating
Pass	$	47,179	$	35,379	$	48,105	$	33,666	$	35,726	$	103,702	$	102,251	$	406,008
Special Mention	547		1,426		146		822		5,075		10,676		2,065		20,757
Substandard	175		—		—		—		—		4,097		—		4,272
Doubtful	—		—		—		—		—		—		—		—
Total Agricultural Loans	$	47,901	$	36,805	$	48,251	$	34,488	$	40,801	$	118,475	$	104,316	$	431,037

Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	8	$	—	$	8

Leases:
Risk Rating
Pass	$	32,214	$	26,392	$	8,272	$	6,578	$	2,128	$	3,669	$	—	$	79,253
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total Leases	$	32,214	$	26,392	$	8,272	$	6,578	$	2,128	$	3,669	$	—	$	79,253

Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following tables present the amortized cost in residential, home equity and consumer loans based on payment activity.


	Term Loans Amortized Cost Basis by Origination Year
As of September 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer:
Payment performance
Performing	$	43,566	$	41,669	$	15,304	$	5,905	$	4,060	$	2,902	$	6,179	$	119,585
Nonperforming	1		12		—		44		—		—		—		57
Total Consumer Loans	$	43,567	$	41,681	$	15,304	$	5,949	$	4,060	$	2,902	$	6,179	$	119,642

Current Period Gross Charge-Offs	$	960	$	32	$	65	$	30	$	15	$	3	$	—	$	1,105

Home Equity:
Payment performance
Performing	$	360	$	1,004	$	1,503	$	4,161	$	1,113	$	4,625	$	443,188	$	455,954
Nonperforming	—		58		128		294		225		155		25		885
Total Home Equity Loans	$	360	$	1,062	$	1,631	$	4,455	$	1,338	$	4,780	$	443,213	$	456,839

Current Period Gross Charge-Offs	$	—	$	—	$	—	$	68	$	—	$	3	$	—	$	71

Residential Mortgage:
Payment performance
Performing	$	69,752	$	86,995	$	102,557	$	194,918	$	146,897	$	187,538	$	—	$	788,657
Nonperforming	—		220		1,190		228		845		1,530		—		4,013
Total Residential Mortgage Loans	$	69,752	$	87,215	$	103,747	$	195,146	$	147,742	$	189,068	$	—	$	792,670

Current Period Gross Charge-Offs	$	—	$	—	$	39	$	—	$	32	$	—	$	—	$	71

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Loans (continued)


	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer:
Payment performance
Performing	$	40,504	$	20,828	$	9,359	$	5,469	$	1,181	$	1,542	$	2,450	$	81,333
Nonperforming	26		1		13		15		—		8		—		63
Total Consumer Loans	$	40,530	$	20,829	$	9,372	$	5,484	$	1,181	$	1,550	$	2,450	$	81,396

Current Period Gross Charge-Offs	$	1,212	$	181	$	72	$	40	$	—	$	2	$	4	$	1,511

Home Equity:
Payment performance
Performing	$	172	$	161	$	3,721	$	773	$	478	$	3,532	$	334,884	$	343,721
Nonperforming	—		128		277		24		25		604		29		1,087
Total Home Equity Loans	$	172	$	289	$	3,998	$	797	$	503	$	4,136	$	334,913	$	344,808

Current Period Gross Charge-Offs	$	—	$	—	$	62	$	99	$	—	$	—	$	9	$	170

Residential Mortgage:
Payment performance
Performing	$	48,957	$	51,059	$	57,988	$	73,239	$	35,370	$	88,633	$	—	$	355,246
Nonperforming	—		214		229		669		234		856		—		2,202
Total Residential Mortgage Loans	$	48,957	$	51,273	$	58,217	$	73,908	$	35,604	$	89,489	$	—	$	357,448

Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

The Company considers the performance of the loan portfolio and its impact on the allowance for credit loan losses. For certain retail loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in credit cards based on payment activity:


Credit Cards	September 30, 2025		December 31, 2024

Performing	$	27,203	$	22,614
Nonperforming	58		54

Total	$	27,261	$	22,668

The following tables present loans purchased and/or sold during the year by portfolio segment and excludes the business combination activity:


September 30, 2025	Commercial and Industrial Loans		Commercial Real Estate Loans		Agricultural Loans		Leases		Consumer Loans		Home Equity Loans		Credit Cards		Residential Mortgage Loans		Total

Purchases	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Sales	—		—		2,391		—		—		—		—		—		2,391

December 31, 2024

Commercial and Industrial Loans

Commercial Real Estate Loans

Agricultural Loans

Leases

Consumer Loans

Home Equity Loans

Credit Cards

Residential Mortgage Loans

Total

Purchases

—

Sales

—

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 8 – Repurchase Agreements Accounted for as Secured Borrowings

Repurchase agreements are short-term borrowings included in FHLB Advances and Other Borrowings and mature overnight and continuously. Repurchase agreements, which were secured by mortgage-backed securities, totaled $ 32,534 and $ 56,862 as of September 30, 2025 and December 31, 2024, respectively. Risk could arise when the collateral pledged to a repurchase agreement declines in fair value. The Company minimizes risk by consistently monitoring the value of the collateral pledged. At the point in time where the collateral has declined in fair value, the Company is required to provide additional collateral based on the value of the underlying securities.

NOTE 9 – Segment Information

For the first five months of 2024, the Company’s operations included three primary segments: core banking, wealth management services, and insurance operations. On June 1, 2024, the Company sold substantially all of the assets of its insurance operations to Hilb Group, and ceased insurance-related activities for the Company. As a result of the sale, insurance revenue and expenses reported within the accompanying financial statements reflect no GAI activity for the first nine months of 2025. See Note 3 for additional information on this sale.

The core banking segment involves attracting deposits from the general public and using such funds to originate consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, primarily in the Company’s local markets by the Company’s banking subsidiary, German American Bank. Net interest income from loans and investments funded by deposits and borrowings is the primary revenue for the core-banking segment. The core banking segment also involves the sale of residential mortgage loans in the secondary market. The wealth management segment’s revenues are comprised primarily of fees generated by the wealth advisory and trust operations of the Company’s banking subsidiary and by German American Investment Services, Inc. These fees are derived by providing trust, investment advisory, brokerage and retirement planning services to its customers. The insurance segment offered a full range of personal and corporate property and casualty insurance products, primarily in the Company’s banking subsidiary’s local markets. Commissions derived from the sale of insurance products by GAI were the primary source of revenue for the insurance segment.

The following segment financial information was derived from the internal financial statements of the Company which are used by management to monitor and manage financial performance. The accounting policies of the three segments are the same as those of the Company. The evaluation process for segments does not include holding company income and expense. Holding company amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the column labeled “Other” below, along with amounts to eliminate transactions between segments.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 9 - Segment Information (continued)


	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Three Months Ended September 30, 2025
Interest and Fees on Loans	$	93,305	$	—	$	—	$	—	$	93,305
Interest on Securities and Other Short-term Investments	14,675		95		—		124		14,894
Net Gains on Sales of Loans	1,189		—		—		—		1,189
Wealth Management Fees	1		4,287		—		—		4,288
Insurance Revenues	—		—		—		—		—

Reconciliation of Revenue:
Other Revenues									12,952
Elimination of Intercompany Revenues									( 102 )
Total Consolidated Revenue									126,526

Less:
Interest on Deposits	29,518		—		—		—		29,518
Interest on FHLB Advances and Other Borrowings	944		—		—		2,012		2,956
Provision for Credit Losses	700		—		—		—		700
Salaries and Employee Benefits	23,367		1,915		—		162		25,444

Reconciliation of Income before Income Taxes:
Other Non-interest Expense									24,256
Elimination of Intersegment Expenses									( 102 )
Income before Income Taxes									43,754

Other Segment Disclosures: (1)
Segment Profit (Loss) Before Taxes	43,421		1,829		—		( 1,496 )		43,754
Segment Assets at September 30, 2025	8,374,812		17,186		—		9,250		8,401,248

(1) In the Other Segment Disclosures section, the column labeled “Other” includes holding company amounts and eliminating transactions between segments.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 9 - Segment Information (continued)


	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Three Months Ended September 30, 2024
Interest and Fees on Loans	$	61,140	$	—	$	—	$	—	$	61,140
Interest on Securities and Other Short-term Investments	13,448		43		—		135		13,626
Net Gains on Sales of Loans	704		—		—		—		704
Wealth Management Fees	1		3,579		—		—		3,580
Insurance Revenues	—		—		—		—		—

Reconciliation of Revenue:
Other Revenues									9,517
Elimination of Intercompany Revenues									( 113 )
Total Consolidated Revenue									88,454

Less:
Interest on Deposits	23,488		—		—		—		23,488
Interest on FHLB Advances and Other Borrowings	905		—		—		1,779		2,684
Provision for Credit Losses	625		—		—		—		625
Salaries and Employee Benefits	17,901		1,815		—		2		19,718

Reconciliation of Income before Income Taxes:
Other Non-interest Expense									16,408
Elimination of Intersegment Expenses									( 113 )
Income before Income Taxes									25,644

Other Segment Disclosures: (1)
Segment Profit (Loss) Before Taxes	27,467		1,321		—		( 3,144 )		25,644
Segment Assets at December 31, 2024	6,340,396		13,544		—		( 58,030 )		6,295,910

(1) In the Other Segment Disclosures section, the column labeled “Other” includes holding company amounts and eliminating transactions between segments.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 9 - Segment Information (continued)


	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Nine Months Ended September 30, 2025
Interest and Fees on Loans	$	264,812	$	—	$	—	$	—	$	264,812
Interest on Securities and Other Short-term Investments	45,624		246		—		376		46,246
Net Gains on Sales of Loans	3,401		—		—		—		3,401
Wealth Management Fees	3		12,286		—		—		12,289
Insurance Revenues	—		—		—		—		—

Reconciliation of Revenue:
Other Revenues									34,312
Elimination of Intercompany Revenues									( 310 )
Total Consolidated Revenue									360,750

Less:
Interest on Deposits	87,389		—		—		—		87,389
Interest on FHLB Advances and Other Borrowings	2,689		—		—		5,528		8,217
Provision for Credit Losses	17,200		—		—		—		17,200
Salaries and Employee Benefits	73,517		5,760		—		845		80,122

Reconciliation of Income before Income Taxes:
Other Non-interest Expense									71,877
Elimination of Intersegment Expenses									( 310 )
Income before Income Taxes									96,255

Other Segment Disclosures: (1)
Segment Profit (Loss) Before Taxes	100,639		4,739		—		( 9,123 )		96,255
Segment Assets at September 30, 2025	8,374,812		17,186		—		9,250		8,401,248

(1) In the Other Segment Disclosures section, the column labeled “Other” includes holding company amounts and eliminating transactions between segments.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 9 - Segment Information (continued)


Nine Months Ended September 30, 2024	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals

Interest and Fees on Loans	$	178,196	$	—	$	—	$	—	$	178,196
Interest on Securities and Other Short-term Investments	36,113		109		1		393		36,616
Net Gains on Sales of Loans	2,424		—		—		—		2,424
Wealth Management Fees	4		10,725		—		—		10,729
Insurance Revenues	—		1		4,383		—		4,384

Reconciliation of Revenue:
Other Revenues									31,009
Elimination of Intercompany Revenues									( 324 )
Total Consolidated Revenue									263,034

Less:
Interest on Deposits	68,073		—		—		—		68,073
Interest on FHLB Advances and Other Borrowings	2,654		—		—		4,526		7,180
Provision for Credit Losses	2,150		—		—		—		2,150
Salaries and Employee Benefits	53,472		5,225		3,151		5		61,853

Reconciliation of Income before Income Taxes:
Other Non-interest Expense									48,685
Elimination of Intersegment Expenses									( 324 )
Income before Income Taxes									75,417

Other Segment Disclosures: (1)
Segment Profit (Loss) Before Taxes	40,638		3,959		37,434		( 6,614 )		75,417
Segment Assets at December 31, 2024	6,340,396		13,544		—		( 58,030 )		6,295,910

(1) In the Other Segment Disclosures section, the column labeled “Other” includes holding company amounts and eliminating transactions between segments.

NOTE 10 – Stock Repurchase Plan

On January 31, 2022, the Company’s Board of Directors approved a plan to repurchase up to 1,000,000 shares of the Company’s outstanding common stock. On a share basis, the amount of common stock subject to the repurchase plan represented approximately 3 % of the Company’s outstanding shares at the time it was approved. The Company is not obligated to purchase shares under the plan, and the plan may be discontinued at any time. The actual timing, number and share price of shares purchased under the repurchase plan will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market and economic conditions and applicable legal requirements. The Company has no t repurchased any shares under this repurchase plan.

In August 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted. Among other things, the IRA imposes a new 1% excise tax on the fair value of stock repurchased after December 31, 2022 by publicly traded U.S. corporations, like the Company. With certain exceptions, the value of stock repurchased is determined net of stock issued in the year, including shares issued pursuant to compensatory arrangements.

NOTE 11 – Equity Plans and Equity Based Compensation

During the periods presented, the Company maintained one equity incentive plan under which stock options, restricted stock, and other equity incentive awards could be granted. The Company’s 2019 LTI Plan (the “2019 LTI Plan”), which authorizes a maximum aggregate issuance of 1,000,000 shares of common stock (subject to certain permitted adjustments), became effective on May 16, 2019, following approval of the Company’s shareholders. It will remain in effect until May 16, 2029, or until all shares of common stock subject to the 2019 LTI Plan are distributed, all awards have expired or terminated, or the plan is terminated pursuant to its terms, whichever occurs first.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 11 - Equity Plans and Equity Based Compensation (continued)

For the three and nine months ended September 30, 2025 and 2024, the Company granted no options. The Company recorded no stock compensation expense applicable to options during the three and nine months ended September 30, 2025 and 2024. In addition, there was no unrecognized option expense.

During the periods presented, awards of long-term incentives were granted in the form of restricted stock. Awards granted under the management incentive plan were granted in tandem with cash credit entitlements in the form of 66.67 % restricted stock grants and 33.33 % cash credit entitlements. The cash portion of an award vests towards the end of the year in which the grant was made, followed by the restricted stock grants vesting 50 % in each of the 2nd and 3rd years. For named executive officers, awards are granted in the form of 100 % restricted stock grants which vest in one-third installments on the first, second and third anniversaries of the award date. Awards that are granted to directors as additional retainers for their services do not include any cash credit entitlement. These director restricted stock grants are subject to forfeiture in the event that the recipient of the grant does not continue in service as a director of the Company through the end of the one-year compensation period or does not satisfy certain meeting attendance requirements, at which time they generally vest 100 %. For measuring compensation costs, restricted stock awards are valued based upon the market value of the common shares on the date of grant. During the three and nine months ended September 30, 2025, the Company granted 1,084 and 88,028 shares of restricted stock, respectively. During the three and nine months ended September 30, 2024, the Company granted 218 and 102,324 shares of restricted stock, respectively. Total unvested shares of restricted stock at September 30, 2025 and December 31, 2024 were 186,982 and 134,553 , respectively.

The following tables present expense recorded for restricted stock and cash entitlements as well as the related tax information for the periods presented:


	Three Months Ended September 30,
	2025		2024

Restricted Stock Expense	$	788	$	828
Cash Entitlement Expense	176		193
Tax Effect	( 250 )		( 265 )
Net of Tax	$	714	$	756


	Nine Months Ended September 30,
	2025		2024

Restricted Stock Expense	$	2,458	$	2,508
Cash Entitlement Expense	516		584
Tax Effect	( 771 )		( 802 )
Net of Tax	$	2,203	$	2,290

Unrecognized expense associated with the restricted stock grants and cash entitlements totaled $ 4,650 and $ 4,591 as of September 30, 2025 and 2024, respectively.

The Company’s shareholders approved the Company’s 2019 Employee Stock Purchase Plan on May 16, 2019, as well as an Amended and Restated 2019 Employee Stock Purchase Plan on May 21, 2020, which was amended and restated to reflect certain clarifying changes (the “2019 ESPP”). The 2019 ESPP provides for a series of 3-month offering periods, commencing on the first day and ending on the last trading day of each calendar quarter, for the purchase of the Company’s common stock by participating employees. The purchase price of the shares has been set at 95 % of the fair value of the Company’s common stock on the last trading day of the offering period. A total of 750,000 common shares has been reserved for issuance under the 2019 ESPP. The 2019 ESPP will continue until September 30, 2029, or, if earlier, until all of the shares of common stock allocated to the 2019 ESPP have been purchased. Funding for the purchase of common stock is from employee and Company contributions.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 11 - Equity Plans and Equity Based Compensation (continued)

For the three and nine months ended September 30, 2025, the Company recorded $ 11 and $ 27 , respectively, of expense related to the 2019 ESPP resulting in $ 8 and $ 20 net of tax, respectively. For the three and nine months ended September 30, 2024, the Company recorded $ 4 and $ 16 , respectively, of expense related to the 2019 ESPP resulting in $ 3 and $ 12 , net of tax, respectively. There was no unrecognized compensation expense as of September 30, 2025 and 2024 for the 2019 ESPP. No stock options were outstanding as of September 30, 2025 and December 31, 2024.

NOTE 12 – Fair Value

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Investment Securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For investment securities where quoted prices are not available, fair values are calculated based on market prices of similar investment securities (Level 2). For investment securities where quoted prices or market prices of similar investment securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Level 3 pricing is obtained from a third-party based upon similar trades that are not traded frequently without adjustment by the Company. At September 30, 2025, the Company held no Level 3 securities. Absent the credit rating, significant assumptions must be made such that the credit risk input becomes an unobservable input and thus these investment securities are reported by the Company in a Level 3 classification.

Derivatives: The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2).

Collateral Dependent Loans: Fair values for collateral dependent loans are generally based on appraisals obtained from licensed real estate appraisers and in certain circumstances includes consideration of offers obtained to purchase properties prior to foreclosure. Appraisals for commercial real estate generally use three methods to derive value: cost, sales or market comparison and income approach. The cost method bases value in the cost to replace the current property. Value of market comparison approach evaluates the sales price of similar properties in the same market area. The income approach considers net operating income generated by the property and an investor’s required return. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Comparable sales adjustments are based on known sales prices of similar type and similar use properties and duration of time that the property has been on the market to sell. Such adjustments made in the appraisal process are typically significant and result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Company’s Risk Management Area reviews the assumptions and approaches utilized in the appraisal. In determining the value of collateral dependent loans and other real estate owned, significant unobservable inputs may be used which include: physical condition of comparable properties sold, net operating income generated by the property and investor rates of return.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 12 - Fair Value (continued)

Other Real Estate: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property utilizing similar techniques as discussed above for Individually Analyzed Loans, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, impairment loss is recognized.

Loans Held-for-Sale: The fair values of loans held for sale are determined by using quoted prices for similar assets, adjusted for specific attributes of that loan resulting in a Level 2 classification.

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Company has elected the fair value option, are summarized below:


	Fair Value Measurements at September 30, 2025 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
U.S. Treasury	$	144,175	$	—	$	—	$	144,175
Obligations of State and Political Subdivisions	—		484,011		—		484,011
MBS/CMO	—		706,977		—		706,977
US Gov’t Sponsored Entities & Agencies	—		282,854		—		282,854
Total Securities	$	144,175	$	1,473,842	$	—	$	1,618,017

Loans Held-for-Sale	$	—	$	10,058	$	—	$	10,058

Derivative Assets	$	—	$	4,780	$	—	$	4,780

Derivative Liabilities	$	—	$	4,872	$	—	$	4,872


	Fair Value Measurements at December 31, 2024 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
U.S. Treasury	$	110,864	$	—	$	—	$	110,864
Obligations of State and Political Subdivisions	—		463,169		—		463,169
MBS/CMO	—		702,179		—		702,179
US Gov’t Sponsored Entities & Agencies	—		241,075		—		241,075
Total Securities	$	110,864	$	1,406,423	$	—	$	1,517,287

Loans Held-for-Sale	$	—	$	8,239	$	—	$	8,239

Derivative Assets	$	—	$	6,439	$	—	$	6,439

Derivative Liabilities	$	—	$	6,476	$	—	$	6,476

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 12 - Fair Value (continued)

As of September 30, 2025 and December 31, 2024, the aggregate fair value, contractual balance (including accrued interest), and gain or loss on Loans Held-for-Sale was as follows:


	September 30, 2025		December 31, 2024

Aggregate Fair Value	$	10,058	$	8,239
Contractual Balance	9,955		8,111
Gain (Loss)	103		128

The total amount of gains and losses from changes in fair value included in earnings for the three and nine months ended September 30, 2025 for loans held for sale were $( 117 ) and $( 25 ), respectively. The total amount of gains and losses from changes in fair value included in earnings for the three and nine months ended September 30, 2024 for loans held for sale were $( 126 ) and $ 84 , respectively.

The tables below present a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2025 and 2024:


	Obligations of State and Political Subdivisions				MBS/CMO
	2025		2024		2025		2024

Balance of Recurring Level 3 Assets at July 1	$	—	$	76	$	—	$	1,009
Total Gains (Losses) Included in Other Comprehensive Income	—		1		—		21
Maturities / Calls	—		—		—		—
Acquired through Bank Acquisition	—		—		—		—
Balance of Recurring Level 3 Assets at September 30	$	—	$	77	$	—	$	1,030


	Obligations of State and Political Subdivisions				MBS/CMO
	2025		2024		2025		2024

Balance of Recurring Level 3 Assets at January 1	$	—	$	75	$	—	$	984
Total Gains (Losses) Included in Other Comprehensive Income	—		2		—		46
Maturities / Calls	—		—		—		—
Acquired through Bank Acquisition	—		—		—		—
Balance of Recurring Level 3 Assets at September 30	$	—	$	77	$	—	$	1,030

Of the total gain (loss) included in earnings for the three months ended September 30, 2025 and 2024, $ 0 and $ 22 was attributable to other changes in fair value, respectively. Of the total gain (loss) included in earnings for the nine months ended September 30, 2025 and 2024, $ 0 and $ 48 was attributable to other changes in fair value, respectively.

Assets and Liabilities Measured on a Non-Recurring Basis

Assets and liabilities measured at fair value on a non-recurring basis are summarized below:


	Fair Value Measurements at September 30, 2025 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Collateral Dependent Loans
Commercial and Industrial Loans	$	—	$	—	$	17,038	$	17,038
Commercial Real Estate Loans	$	—	$	—	$	25,278	$	25,278
Agricultural Loans	$	—	$	—	$	2,657	$	2,657
Consumer Loans	$	—	$	—	$	3	$	3
Home Equity Loans	$	—	$	—	$	329	$	329
Residential Mortgage Loans	$	—	$	—	$	1,071	$	1,071

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 12 - Fair Value (continued)


	Fair Value Measurements at December 31, 2024 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Collateral Dependent Loans
Commercial and Industrial Loans	$	—	$	—	$	3,695	$	3,695
Commercial Real Estate Loans	$	—	$	—	$	1,402	$	1,402
Agricultural Loans	$	—	$	—	$	1,910	$	1,910
Consumer Loans	$	—	$	—	$	10	$	10
Home Equity Loans	$	—	$	—	$	328	$	328
Residential Mortgage Loans	$	—	$	—	$	303	$	303

The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2025 and December 31, 2024:


September 30, 2025	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)

Collateral Dependent Loans - Commercial and Industrial Loans	$	17,038	Sales comparison approach	Adjustment for physical condition of comparable properties sold	4 %- 100 % ( 65 %)
Collateral Dependent Loans - Commercial Real Estate Loans	$	25,278	Sales comparison approach	Adjustment for physical condition of comparable properties sold	10 %- 85 % ( 73 %)
Collateral Dependent Loans - Agricultural Loans	$	2,657	Sales comparison approach	Adjustment for physical condition of comparable properties sold	28 %- 100 % ( 41 %)
Collateral Dependent Loans - Consumer Loans	$	3	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20 %- 20 % ( 20 %)
Collateral Dependent Loans - Home Equity Loans	$	329	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20 %- 20 % ( 20 %)
Collateral Dependent Loans - Residential Mortgage Loans	$	1,071	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20 %- 20 % ( 20 %)

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 12 - Fair Value (continued)


December 31, 2024	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)

Collateral Dependent Loans - Commercial and Industrial Loans	$	3,695	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30 %- 88 % ( 53 %)
Collateral Dependent Loans - Commercial Real Estate Loans	$	1,402	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30 %- 68 % ( 46 %)
Collateral Dependent Loans - Agricultural Loans	$	1,910	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30 %- 100 % ( 57 %)
Collateral Dependent Loans - Consumer Loans	$	10	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20 %- 20 % ( 20 %)
Collateral Dependent Loans - Home Equity Loans	$	328	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20 %- 20 % ( 20 %)
Collateral Dependent Loans - Residential Mortgage Loans	$	303	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20 %- 20 % ( 20 %)

The carrying amounts and estimated fair values of the Company’s financial instruments not previously presented are provided in the tables below for the periods ended September 30, 2025 and December 31, 2024. Not all of the Company’s assets and liabilities are considered financial instruments, and therefore are not included in the tables. Because no active market exists for a significant portion of the Company’s financial instruments, fair value estimates were based on subjective judgments, and therefore cannot be determined with precision.


			Fair Value Measurements at September 30, 2025 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and Short-term Investments	$	255,648	$	112,718	$	142,930	$	—	$	255,648
Interest Bearing Time Deposits with Banks	500		—		500		—		500
Loans, Net	5,656,072		—		—		5,593,129		5,593,129
Accrued Interest Receivable	37,048		—		8,477		28,571		37,048
Financial Liabilities:
Demand, Savings, and Money Market Deposits	( 5,652,713 )		( 5,652,713 )		—		—		( 5,652,713 )
Time Deposits	( 1,361,789 )		—		( 1,355,826 )		—		( 1,355,826 )
Short-term Borrowings	( 32,534 )		—		( 32,534 )		—		( 32,534 )
Long-term Debt	( 178,482 )		—		( 103,014 )		( 77,510 )		( 180,524 )
Accrued Interest Payable	( 10,883 )		—		( 10,550 )		( 333 )		( 10,883 )

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 12 - Fair Value (continued)


			Fair Value Measurements at December 31, 2024 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and Short-term Investments	$	188,792	$	69,249	$	119,543	$	—	$	188,792
Interest Bearing Time Deposits with Banks	500		—		500		—		500
Loans, Net	4,072,818		—		—		3,993,595		3,993,595
Accrued Interest Receivable	31,280		—		8,499		22,781		31,280
Financial Liabilities:
Demand, Savings, and Money Market Deposits	( 4,412,474 )		( 4,412,474 )		—		—		( 4,412,474 )
Time Deposits	( 916,601 )		—		( 911,059 )		—		( 911,059 )
Short-term Borrowings	( 56,862 )		—		( 56,862 )		—		( 56,862 )
Long-term Debt	( 153,269 )		—		( 77,591 )		( 75,210 )		( 152,801 )
Accrued Interest Payable	( 8,468 )		—		( 8,116 )		( 352 )		( 8,468 )

NOTE 13 - Other Comprehensive Income (Loss)

The tables below summarize the changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2025 and 2024, net of tax:


September 30, 2025	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total

Beginning Balance at July 1, 2025	$	( 207,046 )	$	( 514 )	$	( 207,560 )
Other Comprehensive Income (Loss) Before Reclassification	25,180		—		25,180
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	—		—		—
Net Current Period Other Comprehensive Income (Loss)	25,180		—		25,180
Ending Balance at September 30, 2025	$	( 181,866 )	$	( 514 )	$	( 182,380 )


September 30, 2025	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total

Beginning Balance at January 1, 2025	$	( 219,950 )	$	( 514 )	$	( 220,464 )
Other Comprehensive Income (Loss) Before Reclassification	38,084		—		38,084
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	—		—		—
Net Current Period Other Comprehensive Income (Loss)	38,084		—		38,084
Ending Balance at September 30, 2025	$	( 181,866 )	$	( 514 )	$	( 182,380 )

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 13 - Other Comprehensive Income (Loss) (continued)


September 30, 2024	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total

Beginning Balance at July 1, 2024	$	( 217,355 )	$	( 514 )	$	( 217,869 )
Other Comprehensive Income (Loss) Before Reclassification	42,775		—		42,775
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	55		—		55
Net Current Period Other Comprehensive Income (Loss)	42,830		—		42,830
Ending Balance at September 30, 2024	$	( 174,525 )	$	( 514 )	$	( 175,039 )


September 30, 2024	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total

Beginning Balance at January 1, 2024	$	( 216,546 )	$	( 514 )	$	( 217,060 )
Other Comprehensive Income (Loss) Before Reclassification	14,914		—		14,914
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	27,107		—		27,107
Net Current Period Other Comprehensive Income (Loss)	42,021		—		42,021
Ending Balance at September 30, 2024	$	( 174,525 )	$	( 514 )	$	( 175,039 )

The tables below summarize the classifications out of accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2025 and 2024:

Details about Accumulated Other Comprehensive Income (Loss) Components

Amount Reclassified From Accumulated Other Comprehensive Income (Loss)

Affected Line Item in the Statement Where Net Income is Presented

Unrealized Gains and Losses on
Available-for-Sale Securities

—

Net Gains (Losses) on Securities

—

Income Tax Expense

—

Net of Tax

Total Reclassifications for the Three
Months Ended September 30, 2025

—

Details about Accumulated Other Comprehensive Income (Loss) Components

Amount Reclassified From Accumulated Other Comprehensive Income (Loss)

Affected Line Item in the Statement Where Net Income is Presented

Unrealized Gains and Losses on
Available-for-Sale Securities

—

Net Gains (Losses) on Securities

—

Income Tax Expense

—

Net of Tax

Total Reclassifications for the Nine
Months Ended September 30, 2025

—

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 13 - Other Comprehensive Income (Loss) (continued)


Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)		Affected Line Item in the Statement Where Net Income is Presented

Unrealized Gains and Losses on Available-for-Sale Securities	$	70	Net Gains on Securities
	( 15 )		Income Tax Expense
	55		Net of Tax

Total Reclassifications for the Three Months Ended September 30, 2024	$	55


Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)		Affected Line Item in the Statement Where Net Income is Presented

Unrealized Gains and Losses on Available-for-Sale Securities	$	( 34,788 )	Net Gains (Losses) on Securities
	7,681		Income Tax Expense
	( 27,107 )		Net of Tax

Total Reclassifications for the Nine Months Ended September 30, 2024	$	( 27,107 )

NOTE 14 - Revenue Recognition

The following tables present non-interest income, segregated by revenue streams in-scope and out-of-scope of FASB ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, for the three and nine months ended September 30, 2025 and 2024. Wealth management fees are included in the wealth management services segment while insurance revenues are included in the insurance segment. All other revenue streams are primarily included in the banking segment. As a result of the sale of substantially all of the assets of GAI on June 1, 2024, insurance revenues reflect no GAI activity for the quarter ended September 30, 2025. See Note 3 for additional information on the sale.


	Three Months Ended
	September 30,
Non-interest Income	2025		2024
In-Scope of Topic 606:
Wealth Management Fees	$	4,288	$	3,580
Service Charges on Deposit Accounts	3,927		3,330
Insurance Revenues	—		—
Interchange Fee Income	5,087		4,390
Other Operating Income:
ATM Fees	352		313
Wire Transfer Fees	242		182
Other (1)	408		240
Non-interest Income (in-scope of Topic 606)	14,304		12,035
Non-interest Income (out-of-scope of Topic 606)	4,125		1,766
Total Non-interest Income	$	18,429	$	13,801

(1) “Other” income includes safe deposit box rentals and other non-interest related fees totaling $ 408 thousand and $ 240 thousand for the three months ended September 30, 2025 and 2024, respectively, all of which are within the scope of ASC 606.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 14 - Revenue Recognition (continued)


	Nine Months Ended
	September 30,
Non-interest Income	2025		2024
In-Scope of Topic 606:
Wealth Management Fees	$	12,289	$	10,729
Service Charges on Deposit Accounts	11,127		9,325
Insurance Revenues	—		4,384
Interchange Fee Income	14,565		12,881
Other Operating Income:
ATM Fees	980		906
Wire Transfer Fees	687		530
Other (1)	1,004		815
Non-interest Income (in-scope of Topic 606)	40,652		39,570
Non-interest Income (out-of-scope of Topic 606)	9,350		8,976
Total Non-interest Income	$	50,002	$	48,546

(1) “Other” income includes safe deposit box rentals and other non-interest related fees totaling $ 1,004 thousand and $ 815 thousand for the nine months ended September 30, 2025 and 2024, respectively, all of which are within the scope of ASC 606.

A description of the Company’s revenue streams accounted for under Topic 606 follows:

Service Charges on Deposit Accounts : The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as stop payment charges and statement rendering, are recognized at the time the transaction is executed (the point in time the Company fills the customer’s request). Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs.

Interchange Fee Income: The Company earns interchange fees from debit/credit cardholder transactions conducted through various payment networks. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder.

Wealth Management Fees: The Company earns wealth management and investment services income from its contracts with trust and brokerage customers to manage assets for investment and/or to transact their accounts. These fees are primarily earned over time as the Company provides the contracted monthly or quarterly services and are generally assessed based on the market value of assets under management at month-end. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed (trade date).

Insurance Revenues : The Company earned insurance revenue from commissions derived from the sale of personal and corporate property and casualty insurance products. These commissions were primarily earned over time as the Company provided the contracted insurance product to customers.

Other Operating Income : The other operating income revenue streams within the scope of Topic 606 consist of ATM fees, wire transfer fees, safe deposit box rentals, check printing commissions and other non-interest related fees.

NOTE 15 – Leases

At the inception of a contract, an entity should determine whether the contract contains a lease. Topic 842 defines a lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Control over the use of an identified asset means that the customer has both (1) the right to obtain substantially all of the economic benefits from the use of the asset and (2) the right to direct the use of the asset.

The Bank has finance leases for branch offices as well as operating leases for branch offices, ATM locations and certain office

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 15 - Leases (continued)

equipment. The right-of-use asset is included in the ‘Premises, Furniture and Equipment, Net’ line of the Consolidated Balance Sheet. The lease liability is included in the ‘Accrued Interest Payable and Other Liabilities’ line of the Consolidated Balance Sheet.

The Company used the implicit lease rate when determining the present value of lease payments for finance leases. The present value of lease payments for operating leases was determined using the incremental borrowing rate as of the date the Company adopted this standard.

The components of lease expense were as follows:


	Three Months Ended		Three Months Ended
	September 30, 2025		September 30, 2024

Finance Lease Cost:
Amortization of Right-of -Use Assets	$	52	$	52
Interest on Lease Liabilities	62		69
Operating Lease Cost	386		324
Short-term Lease Cost	—		—
Total Lease Cost	$	500	$	445


	Nine Months Ended		Nine Months Ended
	September 30, 2025		September 30, 2024

Finance Lease Cost:
Amortization of Right-of -Use Assets	$	157	$	157
Interest on Lease Liabilities	192		212
Operating Lease Cost	1,245		1,003
Short-term Lease Cost	—		—
Total Lease Cost	$	1,594	$	1,372

The weighted average lease term and discount rates were as follows:


	September 30, 2025		September 30, 2024

Weighted Average Remaining Lease Term:
Finance Leases	7 years		8 years
Operating Leases	5 years		6 years

Weighted Average Discount Rate:
Finance Leases	11.32	%	11.35	%
Operating Leases	3.23	%	3.10	%

Supplemental balance sheet information related to leases was as follows:


	September 30, 2025		September 30, 2024

Finance Leases
Premises, Furniture and Equipment, Net	$	1,281	$	1,491
Other Borrowings	2,206		2,466

Operating Leases
Operating Lease Right-of-Use Assets	$	5,582	$	4,596
Operating Lease Liabilities	5,761		4,586

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 15 - Leases (continued)

Supplemental cash flow information related to leases was as follows:


	Nine Months Ended		Nine Months Ended
	September 30, 2025		September 30, 2024

Cash paid for amounts in the Measurement of Lease Liabilities:
Operating Cash Flows from Finance Leases	$	192	$	212
Operating Cash Flows from Operating Leases	1,240		991
Financing Cash Flows from Finance Leases	214		194

The following table presents a maturity analysis of Finance and Operating Lease Liabilities:


	September 30, 2025
	Finance Leases		Operating Leases

Year 1	$	519	$	1,415
Year 2	506		1,234
Year 3	438		875
Year 4	438		729
Year 5	438		461
Thereafter	743		1,741
Total Lease Payments	3,082		6,455
Less Imputed Interest	( 876 )		( 694 )
Total	$	2,206	$	5,761

NOTE 16 – Business Combinations

On February 1, 2025, the Company acquired 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. 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 accounted for the transaction under the acquisition method of accounting, which means these financial assets and liabilities were recorded at fair value at the day of acquisition. The fair value of the common shares issued as part of the consideration paid for Heartland was based upon the closing price of the Company’s common shares on the acquisition date. Fair value adjustments on premises, certain borrowings and other liabilities, as well as the related tax impacts, were made during the current quarter. The Company increased the fair value of property by $ 1,664 , with a corresponding decrease to goodwill, due to the receipt of finalized appraisals. The increase in fair value resulted in an increase in depreciation expense of $ 152 that would have been recognized in a prior period. The Company does not expect material variances from the current estimates and expects final valuations will be completed prior to December 31, 2025, which is within the allowable one year measurement period.

In accordance with ASC 805, the Company has expensed approximately $ 23,060 of direct acquisition costs and recorded $ 196,212 of goodwill and $ 40,065 of intangible assets. The goodwill of $ 196,212 arising from the acquisition consisted largely of synergies and the cost savings resulting from combining the operations of the companies. This goodwill will be evaluated annually for impairment and is no n-deductible for tax purposes. The intangible assets are related to core deposits and are being amortized over 8 years. The following table summarizes the fair value of the total consideration transferred as a part of the Heartland acquisition as well as the fair value of identifiable assets acquired and liabilities assumed as of the effective date of the transaction.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 16 – Business Combinations (continued)


Consideration
Cash for Stock Options, 401K Shares and Fractional Shares	$	23,102
Equity Instruments	320,007
Fair Value of Total Consideration Transferred	$	343,109

Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
Cash	$	6,216
Federal Funds Sold and Other Short-term Investments	39,550
Interest-bearing Time Deposits with Banks	—
Securities	220,358
Loans, Net	1,503,378
Stock in FHLB and Other Restricted Stock, at Cost	6,992
Premises, Furniture & Equipment	39,764
Other Real Estate	—
Intangible Assets	40,065
Company Owned Life Insurance	20,660
Accrued Interest Receivable and Other Assets	39,274
Deposits - Non-interest Bearing	( 436,467 )
Deposits - Interest Bearing	( 1,294,696 )
FHLB Advances and Other Borrowings	( 29,342 )
Accrued Interest Payable and Other Liabilities	( 8,855 )
Total Identifiable Net Assets	146,897
Goodwill	$	196,212

Under the terms of the merger agreement, each Heartland common shareholder of record at the effective time of the merger became entitled to receive 3.90 shares of common stock of the Company for each of their former shares of Heartland common stock. As a result, in connection with the closing of the merger on February 1, 2025, the Company issued 7,742,723 shares of its common stock to the former shareholders of Heartland and paid $ 23,102 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.

This acquisition was consistent with the Company’s strategy to build a regional presence in Southern Indiana, Kentucky and Ohio. The acquisition offers the Company the opportunity to increase profitability by introducing existing products and services to the acquired customer base as well as add new customers in the expanded region.

The fair value of purchased financial assets with credit deterioration was $ 91,377 on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $ 112,839 . The Company estimates, on the date of acquisition, that $ 16,503 of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.

The following table presents unaudited pro forma information as if the acquisition had occurred on January 1, 2024 after giving effect to certain adjustments. The unaudited pro forma information for the three and nine months ended September 30, 2025 and 2024 includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction, interest expense on deposits and borrowings acquired, and the related income tax effects. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date.

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

(unaudited, dollars in thousands except share and per share data)

NOTE 16 – Business Combinations (continued)


	Unaudited Pro Forma		Unaudited Pro Forma
	Quarter Ended 9/30/2025		Quarter Ended 9/30/2024

Net Interest Income	$	75,725	$	72,553
Non-interest Income	18,429		16,523
Total Revenue	94,154		89,076
Provision for Loan Losses Expense	700		1,219
Non-interest Expense	49,564		46,307
Income Before Income Taxes	43,890		41,550
Income Tax Expense	8,714		8,525
Net Income	$	35,176	$	33,025
Earnings Per Share and Diluted Earnings Per Share	$	0.94	$	0.88

For the three months ended September 30, 2025, the above pro forma financial information excludes non-recurring merger costs that totaled $ 135 on a pre-tax basis.


	Unaudited Pro Forma		Unaudited Pro Forma
	Nine Months Ended 9/30/2025		Nine Months Ended 9/30/2024

Net Interest Income	$	221,871	$	207,812
Non-interest Income	50,830		56,001
Total Revenue	272,701		263,813
Provision for Loan Losses Expense	984		1,476
Non-interest Expense	148,885		145,488
Income Before Income Taxes	122,832		116,849
Income Tax Expense	25,868		25,051
Net Income	$	96,964	$	91,798
Earnings Per Share and Diluted Earnings Per Share	$	2.59	$	2.46

For the nine months ended September 30, 2025, the above pro forma financial information excludes non-recurring merger costs that totaled $ 6,996 on a pre-tax basis and Day 1 provision for credit losses under the CECL model of $ 16,200 on a pre-tax basis.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

GERMAN AMERICAN BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 94 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.

Throughout this Management’s Discussion and Analysis, as elsewhere in this Report, when we use the term “Company” and “German American”, we will usually be referring to the business and affairs (financial and otherwise) of the Company and its subsidiaries and affiliates as a whole. Occasionally, we will refer to the term “German American Bancorp”, “Bancorp”, “parent company” or “holding company” when we mean to refer to only German American Bancorp, Inc., and the term “Bank” when we mean to refer to only the Company’s bank subsidiary.

This section presents an analysis of the consolidated financial condition of the Company as of September 30, 2025 and December 31, 2024 and the consolidated results of operations for the three months ended September 30, 2025 and 2024. This discussion should be read in conjunction with the consolidated financial statements and other financial data presented elsewhere herein and with the financial statements and other financial data, as well as the Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

MANAGEMENT OVERVIEW

This updated discussion should be read in conjunction with the Management Overview that was included in our Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

On February 1, 2025, German American Bancorp 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. 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. German American Bancorp 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.

On September 15, 2025, Bancorp redeemed the Heartland 5.0% Fixed-to-Floating Rate Subordinated Notes Due 2030 (the “Heartland Notes”), outstanding in the aggregate principal amount of $24.3 million, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest.

For further information regarding the acquisition of Heartland, see Note 16 in the Notes to the Consolidated Financial Statements included in Item 1 of this Report.

During June and July 2024, the Company undertook a partial restructuring of its securities portfolio by selling available-for-sale securities totaling approximately $375.3 million in book value, at an after-tax loss of approximately $27.2 million. The tax-equivalent yield on the bonds sold was approximately 3.12% with a duration of approximately 7 years. The proceeds from the securities sold were reinvested in the securities portfolio by the end of the third quarter of 2024.

Effective June 1, 2024, German American Insurance, Inc. (“GAI”), a wholly-owned subsidiary of the Bank, sold substantially all of its assets to The Hilb Group of Indiana, LLC, a Delaware limited liability company (“Hilb”), for a purchase price of $40.0 million in cash. As part of the transaction, the Bank, as the parent of GAI, may receive payments for the referral of customers to Hilb, and the Company will refrain from conducting certain insurance activities, in each case, for a period of five (5) years following closing. Prior to the sale, GAI was a full-service agency offering personal and commercial insurance products. For additional information on this sale, see Note 3 in the Notes to the Consolidated Financial Statements included in Item 1 of this

Report.

Net income for the quarter ended September 30, 2025 totaled $35,074,000, or $0.94 per share, an increase of 32% on a per share basis compared with the third quarter 2024 net income of $21,048,000, or $0.71 per share. Net income for the nine months ended September 30, 2025 totaled $76,952,000, or $2.10 per share, an increase of 3% on a per share basis compared with the nine months ended September 30, 2024.

The third quarter of 2025 results of operations included Heartland acquisition-related expenses of $135,000 ($101,000, on an after-tax basis), and a $975,000 non-recurring gain on the redemption of the Heartland Notes ($731,000, on an after-tax basis). The first nine months of 2025 results of operations included Heartland acquisition-related expenses of $6,996,000 ($5,418,000, on an after-tax basis) and the “Day 2” provision for credit losses under the CECL model of $16,200,000 ($12,150,000, on an after-tax basis), as well as the gain on the redemption of the Heartland Notes.

The third quarter of 2024 included Heartland acquisition-related expenses of $747,000 ($609,000, on an after-tax basis) and the first nine months of 2024 included $1,172,000 ($928,000, on an after-tax basis). As indicated above, results of operations for the first nine months of 2024 also included the insurance sale transaction in the second quarter of 2024, which resulted in an after-tax gain, net of transaction costs, of approximately $27,476,000, or $0.93 per share, and the partial securities portfolio restructuring transaction resulting in an after-tax loss of $27,189,000, or $0.92 per share.

On an adjusted basis, net income for the third quarter of 2025 was $34,444,000, or $0.92 per share, compared with the adjusted third quarter 2024 net income of $21,722,000, or $0.73 per share. Net income, on an adjusted basis, for the nine months ended September 30, 2025, was $93,789,000, or $2.57 per share, compared with the adjusted nine months ended September 30, 2024 net income of $60,420,000, or $2.04 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 Management’s Discussion and Analysis for additional information, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The financial condition and results of operations for the Company presented in the Consolidated Financial Statements, accompanying Notes to the Consolidated Financial Statements, and selected financial data appearing elsewhere within this Report, are, to a large degree, dependent upon the Company’s accounting policies. The selection of and application of these policies involve estimates, judgments, and uncertainties that are subject to change. The critical accounting policies and estimates that the Company has determined to be the most susceptible to change in the near term relate to the determination of the allowance for credit losses, the valuation of securities available for sale, income tax expense, and the valuation of goodwill and other intangible assets.

Allowance for Credit Losses

The Company maintains an allowance for credit losses to cover the estimated expected credit losses over the expected contractual life of the loan portfolio. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. A provision for credit losses is charged to operations based on management’s periodic evaluation of the necessary allowance balance. Evaluations are conducted at least quarterly and more often if deemed necessary. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control.

The Company has an established process to determine the adequacy of the allowance for credit losses. The determination of the allowance is inherently subjective, as it requires significant estimates, including the amounts and timing of expected future cash flows on individually analyzed loans, estimated losses on other classified loans and pools of homogeneous loans, and consideration of past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, reasonable and supportable forecasts and other factors, all of which may be susceptible to significant change. The allowance consists of two components of allocations, specific and general. These two components represent the total allowance for credit losses deemed adequate to cover expected credit losses over the expected life of the loan portfolio.

Management’s estimate of the ACL for loans relies on the identification, stratification and separate estimates of loss for both loans collectively evaluated and loans individually evaluated for loss. The estimate of loss for loans collectively evaluated for loss in particular involves a significant level of estimation uncertainty due to its complexity and the quantity of relevant inputs,

including: management’s determination of baseline loss rate multipliers based on a third party forecast of economic conditions, estimates of the reasonable and supportable forecast period, estimates of the baseline loss rate look back period, estimates of the reversion period from the reasonable and supportable forecast period to the baseline loss rate and estimates of the prepayment rate and related look back period. Additionally, management considers other qualitative risk factors to further adjust the estimated ACL on loans through a qualitative allowance.

Commercial and agricultural loans are subject to a standardized grading process administered by an internal loan review function. The need for specific reserves is considered for credits when: (a) the customer’s cash flow or net worth appears insufficient to repay the loan; (b) the loan has been criticized in a regulatory examination; (c) the loan is on non-accrual; or (d) other reasons where the ultimate collectability of the loan is in question, or the loan characteristics require special monitoring.

Specific reserves on individually analyzed loans are determined by comparing the loan balance to the present value of expected cash flows or expected collateral proceeds. Allocations are also applied to categories of loans not individually analyzed but for which the rate of loss is expected to be greater than other similar type loans, including non-performing consumer or residential real estate loans. Such allocations are based on past loss experience, reasonable and supportable forecasts and information about specific borrower situations and estimated collateral values.

General allocations are made for commercial and agricultural loans that are graded as substandard and special mention, but are not individually analyzed for specific reserves as well as other pools of loans, including non-classified loans, homogeneous portfolios of consumer and residential real estate loans, and loans within certain industry categories believed to present unique risk of loss. General allocations of the allowance are primarily made based on historical averages for loan losses for these portfolios along with reasonable and supportable forecasts, judgmentally adjusted for economic, external and internal quantitative and qualitative factors and portfolio trends. Economic factors include evaluating changes in international, national, regional and local economic and business conditions that affect the collectability of the loan portfolio. Internal factors include evaluating changes in lending policies and procedures; changes in the nature and volume of the loan portfolio; existence and effect of concentrations of credit; changes in volume and severity of past due loans; and changes in experience, ability and depth of lending management and staff.

The allowance for credit losses for loans represents management’s estimate of all expected credit losses over the expected contractual life of the loan portfolio. Determining the appropriateness and adequacy of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the loan portfolio may result in significant changes in the allowance for credit losses in future periods.

Under Accounting Standards Codification (ASC) 805, Business Combinations, in a transaction like the Heartland merger, the acquirer is required to recognize an allowance for credit losses in the period of acquisition for both purchased credit deterioration (“PCD”) assets and non-PCD assets. The determination of PCD versus non-PCD determines how the allowance for credit loss flows through the financial statements. For PCD assets, the gross-up method includes the impact in the “Day 1” business combination entries with no impact to expense. For non-PCD assets, the impact is reflected outside of the business combination entries (sometimes referred to as “Day 2”) and is reflected in expense.

At March 31, 2025, the Company changed its method for estimating the allowance for credit losses to the discounted cash flow model on a prospective basis. Prior to March 31, 2025, the Company utilized the static pool methodology in determining future credit losses. While both methodologies permit the Company to develop reasonable and supportable forecasts, by utilizing the discounted cash flow method, the Company has the ability to better evaluate multiple economic scenarios by capturing macroeconomic conditions within the model assumptions and calculations. This change in methodology had an insignificant impact on the allowance in 2025.

As previously stated, the Company now utilizes a discounted cash flow methodology to estimate the allowance for credit losses. Expected cash flows are estimated for each loan and discounted using the contractual terms of the loan, calculated probabilities of default, loss given default rates, and prepayment and curtailment estimates, as well as qualitative factors. The probability of default estimates are generated using a regression model that estimates the likelihood of a loan being charged-off during its life. The regression model uses combinations of variables to assess historical loss correlations to economic factors, and these variables become model forecast inputs for economic factors that are updated in the model each period. The Company uses an economic forecast provided by a third-party for these model inputs.

Securities Valuation

the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for sale debt securities that do not meet the criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available-for-sale debt securities was needed at September 30, 2025. Accrued interest receivable on available-for-sale debt securities is excluded from the estimate of credit losses. As of September 30, 2025, gross unrealized gains on the securities available-for-sale portfolio totaled approximately $5,799,000 and gross unrealized losses totaled approximately $236,243,000. The net amount of these two items, net of applicable taxes, is included in other comprehensive income (loss).

Equity securities that do not have readily determinable fair values are carried at cost, less impairment with observable price changes being recognized in earnings.

Income Tax Expense

Income tax expense involves estimates related to the valuation allowance on deferred tax assets and loss contingencies related to exposure from tax examinations presumed to occur.

A valuation allowance reduces deferred tax assets to the amount management believes is more likely than not to be realized. In evaluating the realization of deferred tax assets, management considers the likelihood that sufficient taxable income of appropriate character will be generated within carry-back and carry-forward periods, including consideration of available tax planning strategies. Tax-related loss contingencies, including assessments arising from tax examinations and tax strategies, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. In considering the likelihood of loss, management considers the nature of the contingency, the progress of any examination or related protest or appeal, the views of legal counsel and other advisors, experience of the Company or other enterprises in similar matters, if any, and management’s intended response to any assessment.

Goodwill and Other Intangible Assets

Goodwill resulting from business combinations represents the excess of the purchase price over the fair value of the net assets of businesses acquired. Goodwill resulting from business combinations is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually. The Company has selected December 31 as the date to perform the annual impairment test. Goodwill is the only intangible asset with an indefinite life on the Company’s balance sheet. No impairment to Goodwill was indicated based on year-end testing.

Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Other intangible assets consist of core deposit and acquired customer relationship intangible assets. They are initially measured at fair value and then are amortized over their estimated useful lives, which range from 6 to 10 years.

RESULTS OF OPERATIONS

the first nine months of 2024 also included the insurance sale transaction in the second quarter of 2024, which resulted in an after-tax gain, net of transaction costs, of approximately $27,476,000, or $0.93 per share, and the partial securities portfolio restructuring transaction resulting in an after-tax loss of $27,189,000, or $0.92 per share.

Net Interest Income:

The following table summarizes net interest income (on a tax-equivalent basis) for the three months ended September 30, 2025 and 2024. For tax-equivalent adjustments, an effective tax rate of 21% was used for both periods. (1)


	Average Balance Sheet (Tax-equivalent basis / dollars in thousands)
	Three Months Ended September 30, 2025						Three Months Ended September 30, 2024
	Principal Balance		Income / Expense		Yield / Rate		Principal Balance		Income / Expense		Yield / Rate
ASSETS
Federal Funds Sold and Other Short-term Investments	$	187,648	$	2,084	4.41	%	$	164,154	$	2,223	5.39	%
Securities:
Taxable	1,126,435		9,268		3.29	%	1,026,995		8,034		3.13	%
Non-taxable	457,826		4,354		3.80	%	463,812		4,123		3.55	%
Total Loans and Leases⁽²⁾	5,766,875		93,664		6.45	%	4,052,673		61,424		6.03	%
TOTAL INTEREST EARNING ASSETS	7,538,784		109,370		5.77	%	5,707,634		75,804		5.29	%
Other Assets	887,879						552,974
Less: Allowance for Credit Losses	(76,098)						(44,324)
TOTAL ASSETS	$	8,350,565					$	6,216,284

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing Demand Deposits	$	1,868,343	$	7,475	1.59	%	$	1,673,806	$	7,621	1.81	%
Savings Deposits and Money Market Accounts	1,884,892		9,611		2.02	%	1,296,910		6,215		1.91	%
Time Deposits	1,330,944		12,330		3.68	%	888,639		9,539		4.27	%
FHLB Advances and Other Borrowings	216,460		2,956		5.42	%	191,548		2,684		5.57	%
TOTAL INTEREST-BEARING LIABILITIES	5,300,639		32,372		2.42	%	4,050,903		26,059		2.56	%
Demand Deposit Accounts	1,912,208						1,411,377
Other Liabilities	58,359						50,627
TOTAL LIABILITIES	7,271,206						5,512,907
Shareholders’ Equity	1,079,359						703,377
TOTAL LIBABILITIES AND SHAREHOLDERS’ EQUITY	$	8,350,565					$	6,216,284

COST OF FUNDS					1.71	%					1.82	%
NET INTEREST INCOME			$	76,998					$	49,745
NET INTEREST MARGIN (3)					4.06	%					3.47	%

(1) Effective tax rates were determined as though interest earned on the Company’s investments in municipal bonds and loans was fully taxable.

(2) Loans held-for-sale and non-accruing loans have been included in average loans.

(3) Net interest income, on a tax-equivalent basis, represents a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” contained in this Management’s Discussion and Analysis for additional information, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.

The following table summarizes net interest income (on a tax-equivalent basis) for the nine months ended September 30, 2025 and 2024. For tax-equivalent adjustments, an effective tax rate of 21% was used for both periods. (1)


	Average Balance Sheet (Tax-equivalent basis / dollars in thousands)
	Nine Months Ended September 30, 2025						Nine Months Ended September 30, 2024
	Principal Balance		Income / Expense		Yield / Rate		Principal Balance		Income / Expense		Yield / Rate
ASSETS
Federal Funds Sold and Other Short-term Investments	$	247,212	$	8,232	4.45	%	$	122,703	$	4,905	5.34	%
Securities:
Taxable	1,118,585		27,528		3.28	%	905,901		18,111		2.67	%
Non-taxable	462,396		12,881		3.71	%	624,725		16,806		3.59	%
Total Loans and Leases⁽²⁾	5,529,532		265,969		6.43	%	4,015,973		178,988		5.95	%
TOTAL INTEREST EARNING ASSETS	7,357,725		314,610		5.71	%	5,669,302		218,810		5.16	%
Other Assets	852,114						558,066
Less: Allowance for Credit Losses	(72,628)						(44,137)
TOTAL ASSETS	$	8,137,211					$	6,183,231

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing Demand Deposits	$	1,874,987	$	22,388	1.60	%	$	1,711,647	$	23,248	1.81	%
Savings Deposits and Money Market Accounts	1,826,452		27,744		2.03	%	1,284,919		17,418		1.81	%
Time Deposits	1,327,661		36,947		3.72	%	859,272		27,083		4.21	%
FHLB Advances and Other Borrowings	213,771		8,217		5.14	%	190,290		7,180		5.04	%
TOTAL INTEREST-BEARING LIABILITIES	5,242,871		95,296		2.43	%	4,046,128		74,929		2.47	%
Demand Deposit Accounts	1,819,351						1,419,745
Other Liabilities	54,789						47,222
TOTAL LIABILITIES	7,117,011						5,513,095
Shareholders’ Equity	1,020,200						670,136
TOTAL LIBABILITIES AND SHAREHOLDERS’ EQUITY	$	8,137,211					$	6,183,231

COST OF FUNDS					1.73	%					1.77	%
NET INTEREST INCOME			$	219,314					$	143,881
NET INTEREST MARGIN (3)					3.98	%					3.39	%

(1) Effective tax rates were determined as though interest earned on the Company’s investments in municipal bonds and loans was fully taxable.

(2) Loans held-for-sale and non-accruing loans have been included in average loans.

During the third quarter of 2025, net interest income, on a non tax-equivalent basis, totaled $75,725,000, an increase of $27,131,000, or 56% compared to the third quarter of 2024 net interest income of $48,594,000. During the first nine months of 2025, net interest income, on a non tax-equivalent basis, totaled $215,452,000, an increase of $75,893,000, or 54%, compared to the first nine months of 2024 net interest income of $139,559,000. The increase in net interest income for both periods presented for 2025 compared with the same periods of 2024 was primarily attributable to a higher level of earning assets driven by the Heartland acquisition and an improvement of the Company’s net interest margin.

The tax equivalent net interest margin for the quarter ended September 30, 2025 was 4.06% compared with 3.47% in the third quarter of 2024. The tax equivalent net interest margin for the nine months ended September 30, 2025 was 3.98% compared with 3.39% in the same period of 2024. The Company’s net interest margin and net interest income in both periods presented were impacted by accretion of loan discounts on acquired loans. Accretion of discounts on acquired loans totaled $3,914,000 during the third quarter of 2025 and $236,000 during the third quarter of 2024. Accretion of discounts on acquired loans totaled $11,589,000 and $889,000 for the first nine months of 2025 and 2024, respectively. Accretion of discounts on acquired loans contributed approximately 21 basis points to the net interest margin in the third quarter of 2025 and 2 basis points in the third quarter of 2024. Accretion of loan discounts on acquired loans contributed approximately 21 basis points to the net interest margin in the first nine months of 2025 compared to 2 basis points for the same period of 2024.

The continued improvement in the net interest margin, excluding the accretion of discount on acquired loans, during the third quarter of 2025 compared with the third quarter of 2024 as well as the first nine months of 2025 compared with the first nine months of 2024 was largely driven by an improved yield on earning assets (including both loan and security yields) and a lower cost of deposits. The lower cost of deposits was driven by the Federal Reserve’s lowering of the Federal Funds rates over the

last several months of 2024 and the Company’s ability to correspondingly lower deposit costs. The Federal Funds rate cut in mid-September 2025 had minimal impact on the average earning asset yields or average cost of deposits during the third quarter of 2025.

Provision for Credit Losses:

The Company provides for credit losses through regular provisions to the allowance for credit losses. The provision is affected by net charge-offs on loans and changes in specific and general allocations of the allowance. During the quarter ended September 30, 2025, the Company recorded a provision for credit losses of $700,000 compared with a provision for credit losses of $625,000 during the third quarter of 2024. During the nine months ended September 30, 2025, the Company recorded a provision for credit losses of $17,200,000 compared with a provision for credit losses of $2,150,000 for the first nine months of 2024. The first quarter of 2025 included a provision for credit losses of $16,200,000 related to the “Day 2” adjustment for the Heartland acquisition.

Net charge-offs totaled $748,000, or 5 basis points, on an annualized basis, of average loans outstanding during the third quarter of 2025 compared with $447,000, or 4 basis points, on an annualized basis, of average loans during the third quarter of 2024. Net charge-offs totaled $2,082,000, or 5 basis points, on an annualized basis, of average loans outstanding during the nine months ended September 30, 2025 compared with $1,791,000, or 6 basis points, on an annualized basis, of average loans during the same period of 2024.

The provision for credit losses made during the three and nine months ended September 30, 2025 was made at a level deemed necessary by management to absorb expected losses in the loan portfolio. A detailed evaluation of the adequacy of the allowance for credit losses is completed quarterly by management, the results of which are used to determine provision for credit losses. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and reasonable and supportable forecasts along with other qualitative and quantitative factors.

Non-interest Income:

During the quarter ended September 30, 2025, non-interest income totaled $18,429,000, an increase of $4,628,000, or 34%, compared with the third quarter of 2024. The increase during the third quarter of 2025 compared to the same period of 2024 was largely the result of the Heartland acquisition, improvement of the Company’s existing fee revenue generation and a $975,000 gain on the extinguishment of debt resulting from the redemption of the Heartland Notes. On an adjusted basis, non-interest income for the third quarter of 2025 was $17,454,000 compared to $13,731,000 for the third quarter of 2024. Adjusted non-interest income is a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” section in this Management’s Discussion and Analysis for additional information, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.


Non-interest Income (dollars in thousands)	Three Months Ended September 30,				Change From Prior Period
					Amount		Percent
	2025		2024		Change		Change
Wealth Management Fees	$	4,288	$	3,580	$	708	20	%
Service Charges on Deposit Accounts	3,927		3,330		597		18
Insurance Revenues	—		—		—		n/m (1)
Company Owned Life Insurance	630		476		154		32
Interchange Fee Income	5,087		4,390		697		16
Gain on Sale of Assets of German American Insurance	—		—		—		n/m (1)
Other Operating Income	3,308		1,251		2,057		164
Subtotal	17,240		13,027		4,213		32
Net Gains on Sales of Loans	1,189		704		485		69
Net Gains (Losses) on Securities	—		70		(70)		n/m (1)
Total Non-interest Income	$	18,429	$	13,801	$	4,628	34

(1) n/m= not meaningful

Wealth management fees increased $708,000, or 20%, during the third quarter of 2025 compared with the third quarter of 2024. The increase during the third quarter of 2025 compared with the third quarter of 2024 was largely attributable to increased assets under management, driven by healthy capital markets throughout 2024 and much of 2025, and continued strong new business results in addition to the Heartland acquisition.

Service charges on deposit accounts increased $597,000, or 18%, during the quarter ended September 30, 2025 compared with the same period of 2024. The increase during the third quarter of 2025 compared with the third quarter of 2024 was primarily driven by the Heartland acquisition in addition to increased customer utilization of deposit services.

No insurance revenues were recognized during the third quarter of 2025 or 2024 due to the sale of the GAI assets effective June 1, 2024. As previously discussed, the sale of substantially all of the assets of GAI in June 2024 resulted in $38,323,000 in net proceeds. For additional information on this sale, see Note 3 in the Notes to the Consolidated Financial Statements included in Item 1 of this Report.

For the quarter ended September 30, 2025, interchange fees increased $697,000, or 16%, compared with the same quarter of 2024. The increase during the third quarter of 2025 compared with the third quarter of 2024 was largely attributable to the Heartland acquisition.

Other operating income increased $2,057,000, or 164%, in the third quarter of 2025 compared with the third quarter of 2024. The increase during the third quarter of 2025 compared with the third quarter of 2024 was largely attributable to a $975,000 gain on the extinguishment of debt resulting from the redemption of the Heartland Notes during the third quarter of 2025.

Net gains on sales of loans increased $485,000, or 69%, compared with the third quarter of 2024. The increase during the third quarter of 2025 compared with the third quarter of 2024 was largely related to the Heartland acquisition and a higher volume of loans sold. Loan sales totaled $55.5 million during the third quarter of 2025 compared with $40.3 million during the third quarter of 2024.

During the nine months ended September 30, 2025, non-interest income totaled $50,002,000, an increase of $1,456,000, or 3%, compared with the same period of 2024. The increase during the first nine months of 2025 compared to the same period of 2024 was largely the result of the Heartland acquisition, improvement of the Company’s existing fee revenue generation and a $975,000 gain on the extinguishment of debt resulting from the redemption of the Heartland Notes. The first nine months of 2024 included the previously mentioned sale of the GAI assets and the securities portfolio restructuring transaction, which each occurred during the second quarter of 2024. On an adjusted basis, non-interest income for the first nine months of 2025 was $49,027,000 compared to $40,577,000 for the same period of 2024. Adjusted non-interest income is a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” section in this Management’s Discussion and Analysis for additional information, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.


Non-interest Income (dollars in thousands)	Nine Months Ended September 30,				Change From Prior Period
					Amount		Percent
	2025		2024		Change		Change
Wealth Management Fees	$	12,289	$	10,729	$	1,560	15	%
Service Charges on Deposit Accounts	11,127		9,325		1,802		19
Insurance Revenues	—		4,384		(4,384)		n/m (1)
Company Owned Life Insurance	1,908		1,442		466		32
Interchange Fee Income	14,565		12,881		1,684		13
Gain on Sale of Assets of German American Insurance	—		38,323		(38,323)		n/m (1)
Other Operating Income	6,712		3,826		2,886		75
Subtotal	46,601		80,910		(34,309)		(42)
Net Gains on Sales of Loans	3,401		2,424		977		40
Net Gains (Losses) on Securities	—		(34,788)		34,788		n/m (1)
Total Non-interest Income	$	50,002	$	48,546	$	1,456	3

(1) n/m= not meaningful

For the nine months ended September 30, 2025, wealth management fees increased $1,560,000, or 15%, compared with the same period of 2024. The increase during the first nine months of 2025 compared with the same period of 2024 was largely

attributable to increased assets under management, driven by healthy capital markets throughout 2024 and much of 2025, and continued strong new business results in addition to the Heartland acquisition.

Service charges on deposit accounts increased $1,802,000, or 19%, during the first nine months of 2025, compared with the first nine months of 2024. The increase during the first nine months of 2025 compared with the same period of 2024 was primarily driven by the Heartland acquisition in addition to increased customer utilization of deposit services.

No insurance revenues were recognized during the nine months ended September 30, 2025 due to the sale of the GAI assets effective June 1, 2024. As a result, insurance revenues declined $4,384,000 during the nine months ended September 30, 2025, compared with the same period of 2024. As previously discussed, the sale of substantially all of the assets of GAI in June 2024 resulted in $38,323,000 in net proceeds. For additional information on this sale, see Note 3 in the Notes to the Consolidated Financial Statements included in Item 1 of this Report.

Interchange fees increased $1,684,000, or 13%, during the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024. The increase during the first nine months of 2025 compared with the same period of 2024 was largely attributable to the Heartland acquisition.

During the nine months ended, September 30, 2025, other operating income increased $2,886,000, or 75%, compared with the same period of 2024. The increase during the nine months ended September 30, 2025 compared with the same period of 2024 was primarily attributable to the aforementioned gain on extinguishment of debt and the Heartland acquisition.

Net gains on sales of loans increased $977,000, or 40%, compared with the first nine months of 2024. The increase during the first nine months of 2025 compared with the same period of 2024 was largely related to the Heartland acquisition and a higher volume of loans sold. Loan sales totaled $145.0 million during the first nine months of 2025 compared with $97.3 million during the same period of 2024.

There were no securities transactions during the first nine months of 2025 that resulted in net gains or losses. The net loss on securities during the first nine months of 2024 included a loss of $34,858,000 which was related to the net loss recognized on the securities restructuring transaction previously discussed.

Non-interest Expense:

During the quarter ended September 30, 2025, non-interest expense totaled $49,700,000, an increase of $13,574,000, or 38%, compared with the third quarter of 2024. The primary drivers of the increased operating expenses in the third quarter of 2025 compared with the third quarter of 2024 were the Heartland operating costs.

Each period presented included Heartland acquisition-related expenses, with such amounts being $135,000 for the third quarter 2025 and $747,000 for the third quarter 2024.

On an adjusted basis, non-interest expense for the third quarter of 2025 was $49,565,000 compared to $35,292,000 for the third quarter of 2024. Adjusted non-interest expense is 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.


Non-interest Expense (dollars in thousands)	Three Months Ended September 30,				Change From Prior Period
					Amount		Percent
	2025		2024		Change		Change
Salaries and Employee Benefits	$	25,444	$	19,718	$	5,726	29	%
Occupancy, Furniture and Equipment Expense	5,255		3,880		1,375		35
FDIC Premiums	1,059		755		304		40
Data Processing Fees	4,175		3,156		1,019		32
Professional Fees	1,960		1,912		48		3
Advertising and Promotion	1,321		941		380		40
Intangible Amortization	2,693		484		2,209		456
Other Operating Expenses	7,793		5,280		2,513		48
Total Non-interest Expense	$	49,700	$	36,126	$	13,574	38

Salaries and benefits increased $5,726,000, or 29%, during the third quarter of 2025 compared with the third quarter of 2024. The increase in the third quarter of 2025 compared with the third quarter of 2024 was due primarily to the salaries and benefits costs for the Heartland employee base.

Occupancy, furniture and equipment expense increased $1,375,000, or 35%, for the three months ended September 30, 2025, compared to the same period of 2024. The increase during the three months ended September 30, 2025 compared with the same period of 2024 was primarily attributable to the operating costs of the Heartland branch network.

During the third quarter of 2025, data processing fees increased $1,019,000, or 32%, compared with the third quarter of 2024. The increase during the third quarter of 2025 compared with the same period of 2024 was largely driven by operating costs associated with the Heartland acquisition and continued enhancements to existing data systems and processes.

Intangible amortization increased $2,209,000, or 456%, during the third quarter of 2025 compared with the third quarter of 2024. The increase was attributable to the Heartland acquisition.

Other operating expenses increased $2,513,000, or 48%, for the three months ended September 30, 2025 compared with the same period of 2024. The increase in the three months ended September 30, 2025 compared with the same period of 2024 was largely related the to operating costs of Heartland.

During the nine months ended September 30, 2025, non-interest expense totaled $151,999,000, an increase of $41,461,000, or 38%, compared with the same period of 2024. The primary drivers of the increased operating expenses in the nine months ended September 30, 2025 compared with the same period of 2024 were the Heartland operating costs and acquisition related costs.

Each period presented included Heartland acquisition-related expenses, with such amounts being $6,996,000 for the first nine months of 2025 and $1,172,000 for first nine months of 2024. The first nine months of 2024 also included non-recurring professional fees and other costs associated with the GAI asset sale that totaled approximately $1,816,000.

On an adjusted basis, non-interest expense for the first nine months of 2025 was $145,003,000 compared to $104,208,000 for the same period of 2024. Adjusted non-interest expense is 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.


Non-interest Expense (dollars in thousands)	Nine Months Ended September 30,				Change From Prior Period
					Amount		Percent
	2025		2024		Change		Change
Salaries and Employee Benefits	$	80,122	$	61,853	$	18,269	30	%
Occupancy, Furniture and Equipment Expense	14,669		11,171		3,498		31
FDIC Premiums	2,847		2,194		653		30
Data Processing Fees	13,756		8,986		4,770		53
Professional Fees	8,256		6,969		1,287		18
Advertising and Promotion	4,075		2,988		1,087		36
Intangible Amortization	7,566		1,594		5,972		375
Other Operating Expenses	20,708		14,783		5,925		40
Total Non-interest Expense	$	151,999	$	110,538	$	41,461	38

Salaries and benefits increased $18,269,000, or 30%, for the first nine months of 2025 compared with the same period of 2024. The increase in the first nine months of 2025 compared with the same period of 2024 was due primarily to the salaries and benefits costs for the Heartland employee base.

During the nine months ended September 30, 2025, occupancy, furniture and equipment expense increased $3,498,000, or 31%, compared to the nine months ended September 30, 2024. The increase during the nine months ended September 30, 2025 compared with the same period of 2024 was primarily attributable to the operating costs of the Heartland branch network.

Data processing fees increased $4,770,000, or 53%, during the first nine months of 2025 compared with the same period of 2024. The increase during the first nine months of 2025 compared with the same period of 2024 was largely driven by operating costs of the existing Heartland systems and acquisition-related costs during the first nine months of 2025.

Professional fees increased $1,287,000, or 18%, during the nine months ended September 30, 2025 compared with the same period of 2024. The increase during the nine months ended September 30, 2025 compared to the same period of 2024 was due in large part to professional fees associated with the Heartland acquisition. Professional fees related to merger and acquisition activities totaled approximately $2,887,000 during the nine months ended September 30, 2025 and approximately $2,636,000 during the same period of 2024, with both periods being impacted by the Heartland acquisition and the nine months ended September 30, 2024, also being impacted by the GAI asset sale.

Intangible amortization increased $5,972,000, or 375%, during the first nine months of 2025 compared with the same period of 2024. The increase was attributable to the Heartland acquisition.

Other operating expenses increased $5,925,000, or 40%, during the first nine months of 2025 compared with the same period of 2024. The increase in the first nine months of 2025 compared with the same period of 2024 was largely attributable to the operating costs of Heartland.

Income Taxes:

The Company’s effective income tax rate was 19.8% and 17.9%, respectively, during the three months ended September 30, 2025 and 2024. The Company’s effective income tax rate was 20.1% and 19.7%, respectively, during the nine months ended September 30, 2025 and 2024. The effective tax rate in all periods presented was lower than the blended statutory rate resulting primarily from the Company’s tax-exempt investment income on securities, loans and company-owned life insurance, income tax credits generated from affordable housing projects, and income generated by subsidiaries domiciled in a state with no state or local income tax.

FINANCIAL CONDITION

Total assets for the Company totaled $8.401 billion at September 30, 2025, representing an increase of $2.105 billion compared with December 31, 2024. The increase in total assets at September 30, 2025 compared with year-end 2024 was in large part attributable to the Heartland acquisition.

September 30, 2025 total loans increased $1.654 billion compared with December 31, 2024. The increase in total loans at September 30, 2025 compared with year-end 2024 was largely due to the acquisition of Heartland and to a lesser extent organic loan growth from throughout the Company’s existing market areas.

Excluding loans acquired through the Heartland acquisition, total loans increased $150 million, or approximately 5% on an annualized basis, at September 30, 2025 compared with December 31, 2024. From December 31, 2024 to September 30, 2025, excluding the acquired Heartland loans, commercial and industrial loans increased approximately $5.3 million, or 1% on an annualized basis, commercial real estate loans increased $111.5 million, or 7% on an annualized basis, and retail loans increased $36.6 million, or 6% on an annualized basis, while agricultural loans declined $2.5 million, or 1% on an annualized basis.

The composition of the loan portfolio has remained relatively stable and diversified over the past several years. The addition of the Heartland loan portfolio 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 14% of the portfolio (up from 9% at year-end 2024), agricultural loans at 8% of the portfolio, and home equity 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: (dollars in thousands)	September 30, 2025		December 31, 2024		Current Period Change
Commercial and Industrial Loans and Leases	$	815,222	$	671,038	$	144,184
Commercial Real Estate Loans	3,103,181		2,224,872		878,309
Agricultural Loans	472,807		431,037		41,770
Home Equity and Consumer Loans	603,742		448,872		154,870
Residential Mortgage Loans	792,670		357,448		435,222
Total Loans	$	5,787,622	$	4,133,267	$	1,654,355

The Company’s commercial real estate portfolio is well-diversified over numerous property types. The table below provides property type detail for the most significant segments of the Company’s commercial real estate loan portfolio.


	September 30, 2025				December 31, 2024
	% of Commercial Real Estate Portfolio		% of Total Loan Portfolio		% of Commercial Real Estate Portfolio		% of Total Loan Portfolio
Multi-Family Dwellings	21	%	11	%	20	%	11	%
Retail Space	13	%	7	%	15	%	8	%
Industrial, Manufacturing, Warehousing Properties	10	%	5	%	10	%	5	%
1-4 Family Investment Properties	9	%	5	%	11	%	6	%
Lodging	8	%	5	%	6	%	3	%
Office Real Estate	8	%	4	%	9	%	5	%
Healthcare Facilities	8	%	4	%	7	%	4	%
Land Development and Construction	6	%	3	%	7	%	4	%

The Company’s commercial real estate loan portfolio is further diversified by occupancy type, with approximately 76% of the CRE portfolio being non-owner occupied at September 30, 2025 (which is 41% of the Company’s overall loan portfolio), and 24% of the CRE portfolio being owner occupied (which is 13% of the Company’s total loan portfolio). At December 31, 2024, the Company’s commercial real estate loan portfolio was diversified by occupancy type, with approximately 77% of the CRE portfolio being non-owner occupied (which was 42% of the Company’s overall loan portfolio), and 23% of the CRE portfolio being owner occupied (which was 12% of the Company’s total loan portfolio).

Commercial real estate loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Like much of the Bank’s lending activities, the underwriting standards for commercial real estate are designed to promote relationship banking rather than transactional banking. Once it is determined that the borrower’s management possesses sound ethics and solid business acumen, our management examines market conditions and current and projected cash flows to determine the ability of the borrower to repay their obligations as agreed. Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. As discussed above, the properties securing our commercial real estate portfolio are diverse in terms of property type, occupancy type, and geographic location. This diversity helps reduce the Bank’s exposure to adverse economic events that affect any single market or industry. Management will continue to monitor and evaluate commercial real estate loans based on collateral, geography and risk grade criteria.

The following table indicates the breakdown of the allowance for credit losses for the periods indicated (dollars in thousands):


	September 30, 2025		December 31, 2024
Commercial and Industrial Loans and Leases	$	18,809	$	7,456
Commercial Real Estate Loans	39,132		25,818
Agricultural Loans	3,228		4,917
Home Equity and Consumer Loans	5,673		3,443
Residential Mortgage Loans	9,215		2,802
Unallocated	—		—
Total Allowance for Credit Losses	$	76,057	$	44,436

The Company’s allowance for credit losses totaled $76.1 million at September 30, 2025 compared to $44.4 million at December 31, 2024. The allowance for credit losses represented 1.32% of period-end loans at September 30, 2025 compared with 1.08% at December 31, 2024. At March 31, 2025, the Company changed its estimate methodology for the allowance for credit losses from the static pool to the discounted cash flow method which resulted in minimal impact to the allowance.

The Company added $32.7 million to the allowance for credit losses in conjunction with the closing of the Heartland acquisition on February 1, 2025, related to the Heartland loan portfolio. Of the increase in the allowance for credit losses for the Heartland portfolio, $16.2 million was recorded through the provision for credit losses for the “Day 2” Adjustment under the CECL model.

Under the CECL model, certain acquired loans continue to carry a fair value discount as well as an allowance for credit losses. As of September 30, 2025, the Company held net discounts on acquired loans of $56.9 million, which included $54.7 million related to the Heartland loan portfolio.

The following is an analysis of the Company’s non-performing assets at September 30, 2025 and December 31, 2024:


Non-performing Assets: (dollars in thousands)	September 30, 2025			December 31, 2024
Non-accrual Loans	$	23,676		$	10,934
Past Due Loans (90 days or more)	—			188
Total Non-performing Loans	23,676			11,122
Other Real Estate	48			—
Total Non-performing Assets	$	23,724		$	11,122

Restructured Loans	$	—		$	—

Non-performing Loans to Total Loans	0.41		%	0.27		%
Non-performing Assets to Period End Assets	0.28		%	0.18		%
Allowance for Credit Loss to Non-performing Loans	321.24		%	399.53		%

The following table presents non-accrual loans and loans past due 90 days or more still on accrual by class of loans:


	Non-Accrual Loans				Loans Past Due 90 Days or More & Still Accruing
	September 30, 2025		December 31, 2024		September 30, 2025		December 31, 2024
Commercial and Industrial Loans and Leases	$	8,789	$	5,018	$	—	$	—
Commercial Real Estate Loans	7,481		1,745		—		183
Agricultural Loans	2,393		765		—		5
Home Equity Loans	885		1,087		—		—
Consumer Loans	115		117		—		—
Residential Mortgage Loans	4,013		2,202		—		—
Total	$	23,676	$	10,934	$	—	$	188

Non-performing assets totaled $23.7 million at September 30, 2025 compared to $11.1 million at December 31, 2024. Non-performing assets represented 0.28% of total assets at September 30, 2025 compared with 0.18% at year-end 2024. Non-performing loans totaled $23.7 million at September 30, 2025 compared to $11.1 million at December 31, 2024. Non-performing loans represented 0.41% of total loans at September 30, 2025 compared to 0.27% at December 31, 2024.

The overall increase in non-performing assets at September 30, 2025 compared to December 31, 2024 was largely attributable to the Heartland acquisition. As of September 30, 2025, non-performing assets from the Heartland acquisition totaled approximately $11.6 million.

September 30, 2025 total deposits increased $1.685 billion compared to year-end 2024. The increase in total deposits at September 30, 2025 compared with year-end 2024 was largely attributable to the Heartland acquisition. As of September 30, 2025, deposits from the Heartland acquisition totaled $1.615 billion. Excluding the deposits related to the acquisition, total deposits were relatively stable with an increase of $70.9 million, or approximately 2% on an annualized basis, at September 30, 2025 compared with year-end 2024.

The addition of the Heartland deposit portfolio did not result in significant changes to the overall deposit portfolio composition. Notably, non-interest bearing deposits have remained relatively stable as a percent of total deposits with September 30, 2025 non-interest deposits totaling 28% of total deposits while non-interest deposits totaled 26% at year-end 2024.


End of Period Deposit Balances: (dollars in thousands)	September 30, 2025		December 31, 2024		Current Period Change
Non-interest-bearing Demand Deposits	$	1,938,522	$	1,399,270	$	539,252
Interest-bearing Demand, Savings, & Money Market Accounts	3,714,191		3,013,204		700,987
Time Deposits < $100,000	502,548		327,080		175,468
Time Deposits of $100,000 or more	859,241		589,521		269,720
Total Deposits	$	7,014,502	$	5,329,075	$	1,685,427

Capital Resources:

As of September 30, 2025, shareholders’ equity increased by $404.7 million to $1.120 billion compared with $715.1 million at year-end 2024. The increase in shareholders’ equity was primarily attributable to the issuance of approximately 7.7 million shares of the Bancorp’s common stock in the acquisition of Heartland, resulting in an increase to shareholders’ equity of $320.0 million.

Shareholders’ equity represented 13.3% of total assets at September 30, 2025 and 11.4% of total assets at December 31, 2024. Shareholders’ equity included $411.7 million of goodwill and other intangible assets at September 30, 2025 compared to $183.0 million of goodwill and other intangible assets at December 31, 2024.

The Company’s Board of Directors previously approved a plan to repurchase up to 1.0 million shares of the Company’s outstanding common stock. On a share basis, the amount of common stock subject to the repurchase plan represented approximately 3% of the Company’s outstanding shares on the date it was approved. The Company is not obligated to purchase any shares under the plan, and the plan may be discontinued at any time. The actual timing, number and share price of shares purchased under the repurchase plan will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market and economic conditions and applicable legal requirements. The Company has not repurchased any shares of common stock under the repurchase plan.

Federal banking regulations provide guidelines for determining the capital adequacy of bank holding companies and banks. These guidelines provide for a more narrow definition of core capital and assign a measure of risk to the various categories of assets. The Company is required to maintain minimum levels of capital in proportion to total risk-weighted assets and off-balance sheet exposures.

The current risk-based capital rules, as adopted by federal banking regulators, are based upon guidelines developed by the Basel Committee on Banking Supervision and reflect various requirements of the Dodd-Frank Act (the “Basel III Rules”). The Basel III Rules require banking organizations to, among other things, maintain a minimum ratio of Total Capital to risk-weighted assets, a minimum ratio of Tier 1 Capital to risk-weighted assets, a minimum ratio of “Common Equity Tier 1 Capital” to risk-weighted assets, and a minimum leverage ratio (calculated as the ratio of Tier 1 Capital to adjusted average consolidated assets). In addition, under the Basel III Rules, in order to avoid limitations on capital distributions, including dividend payments, the Company is required to maintain a 2.5% capital conservation buffer above the adequately capitalized regulatory capital ratios. At September 30, 2025, the capital levels for the Company and its subsidiary 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.

On September 15, 2025, the Company redeemed the Heartland Notes, outstanding in the aggregate principal amount of $24.3 million, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest. While a portion of the Heartland Notes qualified as Tier 2 capital for regulatory capital purposes, the redemption did not have a material impact on the capital ratios of the Company or the Bank.

The table below presents the Company’s consolidated and the subsidiary bank’s capital ratios under regulatory guidelines:


	9/30/2025 Ratio		12/31/2024 Ratio		Minimum for Capital Adequacy Purposes ⁽¹⁾		Well-Capitalized Guidelines
Total Capital (to Risk Weighted Assets)
Consolidated	15.07	%	17.15	%	8.00	%	N/A
Bank	14.00	%	15.02	%	8.00	%	10.00	%
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated	13.83	%	15.72	%	6.00	%	N/A
Bank	13.10	%	14.23	%	6.00	%	8.00	%
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated	13.30	%	15.02	%	4.50	%	N/A
Bank	13.10	%	14.23	%	4.50	%	6.50	%
Tier 1 Capital (to Average Assets)
Consolidated	11.40	%	12.28	%	4.00	%	N/A
Bank	10.80	%	11.12	%	4.00	%	5.00	%

(1) Excludes capital conservation buffer.

The Company adopted the CECL accounting standard under GAAP effective January 1, 2020. The regulatory capital rules applicable to the Company provided an optional three-year phase-in period for the day-one adverse regulatory capital effects of adopting CECL. In addition, as part of pandemic-related legislation enacted during 2020, banking organizations were further permitted to mitigate the estimated cumulative regulatory capital effects of CECL for up to an additional two years. As a result, on January 1, 2022, the Company began the required three-year phase-in by reflecting 25% of the previously deferred estimated capital impact of CECL in its regulatory capital. An additional 25% was phased in on each of January 1, 2023 and January 1, 2024, and January 1, 2025. As of January 1, 2025, the adverse cumulative effects of adopting CECL have been fully phased into our regulatory capital.

Liquidity:

The Consolidated Statement of Cash Flows details the elements of changes in the Company’s consolidated cash and cash equivalents. Total cash and cash equivalents increased $66.9 million during the nine months ended September 30, 2025 ending at $255.6 million. During the nine months ended September 30, 2025, operating activities resulted in net cash inflows of $116.6 million. Investing activities resulted in net cash inflows of $55.3 million during the nine months ended September 30, 2025. Financing activities resulted in net cash outflows for the nine months ended September 30, 2025 of $105.1 million.

The Company’s primary source of funding is its customer deposits, supplemented by reciprocal deposits. The bank subsidiary of the Company also utilizes short-term funding sources from time to time. These sources consist of overnight federal funds purchased from other financial institutions, secured repurchase agreements that generally mature within one day of the transaction date, and secured overnight variable rate borrowings from the FHLB and the Federal Reserve Bank. These borrowings represent an important source of short-term liquidity for the Company’s bank subsidiary. In addition, the Company, as a separate and distinct corporation from its bank and other subsidiaries, also has the ability to borrow funds from other financial institutions and to raise debt or equity capital from the capital markets and other sources.

The Company’s bank subsidiary is authorized by its Board to borrow up to $1.66 billion at the FHLB, but availability at September 30, 2025 was limited to approximately $592 million based on the then pledged collateral and outstanding borrowings. In addition, the Company had a borrowing capacity of approximately $734 million at the Federal Reserve Bank as of September 30, 2025, based on the then pledged collateral. The capacity for borrowings from the FHLB and the Federal Reserve Bank could be increased, in each case, by the Company pledging additional available collateral. The Company’s Asset/Liability Committee closely monitors the availability of these sources as part of its overall oversight and management of the bank subsidiary’s liquidity.

The parent company is a corporation separate and distinct from its bank and other subsidiaries. The Company uses funds at the parent-company level to pay dividends to its shareholders, to acquire or make other investments in other businesses or their securities or assets, to repurchase its stock from time to time, and for other general corporate purposes including debt service. The parent company does not have access at the parent-company level to the deposits and certain other sources of funds that are available to its bank subsidiary to support its operations. Instead, the parent company has historically derived most of its revenues from dividends paid to the parent company by its bank subsidiary. The Company’s banking subsidiary is subject to statutory restrictions on its ability to pay dividends to the parent company. The parent company has, from time-to-time, supplemented the dividends received from its subsidiaries with borrowings. As of September 30, 2025, the parent company had approximately $68.0 million of cash and cash equivalents available to meet its cash flow needs.

USE OF NON-GAAP FINANCIAL MEASURES

The accounting and reporting policies of the Company conform to 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, provision for credit losses, non-interest expense, non-interest income, efficiency ratio, 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 CECL “Day 2” provision expense for acquired loans that have only insignificant credit deterioration (i.e., non-PCD loans) related to the Heartland merger; (2) non-recurring expenses related to the Heartland merger; (3) the gain on the extinguishment of debt resulting from the redemption of certain subordinated notes on September 15, 2025; (4) the operating results for GAI, whose assets were sold effective June 1, 2024; (5) the gain on the sale of GAI assets; and (6) the loss related to the securities portfolio restructuring transaction that occurred in the second quarter of 2024. 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.


Non-GAAP Reconciliation – Net Income and Earnings Per Share	Three Months Ended				Nine Months Ended
(Dollars in Thousands, except per share amounts)	09/30/2025		09/30/2024		09/30/2025		09/30/2024
Net Income, as reported	$	35,074	$	21,048	$	76,952	$	60,600
Adjustments:
Plus: CECL Day 2 non-PCD provision	—		—		12,150		—
Plus: Non-recurring merger-related expenses	101		609		5,418		928
Less: Gain on debt extinguishment	731		—		731		—
Less: Loss on securities restructuring	—		—		—		(27,189)
Less: Income from GAI operations	—		(65)		—		821
Less: Gain on sale of GAI assets	—		—		—		27,476
Adjusted Net Income	$	34,444	$	21,722	$	93,789	$	60,420

Weighted Average Shares Outstanding	37,493,028		29,679,464		36,561,331		29,649,020

Earnings Per Share, as reported	$	0.94	$	0.71	$	2.10	$	2.04
Earnings Per Share, as adjusted	$	0.92	$	0.73	$	2.57	$	2.04


Non-GAAP Reconciliation – Non-Interest Income and Non-Interest Expense	Three Months Ended				Nine Months Ended
(Dollars in Thousands)	09/30/2025		09/30/2024		09/30/2025		09/30/2024

Non-Interest Income	$	18,429	$	13,801	$	50,002	$	48,546
Less: Gains (Losses) on securities	—		70		—		105
Less: Loss on securities restructuring	—		—		—		(34,893)
Less: Gain on debt extinguishment	975		—		975		—
Less: Revenue from GAI operations	—		—		—		4,434
Less: Gain on sale of GAI assets	—		—		—		38,323
Adjusted Non-Interest Income	$	17,454	$	13,731	$	49,027	$	40,577

Non-Interest Expense	$	49,700	$	36,126	$	151,999	$	110,538
Less: Non-recurring merger-related expenses	135		747		6,996		1,172
Less: Expense from GAI operations	—		87		—		3,342
Less: Expense from sale of GAI assets	—		—		—		1,816
Adjusted Non-Interest Expense	$	49,565	$	35,292	$	145,003	$	104,208


Non-GAAP Reconciliation – Efficiency Ratio	Three Months Ended						Nine Months Ended
(Dollars in Thousands)	09/30/2025			09/30/2024			09/30/2025			09/30/2024

Adjusted Non-Interest Expense (from above)	$	49,565		$	35,292		$	145,003		$	104,208
Less: Intangible Amortization	2,693			484			7,566			1,594
Adjusted Non-Interest Expense excluding Intangible Amortization	$	46,872		$	34,808		$	137,437		$	102,614

Net Interest Income	$	75,725		$	48,594		$	215,452		$	139,559
Add: FTE Adjustment	1,273			1,151			3,862			4,322
Net Interest Income (FTE)	76,998			49,745			219,314			143,881

Adjusted Non-Interest Income (from above)	17,454			13,731			49,027			40,577

Total Adjusted Total Revenue	$	94,452		$	63,476		$	268,341		$	184,458

Efficiency Ratio	49.26		%	56.15		%	53.63		%	47.95		%
Adjusted Efficiency Ratio	49.63		%	54.84		%	51.22		%	55.63		%


Non-GAAP Reconciliation – Net Interest Margin	Three Months Ended						Nine Months Ended
(Dollars in Thousands)	09/30/2025			09/30/2024			09/30/2025			09/30/2024

Net Interest Income (FTE) from above	$	76,998		$	49,745		$	219,314		$	143,881
Less: Accretion of Discount on Acquired Loans	3,914			236			11,589			889
Adjusted Net Interest Income (FTE)	$	73,084		$	49,509		$	207,725		$	142,992
Average Earning Assets	$	7,538,784		$	5,707,634		$	7,357,725		$	5,669,302
Net Interest Margin (FTE)	4.06		%	3.47		%	3.98		%	3.39		%
Adjusted Net Interest Margin (FTE)	3.85		%	3.45		%	3.77		%	3.37		%

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

The Company from time to time in its oral and written communications makes statements relating to its expectations regarding the future. These types of statements are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company may include forward-looking statements in filings with the Securities and Exchange Commission (“SEC”), such as this Form 10-Q, in other written materials, and in oral statements made by senior management to analysts, investors, representatives of the media, and others. Such forward looking statements can include statements about the Company’s net interest income or net interest margin; its adequacy of allowance for credit losses, levels of provisions for credit losses, and the quality of the Company’s loans, investment securities and other assets; simulations of changes in interest rates; expected results from mergers with or acquisitions of other businesses; litigation results; tax estimates and recognition; dividend policy; parent company cash resources and cash requirements, and parent company capital resources; estimated cost savings, plans and objectives for future operations; and expectations about the Company’s financial and business performance and other business matters as well as economic and market conditions and trends. They often can be identified by the use of words like “plan,” “expect,” “can,” “might,” “may,” “will,” “would,” “could,” “should,” “intend,” “project,” “estimate,” “believe” or “anticipate,” or similar expressions.

Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the forward-looking statement is made.

Readers are cautioned that, by their nature, all forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Actual results may differ materially and adversely from the expectations of the Company that are expressed or implied by any forward-looking statement. The discussions in this Item 2 list some of the factors that could cause the Company’s actual results to vary materially from those expressed or implied by any forward-looking statements. Other risks, uncertainties, and factors that could cause the Company’s actual results to vary materially from those expressed or implied by any forward-looking statement 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 the Company 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 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;

• the potential for increases to, and volatility in, the balance of our allowance for credit losses and related provision expense due to the current expected credit loss (CECL) standard;

• 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 the Company’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;

• changes to the fair value estimates used by German American in accounting for its acquisition of Heartland, which preliminary valuations must be finalized no later than January 31, 2026; and

• the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends.

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 the Company. Readers are cautioned not to place undue reliance on these forward-looking statements.

Investors should consider these risks, uncertainties, and other factors, in addition to those mentioned by the Company in its Annual Report on Form 10-K for its fiscal year ended December 31, 2024, this Quarterly Report on Form 10-Q, and other SEC filings from time to time, when considering any forward-looking statement.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company’s exposure to market risk is reviewed on a regular basis by the Asset/Liability Committee and Boards of Directors of the parent company and its subsidiary bank. Primary market risks which impact the Company’s operations are liquidity risk and interest rate risk.

The liquidity of the parent company is dependent upon the receipt of dividends from its subsidiary bank, which is subject to certain regulatory limitations. The Bank’s source of funding is predominately core deposits, maturities of securities, repayments of loan principal and interest, federal funds purchased, securities sold under agreements to repurchase, and borrowings from the Federal Home Loan Bank and the Federal Reserve Bank.

The Company monitors interest rate risk by the use of computer simulation modeling to estimate the potential impact on its net interest income under various interest rate scenarios, and by estimating its static interest rate sensitivity position. Another method by which the Company’s interest rate risk position can be estimated is by computing estimated changes in its net portfolio value (“NPV”). This method estimates interest rate risk exposure from movements in interest rates by using interest rate sensitivity analysis to determine the change in the NPV of discounted cash flows from assets and liabilities. NPV represents the market value of portfolio equity and is equal to the estimated market value of assets minus the estimated market value of liabilities.

Computations for measuring both net interest income and NPV are based on a number of assumptions, including the relative levels of market interest rates and prepayments in mortgage loans and certain types of investments. These computations do not contemplate any actions management may undertake in response to changes in interest rates, and should not be relied upon as indicative of actual results. In addition, certain shortcomings are inherent in the method of computing both net interest income and NPV. Should interest rates remain or decrease below current levels, the proportion of adjustable rate loans could decrease in future periods due to refinancing activity. In the event of an interest rate change, prepayment levels would likely be different from those assumed in the modeling. Lastly, the ability of many borrowers to repay their adjustable rate debt may decline during a rising interest rate environment.

The Company from time to time utilizes derivatives to manage interest rate risk. Management continuously evaluates the merits of such interest rate risk products but does not anticipate the use of such products to become a major part of the Company’s risk management strategy.

The table below provides an assessment of the risk to net interest income over the next 12 months in the event of a sudden and sustained 1% and 2% increase and decrease in prevailing interest rates (dollars in thousands).

Interest Rate Sensitivity as of September 30, 2025 - Net Interest Income


	Net Interest Income

Changes in Rates	Amount		% Change
+2%	$	329,654	1.77	%
+1%	327,073		0.98	%
Base	323,910		—
-1%	318,606		(1.64)	%
-2%	310,920		(4.01)	%

The above table is a measurement of the Company’s net interest income at risk, assuming a static balance sheet as of September 30, 2025 and instantaneous parallel changes in interest rates. The Company also monitors interest rate risk under other scenarios including a more gradual movement in market interest rates. This type of scenario can at times produce different modeling results in measuring interest rate risk sensitivity.

The table below provides an assessment of the risk to NPV in the event of a sudden and sustained 1% and 2% increase and decrease in prevailing interest rates (dollars in thousands).

Interest Rate Sensitivity as of September 30, 2025 - Net Portfolio Value


	Net Portfolio Value				Net Portfolio Value as a % of Present Value of Assets
Changes in Rates	Amount		% Change		NPV Ratio		Change

+2%	$	1,004,236	(6.43)	%	13.44	%	(21) b.p.
+1%	1,041,680		(2.94)	%	13.59	%	(6) b.p.
Base	1,073,214		—		13.65	%	—
-1%	1,097,652		2.28	%	13.60	%	(5) b.p.
-2%	1,105,977		3.05	%	13.35	%	(30) b.p.

This Item 3 includes forward-looking statements. See “Forward-looking Statements and Associated Risks” included in Part I, Item 2 of this Report for a discussion of certain factors that could cause the Company’s actual exposure to market risk to vary materially from that expressed or implied above. These factors include possible changes in economic conditions; interest rate fluctuations, competitive product and pricing pressures within the Company’s markets; and equity and fixed income market fluctuations. Actual experience may also vary materially to the extent that the Company’s assumptions described above prove to be inaccurate.

Item 4. Controls and Procedures

As of September 30, 2025, the Company carried out an evaluation, under the supervision and with the participation of its principal executive officer and principal financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were, as of that date, effective in timely alerting them to material information required to be included in the Company’s periodic reports filed with the Securities and Exchange Commission. There are inherent limitations to the effectiveness of systems of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective systems of disclosure controls and procedures can provide only reasonable assurances of achieving their control objectives.

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s third fiscal quarter of 2025 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no pending legal proceedings, other than routine litigation incidental to the business of the Company’s subsidiaries, to which the Company or any of its subsidiaries is a party or of which any of their property is the subject.

Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed in German American Bancorp, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Sale of Unregistered Securities.

Not applicable.

(b) Use of Proceeds.

Not applicable.

The following table sets forth information regarding the Company’s purchases of its common shares during each of the three months ended September 30, 2025.


Period	Total Number of Shares (or Units) Purchased	Average Price Paid Per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased under the Plans or Programs (1)
July 2025	—	$	—	—	1,000,000
August 2025	—	—		—	1,000,000
September 2025	—	—		—	1,000,000
Total	—	$	—	—

(1) The Company’s Board of Directors previously approved a plan to repurchase up to 1.0 million shares of the Company’s outstanding common stock. On a share basis, the amount of common stock subject to the repurchase plan represented approximately 3% of the Company’s outstanding shares on the date it was approved. The Company is not obligated to purchase any shares under the plan, and the plan may be discontinued at any time. The actual timing, number and share price of shares purchased under the repurchase plan will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market and economic conditions and applicable legal requirements. The Company has not repurchased any shares under this repurchase plan.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a) Information required to be disclosed in a report on Form 8-K.

None.

(b) Changes to director nomination procedures.

None.

During the three months ended September 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

The following exhibits are included with this Report or incorporated herein by reference.


Exhibit No.						Description
2.1 #						Agreement and Plan of Reorganization by and among German American Bancorp, Inc., German American Bank, Heartland BancCorp, and Heartland Bank, dated as of July 29, 2024, is incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed July 29, 2024 (SEC File No. 001-15877).
3.1						Amended and Restated Articles of Incorporation of German American Bancorp, Inc., are incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed May 26, 2020 (SEC File No. 001-15877).
3.2						Amended and Restated Bylaws of German American Bancorp, Inc. are incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed December 20, 2023 (SEC File No. 001-15877).
4.1						Terms of Common Shares and Preferred Shares of the Registrant (included in Restatement of Articles of Incorporation) are incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed May 26, 2020 (SEC File No. 001-15877).
4.2						Specimen stock certificate for Common Shares of the Registrant is incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed October 21, 2010 (SEC File No. 001-15877).
4.3						Indenture, dated as of June 25, 2019, by and between German American Bancorp, Inc. and U.S. Bank National Association, as trustee, is incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed June 25, 2019 (SEC File No. 001-15877).
4.4						Form of 4.50% Fixed-to-Floating Subordinated Note due 2029 of German American Bancorp, Inc. is incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K filed June 25, 2019 (SEC File No. 001-15877).
10.1 *						Description of Director Compensation Arrangements, effective as of July 1, 2025 is incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed July 1, 2025 (SEC File No. 001-15877).
31.1 +						Sarbanes-Oxley Act of 2002, Section 302 Certification of Principal Executive Officer.
31.2 +						Sarbanes-Oxley Act of 2002, Section 302 Certification of Principal Financial Officer.
32.1 ++						Sarbanes-Oxley Act of 2002, Section 906 Certification of Principal Executive Officer.
32.2 ++						Sarbanes-Oxley Act of 2002, Section 906 Certification of Principal Financial Officer.
101.INS+						Inline XBRL Instance Document (The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.)
101.SCH+						Inline XBRL Taxonomy Extension Schema Document
101.CAL+						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB+						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE+						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Note: No long-term debt instrument issued by the Registrant exceeds 10% of consolidated total assets or is registered. In accordance with paragraph 4 (iii) of Item 601(b) of Regulation S-K, the Registrant will furnish the Securities and Exchange Commission copies of long-term debt instruments and related agreements upon request.

# Schedules to the subject agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished to the Securities and Exchange Commission upon request.

* Exhibits that describe or evidence management contracts or compensatory plans or arrangements required to be filed as exhibits to this Report are indicated by an asterisk.

+ Filed with this Report (other than through incorporation by reference to other disclosures or exhibits).

++ Furnished with this Report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


			GERMAN AMERICAN BANCORP, INC.

Date: November 5, 2025			By: /s/D. Neil Dauby
			D. Neil Dauby
			Chairman and Chief Executive Officer
			(Principal Executive Officer)

Date: November 5, 2025			By: /s/Bradley M. Rust
			Bradley M. Rust
			President and Chief Financial Officer
			(Principal Financial Officer)

Date: November 5, 2025			By: /s/Vicki L. Schuler
			Vicki L. Schuler
			Senior Vice President, Controller
			(Principal Accounting Officer)

TABLE OF CONTENTS

Part I. Financial Information Item 1. Unaudited Financial Statements Note 1 Basis Of Presentation and Market Conditions Note 2 - Recent Accounting Pronouncements Note 3 Sale Of Insurance Assets Note 4 Per Share Data Note 4 - Per Share Data (continued)Note 5 Securities Note 5 - Securities (continued)Note 6 - Derivatives Note 6 - Derivatives (continued)Note 7 Loans Note 7 - Loans (continued)Note 8 Repurchase Agreements Accounted For As Secured Borrowings Note 9 Segment Information Note 9 - Segment Information (continued)Note 10 Stock Repurchase Plan Note 11 Equity Plans and Equity Based Compensation Note 11 - Equity Plans and Equity Based Compensation (continued)Note 12 Fair Value Note 12 - Fair Value (continued)Note 13 - Other Comprehensive Income (loss)Note 13 - Other Comprehensive Income (loss) (continued)Note 14 - Revenue Recognition Note 14 - Revenue Recognition (continued)Note 15 Leases Note 15 - Leases (continued)Note 16 Business Combinations Note 16 Business Combinations (continued)Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II. Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

GABC 10-Q Quarter ended Sept. 30, 2025

Exhibits