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Business Combinations | 9 Months Ended
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Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Business Combinations | 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 non-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.
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.
|  | 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.

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