Executive Summary

Q1 2025 GAAP EPS was $0.30 on net income of $10.5M, down from $0.78 in Q4 2024 and $0.64 in Q1 2024, driven by one-time Heartland acquisition impacts: $16.2M Day 2 CECL provision (after-tax $12.15M) and $5.9M merger expenses (after-tax $4.62M) .
Core performance was stronger: adjusted EPS was $0.79 (vs $0.79 in Q4 2024), with net interest margin expanding 42 bps q/q to 3.96% (24 bps from acquired-loan accretion; remainder from higher asset yields and lower (ex-Heartland) deposit costs) .
Balance sheet jumped on the Heartland deal: assets $8.42B (+$2.12B q/q), loans $5.65B (+$1.52B q/q), deposits $7.10B (+$1.77B q/q); credit quality remained strong (NPA 0.22% of assets; NPL 0.33% of loans) .
Dividend increased to $0.29/share (payable May 20, 2025; record May 10, 2025), up from $0.27 in Nov 2024, signaling confidence despite near-term merger noise .
Versus S&P Global consensus, GAAP EPS and “Revenue” missed on reported basis due to transient merger/CECL items; on an adjusted basis, EPS would have been in-line (see Estimates Context) .

What Went Well and What Went Wrong

What Went Well
- Net interest margin expanded meaningfully to 3.96% (from 3.54% in Q4 2024), with accretion contributing 24 bps and underlying improvement from rising asset yields and lower deposit costs (ex-Heartland) .
- Organic growth indicators were solid: non-interest-bearing DDA grew $21M q/q (ex-acquisition) to 27% of deposits; organic CRE loan growth robust; overall organic loans +4% y/y (ex-acquisition) .
- Management executed a smooth systems conversion shortly after quarter end; CEO: “We are extremely pleased to deliver yet another solid quarter of operating performance…position[ing]…for continued profitability and growth with the closing of the Heartland merger” .
What Went Wrong
- Reported EPS fell to $0.30 (from $0.78 in Q4) as one-time Heartland-related costs ($5.9M) and the $16.2M Day 2 CECL provision depressed GAAP results .
- Non-interest expense rose 47% q/q to $52.8M on merger-related items and added Heartland operating costs (adjusted OPEX $46.9M vs $35.6M in Q4) .
- NPAs and NPLs rose (to 0.22% of assets and 0.33% of loans) primarily from acquired credits, though still at low absolute levels; allowance increased to 1.33% of loans (from 1.08% in Q4) .

Financial Results

Income statement and profitability (oldest → newest)

Metric	Q1 2024	Q4 2024	Q1 2025
Net Interest Income ($M)	$45.0	$51.0	$66.6
Non-Interest Income ($M)	$15.8	$14.1	$14.8
Provision for Credit Losses ($M)	$0.9	$0.6	$15.3
Non-Interest Expense ($M)	$36.7	$35.8	$52.8
Net Income ($M)	$19.0	$23.2	$10.5
Diluted EPS ($)	$0.64	$0.78	$0.30
Net Interest Margin (%)	3.35%	3.54%	3.96%
Efficiency Ratio (%)	57.92%	53.38%	61.30%

Balance sheet and credit (period-end, oldest → newest)

Metric	Q1 2024	Q4 2024	Q1 2025
Total Assets ($B)	$6.11	$6.30	$8.42
Loans ($B)	$3.98	$4.13	$5.65
Deposits ($B)	$5.22	$5.33	$7.10
Non-Performing Assets (% Assets)	0.16%	0.18%	0.22%
NPLs (% Loans)	0.25%	0.27%	0.33%
Allowance for Credit Losses (% Loans)	1.10%	1.08%	1.33%
CET1 (Consolidated) (%)	14.27%	15.02%	12.73%
Non-Interest Bearing Deposits (% of total)	28%	26%	27%
Net Charge-offs (annualized, % Avg Loans)	0.09%	0.03%	0.04%
Tangible BVPS ($)	$15.82	$17.93	$16.74

Selected KPIs and drivers

KPI	Q1 2024	Q4 2024	Q1 2025
Accretion on Acquired Loans ($M)	$0.36	$0.62	$4.19
Accretion Contribution to NIM (bps)	3	4	24
Avg Earning Assets ($B)	$5.59	$5.88	$6.92

Estimate comparison (S&P Global definitions; Q1 2025)

Metric	Actual	Consensus*	Surprise
EPS (GAAP)	$0.30	$0.66*	-$0.36 (miss, one-time items)
Revenue* ($M)	$66.11*	$79.56*	-$13.45M (approx. -16.9%)

Values with asterisks (*) retrieved from S&P Global.

Segment breakdown: Not applicable; the company does not report by operating segment. Loan and deposit composition details provided above .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular Quarterly Dividend	Payable 5/20/2025 (record 5/10/2025)	$0.27/share (declared 11/20/2024 payment per prior cycle)	$0.29/share	Raised
Merger-Related Expenses	2025 integration	N/A	Expected to decline as Heartland operations are fully integrated	Qualitative improvement

No explicit quantitative guidance for revenue, margins, opex, tax, or segment metrics was provided in the quarter’s materials .

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript was not available in our document set. Themes below reflect disclosures in Q1 2025 press release/8-K and the Q3 2024 earnings release.

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Net Interest Margin	NIM improved to 3.47% from 3.34% on rising asset yields; deposit cost pressures moderated	NIM 3.54%; accretion ~4 bps	NIM 3.96%; accretion 24 bps; underlying expansion from higher earning asset yields and lower deposit costs (ex-Heartland)	Improving
Deposit Mix/Costs	Seasonal public fund outflows; NIBD ~27%	NIBD 26% of total	NIBD 27% of total; ex-acq DDA +$21M q/q; lower deposit costs cited	Stable to improving
Loan Growth	Broad-based modest growth; limited office CRE exposure	Stable with year-end base prior to deal (implied)	EOP loans +$1.52B q/q (deal); organic CRE growth; ex-acq total loans +2% annualized q/q, +4% y/y	Stronger (deal-driven + organic)
Credit Quality	NPA 0.15% assets; NPL 0.24% loans; ACL 1.09%	NPA 0.18%; NPL 0.27%; ACL 1.08%	NPA 0.22% (increase due to acquired portfolio); NPL 0.33%; ACL 1.33%; NCOs 4 bps	Slightly weaker levels, still strong
M&A Integration	Pending Heartland (strategic/financially attractive)	Closing imminent (implied)	Heartland closed 2/1; smooth systems conversion post-quarter end; expenses expected to decline	De-risking progressing
Capital & TBV	Consolidated CET1 15.04%; TBVPS $18.90	CET1 15.02%; TBVPS $17.93	CET1 12.73% (deal impact); TBVPS $16.74	Lower on deal, still solid

Management Commentary

“We are extremely pleased to deliver yet another solid quarter of operating performance as German American continues to position itself for continued profitability and growth with the closing of the Heartland merger…A smooth conversion of bank operating systems took place shortly after the conclusion of first quarter 2025” — D. Neil Dauby, Chairman & CEO .
“[Q1] was highlighted by net interest margin expansion, strong organic commercial real estate loan growth, [and] strong organic non-interest bearing demand deposit growth…” .
On deposit mix and stability: non-interest-bearing DDAs represented 27% of deposits; Heartland’s deposit composition did not significantly change the merged entity’s mix .

Q&A Highlights

A Q1 2025 earnings call transcript was not available in our document corpus; as a result, Q&A themes and any verbal guidance clarifications could not be reviewed or cited.

Estimates Context

S&P Global consensus for Q1 2025 EPS was $0.66*, vs actual GAAP EPS of $0.30 (miss of $0.36), primarily due to one-time Heartland Day 2 CECL ($16.2M) and merger expenses ($5.9M) . On a non-GAAP basis, adjusted EPS was $0.79, which would have been roughly in-line with consensus .
S&P Global consensus “Revenue”* was $79.56M*, vs actual “Revenue” of $66.11M*, implying a ~17% miss. Note: S&P’s “Revenue” for banks may differ from company “total revenue” (NII + non-interest income) definitions .