GERMAN AMERICAN BANCORP, INC. 10-K

Item 8. Financial Statements and Supplementary Data. Report of Independent Registered Public Accounting Firm Shareholders and the Board of Directors of German American Bancorp, Inc. Jasper, Indiana Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of German American Bancorp, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, consolidated statements of comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO. Basis for Opinions The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 56 Report of Independent Registered Public Accounting Firm Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates Allowance for Credit Losses on Loans - Weighting of Economic Forecasting Scenarios As discussed in Notes 1 and 5 the allowance for credit losses (the “ACL”) is an accounting estimate of expected credit losses over the estimated life of loans. The Company’s loan portfolio, measured at amortized cost, is presented at the net amount expected to be collected. Estimates of expected credit losses on loans are based on historical experience, current conditions and reasonable and supportable forecasts over the life of the loans. The Company measures expected credit losses based on pooled loans when similar risk characteristics exist primarily utilizing a discounted cash flow (“DCF”) model. 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. 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. 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. The Company then adjusts results for certain qualitative factors to reflect the extent to which management expects current conditions and reasonable and supportable forecasts to differ from the conditions that existed for the period over which historical information was evaluated. The auditing of the weighting of the economic forecasting scenarios assessed by management in the calculation of the ACL was identified by us as a critical audit matter because of the significant subjective and complex judgments made by management to determine the weighting, which led to significant auditor judgment and a high degree of auditor subjectivity and audit effort in evaluating management’s chosen weightings. The primary procedures performed to address this critical audit matter included: • Testing the effectiveness of management’s controls addressing: o Evaluation of the appropriateness of the key judgments used in the determination of the weightings of the economic scenarios used in the quantitative calculation. 57 Report of Independent Registered Public Accounting Firm o Evaluation of the relevance and reliability of data used in the determination of the weightings of the economic scenarios used in the quantitative calculation. • Substantive testing included: o Evaluating management’s methodology, judgments and the relevance and reliability of data used in the determination of the weighting of the economic scenarios used in the quantitative calculation. Crowe LLP We have served as the Company’s auditor since 1977. Indianapolis, Indiana February 26, 2026 58 Consolidated Balance Sheets Dollars in thousands, except share and per share data December 31, 2025 2024 ASSETS Cash and Due from Banks $ 71,428 $ 69,249 Federal Funds Sold and Other Short-term Investments 46,954 119,543 Cash and Cash Equivalents 118,382 188,792 Interest-bearing Time Deposits with Banks 500 500 Securities Available-for-Sale, at Fair Value (Amortized Cost $ 1,865,732 for December 31, 2025; Amortized Cost $ 1,796,040 for December 31, 2024; No Allowance for Credit Losses) 1,657,394 1,517,287 Other Investments 353 353 Loans Held-for-Sale, at Fair Value 7,817 8,239 Loans 5,884,448 4,133,267 Less: Unearned Income ( 9,351 ) ( 8,365 ) Allowance for Credit Losses ( 77,694 ) ( 44,436 ) Loans, Net 5,797,403 4,080,466 Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost 17,688 14,423 Premises, Furniture and Equipment, Net 139,001 104,045 Other Real Estate 68 — Goodwill 375,470 179,025 Intangible Assets 33,790 4,018 Company Owned Life Insurance 109,585 86,710 Accrued Interest Receivable and Other Assets 131,329 112,052 TOTAL ASSETS $ 8,388,780 $ 6,295,910 LIABILITIES Non-interest-bearing Demand Deposits $ 1,944,831 $ 1,399,270 Interest-bearing Demand, Savings, and Money Market Accounts 3,755,374 3,013,204 Time Deposits 1,289,537 916,601 Total Deposits 6,989,742 5,329,075 FHLB Advances and Other Borrowings 182,683 210,131 Accrued Interest Payable and Other Liabilities 54,030 41,637 TOTAL LIABILITIES 7,226,455 5,580,843 Commitments and Contingencies (See Note 15) SHAREHOLDERS’ EQUITY Common Stock, no par value, $ 1 stated value; 45,000,000 shares authorized 37,496 29,677 Additional Paid-in Capital 706,818 392,266 Retained Earnings 582,945 513,588 Accumulated Other Comprehensive Income (Loss) ( 164,934 ) ( 220,464 ) TOTAL SHAREHOLDERS’ EQUITY 1,162,325 715,067 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 8,388,780 $ 6,295,910 End of period shares issued and outstanding 37,495,679 29,677,093 See accompanying notes to the consolidated financial statements. 59 Consolidated Statements of Income Dollars in thousands, except per share data Years Ended December 31, 2025 2024 2023 INTEREST INCOME Interest and Fees on Loans $ 358,597 $ 240,241 $ 212,517 Interest on Federal Funds Sold and Other Short-term Investments 10,817 7,697 1,677 Interest and Dividends on Securities: Taxable 37,041 26,586 20,614 Non-taxable 13,634 16,519 21,848 TOTAL INTEREST INCOME 420,089 291,043 256,656 INTEREST EXPENSE Interest on Deposits 115,092 90,622 56,916 Interest on FHLB Advances and Other Borrowings 10,865 9,830 9,307 TOTAL INTEREST EXPENSE 125,957 100,452 66,223 NET INTEREST INCOME 294,132 190,591 190,433 Provision for Credit Losses 19,425 2,775 2,550 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 274,707 187,816 187,883 NON-INTEREST INCOME Wealth Management Fees 16,808 14,416 11,711 Service Charges on Deposit Accounts 15,083 12,669 11,538 Insurance Revenues — 4,384 9,596 Company Owned Life Insurance 2,555 2,058 1,731 Interchange Fee Income 19,598 17,125 17,452 Sale of Assets of German American Insurance — 38,323 — Other Operating Income 8,758 5,419 5,830 Net Gains on Sales of Loans 4,510 3,054 2,363 Net Gains (Losses) on Securities — ( 34,788 ) 40 TOTAL NON-INTEREST INCOME 67,312 62,660 60,261 NON-INTEREST EXPENSE Salaries and Employee Benefits 107,742 82,257 83,244 Occupancy, Furniture and Equipment Expense 19,634 14,944 14,467 FDIC Premiums 3,800 2,908 2,829 Data Processing Fees 17,579 12,243 11,112 Professional Fees 10,418 8,147 5,575 Advertising and Promotion 5,153 3,939 4,857 Intangible Amortization 10,148 2,032 2,840 Other Operating Expenses 27,475 19,907 19,573 TOTAL NON-INTEREST EXPENSE 201,949 146,377 144,497 Income before Income Taxes 140,070 104,099 103,647 Income Tax Expense 27,435 20,288 17,759 NET INCOME $ 112,635 $ 83,811 $ 85,888 Basic Earnings per Share $ 3.06 $ 2.83 $ 2.91 Diluted Earnings per Share $ 3.06 $ 2.83 $ 2.91 See accompanying notes to the consolidated financial statements. 60 Consolidated Statements of Comprehensive Income Dollars in thousands Years Ended December 31, 2025 2024 2023 NET INCOME $ 112,635 $ 83,811 $ 85,888 Other Comprehensive Income (Loss): Unrealized Gains (Losses) on Securities: Unrealized Holding Gain (Loss) Arising During the Period 70,415 ( 39,113 ) 58,769 Reclassification Adjustment for Gains Included in Net Income — 34,788 ( 40 ) Tax Effect ( 14,885 ) 921 ( 12,351 ) Net of Tax 55,530 ( 3,404 ) 46,378 Total Other Comprehensive Income (Loss) 55,530 ( 3,404 ) 46,378 COMPREHENSIVE INCOME $ 168,165 $ 80,407 $ 132,266 See accompanying notes to the consolidated financial statements. 61 Consolidated Statements of Changes in Shareholders’ Equity Dollars in thousands, except share and per share data Common Stock Shares Amount Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity Balances, December 31, 2022 29,493,193 $ 29,493 $ 387,171 $ 405,167 $ ( 263,438 ) $ 558,393 Net Income 85,888 85,888 Other Comprehensive Income (Loss) 46,378 46,378 Cash Dividends ($ 1.00 per share) ( 29,433 ) ( 29,433 ) Issuance of Common Stock for: Restricted Share Grants 91,516 92 2,240 2,332 Balances, December 31, 2023 29,584,709 29,585 389,411 461,622 ( 217,060 ) 663,558 Net Income 83,811 83,811 Other Comprehensive Income (Loss) ( 3,404 ) ( 3,404 ) Cash Dividends ($ 1.08 per share) ( 31,845 ) ( 31,845 ) Issuance of Common Stock for: Restricted Share Grants 92,384 92 2,855 2,947 Balances, December 31, 2024 29,677,093 29,677 392,266 513,588 ( 220,464 ) 715,067 Net Income 112,635 112,635 Other Comprehensive Income (Loss) 55,530 55,530 Cash Dividends ($ 1.16 per share) ( 43,278 ) ( 43,278 ) Issuance of Common Stock for: Acquisition of Heartland BancCorp 7,742,723 7,743 311,754 319,497 Restricted Share Grants 75,863 76 2,798 2,874 Balances, December 31, 2025 37,495,679 $ 37,496 $ 706,818 $ 582,945 $ ( 164,934 ) $ 1,162,325 See accompanying notes to the consolidated financial statements. 62 Consolidated Statements of Cash Flows Dollars in thousands Years Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES 2025 2024 2023 Net Income $ 112,635 $ 83,811 $ 85,888 Adjustments to Reconcile Net Income to Net Cash from Operating Activities: Net Amortization on Securities ( 1,685 ) 2,161 5,566 Depreciation and Amortization 18,714 9,277 9,560 Loans Originated for Sale ( 171,177 ) ( 134,521 ) ( 106,781 ) Proceeds from Sales of Loans Held-for-Sale 176,327 134,589 112,525 Provision for Credit Losses 19,425 2,775 2,550 Gain on Sale of Loans, net ( 4,510 ) ( 3,054 ) ( 2,363 ) Loss (Gain) on Securities, net — 34,788 ( 40 ) Gain on Sales of Other Real Estate and Repossessed Assets 31 ( 37 ) ( 83 ) Loss (Gain) on Disposition and Donation of Premises and Equipment ( 36 ) 11 ( 547 ) Gain on Debt Extinguishment ( 692 ) — — Loss (Gain) on Disposition of Land ( 45 ) — ( 83 ) Increase in Cash Surrender Value of Company Owned Life Insurance ( 2,215 ) ( 870 ) ( 1,842 ) Equity Based Compensation 2,874 2,947 2,332 Sale of Assets of German American Insurance — ( 36,507 ) — Change in Assets and Liabilities: Interest Receivable and Other Assets 7,392 1,748 3,725 Interest Payable and Other Liabilities 2,278 ( 1,354 ) ( 3,173 ) Net Cash from Operating Activities 159,316 95,764 107,234 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Maturities, Calls and Redemptions of Securities Available-for-Sale 565,795 356,471 287,084 Proceeds from Sales of Securities Available-for-Sale 206,875 404,103 114,259 Purchase of Securities Available-for-Sale ( 620,316 ) ( 722,304 ) ( 183,302 ) Proceeds from Redemption of Federal Home Loan Bank Stock 3,727 264 350 Purchase of Loans — — ( 1,502 ) Proceeds from Sales of Loans Held for Investment 2,391 — — Loans Made to Customers, net of Payments Received ( 236,185 ) ( 155,957 ) ( 187,624 ) Proceeds from Sales of Other Real Estate 17 70 108 Property and Equipment Expenditures ( 5,315 ) ( 5,047 ) ( 5,745 ) Proceeds from Sale of Land and Building 75 — 3,627 Proceeds from Sale of German American Insurance Assets — 40,000 — Acquisition of Heartland Bancorp 22,665 — — Net Cash from Investing Activities ( 60,271 ) ( 82,400 ) 27,255 CASH FLOWS FROM FINANCING ACTIVITIES Change in Deposits ( 69,762 ) 76,205 ( 96,782 ) Change in Short-term Borrowings ( 16,937 ) ( 9,105 ) ( 35,193 ) Advances in Long-term Debt 25,000 75,000 25,000 Repayments of Long-term Debt ( 64,478 ) ( 50,157 ) ( 132 ) Dividends Paid ( 43,278 ) ( 31,845 ) ( 29,433 ) Net Cash from Financing Activities ( 169,455 ) 60,098 ( 136,540 ) Net Change in Cash and Cash Equivalents ( 70,410 ) 73,462 ( 2,051 ) Cash and Cash Equivalents at Beginning of Year 188,792 115,330 117,381 Cash and Cash Equivalents at End of Year $ 118,382 $ 188,792 $ 115,330 Cash Paid During the Year for Interest $ 124,182 $ 99,057 $ 60,663 Income Taxes 18,925 17,823 15,375 Supplemental Non Cash Disclosures Loans Transferred to Other Real Estate $ 116 $ — $ — Reclass of Land & Buildings to Other Assets — — 691 Interest Rate Swap Fair Value Activity ( 2,294 ) ( 992 ) ( 2,282 ) See Note 20 (Business Combinations, Goodwill and Intangible Assets) regarding non-cash transactions included in the acquisition. See accompanying notes to the consolidated financial statements. 63 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 1 – Summary of Significant Accounting Policies Description of Business and Basis of Presentation For the year ended December 31, 2025 and the last 7 months of 2024, the operations of German American Bancorp, Inc. (the “Company”) were primarily comprised of two business segments: core banking, and wealth management services. Prior to June 1, 2024, the operations of the Company included three primary segments: core banking, wealth management services and insurance operations. The accounting and reporting policies of the Company and its subsidiaries conform to U.S. generally accepted accounting principles. The more significant policies are described below. The consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of all material intercompany accounts and transactions. Certain prior year amounts have been reclassified to conform with current classifications. Reclassifications had no impact on shareholders’ equity or net income. To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. Securities Debt securities classified as available-for-sale are securities that the Company intends to hold for an indefinite period of time, but not necessarily until maturity. Held-to-maturity securities, when present, are carried at amortized cost. As of December 31, 2025, and 2024, the Company held no securities classified as held-to-maturity. Debt securities classified as available-for-sale include securities that management may use as part of its asset/liability strategy, or that may be sold in response to changes in interest rates, changes in prepayment risk, or similar reasons. Securities classified as available-for-sale are reported at fair value with unrealized gains or losses included as a separate component of equity (other comprehensive income), net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on trade date and determined using the specific identification method. Investments with readily determinable values (except those accounted for under equity method of accounting or those that result in consolidation of the investee) are measured at fair value with changes in fair value recognized in net income. Equity securities that do not have readily determinable fair values are carried at historical cost and evaluated for impairment on a periodic basis. Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are carried at fair value. Fair value is determined based on collateral value and prevailing market prices for loans with similar characteristics. Net unrealized gains or losses are recorded through earnings. Certain mortgage loans held for sale are sold on a servicing released basis while others are sold on a servicing retained basis. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, deferred loan fees and costs. Accrued interest receivable totaled $ 29,501 at December 31, 2025 and was reported in Accrued Interest Receivable and Other Assets on the Consolidated Balance Sheets. Interest income is accrued on the unpaid principal balance. Loan origination fees and costs are deferred and recognized in interest income using the level-yield method without anticipating prepayments. Purchase Credit Deteriorated (PCD) Loans The Company has purchased loans, some of which have experienced more than insignificant credit deterioration since origination. PCD loans are recorded at the amount paid. An allowance for credit losses on loans is determined using the same methodology as other loans held for investment. The initial allowance for credit losses on loans determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses on loans becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses on loans are recorded through provision expense. 64 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 1 – Summary of Significant Accounting Policies (continued) Allowance for Credit Losses - Loans The allowance for credit losses (ACL) is a valuation account that is deducted from the amortized cost of loans receivable to present the net amount expected to be collected on the loans. 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 do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are also not included in the collective evaluation. 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. Loans that share common risk characteristics are evaluated collectively and the Company employs a methodology to estimate the allowance for these loans that evaluates both quantitative and qualitative factors. To evaluate quantitative factors for loans on a collective basis, the Company pools loans into portfolio segments that share similar risk characteristics. Pooled loan portfolio segments include commercial industrial loans, commercial real estate, agricultural loans, leases, home equity loans, consumer loans, credit cards and residential mortgage loans which are described in more detail below. For pooled loans, the Company utilizes a discounted cash flow (DCF) model to estimate the credit losses over the expected life of the loan. The discounted cash flow approach estimates cash flows considering 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. The Company utilizes and evaluates multiple economic scenarios from Moody’s 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. To calculate the adequacy of the allowance, the Company weights differing scenarios, including a baseline scenario as well as two alternative scenarios. 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. Quantitative loss factors are also supplemented by certain qualitative risk factors reflecting management's view of how losses may vary from those represented by quantitative loss rates. The qualitative risk factors management considers include: changes in nature and volume of loan portfolio, concentrations of loans to specific industries, the volume and severity of delinquencies and adversely classified loan balances, and a number of other economic indicators. Management reviews the need for an appropriate level of qualitative adjustments on a quarterly basis, and as such, the amount and allocation of qualitative adjustments may change from period to period. 65 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 1 – Summary of Significant Accounting Policies (continued) As mentioned above, the allowance for credit losses is measured on a collective (pooled) basis when similar risk characteristics exist. The Company has identified the following loan portfolio segments as well as 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 are 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 flows from the 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. Modifications to Borrowers Experiencing Financial Difficulty From time to time, the Company may modify certain loans to borrowers who are experiencing financial difficulty. 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. Allowance for Credit Losses on Available-For-Sale Securities For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it 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 written down to fair value through income. For debt securities available for sale that do not meet the aforementioned 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, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to 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, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost 66 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 1 – Summary of Significant Accounting Policies (continued) basis. Any impairment that has not been recorded through an allowance for credit losses is recorded in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Allowance for Credit Losses on Off-Balance Sheet Credit Exposures The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit loss expense included in other expense on the consolidated income statement. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Expected utilization rates are compared to the current funded portion of the total commitment amount as a practical expedient for funded exposure at default. Mortgage Servicing Rights When the Company sells mortgage loans with servicing retained, mortgage servicing rights (MSRs) are initially recorded at fair value with the income statement effect recorded through Net Gains on Sales of Loans. Capitalized MSRs are amortized over the period of estimated future servicing income of the underlying loan and are included in Other Operating Expense. MSRs are assessed for impairment quarterly, based on fair value compared to carrying amount, with any impairment recognized through a valuation allowance to the extent that the fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income. Changes in the valuation allowance are reported within Other Operating Expense on the Income Statement. The fair value of MSRs is determined by discounting estimated future cash flows from the servicing assets, using market discount rates and expected future prepayment rates. Impairment is determined by stratifying the MSRs into groupings based on predominant risk characteristics, such as loan type, term and interest rate as well as time period originated. Servicing fee income is recorded for fees earned for servicing loans. Fees earned for servicing loans are based on a contractual percentage of the outstanding principal amount of the loan and are recorded as income when earned. Federal Home Loan Bank (FHLB) Stock The Bank is a member of the FHLB of Indianapolis and FHLB of Cincinnati. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Premises, Furniture and Equipment Land is carried at cost. Premises, furniture, and equipment are stated at cost less accumulated depreciation. Buildings and related components are depreciated using the straight-line method with useful lives ranging generally from 10 to 40 years. Furniture, fixtures, and equipment are depreciated using the straight-line method with useful lives ranging generally from 3 to 10 years. Other Real Estate Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of commercial/residential real estate property collateralizing a commercial/consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through the completion of a deed in lieu of foreclosure or through a similar legal agreement. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. Goodwill and Other Intangible Assets Goodwill arises from business combinations and 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. Intangible assets with definite useful lives are 67 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 1 – Summary of Significant Accounting Policies (continued) amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on the Company’s balance sheet. 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 7 to 8 years. Company Owned Life Insurance The Company has purchased life insurance policies on certain directors and executives. This life insurance is recorded at its cash surrender value or the amount that can be realized, which considers any adjustments or changes that are probable at settlement. Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe currently that there are any such matters that will have a material impact on the financial statements. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Mortgage Banking Derivatives Commitments to fund mortgage loans (interest rate locks) to be sold in the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as non-designated derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. It is the Company’s practice to enter into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into in order to economically hedge the change in interest rates resulting from its commitments to fund the loans. The fair value of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in the fair value of these derivatives are included in net gains on sales of loans. Restrictions on Cash At December 31, 2025 and 2024, the Company was no t required to have balance on deposits with the Federal Reserve, or as cash on hand. Long-term Assets Premises and equipment, core deposit and other intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value. Stock Based Compensation Compensation cost is recognized for restricted stock awards issued to employees and directors, based on the fair value of these awards at the date of grant. Market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale and changes in unrecognized amounts in pension and other postretirement benefits, which are also recognized as a separate component of equity. Income Taxes Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. 68 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 1 – Summary of Significant Accounting Policies (continued) A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in other operating expense. Retirement Plans Pension expense under the suspended defined benefit plan is the net of interest cost, return on plan assets and amortization of gains and losses not immediately recognized. Employee 401(k) and profit sharing plan expense is the amount of matching contributions. Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service. Earnings Per Share Earnings per share are based on net income divided by the weighted average number of shares outstanding during the period. Diluted earnings per share show the potential dilutive effect of additional common shares issuable under the Company’s stock based compensation plans. Earnings per share are retroactively restated for stock splits and stock dividends. Cash Flow Reporting The Company reports net cash flows for customer loan transactions, deposit transactions, deposits made with other financial institutions and short-term borrowings. Cash and cash equivalents are defined to include cash on hand, demand deposits in other institutions and Federal Funds Sold. Fair Values of Financial Instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 16. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Recently Adopted Accounting Guidance In March 2025, the FASB issued ASU 2025-02, “Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122” to rescind the previously-issued interpretative guidance included within Staff Accounting Bulletin (“SAB”) No. 121 with respect to accounting for obligations to safeguard crypto assets that an entity holds for its customers. SAB 122 directs an entity to apply ASC 450-20, Loss Contingencies, to determine whether there is a liability related to risk of loss from such an obligation to safeguard crypto assets for its customers. This guidance is effective for annual periods beginning after December 15, 2024, including interim periods within those fiscal years. While the Company adopted this standard, it did not have an effect on the Company’s financial statements as the Company’s current operations do not include such safeguarding activities. 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 18 for additional information. 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 retrospectively adopted this standard and updated the income tax footnote. See Note 11 for additional information. Issued But Not Yet Effective 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) 69 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 1 – Summary of Significant Accounting Policies (continued) 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. In November 2025, the FASB issued ASU 2025-08, “Financial Instruments - Credit Losses (Topic 326): Purchased Loans”. This guidance amends how entities account for certain acquired loans under the current expected loss (CECL) model by expanding the "gross-up" approach to include purchased seasoned loans rather than only including purchased credit-deteriorated assets. The guidance also eliminates the double count of expected credit losses that previously occurred when purchased loans were recorded at fair value with a credit loss discount and then separately recognized through a provision to establish the credit loss allowance. This guidance is effective for annual reporting periods beginning after December 15, 2026 including interim periods within those years. Early adoption is permitted. The Company has not yet adopted ASU 2025-08. The Company expects the amendments to primarily affect the accounting for loans acquired in future business combinations or asset acquisitions. NOTE 2 – 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”), 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 ASC 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. 70 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 3 – 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 2025 U.S. Treasury $ 152,026 $ 64 $ — $ 152,090 Obligations of State and Political Subdivisions 603,528 822 ( 106,744 ) 497,606 MBS/CMO 795,574 4,714 ( 80,746 ) 719,542 US Gov’t Sponsored Entities & Agencies 314,604 853 ( 27,301 ) 288,156 Total $ 1,865,732 $ 6,453 $ ( 214,791 ) $ 1,657,394 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 3 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 have underlying collateral of equipment, machinery and commercial real estate. The amortized cost and fair value of securities at December 31, 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. Amortized Cost Fair Value Securities Available-for-Sale: Due in one year or less $ 154,385 $ 154,453 Due after one year through five years 10,867 10,758 Due after five years through ten years 62,323 56,986 Due after ten years 527,979 427,499 MBS/CMO 795,574 719,542 US Gov’t Sponsored Entities & Agencies 314,604 288,156 Total $ 1,865,732 $ 1,657,394 During 2024, the Company undertook a partial securities portfolio restructuring transaction whereby available-for-sale securities totaling $ 375,321 in book value were sold. The approximate loss on these securities totaled $ 34,893 , $ 27,189 after tax, or $ 0.92 per share, and was included in earnings for the second quarter of 2024. The proceeds from the securities sold were reinvested in the securities portfolio by the end of the third quarter of 2024. 2025 2024 2023 Proceeds from the Sales of Securities are summarized below: Available- for-Sale Available- for-Sale Available- for-Sale Proceeds from Sales $ 206,875 (1) $ 404,103 $ 114,259 Gross Gains on Sales — 614 346 Gross Losses on Sales — 35,402 306 Income Taxes on Net Gains (Losses) — ( 7,305 ) 8 (1) No gains or losses were recognized on the sale of securities during 2025 as these securities were sold at time of acquisition and were recorded at fair value at the closing of the Heartland acquisition. 71 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 3 – Securities (continued) The carrying value of securities pledged to secure repurchase agreements, public and trust deposits, and for other purposes as required by law was $ 1,034,917 and $ 1,065,880 as of December 31, 2025 and 2024, respectively. At year-end 2025 and 2024, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount great than 10% of shareholders’ equity. Below is a summary of securities with unrealized losses as of December 31, 2025 and 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 Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss December 31, 2025 Obligations of State and Political Subdivisions $ 3,054 $ ( 29 ) $ 461,657 $ ( 106,715 ) $ 464,711 $ ( 106,744 ) MBS/CMO 38,024 ( 420 ) 463,315 ( 80,326 ) 501,339 ( 80,746 ) US Gov’t Sponsored Entities & Agencies 6,793 ( 40 ) 171,247 ( 27,261 ) 178,040 ( 27,301 ) Total $ 47,871 $ ( 489 ) $ 1,096,219 $ ( 214,302 ) $ 1,144,090 $ ( 214,791 ) Less than 12 Months 12 Months or More Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss December 31, 2024 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. This evaluation process is applied to all types of securities held by the Company: obligations of state and political subdivisions, MBS/CMO and US gov't sponsored entities and agencies. 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 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 December 31, 2025 and 2024 are considered temporary and the result of fair value adjustments caused by market interest rate fluctuations. No allowance for credit losses for available-for-sale debt securities was needed at December 31, 2025 or 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 $ 9,239 at December 31, 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 December 31, 2025 and 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. There was no additional impairment recognized through earnings during 2025 or 2024. 72 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 4 – Derivatives Interest Rate Swaps 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 $ 126,573 at December 31, 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 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 December 31: 2025 2024 Notional Amount Fair Value Notional Amount Fair Value Included in Other Assets: Interest Rate Swaps $ 126,573 $ 4,145 $ 149,456 $ 6,439 Included in Other Liabilities: Interest Rate Swaps $ 126,573 $ 4,212 $ 149,456 $ 6,476 The following table presents the effect of derivative instruments on the Consolidated Statements of Income for the years ended December 31, 2025, 2024 and 2023 is as follows: 2025 2024 2023 Interest Rate Swaps: Included in Other Income $ 307 $ 651 $ 344 Mortgage Banking Derivatives Commitments to fund certain mortgage loans (interest rate lock commitments) to be sold into the secondary market to third party investors are considered derivatives. It is the Company’s practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. These mortgage banking derivatives are not designated in hedge relationships. The following table reflects the amount and fair value of mortgage banking derivatives included in the Consolidated Balance Sheets as of December 31: 2025 2024 Notional Amount Fair Value Notional Amount Fair Value Included in Other Assets: Interest Rate Lock Commitments $ 18,047 $ 213 $ — $ — Included in Other Liabilities: Interest Rate Lock Commitments $ 11,000 $ ( 31 ) $ — $ — 73 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 4 – Derivatives (continued) The net gains (losses) relating to non-designated derivative instruments used for risk management are summarized below for the years ended December 31, 2025, 2024 and 2023 is as follows: 2025 2024 2023 Interest Rate Lock Commitments: Included in Net Gains on Sales of Loans $ ( 66 ) $ — $ — NOTE 5 - Loans Loans were comprised of the following classifications at December 31: 2025 2024 Commercial: Commercial and Industrial Loans $ 761,167 $ 591,785 Commercial Real Estate Loans 3,142,472 2,224,872 Agricultural Loans 489,168 431,037 Leases 87,073 79,253 Retail: Home Equity Loans 484,300 344,808 Consumer Loans 117,648 81,396 Credit Cards 28,067 22,668 Residential Mortgage Loans 774,553 357,448 Subtotal 5,884,448 4,133,267 Less: Unearned Income ( 9,351 ) ( 8,365 ) Allowance for Credit Losses ( 77,694 ) ( 44,436 ) Loans, net $ 5,797,403 $ 4,080,466 The table above includes $ 89,134 and $ 11,178 of purchase credit deteriorated loans as of December 31, 2025 and 2024, respectively. As further described in Note 20, 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 Discounts 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 December 31, 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 $ 125,463 $ 735,729 $ 41,074 $ — $ 23,476 $ 54,206 $ — $ 402,588 $ 1,382,536 Fair Value (Discount)/Premium ( 2,774 ) ( 13,961 ) ( 578 ) — ( 147 ) ( 881 ) — ( 32,404 ) ( 50,745 ) 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 follow: 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 74 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) Allowance for Credit Losses for Loans: The following tables present the activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2025, 2024 and 2023: 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 Losses 4,751 2,908 ( 3,460 ) 61 1,202 309 706 ( 3,245 ) 3,232 Loans Charged-off ( 764 ) ( 26 ) — — ( 1,667 ) ( 96 ) ( 905 ) ( 114 ) ( 3,572 ) Recoveries Collected 49 — — — 510 19 303 21 902 Total Ending Allowance Balance $ 19,576 $ 40,626 $ 3,324 $ 1,178 $ 687 $ 4,065 $ 600 $ 7,638 $ 77,694 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 Losses ( 694 ) 120 1,086 51 962 424 786 40 2,775 Loans Charged-off ( 223 ) ( 308 ) ( 8 ) — ( 1,511 ) ( 170 ) ( 681 ) — ( 2,901 ) Recoveries Collected 55 83 2 — 517 108 32 — 797 Total Ending Allowance Balance $ 7,059 $ 25,818 $ 4,917 $ 397 $ 727 $ 2,196 $ 520 $ 2,802 $ 44,436 2023 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 $ 13,749 $ 21,598 $ 4,188 $ 209 $ 595 $ 1,344 $ 257 $ 2,228 $ 44,168 Provision (Benefit) for Credit Losses ( 4,190 ) 4,305 ( 324 ) 137 919 551 563 589 2,550 Loans Charged-off ( 1,792 ) ( 56 ) ( 27 ) — ( 1,309 ) ( 94 ) ( 455 ) ( 58 ) ( 3,791 ) Recoveries Collected 154 76 — — 554 33 18 3 838 Total Ending Allowance Balance $ 7,921 $ 25,923 $ 3,837 $ 346 $ 759 $ 1,834 $ 383 $ 2,762 $ 43,765 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. 75 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) 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. 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. 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. 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. 76 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) The following tables present the amortized cost basis of loans on non-accrual status and loans past due over 89 days still accruing as of December 31, 2025 and 2024: December 31, 2025 Non-Accrual With No Allowance for Credit Loss ⁽¹⁾ Non-Accrual Loans Past Due Over 89 Days Still Accruing Commercial and Industrial Loans $ 308 $ 16,549 $ — Commercial Real Estate Loans 285 6,303 92 Agricultural Loans 1,197 3,123 — Leases — — — Home Equity Loans 776 776 — Consumer Loans 30 33 — Credit Cards 148 148 — Residential Mortgage Loans 1,471 2,387 — Total $ 4,215 $ 29,319 $ 92 (1) Includes non-accrual loans with no allowance for credit loss and are also included in Non-Accrual loans totaling $ 29,319 . December 31, 2024 Non-Accrual With No Allowance for Credit Loss ⁽¹⁾ 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 Non-Accrual loans totaling $ 10,934 . Interest income on non-accrual loans recognized during the years ended December 31, 2025 and 2024 totaled $ 521 and $ 291 . The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2025 and 2024: December 31, 2025 Real Estate Equipment Accounts Receivable Other Total Commercial and Industrial Loans $ 8,348 $ 6,880 $ 400 $ 10,070 $ 25,698 Commercial Real Estate Loans 30,670 494 — — 31,164 Agricultural Loans 2,958 279 — 633 3,870 Leases — — — — — Home Equity Loans 425 — — — 425 Consumer Loans — — — — — Credit Cards — — — — — Residential Mortgage Loans 633 — — — 633 Total $ 43,034 $ 7,653 $ 400 $ 10,703 $ 61,790 77 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) 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 December 31, 2025 and 2024: December 31, 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 $ 518 $ 1,600 $ 7,096 $ 9,214 $ 751,953 $ 761,167 Commercial Real Estate Loans 2,559 281 4,497 7,337 3,135,135 3,142,472 Agricultural Loans 875 — 1,124 1,999 487,169 489,168 Leases — — — — 87,073 87,073 Home Equity Loans 2,415 140 776 3,331 480,969 484,300 Consumer Loans 1,017 287 33 1,337 116,311 117,648 Credit Cards 222 105 148 475 27,592 28,067 Residential Mortgage Loans 9,383 2,751 2,142 14,276 760,277 774,553 Total $ 16,989 $ 5,164 $ 15,816 $ 37,969 $ 5,846,479 $ 5,884,448 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 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 in 2025 or 2024 resulted in the permanent reduction of the amortized cost in the loan. At December 31, 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 year ended December 31, 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. 78 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) 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. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. 79 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) The following table presents the risk category of loans and current period gross charge-offs as of December 31, 2025 by loan class and vintage year: Term Loans Amortized Cost Basis by Origination Year As of December 31, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Total Commercial and Industrial: Risk Rating Pass $ 139,921 $ 105,911 $ 64,427 $ 77,540 $ 52,599 $ 45,106 $ 231,427 $ 716,931 Special Mention 1,171 714 2,077 1,221 286 2,046 5,364 12,879 Substandard 277 1,628 3,081 5,983 4,394 11,510 4,484 31,357 Doubtful — — — — — — — — Total Commercial and Industrial Loans $ 141,369 $ 108,253 $ 69,585 $ 84,744 $ 57,279 $ 58,662 $ 241,275 $ 761,167 Current Period Gross Charge-Offs $ — $ 306 $ — $ 138 $ — $ 77 $ 243 $ 764 Commercial Real Estate: Risk Rating Pass $ 455,803 $ 435,591 $ 385,103 $ 515,257 $ 443,780 $ 774,987 $ 36,077 $ 3,046,598 Special Mention 220 2,448 17,816 3,173 7,879 22,681 783 55,000 Substandard 68 12 865 2,861 8,948 28,120 — 40,874 Doubtful — — — — — — — — Total Commercial Real Estate Loans $ 456,091 $ 438,051 $ 403,784 $ 521,291 $ 460,607 $ 825,788 $ 36,860 $ 3,142,472 Current Period Gross Charge-Offs $ — $ — $ — $ — $ — $ 26 $ — $ 26 Agricultural: Risk Rating Pass $ 54,791 $ 35,843 $ 33,138 $ 45,677 $ 29,011 $ 126,308 $ 118,304 $ 443,072 Special Mention 4,683 1,974 2,823 2,138 3,183 11,842 12,510 39,153 Substandard — 437 832 64 101 4,526 983 6,943 Doubtful — — — — — — — — Total Agricultural Loans $ 59,474 $ 38,254 $ 36,793 $ 47,879 $ 32,295 $ 142,676 $ 131,797 $ 489,168 Current Period Gross Charge-Offs $ — $ — $ — $ — $ — $ — $ — $ — Leases: Risk Rating Pass $ 33,383 $ 24,235 $ 19,668 $ 4,356 $ 2,064 $ 3,367 $ — $ 87,073 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total Leases $ 33,383 $ 24,235 $ 19,668 $ 4,356 $ 2,064 $ 3,367 $ — $ 87,073 Current Period Gross Charge-Offs $ — $ — $ — $ — $ — $ — $ — $ — 80 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) As of 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 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 and 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 $ — $ — $ — $ — $ — $ — $ — $ — 81 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For residential, home equity 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 table presents the amortized cost in residential, home equity and consumer loans based on payment activity as well as the current period gross charge-offs for the periods ended December 31, 2025 and 2024. Term Loans Amortized Cost Basis by Origination Year As of December 31, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Total Consumer: Payment performance Performing $ 58,703 $ 28,540 $ 13,023 $ 5,094 $ 3,489 $ 2,434 $ 6,332 $ 117,615 Nonperforming — 27 — 6 — — — 33 Total Consumer Loans $ 58,703 $ 28,567 $ 13,023 $ 5,100 $ 3,489 $ 2,434 $ 6,332 $ 117,648 Current Period Gross Charge-Offs $ 1,502 $ 51 $ 66 $ 30 $ 15 $ 3 $ — $ 1,667 Home Equity: Payment performance Performing $ 315 $ 1,706 $ 1,495 $ 3,900 $ 1,294 $ 4,672 $ 470,142 $ 483,524 Nonperforming — — 198 251 85 86 156 776 Total Home Equity Loans $ 315 $ 1,706 $ 1,693 $ 4,151 $ 1,379 $ 4,758 $ 470,298 $ 484,300 Current Period Gross Charge-Offs $ — $ — $ — $ 68 $ 25 $ 3 $ — $ 96 Residential Mortgage: Payment performance Performing $ 78,420 $ 83,687 $ 99,058 $ 188,414 $ 142,032 $ 180,555 $ — $ 772,166 Nonperforming — 335 148 228 502 1,174 — 2,387 Total Residential Mortgage Loans $ 78,420 $ 84,022 $ 99,206 $ 188,642 $ 142,534 $ 181,729 $ — $ 774,553 Current Period Gross Charge-Offs $ — $ — $ 77 $ — $ 37 $ — $ — $ 114 82 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) The following table presents the amortized cost in residential, home equity and consumer loans based on payment activity for the period ended December 31, 2024. 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 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 retail loans based on payment activity: Credit Cards December 31, 2025 December 31, 2024 Performing $ 27,919 $ 22,614 Nonperforming 148 54 Total $ 28,067 $ 22,668 The following table presents loans purchased and/or sold during the year by portfolio segment: Commercial and Industrial Loans Commercial Real Estate Loans Agricultural Loans Leases Consumer Loans Home Equity Loans Credit Cards Residential Mortgage Loans Total December 31, 2025 Purchases $ — $ — $ — $ — $ — $ — $ — $ — $ — Sales — — 2,391 — — — — — 2,391 December 31, 2024 Purchases $ — $ — $ — $ — $ — $ — $ — $ — $ — Sales — — — — — — — — — 83 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 5 – Loans (continued) Certain directors, executive officers, and principal shareholders of the Company, including their immediate families and companies in which they are principal owners, were loan customers of the Company during 2025. A summary of the activity of these loans follows: Balance January 1, 2025 Additions Changes in Persons or Interests Included Deductions Balance December 31, 2025 Collected Charged-off $ 35,196 $ 4,518 $ 1,527 $ ( 7,459 ) $ — $ 33,782 NOTE 6 – Premises, Furniture, and Equipment Premises, furniture, and equipment was comprised of the following classifications at December 31: 2025 2024 Land $ 37,330 $ 27,026 Buildings and Improvements 137,411 108,057 Furniture and Equipment 53,312 48,347 Total Premises, Furniture and Equipment 228,053 183,430 Less: Accumulated Depreciation ( 89,052 ) ( 79,385 ) Total $ 139,001 $ 104,045 Depreciation expense was $ 8,983 , $ 6,882 and $ 6,570 for 2025, 2024 and 2023, respectively. NOTE 7 - Deposits At year end 2025, stated maturities of time deposits were as follows: 2026 $ 1,074,869 2027 106,847 2028 95,769 2029 7,670 2030 4,354 Thereafter 28 Total $ 1,289,537 Time deposits and brokered certificates of deposit exceeding the FDIC insurance limit of $250 at December 31, 2025 and 2024 were $ 448,699 and $ 353,961 , respectively. Time deposits originated from outside the geographic area, generally through brokers, totaled $ 37,358 and $ 4,713 at December 31, 2025 and 2024, respectively. Deposits from principal officers, directors, and their affiliates at year-end 2025 and 2024 were $ 105,902 and $ 64,352 , respectively. 84 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 8 – FHLB Advances and Other Borrowings The Company’s funding sources include Federal Home Loan Bank advances, borrowings from other third party correspondent financial institutions, issuance and sale of subordinated debt and other capital securities, and repurchase agreements. Information regarding each of these types of borrowings or other indebtedness is as follows: December 31, 2025 2024 Principal Unamortized Discount and Debt Issuance Costs Principal Unamortized Discount and Debt Issuance Costs Long-term Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities $ 100,000 $ — $ 75,000 $ — Junior Subordinated Debentures assumed from American Community Bancorp, Inc. 8,248 ( 1,423 ) 8,248 ( 1,573 ) Junior Subordinated Debentures assumed from River Valley Bancorp, Inc. 7,217 ( 766 ) 7,217 ( 871 ) Junior Subordinated Debentures assumed from Citizens First Corporation 5,155 ( 722 ) 5,155 ( 787 ) Junior Subordinated Debentures assumed from Citizens Union Bancorp of Shelbyville, Inc. 20,600 ( 1,615 ) 20,600 ( 1,751 ) Subordinated Debentures — — 40,000 ( 372 ) Finance Lease Obligation 2,137 — 2,403 — Long-term Borrowings 143,357 ( 4,526 ) 158,623 ( 5,354 ) Overnight Variable Rate Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities — — — — Federal Funds Purchased — — — — Repurchase Agreements 43,852 — 56,862 — Short-term Borrowings 43,852 — 56,862 — Total Borrowings $ 187,209 $ ( 4,526 ) $ 215,485 $ ( 5,354 ) Repurchase agreements, which are classified as secured borrowings, generally mature within one day of the transaction date. Repurchase agreements are reflected at the amount of cash received in connection with the transaction. The Company may be required to provide additional collateral based on the value of the underlying securities. 2025 2024 Average Daily Balance During the Year $ 37,573 $ 47,187 Average Interest Rate During the Year 0.94 % 1.50 % Maximum Month-end Balance During the Year $ 47,488 $ 68,228 Weighted Average Interest Rate at Year-end 0.81 % 1.27 % At December 31, 2025, interest rates on long-term FHLB Advances ranged from 3.43 % to 3.99 % with a weighted average rate of 3.67 %. At December 31, 2024, interest rates on long-term FHLB Advances ranged from 3.54 % to 3.99 % with a weighted average rate of 3.75 %. At December 31, 2025 and 2024, the Company had no advances containing options whereby the FHLB may convert a fixed rate advance to an adjustable rate advance. At December 31, 2024, the Company had outstanding $ 39,628 , in aggregate principal amount, a 4.50 % Fixed-to-Floating Rate Subordinated Notes due 2029 (the “2029 Notes”). The 2029 Notes were redeemed in their entirety on December 30, 2025, at a redemption price equal to 100 % of the principal amount, plus accrued and unpaid interest. Prior to June 30, 2024, the interest rate on the 2029 Notes was fixed at an annual rate of 4.50 %, payable semi-annually in arrears. From and including June 30, 2024 to but excluding the redemption date, the interest rate was reset quarterly to a rate per annum equal to the then-current three-month CME Term SOFR, plus the applicable spread adjustment of 0.26161 % percent, plus 2.68 % percent. On September 15, 2025, the Company redeemed its 5.0 % Fixed-to-Floating Rate Subordinated Notes due 2030 (the “2030 Notes”), outstanding in the aggregate principal amount of $ 24.3 million, at a redemption price equal to 100 % of the principal 85 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 8 - FHLB Advances and Other Borrowings (continued) amount, plus accrued and unpaid interest. The 2030 Notes were acquired through the acquisition of Heartland BancCorp in February 2025. While portions of the 2029 Notes and 2030 Notes qualified as Tier 2 capital for regulatory capital purposes, the redemptions did not have a material impact on the capital ratios of the Company or the Bank. At December 31, 2025, the parent company had a $ 15 million line of credit with U.S. Bank National Association, which had no outstanding balance. The line of credit matures September 23, 2026. Interest on the line of credit is based upon one-month Term SOFR plus 2.10 %. At December 31, 2025, scheduled principal payments on long-term borrowings, excluding the capitalized lease obligation and acquired subordinated debentures (which are discussed below) are as follows: 2026 $ — 2027 — 2028 — 2029 75,000 2030 25,000 Thereafter — Total $ 100,000 The Company assumed the obligations of junior subordinated debentures through the acquisitions of American Community Bancorp, Inc., River Valley Bancorp, Citizens First Corporation and Citizens Union Bancorp of Shelbyville, Inc. The junior subordinated debentures were issued to ACB Capital Trust I, ACB Capital Trust II, RIVR Statutory Trust I, Citizens First Statutory Trust I, CUB Capital Trust I and CUB Capital Trust II. The trusts are wholly owned by the Company. In accordance with accounting guidelines, the trusts are not consolidated with the Company’s financials, but rather the subordinated debentures are shown as borrowings. The Company guarantees payment of distributions on the trust preferred securities issued by the various trusts. Interest is payable on a quarterly basis. These securities qualify as Tier 1 capital (with certain limitations) for regulatory purposes. $ 35,733 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2025. $ 35,281 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2024. As a result of the acquisitions, these liabilities were recorded at fair value at the acquisition date with the discount amortizing into interest expense over the life of the liability, ultimately accreting to the issuance amount disclosed below. The following table summarizes the terms of each issuance: Date of Issuance Issuance Amount Carrying Amount at December 31, 2025 Variable Rate (1) Rate as of December 31, 2025 Rate as of December 31, 2024 Maturity Date ACB Trust I 5/6/2005 $ 5,155 $ 4,289 3-Month SOFR + 2.15 % 6.08 % 6.74 % May 2035 ACB Trust II 7/15/2005 3,093 2,536 3-Month SOFR + 1.85 % 5.99 % 6.63 % July 2035 RIVR Statutory Trust I 3/26/2003 7,217 6,451 3-Month SOFR + 3.15 % 7.10 % 7.74 % March 2033 Citizens First Statutory Trust I 10/16/2006 5,155 4,433 3-Month SOFR + 1.65 % 5.90 % 6.50 % January 2037 CUB Capital Trust I 10/21/2004 10,310 9,741 3-Month SOFR + 2.00 % 6.14 % 6.78 % November 2034 CUB Capital Trust II 8/17/2005 10,310 9,244 3-Month SOFR + 1.50 % 5.67 % 6.42 % October 2035 (1) “3-Month SOFR” refers to the three-month CME Term SOFR, which became effective following the first London banking day after June 30, 2023, plus the applicable spread adjustment of 0.26161 % percent. NOTE 9 - Shareholders ’ Equity Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. 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 86 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 9 – Shareholders ’ Equity (continued) 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. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. At December 31, 2025, the Company and Bank meet all capital adequacy requirements to which they are subject. Prompt corrective action regulations provide five classifications, including well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year end 2025 and 2024, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category. At December 31, 2025, consolidated and bank actual capital and minimum required levels are presented below: Actual: Minimum Required For Capital Adequacy Purposes: Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Amount Ratio Amount Ratio ⁽¹⁾ Amount Ratio Total Capital (to Risk Weighted Assets) Consolidated $ 1,024,473 14.93 % $ 548,951 8.00 % N/A N/A Bank 945,643 13.80 548,089 8.00 $ 685,111 10.00 % Tier 1 (Core) Capital (to Risk Weighted Assets) Consolidated $ 963,391 14.04 % $ 411,713 6.00 % N/A N/A Bank 884,561 12.91 411,067 6.00 $ 548,089 8.00 % Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets) Consolidated $ 927,658 13.52 % $ 308,785 4.50 % N/A N/A Bank 884,561 12.91 308,300 4.50 $ 445,322 6.50 % Tier 1 (Core) Capital (to Average Assets) Consolidated $ 963,391 11.54 % $ 333,993 4.00 % N/A N/A Bank 884,561 10.61 333,489 4.00 $ 416,862 5.00 % (1) Excludes 2.5 % capital conservation buffer. 87 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 9 – Shareholders ’ Equity (continued) At December 31, 2024, consolidated and bank actual capital and minimum required levels are presented below: Actual: Minimum Required For Capital Adequacy Purposes: Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Amount Ratio Amount Ratio ⁽¹⁾ Amount Ratio Total Capital (to Risk Weighted Assets) Consolidated $ 863,999 17.15 % $ 402,996 8.00 % N/A N/A Bank 756,122 15.02 402,638 8.00 $ 503,297 10.00 % Tier 1 (Core) Capital (to Risk Weighted Assets) Consolidated $ 791,794 15.72 % $ 302,247 6.00 % N/A N/A Bank 715,917 14.23 301,978 6.00 $ 402,638 8.00 % Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets) Consolidated $ 756,513 15.02 % $ 226,685 4.50 % N/A N/A Bank 715,917 14.23 226,484 4.50 $ 327,143 6.50 % Tier 1 (Core) Capital (to Average Assets) Consolidated $ 791,794 12.28 % $ 257,936 4.00 % N/A N/A Bank 715,917 11.12 257,468 4.00 $ 321,835 5.00 % (1) Excludes 2.5 % capital conservation buffer. The Company and the Bank at year end 2025 and 2024 were categorized as well-capitalized. There have been no conditions or events that management believes has changed the classification of the Bank under the prompt corrective action regulations since the last notification from regulators. Regulations require the maintenance of certain capital levels at the Bank, and may limit the dividends payable by the affiliate to the holding company, or by the holding company to its shareholders. At December 31, 2025 the Bank had approximately $ 145,000 in retained earnings available for payment of dividends to the parent company without prior regulatory approval. 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 the CARES Act, 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 effective January 1, 2022. An additional 25 % was phased in on each of January 1, 2023, 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. 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 Long-Term Equity Incentive 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. Stock Options Options may be designated as incentive stock options or as nonqualified stock options. While the date after which options are first exercisable is determined by the appropriate committee of the Board of Directors of the Company (the “Committee”) or, in the case of options granted to directors, by the Board of Directors, no stock option may be exercised after ten years from the 88 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 9 – Shareholders ’ Equity (continued) date of grant. The exercise price of stock options granted pursuant to the plan must be no less than the market value of the common stock on the date of the grant. In addition to paying the exercise price for options in cash, the Committee, in its sole discretion, may allow an optionee to tender outstanding common shares as payment of the exercise price. Any common shares delivered by an optionee in connection with the exercise of an option award must have been owned by the optionee for at least six months as of the date of delivery. Shares used to satisfy the exercise price of an option are valued at their fair market value on the date of exercise. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of common stock as of the reporting date. During 2025, 2024 and 2023, the Company granted no options, and recorded no stock compensation expense related to option grants. The Company recorded no other stock compensation expense applicable to options during the years ended December 31, 2025, 2024 and 2023. Restricted Stock During the periods presented, awards of long-term incentives were granted in the form of restricted stock. Awards granted under the management incentive plan are 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 three annual installments. 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. The following table presents expense recorded for restricted stock and cash entitlements as well as the related tax effect for the years ended December 31, 2025, 2024, and 2023: 2025 2024 2023 Restricted Stock Expense $ 3,274 $ 3,190 $ 2,345 Cash Entitlement Expense 760 761 750 Tax Effect ( 1,046 ) ( 1,025 ) ( 803 ) Net of Tax $ 2,988 $ 2,926 $ 2,292 Unrecognized expense associated with the restricted stock grants and cash entitlements totaled $ 3,771 , $ 3,516 , and $ 3,519 as of December 31, 2025, 2024, and 2023, respectively. The following table presents information on restricted stock grants outstanding for the period shown: Year Ended December 31, 2025 Restricted Shares Weighted Average Market Price at Grant Outstanding at Beginning of Period 134,680 $ 32.80 Granted 92,184 38.87 Vested ( 77,246 ) 33.37 Forfeited and Tendered ( 16,321 ) 34.47 Outstanding at End of Period 133,297 35.78 Employee Stock Purchase Plan 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 89 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 9 – Shareholders ’ Equity (continued) 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 market 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. In 2025, the Company recorded $ 37 of expense, $ 28 net of tax, for the 2019 ESPP. In 2024, the Company recorded $ 22 of expense, $ 17 net of tax, for the 2019 ESPP. In 2023, the Company recorded $ 29 of expense, $ 22 net of tax, for the 2019 ESPP. There was no unrecognized compensation expense as of December 31, 2025, 2024 and 2023 for the 2019 ESPP. Stock Repurchase Plan The Company’s Board of Directors previously approved a plan to repurchase up to one 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 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 1% excise tax on the fair market 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 10 - Employee Benefit Plans The Company provides a contributory trusteed 401(k) deferred compensation and profit sharing plan, which covers substantially all employees. The Company agrees to match certain employee contributions under the 401(k) portion of the plan, while profit sharing contributions are discretionary and are subject to determination by the Board of Directors. Company contributions were $ 2,871 , $ 2,381 , and $ 2,356 for 2025, 2024, and 2023, respectively. The Company self-insures employee health benefits. Stop loss insurance covers annual losses exceeding $ 175 per covered family. Management’s policy is to establish a reserve for claims not submitted by a charge to earnings based on prior experience. Charges to earnings were $ 8,797 , $ 7,303 , and $ 7,227 for 2025, 2024, and 2023, respectively. The Company maintains deferred compensation plans for the benefit of certain directors and officers. Under the plans, the Company agrees in return for the directors and officers deferring the receipt of a portion of their current compensation, to pay a retirement benefit computed as the amount of the compensation deferred plus accrued interest at a variable rate. Accrued benefits payable totaled $ 2,745 and $ 2,485 at December 31, 2025 and 2024, respectively. Deferred compensation expense was $ 161 , $ 81 , and $ 261 for 2025, 2024, and 2023, respectively. In conjunction with the plans, the Company purchased life insurance on certain directors and officers. 90 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 10 – Employee Benefit Plans (continued) Postretirement Medical and Life Benefit Plan The Company has an unfunded postretirement benefit plan covering substantially all of its employees. The medical plan is contributory with the participants’ contributions adjusted annually; the life insurance plans are noncontributory. Changes in Accumulated Postretirement Benefit Obligations: 2025 2024 Obligation at the Beginning of Year $ 1,534 $ 1,747 Unrecognized Loss (Gain) 753 ( 240 ) Components of Net Periodic Postretirement Benefit Cost Service Cost 106 118 Interest Cost 79 77 Net Expected Benefit Payments ( 113 ) ( 168 ) Amendments — — Obligation at End of Year $ 2,359 $ 1,534 Components of Postretirement Benefit Expense: 2025 2024 2023 Service Cost $ 106 $ 118 $ 101 Interest Cost 79 77 71 Amortization of Prior Service Costs ( 3 ) ( 3 ) ( 3 ) Amortization of Unrecognized Net (Gain) Loss 19 46 32 Net Postretirement Benefit Expense 201 238 201 Net Gain (Loss) During Period Recognized in Other Comprehensive Income (Loss) 737 ( 283 ) 158 Total Recognized in Net Postretirement Benefit Expense and Other Comprehensive Income $ 938 $ ( 45 ) $ 359 Assumptions Used to Determine Net Periodic Cost and Benefit Obligations: 2025 2024 2023 Discount Rate 5.06 % 5.30 % 4.64 % Assumed Health Care Cost Trend Rates at Year-end: 2025 2024 Health Care Cost Trend Rate Assumed for Next Year 8.00 % 7.50 % Rate that the Cost Trend Rate Gradually Declines to 4.50 % 4.50 % Year that the Rate Reaches the Rate it is Assumed to Remain at 2040 2031 Contributions The Company expects to contribute $ 170 to its postretirement medical and life insurance plan in 2026. Estimated Future Benefits The following postretirement benefit payments, which reflect expected future service, are expected to be paid: 2026 $ 170 2027 167 2028 177 2029 200 2030 240 2031-2035 1,367 91 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 11 - Income Taxes The provision for income taxes consists of the following: 2025 2024 2023 Current Federal $ 17,453 $ 17,521 $ 13,067 Current State 1,723 3,306 1,934 Deferred Federal 7,126 ( 766 ) 2,602 Deferred State 1,133 227 156 Total Income Tax Expense from Continuing Operations $ 27,435 $ 20,288 $ 17,759 Effective tax rates differ from the federal statutory rate of 21 % for 2025, 2024 and 2023 applied to income before income taxes due to the following: 2025 2024 2023 Amount Percent Amount Percent Amount Percent Federal Statutory Income Tax $ 29,415 21.00 % $ 21,861 21.00 % $ 21,766 21.00 % Effect of: State and Local Income Tax, Net of Federal Tax Effect* 2,256 1.61 2,782 2.67 1,651 1.59 Tax Credits: General Business Tax Credits, Net of Amortization ( 40 ) ( 0.03 ) ( 54 ) ( 0.05 ) ( 27 ) ( 0.03 ) Nontaxable or Nondeductible Items: Income from Tax-exempt Loans and Investments, Net of Interest Expense Disallowance ( 3,842 ) ( 2.74 ) ( 4,008 ) ( 3.85 ) ( 4,951 ) ( 4.78 ) Other Differences ( 354 ) ( 0.25 ) ( 293 ) ( 0.28 ) ( 680 ) ( 0.65 ) Total Income Taxes $ 27,435 19.59 % $ 20,288 19.49 % $ 17,759 17.13 % *State taxes in Indiana and Kentucky made up the majority (greater than 50 percent) of the tax effect in this category. The Company does not have income from foreign sources and therefore does not have any foreign income tax. Income taxes paid were as follows, net of refunds: 2025 2024 Federal $ 16,550 $ 14,823 State and Local Indiana 1,900 1,430 Kentucky 375 1,450 All Other States 100 120 Total Taxes Paid $ 18,925 $ 17,823 92 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 11 – Income Taxes (continued) The net deferred tax asset/(liability) at December 31 consists of the following: 2025 2024 Deferred Tax Assets: Allowance for Credit Losses $ 18,805 $ 11,088 Lease Liability (Operating Leases) 1,372 1,121 Unrealized Loss on Securities 43,915 58,803 Deferred Compensation and Employee Benefits 1,055 933 Other-than-temporary Impairment 239 246 Accrued Expenses 1,504 1,248 Business Combination Fair Value Adjustments 11,391 — Pension and Postretirement Plans 182 182 Other Real Estate Owned 40 41 Non-Accrual Loan Interest Income 472 355 Net Operating Loss Carryforward 3,101 488 Other 1,679 1,046 Total Deferred Tax Assets 83,755 75,551 Deferred Tax Liabilities: Depreciation ( 5,516 ) ( 3,095 ) Leasing Activities, Net ( 15,208 ) ( 13,039 ) FHLB Stock Dividends ( 442 ) ( 432 ) Prepaid Expenses ( 358 ) ( 136 ) Intangibles ( 9,660 ) ( 2,061 ) Deferred Loan Fees ( 1,058 ) ( 996 ) Mortgage Servicing Rights ( 1,088 ) ( 44 ) Right of Use Asset (Operating Leases) ( 1,321 ) ( 1,080 ) Business Combination Fair Value Adjustments — ( 640 ) Other ( 976 ) ( 1,198 ) Total Deferred Tax Liabilities ( 35,627 ) ( 22,721 ) Valuation Allowance — — Net Deferred Tax Asset/(Liability) $ 48,128 $ 52,830 Under the Internal Revenue Code, through 1996, three acquired banking companies, which are now a part of the Company’s single banking subsidiary, were allowed a special bad debt deduction related to additions to tax bad debt reserves established for the purpose of absorbing losses. The acquired banks were formerly known as River Valley Financial Bank (acquired in March 2016), Peoples Community Bank (acquired in October 2005) and First American Bank (acquired in January 1999). Subject to certain limitations, these banks were permitted to deduct from taxable income an allowance for bad debts based on a percentage of taxable income before such deductions or actual loss experience. Each of the banks generally computed its annual addition to its bad debt reserves using the percentage of taxable income method; however, due to certain limitations in 1996, the banks were only allowed a deduction based on actual loss experience. Retained earnings at December 31, 2025, include approximately $ 5,095 for which no provision for federal income taxes has been made. This amount represents allocations of income for allowable bad debt deductions. Reduction of amounts so allocated for purposes other than tax bad debt losses will create taxable income, which will be subject to the then current corporate income tax rate. It is not contemplated that amounts allocated to bad debt deductions will be used in any manner to create taxable income. The unrecorded deferred income tax liability on the above amount at December 31, 2025 was approximately $ 1,070 . As of December 31, 2025, the Company had Federal net operating loss carryforwards of $ 13,041 that do not expire and Kentucky net operating loss carryforwards of $ 8,666 , which expire in years ranging from 2030 through 2040. These net operating loss carryforwards are expected to be fully utilized before their expiration dates. Unrecognized Tax Benefits The Company had no unrecognized tax benefits as of December 31, 2025, 2024, and 2023, and did no t recognize any increase in unrecognized benefits during 2025 relative to any tax positions taken in 2025. Should the accrual of any interest or penalties 93 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 11 – Income Taxes (continued) relative to unrecognized tax benefits be necessary, it is the Company’s policy to record such accruals in its income tax expense accounts; no such accruals existed as of December 31, 2025, 2024, and 2023. The Company and its corporate subsidiaries file a consolidated U.S. Federal income tax return, which is subject to examination for all years after 2021. The Company and its corporate subsidiaries file combined/unitary returns in various states, which are subject to examination for all years after 2021. NOTE 12 - Revenue Recognition The following table presents 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 years ended December 31, 2025, 2024 and 2023. Trust and investment product 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. Years Ended December 31, Non-interest Income 2025 2024 2023 In-Scope of Topic 606: Wealth Management Fees $ 16,808 $ 14,416 $ 11,711 Service Charges on Deposit Accounts 15,083 12,669 11,538 Insurance Revenues — 4,384 9,596 Interchange Fee Income 19,598 17,125 17,452 Other Operating Income: ATM Fees 1,299 1,197 1,185 Wire Transfer Fees 931 709 696 Other (1) 1,387 1,100 1,251 Non-interest Income (in-scope of Topic 606) 55,106 51,600 53,429 Non-interest Income (out-of-scope of Topic 606) 12,206 11,060 6,832 Total Non-interest Income $ 67,312 $ 62,660 $ 60,261 (1) “ Other ” income includes safe deposit box rentals and other non-interest related fees totaling $ 1.3 million, $ 1.1 million, and $ 1.2 million for the years ended December 31, 2025, 2024, and 2023, respectively, all of which are within 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 wealth management 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. 94 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 13 – Per Share Data The computation of Basic Earnings per Share and Diluted Earnings per Share are provided below: 2025 2024 2023 Basic Earnings per Share: Net Income $ 112,635 $ 83,811 $ 85,888 Weighted Average Shares Outstanding 36,796,342 29,656,416 29,557,567 Basic Earnings per Share $ 3.06 $ 2.83 $ 2.91 Diluted Earnings per Share: Net Income $ 112,635 $ 83,811 $ 85,888 Weighted Average Shares Outstanding 36,796,342 29,656,416 29,557,567 Potentially Dilutive Shares, Net — — — Diluted Weighted Average Shares Outstanding 36,796,342 29,656,416 29,557,567 Diluted Earnings per Share $ 3.06 $ 2.83 $ 2.91 There were no anti-dilutive shares at December 31, 2025, 2024, and 2023. There were no stock options outstanding at December 31, 2025, 2024 and 2023. Restricted stock units are participating shares and included in outstanding shares for purposes of the calculation of earnings per share. NOTE 14 - 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 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: December 31, 2025 December 31, 2024 Finance Lease Cost: Amortization of Right-of-Use Assets $ 210 $ 210 Interest on Lease Liabilities 252 280 Operating Lease Cost 1,701 1,319 Short-term Lease Cost — — Total Lease Cost $ 2,163 $ 1,809 The weighted average lease term and discount rates were as follows: December 31, 2025 December 31, 2024 Weighted Average Remaining Lease Term: Finance Leases 6 years 7 years Operating Leases 5 years 6 years Weighted Average Discount Rate: Finance Leases 11.30 % 11.34 % Operating Leases 3.27 % 3.10 % 95 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 14 – Leases (continued) Supplemental balance sheet information related to leases were as follows: December 31, 2025 December 31, 2024 Finance Leases Premises, Furniture and Equipment, Net $ 1,228 $ 1,438 Other Borrowings $ 2,137 $ 2,403 Operating Leases Operating Lease Right-of-Use Assets $ 5,584 $ 4,315 Operating Lease Liabilities $ 5,764 $ 4,484 Supplemental cash flow information related to leases were as follows: December 31, 2025 December 31, 2024 Cash Paid for Amounts in the Measurement of Lease Liabilities: Operating Cash Flows from Finance Leases $ 252 $ 280 Operating Cash Flows from Operating Leases 1,687 1,307 Financing Cash Flows from Finance Leases 289 261 The following table presents a maturity analysis of Finance and Operating Lease Liabilities: December 31, 2025 Finance Leases Operating Leases Year 1 $ 519 $ 1,546 Year 2 486 1,279 Year 3 438 871 Year 4 438 663 Year 5 438 426 Thereafter 633 1,634 Total Lease Payments 2,952 6,419 Less Imputed Interest ( 815 ) ( 655 ) Total $ 2,137 $ 5,764 NOTE 15 - Commitments and Off-balance Sheet Items In the normal course of business, there are various commitments and contingent liabilities, such as commitments to extend credit and commitments to sell loans, which are not reflected in the accompanying consolidated financial statements. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to make loans and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policy to make commitments as it uses for on-balance sheet items. The Company’s exposure to credit risk for commitments to sell loans is dependent upon the ability of the counter-party to purchase the loans. This is generally assured by the use of government sponsored entity counterparts. These commitments are subject to market risk resulting from fluctuations in interest rates. 96 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 15 – Commitments and Off-balance Sheet Items (continued) Commitments and contingent liabilities are summarized as follows, at December 31: 2025 2024 Fixed Rate Variable Rate Fixed Rate Variable Rate Commitments to Fund Loans: Consumer Lines $ 16,377 $ 971,533 $ 19,477 $ 734,821 Commercial Operating Lines 124,804 826,030 83,754 544,757 Residential Mortgages 1,897 480 13,602 525 Total Commitments to Fund Loans $ 143,078 $ 1,798,043 $ 116,833 $ 1,280,103 Commitments to Sell Loans: Mandatory $ 7,046 $ — $ 2,715 $ — Non-mandatory $ — $ — $ 6,043 $ — Standby Letters of Credit $ 2,152 $ 15,589 $ 2,170 $ 12,586 The fixed rate commitments to fund loans have interest rates ranging from 2.00 % to 24.00 % and maturities ranging from less than 1 year to 36 years. Since many commitments to make loans expire without being used, these amounts do not necessarily represent future cash commitments. Collateral obtained upon exercise of the commitment is determined using management’s credit evaluation of the borrower, and may include accounts receivable, inventory, property, land, and other items. The Company maintains an allowance for credit losses on unfunded loan commitments to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses on loans, modified to take into account the probability of a drawdown on the commitment. The allowance for credit losses on unfunded loan commitments is classified as a liability account on the balance sheet within accrued interest payable and other liabilities which totaled $ 1,054 and $ 586 for December 31, 2025 and 2024, respectively. NOTE 16 - 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 December 31, 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. 97 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 16 – Fair Value (continued) 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 impaired 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 impaired 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. Other Real Estate: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate (ORE) 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 Impaired 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. Mortgage Servicing Rights (MSR): On a quarterly basis, mortgage servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. If the carrying amount exceeds fair value, impairment is determined and recorded. The fair value of MSRs is determined by discounting estimated future cash flows from the servicing assets, using market discount rates and expected future prepayment rates stratifying the MSRs into groupings based on predominant risk characteristics, such as loan type, term and interest rate as well as time period originated. 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. 98 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 16 – Fair Value (continued) 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 December 31, 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 $ 152,090 $ — $ — $ 152,090 Obligations of State and Political Subdivisions — 497,606 — 497,606 MBS/CMO — 719,542 — 719,542 US Gov’t Sponsored Entities & Agencies — 288,156 — 288,156 Total Securities $ 152,090 $ 1,505,304 $ — $ 1,657,394 Loans Held-for-Sale $ — $ 7,817 $ — $ 7,817 Mortgage Servicing Rights $ — $ 4,544 $ — $ 4,544 Derivative Assets $ — $ 4,145 $ — $ 4,145 Derivative Liabilities $ — $ 4,212 $ — $ 4,212 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 Mortgage Servicing Rights $ — $ 179 $ — $ 179 Derivative Assets $ — $ 6,439 $ — $ 6,439 Derivative Liabilities $ — $ 6,476 $ — $ 6,476 As of December 31, 2025 and 2024, the aggregate fair value, contractual balance (including accrued interest), and gain or loss on Loans Held-for-Sale were as follows: 2025 2024 Aggregate Fair Value $ 7,817 $ 8,239 Contractual Balance 7,660 8,111 Gain (Loss) 157 128 The total amount of gains(losses) from changes in fair value included in earnings for the years ended December 31, 2025, 2024 and 2023 for loans held for sale were $ 29 , $ 27 , and $( 25 ), respectively. 99 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 16 – Fair Value (continued) The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the twelve months ended December 31, 2025 and 2024: 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 — 69 Maturities / Calls — ( 15 ) — — Transfers out of Level 3 — ( 62 ) — ( 1,053 ) Balance of Recurring Level 3 Assets at December 31 $ — $ — $ — $ — Of the total gain/loss included in earnings for the years ended December 31, 2025 and 2024, $ 0 and $ 56 was attributable to other changes in fair value, respectively. As of December 31, 2024, one MBS/CMO Security with a fair value of $ 1,053 and one Obligation of State and Political Subdivisions security with a fair value of $ 62 were transferred from Level 3 to Level 2 because observable market data became available. 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 December 31, 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 $ — $ — $ 14,914 $ 14,914 Commercial Real Estate Loans — — 23,698 23,698 Agricultural Loans — — 2,544 2,544 Consumer Loans — — — — Home Equity Loans — — 330 330 Residential Mortgage Loans — — 366 366 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 There was no Other Real Estate carried at fair value less costs to sell at December 31, 2025 and 2024. No charge to earnings was included in the years ended December 31, 2025 and 2024. 100 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 16 – Fair Value (continued) The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2025 and 2024: December 31, 2025 Fair Value Valuation Technique(s) Unobservable Input(s) Range (Weighted Average) Collateral Dependent Loans - Commercial and Industrial Loans $ 14,914 Sales comparison approach Adjustment for physical condition of comparable properties sold 7 % - 100 % ( 69 %) Collateral Dependent Loans - Commercial Real Estate Loans $ 23,698 Sales comparison approach Adjustment for physical condition of comparable properties sold 20 % - 100 % ( 89 %) Collateral Dependent Loans - Agricultural Loans $ 2,544 Sales comparison approach Adjustment for physical condition of comparable properties sold 10 % - 53 % ( 37 %) Collateral Dependent Loans - Consumer Loans $ — Sales comparison approach Adjustment for physical condition of comparable properties sold 0 % - 0 % ( 0 %) Collateral Dependent Loans - Home Equity Loans $ 330 Sales comparison approach Adjustment for physical condition of comparable properties sold 20 % - 20 % ( 20 %) Collateral Dependent Loans - Residential Mortgage Loans $ 366 Sales comparison approach Adjustment for physical condition of comparable properties sold 20 % - 20 % ( 20 %) 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 ending December 31, 2025 and 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 December 31, 2025 Using Carrying Value Level 1 Level 2 Level 3 Total Financial Assets: Cash and Short-term Investments $ 118,382 $ 71,428 $ 46,954 $ — $ 118,382 Interest Bearing Time Deposits with Banks 500 — 500 — 500 Loans, Net 5,755,551 — — 5,702,933 5,702,933 Accrued Interest Receivable 38,997 — 9,496 29,501 38,997 Financial Liabilities: Demand, Savings, and Money Market Deposits ( 5,700,205 ) ( 5,700,205 ) — — ( 5,700,205 ) Time Deposits ( 1,289,537 ) — ( 1,286,002 ) — ( 1,286,002 ) Short-term Borrowings ( 43,852 ) — ( 43,852 ) — ( 43,852 ) Long-term Debt ( 138,831 ) — ( 102,892 ) ( 34,126 ) ( 137,018 ) Accrued Interest Payable ( 10,243 ) — ( 9,925 ) ( 318 ) ( 10,243 ) 101 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 16 – 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 17 - Loan Servicing Mortgage loans serviced for others are not reported as assets. The principal balances of these loans at year-end are as follows: 2025 2024 Mortgage loan portfolios serviced for: FHLB $ 84,942 $ 25,401 FHLMC 348,750 — FNMA 1,651 1,897 Custodial escrow balances maintained in connection with serviced loans were $ 1,110 and $ 234 at year-end 2025 and 2024, respectively. Activity for loan servicing rights and the related valuation allowance follows: 2025 2024 Loan Servicing Rights: Beginning of Year $ 179 $ 207 Additions 569 — 2/1/2025 Acquired Heartland Loan Servicing Rights 4,513 — Disposals — — Amortized to Expense 717 28 Other Changes — — Change in Valuation Allowance — — End of Year $ 4,544 $ 179 Valuation Allowance: Beginning of Year $ — $ — Additions Expensed — — Reductions Credited to Operations — — Direct Write-downs — — End of Year $ — $ — The fair value of servicing rights was $ 4,556 and $ 179 at year-end 2025 and 2024, respectively. Fair value at year-end 2025 was determined using discount rates ranging from 9.63 % to 10.00 %, prepayment speeds ranging from 9.00 % to 27.54 %, depending on the stratification of the specific right, and a weighted average default rate of .43 %. Fair value at year-end 2024 was determined using a discount rate of 10.00 % and prepayment speeds ranging from 9.00 % to 12.60 %, depending on the stratification of the specific right. 102 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 18 – Segment Information The Company’s reportable segments are determined by the type of products and services offered and the level of information provided to the Company’s chief operating decision maker, who uses such information in evaluating revenue streams, significant expenses, and budget to actual results in assessing the performance of the Company’s segments and in the determination of allocation resources. For the year ended December 31, 2025 and the last 7 months of 2024, the Company’s operations included two primary segments: core banking and wealth management services. 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 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 operations during the first five months of 2024. See Note 2 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, which operated through 94 banking offices at December 31, 2025. 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. 103 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 18 – Segment Information (continued) The following segment financial information has been 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 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. Core Banking Wealth Management Services Insurance Other Consolidated Totals Year Ended December 31, 2025 Interest and Fees on Loans $ 358,597 $ — $ — $ — $ 358,597 Interest on Securities and Other Short-term Investments 61,050 354 — 509 61,913 Net Gains on Sales of Loans 4,510 — — — 4,510 Wealth Management Fees 5 16,803 — — 16,808 Insurance Revenues — — — — — Reconciliation of Revenue: Other Revenues 45,994 Elimination of Intercompany Revenues ( 421 ) Total Consolidated Revenue 487,401 Less: Interest on Deposits 115,513 — — — 115,513 Interest on FHLB Advances and Other Borrowings 3,775 — — 7,090 10,865 Provision for Credit Losses 19,425 — — — 19,425 Salaries and Employee Benefits 98,976 7,759 — 1,007 107,742 Reconciliation of Income before Income Taxes: Other Non-interest Expense 94,207 Elimination of Intersegment Expenses ( 421 ) Income before Income Taxes 140,070 Other Segment Disclosures: (1) Segment Profit (Loss) Before Taxes 144,887 6,676 — ( 11,493 ) 140,070 Segment Assets at December 31, 2025 8,363,150 18,703 — 6,927 8,388,780 (1) In the Other Segment Disclosures section, the column labeled “Other” includes holding company amounts and eliminating transactions between segments. 104 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 18 – Segment Information (continued) Core Banking Wealth Management Services Insurance Other Consolidated Totals Year Ended December 31, 2024 Interest and Fees on Loans $ 240,241 $ — $ — $ — $ 240,241 Interest on Securities and Other Short-term Investments 50,552 158 1 532 51,243 Net Gains on Sales of Loans 3,054 — — — 3,054 Wealth Management Fees 6 14,410 — — 14,416 Insurance Revenues — 1 4,383 — 4,384 Reconciliation of Revenue: Other Revenues 40,806 Elimination of Intercompany Revenues ( 441 ) Total Consolidated Revenue 353,703 Less: Interest on Deposits 91,063 — — — 91,063 Interest on FHLB Advances and Other Borrowings 3,656 — — 6,174 9,830 Provision for Credit Losses 2,775 — — — 2,775 Salaries and Employee Benefits 71,610 6,958 3,079 610 82,257 Reconciliation of Income before Income Taxes: Other Non-interest Expense 64,120 Elimination of Intersegment Expenses ( 441 ) Income before Income Taxes 104,099 Other Segment Disclosures: (1) Segment Profit (Loss) Before Taxes 70,418 5,381 37,595 ( 9,295 ) 104,099 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. 105 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 18 – Segment Information (continued) Core Banking Wealth Management Services Insurance Other Consolidated Totals Year Ended December 31, 2023 Interest and Fees on Loans $ 212,517 $ — $ — $ — $ 212,517 Interest on Securities and Other Short-term Investments 43,886 120 56 402 44,464 Net Gains on Sales of Loans 2,363 — — — 2,363 Wealth Management Fees 5 11,706 — — 11,711 Insurance Revenues 1 24 9,572 ( 1 ) 9,596 Reconciliation of Revenue: Other Revenues 36,591 Elimination of Intercompany Revenues ( 325 ) Total Consolidated Revenue 316,917 Less: Interest on Deposits 57,241 — — — 57,241 Interest on FHLB Advances and Other Borrowings 3,947 — — 5,360 9,307 Provision for Credit Losses 2,550 — — — 2,550 Salaries and Employee Benefits 70,355 6,240 6,114 535 83,244 Reconciliation of Income before Income Taxes: Other Non-interest Expense 61,253 Elimination of Intersegment Expenses ( 325 ) Income before Income Taxes 103,647 Other Segment Disclosures: (1) Segment Profit (Loss) Before Taxes 103,735 3,669 2,238 ( 5,995 ) 103,647 Segment Assets at December 31, 2023 6,137,687 9,508 3,509 1,494 6,152,198 (1) In the Other Segment Disclosures section, the column labeled “Other” includes holding company amounts and eliminating transactions between segments. NOTE 19 - Parent Company Financial Statements The condensed financial statements of German American Bancorp, Inc. are presented below: CONDENSED BALANCE SHEETS December 31, 2025 2024 ASSETS Cash $ 55,877 $ 96,281 Securities Available-for-Sale 3,650 3,757 Other Investments 353 353 Investment in Subsidiary Bank 1,122,765 676,916 Investment in Non-banking Subsidiaries — — Other Assets 17,431 15,984 Total Assets $ 1,200,076 $ 793,291 LIABILITIES Borrowings $ 36,694 $ 75,866 Other Liabilities 1,057 2,358 Total Liabilities 37,751 78,224 SHAREHOLDERS’ EQUITY Common Stock 37,496 29,677 Additional Paid-in Capital 706,818 392,266 Retained Earnings 582,945 513,588 Accumulated Other Comprehensive Income (Loss) ( 164,934 ) ( 220,464 ) Total Shareholders’ Equity 1,162,325 715,067 Total Liabilities and Shareholders’ Equity $ 1,200,076 $ 793,291 106 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 19 – Parent Company Financial Statements (continued) CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) Years Ended December 31, 2025 2024 2023 INCOME Dividends from Subsidiaries Bank $ 90,000 $ 65,000 $ 50,000 Non-bank — — — Interest Income 507 533 277 Other Income (Loss) 808 1 ( 28 ) Total Income 91,315 65,534 50,249 EXPENSES Salaries and Employee Benefits 650 610 535 Professional Fees 3,076 1,637 777 Occupancy and Equipment Expense 6 8 8 Interest Expense 7,090 6,174 5,360 Other Expenses 1,582 1,399 1,183 Total Expenses 12,404 9,828 7,863 INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES 78,911 55,706 42,386 Income Tax Benefit 2,484 2,225 2,215 INCOME BEFORE EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES 81,395 57,931 44,601 Equity in Undistributed Income of Subsidiaries 31,240 25,880 41,287 NET INCOME 112,635 83,811 85,888 Other Comprehensive Income (Loss): Changes in Unrealized Gain (Loss) on Securities, Available-for-Sale 55,530 ( 3,404 ) 46,378 Changes in Unrecognized Loss in Postretirement Benefit Obligation, Net — — — TOTAL COMPREHENSIVE INCOME (LOSS) $ 168,165 $ 80,407 $ 132,266 CONDENSED STATEMENTS OF CASH FLOWS Years Ended December 31, 2025 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 112,635 $ 83,811 $ 85,888 Adjustments to Reconcile Net Income to Net Cash from Operations Net Amortization on Securities 8 8 — Change in Other Assets 3,349 ( 989 ) 3,929 Change in Other Liabilities ( 2,901 ) 1,065 ( 3,113 ) Equity Based Compensation 1,899 2,947 2,332 Equity in Excess Undistributed Income of Subsidiaries ( 31,234 ) ( 25,880 ) ( 41,287 ) Net Cash from Operating Activities 83,756 60,962 47,749 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Maturities, Calls and Redemptions of Securities Available-for-Sale 257 329 — Cash Used for Business Acquisitions ( 16,839 ) — — Net Equity in Dissolution of Subsidiary — — 1,978 Net Cash from Investing Activities ( 16,582 ) 329 1,978 CASH FLOWS FROM FINANCING ACTIVITIES Repayment of Long-term Debt ( 64,300 ) — — Dividends Paid ( 43,278 ) ( 31,845 ) ( 29,433 ) Net Cash from Financing Activities ( 107,578 ) ( 31,845 ) ( 29,433 ) Net Change in Cash and Cash Equivalents ( 40,404 ) 29,446 20,294 Cash and Cash Equivalents at Beginning of Year 96,281 66,835 46,541 Cash and Cash Equivalents at End of Year $ 55,877 $ 96,281 $ 66,835 107 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 20 – Business Combinations, Goodwill and Intangible Assets 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. In accordance with ASC 805, the Company has expensed approximately $ 23,196 of direct acquisition costs and recorded $ 196,445 of goodwill and $ 40,065 of intangible assets. The goodwill of $ 196,445 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. Consideration Cash for Stock Options, 401K Shares and Fractional Shares $ 23,102 Cash Consideration — 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 39,003 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 ( 8,817 ) Total Identifiable Net Assets $ 146,664 Goodwill $ 196,445 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. 108 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 20 – Business Combinations, Goodwill and Intangible Assets (continued) 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 years ended December 31, 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 Year Ended 12/31/2025 Unaudited Pro Forma Year Ended 12/31/2024 Net Interest Income $ 332,836 $ 229,295 Non-interest Income 70,317 65,665 Total Revenue 403,153 294,960 Provision for Credit Losses 20,325 3,675 Non-interest Expense 212,451 156,879 Income Before Income Taxes 170,377 134,406 Income Tax Expense 34,921 27,774 Net Income $ 135,456 $ 106,632 Earnings Per Share and Diluted Earnings Per Share $ 3.61 $ 2.85 For the years ended December 31, 2025 and 2024, 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 methodology of $ 16,200 on a pre-tax basis. Goodwill The changes in the carrying amount of goodwill for the periods ended December 31, 2025, 2024, and 2023, were classified as follows: 2025 2024 2023 Beginning of Year $ 179,025 $ 180,357 $ 180,357 Acquired Goodwill 196,445 — — Divested Goodwill — ( 1,332 ) — Impairment — — — End of Year $ 375,470 $ 179,025 $ 180,357 The carrying amount of goodwill totaling $ 375,470 and $ 179,025 at December 31, 2025 and 2024, respectively, is allocated to the core banking segment. For the carrying amount of goodwill at December 31, 2023 of $ 180,357 , $ 179,025 was allocated to the core banking segment, and $ 1,332 was allocated to the insurance segment. The decrease of $ 1,332 in 2024 was attributable to the sale of substantially all of the assets of German American Insurance, Inc. For additional information on the sale, see Note 2. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2025, the Company’s reporting units had positive equity, and the Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting units exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment. 109 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 20 – Business Combinations, Goodwill and Intangible Assets (continued) Acquired Intangible Assets Acquired intangible assets were as follows as of year end: 2025 2024 Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Core Banking Core Deposit Intangible $ 73,312 $ ( 39,991 ) $ 33,247 $ ( 29,843 ) Branch Acquisition Intangible 257 ( 257 ) 257 ( 257 ) Total $ 73,569 $ ( 40,248 ) $ 33,504 $ ( 30,100 ) Amortization Expense was $ 10,148 , $ 2,032 and $ 2,840 , for 2025, 2024 and 2023, respectively. Estimated amortization expense for each of the next five years is as follows: 2026 $ 9,234 2027 7,625 2028 6,107 2029 4,599 2030 3,177 NOTE 21 - Other Comprehensive Income (Loss) The tables below summarize the changes in accumulated other comprehensive income (loss) by component for the years ended December 31, 2025 and 2024, net of tax: December 31, 2025 Unrealized Gains and Losses on Available-for-Sale Securities Postretirement Benefit Items Total Beginning Balance $ ( 219,950 ) $ ( 514 ) $ ( 220,464 ) Other Comprehensive Income (Loss) Before Reclassification 55,530 — 55,530 Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) — — — Net Current Period Other Comprehensive Income (Loss) 55,530 — 55,530 Ending Balance $ ( 164,420 ) $ ( 514 ) $ ( 164,934 ) December 31, 2024 Unrealized Gains and Losses on Available-for-Sale Securities Postretirement Benefit Items Total Beginning Balance $ ( 216,546 ) $ ( 514 ) $ ( 217,060 ) Other Comprehensive Income (Loss) Before Reclassification ( 30,511 ) — ( 30,511 ) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 27,107 — 27,107 Net Current Period Other Comprehensive Income (Loss) ( 3,404 ) — ( 3,404 ) Ending Balance $ ( 219,950 ) $ ( 514 ) $ ( 220,464 ) 110 Notes to the Consolidated Financial Statements Dollars in thousands, except per share data NOTE 21 – Other Comprehensive Income (Loss) (continued) The table below summarizes the classifications out of accumulated other comprehensive income (loss) by component for the year ended December 31, 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 Gain (Losses) on Securities — Income Tax Expense — Net of Tax Amortization of Post Retirement Plan Items Actuarial Gains (Losses) $ — Salaries and Employee Benefits — Income Tax Expense — Net of Tax Total Reclassifications for the Period $ — The table below summarizes the classifications out of accumulated other comprehensive income (loss) by component for the year ended December 31, 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 $ ( 34,788 ) Net Gain (Losses) on Securities 7,681 Income Tax Expense ( 27,107 ) Net of Tax Amortization of Post Retirement Plan Items Actuarial Gains (Losses) $ — Salaries and Employee Benefits — Income Tax Expense — Net of Tax Total Reclassifications for the Period $ ( 27,107 ) The table below summarizes the classifications out of accumulated other comprehensive income (loss) by component for the year ended December 31, 2023: 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 $ 40 Net Gain (Losses) on Securities $ ( 8 ) Income Tax Expense 32 Net of Tax Amortization of Post Retirement Plan Items Actuarial Gains (Losses) $ — Salaries and Employee Benefits — Income Tax Expense — Net of Tax Total Reclassifications for the Period $ 32 111 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not Applicable.